By Varada Bhat, IANS
Mumbai : After earning ancillary revenues from freight and sale of food, drinks and gifts on board, more and more low cost carriers (LCCs) are teaming up with insurance companies to offer travel insurance to passengers against flight delay, trip cancellation and baggage loss.
First to jump on the bandwagon was Delhi-based LCC SpiceJet, which has tied up with TATA AIG general insurance to cover travel related risks of domestic passengers.
Following them are the Wadia-group promoted GoAir with TATA AIG, and Deccan – the low cost arm of UB Group’s Kingfisher Airline – inking a deal with ICICI Lombard.
New Delhi-based Indigo Airlines, run by InterGlobe enterprise, is also looking for a suitable insurance partner.
Besides LCC, travel portals like Yatra.com and MakeMyTrip.com are also offering travel insurance.
According to SpiceJet chairman Siddhanta Sharma, the response has been quite overwhelming. “On the first day itself, we sold around 1,000 policies.” SpiceJet operates 100 flights daily connecting 18 destinations with an 18-aircraft fleet.
Echoing similar sentiments, Deccan officiating CEO Ramki Sundaram said: “Passengers are seeing a significant relevance in these products. It’s not just the financial incentive but an added attraction to passengers.”
The insurance cover will be available on the airline website – the option of buying the insurance shall remain that of the domestic passenger.
Under the Deccan bouquet, benefits for $2.5 (Rs.99) will include a range of emergency medical expenses, loss arising from trip cancellation and loss of baggage.
Similarly with GoAir for $3 (Rs.129), a passenger would be compensated up to Rs.10,500 by TATA-AIG in case of a flight delay beyond a specified duration. The passenger will also be reimbursed for lost baggage up to Rs.7,500.
For Accidental Medical Benefit, the insurance will cover medical bills (up to Rs.100,000) if the passenger is involved in an accident during a trip and needs medical attention.
“Such integration has helped many airlines in other parts of the world. We can offer insurance products on real time basis with convincement claims process, ” said AIG president for South Asia Charles Bouloux.
He feels that a traveller, whether on work or leisure, will now be able to reduce travel-associated risks during his trip.