Mandala asks govt to cover insurance<\/p>\n
JAKARTA (JP): Privately owned domestic airline PT Mandala
\nAirline has asked the Indonesian Air Carriers Association (Inaca)
\nto petition for a government subsidy on war-coverage insurance,
\nan Inaca executive said.<\/p>\n
Inaca's economic commission executive Yoyok Priyowiwoho said
\non Tuesday that the association was currently engaged in
\ndiscussions whether or not to make it an association policy.<\/p>\n
Mandala was unavailable for comment.<\/p>\n
Immediately after the terrorist attacks in the United States
\non Sept. 11, insurance companies, facing billions of dollars in
\npotential claims, notified airlines worldwide that they were
\ncanceling existing war liability policies and limiting coverage
\nfor war and terrorist attacks to US$50 million a year.<\/p>\n
Yoyok did not mention the amount of the subsidy asked by
\nMandala but he said the usual coverage was between $500 and $1
\nbillion a year.<\/p>\n
Many governments in Europe and Asia had agreed to provide
\ninsurance liability payment guarantees for their airlines
\nreaching up to $2 billion.<\/p>\n
Yoyok said that the insurers had reduced the liability
\ncoverage but not the premium, saying that the premium to insure
\nan aircraft was between 0.8 percent to 1 percent of the total
\ncoverage per year. The liability coverage depends on the type of
\naircraft.<\/p>\n
\"For the same liability coverage, the premium would be greatly
\nincreased,\" he said, adding that Indonesia's high risk of war
\nwould likely prompt insurers to ask for even higher premiums.<\/p>\n
Yoyok said that the airlines would be taking a big risk in
\nflying their aircraft without adequate insurance coverage, but
\nthat airlines would rather take the risk than be totally
\ngrounded.<\/p>\n
\"So far no Indonesian plane has ever been destroyed or shot
\ndown because of war or terrorists,\" Yoyok said.<\/p>\n
It was not yet clear whether the government would be asked to
\nsubsidize the premium for a higher liability coverage or to give
\na guarantee for the risks not covered by insurance, he said.<\/p>\n
Yoyok, who is also manager for marketing analysis at state-
\nowned PT Merpati Nusantara Airlines, said that Merpati had no
\nintention to present its own petition to the government.<\/p>\n
\"With the government's current financial situation, it would
\nbe difficult,\" he said.<\/p>\n
Merpati spends between $3.5 million and $4 million in
\ninsurance premiums each year, Yoyok said, adding that the
\ncompany's planes were insured by Lloyd London.<\/p>\n
Separately, national flag carrier PT Garuda Indonesia's vice
\npresident for corporate communications Pujobroto said that as of
\nOct. 1 the company's premium payment would be increased, but that
\nit would not affect ticket prices.<\/p>\n
Premium on passengers, cargo and baggage will be increased by
\n$1.25 a passenger, he said, adding that the company spends
\nbetween $8 million and $9 million on insurance premiums each
\nyear.<\/p>\n
Pujobroto said that he did not know whether Garuda would
\nfollow Mandala's move in asking for a government subsidy on war-
\ncoverage insurance, as he had yet to be informed about the
\nmanagement's policy on the issue. (tnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mandala-asks-govt-to-cover-insurance-1447893297",
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