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25% Interest rate, high insurance premium killing Nigerian airlines – NCAA

The Director-General of Civil Aviation (DGCA), Capt. Musa Nuhu highlighted the formidable challenges facing Nigerian airlines in a strained economic environment.

He emphasized the significant burdens posed by the 25% interest rate on loans and exorbitant insurance premiums for aircraft.

Speaking with Naijaonpoint in Lagos, Nuhu underscored the impact of these high operational costs, making it difficult for the country’s airlines to compete with counterparts in regions like Europe and America, where loans feature single-digit interest rates and aircraft insurance premiums are considerably lower.

He, however, said that the airline could not operate in isolation of the economy.

Nuhu also emphasised that the aviation agencies would try all within their power to reduce the burdens on the airlines by ensuring flexibility in their operations.

He explained that in a bid to ease the burden on the operating airlines, the apex aviation agency gave the airlines a leeway of quarterly insurance premiums on aircraft, but said it ensured the insurance cover was adequate for the risk.

According to him, the NCAA also signed a Memorandum of Understanding (MoU) with some of the debtor airlines on how they could repay their outstanding debts with ease without crippling their operations.

He explained that some of these attempts by the NCAA had gone a long way to keep the airlines in business, while also boosting the nation’s Gross Domestic Product (GDP).

Nuhu further emphasised that for the Single African Air Transport Market (SAATM) to have the desired impact, the African countries needed to take a cue from the European Union Aviation Safety Agency (EASA) by harmonising their regulations.

He insisted that without harmonisation, the effort of the African Civil Aviation Commission (AFCAC) would not yield the expected result.