Volcanic ash damage insurance claims 'likely to be disputed'

London
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Aviation insurers and lawyers meeting in London say they have not received any claims for aircraft or engine volcanic ash damage since European airspace was contaminated by ash from an Icelandic eruption in late April and early May.

They believe, however, that any airline that had knowingly operated in a contaminated area would be unlikely to succeed with a claim.

Speaking at Clyde and Co's 10th Beaumont International Aviation Conference on 23 June, Richard Powell of Chartis Insurance said that an airline claim against damage from a genuinely accidental encounter with volcanic ash would be met, but suggested if the airline had made a decision to operate in ash it would effectively be self-insured.

The insurers also debated the issue of claims for cumulative or attritional damage, and it seems this is a particularly complex issue. Sometimes ash damage accumulates over a period, and a claim would likely to be disputed under certain circumstances, especially if the damaged aircraft has had several owners, lessors or operators.

The consensus appeared to be that only the current operator's claim would be considered, and even a claim by the current operator would be subject to a dispute about how much of the attrition had accumulated before the current operator took it on and finally identified the damage.

It was explained that attritional losses, corrosion and similar degradations with time are not normally claimable. If a lessee, for example, were to hand an aircraft back with attritional damage, the lessor could reasonably expect the lessee to make that damage good, but it would probably not be able to claim the cost of doing so.

This warning to the airlines follows the revelation by Dieter Kaden of German ATM provider DFS who pointed out at the Civil Air Navigation Services Organisation conference in Oslo on 14 June that engine manufacturers were not providing the support and data on ash damage tolerance that might be expected, and that warranties for engines were still being removed by manufacturers from aircraft flying in or close to ash.