Professional Documents
Culture Documents
The origin of Indian civil aviation industry can be traced back to 1912,
when the first air flight between Karachi and Delhi was started by the Indian
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State Air Services in collaboration with the UK based Imperial Airways. It was
an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD
Tata founded Tata Airline, the first Indian airline. At the time of
independence, nine air transport companies were carrying both air cargo and
passengers. These were Tata Airlines, Indian National Airways, Air service of
India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and
Mistry Airways. After partition Orient Airways shifted to Pakistan.
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HISTORY OF AVIATION INSURANCE
It is believed that the first aviation polices were underwritten by the marine
insurance Underwriting community.
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The London insurance market is still the largest single centre for
aviation insurance. The market is made up of the traditional Lloyds of London
syndicates and numerous other traditional insurance markets. Throughout
the rest of the world there are national markets established in various
countries, this is dependent on the aviation activity within each country, the
US has a large percentage of the world's general aviation fleet and has a
large established market.
No single insurer has the resources to retain a risk the size of a major
airline, or even a substantial proportion of such a risk. The Catastrophic
nature of aviation insurance can be measured in the number of losses that
have cost insurers hundreds of millions of dollars (Aviation accidents and
incidents). Most airlines arrange "fleet policies" to cover all aircraft they own
or operate.
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RISK COVERED IN AVIATION INSURANCE
There are different types of risk which takes place in aviation insurance
and those risks are covered in aviation insurance they are as follows:
AVAIATION INSURANCE
The S
above diagram suggests that there are mainly two kinds of risks which an
aviation insurance company will cover which has been divided into two parts.
They are:
1. Normal Risks
2. Liabilities
These two risks are further divided into various parts which involve
various risks and liabilities they are which is explained in detail later on.
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NORMAL RISKS
These risks are those risks which every aviation company in this
industry carries it on its back when it enters into the business. These risks
may differ from time to time and situation to situation. These are
1. Hull Risks
2. Hull War Risks
3. Spares All Risks/ War Risks
4. Hull total Loss Only cover
These risks are those risks which takes place when these takes place
when any of these factors comes into action. Because all the above risks
mentioned above are unpredictable and may occur at any time
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HULL RISKS
The hull "All Risks" policy will usually refer to something like "all risks
of physical loss or damage to the aircraft from any cause except as
hereinafter excluded".
The term "all risks" can be misleading. "All risks of physical loss or
damage" does not include loss of use, delay, or consequential loss.
"Grounding" is a good example of consequential loss. Some years ago when
there had been a couple of accidents involving DC10 Aircraft, the Civil
Aviation Authorities throughout the world imposed a "grounding order" on
that type of aircraft.
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That order in effect said until certain things had been established and
checked out those aircraft could not fly. The operators of those aircraft were
unable to fly them and as a consequence of that they "lost" the use of them.
But the aircraft were not "lost" - it was known precisely where they were but
they could not be used to carry passengers. Such an eventuality would not
be covered by an "all risks" policy because in such circumstances there is no
PHYSICAL loss or damage.
What the policy will cover is the reinstatement of the aircraft to its
"pre-loss" condition, if repairable damage is involved, or some other form of
settlement in the event that more substantial damage is sustained. Exactly
what form of settlement will depend on the policy conditions.
Today, the vast majority of airline hull "all risks" policies are arranged on an
"Agreed Value Basis". This provides that the Insurers agree with the Insured,
for the policy period, the value of the aircraft and as such, in the event of
total loss, this Agreed Value is payable in full. Under an Agreed Value policy
the replacement option is deleted.
8
Concorde plane disaster in France, 25 July 2000
The hull risks does not cover some risks whish are as follows
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3. Mechanical Breakdown - likewise is thought by aviation insurers to
be an operating expense, but subsequent damage outside the unit
concerned is usually covered. However, it is possible to obtain
insurance coverage against mechanical breakdown of engines by
way of a separate policy. This coverage has a high degree of
exposure and as a result is relatively expensive. The majority of
airlines do not purchase it probably viewing such exposure as a part
of the "engineering"
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The hull "All Risks" policy will contain the exclusion of "War and Allied
Perils". Generally speaking, throughout the aviation insurance world, "War
and Allied Perils" have a defined meaning. In the London Aviation Insurance
Market the standard exclusion is called the War, Hi-jacking and Other Perils
Exclusion Clause (currently known by its reference - AVN48B for short) this
lists and defines these so-called war and allied perils. It say,
1. War - this includes civil war and war with no formal declaration.
2. The detonation of a weapon
3. Strikes, riots, civil commotions and labour disturbances.
4. Political or terrorist acts.
5. Malicious or sabotage acts.
6. Confiscation, nationalization, requisition and the like by any
government.
11
The brutal second plane crash in World Trade Center, New York, United States of Ameica,
11 September,2001
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The exclusion also applies to any loss or damage occurring whilst the
aircraft is outside the control of the operator by reason of any of these "war"
perils.
The majority of the excluded "War and Allied Perils", other than the
detonation of a nuclear weapon and a war between the Great Powers (the
aviation insurance world identifies these as the U.S.A., the Russian
Federation, China, France and the UK), can normally be covered by way of a
separate "War and Allied Perils" policy. Aircraft deductibles are not normally
applied in respect of losses arising out of "War and Allied Perils".
The aircraft hull "War and Allied Perils" policy will cover the aircraft on
an "Agreed Value" basis against physical loss or damage to the aircraft
occasioned by any of these perils. This statement is made carefully and
deliberately in order to highlight the essential difference from a "Political
Risks" Insurance.
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SPARES ALL RISKS
If the equipment is insured on the hull "All Risks" policy the automatic
transfer of coverage from "aircraft" to "spare" and vice versa is automatically
accomplished.
14
A flight cockpit with its spare parts An engine with its spare parts working
inside
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HULL TOTAL LOSS ONLY COVER
This is similar to Hull All Risks cover given above but will respond only to
total losses of aircraft, whether actual, constructive or arranged. This is
particularly given for old aircraft since the old aircraft are heavily
depreciated and insured for low sums and premium on such low sums would
result in low premium, which would be inadequate for the partial losses. The
ratio of partial losses to total losses in such old aircraft is distorted.
LIABILITIES
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Liabilities are those risks which may arise due to some consequences
or some “reasons” the company has to face. Those “reasons” are as
follows
1. Aircraft Liability
2. Excess Liability
3. Aerospace Manufacturers products and Grounding Liability
4. Airport Owners and Operations Liability
5. Product Liability
AIRCRAFT LIABILITY
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Here in aircraft liability there are many other liabilities involved which
are further divided into four parts. They are
AIRCRAFT
3RD LIABILITY
PARTY
PASSENGE
R CARGO
BAGGAGE
AND
These are the kinds of liabilities which are covered in aviation insurance
the explanation in detail is given below
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PASSENGER LIABILITY
Coverage for
aircraft operators in
the event a
passenger is injured,
killed or disabled
during an accident
while aboard an
insured aircraft.
Aviation policies
Passengers injured in 'Turkish Airlines Plane Crash in divided liability
Netherlands' Feb 25, 2009
coverage into two
parts--general liability (excluding passengers), and passenger liability.
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However care must be taken to check that the motor policy wording does not
exclude fare-paying passengers, which is often the case. It is unlikely that an
underwriter will be prepared to cancel or amend the wording of a standard
motor vehicle policy.
For this reason Daily Cover policies are specifically for to cater for fare-
paying passenger liability.
This program offers 3rd Party Liability insurance coverage for non-
commercial operations only. Pilot and passenger injuries and aircraft physical
damage are not covered. This member benefit program is designed to allow
non-commercial pilots the benefits that insurance coverage can offer.
While pilot and passenger injuries and damage to the aircraft itself are
not covered under a Third Party program, financial responsibilities bodily
injury or property damage caused by the aircraft for which the pilot is found
to be legally liable to pay to others is covered. Additional insured parties
such as landowners, municipalities and airports, can also be covered under
this type of policy. Because the possession of Third Party coverage provides
landowners with a Certificate of Insurance showing that coverage is in place,
access to more flying sites are accessible for the operation of your aircraft
20
Concorde crash on a hotel near Paris Airport just few minutes after the take off which
resulted in destruction of th hotel it fell on, 25 July, 2000
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opportunity to enjoy the thrill of aviation without the worry of liability
concerns or the expense of high-priced insurance.
The people can be only eligible who are a registered, certificated or licensed
pilot are eligible. Sport Pilot Students who are endorsed to solo are also
eligible. Pilot registration can be with any recognized organization.
BAGGAGE LIABILITY
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This kind of liability may include various reasons in the happening. They are
as follows:
1. Delays
If your bags are delayed, try not to panic. The airlines typically
have ways to track them, and about 98 percent of all misplaced luggage
is returned eventually. If your bags are on the next flight, you could have
them within a few hours. If they've been sent to the wrong airport, it could
take a couple of days. Make sure to file your claim immediately at the
airport and to give the attendant a hotel or home phone number and
address.
The airlines will typically bring you your luggage when it is found; you will
rarely need to return to the airport to pick it up. Additionally, many
airlines will reimburse any unexpected expenses caused by the loss or
delay (keep your receipts!). But be careful here -- the airline sometimes
has the option to deduct any reimbursement or stipend from any
subsequent awards.
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Before you leave the airport, be sure you know how to check on your
bag's status; some airlines have an online system while others will
provide you with a phone number to call for updates.
2. Lost Baggage
If the airline loses your bags, make sure you get a written claim for
damages. This may require a different form than the original "missing
luggage" form. This can be done at the airport or by mail.
You may
need to produce
receipts to prove
the value of items
you had in your
suitcase. If you
have them,
include copies in
any
documentation
A place consisting lost baggage’s in airport
you send to the
airline. (Keep in mind that you will be reimbursed for the depreciated value
of your items -- so the airline won't give you the full $1,000 you paid for that
suit you purchased two years ago.) You can purchase "excess valuation"
protection if your checked baggage is worth more than these limits (but
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before doing so, make sure the items aren't already covered by your
homeowner's or travel insurance policy).
The airlines typically have a long list of items for which they will not
be held responsible; these include jewelry, money, heirlooms and other
valuables. These sorts of items should always be packed in your carry-on
bag.
3. Stolen Baggage
Head directly to
the baggage carousel
when you get off your
flight. Many airlines
scan bags when they're
loaded into the
baggage claim area and
keep records, especially
Unclaimed baggage ready to be stolen at larger airports. Once
you've left the baggage
claim area, your claim is
no longer with the airline,
but with the police.
4. Damaged Baggage
According to,
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“Although Martinair Cargo will give its best efforts to deliver your shipment at its
final destination in good order and condition, sometimes damage / depreciation,
delay or (partial) loss unfortunately occurs. In case such an irregularity should
affect your shipment, a claim can be filed with Martinair Cargo Claims. In order to
facilitate and speed up the claim handling process, we kindly would like to draw
your attention to the following:
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independent evidence in order to prove the extent of the damage as claimed
for.
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II What to do in case of (partial) loss/pilferage of your shipment
Loss:
.
1 Definition: loss is defined as all pieces (mentioned on the Master Air
Waybill) reported missing
2
3 Send a preliminary claim to Martinair Cargo Claims within 120 days
from the date of issue of the Master Air Waybill.
1 Make sure, that partial loss and/or pilferage is noted on the warehouse
release form/delivery receipt of the warehouse or on the Trucking document
in case of direct deliveries. In case of pilferage, please also establish the
weight discrepancy.
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sales invoice as a refund for loss of profit is not part of our contractual
liability.
2 Packing list. Please indicate the items / pieces claimed for Cession
of Rights, if required, from the party (shipper / consignee as mentioned of
the Master Air Waybill) entitled to claim, which states that your company is
authorized to act on their behalf.
3
4 Copy of the Martinair Master Air Waybill (and if possible a copy of
the relevant House Air Waybill).
5
A specification of the amount claimed for (by means of a shipper’s
invoice, an independent survey report, a bill of sale or a bill of repair).
1 Copy of the delivery receipt.
2 (digital) Pictures, if available.
3 Your banking details, including swift code.
In case your claim concerns damage / depreciation, please enable us to verify the
extent / direct consequences of the irregularity by also enclosing:
1 Independent and objective survey report, if issued. In case the
amount of the damage / depreciation is expected to be below the costs
involved in employing a surveyor, a survey report obviously is not required.
Please note that the decision whether or not to involve a surveyor is entirely
yours. The presence of an objective survey report, however, will never
reduce the strength of your case.
2 Destruction report, in case the shipment was no longer fit for sale.
3
4 Bill (s) of sale, in case the shipment was still fit for sale.
5
6 Bill (s) of repair (if applicable).
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Only upon receipt of the information as requested above, your claim can be taken
into consideration. If any of these documents are not available, please explicitly
state so. Please be informed that an adequate and sufficient provision of all
relevant documents enables a swift and efficient claim handling procedure.
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fines etc.), Act of God , Force Majeure situation, authority regulations.
Reference is made to our General Conditions. Martinair also will decline all
liability for goods not properly packed for air transportation.
Martinair Cargo does not accept liability for perishable cargo delivered
into our custody at a temperature exceeding the temperature limits
mentioned on the warehouse receipt / acceptance slip or exceeding the
temperature limits mentioned in the “IATA, Perishable Cargo Manual”. Also
liability is not accepted by Martinair Cargo for damages which are a result of
inherent defect, nature or vice of the cargo whilst shipment has not suffered
a significant delay.
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EXCESS LIABILITY
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Excess liability is all about the refueling and the defueling of the aircraft.
Excess liability is also known as THIRD PARTY WAR RISKS.
General aviation refers to aircraft such as small planes that seat less
than 20 passengers and were not engaged at the time of the flight in
scheduled passenger-carrying operations. It includes helicopters, as well.
Knowledgeable brokers can assist in the process of identifying what type
of coverage is necessary on a case by case basis.
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Wings of the plane made of Aluminum
Coverage
This policy protects parties from claims arising from injury or
damage caused by defects in the products sold or manufactured or from
improperly completed operations. Manufacturers, distributors and sellers
can be open to liability even if it is proven that the product was used
improperly. Insurance coverage will cover their legal fees needed for
defense against claims and class action suits
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Three times big tyres of a plane
Statistics
Though air traffic is considered to be a safe means of
transportation, accidents do occur. Some of the more common causes of
many of these incidents are faulty equipment and structural or design
problems. Aviation products can cause catastrophic accidents as the
result of relatively minor failures.
GROUNDING LIABILITIES
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This may include liabilities as follows
PREMISES-LIABILITY
This basic part of the policy will protect the liability of the operation for the
employees while performing their duties. This would be the fueling operation,
and any part of the business associated with the office and ramp areas. The
facility will add to this policy additional parts to cover the specific needs of
each operation.
HANGARKEEPERS
The larger operations, you know, like a Bell service center with 8 to 10
beautiful ships in various stages of maintenance with full pilot training
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facilities for instance, is almost always going to have exceptional policies
covering their business operations that include what you do. Their policy will
cover any person acting on behalf of the operation in the carrying out of their
duties. This policy will protect you if you should do something unintentional
that causes damage. An example might be in the process of moving a helo in
or out of the hangar with a power tug. If you are watching one side and start
the turn too soon and catch the tail boom or rotor on the hangar door or
another helicopter sitting next to the one you are moving, the damage you
cause will be covered by the operations Hangarkeepers coverage.
Now let’s say you work for a maintenance only shop with just 1or 2 ships
being worked on at any one time. In these difficult economic times, it is not
unheard of for some operations to trim expenses and not purchase the
Hangarkeepers option of the policy. If you are unsure, work up the courage
to ask your boss if you are covered under this part of the policy. Seeing a
copy of the declarations page with the policy effective dates will help
reassure you and will also tell you if the coverage has been purchased.
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People working as hangar keepers
TRAINING
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IN-FLIGHT-HANGARKEEPERS
This coverage is important if you are operating the helicopter in flight. It is
not uncommon for an operation to do a test flight after maintenance has
been performed or if avionics have been installed or changed. Sometimes a
problem reported by the owner can only be replicated while in flight. If you
are the one who flies it, be sure you meet all of the pilot requirements of
both the operators’ policy and the helicopter owners’policy.
In almost every case, an owner will have an aircraft policy that has as part of
their pilot warranty a paragraph that states what qualifications a pilot needs
to meet before he can fly as part of a maintenance flight. There are some
operators who believe that the owners’ policy will cover any damage that
results from a loss to the aircraft while flying under this provision. Remember
that the owner
has a policy to
protect them;
not you. If
there is a loss,
they will get
the aircraft
repaired; but if
the loss was
the fault of the
pilot and not
the ship, the
company may
Eligible pilots
take the
opportunity to subrogate the loss back to the repair shop.
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AIRPORTS OWNERS AND OPERATIONS LIABILITY
Insurance objects:
o - fuelling station;
o
Insurance risks:
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Beautifully built Riyadh Airport
Insurance period:
43
• - structures comprising the airport;
•
• - security measures;
•
Exclusions:
• Specific:
o - liability to the Insured’s personnel;
o
PRODUCT LIABILITY
Product liability is the area of law in which manufacturers,
distributors, suppliers, retailers, and others who make products available to
the public are held responsible for the injuries those products cause.
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Theories of liability
In the United States, the claims most commonly associated with product
liability are negligence, strict liability, breach of warranty, and various
consumer protection claims. The majority of product liability laws are
determined at the state level and vary widely from state to state. Each type
of product liability claim requires different elements to be proven to present
a successful claim.
Plane crash due to manufactures and other members related with the airlines
Types of liability
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• manufacturing defect,
• design defect,
• a failure to warn (also known as marketing defects).
Manufacturing defects are those that occur in the manufacturing process and
usually involve poor-quality materials or shoddy workmanship. Design
defects occur where the product design is inherently dangerous or useless
(and hence defective) no matter how carefully manufactured. Failure-to-warn
defects arise in products that carry inherent nonobvious dangers which could
be mitigated through adequate warnings to the user, and these dangers are
present regardless of how well the product is manufactured and designed for
its intended purpose.
During the past century, man has realized his dream to fly. The
aircraft has been developed and partially perfected. The aviation industry, as
it is known today, has grown into a set of definable sub-industries based
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upon usage. Modern-day aircraft range from military to commercial airlines
to the most diverse group, general aviation. As with any technology-based
industry, aviation continues to grow and develop. New uses for aircraft are
identified, better aircraft and avionics are created, and problems are
recognized and solved.
Although aviation has come a long way in the last 100 years, it is still a
developing industry. With growth and development come problems that
must be solved before an industry can graduate to the next level. In the
United States, aviation is now being confronted with a series of problems
that may take as long to solve as the act of flight itself. As aviation enters
the new millennium, it is these problems with which the aviation insurance
industry must deal. Some are simply growing pains. Others are outside
influences for which no simple solution may exist.
Legal Concerns
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And so it goes for the owner of general aviation and commercial aviation
aircraft in the United States. Aircraft owners seem to be trapped between
inadequate coverage limits, high-priced liability insurance premiums, and the
perils of the U.S. court system.
In the future, such sectors of general aviation as the small piston repair
shop and the small flight training school may not be able to afford the
increasing insurance premiums and in some cases may not be able to buy
adequate insurance at any price. This may spell the end for many in these
businesses. As of February 2000 at least three aviation insurance companies
have ceased writing small "Instruction and Rental" risks while others have
increased their premiums for this class.
The future may see the small maintenance facility replaced with a new-
technology aircraft requiring far less maintenance. The same style of
maintenance used by the military and airlines -- the remove-and-replace
concept -- may become commonplace throughout general aviation as well.
Maintenance problems may be identified by computer and repaired only by
the manufacturer at factory service centers, a practice that is already
common in today's bizjet fleet. "Plug and fly" replacement parts keyed to a
computer analysis may decrease cost with little or no downtime.
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All this, of course, is little consolation to owners of existing, older-
technology, maintenance-intensive aircraft. They're not getting any
younger ... and neither are we.
Aircraft hull and liability insurance for the senior pilot has become such
a concern that our insurance agency has developed a special task force to
help deal with this problem. Looking into the future, as the baby boomers
age, our average pilot populations continue to age. As with automobile
drivers, we have found this segment of our industry to be no more likely to
have an accident than the younger group. In fact, they tend to be more
cautious, better trained, and better financed than most underwriters care to
admit. Maybe it is because we are growing older ourselves, but we believe
increased awareness at the underwriting level will soon improve insurance
company acceptance and serve to extend the insurable age of the senior
pilot. We can assure you, we are doing everything in our power to influence
the underwriting community in that direction.
Meantime, what can be done to infuse new blood in the cockpit? The
industry is currently suffering from a lack of trained professional pilots.
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Without the military-trained pilot to help fill the need for commercial and
airline pilots, we must depend solely upon civilian-trained pilots. This then
becomes an economic problem. There is no longer a generous GI Bill to
offset the cost of flight training in an age of escalating costs.
Shrinking Fleet
Primary training costs are increasing for a number of reasons. The high
cost of new replacement training aircraft and inadequate and expensive
insurance render the training sector of aviation vulnerable to lawsuits and
financial disaster, and a shortage of qualified instructors has slowed the flow
of new pilots to a trickle. The shortage of career CFIs is due in part to the low
pay scale at most flight schools, whose owners respond that they're just
barely able to stay in business as it is.
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Again, a look into the future suggests that the majority of primary
training will be done in flight simulators and computerized flight-training
devices. As demand increases and technology advances, the full-motion
simulator should become much more affordable and so realistic the only
thing left for the student pilot is the checkride. "Safe and inexpensive" will
become the name of the game.
If you want proof, the military has already adopted this method of
training from the combat tank to aircraft and everything in between, and
airline pilots are getting type-rated in new transport jets without having ever
set foot in the actual aircraft.
The proof is in the requests our agency receives for insurance quotations.
We are seeing increasing momentum toward turbine and jet aircraft. For
years, the corporate flight department has insisted upon the business jet for
comfort and safety. Now, with the development of the single-pilot jets, there
is increased interest from the businessman pilot in Citation SPs, CitationJets,
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and other new-generation Williams-engine-powered jets. In our opinion, this
is clearly a look into the future. With the ease of operation and safety and
the decreasing acquisition and operational costs of new-generation turbine
aircraft, it is easy to see what the near future holds for the piston-powered
aircraft. Coupled with the increasing profitability of medium and large
businesses and their ability to afford private aircraft, and the frustrations of
flying the commercial airlines, we believe that the trend toward the small
corporate jet will escalate.
There is good news ahead, however. There is more competition in the upper-
level flight training area. With increased competition will come improved
programs and improved affordability. There will be more flight simulators
available for a wider variety of aircraft. In the future, we predict there will be
full-motion simulator-based training at every level ... yes, even for primary
training. You may see a pilot solo without ever leaving the ground. This is an
insurance underwriter's dream!
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We have no idea what can or should be done about the U.S. court
system with its irrational verdicts and out-of-control damage awards. From
this standpoint, aircraft owners and operators will continue to be plagued by
high liability insurance premiums and inadequate limits. We can only hope
that society will wake up at some point, change its attitude toward litigation,
and break loose from the hold that attitude has over all of us.
The advent of the computer is changing the way we live our lives, and the
cockpit is no exception. First seen in our navigational aids with the very
affordable GPS, the computer is revolutionizing the entire look and function
of our instrument panels. Tom Chappell, president of our agency, recently
attended the open house of one of our clients to view his new Lear 45. This
new-generation aircraft is truly an awakening. Sitting in the cockpit
wondering just what all the new pretty and colorful screens and dials were,
Tom felt as if he was viewing a piece of equipment from a future epoch. The
instrumentation, function and completeness of the panel were truly a look
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into the future of general aviation. The way pilots are trained in the future
will be changing -- not just to cut costs, but because the aircraft of the future
are here and are like nothing you have ever seen.
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The author is the Vice President & Head – Aviation at Aon Global Insurance
Brokers Pvt. Ltd.
Insurers on aviation growth path Indian Insurers have come a long way
in developing the market capacity for aviation insurance business and as
India‟s growth story continues, Insurers have kept pace with the growing
demand from buyers in India. Today the Indian market is playing a key role
in supporting not only buyers in India but also buyers in the sub-continent,
including major support to the SAARC region. As the Indian aviation industry
continues to grow, many new buyers have entered the insurance market
with requirement for different types of products. Apart from traditional airline
and aircraft related insurances, Insurers are now covering different verticals
of aviation industry ranging from airports to aircraft manufacturers with
bigger risks appetite. The year 2008 has seen heightened level of
competition amongst both Public and Private Sector Insurance Companies in
an attempt to retain the current market share and to fulfill an ever increasing
desire to participate in the aviation growth story.
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MR.Praful Patel, Ministry of Civil Aviation, Union Government of India
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This is more so in the General Aviation (generally aircraft with less than 61
seats) segment where the sum insured limits are within the capacities of
many Indian Insurers. General Aviation buyers in India have enjoyed
substantially lower premium payouts in 2008 compared to their world and
regional peers, as buyers have bargained hard taking advantage of the soft
market conditions and excess market quite a few buyers have switched their
insurers. On the Airline front, pricing continues to be driven by leading
international markets especially in London, as Indian Insurers continue to off
load major risks to international companies mainly in the European sub
continent, with insurance brokers playing a very important role in the entire
process. Market Potential For 2008, Aviations direct premium income in
India is circa INR 3,750 million and this includes buyers from all segments
including airlines, general aviation, aerospace, airports, ground handlers,
catering companies etc but excluding satellite. Over 75% of the total
premium comes from the airline segment with another 23% from General
Aviation. A very small portion of 2% is contributed by airport, ground
handlers, catering segment etc. In addition, capacity. In the process, National
Reinsurer, „GIC Re‟ writes substantial international aviation business (mainly
by way of inward reinsurance) coming into the country and gradually other
insurers are following suit, but with caution. Over the last 10 years GIC Re
has emerged as one of the largest aviation reinsurer in the international
market and is playing a key role in supporting Indian Insurers. Currently
there are over 200 buyers of aviation insurances in the country who need
aviation products in one form or other. Many new buyers have entered the
market in 2008 and the trend is expected to continue in 2009 albeit at a slow
pace. For the airline sector, customer base and number of aircrafts has
increased significantly in the past three years but current economic situation
is taking a toll on its future growth.
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When one compares the above limits to 2-3 years back it signifies a jump of
over 200%-250% and majority of the capacity comes from National
Reinsurer, GIC Re. New capacity has entered Indian market especially during
2007, 2008 with Private Insurers buying reinsurance programmes to support
their direct underwriting. At the same time existing Insurers have expanded
their underwriting limits.
It is expected that capacity will be more or less stable during 2009 and as a
result dependence on international market for General Aviation is likely to
get reduced, but for large airline risks reliance on international market is
expected to continue.
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Claims Scenario
Each Insurer will have its own underwriting experience to
show and can vary from its peers considerably depending on their
participation on the policies that has produced losses. General Aviation
claims in 2008 are expected to exceed Rs. 500 million and 2009 has started
on a bad note with claims in first five months exceeding Rs.350 million. As
against this, past 10 years average general aviation losses are hovering
around Rs.400 million. When we compare these claim figures against the
total general aviation premium in India, one may come to a conclusion from
the insurers perspective that general aviation is profitable over the last 10
years period. This may not be true for all insurers, especially considering the
fact that 10 years average loss figure consists of two or three major losses in
each year. Insurers participating on these losses would have been hit hard.
Majority of the losses in the last 10 years are on account of aircraft damages
and liability claims forma a very small portion of it. However, by no means
does this give any indication into the future considering the catastrophic
nature of aviation business.
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Montreal Convention
The Indian Government ratified “Montreal Convention 1999” in March 2009
and currently it applies to international travel. There is nothing on record at
this stage to show that the revised liability limits are applicable to domestic
sectors. In brief, the Convention has increased compensation levels for
international passengers in the event of death or bodily injury and damage
and delay to the passenger baggage and cargo. While the compensation for
death or bodily injury has increased almost 7 times from the existing levels
of approximately USD 20,000 to around USD 140,000, the compensation for
damage to the checked baggage has increased from approximately USD 20
per kg to around USD 1,400 per passenger. The compensation for damage to
cargo has increased from USD 20 per kg approximately to USD 24 per kg.
The Warsaw System, which is in force in India by way of Carriage by Air Act,
1972 had allowed four choices of jurisdiction for filing of a claim by the
passenger, namely, place of issue of ticket, principle place of business of the
carrier, the place of destination of the passenger and the place of domicile of
the carrier. Through the Montreal Convention a fifth jurisdiction is added
which is the place of domicile of the passenger, provided the airline has a
presence there. Therefore an Indian would be able to file claim in India even
if the journey was undertaken outside India. Liability Limit for domestic
passengers in the event of death or bodily injury continues to be at the old
level of Rs.750,000 for passengers above 12 years of age and Rs.350,000 for
below 12 years. As regards damage and delay to the passenger, baggage
compensation is Rs.4,000 per passenger for hand baggage and Rs.450 per
kg for registered baggage. So far, Insurers have responded very positively by
covering their customers based on the revised limits for international travel
and it remains to be seen whether new limits will be applicable for domestic
travel as well and its impact on the liability claims scenario.
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Aviation Liability Insurance Limits in India:
Western European countries including countries in the Far East namely Hong
Kong, Singapore have adopted regulations specifying minimum liability
insurance limits for aircraft based on the “maximum take off weight of the
aircraft” and “passenger seating capacity”, however India is yet to adopt any
such regulations. Even neighboring countries like Sri Lanka and Nepal have
minimum liability insurance requirements for aircraft and it may not be too
long before India adopts such requirements. While Airlines and Corporate Jet
owners are buying liability limits in line with the international trend, there is
no similar trend when it comes to helicopter operators. Like Airline policies,
liability limits on Corporate Jets many times are driven by financing
/purchase agreements; however helicopter operators tend to buy low limits
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AVIATION INSURANCE SERVICE PROVIDERS IN INDIA- NEW INDIA LIFE
ASSURANCE CO. LTD
The logo of THE NEW INDIA LIFE ASSURANCE insurance advice and
solutions to the needs of
small aircraft operators
as well as scheduled airlines.
• Hull All Risk Insurance Policy: This policy is suitable for small
aircraft operators belonging to flying clubs, companies engaged in
agricultural spraying operations, aircrafts especially designed for
VVIPs, business executives and for those engaged in industrial aids.
The policy scope includes all physical loss or damage sustained by
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the insured aircraft including total loss, disappearance. All losses are
paid subject to deductibles.
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financial loss is covered by the loss of license policy. Cover provided
is in respect of incapacity causing permanent total disablement or
temporary total disablement due to bodily injury or illness.
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FORMS PROVIDED BY THE COMPANY REGARDING
AVIATION INSURANCE
There are basically three types of forms provided by the company regarding
aviation insurance. They are as follows:
All the forms are different from each other and also the columns to be filled.
In other words they differ from each other.
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The New India Assurance Company Limited
Registered & Head Office: New India Assurance, 87, M.G. Road, Fort, Mumbai - 400 001.
Declaration Form for Aviation Personal Accident Policy For Crew Members
(To be completed by each person to be insured and to form part of the Aviation Personal
Accident Proposal Form)
1. Name :
6. Give details of your flying experience : Aircraft Total No. of Hours Flown
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9. Has any insurance company at any time,
a. Declined your proposal for aviation
P.A. Policy or Life Insurance :
b. Required an increased premium or
imposed special conditions? :
c. Cancelled or refused to renew
your insurance? :
If answer to a, b or c is “yes”,
Please give details :
I, the undersigned, hereby declare that all the above particulars are true and complete in
every respect, that I am in good health and free from physical infirmity or defect of any
kind, that I am and always have been of temperate habits, and that I have not withheld or
suppressed any information regarding the proposal.
Place:
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Proposal Form for Aviation Personal Accident Policy
(For pilots, navigators, aircraft flight engineers, aircraft flight technicians & other crew
members)
2. Proposer’s Address :
4. Persons to be insured
(A declaration form in the prescribed format should be completed by each person to be
insured and attached to this proposal)
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10. Has any aircraft owned or operated
by you ever met with an accident
involving injuries to passengers
and/or crew members? :
(Signature of the
Insured)
I/We hereby declare that the above statements are true and complete. I/We agree that this
proposal and declaration form (signed by the person/persons) to be insured) shall be the basis
of
the contract between me/us and the insurance company. I/We further agree to accept a policy
subject to the conditions stipulated therein by the insurance company.
Place:
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The New India Assurance Company Limited
Registered & Head Office: New India Assurance, 87, M.G. Road, Fort, Mumbai - 400 001.
(DEFINITE ANSWERS SHOULD BE GIVEN FOR ALL QUESTIONS. NO COLUMN SHOULD BE LEFT BLANK OR
COMPLETED WITH A '-' (DASH))
2. Proposer's address:
3. Proposer's business:
or occupation
Year of Price Paid Present value of the aircraft Extra equipment and accessories Total value of
purchase Rs. with standard instruments fitted to or carried in the aircraft the aircraft for
and equipment (Rs.) the purchase of
Details Value insurancee
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6. Purpose for which the
aircraft will be used
11. Will the aircraft be taxied by persons other than licensed pilots or competent licensed
engineers?
12. Have you entered into any agreement with any party whereby liability is assumed or
denied in respect of the operations of the aircraft ?
If so, give details
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Total Night:
During last 3 months:
On type & make of
aircraft proposed for
insurance:
Current License
Date of expiry
Classification
Details of accidents, if
any, during last three
years
DECLARATION: I/We warrant that the abovementioned aircraft is/are my/our property,
and the statements and particulars given are true and that no material information has been
withheld or suppressed, and I/We agree that this proposal and declaration shall be
the basis of the contract between me/us and the Insurance Company and to accept a
policy subject to terms, conditions and exclusions prescribed therein.
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The New India Assurance Company Limited
Registered & Head Office: New India Assurance, 87, M.G. Road, Fort, Mumbai - 400 001.
A. Surname:
Christian Names:
Address:
Date of Birth:
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If freelance state: -
1. Type of Employment anticipate and all remunerated occupation:
2. Type of flying during past 2 years e.g. Air Line, Crep-spraying, Helicopter etc
D. State whether or not you already have a Loss of License Insurance Policy,
(State “Yes” or “No”. If Yes, state: -
a. With whom?
b. For what amount?
c. Date of expiry of the Insurance:
d. Particulars of Insurance required:
NOTE: This insurance may be invalidated by the existence of another Loss of License
insurance unless prior agreement is obtains from the "NEW INDIA ASSURANCE CO. LTD."
________________________________________________________________________
I hereby declare that to the best of my knowledge I have not sustained any personal injury
whatsoever and I am not at the present time and have not been at any time afflicted any
illness whatsoever (including temporary or otherwise of my physical aural or eye condition)
except as detailed below: -
I further declare that the certificate of validity forming part of my above mentioned License
has never been invalidated for any period, except as stated below: -
I warrant that the above statements and particulars are true and thereby agree that this
Declaration shall be held to be promissory and shall form the basis of the contract between
me and the New India Assurance co. Ltd. and I am willing to accept a policy subject to the
terms, exceptions and condition prescribed by the Company therein, and to pay the
premium thereon.
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THE NEW INDIA ASSURNACE COMPANY LIMITED reserves the right to impose special
conditions or refuse to accept a proposal form.
________________________________________________________________________
(State all illnesses of whatsoever nature and all accidents involving injury and give result of
last cardiograph examination with date in all cases)
SPACE FOR DETAILS DURING WHICH THE CERTIFICATE OF VALIDITY FORMING PART OF
THE PROPOSERS' LICENCE HAS BEEN INVALIDATED (State date and cause: If NIL state
NIL.)
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