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By Chinelo Obogo
The Chief Executive Officer of Overland Airways, Capt. Edward Boyo, has blamed the Federal Airports Authority of Nigeria’s (FAAN) failure to insure airports nationwide for the significant financial losses endured by airlines.
This comes as a former Managing Director of FAAN Capt. Rabiu Yadudu said that every facility operated by the agency is fully insured.
Yadudu said that when heft office in 2023, all premiums had been cleared and subsequent payments have been sustained.
“All FAAN airports, I can confirm to you, are fully insured. Up to the time I left, payments were made. After your call, I made further checks and received confirmation that FAAN is still paying. So, there is no issue with FAAN airports; it is the state airports that are questionable,” Yadudu said.
However, Boyo while speaking at the 5th CHINET Aviacargo Conference in Lagos with the theme, “The Emerging Synergy Between Aviation and Insurance Industry,” Boyo urged the National Insurance Commission (NAICOM) to work towards ensuring all airports in Nigeria are properly insured to stop the financial haemorrhage and other risks airlines bear.
He noted that the poor state of many airports has resulted in significant damage to aircraft, with airlines shouldering the financial burden. He expressed concern that aviation insurance has largely focused on airlines, passengers, and luggage, while the primary source of accidents, the airports themselves, has been largely ignored. He cited examples such as deteriorating runways, neglected operational areas, and inadequate wildlife management, which often lead to bird strikes and other safety hazards. He called on the federal government to ensure it meets its own responsibilities by enforcing compulsory insurance coverage for all airports.
Boyo said: “We are talking about insuring airlines, passengers, luggage and all but what is the insurance regulator doing about the principal causative factor? The inadequacy of their wildlife control, the inadequacy of their runway and so many other things.
They are not insured. It is like I am driving a car on the road, I have insurance and you are allowed to drive a car on the road without insurance.”
Responding to his concerns, NAICOM Commissioner, Olusegun Omosehin, who was represented by the Deputy Commissioner (Technical), Usman Jankara, said the Commission is ready to commence discussions on the compulsory insurance of Nigerian airports, saying that the new reforms gives the regulator the necessary authority to enforce such mandates.
He said the reason for compulsory insurance is to protect public interest and ensure that no one is left without financial compensation in the event of harm. He explained that while regulations have been in place, the Commission historically lacked the direct authority to enforce them, a situation that has now been rectified.
“As regulators, we work within the ambit of the law. The president has now imposed a reform to enforce composite insurance. Before now, those regulations were in place, but the authority to enforce wasn’t there,” he said.
The Managing Director of PeakThrust Insurance Brokers, Bimbo Onakomaiya, said there are about 370 registered aircraft in Nigeria, out of which 147 are with the Nigerian Air Force and about 170 domestic aircraft for business and pleasure.
She said that there are about 31 airports, about 92 airstreams and 13 scheduled commercial aircraft operators in Nigeria and growing, adding that there is no way Nigeria would have such a high number of fleets without having a very strong insurance backing for these aircraft.“And so there is a need to work hand-in-gloves with NAICOM. A better part of synergy is what we can expect. We cannot expect synergy if both of those industries are not strong. Because when we have synergy between different areas of both industries, we would have better results,” she said.
