Managing Aviation Risk in Emerging Economies with the SGS Airline Risk Calculator
The demand for air travel in emerging economies is increasing. As a result, measuring airline risk within these regions is becoming more important.
For example, the recent economic development and growth within Myanmar has generated a sizable increase in the demand for air travel in the region. In 2010, only four airlines operated domestically within Myanmar, this number had grown to a total of ten operators by mid-2015.
Similarly, international airlines have also significantly increased their capacity into and out of Myanmar, with the number of international airlines operating to Myanmar growing from 13 airlines in early 2012 to 22 airlines in early 2015.
Ensuring airline safety
The surge in the number of airlines operating in emerging economies, such as Myanmar, can potentially introduce an excess of supply within the aviation industry that may place added financial pressure on domestic operators.
While safety is not necessarily compromised as a result of poor financial performance, it can influence an airline’s capacity to invest in enhanced and continued safety initiatives.
Increased pressure on airline infrastructure
This industry growth can also place increasing pressure on existing aviation infrastructure and in the absence of adequate planning, could surpass the industry’s ability to keep pace with the rate of growth. Infrastructure upgrades can become increasingly problematic. The timeframe needed to construct and implement upgrades to airport facilities and supporting infrastructure can often take several years.
For example, in 2012 and 2013, several domestic airports within Myanmar lacked a consistent electricity supply to support terminal and runway lighting and power requirements, indicating that these facilities required further investment in order to improve their operating capacity and standards.
Managing aviation risk
As a result of these factors, the need to develop and implement mechanisms to help organizations manage these risks has become increasingly critical. With the advent of new start-up airlines and an increasingly competitive and strained aviation environment, the conundrum for travel and safety managers is how do you determine the level of risk when planning to travel on a particular airline and which of these airlines should be avoided?
SGS’s online Airline Risk Calculator (ARC) enables organizations to create and maintain an aviation safety program that mitigates their exposure to aviation risk, and keeps employees as safe as possible when travelling by air. The ARC allows users to review and compare the relative risk ratings of over 300 airlines globally and helps organizations to meet their corporate responsibility and ensure employee safety.
SGS reviews and scores each airline taking into account the following factors:
- Accident and incident reports
- Fleet/aircraft type and age
- Regional factors
- Country security, regulations and air traffic control
- Alliances and affiliations
- Commercial/financial stability
For further information regarding SGS’s Airline Risk Calculator visit our website.
For aviation enquiries in general, visit the SGS Aviation page or contact:
t: +61 3 9347 5444
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