Four crashes this month have already made August the worst month for aircraft losses in more than three years, a major insurance broker said last week.
The string of crashes has caused the loss of aircraft with a total insured hull value of over $170 million, said Aon Corp., the world's second-largest insurance broker. The latest loss estimate is $182 million, an industry source said.
The most expensive loss was the Air France Airbus A340-300, which crashed and burst in flames after landing at Toronto's Pearson International Airport on August 3, although all crew and passengers survived. The aircraft was insured for $136 million, according to an industry source.
Also this month, a Helios Airways Boeing Co. 737 plane crashed into a mountain near Athens, a West Caribbean Airways MD-82 airliner crashed in Venezuela near its border with Colombia and a Tuninter ATR regional plane crashed off the coast of Sicily.
These crashes have made August the highest loss month since May 2002, when an Air China Boeing 747 crashed into the sea off Taiwan, killing 206 people, said Aon.
It is unclear at the moment how much insurers will have to pay out in compensation to the victims of the crashes. These sums sometimes exceed the amounts paid to the airlines for the loss of the aircraft.
The string of crashes comes at a difficult time for airlines and their insurers as most major international airlines will seek to renew their insurance policies in the next few months.
But the disasters will not necessarily cause a hike in airline premiums, Aon said. In spite of four downed airliners in three weeks this month, the number of losses this year is still within the average range for the number of big airliner crashes for the last three years, Aon said.
Recent years have seen a drop in the number of major crashes, with 2004 being the safest year on record for the airline sector. These have pushed the cost of insurance down for airlines.
"It remains too early to predict if these losses alone will result in changes to the current market environment," said Steve Doyle, Aviation and Aerospace Global Practice Manager at Aon UK.
Rather than push prices up, the crashes may ease the pressure on airline insurers to cut prices further after several years of relatively benign claims, one industry expert said.