ExecutiveOrdersEO
MemoMemorandumG.W. Bush · R

Presidential Memorandum

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

This memorandum extends federal aviation insurance coverage for U.S.-flag commercial air carriers through August 31, 2009, authorizing the Secretary of Transportation to provide insurance or reinsurance when commercial coverage is unavailable on reasonable terms. The President delegates authority to the Secretary to extend the program in additional periods as needed. The directive requires immediate notification to all air carriers and Federal Register publication.

Federal Register Open PDF 73 FR 79589

Impact dates

  1. Final deadline for all insurance coverage and extensions

  2. Initial insurance coverage period expires

  3. Secretary determination on commercial insurance availability for post-March 31 extension

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 March 31, 2009
  • Approve provision after March 31, 2009 through August 31, 2009 when Secretary determines commercial insurance unavailable on reasonable terms
  • Delegate authority to Secretary to extend determination for additional periods beyond March 31, 2009, no later than August 31, 2009
  • Direct Secretary to notify all air carriers immediately
  • Arrange for Federal Register publication

Who is ordered

Timeline

Immediate

  • Notification to all air carriers required
  • Federal Register publication required
  • Insurance coverage continues until March 31, 2009

Near term (90d)

  • Potential extension of coverage beyond March 31, 2009 if commercial insurance unavailable
  • Secretary determination on reasonable commercial terms required for extension

Long term

  • Program expires August 31, 2009 unless extended under delegated authority
  • Possible precedent for future federal aviation insurance interventions

Risks & tensions

  • Vague standard for 'reasonable terms and conditions' leaves discretion to Secretary without objective criteria
  • Post-9/11 federal aviation insurance program continuation reflects ongoing market failure in terrorism risk coverage
  • Timing during 2008 financial crisis may compound insurance market stress
Presidential Memorandum: Provision of Aviation Insurance Coverage for Commercial Air Carrier Service in Domestic and International Operations · Executive Orders