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Air-India to levy insurance surcharge from Nov 1

International airline Air-India said on Thursday it would levy a $3.50 surcharge on passenger tickets from November 1 to cover higher insurance costs stemming from last month's suicide attacks on the United States.

"We're levying a surcharge of $3.50 per ticket to cover insurance costs," Jitender Bhargava, a spokesman for the long-haul carrier, told Reuters.

Airlines around the world have begun to impose surcharges to offset additional premiums charged by insurance companies after hijackers slammed planes into New York's World Trade Center and the Pentagon that left around 5,400 dead.

A-I, IA TO GET WAR INSURANCE FROM MARKET

The government on Wednesday said that it will not extend a guarantee for third-party war risk cover for state-run Air-India and Indian Airlines beyond October 31 when the guarantee expires.

"We have asked Air-India and Indian Airlines to pay to get the insurance from the market. It is available from insurers," the official said. "We will not extend the guarantee."

PASSENGERS TO PAY

An Air-India spokesman said on Wednesday that the long-haul flag carrier would have "little option but to pass on the higher insurance costs to passengers" if it raised cover from the market.

"So far, Air-India has not passed on any costs to passengers unlike other international airlines. But we will have to take a look at ticket prices with the added war risk cover," said Bhargava on Wednesday.

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