Understanding and preparing for climate risks is more critical than ever
As momentum in the aviation industry builds toward increased transparency and more ambitious climate targets, there is growing recognition that resilience is not just an environmental imperative, but a financial one. In an industry with high fixed costs and volatile profitability, having a keen understanding of the short- to long-term financial implications of climate risk is critical for informed decision-making and sustainable growth.
Climate-related disruptions that once seemed unlikely are now occurring with increasing frequency and severity. In truth, many of these events were always possible, but they were often not treated as plausible within traditional risk frameworks. Scientific literature and modelling have long pointed to such hazards, yet assumptions around recurrence and perceived improbability often kept them at the margins of planning. Risk is also not static, and climate change is amplifying the impact of many hazards and increasing the likelihood of disruption.
For the aviation sector, and airports in particular, this presents a growing operational challenge. From extreme heat and intense rainfall to stronger windstorms, these disruptions affect not only flight schedules but also the integrity of infrastructure, safety margins, and broader supply chains. The ripple effects extend far beyond terminals and runways to air traffic control, ground services, and global logistics networks, adding layers of complexity to resilience planning across aviation’s physical and operational systems.
Understanding which climate risks are most relevant to each location, and how prepared you are to respond, is essential for strengthening airport resilience. But knowing where to invest and how to adapt requires a grounded understanding of today’s risks, and a clear-eyed view of what may lie ahead.
Events like Dubai’s floods serve as a warning that a narrow view of risk, based only on past data, may be insufficient in a changing climate. To better navigate these evolving challenges, applying risk management fundamentals - identifying today’s vulnerabilities, quantifying their financial impact, and managing their exposure over time – can provide a practical framework.
This approach and set of challenge questions (table 1) can support airport operators in integrating climate risk into decision-making across planning, finance, and operations:
| Step | Action | Challenge Questions | Outcome |
|---|---|---|---|
| Identify | Identify, rank and prioritize current and future hazards to your assets | How well do you understand the physical characteristics of your assets and the local conditions that can significantly impact potential damage? | A strategic response to climate risks that protects financial performance, informs planning and disclosure. |
| Quantify | Assess the financial impact of physical risks and individual assets including your value chain | How are you currently assessing cost-benefit options for adaptation/risk mitigation for physical climate and geophysical risks? | Prioritization of investment and mitigation based on robust financial understanding. |
| Manage | Identify measures to avoid, reduce, transfer or retain risks from physical climate change | What are you doing to protect your organization’s financial resilience to growing physical risks? | Targeted resilience-building aligned with broader strategic and operational |
Understanding and managing climate risk begins with a rigorous and credible assessment of today’s landscape. Over the last year, flights have been grounded by searing heat, terminals flooded by unprecedented rainfall, and storms have caused damage and delays across increasingly congested skies. While surprising to many, a review of historical records and climate data suggests that these events were always within the realm of possibility. This reinforces the importance of challenging assumptions and considering a wider range of scenarios when assessing risk across both near- and long-term horizons.
While tools like WTW’s Airport Risk Index provide a structured, present-day lens for understanding risk exposure, the changing climate introduces deeper layers of uncertainty. Capturing the full picture requires forward-looking tools that can account for shifting baselines and emerging climate dynamics.
Risk management best practice for airport operations begins with identifying the full range of current and future physical risk hazards. This means drawing on historical records, present-day observations, and forward-looking climate hazard datasets. These hazards include acute events such as extreme rainfall and tropical cyclones, as well as chronic risks like water scarcity and sea level rise.
Once these hazards are identified, their potential impact can be quantified. This can be done using a combination of risk engineering, catastrophe modelling, and climate data. For example, higher daily temperatures are already triggering take-off weight restrictions for aircraft. As these temperatures rise further or occur more frequently, these operational constraints are likely to intensify. Impacts to runways, terminals, and equipment may require additional capital expenditure, while disruption to value chains or ground handling may reduce capacity and productivity, placing pressure on operating margins.
Linking physical hazard information to operational and financial impact is where risk management and business strategy value becomes clearer. Assessing the possible future range of hazards, and how this affects operations and business decisions has become more relevant as the climate baseline continues to shift.
From here, management strategies can be designed. Building on existing risk appetite and tolerance, climate risks can be treated as amplifiers of existing exposures. Ultimately, the financial exposure to these risks will depend on the operational structure and business model of the airport. Some airports may prioritize risk reduction over risk transfer, whilst others may prefer to build additional contingency into operations and embed the financial impact with passengers, cargo, airlines, and the wider value chain.
This is where WTW’s climate risk analytics play a critical role.
As the climate continues to evolve, so too must the way airports assess and prepare for risk. A clearer understanding of present-day vulnerabilities, combined with credible insights into how those vulnerabilities may shift in the future, offers a valuable foundation for long-term planning and resilience. This dual perspective enables aviation stakeholders to consider climate risk in both operational and strategic contexts, supporting a more robust approach to adaptation over time.
WTW contributed to the ICAO Environmental Report 2025, which presents the progress made over the last three years across key areas of ICAO’s environmental protection activities.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
