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REALITY – The Cost of Error

This presentation explores the reality of the aviation industry's approach to the cost of error. It discusses the proportionality of our responses and the costs involved. It also examines the difficulty in assessing the cost of accidents and incidents, as well as the direct and indirect costs involved. The presentation highlights the impact of delay costs and maintenance errors, providing examples from both commercial and military aviation. Ultimately, it raises the question of how we can better deliver the message about the true cost of error in the industry.

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REALITY – The Cost of Error

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  1. REALITY – The Cost of Error Wednesday 18th October 2006 RAF Bentley Priory David King, Chief Inspector of Air Accidents

  2. Topics to cover. • What is the reality of the industry approach to the cost of error? • Are we proportionate in our responses? • What are the costs? Do we know? • If we know – are we ‘selling’ the case for an appropriate response?

  3. Reality = what underlies appearances - on the surface industry seems to accept much of the cost? -disproportionate response to cost! Cost = the price to be paid due to delays, cancellations, turn backs, incidents, Accidents What is the price ?– direct vs indirect Do we know?

  4. The vast amount of data on accidents and incidents is in stark contrast to the paucity of cost data on those same events. • Even more difficult to assess is the cost of not having an incident. (Simmons 2005)

  5. Ground Accidents – FOD!

  6. Ground Accidents (Civil) Direct cost estimate = c$ 5 Billion pa & 200 fatalities

  7. ‘Save One Minute’ initiative ‘Raise awareness of Air Navigation Providers’ Average Air Transport Flight Time = 97 minutes 40 million flights per year = $400 billion Saving 1 minute per flight would potentially save $4 Billion per year.

  8. Direct Costs • Rework costs • Airport/hangar charges • Loss of ticket revenue • Refreshments, & compensation (EC Reg N0 261/2004 ) • Diversion • Fuel • Labour overtime (airport staff, crew) • Hotel • Alternative flight • Loss of cargo revenue

  9. Indirect Costs • Further impact on scheduling • Damage to reputation • Loss of goodwill • Reduction in Flight Crew confidence • Adverse impact on individuals/Depts

  10. Delay Costs Timeline – Revised 2005 +720’ / Cancellation 0 +90’ +120’ +180’ +240’ +360’ Delay time STD Airport Parking / GPU Charges Pax Re-protection / Airport Staff OT / Engineering Costs (where applicable) • Discount 3 on future flight / flying miles • Hotel, meal(s), transport • Ramp • Catering – meal change • Cargo lost revenue • Refreshment 1 • Phone card • Catering - Dry ice* • Refreshment 2 • Discount1 on future flight / flying miles • Catering - replace perishables and dry ice* • Refreshment 3 • Discount2 on future flight / flying miles Cost Elements

  11. Delay Costs Build-up & Grand Total 2005 Fleet Cost Delay Time 03/04 (mins) Avg Cost per Min £4.9M £5.5M £1.3M £5.4M £17.0M 175,372 160,894 20,688 0 356,954 £42.48 £50.03 £62.84 - £47.67 A340 747-400 747-200 Cancellation TOTAL Average cost per cancellation – £73,972

  12. Maintenance errors • 60-80% of aviation accidents are attributed to human error- maintenance and inspection errors have contributed 9-23%. • Contributed to 15% of commercial jet accidents (Boeing 1995) • Maintenance problems are the 2nd greatest contributor to onboard fatalities, following CFIT (UK CAA, 1992)

  13. Maintenance errors • 20-30% of engine in-flight shutdowns and 50% of engine-related flight delays/cancellations are caused by maintenance error. (Boeing 1997) • 48,800 unairworthy aircraft are dispatched per year as a result of maintenance error (Marx 1998)

  14. Commercial Maintenance Incident Costs (c 2000) • Average cost of:- • Rework ?? • In-flight engine shutdown $500k • Flight cancellation $50k • Return to gate & $15k • Ground damage incident $70k ($1m) (£73k) ($30) ($140)

  15. Military Maintenance Incidents • FOD Following a series of engine ground runs …boroscopic investigation revealed that 3 of the Stage 4 compressor blades were damaged. At under 200 hrs, engine changed. • Ground Damage During night shift ……the minibus driver reversed into the aircraft damaging its port aileron. • ProceduresThe left hand undercarriage door …. remained locked when hydraulic power was applied on the ground twisting it. The door had been manually raised and locked… and not returned to the open position.

  16. Military Maintenance Incident Costs • Diversion • Fuel • Labour overtime (staff, crew) • Alternative tasking • Failed mission – loss of ground support? • Further impact on mission scheduling • Damage to reputation • Reduction in Flight Crew confidence • Adverse impact on individuals/Depts

  17. Excalibur Charter airline suffered a serious incident in 1993 In 1996 a series of maintenance problems resulted in delays, a rejected take-off and further departure delays. The delays and costs of rectification, further delays, costs of finding a replacement aircraft and adverse publicity put the airline into receivership!

  18. REALITY – The Cost of Error We do not know what it costs but Direct + indirect = $Ms + Damage to reputation Loss of goodwill + Damage to staff Loss of the business Loss of life

  19. we need to rethink how we are delivering the message?

  20. QUESTIONS?

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