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Who’s fleecing Sosoliso, ADC crash victims’ families of full entitlements?

By  Kenneth Ehigiator
When will Sosoliso    and ADC Airlines pay compensation to families of victims of accidents involving their air planes?
The airliners of both carriers were involved in fatal crashes in 2005 and 2006, killing well over 200 passengers and crew. Both airlines do not appear to have answers to this poser, as they have severally failed to meet their obligations to their passengers who died in the crashes.

Although the nation’s aviation laws put each passenger’s entitlements at $100,000 in the event of a crash, managements of the two airlines have had to get involved in what in aviation parlance is known as non-disclosure negotiations.

It was learnt that ADC Airlines negotiated compensations raging from $35,000 to $65,000, depending on the negotiating powers of each families, while Sosoliso is said to have negotiated to pay each families some$10,000 which the families have rejected.

The question is, why have the airlines not been able to pay up years after the accidents?  The reason can be attributed to failure of regulation.  For Sosoliso, the airline’s plane involved in the crash at Port Harcourt International Airport had no insurance cover, yet it was allowed to fly the nation’s airspace.

The original owners of the MD-83 plane, Yugoslavia’s JAT Airlines, was said to be in the process of renewing the air plane’s insurance when Sosoliso approached it for a lease of the plane.  At the time the aircraft was leased, JAT had only paid a paltry of the premium to its insurer before it was approached by the Nigerian carrier, which promised to complete the process after the lease.

The aircraft was brought into the country, but the insurance process was never concluded before it crashed.
The dispensation at the Nigerian Civil Aviation Authority (NCAA) under the leadership of Mr. Fidelis Onyeyiri detected nothing apparently because the agency was in a state of inertia.

Consequently, at the time of the crash, that air plane was not covered by insurance.  That obviously explains why nothing had been heard of the airline’s insurers either here in  Nigeria or oversea.  In fact, Sosoliso had none.
Vanguard gathered that the regulatory agency’s current Director-General, Dr. Harold Demuren, had to insist that the airline trade off its remaining aircraft to be able to pay.  Unfortunately, the money realised from the sale is not enough to pay off families of the 109 persons who died in the crash.

At the point of application for Air Operators’ Certificate (AOC), one of the requirements applicants are expected to forward to the NCAA is evidence of an insurance cover.

Beside this, the airline, by the time it is granted an operating license, is expected to regularly pay premiums to its insurer.
This is to enable it offset the cost of compensation should there be any accident.  It is obvious in this case that the regulatory agency did not do enough oversight of Sosoliso and perhaps other airlines at the time.  Therefore, Sosoliso Airlines may not be able to pay the $100,000 compensation for families of victims of the crash.
For ADC Airlines, it was obvious that the airline had insurance cover with Crusader Insurance Plc, which had its oversea partner in Ingostrrakh of Russian.  Recent revelations at the stakeholders meeting convened by the senate committee on aviation indicated that ADC Airlines also paid its premiums up to date.

However, the airline’s mystery appears to have been compounded by Crusader Insurance who allegedly had informed Ingostrrakh that what was inscribed on the airline’s ticket as compensation payable in times of crash was $10,000, citing provisions of the 1953 aviation law, but this was countered by the Director-General of the NCAA, Dr. Harold Demuren, who said the country’s civil aviation law recognised $100,000 as compensation that must be paid when there is an accident.

This explained the reason the insurer had said it would only pay $10,000.  If Crusader Insurance was sure of its stance, why did it talk its client, ADC Airlines, into getting into non-disclosure negotiations with victims’ families?
Vanguard gathered that the insurer had got into negotiations with the families on behalf of the airline, agreeing to pay compensations arrived at by each family’s bargaining powers, while advising them not to disclose whatever sum was arrived at should not be disclosed to anyone, not even the regulatory agency.

It was learnt while some families negotiated as much as $65,000, some others bargained for as low as $35,000.  As things are at the moment, the two airlines appear to have given up hopes of paying the required compensation, even though the senate committee on aviation seems to be on top of the matter.

The NCAA has, itself, given up on the matter also, especially as it does not have the powers to drag the airlines to court.  The only thing the regulatory is now holding on to is the desire of the owners of the airlines to return to the business of flying. Demuren had said repeatedly that the airlines would not fly unless they pay full compensation to the families of victims.  The question is, what if the airlines’ owners resolve to shut down their businesses completely, what will become of the payment?

This is why stakeholders in the industry contend that the federal government remained the only entity that could take up the matter, with a view to perhaps prosecuting parties to the issue found wanting in any way.

Like Demuren noted in an interaction with journalists last year, some countries have had to resort to arresting and prosecuting  airline operators who default in payment of compensation to crash victims’ families.

One huge lesson that could be drawn from this development is the need for the NCAA to take more seriously its economic audit of airlines.

No doubt, the agency has, in the last three years done well in technical audit of airlines and other key service providers in the industry, but has done very little with economic audit, and this is the reason delay and even non-payment of salaries have become regular features of airline operations in Nigeria.

As it has often been noted, a pilot, aircraft engineers, whose salaries are not paid when due is an accident waiting to happen.

The NCAA may have learnt its lessons from Sosoliso and ADC Airlines’ experiences and should not allow it to recur in the future.

The only way to avert it is to intensify its economic oversight of airlines in the country, after all a clause in the Act that set up the agency empowers it to compel airlines to mandatorily open their books for audit.

That way, it is able to know what airlines are on a solid ground and could pay salaries, pay insurance premiums when due, maintain aircraft when due and pay charges for services rendered them by service providers.

The practice of airlines providing full insurance cover only for hull and not passengers on board the aircraft should be stopped.  Aviation is a global industry which has same regulations all over the world.

Ideally, an airline should provide insurance covers for both hull (aircraft) and passengers as well as third party in case of any accident.

But the situation in Nigeria is that airlines are more concerned about having their aircraft replaced in the event of a crash that what become of passengers who turn out being victims of such a crash.

This is an area the needs NCAA oversight, so that as airlines are getting a replacement for their crashed planes, families of victims are also getting full compensation for the loss of their loved ones.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.