Financial Daily from THE HINDU group of publications
Saturday, May 20, 2006
Financial Daily from THE HINDU group of publications Saturday, May 20, 2006 |
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Airlines Money & Banking - General Insurance Pvt players pitch for AI insurance contract Ashwini Phadnis
New Delhi , May 19 Private sector insurance companies are making another attempt to bag the insurance contract for the 50 aircraft fleet of Air India. Official sources told Business Line that the airline had received four technical bids including three from private sector companies for insuring its fleet. The private sector companies in the fray include IFFCO-Tokio, Reliance General Insurance and ICICI-Bajaj. In the reckoning is also a consortium of public sector insurance companies led by New India Assurance, which has been insuring the AI fleet for the past two years. The other consortium members include Oriental Fire and General Insurance and United Fire and General Insurance. Last year was the first time that private sector companies were allowed to make a pitch for picking up the insurance cover of AI. The airline, whose insurance cover expires on June 30, is expected to take a decision on who it should pick up for the insurance cover by next week officials indicated. The fleet value of the 50 aircraft is likely to be in excess of $3 billion, sources indicated.
Less payout
While the airline paid close to $14 million as an insurance premium during 2005-06, officials indicate that the payout may not be so large this year. "The global trend is that the aircraft insurance market is softening. Besides, there has been no major incident with the airline and therefore there is no reason why the insurance premium payout should not decrease as compared to the previous year," said an AI official. During 2003, the airline recorded a decline of 25 per cent drop in the insurance premium at $11.6 million or about Rs 55 crore, down from close to $13 million paid during the previous year.
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