Insurance alert for Kiwis over grounding of 737 Max jets
Travel disruption while fleet assessed after two crashes may not be covered
Travel agents are fielding a rising number of calls from worried passengers hit by Boeing 737 Max groundings and warn that most travel insurance policies don’t cover any disruption.
New Zealand’s Civil Aviation Authority followed the lead of other regulators yesterday and suspended the Max model until more is known about two crashes within five months.
While Fiji Airways is the only airline that flies the new version 737 here, the plane type has been grounded in many European countries, Asia and South America causing headaches for Kiwis connecting with affected airlines. More than 50 airlines have had planes grounded.
Flight Centre says most travel insurance policies won’t cover claims directly or indirectly resulting from agencies’ grounding of the Boeing 737 8 Max planes, as these were government bodies rather than Boeing itself.
The agent says one of its policies — with a “cancellation for any reason” option, would cover this.
Cover-More offers that policy and says it is common in the industry that cancellations brought about through government regulations are generally excluded from cover.
“Issues brought about by such things as visa limitations, restrictions on travel over borders and other legislatively controlled circumstances (such as the current restrictions on the Boeing) are normally outside the scope of leisure travel insurance policies.”
Sue Matson, Flight Centre NZ general manager retail, said its agents were helping customers around the world whose flights had been grounded.
“We are monitoring the situation closely and in constant communication with the relevant airlines,” she said.
Another agent, House of Travel, says any new insurance wouldn’t cover 737 Max disruption as it was a “known event”.
Its commercial director Brent Thomas said it was not only flights that were disrupted, but also airport transfers, hotels and activities. “If you’ve done the booking yourself good luck with moving all those around.”
Fiji Airways operates between 17 and 21 flights a week to and from New Zealand. Of those only around four to five are operated by the Max. They would be replaced by earlier model 737s and Airbus aircraft across the network which includes Australia, which has also suspended the planes.
Thomas said the impact of the grounding would have been worse had it happened in a busy travel period for New Zealanders but any travellers to affected parts of the world faced disruption.
The CAA said because the Fiji Airways plane was infrequently here it had time to “thoroughly review” concerns about Max aircraft following the crashes in Indonesia and Ethiopia. The two accidents claimed 347 lives and although no final causes have been found, attention is focused on new control systems.
“This is a temporary suspension while we [monitor the situation] and analyse information . . . to determine the safety risks of continued operation of the Boeing 737 Max to and from New Zealand,” said the director of Civil Aviation, Graeme Harris.
The association representing airline pilots backs the CAA move.
New Zealand Air Line Pilots’ Association president Tim Robinson said his group had not called for a suspension, but it backed a “conservative” approach.
United States regulator the Federal Aviation Administration (FAA) insists the plane is safe and is not taking any action in spite of mounting political pressure.
Robinson said a grounding by the FAA would be a bigger call because of higher numbers of the new generation 737s in North America and that body had a closer relationship with Boeing than other regulators around the world.
“They’ve probably got a better insight into the risk mitigation that Boeing is taking with this automated control system.”
Following the Lion Air crash in Indonesia, the FAA issued an airworthiness directive to all airlines operating about 350 of the planes on new training for pilots to deal with new systems problems.
Airlines were required to put their pilots through specific exercises to deal with circumstances where the aircraft angle of attack gauge fails and this automated system drives the aircraft into a nosedive, Robinson said.
We are monitoring the situation closely and in constant communication with [the airlines].
Sue Matson, Flight Centre NZ