European airspace users may have to beef up their insurance

 - January 21, 2008, 11:02 AM

All aircraft using European airspace are facing the prospect of having to carry minimum levels of third-party liability insurance. Under European Commission (EC) proposals now being debated by the European Parliament, operators of aircraft of up to 25 metric tons mtow (55,115 pounds) would be required to have minimum cover
of approximately $109 million. This rises to $365 million for aircraft weighing between 25 and 50 metric tons (110,230 pounds) to $541 million for 50 to 200 metric tons (440,920 pounds) and to $810 million for aircraft above 200 metric tons.

The proposals have provoked staunch opposition not just from operator representatives, but also from government officials with European Union member states. The UK Department of Transport (DoT), for example, has protested against the inclusion of all noncommercial aircraft operators and has questioned the legality of applying the insurance cover minimums to non-European aircraft overflying the continent.

According to Peter Smith of the DoT’s aviation directorate, the EC “took a battering” when the proposals were sent to an intergovernment working group. Speaking at the annual conference of Britain’s General Aviation Manufacturers and Traders Association (GAMTA), he predicted that it could now take at least another 18 months to resolve the new requirement.

To relieve the financial burden on the business and general aviation sectors, the UK officials have proposed four additional aircraft weight categories with lower minimum third-party insurance limits. Under these counterproposals, aircraft weighing up to 500 kg (1,102 pounds) would require just $1.9 million of coverage, rising to almost $4.8 million for up to two metric tons (4,409 pounds), to $9.6 million for up to five metric tons (11,023 pounds) and to $24 million for up to 12 metric tons (26,455 pounds).

Smith said that he is not hopeful of being able to get non-commercial aircraft operators completely exempted from the new insurance requirement, as the UK would prefer. However, he did predict that the levels of required coverage will probably be reduced for most business and general aviation aircraft. The UK official added that it will likely prove to be “very difficult” to effectively police the new insurance requirement for noncommercial operators and especially for overflying foreign operators.