The aerospace industry is an extremely complex and interconnected sector comprising various components, organizations, and activities related to air transport, aircraft manufacturing, and other support services. Key components of this sector include airlines, aircraft manufacturing, airports, air traffic navigation, and regulators, among others.
In the past decade, digital transformation has had a profound impact on the aviation industry, revolutionizing various aspects including aircraft design, manufacturing, operations, and customer experience. As technology becomes increasingly embedded into the aviation industry, it is imperative for industry stakeholders to prioritize cybersecurity measures.
Unfortunately, for many aviation organizations, the benefits of digital transformation are outweighed by the risks of industrial cybersecurity. RENOMIA, together with our partner GALLAGHER, is well-prepared to keep on innovating and provide the best insurance services and solutions for our clients and support them with whatever challenges and opportunities they will face.
Aviation Organizations Implement Cyber Physical Systems
The aviation industry is constantly modernizing operations to ensure safe and efficient functionality. However, the introduction of internet connectivity into previously air-gapped operational technology (OT) introduces a cyber risk that can pose significant threats to the safety and reliability of aviation operations and air traffic. As a result, aviation organizations and regulators are working to implement security measures and best practices to secure the Cyber Physical Systems (CPS) and networks in their environments.
Having robust cybersecurity measures has become critically important as airlines continue to adopt advanced technologies. However, they face many challenges when it comes to successfully implementing these measures.
Challenges to Aerospace Cybersecurity
The goal of aviation cybersecurity is to prevent cyber threats that could compromise the safety and reliability of aviation systems. To do so, aviation companies must contend with the following challenges: legacy systems, ransomware, supply chain vulnerabilities, and regulatory compliance.
Ransomware attacks represent a significant threat to the aviation sector. Cybercriminals use malicious software to encrypt the sensitive data of airlines and then demand a ransom payment in exchange for the release of the information. These attacks have serious consequences not only in terms of operational disruption but also in significant financial risks, not to mention the loss of trust among users of various airlines or aviation companies and their clients. The highly strategic and sensitive nature of data in the aviation sector makes it a prime target for ransomware attacks.
Cyberattacks in the Aviation Industry
In 2023, 764 types of cyberattacks were recorded, with two types of attacks predominating: Distributed Denial of Service (DDoS) attacks and ransomware attacks. Of these, approximately 90% were DDoS attacks, 52 were ransomware attacks, and 24 were data breach attacks (source: SysDream, Cyber threat landscape in the aviation industry 2023). As key air transport hubs and essential players in the transport of people and goods across borders, airports are strategic targets for attackers.
As the threat landscape continues to evolve and new attack vectors emerge, cybercriminals are becoming increasingly sophisticated in their tactics. These challenges and the ever-evolving threat landscape have made aviation cybersecurity critical to protecting national security interests. By understanding the challenges of aerospace cybersecurity, implementing key principles for aerospace security, and partnering with the right CPS protection platform, organizations can strengthen their security defenses and protect against the toughest of aerospace cybersecurity threats.
Cyber Risk Insurance Management
Aviation insurance has some of the most comprehensive insurance coverages in the world, but cyber coverage remains a complication. Cyber risks may be excluded or limited in aviation insurance policies. For example, such policies may not cover certain risks to network business interruption.
Aviation companies consider specialized cyber insurance products to help them cover any financial losses they may incur in the event of a cyberattack or data breach. These policies also help to cover any costs associated with the redress process, such as paying for the investigation, crisis communication, legal services, and refunds to customers. However, most cyber insurance policies don’t cover business losses due to the decline in company value. An insurance broker is a strong referral partner for aviation companies to provide a tailored cyber insurance product across the insurance market.
Civil Aviation Security Prevents Criminal Activities
There are many challenges facing aviation security, including airports with traditional problems (such as homeless people, the mentally ill, drug abuse, petty and complex crime, civil disobedience), international terrorism, cyber-attacks, in-flight disruption, insider threats, and the use of unmanned aerial vehicles (UAVs) or drones. In the earliest days of aviation, security was only a minor concern, but today, aviation security is high on the list of priorities for air travelers, governments, and the international air community.
Civil aviation security exists to prevent criminal activity on aircraft such as hijacking (air piracy), damaging or destroying aircraft with bombs, and assaults on passengers or aviation employees.
Hull War and Terrorism Risks in Insurance
These risks and the resulting damages can be covered via aviation hull war, terrorism, and/or hijacking insurance products. If airports, air traffic/navigation services, airport infrastructure, etc., are affected by such threats, the consequences of such attacks may be covered by property damage insurance and terrorism business interruption insurance.
To improve aviation security and achieve best practices in airline security, follow the industry standards in the company’s manuals and ensure employees have access to high-quality training programs. Staff should be trained on the assessment and mitigation of risks, security equipment and devices, and quality control. Even when staff are trained, the most common threat resulting from their activities is cyber risk. Cyber insurance can cover against malicious attacks and non-malicious IT failures caused to aircraft operations, air traffic control/navigation services, airport infrastructure, corporate IT systems, etc.
New Engine Technologies
Engine manufacturers are under increasing industry pressure to provide new engine options with improved thrust, lower fuel consumption, and longer lifespans to improve economic performance. To support growth, airlines and airframe manufacturers are demanding faster entry to service and higher delivery rates. As is always the case when pushing the boundaries of technology, the road to releasing a new type of engine for operation in an aircraft is challenging. Failures and incipient problems are expected, and manufacturers usually identify the root causes of these problems and quickly develop solutions through several upgrades and modifications.
In recent cases, such as the Pratt & Whitney PW1000 engine, these problems were not related to the durability of the new technology but rather the result of proven manufacturing techniques that experienced quality assurance deficiencies. This had a significant impact on operators, many of whom were still struggling with initial failures, and led to numerous engine dismantling and aircraft retirements. We hope that the extent of the problems is at least now understood, and solutions have already been identified and implemented.
Insurance of Engines Needs Tailor-Made Solutions
Adequate insurance coverage could protect aircraft engines. Damages caused to aircraft engines, which could cost the aircraft owners a huge amount of money, could be mitigated or replaced by adequate insurance coverage. Aircraft engine insurance begins where aircraft hull insurance coverage ends. While aircraft hull insurance generally covers unexpected damage due to external causes, such as bird strikes in flight, it does not cover engine damage caused by internal issues.
Additional clauses cover any failure of the engine and related installations, both against accidents as well as against latent defects. This type of policy transfers liability for a wide variety of accidents, from design errors, disassembly or explosion, in operation failure of certain components, faults or errors of the protective devices, or accidental entry of foreign objects into the engine body (Foreign Damage Objects – FODs).
All details and possibilities around aircraft engine insurance can be discussed with your insurance broker, who can then find the appropriate solution on the insurance market and find a tailor-made insurance product just for you.
Text by: Hana Kulhova
Photo credit: RENOMIA
