As geopolitical tensions escalate, particularly concerning the ongoing conflict in Ukraine and renewed hostilities in Kashmir, airlines are embarking on significant changes to their operational strategies and insurance policies.

Currently, an international consensus mandates that all civil flights be grounded in the event of a nuclear explosion, a rule that dates back to the Cold War era.

This policy assumes that such an event would precipitate a broader global conflict, effectively leading to a third world war.

However, the rise of tactical nuclear weapons, designed for limited battlefield use, has prompted the aviation insurance industry to reconsider these long-standing policies.

Gallagher, the world’s largest aviation insurance broker, has initiated a new scheme aimed at allowing flights to continue in regions that are distanced from active conflict zones, acknowledging that not all nuclear detonations would entail a catastrophic global fallout.

In 2022, following threats from Russian President Vladimir Putin regarding the potential deployment of nuclear weapons, Gallagher began developing its revised insurance framework.

The recent escalation in tensions between India and Pakistan has further accelerated this initiative.

Nigel Weyman, a senior partner at Gallagher, indicated that the current insurance language, which presumes any nuclear event would yield apocalyptic consequences, fails to account for the modern landscape of varied nuclear arsenals, including smaller, deployable tactical weapons.

The American B61 air-launched gravity bomb, for instance, can be equipped with a nuclear warhead with a yield as low as 0.3 kilotons, starkly contrasting the 15 kiloton yield of the bomb dropped on Hiroshima in 1945. Russia maintains a significant stockpile of tactical nuclear weapons, estimated at nearly 2,000, while countries like North Korea and Pakistan have also developed battlefield nuclear capabilities.

Weyman raised a pivotal question regarding the justification for grounding all airlines globally due to a relatively contained nuclear detonation in distant regions, such as Europe.

He emphasized that airlines historically find operational solutions to various challenges, maintaining flight paths and altitudes that mitigate risks from ground-to-air threats.

In response to potential nuclear incidents, Gallagher's proposal includes regional assessments conducted by a select coalition of insurers.

This group, which includes major players like Allianz, would convene within hours of a nuclear detonation to evaluate safety and determine which airlines could safely operate based on the immediate geopolitical landscape.

The proposed insurance coverage would provide airlines with $1 billion per aircraft for war-related damages to passengers and third parties, a notable adjustment from the existing coverage that often exceeds $2 billion.

Weyman noted that the additional cost of this insurance could be as minimal as a few cents per passenger, making it a manageable expense for airlines amid concerns over operational viability.

So far, approximately 100 airlines have signed on to Gallagher's revised insurance plan, out of a global total of around 500 airlines.

The initiative has garnered considerable interest among European carriers; however, low-cost airlines have shown hesitance in joining.

An additional layer of complexity remains, as existing policies may still contain clauses that revoke coverage if a military conflict arises between nuclear powers, such as the UK, US, France, Russia, and China.

This clause could be triggered by military engagements involving forces from these nations, further complicating the landscape for international air travel in times of heightened military tension.