The Hindu Business Line : Indian to save Rs 22 cr on insurance payout cut

The private sector has again failed to participate in the insurance of the fleet of Indian, which bucking international trends, has achieved a reduction of close to 30 per cent in the insurance premium payable during 2006-07.

Sources told Business Line that the airline would save around $5 million or about Rs 22 crore on the insurance payout for a fleet of 74 aircraft as compared to the insurance premium paid during the previous year. The insurance for the airline's fleet is renewed annually and comes into effect from October 1.

Aircraft arrival

"The insurance cover that has been negotiated includes some of the aircraft that Indian is purchasing and would be joining the fleet during the year," sources said. The first of the purchased aircraft is expected to join the fleet in October while another six are to join in 2007.

Incidentally, during 2004-05, the airline recorded a decline of about 18 per cent in the premium paid for insuring its then fleet of more than 60 aircraft.

Negotiations

A high-powered delegation that included the airline Chairman and Managing Director, Dr Vishwapati Trivedi, negotiated the insurance payout in the UK earlier this week.

Sources said that during the negotiations for renewing the insurance cover for the current year, New India Insurance Company explained to the underwriters the steps that the airline had taken towards improving critical operational areas, flight safety and training, among others. "At the end of the day, the operational record of the airline reflects in the insurance premium paid out," sources said when asked how Indian was able to get a reduction in the insurance premium.

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