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Study Finds Link Between Airlines' Profitability And Accident Rates
Airlines' accident risk is highest when they are performing very close to their financial targets, according to a study by a professor in BYU’s Marriott School of Management. “The accident risk went down as they got further away from their financial goals in either direction,” said Peter Madsen, assistant professor of organizational leadership and strategy. “Speaking generally, airlines are safest when their financial performance is either much better or must worse than it has been in the… (www.physorg.com) Mehr...Sort type: [Top] [Newest]
It sounds reasonable although there isn't much to change about the accedents ocouring when they are nearest to their finacial goals.
Without seeing the raw data that was used to conclude that financial performance affects safety, it is hard to imagine how an airline that was performing extremely well financially would have the same deviation from "the norm" as would an airline experiencing severe financial problems. If that is the case that would tend to suggest that the airlines didn't change their operating standards based on financial performance.
The number or accidents is so small that one accident that happened to occur at a particular time could greatly skew the reports. In a good portion of the accidents weather is a factor, and I don't think that is caused by financial performance, or that pilots take a different approach to weather based on the financial performance of the company.The people doing the maintenance on the planes have no financial incentive to shirk their duties to help meet financial targets, in fact they are probably not aware of the finacials until they read them in the newspapers after the fact.
It could be that the results of this study mirror the fact that the stock market happens to perform differently in years when the super bowl is won by the national conference than when it is won by the American conference.Simply a coincidence
The number or accidents is so small that one accident that happened to occur at a particular time could greatly skew the reports. In a good portion of the accidents weather is a factor, and I don't think that is caused by financial performance, or that pilots take a different approach to weather based on the financial performance of the company.The people doing the maintenance on the planes have no financial incentive to shirk their duties to help meet financial targets, in fact they are probably not aware of the finacials until they read them in the newspapers after the fact.
It could be that the results of this study mirror the fact that the stock market happens to perform differently in years when the super bowl is won by the national conference than when it is won by the American conference.Simply a coincidence
Correlation is not causation. I agree with Larry on the point that number of accidents is very small which can swing the correlation greatly. I would also like to think that airlines meeting targets are doing more the "right" way than the "wrong" way compared to their peers.. Maybe just fanciful thinking.
Failing to meet the financial performance could reasonable lead to poor performance in safety as well as other metrics. But the most intriguing result is why an airline that was exceeding it's performance goals might have a higher "accident risk". The full article will be an interesting read when it comes out in a forthcoming issue of "The Journal of Management".
What is meant by "accident risk"? Accidents? Derived from the number and size of FAA fines? Some other metric?
The phenomenal safety record of scheduled airline travel provides scant opportunities for improvement, but one should always look for the lowest of the 'high hanging fruit'.
What is meant by "accident risk"? Accidents? Derived from the number and size of FAA fines? Some other metric?
The phenomenal safety record of scheduled airline travel provides scant opportunities for improvement, but one should always look for the lowest of the 'high hanging fruit'.
For a possible clue, think of two things at once:
Air France, and,
Pilot training (hint: woefully inadequate)
Air France, and,
Pilot training (hint: woefully inadequate)
There is too much pressure on airlines today. Too many airlines are chasing after a limited number of passengers and thus offer "low" fares.
With low fares that means that revenue might be impacted. How much money will be there be for regular maintenance? Pilot Training?
There is too much pressure to return a plane to service. It is very easy to rush and thus to overlook things.
With low fares that means that revenue might be impacted. How much money will be there be for regular maintenance? Pilot Training?
There is too much pressure to return a plane to service. It is very easy to rush and thus to overlook things.