Safety Costs
Regional operator relates how incidents impact airline operations
By John F. Infanger, Editorial Director
September 2001
Chuck Howell helps direct the operations of Corporate Airlines out of his headquarters office in Smyrna, TN. On this day, two incidents have occurred, one a bird strike at Burlington, IA, and the other a fuel truck incident at Norfolk, VA. With one, a contract service provider helps respond; with the other, the service provider is the cause. Safety is the overriding issue, and it has costs associated with it.
Corporate Airlines serves as a regional
carrier for TWA to eight cities in the Midwest and for Midway Airlines
to seven locations out of the Raleigh-Durham hub. At many locations, the
airline subcontracts for fueling and other passenger handling services.
Howell, 44, has a clear idea of what the aircraft servicing business is
all about, being part owner of an FBO, Corporate Flight Management, Inc.,
with locations at John Tune Airport in Nashville and in Smyrna.
"Our quality assurance person,"
explains Howell, "has to go out and sanction on-call maintenance
personnel at each location, as part of our Part 121 requirements. We provide
them the necessary hours of training for our particular aircraft (Jet-streams).
If we have an unscheduled maintenance event, then our maintenance guys
in Smyrna get on the phone and communicate with the person at the FBO
for a visual inspection, assuming it’s not potentially catastrophic."
The bird strike incident at Burlington resulted
in the visual inspection determining no damage, and the aircraft remained
in service.
At Norfolk, however, the refueler backed
into a Corporate Airlines wingtip, damaging the aileron and grounding
the aircraft. "We had to launch a crew with an aileron and wingtip
to make the aircraft airworthy again," explains Howell.
What is the cost of safety? In this incident,
according to Howell, there were no injuries involved, but one unsafe act
by a refueler resulted in thousands of dollars in costs for the FBO, air
carrier, and related insurance companies. It also cost the company’s
passengers in inconvenience and the airline in its reputation.
Says Howell, "At the airline, we’re
required to carry $200 million in insurance, and pay roughly $110,000
a year per aircraft. That’s close to $80,000 more than a guy who
is operating on a (Part 135) charter certificate; that’s the difference
between Part 121 and 135 exposure."
The refueling mishap led to the cancellation
of four legs for the airline, locating and sending along another flight
crew, and the necessary work to repair the plane.
"We figure that if we have to cancel
a flight it’s $1,000 in lost revenue for that leg," says Howell.
"In the meantime, we had to ferry our spare maintenance aircraft
from Smyrna with the extra crew, burning up time and fuel. From a financial
perspective, we’ll probably burn $10,000 for this incident, but the
customer relations hit is the worst part. John Q. Public doesn’t
understand that this was out of our control.
"We inconvenienced 50 to 60 people
this morning, and there will be one or two of those who will call to tell
us that they’ll never fly us again. Plus, it affects the carriers
we’re aligned with; everything in the 121 business is tracked by
performance, tracked on cancellations."
The service provider’s cost for the
incident, estimates Howell, will run some $50,000 to $60,000 to replace
the aircraft’s control surface, along with the cost to the refueler.
"In theory, they could hit the aircraft with that refueler and total
the darn airplane or burn it to the ground. Now, you’re talking about
a $3 million hull loss."
The employee driving the refueler will also
need recurrent training, says Howell. "He’ll be pulled off the
line and provided recurrent training, and we’ll document it. It will
be turned into their insurance carrier and they’ll want to know what’s
being done to prevent such an incident in the future," he says.
