AI seeks insurance cover to underwrite losses due to fog

National carrier Air India has floated a tender seeking a Rs 20 crore insurance cover to underwrite its losses resulting from cancellations or delays in flights due to fog during winter in India and abroad.

The insurance is being sought as part of its corporate strategy to minimise the risk from poor weather conditions for a period of five months starting November 1, as winter sets in, airline sources said. 

Air India has identified 18 domestic stations and eight overseas stations, which face moderate to heavy fog during the winter season.

The tender seeks coverage from leading insurance firms which underwrite similar weather-related risks, they said, adding that bids have been invited from both public sector and private insurance companies. 

Under the fog insurance, Air India has sought risk coverage of an average daily loss of Rs 10 lakh at each Indian station, barring Delhi.

For Delhi, the daily loss is around Rs 20 lakh, the sources said, adding that similarly for foreign stations the daily loss are likley be to of Rs 20 lakh each.

Such losses incurred would have to be payable by the insurance company without proof of expenditure from the company, sources said.

The domestic fog-prone airports identified are Amritsar, Bangalore, Dibrugrah, Delhi, Kolkata, Jaipur, Srinagar, Guwahati, Indore, Lucknow, Kullu, Nagpur, Jodhpur, Patna, Raipur, Ahmedabad, and Jammu.

The foreign stations were Newark, Frankfurt, London, New York (JFK), Chicago, Toronto, Paris, Shanghai and London which face considerable problems due to foggy weather.

A large number of flights are cancelled through the winters every year due to thick blanket of fog engulfing major airports of the northern, eastern and northeastern parts of the country.

The Directorate General of Civil Aviation (DGCA) has laid down strict guidelines on low visibility operations or airlines, airport operators, air traffic control and other agencies to follow.

These include positioning of aircraft equipped with anti- fog devices like those matching the Category-III Instrument Landing System on ground at airports like Delhi and rostering pilots specially trained to fly in these weather conditions. 

Once an aircraft of any airline is delayed, say in Delhi, the entire flight and routing operated by that aircraft on the same day gets affected, causing considerable losses.