MMIA INFERNO: Many airports not insured, aviation, insurance experts lament

2026-03-14 - 00:46

•Task govt on fire insurance By Dickson Omobola Following the recent fire incident at the Murtala Muhammed International Airport, MMIA, Lagos, aviation and insurance experts have urged federal and state governments to ensure that airports across the country are adequately insured, lamenting that many are not insured. While Wikipedia states that Nigeria has 32 airports, 26 of which are operated by the Federal Airports Authority of Nigeria, FAAN, the agency recently said 22 airports are under its management. However, the experts told Saturday Vanguard that the absence of comprehensive insurance coverage for these airports could expose government to huge financial losses and compensation claims in the event of major disasters. They shared their views days after the inferno led to the complete destruction of the meteorological and air-to-ground communication equipment at MMIA’s Old Terminal. While statutory regulatory requirements should mandate airports to have a comprehensive insurance cover, an aviation analyst, Grp Capt John Ojikutu, retd, told Saturday Vanguard that it was not the case in the country. According to him, earlier provisions of the Nigerian Civil Aviation Regulations required international airports to maintain insurance coverage of about $250 million, while domestic airports were expected to carry coverage of around $100 million. Challenge Ojikutu, who challenged FAAN to clarify the insurance status of the airports it manages, said: “The regulations that came out in 2012 and were reviewed in 2022, made provision for our international airports to be insured $250 million. In the new regulation, the insurance is not there. Whose fault? I will hold the Nigerian Civil Aviation Authority, NCAA, responsible. “What FAAN should do now is to come out and tell the public that they have insurance. If they do not, those who might have lost equipment in the inferno at the Lagos International Airport should be able to sue them.” Economic loss Sharing his thoughts with Saturday Vanguard, an insurance practitioner, Aluor Stephen, said while insuring an airport was not difficult in other climes, government has not shown the will power to do so in the country. Stephen warned that an uninsured airport could result in huge economic loss for government and people who benefit directly or indirectly from the facility when a major disaster occurs. He said: “In all my years of experience, I have never seen insurance covering airports (in Nigeria). As an airline operator, if you do not have any insurance, you cannot fly. For you to run an aircraft and for it to take off from the ground, you must have insurance. But I have not seen or heard of any insurance that they have taken for the airport itself. Implications “An airport is a building like every other normal building. There is no specific equipment on the airport that cannot be insured. And the pricing for such equipment is not such that it’s going to be different from whatever pricing you have for all risk. “The furniture, the equipment, even the navigation equipment at the airport where the control towers are, is the same equipment like you have plants and machinery used in other industries. They can be insured under normal fire and machinery breakdown policies. “The impact of an uninsured airport would be huge financially, especially for government. Government would have to start allocating large sums of money to rebuild such infrastructure. Those who do business at the facility could also be forced out of business.” Meanwhile, an Associate Professor of Insurance at the Lagos State University, Dr Olufemi Abbas, said the implications of not insuring an airport could be catastrophic. Abbas, in a chat with Saturday Vanguard, said: “When you look at insurance, the premium paid by the insured is very small compared to the risk when it does occur. The implication is very straightforward. It is going to affect businesses. There will be loss of revenue. It will also affect third parties. There can be third-party claims. For example, if I have my luggage around that area, and it’s affected by a fire, of course, I have the right to make claims because the cause of that fire was not due to my own negligence.” Value He said insuring an airport involves assessing the value of the facility and the various risks it is exposed to. He said: “Like any other building, there are several risks associated with such assets. There could be fire risk, burglary risk, theft or destruction of property. Insuring an airport involves identifying the risk exposures and placing them under appropriate insurance cover. “The process is called underwriting. Are we talking about fire risk? Burglary risk? Third-party liability? These risks determine what exactly should be insured. So, we cannot simply say we want to insure an airport. We must first identify the risks it is exposed to and then insure them individually or collectively. “While I may not categorically affirm whether our airports are insured because, one, I do not work with FAAN, I know that as a responsible organisation, as a responsible nation and judging from the risk exposure of airports, I am convinced that our airports, especially the international airports, will or must be insured. Now, what I may not be able to say practically is the kind of insurance that they have, or the kind of risk exposure that they are insuring.” Efforts by Saturday Vanguard to contact the Director of Public Affairs and Consumer Protection of FAAN, Mr Henry Agbebire, to clarify the insurance status of FAAN-managed airports were unsuccessful. He did not take calls or respond to messages as of the time of filing this report.