War-risk insurance end a worry for airlines (set to expire in 2 weeks)

[NVMojo]

my, what timing ...

Published August 12, 2006

The suspected terrorist plot foiled by British investigators underscores the continued need for a federal insurance program for airlines developed in response to the Sept. 11 attacks, according to an aviation consultant at one of the nation's largest insurance brokerages.

Without the coverage provided by the war-risk insurance program, which is set to expire Aug. 31, a catastrophic loss of lives and aircraft due to a terrorist attack "would crater the commercial insurance market," said Wayne Wignes, president of the aviation group for Chicago-based insurance broker Aon.

The Air Transport Association, an industry trade group, has called the program "indispensable" for the nation's carriers.

Commercial liability coverage generally does not cover carriers for most of the losses caused by acts of war. And going without coverage is not an option. The banks and financiers that have pumped billions of dollars into the aviation industry demand carriers have war-risk insurance, as do many foreign countries, .

"You need it to respond to a 9/11-type event, for the loss of the airplane, the loss of passengers and any third-party claims," Wignes said.

more...

http://www.chicagotribune.com/business/chi-0608120185aug12,1,4851649.story?coll=chi-business-hed

[MaineDem]

1. Hmmmmmmmmmmmmmmmmmm

Now that's a coincidence...

[JesterCS]

2. indeed n/t

[NVMojo]

3. that's what I was wondering ...remember the pension news just a week ago?

http://www.hawaiireporter.com/story.aspx?04a2de7c-6270-4d52-9b73-43db2f421683

snip...

Some policies are so bad that they overshadow the good features of legislation. If Congress insists on including special treatment for airlines and or other industries in the Pension Protection Act (H.R. 4), President George W. Bush should veto it. A veto would reduce the chance that companies could transfer the costs of their pension obligations to the taxpayer.


A Dangerous Precedent

Under H.R. 4, Delta and Northwest, which have frozen pension benefits, would be allowed up to 17 years to repay the underfunding of their pension plans, while American and Continental, which have not, would be allowed to take 10 years. These periods are significantly longer than the seven years other sponsors of defined benefit pension plans would have to eliminate their plans’ underfunding. In addition, Delta and Northwest would be allowed to use an unusually generous formula that would sharply reduce the amount that they would have to contribute to their pension funds.


American and Continental now want the same treatment that Delta and Northwest would receive and, after threatening to delay the pension bill, are likely to receive additional breaks in a “technical corrections” bill that is expected to be considered later this year.


Even more alarming, in addition to the special treatment for the airlines, certain defense contractors would receive an extra three years before the new pension funding requirements apply to them. Supposedly, this is to allow time for government contract accounting requirements to be adjusted. However, since the new funding requirements are gradually phased in for all companies, there is no reason why the additional time is needed. The suspicion that this is just special treatment for a powerful industry is reinforced by language that allows these contractors to use a generous funding formula that would reduce the amount that they have to contribute to their pension plans. This special treatment for certain government contractors alone is more than enough to justify a veto.

snip...

[Lars39]

4. K&R

for the emerging dots. :kick:

[NVMojo]

6. remember the 9-11 attacks? I'm trying to remember, wasn't there

mass dumping of certain airline stock in the days before those attacks?

[MaineDem]

9. A few weeks before 9/11/01...

transportation stocks were all down. I dumped all my stock at that point and went to cash. Talk at the time was that transportation was a bellwether indication of a failing market. This was at the end of August/beginning of Sept.

Airline stocks, if I remember correctly, were especially poor.

[NVMojo]

13. here's the story from Sept 2001

Data shows heavy airline-stock short selling

Saturday, September 22, 2001

In another sign that some investors speculated against the stocks of airlines whose jets were used in terrorist attacks on New York and the Pentagon, there was a sharp increase in short selling of the stocks of American and United airlines during the month before Sept. 11.

The trading activity far outpaced the rise in short selling for all stocks on the New York Stock Exchange -- or other major airline stocks as a group on the Big Board -- according to a computer analysis by The Chronicle of data released yesterday by the New York Stock Exchange.

A short sale is essentially a financial market bet that the value of a particular stock will drop. In a successful short sale, an investor borrows the stock from a broker, sells it and then repurchases it at a lower price, returning the shares to their owner and turning a profit on the difference.

more...

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/22/BU27558.DTL

and this one:

Suspicious profits sit uncollected
Airline investors seem to be lying low

Saturday, September 29, 2001

Investors have yet to collect more than $2.5 million in profits they made trading options in the stock of United Airlines before the Sept. 11 terrorist attacks, according to a source familiar with the trades and market data.

The uncollected money raises suspicions that the investors -- whose identities and nationalities have not been made public -- had advance knowledge of the strikes.

"Usually, if someone has a windfall like that, you take the money and run," said the source, who spoke on condition of anonymity. "Whoever did this thought the exchange would not be closed for four days.

"This smells real bad."

more...

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/29/MN186128.DTL

[savemefromdumbya]

5. 2 weeks?

[NVMojo]

7. August 31st, just a hair over 2 weeks.

[savemefromdumbya]

11. 31st, then that's 11 days until you know.....

[CountAllVotes]

8. Hmmmmmmm is right

>> "It's going to take Congress to extend it beyond next year," Wignes said.

During the past five years, the federal government has collected about $100 million in premiums but has not had to spend any money.

"They've never had a payout under this program because this program was introduced after 9/11," Wignes said. "But that also reinforces something: $100 million doesn't do much if there is a terrorist attack, because it's beyond the financial capacity of traditional insurers." <<

:kick:

[NVMojo]

10. fecking crooks!!! I also think they are lying to us about which US cities

were targeted.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2453111

[CountAllVotes]

12. from Heathrow to the USA

they fly direct (British Mydland/United) to SFO, I do know that much! :wtf:

[NVMojo]

18. I still say Boston was involved

[NVMojo]

14. if link doesn't work, try this one ...

http://www.chicagotribune.com/business/chi-0608120185aug12,1,1231340,print.story?coll=chi-business-hed

[pitohui]

15. oh THAT'S interesting

in that case i honestly wonder if there was any threat at all or if some big talkers had to be "pumped" in order to help the airlines retain this insurance coverage

any proof these magical gatorade cans ever existed or do we have another "miami 7" situation here?

[mbperrin]

16. Hmmmmm...I thought GOVERNMENT was the problem...

according to Saint Ronnie - won't the market create a solution for this? Huh? HUH? <crickets>

[NVMojo]

17. they interfere with everything as "the government"