High war-risk premiums for airline insurance to push up airfares

Air travellers may have to brace for fare hikes of up to ₹20,000 on Gulf routes as insurers slap steep war-risk premiums on airlines, forcing carriers to pay extra for cover against risks such as missile strikes, terrorism, aircraft damage, and passenger casualties amid the escalating Iran-Israel conflict.

Air travellers may have to brace for fare hikes of up to ₹20,000 on Gulf routes as insurers slap steep war-risk premiums on airlines, forcing carriers to pay extra for cover against risks such as missile strikes, terrorism, aircraft damage, and passenger casualties amid the escalating Iran-Israel conflict.

Alongside rising crude oil prices that are inflating aviation turbine fuel (ATF) costs, mounting operational expenses could ultimately push up domestic airfares as well, industry executives said.

Israel-Iran war LIVE

While insurers had initially barred airlines from operating flights into parts of the conflict-hit Gulf region, they have since eased the restrictions, given the need for repatriation and continued travel demand, according to an insurance broker who spoke to The Hindu on the condition of anonymity.

Airlines are now required to notify insurers before operating each flight into West Asia. But coverage can be withdrawn at short notice if the conflict escalates.

The additional premium being imposed ranges from 0.075% to 0.1% of the aircraft value for every return flight undertaken by an airline, the insurance broker explained.