The Impact of Sanctions on Aviation and Safety in the Air


Economic sanctions used for foreign policy purposes are economic penalties – such as prohibiting trade, stopping financial transactions or barring economic and military assistance – used to influence a nation and provide incentives for obedience with the rule of law or other governing rules and regulations.

Given the extent and complexity of global interdependence in the international goods and tourist traffic, sanctions not only affect the sanctioned nation, but also have repercussions all over the world. 

The aviation industry is particularly affected by the sanctions imposed upon Russia:

  • Closed airspaces over Russia and the Ukraine war zone
  • Airspace closure for Russian aircraft en route to western states
  • No import of spare parts for western types of aircraft in Russia
  • Terminated leasing contracts for Russian aircraft, no return of leased planes
  • Stagnant or a lack of tourism and business travel
  • Etc.

The economic impact of a non-existing passenger and air cargo traffic – which is only possible using alternative routes – is obvious for all parties concerned: higher costs, lower goods turnover, a lack of passenger and tourism traffic.

What impact do the sanctions imposed on Russia have on aviation safety?

No other industry sector is as strictly regulated as aviation. Precise maintenance regulations and intervals specify the renewal of aircraft parts and components and help ensure that aviation continues to provide the safest means of transport. However, Russian airlines and aircraft owners are no longer able to comply with these strict regulations. Due to sanctions and EU export bans for aerospace technologies and goods, much needed parts and components for western types of aircraft (which comprise the majority of the fleet of aircraft in Russia) can no longer be procured. Airbus and Boeing were among the first to suspend deliveries of spare parts, technical support, and maintenance services.
Meanwhile, aircraft manufacturers have raised safety alarms due to the lack of spare parts. There are reports that airlines are stripping grounded aircraft (of which there are plenty given the low level of air traffic in Russia) as well as aircraft that were not returned to western lessors to keep other aircraft airworthy. One can take a wild guess how long this “supply” will last. Another concern is that aircraft subject to irregular maintenance intervals or non-compliance with international maintenance standards quickly lose their safety certificates. Besides subjective and objective safety concerns, this poses a problem of possible landing bans and further restrictions.
In addition to technical regulations, there are certain requirements for pilots and flight crews which ensure the validity of their license, their knowledge and skills of operating procedures. Due to a large number of fleets having been grounded, pilots and flight crews lack the routine with specific flying procedures. Pilots, for example, are reduced to logging the required amount of flight times in simulator trainings, which normally are only an add-on to real flights. They cannot use these trainings over an extended period of time to maintain their level of flying skills and the validity of their license.

Aviation safety, whether in the air or on the ground, is a top priority

The International Civil Aviation Organization (ICAO) has therefore defined rules for safety standards and recommended practices. These are implemented on a national level via, e.g., the European Union Aviation Safety Agency (EASA). Similarly, there are standards and regulations for the airworthiness of aircraft, for aircraft operation, and for training and licensing of flight crew members.
While passenger numbers are increasing, the number of casualties is decreasing. Technical improvements, rules and regulations that stipulate maintenance and licensing procedures for aircraft, the development of airport infrastructure and air traffic control as well as training of personnel give us reasons to be optimistic about a safe future.

Ilse Konheisner-Holub

Group Practice Leader Aviation

Hotline available 24/7: +43 5 04 04 200

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Cover aspects in aviation insurance in respect of war and terrorism

In addition to this general exclusion referring to damage occurred, there exists clause LSW617 that restricts the validity of cover itself: there is generally no cover for various named high-risk and existing crisis and war zones.

Like other insurance lines, aviation insurance also excludes damage caused in connection with war and terrorism.
The specific definition in the insurance policies says that there is no cover for claims caused by:

  • war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution insurrection, material law, military or usurped power or attempts at usurpation of power.
  • any hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.
  • strikes, sabotage, confiscation, hi-jacking etc.

In addition, all insurance payments are subject to the various sanction regulations – please see our separate information on sanctions.

In addition to this general exclusion referring to damage occurred, there exists clause LSW617 that restricts the validity of cover itself: there is generally no cover for various named high-risk and existing crisis and war zones. This stipulation, however, allows overflights in international corridors as well as landings of aircraft in emergency situations.

In compulsory aviation liability insurance, however, consequential damage in the case of war and terrorism is covered according to Article 7 of Regulation (EC) No. 785/2004, but this is limited with the statutory minimum liability amount.
By way of the international clause AVN52 there is the possibility to buy cover or to increase the limit of indemnity for war and terror risk in aviation liability insurance; this applies to general aviation as well as airports, ATC or product liability.
War risk extension for aircraft hull insurance is, in principle, also available.

Coverage in both lines – liability and hull – includes the risk of war and terrorism with extension to strike, sabotage, as well as seizure or unlawful takeover (hijacking) of the aircraft, etc., but it excludes any hostile explosion of a weapon of war using atomic or nuclear fission and/or fusion or any other similar reaction or radioactive radiation.

In the event of a crisis/war, there are thus several factors to consider:

  • Extension of LSW617:the above-mentioned clause limiting the insurance coverage in the geographical area can be extended to additional countries at any time.
  • Closure of the airspace: notified by governments or authorities – no insurance cover is provided for the respective area, neither for take-offs/landings nor overflights.
  • Cancellation of AVN52 (liability) and hull war coverage (e.g. LSW555): The agreed extension can be terminated at any time with 7 days’ notice. The termination option is also open to the policyholder.
  • Partial termination of AVN52 with 48 hours’ notice: The insurer may terminate one or more parts of the clause with 48 hours’ notice in the event of hostile detonation of nuclear or nuclear fission weapons of war.
  • Automatic termination of AVN52: In case of war between two or more explicitly named states (e.g. Russian Federation, USA, France, UK, etc.).

The following additional limitations that represent a significant impairment and impact of financial nature must be considered:

  • Suspended flights to Russian regions and to the Ukraine
  • Airspace closure in the crisis area for all aircraft
  • Closure of European airspace for Russian aircraft

This leads to the change of flight routes in all areas, especially from Western Europe to the Far East (China, Japan, etc.) and thus to longer flight times, higher fuel consumption, additional costs for overflight rights for areas and states otherwise not overflown.

Source: /28.02.2022/ 12.30 CET

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Ilse Konheisner-Holub

Group Practice Leader Aviation

Hotline available 24/7: +43 5 04 04 200

Changes and challenges for aviation after Covid-19

The effects of Covid-19 and the resulting standstill in air traffic are well known. But which developments can we expect in the future? What will airports and aircraft look like in the future? Even if we are already quite carefree about the pandemic in our everyday lives, some innovations are necessary and to be expected (if not already introduced) that will affect us when we fly.

Passenger numbers are rising, air traffic is increasing again. Passenger and flight cancellations of almost 100% are currently a thing of the past again, but all airlines are under pressure to fill their planes.

Will prices continue to fall, or will there be an increase in price to cover additional costs? Will there be the same number of offers and will all destinations be possible?

There are already cheap offers again – the airlines are under pressure to fill their planes and new low-cost airlines have already been founded. In the medium term, however, prices could rise: a reduction in offers is expected, the extra expense for corona protection must be paid. And the increase of the ticket tax – especially short-haul flights up to about 300 km distance are to be taxed additionally with 30 EUR (one-way) is being. Discussions about CO2 emissions and the cancellation of short-haul flights or switching to rail are also an issue.

How is the security situation? What protective measures have already been taken or are still necessary?

An airport is a mass operation of passengers, visitors and staff employed – coming and going in crisscross fashion, queues at check-in, dense crowds in front of the security check, narrow waiting zones in front of the gates, in the feeder buses and finally on the plane itself.

The “3-G rule” of course also applies here. Corona quick tests are offered virtually at the gate: the test can be carried out for a small fee and the result is available within three to six hours. Premium services for passengers are created in order to avoid waiting times and passenger congestion.

Passenger data and seat allocation are becoming even more important to make infection traceable. Mandatory protective masks for passengers and employees, plexiglass at check-in, boarding and information desks, distance markings and disinfection, limitation of passengers per bus and protective measures in the aircraft itself such as mandatory masks will accompany us for a long time.

Current security measures can be found on the homepage of airports and airlines.

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Ilse Konheisner-Holub

Group Practice Leader Aviation

Hotline available 24/7: +43 5 04 04 200

Sky dangers

Aviation accidents and their effects on insurance

Safety is of enormous importance, especially in the field of aviation, and must or will become an increasingly important issue – but accidents still happen. We also see the effects in the developments of aviation insurance.

Spectacular accidents are reported in the media, but a large number of small, private aircraft involved in accidents remain hidden from the public.

Aviation accidents on the rise

According to statistics from Austro Control 1), to which damage must be reported as the highest aviation authority in Austria (Regulation (EU) No. 376/2014), the human factor is the greatest cause of accidents. Not only due to a loss of control during the flight or during take-off and landing, but also due to poor briefing in flight planning and preparation, as well as from airmen ship, i.e. the behaviour and skills of a pilot in terms of dexterity, technique and also awareness of the aircraft, the flight conditions and one’s own abilities.

Technical failure, weather turbulence or e.g. bird strikes are far behind in the damage scenario!

According to Statistics Austria , a total of 64 aviation accidents were registered in Austria in 2020. Despite the Corona year with fewer flight movements, this is an increase of 14.3% compared to 2019. Hang-gliders/paragliders and parachutists are particularly affected (53 incidents). Fatalities are also reported.

The remainder relates to the area of general aviation, whereby commercial aviation in Austria did not file a claim.
Internationally, the year 2020 – despite the low air traffic – was affected by a number of major accidents, with a total of 176 incidents reported worldwide (private and commercial aviation)2. The following are certainly still remembered:

Why choose GrECo?

The insurance market has become extremely demanding. An insurance broker makes the process of gathering the offers much easier, more time and cost efficient and, above all, focused on a tailor made solution for the client. Operating completely independently, we are representing interests and benefits of the insured and not the insurer under both professional and material responsibility.

Our team work provides our clients with in-depth specialist knowledge, committed representation of the client’s interests, providing custom solutions, counseling and excellent support. Such solid foundations are the result of fruitful cooperation of our teams, their perseverance, commitment and an unwavering focus on achieving the best results for the benefit of our clients in a demanding risk management environment.

  • January: Boeing 737-800 / Ukraine International Airlines – 176 persons
  • February: Boeing 737-800 / Pegasus Airlines – 3 persons dead, 179 injured
  • May: Airbus A320-214 / Pakistan International Airlines – 97 people dead, 2 injured
  • August: Boeing 737-800 / Air India Express – 21 people dead, 100 injuredine 1

Natural disasters such as hurricanes, which have a destructive effect on airports and the aircraft on them, are a further potential hazard and source of damage.

If one assumes that a Boeing 737-800, for example, can have a value of around 85 million USD, and that the compulsory liability insurance sums for this aircraft are set at 300 million SDR, the extent for international aviation insurers can be imagined.

Consequences for the aviation insurance market

The consequence of this has been noticeable in the entire aviation insurance market for about two years, especially in rising premiums and increased deductibles, but also higher requirements in the experience of pilots and mandatory simulator training. The other effects are a shortage of capacity, insurers withdrawing from areas of the market and/or reducing the coverage capacity made available for risks. Where two years ago sums of 150 million EUR were underwritten by one insurer, today two to three are needed to cover this sum.

An end to developments in this direction is not yet in sight. The gap between claims expenditure and insurers’ income is still large and needs to be covered.

1) Annual Safety Review 2019
2) Aviation Safety Network

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Ilse Konheisner-Holub

Group Practice Leader Aviation

Hotline available 24/7: +43 5 04 04 200