When it comes to aviation safety, don’t just wing it: best practices for staying safe and choosing an insurance partner

When it comes to aviation safety, don’t just wing it: best practices for staying safe and choosing an insurance partner

By Gregg Strange, head of major risk; Lamont Rosemond, general aviation & technical underwriting; and Peter Pogue, head of aviation claims

Talent shortages are affecting industries across the US, and the aviation field is no exception. Add to that the complexities that come with navigating a heavily regulated environment and the risks and vulnerabilities are often compounded.

Keeping the skies safe is paramount, and that starts with knowing the risks and actively addressing them. Partnering with an insurer that understands the industry’s strengths and weaknesses can be a tremendous value and make all the difference when the rubber leaves the runway.

U.S. airlines transported an estimated 658 million passengers in 2021, according to the Bureau of Transportation Statistics. That number increased 30% year-over-year in 2022 as an estimated 853 million passengers soared through the bright blue skies.

Experts believe those numbers will only continue to climb post-pandemic, which is why reviewing and bolstering aviation safety practices is more important than ever.

While losses in aviation are infrequent compared to other forms of transport, when a crisis does occur, the severity of the loss and the negative publicity it attracts can be extremely damaging to a company’s business and reputation. One effective way to avoid losses of any kind is implementing safety best practices, which can be augmented depending on which insurance partner an aviation company works with.

Risk Considerations: From Cockpit to Crew & Passengers, Too

When it comes to managing the most current and pressing risks within aviation, the impact of the COVID-19 pandemic — and the importance of experienced talent across all segments of the industry — cannot be underestimated.

A tenured, experienced crew goes a long way toward maintaining and improving safety, but the current aviation workforce is experiencing a shift.

With the pandemic came a reduction in overall flight activity, and many pilots took time to reevaluate their work-life balance. As a result, the supply of pilots was challenged by a wave of early retirements and a difficult value proposition for potential candidates.

While it was widely known that a talent shortage due to an aging workforce was on the horizon, the aviation industry wasn’t prepared for the accelerated nature of the pilot exodus caused by the pandemic, or the extent to which it impacted succession planning. It’s a predicament several industries are facing post-pandemic, but for aviation it means a shortage of experienced pilots to meet the increased hiring demand as air travel returns to (and in some cases exceeds) pre pandemic levels.

This talent shortage spans multiple segments of the aviation industry. Without adequate staffing within air traffic control towers, as another example, there’s a potential risk of an uptick in runway incursions involving sitting aircraft or aircraft departing at the last second.

It’s a problem that’s also being discussed on the maintenance side of aviation. Within large aviation MRO (maintenance, repair and overhead), the turnover in experienced staff is concerning. Maintenance facilities are having a very tough time attracting and retaining talent.

A shortage of maintenance workers can lead to flight delays or even faulty aircraft. This can impact not only safety but profitability, disrupting schedules and potentially leading to an increase in the number of disgruntled passengers, which produces another risk area all its own.

During COVID, there was an uptick in passenger disruption on flights. At the height of the pandemic, tension naturally rose due to the stress and fear of the virus. As time has passed and COVID has become more manageable, there’s been a slight decrease in passenger disruption, but it isn’t completely eradicated. With this risk, the most important thing to consider is flight crew safety and training.

Best Practices: The Ticket to Safety

While risks will always exist, aviation remains a highly regulated industry. When it comes to reporting incidents, there are several channels in place to act as safeguards.

If you look at how big the industry is and how many aircraft are in the sky, even right now, there are few true catastrophic incidents reported on a regular basis because the airline industry itself must operate at a higher standard. There’s a level of oversight and attention at every step of getting a plane off the ground at point A and landing it safely at point B.

The amount of self-reporting that happens in the airline industry — whether from air traffic controllers, flight crew or administrative personnel is abundant and when mistakes are brought up, the root cause analysis is a pretty extensive process between both the insurance carrier and the FAA.

Even better, there are many best practices and guidelines in place that will continue to make it that much safer.

Not only is the aviation industry continuing to comply with a wide range of standards and regulations to ensure the safety of passengers and crew, but it’s also creating strategic solutions to help overcome the talent crisis. Airlines have done a respectable job establishing feeder programs, which entice more pilots into the profession and create a talent pool to help fill their pipelines for the future.

In anticipation of the talent shortage, many airlines were proactive in establishing feeder programs, where they’ve been able to create pipelines and groom talent for success in their respective cultures.

Another factor in attracting and retaining good talent comes down to compensation and benefits. General aviation operators, many of whom have lost top talent to the airlines, have tried offering better compensation and benefits, as well as more reasonable schedules, to combat the trend. This can be challenging though, as airlines can often offer more stability in pilot schedules, as well as more competitive compensation.

When it comes to hiring, feeder programs can be helpful but aren’t a one-size-fits-all solution to talent management across every division of aviation. For example, it may not be as impactful for part 91 or part 135 operators who have unique missions that require a specific skill set. But those operators are also making headway to establish their pipelines for the future.

It’s also advisable to start developing a robust strategy for succession planning as older, more experienced captains retire.

Training air traffic controllers is another best practice. There are certified training programs offered by universities to help educate soon-to-be air traffic controllers, as well as FAA training programs, which create a pipeline of preparedness.

Turbulence Happens, The Right Insurer Can Help

Having the deep knowledge and expertise to assess and manage the risks associated with the aviation industry is just the start of strengthening safety efforts. Collaboration among the risk management team is equally vital. To address aviation’s biggest risks and implement safety best practices, it’s important to partner with an insurer who not only understands the unique needs of aviation customers but also values a strong partnership between underwriting and claims.

Communication and collaboration are key. QBE’s underwriting and claims teams leverage their collective backgrounds and expertise to share best practices. Our strength lies in our teamwork, ensuring deep risk understanding. This collaboration is crucial for managing aviation insurance’s complexities, where the balance between risk and reward is delicate. QBE focuses on sustainability and strategic risk mitigation, addressing the challenges of high-severity events and stringent regulatory demands, demonstrating a practical and proactive approach to aviation insurance. From there, we can inform our insureds and trading partners on what’s happening in aviation, what’s working and how they can improve their overall operations. 

In today’s uncertain and challenging market, we recognize the importance of having strong technical capabilities and using an innovative approach when assessing risk. We blend cutting-edge technology and collaboration to tackle the industry’s unique challenges. By integrating advanced actuarial techniques with the latest in data analytics and AI, QBE manages risks in both general aviation and major risk segments effectively. This approach improves risk assessment accuracy but also redefines efficiency in the industry, making QBE's strategy a pillar of technical and actuarial excellence. Moreover, aviation customers are at the center of what the team does, and therefore maintaining strong relationships remains a top priority for our underwriters and claims experts alike.

Expediency in identification and rigorous post-accident breakdown, including communication with the NTSB (National Transportation Safety Board) and the FAA, are what make QBE a great partner in addressing aviation risk. Additionally, our claims team has legal experience on its side, which is beneficial to clients should an incident land in today’s heightened litigious environment.

To learn more, visit: https://www.qbe.com/us/aviation