Airlines to be Grounded Over Changes in Insurance Rules?
Guest
Posts: n/a
Airlines to be Grounded Over Changes in Insurance Rules?
Perhaps BFU or other insurance PPRuNers could comment? This has serious ramifications for us all.
From today's ATWonline:
From today's ATWonline:
Industry faces shutdown over insurance changes
Dateline: Thursday September 20, 2001
ATWOnline has learned that the world's airlines were served with notices from the global insurance industry advising that from Sept. 24, liability for any single accident caused by terrorism or civil unrest will be limited to $50 million relating to third-party damage to buildings and people on the ground.
Senior Qantas executives have confirmed the advice and say that no airline can take the risk and that all airplanes would be grounded unless governments acted quickly. A US Major airline also said it had been informed of the policy change. The insurers of American Airlines and United Airlines already face potential claims well into the billions of dollars from the World Trade Center and Pentagon attacks last week.
Australian Transport Minister and Deputy Prime Minister John Anderson said the situation is extremely serious and that the Australian government is discussing th matter with other governments and airlines. Qantas told ATWOnline that all its flights would come to a standstill Monday unless the government agreed to meet the underwriting difference of any claim. The insurance industry also advised airlines that it will impose a levy on tickets of $1.25 for each sector to meet the $50 million cap.
Dateline: Thursday September 20, 2001
ATWOnline has learned that the world's airlines were served with notices from the global insurance industry advising that from Sept. 24, liability for any single accident caused by terrorism or civil unrest will be limited to $50 million relating to third-party damage to buildings and people on the ground.
Senior Qantas executives have confirmed the advice and say that no airline can take the risk and that all airplanes would be grounded unless governments acted quickly. A US Major airline also said it had been informed of the policy change. The insurers of American Airlines and United Airlines already face potential claims well into the billions of dollars from the World Trade Center and Pentagon attacks last week.
Australian Transport Minister and Deputy Prime Minister John Anderson said the situation is extremely serious and that the Australian government is discussing th matter with other governments and airlines. Qantas told ATWOnline that all its flights would come to a standstill Monday unless the government agreed to meet the underwriting difference of any claim. The insurance industry also advised airlines that it will impose a levy on tickets of $1.25 for each sector to meet the $50 million cap.
Join Date: Aug 2000
Location: UK
Posts: 1,914
Likes: 0
Received 0 Likes
on
0 Posts
Pray what 'serious ramifications for us all'? You have only an imaginary airline to be a boss of? How many Tristars do you operate then? For someone with nearly 3000 posts, you have an awful lot to preach as if you are an expert. Go get your aeroplanes then come here tell the industry how to do it! http://flytristar.tripod.com/article/art06.html
Guest
Posts: n/a
Notso Fantastic - you have already established yourself as a thoroughly unpleasant individual without an ounce of concern for his colleagues who appears to think that airlines should be run for the benefit of the pilots.
Unlike you, some of us do care about the implications the current crisis has on our colleagues; and this news about insurers limiting their liability to $50m in any single incident will have horrendous ramifications if it goes ahead.
I specifically requested information from people associated with the insurance industry; I did not want, and I am sure no one else here appreciates, your fatuous, small minded sniping at a time like this.
Incidentally, despite my saying that I would be happy to send a copy of the rebuttal I sent to Ryo Yano about that article you keep trying to direct people to I do not seem to have received such a request from you. Nice to see that you're so open minded and unbiased.
Unlike you, some of us do care about the implications the current crisis has on our colleagues; and this news about insurers limiting their liability to $50m in any single incident will have horrendous ramifications if it goes ahead.
I specifically requested information from people associated with the insurance industry; I did not want, and I am sure no one else here appreciates, your fatuous, small minded sniping at a time like this.
Incidentally, despite my saying that I would be happy to send a copy of the rebuttal I sent to Ryo Yano about that article you keep trying to direct people to I do not seem to have received such a request from you. Nice to see that you're so open minded and unbiased.
Join Date: Jun 1999
Location: Newcastle, UK
Posts: 63
Likes: 0
Received 0 Likes
on
0 Posts
Guvnor,
Surely this cannot be true. Because, if it is then you are absolutely correct - all airlines will have to cease flying which means that the world's economy will not just collapse but will completely shut down. The world cannot function without airlines. There will, quite simply, be no jobs for anyone in any industry whatsoever. If this is true, all governments must act to force the insurance industry to cover the airlines adequately and responsibly. This is one of the most ridiculous knee-jerk reactions I have heard of yet. People need to calm down and get a grip. It doesn't help when they keep showing airplanes crashing over and over and over again 24 hours a day on the TV but the reality is that it is still more likely that you will be hit by lightning before being in a airplane crash, and the insurance industry knows that. Profiteering from this crisis is criminal.
lazlo
[ 20 September 2001: Message edited by: Lazlo ]
Surely this cannot be true. Because, if it is then you are absolutely correct - all airlines will have to cease flying which means that the world's economy will not just collapse but will completely shut down. The world cannot function without airlines. There will, quite simply, be no jobs for anyone in any industry whatsoever. If this is true, all governments must act to force the insurance industry to cover the airlines adequately and responsibly. This is one of the most ridiculous knee-jerk reactions I have heard of yet. People need to calm down and get a grip. It doesn't help when they keep showing airplanes crashing over and over and over again 24 hours a day on the TV but the reality is that it is still more likely that you will be hit by lightning before being in a airplane crash, and the insurance industry knows that. Profiteering from this crisis is criminal.
lazlo
[ 20 September 2001: Message edited by: Lazlo ]
Plaything of fine moderators everywhere
Join Date: Aug 1999
Location: On the beach
Posts: 383
Likes: 0
Received 0 Likes
on
0 Posts
Notso – bad call there. Whatever anybody thinks about the Guv, he is reporting facts here. My industry is in a state of flux at the moment and none of us are getting that much rest. The situation will become clearer in the next few days but it is clear that things will change substantially. I’ll report back as/when I have time.
Top Dog
Join Date: May 2000
Location: Close to FACT
Age: 55
Posts: 2,098
Likes: 0
Received 0 Likes
on
0 Posts
Few bits & pieces I found on the subject.
LONDON, Sept 20 (Reuters) - Airlines, facing big hikes in war risk insurance after the attacks on the United States, could be grounded if they fail to agree new cover with insurance underwriters by Monday, industry experts said on Thursday.
Airlines are required to have insurance covering a whole range of risks, including hijacking and war, and are not permitted to fly without this cover, a spokesman for the UK´s Civil Aviation Authority said.
Aviation insurers are entitled to withdraw cover for war risks, including terrorism, with seven days notice.
Insurers issued notices of cancellation to airlines which take effect on Tuesday after thousands of people were killed last week by hijacked passenger jet attacks in New York and Washington.
Korean airline, shipping war premiums up 500-700 pct
By Park Sung-woo
SEOUL, Sept 20 (Reuters) - South Korean airlines and shipping companies said on Thursday their war risk insurance premiums would jump 500 to 700 percent annually as a result of rising tensions following last week´s deadly U.S. attacks.
The airlines, already wincing from a U.S. safety downgrade and grappling with falling traffic demand and oil price worries, said they may be forced to seek government assistance.
Shipping companies said they expected their insurance premiums to rise nearly 500 percent and they may raise freight rates to cover the costs.
Lloyd´s of London [LOL.UL] notified the airlines on Tuesday war risk premiums for aircraft would be raised up to 700 percent from October 1, spokesmen for Korea´s two carriers said.
Lloyds is also demanding that the airlines pay a new per-passenger surcharge of $1.25 as part of increased insurance cover.
The annual aircraft insurance costs for Korean Air (KAL) <03490.KS>, the nation´s largest carrier, would rise to $4.86 million from the current $560,000, KAL spokesman Lee Chang-wook said.
The new passenger surcharge would cost the airline roughly $27 million annually, Lee said. Korean Air carries an average of 60,000 passengers per day.
Second-ranked Asiana Airlines <20560.KQ> would see annual aircraft premiums rise more than 500 percent to $2.3 million from $300,000 and the new passenger surcharge would be about $16 million a year, Asiana spokesman Kim Haeng-seok said.
The airlines said they would need the government´s support.
"We are reviewing asking the government to extend indirect supports to us instead of direct financial support," KAL´s Lee said.
"We´ll soon formally request (it) once we decide what we need," he said.
Indirect support could include government participation in shouldering the costs of stricter security standards, deregulation or route rescheduling, he said.
But another KAL spokesman said the airline was not reviewing an increase in fares despite the higher insurance costs.
The two airlines saw about 26 billion won ($20.20 million) in losses from flight disruptions on U.S. routes in the wake of the U.S. attacks and they said additional losses should be expected if there was U.S. retaliation for the attacks.
SHIPPING COMPANIES HIT TOO
Korean shipping companies said they had not been formally notified that their insurance premiums would rise but they were expecting to be informed soon of an increase.
They said they were reviewing an increase in freight rates to cover the higher insurance costs.
Hanjin Shipping <00700.KS>, one of the nation´s leading shipping firms, said its monthly insurance premiums would rise to around $125,000 a month from the current $25,000.
"We are reviewing an increase in our sea freight rates. There´s no other way to cope with the increase," an official at Hanjin told Reuters.
Hyundai Merchant Marine <11200.KS> said its insurance premiums would likely jump to $195,000 per month from $39,000.
Shares of Korean Air rose 90 won to 4,450, while Asiana was fell 70 won to 1,200 on Thursday.
Hanjin shares firmed 25 won to 3,325, while Hyundai Merchant increased 260 won to 2,000.
($1=1287.0 Won)
KAL says cargo jets may bypass Tashkent on war risk
SEOUL, Sept 20 (Reuters) - Korean Air (KAL) <03490.KS>, the world´s second-largest cargo carrier, said on Thursday it was looking for an alternative refuelling stopover, switching from Tashkent in Uzbekistan, because of the risk of war.
Every week, a total of 12 Boeing 747-400 freighters heading for European cities including London, Amsterdam and Frankfurt, stop to refuel in Tashkent, KAL spokesman William Han told Reuters.
"We don´t know clearly as of now whether the region is unsafe, but just in case, we are looking into other places for refuelling," Han said.
"And the most likely alternative is Anchorage, Alaska. We are ready to go for it immediately in case of emergency," he said.
According to the Washington Post earlier this week, Uzbekistan´s foreign minister has said his country is willing to discuss with the United States using its bases and airspace to attack extremist groups in Afghanistan.
KAL has cancelled a passenger flight to Cairo via Dubai scheduled on Thursday to avoid any possible risk of being caught up in U.S. retaliation in the region against those behind last week´s air attacks on U.S. landmarks.
Korean Air operates an Airbus 330-200 with 280 seats to Cairo twice a week, on Mondays and Thursdays, and no decisions were made regarding next week´s flights.
Shares in Korean Air were down 150 won at 4,210 at 0147 GMT on Thursday, while the benchmark stock index <.KS11> was off 2.25 percent at 475.80.
Notso: you're becoming somewhat boring.
LONDON, Sept 20 (Reuters) - Airlines, facing big hikes in war risk insurance after the attacks on the United States, could be grounded if they fail to agree new cover with insurance underwriters by Monday, industry experts said on Thursday.
Airlines are required to have insurance covering a whole range of risks, including hijacking and war, and are not permitted to fly without this cover, a spokesman for the UK´s Civil Aviation Authority said.
Aviation insurers are entitled to withdraw cover for war risks, including terrorism, with seven days notice.
Insurers issued notices of cancellation to airlines which take effect on Tuesday after thousands of people were killed last week by hijacked passenger jet attacks in New York and Washington.
Korean airline, shipping war premiums up 500-700 pct
By Park Sung-woo
SEOUL, Sept 20 (Reuters) - South Korean airlines and shipping companies said on Thursday their war risk insurance premiums would jump 500 to 700 percent annually as a result of rising tensions following last week´s deadly U.S. attacks.
The airlines, already wincing from a U.S. safety downgrade and grappling with falling traffic demand and oil price worries, said they may be forced to seek government assistance.
Shipping companies said they expected their insurance premiums to rise nearly 500 percent and they may raise freight rates to cover the costs.
Lloyd´s of London [LOL.UL] notified the airlines on Tuesday war risk premiums for aircraft would be raised up to 700 percent from October 1, spokesmen for Korea´s two carriers said.
Lloyds is also demanding that the airlines pay a new per-passenger surcharge of $1.25 as part of increased insurance cover.
The annual aircraft insurance costs for Korean Air (KAL) <03490.KS>, the nation´s largest carrier, would rise to $4.86 million from the current $560,000, KAL spokesman Lee Chang-wook said.
The new passenger surcharge would cost the airline roughly $27 million annually, Lee said. Korean Air carries an average of 60,000 passengers per day.
Second-ranked Asiana Airlines <20560.KQ> would see annual aircraft premiums rise more than 500 percent to $2.3 million from $300,000 and the new passenger surcharge would be about $16 million a year, Asiana spokesman Kim Haeng-seok said.
The airlines said they would need the government´s support.
"We are reviewing asking the government to extend indirect supports to us instead of direct financial support," KAL´s Lee said.
"We´ll soon formally request (it) once we decide what we need," he said.
Indirect support could include government participation in shouldering the costs of stricter security standards, deregulation or route rescheduling, he said.
But another KAL spokesman said the airline was not reviewing an increase in fares despite the higher insurance costs.
The two airlines saw about 26 billion won ($20.20 million) in losses from flight disruptions on U.S. routes in the wake of the U.S. attacks and they said additional losses should be expected if there was U.S. retaliation for the attacks.
SHIPPING COMPANIES HIT TOO
Korean shipping companies said they had not been formally notified that their insurance premiums would rise but they were expecting to be informed soon of an increase.
They said they were reviewing an increase in freight rates to cover the higher insurance costs.
Hanjin Shipping <00700.KS>, one of the nation´s leading shipping firms, said its monthly insurance premiums would rise to around $125,000 a month from the current $25,000.
"We are reviewing an increase in our sea freight rates. There´s no other way to cope with the increase," an official at Hanjin told Reuters.
Hyundai Merchant Marine <11200.KS> said its insurance premiums would likely jump to $195,000 per month from $39,000.
Shares of Korean Air rose 90 won to 4,450, while Asiana was fell 70 won to 1,200 on Thursday.
Hanjin shares firmed 25 won to 3,325, while Hyundai Merchant increased 260 won to 2,000.
($1=1287.0 Won)
KAL says cargo jets may bypass Tashkent on war risk
SEOUL, Sept 20 (Reuters) - Korean Air (KAL) <03490.KS>, the world´s second-largest cargo carrier, said on Thursday it was looking for an alternative refuelling stopover, switching from Tashkent in Uzbekistan, because of the risk of war.
Every week, a total of 12 Boeing 747-400 freighters heading for European cities including London, Amsterdam and Frankfurt, stop to refuel in Tashkent, KAL spokesman William Han told Reuters.
"We don´t know clearly as of now whether the region is unsafe, but just in case, we are looking into other places for refuelling," Han said.
"And the most likely alternative is Anchorage, Alaska. We are ready to go for it immediately in case of emergency," he said.
According to the Washington Post earlier this week, Uzbekistan´s foreign minister has said his country is willing to discuss with the United States using its bases and airspace to attack extremist groups in Afghanistan.
KAL has cancelled a passenger flight to Cairo via Dubai scheduled on Thursday to avoid any possible risk of being caught up in U.S. retaliation in the region against those behind last week´s air attacks on U.S. landmarks.
Korean Air operates an Airbus 330-200 with 280 seats to Cairo twice a week, on Mondays and Thursdays, and no decisions were made regarding next week´s flights.
Shares in Korean Air were down 150 won at 4,210 at 0147 GMT on Thursday, while the benchmark stock index <.KS11> was off 2.25 percent at 475.80.
Notso: you're becoming somewhat boring.
Join Date: Dec 1999
Location: Hounslow, Middlesex, UK
Posts: 81
Likes: 0
Received 0 Likes
on
0 Posts
Its true.
As I understand it the 7 days notice of cancellation of the old AV52C expires 2359GMT this Monday (maybe extended by 48 hours in US to allow for recorded delivery of notice of cancellation.) We've already had our notice of cancellation. Incidently this applies to everything, not just airlines but also airports, refuellers, ga and so on, everyone who had AV52. The new AV52C limits third party cover to just US$50million and currently is just available for airlines.
Many many contracts require more than $50m, eg airports conditions of use, so even if the airlines could accept this limit, they may not be able to operate because of other contractural problems. But can we do without air transport? Will the governments give gaurantees for the extra?
As I understand it the 7 days notice of cancellation of the old AV52C expires 2359GMT this Monday (maybe extended by 48 hours in US to allow for recorded delivery of notice of cancellation.) We've already had our notice of cancellation. Incidently this applies to everything, not just airlines but also airports, refuellers, ga and so on, everyone who had AV52. The new AV52C limits third party cover to just US$50million and currently is just available for airlines.
Many many contracts require more than $50m, eg airports conditions of use, so even if the airlines could accept this limit, they may not be able to operate because of other contractural problems. But can we do without air transport? Will the governments give gaurantees for the extra?
Join Date: Jan 2000
Location: LTN
Posts: 11
Likes: 0
Received 0 Likes
on
0 Posts
Added to the below, UK Government insurance requirements for Operations Certificates require levels of insurance that are significantly higher than $50M for any aircraft 737 size upwards, so it isn't the financers who are going to be grounding aircraft, but the UK Government.
Airlines voice concern over liability changes
Insurance day 20/9/1, By Stacy Shapiro, London
MAJOR airlines have been talking to governments around the world, voicing their concern about flying without sufficient liability insurance to cover terrorist attacks.
Most of the world’s airlines were sent “notices of cancellation” on Monday by aviation underwriters, which cancelled coverage for liability war risk perils. These notices go into effect within seven days of the time they are received, which would be early next week.
Typically, airlines buy all-risk hull and liability insurance, which excludes liability war risk perils. However, just about all airlines buy back the liability war risk perils under a clause known as AV52. This write-back has typically offered airline liability war risk coverage up to the limits of the all risk policy.
The AV52 clause extends to death and bodily injury to passengers as well as third party property damage and liability. This broad coverage has meant that aviation underwriters may have to pay as much as $6bn for the attacks on the US, including the loss of the World Trade Center and claims arising from the thousands who died or were injured.
Following last week’s attacks and the cancellation of liability war risk perils insurance, the airlines have now been told by their aviation underwriters that:
- Hull war risk coverage will be reviewed on a case-by-case basis to see if premiums need to be increased. Hull war risk underwriters also plan to impose a surcharge of 0.05% of the hull value on top of any increased premiums. Hull war risk is excluded on all-risk hull and liability insurance policies and is placed in a separate market.
- As of October 1, aviation liability insurers will impose a surcharge of $1.25 per passenger on each flight to cover war risk perils. Airlines are not sure whether they can pass this cost on to the passenger.
- There will be a liability limit for war risk perils of only $50m to cover property damage and third party liability.
Airlines believe they can almost handle the increase in cost for this kind of coverage, but they are very worried about the reduction in property damage and third party liability for war perils. They are concerned that this reduction in coverage could leave them in default of their aircraft financing contracts.
Those contracts ask for proof of liability insurance. If the cover is believed to be insufficient, then financiers could ground the airlines.
The US and UK governments may have a way of supplying liability war risk coverage to airlines. In the US, Title 13 under the Civil Aviation Act gives the Federal Aviation Administration the ability to raise money to pay war risk premiums, sources say.
In the UK, the government set up Pool Re several years back to cover property damage when UK property underwriters refused to write terrorist coverage following IRA attacks on the City of London and the Docklands.
[ 20 September 2001: Message edited by: bobtoldmetodoit ]
Airlines voice concern over liability changes
Insurance day 20/9/1, By Stacy Shapiro, London
MAJOR airlines have been talking to governments around the world, voicing their concern about flying without sufficient liability insurance to cover terrorist attacks.
Most of the world’s airlines were sent “notices of cancellation” on Monday by aviation underwriters, which cancelled coverage for liability war risk perils. These notices go into effect within seven days of the time they are received, which would be early next week.
Typically, airlines buy all-risk hull and liability insurance, which excludes liability war risk perils. However, just about all airlines buy back the liability war risk perils under a clause known as AV52. This write-back has typically offered airline liability war risk coverage up to the limits of the all risk policy.
The AV52 clause extends to death and bodily injury to passengers as well as third party property damage and liability. This broad coverage has meant that aviation underwriters may have to pay as much as $6bn for the attacks on the US, including the loss of the World Trade Center and claims arising from the thousands who died or were injured.
Following last week’s attacks and the cancellation of liability war risk perils insurance, the airlines have now been told by their aviation underwriters that:
- Hull war risk coverage will be reviewed on a case-by-case basis to see if premiums need to be increased. Hull war risk underwriters also plan to impose a surcharge of 0.05% of the hull value on top of any increased premiums. Hull war risk is excluded on all-risk hull and liability insurance policies and is placed in a separate market.
- As of October 1, aviation liability insurers will impose a surcharge of $1.25 per passenger on each flight to cover war risk perils. Airlines are not sure whether they can pass this cost on to the passenger.
- There will be a liability limit for war risk perils of only $50m to cover property damage and third party liability.
Airlines believe they can almost handle the increase in cost for this kind of coverage, but they are very worried about the reduction in property damage and third party liability for war perils. They are concerned that this reduction in coverage could leave them in default of their aircraft financing contracts.
Those contracts ask for proof of liability insurance. If the cover is believed to be insufficient, then financiers could ground the airlines.
The US and UK governments may have a way of supplying liability war risk coverage to airlines. In the US, Title 13 under the Civil Aviation Act gives the Federal Aviation Administration the ability to raise money to pay war risk premiums, sources say.
In the UK, the government set up Pool Re several years back to cover property damage when UK property underwriters refused to write terrorist coverage following IRA attacks on the City of London and the Docklands.
[ 20 September 2001: Message edited by: bobtoldmetodoit ]
Guest
Posts: n/a
From today's Daily Telegraph
19Sep2001 UK: City - Insurers drive up cost of airlines' war cover British Airways could have to pay $70m more for terrorism risk
By Andrew Cave.
Associate City Editor
INSURERS are terminating airlines' war and terrorism cover and threatening to impose a surcharge of $1.25 per passenger following last week's attacks on New York and Washington.
The surcharges, being discussed in meetings between airline brokers, Lloyd's agencies and London company insurers would add hundreds of millions of pounds to airline costs.
Premiums are expected to incur substantial increases with cover for war, terrorism and "other perils" expected to soar within the next fortnight.
Richard Hextall, finance director at Lloyd's insurer Amlin, said: "Typically you'd be seeing a rise of 200pc, but it could be up to 400pc. Some airlines are just worse risk than others."
Under the suggested surcharge, British Airways, which carries 48m passengers a year, would have to pay an extra $70m each year for terrorism cover. Some analysts already expect the company to lose £200m to £300m this year.
Virgin Atlantic, which is axing 1,200 jobs, carries 4m passengers a year and would have to pay an extra $5m.
War and terrorism are excluded from most airline liability insurance policies. Cover for such atrocities is sold separately but includes a clause allowing insurers to cancel with seven days' notice.
Lloyd's syndicates and insurers on the London companies market are understood to have issued cancellation notices under such clauses and are also reviewing war cover for aircraft.
The review, which began on Monday and runs until Sunday, involves airlines being asked about their route structure, locations outside their home countries, number of aircraft on foreign soil and details of changes they have made to airline security.
Airlines have also beeen asked to detail any threats that have been made against them during the past 12 months.
New rates will be issued next week and airlines will be told to take their business elsewhere if they are unwilling to pay. One broker involved in the airline negotiations said: "They have given notice that they are reviewing the situation. They have not been making money and things have got to change.
"It is bound to be passed on to customers. It will make things very tough for the airlines."
A British Airways spokesman said: "We are working closely with the insurance market to satisfy their requests for information and all the information they require has been given to them, including the details of the extra security currently being implemented by carriers in the UK."
Virgin Atlantic's Paul Moore said: "Almost on a daily basis, one or another of our policies has been varied by quite a lot. Insurance is an increasing cost for us. There is no question about that." Yesterday, credit rating agency Standard & Poor's warning that 55 leading underwriters have a combined $14 billion of insured losses from the collapse of the World Trade Center.
The agency said a "significant number" of companies are not well positioned to absorb expected losses and are likely to suffer downgrades in their credit ratings.
Rival agency Moody's said the cost of the attacks will be "exceptionally severe" for insurers because of the weight of claims, the timing of the attacks and the ripple effects of the lengthy disruption of a key global financial centre.
By Andrew Cave.
Associate City Editor
INSURERS are terminating airlines' war and terrorism cover and threatening to impose a surcharge of $1.25 per passenger following last week's attacks on New York and Washington.
The surcharges, being discussed in meetings between airline brokers, Lloyd's agencies and London company insurers would add hundreds of millions of pounds to airline costs.
Premiums are expected to incur substantial increases with cover for war, terrorism and "other perils" expected to soar within the next fortnight.
Richard Hextall, finance director at Lloyd's insurer Amlin, said: "Typically you'd be seeing a rise of 200pc, but it could be up to 400pc. Some airlines are just worse risk than others."
Under the suggested surcharge, British Airways, which carries 48m passengers a year, would have to pay an extra $70m each year for terrorism cover. Some analysts already expect the company to lose £200m to £300m this year.
Virgin Atlantic, which is axing 1,200 jobs, carries 4m passengers a year and would have to pay an extra $5m.
War and terrorism are excluded from most airline liability insurance policies. Cover for such atrocities is sold separately but includes a clause allowing insurers to cancel with seven days' notice.
Lloyd's syndicates and insurers on the London companies market are understood to have issued cancellation notices under such clauses and are also reviewing war cover for aircraft.
The review, which began on Monday and runs until Sunday, involves airlines being asked about their route structure, locations outside their home countries, number of aircraft on foreign soil and details of changes they have made to airline security.
Airlines have also beeen asked to detail any threats that have been made against them during the past 12 months.
New rates will be issued next week and airlines will be told to take their business elsewhere if they are unwilling to pay. One broker involved in the airline negotiations said: "They have given notice that they are reviewing the situation. They have not been making money and things have got to change.
"It is bound to be passed on to customers. It will make things very tough for the airlines."
A British Airways spokesman said: "We are working closely with the insurance market to satisfy their requests for information and all the information they require has been given to them, including the details of the extra security currently being implemented by carriers in the UK."
Virgin Atlantic's Paul Moore said: "Almost on a daily basis, one or another of our policies has been varied by quite a lot. Insurance is an increasing cost for us. There is no question about that." Yesterday, credit rating agency Standard & Poor's warning that 55 leading underwriters have a combined $14 billion of insured losses from the collapse of the World Trade Center.
The agency said a "significant number" of companies are not well positioned to absorb expected losses and are likely to suffer downgrades in their credit ratings.
Rival agency Moody's said the cost of the attacks will be "exceptionally severe" for insurers because of the weight of claims, the timing of the attacks and the ripple effects of the lengthy disruption of a key global financial centre.
Join Date: Mar 2000
Location: Bermuda Shorts and Cessna Caravans
Posts: 242
Likes: 0
Received 0 Likes
on
0 Posts
NotSo, you come across like a bitter vindictive ex-lover.
Ooops, is that libellous ??
Whatever your motives, the Guv provides opportunity for debate, humour, and yes, sometimes even ridicule with his often hard-line or fantastic posts.
You, however, come across like an old carp.
This thread is probably one of the most pertinent and relevant to us all posted today.
Why not button it, and let people judge others by their own merits ?
Ooops, is that libellous ??
Whatever your motives, the Guv provides opportunity for debate, humour, and yes, sometimes even ridicule with his often hard-line or fantastic posts.
You, however, come across like an old carp.
This thread is probably one of the most pertinent and relevant to us all posted today.
Why not button it, and let people judge others by their own merits ?
Guest
Posts: n/a
Notso, the Guv has run airlines before in Africa which I suspect is more than you ever have my friend. I also suspect that very few people would ever have the guts to do what he's done and set one up. I'll bet my dogs nuts that a lot of those who enjoy giving him grief that they'd be first in line asking for a job when (not if) he does get his next airbourne.
He does have an uncanny knack of putting his finger on the issues that we all ignore at our peril, such as flagging out, security issues and high crew pay. He was right though, wasn't he, even if we slagged him off at the time for saying what we didn't want to hear?
I haven't put my finger on what attracts his cyber stalkers such as yourself and your mate Who? - but I reckon it's jealousy. I can tell you that I haven't met anyone who can tell me that he has done anything bad to them and I know a lot of the same people he does.
If anything, his main failing is that he's too open and honest, but he's obviously learnt to keep quiet about his plans now as I haven't seem him discussing them for a while.
Good luck to the Guv - he's one of the real 'characters' that make PPrune what it is.
He does have an uncanny knack of putting his finger on the issues that we all ignore at our peril, such as flagging out, security issues and high crew pay. He was right though, wasn't he, even if we slagged him off at the time for saying what we didn't want to hear?
I haven't put my finger on what attracts his cyber stalkers such as yourself and your mate Who? - but I reckon it's jealousy. I can tell you that I haven't met anyone who can tell me that he has done anything bad to them and I know a lot of the same people he does.
If anything, his main failing is that he's too open and honest, but he's obviously learnt to keep quiet about his plans now as I haven't seem him discussing them for a while.
Good luck to the Guv - he's one of the real 'characters' that make PPrune what it is.
Join Date: Aug 2000
Location: UK
Posts: 1,914
Likes: 0
Received 0 Likes
on
0 Posts
Love 'im or hate 'im, but over 3000 posts , you will not escape him. I know 160to4 loves him- hoping for a job in an imaginary airline with a Walter Mitty at the head? But really- does he qualify to hit us all with 3000 lengthy posts? Un peu OTT n'est-ce pas? I am a 30 years standing airline pilot and I find this guy is drowning out the forum! Anything anti-pilot/anti-American/doom/drama laden is right up his street. I wish for goodness sake he would start up his own bulletin board! And I love my Chief Pilot too! We just have a love/hate relationship.
BTW, Guvnerd's using a good trick. When I first replied to this message, he deleted the thread and reposted (without my contribution!). Then he seems to have given himself a new identity (Sid's Stars) to eulogise himself! Good one!
[ 20 September 2001: Message edited by: Notso Fantastic ]
BTW, Guvnerd's using a good trick. When I first replied to this message, he deleted the thread and reposted (without my contribution!). Then he seems to have given himself a new identity (Sid's Stars) to eulogise himself! Good one!
[ 20 September 2001: Message edited by: Notso Fantastic ]
Guest
Posts: n/a
Nosto, who died and made you God? We can do what you should be doing and either read the post or ignore it. You come across as a spoilt brat rather than as a 30 year pilot, and I see you have yet again successfully hijacked the thread away from its true purpose and made it one about the Guv. I hope you have got the message now that your posts about the Guv are NOT WELCOME HERE!!
Join Date: Mar 1999
Location: UK
Posts: 60
Likes: 0
Received 0 Likes
on
0 Posts
Its all true. Here is a copy of the "London Insurers Revised Regulations for War and Related Policy Coverage's."
17th September 2001.
"... in respect of Airports and airport based operators, products manufacturers, ground handlers, general aviation operators.
Following the tragic events of 11th September 2001, there have been many meetings between aviation brokers and representatives of the aviation underwriting market. The position of underwriters following these meetings is as follows:-
Seven (7) days notice of cancellation is being given effective 23.59 GMT 17th September 2001 under the ... section of the policies for all aviation operators ie. airlines, airports and airport based operators, products manufacturers, ground handlers, general aviation and any other companies whose policies include (these sections).
It is not clear at this stage whether it will be possible to reinstate this cover for non-airline customers. We are of course pressing for whatever cover is available, if any, to be reinstated on your behalf and we will keep you fully appraised of developments as they occur."
17th September 2001.
"... in respect of Airports and airport based operators, products manufacturers, ground handlers, general aviation operators.
Following the tragic events of 11th September 2001, there have been many meetings between aviation brokers and representatives of the aviation underwriting market. The position of underwriters following these meetings is as follows:-
Seven (7) days notice of cancellation is being given effective 23.59 GMT 17th September 2001 under the ... section of the policies for all aviation operators ie. airlines, airports and airport based operators, products manufacturers, ground handlers, general aviation and any other companies whose policies include (these sections).
It is not clear at this stage whether it will be possible to reinstate this cover for non-airline customers. We are of course pressing for whatever cover is available, if any, to be reinstated on your behalf and we will keep you fully appraised of developments as they occur."
Guest
Posts: n/a
Yes, Notso Fantastic I did indeed delete my original post (with your pathetic response) and I hoped you had got the message. Unfortunately not.
And yes, I admit it. I am Sids Stars. I am also CargoRat2, 160to4DME and P22 along with everyone else that objects to your little games. You claim that you're in your 50s. Sure you don't mean that you're 15? Grow up!
And yes, I admit it. I am Sids Stars. I am also CargoRat2, 160to4DME and P22 along with everyone else that objects to your little games. You claim that you're in your 50s. Sure you don't mean that you're 15? Grow up!