Airlines update nuclear war insurance plans as escalation threats grow.

COMMENT. The airlines are insane to want to keep flying in the case of a “small” nuclear war.

Airlines are taking steps to ensure that they can keep flying even after the outbreak of a nuclear war.

Jets could continue to fly following an atomic blast under special insurance policies being drawn up to address the possibility of conflicts escalating in Ukraine and Kashmir.
Current policies that date back to the 1950s would force the grounding of all civil aircraft worldwide in the event of a single nuclear detonation, assuming that this would lead to the outbreak of a third world war.

However, with the deployment of nuclear weapons now regarded as more likely to involve so-called tactical warheads used in a limited role on the battlefield, the insurance industry has developed plans to allow flights to continue in regions removed from conflict zones.

Gallagher, the world’s largest aviation insurance broker, began working on the scheme when Vladimir Putin threatened to deploy Russia’s atomic weapons against Ukraine in 2022.
Its plans have been given fresh impetus by the recent clash between India and Pakistan over Kashmir, where hostilities reached a level not seen for decades.

Nigel Weyman, senior partner at Gallagher, said the Ukraine conflict had revived interest in nuclear-related insurance policies.

He said: “Back when the wording was drawn up, it was assumed that any hostile detonation meant that it would all be over, Armageddon. But what they didn’t have in those days was tactical nuclear weapons that vary in size and impact and which are, ultimately, very usable.”
The latest generation of the American B61 air-launched gravity bomb carries a nuclear warhead with a yield as low as 0.3 kilotons, for example.

That compares with 15 kilotons for the bomb dropped on Hiroshima in 1945, and 100 kilotons for a single Trident II missile warhead.

While Britain retired its last tactical nuclear weapons in 1998, Russia is believed to have almost 2000. North Korea unveiled what it claimed was a tactical weapon in 2023, while Pakistan’s Nasr missile can also carry a battlefield nuclear warhead.

Weyman said, “Why should Air New Zealand, for example, be grounded in the event of a nuclear detonation in Europe that was quite minor, albeit not for the people near it?”

“Airlines find workarounds for whatever challenges they face, safe corridors, minimum heights so that ground-to-air missiles can’t reach them.

“Volcanic ash clouds affect big areas, but the world keeps flying. Yet a few words on an insurance policy can ground every jet there is.”

Threat management
The broker has come up with a plan that would see a select number of insurers evaluate where airlines should be permitted to fly after a nuclear detonation, aided by analysis from security experts at risk-management specialists Osprey Flight Solutions.
The 15-strong group, which includes Allianz, the world’s largest insurer, would meet within four hours of a detonation and evaluate the threat to airlines on a country-by-country basis.
The plan would provide each carrier with $US1 billion ($1.56 billion) per plane of war cover for passengers and third parties, compared with $US2 billion or more under existing policies.

Weyman said the cost of the scheme would amount to less than the price of a cup of coffee per passenger, if ever triggered, something “easily passed on in ticket prices”.

Airlines spent about $3.1 billion on insurance premiums last year to cover slightly over 4 billion passenger journeys, indicating a current cost of around 33 cents per customer.

About 100 airlines have so far signed up to the plan, out of the 500 or so worldwide. About 60 in Europe have joined, though low-cost operators are proving reluctant, Weyman said.

Airlines could yet be grounded by other insurance stipulations, including a “five powers war clause” that terminates cover in the event of a military clash between any of the UK, US, France, Russia and China.

That could be invoked in the event of any British or French troops sent to Ukraine being fired on, according to some industry experts.