Thursday, March 14, 2019

No cover for grounding of 737 Max 8 planes in India

Mumbai: Airlines that have been forced to ground the Boeing 737 Max 8 aircraft will not have any recourse to claims from insurance companies to make up for their losses.
SpiceJet on Wednesday announced that it was grounding its Max fleet of about a dozen aircraft, which would result in the cancellation of 14 flights. This has resulted in its fleet size shrinking to about 64 from 76. Jet Airways has five Max aircraft in its fleet. However, these are already believed to be grounded by lessors due to non-payment of dues.

“The aircraft have been grounded by the regulator as a precautionary measure. There has not been any damage to the aircraft and no other insured event has occurred, so we are not expecting any claim,” said an official with an insurance broking firm that specialises in aviation cover.

Sources in New India Assurance, which has provided cover for most of the Boeing 737 Max aircraft, said that they have not received any claims because of the grounding. “Unlike any manufacturing business, the assets of airlines are mobile, which is why airlines do not take business interruption cover,” said the official.
14/03/19 Mayur Shetty/Times of India