09 December 2024
A New Era of Managing Aviation Risk
The world is changing at an extraordinary pace. Every day, we see new challenges, innovations, and risks emerging across industries, but perhaps none more so than in aviation. As the industry faces unprecedented volatility, it continues to grow rapidly, with a projected 200,000 daily flights globally by the mid-2030s. This growth is undeniably positive, as it demonstrates the recovery and vitality of air travel. However, it also places greater pressure on operators and industry stakeholders to manage a risk landscape that is more unpredictable than ever before.
As the CEO of Osprey Flight Solutions, I’ve witnessed firsthand how the aviation industry has evolved in response to global events, technological advancements, and increased regulatory scrutiny. At Osprey, we’ve made it our mission to stay ahead of these changes, offering our clients cutting-edge risk intelligence solutions that not only help manage risk but also provide the necessary insights to make informed, data-driven decisions. Today, I’m proud to say that we are at the forefront of a new way of managing risk in aviation.
A word about risk management
The term ‘Risk Management’ comes with a hefty dose of preconceptions and misperceptions. When given lip service or implemented solely to tick a box, it can become a burden on organisations for limited or no gain, or even worse, can be damaging in the aim of actually reducing risk. That is, a poor risk management process or function can actually increase the risk faced by an organisation whilst being a self-sustaining cycle of inefficiency. Often this is the result of forgetting, or a misunderstanding of the true and simple purpose of risk management.
To make better decisions.
In other words, risk management is simply a mechanism through which an organisation can better understand the context and considerations that must inform accurate and timely decision-making. It is a means to an end, not the end in itself. It must be used to quantify the component considerations in order to model the outcome and therefore accurately forecast the effect of taking one or other option. The future is uncertain, and risk management is intended, at its core, to quantify that uncertainty and, specifically, any negative effect in order to support decision-making.
The volatile risk landscape
The aviation sector operates in one of the most complex environments in the world. It faces risks that can arise from a myriad of factors - geopolitical tensions, weather patterns, cyber threats, and health crises, to name a few. Over the past decade, the nature of these risks has evolved dramatically. For instance, we’ve seen geopolitical risks become more prominent, with certain regions becoming no-fly zones overnight. Additionally, the COVID-19 pandemic forced us to rethink health and operational risks in a way we never imagined before. This evolving landscape means that operators need more sophisticated tools to assess and mitigate these risks effectively.
There has also been the realisation that risk management is no longer a function required purely for duty of care purposes but is a strategic necessity for decision-making. More and more executive teams and boards have recognised that understanding the geo-political and security landscape is essential and that they must build a capability, both internally and through judicious use of external providers. The hyper-connectedness of the world means that ostensibly minor disruptive security situations can prove to be globally impactful. Just consider the impact of a single ship running aground in the Suez Canal. This has driven the essentiality of risk management as a core component of any international organisation’s strategic and operational decision-making.
However, managing risk in aviation is no longer just about addressing known hazards. The unpredictability of the modern world requires operators to be proactive, not reactive. This is where risk intelligence and accurate forecasting come into play. At Osprey Flight Solutions, we believe that the key to mitigating risk lies in being able to have a high-confidence view of the operational landscape, not as it was yesterday, but as it will be tomorrow, next week, next month. This is the key that allows operators to stay one step ahead of potential threats.
Risk management is no longer a function required purely for duty of care purposes but is a strategic necessity for decision-making
The volatile risk landscape
At Osprey, we’ve been leaders in the field of Aviation Risk Intelligence for many years. Over this time, we’ve developed a deep understanding of the needs and challenges facing the industry. This insight has been further enhanced by our close collaboration with Gallagher Specialty’s Aerospace team, a partnership that has spanned the past three years. Together, we’ve worked tirelessly to develop industry-supporting products and educate operators on best practices when it comes to managing risk.
The power and value to the industry of this partnership could not be better demonstrated than by the joint presentation of the World Overflight Risk Conference 2024, a landmark event that marked a turning point in the cross-sector collaboration to support operators in managing this critical risk in today’s unstable geo-political environment.
Our partnership with Gallagher Specialty is built on a shared vision: to provide aviation operators with the tools they need to make informed, data-driven decisions that are grounded in real-time intelligence and accurate forecasting. Together, we’ve been able to create solutions that are specifically tailored to the unique needs of the aviation industry. These solutions not only help operators manage risk more effectively but also provide them with the insights they need to optimise their operations and enhance safety.
The importance of documented decision-making processes
The necessity of having documented and defined decision-making processes has been underscored by the recent verdict in the PS752 Imperial court ruling in June 2024. The court’s verdict of negligence in this tragic case highlighted the importance of having clear, documented workflows when it comes to making operational decisions. In an increasingly litigious environment, operators need to be able to demonstrate that their decisions are based on sound, real-time intelligence and that they have taken all necessary precautions to mitigate risk.
The PS752 ruling serves as a stark reminder of the consequences of failing to properly document decision-making processes. In today’s world, where operators are under increasing scrutiny, it’s no longer enough to rely on intuition or experience alone. Operators must be able to show that they have followed a rigorous, well-documented process when it comes to assessing risk and making operational decisions.
At Osprey, we’ve designed the Risk Manager platform to address this need. The platform not only provides operators with real-time risk data but also allows them to document their decision-making processes in a way that is transparent, traceable, and defensible. In a world where litigation and regulatory scrutiny are on the rise, having a documented decision-making process is not just a best practice - it’s a necessity.
A call to action
As the aviation industry continues to grow and evolve, the need for robust, documented risk management processes has never been greater. The risks facing operators today are more complex and unpredictable than ever before. In this environment, having access to real-time risk intelligence and a platform that allows for documented, traceable decision-making is essential.
At Osprey Flight Solutions, we are proud to be leading the way in this new era of risk management. Our Risk Manager platform is designed to help operators navigate the challenges of today’s volatile risk landscape, providing them with the tools they need to make informed, data-driven decisions that enhance safety and operational efficiency.
In a fast-changing world, having the right tools is vital. The future of aviation depends on evolving our approach to risk, and Osprey Flight Solutions is here to lead the way.
The Walbrook Building 25 Walbrook London, EC4N 8AW
Author
Arthur J. Gallagher (UK) Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 119013.