Air Peace–NAHCO Incident Puts Insurance and Liability Under Spotlight

The recent disruption of Air Peace flight operations following damage to its newly acquired Embraer 195-E2 aircraft at the Murtala Muhammed International Airport (MMIA), Lagos, has sparked renewed debate over liability, insurance adequacy, and consumer protection within Nigeria’s aviation industry.

The incident, disclosed by the Director of Public Affairs and Consumer Protection at the Nigerian Civil Aviation Authority (NCAA), Mr. Michael Achimugu, occurred after passengers had boarded the aircraft when a conveyor belt operated by the Nigerian Aviation Handling Company (NAHCO) Plc struck the engine area, damaging the engine cowling. The aircraft was immediately withdrawn from service, forcing passengers to be deboarded and triggering delays and cancellations across nine scheduled flight sectors.

While passengers bore the immediate inconvenience, industry analysts say the deeper impact lies in the financial and reputational burden placed on airlines for disruptions outside their control.

According to Achimugu, airlines often shield service providers from public scrutiny by attributing such incidents to “technical or operational reasons.” However, under Part 19 of the NCAA Regulations 2023, airlines still face refund obligations, compensation claims, and regulatory scrutiny, even when the fault clearly lies with third-party operators.

Insurance and Economic Implications
Economist Celestine Ukpong described the incident as a textbook case of operational risk transfer and questioned whether Nigeria’s aviation insurance framework is sufficiently responsive to real-time disruptions.

“From an economic standpoint, aircraft ground damage exposes airlines to cascading losses—lost revenue, passenger compensation, aircraft leasing costs, and foreign exchange exposure for repairs,” Ukpong explained. “Even when insurance exists, delays in claims settlement can strain cash flow, especially for domestic carriers operating on thin margins.”

Ukpong added that while improved access to foreign exchange under President Bola Ahmed Tinubu’s administration eases the procurement of spare parts, it does not eliminate the opportunity cost of grounded aircraft or restore lost market confidence.
“The real economic loss is not just repair costs; it is the interruption to service delivery and erosion of consumer trust,” he said.

Accounting and Liability Perspective
Reacting from a financial accountability standpoint, Mr. Peter Adebayo, FCA, stressed that incidents involving ground handling equipment should clearly activate liability insurance held by service providers.
“In principle, this is a third-party liability issue,” Adebayo noted. “Ground handling companies are expected to carry comprehensive insurance to cover aircraft damage caused during ramp operations.

Where this insurance is adequate and efficiently triggered, airlines should not be left bearing costs that are not theirs.”
He, however, cautioned that disputes over fault attribution and policy exclusions often prolong settlement timelines, forcing airlines to absorb short-term losses.

“This is where regulatory oversight becomes critical,” Adebayo added. “Clear enforcement ensures that insurers, ground handlers, and airlines all meet their obligations without shifting the burden unfairly to operators or passengers.”

Passengers, Transparency and Regulation
The damaged Embraer E195-E2 aircraft was reportedly fully booked until January 15, 2026, amplifying the scale of disruption. Although Air Peace maintains standby aircraft, Achimugu confirmed that the available units were already deployed to manage similar incidents elsewhere and have lower seating capacities than the E2.

Achimugu emphasized that the NCAA is reviewing regulatory measures to impose stiffer sanctions on poorly trained ground handling personnel and service providers whose actions inflict reputational and financial damage on airlines.
“Airlines should not be held responsible for situations like this,” he stated, adding that passengers deserve honest and transparent explanations for disruptions rather than vague operational disclaimers.

Both Ukpong and Adebayo agreed that greater transparency would strengthen passenger confidence and improve industry accountability.
“When facts are clearly communicated, passengers are more likely to direct their expectations appropriately, and systemic weaknesses can be addressed,” Ukpong said.

Industry Outlook

The incident has renewed calls for stronger enforcement of insurance compliance, clearer liability demarcation, and enhanced training standards for ground handling operators. As Nigeria’s aviation sector continues to modernize with newer aircraft and expanding routes, stakeholders warn that risk management frameworks must evolve at the same pace.

For now, regulators, operators, insurers, and service providers face mounting pressure to ensure that behind-the-scenes failures do not continue to undermine public confidence in the nation’s aviation system.

Aviation experts analyze the Air Peace–NAHCO aircraft damage incident at Lagos airport, highlighting insurance liability, passenger rights, economic impact, and NCAA regulatory reforms shaping Nigeria’s aviation sector.

Experts weigh in on the Air Peace aircraft damage caused by ground handling equipment at Lagos airport, examining insurance liability, economic losses, passenger compensation, and NCAA regulatory actions.