Canadian Underwriter

Risk levels change when pilots rely on automated systems

June 30, 2015   by Daniel Sellers

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When Andreas Lubitz sent a Germanwings Airbus smashing into the French Alps on March 24, killing all 150 people on board, we learned far too much—and yet not enough. Audio from the salvaged black box revealed that passengers screamed for five minutes as they went helplessly to their deaths. We discovered the other pilot pounded on the cockpit door in vain, pleading to be let in. The authorities tried to figure out what made Lubitz do what he did and found no answers, but they did learn he had rehearsed his descent.

Much news coverage focused on cockpit door locks and Lubitz’s mental history. Only two days after the disaster, Transportation Minister Lisa Raitt announced that Canadian airlines would be required to keep a minimum of two crew members in the cockpit while flying, effective immediately. Many European carriers rushed to implement similar policies of their own.

But it’s extremely uncommon for pilots to intentionally down commercial flights. In their preliminary report on the crash, French investigators wrote that a search of their own data, plus that of the UN’s International Civil Aviation Organization, revealed just six other such cases since 1980.

In fact, honest cockpit mistakes related to manual handling and flight controls have contributed to nearly 100 crashes in the last five years alone. Meanwhile, commercial flying has never been more statistically reliable. The International Civil Aviation Organization’s most recent numbers show 2013 to have been the safest year on record, with just 2.8 accidents per million departures, down from 4.2 per million two years prior. But in many ways, it’s just as vulnerable as ever to human error.

In part, this is simply because we fly more than we ever used to. Global airline passengers today travel roughly 100 billion kilometres farther per month than they did in just 2010, and Boeing reported earlier this year that its backlog of orders for commercial aircraft had swelled to nearly 5,800. This volume creates more opportunities for mistakes to be made during a flight, even as it stretches thin the available supply of competent, experienced aviators. In February of this year, an information paper presented to a safety conference by the International Air Transport Association warned of “unavailability of instructors” and “lower entrylevel knowledge,” among other things. “We will see an increase of less experienced crew pairings,” the paper cautioned. “This could have a negative impact on safety during operation, in particular when non-standard situations occur.”

Other trade groups are similarly concerned. “Worldwide, there is going to be—in the next 20 years—a huge shortage of pilots,” says Air Transport Association of Canada president and CEO John McKenna.

Compounding the increasing demand, he says, is that a disproportionate number of pilots are nearing retirement age. Recruiting young people to learn to fly is difficult because of the lengthy and expensive accreditation process involved; also other industries can offer higher salaries and better working conditions.

There’s competition within aviation, too. “You speak to somebody like Air Canada, they’ll say, ‘No, there’s no pilot shortage,’” McKenna explains. “They basically raid all the smaller companies. It’s been a sore point in our industry for a long time.”

Even so, the small carriers are not yet struggling to staff their fleets. “We’ve had no issues recruiting,” says Alasdair Martin, president of Air Tindi, which provides a range of scheduled flights, charters and medevac services from its bases in Yellowknife and Cambridge Bay, Nunavut. At Central Mountain Air, a regional carrier operating in B.C. and Alberta, president Doug McCrea reports “lots of turnover, so lots of additional training, but we haven’t seen the actual shortage materialize yet.” But new hires at both airlines are saddled with training bonds to protect the time and money invested in them; those who quit during the bond period are expected to repay the company for a portion of their training.

Insuring aviation properly requires a familiarity with these broad industry issues and a high degree of specific technical knowledge. “When you know the risk,” says Paul Tuhy, who is both a pilot and the chief underwriting officer of global aerospace at XL Catlin, “there’s a keen sense of: I want this risk, and if bad luck happens and the plane has a problem and it crashes, I still feel comfortable that I would write the risk again tomorrow.”

It’s all autopilot

When it comes to commercial flying, that risk is carved up and divided among many companies, because of the substantial liability coverage that airlines need to carry and the enormous hull values of their planes. Insurers share the premiums but also the responsibility for settling what can sometimes be astronomical claims. Tuhy says it often takes fifteen underwriters or more to insure a single air carrier.

Although aware of the increasing pilot deficit, Tuhy doesn’t think it’s cause for particular alarm. “There is a shortage, and as with anything else, there’s a lot of people in flight schools, and then there’ll be a glut,” he says. “It eventually will even itself out.”

There is precedent for this. In late 2007, Giovanni Bisignani—then IATA’s director general and CEO—told the U.S. Federal Aviation Administration’s International Safety Forum that 17,000 new pilots would be needed annually to keep up with the number of planes being manufactured at the time. “Already we are seeing the first signs of strain with two worrying tendencies: lower standards for training and qualifications; and human factors cropping up more in accidents.”

But the year that followed brought a global recession. “No more shortage of pilots,” McKenna says. “Planes were being parked left and right because the economy was down.” And the same forces that prevented a shortage seven years ago might have helped create the one being felt now. “Airlines were going bankrupt,” says McKenna. “A lot of people who were looking at our industry said, ‘I’m not going there.’”

If a career in aviation has become less attractive over the years, Daniel Slunder thinks he knows another reason why. “It’s not as it used to be when I was young and ambitious.” Slunder is the national chair of the Canadian Federal Pilots Association, which represents a wide variety of government aviation inspectors and evaluators. “The glamour of the job certainly isn’t there anymore.”

What’s expected of pilots has changed, too; in-flight hours are often spent simply monitoring the airplane’s automated systems. “There are some instances where they will deactivate it,” says Jeremy Mammen, director of aviation safety at Embry-Riddle Aeronautical University in Daytona Beach, Fla., “but for the majority of these flights that are going up with air carriers, it’s all autopilot.”

Mammen says enrolment at Embry- Riddle is high and that graduates are just as well trained as ever in how to fly both with and without automation. But mental rust can accumulate during a career spent working for an airline. And although the modern reliance on autopilot has made accidents far less common, it may also be eroding pilots’ aeronautical fundamentals as the nature of their job changes. “When you lack proficiency hand-flying,” says Mammen, “whenever you have to go back to knowing what to do and how to react and how the airplane’s going to behave, there’s the possibility for something catastrophic happening.”

Slunder, by contrast, estimates he’s hand-flown 4,000 hours during his career. “I spent five years teaching on Tutor jets— what the Snowbirds fly. And then I flew an airplane, twin engine, over the ocean, as low as 100 feet for six-and-a-half hours at a time. And none of those had autopilot. But if I didn’t have that experience, and I didn’t have all the confidence in the world, I would find it suddenly difficult to keep control of an airplane without the autopilot and with an emergency at the same time.” The autopilot relies on information from other systems in order to function properly and will shut off when these are lost—as in certain times of crisis. “Everything else is gone,” says Slunder, “and you’re left holding the bag.”

To confirm that their employees will act appropriately in those kinds of unusual situations, many Canadian airlines employ Approved Check Pilots, whose job is to conduct regular evaluations known as Pilot Proficiency Checks. Government inspectors once did most of this, but about ten years ago, then-Transport Canada commercial and business aviation director Michel Gaudreau decided to devolve the work onto the airlines themselves.

McKenna, the trade association head, insists this does not create a conflict of interest. During check rides, he says, check pilots are expected to represent the ministry, not the company. But this reduction of direct government oversight is consistent with a new dominant philosophy in aviation safety: SMS stands for safety management system, and it’s an increasingly prevalent process designed to instill a culture of self-assessment within an airline.

“The idea is to have everyone involved in the company as a safety inspector,” says McKenna. “Everybody is obligated to report things that they see that aren’t right. It could be some little technical thing that could lead to a bigger one. It could be just a procedure that someone doesn’t quite get.”

At an air carrier that has it fully implemented, SMS covers every aspect of operations, from training employees to maintaining equipment. Periodic inspections by the ministry are meant to ensure the system is working properly. In Canada, airlines operating planes that seat 20 or more passengers are required to have SMS in place. Many smaller carriers do so voluntarily.

But the system also has its detractors. “This new approach is not designed to ensure operators are in compliance with safety requirements; it’s about ensuring that there is a functioning SMS in place,” Slunder wrote in a 2009 Ottawa Citizen op-ed. “Transport Canada inspectors have become desk-bound, relying on the paperwork assurances of the airlines that everything is okay instead of inspecting airplanes and crews.”

This sentiment is echoed by many of Slunder’s peers. An online survey commissioned by the CFPA and carried out by Abacus Data in April of 2014 suggests that nine in 10 aviation inspectors believe SMS “prevents the correction of safety problems in a timely fashion” and twothirds think it will “increase the chances of a major aviation accident or incident.”

McKenna sees it differently, arguing SMS amounts to a new way for inspectors to gauge an airline’s commitment to safety. “Rather than checking every little nut and bolt—although they can still do that—they check to see if the process was respected. If they’ve gone through your SMS system, and they feel comfortable that it’s well structured and people have adopted the safety culture, it makes their oversight job a lot easier.”

McKenna says that ATAC is now working with the government to develop a model of SMS that can be applied to smaller carriers, which sometimes struggle with the expenses involved. And he’d like to see airlines that have already implemented the system better rewarded in their insurance premiums.

“Insurers will win in the long run,” he says. “There’ll be fewer incidents, because of the safety culture within the company.” Airlines, like underwriters, have experience assessing risk. Those still thinking about adopting SMS have a decision to make. “It’s very costly to set up, and it’s costly to maintain,” says McKenna, “but not as costly as the consequences of not having one.”

Copyright 2015 Rogers Publishing Ltd. This article first appeared in the June / July 2015 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.