The insurer for the Lulutai Airlines’ crashed Saab340 aircraft has allegedly denied a payout for the aircraft following a collision at Fua’amotu Airport in December 2023.
The impact rendered the aircraft non-operational and has remained stationary since then.
As Kaniva News reported earlier this week, Monte Aircraft Leasing, an Australia-based UK company, has claimed ownership of the aircraft.
Tony Frank, the director of Monte, claimed QBE Insurance insured the Saab340 aircraft.
However, after the crash, Frank also claimed QBE reportedly insisted that the aircraft could be repaired. He said QBE would only provide financial compensation if the repairs were carried out as a prerequisite.
One year has passed since the crash, yet Lulutai and Monte are in an ongoing battle with QBE, and their request for a replacement aircraft remains unapproved.
QBE Insurance could not be reached for comment.
While attention turned to Monte and QBE, insurance advisor Semi Halanukonuka suggested that the primary issues may be attributable to Lulutai Airlines.
With 15 years of extensive experience working at AIA Insurance in New Zealand, Halanukonuka expressed concerns regarding the approval process from the insurer.
He said that the year passed without any sign of approval led him to conclude that it is increasingly unlikely that any approval will be granted in the foreseeable future.
Standard Procedure
Halanukonuka said it is standard practice for insurance companies, including QBE, to perform a thorough independent assessment of the aircraft when processing a claim.
“This assessment typically involves a comprehensive evaluation of the aircraft’s condition, documentation verification, and examination of any relevant incident reports”, he told Kaniva News in Tongan.
He said this was aimed to ensure an accurate determination of the damage and losses incurred, which ultimately helps in establishing the appropriate compensation for the claim.
“For example, if they discovered that the aircraft wasn’t serviced on time and that essential mechanical parts, which were due for replacement based on their expiry date, weren’t replaced, they may consider denying the claims”, Halanukonuka said.
He said that if the insurance experts discovered that the aircraft had operated with damaged parts, they could decline the claims.
Other possible issues that might force the insurer to consider refusing any claims include receiving incorrect information or false statements or altering the circumstances of the loss, he said.
“The insurer could also consider that the policy may not cover the loss or damage or there was insufficient proof of the loss or damage”.
Controversy surrounding Lulutai airlines
Lulutai Airlines has been a subject of controversy since it was founded in 2020.
Critics, particularly from the Opposition Party, have consistently raised concerns about the airline’s financial viability.
They argued that the market in Tonga is too small to sustain such an operation, leading to significant doubts about its profitability.
The government maintained its position for quite some time, but tensions grew when the king voiced his concerns regarding its involvement in various business ventures.
He argued that such involvement was inappropriate and that the operation of business enterprises should be the private sector’s responsibility.
This week, Kaniva News made a surprising revelation regarding the Saab340 aircraft, which many assumed was owned by Lulutai. This information has remained undisclosed since the airline first began operations.
Monte Aircraft Leasing
We asked Frank how much Lulutai paid for the lease and whether the airlines is still paying the lease while the aircraft is inoperative. We also asked if we can get a copy of the lease agreement.
He said he could not release this information to us, citing confidentiality.
Frank said: “We believe that the aircraft is a constructive loss and Lulutai and Monte have been seeking a payout from QBE for most of this year.
“However QBE have refused the payout, claiming that the aircraft is repairable and only offering to pay only a small portion of the insured value.
He said this has caused a huge amount of damage to Tonga’s people, economy, and to Monte’s business.
“Lulutai and we are continuing to press QBE but more than 12 months after the incident there is still no resolution”.
The revelations follow a recent report by Kaniva News, which raised questions about the aircraft’s insurance status.
The article asked whether the aircraft was indeed insured and, if so, why it had been taking approximately 12 months without any replacement being provided.
In that article, we said we had asked Lulutai CEO Poasi Tei for comment, but he has yet to respond.
The crash
The aircraft was heading to the terminal after reportedly experiencing an undesired landing before hitting a cement block on the side of the apron. Following this incident, the plane was rendered inoperative and could not resume normal flight operations.
The Australian Transport Safety Bureau (ATSB) were in Tongan early last year to assist the Civil Aviation Division’s Chief Investigator’s ongoing investigation of the accident involving the SAAB340 aircraft.
It follows with a report that the Minister for Infrastructure received an update on the status of the Preliminary Report.
As Kaniva News reported previously, the preliminary report showed several mechanical issues the aircraft had experienced, including hydraulic fuel loss and other safety problems.
The report also indicated signs that the aircraft’s flight recorder may have been deliberately disabled.
