Aviation

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INTRODUCTION
INTRODUCTION TO SERVICE SECTOR INSURANCE INDUSTRY AIRLINE INDUSRTY INDIAN AIRLINE INDUSTRY AVIATION INSURANCE AVIATON INSURANCE IN INDIA
1 N. G. Acharya & D. K. Marathe College, Chembur
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INTRODUCTION TO SERVICE SECTOR
The service sector accounts for more than half of India's GDP: 51.16 percent in 1998-99. This sector has gained at the expense of both the agricultural and industrial sectors through the 1990s. The rise in the service sector's share in GDP marks a structural shift in the Indian economy and takes it closer to the fundamentals of a developed economy (in the developed economies, the industrial and service sectors contribute a major share in GDP while agriculture accounts for a relatively lower share).
The service sector's share has grown from 43.69 per cent in 1990-91 to 51.16 per cent in 1998-99. In contrast, the industrial sector's share in GDP has declined from 25.38 per cent to 22.01 per cent in 1990-91 and 1998-99 respectively. The agricultural sector's share has fallen from 30.93 per cent to 26.83 per cent in the respective years.
Some economists caution that if the service sector bypasses the industrial sector, economic growth can be distorted. They say that service sector growth must be supported by proportionate growth of the industrial sector; otherwise the service sector grown will not be sustainable
Within the services sector, the share of trade, hotels and restaurants increased from 12.52 per cent in 1990-91 to 15.68 per cent in 1998-99. The share of transport, storage and communications has grown from 5.26 per cent to 7.61 per
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cent in the years under reference. The share of construction has remained nearly the same during the period while that of financing, insurance, real estate and business services has risen from 10.22 per cent to 11.44 per cent. The fact that the service sector now accounts for more than half the GDP probably marks a watershed in the evolution of the Indian economy.
Customer satisfaction predominates the success of an enterprise. In the service industry where intangibles are marketed, the importance of customer satisfaction is all the more significant. Service is said to be the sharpest edge of marketing strategy. Sales and service are the two important wings of service industry like LIC, ITI and the post office. If one of the wings turns weak the organization cannot rise because the weaker wing will hamper its flight. Hence the emphasis should not be concentrated only on the sales but on service aspects too. Besides a supportive role in promoting sales effort, servicing influences the institutional image. Prompt and effective service boosts the morale of the sales force to present a bold form and hold their prospects. Service encompasses the service rendered to clients before, during, and after sales. A few examples of services are the Hotel industry, Airline industry, Insurance industry, Transportation industry, etc.
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INSURANCE INDUSTRY
Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. Insurance in the modern form originated in the Mediterranean during 13/14th century. The earliest references to insurance have been found in Babylonia, the Greeks and the Romans. The use of insurance appeared in the account of North Italian merchant banks who then dominated the international trade in Europe at that time. Marine insurance is the oldest form of insurance followed by life insurance and fire insurance. The patterns that have been used in England followed in other countries also in these kinds of insurance. The origin and growth of Marine Insurance, life Insurance, Fire Insurance and miscellaneous insurance.
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AIRLINE INDUSTRY
In Airline Industry Aviation Insurance is a type of miscellaneous insurance, concentrating on each and every aspect of aviation insurance and how it has affected the service sector in recent times. Aviation is the most expensive industry means of transport today. This sector gained importance and created awareness after the 9/11 attack on the twin towers of America. After this attack lot of changes took place in the aviation sector and also lot of amendments were made by the law to regulate the aviation insurance contracts. So let us see what these changes are and how aviation insurance forms one of the important parts of any countrys insurance sector.
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INDIAN AIRLINE INDUSTRY

The Indian aviation industry is one of the fastest growing aviation industries in the world. The government's open sky policy has led to many overseas players entering the market and the industry has been growing both in terms of players and number of aircrafts. Today, private airlines account for around 75 per cent share of the domestic aviation market. India is the 9th largest aviation market in the world. According to the Ministry of Civil Aviation, around 29.8 million passengers traveled to/from India during 2008, an increase of 30 per cent on previous year. It is predicted that international passengers will grow upto 50 million by 2015. Further, due to enhanced opportunities and international connectivity, 69 foreign airlines from 49 countries are flying into India. Growth The Indian Civil Aviation market grew at a compound annual growth rate (CAGR) of 18 per cent, and was worth US$ 5.6 billion in 2008. Airlines recorded a doubledigit growth in air traffic in August 2009, according to data released by the industry regulator Directorate General of Civil Aviation (DGCA). Domestic airlines flew 3.67 million passengers in August 2009, as against 2.92 million in the corresponding period last yearan increase of 26 per cent. The Centre for Asia Pacific Aviation (CAPA) forecasted that domestic traffic will increase by 25 per cent to 30 per cent till 2010 and international traffic growth by 15 per cent, taking the total market to more than 100 million passengers by 2010.
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By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and around 3.4 million tons of cargo per annum. Moreover, significant measures to propel growth in the civil aviation sector are on the anvil. The government plans to invest US$ 9 billion to modernize existing airports by 2010. The government is also planning to develop around 300 unused airstrips. India ranks fourth after US, China and Japan in terms of domestic passengers volume. The number of domestic flights grew by 69 per cent from 2005 to 2008. The domestic aviation sector is expected to grow at a rate of 9-10 per cent to reach a level of 150-180 million passengers by 2020. The industry witnessed an annual growth of 12.8 per cent during the last 5 years in the international cargo handled at all Indian airports. The airports handled a total of 1020.9 thousand metric tons of international cargo in 2006-07. Further, there has been an increase in tourist charter flights to India in 2008 with around 686 flights bringing 150,000 tourists. Also, there has been an increase in non-scheduled operator permits 99 in 2008 as against 66 in 2007. Low cost services Major full-service carriers have converted around half their capacity into low-cost services, which has resulted in bringing down the average fares of airlines as a whole by about 30 per cent and thereby increasing demand from the domestic passenger market.
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Kingfisher Airlines and Jet Airways have converted around half their capacity into low-cost services. While, government carrier Air India plans to launch a low-cost model in the domestic skies. It already has a low-cost airline called Air India Express which operates on international routes. Jet Airways has also increased the number of low-cost seats in the system by around 50 per cent. Low cost carriers (LCCs) such as Indigo and SpiceJet have increased the total number of seats by 40 per cent and 53 per cent, respectively, in the past year.
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Aviation Insurance was first introduced in the early years of the 20th Century. The first aviation insurance policy was written by Lloyd's of London in 1911. The company stopped writing aviation policies in 1912 after bad weather and the resulting crashes at an air meet caused losses on many of those first policies. It is believed that the first aviation polices were underwritten by the marine insurance Underwriting community.
In 1929 the Warsaw convention was signed. The convention was an agreement to establish terms, conditions and limitations of liability for carriage by air, this was the first recognition of the airline industry as we know it today.
By 1933 realizing that there should be a specialist industry sector the International Union of Marine Insurance (IUMI) set up an aviation committee and by 1934 eight European aviation insurance companies and pools were formally established and the International Union of Aviation Insurers (IUAI) was born.
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
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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.
AVIATION INSURANCE IN INDIA

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded by a large number of people. 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 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
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Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan in early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers. The assets of the existing airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These government-owned airlines dominated Indian aviation industry till the mid-1990s.
In April 1990, the Government adopted open-sky policy and allowed air taxioperators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services sector.
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THE RISK
THE RISK EXCLUSION GENERAL LIABILITIES
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THE RISKS
Hull "All 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". Airline hull "All Risks" policies are subject to a standard level of deductible (that is an uninsured amount borne by the Insured) applicable in the event of partial (non-total) loss. Currently, this deductible can range from $50,000 in respect of a Twin Otter to $1,000,000 in respect of a wide-bodied jet aircraft, such as a Boeing 747. Deductibles too can be reduced by means of a separate "Deductible Insurance" policy. The Deductible Insurance Policy is affected to reduce the large "All Risks" policy deductibles to a more manageable level. For example the US$1,000,000 applicable to a Boeing 747 can be reduced to say US$100,000. 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. 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
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"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 "preloss" 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.
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EXCLUSIONS
Wear, tear and gradual deterioration - in common with most non-marine policies these perils are thought to be a trading expense and not a peril to be insured. Ingestion damage - caused by stones, grit, dust, sand, ice, etc., which result in progressive engine deterioration is also regarded as "wear and tear and gradual deterioration", and as such is excluded. Ingestion damage caused by a single recorded incident (such as ingestion of a flock of birds) where the engine or engines concerned have to shut down is not regarded as wear and tear and is covered subject to the applicable policy deductible. 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" budget.
Spares
First of all we must identify what we mean by a "spare" or perhaps "when is a spare not a spare" to which a simple answer is "when it is attached". Under most "Hull" policies the word "Aircraft" means Hulls, machinery, instruments and the entire equipment of the aircraft (including parts removed but not replaced). Once a part is replaced it is no longer, from an insurance viewpoint,
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part of the aircraft. Conversely once a spare part is attached to an aircraft as a part of that aircraft (not in the hold as cargo or on the wing as an extra pod) it is no longer a "spare". 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. Having established when a spare is a spare how is it insured as such? Usually in one of two ways. Either under a "spares" section of a hull policy or by a separate Spares Policy. In either case the scope of coverage will probably be similar. All Risks whilst on the Ground and in Transit for a limit of [so much] any one item or sending or any one location. War Risks can also be covered (in respect of transits), Strikes, Riots, Civil Commotions can be covered in accordance with standard market clauses. Spares coverage is usually subject to a small deductible except, however, in respect of ground running of spare engines when the appropriate Ingestion deductible will be applied. Spares are normally covered on an agreed value basis - usually their replacement cost (be it new or reconditioned as is required). Spares installed on any aircraft are not covered by the Spares Insurance. They become, from an insurance standpoint, a part of the aircraft upon which they are installed and a part of the Agreed Value for which it is insured. This becomes particularly important if the parts are loaned to another airline.
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Hull War Risks
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.
War Definition: War - this includes civil war and war where there is no formal declaration. The detonation of a weapon of war employing nuclear fission or fusion. Strikes, riots, civil commotions and labour disturbances. Political or terrorist acts. Malicious or sabotage acts. Confiscation, nationalization, requisition and the like by any government. Hi-jacking or any unlawful seizure or exercise of control of the aircraft or crew in flight. 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.
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Aircraft deductibles are not normally applied in respect of losses arising out of "War and Allied Perils". Other exclusions insurers will usually apply are, as follows: Confiscation etc. by the "state" of registration (this exclusion can often be deleted in respect of financial interests - albeit, in some instances at an additional premium charge) Any debt, failure to provide bond or security or any other financial cause under court order or otherwise; The repossession or attempted repossession of the Aircraft either by any title holder or arising out of any contractual agreement to which any Insured protected under the policy may be party; Delay and loss of use. (Although there is often an extension to the policy for a limited amount for extra expenses necessarily incurred following confiscation or hijacking). 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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Liability Insurance
Liability can be divided basically into two categories: Liability in respect of Passengers, Baggage, Cargo and Mail carried on the aircraft. These liabilities result from the operations the airline is set up to perform and are normally the subject of a contract of carriage like a ticket or airway bill, which provides some possibility of limiting the airline's liability.
Aircraft Third Party Liability - the liability for damage done to property or people outside the aircraft itself.
Every airline will arrange liability insurance for these two categories, normally in a single liability policy. In many countries there are requirements laid down imposing minimum limits of liability that are a prerequisite to obtaining an operator's licence. Elsewhere limits are specified for an aircraft to be allowed to land. The size of limit required is often related to the size of the aircraft concerned (and its potential for causing damage). A small aircraft operating only in remote regions and using small airstrips incurs considerably less potential exposure than an aircraft flying into and out of major airports.
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GENERAL LIABILITIES
The other category of liability covers premises, hangarkeepers and products liability and is called "Airline General Third Party" - being the liability for damage done to property or people arising from other than the use of aircraft. Many airlines cover their "Airline General Third Party Liability" within their main liability program.
It is called "Airline General Third Party Liability" these days since the insurers took steps specifically to exclude all non aviation activities (for example hotel ownership or management) from "Aviation" Policies a few years ago. Basically for a risk to be considered as "Airline General Third Party Liability" it must arise from what are described as "aviation occurrences" being those involving aircraft or parts relating thereto, or arising at airport locations or arising at other locations in connection with the airline's business or transporting passengers/cargo or arising out of the sale of goods or services to others involved in the air transport industry.This means that there is a definitive language detailing what is considered as "aviation exposure" such that any other (non-aviation) exposure is excluded.
Most policies are placed on a Combined Single Limit Basis. This means Bodily Injury and Property Damage combined. In the past, personal injury was included but now this has been separated. It should be mentioned, however, that these days the term "bodily injury", in addition to bodily injury, sickness and death resulting at any time, will include shock and mental anguish. "Personal Injury" on the other hand is defined as "offences against the person", such as false arrest, malicious prosecution, invasion, libel or slander and the like.
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In respect of Personal Injury the full policy limit, whatever that may be, is not available and is usually limited to US$25,000,000 any one offence and in the annual aggregate.
What are excluded from liability insurance are such things as: Damage to the Insured's own property. (It is after all a third party liability policy). War and Allied Risks although these are "written back" by a device called "The Extended Coverage Endorsement - AVN 52". Radioactive Contamination. Noise and Pollution - unless caused by or resulting in a crash, fire, explosion or recorded "in flight" emergency.
Both the Aircraft and General Liability policies usually includes the "war and allied perils" exposure by way of a "write back" and will probably provide for such things as search and rescue expenses, first aid and other humanitarian expenses and also defence costs.
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.
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BUYING AVIATION INSURANCE CONTRACT
SELECTION OF A BROKER WHAT DOES YOUR BROKER DO FOR YOU? WHAT TO GIVE YOUR INSURANCE BROKER
RENEWING AVIATION INSURANCE
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BUYING AVIATION INSURANCE CONTRACT

As with many specialized service or commodity purchasing, the use of an experienced intermediary or middleman is usually prudent for the transaction process. Although this middleman may not be required in all facets or industries for successful purchases, in the Aviation Insurance Industry, with only one exception, it is required. The middleman we are discussing is often referred to as a Broker; it is quite frankly the only way to accomplish this need. All the Aviation Insurance companies or groups require the use of a Broker to secure insurance on behalf of the consumer. So what is this Aviation Insurance Broker we need to utilize and access most of the companies providing insurance?
Well, the term broker refers to an independent insurance person who is licensed by the State to represent and work for the consumer in the insurance purchasing and service process. Unlike an insurance agent who represents an insurance company and represents that insurance companys interest, a broker is independent of the insurance company and represents the needs and interest of the client. This independence allows the broker the freedom and opportunity to deal with multiple aviation insurance companies and is considered to be working the client. The brokers compensation is paid by a percentage of premiums, which comes from the consumer. This commission structure keeps the brokers attention to represent the best interest of the client/consumer and places a responsibility that the broker provides a continuous service and handling of the insurance needs or requirements.
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SELECTION OF A BROKER:
The selection process of a broker should be more involving for the consumer, than which insurance company to buy the coverage from. That is a process consumer and the broker decide upon. The selection of a broker should take several considerations, such as the experience the broker has in the consumers segment of aviation or operation, the infra-structure or team support behind the broker to achieve the demands of technical service and document handling, the market relationship and credibility with underwriters (the insurance company), and the overall reputation in the aviation community. Just as an extensive interview process in conducted to select an employee for a company, so should the hiring process involve searching for, and selecting the aviation insurance broker. This can be conducted by an interview process where the broker sells themselves and the organization they represent as well as a check upon their credentials with a client list of references. Once this process is complete and the consumer feels comfortable with the selection, the long-term relationship the consumer develops with his broker will provide the consumer years of professional service. If, however, the client believes his choice was not good or the broker service does not meet his expectations for a variety of reasons, the client can always change the broker as in the original selection process by writing a "Broker of Record" letter which is provided to the current insurance company. This letter will replace or fire the current broker with the clients new selection, which is based on his criteria and not that of any insurance company. Whatever the process by which the client select or remove the broker representation is controlled by the client.
WHAT DOES YOUR BROKER DO FOR YOU?

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Understanding the brokers job should help the client during the selection process. The broker will gather the "underwriting" information on the clients "risk", the aircraft or operation, and submit this information to the insurance company. This gathering of information can be as simple as a one-page application for small risk such as private aircraft usage or as complex as booklets of information for large commercial operations. In any event it is important that the broker knows what information to secure, how to present it and understands completely its context. Thats because the next important part of the brokers responsibility to the client is to negotiate the best combination of coverage and price for clients risk. This can only be achieved with a brokers level of understanding of clients risk, their experience in this area, and for larger risk having a support mechanism the underwriter can relate to. It is in this process the brokers skill is utilized to create the competition between insurance companies to obtain best industry prices at the current time. Once the broker has negotiated the clients insurance program, they will continue to advise the client from the purchasing process through the coverage issues that may arise during the policy period, usually one year. This expertise in service can deal with changes in your policy during its term to the most important reason the client bought the policy in the first place and that is handling a claim should one occur during the policy term. This service process from the client broker may not involve just one person, but multiples of support personnel depending on the size and complexity of your risk. As stated earlier, this is why the selection process is important and should involve understanding the structure of the entire brokerage firm for which to represent the client.
WHAT TO GIVE YOUR INSURANCE BROKER:
AIRCRAFT INFORMATION
Report year, make, model and acquisition value,

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N. G. Acharya & D. K. Marathe College, Chembur
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plus tail and serial numbers and information about passenger and crew seating.
BASE INFORMATION
Give details about home airport, hanger space and ground handling.
CONTRACTS
Supply drafts of usage, ownership and storage agreements.
LIABILITY LIMITS & PROVISIONS
Report average passenger load and profile and review insurance provisions, deductibles and war risk perils.
MAINTENANCE DETAILS
Explain whether youll outsource it, use an inhouse mechanic or do a little of both.
MISSION INFORMATION
Detailed purpose of use, territory of operations and anticipated annual hours of operations.
PILOT HISTORY FORMS
Submit signed forms (which are obtainable from your broker) for all pilots.
RENEWING AVIATION INSURANCE

If you're like most owners and pilots, you simply renew your aviation insurance policy every year. If it was good enough last year it will be good enough this year.
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Then you probably don't give it another thought until next year. And this pattern often repeats itself for many years.
There are two very big problems with this scenario. First, things change. Your aircraft, where you fly, who you fly with, how much you flymany of these things can change over the years, and they should be reflected in your policy. Second, and even more serious, it is quite possible that your policy wasn't the right one for you to begin with! In that situation, you are simply renewing your mistake year after year. In either case, your aviation insurance policy deserves a little bit of your time once a year. Here are the five things you should do to make sure you are adequately protected.
1. Choose your broker

When you insure your home or your business, a broker can choose from dozens and dozens of insurance companies. As a result, shopping around with a few brokers can make sense. Chances are, they may not even approach the same companies for your quote. In the case of aviation insurance, however, there are only four or five companies in Canada to choose from and even fewer that specialize in light aircraft. Obviously, it doesn't matter how many brokers you go to, the odds are that they will be approaching the very same companies on your behalf. This can actually be a serious disadvantage for you, as some companies will simply refuse to quote in these circumstances in order to avoid the feeding frenzy that can result when a number of brokers vie for the same account. So, as you can see, choosing your broker is the first step. But how do you choose? And are there any alternatives to a broker?
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Let's look at alternatives first. The only alternatives to a broker are the direct sellers and special programs. In these cases you are dealing with a salesperson who can only offer you the one product they represent. As a result, these options tend to be promoted on the basis of cheap ratesbut like bargains anywhere, they do so by cutting coverage and often leaving you seriously underinsured. If you really want to know what they can offer you, check them out. But before you make your decision; be sure to talk to a broker who works for you and not any one company.
So how do you choose the right broker? Start by finding an aviation specialist. Although any general insurance broker can sell you aviation insurance, they simply do not have the experience or familiarity with the field to be your best choice. Even more importantly, they usually can't get you the best rates.
If the insured is an aviation specialist, he may deal with the companies and underwriters every single day. He gets to know them personally and may place a lot of business with them. Now compare that to the average general insurance broker who maybe places one or two policies a year with that company. Who do you think will get you the better results? Finally, make sure that you are comfortable with the broker you choose.
2. Confirm the value of your aircraft

Neglecting to keep up with the market value of your aircraft is one of the most common renewal mistakes. If you do this year after year, you could be in for a rude awakening. Aircraft values have soared in recent years, with many doubling in
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price over the last decade.
Unlike home or auto insurance, aviation insurance is a stated value policy. That means that the owner is responsible for declaring the value of the insured aircraft. If you undervalue your plane, you risk losing it after even a minor accident. As I have explained many times in this column, the stated value is the maximum the insurance company will pay out and they will keep the plane as salvage.
So whether you have simply neglected to increase the value on your policy at renewal time or have tried to save a few bucks on the premium by insuring for a lower amount you are taking a very big gamble. Make sure you resolve this issue at your next renewal.
3. Review your liability

Make sure your policy doesn't have passenger or family member restrictions. This is the most common way that companies offer bargain policies. It is also the most common way owners lose everything they own when courts award large injury settlements that are not covered by their bargain policy. I regularly see people with limits of only $100,000 per person. You'd never consider such a low amount for your home or auto insurance, so why allow it on your aviation policy? With the high court settlements being awarded today, one to two million dollars should be the least you consider.
4. Get the right coverage for your needs
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At every renewal, you should discuss your flying habits with your broker. Many companies have territorial restrictions to the and some have restrictions for dirt or grass landing strips. Make sure your policy covers the kind of flying you do. If you have madeor are planning to makeany upgrades or changes to the configuration of your aircraft, you may need to make some adjustments to your policy. Otherwise, you may find yourself out of luck in case of an accident.
5. Protect your interests

Finally, you should discuss any other unusual circumstances regarding your aircraft. You may need to arrange for special coverage to protect your interests. One common example I run into is an owner who has his aircraft on lease to a flying school or commercial operator. If the lessee commits an illegal act or omission, your aviation policy could be nullified. In these situations, you should obtain Breach of Warranty coverage which will pay a lien holder's interest despite the policy being otherwise invalidated. Following these simple steps once a year at renewal time is an easy way to make sure that your aviation insurance policy continues to protect you. So don't take the easy way outdon't just say renew it as is for another year.
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KINGFISHER AIRLINES LTD

HISTORY STATISTICS FLEET
AVIATION INSURANCE OF KING FISHER AIRLINES
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Kingfisher Airlines
Kingfisher Airlines Limited is a major Indian airline. Kingfisher operates more than 400 flights a day and has a network of 80 destinations, with regional and long-haul international services. Kingfisher Airlines, through one of its holding companies United Breweries Group, has a 50 percent stake in low-cost carrier Kingfisher Red. Kingfisher Airlines is one of six airlines in the world to have a five-star rating from Skytrax, along with Asian Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and Airways. In May 2009, Kingfisher Airlines carried more than a million passengers, giving it the highest market share among airlines in India. Kingfisher has its registered office in the UB Tower in Bangalore and its head office in the Kingfisher House in Mumbai.
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History
Kingfisher Airlines registered office at the UB Group Towers in Bangalore, India The airline started operations on 9 May 2005, following the dry lease of four new Airbus A320-200 aircraft. Its first flight was from Mumbai to Delhi. At the launch of the airline, Dr. Malaya said that he is "committed to achieving our ambition of making Kingfisher Airlines India's largest private airline both in capacity and market share by 2010." Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems on every seat even on domestic flights. All passengers were given a "welcome kit" consisting goodies such as a pen, facial tissue and headphones to use with the IFE system. Initially, passengers were able to watch only recorded TV programming on the IFE system, but later an alliance was formed with Dish TV to provide live TV in-flight.[8] And in a marked departure from tradition, Kingfisher Airlines decided to have an on-screen safety demonstration using the IFE system. On 14 July 2008, Kingfisher unveiled its first ever Wide-body aircraft, a Airbus A330-200 (registered VT-VJL) at the 46th Farnborough Airshow held in July 2008. Kingfisher's first Airbus A330-200 was widely billed (according to the airline's press release) as the best A330-200 ever built by Airbus On 3 September 2008, Kingfisher started its international operations by connecting Bangalore with London. On 15th September 2009 the London service was withdrawn.
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Statistics Kingfisher Airlines Statistics Year Ended April 7 March 8 April 8 March 9 Destinations Kingfisher Airlines serves over 60 domestic destinations and 7 international destinations in 7 countries across Asia and Europe. Fleet Passengers Carried % Change Average Load factor (%)
12,414,336
10,850,359
12.6%
60%
Airbus A320-200
ATR 72-500
Airbus A330-200
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Kingfisher Airlines' fleet currently consists of ATR 42, ATR 72 and Airbus A320 family aircraft for domestic and short haul services and Airbus A330-200s for international long-haul services. The average age of its fleet as of January 2009 was 2.3 years. Kingfisher's fleet consists of the following aircraft as of 18 January 2010: Kingfisher Airlines Fleet Passengers Aircraft In Service Orders Options (Kingfisher First/Kingfisher Class) ATR 42500 ATR 72500 Airbus A319-100 Both aircraft dry leased. 15 new aircraft to be dry leased Notes
48 (0/48)
17 8
38
20
66 (0/66) 72 (0/72)
144 (0/144)
All 3 dry leased.
Airbus A320-200
10 3 10 67
134 (20/114) 174 (0/174) 180 (0/180)
9 dry leased. Deliveries through 20102012. 2 dry leased.

36
Airbus
151 (32/119)
N. G. Acharya & D. K. Marathe College, Chembur
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A321-200
199 (0/199) Deliveries
Airbus A330-200
15
217 (30/187)
through 20102012. Deliveries starting 2014. Deliveries starting 2014.
Airbus A350-800 Airbus A380-800 Total
TBD
TBD
66
130
25
Kingfisher Airlines has a commitment for 35 Airbus A320 family aircraft and 15 Airbus A350-800s which was announced at the 2007 Paris Air Show.[12]
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Cabin classes
Domestic
Kingfisher First The domestic Kingfisher First seats have a 48 inch seat pitch and a 125 degree seat recline. There are laptop and mobile phone chargers on every seat. Passengers can avail of the latest international newspapers and magazines. There is also a steam ironing service on board Kingfisher First cabins. Every seat is equipped with a personalized IFE system with AVOD which offers a wide range of Hollywood and Bollywood movies, English and Hindi TV programmes, 16 live TV channels and 10 channels of Kingfisher Radio. Passengers also get BOSE noise cancellation headphones. Domestic Kingfisher First is only available on selected Airbus A320 family aircraft. Kingfisher Class The domestic Kingfisher Class has 32-34 inch seat pitch with footrests. Every seat is equipped with personal IFE systems with AVOD on-board the Airbus A320 family aircraft. As in Kingfisher First, passengers can access the latest movies, English and Hindi TV programmes, live TV and Kingfisher Radio. On-board the ATR 72-500s there are 17 colour LCD drop-down screens mounted along with loudspeakers for audio in the cabin overhead, a head-end unit to handle CDs and DVDs, and a crew control panel. The screens measure 12.7 cm by 9.3 cm, weigh 0.2 kg each and are spaced every two or three seat rows along both sides of the cabin.
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Economy class meal on-board a Kingfisher Airlines domestic flight Kingfisher Red After Kingfisher Airlines acquired Air Deccan, its name was changed to Simplifly Deccan and subsequently to Kingfisher Red. Kingfisher Red is Kingfisher Airline's low-cost class on domestic routes. Passengers are given complimentary in-flight meals and bottled water. A special edition of Cine Blitz magazine is the only reading material provided. Kingfisher Airlines is the first airline in India to extend its King Club frequent flyer program to its low-cost carrier as well. Passengers can earn King Miles even when they fly Kingfisher Red, which they can redeem for free tickets to travel on Kingfisher Airlines or partner airlines. International Kingfisher First The international Kingfisher First has full flat-bed seats with a 180 degree recline, with a seat pitch of 78 inches, and a seat width of 20-24.54 inches.[13] Passengers are given Merino wool blankets, a Salvatore Ferragamo toiletry kit, a pyjama to change into, five-course meals and alcoholic beverages. Also available are in-seat massagers, chargers and USB connectors. Every Kingfisher First seat has a 17 inch widescreen personal television with AVOD touch screen controls and offers 357 hours of programming content spread over 36 channels, including Hollywood and Bollywood movies along with 16 channels of live TV, so passengers can watch their favorite TV programmes live. There is also a collection of interactive games, a jukebox with customisable
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playlists and Kingfisher Radio. Passengers are given BOSE noise cancellation headphones. The service on board the Kingfisher First cabins includes a social area comprising a full-fledged bar staffed with a bartender, a break-out seating area just nearby fitted with two couches and bar stools, a full-fledged chef on board the aircraft and any-time dining. A turn-down service includes the conversion of the seat into a fully-flat bed and an air-hostess making the bed when the passenger is ready to sleep. Both Kingfisher First and Kingfisher classes feature mood lighting on the Airbus A330-200 with light schemes corresponding to the time of day and flight position.
Kingfisher Class
The international Kingfisher Class seats offer a seat pitch of 34 inches, a seat width of 18 inches and a seat recline of 25 degrees (6 inches). Passengers get full length mod acrylic blankets, full size pillows and business class meals. There are in-seat chargers and USB connectors. Each Kingfisher Class seat has a 10.6 inch widescreen personal television with AVOD touchscreen controls. The IFE is similar to that of the international Kingfisher First class. In-flight entertainment Kingfisher's IFE system is the Thales TopSeries i3000/i4000 on-board the Airbus A320 family aircraft, and Thales TopSeries i5000 on-board the Airbus A330 family aircraft provided by the France-based Thales Group.[14]
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Kingfisher Lounge Kingfisher Lounges are offered to Kingfisher First passengers, along with King Club Silver and King Club Gold members. Lounges are located in: India

Bangalore Chennai Delhi Hyderabad Mumbai
King Club The Frequent-flyer program of Kingfisher Airlines is called the King Club in which members earn King Miles every time they fly with Kingfisher or its partner airlines, hotels, car rental, finance and lifestyle businesses. There are four levels in the scheme: King Club Base, Red, Silver and Gold levels. Members can redeem points for over a number of schemes. Gold and Silver members enjoy access to the Kingfisher Lounge, priority check-in, excess baggage allowance, bonus miles, and 2 Kingfisher First upgrade vouchers for Gold membership. Accidents and incidents
On 10 November 2009, Flight 4124, operated by ATR 72-212A VT-KAC skidded off the runway after landing at Chhatrapati Shivaji International Airport. The aircraft suffered substantial damage but all 46 passengers and crew escaped unharmed.
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AVIATION INSURANCE OF KINGFISHER AIRLINES
Two private sector general insurance companies, ICICI Lombard General Insurance and Bajaj Allianz General Insurance, have bagged the insurance account of Vijay Mallyas Kingfisher Airlines.
This is for the first time that the private sector general insurance companies have made major inroads into the aviation sector, which has mainly been the forte of the public sector insurers. Both ICICI Lombard and Bajaj General Insurance will share the Kingfisher Airlines account in a 75:25 ratio. After a beauty parade by the public sector and private general insurance companies, the account was awarded to the two private sector general insurance companies last week. ICICI Bank, one of the promoters of ICICI Lombard, has also financed the aircraft acquisition plans of the Kingfisher Airlines. The insurance deal will be executed the moment Kingfisher Airlines acquires its fleet of aircraft. Kingfisher will be the first private carrier to be launched with an all-new fleet. The airline has signed an agreement with Airbus Industries of France for the purchase of three brand new Airbus A319 aircraft. With this new purchase, Kingfisher Airlines, which will launch its operations on May 7, has ordered a total of 33 brand new aircraft. Of these, a total of 13 aircraft 10 A320s and 3 A319s are on firm order, with options for buying a further 20 aircraft.
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INFORMATION FLEET DETAIL AVIATION INSURANCE OF AIR INDIA
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AIR INDIA
Air India is India's finest flying Ambassador. The urge to excel and the enthusiasm, which characterised Air India's first flight, way back on October 15, 1932, is quintessential even today - thanks to Air Indians who have kept alive the tradition of flying high.
The recent merger of Air India and Indian, the country's leader in the domestic sector, has helped the airline to emerge as a major force in the airline industry. The re-branding exercise is currently underway and passengers are getting to see the unified face of the new invigorated Air India. The merged entity, which presently has a fleet of 148 aircraft offers passengers seamless travel across domestic and international routes.
FLEET DETAILS
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Aircraft Type B777 B747 A310 A319 A321 A320 A330 B737-800 ATR CRJ 700 B737-800 B737 Freighters A310 Freighters TOTAL
Owned 10 3 0 9 10 30 0 13 0 0 5 6 4 90
Leased 4 3 9 5 0 18 2 7 7 3 0 0 0 58
Total 14 6 9 14 10 48 2 20 7 3 5 6 4 148
Aircraft on order include eight B777-200LRs, fifteen B777-300ERs, twenty seven B787 Dreamliners, eighteen B737-800s, nineteen A319s, twenty A321s and four A320s. Of the 111 aircraft ordered, twenty three Boeing (five B777-200LRs, five B777-300ERs, thirteen B737- 800s) and nineteen Airbus (ten A321s and nine A319s) have been in the fleet so far.
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AVIATION INSURANCE OF AIR INDIA (Primary data)
New India Assurance Company participated in the Aviation Insurance of Air India way back in 1946. New India Assurance Company provides professional aviation insurance advice and solutions to the needs of small aircraft operators as well as scheduled airlines.
The aviation portfolio of New India Assurance Company encompasses following type of covers. 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 the insured aircraft including total loss, disappearance. All losses are paid subject to deductibles.
Spares All Risk Insurance Policy: Covers loss or damage to spares, tools, equipments and supplies owned by the insured or the property for which the insured is responsible whilst on ground or in transit by land, sea, air including in own aircraft or whilst on the premises of others for storage only.
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Hull/Spares War Risk Insurance: Indemnity is provided to the aircraft as well as spares caused by war, invasion, acts of foreign enemies, hostilities, civil war, rebellion, revolution, resurrection, martial law, strikes, riots, civil commotion, malicious acts, sabotage. Hull Deductible Insurance: Airlines at times have to bear a proportion of loss due to application of a deductible under All Risk Policy, which may impose considerable financial difficulty on the insured. Therefore the operators insure part of their deductibles under this kind of insurance.
Aviation Personal Accident (crew member) Insurance: This cover is designed to cover insured person against injury, disablement or death arising as result of an accident that is generally granted on annual basis. The cover operates while mounting or dismounting from and whilst traveling an aircraft while the aircraft is being used within the geographical scope as per its permitted usage. This cover can also be on 24 hours basis. The capital sum insured varies according to the status of the insured or earning capacity and fixed by the insurers.
Loss of License Insurance: Operating crews of the aircraft are required to have valid license. License is liable to be suspended either temporarily or permanently on medical grounds. Consequential 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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Besides the aforesaid general aviation policies New India Assurance Company also provides various other tailor-made insurance as per specific requirements of the insured.
Claims: In case of claims following are illustrative documents that are generally called for from the insured.
Documents in connection with aircraft details Documents in connection with flight details Documents in connection with the accident Certificate of airworthiness/registration Crew details Maintenance & engineering information Operational manual passenger documentation in case of claims
CURRENT SCENARIO OF AVIATION INSURANCE
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The magic of multiplier effect is now working for the aviation ancillary industry. Reaping the benefits of the aviation boom is not only maintenance, repairs & overhaul (MRO) operations but also the insurance sector. In fact, the spiraling growth in the aviation sector has given an upshot to the insurance segment.
As per an airline risk management survey - commissioned by international magazine Airline Business and global airline insurance broker Aon - airlines are spending no less than $8.36 bn a year on risk management, with around 70%, or $5.86 bn, spent on insurance premiums. Aviation premiums are, on an average, growing by 15.5% post-9/11, the survey reports. It further states that while the industry's loss record has been respectable in the last four years, traffic and passenger numbers have risen significantly, increasing the exposure to risk.
In India, a majority of the private players, including Bajaj Allianz, ICICI Lombard, Reliance and the four public sector general insurance companies - Oriental, New India Assurance, United India, National Insurance - offer aviation insurance in the market.
Although there are no official estimates, industry players put a ballpark figure of the Indian aviation insurance market at somewhere around Rs 400 cr to Rs 500 cr. "With new aircraft being bought by new players entering the sky and the existing one in expansion mode, this segment will only grow," says T A Ramalingam, head, underwriting, Bajaj Allianz. Bajaj Allianz is one of the most active players in the market and a co-insurer with Kingfisher Airlines, Go Air, Indigo Air and Air India among the scheduled airlines and also insured aircraft owned by India companies such as Bajaj Auto consortium,
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Force Motors, Ranbaxy group, Shamanur Sugar group, Orient Flight school, Asia Aviation, a part of the BILT group, Mundra Port and SEZ Ltd, an Adani group company.
In India, this segment is highly reinsurance-driven. A majority of the players have re-insured the value of risk covered with foreign companies. Take the case of Air India where almost 90% of the risk is insured overseas through reinsurance arrangements, while the remaining cover rests domestically.
According to Ernst & Young, a global consultancy firm, Indian skies would have over 700 aircraft - from 235 currently - by 2012, an increase of almost 200%. The numbers speak for the potential of this segment in the market, which is one of the fastest growing in the world.
"Predictions for aircraft deliveries to meet the increasing demand for air travel, particularly in Asia, mean that some 4,000 new airliners are on order, with this region at 1,242 leading the way. Growth in purchasing power of passengers and entry of low cost airlines has driven the upward movement of the airline industry both in terms of equipment and staff and opening new opportunities for this niche segment," believes Kartik Jain, head, marketing and e-channel, ICICI Lombard. The company has insured more than 75 aircraft till date. The shot in the arm for this industry has further come from the fact that aircraft are becoming bigger in size with large seating capacity. This, in turn, increases the risk for insurers, sometimes even catastrophic. With the emergence of bigger aircraft such as Airbus A 380 and Boeing 777 Dream liners, the values of the aircraft as well as the liability are slated to increase tremendously. The severity of each loss is
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also expected to go up proportionately. Currently, at least 10-15 re-insurers participate in an airline insurance programme. However, with the introduction of larger aircraft, the number of re-insurers participating would increase to 25.
The total premium figures for aviation insurance in India for 2006-07 stood at Rs 417.29 cr. Reliance, which does not hold a major share in the airline business till now, is counting on its experience of handling major risks pertaining to energy/ off-shore risks/ package policies of large clients and strong network of international underwriters. "National reinsurer, GIC, leads our reinsurance treaties.
As reinsurance support is essential in getting competitive quote in aviation insurance, we aim to increase our share considerably in this financial year," says K A Somasekharan, CEO, Reliance General Insurance. Typically, the premium depends upon underwriting factors such as age of the aircraft, experiences of the pilot flying the aircraft, make and model and use of the aircraft. It is generally 1% to 3% of the aircraft value.
Future of Aviation Insurance
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As the industry enters into the millennium, the insurance industry must look at several problems that also face the aviation industry. Survival for the small FBOs is getting harder each day; the threat of financial devastation is real when it comes to lawsuits. General aviation may be forced to change its way of doing business and become more like the military and commercial airlines. One can only hope that society will change their attitude towards the aviation industry and the litigation that surrounds the industry. We all hope for a positive future for the community.
Insurance and the Future of Aviation the aviation industry, as it is known today, has grown into a set of definable industries. Modern aircraft range from military to commercial airlines to the most diverse group, general aviation. Aviation has come a long way the last 100 years. The industry is still developing. With growth comes problems that must be solved before the industry can go to the next level.
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As the industry enters into the millennium, the insurance industry must look at several problems that face the aviation industry. Legal concerns, in many cases, theyre influenced by our society. The court system plays a big part by their decisions that are passed down. Its rare when an aviation case goes to court, because insurance agencies know theyll lose when the jury hears the case. Its just too easy to prove pilot negligence; most aviation accidents result from pilot error. Also, when they do go to court, they very seldom mount a defense due to the unreasonable verdicts, and ridiculous awards. These practices has forced aircraft owners to stay away from new policies and let their insurance coverage lapse. Aircraft owners pay three to five times the amount for adequate liability coverage than their counter parts elsewhere in the world. Survival for the small business operators is getting harder each day due to the General Aviation Revitalization Act (GARA); the threat of financial devastation is real when it comes to lawsuits. The (GARA) defects lawsuits from manufacturers to aviation service providers.
FBOs insurance rates are skyrocketing because of this, which contributes to the cycle by causing higher repair cost. Many small business operators really dont want to take the chance and cant afford the rising cost thats associated with liability insurance. As of February 2000 at least three aviation insurance under writers ceased writing coverage for the small business operators, saying its a major risk. One of the main reasons is the cost to the underwriters. Aviation insurance companies have paid out a dollar and quarter for every dollar theyve taking in, for each of the last several years. No wonder so many are closing down, merging, or getting out of the historically riskier aviation activities, General aviation may be forced to change its way of doing business and become more like the military and commercial airlines. Maintenance problems may be identified by computers, and then repaired by the manufacturers. The industry is coping with the
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mounting cost associated with liability insurance. Remove and replace maintenance is the attitude the industry must lean towards. The manufacturers would set up new factory service centers and repair facilities for the general aviation customers. This system wouldnt help the rising cost of insurance, but maintenance and ground liabilities would rest on the shoulders of the manufacture. The market itself is shrinking, weve had a generation of pilots from WWII, Korea, and Vietnam that was introduced to aviation and trained at the governments expense. Because of modern technology, well never again have the numbers that we once had. The ageing fleet and pilots cant help the situation that the industry is facing; the average aircraft age is 15 to 20 years, and the post Indian pilot is now 50 to 60 years of age. The underwriters are very worried about the age of both the pilots and the aircraft. During a telephone interview with Darrel Hyde of CS&A Insurance, he stated; Aircraft hull and liability insurance for the senior pilot has become such a concern that the insurance industry should develop a special task force to help deal with this problem. The need to extend the insurable age of the senior pilots and to introduce new blood in to the cockpits will only help matters with the attempt to lower insurance cost for the industry. Insurance cost for the industry remains high, with the shrinking fleet of aircraft, means that the training cost will increase. The value of airplanes is soaring; the high cost of new replacement aircraft for training isnt feasible. The FBOs are facing insurance thats inadequate and expensive, and its forcing companies to reduce their operations or even cut them all together. Owners of flight schools are having a hard time just staying in business. The shortage of qualified instructors has slowed the flow of new pilots, which in turn is putting a hardship on the industry. The future of the industry could hold a brighter out-look.
AVIATION INSURANCE
One can only hope that society will change their attitude towards litigation, this would hopefully drive down cost of liability coverage insurance. The industry hopes that with the use of simulators at all levels of training will increase the number of bettertrained pilots and hopefully lower insurance cost at the same time. Insurance can be one of the most expensive elements in the fix cost of owning an aircraft. To keep insurance cost under control in this difficult environment, aircraft and aviation business owners are going to have to make some changes in the way they purchase and think about insurance. There are ways to reduce your insurance cost, remember buying cheap insurance isnt always the best way to go, and its not heavily regulated by our government. Companies can write policies pretty much the way they want to, you must pick the right company for you and your aircraft. When shopping you can ask your friends who they do business with and ask them their feelings on that company, and are they treated well. Looking in one of the aviation trade magazines for information dealing with aviation insurance companies is a great source; get a phone number or a web address so you can make contact. Saving money is the key when shopping for insurance. Only buy the needed coverage; if you dont fly passengers, why pay for the protection against them? You can always change your coverage when the need arises. Most people pay for coverage in the winter even if theyre not flying. In the winter paying for in flight liability insurance can be a waste. Why not store the aircraft in the winter, and change to storage coverage for that period of time.
CONCLUSION
AVIATION INSURANCE
I started this Project by asking the question Why Aviation Insurance is required? In the course of the analysis various trends and developments in the aviation industry were discussed that provide partial answers to this question. Airlines employ a wide variety of business models while taking an aviation insurance contract. For example, some companies like Kingfisher Airlines take policy with high premium while others like Air India take an aviation insurance contract with low premium. It was also observed that airlines with huge and expensive airbuses like ATR 42-500 aircraft tend to generate high amounts of risk; while relatively less expensive aircraft like A330 aircraft tend to generate less risk. The aviation insurance market is highly volatile due to the inherent nature of the risk and the underwriting cycle of insurance. Historically, the market wide premium appears to be almost as volatile as the claims, suggesting a lack of consistency in underwriting this business. The major caveat to my conclusion is that there is significant amount of public data available to assist in underwriting and pricing aviation insurance. This data can be used to develop more effective underwriting rating models for aviation insurance and this should result in better selection of risks and more consistent profits for the insurer. The aviation insurance market, by its own nature, is highly volatile. There are many causes including the overall insurance underwriting cycle, the major accident risk, the short-term memory of the insurance market, and the long-tailed nature of determining responsible parties.
RECOMMENDATIONS
AVIATION INSURANCE
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 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.
Legal concerns are the biggest threat. Its rare when an aviation case goes to court, because insurance agencies know theyll lose when the jury hears the case. Its just too easy to prove pilot negligence; most aviation accidents result from pilot error. Hence, today there is a strict need that the legal authorities should be lenient and should also listen to the airline. Every time its not the fault of the pilots. Unbiased decision can really enhance and improve the working of airlines and also the efficiency of the pilots gets boosted.
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The average age of both our pilot population and the fleet (both commercial and general aviation) is increasing. Aircraft hull and liability insurance for the senior pilot has become a serious concern. The underwriters are very worried about the age of both the pilots and the aircraft. Hence, the insurance industry should develop a special task force to help deal with this problem. The insurable age of the senior pilots should be extended and new blood should be introduced in the cockpits to lower insurance cost for the industry.
The airline should only buy the needed coverage; if they dont fly passengers, why pay for the protection against them? They can always change the coverage when the need arises. Most people pay for coverage in the winter even if theyre not flying. In the winter paying for in flight liability insurance can be a waste. Rather they should store the aircraft in the winter, and change to storage coverage for that period of time. To keep insurance cost under control in this difficult environment, aircraft and aviation business owners will have to make some changes in the way they purchase and think about insurance. Buying cheap insurance isnt always the best way to go, and its not heavily regulated by the government. The airline should find an insurance player which takes low premiums and has plenty of coverage options.
BIBLIOGRAPHY
BOOKS:
AVIATION INSURANCE
Insurance in India -P.S. Palande -R.S. Shah Insurance (Fundamentals, Environment and Procedures) -B.S. Bodla -M.C. Garg Fundamentals of Risk and Insurance Emmett J. Vaughan Therese M. Vaughan Insurance Chronicle- The ICFAI University Press (September, 2004)
WEBLIOGRAPHY
www.irdaindia.com www.google.com www.avbuyer.com www.flykingfisher.com www.airindia.com

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AVIATION INSURANCE

1 N. G. Acharya & D. K. Marathe College, Chembur

INTRODUCTION TO SERVICE SECTOR

3 N. G. Acharya & D. K. Marathe College, Chembur

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INDIAN AIRLINE INDUSTRY

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AVIATION INSURANCE IN INDIA

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THE RISK EXCLUSION GENERAL LIABILITIES

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Hull "All Risks"

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Hull War Risks

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Hull Total Loss Only Cover

BUYING AVIATION INSURANCE CONTRACT

RENEWING AVIATION INSURANCE

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BUYING AVIATION INSURANCE CONTRACT

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WHAT DOES YOUR BROKER DO FOR YOU?

Report year, make, model and acquisition value,

N. G. Acharya & D. K. Marathe College, Chembur

Supply drafts of usage, ownership and storage agreements.

LIABILITY LIMITS & PROVISIONS

PILOT HISTORY FORMS

RENEWING AVIATION INSURANCE

1. Choose your broker

2. Confirm the value of your aircraft

price over the last decade.

3. Review your liability

4. Get the right coverage for your needs

29 N. G. Acharya & D. K. Marathe College, Chembur

5. Protect your interests

AVIATION INSURANCE PROVIDED BY VARIOUS INSURANCE COMPNYS

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KINGFISHER AIRLINES LTD

AVIATION INSURANCE OF KING FISHER AIRLINES

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All 3 dry leased.

134 (20/114) 174 (0/174) 180 (0/180)

9 dry leased. Deliveries through 20102012. 2 dry leased.

N. G. Acharya & D. K. Marathe College, Chembur

199 (0/199) Deliveries

through 20102012. Deliveries starting 2014. Deliveries starting 2014.

Airbus A350-800 Airbus A380-800 Total

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Bangalore Chennai Delhi Hyderabad Mumbai

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AVIATION INSURANCE OF KINGFISHER AIRLINES

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