Dec 19
Fog Insurance for the Indian Air Travel Industry
Out of Bangalore comes the news that Air-India has put out a bid for fog insurance. This coverage would be designed to cover airline losses due to foggy conditions that persist for more than four days. Costs incurred include the rerouting of flights, cancellations and providing housing in local hotels for stranded passengers.
Air-India has received bids from a dozen companies. The new coverage is part of Air-India’s strategy to minimize losses stemming from inclement weather. “Although the weather-risk cover will be limited to India initially, we will extend it to airports at London, Paris, Frankfurt, and New York, where fog and snow are more severe,” according to an Air-India executive.
A competitor, SpiceJet, plans to get insured against not only fog, but also delays caused by technical snags, traffic congestion, and other exigencies. Another Indian carrier, Air Deccan, said its fog insurance scheme would be ready by next winter.
This is not the first time fog insurance is being considered by airlines. A similar attempt was made five years ago, but the interest from the insurance sector was minimal. A spokesman for the Indian insurance industry now maintains that fog insurance can be financially viable if an airline has large operations: “Since there are many competing players in the insurance industry now, it may be worth exploring.”
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February 21st, 2008 at 7:43 pm
Fog insurance? Who knew. I only hope it leads to American carriers picking up a little extra insurance, too. Insurance against inept gate agents, insurance against bad airline food, insurance your bathroom gets cleaned between flights. You catch my drift:)
Jerry