Tag Archives: malaysia airlines

Immediate Vault Immediate Access

EgyptAir Flight MS 804 Crash Confirmed, Killing 66

Posted on by

Egyptian authorities believe they have found debris from EgyptAir Flight MS 804, but the search remains on for the wreckage of the Airbus A320 traveling from Paris to Cairo that vanished from the radar and crashed into the Mediterranean early this morning.

According to the Greece’s defense minister, Greek controllers attempted to contact the aircraft when it crossed through the country’s airspace but could not get a response. The plane made “sudden swerves” before dropping from 37,000 to 15,000 feet and disappearing from radar. The small commercial jet was about half full, carrying 66 passengers from a range of nations, including 30 from Egypt, 15 from France, two Iraqis, and one person each from Britain, Belgium, Kuwait, Saudi Arabia, Sudan, Chad, Portugal, Algeria and Canada.

egyptair map reuters

No cause has been officially identified, but many security analysts and government officials believe that an act of terrorism may have downed the plane. There were no documented red flags before the plane disappeared: local weather was good, the plane was on its fifth flight of the day, the pilot and copilot had logged a significant amount of flying experience, and Greek aviation officials said the pilots did not mention any issues.

According to Reuters, Egyptian Prime Minister Sherif Ismail said it was too early to rule out any possible explanation, and French President Francois Hollande told reporters, “No hypothesis can be ruled out, nor can any be favored over another.” Egypt’s civil aviation minister said a terrorist attack was more likely than a technical failure, however. Two U.S. officials told CNN that the government is operating on an initial theory the flight was taken down by a bomb, but cautioned this is not yet supported by a “smoking gun.” No terrorist groups have yet claimed responsibility for the crash.

As Time noted:

Egypt has been the victim of terrorism in the skies relatively recently. Last October, a Metrojet charter plane filled with Russian tourists crashed into the Sinai Desert shortly after taking off from the Egyptian Red Sea resort of Sharm el-Sheikh, headed to St. Petersburg, Russia. All 224 passengers died in the crash. Investigators quickly speculated that a home-made bomb had been placed aboard the aircraft and in February the Islamic State, or ISIS, claimed responsibility, saying that it had indeed smuggled an explosive device aboard the aircraft.

In March, a passenger aboard an EgyptAir plane flying from Alexandria to Cairo hijacked the plane wearing a fake suicide belt, an incident that raised deep concerns among aviation authorities about the anti-terrorist measures in place on EgyptAir flights, and at Egyptian airports.

Beyond the region, a number of high-profile losses have hit the aviation industry as a whole over the past two years, including the disappearance of Malaysia Airlines flight MH370 and the crash of MH17, a Boeing 777 shot down over Ukraine. As we reported at the time, however, crashes actually continue to decrease. While the insured losses from a plane crash can be significant, the capacity in the aviation insurance market has continued to keep rates stable and relatively low.

In the terrorism insurance market, recent losses have also not yet borne out a concrete impact on rates or capacity. While some European markets have recently reduced their underwriting appetite, terrorism coverage has primarily broadened, with significant capacity and rates that remain relatively low.

As Business Insurance recently reported, the terror attacks in Paris and Brussels have prompted an increase in the take-up rate for event coverage to add to buyers’ terrorism insurance programs. Tim Davies, head of sabotage and terrorism at London specialty insurer Sompo Canopius, told the magazine that many buyers have been adding liability and event cancellation coverage, prompted by the continued relatively low rates. Despite the spike in attacks in Europe, Richard Sawyer, director and head of North American terrorism at Aon Risk Solutions, told AM Best last week that rates for terror coverage should remain relatively stable unless the frequency of attacks escalates.

A Turbulent Year for the Aviation Industry, Despite Improving Safety

Posted on by

MH 17 Wreckage Denis Kornilov / Shutterstock.com

First, Malaysia Airlines flight MH370 mysteriously disappeared in March, dominating the news cycle and baffling aviation experts, government officials and civilian observers alike. This month, three tragedies in short succession have kept the industry in the hot seat. Malaysia Airlines made headlines once again on July 17 after Flight MH 17, a Boeing 777 flying from Amsterdam to Kuala Lumpur, was shot down over Ukraine. It is now the seventh most deadly aviation crash in history. Exactly who fired on the plane remains unclear, as do many questions of insurance, as war has not officially been declared, despite months of fighting in the region. An act of war would exclude losses from insurance coverage, but remaining uncertainty does as well. Plus, “Unless Russia has declared war on Malaysia, that would knock out the exclusion,” RIMS Vice President Rick Roberts told Mashable. But for it to fall under under terrorism coverage, “someone has to certify that the act that occurred wasn’t a mistake—that it was a malicious act.” The already struggling company may not be able to survive this second disaster, or the reputational devastation.

Ten Deadliest Plane Crashes

Tragedy has further plagued the industry this month. On July 23, a TransAsia flight from Taiwan crashed, killing 48. The next day, an Air Algérie flight from Burkina Faso to Algeria disappeared less than an hour after takeoff in the air space over Mali. Approximately 24 hours later, peasants found the plane’s wreckage near Gao, Mali, and French soldiers dispatched to the scene were able to recover a black box, but no survivors.

Despite the string of disasters, there is no evidence that air travel is in any way more dangerous on the whole. In fact, it is safer than ever before. Nearly three billion people fly safely each year on more than 37 million flights, the International Air Transport Association (IATA) reports, and the global plane accident rate fell to the lowest level in aviation history in 2012. Over the past 10 years, both the crash and fatality rates have trended downward, according to statistics from the Bureau of Aircraft Accidents Archives. But, little more than halfway into 2014, the number of people killed in plane crashes is more than double the total for 2013 (991 and 459, respectively).

Based on BAAA data:

Crashes per year

Deaths per year

Looking back even further, this chart from the Wall Street Journal leaves little doubt that the aviation industry has grown drastically safer:

Deadly flights

While 2014 has been more fatal thus far, the overall number of crashes continues to decrease. There have been 70 commercial-plane crashes globally so far, versus 81 for the comparable period a year earlier, according to Aviation Safety Network, part of the Flight Safety Foundation. Further, the four tragedies do not have any common root causes for their failures.

Insurance Changes on the Horizon

International carriers are feeling most of the strain, and that is likely to have serious implications for insurance premiums. “Given the accumulation of losses, including the loss of Asiana Airlines’ Boeing 777 in San Francisco last year, an explosion causing damage to 20 aircraft in Tripoli recently, and this week’s losses in Africa and Taiwan, these will, altogether, put pressure on the global insurance market,” said Robert Hartwig, president of the Insurance Information Institute. “I expect most of the impact to be focused on international carriers, particularly those operating in or traversing parts of the world that I would characterize as ‘hotspots,’ currently experiencing military or political instability. That would certainly include Ukraine, parts of the Middle East, and parts of Africa.”

While the recent spate of tragedies may leave many travelers wary of getting on a plane, American airlines have less to worry about regarding premiums than their foreign counterparts. There have been are no notable losses this year among domestic carriers, or U.S.-based airlines that fly internationally. As Hartwig pointed out, however, “With a few exceptions, they do not tend to traverse many of those hotspots to begin with.”

In Africa and other developing regions, “you identify accidents in many places that would have happened 30 or 40 years ago in the West, because oversight is lagging,” Dominique Fouda, spokesman for the European Aviation Safety Agency, told the Wall Street Journal. “You also see different accidents linked to local conditions.”