On local soil
It is an ordeal for a company, but if the company and its employees have a solid and well-exercised crisis communication plan that is regularly updated, it can emerge with its reputation intact, says Birns. The trajectory of public and investor opinion is often reflected in the airline’s share price following an accident – if it’s a listed company of course. “You’ll see a dip in the share price immediately following news of an accident and depending on how they handle it, you’ll see the perceived value of the share price of the company fluctuate,” he says. “The share price is all about perception.” Birns says he’s not aware of any existing insurance policies that would cover potential business loss resulting from an airline accident. “Companies are, however, able to get discounted insurance if they pass the International Aviation Safety Assessments (IASA) safety audit.” One of the prerequisites of the bi-yearly audit is that an airline has a comprehensive emergency plan in place including a crisis communication plan; a plan Lufthansa seems to firmly have in place. A quick perusal of their site shows almost bi-daily press releases and updates almost every couple of days. The airline offers flights and transport to and from Marseille near the crash site for next of kin of the deceased to pay their respects, and Thomas Winkelmann, Germanwings CEO, shares his condolences in a video on the site. Regarding remedial measures, Birns says that considerable political pressure is often applied to an airline in the event of a sensitive accident of this nature, as was evident with the introduction of the armoured doors in the cockpit that immediately followed 9/11. “Neither the manufacturer, airline nor pilot wanted the doors to be installed as it was going to create more problems than solutions, but the political opinion at the time was that the cockpit needs to be fortified to keep the bad guys out,” says Birns. The ‘ bad guys’ should, however, be stopped at airport security, he says. “When they’re on the plane it’s too late.” Comair, who operates under low-cost airline, Kulula, as well as British Airways, is in discussion with the South African Civil Aviation Authority (SACAA) and other regulators about possible changes to safety procedures at the airline following the Germanwings incident. In the interim, the airline has introduced preliminary safety precautions. “Pilots will minimise their requirement to leave the flight deck as far as possible. If a cockpit crewmember does indeed require leaving the cockpit, a cabin attendant will move into the cockpit for the duration of the cockpit crewmember’s absence,” a statement from the airline says. Comair’s operations director, captain Martin Lowe, says pilots that fly with Comair receive adequate training and rest as well as undergo extensive psychometric assessments before they are employed. “Our pilots are trained to recognise and deal with abnormal behaviour on the flight deck and are encouraged to report abnormal behaviour immediately,” he says. “Pilots are monitored by their fleet management team to ensure mental fitness as far as possible.” The company also has a programme in place to support pilots in managing their emotional wellbeing. “In partnership with the Independent Counselling and Advisory Services (ICAS) which provides a 24 hour a day, 365 days a year personal support, the company invests in an employee-wellbeing programme to ensure its pilots, as well as its other employees, have access to the assistance and support they might need in managing their overall well-being, including their psychological and emotional wellbeing,” says Lowe.
In its 2014 report, Allianz says that even though exposure or potential loss has increased by more than 50 per cent since 2000 due to an increase in flights, the improved safety environment is reflected in the premiums for aviation insurance, which were at their lowest prior to the increase in airplane losses in 2014. “Exposure’s increased from $576 billion in 2000 to $896 billion. This means that if exposure growth continues at the same rate, we can expect it to break through the $1 trillion barrier within the next five years and possibly even earlier,” the insurer says. Godden at Sanlam Aviation says the most recent crash will probably not have a massive impact on insurance premiums in the aviation market. “Despite some big claims of late there is still a great deal of insurance capacity available,” he says. Rintjes agrees and doesn’t foresee any impact on underwriting in the aviation industry. In the meantime, the safest and quickest way of travelling remains thousands of feet off the ground in a metal capsule hurtling along at hundreds of kilometres per hour. However unsafe that sounds, the odds of dying while riding a bicycle are 100 times greater than flying, odds that any betting man would back, especially if his life depended on it.