Aviation war risk insurance and its impacts on US passenger aviation

• Autor(a) principal: Freitas,Paul J.
• Data de Publicação: 2013
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Journal of Transport Literature
• Texto Completo: http://old.scielo.br/scielo.php?script=sci_arttext&pid=S2238-10312013000200014
• topic: aviation insurance; airlines; jets; wars

In the aftermath of the September 11 attacks, the United States government became a supplier of aviation war risk (AWR) insurance for airliners, as well as a reinsurer for commercial insurance. Here we quantitatively examine the consequences of these offerings. The AWR offering is primarily needed for widebody and jumbo jets; smaller aircraft like the Embraer 195 are far less capable of creating damage in excess of the $50 million AWR deductible. Widebody and jumbo jets are also the only aircraft capable of creating long-term government liability through its commercial reinsurance. The US government's assumed risk through its insurance involvement can reach into the hundreds of billions of dollars. This risk level can create a perceived financial incentive for government to force airline passengers through invasive and dangerous search procedures. Thus, governmental insurance offerings can create a conflict of interest at infringes air passengers' civil liberties.