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S.Lanka Government Absolved of Indemnity to Airlines
The Sri Lankan government was absolved on Friday of the 1.45 billion U.S. dollars it offered to indemnify the national carrier SriLankan Airlines following the airlines' successful negotiations with a consortium of overseas insurance underwriters, the official Daily News said on Saturday.
These consortia of insurance underwriters have agreed to cover their war risk of 1.45 billion U.S. dollars, thus absolving the government of the indemnity it agreed to with the airline on Tuesday.
The airline was compelled to ground its outbound flights since Monday due to its consortium of insurers deciding to reduce the war risk cover from 1.5 billion dollars to 50 million dollars with effect from Tuesday.
The government agreed to meet the shortfall of the 1.45 billion dollars after negotiations with the airlines.
The Srilankan Airlines resumed its flights Tuesday afternoon following the government decision.
The insurers action followed the September 11 terrorist attacks in the United States.
Underwriters imposed war-risk surcharges on flights operating to Sri Lanka after separatist Tamil Tiger rebles destroyed four passenger aircraft when they attacked the country's only international airport in late July.
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