Flying has never been safer
People often say that the most dangerous part of flying is the drive to the airport. On the face of it, racing 100 tons of metal along a narrow runway at up to 300 kmh with over 300 people and 50 tons of flammable fuel on board doesn't sound terribly safe.
Nor does landing a metal tube on a narrow tarmac strip in all weathers with just enough space to brake on. But as we all know, it works amazingly well in practice: It does not matter whether there is fog in London, air traffic congestion in New York, or searing heat in Dubai, civil aviation has developed an impressive list of procedures to deal with the day-to-day risks it faces. Safety always comes first in aviation.
2019 the third-safest year in history for civil aviation
"Hundreds killed in air disaster": Looking back, it feels as if the media used to be full of headlines like this every few weeks. Fortunately they have now become extremely rare and flying has been safer than ever before over the last decade. The Aviation Safety Network recorded 20 accidents with a total of 283 deaths in 2019, making it the third-safest year ever in terms of number of passengers killed.1 According to the UN aviation organization ICAO, airlines carried over 4.5 billion air passengers globally and thus 14 times as many as in 1970. As figure 1 shows, even though passenger numbers have grown exponentially, the number of deaths has fallen significantly. The German Aviation Association (BDL) calculates that there was one death per 265,000 starts in 1970. Today the equivalent figure is one death in 16 million starts. In other words, flying is around 61 times safer than it was in 1970.2
The aviation industry reports and investigates every accident, near-miss, and irregularity. After determining the causes, appropriate conclusions are drawn. The belief that learning is a continuous and never-ending process is an important part of the safety culture in aviation. As conclusions are drawn after every incident, the result of this approach is that air travel becomes safer day by day.
Flying is around 61 times safer than it was in 1970.
Alongside the redundancy and maintenance of the systems (more on these in the next section), the main drivers of greatly improved aviation safety include more reliable aircraft technology, developments in airport infrastructure and air traffic control, and the perfecting of luggage, passenger and freight controls.4
Redundancy and system maintenance
Air safety is the connecting theme running through all areas of aircraft construction. The construction standards specify the requirements that need to be met down to the last detail. Redundancy is a key part of this. This means that all important components, from complex electronic systems and navigation instruments to individual nuts and bolts, are built at least in duplicate, in some cases even in triplicate. If a component fails, the remaining functioning systems need to be able to ensure that the aircraft can still fly. Each individual nut and bolt, however small, is specified precisely for its particular application and must be certified by the regulatory authorities. If a part fails or is damaged, it can only be replaced with the same identical part. A quick replacement from the local wholesaler is strictly prohibited and the thought would not even cross anyone's mind.
Aircraft maintenance is highly complex and time-consuming. Every airline is required to submit a maintenance plan to the regulator based on the manufacturer's recommendations and their own usage patterns. If the plan is approved, it becomes the basis for scheduling all maintenance events. The component parts of a plane are monitored in two ways5:
- Many aircraft parts have a fixed life. As detailed records are kept of when a component was installed, it is possible to see at any time how long it has been in use. When it reaches the end of its normal life, it is removed from the aircraft.6
- The second part of the system is a very detailed check of aircraft parts that cannot be removed, or only with difficulty. These involve not just visual checks, but a whole range of technology, such as a borescope (camera built into a long tube), which can be used to look into inaccessible internal spaces. Tiny metal fatigue cracks can also be discovered using eddy current and ultrasound inspections. And if the aircraft is placed on stands, it is even possible to simulate a flight and the undercarriage can be raised and lowered.
New challenge: drones
The new challenges facing commercial aviation include unmanned craft. Drone technology has huge potential and many benefits, but in order to realize these benefits, drones need to be integrated into existing airspace safely. This was clearly demonstrated in London at the end of 2018, when Gatwick airport was brought to a standstill for hours as a result of the malicious flying of drones. Around 1,000 flights were cancelled or diverted for safety reasons and tens of thousands of passengers were stuck or forced to travel via other destinations7.
One of the biggest concerns is what happens if a drone malfunctions. In January 2019 a drone operated by Swiss Post short-circuited and plunged into Lake Zurich from a height of around 60 meters. A few months later another drone from the same operator plummeted into a forest in a Zurich suburb close to where children were playing outdoors. The emergency parachute designed to break the fall of the drone – which weighs around 10 kg – to protect pedestrians below snapped and floated uselessly into the trees, while no one heard the drone's alarm. The accident report uncovered serious failings and negligence with regard to safety issues. The cable connecting the parachute to the drone was damaged by a sharp edge on the drone. The jolt caused by the opening of the parachute then led the cable to snap. Nobody had noticed this design fault. So the drones had been whizzing above the heads of the people of Zurich for months with faulty safety features.8
- Investor may lose part or all of the invested amount.
- Focus on security and safety companies can lead to significant sector/regional exposures.
- A slowdown of the world economy might impact the security and safety sector.
- Liquidity risk (exposure to small caps).
- Equity markets can be volatile, especially in the short term.
- Due to the possibility of increased exposure to the emerging markets the fund may be affected by political and economic risks in these countries.
- In cases of significant in- or outflows there might be a disparity in the value date among stocks from different countries, which can result in short-term currency exposure.