The general managers of El Al, Arkia, and Israir will tomorrow ask Minister of Transport Ephraim Sneh to transfer the insurance of their aircraft, passengers, and third-party insurance from international insurance companies to the government.
The demand will be made after international insurance companies notified airlines that they were making an extraordinary reduction in the coverage they offer to companies against terrorist attacks. The airlines will, in effect, be asking the government to start operating in wartime format.
Government insurance company Inbal Insurance Co. insured Israeli airlines during the Gulf war. In the past few days, the insurance company that insures Arkia notified it that it was reducing liability insurance for aircraft, passengers, and third-party insurance from about $1 billion to $50 million.
A senior Arkia source said, “Foreign countries have already notified us that we wouldn't be able to enter their airspace with such reduced insurance."
”The insurance companies have in fact cancelled insurance for the aircraft, as well as third-party insurance. They’re entitled to do that, provided they give notice seven days in advance, which they did. The demand has also been made that each international passenger pay an extra $1.25 due to the situation."
”We’ll ask the Minister of Transport to provide immediate assistance to us and to the other companies, just as the US Administration will give US airlines $15 billion in assistance. In any case, it’s clear to us that the passengers will eventually have to participate in covering the costs.”
Published by Israel's Business Arena on 23 September, 2001