EC extends government-backed terrorism cover for airlines

The European Commission has granted approval to its member countries to extend existing government insurance coverages of terrorism and war risks for airlines to the end of October this year. This follows the expiry of existing government insurance agreements which had been in place until the end of June. The U.S. Federal Aviation Administration (FAA) recently extended its own government-backed insurance plan for airlines to August 17.The EC decision to allow countries to extent covers for longer than the 60-day limits that have been made to date comes on the news that two European airline industry "self insurance" initiatives have been put forward for approval. Similar to the recently formed U.S. "Equitime" scheme, the European "Eurotime" would provide airlines with third-party terrorism and war risk coverage. Offering liability cover of up to US$1.5 billion, the Eurotime and Equitime plans would initially require ongoing government support until adequate financial reserves could be established. Another global insurance scheme has been proposed by the International Civil Aviation Organization (ICAO). The EC says it will evaluate the Eurotime and ICAO plans during a meeting in October.