covid impact on aviation insurance

The impact of the covid on aviation

Covid-19 emerged as airport aircraft parking lots were already filled with hundreds of Boeing 737 MAX planes that had been frozen due to technical malfunctions.

The coronavirus pandemic has exacerbated an already alarming situation. The financial burden associated with aircraft storage has become a burden for businesses and airports, with more than 8,000 aircraft being shut down, or a third of the global fleet, with an insured value of $ 164 billion.

Insurance companies that cover aircraft on the ground and in the air face high cumulative risks. This cumulative exposure to the same location is a source of concern for insurance companies. They must take into account the impact of an unexpected event, such as natural disasters, explosion, fire, attack and danger of war,

Increased freight operations

During the pandemic, shipments increased, especially those involving medical and humanitarian supplies. Companies have had to reconfigure aircraft to meet this unexpected demand. Hence, insurance companies must ensure compliance with safety and navigation requirements for all aircraft types and uses. Air carriers that fail to comply with these provisions could end up with void insurance contracts.

Insurance companies should also be informed of any change in device usage so that they can re-evaluate their liabilities.

Predict the impact of Covid-19 at the end of 2020

Global passenger traffic: a decrease of between 35% and 65% in the global number of passengers, domestic and international flights.

Airport: 50% decrease in passenger traffic with an estimated 57% loss in airport revenue in 2020, or more than US $ 97 billion.

Airlines: 48% decrease in transport volume (RPK) in 2020 compared to 2019.

Tourism: low tourism receipts around the world. The deficit could range from $ 910 to $ 1.170 billion in 2020 versus revenues of $ 1.5 trillion in 2019.

Trade: The volume of global merchandise trade decreased from 13 to 32%.

Global economy: Expect a 4% contraction of global GDP, a bigger drop than recorded during the 2008 financial crisis.

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The COVID-19 pandemic is pushing the global economy into its worst recession since World War II

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