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Air NZ receives $76m ‘crash cash’

Posted by te2ataria on March 15, 2009

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$76m payout? Not bad for an aging flying coffin!

One interesting news item this week was the report of NZ$76m [USD40m] payout to Air New Zealand, [the world’s sub-aqua airline]

The first point of interest was age of the plane, only 2 years old according to New Zealand’s Herald on Sunday, which wrote:

Last month insurers for Air NZ – which owned the Airbus A320 but had leased it to the German airline XL Airways – paid out [only 😉 ] $76m on the two-year-old aircraft. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10561736

air-nz-plane-tail-lseen-in-the-sea
The tailfin of the doomed Air New Zealand A320 is seen floating in the Mediterranean Sea. Photo / AP/ via NZHerald. Image may be subject to copyright

Now,  EADS, the company that owns Airbus, the maker of the plane, had earlier reported that  the downed Air NZ plane was more than 4 years old in a press release:

Accident Near Perpignan, France – Media Information on A320 flight accident (Issue I) – Toulouse, 27  November  2008

Airbus regrets to confirm that an A320 operated by XL Airways Germany and owned by Air New Zealand was involved in an accident this afternoon. The aircraft was operating a flight from Perpignan, France with seven passengers on board.

The aircraft involved in the accident was MSN (Manufacturer Serial Number) 2500, delivered in July 2005. The aircraft had accumulated approximately 7000 flight hours in some 2800 flight cycles. It was powered by IAE V2500 engines. At this time no further factual information is available.  . . .
http://www.eads.com/1024/en/investor/News_and_Events/news_ir/2008/20081127_airbus_perpignan_a320.html

What’s the difference?

The residual value of the aircraft! If the doomed Air NZ plane was only 2 years old, it’s ‘re-sale’ value would have been about  80-90 percent of replacement cost of a new plane [about US$50m, depending on the cabin design and type of engine used.]

However, a 4 to 5-year-old Airbus A320 would be worth no more than about 60 – 70 percent of cost of the replacement, assuming average condition.

Here’s when things get more interesting

  • Cost of new Airbus A320-200:  ~ NZ$95m
  • “Re-sale” value of MSN2500 (the crashed aircraft) :  ~ 65% x NZ$95m [cost of new plane]  NZ$61.75m  [Say, NZ$62m ]
  • ‘Crash Cash’ received in settlement:  NZ$76m
  • Unexplained additional ‘bonus’ paid out by the insurers to Air NZ ~ NZ$14m [at this rate, Air NZ could make a fortune ditching all their planes in the Mediterranean sea.]

NZherald went on to say:

Whatever the amount, it is unlikely to approach the multi-million-dollar settlements traditionally awarded by American courts after air crashes.

You’d better believe it!

An Air NZ spokesman said the company had yet to decide if it would replace the Airbus.

It’d be very interesting to learn the outcome of their decision. The odds look like 14,000,000 to 1 against a replacement!

On the issue of compensation for the victims, NZHerald wrote:

But compensation for the families of the five New Zealanders who died – pilot Brian Horrell, 52, aircraft engineers Noel Marsh, 35, Michael Gyles, 49 and Murray White 37, and Civil Aviation Authority inspector Jeremy Cook, 58 – is likely to be a more complex issue.

Well, will they or won’t they? [The victims’ families hitting the jackpot.] That depends on a number of factors

  • Was is not pilot error that caused the Air NZ Airbus300 to crash, as France’s Bureau d’Enquetes et d’Analyses (BEA) suggested in their report?
  • Were the pilots poorly trained/ incompetent/ tired/ flying under the influence/etc?
  • Is Air NZ in the business of ripping off insurance companies, only to hand over the settlement cash to the victims’ families?
  • Did the ailing Air NZ sabotaged its own unneeded/ no longer viable to maintain aircraft for the insurance money?
  • Other factors not stated here.

NZHerald article is posted at: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10561736

[That said, Air new Zealand was ass-lucky not to have had any Israeli passengers on-board because they would have taken the airline to the cleaners! Moderator]

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Posted in Airbus A320, Civil Aviation Act, Mediterranean sea, PILOT ERROR, XL Airways | Tagged: , , , , | 2 Comments »