Disruption to airport operations due to climate-driven hazards can have cascading impacts across corporate value chains, affecting:

1. Operational continuity
2. Market access
3. Financial exposure
4. Insurance costs
5. Regulatory and ESG reporting

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An international airline running flights into four continents and several small island nations was concerned that increasing extreme weather put airport infrastructure at risk and could disrupt operations, resulting in flight disruptions and lost earnings. It wanted to understand this risk in more detail and asked XDI to evaluate the risk to infrastructure of over 30 international airports to climate change hazards, under different climate scenarios, from now until the end of the century. Specifically the airline wanted XDI’s physical climate risk analysis to identify:

1. The airline’s potential future cost exposure from climate-related events impacting the airports they fly to
2. Airports that could benefit from adaptation measures to prevent climate hazards materialising.

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How did XDI Help?

XDI’s physical risk model used the Intergovernmental Panel on Climate Change (IPCC) physical risk scenarios and its award-winning Climate Risk Engines, which simulate the past, current and future climate. The model provided Maximum-to-date Value-at-Risk (MVAR), failure probability and productivity loss metrics for the airline to integrate into an internal cost impact model. The analysis provided the airline with an understanding of the financial risk from climate-related events and decision-useful insights for airports to invest in adaptation measures.

The modelling used three physical scenarios defined by the IPCC sixth assessment report: (i)(RCP2.6/SSP1-2.6) (ii) (RCP 4.5/SSP2-4.5) and (iii) (RCP8.5/SSP5-8.5).

 Large Site Analysis was used to assess terminals, hangars, fuel depots, and other large spatial assets

 Linear Asset Analysis analysed a series of points at regular intervals to assess risks to runways, access roads, taxiways, and underground services.

The modelling assessed each piece of infrastructure’s exposure to nine climate hazards in the airline’s short, medium and long-term planning horizons (five-year time steps from1990 to 2100). It also provided a spatial assessment of the entire airport footprint demonstrating where adaptation measures would be most effective to increase resilience.

Results Provided:‍

· Asset-level failure probabilities

· Maximum-to-Date Value-at-Risk (MVAR)

· Insurability flags and asset classification (ABC Risk Ratings)

· Technical insurance premium estimates

· Productivity Loss

· Adaptation options and cost-benefit metrics

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Overview of findings

Across all airports analysed.

RCP2.6/SSP1-2.6

Scenario Details:
Government, industry and society come together to avoid the most catastrophic impacts of climate change.Nations invest heavily in renewable energy, energy efficiency, and reforestation efforts, leading to a peak in global emissions around 2030, followed by a steady decline. The world limits global warming to about 1.5–2°C by 2100, avoiding the most severe climate impacts.

Potential impact:‍

Minimal impact to airport infrastructure. Climate events slightly increase in frequency and financial impact remains at a manageable level, but adaptation reduces risk at airports.

2050 exposure:

12% of airports have significant operational risk exposure from climate hazards

RCP 4.5/SSP2-4.5

Scenario Details:
The world takes a fragmented approach to development, resulting in moderate success in mitigating climate change. By 2100, global warming stabilises around 2.5–3°C. Climate impacts – such as heatwaves, droughts and floods – are increasingly severe and have material impacts in many locations.

Potential impact:

Moderate impacts on airports from changing climatic conditions. These conditions result in a greater number of rerouted and cancelled flights, along with increased care costs to support customers during airport disruptions. Greatest risk is experienced by 2050.

2050 exposure:

26% of airports have significant operational risk exposure from climate hazards

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RCP8.5/SSP5-8.5

Scenario Details:

Economic growth is prioritised and efforts to address climate change are minimal, leading to high emissions and severe climate impacts. Global warming reaches 3.3 to 5.7° by 2100, triggering catastrophic climate impacts: massive ice sheet loss, extreme sea level rise, frequent tropical storms, and severe droughts.

Potential impact:

Airports face significant challenges from heightened risks of tropical storms, flooding, and high wind speeds, which lead to severe and prolonged events. These conditions lead to increased costs from rerouted flights and higher care expenses during periods of airport incapacitation

2050 exposure:

32% of airports have significant operational risk exposure from climate hazards

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Additional findings

Access roads were identified as being the most vulnerable piece of airport infrastructure today, with riverine and surface water flood hazards driving most risk.

Overall damage probability analysed from hazards to all types of airport infrastructure is modelled to double from 2025 to 2050 in a high emissions scenario.

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Productivity Loss under RCP8.5/SSP5-8.5

In addition to risk of damage to infrastructure, XDI also analysed Productivity Loss resulting from climate change hazards, including periods of closure associated with different hazard events.

Productivity Loss is based on Failure Probability, which includes both the annual average probabilities of event occurrence and the vulnerability of the asset and its components.

· On average, across all airports, Productivity Loss was modelled to double between now and 2050.

· Coastal Inundation is the largest contributor to this increase, with risk from this hazard increasing more than three-fold between now and 2050.  

· Extreme Heat is also significant when looking at Productivity Loss to airports, and losses due to this hazard are modelled to double between now and 2050.

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In general:

· Several airports showed a large increase of heat-related failure probability, particularly in electronics-rich areas like control towers.

· Flood risks to low-lying runways were common in coastal and delta regions.

· Supply chain vulnerability emerged in locations where airport access roads were exposed to physical risk.

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Next steps

The client used the dataset to calculate potential losses and open discussions with airport operators about introducing adaptation measures to improve the resilience of airport infrastructure and reduce losses for airlines using the airports. The analysis was used to identify critical points within infrastructure most at risk and the cost-benefit of various adaptation efforts.

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