Discussion Board 4
Research indicates that in the field or area of global commercial aviation, airlines are often exposed to damage caused by ground-related occurrences, and these are referred to as ground accidents or ramp rash. There are several factors of interests during ground accidents, and these include environmental conditions, aircraft state, ramp vehicle or equipment type, and aircraft damage location. The true value of ground accidents is estimated at US$4,000,000,000, and this implies that ground accidents are some of the key contributors to losses incurred by aviation companies. Recent reports by the Flight Safety Foundation (FSF) indicate that the value of ground accidents is high, and it is around US$ 10,000,000,000. Agreeably, with the mentioned values, ground accidents have adverse economic accidents, hence the great concern from organizations and stakeholders involved in the commercial aviation sector.
Ground accidents or ramp damage are often accompanied by direct costs, which are infrequently reported to insurance companies, and indirect costs, which often extend for several years. An example of direct cost is that used to repair a damaged part of an aircraft when it is hit by a catering truck or other jetway hits. On the other hand, indirect cost is that used to cover or cater for perspectives such as damage to airline’s image and others. Seemingly, indirect costs are harder to measure as compared to direct costs, and this leads to the conclusion that indirect costs are even greater or more than direct costs. According to Modern Accident Investigation and Analysis, it is estimated that the indirect costs of ground accidents range from twice to 200 times as much as the direct costs. From a conservative point of view, indirect costs average three times the direct costs.
Various components make up the direct and indirect costs incurred during ground accidents in the commercial aviation sector. On one hand, the components that make up indirect costs include but are not limited to lost direct revenue (ticket sales), aircraft diversions (replacements), flight cancellations, passenger food and lodging, replacement labor and overtime, damage to public image, management and supervision time, as well as accident or incident investigations. It is estimated that the mentioned components are valued at US$ 480 million, a significant figure that could otherwise be used in the development of the global commercial aviation sector. On the other hand, the components that make up direct costs include repair and maintenance as well as the purchase of equipment. It is estimated that the mentioned components of direct costs are valued at US$160 million.
Based on the above information, it is worthwhile for airlines and aviation companies to invest in ground operations safety. As seen above, lack of or minimum investment in ground operations safety leads to the occurrence of ground accidents or ramp damages that result in the incurrence of direct and indirect costs. As already mentioned, ground accidents are valued at US$ 6,000,000,000 to US$ 10,000,000,000. This is a significant figure, an implication that a continuous occurrence of ground accidents would result in great losses for aviation companies. However, with ground operations safety, more emphasis will be on environmental conditions, aircraft states, as well as ramp vehicles that are underlying factors of ground accidents. In the real sense, the eradication of ground accidents that jeopardize profitability for aviation companies depends primarily on investment in ground operations safety.