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Rediff.com  » Business » Air India spends $6 million to insure 6 grounded planes

Air India spends $6 million to insure 6 grounded planes

Source: PTI
October 13, 2014 09:39 IST
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The airline had renewed its insurance on Oct 1 for nearly $29 million to cover its 132 aircraft.

Government carrier Air India, sitting on a huge debt pile and surviving on a Rs 30,000- crore (Rs 300 billion) government bailout, is allegedly getting even those aircraft not in operations for some years, insured at a cost of $6 million a year.

The airline's recognised pilots union, the Indian Commercial Pilots Association (ICPA), has sought an independent probe into these allegations and fix accountability on individuals responsible.

"Six Boeing 737-200 Fs, out of service for more than three years, are still being insured at $1 million each per annum, for more than the past three years. We demand an immediate, time-bound investigation by an external agency to look into this huge financial irregularity," ICPA General Secretary Shailender Singh said in a letter to AI Chairman Rohit Nandan.

The letter is also addressed to Aviation Minister Ashok Gajapathy Raju and the Chief Vigilance Commissioner.

The AI spokesperson did not respond to calls.

The airline had renewed its insurance on October 1 for nearly $29 million to cover its 132 aircraft (including the 17 of AI Express and 8 of Alliance Air,) close to 18 per cent higher than it what it paid last year, $23 million. 

Airline insurance premia had gone up this year after a string of tragedies across the globe.

Alleging that even as recent as on October 1, the insurance cover for four of these aircraft was renewed for another year at $50,000 each, the ICPA said, "We are also alarmed at the sharp 95 per cent drop in the insured sum of these aircraft, which till September 30 were insured for $10,00,000 and now only for $50,000."

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