When an airline loses its aircraft (which costs lot of millions), who pays for it?

Question

The insurances? But if they have to pay these millions, how do they do it? Do they have special contracts with the airlines?

Answer 1

If the airline actually owns the airliner or if it belongs to a leasing company it is insured.  In the case of the first big DC-10 crash that took place in Chicago, (Flight 191 in 1979) the airline had insured the plane for replacement value and actually made millions when it crashed.  The money paid out to the families of the victims comes from a separate liability policy.

Answer 2

As you can imagine, even airlines have insurance.

Many airlines lease thier aircraft from companies that specialize in financeing these large transacations.  AC manufactureres strike deals with leasing co's and pass along some savings. All these demand insurance, both for replacement and the inevitable liability that ocurrs from such a loss.

Paying for it.  Just like you do.  Periodic payments.  Keeping tabs on all of this is a big business in itself.  Fortunatly the insurance companies are more than willing to keep track for you.

Just like you, if an Airline has an increasing record of incidents, claims and such then thier rates go up too.

Some large Airlines, "Self-Insure" against the more common 'fender bender' type issues.

Answer 3

Hull insurer.