The world’s aviation insurers have been warned the COVID pandemic has created a perfect storm as over $135 billion worth of aircraft are grounded, many in areas of extreme natural peril.
Specialty analytics firm Russell Group has released new research which found that the value of aircraft left grounded in the world’s airports has leapt $50 million since the COVID Pandemic decimated global air transport.
While freight flights continue, passenger traffic has drastically reduced and with it the increase in the hull value of plans left on the ground has been significant.
The threat has been exacerbated by the fact that many of the grounded fleets are in some of the world’s busiest airports.
Singapore’s Changi Airport has the highest aircraft value of $18,967,454,770, a jump from the pre-COVID-19 value of $8,685,030,000. This is followed by Doha Airport, Qatar which has an aircraft value of $17,019,302,000, a jump from $11,122,900,000.
Dubai International saw a rise in aircraft value from $15,224,490,000 to $16,623,128,000. Meanwhile, Hong Kong International Airport has seen a large jump from $10,0099,800,000 to $16,357,112,271.
Russell said the combined grounded aircraft value at these 10 airports is $136,073,111,433, a significant jump from the pre-COVID figure of $81,263,671,600.These market figures have been compiled from Russell’s exposure management platform, ALPS Aerospace.
Suki Basi, CEO of Russell Group explained: “Our research, has revealed new insights into where the global aircraft fleet, which is valued at almost $1 trillion, is currently located. This has revealed new exposure concentration for re/insurers, similar to property catastrophe.”
He warned it was not only the value of the aircraft which are currently idle but also many are parked in areas which are open to natural peril.
“What our current research is showing is that many of the grounded aircraft are located in places vulnerable to natural perils, such as the aircraft parked at Tulsa Airport in the middle of ‘Tornado Valley’,” added Mr Basi. “We are publishing these figures to inform aviation re/insurers that whenever the so-called ‘return to flight’ commences, they will find themselves with larger exposure in locations that they hadn’t expected”.