New Telegraph

IATA: Aviation Loan Interest, Premium in Nigeria Highest in the World

…Carriers Set Up to Fail From Start

The International Air Transport Association (IATA) said that with 25 per cent interest on loans, which it tagged ‘ridiculous,’ high airport taxes and insurance premiums that is six times more than anywhere in the world would do incalculable damage to aviation in Nigeria. IATA’s Regional Vice President Africa & Middle East, Kamil Al-Awadhi, at a media presentation with African journalists at the IATA Global Media Day in Geneva, Switzerland on Thursday, also bemoaned the ranking of two Nigerian airports emerging as the most expensive in the world including jet fuel, which is considered costly and higher than elsewhere in the world.

He disclosed that the country’s carriers were set up to fail because of the huge challenges they face from the outset because of the many challenges stacked again. Some of these challenges have seen more than 60 air- lines go into extinction in the last 30 years as many of them begin to show signs of weakness a few years after they are set up and eventually give way. Virtually all the country’s carriers are wobbling and show signs of threat to their existence as many of the encumbrances highlighted by the IATA chief have conspired to make things difficult for the carriers.

Al-Awadhi stated that any airline in Nigeria operating outside of Nigeria has a cheaper operating cost and better prices than Nigerian airlines, further highlighting why it is very difficult for African airlines in general to make a profit. “Every airline has its challenges and it depends on where it operates. To answer this question, I will use Nigeria as an example. Nigeria has two most expensive airports; their fuel is higher than elsewhere in the world, and insurance is six times more expensive than anywhere else in the world. “The interest on loans is 25%. It is ridiculous.

It is the highest interest I have ever seen. When you set up these airlines, you are already disadvantaged. Any IATA: Aviation loan interest, premium in Nigeria highest in the world FG pays UK firm $44 per IPPIS account –ASUU CONTINUED FROM PAGE 1 Director of Defence Media Operations, Maj-Gen Edward Buba (middle), and other senior officers, observing a one-minute silence for victims of the recent Kaduna bombing incident and others, during a news conference on operations conducted by the Armed Forces in Abuja…yesterday airline in Nigeria operating outside of Nigeria has a cheaper operating cost and better prices than Nigerian airlines.

You can see why it is difficult for African air- lines to make profit. “IATA is identifying why these costs are high and we are trying to tackle them one by one by seeing how they can reduce the costs. We are expecting that the operating costs of the African airlines will be lowered and they can become profitable,” said Al-Awadhi. IATA is identifying why these costs are high and we are trying to tackle them one by one by seeing how they can reduce the costs, hoping that the operating costs of the African air- lines will be lowered and they can become profitable.

Al-Awahdi’s view on high insurance premiums for Nigerian carriers was recently corroborated by the chairman of Air Peace Airlines, Mr. Allen Onyema who lamented that despite the highest safety standards implemented in the aviation industry, Nigerian operators pay the highest insurance premium in the world. New Telegraph’s investigations show that while Nigerian airlines pay between 10 percent and 12 percent of the value of an aircraft to insure it, airlines operating in Ghana, South Africa, and other African countries pay 2-3 per cent. Airlines operating in Europe and the United States pay between 0.5 per cent and one per cent to insure the same aircraft.

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