Page 26 - Insurance Times August 2020

AIRLINES

NEED MERCY

OF INSURERS

C ockpit of the aviation industry is out of control. Revolutionary Guards shot down Ukraine's Boeing 737-800

after its take off from Tehran Imam Khomeini International
Certainly the year 2020 has become a miserable
Airport. In February 2020, Pegasus Airlines' Boeing 737-800
year for airlines and epidemic dilemmas, travel
constraints, border blockages, quarantines or
isolations brought an unforeseen termination to a decade skidded of the airstrip while landing at Turkey's Istanbul-
SabihaGökçen International Airport. In May 2020, Pakistan's
of happiness. The International Air Transport Association has Airbus A320 crashed in a thickly inhabited residential area
already sketched the grim picture and according to its report of Karachi. Many people were killed and aircrafts were
worldwide air companies expected to lose approximately 85 destroyed in all these ill-fated incidents.
billion dollars in this year for a net loss margin of around 20
percent. In addition, the report of the association predicts Regrettably, in August 2020 the Air India Express Boeing
revenues to fall from 838 billion dollars to 419 billion dollars, 737-800 became the victim of unlucky event. The aircraft
passenger revenues will be about a third of 2019 level, skidded off the table-top airstrip and went down thirty five
passengers numbers will be nearly halve to 2.25 billion which meters slop. Many people were killed and aircraft was
would equate to an average net loss of 38 dollar per gravely wrecked. Consequently, along with the public sector
passenger. Thus financially 2020 will go down as the nastiest insurance conglomerate headed by New India Insurance
year in the history of aviation industry. which reinsured the risk overseas, global reinsurers will have
to reimburse more than 90 per cent of the insured value of
To rub salt in the wound, sequence of plane crashes brought the star-crossed plane that was destroyed in the
bad times and jerking moments for both the airline entities catastrophe. Many insurance partakers sense that premiums
and its insurers. In January 2020, Iranian Islamic may get elevated in the next fiscal year due to increase in
the calamities. This is a grave concern for half-dead airline
About the author industry.

Shivanand Pandit Overview of Aviation insurance
Autonomous Finance and Tax Adviser Sophisticated technical operations of an airplane and
Margao, Goa resulting risks have exposed the aviation industry to a chain

26 The Insurance Times, August 2020