Learning Unit 10: The economics of aviation safety and security

Review
The purpose of learning unit 10 is to enable you to comprehensively understand the
economics of aviation and security.

Unit Outcomes
On completion of this unit, you should be able to

• understand what aviation safety is

• explain how accidents occur and what causes accidents in the aviation sector
• discuss the economic implications related to aviation safety

10.1 Introduction

Aviation safety and security are extremely important issues in both passenger and
cargo transportation. Aviation safety refers to the physical safety of an aircraft and the
accidents and incidents associated with it. The safety of passengers, crew and cargo
is one of the most important aspects of a journey. Aviation security differs from aviation
safety in that it encompasses the threats to security posed by specific attacks and
terrorism. These threats come in many forms, all of which are discussed in this learning
unit. Safety and security have obvious implications for passenger and crew well-being,
and can also have significant economic implications for airlines and cargo-carrying
companies. In this learning unit, we discuss both of these implications in a global as
well as a local context.

10.2 Aviation safety

Aviation safety is paramount to the survival and success of the air transport industry.
It is an area of aviation that receives constant attention and analysis in order to make
airlines and cargo carriers safer and more reliable for passengers and customers.
However, from an economic standpoint, it is important to consider the costs involved,
and to ensure that the benefits of safety justify the costs of safety (Vasigh 2013). This
type of cost-benefit analysis needs to be conducted on an individual airline basis, the
technicalities of which surpass the level of this course. We can, however, get an
understanding of the broader costs and benefits associated with aviation safety. In

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order to do so, let us first examine the causes and probabilities of accidents during
flights, and the current safety statistics within the industry.

Aviation safety levels across the world have on average improved dramatically. Table
1, below, shows the number of accidents per one million flights between 2009 and
2014, according the ICAO safety report 2014. As you can see, they are steadily
decreasing.

TABLE 1: Number of accidents per 1 million flights (ICAO safety report 2014)

Year Number of accidents per 1 million departures

2009 4.1
2010 4.2
2011 4.2
2012 3.2
2013 2.8
2014 1.92

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10.2.1 When do accidents occur

Numerous and extensive studies have been done on the times during a flight at which
accidents occur. Figure 1 below illustrates the different flight phases.

FIGURE 1: Flight phases

Each of these flight phases occurs for a proportion of the flight. For example, ground
operations account for 1% of exposure, whereas cruise accounts for 57% – in other
words, the aircraft cruises for much more of the total flight than it taxis or spends being
loaded and unloaded, parked and so on. According to the Boeing Statistics Summary
(2012), these exposure percentages are based on a flight of 1.5 hours. Therefore, on
longer flights, cruise percentages will increase and ground operations will decrease,.
Table 2 below shows the exposure percentages of each flight stage and the
percentage of fatal accidents that occurred within each phase between the years 2002
and 2011 (Oster et al 2013:150).

TABLE 2: Percentage of exposure and fatal accidents for each flight phase
Flight phase Exposure (% of total Fatal accidents (% of accidents
flight) that occurred during this phase)

Ground operations 0 11
Take-off 1 10
Initial Climb 1 5
Climb 14 5
Cruise 57 11

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 Descent 11 4
Initial Approach 12 14
Final Approach 3 16
Landing 1 20

As you can see, the riskiest phases of flight are take-off, initial approach, final approach
and landing. They are all very short phases but account for high percentages of fatal
accidents. Understanding when accidents are most likely to occur is very important. It
allows high-risk areas to be identified and proactive measures can then be taken to
reduce the riskiness of these phases (Oster et al 2013:150). We discuss this concept
further in section 10.2.2.5.

ACTIVITY 10.1

Using the knowledge, you will obtained in the part below, go to Discussion Forum
10.1 and briefly explain how accidents occur and what causes accidents in the aviation
sector.

10.2.2 What causes accidents?

Aviation accidents are seldom caused by an individual fault or event. In almost all
cases, accidents are a result of a sequence of events, failures or mistakes (Oster et al
2013:151). Let’s take an engine failure as an example. Engine failure is, simply put, a
failure of equipment. However, how pilots and crew respond to such a failure can
greatly influence the outcome of the incident. If they respond adequately with the
correct procedures and manage to continue the flight until they can safely land, the
outcome will be favourable. However, if they do not follow correct procedure, if the pilot
makes a mistake regarding how to rectify the failure, if the passengers start to panic
and people get hurt, the outcomes are obviously unfavourable and the situation can
become a lot worse.

With this in mind, we will explore the basic categories that accidents fall into. Bear in
mind the concepts discussed above and that the categories are not mutually exclusive.

NOTE:

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Mutually exclusive is a term used when referring to the occurrence of different events.
If two events are said to be mutually exclusive, it means that it is impossible for them
to occur simultaneously. Events that are not mutually exclusive are therefore able to
happen at the same time as each other – in other words, when there can be two or
more events that occur and that result in an aircraft accident.

10.2.2.1 Aircraft complications

Aircraft complications include all aircraft equipment failure such as engines,

instruments, electronic systems, landing gear, tyres, or failures of any structures within
the aircraft (Oster et al 2013:158). According to the World Aircraft Accident Summary
(2012), equipment failure accounted for 30% of all aircraft accidents outside of the
United States of America between 1990 and 2011. Africa specifically recorded
equipment failure as a cause of 35% of aircraft accidents for the same period (Oster
et al 2013:157). There are a number of reasons why the figure for Africa may be higher
than the average, but two obvious deductions are that the age of the fleets and the
maintenance of fleets (that is, how well maintained the equipment is) are factors. Both
of these may be reasons for higher incidences of accidents due to equipment failure.
However, the matter would require further investigation to reach a firm conclusion.

10.2.2.2 Pilot error

Pilot error refers to any incident in which the pilot was unable to maintain physical
control of the aircraft, any incident involving controlled flight into terrain (much less
common due to the development of ground proximity warning devices), as well as
errors in judgment when responding to unsafe conditions (Oster et al 2013:158). In
countries outside of the USA, pilot error caused 48% of all fatal accidents between
1990 and 2011 (Oster et al 2013:157). In comparison, accidents in Africa caused by
pilot error during this period were much lower at 29% (Oster et al 2013:157). This is a
good reflection on the flight training and calibre of pilot that African airlines employ.
Pilot and other human error is often difficult to quantify and measure and is also an
area that receives a lot of attention. It is perhaps the area that overlaps the most with
other accident causes as it is dependent on a host of other variables.

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10.2.2.3 Navigational aids and air traffic management

Navigational aids plan routes, record aircraft activity and control the aircraft along
certain paths. Different aircraft have different navigational systems and controls, but
essentially, they all assist the plane in getting from origin to destination without getting
lost, breaking any air traffic regulations or causing any danger. Air traffic management
systems involve the management of airspace and traffic flows. Airports have air traffic
management systems and staff that manage the traffic in and out of the airport. As air
traffic volumes have increased over recent years, air traffic management has become
more pressurised and more important for the safety of the flights (Oster et al 2013:149).
In addition, as on-board flight safety becomes better and accidents become fewer,
there is increased focus on ground safety (Oster et al 2013:148).

10.2.2.4 Forecasting and understanding weather

Weather is a major factor in aviation safety, as it is totally uncontrollable and often

unpredictable. Weather as a cause of accidents in aviation refers to wind shears,
slippery runways, emergency landings as a result of bad weather conditions, down
draughts and high winds, amongst others (Oster et al 2013:158). In countries outside
of the USA, weather was recorded as the cause of 14% of all accidents between 1990
and 2011 (Oster et al 2013:157). However, in Africa this percentage was slightly higher
at 22% (Oster et al 2013:157). Technology has played a huge role in forecasting and
understanding the weather and weather patterns within certain areas. An improved
ability to do so has had a large influence on the reduction in air traffic accidents that
we have seen over recent years.

10.2.2.5 Investigations of past incidents

In most cases, especially looking back more than ten years, improvements to aviation
safety have been mostly reactive (Oster et al 2013:148–149). Reactive measures refer
to those taken as a result of accidents that have already occurred. Investigations into
previous accidents and incidents have allowed aviation safety authorities to avoid
similar errors and faults going forward and, therefore, safety standards have improved.
The past few years, however, have seen an increase in a proactive approach to
aviation safety (Oster et al 2013:148–149). Investigations have continued to occur as
they have always done, but instead of simply reacting to the findings and fixing

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problems, technicians and researchers are now identifying areas of high risk and
focusing resources and attention on these areas in the hope of avoiding accidents
completely. Section 10.2.1 contains an example of data that can be used to reduce
accident rates proactively. By identifying high-risk flight phases, technicians and
engineers are able to focus on areas or equipment or processes that may increase the
risk of accidents. By doing so, they may be able to increase the safety of such
equipment – or of the affected phases – before accidents occur. Click on this link:
https://www.youtube.com/results?search_query=disappearance+of+flight+370%2C+
which+disappeared+on+the+08+March+2014.

ACTIVITY 10.2

After obtaining knowledge in this part, head to Discussion Forum 10.2 and discuss
the difference between a reactive and a proactive strategy for air accidents and the
role of investigations.

10.3 Economic implications related to aviation safety

As mentioned in section 10.2, as an economist it is important to be able to identify the

benefits and the costs associated with aviation safety in order to determine whether
certain improvements are justifiable. In this section, we discuss the economic
implications of aviation safety on passengers, employees, cost of capital, direct costs
such as insurance, and government penalties. In the subsections, we consider the
costs of unsafe conditions and the benefits of improvements in safety standards for
airlines.

10.3.1 Passenger reactions: decreases in demand

When considering passenger reaction to safety levels in an airline, it is important to

note that their reactions are based on the perceived safety of an airline and not the
actual level of safety (Vasigh 2013). This is because passengers generally don’t have
knowledge on actual safety standards and conditions for airlines, and much of their
information is sourced from the media. Therefore it is their perception that matters.
Needless to say, perception is as important as actual performance when it comes to
demand levels.

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After an incident such as an accident or crash, airlines often react to a decrease in
demand by dropping their fares (Vasigh 2013). This is considered competitive action.
In some cases this does help to alleviate the effects of reduced demand, but in others
(depending on the severity of the incident and the extent of the media coverage) there
is a long-term impact on the airlines that is extremely difficult to avoid. Ultimately,
perceptions that one airline is less safe than others reduce passenger demand.

It is difficult to quantify whether perceptions related to increased safety levels result in

increases in passenger demand. It is a difficult market reaction to measure and little
research has been done on this. We can assume, however, that passengers would
react favourably to an airline’s increased safety levels. In conclusion, less safe airlines
lose passenger demand while safer airlines gain demand, though this gain is not to the
same degree as the drop in demand for the former.

10.3.2 Employee reactions and labour supply

Just as passengers do not wish to travel on an unsafe airline, neither do employees

wish to work for an unsafe airline – especially crew members. If an environment is
perceived to be unsafe, the airline will experience either a high staff turnover
(employees will join and leave the firm more often than the industry norm) or an
increase in wage demands (Vasigh 2013). The hiring and resignation processes
involved in high staff turnover represent an implicit cost to the airline as a result of an
unsafe environment (Vasigh 2013).

Again, determining the exact effects that a safe environment has on employees and
labour supply is difficult. It can be said that a safer work environment will strengthen
the labour supply as it will attract a higher calibre of staff than an unsafe environment,
which may perhaps attract only those employees who are unable to find employment
elsewhere (Vasigh 2013).

Safer environments in which to work therefore benefit the airline in terms of employee
calibre (an implicit benefit) and unsafe working conditions increase both implicit and
explicit costs related to the employment process and increased wages.

NOTE:

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Explicit costs vs implicit costs

In this context, explicit costs are costs that can be directly attributed to an event and
can be identified on the income statement of a business. For example, unsafe working
conditions can cause an increase in employee wages, which will be seen as a
separate cost.

An implicit cost is a cost that occurs as a result of an event but is not able to be
separately identified. For example, there are numerous costs involved when there is
a high turnover of staff, including additional time spent on recruitment, drawing up
new contracts, training new staff, providing new uniforms and so on. These costs
are more difficult to ring-fence.

10.3.3 Financial concerns

As with passengers, investors will react negatively to media coverage regarding

accidents or reductions in safety levels of airlines. The market will begin to feel a
certain level of uncertainty around the future prospects of the airline, and share prices
may well drop (Vasigh 2013). Reductions in share price have a number of
consequences for an airline. Firstly, it is common that higher-level employees own
shares in the firm, meaning that a drop in share price affects their personal wealth.
Secondly, employees in management positions of a public and private entity report to
shareholders. Reductions in a share price will be detrimental to these shareholders
who will either put pressure on the management team to perform or, in some instances,
will attempt to restructure the organisation and remove certain employees. Thirdly, a
share price often acts as a measure of performance for creditors. Creditors are firms
and banks that lend money to airlines. As part of a capital-intensive industry, airlines
often need loans to purchase expensive equipment and aircraft. Reductions in share
prices reduce creditors’ confidence in an airline as well as their likeliness to supply
capital. Creditors who are willing to offer capital will be charging higher interest rates
as the airline concerned has become a riskier investment. If an airline is unable to
secure capital, or has significantly increased its cost of capital – in other words, the
interest rate at which they can get it – their long-term future could be jeopardised
(Vasigh 2013).

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Conversely, an airline that has a perfect safety record will be more attractive to
investors, and they may be able to source capital more easily or cheaply (Vasigh
2013). Lowering the costs of capital will increase the airline’s profitability.

Ultimately, improvements in safety can reduce the direct cost of capital, while
deteriorations in safety will increase the direct cost of capital.

10.3.4 Insurance costs

Perhaps a more obvious benefit of a clean safety record is the direct effect on
insurance costs (Vasigh 2013). When accidents occur, insurance companies will often
increase the insurance premiums that airlines pay each month. This increase will
directly increase their overall expenses and reduce their profitability.

NOTE:

Insurance premiums

When a company insures a certain asset, such as an aircraft, the insurance company
considers how risky the company and the asset are – that is, how likely it is that the
asset will be damaged and require an insurance pay-out. The insurance company
decides on a certain risk status for the airline. An insurance premium is calculated
based on this status – a lower status means that the airline pays less per month,
while a higher status means that an airline pays more per month. If an airline’s risk
status changes, the premiums charged change as well. This means that, if an airline
has an accident, the insurance company may change its risk status to one that
shows it as a higher risk, resulting in an increase in the monthly charge paid by the
airline.

10.3.5 Government penalties

Government penalties and fines related to aviation safety are not an economic or
market-related effect, but they do directly affect the costs that an airline incurs as a
result of a reduction in safety levels (Vasigh 2013). In South Africa, the South African
Civil Aviation Authority (SACAA) is responsible for the enforcement of the safety
standards and recommended practices, as outlined by the ICAO, for airlines operating

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in our skies. The SACAA will issue fines to any airline that fails to adhere to any of the
safety regulations. For example, fines can be issued for not performing adequate
preflight inspections or for neglecting certain maintenance tasks. The SACAA has the
power to force an airline to cease operations altogether if it sees fit to do so. This is a
major incentive for airlines to adhere to the safety regulations and practices required –
over and above the fact that reductions in safety standards will result in direct penalty
costs.

ACTIVITY 10.3

Read the case study below and then go to myUnisa Discussion Forum 10.3 and
participate in Discussion 1: Case Study 1.

Case Study 1: Aviation accidents cast a dark shadow over Indonesia’s travel
sector – an article by Yudha Prawira for CEIC, Indonesia Data Talk – January
21, 2015

Summary of events in order to give you the context in which the article was
written:

Indonesia AirAsia flight QZ8501 was a scheduled international passenger flight

traveling from Surabaya, Indonesia, to Singapore on 28 December 2014. At
approximately 06:18 the aircraft crashed into the Java Sea during bad weather, killing
155 passengers and six crew members, making the total death toll 162 lives (BBC
News 2015). On 30 December, two days after the crash, aircraft debris and human
remains were found in the Java Sea. After an extensive search was performed, the
flight data recorder and cockpit voice recorder were found (BBC News 2105). It was
later reported that there had been a malfunction in the rudder travel limiter unit and
the aircraft had stalled during a steep climb in an attempt to avoid the bad weather.
This malfunction and miscommunication between pilots were reported as the reason
why the aircraft failed to recover and ended up crashing into the sea (Westcott 2015).

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10.4 Aviation security

Aviation security is a very important part of overall aviation safety. Aviation security is
the broad term that covers all threats to aviation, including attacks and terrorism (Gillen
& Morrison 2015).

The types of security threats include:

• Destruction of aircraft – this is generally through the use of on-board bombs.

• Hijacking of aircraft – in some cases an aircraft is hijacked and then destroyed, and
in others the aircraft is hijacked in order to have a certain demand fulfilled.
• Airport attack – shootings and bombings have occurred in airport terminals. A
recent attack occurred in Belgium, during which bombs were detonated in the
departure hall of the Brussels International Airport (Blenkinsop 2016).
• Disruption of aviation systems such as air traffic controls (GAO 2000).

What are common security challenges at the airport?

On a year-by-year basis, in-flight terror attacks have in fact decreased since the 1970s.
In 1970 there were 557 reported fatalities from terror attacks, in the 1990s this number
dropped to 160, and between 2000 and 2009 only 94 passengers were killed as a
result of inflight terror attacks (Gillen & Morrison 2015:2). However, the alleged
hijackings and strategic crashes of four planes on 11 September 2001 resulted in 2
938 fatalities and was a defining moment in aviation security (Gillen & Morrison
2015:2). Since these attacks in the USA, aviation security regulations and standards
have been dramatically increased and airport safety requirements and procedures
have become much more stringent. For current security challenges facing airports,
both internal and external, see:
YE_Research_Paper_by_HYD_Naveen_Raja_Kannamala.pdf.

Increased security requirements aboard aircraft and at airports increase both direct
and indirect costs to airlines, airports and the general public (Gillen & Morrison 2015:2).
In the sections below we investigate what these costs are and examine their economic
implications.

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ACTIVITY 10. 4

After obtaining knowledge in this part, go to Discussion Forum 10.4 and discuss with
your mates the definition of key terms "aviation safety" and "aviation security".

10.5 Economic implications related to aviation security

More stringent security regulations require improvements and changes to the design,
provision and financing of security procedures and equipment (Gillen & Morrison
2015:2). Let’s take a look at the specific effects that these changes have on direct
costs to airlines and air cargo operations.

10.5.1 Direct costs

Airlines, airports and governments ultimately bear the costs of increasing security
standards and procedures. the security manual created by the ICAO that provides
guidance and standard procedures to which the civil aviation industries of all world
states need to adhere (ICAO 2011). Governments therefore need to establish and
implement locally relevant security procedures that are in line with Annex 17. These
include promoting and developing new security equipment and research, establishing
and implementing written security programmes for airports and airlines and
establishing preventative security measures for access control at airports, amongst
numerous other tasks (ICAO 2011). All of these tasks require extensive human
resources and skills – all of which cost the government money. A global improvement
to security standards had major spending consequences for governments across the
world. In Europe: he annual security spend increased from €2.8 billion (equivalent to
R46 billion) in 2002, to an estimated €5.7 billion (R95 billion) in 2011 (Gillen & Morrison
2015:3–4). In the USA, we saw an even higher increase from $2.2 billion (R32 billion)
in 2002 to approximately $8 billion (R117 billion) in 2013 (Gillen & Morrison 2015:3–
4). These numbers are difficult to comprehend due to their size; perhaps a more
tangible figure is that in Europe, the government spends R32.00 on average per
passenger on security-related costs (Gillen & Morrison 2015:5–6). That is an extremely
large amount of money, and a direct aviation security cost for the government.

For airlines, much of the increased security entails increased security checks and
processes that they need to perform before take-off and during a flight. These

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processes require additional skills that employees have to be taught. Airlines therefore
need to run training courses on security requirements and process management for
employees. From an economic perspective, increased security requirements result in
increased direct staff training costs for airlines.

The security-associated costs pertaining to airports have already been discussed (in
learning unit 9) but we will touch briefly on the direct costs here. More stringent security
requirements include the installation of more security checkpoints in airports – where
cabin baggage is scanned, passengers are searched, and passports are checked. The
direct costs associated with these checkpoints include additional staff wages,
installation costs, and increased electricity costs. Each of these costs directly
increases airport expenses and reduces profit margins.

All things considered, an increase in security standards has a direct effect on the costs
incurred by governments, airlines and airports.

10.5.1.1 Visible security that can protect airline employees and passengers

Trace portal machines - In some cases, detection of explosives can be automated

using machine learning techniques. Explosive detection machines can also be used
for both carry-on and checked baggage. These use gas chromatography to detect
volatile compounds given off by explosives.

Computed tomography - This type of walk-through body scanning may also be done.
Artificial intelligence systems are also being used, for example for translation services
on information stations around the airport and for reducing the time airplanes spend at
the gate between flights (by monitoring and analysing everything that happens after
the aircraft lands).

Backscatter X-rays to detect hidden weapons and explosives on passengers – These

devices, which use Compton scattering, require that the passenger stand close to a
flat panel and produce a high resolution.

10.5.1.2 Security risks and threats at the airport

In security, it is important to understand what risk is and ultimately determine what level
of risk an airport is willing to accept.

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Risk is defined as the probability of an act of unlawful interference being successfully
carried out on a specific target, based on an assessment of threat, consequence, and
vulnerability.

Using the example of driving, we know there will never be zero risks when driving, and
the same applies within aviation. Airport operators need to be aware 24/7/365 that
there is a possibility an act of unlawful interference could occur. It is key that these
risks are assessed formally to allow airports to prioritise the measures needed to
address the risks and that the risk of a specific act can be managed to an acceptable
level

10.5 How airports can address security risks and threats

A threat is an action, which may cause harm in the form of death, injury, destruction,
disclosure, interruption of operations, or denial of services. Threat assessment defines
the level of the threats against critical assets by evaluating the types, means and
possible tactics of those who may carry them out. In a threat assessment it is important
to be aware of national threats and to identify the threats specific to the airport and to
the airlines serving it. For in-depth analysis, it is also interesting to identify the history
of criminal or disruptive incidents in the area surrounding the airport, but not primarily
directed toward the airport operations. A risk is a combination between the probability
of the threat and its potential impact on a critical asset. In order to define a defense
strategy the security risks need to be assessed.

10.5.2 Cargo

Baggage poses as great a risk to aviation security as passengers do, and security
regulations are therefore as strict when it comes to air cargo. There are three types of
air cargo – checked baggage, belly cargo and freighter cargo. Checked baggage
includes all personal baggage that passengers check in when they travel, and it is
stowed in the hold. Belly cargo refers to cargo that passenger planes transport in the
excess capacity of the aircraft belly (discussed in depth in learning unit 3), while
freighter cargo refers to all cargo transported on designated freighter aircraft.

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Checked baggage is passed through machines that detect the existence of any
dangerous materials, including liquids and explosives (Gillen & Morrison 2015:6–7). In
addition, passengers are matched to their baggage, ensuring that any baggage that is
loaded has a matching passenger. If a passenger fails to board a flight, his or her
baggage is offloaded before take-off. This is to avoid an attacker checking in a
dangerous bag and then leaving the airport. Screening and baggage costs amounted
to the equivalent of per R110 passenger in a study done across the USA, Canada and
New Zealand (Gillen & Morrison 2015:5–6), a substantial additional cost for airlines to
bear.

Belly and freighter cargo are more difficult to manage, purely because of their size – in
other words, some cargo containers are too big to fit into an X-ray machine (Gillen &
Morrison 2015:6–7). Owing to this, all cargo is inspected by a member of staff known
as the inspector (Gillen & Morrison 2015:6–7). In addition, all parties and suppliers
involved in the freight process, such as freight forwarders and ground-handling firms,
need to be registered according to the ICAO and pass regular security checks (Gillen
& Morrison 2015:6–7).

These security checks and inspections add a significant operating cost to airlines and
airports alike. Increased costs reduce profit margins, and often result in increases in
fares. Increased fares reduce a firm’s competitive advantage and can affect the
demand for its service. However, because security regulations and requirements are
enforced across all airlines and all airports, the effect should be equal amongst firms
and therefore be less significant to competition.

The safety and security of all stakeholders involved in the aviation industry are of
paramount importance to governments, regulatory bodies and stakeholders
themselves. Ensuring safe and secure operations brings additional costs (both implicit
and explicit, direct and indirect) as well as additional operational requirements,
processes and obligations. Each of these has a different economic effect on airline and
airport revenues, as well as on government spending. It is important that, as a transport
economist, you are able to identify how and why these economic effects occur, and to
what extent they impact on a firm’s profitability and sustainability.

Airports, particularly in the developed countries, are using 4IR in the form of robotics.

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The direct and mediated impact of 4IR technologies, especially robots, on employment
generation has dominated large parts of the 4IR academic and policy debate. Based
on a general understanding of 4IR technologies, two critical points have been made.
First, that mature industrial economies will be increasingly relying on robots in
industrial production (thus, reducing job absorption in these sectors) while at the same
time, reshoring large parts of labour-intensive processes from developing countries
(thus, reducing opportunities for developing countries to exploit their low wage
comparative advantage). The scenario emerging from this line of thinking is one in
which developing countries are kicked off the industrialisation ladder (again) and
mature industrial economies and fast industrialisers “reverticalise industrial
production”.

HOW MUCH DO YOU KNOW?

Go to the Self-Assessment tool on myUnisa and do the self-assessments for

learning unit 10. This will give you an indication of whether you understand the
content of this unit.

10.7 Bibliography

10.7.1 Recommended Reading

Oster, C.V., Strong, J., Zorn, C.K. (2013) Analyzing aviation safety: Problems,
challenges, opportunities. Research in Transport Economics. Vol. 43. Pages
148–164.

10.7.2 References

AirclaimS (2012) In: Oster, C.V., Strong, J., Zorn, C.K. (2013) Analyzing aviation
safety: Problems, challenges, opportunities. Research in Transport Economics.
Vol. 43. Pages 148 –164.

BBC News (2015) AirAsia QZ8501: Two more bodies recovered. BBC News Asia.
[Online]
1 January 2015. Available at: http://www.bbc.com/news/world-asia-30647375 [12
April 2021].

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Blenkinsop, P. (2016) In ‘sign of hope’, bombed Brussels Airport to reopen Sunday.
Reuters. [Online] 2 April 2016. Available at:
<http://www.reuters.com/article/usbelgium-blast-airport-idUSKCN0WZ0HM> [12
April 2021].

Gao (2000) In: Oster, C.V., Strong, J., Zorn, C.K. (2013) Analyzing aviation safety:
Problems, challenges, opportunities. Research in Transport Economics. Vol. 43.
Pages 148–164.

Gillen, D., Morrison, W.G. (2015) Aviation security: Costing, pricing, finance and
performance. Journal of Air Transport Management. Vol. 48. Pages 1–12.

International Civil Aviation Organisation (2011) Annex 17 to the Convention on

International Civil Aviation. [Online] Available at:
http://www.icao.int/Security/SFP/Pages/Annex17.aspx [11 April 2021].

Oster, C.V., Strong, J., Zorn, C.K. (2013) Analyzing aviation safety: Problems,
challenges, opportunities. Research in Transport Economics. Vol. 43. Pages
148–164.

Prawira, Y. (2015) Aviation Accidents Cast a Dark Shadow Over Indonesia’s Travel
Sector. CEIC Indonesia Data Talk. [Online] 21 January 2015. Available at:
<http://www.ceicdata.com/en/blog/aviation-accidents-cast-dark-shadow-
overindonesia%E2%80%99s-travel-sector> [12 April 2021].

Vasigh, B, Dr. (2013) Introduction to Air Transport Economics: From Theory to

Applications, 2nd edition. [Online] Available at:
https://bookshelf.vitalsource.com/#books/9781472400246/ [20 March 2021].

Westcott, R. (2015) AirAsia probe: Anatomy of an avoidable crash. BBC News Asia.
[Online] 1 December 2015. Available at: http://www.bbc.com/news/world-
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