JAL estimates $139 million loss from plane destroyed in runway collision

TOKYO – Japan Airlines (JAL) estimated on Jan 4 that the

collision of its Flight JL516 with a Japan Coast Guard aircraft

on Jan 2 would result in an operating loss of about 15 billion yen (S$139 million).

The loss of the aircraft would be covered by insurance, the company said, adding that it was assessing the impact on its earnings forecast for the financial year ending March 31.

Insurance industry sources have said American insurer AIG was the lead insurer on a US$130 million (S$173 million) “all-risks” policy for the two-year-old JAL Airbus A350 wide-body jet that was destroyed by a fire after the collision at Tokyo’s Haneda Airport.

It was the first-ever hull loss globally for the A350 model, according to the Aviation Safety Network. The type, made largely from carbon composite, entered commercial service in 2015.

Shares of JAL rose 0.5 per cent on Jan 4, showing a muted reaction to the crash as trading resumed after the New Year’s Day holiday. They initially fell as much as 2.4 per cent before recovering from that drop.

All 379 people aboard the JAL airliner managed to evacuate the burning plane

after the collision. Five of six crew members on the coast guard aircraft were killed in the crash.

The Japanese authorities said on Jan 3 that the passenger jet had been given permission to land, but

the smaller plane had not been cleared for take-off,

based on control tower transcripts.

The authorities have only just begun their investigations and there remains uncertainty over the circumstances surrounding the crash, including how the two aircraft ended up on the same runway.

Experts stress that it usually takes the failure of multiple safety guardrails for an airplane accident to happen. REUTERS