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The Managing Director of Arik Air, Chris Ndulue, has said the airline plans to raise up to $1 billion through a private placement next year and an Initial Public Offering (IPO) in Lagos and London, according to a Reuters report on Friday.

Ndulue said the airline will tap the markets, rather than use internally generated cash or debt, to add more international routes as a strategy to earn more foreign exchange amidst an economic slowdown in Nigeria. According to the Managing Director of Arik Air, the airline has appointed advisers for the private placement and possible IPO in Lagos, with a secondary listing in London.

"What we plan to do is first a private placement which will bring in a few new shareholders, then one year or 18 months down the line we can do an initial public offer," Ndulue said. "We are looking at something in the neighbourhood of $1 billion for both private placement and IPO."

As part of its expansion plans, Ndulue said the airline aims to fly daily to New York, up from three times per week, and begin flights to Rome and Paris within the next 18 to 24 months.

Airlines operating in Nigeria have been affected by the country’s lingering foreign exchange crisis and fuel shortages. The FX scarcity has made it increasingly challenging for Nigerian airlines to conduct regular aircraft maintenance checks. Aero Contractors, one of the largest Nigerian carriers, suspended operations in August due to the harsh operating environment.

Foreign airlines have also been affected by the current challenges as they face difficulties repatriating ticket revenues. Earlier this week, Emirates Airlines and Kenya Airways suspended flights to Abuja. United Airlines, a major U.S. airline, and Iberia, Spain’s leading airline, cancelled their Nigeria routes earlier this year.

"The biggest problem now is the foreign exchange issues,” Ndulue said. “A lot of things are imported, a lot of services are imported we depend so much on foreign exchange which means that our costs have increased, in some cases more than doubled.”

Founded in 2002, Arik Air is reputed to be the largest airline in West and Central Africa, flying to over 130 destinations daily. The Nigerian carrier has 28 aircrafts in its fleet.