Abu Dhabi's Etihad Airways on Monday said it would cover medical and quarantine costs for passengers if they contract the new coronavirus after travelling on one of its flights.
Airlines around the world are trying to find ways to stimulate demand that has been shattered by the pandemic and expected to take years to recover.
Medical costs of up to 150,000 euros ($177,000) and quarantine costs of up to 100 euro a day for 14 days will be covered by Etihad for its passengers who contract the disease within 31 days of first travel.
"This additional cover will not only instil confidence to travel but also reassure our guests that we are doing all we can to keep them safe and protected," Etihad Vice President Duncan Bureau said in a statement.
The Covid-19 cover is included in the airfare of tickets for travel until the end of the year, valid around the world and is being offered in partnership with insurance firm AXA.
The move matches Dubai's Emirates, which in July started offering free Covid-19 insurance.
($1 = 0.8460 euros)