Monday, July 26, 2021

$ Money Talks $

 Money Talks

By Catalina9

One could define risk management as the identification, analysis and elimination of those hazards, as well as the residual risks that threaten the viability of an enterprise. The discussion if it is possible or practical to eliminate hazards are ongoing with opposing views. Airports and airlines accept the inherent risks in aviation every time there is a movement on the field or in aeronavigation. On the other hand, both regulators and professional auditors, expects from the corrective action plans that an operator make changes to ensure that an occurrence will never happen again. While it is unreasonable to expect the complete elimination of risk in aviation, it is also unreasonable to expect that that all risks are acceptable. It is a fine line to balance between what risks to eliminate, and what risk to accept. Risk acceptance, or elimination is a 3D identification process measured in time (speed), space (location), and compass (direction). When 3D thinking is introduced, a future scenario can be designed, or the exposure level. Risk mitigation then becomes an exposure level mitigation and not the mitigation of the hazard itself.  This does not imply that the future can be predicted, but it implies that data, information, knowledge, and comprehension are vital steps to predict hazards that affect operational processes. Exposure level mitigation is currently a major part of risk mitigation, e.g., airside markings, markers, signs or lighting, or aeronavigation flow into congested airspace and for gate assignments. 

Risk in aviation are the common cause variations, which are variations within a process, and required to be a part of the process for the process to function as intended. An example of a common cause variation is the runway friction. Without runway friction landings and takeoffs would not be possible. For an air operator, runway friction becomes a special cause variation with rain, snow or slush. Special cause variations are mitigated to an acceptable exposure level. The difference between a risk and a hazard, is that a hazard is one item and the effect it has on safety, while the risk is a conglomerate of hazard probabilities in a 3D scenario with a combined effect of safety.

Let’s take a moment and analyze the probability of the probability of a midair disaster involving two aircraft departing 350 NM apart and travelling to two different destinations in a non-congested airspace. If a risk assessment was done of a midair collision prior to departure, the assumption is that both assessments would accept the risk and defined as a green color. In this first risk assessment the planned departure times and destinations of the other aircraft was unknown. An inherent risk in aviation, or common cause variation, is that the 3D position of other aircraft flying in accordance with the visual flight rules (VFR) are unknown. In an instrument flight rule (IFR) environment, the position of other aircraft, or their estimated 3D positions are known and mitigated. In an IFR environment the exposure level is mitigated to an acceptable level. In a VFR operational environment, the exposure level is unknown until communication between pilots are established, or visual contact has been established. 

Safety in aviation is the strategic game of moving hazards.
 Two aircraft may be on collision course   without knowing of each other.   Depending on aircraft design, an   approaching aircraft may be in a blind   spot for several minutes, as it was for   flight 498. An exposure level may last   for  several minutes, or only for a split   second. When the 3D location is   unknown, the exposure level is   unknown,  even if two aircraft are on a   certain collision course. In 2012 two   aircraft departed 350 NM apart for   different destinations and crashed   midair.  A 3D location could have been   calculated if their altitude, track and groundspeed were known. However,

flying VFR and relying on visual or audio clues is an inherent risk, or a common cause variation in aviation. A common cause variation transforms to special cause variation when one or more of the other systems are malfunctioning. The investigating authority defined a weakness of the see-and-avoid system for VFR flights. A secondary system malfunctioning may have been the position reporting system when departing an altitude or communicate their intended VFR approach procedure.

The safety cycle in aviation is safety, operations, and accounting. When a student pilots take off for their first solo flight, their primary concern is safety and that their first landing will be a safe landing. What their general flying skills are or what the cost of the airplane is, becomes secondary to safety. When safety is achieved and the student pilot is proficient in landing, they are focusing on cross country skills and flights beyond sight of the airport. As more time is accumulated equals more money spent. Eventually, money becomes the governing factor of flying. 

Safety is Project Solutions Leadership Motivation

The principle, or cycle of safety, operations and accounting is a cycle that airlines or airports go through at regular intervals. When first starting up as an airline, their primary concern is safety, including new upstarts of low-cost carriers. Without safety processes in place, they would not qualify for the operations certificate. When SMS was regulatory mandated, airlines and airports went overboard to ensure safety compliance. As they move forward, customer service is added to safety in operations, but eventually, their capacity limits out and cost becomes the determining factor. A regional airline spent more than $750,000.00 within a short time to ensure safety compliance. Eventually the accounting department focuses on cash spent on safety and demands reductions in spending. At first this seems reasonable and acceptable, but over time this drift eliminates critical tasks and moves the operations closer to the fine line between safety and incidents. Several years ago, a regional operator, who had not experienced a fatal accident in 35 years, had their first fatal accident because they relied on prior years track records which had included safety processes. With a good track record, it made sense to accounting to reduce cash spent on safety investments. Fail to plan equals plan to fail.    

Safety in aviation is not what accidents or incident did not occur, but it is what the cash return on safety investment is. In general terms, return on investment is the additional revenue, or cash generated. The return on investment in aviation safety is the reduction of cash spent on safety, or negative cash generated. Return on investment of SMS is not the savings by a reduction of accidents or incidents, but the return of cash revenue generated by in-control processes and organizational based safety investment decisions. A CEO of a company works with cash daily and a reduction of quantity is less significant than a higher cash value of the organization. For an airline or airport with 500,000 annual movements or cycles, a reduction of annual incidents from 1,500 to 1,200 is less significant to the CEO and the Board than a reduction in cash spending of 1,080,000.00 dollars. 

When the reduction of cash spent on incidents has a positive impact on the bottom line, the old-fashion cycle of safety may be broken, and continuous safety improvements becomes an available option to the processes. Money talks and when safety is the profit generator, it makes sense to invest in safety.    


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