The world’s leading insurance company for airlines, Lloyds of London, has said she will blacklist Nigerian airlines.
Lloyds says she will do this since most Nigerian aircraft owners have refused to pay their insurance premiums.
Lloyds had dispatched a delegation to Nigeria last week to commercial operators and charter services to pay up or close up.
Here is the implication of the blacklisting: all domestic airlines in the country will be grounded.
The reason is because global rules posit that no aircraft should go airborne without an insurance cover.
The airline operators blamed the lack of payment to the current foreign exchange palaver.
Lloyds has already declared Nigeria a high-risk environment to do aviation business.
The aftermath of this is that additional international carriers might pull out of Nigeria.
“Lloyd’s market might have no other choice than to blacklist the country.
“It will surely have far-reaching consequences for the aviation industry and the country to a large extent.”
Lloyd’s market accounts for about 92% of reinsurance of airlines globally.
5% of those goes to the Russian market, Cyprus, and others, while a mere two% is retained locally worldwide.
The Nigerian market is grossly unable to effectively underwrite risks in aviation.
The risk in flying a single airplane has an exposure risk of $500million to cover hull, war, and third party liabilities.
Chairman of the Airline Operators of Nigeria (AON), Capt. Nogie Meggison confirmed the threat yesterday.
Nogie said, “The consequences will be dire for Nigeria’s economy”.
“Virtually 100% of the aircraft being operated in Nigeria are re-insured in Lloyd’s market.
“Nigeria can’t afford to be blacklisted because this will have very grave and deleterious consequences.
“The net result is that the entire domestic airlines will shut down since airplanes can’t be operated without being insured.”
“Even if we switch to a secondary market like Russia or China, it would still not help Nigeria.
“It will take days, coupled with the fact that premiums in the alternative markets will also have skyrocketed if Nigeria is blacklisted by Lloyds.”