Taiwan airlines applauded a proposal by the International Civil Aviation Organization (ICAO) to reduce insurance premiums that have skyrocketed for local carriers in the wake of Sept. 11 and are likely to be further inflated by the recent China Airlines (華航) crash.
Member airlines of the International Air Transport Association (IATA) voiced their strong support for Canada-based ICAO's plan which calls for the establishment of a non-profit airline insurance company which would seek financing from the world market and provide affordable third-party coverage.
The company would be financed by the airlines with initial state support and provide industry-wide coverage of between US$1 billion -- US$1.5 billion per event, according to the plan by ICAO, which monitors and regulates international air traffic.
According to a statement, member airlines, who were attending IATA's annual general meeting in Shanghai that ended on Tuesday, also asked the ICAO to initiate measures to establish an international convention to limit third party war risk liability of international airlines.
Alex Shih (施建華), secretary general of the Taipei Airlines Association (台北運輸商業公會) -- of which all Taiwan's six airlines are members -- embraced the concept saying that IATA and ICAO have the combined influence to establish a mechanism to bargain for reasonable insurance premiums.
The need to bargain for cheaper premiums has been made essential since insurance companies hiked their rates for third party coverage of war risk -- including acts of terrorism -- since the Sept. 11 attacks.
According to Juergen Weber, Chairman and CEO, Deutsche Lufthansa, insurance costs are "out of control."
"Lufthansa forecasts a 600 percent increase of its overall insurance costs in the year 2002. Against the background of the already dismal situation of our industry after Sept. 11, this cost exposure adds to the economic pressure of all airlines," said Weber in a speech at the Shanghai meeting.
"The cost explosion challenges the efficiency and survivability of an entire industry which over the past decade has struggled to break-even financially," he said.
This will be compounded for Taiwanese airlines whose premiums will be negatively affected by the recent crash of a China Airlines Boeing 747 aircraft into the Taiwan Strait, Shih said.
"We are worried that by the end of the year that premiums will not have come down. Additionally the China Airlines accident will affect all our insurance premiums because the insurance company will categorize this area's risk based on its overall safety record," he said.
Shih said negotiations between Taiwan's airlines -- which have banded together since last December when the government ended its guarantee of risk for the carriers -- with a pool of international insurance companies headed by international insurance firm Marsh Inc are ongoing.
The ICAO proposal to help airlines reduce insurance costs were welcomed by China Airlines and its arch rival EVA Airways Corp (
"We are very happy to see that and move forward and organize airlines to solve this problem," said Roger Han (
Han however was unsure of how much the company's premiums may increase due to the crash, saying that its current coverage wouldn't expire until October.
A spokesperson for EVA said the proposal would be welcomed by the airline which has already had to swallow higher premiums to bolster its third-party coverage from US$50 million to US$1-1.5 billion.
But dispute whatever plan the ICAO and IATA eventually devise to help reduce the insurance burden it remains uncertain as to whether Taiwanese airlines will be able to benefit from it.
Due to pressure from China no Taiwan airlines are members of either ICAO or IATA.
"It remains a question mark as to whether Taiwan airlines will be able to participate in such a plan," Shih said.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS