‘Why African Airlines Pay Higher Insurance Premium’

Chinedu Eze

The Managing Director, Ethiopia Airlines International Operations, Mr. Esayas WoldeMariam has explained why African airlines pay higher insurance premium than their counterparts in other parts of the world, especially Europe, the Americas and others parts of Asia.

WoldeMariam attributed the high insurance premium to low capacity of most airlines in the region and the inability to build a high standard of safety among the operators in the region.

“Insurance companies are always there assessing their own risk, so risk assessment is based on the past experiences, safety standard and what have you. So, for any African operator to have a palatable insurance expense, we Africans need to build our capability of safety records by way of safety assessment, safety avoidance, accident predictions and our aviation facilities and our safety equipment, which are expected to be of world standard.

“Once African airlines are able to achieve these standards, then insurance companies will be comfortable to cover aircraft with acceptable insurance premium and that is exactly what Ethiopian Airlines is doing. This is because the safety area of aviation is over regulated. There are Safety Audit Offering Airlines (SAOA), EASA (European Aviation Safety Agency), the US Federal Aviation Administration (FAA) and the International Civil Aviation Organisation (ICAO), which are regulating safety of flight operations,” he said.
WoldeMariam said all these agencies come every year to Ethiopia to audit the airline.

“They review our facilities and renew our safety licenses every year. And that does not come easily because we have to live safety every day. It is not only for the audit purpose which we conduct once in a year but we just have to live it. So it all boils down to meeting the safety requirements because aviation is something very, very safety orientated. Because once the aircraft leaves the ground it needs to land back safely with all the souls it is carrying. So it is for a purpose that safety is being given a big emphasis. Therefore, insurance evaluation depends on our safety capabilities and safety records, the better it is, the lower we pay. So all what we need to do is safety oversight, trainings and our aviation academy gives a lot of training as far as aviation safety and cargo logistic are concerned especially for African students,” he said.

He added that the airline has discounted price for African students from everywhere in Africa in its aviation academy, noting that the airline has more aviation professionals who trained in the school.

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