Insecurity: Airlines Pay High Aircraft Insurance Premium

Boko Haram terror
threat, porous airports and high accident ratio have made Nigeria a volatile country and increased the premium for aircraft insurance that is estimated to cost operating airlines over N20 billion annually.
The outcome of this is that leasers are now reluctant to lease aircrafts to Nigerian airlines, aircraft maintenance costs more and loans from international financiers are obtained at higher interest rates.
Locally, the high cost of insurance, cost of aviation fuel and high charges by aviation agencies are passed to passengers leading to high fares, such that a one hour flight which cost about $80 (N13,000) now costs as much as $200 (N32,000) on the average in domestic travels.
A Senior  Executive Officer of a Nigerian airline  said what increases insurance premium in the country is mainly the operating environment, poor infrastructure, equipment on ground, operating procedure and frequency of air accidents in Nigeria.
Sources at a major airline hinted that it pays more than 70 per cent higher insurance premium than what obtains in another country like Europe or the United States of America (USA), paying for the same aircraft type manufactured in the same year and by the same company.
According to him, insurance graduates its risks assessment of the countries as high risk, medium  risk and low risk and what we pay on insurance is higher than what is paid in other parts of the world, and once you bring an aircraft into Nigeria its second hand value drops immediately because they believe that the aircraft is flying in a jungle where there is no maintenance facilities.