KAC chief raps high insurance premiums


Kuwait Airways Corp (KAC) has said insurance firms should tailor premiums, massively raised since the September attacks, to better reflect airlines' security arrangements.

"Insurance companies need to ... differentiate between airlines that fully comply with all (required) security measures and those which do not," KAC chairman Ahmad Al Zibn said.

Kuwait's flag carrier could overshoot a projected loss of KD31.546 million ($100.1 million) for the current April-March fiscal year, Zibn said.

An increase of an estimated 1,000 per cent was applied on insurance premiums for airlines that fly to Western cities after the September 11 hijacked aircraft attacks on New York and Washington.

KAC, earmarked for eventual partial privatisation, has received insurance coverage of $2 billion from the state to meet new requirements to fly to Europe and the United States.

But not all KAC's possible losses can be attributed to the attacks. KAC suffers from heavy debt payments for a new fleet after it lost 84 per cent of its assets during the 1990-91 Gulf War.

The airline, which has one of the youngest fleets in the region, plans to replace its Airbus A310s and A300s aircraft, but a study on actual requirements is expected to be concluded by June, Zibn said.