Wednesday, August 17, 2005

Airline accident rates in times of high fuel costs

With the recent crashes in Greece and Venezuela, I wonder whether a correlation between high fuel or other costs and accident rates among smaller carriers exists. At the least, I expect that mechanical failure as the cause of accidents would go up.

When airlines struggle to control costs, managers at all levels are pressured to do their bit. This can mean decisions to charge passengers for meals and drinks, to strictly control baggage weight, and ensure flights are full by overbooking more than usual.

Unfortunately, it may also lead to mechanics pencil-whipping the occasional repair or check-up. The Greek and Venezuela tragedies were due to mechanical malfunctions of some sort, and I expect more accidents among smaller, overseas airlines as fuel costs bite more.

I did some quick goggling but found no up to date statistics for accident rates/causes for 2004-2005, when high fuel costs became the norm. Common sense certainly implies a correlation, at least in smaller airlines less able to contract for reasonable long term fuel prices. Charter airlines would also seem to be at risk as they are often small enterprises leasing a few planes.

On the other hand, perennially cash-strapped Delta has a fine safety record. But this is likely due to stringent oversight in the US. Moreover, large carriers are better able to offset for fuel increases by locking in long term deals.