Boeing 737 Max ban: Insurance alert for Kiwis

Newstalk ZB, NZ Herald,
Publish Date
Wednesday, 13 March 2019, 5:56PM
House of Travel says they have no idea how long the 737 Max8 ban will last. (Photo / Getty)

Travel agents are fielding a growing number of calls from worried passengers hit by Boeing 737 Max groundings and warn that most travel insurance policies don't cover any disruption.

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

While Fiji Airways is the only airline that flies the new version 737 here, 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.

House of Travel's Brent Thomas told Larry Williams that a lot of people have come into store to express their concern and asking what to do. 

"The good news is that Fiji Airways has got a couple of aircraft to replace the 737 Max, so we're working with them to see how we can accommodate those customers.

"It goes well beyond just the airline, as we have customers who have transfers in Fiji and hotels to be rebooked."

Thomas says that the insurance question depends on what their policy is. 

"If a person is travelling in the next 24, 48 hours and haven't taken out insurance, it's too late and it's a 'known event'." 

He says that a lot of airlines will be hurting as they have a significant number of these planes. Thomas says it is a case by case basis, though they have no idea how long the 737 Max ban will take. 

"The airline company and also the manufacturer examine what happened and try to ascertain the problem, and then send out a notification to all those airlines that use that aircraft. 

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.

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 itself 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.

Fiji Airways operates between 17 to 21 flights a week to and from New Zealand of those only around four to five are operated by the Max. They would be replaced by earlier model 737s and Airbus aircraft across the network which includes Australia, which 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.

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.

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