Home
FacebookTwitterSearchMenu
  • Subscribe
  • Subscribe
  • News
  • Features
  • Knowledge Library
  • Columns
  • Customs
  • Jobs
  • Directory
  • FX Rates
  • Contact us
    • Contact us
    • About Us
    • Advertise
    • Send us news
    • Editorial Guidelines
Air Freight

Collisions and faulty workmanship drive aviation insurance claims higher

08 Aug 2024 - by Jeanne van der Merwe
 Source: Allianz
0 Comments

Share

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • E-mail
  • Print

The aviation industry is expecting an all-time high in passenger numbers this year, but insurance claims show it is still suffering the consequences of the pandemic.

Mass layoffs in the industry during the pandemic have led to “a noticeable rise in ground-handling claims at large airports worldwide, including towing, fuelling, catering, and wheelchair services related to commercial aircraft operations, as well as vehicle collisions on the tarmac.”

This is according to an analysis by multinational insurer Allianz of more than 30 000 aviation insurance claims over the past five year.

“Pandemic-related lay-offs have resulted in new hires and less experienced employees in some cases, contributing to these claims.”

The analysed claims were valued at US$15.1 billion (R278 billion).

The most expensive claims came from collisions, crashes, hard landings and bird strikes, which accounted for 63% of the value of all aviation-related insurance claims over the past five years, and 33% by number.

Claims originating in faulty workmanship or defective product is the second top cause of claims by value and frequency, and natural disasters, including those caused by turbulence, ranked third.

Higher labour costs, the rising cost of aircraft parts and inflation have led to “a significant increase in aircraft repair costs”.

“The shift to next-generation aircraft continues to impact claims, especially when it comes to engine disassembly and repair costs. Claims costs related to certain aircraft spare parts have increased by 10% to 15% over the last few years, which has resulted in a greater number of aircraft being deemed Constructive Total Losses (CTLs) than in the past.”

The sector is also suffering significant supply chain challenges.

“Delivery times for mechanical and avionic components are challenging and unpredictable for all involved: insured clients, maintenance, repair and overhaul operations, and insurers, driving up the cost of claims. Maintenance and repair capacity resources are dwindling across the UK, Europe, and the US.”

The report also flags “the growing shortage of aircraft mechanics”, which “may impact future claims activity”.

“An obvious concern is that the shortfall ultimately leads to an accident, despite the systems of checks and balances in place in the industry. It may take longer to complete repairs if vendors lack manpower, or efficiency. Further, if a mechanic does not have the ability to repair a part, it will need to be replaced with a new one, which typically is more costly.”

Allianz also flagged GPS spoofing and jamming amidst rising geopolitical tensions, saying there were on average 40% more of these incidents in the first quarter of 2024 than in 2023.

“Examples include false GPS signals which have tricked aircraft flight management systems into indicating that the aircraft is many miles off-track. To date, most reported spoofing attacks have come from Eastern Europe and the Middle East, as well as up through the Black Sea region. Incidents have escalated since the onset of Russia’s invasion of Ukraine. However, operators should be cognisant of the potential for spoofing anywhere.”

Sign up to our mailing list and get daily news headlines and weekly features directly to your inbox free.
Subscribe to receive print copies of Freight News Features to your door.

Nigeria moves to end cabotage waivers

Sea Freight

The government has launched a maritime joint venture to boost the local shipping industry.

15 May 2025
0 Comments

Africa must raise energy tariffs to attract investment

Africa

Tariff policies in many countries have kept electricity prices artificially low.

15 May 2025
0 Comments

SACU ‘should be renegotiated’ to benefit the region

Imports and Exports

Namibia says the restrictions on imports are justified to support industries to become self-sufficient.

15 May 2025
0 Comments

Business driving growth amid political divide

Economy

The provincial governments need business to become involved in upgrading the logistics infrastructure of roads, rail, ports and airports.

15 May 2025
0 Comments

Majority union at Transnet downs tools

Logistics

The company, responsible for rail and port cargo, remains in a precarious financial state.

14 May 2025
0 Comments

Thought leaders talk Trump and tariffs at Nampo Harvest Day

Economy

Landman remarked that it all came down to Ramaphosa’s visit to Washington next week.

14 May 2025
0 Comments

SA avocado growers ship first fruit of season to China

Imports and Exports

The country’s total avocado exports were just over 81 000 tonnes in 2024 with just a fraction heading to this new market.

14 May 2025
0 Comments

China Airlines announces Boeing 777X orders

Air Freight

As the world's largest twin-engine jet, the B777X-9 uses 20% less fuel and has a range of 7 295 nautical miles (13 510 km).

14 May 2025
0 Comments

US retailers welcome pause on China tariffs

Imports and Exports

The move paves the way for a fair and balanced trade relationship, says the National Retail Federation.

14 May 2025
0 Comments

RFA celebrates 50 years of road freight industry dedication

Road/Rail Freight

The RFA is the unified voice of South Africa's road freight industry, known for its advocacy, leadership, and commitment to sustainable transport.

14 May 2025
0 Comments

OPINION: Sars customs cadets training – can the private sector assist?

Customs

Trade has welcomed the initiative, mainly due to an exodus of experienced officers over the past few years.

14 May 2025
0 Comments

On-point logistics buys peace of mind for agri brand

Imports and Exports

Trusted transport and customs clearing ensure value chain integrity for pellet machine manufacturer.

13 May 2025
0 Comments
  • More

FeatureClick to view

The Cape 16 May 2025

Border Beat

The N4 Maputo Corridor crossing – congestion, crime and potholes
12 May 2025
Fuel-crime curbing causes tanker build-up at Moz border
08 May 2025
Border police turn the tide on illegal crossings
29 Apr 2025
More

Featured Jobs

Seafreight Export Controller

Tiger Recruitment
Cape Town
15 May

Import Manager (NVOCC)

Switch Recruit
Eastrand
15 May
More Jobs
  • © Now Media
  • Privacy Policy
  • Freight News RSS
  • About Us
  • Advertise
  • Send us news
  • Contact us