MORGANABLE LIFE & CULTURE / NEWS
United Nigeria Airlines has raised ₦22 billion through its commercial paper issuance, exceeding its initial target of ₦20 billion after attracting investor demand.
Akure —
United Nigeria Airlines has raised ₦22 billion through its commercial paper issuance, exceeding its initial target of ₦20 billion after attracting investor demand.
The airline completed the first tranche of its ₦100 billion commercial paper programme on November 1, 2026.
The transaction marks a funding milestone for the airline and introduces a financing route that other Nigerian airlines may consider.
The issuance attracted subscriptions exceeding the target by more than ₦5 billion, according to details released by the airline’s financial advisers.
However, United Nigeria Airlines chose to increase the amount by only 10 per cent. It therefore raised ₦22 billion and returned the remaining unallocated subscriptions to investors.
This allowed the airline to respond to demand while keeping the fundraising within its planned limit.
Meristem Capital Limited, the lead issuing house, described the transaction as the first commercial paper issuance by an airline in Nigeria.
Investors included asset managers, insurance companies and high-net-worth individuals.
Their participation gave the offering a broad investor base and showed that aviation companies can seek funding through Nigeria’s debt market.
United Nigeria Airlines’ Managing Director, Mazi Osita Okonkwo, said the demand reflected confidence in the airline’s business model, financial performance and growth plans.
He added that the company would use the proceeds to support fleet expansion and operations.
The airline thanked investors and said it planned to maintain engagement with the investment community as it pursues further capital market programmes.
The commercial paper forms the first tranche of a ₦100 billion programme. It came in two series, with repayment periods of 270 days and 364 days.
These periods give investors different maturity options and provide the airline with short-term funding.
Commercial paper is a debt instrument companies use to raise money for working capital and other business needs.
Unlike selling shares, it does not transfer ownership. The issuer must repay the borrowed amount under agreed terms.
The transaction received credit ratings from two agencies. Agusto & Co. assigned the airline an A3 short-term rating and a BBB- long-term rating, with a stable outlook. DataPro assigned ratings of A1 for the short term and BBB for the long term.
These assessments give investors information about the airline’s credit profile. However, ratings do not guarantee repayment or remove investment risks.
The fundraising follows reported growth in the airline’s financial performance. United Nigeria Airlines’ revenue rose from ₦10.3 billion in 2021 to ₦90.8 billion in 2025.
Its profit after tax also increased from ₦1.3 billion to ₦23.8 billion over the same period.
In addition, the airline reported revenue of ₦95.6 billion in the first half of 2026. These figures formed part of the financial information it presented ahead of the issuance.
The airline also reported a stronger August performance. Its turnover increased to ₦19.4 billion from ₦14.1 billion in July, while it recorded a net profit of ₦1.2 billion in August.
These figures show revenue growth, although monthly results do not establish how the company will perform over the full year.
The airline must sustain revenue, manage costs and generate enough cash to meet its repayment obligations.
United Nigeria Airlines plans to use the new funding for fleet development and operating needs.
These priorities matter in an industry where aircraft acquisition, leasing, fuel, maintenance, insurance and spare parts require substantial spending.
Many of these expenses are linked to foreign currencies. As a result, exchange-rate movements and access to foreign currency can affect airline costs, even when carriers earn much of their income in naira.
The airline operates 10 aircraft, including Embraer ERJ-145s, Boeing 737-800s, Embraer E190s and CRJ900s, according to information released ahead of the fundraising. It previously indicated plans to add six aircraft before the end of 2026.
The commercial paper proceeds could support its wider expansion plans, but the issuance does not confirm that aircraft purchases or deliveries have been completed.
United Nigeria Airlines serves 14 destinations across Nigeria and Ghana and is working to increase its regional network.
It has received approvals to operate as a flag carrier to six international destinations. However, approvals do not mean flights to all those destinations have started.
The airline must complete the required operational, commercial and regulatory arrangements before launching additional services.
The carrier has also taken steps to improve its international reach. In 2026, it signed the International Air Transport Association’s Multilateral Interline Traffic Agreement, which can help it establish connections with other participating airlines.
It also secured global distribution system agreements with Amadeus and Sabre.
These systems allow travel agents in different markets to access its ticket inventory and can improve its visibility among international customers.
The ₦22 billion fundraising could have implications for Nigeria’s aviation industry. Airlines often face high operating costs and limited access to affordable long-term finance.
Commercial paper offers another channel for companies that can attract investors and meet debt-market requirements.
If the airline repays investors on schedule, the transaction may encourage further interest in aviation-related debt offerings.
However, commercial paper is not free funding. United Nigeria Airlines must repay the money within the agreed 270-day and 364-day periods, alongside applicable financing costs.
The company will need to manage cash flow while funding daily operations and expansion.
It must also balance short-term repayment commitments with the longer-term costs of adding aircraft and routes.
The debut issuance is significant, but its lasting value will depend on how effectively the airline uses the proceeds.
The ₦22 billion gives United Nigeria Airlines capital as it seeks to expand its fleet, strengthen operations and grow beyond its current network.
Investors will watch its financial performance and repayment capacity. For the sector, the transaction shows how airlines may use Nigeria’s capital market to support growth.
