By a Staff Reporter
THE BRITISH parliament is preparing emergency legislation to keep airlines flying to the Middle East and Cyprus during an Iraq war, the Financial Times (FT) reported yesterday.
The newspaper said that an order is expected to be laid before parliament to give the government the power to protect the aviation industry against war risks if insurers withdraw cover.
“Airlines fear premiums will soar not only for flights to the Gulf but also to nearby destinations such as Cyprus. They believe insurers would withdraw cover more widely if a war in Iraq made airlines the target of terrorist reprisals,” the FT said.
Insurers cancelled cover after September 11, 2001, and the government had to step in as an underwriter to prevent aircraft being grounded. But that agreement expired at the end of October last year.
A Whitehall insider told the FT: “We are aware of the dangers, and there’s a contingency plan.”
Ministers are also discussing whether to help out the shipping industry, which is facing extra costs to secure ports and ships against terrorism, the paper said.
It quoted an aviation industry insider as saying: “When a war is declared, the insurers may come and say ‘we’re not prepared to insure you, or we will insure you at such a premium that it’s unprofitable’.”
The government has the power to provide airlines with insurance under the Marine and Aviation (War Risks) Act 1952. The legislation was used in 1991 to maintain scheduled flights to the Gulf. But it was only tabled in parliament when the market withdrew risk insurance.
Cyprus is already engaged in talks with Lloyds of London in an attempt to persuade the prestigious insurance company not to place the island in the danger zone if the US-led war on Iraq goes ahead.
UK-based charter firms are already cutting back on capacity to Cyprus, and a negative report by Lloyds would deal a fatal blow to scheduled air transport in and out of the island.
During the Gulf War in 1991, when Cyprus was placed firmly in the danger zone, it would have cost each aircraft an additional $80,000 in insurance costs to land at Larnaca and Paphos airports. The move effectively isolated the island for the duration of the war.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
