Israel approves $8 billion war insurance cover for Israeli and foreign airlines
Once Israeli airspace reopens, state-backed guarantee will enable foreign airlines to obtain wartime insurance policies, hopefully encouraging them to keep flying despite fighting
Sharon Wrobel is a tech reporter for The Times of Israel
The Knesset Finance Committee on Monday approved a state-backed guarantee of $8 billion for the coverage of insurance against war risks to Israeli airlines and, for the first time, also to foreign airlines for the coming two years.
The move is intended to encourage foreign airlines to return to flying to Israel when the country’s airspace fully reopens. Many foreign carriers have not resumed flight operations since the Houthi missile strike near Ben Gurion Airport at the beginning of May. Since Israel’s airspace was closed on June 13, in the wake of the attacks on Iran, most foreign airlines extended flight suspensions until after the summer months and some until October.
Israel launched a campaign of extensive strikes against Iranian nuclear and ballistic missile targets. Iran has retaliated to Israel’s attacks by launching over 550 ballistic missiles and around 1,000 drones at Israel. Meanwhile, Ben Gurion Airport has remained closed for takeoffs and landings, except for restricted repatriation flights that were launched on Wednesday to help bring Israelis stranded abroad back home.
Due to the Iran conflict, insurance companies insuring Israeli airlines — El Al, Israir, and Arkia — have announced that they are entitled to cancel insurance policies.
The state guarantee framework is put in place upon request by the accountant general to provide Israeli airlines as well as foreign carriers with insurance policies against war risks if needed, to ensure continuity of air operations of repatriation flights, cargo flights, and to maintain the proper functioning of the economy.
“There is a need to maintain the continuity of the economy, imports, exports, the transportations of goods, and we also need to provide security to foreign companies as well,” said Accountant General official Michal Sheshinski.
The insurance policies are issued by state-owned Inbal Insurance Company Ltd. and are contingent on the cancellation or reduction of existing insurance coverage held by airlines.
To keep the skies open since the outbreak of war with the Hamas terror group on October 7, 2023, Israel approved $6 billion in insurance guarantees to Israeli airlines, enabling flag carrier El Al Airlines, as well as Arkia and Israir, to continue repatriating Israelis from abroad and help bring reserve soldiers home.
Since the start of the Hamas war, most foreign airlines have repeatedly canceled and resumed their flights to and from Israel and have called on the government to provide them with assistance also related to insuring their operations in Israel, similar to the assistance given to Israeli airlines.
The Times of Israel Community.