NAC officials say the insurance premium it is charged by China is very high compared to insurance paid by private airlines. NAC says it has requested for reduction in the premium before renewing the insurance.
“At present we are paying a very high amount of 4.7 percent of the total cost of the aircraft in insurance premium which amounts to Rs 250,000 a day,” Ram Hari Sharma spokesperson of NAC told Republica, adding: “We have requested AVIC International Holding Corporation to reduce the insurance premium in line with international standards.”
Sharma says NAC has urged the company to make it around 1 percent of the total cost of the aircraft.
A board meeting of NAC had earlier decided that if the insurance was not renewed by April 15, they were likely to send the aircraft back and will also not bring in the remaining of the ordered aircraft.
“Until Friday, no decision has been made regarding the renewal of insurance as we cannot renew insurance at such a high premium,” Sharma said.
A meeting was held on March 31 among officials of the Ministry of Culture, Tourism and Civil Aviation (MoCTCA), NAC and AVIC to settle the issue. Sharma said AVIC has not yet responded, though it had vowed to talk to the government regarding the insurance premium.
Meanwhile, NAC on Wednesday had written to MoCTCA requesting it to sort out various problems faced by NAC in regard to MA60.
NAC has been facing a host of issues with the MA60 including problems with landing and take-off weight, timely delivery of spare parts and high cost of spare parts. As a result, both Chinese aircraft -- MA60 and Y12E -- have not been able to carry passengers as per their capacity.
“We have requested AVIC to reduce the insurance premium as it is very high compared to the whole value of the aircraft and what the private companies are paying,” Suresh Acharya, joint secretary of MoCTCA, said adding that it is not commercially viable for NAC to renew the insurance at very high premium cost.