By Simon Challis and Bill Rigby NEW YORK, March 12 (Reuters) - The U.S. is "almost certain" to extend insurance support for its aviation operators for "at least another 60 days," giving airlines more time to set up their own cover plans, a leading airline executive said on Tuesday, The U.S. government's six-month coverage of airlines' third-party war-risk liabilities in excess of $50 million -- introduced shortly after Sept. 11 -- is to expire on March 20. "I hope to hear the announcement in the next couple of days," Chris Duncan, chief risk officer at Delta Air Lines Inc. (DAL), told an insurance meeting of the International Air Transport Association in London. The U.S. Transportation Department said the issue is still pending. "We make these decisions independently, and I don't want to judge what we might decide," spokesman Bill Mosley told Reuters. The U.S. and other governments have temporarily insured airlines against damage on the ground as a result of terror attacks or acts of war since shortly after the attacks on Sept. 11, when hijacked planes crashed into landmarks in New York and Washington. Fearing new instances of aircraft being used as weapons, commercial insurers all but abandoned the market, or raised premiums and drastically cut the extent of their coverage, refusing to offer the multibillion-dollar insurance that airlines need under international regulations. The U.S. government initially offered airlines coverage for only six months on the assumption that private insurers, possibly backed by government reinsurance, would eventually step in to take the risks. But so far only a handful of insurers, such as American International Group Inc. (AIG) and Berkshire Hathaway Inc. (BRKa), have returned to the market, offering expensive coverage. Meanwhile, U.S. airlines are trying to set up their own risk retention group with the help of broker Marsh & McLennan Cos. Inc. (MMC). An extension in government coverage would give Marsh time to get the scheme up and running. "Without the federal government's intervention we would not be flying," said Duncan, a supporter of the Marsh plan, which should work out cheaper for airlines. "We are paying for (government coverage) at $7.50 per departure (take off)," Duncan said, calculating an $8 million annual cost to the airline, and rejecting accusations that the government cover was a subsidy for the industry. Meanwhile, insiders said the British government's insurance support for airlines -- also expiring on March 20 -- would not be renewed. "My own personal view is that the (British) government is going to be extremely loath to go beyond the March date," said Dennis Mahoney, chairman of Aon Worldwide, a unit of insurance brokerage Aon Corp. (AOC) and of Troika, a company set up to administer the British government's airline coverage. That would throw airline liability insurance back into the hands of commercial insurers, which would likely mean higher premiums for airlines as insurers look to make a profit on the business. "Our capital providers would never forgive us if we could not make a profit," Peter Butler, spokesman for leading aviation insurance group Global Aerospace, told the conference. He said insurers would consider dropping the $1.25 surcharge they are currently getting from airlines for $50 million of third-party war and terror liability coverage, but the cost would likely be reflected in higher premiums. (Additional reporting by John Crawley in Washington, David Bailey in Chicago) ©2002 Reuters Limited.