New Delhi: The spate of serious aviation mishaps globally is all set to impact the financials of already struggling Indian airlines. A leading unlisted Indian airline will have to renew its aircraft insurance in coming days. To its horror, it found that insurance premia charged by foreign companies (Indian insurers do not provide cover for aircraft to airlines) have shot by 15-20%.
"Our insurance covers have to be renewed shortly. The initial talks we had with insurers in past few days showed that premia are up by 15-20%. May be when we actually strike a deal, the hike is softened a bit but general insurers feel that their underwriting risk is up and they are going to charge more," said the CEO of this airline.
Another airline also confirmed that insurance premia are up. "We are trying to minimize this blow as any additional cost has to be passed on to the flyer. In India, however, irrational pricing by some airlines means that we are unable to recover our costs. For airlines in black, it means lower profits. And, for loss-making carriers, it means more red ink on the balance sheet," said a senior official of the airline.
18/08/14 Saurabh Sinha/Times of India
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"Our insurance covers have to be renewed shortly. The initial talks we had with insurers in past few days showed that premia are up by 15-20%. May be when we actually strike a deal, the hike is softened a bit but general insurers feel that their underwriting risk is up and they are going to charge more," said the CEO of this airline.
Another airline also confirmed that insurance premia are up. "We are trying to minimize this blow as any additional cost has to be passed on to the flyer. In India, however, irrational pricing by some airlines means that we are unable to recover our costs. For airlines in black, it means lower profits. And, for loss-making carriers, it means more red ink on the balance sheet," said a senior official of the airline.
18/08/14 Saurabh Sinha/Times of India
