Airlines call for state backed insurer

The European airline industry is lobbying the European Commission, as well as the constituent governments of the European Union, for the creation of a state-backed European captive insurer to cover them specifically against war and terrorism risks. The industry complains that the cover being offered by the market – notably by AIG and Frankona, by Allianz, and by Berkshire Hathaway – is too expensive, and above all uncertain since it could be cancelled after a single attack. The only solution airlines see to this problem is to have state backing for the insurer. Among the organisations that have lobbied for the new captive company are the Association of European Airlines, the International Air Carriers Association, the European Regions Airline Association, the European branch of Airport Council International, and the British Air Transport Association. However, the creation of this new insurer will inevitably take some time. The current government-backed scheme was due to expire on 20 June – effectively in a few days. Consequently, the European airline industry has asked the authorities to extend the existing cover until 30 September of this year.