Insurance coverage

Insurance coverage withdrawn? – Several airlines are now avoiding Ukraine

The Dutch Press Agency NAP reports that the national airline KLM is suspending flights to Ukraine. It looks like other airlines will soon be affected as well.

In a statement on Saturday, KLM said the scheduled evening flight to the Ukrainian capital Kyiv would not operate. The airline relied on the Dutch government’s travel advice, which had been adapted to “Code Red”, and on a “comprehensive safety analysis”. The Dutch airline explained that this step is about “choosing safe and optimal routes”.

Also on Saturday, a passenger plane operated by Kyiv’s SkyUp Airlines had to cancel its flight from Portugal to the Ukrainian capital after the Irish owner of the leased aircraft banned entry into Ukrainian airspace. According to a spokesman for the airline, the plane, originally destined for Borispol airport in Kiev, had to land in the Moldovan capital Chisinau instead. The plane’s owner, who leases it from SkyUp, contacted the Ukrainian company when the plane was already in the air. According to the airline, he informed that the plane was “categorically” prohibited from flying in Ukrainian airspace.

A source of news platform – an aviation market insider, according to the report – revealed that a pool of major international insurance companies are preparing to cancel insurance coverage for the airspace over Ukraine as early as Monday . Therefore, airlines would not be covered if they were flying over Ukraine.

The boss of the consulting agency Friendly Avia Support, Alexander Lanetsky, explained himself opposite the consequences if this development occurs:

“Most of the planes of Ukrainian and foreign airlines are not owned by them, but are leased under an operating lease. The lessor requires insurance for the value of the aircraft plus 10% ($10-100 million) to cover potential risks. In addition, according to international law, the airline must take out liability insurance, the cost of which for the European market amounts to 550 million dollars per year. Without it, planes cannot take off. Without insurance coverage, the airline is not allowed to fly.

If there were no other insurance companies willing to cover risks in Ukrainian airspace, air traffic in Ukraine would be completely paralyzed.

The informed source of explains the context as follows:

“Actually, this is not a surprise for the market. The first bell rang just before the start of the year when a lessor – a European company – demanded that two Ukrainian airline planes be removed from Ukraine. At that time, it was not entirely clear what it was. Rumors swirled that it was the problem of a certain airline which ran out of money and did not know if it could pay, so the insurers advised the owner of the planes to take them to Europe Similar practices were repeated on other airlines on January 1. International insurers are increasingly insisting that foreign airline planes they serve should not be allowed to park in Kyiv. The decision not to cover the risks of flights via Ukraine has since And the announcement of a concrete date for Putin’s “attack” has now accelerated.

This hypothesis is indirectly confirmed by the fact that the owners of private planes have already received mail from their insurance companies. In it, their insurance coverage was terminated with 48 hours notice. These letters also contained the request to transfer the private jets to a European country within the time limit.

A Ukrainian politician who owns a private plane told the news platform correspondent:

“A few hours ago I received a notification from the insurance company that the plane must be brought to the European zone within 48 hours. My jet is currently not in Ukraine, so I have decided to leave it abroad. also discovered that the trigger for this development is obviously a large London-based reinsurer. He wrote to all his clients and lessors and announced that he would not be liable for damages occurring in Ukraine or above.

German airline Lufthansa meanwhile told the Russian news agency RBCthat the possibility of a stoppage of air traffic is being considered. She added that the company is closely monitoring the situation in Ukraine. However, the airline’s representative clarified that “no decision has been made yet”.

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