By: James Lara
Gray Stone Advisors
We’ve all heard the buzz words and read the banners that proclaim, “Safety Pays.” Have you really thought about the economic benefits of safety? How true are the slogans?
Your colleagues in Finance have another buzz phrase. “A dollar saved is never seen!” From a bookkeeping perspective, that’s true. There’s no bookkeeping account for an expense not incurred. How can you, as an Aviation Professional, measure the economic advantage of safer operations?
More than in almost any other career, an aviation professional’s commitment to safety is the basic foundation of his or her business. Your ability to obtain and maintain your professional livelihood is directly linked to your record of safe, accident and incident free work. Safety is the cornerstone of your reputation. Without a personal commitment to safe operations, your income will be negatively impacted. It’s that simple.
Is there a positive financial impact upon a company that embraces Best Practices in Business Aviation Safety? Absolutely. Two of the most valuable properties of any organization are its reputation and image. Your Company’s financial statement lists these assets collectively as “Goodwill.” Conservative and safe Business Aviation operations enhance that image and strengthen your firm’s reputation in its industry. On the other hand, if your aviation operations are suspected to be “reckless” or “on the edge,” great harm can be done to your firm’s Goodwill, possibly impacting its financial viability. But how can you help?
Lower Direct Operating Costs
Every aircraft, regardless of type, will cost less to operate and maintain when flown in a responsible and safe manner. Stabilized approaches, with touchdowns on speed, followed by conservative braking and using more of the available runway will lead to smoother aircraft handling and much longer brake and tire life. When this practice results in 30% more landings per tire, your company saves real money. This same concept holds true for virtually every aircraft system - pow- er settings (fuel burns), engine restoration costs, flight control systems repairs, etc. If you operate conservatively it will cost you or your Company less to maintain your aircraft. And, from an Insurance perspective, conservative operations generally result in less crumpled metal!
Reduced Maintenance Error and Risk
Being in a hurry or shortcutting Standard Operating Procedures can get you into serious trouble quickly. Hustling through the hanger, slipping on the wet floor, impaling yourself on a rigid aircraft static wick is an example of an incident that can cause significant pain – and massive negative economic impact. And don’t think you’re exempt. These injury accidents happen every day and can happen to you.
Have you ever rushed through a maintenance procedure, bowing to the pressure of an unexpected glitch or a late arriving replacement part? If you are feeling the pressure of the schedule, distracted, preoccupied; these are danger signals. You are at greater risk for error. Slow down and do it right the first time. You will be money and time ahead.
Improperly deferred maintenance commonly results from rationalization. If you ignore a problem or discrepancy, you are spending money unnecessarily and taking imprudent risks. Almost nothing in an aircraft is completely independent. Although “fail-safe architecture” is supposed to be the norm - i.e., the failure of one item should not destroy another component - it doesn’t always work that way. When you note a mechanical or system problem, fix it promptly. There is nothing, repeat - NOTHING - more important than safe and conservative aviation operations.
Lower insurance Costs
Aviation professionals who embrace Best Practices will be less likely to have an accident or incident. That will help keep insurance premiums under control. If you proactively manage risk through an implemented Safety Management System, SOPs (codified in Manual Form) or a well developed Quality Management System, you should make certain that your broker and underwriter see and hear about it. These safety initiatives indicate a positive approach to risk management and that approach should be reflected in your premium.
The case for “The Economics of Safety” is clear. Safety pays real cash dividends. The opposite - unsafe operations - requires you to continually “Bet the Farm” and dramatically increases your chances of loss, including the ultimate loss. The next time you see a “Safety Pays” banner, give it serious thought. “Safety” is a sound financial investment, paying tangible dividends to you and your Company every single day!
