SYDNEY/TAIPEI (Reuters) – Airlines, airports and insurers across Asia are bracing for the prospect of unusually high damage as the region’s tropical storm season begins, as hundreds of aircraft grounded by the coronavirus pandemic can’t be moved easily.
FILE PHOTO: A man walks inside the flooded Cochin international airport after the opening of Idamalayar, Cheruthoni and Mullaperiyar dam shutters following heavy rain, on the outskirts of Kochi, India, August 15, 2018. REUTERS/Sivaram V/File Photo
Major airports in storm-vulnerable regions such as Hong Kong, Taiwan, Japan, the Philippines, Thailand and India have been effectively turned into giant parking lots as COVID-19 travel restrictions choke demand.
“If you have got those aircraft on the ground, you can imagine to get them back up and running in a short space of time is no easy thing,” said Gary Moran, head of Asia aviation at insurance broker Aon. “The challenge is you can have a typhoon or hurricane coming and there are going to be a lot of aircraft that aren’t going to be able to be moved in time.”
Airline insurers, already on the hook to refund large portions of crash risk premiums because of the groundings, now face the larger-than-usual risk posed by having lots of airplanes grouped together at airports, industry experts said.
“One event could create damage which costs millions to repair, maybe even closer to hundreds of millions depending on the aircraft that are involved,” said James Jordan, a senior associate at law firm HFW’s Asia aerospace and insurance practices.
In guidance to be issued to airport operators this week,