ACMI Lease(Aircraft,Crew,Maintenance and Insurance)
The Lessor provides the aircraft,one or more complete crews (including engineers),maintenance of
aircraft and all insurance viz.Hull and 3rd party liability.The Lessor charges the Lessee on the
basis of minimum Guranteed block hours limit per month, no matter whether the aircraft flies or
not. The Lessee has to provide the fuel, landing/handling/storage/parking fees /crew transport,
meals,flight navigation charges etc. Passenger,cargo insurance done by Lessee.. Besides Lessee
may have to take War Risk cover at his end.
Any ACMI Lease less than 1 month.
These relate to operation & management of Air Navigation services during all phases of
operation i.e. arrival, departure & enroute. Air Navigation Services comprise of such as
(1)Air Traffic Management(ATM)(2)Communication, Navigation & Surveillance Systems (CNS)
(3)Meteorological Services for Air Navigation (MET) (4)Search & Rescue (SAR)
(5)Aeronautical Information Services (AIS).
In General Aviation, Aircrafts flown for Specialised purpose such as (1)Advertising eg.Banner
Towing (2)Agriculture eg. Chemical/Fertilizer spraying (3)Air Ambulance (4)Construction
(5)Photography (6)Observation eg. Crowds (7)Patrol eg. Pipe Controls (8)Survey eg. ARIEL survey
(9)Search & Rescue (10)Fire fighting eg. Spotting (11)Water Bombing (12)Government Operations
not covered under State flights eg. Ambulance Service by Health Ministry (13)Logging Activities
(14)Parachute Dropping eg.Flight to carry parachutes (16)Towing other Aircrafts eg. Towing Gliders
(17)Other similar acitivities.
Aerodrome refers to the speficied Land/Water area to be used wholly/partly for the arrival,
departure & surface movement of an aircraft. These include buildings, installations & equipment.
Aircrafts heavier than Air eg. Jets, Helicopters, Propellers etc.
Airport refers to place from where Arrival & Departure of Aircrafts take place. It is the
responsibility of Airport Authorities to ensure that the aircrafts keep flying smoothly. The
Airport Authorities can either handle the Airport services directly or can outsource their work.
Airport Services comprise of services such as Customs, Immigration, Public Health including
Fire fighting/Ambulance/Medical Support, Agricultural Quarantine, Others.
Aircrafts lighter than Air eg. Balloons etc.
Admitted cost of repairing(AVN 11A)
Aggregate cost of labor, replacement parts & material to make good the damage covered by the
policy,including cost of any necessary dismantling required for inspection & repairs and
reassembly. Admitted Cost of repairing the Hull = cost of Labor + cost of replacement parts
& material to make good the damage covered by this policy+ cost of any necessary dismantling
required for inspection & repairs + Reassembly.
It is also known as Voluntary settlement provision and os usually added to the Passenger Liability
Insurance. It is written on limit per person basis and the crew can also be provided this coverage.
The intent of this cover is to offer to pay, regardless of legal liability, pre-arranged sums of
money for the passenger accident's. At time of making voluntary settlement offer, a letter of
release of liability against the insured must be obtained else the voluntary settlement is
withdrawn.
It is generally taken by the insured alongwith the Hull Cover. The insured may or may not opt for
passenger liability cover.
Non Commercial use of Owned/non owned aircrafts operated by individuals/Corporates for carrying
Company personnel/property as per their business need.
Non Commercial use of Owned/non owned aircrafts operated by individuals/Corporates for Personal /
Recreational purposed.
Aircraft owner /Operator - Fixed Base operators
These operators are airport based businesses which own,operate,buy,sell,rent and lease aircrafts.
It also comprises of service operators viz. fuelling services, repairs, flight instruction
services etc.
Aircraft owner /Operator - Flying Clubs
These aircraft operators/owners are non-profit organisations have at least 03 individuals who
jointly own and operate the aircrafts for pleasure only.
Aircraft owner /Operator - Industrial Aid
Industrrial Aid operators refers to Corporations which own and employ full time, highly skilled
Professional Pilots to fly them.
High valued aircrafts with the seating capacity of more than 20.
It means:(1) Completed Aircraft or Space Vehicle or Satellite. (2)Any article forming part thereof
or supplied for installation in or for use in connection with, or for spareparts for an Aircraft
or Space Vehicle or Satellite or ground handling tools and equipment.(3) Training aids,
instructions, manuals, blueprints, engineering or other data or any data or any article in respect
of which engineering or other advice and services and labor have been given or supplied by the
insured in connection with an Aircraft or Space Vehicle or Satellite.
Techniques available to quickly identify the passengers at check in. It includes fingerprints,
iris, retinal, face shape or palm scanning. However, to use these standards, databases need to be
establihed and maintained in an ultra secure environment.
Use of an Aircraft for private, pleasure ,business or professional purposes but not for any hire
or reward.It doesn't include aircraft's used for special uses.
Non Scheduled Operation of aircraft for carriage of Passengers, Cargo or both.
Use of an Aircraft for private pleasure , business and used for carriage by the insured of
passengers , baggage accompanying passengers and cargo for hire or reward.It doesn't include
aircraft's used for special uses.
Contract Party(ies) - AVN 99
Contract parties refers to parties in the capacity of former financer, former lessor, former lease
servicer or manager under the contracts- Lease servicer or manager refers to a Contract party who
is appointed by one or more other contract party(ies)to provide services relating to the Equipment
in connection with the contracts.
This is similar to ACMI/Wet Lease with an exclusion of Cabin Crew. In this lease the SEP(safety
and Emergency procedures) training needs to be given by the Lessor to the Cabin Crew .
Amount generally deducted by all insurance companies from the insurance claim.It is not applicable
in case of Hull Total Loss. The policy cover defines the extent of deductible applicable. The
deductible is not applicable when the aircraft is not in motion and loss is caused by fire,
explosion, lightning, theft, robbery, pilferage, vandalism or accident to a conveyance on which
the plane is being transported.
Digital Flight Data Recorders - They record over 100parameters per second. They are often played
back through a Special Event Search and Monitor Analysis program to identify if any flight exceeds
pre-set parameters. If this happens, further investigations are performed.
With reference to Aviation insurance, it means a passenger ticket, baggage ticket or an air
consignment note/airway bill(whichever is relevant to the liability cover by the policy) to be
issued to the passenger /consignor/shipper before they board the aircraft or when the Insured
takes charge of registered/checked baggage/cargo.
This Lease is generally without insurance,crew,maintenance etc. Generally used by Banks &
Leasing Companies.Aircraft registration is done by LESSEE.The Lease may be for 2 years or more.
Dry lease is of 2 types : a) Operating Lease b) Finance Lease
Deep Vain Thrombosis-Disease the affects the passengers on long haul flights. It may be caused
due to immobility, cramped seating, compression of the thighs by seat edge, dehydration from
alcohol and cabin air-con units.
Electrical Risk Exclusion
Loss, destruction or damage by any the air craft due to over-running, excessive pressure, short
circuiting,arcing,self heating or leakage of electricity from whatever cause(lightning included).
This exclusion shall apply only to the particular air craft so affected and not to other machines,
apparatus, fixture of fittings which may be destroyed or damaged by fire so set up.
Excluded cost = Office expenses of the insured + Salary expenses of the Insured + General retainer
fee for the counsel normally paid by the insured.
The meaning of Expenses is specifically in reference to Aviation Expenses incurred by the insured.
It means reasonable and necessary costs exclusively incurred as a result of the recall and shall
include costs necessarily incurred by the insured for the physical examination of the Aviation
Product ; installation of a replacement Aviation product but does not include cost of such
replacement Aviation Product. Costs covered are : communications, transport and advertising,
cost of additional personnel, overtime payments to regular personnel and the out of pocket
expenses of such personnel.
Federal Aviation Administration.
Also referred to as Capital Lease. This operates if any 1 of the below conditions are met :
A) It appears in the Balance Sheet of LESSEE as it is viewed as a purchase.
B) The LESSEE has the option to purchase the aircraft at an agreed price at the end of the term.
C) The Lease payment is more than 90% of the market value of the aricraft. D) The term of the
Lease is greater than 75% of the aircraft's useful life.
Transit of Aircrafts to the Base country from where they will Operate and will be Registered.
When the aircraft is in take-off stage or attempting to take - off or when it completes it's
landing run. A rotor-wing aircraft is said to be in flight when the aircraft is in air.
Aerodyne Category. These aircrafts are driven by Jet Engines, Propellers etc.
Geographical Limits beyond which the aircraft should not fly. This details is mentioned in the
Insurance cover.
Ground Proximity Warning System - It helps to reduce the number of accidents when planes hit the
ground.
When the aircraft is not in Flight/Taxiing or Moored.
Complete & continuous withdrawal of aircraft flight operatons due to an existing or alleged or
suspected defect, fault or condition affecting the safe operation of 2 or more aircrafts and
which results from an occurrence. Grounding orders may be received from Federation of Aviation
Administration or The Civil Aviation Authority or any similar Civil Airworthiness Authority.
These services can be referred to as those related to (1)Aricraft Maintenance (2)Aircraft Services
(3)Baggage Handling (4)Catering (5)Crew Administration (6)Entertainment & Communication
(7)Flight Operations (8)Freight & Mail Handling (9)Fuel & Oil Handling
(10)Ground Administration & Supervision including emergency services (11)Ground Equipment
Supply (12)Passenger Handling (13)Ramp Handling (14)Security Handling (15)Surface Transportation
(16)Others.
No usage for illegal purposes allowed in insurance. If the usage is found to be for illegal
purposes, the insurance gets void.
Any Device, the purpose of which is to transport any person or article(eg. space vehilcle or
satellite) to, from or in space. It includes both manned and unmanned vehicles.
With reference to Aviation insurance, it means any order requiring immediate modification,
inspection or action to be performed under the emergency airworthiness directives of the CAA or
the immediately adopted rule or immediate safety - of - flight rules of the FAA, or the equivalent
rule, directive or procedure of any similar civil aviation authority.
Aircraft Used for War, rescue , bombing etc. by the Military.
Military Aircraft Products
Aircraft products owned or used by or in possession of the armed services of any government .
However, Aircraft products that are leased or chartered to the armed services of any government
are not deemed to the Military Aircraft Products.
Any non-manned, self - propelled device(other than a Launch Vehicle) capable of free flight,
whether self-controlled or not. Any ground support or control equipment used in connection
therewith may also be a party of insurance cover.
In case the aircraft is designed to land on water whilst it is afloat. In this stage the aircraft
is neither in Flight nor Taxiing. Risk of launching and hauling up is normally included in the
insurance cover.
MRO services refer to Maintainence, Repair & Overhaul of Aircrafts. These services
can be broadly categorised as (1)Hangarkeeping (2)Maintaining Aircraft Air Worthiness (3)Overhaul,
inspection, replacement, defect rectification etc. (4)Repair work to restore aeronautical product
to an airworthy condition as per airworthiness requirements (5)Other AirWorthiness Compliances.
Manuals in Aviation refers to Policy Documents that need to be prepared , followed, maintained &
updated by the Aviation Operators for the safe, secure & sustainable develeopment of Civil
Aviation. Some of the Manuals required to obtain NOC for operating Scheduled Operations in India
comprise of -(1)Operations Manual (2)Training Manual (3)Quality Control Manual (4)Maintainence
System Manual (5)Security Manual (6)Flight Safety Manual.These manuals need to be prepared,
followed & updated reqularly by the operators.
Non owner insurance policy
It is for an individual who is not the owner of the aircraft but flies it occassionally. This
insurance covers his liability for bodily injury or damage to property other than the insured
aircraft eg. Aircraft Trainers.
Flying aircrafts other than for Scheduled Operations.
Unexpected or unintended accident/incident(other than a Grounding) or continuous or repeated
exposure to conditions causing : (1) Bodily injury /including care & loss of services/sickness
/disease/death at any time resulting therefrom (2) Property Damage-Damage to or destruction of
property , including the loss of use thereof. A series of occurrences is treated as a single
occurrence.
This Lease is generally without insurance,crew,maintenance etc. Taken by Banks & Leasing
Companies.Aircraft registration is done by LESSEE.The Lease is from 2-7 years . It does not
appear in the Balance Sheet of the LESSEE.
Every Country lays down their Operational requirements for granting Licences to operate in the
Civil Aviation Sector of their Country eg. In order to obtain NOC in India as Scheduled Operator
some of the Operational requirements to be met are - (1)Maintaining information about adequate
qualified & trained staff, pilots etc. (2)Computerised set up for crew scheduling
(3)Maintaining flying records, medicals etc. (4)Record management of crew licences,type rating
of crew , engineers etc.(5)Submission of documents to Regulators to obtain NOC (6)Others.
Operational Life of Space Vehicle or Satellite
It refers to the life period the manufacturer of any Space Vehicle or Satellite specifies
in the original sales contract as the operational/service life of such Space Vehicle or Satellite.
Non Scheduled Operation of aircraft for Commercial Business operation etc.
This term is used in Aviation Insurance with reference to the Aircraft Unit. Overhaul or
replacement cost refers to the cost of labor and material incurred/to be incurred at the end of
the Overhaul life of the damaged or a similar unit.
Overhaul life is with reference to the life of Aircraft Unit. Airthworthiness Authority
determines the usage, or operational and / or calendar time after which the overhaul or
replacement of a Unit is required.
Any person in, on or boarding the aircraft for the purpose of riding or flying therein or
alighting therefrom is a passenger. The passenger may be paying or a guest.
Permitted cost = Accrued Interest after entry of judgment, investigation, adjustment and legal
expenses . This amount can be claimed by the insured. It excludes all expenses for salaried
employees of Insured and general retainer fees for Counsel normally paid by the insured.
Prime manufacturer is the one who sells its Aviation Product directly to and/or enters into a
contract of sale with an Aircraft Purchaser.
It refers to hazard in an aircraft product . This hazard in the product might be at the time of
handling the product or using such product or consuming the product or pre-existing in a
product.
Private Pleasure - Aircraft
Use of Aircraft for private and pleasure purposes but not for any business,profession,hire or
reward.It doesn't include aircraft's used for special uses.
Product Liability - Aviation
Product Liability covers an insured's Legal Liability to 3rd Parties for Any bodily injury and/or property
damage arising out of the defective designing or manufacture of an aircraft product. The loss
may arise due to possession, use, consumption or handling of any goods or products manufactured,
constructed, altered, repaired, serviced, treated, sold, supplied or distributed by the insured,
after such goods or products have ceased to be in the possession or under the conrol of the
insured.
Every Country lays down their Procedural requirements for granting Licences to operate in the
Civil Aviation sector of their country eg. In order to obtain NOC in India as Scheduled Operator
some of the Procedural requirements to be met are - (1)Obtaining FIPB approval in case of foreign
investments in aircraft operations (2)Preparing Manuals & Policy Documents (3)Obtaining
security clearence for foreign flight crew & engineers & so on.
Aircrafts such as Propellers, Jets, Helicopters, Rocket powered Aircrafts etc.
Aerodyne Category. These aircrafts have several rotorblades mounted on a single mast
eg. Helicopters.
Aircrafts that are flown as per the specific purpose for which they have been purchased/Hired.
These equipments are used to detect weapons and other hazardous material.
Revennue Passenger Kilometres /(RPK)
It refers to Number of Passengers multiplied by the Distance flown.
Space Vehicle or Satellite
Spacecraft or Satellite including parts detached en route designed to travel to and/or from or
into space or any orbit.
Scheduled Operations refers to Scheduled flights at published timetables/systematic flights
opened for direct booking by public.
Use of an Aircraft for instruction, aerobatics, hunting, patrol, fire-fighting, intentional
dropping, spraying or release of anything, any form of experimental or competitive flying and
any other abnormal hazard.
Specific Airworthiness Requirements
Every country lays down their Specific Airworthiness requirements for granting Licences to
operate in the Civil Aviation Sector of their Country eg. In order to obtain NOC as Scheduled
operator in India the operator is required to meet Specific Airworthiness requirements such as
(1)Ensuring specific mandatory equipments to be fitted in the aircraft (2)Maintaining sufficient
numnber of technicians in each category as required (3)Maintaining various checks eg. CVR readout
etc.(4)Others.
Traffic Collision Avoidance System - It helps to reduce mid-air collisions. This works only if
fitted in both the planes. It provides only height - related information, the lateral positions
of planes is often inaccurate.
Rental Aircraft refers to an aircraft given on rent, lease, charter or hire by the original
insured to any person /organisation for Private Pleasure and Business uses only and the aircraft
is not under the control of the insured. It doesn't include aircraft's used for special purpose.
Part not attached to the aircraft.
Transportation cost (AVN 11A)
Transportation cost with reference to Hull insurance comprises of paying claim related to
(a) Removing the aircraft to the repair site.(b) Transporting labor, replacement parts,
material & equipment to make good damage covered in the policy (c) Returning the aircraft
from the repair site to the airfield nearest to the place of accident or to its home field,
whichever may be nearer.
Turnover (Product Liability insurance)
It refers to sale price of the Aviation Product(s)delivered during the policy period.
It is with reference to the final claim amount payable to the insured .Ultimate Net Loss = Actual
Liability of the Insured (-) All recoveries from the insured(-) valid and collectible insurances.
Exception is Primary and underlying Excess policies. It excludes all excluded cost and permitted
cost.
With reference to Aviation Insurance interpretation, Unit is a part or an assembly of parts
(including any sub-assemblies) of the aircraft which have been assigned an Overhaul life as a
part or an assembly. Nevertheless, an engine complete with all parts normally attached when
removed for the purpose of overhaul or replacement shall together constitute a single unit.
Aircrafts such as Gliders, Baloons, Kites etc.
This Lease is for a period >1month till 2years.The Lessor provides the aircraft,one or more
complete crews (including engineers),maintenance of aircraft and all insurance viz.Hull and
3rd party liability. The Lessor charges the Lessee on the basis of minimum Guranteed block hours
limit per month, no matter whether the aircraft flies or not. The Lessee has to provide the fuel,
landing/handling/storage/parking fees /crew transport,meals,flight navigation charges etc.
Passenger,cargo insurance done by Lessee.. Besides Lessee may have to take War Risk cover at his
end.
When the aircraft moves under its own power other than in 'Flight'. Temporary halting of an
aircraft is a part of Taxiing.