‘High premium, multiple taxation threaten aviation’

Besides, he said that all the insurance firms in the country do not have the capacity it takes to insure a single airline, explaining that this formed the decision of operators to be insured outside the shores of the country.

He stated that all the odds are stacked against the carriers, adding that all over the world, insurance premium is low.

He said: “Insurance premium is very high in Nigeria. It is very high to insure one aircraft. All the odds are stacked against us. All over the world, insurance premium is next to nothing. All the insurance companies have no capacity to insure one aircraft.”

 

The airline chief disclosed that many foreign insurance firms are very reluctant to serve as insurers to Nigerian carriers because of default in renewing their premium or paying their premiums as at when due.

He noted that the huge insurance premium is impacting significantly on the cost of operations of airlines, which are transferred to consumers.

The Air Peace boss lamented: “It makes my heart bleed that Nigerian airlines registered in Nigeria have to pay twice or more than the amount foreign registered airlines pay on insurance premium.

“They say the reason why aircraft registered in Nigeria cost more is because Nigeria is considered high risk nation.

But we are not high risk. We have the Category One status; we wouldn’t get it if we are high risk. We are doing very well in terms of safety and, globally, we are regarded as safe. So why are we designated high risk back home?

“Ultimately, it is the consumers that suffer because the cost is transferred to them.”

Specialist insurance firm, Lloyd’s of London, had recently issued a warning to Nigerian airline operators that it may be forced to blacklist or downgrade them over their continued failure to fulfil their obligations of paying premiums regularly.

This was made known by Lloyd’s representatives who visited Nigeria recently.

They noted that the Nigerian market is a high-risk market, the volume of business from it has been small and the airline operators are not paying their premiums.

Consequently, they revealed that Lloyd’s might have no other choice than to blacklist the country and that the decision might have far-reaching consequences for the aviation industry and the country at large.

Onyema also asked the relevant aviation authorities to streamline all the over 33 charges to make it easier for them to pay.

He stated this while backing the payment of taxes and charges but called on the government to make it a win-win situation for both the operator and the various agencies.

“We support the payment of taxes to government but we are saying that they must be streamlined to make it easier for us to survive.

We are not against taxation but they must make it a win-win situation for all of us.”

He said: “There are so many charges levied against us. I think there are over 37 of them.

There are too many. It has really affected our operations and taken all the gains we are supposed to make.”

Nigerian carriers are faced with 34 charges allegedly levied and organisations that have made the nation’s aviation rank among the highest taxed in the world.

The charges and levies are apart from the five per cent Value Added Tax (VAT) paid into coffers of the Federal Government through the Federal Inland Revenue Services (FIRS).

The levies are divided into aeronautical and non-aeronautical revenues and are added to charges collected from passengers as air tickets.