Aviation safety: Plane hull loss rate by region
| Region | Rate 2018 | Average annual rate 2013-2017 |
|---|---|---|
Africa | 0 | 1.06 |
North and East Africa | 0 | 0.72 |
NorthAmerica | 0.10 | 0.22 |
Latin America and the Caribbean | 0.76 | 0.51 |
Asia-Pacific | 0.32 | 0.37 |
Commonwealth of Independent States (CIS) | 1.19 | 1 |
Europe | 0 | 0.14 |
The aircraft loss rate remains quite high in Africa. That is why many African airliners are denied flight outside their national or regional territory. That is, for instance, the case of the companies of the Democratic Republic of Congo, the Congo Republic, Angola, Zimbabwe, Sierra Leone, Nigeria, Sudan, Liberia, Libya,…
Read also | Air disasters in 2018 [4]
Aviation safety: Number of claim reports according to the origin of incident
51 867 aviation claim reports were recorded between July 2013 and December 2018, totaling 16.3 billion USD in damages.
Plane collision and crashes account for 27% of the number of claims, followed by manufacturing andmaintenance defects with 19% of the overall compensation applications.
| Origin | Number of claims | Share |
|---|---|---|
Collision/crash | 14 005 | 27% |
Manufacture defect/maintenance | 9 855 | 19% |
Machine breakdown | 7 261 | 14% |
In-flight problem (including loss of luggages and delays) | 2 593 | 5% |
Property damage (including handling and storage) | 1 556 | 3% |
Others | 16 597 | 32% |
Total | 51 867 | 100% |
* from July 2013 to December 2018
Read also | Aviation accidents: 2018 toll [5]
Aviation safety: Financial loss toll according to the origin of the claims
Allianz survey shows that collisions and crashes account for 57% of aviation claims paid by insurers in the course of the 2013-2018 period. Manufacturing and maintenance defects account for just 12% of the amounts of claims for that period under study.
The figures do not take into account the anomalies spotted recently in the Boeing 737 MAX and incidentally on the 737 NG. These latter are likely to cost insurers nearly 20 billion USD.
| Origin | Amount (in millions USD) | Share |
|---|---|---|
Collision/crash | 9 291 | 57% |
Manufacture defect/maintenance | 1 956 | 12% |
Machine breakdown | 978 | 6% |
In-flight problem (including loss of luggages and delays) | 652 | 4% |
Property damage (including handling and storage) | 489 | 3% |
Others | 2 934 | 18% |
Total | 16 300 | 100% |
* from July 2013 to December 2018
The increase in the amounts of air claims is accounted for by:
Human error
Improved aviation safety is the result of technical progress and improved quality control in the manufacture and maintenance of aircrafts. Despite this progress, human error will always be there as a major cause behind accidents.
Pilot errors are generallyassociated with pilots conduct, their inadequate reactions to unexpected situations or even lack of training. It is estimated that 95% of aviation disasters are due to pilot errors.
Rising repair costs
It is true that over a long period of time, the number of air disasters is clearly declining. However, claim costs are now on a rising curve. The payments in damages and compensation made by insurers are getting higher and higher due to the rising repair cost and aircraft value.
The design complexity, along with that of manufacture and technology, contribute to theincrease in costs. The 2013 Boeing 787 Dreamliner accident, witnessing electricalproblems related to Lithium-ion batteries, required huge reparation and compliance expenses.
Collisions
Collisions account for major causes of claims, with most of them attributed to birds that are aspired by reactors or that crash into the aircraft windshield. Approximately 1000 compensation claims of this kind have been filed in the 2013-2018 period with damages amounting to 340 million USD. Theaverage cost of such a claim amounts to nearly360 000 USD, with some cases amounting to 16million USD.
The economic toll of bird impact is estimated at 400 million USD per year in the United States and at 1.2 billion USD elsewhere.
Land collisions are also considered as majoraviation risk. The AGCS report finds that 470 ground track errors had cost 883 million USD in the2013-2018 period.
Airport congestion
With the growing number of passengers and aircrafts, airports have become extremelysaturated. This airport congestion has triggered an increase in the number of ground collision. These incidents generally originate from plane impact with towing machines, luggage tractors, forklifts or with clean-up and supply vehicles.
Ground collisions are, according to this rationale, among the main insured risks, with the bill likely to amount to 1 billion USD for a major claim.
Cyber-attacks
Air transportation is not safe from hackers. Acyber-attack may trigger a failure of information system either on the ground or on board of planes. Such a threat may trigger:
- the outright disruption of airport operations,
- flight suspension,
- attack on operational softwares,
- material damage to aircrafts,…
According to the 2019 Allianz risk barometer,cyber-risks stand as the biggest threat to theaviation sector, topping the rankings of the concerns of air transportation professionals.
Aviation safety: Top 5 risks of the aviation insurance market in 2019
| Ranking | Risk | Share | |
|---|---|---|---|
| 2019 | 2018 | ||
| 1 | 2 | Cyber-risks | 43% |
| 2 | 1 | Business interruption | 37% |
| 3 | 4 | Legislative and regulatory changes | 36% |
| 4 | 3 | Marketevolution | 33% |
| 5 | - | Natural catastrophes | 19% |
According to Allianz 2019 risk barometer, cyber risks should be at the top of the concerns of the aviationinsurance market. There is no doubt that the setbacks of the Boeing 737 MAX will impact this order in the years to come.