The European Commission (EC) has extended insurance coverage for the continent's airlines to the end of this month, but any further extension is likely to run into problems with European anti-subsidy laws.
After 11 September, with EC blessing, European governments brought in emergency insurance measures to make up for the withdrawal of commercial war risk coverage. These were due to expire at the end of May.
Late last month, however, Germany, Spain and the UK began encouraging airlines to end dependence on state emergency cover. The UK is pushing Eurotime, a three-tier scheme based on the US Equitime plan, whereby commercial insurers provide initial cover of up to $150 million, with a mutual insurance pool covering risk up to $1.5 billion, and governments picking up any surplus. But Germany and Spain want the industry to go further, pointing to insurers such as Allianz, which is prepared to provide full cover of up to $1 billion per aircraft or $2 billion per airline a year.
Putting all risk into the commercial market is expected to result in higher charges for airlines, which are now covered for only $50 million per aircraft via the commercial sector. But without complete cover, the aircraft will be grounded.
Source: Flight International
