AFRICAN aviation stakeholders yesterday in Johannesburg, South Africa said the crash of DANA Flight 0992 in Nigeria would engender a massive increase of the insurance premium for all Nigerian airlines.
At the 21 African Aviation’s “Air Finance” conference hosted by Nick Fadugba, Chief Executive Officer of African Aviation and former Secretary General of African Airlines Association in Johannesburg, South Africa, said the DANA crash would be factored into the future premium benchmarks for carriers in the country.
With the crash and expected payout of insurance claims, the overall insurance premium per aircraft and the entire fleet of DANA Air is expected to jump by 850 per cent, according to an aviation insurance expert who pleaded anonymity.
Other contributors on the panel included Zakhele Thwala, director of Civil Aviation South Africa, Captain Colin Jordaan, A340 pilot; John Somiolis, Clyde and Co; Steve Doyle, director Willis Aerospace, UK, Scort Smit, director Airborne Insurance South Africa.
They noted that the insurance premium of an airline also “shoots up as the potential liability of a carrier changes with the type of international passengers it carries.”
The panelists observed that in most African countries, “aviation is often not accorded priority until a major crash redirects everyone to critical roles they play.”
Aviation analyst, Francis Ayigbe told The Guardian that overall, the insurance premium paid by Nigerian airlines was high in view of the fact that international underwriters see Nigeria as a high risk end of the aviation market.
Speaking with The Guardian from Johannesburg, Fadugba noted that Africa airlines were doing well in general as strong members of the International Air Transport Association (IATA), the clearing house for global airlines.
On the flip side, however, Fadugba observed that the continent’s airlines lacked capacity for networking and opening themselves up to finance opportunities.
He said although African airlines were working hard at safety, competition might knock them off their strides.
Fadugba regretted that rather than collaborate, African airlines work hard to put one another out of business, even as they lack the strength to stave off massive competition from Europe, America and the Middle East.
According to him, said most airlines in West Africa, would need to work on their business model to make it in the larger, competitive space.
The former AFRAA scribe stated: “The principle of insurance is that the losses of a few will be paid by many. The age of an aircraft does not matter in insurance claims.”