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Air India has saved close to $4 million (₹26 crore) in the premium it has to pay for getting its fleet of over 100 aircraft insured for 2017-18, a reduction of 20 per cent in the insurance premium payout for the previous year.
The insurance cover for the AI fleet runs from September to October of the next year. A senior official told BusinessLine AI was able to negotiate a lower premium for 2017-18 as its safety record was good.
No major damageIn effect this means the aircraft in its fleet did not suffer any major damage for which AI would have had to file a claim with the insurers.
In the airline industry, if the claim by any airline exceeds 40 per cent of the premium paid, there is generally an increase in the premium for the following year.
Globally no airline is allowed to fly its aircraft till such time as the fleet has insurance cover.
This is not a lone instance of Air India being able to negotiate a better insurance premium payout. As far back as in 2004, the airline was able to negotiate an over 20 per cent reduction in its insurance premium payout. It had been the second successive year for it to do so.
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