Provision of Aviation Insurance Coverage for Commercial Air Carrier Service in Domestic and International Operations

This memorandum determines that U.S.-flag commercial air service is necessary for national interests and approves federal aviation insurance coverage for U.S. air carriers through December 31, 2006, with delegated authority to the Secretary of Transportation to extend coverage under specified conditions.

Federal Register Open PDF 70 FR 76669

Impact dates

Dec 31, 2006
Final deadline for all insurance coverage and extensions
Aug 31, 2006
Initial insurance coverage period expires

Key directives

Determine continuation of U.S.-flag commercial air service necessary for air commerce, national security, and foreign policy
Approve provision of insurance/reinsurance to U.S.-flag air carriers until August 31, 2006
Approve conditional provision of insurance/reinsurance after August 31, 2006 through December 31, 2006 when commercial insurance unavailable on reasonable terms
Delegate authority to Secretary of Transportation to extend determination beyond August 31, 2006 through December 31, 2006
Direct Secretary to notify all air carriers immediately
Direct Secretary to arrange Federal Register publication

Who is ordered

Secretary of Transportation · Department of Transportation

Timeline

Immediate

Federal Register publication required
Notification to all air carriers required

Near term (90d)

Insurance coverage effective through August 31, 2006

Long term

Potential extension of coverage to December 31, 2006
Delegated authority for Secretary to extend beyond August 31, 2006

Risks & tensions

Conditional extension after August 31, 2006 creates uncertainty for air carriers planning around insurance availability
Delegation to Secretary of Transportation for extensions concentrates discretionary authority in one official
Vague standard of 'reasonable terms and conditions' for commercial insurance unavailability leaves room for inconsistent application