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Insufficient insurance may halt flights

Despite today's 8am deadline requiring airlines worldwide to have sufficient insurance for jets brought down by acts of war, government officials have so far failed to step in and provide supplemental coverage to Taiwan's international carriers.

"Unfortunately, Taiwan is unlikely to meet the deadline [today] because of typical government and legislative procedures," China Airlines spokesman Paul Wang (王振畬) said late last night. "This is an urgent matter, so we are working on all possible solutions."

Insurers worldwide have decided to limit their coverage to US$50 million per aircraft for planes brought down by acts of war, down from as much as US$2 billion.

The new policy goes into effect today.

That has forced airlines worldwide to seek out supplemental government coverage.

Insurers made the decision last week to slash coverage after commercial aircraft were used in the Sept. 11 attacks against the US.

"Insurers have made it clear this is a `take it or leave it' offer and the deadline is [today]," EVA Airways spokesman Nieh Kuo-wei (聶國偉) said.

The biggest problem is that some airports may demand airlines to provide US$1 billion in liability insurance for ground damages, but insurers have refused to provide such guarantees, Nieh said.

The Ministry of Finance said in a statement that it "will try the best it can to provide the necessary assistance."

While it remains to be seen whether any of Taiwan's international flights will be affected, one industry watcher said the requirement is for real.

"They may not be able to fly to some [destinations] like the EU and the US if they don't have the minimum level of insurance required," said Nick Ionides, Asia editor for London-based Flight International magazine.

He added that even if the airports give them the go-ahead, shareholders may veto any plans to take to the air.

"Shareholders may ground flights, as flying without enough insurance is too big a risk to accept," Ionides said.
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