What Country Risk Status Did To Nigerian Airlines, By Onyema
The Chairman of Air Peace Limited, Dr. Allen Onyema has highlighted the impact of Nigeria’s country risk status on the local airlines over the years.
Speaking during the panel session at the 29th Annual Conference of League of Airport & Aviation Correspondents (LAAC) held in Lagos with the theme, “Aviation Financing in Nigeria: The Risks, Opportunities and Prospects”, Onyema said: “They tell you that your country is so unsafe. Yet, they come here. They tell you that the country is this, that, and paint us black and blue and raise the premium for insurance. The premium the Nigerian airline pays on one aircraft is what is used to insure five or six aircraft outside Nigeria. Yet, we expect these airlines to survive.”
Onyema said stigmatization of Nigeria has affected amount of insurance premiums, adding that “all it takes for you to go to jail abroad is for somebody to shout, this is Nigeria. Oh! he was one that committed a crime; and everybody believes. Your country is stigmatized for the wrong reasons and because of that, it is affecting aviation too. It is affecting the amount of money we pay on insurance.”
He said: “Insurance is one of them. It is not the airlines now, it is country risk. It is called country risk. They say Nigeria is unsafe and because of that, they raise the bar for premiums. So, we pay a lot of premiums just to insure one aircraft. We pay millions of dollars every year on this. It does not happen anywhere. The Vice President of IATA the other time came to Nigeria, visited Nigeria, and we were discussing, and we showed him our books. He screamed.
He said that in Kuwait, what we use on one aircraft could insure about seven. So, you see, you have to give it to the Nigerian airlines. We are not against having partnerships. We are not against having and belonging to alliances but I tell you, over the years, it is now that the government of Nigeria is telling the international community that look, we have to support our own. We have to grow our own. Maybe certain things will change,” he said.
Onyema alleged “an unholy alliance” against Nigeria, saying “if you want to belong to these alliances, it is not easy to go to them as a group. Yes, Emirates signed on Air Peace, but can Air Peace go to Star Alliance or Oneworld and get enrolled easily and immediately? I leave that to you. Now that the government of Nigeria has stepped out, maybe some of these things will come our way. It is not as if the Nigerian airlines don’t want to alliances. We want to. What we are doing in the time being is to select individual airlines and sign alliances with them, like we have done with Emirates. They came for us, and we signed up with them.”
He further said: “We can convince you. We did India. We are flying Mumbai. I never for one day, carried one passenger from the West Coast or from Central Africa when we fly because of this. So, we depended on only Nigerian passengers going from here to Mumbai. That was the reason why your rivals outside Nigeria, are converting people from everywhere in Africa and pushing them. Air Peace has paid the price for this country whether we like it or not. We continued doing India because I knew the trap set for this airline. If we had stopped India abruptly, we would not be in London today. The powers that be at that time were waiting for us, to use it as an example. Oh! They asked for India. We gave them India. They started India within two weeks, they stopped. We lost 12.3 billion in one year in India. I was carrying 50 passengers on a B777 that we could carry 360 people. We were carrying 50 passengers. We continued doing it.
Toyin Olajide (my COO) wanted to pull out. I said no. Remain there. This is a trap. She said, Sir, we cannot do Asian countries without getting passengers from these West African countries and pushing them. I said, if we stop it, you will never get London. Let us sacrifice this for London. That was exactly what we did.”
“Like I said out there, what is used for insuring eight planes outside Nigeria is what we use for insuring only one aircraft because they tell you that Nigeria is unsafe and it is a lie. This is a very beautiful country. Every country has its own share of stupidity and foolishness. It is not limited to Nigeria but they do it to us.
The government is doing something about it now. The premium to pay on insurance can change. It will help the bottom lines of the airlines,” he said.
Onyema frowned at comparing defunct Nigeria Airways performance with current Nigeria local airlines. He said: “Give it to Nigerian airlines. We cannot look ourselves in the face and say that Nigerian Airways was actually a success. Nigerian Airways depended on the budget of this country for everything they did. They were buying planes through budget. They were budgeting for salaries. They bought the entire Government Reservation Area (GRA). Let us call a spade a spade; and don’t take us backwards.”
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