Insurers could pay out more than $320 million as a result of the July 25 Air France Concorde crash that killed 113 people, according to the Guardian, a U.K. newspaper.
The supersonic jet went down just after taking off from the Charles de Gaulle Airport, killing all but one of the 110 passengers and crew. The Concorde crashed into the hotel Hotelissimo in the small town of Gonesse, engulfing the building in flames.
Four people on the ground were killed as well. This count was raised to five last week, but on Aug. 1, the public prosecutor’s office revised the death count due to “a mix-up in registering the badly burned corpses,” according to the Guardian.
Compensation for families of victims of the crash is expected to account for most of the cost of the accident. Air France promised on July 27 to compensate victims’ families and to pay initial advances of $20,000.
The Guardian reported that the plane was insured for about $51 million. Thus far, no U.S. insurers appear to be exposed to major claims.
French insurance pool La Reunion Aerienne has claimed responsibility for insuring the Air France Concorde. The consortium is made up of British insurer CGNU, Abeille, Italy’s Generali France and French mutual insurers Groupama-GAN and Mutuelles du Mans Assurance. La Reunion Aerienne had also insured (for $53 million) the EgyptAir Boeing Co. 767 jetliner that crashed off of Massachusetts last year, killing 217.
Stewart Wilson, chief operating officer for Heath Lambert in London, told Insurance Journal that Lloyd’s covers at least part of the aircraft’s reinsurance. “But the direct insurance of Air France is done in the French market,” Wilson said. “Heath handles a portion of the reinsurance, so a small portion of the risk is based directly at Lloyd’s.”
Wilson could not confirm a dollar amount as yet. “Reports are still coming in…But the value of the liability claim will take quite a while to come out.”
The Concorde crash raises some obvious questions about the safety of the supersonic jets.
The BEA (French Accident Investigation Bureau), published the initial findings of the crash inquiry on July 27: “During take-off, after the aircraft had exceeded V1 (decision speed), the control tower warned the crew that there were flames at the rear of the aircraft. The voice recorder revealed that, after the rotation, the crew announced a failure in engine No. 2, adding shortly afterwards that the landing gear could not be retracted…The plane had been in flight for less than one minute when engine No.1 started losing power again. The plane then banked sharp left and crashed.”
According to Air France, the inquiry is still in its initial phase and a preliminary report will be published at the end of August. Flights on Air France’s five Concorde jets will remain suspended, pending decisions on how to improve the safety of the plane.
British Airways, which is the only other airline to fly Concordes, issued a statement immediately after the incident that “We have complete confidence in our Concorde aircraft and our engineering.”
However, the weekend following the crash brought several new troublesome incidents: one emergency landing due to fuel odors, one due to flames from an engine, and one plane grounded after a loud bang was heard inside the cabin.
Topics Trends Carriers Profit Loss Europe Aviation
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