Minister of Aviation and Aerospace Development, Festus Keyamo, has bemoaned the inability of numerous insurance companies in the country to provide coverage for a significant number of the aircrafts in the fleet of Nigerian airlines.
The Minister disclosed to pressmen in a summit in Lagos recently, stating that the lack of capacity and the high premiums by the insurance firms had also contributed to the hike in airfares, according to The Punch.
He revealed that the National Insurance Commission’s new rule requires all risks to be placed in the local market in order to support our local insurance providers.
He also said that this rule can be slightly bent in order to provide lessors with the assurance that they can place the risk in the international market and allow operators to bring their aircraft in.
Keyamo said that if an airline purchases an aircraft, it is an international requirement that it has to be insured, but no insurance company can do that in Nigeria.
He further said that many lessors are not operating in Nigeria because of insurance, a situation he said was hurting Nigeria’s businesses.
“Keyamo said, “But then, I apologise to say that most of them don’t have the capacity. So when you give them. they go and reassure again and that is a double amount for them too. That is why you are seeing a rise in the cost of tickets. The cost is too much. That is what translated to these high fares, and ticket prices we are seeing.
“So, we apologise to Nigerians, but then, we have a lot to do so that the prices will come down.”
He added that many domestic airlines had failed to maintain operations during the previous forty years, going bankrupt, and in certain situations, obtaining Air Operating Certificates but never starting operations.
He maintained that this trend highlights broader general issues facing the industry, such as operational inefficiency, financial instability, and regulatory difficulties.
The Minister inferred that the inability of the airlines to remain viable underscores the urgent need for comprehensive reforms to ensure the long-term health and sustainability of Nigeria’s aviation industry.
“For so many years we have had a lot of high mortality rates in the aviation industry, in terms of airlines coming and going under with very high mortality. I think more than 100 airlines have come and gone under in the last 40, or 50 years. We have had some AOC holders who never came at all. They have AOC, but they never want to come at all.
“We need to enhance their capacities. In the absence of a national carrier, in the absence of our airlines, aviation, then we should have flag carriers within the aviation who will make us proud. And we will service our reciprocal rights under all the different BASAs that we have.”
