Boeing 737 Max ban: Insurance warning for Kiwis

More than 50 airlines have had their Boeing 737 Max planes grounded. Photo: AP
More than 50 airlines have had their Boeing 737 Max planes grounded. Photo: AP
Travel agents are fielding a growing number of calls from worried passengers affected by Boeing 737 Max groundings and warn most travel insurance policies don't cover any disruption.

New Zealand's Civil Aviation Authority today followed the lead of other regulators and suspended the Max model until more was known about two crashes within five months.

An Ethiopian Airlines plane in Addis Ababa crashed shortly after takeoff on Sunday, killing all 157 people on board. In October, a plane operated by low-cost airline Lion Air went down off the coast of Indonesia, killing all 189 passengers and crew.

While Fiji Airways is the only airline that flies the new version 737 to New Zealand, 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 that is regulating this.

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 would not cover 737 Max disruption as it was a ''known event.''

Its commercial director, Brent Thomas, said not only travellers' 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 to 21 flights a week to and from New Zealand. Of those, only four to five are 737 Max planes.They would be replaced by earlier model 737s and Airbus aircraft across the network which includes Australia. It has also suspended the planes.

"Fiji Airways is hopeful of a smooth transition with minimal disruption to passengers. We intend to operate schedules as planned,'' said a spokesman.

Thomas said the impact of the grounding would have been worse if it had happened in a busy travel period for New Zealanders, such as the school holidays, 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 continue to monitor the situation closely and analyse information as it comes to hand 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 supports the CAA move.

New Zealand Air Line Pilots Association president Tim Robinson said his group had not called for a suspension, but it supported 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 problem.

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 nose dive, Robinson said.

"There were specific drills. Clearly airlines would have to comply with that and pilots would have to demonstrate their competency."

Although the possibly linked problems happened at a critical take off stage of flight Robinson said trained pilots should be able to implement the new measures.


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