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Flying has never been safer

People often say that the most dangerous part of flying is the drive to the airport. On the face of it, racing 100 tons of metal along a narrow runway at up to 300 kmh with over 300 people and 50 tons of flammable fuel on board doesn't sound terribly safe.

April 9, 2020

Dr. Patrick Kolb

Fund Manager, Credit Suisse Asset Management

Nor does landing a metal tube on a narrow tarmac strip in all weathers with just enough space to brake on. But as we all know, it works amazingly well in practice: It does not matter whether there is fog in London, air traffic congestion in New York, or searing heat in Dubai, civil aviation has developed an impressive list of procedures to deal with the day-to-day risks it faces. Safety always comes first in aviation.

2019 the third-safest year in history for civil aviation

"Hundreds killed in air disaster": Looking back, it feels as if the media used to be full of headlines like this every few weeks. Fortunately they have now become extremely rare and flying has been safer than ever before over the last decade. The Aviation Safety Network recorded 20 accidents with a total of 283 deaths in 2019, making it the third-safest year ever in terms of number of passengers killed.1 According to the UN aviation organization ICAO, airlines carried over 4.5 billion air passengers globally and thus 14 times as many as in 1970. As figure 1 shows, even though passenger numbers have grown exponentially, the number of deaths has fallen significantly. The German Aviation Association (BDL) calculates that there was one death per 265,000 starts in 1970. Today the equivalent figure is one death in 16 million starts. In other words, flying is around 61 times safer than it was in 1970.2 

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Figure 1: No. of deaths in civil aviation and growth in worldwide passenger numbers3
Source: BDL (2020): Wie sicher war Luftverkehr im Jahr 2019 [How safe was air travel in 2019]? (available in German only), URL: https://www.bdl.aero/de/publikation/wie-sicher-war-luftverkehr-im-jahr-2019/, accessed January 31, 2020.

The aviation industry reports and investigates every accident, near-miss, and irregularity. After determining the causes, appropriate conclusions are drawn. The belief that learning is a continuous and never-ending process is an important part of the safety culture in aviation. As conclusions are drawn after every incident, the result of this approach is that air travel becomes safer day by day.

"Flying is around 61 times safer than it was in 1970."

Alongside the redundancy and maintenance of the systems (more on these in the next section), the main drivers of greatly improved aviation safety include more reliable aircraft technology, developments in airport infrastructure and air traffic control, and the perfecting of luggage, passenger and freight controls.4 

Redundancy and system maintenance

Air safety is the connecting theme running through all areas of aircraft construction. The construction standards specify the requirements that need to be met down to the last detail. Redundancy is a key part of this. This means that all important components, from complex electronic systems and navigation instruments to individual nuts and bolts, are built at least in duplicate, in some cases even in triplicate. If a component fails, the remaining functioning systems need to be able to ensure that the aircraft can still fly. Each individual nut and bolt, however small, is specified precisely for its particular application and must be certified by the regulatory authorities. If a part fails or is damaged, it can only be replaced with the same identical part. A quick replacement from the local wholesaler is strictly prohibited and the thought would not even cross anyone's mind. 

Aircraft maintenance is highly complex and time-consuming. Every airline is required to submit a maintenance plan to the regulator based on the manufacturer's recommendations and their own usage patterns. If the plan is approved, it becomes the basis for scheduling all maintenance events. The component parts of a plane are monitored in two ways5:

  • Many aircraft parts have a fixed life. As detailed records are kept of when a component was installed, it is possible to see at any time how long it has been in use. When it reaches the end of its normal life, it is removed from the aircraft.6
  • The second part of the system is a very detailed check of aircraft parts that cannot be removed, or only with difficulty. These involve not just visual checks, but a whole range of technology, such as a borescope (camera built into a long tube), which can be used to look into inaccessible internal spaces. Tiny metal fatigue cracks can also be discovered using eddy current and ultrasound inspections. And if the aircraft is placed on stands, it is even possible to simulate a flight and the undercarriage can be raised and lowered.

New challenge: drones

The new challenges facing commercial aviation include unmanned craft. Drone technology has huge potential and many benefits, but in order to realize these benefits, drones need to be integrated into existing airspace safely. This was clearly demonstrated in London at the end of 2018, when Gatwick airport was brought to a standstill for hours as a result of the malicious flying of drones. Around 1,000 flights were cancelled or diverted for safety reasons and tens of thousands of passengers were stuck or forced to travel via other destinations7.

One of the biggest concerns is what happens if a drone malfunctions. In January 2019 a drone operated by Swiss Post short-circuited and plunged into Lake Zurich from a height of around 60 meters. A few months later another drone from the same operator plummeted into a forest in a Zurich suburb close to where children were playing outdoors. The emergency parachute designed to break the fall of the drone – which weighs around 10 kg – to protect pedestrians below snapped and floated uselessly into the trees, while no one heard the drone's alarm. The accident report uncovered serious failings and negligence with regard to safety issues. The cable connecting the parachute to the drone was damaged by a sharp edge on the drone. The jolt caused by the opening of the parachute then led the cable to snap. Nobody had noticed this design fault. So the drones had been whizzing above the heads of the people of Zurich for months with faulty safety features.8

Conclusion

Risks

  • Investor may lose part or all of the invested amount.
  • Focus on security and safety companies can lead to significant sector/regional exposures.
  • A slowdown of the world economy might impact the security and safety sector.
  • Liquidity risk (exposure to small caps).
  • Equity markets can be volatile, especially in the short term.
  • Due to the possibility of increased exposure to the emerging markets the fund may be affected by political and economic risks in these countries.
  • In cases of significant in- or outflows there might be a disparity in the value date among stocks from different countries, which can result in short-term currency exposure.

Source:

2019 was dominated by a single air disaster: the crash of an Ethiopian Airlines Boeing 737 Max in which all 157 passengers on board lost their lives. It was the second crash for this new Boeing model. Just a few months before, in October 2018, another Boeing 737 Max had crashed in Indonesia. In response the plane was grounded worldwide, which remains in force today. 

2 Source: German Aviation Association (2020): Luftfahrt aktuell: Fakten und Hintergründe zum deutschen Luftverkehr [Facts and background on the German aviation industry], 1/2020, p. 1 (available in German only).

3 Aircraft with a capacity of over 14 passengers, including kidnappings and acts of sabotage, data as of January 1, 2020.

4 Source: Neue Zürcher Zeitung (2018): Noch nie war das Fliegen so sicher wie 2017 [Flying has its safest year ever in 2017] (available in German only), in: NZZ, January 3, 2018.

5 Source: Airliners.de (2017): So sicher ist Fliegen [How safe is flying?] (available in German only), October 5, 2017, URL: https://www.airliners.de/so-fly-answers-Cockpit-18/37718, accessed January 31, 2020.

6 Aircraft are maintained and serviced using a system of rolling "letter checks" (also known as A, B, C and D checks). A checks are performed most frequently, typically every 250-650 flying hours. For a plane in normal usage, this means a detailed check every six to eight weeks, taking around 50 to 80 working hours. It focuses primarily on regular service checks, combined with engine and functional checks. B checks are carried out every three to four months and C checks about every two years. The D check is a thorough overhaul and takes place approximately every six to ten years. This is the longest, most detailed, and most expensive maintenance event: The aircraft is dismantled, all its parts are checked and the paint is taken off to inspect the aircraft hull for possible damage (Source: Focus (2009): Flugzeugwartung: Teure Checks für alte Kisten [Aircraft maintenance: expensive checks for old machines] (available in German only), July 1, 2009, URL: https://www.focus.de/reisen/flug/airline-sicherheit/tid-14743/flugzeugwartung-teure-checks-fuer-alte-kisten_aid_413162.html), accessed January 31, 2020.

7 Source: Neue Zürcher Zeitung (2018): Drohne legt Londoner Flughafen Gatwick lahm [Drone brings Gatwick airport to a standstill] (available in German only), in: NZZ, December 20, 2018.

8 Source: Neue Zürcher Zeitung (2019): Drohnenabsturz: Mit ihrer Fahrlässigkeit gefährdet die Post eine grosse Innovation [Drone crash: Swiss Post negligence endangers an important innovation] (available in German only), in: NZZ, June 28, 2019.

9 Source: Handelsblatt (2013): Welches Verkehrsmittel ist das sicherste [Which form of transport is the safest]? (available in German only), in: Handelsblatt, July 11, 2013.

10 Source: IATA (2019): IATA Releases 2018 Airline Safety Performance, February 21, 2019, URL: https://www.iata.org/en/pressroom/pr/2019-02-21-01/, accessed January 31, 2020.

 

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