There will be times when a warhead will be launched at you from near point-blank range. You may also find yourself the target of multiple warheads, or occupied such that the incoming warhead(s) is not your priority. In this case, you will revert to countermeasures to counter the threat of the warhead.
X-Wing Alliance allows you to utilize two separate countermeasure systems - the flare and the chaff. The flare is in itself, a miniature warhead designed as an anti-warhead warhead. The chaff is a type of material that is designed to confuse tracking systems by providing a distorted radar feedback. Chaff also has the property that it can disperse the warhead, absorbing the blast for you.
The flare is the most potent countermeasure in terms of combat usage. When launched, the flare tracks the nearest incoming warhead and attempts to destroy it by detonating it. The flare can also act as a point defense system against hostile fighters. If there is no warhead which is tracking you present, then the flare will track down and engage the nearest enemy fighter. In this manner, the flare behaves the same as any other warhead. The flare however, inflicts minor damage, which is generally nominal However, against unshielded craft such as the TIE fighter, a flare can be fatal. Upon impact, the target craft experiences the same effects encountered from other warheads short of destruction. The craft sustains nominal damage and is thrown into a short, uncontrolled roll.
Flares are best deployed when the warhead closes to within 0.50 klicks of your craft. When used against fighters, warheads should be deployed within a range of 0.3 klicks.
Chaff is the second type of counter you can equip or craft with. Chaff can not be deployed offensively and is primarily a defensive system. Chaff emits particles that distort and attempt to obscure the radar signature of your craft. A side effect of this is that chaff can be used to neutralize an attempt at a lock on and also disrupt beam systems targeted at your craft. Chaff is best deployed when the warhead is between .75 and .50 klicks. A single chaff burst lasts for approximately ten seconds. Unlike flares, chaff does not neutralize the warhead, but absorbs the damage for you. However, the craft will still be thrown into an uncontrolled roll.