The soon to be launched carrier Vistara, a Tata Group-Singapore Airlines venture, has secured insurance cover for its aircraft from New India Assurance, India's largest non-life player, for Rs 5 crore premium.
"We have provided insurance cover to both the aircraft of Vistara. We are hopeful of providing cover to the three more planes the airline is likely to bring in for operations by next March," a New India Assurance official told PTI today.
The premium amount fixed for providing the insurance cover to the five aircraft is Rs 5 crore. The cover per plane under the hull segment is USD 100 million, whereas it will be up to USD 350 under the liability segment, he added.
The full service carrier, a 51:49 joint venture between Tata Group and Singapore Airlines, is likely to launch operations this month or early next month with two aircraft.
Last week, Air India renewed insurance cover for USD 26.75 million for its fleet at a premium of 15 per cent over the 2013 figure from a consortium of Government-run insurers led by New India and private firms headed by ICICI Lombard. The reinsurance cover was renewed by a couple of Lloyd's syndicate.
The national carrier has a fleet of 132 aircraft - 108 with itself and 24 with its two subsidiaries - Air India Express (17) and Alliance Air (7).
The aviation premium has gone up this year after two tragedies involving Malaysian Airlines in March and July. One its planes with 300 passengers mysteriously disappeared over the Indian Ocean in March, and another one was shot down over Ukraine allegedly by rebels in July killing over 300 people. Then there were two air crashes in Africa.
Air India's current insurance policy, issued by New India Assurance, includes a USD 9.5-billion hull cover and a combined single liability of USD 1.5 billion.
Hull all-risk insurance covers any damage to the body of an aircraft caused by an accident, while war risks, part of hull cover, insures against war, invasion, insurrection, rebellion and hijacking. In addition, the insurance covers liability toward passengers and also legal protection against suits.
This is the first time in four years that Air India has to pay a higher premium to renew its account. In the past, renewal the premium had fallen by 10 per cent.