Flight cancellations: MIAL may not claim insurance for losses

A SpiceJet aircraft on September 9 had skidded off the main runaway following heavy rains in the city. (Express File Photo)

DAYS after flight operations at the Chhatrapati Shivaji International Airport (CSIA) in Mumbai were severely affected due to a SpiceJet aircraft skidding off the main runway late September 19 after heavy rains, aviation safety consultants believe the Mumbai International Airport Ltd (MIAL) may not be able to claim insurance for the losses incurred due to subsequent cancellation of multiple flights. According to experts, the incident may not be classified as an “accident”.

For MIAL, cancellation of 181 flights on September 20 resulted in multiple losses — landing fees, parking charges of the aircraft, material and personnel services used at the airport paid by the airlines. “In such cases, MIAL may claim insurance from their insurers for the losses incurred on Wednesday. They may ask SpiceJet to compensate them for losses incurred that day,” said Mohan Ranganathan, former instructor pilot of Boeing 737 and an aviation safety consultant.

On September 20, 63 Jet Airways flights, eight IndiGo flights, three SpiceJet flights and one GoAir flight were cancelled. Airlines claimed affected passengers were offered waiver of cancellation charges, given refunds or adjusted on board larger aircraft to ferry them to their destinations. The experts ruled out possibility of the operator hiking parking charges or infrastructure costs for the airlines in future as it needs to be done after consulting regulators, including the Airports Authority of India (AAI), the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation. “In this scenario, all the affected airlines and MIAL may want to claim an insurance. Each airline will abide by the details of their insurance policy, which could be used to avail the cost. It may be difficult for MIAL to recover the same as the losses incurred may be much more than the premium costs paid,” said a senior aviation safety consultant who has closely worked on framing national civil aviation policy.

“What happened with the SpiceJet aircraft that day was neither an accident nor an incident. It was a runway excursion and thus MIAL would not be in a position to claim it as an incident,” said Mark Martin, CEO and founder at Martin Consulting, an aviation advisory firm. According to Martin, each airline incurs a cost of about $6800 for flying each aircraft per hour on a daily basis. “Banks may not be able to repay such higher costs either to MIAL or airlines. This brings us to a larger question of whether aviation safety is practised to its best around Mumbai airport. There is a need to decongest the airport sooner so that airlines can effectively use an alternative space during such days of calamities,” he added.

A senior MIAL official, however, said the losses were “not much”. “The losses are not much due to the cancellation of flights. It was a natural calamity and could not be prevented. We have not sustained major damage to the airport or the runway side. We have not yet decided about claiming insurance,” said the official. Airlines, including Jet Airways, SpiceJet and GoAir, refused to comment on the issue.