SEC boosts CMOs with new finance principles

By Favour Nnabugwu

The Securities and Exchange Commission, SEC, at weekend, said it has adopted the Nigerian Sustainable Finance Principles, NSFP, as developed by the Financial Services Regulation Coordinating Committee, FSRCC, for the capital market.

The Commission stated that the new principles would lead to a resilient, competitive and sustainable capital market.
This was contained in a statement released by the Commission in Abuja.

According to the regulator, the objectives of the guidelines on NSFP are to: Stimulate a resilient, competitive and sustainable capital market that promotes economic development and improves the quality of life for all; Improve corporate governance practices to ensure that the participants in the capital market operate in a transparent and sustainable manner; Nurture an environment that facilitates job creation and diversity, women empowerment, human rights protection, access to affordable capital market products by the economically less privileged and contribute to efforts aimed at reducing global warming and other environmental footprints resulting from our activities and those of our stakeholders.

The Commission said the guidelines and approach are principles based and therefore do not prescribe specific implementation requirements but however noted that these principles should be applied by each regulated entity in a manner that fits individual mandates, core values, and enterprise risk management framework.

SEC explained that reporting enhances companies’ accountability for the effects of their social impacts which in turn fosters social responsibility in organizations and therefore enhances trust, while facilitating shared values on which to build a more cohesive society, adding that “Consequently, regulated entities must report regularly on the extent to which they apply these principles.

Consequently, the adoption of financial sustainability principles and its reporting are vital steps towards achieving a sustainable global economy”.

SEC added: “The Nigerian Capital Market plays a major role in the industrialization and economic development of Nigeria.

However the pursuance of these key objectives involves activities that give rise to a range of challenges including air and water pollution, climate change, water and natural resource scarcity, environmental degradation, growing population density and poverty.

“These externalities and other social impacts affect not only businesses but also the communities where they operate. Sustainable finance principles are guidelines developed to help address the impact of these externalities, ensure long term economic growth while safeguarding the environment and society.

“The primary objective is to achieve a balance in the pursuit of economic prosperity while ensuring environmental protection and social development. To this end, the principles help create an economic, environmental and social organization that ensures and improves economic efficiency, prosperity, and sustained economic competitiveness while contributing to protecting and restoring ecological systems, enhancing cultural diversity and social well-being.

“In the financial services industry, there is an increasing realization that sustainable practices have a potential to save costs, grow revenues, reduce reputational and legal risks, as well as drive the development of human capital and improve access to finance”.

SEC continued: “In implementing these principles, regulated entities are expected to: Establish the standards for their organization and be committed to it: They are to set the pace for the integration of the Principles into their organizational culture, such that the Board and Management are committed to sustainable finance and ensuring successful implementation.

The entity’s commitment to the Principles should be demonstrated through policies and decisions and also ensure their supervised organizations do the same.
“They are also to establish sustainable operations approach by having a set of procedures that detail how Environmental, Social and Governance (ESG) and related issues are managed and aligned with existing internal decision-making processes

“Lastly, they are to ensure proper reporting: Regulated entities should ensure that appropriate reports are prepared detailing their progress and performance regarding their commitment to ESG guidelines”.
Regulated entities include Capital Market Operators, Trade Groups, Self-Regulated Organizations and Capital Trade Points.

By Favour Nnabugwu

 

Nigeria Accident Investigation Bureau, AIB has been given the mandate to lead the investigation into the cause of the Air Force Beechcraft 350 jet that killed the immediate past Chief of Army Staff, vLt General Ibrahim Attahiru.

This is the first time in recent past AIB is allowed to investigate a military plane crash

Disclosing this development yesterday, Mr Tunji Oketunbi, AIBGeneral Manager, Public Affairs stated,  “Nigerian Accident Investigation Bureau, AIB, has been mandated by the Nigerian Air Force (NAF) to lead the Investigation into the crash of a military aircraft that occurred on Friday in Kaduna, in which the Chief of Army Staff died.”

“The Flight Data Recorder (FDR) and the Cockpit Voice Recorder (CVR) from the accidented Beechcraft 350 aircraft have been recovered and investigation has commenced.”

“Investigators will download and analyse vital information contained in the recorders at the AIB-N’s world class Flight Safety Laboratory, in Abuja.

“The crash, which occurred on landing, claimed 11 lives including the Chief of Army Staff, Lt. Gen Ibrahim Attahiru, his aides, and the flight crew.”

“The mandate given to AIB-N is based on the Memorandum of Understanding (MOU) signed between the two agencies on July 1, 2020 covering areas of mutual assistance” Oketunbi revealed.

Global spending on blockchain to hit $19bn by 2024

By Favour Nnabugwu

 

Global spending on blockchain solutions is expected to soar by 188 percent and hit $19billion by 2024.

This is even as Blockchain is seen as one of the most important innovations to come out of the cryptocurrency boom.

The International Data Corporation (IDC)’s Worldwide Semiannual Blockchain Spending Guide had revealed that between 2017 and 2019, the global spending on blockchain solutions jumped from $950 million to $2.7bn.

Meanwhile, like all technology investments, spending on blockchain projects has also been affected by the COVID-19.

Nevertheless, global spending on blockchain solutions still surged by 66% year-over-year and hit $4.5bn in 2020. Statistics show this figure is expected to increase by $2.1bn in 2021 and then jump by another $12.4bn in the next three years.

The IDC report also revealed that cross-border payments and settlements were the largest individual blockchain use case, accounting for nearly 16% of the global blockchain technology market in 2021. Lot lineage and provenance ranked as the second-largest use case with a 10.7% market share this year. Trade finance and transaction settlements and asset and goods management follow with a 10% and 8.8% share, respectively.

The Number of B2B Cross-Border Transactions to Soar by 345% and Hit 1.2B by 2024

The 2021 Juniper Research revealed the number of B2B cross-border transactions finalized on the blockchain is expected to increase dramatically in the following years. Last year, there were 122 million B2B cross-border transactions worldwide. This figure is set to double and hit 280 million in 2021. By 2024, the number of transactions is forecast to soar by 345% to over 1.2 billion by 2024.

Statistics show that the Asian market accounts for 109 million or nearly 40% of total transactions in 2021. By 2025, the number of B2B cross-border transactions on the blockchain in the region is expected to grow seven times and hit 745 million.

Europe ranked as the second-leading region with 81.3 million transactions in 2021. This figure is forecast to rise to 466 million by 2025. As the third-leading region, North America is expected to witness almost a 550% growth in the next four years, with the number of B2B cross-border blockchain transactions surging from 39.2 million to 254.3 million.

Africa Specialty Risks to develop business hub in Nigeria, 5 other countries

By Favour Nnabugwu

 

Africa Specialty Risks (ASR) has launched a new reinsurer in Mauritius, from which it committed to establish business development hubs in Nigeria, and five other countries.

The other five countries comprise Morocco, Kenya, South Africa, Cote d’Ivoire and Egypt.

Reinsurer has been fully capitalised, though the amount has not been revealed, and secured an Insurance Manager licence from the Financial Services Commission in Mauritius.

The founders say the launch will look to fix the issue of a shortage of insurance capacity across Africa – a situation that has been made worse by the COVID-19 pandemic. Mauritius has ambitions of becoming the re/insurance hub for the African continent.

Mikir Shah, CEO of Africa Specialty Risks, said: “We have chosen to set up Africa Speciality Risks Reinsurer in Mauritius as we see it as a central hub for Africa. Mauritius has a naturally bilingual population, allowing us to operate effectively across the vast majority of African countries.

It has an educated population, making it an ideal reinsurance hub because there is an abundance of potential skills that can be developed further with training. It already has an established insurer presence expanding into the continent, and we believe that Mauritius has the capability to become the reinsurance hub for Africa.

“Mauritius will be one of our major operations and we are pleased to count on the support of the Mauritian Government and the FSC.

We are delighted to have both our Reinsurer and Insurance Manager licences in place as we prepare to establish our business on the ground. We will have underwriting, claims management, office support, compliance, accounting and business development functions in Mauritius. We will shortly be making further announcements regarding our plans for recruitment on the island.”

Souleymane Ba, a Partner at Helios Investment Partners, said: “We have identified a sustained lack of adequate insurance capacity across Africa, which has been exacerbated further by COVID-19 as global reinsurance providers focus on their home markets.

ASR has been established to address this gap by providing specialist risk mitigation products which companies and capital providers operating in Africa have found difficult to access to date. We are pleased that the Reinsurer is to be based in Mauritius, as a well-established hub for financial services and investments in Africa.”

The Minister of Financial Services and Good Governance, the Hon. Mahen Kumar Seeruttun, said: “Mauritius has all the right ingredients to become a reinsurance hub for Africa. Mauritius is a safe, sound and trusted jurisdiction, with a robust legal framework and a well-developed ecosystem for financial services, including insurance. Our jurisdiction is well recognised by investors and international bodies for its ease of doing business.

“Mauritius is also very well connected internationally and is part of the African Continental Free Trade Area (AfCFTA), which entered its implementation phase this year, and which is expected to boost intra-Africa trade and investment.

It is therefore very timely that Africa Specialty Risks has chosen to domicile its Reinsurer in Mauritius to provide additional choice and capacity to support the growing reinsurance needs of the African continent. I welcome this initiative as a key step forward in reinforcing the position of Mauritius as a reinsurance hub for Africa.

“As the pandemic spreads, the emerging risk of multiple lines of insurance exposed to COVID-19 also grows, leaving insurers, reinsurers, regulators and rating agencies with the daunting task of quantifying that exposure and estimating how it will be allocated between the primary insurance and reinsurance markets.

On the other hand, COVID-19 also represents an opportunity for established reinsurers and new entrants. It also signifies an opportunity to reaffirm the purpose of insurance: protecting people, communities and businesses from unexpected risk, while embracing rising societal concerns around sustainability and fairness.”

Beechcraft 350 Aircraft takeoff accidents crash twice in 3 months

By admin

On February 21, 2021 A Beechcraft 350 Super King Air crashed in Abuja, Nigeria killing 7 people.

Two deadly Beechcraft King Air accidents at the end of June 2019 helped propel aviation safety into one of its darkest periods on record.

The fact that both accidents occurred shortly after takeoff—and several recent similar events—might be cause for alarm for this popular twin turboprop, according to Per Second News

Nigeria’s Defence Headquarters on Friday said bad weather was also responsible for the crash of a Nigerian Air Force Beachcraft 350 aircraft at the Kaduna International Airport that killed 10 people including the Army Chief, General Ibrahim Attahiru.

Since October 2014 there have been at least five King Air accidents during takeoff or initial climb.

During each of these events, including the two most recent crashes, the pilot lost control of the aircraft shortly after takeoff. In four of these events, the aircraft wreckage hit structures on or near an airport.

The crash on Friday in Kaduna occurred close to the airport after takeoff also.

On June 30, 2019, nine days after an Hawaii crash involving a Beechcraft 350 aircraft, another King Air 350 collided with a hangar and terrain after takeoff from Addison Airport in Texas. Two pilots, one an ATP and the other commercial-rated, and eight passengers died. The Part 91 cross-country flight was planned to depart Addison and fly to St. Petersburg, Florida.

According to the preliminary report, the takeoff and departure of the airplane were captured by several video cameras, radar, and observed by witnesses. One witness stated that as the aircraft went down the runway, “it seemed quieter than normal and sounded like it didn’t have sufficient power to takeoff.”

COAS Air Crash: Pilot of ill-fated flight married two months ago, the only son of his parents

By Favour Nnabugwu

Co-pilot Flt. Lt Alfred Ayodeji Olufade, who died in the tragic incident, is survived by his new wife, who, according to relatives got married two months ago

Flt Lt Olufade

Chief of Army Staff, Lt.-Gen. Ibrahim Attahiru, died in the crash on Friday.

A tweet by the Nigerian Air Force confirmed that the air crash, involving a @NigAirForce aircraft, occurred near the Kaduna International Airport.

The Air Force spokesperson, Air Commodore Edward Gabkwet, in the tweet, said that the immediate cause of the crash was still being ascertained.

Friends, family members and associates of a Nigerian Air Force pilot, Flt Lt Alfred Ayodeji Olufade, are inconsolable at the moment as the young officer, who recently got married, died when a Beachcraft 350 aircraft crashed at the Kaduna International Airport on Friday.

Olufade and the newly appointed Chief of Army Staff, Lt. Gen. Ibrahim Attahiru, as well as nine other military personnel were onboard the jet when it crashed around 6pm on Friday. The 11 souls died in the tragic incident.

Friends and associates of Olufade have since taken to the social media to express raw grief over the sad demise of the officer.

A tweep, @Sir_KB, wrote, “My heart is in pain. I lost my friend. Flight Lt. AA Olufade. He got hitched months back and often teased me to get out of the bachelorhood. Rest well Freddy.”

@OvieNews said, “Rest in Peace Alfred. Flight Lt. AA Olufade just married two months ago. Our Heroes.”

Also, @SodyBar stated, “Olufade is a close associate. He got married February this year. We’re all disheartened!”

“We’re all saddened by his death. Everyone affiliated with Kuje seminary will surely miss him. May the Almighty grant you eternal rest,” @EmekaWilfred wrote

I need prayers, late pilot my only son – Grieving dad
by Punch News
George Olufade, the father of Flt Lt Alfred Olufade, the pilot of the ill-fated aircraft that killed 11 military officers, including the Chief of Army Staff, Lt. Gen. Ibrahim Attahiru, said only prayers could sustain him as George was his only son.
He also decried the state of military aircraft in the country and called on the authorities to overhaul the planes and focused on staff welfare.
The late George got married three months ago amid pomp and circumstance.
The grieving father said, “It is devastating. I just need prayers for strength. I pray that God should hold us because he was my only son. He was very intelligent, generous, extremely humble, and dedicated to his duty. He was a giver and a lover of Christ.
“He was in the seminary before he eventually got into the military school.
“He was the only Airforce officer in my state. He was a special child. He graduated as the youngest in his set. When he wanted to join the military, I encouraged him from the beginning to the end because he had passion for flying. I encouraged him and prayed for him.
“They should take care of their planes. Most of their planes are outdated and not properly taken care of. They stress their pilots, too. He just returned from Maiduguri and he had to fly again. They need to take care of their planes before they lose all their brilliant talents.”
Olufade added, “Each time he was flying, he would tell me and I would pray for him. But this last one, he didn’t tell me. But God knows better. It has not been my prayer holding him, but God that has been holding him. God gave me Ayodeji and He had taken him; may his soul rest in peace. If it is from God, glory be to Him. If it is from man, God will judge.”

Great Nigeria Insurance annuity rise by 8.9% in Q1 2021

.By Favour Nnabugwu

Great Nigeria Insurance Plc has announced that the underwriting firm recorded an impressive figure by significantly growing its Annuity portfolio to over N4.7 Billion in first quarter 2021 representing an increase of 8,9 percent over N52.5million recorded during the same period in 2020.

Speaking to newsmen in Lagos, the Managing Director, Mrs. Cecilia O. Osipitan explained that life annuity is a stream of periodic payments that commences at a specified date, which is either the normal retirement age or at 50 in the case of early retirement. This payment, she said, could either be monthly or quarterly depending on the retiree’s preference.

According to her,  “The benefits include the continuous flow of regular income for the retiree, insulation from the risks associated with the investment of lump sum benefits, structured management of resources and the transference of the risk of diminution in assets and possible failure of investments of retirees to insurance companies which are better equipped to manage such risks.

She further said, “Insurance remains the most reliable bedrock of our existence and cultivating the culture of insurance can never be over emphasized”. There is a need to call for a paradigm shift through effective sensitization of the insuring public as it is very important to imbibe the culture of getting appropriate insurance cover to protect our assets and lives in case of any eventuality”.

Osipitan reiterated the company’s unwavering commitment to creating value to both Shareholders and Stakeholders alike. In her words, “the path through achieving growth and sustaining same is not without its challenges but with the perseverance and doggedness of every member of staff, success is guaranteed”.

Also speaking, the Corporate Communications and Brand Manager, Oyinkansola Sobande mentioned that retirement should be the time to live that stress-free life after years of active engagement and not a time of financial difficulties. Annuity sets out to protect the future of retiree through guaranteed income for as long as they live.

Oyinkansola further elucidated that Annuity for Life Policy is a retirement instrument option for retiring employee. It is a contract that provides, in return for a Lump sum, a monthly or quarterly payment starting immediately after retirement and continuing for the rest of the retiree’s life. The contract is often purchased by retiring persons who want an income that is guaranteed to last for the rest of their lives, no matter how long that might be.

According to the management, “The drive to continue to uphold comprehensive growth strategy still forms the bedrock upon which the company is built; this is evident in the first quarter performance of the company’

Emirates’ newest airbus A380 entered service

By admin

 

Emirates’ newest Airbus A380 entered service earlier this week, doubling the number of premium economy seats offered by the Dubai-based airline.

The aircraft is one of two set to be delivered to the airline this year, with only four A380 deliveries outstanding.

A year ago, the Airbus A380 was practically non-existent in our skies. In the 12 months since the giant has slowly returned to service. Most jets remain on the ground, although Emirates is slowly removing its jets from an extended stay on the ground as it increases its network and capacity.

Dubai-based giant Emirates has wasted no time putting its latest aircraft into service. The carrier received 118th Airbus A380 from Airbus last Wednesday.  The Upon delivery, the aircraft flew to Dubai, arriving on May 13th. Here, it will have undergone an entry to service check.

With the aircraft getting the all-clear, it has joined 19 other active Airbus A380s in the Emirates fleet. On Tuesday, the aircraft operated its first passenger flight, heading to Paris and back. On Wednesday and Thursday, Emirates flew Frankfurt and back the marking the first time that the airline’s new premium economy cabin had been flown to the German aviation hub

Today, the aircraft was given a slightly shorter flight to operate. The giant departed Dubai International Airport (DXB) at 16:02 as flight EK2803. Cruising at an altitude of 40,000 feet, the aircraft is expected to arrive in its neighboring country at 18:12. After a turnaround in the Saudi Arabian city of Jeddah, the aircraft will return to its Dubai home.

Which Airbus A380 aircraft is Emirates currently flying?

According to ch-aviation.com, aside from A6-EVP, 19 other Emirates Airbus A380 aircraft are currently flying. The oldest of these is A6-EEU, with an age of 7.55 years, while the average age of the airline’s active A380s is 3.41 years old. This compares to an average age of 6.9 years across the entire fleet.

Of the airline’s 145 current Boeing 777 aircraft, 141 are currently active, with four stored according to ch-aviaiton.com’s fleet data. This means that the airline’s only option to add additional seats is to reactive further Airbus A380 aircraft. Emirates’ Airbus A380s count for 55% of the airline’s capacity, with 61,579 seats across the fleet. This compares to 48,522 seats on the Boeing 777 fleet

Emirates is set to take the last four Airbus A380s to be built over the next year. According to the current delivery plan, one more aircraft delivery is currently scheduled for 2021. The remaining three should join the airline in 2022  The A380 production line is set to be modified into an A320 family production line

Fueling the expansion of engineering insurance in Africa

By admin

Mirabilis is ready and equipped to respond to the insurance needs of Africa’s construction and engineering sector.

Innumerable reports inform us that two-thirds of Africa’s cities are yet to be built; that some US$100-billion of private and public funds are to be invested in new African city projects; and that rising urban growth rates translate into the need for homes for an additional 950-million people by 2050.

Also forthcoming is public infrastructure development that supports inter-continental trade and facilitates improvements to socio-economic conditions.

This bodes well for the construction and engineering industry, particularly in South Africa, which is one of the sectors hardest hit by the country’s economic decline and the Covid-19 pandemic.

Over the years the sector has also faced toughening market conditions and declining political and investment sentiment; and natural disasters that impact heavily on projects because of the unpredictability of, for example, weather and ground conditions.

The vulnerability of a project is, therefore, crucially dependent on how, and the depth to which, risks are insured. This responsibility falls to construction and engineering insurance underwriters, who not only need to be skilled in the underwriting of complicated insurance solutions but also have expertise in aspects of process, mechanical, electrical, building, civil, and structural engineering projects.

This is one of the reasons why Mirabilis, Santam’s construction and engineering underwriting business (which has a vast footprint spanning Africa, the Middle East, Central and Southeast Asia, and the Indian sub-continent) demands the adoption of professional global best practice standards.

Risks in this sector are difficult to quantify because construction and engineering insurance is highly specialised. No two risks are the same and similarly no two underwriters will underwrite in the same manner. But what is assured at Mirabilis, is that a minimum standard is applied. This is vital because there is pressure on an insurance broker to produce a policy timeously, sometimes within hours of the awarding of a project, and which must meet the contractual requirements of the project.

To underwrite complex risks involves the collection of vast amounts of information: including a proposal form, detailed scope of the project, summary of the Bill of Quantities, details of ground conditions, site drawings, and engineering method statements. Further considerations are the unique aspects of the project, which is when Mirabilis underwriters engage their industry skillsets, knowledge, and experience to ensure that additional information is sourced.

This information takes cognisance of the insured’s requirements, from whom full disclosure is required. If such disclosure is not provided at underwriting stage, it could lead to disputes at claim stage.

This is also not a simple under-writing effort. Construction and engineering processes are ever-changing, meaning that there is always new knowledge to be acquired, which is why Mirabilis regularly trains its underwriters and exposes them to new advances and challenges faced by contractors.

As such, Mirabilis has, in the past 15 years of its existence, built a network of localised and international credible affiliations, including Santam’s extensive network of partnerships such as Sanlam Pan Africa and Saham Finances, and has aligned with New Reinsurance Company Limited (NewRe), a Zurich-based reinsurer that has authorised Mirabilis to act as an agent to underwrite and accept, on NewRe’s paper, engineering classes of reinsurance business.

Mirabilis is optimistic for the near future for at least three reasons: the number of requests for quotations is increasing; the SA government intends to award R791-billion to infrastructure projects; and the private sector is stimulating new development. In readiness, Mirabilis has introduced an online quoting platform in SA to provide insurance brokers, at their convenience, with real-time underwriting feedback, quotations, and policy documents, and cater for the smaller Contractors’ All Risks insurance policies.

Caring for brokers is integral to Mirabilis’ success over the years. We have walked a long path with our brokers, helping and supporting them to grow. We keep them visible at all times, such as currently in the wake of the pandemic, where we are engaging them on a one-to-one basis.

Never before have the insurance needs of the African construction and engineering sector required more care, and our brokers can take comfort in knowing that Mirabilis is a brand that can be depended on with confidence.

How airlines navigate over, around conflict zones

By admin

Flying is statistically by far the safest means of transportation.

However, some parts of the world’s airspace are more precarious than others. From State-to-operator information and NOTAMs to concessions due to practicality, we take a look at what goes into route planning when conflicts need to be considered and what can happen when information is insufficient, or wires get crossed.

Last week, Israel redirected flights from Tel Aviv’s Ben Gurion Airport due to the escalating conflict with Hamas. While the country has the most sophisticated missile defense system in the world, known as the Iron Dome, the decision was a reminder of the potentially tragic outcomes of civilian aircraft passing through or over zones of conflict.

From Korean Air Lines Flight KE007 and Iran Air IR655 to Malaysian Airlines MH17 and Ukraine International PS752 on this side of the century, misdirected fire sometimes leads to massive civilian casualties.

And yet, airlines sometimes continue to fly to and above areas of ongoing conflict and unrest. What precautions are taken to keep aircraft and passengers safe, and through what mechanisms are the decisions made?
ICAO regulations for State-to-operator
Most of the decisions on what routes to take are decided by airlines and pilots.

When planning a flight route, the on-ground planning team usually calculates the most fuel-efficient path depending on atmospheric conditions. Meanwhile, in certain parts of the world, they also need to take the situation on the ground into consideration, as well as potential ‘no-fly zones’.

There are international standards for sharing information on local and potentially precarious situations on the ground.

Accordingto the Chicago Treaty setting up the International Civilian Aviation Organisation (ICAO), its member states are obliged to ‘promptly communicate potential risks to safe and secure civil aviation operations in their sovereign or delegated airspace’.

This is done via what is called the Aviation Security Point of Contact (POC) Network, or through regional contingency mechanisms. The ICAO also has a specific document, numbered 10084, which outlines State-to-operator and State-to-State sharing procedures, as well as airline risk assessment.

NOTAMs

Updated conditions that could potentially affect the safety along the route are relayed to pilots via so-called NOTAMs (Notice to Airmen). These are generated and disseminated by government agencies and airport operators to staff and crew concerned with flight operations.

Other than immediate conflict and missile launches, they can inform of closed runways, bird flocks, lasers, military exercises, volcanic ash (specifically known as ASHTAM), software patches, and temporary flight restrictions due to passing head-of-state aircraft.

Safety depending on accurate information
Airlines also conduct their own security assessments, often by bringing in third-party consultant agencies. However, all well-informed decisions are based on access to reliable, accurate, and up-to-date information, such as what kind of weapon capabilities fighting groups in a given area have access to.

When this is not available, risk assessment can sometimes be flawed, as the tragic case of MH17 shot down over eastern Ukraine in July 2014 demonstrates.

The area over which the Boeing 777-200 was passing had a no-fly zone in place for up to 32,000 feet. The aircraft was cruising at 33,000 when a ground-to-air missile hit it, and all 283 passengers and 15 crew on board were killed.

At the same time, contingency plans must be in place for unscheduled events while flying over an area of uncertain conditions. For instance, when only certain flight paths and levels are advisable, such as over Somalia or Western Sahara.

What happens in case of an emergency, such as an engine failure or depressurization of the cabin?
Potential risk vs. practicality
Assessments can also differ from country to country and airline to airline. For instance, most national aviation agencies classify Syrian airspace as high risk due to the potential of missiles erroneously locking on to civilian aircraft, whether from military jets or ground-to-air. The FAA even warns that the threat is extended to neighboring flight information regions (FIRs) in the Eastern Mediterranean.

However, in 2019, Qatar Airways once more began flying through Syrian airspace on its routes from Doha to Beirut and Larnaca in an effort to cut down on detour times caused by the then two-year-long neighborhood blockade. At the time of the decision, Qatar Airways CEO Akbar Al Baker told Reuters, while ensuring that the restored routes posed no safety issue, that,

“This is all about the blockade. We are blockaded, and so we have to find ways to fulfill the requirements of my country. It’s very simple.”

Dual ATC and pre-authorization
Generally, the Eastern Mediterranean is a tricky area to navigate. Due to the conflict and lack of recognition of sovereignty between the Greek and the Turkish part of Cyprus, pilots need to listen to air traffic controllers from both sides while diplomatically navigating the airspace above Nicosia.

Pivoting back to the air defense system of Israel, all aircraft must receive entry approval from Israeli ATC about 180 miles before entering the country’s airspace. Otherwise, they risk having an Israeli fighter jet outside of the windows, demanding identification and justification.

Something similar occurred in September 1983. Korean Air Lines Flight KE007 was on its way from New York to Seoul via Anchorage when it entered Soviet prohibited airspace due to a navigational mistake. The USSR forces mistook the unidentified 747-200 for a US spy plane and took it down with air-to-air missiles. All 246 passengers and 23 crew on board were killed.
When things go wrong.

The immediate loss of life is tragic in and of its own. Just as any casualty of war, the trauma reverberates and extends through generations. However, ‘mistaken identity’ shoot-downs also generate more tension between the actors involved or responsible. While only material, it may also cause revenue problems stemming from lack of overflight fees as airlines choose different routes.

Following the missile launch against Ukrainian International Airlines Flight 752 by Iranian forces shortly after take-off from Tehran in January 2020, many carriers stopped flying over the country. Due to potential airstrikes in the broader area, carriers such as Lufthansa, Air France, Singapore Airlines, and Qantas all stopped flying over Iraqi and Irani airspace.

Earlier this year, Iran announced a plan to encourage foreign airlines to make use of the country’s airspace by providing incentive tariffs. Qatar Airways has increased its number of flights over Iran as a result, and discussions are ongoing with Turkish Airlines.

Flight PS752 is not the only tragedy to result from tensions between the US and countries in the region. In July 1988, Iran Air Flight 665 was traveling from Tehran to Dubai when it was shot down by a missile fired from the USS Vincennes. All 290 people on board the aircraft were killed.

The US insists that it misidentified the Airbus A300 as a possible enemy F-14 Tomcat and that it made over ten unanswered calls. Iran, on the other hand, says that the pilots identified themselves as civilian. The black box was never recovered.