Uninsurable? What Airline Cyber Fallouts Reveal About Systemic Risk

Cyberattacks have taken flight — grounding airlines, exposing millions of passengers, and straining the limits of digital infrastructure across the industry.

The recent Qantas breach compromised data on six million passengers, including names, birthdates, frequent flyer numbers, and contact info. Similar incidents at WestJet and Hawaiian Airlines make one thing clear: commercial aviation is a prime target for cyberattacks, and the stakes are escalating.

This wave of attacks signals a broader shift in systemic cyber risk. Despite their size, scrutiny, and security investments, airlines remain exposed. And the risks they face are not unique to aviation.

Are airline cyber risks insurable?

From a cyber underwriting perspective, airlines are high-risk clients. One breach can activate every part of a policy:

• Ransomware payments
• Business interruption losses
• Regulatory investigations and fines
• Class action litigation
• Long-term reputational fallout

Many insurers stay away, so using a knowledgeable insurance broker is important. The U.S. airline industry is highly concentrated. A successful attack on one major airline can cause ripple effects across all 50 states and beyond. This level of exposure makes it nearly impossible for insurers to limit losses or underwrite the risk competitively.

Recent events prove that airlines remain exposed even with strong security tools and mature response plans. The CrowdStrike software failure brought down baggage tracking, delayed flights, and disrupted customer communications. The operational chaos came with legal consequences, and no cyber insurance was available to absorb the loss.

The limits of cyber defense in airline operations

Airlines work with some of the best security vendors in the world. They meet demanding regulatory requirements and invest heavily in modern tools. The challenge lies in how interconnected and irreplaceable those systems are.

Key areas of exposure include:

• Passenger-facing tools like biometric boarding and real-time baggage tracking
• Core operational systems used for aircraft maintenance, crew scheduling, and ticketing
• Vendor integrations with airport infrastructure, cloud services, and acquired regional carriers

Disruption in any one area can multiply into widespread operational failure. The scope and scale of airline operations mean there's rarely such a thing as a contained incident.

Vendor risk: a growing blind spot in airline cybersecurity

Many of today's most severe cyber incidents start outside the organization. A faulty software update, like the one behind the CrowdStrike outage, paralyzed airport operations worldwide. The incident wasn't malicious, but the business consequences were massive.

Airlines depend on a vast web of outside providers. Vendors with little transparency often manage cloud platforms, ticketing software, airport systems, and backend infrastructure. That makes it harder to assess risk and nearly impossible to detect problems early.

Concerns include:

• Limited visibility into how vendors manage security or apply critical updates
• Inconsistent practices across newly acquired or regional partners
• Lack of real-time alerts when something goes wrong in third-party systems

Legacy systems and inconsistent controls at affiliated airlines create security gaps that carriers can’t easily oversee. To reduce that exposure, treat vendor risk as a core cyber issue. Ensure contracts include breach notification requirements and expectations for patching. Conduct security reviews before onboarding, not after an incident.

AI-driven cyber threats introduce new pressure points for airlines

Artificial intelligence is reshaping airline operations, powering predictive maintenance, fraud detection, and operational planning. However, it also introduces new forms of cyber risk.

Externally, attackers use generative AI to impersonate executives, craft hyper-realistic phishing lures, and create deepfakes that erode trust in identity systems. Internally, AI platforms make high-stakes decisions, optimizing routes, pricing, and staffing, with limited transparency or oversight.

These systems often plug into aging infrastructure not built for autonomous logic. Without clear controls, AI can accelerate flawed decisions or expose vulnerabilities at enterprise scale.

What can other industries learn from systemic cyber risks in aviation?

You may not operate a major airline, but the same risk factors apply: complex systems, layered technologies, vendor dependencies, and AI tools with limited transparency. These are all sources of exposure, regardless of industry or company size.

A few actions worth prioritizing:

• Invest in AI-aware security: Use tools that detect deepfakes, malicious automation, and data inference attacks.
• Train your frontline teams: Social engineering attacks often start with a single employee. Equip them to recognize the signs.
• Audit your vendor ecosystem: Require transparency into patching, access controls, and incident response. Identify your exposure points and establish how quickly vendors will notify you when something goes wrong.
• Test your continuity plan: Walk through breach scenarios with your leadership team. Define roles, uncover communication gaps, and test how quickly your team can make decisions during an operational shutdown.
• Stay ahead of patching obligations: Many insurers scan networks before issuing or renewing policies. In some cases, missing a known vulnerability can impact coverage or binding eligibility.

Cyber insurance has limits, and some industries are reaching them. Airlines are the early warning. For others, the message is clear: don't wait to build resilience.

Stay agile. Know your exposure. Strengthen the response muscle across your business. When coverage is out of reach, preparation becomes your best defense.