The country’s largest airline, which is in discussions on finalising the insurance premiums, has a fleet of over 400 planes, and the fleet is expanding.
New Delhi: The insurance premium for aircraft is expected to go up as there are elements of the geopolitical situation, inflationary pressures and accidents, IndiGo CEO Pieter Elbers said on Wednesday.
The country’s largest airline, which is in discussions on finalising the insurance premiums, has a fleet of over 400 planes, and the fleet is expanding.
During a virtual interaction post announcing the June quarter results, Elbers said the insurance premiums always follow some of the trends in the market and “we do expect them to go up and we’re still finalising some of the discussion in what magnitude that would be”.
Without mentioning the possible quantum of increase in premiums, he said there are different elements coming together, including the entire geopolitical situation, and there are overall inflationary pressures.
“And then clearly, when accidents are happening, and not only the one which happened in India, but on the global scale, insurers operate on the global scale. They look at what’s happening in the industry, and then it becomes a reflection…,” he said.
Elbers’ response was to a query on whether the Air India plane crash would be a factor that would result in a higher insurance premium for IndiGo aircraft.
On June 12, Air India’s Boeing 787-8 plane enroute to London Gatwick crashed into a building soon after take off from Ahmedabad, killing 260 people. It was also the first time that Boeing’s best-selling 787 aircraft suffered a hull loss.
On the Aircraft on Ground (AOG) situation, Elbers said the airline has turned the corner in terms of high numbers, and the number was now “in the range of 40s”.
IndiGo had grounded many aircraft due to issues with Pratt & Whitney engines, and at the peak, the AOG count was in the 70s.
“We are in a much better shape than we were, let’s say, a year ago. We do expect them to continue to decline… we have turned the corner in terms of all these high numbers,” the IndiGo chief said.
When asked about US President Donald Trump’s decision to impose 25 per cent tariffs on Indian goods, along with a penalty from August 1, Elbers said it would be too early for him to have a clear assessment about it.
“We have a lot of our elements and planes coming from Europe, so it would be too early for me to have a very clear assessment of that. Again, we have our planes coming from Europe. We need to see what is the exact consequences of that overall equation. It’s too early for me to have a precise number on that,” he noted.