BA 777 on fire in Las Vegas
Total repair cost was around $10m in 1983 prices. Must have been a -100 or -200. If the latter, then it would have been at least 10 years younger at the time than the Vegas 777, with a further 18 years of flying for BA ahead of it.
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What I said in a previous post, which most people have ignored, is that when calculating the viability and economy of repairs from an insurers perspective, the costs for the engine damage will almost certainly be excluded. There is no coverage for a mechanical failure.
Insurers will only be paying for the airframe and associated repairs. Therefore, now there has been a physical inspection of the damage, the numbers probably add up.
As suggested by some posters, BA nor anyone I know of , do not "self insure" their engines. How could they afford to at $20 or $30 million a piece? Imagine an A380 runoff where all 4 engines damaged!
BA will pay for the engine damage ( they may sue someone after to try and get everything back including insurers proportion) and Insurers will pay for the resultant airframe damage.
Hope that clarifies?
Insurers will only be paying for the airframe and associated repairs. Therefore, now there has been a physical inspection of the damage, the numbers probably add up.
As suggested by some posters, BA nor anyone I know of , do not "self insure" their engines. How could they afford to at $20 or $30 million a piece? Imagine an A380 runoff where all 4 engines damaged!
BA will pay for the engine damage ( they may sue someone after to try and get everything back including insurers proportion) and Insurers will pay for the resultant airframe damage.
Hope that clarifies?
Aren't the engine costs pretty much a wash anyway? At least I'd assume that the "salvage" value of an undamaged engine is essentially the same as the cost of a replacement engine in similar condition.
Roughly speaking, something is economically repairable if the salvage value plus the repair cost is lower than the value of the item after repair. In other words, if increase in value due to repair is greater than the cost of the repair.
Here, a destroyed engine increases the repair cost of the aircraft, but decreases the salvage value by a similar amount -- so the sum should be about the same. It could matter who's paying for what, but in an efficient market it shouldn't.
Roughly speaking, something is economically repairable if the salvage value plus the repair cost is lower than the value of the item after repair. In other words, if increase in value due to repair is greater than the cost of the repair.
Here, a destroyed engine increases the repair cost of the aircraft, but decreases the salvage value by a similar amount -- so the sum should be about the same. It could matter who's paying for what, but in an efficient market it shouldn't.
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What I said in a previous post, which most people have ignored, is that when calculating the viability and economy of repairs from an insurers perspective, the costs for the engine damage will almost certainly be excluded. There is no coverage for a mechanical failure.
Insurers will only be paying for the airframe and associated repairs. Therefore, now there has been a physical inspection of the damage, the numbers probably add up.
Insurers will only be paying for the airframe and associated repairs. Therefore, now there has been a physical inspection of the damage, the numbers probably add up.
Aviation hull insurance contracts (unlike most types of insurance contracts) are written to a pre-determined "Agreed Value". Any payout resulting from an accident will be in this amount minus deductibles. That's it, no more, no less.
So in aviation hull insurance, the payout value is fixed, and the insurance company doesn't "adjust" the amount based on investigation into engine damage, mechanical failure, etc. The only value to determine is if repairs are economical (that is, under the Agreed Value). If not, the Agreed Value is paid out in full. Period.
In almost all instances, the value of the engines are covered as part of this "Agreed Value" under the aircraft's hull insurance.
The only exceptions relate to things like replacement engines, spare engines, and engines taken off the aircraft for maintenance, storage, shipping, etc.
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You also need to look at the cost of not having the engine. If they are going to be short of spare engines for a significant period (I assume one does not just go to the engine store and buy a new one off the shelf) then the potential cost of that will be factored in. The same with the airframe, if they don't have a spare then a future failure may well disrupt schedules and end up costing them more. In itself it's a form of insurance.
The insurance company probably only covers the airframe/engine, not the consequential loss, that's usually clearly excluded in pretty much any insurance policy unless a much bigger premium gets paid.
The insurance company probably only covers the airframe/engine, not the consequential loss, that's usually clearly excluded in pretty much any insurance policy unless a much bigger premium gets paid.
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We taxied by it yesterday evening and it was still parked where they initially parked it after the incident. The engine had been removed and was not in sight. Several large tarps covering things at this hour. Will interesting to see where they move it for the repairs. Probably just relocate it on the same ramp.
BKK Buggy
@TDRacer:-
Are you referring to the QF Golf Buggy? I don't think economics came into that decision; it was Rainman & QANTAS corporate reputation by accounts. Never lost a hull...
There was a case of a 747 heavily damaged in runway over-run back in the 1980's that was repaired and returned to service even though it cost more to repair than it was worth, simply because they needed the aircraft and Boeing didn't have any available delivery slots.
@TDRacer:-
Are you referring to the QF Golf Buggy? I don't think economics came into that decision; it was Rainman & QANTAS corporate reputation by accounts. Never lost a hull...
There was a case of a 747 heavily damaged in runway over-run back in the 1980's that was repaired and returned to service even though it cost more to repair than it was worth, simply because they needed the aircraft and Boeing didn't have any available delivery slots.
It is about time to put the OJH issue to bed.
The repair was a commercial decision, made by the insurance companies. The figures are well known, the repair was just under US$90M, the value of the aircraft around US$140 at the time.
There is an excellent TV documentary of the subject, you will probably find it on YouTube.
As a bonus, the repairs and re-rigging were so well done that it became the best in the fleet, fuel wise, delta fuel more than 3% better than the worst, better than baseline book, and the ONLY one in the fleet that flew with zero rudder trim in cruise.
I know from personal experience, not company propaganda, I flew it often enough before and after tearing up the General's golf course.
And, no, Qantas never self insured it's fleet, another nonsense story.
Tootle pip!!
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OD-AGC of TMA was badly damaged on 3/12/75 whilst involved in a overrun at Athens. Complex recovery and rebuild.
Also a JAL 747 badly damaged and rebuilt after `weather cocking` at Anchorage
Also a JAL 747 badly damaged and rebuilt after `weather cocking` at Anchorage
OD-AGC of TMA was badly damaged on 3/12/75 whilst involved in a overrun at Athens. Complex recovery and rebuild.
Spooky 2 wrote:
I wouldn't be surprised if the damaged engine is already in the hands of General Electric for strip and examination, under the auspices of the NTSB?
The engine had been removed and was not in sight.
The QF A380 with the uncontained engine failure out of Singapore could have been a scrap case as well, given the extent of the damage. It was grounded for a very long time but eventually returned to service.
Flight International reported that the fire in the engine spread to the underbelly and fuselage due to a crosswind as the aircraft stopped on the runway.
Shades of the British Air Tours Boeing 737-200 accident at Manchester where the effect of the reverse thrust plume of the affected engine atomised escaping fuel from a ruptured fuel tank and increased the severity of the conflagration. When that aircraft turned off the runway and stopped on the taxiway, the five knot now crosswind blew the flames against the fuselage with disastrous results.
ASN Aircraft accident Boeing 737-236 G-BGJL Manchester International Airport (MAN)
Shades of the British Air Tours Boeing 737-200 accident at Manchester where the effect of the reverse thrust plume of the affected engine atomised escaping fuel from a ruptured fuel tank and increased the severity of the conflagration. When that aircraft turned off the runway and stopped on the taxiway, the five knot now crosswind blew the flames against the fuselage with disastrous results.
ASN Aircraft accident Boeing 737-236 G-BGJL Manchester International Airport (MAN)
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The QF A380 with the uncontained engine failure out of Singapore could have been a scrap case as well, given the extent of the damage. It was grounded for a very long time but eventually returned to service.
Fire causes massive damage, a lot of it can be un-seen...
The QF incident cost $140 million to repair, a considerable proportion of the aircrafts $390 million price tag. The repair took eight months but the aircraft was grounded for eighteen months due to hangar availability. Structural damage was considerable including the forward spar. The incident also led to the wing crack problem being discovered. RR paid $95 million in compensation for schedule disruption.
AIRBUS were keen not to have a write off. Had the aircraft been an old A340 it would probably have been scrapped.
AIRBUS were keen not to have a write off. Had the aircraft been an old A340 it would probably have been scrapped.
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Peekay Quote:
In general what you're saying is not at all correct, at least not in the aviation industry.
Aviation hull insurance contracts (unlike most types of insurance contracts) are written to a pre-determined "Agreed Value". Any payout resulting from an accident will be in this amount minus deductibles. That's it, no more, no less.
So in aviation hull insurance, the payout value is fixed, and the insurance company doesn't "adjust" the amount based on investigation into engine damage, mechanical failure, etc. The only value to determine is if repairs are economical (that is, under the Agreed Value). If not, the Agreed Value is paid out in full. Period.
In almost all instances, the value of the engines are covered as part of this "Agreed Value" under the aircraft's hull insurance.
The only exceptions relate to things like replacement engines, spare engines, and engines taken off the aircraft for maintenance, storage, shipping, etc.
Peekay, you obviously didnt read my post and you are not correct. I said when calculating the repair costs........! As you correctly say, there is an Agreed Value and this is what is used to calculate whether the aircraft is economic to repair or not! So say the Agreed Value is US$30 million. You can exclude the engine (as it will likely not be covered by insurance) so you have approximately US$ 21 milllion to play with (approx 70% level before things are written off). Therefore, if the Hull calculated repair costs fall within US$21 million (there or thereabouts), it will be economic to repair and that number (for repair) will be the numbers that insurers will cough! Therefore there is an adjustment calculated for the repairs. It is not automatically paid at the Agreed Value, as you suggest. Only when the aircraft is clearly a write off is the Agreed Value paid and again you are incorrect in saying nothing more, nothing less. If there are additional costs incurred for recovery, parking, storage, transportaion, Search and Rescue, these are paid in addition to the Agreed Value.
In general what you're saying is not at all correct, at least not in the aviation industry.
Aviation hull insurance contracts (unlike most types of insurance contracts) are written to a pre-determined "Agreed Value". Any payout resulting from an accident will be in this amount minus deductibles. That's it, no more, no less.
So in aviation hull insurance, the payout value is fixed, and the insurance company doesn't "adjust" the amount based on investigation into engine damage, mechanical failure, etc. The only value to determine is if repairs are economical (that is, under the Agreed Value). If not, the Agreed Value is paid out in full. Period.
In almost all instances, the value of the engines are covered as part of this "Agreed Value" under the aircraft's hull insurance.
The only exceptions relate to things like replacement engines, spare engines, and engines taken off the aircraft for maintenance, storage, shipping, etc.
Peekay, you obviously didnt read my post and you are not correct. I said when calculating the repair costs........! As you correctly say, there is an Agreed Value and this is what is used to calculate whether the aircraft is economic to repair or not! So say the Agreed Value is US$30 million. You can exclude the engine (as it will likely not be covered by insurance) so you have approximately US$ 21 milllion to play with (approx 70% level before things are written off). Therefore, if the Hull calculated repair costs fall within US$21 million (there or thereabouts), it will be economic to repair and that number (for repair) will be the numbers that insurers will cough! Therefore there is an adjustment calculated for the repairs. It is not automatically paid at the Agreed Value, as you suggest. Only when the aircraft is clearly a write off is the Agreed Value paid and again you are incorrect in saying nothing more, nothing less. If there are additional costs incurred for recovery, parking, storage, transportaion, Search and Rescue, these are paid in addition to the Agreed Value.
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You can exclude the engine (as it will likely not be covered by insurance)
I think you may be misinterpreting the mechanical "breakdown or failure" exclusions that's common in policies. The usual wording for this exclusion is "due and confined to (mechanical or other failure)".
The "confined to" part is important. If an engine fails on taxi and the engine simply shuts down -- this is considered a mechanical issue "confined to" the engine and is not covered by insurance.
But if the same engine fails on taxi and burns down the entire plane -- this is not a confined mechanical issue and insurance will provide full "Agreed Value" coverage.
On turbine aircraft there is usually a similar exclusion for engine hot starts. If you screw up a start and heat damage the engine, vanilla insurance of course won't cover it.