Investigation by NigerianFLIGHTDECK reveals that there may be exposure in the industry regarding airside safety following documents revealing corner cutting in payment of aviation insurance.
Our reporter learnt from a credible source that the Nigerian Aviation Handling Company ( NAHCO) is currently in contract with AHS Nigeria having leased under-insured Ground Services Equipment ( GSE) at N22,000,000 monthly for all its 30 GSEs operating in Lagos and Abuja
Equipment like tractors, belt loaders, motorised stairs, toilet bowsers; push backs and ground power units, air start units and baggage carts situated in both Lagos and Abuja are operating everyday on the airside in Lagos and Abuja and are putting NAHCO and non NAHCO airline customers at risk with insurance for all of these equipment valued at N1,000,000 only annually.
NigerianFLIGHTDECK is unaware at this point if NAHCO is or not aware of the lack of adequate insurance cover for the equipment, however, our reporter is aware, according to the contract sited namely: Fixed Term Equipment Rental between Nigeria Aviation Handling Company ( NAHCO) ans Aviation Handling Services Nigeria ( AHS) that AHS is in charge of maintaining the insurance policy of the equipment
Our correspondent further learnt that AHS did a Comprehensive Insurance for all the equipment at N1,000,000 with Fengate Insurance Brokers Limited. Comprehensive insurance is like car insurance and is not adequate or specialist enough to cover aviation insurance which is required by regulation. All service providers at airports including ground handling services are required to have liability insurance regardless your function at the airport and these airside incidents/accidents have become frequent in Nigeria lately.
Specifics of insurance needed includes Aircraft Hull Insurance: This insurance policy provides compensation for losses due to physical damage to the aircraft. It can be In-flight Insurance :This provides coverage against damage during flight or ground operations or Ground risk Insurance – This provides coverage for an aircraft when it is not in motion e.g., vandalism, theft, fire collision etc.
Clause 12 in the contract between the parties on Insurance, gleaned by our reporter states that,”AHS shall effect and maintain throughout the continuance of This Agreement, insurance policy with insurers of good repute.
However, under 13.1 of the contract dealing with Indemnity, “NAHCO agrees to indemnify and hold AHS, its subsidiaries, affiliates,and respective officers, agents, partners, and employees harmless from any loss, liability, demand, claim, or legal proceedings brought kr threatened, including expenses suffered or incurred arising out of NAHCO’s use of the equipment, and the functionality of the equipment.
While, 13.2 states that: “Losses, liability, demand, claim, or legal proceedings brought or threatened, including expenses suffered or incurred arising from AHS’s negligence and wilful misrepresentation, are excluded from13.1 above.
On how the equipment came to NAHCO, our reporter learnt from a source that AHS Group made a deal with Precision Handling Company ( PAHCOL) to bring ground handling services to Nigeria on a 50-50 basis for the international and local partners but somewhere along the line the parties fell out. The PAHCOL shareholders it was learnt, allegedly, did not pay their 50%.
According to checks, a N1m insurance cover annually for 30 equipment is a far cry from what it takes to secure many operations around wide-bodied US$300,000,000 aircraft and many other aircraft and this puts safety, risk and the country’s name in jeopardy as these are basic norms in aviation and this cheating exposes the country again to further claims of being unsafe and unethical in its dealings.
According to information the AHS Group took AHS Nigeria to court over alleged wrong doings including fraudulent change of bank signatories, multiple other frauds and sundry issues.
It was further learnt that the equipment were procured to AHS Group and since the matter has been in contention in court for two years the equipment were all grounded and therefore they do not have legal right to the equipment and it is not theirs to lease to NAHCO.
However, the contract commenced on 1st September 2022, when one of the local shareholders Samuel Oluwole, approached NAHCO which agreed to lease the equipment that should be grounded because they were all under dispute.
NAHCO leased the equipment and have been operating them on the Abuja and Lagos airside with the high risk in a capital intensive and safety inclined industry.
The insurance cover for GSE does not cover anything in an industry that needs special insurance to handle risks.
This is a major breach of aviation regulatory requirements on ground handler insurance requirements. The figure for the proper aviation insurance that includes all airside activity and hull liability for this equipment should be in the region of seventy thousand dollars – corners have been cut and risk is being introduced to the airside operations in both Abuja and Lagos airports.
According to a source speaking under conditions of anonymity, “if there is an airside accident with any of those equipment, NAHCO would be exposed, the airport, in fact the whole country would be exposed negatively for allowing this failing to happen.
” An exposure like that would spell catastrophe for an already ailing aviation sector in Nigeria and attract the likes of the International Civil Aviation Organisation ( ICAO) for an on the spot assessment all because a few people are cutting corners. This may even affect the category 1 rating that Nigeria worked so hard to achieve. It may also mean that foreign carriers cease flying into Lagos and Abuja until the matter is resolved and proper insurance is put in place, the knock on effect could be a major blow to aviation in the country.