At the just concluded 5th CHINET Aviacargo Conference in Lagos, it was revealed that over the years, Nigerian airports have not been insured, a development that negates international practices and has compelled airlines and other airport users to carry financial burdens that hitherto would have been borne by insurance, writes Chinedu Eze

One of the reasons why Nigeria is regarded as country with high risk by lessors and international insurance providers, is because the airports in Nigeria are considered insecure, since they are not covered by any insurance policies.

Also, reports about incidents that happened at the runways of Nigerian airports, such as the mentally derailed man that hung at the wing of aircraft at the Lagos airport, including villagers carving pathway near the runway at the Kaduna airport, and the Omagwa people spreading their farm produce at the runway at the Port Harcourt airport, give credence to the risky nature of Nigerian airports.

All these indicate that the airports managed by the Federal Airports Authority of Nigeria (FAAN) are porous and the most sensitive area, the airside, could be easily accessed. The poor insecurity at the airports justifies the decision to designate Nigeria as harsh operating environment. The airlines bear the burden of this designation because they pay higher premium in insuring their aircraft; almost three times what other airlines pay in Europe and the US. The mind-blowing information was revealed during the recently concluded 5th CHINET Aviacargo Conference, which held at the Eko Hotel and Suites, Lagos. 

Insecurity

At Nigerian airports, airlines spend money to protect their equipment and there have been incidents where unauthorised persons accessed aircraft parked at the ramp at the airports. Also, there have been cases where aircraft were damaged by poor facilities at the airports. There are many cases of bird strike at the take-off and landing at the airports, but when all these happen, the airlines carry the financial burden of repairing their equipment 100 per cent.

In March 2010, Arik Air aircraft, Boeing B737 was rammed by a taxi cab under its underbelly at Margaret Ekpo International Airport, Calabar. The incident caused significant damage to the plane and this occurred when a taxi driver drove past Nigeria Air Force gates and onto the tarmac, eventually stopping under the belly of the aircraft. The management of Arik Air insisted then that FAAN must pay for the repair of the aircraft but the management of the agency refused.

Also in January 2022, unknown persons accessed a Boeing B737-700 operated by Arik Air at the tarmac of the domestic terminal of the Murtala Muhammed International Airport, known as MMA2 and cannibalised the aircraft. The thieves took away Flight Management Computer (FMC), Pilot Static Cover and other sensitive parts from the aircraft. The aircraft was repaired and expenses was fully paid by the airline.

Importance of Insuring Airports

At the 5th CHINET Aviacargo Conference which was incorporated into the 21^stAkwaaba African Market meeting, the Managing Director of Overland Airways, one of oldest and successful airlines in Nigeria, Captain Edward Boyo, said: “We have to make sure that all airports in Nigeria take on insurance. Because a lot of jet aircraft are destroyed by airports’ inefficiencies in infrastructure. A lot of the accidents that happen at the airports are the direct consequence of the airports. This is because airports have traditionally been owned by the government. You find most of the government oppressing the people. We are talking about airline insurance, passengers’ insurance, luggage insurance.”

According to him, the inadequacy of their wildlife control, the inadequacy of their Derubberization, the inadequacy of their runway activity area hygiene, and so many other things, pose risk because the airports are not insured. It is like I am driving a car on the road, and I have insurance, while others are allowed to drive a car on the road without insurance.

Captain Boyo said airport insurance was removed from the part 18 of the Nigerian Civil Aviation Regulation (Nig-CARs) and urged the Nigeria Insurance Commission (NAICOM) to give serious consideration to making FAAN and other airport operators in Nigeria take on insurance.

However, the Managing Director and CEO of FAAN, Mrs. Olubunmi Kuku, said that the agency has insured all its airports.

“This issue was brought to my attention, but I am clarifying that all FGN airports managed by FAAN are insured with the insurance up to date. Derubberization and runway hygiene has been intact; records are available. The only area that I will agree is the habitation and community issues that have impacted the wildlife/bird strikes and we have been working closely with relevant stakeholders to control. The historical runway issues based on structural/engineering issues on some of the runways along with those exceeding their lifespan are being corrected gradually with complete overhauls and maintenance,” she said.

Insiders in Insurance sector have however, queried the type of insurance undertaken by FAAN when airlines are allowed to bear the full cost of damages to their aircraft at the airports. THISDAY learnt that airlines that have suffered bird strike at different airports in Nigeria with severe damage to their aircraft fully pay for the repair of those engines without any insurance company intervening on behalf of FAAN to defray the cost of repairs.

“FAAN as an institution is supposed to take three insurances, which include fire and burglary insurances for their assets; group life assurance for their workforce and public building insurance for third party liability. Does FAAN pay insurance for its airports? I can say yes and no in the sense that they could be paying group life insurance, which the federal government pays for MDAs. I can also say no; that they do not pay because they hardly undertake fire and burglary insurance, public building insurance for third party, which is one of the compulsory insurances but government agencies do not pay the insurance adequately. So, FAAN should explain which insurance policies it has undertaken,” an insurance insider told THISDAY.

Standard Practice

The former Managing Director of FAAN and currently the Managing Partner, Avialog Company Limited, Dr. Richard Aisuebeogun, who is an expert in airport management, told THISDAY that although the Airport Council International (ACI) did not make airport insurance a sine qua non for its membership and operation but it is standard practice that airports should be insured.

Aisuebeogn stated that the Airports Council International generally does not issue binding regulatory requirements like International Civil Aviation Organisation (ICAO) or Civil Aviation Authorities. Instead, ACI provides best practice guidance and industry standards to promote safety, security, and efficiency at the airports.

“In the same token, ACI encourages risk management and adequate insurance coverage as part of airport corporate or statutory governance. It does not specifically mandate that every airport serving scheduled airline operations must be insured,” he said.

Aisuebeogun pointed out the reasons why it is so and noted in terms of regulatory context, insurance requirements are usually enforced by the civil aviation authorities or regulatory agency and not ACI. For example, many States (countries) make it compulsory for airports or aerodrome to maintain liability and property insurance as part of their certification standards procedural requirements.

The Managing Partner of Avialog Company Limited also noted that even if insurance of airports is not compulsory under ACI, most international, regional, and domestic airlines, investors, and service providers, expect airports management agencies or authority, as in Nigeria’s case, to carry adequate liability and property insurance.

“It is both a risk management tool and evidence of financial responsibility,” he said.

He also noted that in terms of practical risk management, “airports are exposed to significant risks (aircraft accidents and incidents, passenger injury claims, damage to third parties, terrorism, natural disasters, etc.). Operating without insurance could expose both the airport operator and the State to disastrous or devastating financial loss.”

Credibility and Protection

Expressing his view on the issue, Aisuebeogun said: “Yes, insurance should be considered essential and non-negotiable for airports serving scheduled airline operations. Even if ACI does not make it compulsory, an airport that wants to be credible, safe, and sustainable in operations must and should be insured. It protects not only the airport authority but also airlines, passengers, and the wider aviation system. Airports providing services for scheduled airline operations must maintain adequate insurance coverage as a fundamental component of aviation safety, financial responsibility, and operational resilience.”

According to Aisuebeogun, “While the International Civil Aviation Organization does not prescribe specific insurance policies, its standards and recommended practices — particularly in Annex 14 (Aerodromes), Annex 19 (Safety Management), and Doc 9774 (Aerodrome Certification) establish the obligation for aerodrome operators to safeguard passengers, airlines, and third parties, and to demonstrate the financial capacity to manage liabilities. Insurance provides the practical mechanism for fulfilling these obligations,”

He also disclosed that the Airports Council International, through its policy handbook and risk management guidelines, emphasizes insurance as an essential tool for sustainable airport governance. ACI recommends liability, property, war/terrorism, business interruption, environmental, and even in recent times, cyber risk insurance as part of an airport’s comprehensive risk management framework.

“Given the inherent risks of aviation operations including accidents and incidents, infrastructure damage, terrorism, natural disasters, environmental hazards, and cyber threats, insurance is not only a prudent safeguard but also a strategic requirement for ensuring business continuity, maintaining stakeholder confidence, and protecting the traveling public. Therefore, I would say unequivocally that airports serving scheduled airline operations should regard insurance not as optional but as a core operational necessity in line with ICAO obligations and ACI best practices. 

Harsh Operating Environment

Speaking in the same vein, another expert in airport management who was General Manager, Cape Town International Airport, the Managing Director, FAAN and currently, the Executive Director/Chief Operating Officer, Ibom Air, George Uriesi, told THISDAY that airports usually have insurance cover because the airport has to insure itself against myriad of risks and also cover the risks of aircraft in airport related events that lead to the damage of the equipment.

“Airports have always taken insurance cover. The airport has to insure itself against a myriad of unquantifiable risks as it is a platform for so many interlocking activities and businesses. In other climes, the safer and more secure an airport is assessed to be by insurers, the better the insurance rates and premiums they are able to secure from insurers. With respect to aircraft, the airport’s insurance covers risks to the aircraft from airport related events. Aircraft owners will usually make claims from airports for damage to their aircraft that they associate with airport related causes. However, I do not know how this applies in Nigeria,” he said.

These observations by experts indicate that FAAN, not insuring its airports has contributed to the designation of Nigeria as high-risk country and has also contributed to Nigeria’s identity as a country with harsh business environment for airline operations.

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