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E.C. proposes eased aviation cover limits

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BRUSSELS, Belgium--The European Commission Transport Committee published a draft regulation proposal Friday in an attempt to lighten the insurance burden for smaller airlines.

The draft regulation is an amended version of a European Commission initiative designed to ensure minimum insurance requirements for aircraft operators in the European Union. The minimum insurance requirements include war and terrorism coverage.

The Committee said some smaller aircraft operators are facing bankruptcy because of "onerous" insurance requirements that were included in the original proposals. The Committee claims that the originally suggested minimum liability insurance coverage of 80 million special drawing rights ($57.6 million) for aircraft under 25,000 kilograms (55,000 pounds) would be an "intolerable burden" for the small-aircraft sector.

Under the new proposals, three new subcategories would be introduced. Category one, for aircraft under 2,000 kilograms (4,400 pounds), would require minimum insurance coverage of 1.5 million SDR ($1.1 million); category two, for aircraft under 6,000 kilograms (13,200 pounds), would require coverage of 4.5 million SDR ($3.2 million); and category three, for aircraft under 14,000 kilograms (30,800 pounds), would require coverage of 9 million SDR ($6.5 million). These weights typically apply to aircraft with capacity for only a few passengers.

David Gasson, secretary-general of the International Union of Aviation Insurers, welcomed the new proposals, calling them "common-sense measures that are likely to keep small airlines in business."

The Commission is expected to announce near the end of May whether the new proposals will be enacted.