Go Airlines got premium refund for grounded aircrafts

By Venkatchari Jagannathan
Chennai, May 8 With 50 per cent of its fleet grounded due to the problems with Pratt & Whitney engines, the Wadia group's low cost Go Airlines (India) got a portion of its aircraft hull insurance premium from its insurers, said a top official.

The airlines' total fleet size is 54 aircraft, out of which 27 have been grounded for more than a year, Kaushik Khona, Chief Executive Officer, Go Airlines, told .

"Last year, we got a refund of the premium paid for covering the aircraft hull. The refund was about 70 per cent. The insurer was New India Assurance," Khona told .

However, he declined to share the actual quantum of 'lay-up period' premium refund received by Go Airlines.

Simply put, lay-up premium refund in the case of aviation insurance means refund of premium for the period an aircraft did not fly. When this refund would kick-in is a subject matter of the policy conditions.

Even though the aircraft is on the ground, the airline will not get a premium refund on a pro-rata basis as it is exposed to various kinds of risks while on the ground.

Normally, the lay-up premium refund is adjusted at the end of the policy period.

In normal circumstances, an airline may have a couple of planes grounded due to repair work or other issues. But in the case of Go Airlines' 27 aircraft fitted with Pratt & Whitney engines, they have been on the ground due to engine faults.

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