Israel Approves $8 Billion War Insurance for Israeli, Foreign Airlines

Israel has approved an $8 billion state-backed insurance guarantee to cover war-related risks for both Israeli and foreign airlines, marking the first time such coverage has been extended to international carriers. The plan, approved Monday by the Knesset Finance Committee, is designed to restore air connectivity once Israeli airspace fully reopens.

The guarantee will provide airlines with access to wartime insurance policies through Inbal Insurance Company Ltd., a state-owned insurer. These policies will be available only if existing coverage is canceled or reduced due to heightened security risks. The move is intended to support continued air operations, including repatriation and cargo flights, and to maintain economic stability amid ongoing regional conflict.

“This is essential to ensure the continuity of the economy, including imports, exports, and aviation operations. It also provides security for foreign carriers,” said Michal Sheshinski, a senior official in the office of the Accountant General.

The decision follows the suspension of many foreign airlines’ operations after a Houthi missile strike near Ben Gurion Airport in early May and the full closure of Israeli airspace on June 13, following Israel’s retaliatory strikes on Iranian nuclear and missile infrastructure. In response, Iran launched more than 550 ballistic missiles and around 1,000 drones at Israel.

Ben Gurion Airport remains closed to general takeoffs and landings, operating only limited repatriation flights for stranded citizens. Insurance providers for Israeli airlines—including El Al, Arkia, and Israir—had previously signaled their right to cancel coverage due to the rising war risk.

Israel had previously approved $6 billion in war insurance guarantees following the outbreak of war with Hamas on October 7, 2023, allowing domestic carriers to continue operations despite security threats. Foreign airlines have consistently called for similar support to resume safe and reliable operations to and from Israel.


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Sources: AirGuide Business airguide.info, bing.com, timesofisrael.com