Learn more – Special Drawing Rights

You may have seen in your insurance policies or on G-INFO that values are often expressed in Special Drawing Rights (SDRs). What are SDRs and why are they used?

Chrystelle Launai explains

The SDR story begins in 1969 with the creation of this ‘hybrid currency’ by the International Monetary Fund (IMF), aimed at supplementing existing money reserves of the IMF’s member countries. They are basically a supplementary international reserve asset held by the IMF, consisting in a basket of major currencies. Previously, international accounts between countries were settled solely through means of gold or dollars. But the limitations of gold and dollars as the sole means of settling international accounts created some concerns.

This new creation aimed to be beneficial in resolving the issue arising from fluctuations between currencies.

The make-up of the SDR

The value and composition of the SDR, also colloquially called paper gold, is defined by a basket of some major currencies from IMF member countries. Currently, the main body of SDR comprises US Dollars (Approximately 42%), and the limbs include euros, Chinese renminbi, Japanese yen and GB pounds.

How does it affect your aviation insurance coverage?

Minimum liability limits legal requirements for aviation in Europe are mainly defined according to the 785/2004EC regulation (incorporated into UK local law after Brexit), taking into account the aircraft MTOW (legal liability to third parties) and the number of passenger seats (legal liability to passengers), and a couple of ancillary criteria irrelevant for private aviation. The minimum limits are expressed in SDRs. In respect of third-party liability, as far as LAA Permit-to-Fly aircraft are concerned, minimum legal requirement varies between SDR 750,000 (for a MTOW lower than 1,100lb) and SDR 3,000,000. As at 15 February 2022 exchange rate, this represents a third-party limit between £774,000 and £3,097,000 approximately. Additionally, in respect of your legal liability towards passengers, the minimum insurance requirement is SDR250,000 per passenger seat. However, in respect of non-commercial operations with light aircraft, each country is authorised to set a lower level of minimum insurance cover, but not below SDR 100,000 per passenger. The UK and some other countries have opted for this reduced liability.

You can find these minimum requirements for your aircraft in SDRs and converted into pounds, and regularly updated on the CAA G-INFO website.

Although the basket of currencies is reviewed every five years, it may sometimes perform erratically. It is therefore essential to make sure you are sufficiently covered for each flight. Fluctuation in the value of SDR can make you under-insured for an upcoming flight. To protect your own interests and make sure your policy insurance is compliant during the whole policy period, the legal liability limits we offer are always above minimum legal requirements. For more information, please contact us.

+44 (0)3306 845108 laa@air-assurances.com

Insurance broker duly authorised by the FCA to act in the UK �

Farewell Ken – and thanks… Dear Ken,

A brief note to wish you all the best for the years to come, and to say ‘thank you’ for having looked after the standards of PFA/ LAA Engineering so very well, for so very long.

Like you, I was immersed in aviation from day one, growing up at Cranfield where my playmates were fascinating aircraft –Lancaster PA474/Shorts Sherpa/Saro flying boat etc. Unable to get a proper job, I had to settle for 747 Captain, but there was time to build a couple of aircraft. The family tradition continues from my father, Denis – and through to our son – who is also unable to get a proper job. He flies an A320, but sensibly has Engineering Licences and built a beautiful RV-6, which is my present mount.

Denis held you in high regard… ‘He’s had a proper practical apprenticeship with Doug’, was his view, and all those in your care have great respect for you.

I look forward to meeting you once again. In the meantime, thanks!

All the best, Gerry Price.

Coaching Corner query…

With reference to David Cockburn’s article about gliding sites, surely Rules of the Air, Section 4, Rule 12 covers it adequately? Best wishes, Laurence Luscombe.

David Cockburn replies: The Rules of the Air Regulations 2015 as amended contain several rules for avoiding aerial collisions, but I’m afraid neither Rule 12 nor Section 4 give any guidance about avoiding other aircraft in the air. Perhaps our correspondent is referring to a previous document which has been superseded. Following the UK’s exit from Europe, we are now constrained by Part-SERA of the adopted EU Regulations, which include the right-of-way rules we were all taught during our training, but which may have been slightly ‘tweaked’ over the years.

Rules are vital, but if you don’t know there’s a risk of collision you don’t know you need to apply them! If you haven’t seen the other aircraft you don’t know to avoid it, and accidents as well as airproxes and trials continue to demonstrate that collision hazards are not easy to spot until they are very close indeed, if indeed then. Not only do gliders present a particularly small visual target when seen head on, but if there are several in the vicinity you can easily be distracted by watching one when another one is the actual primary collision threat. All pilots, whether of aeroplane or glider, can miss seeing other aircraft, but we can reduce the risk by avoiding likely threat areas, and even more by concentrating lookout in the direction of the most likely threat. Situational awareness includes knowing where a likely threat is greatest, and that article was an attempt to improve pilots’ situational awareness.

Aircraft data, not as you know it…

Dear Ed,

I am a returner to Light Aviation in my retirement and a member of the LAA for just a few years now. My group operates a Chipmunk under the LAA scheme. In the process of getting to this happy situation I found a lack of critical decision-making information and wondered if other members have found the same?

I am 6ft 1in tall, so above average height – and now as I get older, over average weight as well! I found myself replying to adverts for aircraft I could not use at all. Checking the data available on the LAA aircraft and kits I have found little or no information for many aircraft indicating as to whether or not I would fit in it, nor be able to carry much if I did. Although, some of the latest kits are now remedying that. I estimate around half of the aircraft types cannot accommodate me, mostly due to my height.

Yet, I do not believe I am unique in this problem, as much of the sizing is historic in nature, potentially excluding more individuals from specific types as time goes on.

There must be a wealth of experience and knowledge covering personal fit among the members. A member uses every single aircraft listed and knows what the fit for size and weight is like and other restrictions that may result. For example, some aircraft will also have minimum sizes/weights for operation.

The LAA community would benefit from more published data regarding ‘Fit’ and the members could provide that themselves. Maybe we could all contribute to a spreadsheet type presentation for the LAA website or even a Wiki style reference sub site. It would be very helpful to the community, pointing us in the right direction for further consideration for ownership or the next kit build. It could also serve as a reminder you could get in and fit, but your family member or friend may not.

I would suggest pilot data for max and min weights, max and min heights and some ease of entry and exit comments for those of us growing older. Also some idea of the additional load and fuel available with the figures given; e.g. some two-seaters may well be rendered single-seat for practical purposes and it helps to fit some fuel in!

Maybe other members would like to suggest data they would find helpful but not readily available?

Yours, Derek Clews.

Ed replies: Derek, this sounds like an intriguing idea. Any other members interested?

Last LA cover

Dear Ed(itor),

Well done on taking the reins of the LA magazine. I appreciate how hard your task is, however, as the magazine is the public face of the LAA I’m afraid the cover photo on the July issue is appalling. How many potential members sitting idly in a waiting room or flying club are going to pick that up? A dull cockpit shot and a blurred runway. Really?

Why not something that captures the joy of flying and embodies the spirit of the LAA?

You’ve got that photo at the top of page three, the Taylor Mono’s at Glenforsa. Pity no casual reader will have made it that far… Yours, Bill Wilson.

Ed replies. Sorry to hear that you didn’t enjoy the July cover. While Night/IFR isn’t something that I personally would apply for with my own homebuilt, We are proud of the LAA’s achievement of creating a path that allows members to earn approval for their own aircraft to operate unrestricted under IFR conditions alongside certified aircraft. It’s something that I felt was worthy of recognition with a slot on the cover.

Rest assured we have plenty of inspiring aircraft to continue to feature in future! ■