2016 was yet another good year for air safety.

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2 216 was yet another good year for air safety. However, again, insurers did not have a good year with incurred all-risk losses exceeding written premiums for the fourth year running. Insurance All-Risk 1 We currently estimate that the cost of incurred airline hull and legal liability losses for 216 is about $1,4 million. This is some $3 million less than the estimated cost of claims in 215 and $5 million less than in 214. Nevertheless, the cost of claims in 216 easily exceeds the estimated $1,2 million of premiums written during the calendar year 2 and is the fourth year running where claims have exceeded premiums. Written premium in 216 was lower than in any year since However, despite the continued erosion of written premiums, some in the market claim to have seen some small sign of the market beginning to harden as the year drew to a close, we shall see. Premiums obviously cannot continue to fall indefinitely but, unless there is a change in external conditions or some other shock so that there is a withdrawal of capacity from aviation as an insurance class, the current situation might be considered the new normal. Airline All-Risk Hull & Liability Claims Costs and Written Premium (US$ Millions) Year P Written Premium 1,575 1,66 1,96 2,1 2,5 1,825 1,6 1,65 1,3 1,2 Hull Cost , Liability Cost Minor Liability Total Cost 1,976 1,597 2,263 2,123 1,342 1,19 1,637 1,935 1,715 1,47 1 At the time of writing it is still not known whether the disappearance of the Malaysia Boeing 777, MH37, in March 214 or the crash of the Egyptair A32, MS84, in 216 will be confirmed as war or all-risk losses. Currently, for the sake of these statistics, we are treating the MH37 loss as a deliberate act of violence but the Egyptair loss as an accident. However, we understand that the hull claim in both cases is currently being met, 5/5, by the all-risk and war-risk markets and this is reflected in our cost of hull claims numbers. 2 The amount of premium written in an underwriting year and the cost of claims incurred in a calendar year are not directly comparable since, nowadays, the inception of the majority of airline policies occurs during the last quarter of the year with a large number being renewing during December. Therefore most of the premiums written in 216 will not be earned until 217 and, similarly, most of the 216 losses will have fallen on 215 policies. Flightglobal.com/Reports 2

3 6 5 Airline Hull & Liability Claims Cost and Premium ($m) (Excludes Hull War & Excess TP War) The amount of premium written in an 'underwriting year' and the cost of claims incurred in a calendar year are not directly comparable. 4 US$ Millions Claims Cost Written Premium Accidents (Airline Operations) The year 216, was one of the safest ever, with a global fatal accident rate of one per 3.3 million flights and a revenue passenger fatality rate of one per 17.2 million passengers carried and continues the trend in improving airline safety. The fatal accident rate for 215, by far the safest year ever, was one per 4.76 million flights and for 214 one per 2.43 million. The average for the last five years is now about one per 3. million flights. On this basis, airline safety is almost three times better than ten years ago. Although some years have been better than others, the fatal accident rate has been improving for many years. At the start of the 199s, the rate was about one per.6 or.7 million flights. Therefore, based on this metric, airline operations are now some four or five times safer than they were 2 years ago. Flightglobal.com/Reports 3

4 Flights (Millions) per Fatal Accident 6. Jet and turboprop aircraft of more than 14 seats or cargo equivalent 5. Flights (Millions) Flights (Millions) per Fatal Accident 5 per. Mov. Avg. (Flights (Millions) per Fatal Accident) The number of fatal accidents increased in 216, going from 8 in 215 to 12 last year, there were 15 fatal accidents in 214. Five of these accidents happened on revenue passenger flights. The average annual number of fatal accidents for the current decade is The annual average for the period 2-29 was 27.4 while the 199s average was The annual averages for the 198s and 197s were 33.1 and 4. respectively. (jet and turboprop aircraft) Year (jet and turboprop aircraft) Decade s Period Flightglobal.com/Reports 4

5 5 45 Airline Jet and turboprop aircraft of more than 14 seats or cargo equivalent (Excl. Violence) (Incl. Violence) 5 per. Mov. Avg. ( (Excl. Violence)) 5 per. Mov. Avg. ( (Incl. Violence)) The number of passenger and crew fatalities last year, at 296, was an increase on 215 when only 158 people were killed but, nevertheless, it still continues the trend to fewer airline fatalities. On average, over the last five years, there have been some 3 fatalities per year compared to perhaps 8 a year ten years ago and maybe 1,2 per year 2 years ago. However, with generally so few fatalities in airline operations nowadays, one bad accident can make all the difference to the result. The annual average number of fatalities for the period 2-29 was 793 and that for the 199s was 1,135. The annual average for the current decade (21-216) is 42. Passenger & Crew Fatalities (jet and turboprop aircraft) Year Fatalities Passenger & Crew Fatalities (jet and turboprop aircraft) Decade s Period To put these improvements into perspective, if the current decade s annual average is maintained, some 4,4 fewer passengers and crew will be killed in airline accidents during the period than in the previous decade and over 7,3 fewer than during the 199s. Flightglobal.com/Reports 5

6 Airline Passenger and Crew Fatalities 2 18 Jet and turboprop aircraft of more than 14 seats or cargo equivalent Fatalities Fatalities 5 per. Mov. Avg. (Fatalities) On a more restrictive basis, the five fatal accidents involving passenger deaths on revenue passenger flights in 216, again, after 215, is the lowest seen in any year since This is also less than the previous lowest years, 214 and 213, which were, in turn, each the best years ever. However there were 18 such accidents in 211 and 19 in 21 so the annual average so far for this decade is still 1., not such a marked improvement on the previous 1 years (2-29) when the annual average was The annual average number of fatal accidents involving revenue passengers for the 199s was to Passengers (jet and turboprop aircraft) Year to Passengers (Jet and turboprop aircraft) Decade s Period Flightglobal.com/Reports 6

7 3 to Passengers Jet and turboprop aircraft of more than 14 seats to Passengers Although there were relatively few fatal accidents in 216 there were still 244 revenue passenger fatalities during the year (there were 96 passenger fatalities in 215). Nevertheless, this was still one of the lowest number killed in any year since There were 369 passenger fatalities in 214 and 135 in 213. The annual average number of passenger fatalities so far this decade is now 333.7, less than half the average for the previous decade, which was 68.4, and very considerably less than the average for the 199s, which was Passenger Fatalities on Revenue Passenger Flights (jet and turboprop aircraft) Year Fatalities Passenger Fatalities on Revenue Passenger Flights (jet and turboprop aircraft) Decade s Period Flightglobal.com/Reports 7

8 2 18 Passenger Fatalities on Revenue Passenger Flights Jet and turboprop aircraft of more than 14 seats 16 Passenger Fatalities Rev. Pass. Fatalities (Excl. Violence) Rev. Pass. Fatalities (Incl. Violence) The estimated passenger fatality rate for 216 was one per 17.2 million passengers carried. Although this is not as good as the one per 42.3 million rate for 215 or the one per 25.9 million rate for 213, it is still markedly better than the one per 1.4 million in 214 and continues the trend of improving safety. On this basis, 216 was the third safest year ever. On average, from the point of view of passengers, the airline industry as a whole is now more than three times safer than it was as recently as ten years ago and nine times safer than 2 years ago. The passenger fatality rate for the last five years is almost one per 16 million passengers carried. The rate for the last decade (2-29) was one per 3.7 million and for the 199s one per 1.8 million. The worst accidents in 216 were 1) the Lamia Avro RJ that flew into high ground following fuel exhaustion on approach to Medellin, Colombia on 18 November, killing 68 passengers and 3 crew. There were 73 passengers and 4 crew on board. 2) the Egyptair Airbus A32 on 19 May which crashed into the Mediterranean Sea, apparently following an on board fire, towards the end of a flight from Paris, France to Cairo, Egypt, killing all 59 passengers and 7 crew on board 3) the flydubai Boeing 737 on 19 March which went out of control and crashed at the start of a go-around at Rostov-on-Don, Russia killing the 7 crew and 55 passengers on board and 4) the PIA ATR 42 that crashed killing all 5 crew and 47 passengers on board following a reported engine problem while descending inbound to Islamabad, Pakistan on 7 December. Flightglobal.com/Reports 8

9 Passengers Carried (Millions) Passengers Carried (Millions) per Passenger Fatality on Revenue Passenger Flights Jet and turboprop aircraft of more than 14 seats Passengers Carried (Millions) per Passenger Fatality Five Year Moving Western-Built Jets During 215, western-built jets, which carry more than 9% of the world's traffic, suffered five fatal accidents. This is disappointing after 215 when the class suffered no fatal accidents but is more or less in line with other recent years. The annual average number of fatal accidents for the current decade is now 4.. The annual average for the previous decade was 7.7 and that for the 199s, 1.5. (western-built jets) Year (western-built jets) Decade s Period Flightglobal.com/Reports 9

10 - Western-Built Jets per. Mov. Avg. () Western-built jets made some 32 million flights in 216 and the fatal accident rate for the last five years for this class of aircraft stands at about one per 1 million flights. The fatal accident rate for the current decade is one per 7.2 million flights. On this basis worldwide western-built jet operations are now more than twice as safe as they were 1 years ago, almost five times safer than in the 199s, seven times safer than in the 198s and more than 1 times safer than in the 197s. Fatal Accident Rate (western-built jets) Period Flights (millions) per Fatal Accident Flightglobal.com/Reports 1

11 2 Flights (millions) per Fatal Accident Western-Built Jets Flights (Millions) Flights per fatal accident (all) 5 Year Moving The annual average for passenger and crew fatalities, so far, for the current decade (21-216) is 23., that for the previous decade was and the average for the 199s was Passenger & Crew Fatalities (western-built jets) Year Fatalities Passenger & Crew Fatalities (western-built jets) Decade s Period Passenger & Crew Fatalities per Fatal Accident (western-built jets) Year Fatalities Passenger & Crew Fatalities per Fatal Accident (western-built jets) Decade s Period Fatalities Flightglobal.com/Reports 11

12 14 Passenger and Crew Fatalities Western-Built Jets 12 1 Fatalities Fatalities There were three fatal accidents in 216 involved passenger fatalities on revenue passenger flights operated by western-built jets. There were no such accidents in 215 but two in 214, three in 213, three in 212 and four in 211. The three fatal accidents in 216 gave rise to 182 passenger fatalities. In 215, with no fatal accidents there were, of course, no fatalities. There were 266 passenger fatalities in 214, 63 in 213 and 269 in 212. to Passengers (western-built jets) Year to Passengers (Western-Built Jets) Decade s Period The average annual number of fatal accidents (to passengers) so far this decade is 3., about 45% down on the last decade s average of 5.5 and considerably better than that for the 199s of 7.8. Flightglobal.com/Reports 12

13 12 to Passengers Western-Built Jets to Passengers The annual average number for passenger fatalities for the current decade so far is 211, less than half of that for the previous decade, The annual average for the 199s was 598. Passenger Fatalities on Revenue Passenger Flights (western-built jets) Year Fatalities Passenger Fatalities on Revenue Passenger Flights (western-built jets) Decade s Period Flightglobal.com/Reports 13

14 Passenger Fatalities on Revenue Passenger Flights - Western-Built Jets Passenger Fatalities Passenger Fatalities Some 4 billion passengers were carried on western-built jets in 216 giving a passenger fatality rate during the year of one per 22 million passengers carried. With no passenger fatalities in 215 it is not possible to calculate a rate for the year. The passenger fatality rate in 214 was one per 13.8 million carried and that for 213, one per 52.6 million carried. The passenger fatality rate for the current decade so far is about one per 16.2 million passengers carried while that for the period 2-29 was one per 4.8 million and for the 199s, one per 2.5 million. This suggests that, as far as accidents are concerned, passengers on western-built jet flights are now over three times as safe as in the 2s more than six times safer than during the 199s and 15 times safer than in the 197s. Passenger Fatality Rate (western-built jets) Period Passengers Carried (Millions) per Passenger Fatality Flightglobal.com/Reports 14

15 6 Passengers Carried (Millions) per Passenger Fatality (Western-Built Jets) 5 Passengers (Millions) Passengers Carried (Millions) per Fatality 5 Year Moving At the time of writing, western-built jets had suffered 14 confirmed operational all-risk insurance total losses during 216. This is two less than in 215 but five more than in 214. The average annual number of operational total losses for the current decade is 12.9, increasing to 13.3 if non-operational losses are also included. For the previous decade, it was 17.7 (19.7 including non-operational losses) and for the 199s, 2.9 (21.9). All-Risk Total Losses (western-built jets) Year Operational Non-Operational All All-Risk Total Losses (western-built jets) Decade s Period Operational All Flightglobal.com/Reports 15

16 Total Losses - Western-Built Jets 3 25 Total Losses Operational Non-Operational The estimated cost of major hull claims (total losses and major partial losses) in 216 is provisionally estimated at $528 million. This is a worse result than in 215 and 214 when losses totaling some $487 million and $399 million were incurred respectively but markedly better than the $648 million cost of claims in 213. The worst recent year was 21 when the cost of major hull claims totaled $1,142 million. The result for 216 still compares favorably to the annual average for the current decade of $593 million. The annual average for the previous decade was $58.7 million and for the 199s, $617.7 million. Cost of Major Hull Claims $m (western-built jets) Year Total Losses Major Partial Spares* Total , * Spares significant losses falling on the airline s hull policy only. Cost of Major Hull Losses $m (western-built jets) Decade s Period Total Losses Major Partial All (including spares) Flightglobal.com/Reports 16

17 12 Cost of Major Hull Losses - Western-Built Jets 1 US$ Millions Total Losses Major Partial Losses & Spares Western-Built Turboprops During 216, western-built turboprops (of more than 14 passenger seats or cargo equivalent) suffered five fatal accidents resulting in 8 passenger and crew deaths. This is the same number of fatal accidents as in 215 but three less than in 214, when there were eight. Fatalities in 216 were 34 less than in 215 when 114 passengers and crew were killed but about the same as in 214 which saw 82 fatalities The average annual number of fatal accidents so far in this decade (21-216) is 7.7 while the average for the previous decade was 9.8. In comparison, the annual average for the 199s was (western-built turboprops) Year (Western-Built Turboprops) Decade s Period Flightglobal.com/Reports 17

18 3 - Western-Built Turboprops per. Mov. Avg. () The fatal accident rate for western-built turboprops in 216 is estimated at about one per 1.4 million flights, about the same as in 215 but considerably better than in 214 and 213. The relatively good result in 216, following 215, may, at last, represent the beginning of improvement to the safety of this class of aircraft. Until now there has been no significant sustained improvement in the fatal accident rate for this class, which, on average, has now been at around one per.8 or.9 million flights for more than 1 years. 1.6 Flights (millions) per Fatal Accident - Western-Built Turboprops Flights (Millions) Flights (Millions) per Fatal Accident 5 Year Moving Flightglobal.com/Reports 18

19 The number of passengers and crew killed on western-built turboprops in 216, 8, is considerably better than in 215 when 114 people were killed on board this class of aircraft. The annual average for passenger and crew deaths on this class of aircraft so far in this decade is 13.6 which is about 2% worse than the annual average for the previous decade of The average for the 199s was 197.1, for the 198s, 199.1, and for the 197s, Passenger & Crew Fatalities (western-built turboprops) Year Fatalities Passenger & Crew Fatalities (western-built turboprops) Decade s Period Passenger & Crew Fatalities per Fatal Accident (western-built turboprops) Last 1 Years Year Fatalities Passenger & Crew Fatalities per Fatal Accident (western-built turboprops) Decade s Period Fatalities Passenger and Crew Fatalities - Western-Built Turboprops 35 3 Fatalities Fatalities 5 per. Mov. Avg. (Fatalities) Flightglobal.com/Reports 19

20 There were just two fatal accidents to passengers on revenue passenger flights during 216; one less than in 215. This is the lowest number since 27 when there were also two such accidents. The two accidents in 216 resulted in 62 passenger deaths, considerably less than the 96 killed in 215 but about equal to the 61 killed in 214. The average annual number of fatal accidents (to passengers) for the current decade is 4.4, almost the same as that for the previous decade, 4.5. The average for the 199s was to Passengers (western-built turboprops) Year to Passengers (western-built turboprops) Decade s Period to Passengers - Western-Built Turboprops per. Mov. Avg. () There were 62 passengers killed on revenue passenger flights operated by western-built turboprops during 216. This is considerably better than the 96 passengers killed on these aircraft in 215. The average annual number of passenger fatalities for the current decade is 81.. The annual average for the previous decade (2-29) was 64.7 and that for the 199s was Flightglobal.com/Reports 2

21 Passenger Fatalities on Revenue Passenger Flights (western-built turboprops) Year Fatalities Passenger Fatalities on Revenue Passenger Flights (western-built turboprops) Decade s Period Passenger Fatalities Revenue Passenger Flights - Western-Built Turboprops 3 Passenger Fatalities Passenger Fatalities 5 per. Mov. Avg. (Passenger Fatalities) Flightglobal.com/Reports 21

22 8 Passengers Carried (millions) per Passenger Fatality Western-Built Turboprops) Passengers Carried (Millions) Passengers Carried (Millions) per Passenger Fatality 5 Year Moving The passenger fatality rate in 216 for western-built turboprops was one per 3.2 million passengers carried. This is an improvement on 215 when the rate was one per 1.9 million passengers carried and also better than other recent years. Unfortunately, despite 216 s better result, there has been no real sustained improvement in the passenger fatality rate for this class of aircraft for more than 15 years. The number of confirmed airline insurance total losses suffered by western-built turboprops during the year, currently standing at 9 (including one non-operational loss), is half that recorded for 215 and is by far the lowest number of such losses in any year for more than 4 years. Based on experience, it is thought likely that more total losses will be confirmed in the coming months but that the final figure for 216 will probably still end up considerably less than that for 215 and the average for the 2s. The annual average for the current decade so far is 19.3 (21. including non-operational losses), for the previous decade 23.1 (25.1) and for the 199s, 3.7 (31.9). Total Losses (western-built turboprops) Year Operational Non-Operational All Total Losses (western-built turboprops) Decade s Period Operational All Flightglobal.com/Reports 22

23 Total Losses - Western-Built Turboprops Total Losses Operational Non-Operational The estimated cost of major hull claims (total losses and major partial losses) in 216 for western-built turboprops is provisionally estimated at $94 million. This is considerably better than the $157 million incurred in 215 but is similar to most other recent years. The annual average for the current decade for turboprop major hull claims is $12.9 million and that for the previous decade, $79.2 million. The annual average for the 199s was $96.5 million. Cost of Major Hull Losses $m (western-built turboprops) Year Total Losses Major Partial Spares* 6 Total * Spares significant losses falling on the airline s hull policy only. Cost of Major Hull Losses $m (Western-Built Turboprops) Decade s Period Total Losses Major Partial All (including spares) Flightglobal.com/Reports 23

24 Cost of Major Hull Losses Western-Built Turboprops US$ Millions Total Losses Major Partial Losses Eastern-Built Jets Airline-operated eastern-built jets suffered no fatal accidents again in 216; the fourth year running. This is now also the fifth year running when no revenue passengers have been killed. However, the operational eastern-built jet fleet has reduced very considerably over recent years and, in 216, these aircraft probably accounted for less than one percent of the world s total airline operations. With so little exposure it is not surprising that the fleet has been loss free. (eastern-built jets) Year (All) (Passengers) (eastern-built jets) Decade s Period (All) Passenger Accidents Fatalities (eastern-built jets) Year Fatalities (All) Fatalities (Passenger) Flightglobal.com/Reports 24

25 Fatalities (eastern-built jets) Decade s Period All Accidents Passenger Accidents Eastern-Built Jets per. Mov. Avg. () 4 Passenger and Crew Fatalities - Eastern-Built Jets 35 3 Fatalities Fatalities 5 per. Mov. Avg. (Fatalities) Flightglobal.com/Reports 25

26 Eastern-Built Turboprops Eastern-built turboprops suffered two fatal accidents during 216, one less than in 215 and down on the annual average for the current decade so far of 4.3. The annual average for the previous decade (2-29) was 7.4. A total of ten passengers and crew died in these accidents. Again this is lower than in 215 when 44 people were killed and considerably better than the annual average for the seven year period which was There were no fatal accidents involving revenue passenger fatalities during 216, the second year running. The annual average for passenger fatalities for the current decade is 3.1. (eastern-built turboprops) Year (All) (Passengers) (eastern-built turboprops) Decade s Period Fatal Accidents (All) Passenger Accidents Fatalities (eastern-built turboprops) Year Fatalities (All) Fatalities (Passenger) Fatalities (eastern-built turboprops) Decade s Period All Accidents Passenger Accidents Flightglobal.com/Reports 26

27 - Eastern-Built Turboprops per. Mov. Avg. () 25 Passenger and Crew Fatalities - Eastern-Built Turboprops 2 Fatalities Fatalities 5 per. Mov. Avg. (Fatalities) Paul Hayes, London, January 9, 217 Flightglobal.com/Reports 27

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