By Fiscal Posts
Stakeholders in Nigeria’s aviation sector have decried the crippling effect of exorbitant insurance premiums imposed on local airlines, describing it as one of the biggest obstacles to the growth of the industry. They argue that Nigerian carriers are unfairly stigmatized on the international scene, forced to pay multiple times more to insure a single aircraft than their counterparts abroad.
Speaking at a recent event hosted b the League of Aviation and Airport Correspondents, LAAC, in Lagos, the chairman of Air Peace, Allen Onyema lamented that what a Nigerian airline pays as premium on just one aircraft is enough to cover up to six aircraft in other countries, insisting that the inflated premiums are not tied to the airlines themselves but to “country risk,” with insurers branding Nigeria as unsafe and consequently raising the bar.
Onyema said: “The situation is killing our bottom line,” one industry leader lamented, noting that millions of dollars are drained annually by local carriers just to insure their fleets. “This does not happen anywhere else. It is an unfair burden placed on Nigerian airlines simply because of how our country is perceived,” he quipped.
The disparity was highlighted when the Vice President of the International Air Transport Association (IATA) visited Nigeria and, upon seeing the books of some airlines, reportedly “screamed” in disbelief at the premiums being paid. In contrast, he said, what insures one Nigerian aircraft could cover about seven in Kuwait.
Onyema maintained that unless these structural barriers are addressed, no amount of financial injection into the industry will save Nigerian airlines from decline. He further warned that continued stigmatization of Nigeria as unsafe will keep fuelling excessive premiums and eroding the competitiveness of local carriers.
While welcoming partnerships and alliances with global players, industry voices say it is only now that the Nigerian government is beginning to challenge the international community on the need to support and grow local airlines. “If we are given the right infrastructure and a level playing field, believe me, Ethiopia and the rest will be history within 10 years,” Onyema concluded.