IATA: “Covid-19” outbreak loses more than 16 times the lost revenues during “SARS” airlines
The Egyptian Insurance Federation addressed its members of the companies that practice property insurance activities in the aviation branch to find more flexible solutions to face the impact of the Covid crisis on aviation insurances, whether in terms of pricing or flexibility of reinsurance programs.
In its periodic newsletter that it broadcasts on its website, the federation directed the companies to provide alternative solutions for subscribing at the branch in light of the presence of previous risks, in addition to new risks imposed by the current crisis of the emerging corona virus.
According to the Union, the market has to face this great challenge in light of the current situation, as the restrictions imposed on airlines, reducing flights and stopping some of them will result in a significant reduction in the size of the premiums for the branch.
In a related context, the Union noted that the proceeds of direct premiums for the aviation insurance branch rose to reach 564 million pounds in 2018-2019 compared to 418 million pounds in the previous year 2017-2018, according to statistical data issued by the Financial Supervisory Authority.
In contrast, direct compensation was paid in the amount of EGP 512 million in 2018-2019 compared to EGP 921.5 million during 2017-2018 and EGP 317.5 million in 2016-2017, an increase of 190.2%.
It is noteworthy that the EgyptAir plane – flight number (804) for Egyptian Airlines between Paris and Cairo disappeared from the radar screens on May 19, 2016, to join the series of accidents that affected Egyptian Airlines or other airlines on Egyptian territory.
According to the “Egyptian Insurance”, the International Air Transport Association (IATA) warned that with the outbreak of “Covid-19”, airlines will lose more than 16 times the revenues they lost during the SARS epidemic of 2003.
According to the International Air Transport Association (IATA), whose members account for 82% of the world’s air traffic, Asia-Pacific airlines could see a 23% year-on-year drop in passenger numbers, with similar estimates for parts of Europe and the Middle East.
These new projections indicate that Asia-Pacific airlines may see a $ 49.7 billion drop in revenue this year, according to the International Air Transport Association (IATA) update, while when the SARS crisis hits, the International Air Transport Association (IATA) identified losses. Global airlines at about $ 7 billion.
According to the International Federation, the “Covid-19” pandemic has greatly affected the aviation sector due to the imposition of travel restrictions and the decline in demand among travelers. The great shortage in the number of passengers has led to the cancellation of flights or empty flights between airports, which greatly reduced the revenues of airlines, and forced Many of them lay off their employees or declare bankruptcy.
The most pessimistic forecasts are also based on a number of recent trends, including slow containment of the virus in the United States and developing economies: as it accounts for about 40% of global air travel markets, and their continued closure, as well as a decline in corporate travel as corporate travel budgets are expected to be severely restricted. As companies are still under financial pressure even as the economy improves, in addition, it seems that conferences and virtual interviews have achieved great successes as an alternative to personal meetings (face to face).
Aviation insurance documents generally include many dangers, including, for example, risks to aircraft structures and civil liability insurance in civil aviation, which are divided into insurance documents for the responsibility of the air carrier towards passengers, bags, and luggage, and insurance documents for the responsibility of the air carrier towards the injured third party Physically or physically, in addition to the civil liability insurance documents of the air carrier for parcels, goods and newspapers, as well as various civil liability insurance documents, whether for the air carrier or for others.
The coverage of the aviation branch also includes insurance documents that the buyer does not commit to obtaining the contracted aircraft from the producer and this type of insurance contracted by the producer to protect him from the risk of obstacles or difficulties that prevent the contracting buyer from completing the purchase process, as well as insurance documents that guarantee full insurance protection for the air carrier .
The article “Insurance Union” addresses its members to reconsider the pricing of aviation coverage, it was written in the Al-Borsa newspaper.