PowerPoint Presentation

Willis IATA AAPA Asia Pacific Aviation Insurance ConferenceMarch 5-8, 2013

The Economic Case for Enhanced Weather Awareness in Airline OperationsDr. Paul A. RobinsonAeroTech Research (U.S.A.), Inc.# 2013 AeroTech Research (U.S.A.), Inc.March 6, 20131Weather is an accepted day to day issue in airline operations.

The impacts of weather can injure flight crew and passengers and have an adverse economic impact on operations.

New technologies are in use today address this issue.

Presentation outlineIllustrations of the problem. Describe economic impact.A simple Value Proposition.Some mitigating technologies in use today.Recommendations to industry.Additional detail is in the Notes page of the PowerPoint (.ppt) file.# 2013 AeroTech Research (U.S.A.), Inc.In this presentation there will be:

Illustrations of operational problems associated with encounters with weather and turbulence with real life cases

A description of the economic impact of weather encounters

A simple economic value proposition showing increased profitability through cost avoidance

Some mitigation tools to address the problem.

Recommendations to industry & community.March 6, 20132The problem# 2013 AeroTech Research (U.S.A.), Inc.March 6, 20133A Turbulence EncounterT = 0 (event time)

T = +35 mins.

Flight CO128, B-767-200From Rio de Janiero to HoustonAug. 3, 2009 @ 0400 Local

# 2013 AeroTech Research (U.S.A.), Inc.This was a serious event and the observations below are not intended to blame the flight crews. The points below are made as they are quite typical of these types of encounters.

Note: 1. The surprise the lack of information of the hazard to the encountering aircraft. 2. The impact 26 passengers & crew injured and the flight diverted to Miami.

3. Perception of time/location of encounter is off by 15 mins (about 120 mi).

4. Awareness of the relative location of encounter aircraft to following aircraft is lacking.

March 6, 20134AAPA Global Turbulence StudyComprehensive reports from seven AAPA airlines

From July 2009 October 2011145 incidents, 219 injuriesReproduced courtesy of AAPA# 2013 AeroTech Research (U.S.A.), Inc.Study sponsored by the AAPA Flight Operations and Safety Working Group. Followed seven airlines over a 2 year period.Turbulence is a problem to operations for Asia Pacific Operators, and primary concerns are injuries to passengers and flight attendants.

Summary of findingsJapan and South Korea region a hotspot, possibly due to high concentrations of Asia Pacific operator traffic and ITCZ.The Standard Operating Procedures associated with seat belt sign use are critical. When the seat belt sign is on, there are almost no passenger injuries. Crews get injured checking passenger seat belts secured indicating lack of warning time of turbulence and seat belt sign going on too late.No pilot reports sent out by pilots even after moderate or severe events.Introduction of new information will only make sense to the airlines if there is a clear, reliable, and immediately realizable way to get the information to the flight crews in flight planning and en route. The average sector flight time for these operators was 5 hrs 7 mins therefore en route updates are a must.Note that if cabin is secure object & people, there typically is no accident.

March 6, 201351. MaintenanceTurbulence Costs: U.S. Airlines2. Passenger and Flight Attendant Injuries3. Operational Efficiencies# 2013 AeroTech Research (U.S.A.), Inc.March 6, 2013Costs not well established for Asia Pacific airlines, therefore we will use costs for U.S. airlines which we have experience with.

How does weather awareness impact operational costs?MaintenanceEffect:Unnecessary airframe inspections Cost:$5M / year (Source: ATA)

Injuries Effects:Long-/short-term disability (flight crew)Crew replacement Law suitsInsurance Costs:$35M FA injuries only (Source: Bureau of Transportation Statistics)

Sub optimal efficiency of operation Effects:Non-optimal altitudesVertical and lateral deviations;Diversions and cancellations

Costs (all weather):$1.36Bn (Source: Volpe National Transportation System Center)

6The economic impact# 2013 AeroTech Research (U.S.A.), Inc.March 6, 20137Airline Profitability20102.7%2013 (forecast)1.1%40 year average0.1%Airline Net Profit Margins** IATA# 2013 AeroTech Research (U.S.A.), Inc.sustainable profitability will be the biggest challenge [to the airline industry]Cost cutting alone does not increase long-term profits.Director General Giovanni Bisignani, June, 2011

The goal is to boost profitability through cost avoidance.March 6, 20138Value Proposition for a Fictional US AirlineEventCost per Event# Occurrences per year% preventionSavings / yearEquivalent RevenueMaintenance inspections after encounter.FA injuries due to turbulence.Sub-optimal altitude due to turbulence.$10,000$15,000$500 per flight177590%50%1% of all flights$153 K$ 563 K$1.24 MTOTALResulting Net Margin$1.96 M3.41%Fleet (all pax)100 aircraftOperational revenues$940 MOperating income$ 94 MOperating margin 10.0 %Net margin 3.20 %$4.78 M$17.6M$38.8M$61.3 M# 2013 AeroTech Research (U.S.A.), Inc.Costs presented here have been analyzed for some U.S. carriers and prorated to this fictional airline. These costs are based on U.S. airline operations cost structure and it is understood that the business model for Asia Pacific carriers will have differences. This is a simple example to illustrate the approach but realistic values have been used. It is also conservative in the amount of prevention that could be achieved.MaintenanceRealizing a profit of $153K requires $4.78 M in revenue.InjuriesThis cost value was provided by a Flight Attendant industry group. The equivalent revenue is $17.6M.Suboptimal altitude due to turbulenceNote that this in only one efficiency effect due to turbulence. Other costs will enhance the business case; e.g. a diversion due to injuries can cost in excess of $100K depending on factors.$500 is approximately the cost of 1000lbs of fuel penalty incurred in about 30 minutes of off-optimal altitude flight. This will vary with aircraft type and altitude variation from optimal.Total$1.96 M requires $61.3 M revenue.Roll these savings into operating income and net margin, we see an Increase of 0.21% in net margin which is an increase of 6.5%.March 6, 20139Mitigating technologies# 2013 AeroTech Research (U.S.A.), Inc.While technology on its own will not solve the problem, there have been recent advances that greatly increase operators awareness of weather hazards.March 6, 201310WSI FusionTM Dispatch Product

Courtesy WSI# 2013 AeroTech Research (U.S.A.), Inc.This is a snapshot from WSIs Fusion product for dispatchers. This actual scenario shows a flight out of Chicago (KORD) heading south through convective activity.

AeroTech, in conjunction with NASA and FAA has developed an automated turbulence reporting system TAPS. Now on 330+ American Airlines aircraft with more implementations underway. Coverage extends to North Atlantic, South America, and Hawaii.

Various products shown are:- NEXRAD ground-based radar (blue/green/yellow regions).- Cell top heights with motion direction and speed.- Regions of hail.- TAPS reports (green and yellow triangles light and moderate turbulence).- WSI forecast shape (yellow outline) depicting where the convection is forecasted to be.

An integrated picture of real-time weather and aircraft turbulence encounter reports enhanced weather awareness, and is In use at WSI customers today.

Recall in AAPA Report findings, injuries occurred due to a lack of forewarning of the hazards. In the future, aircraft receiving this information in flight will have weather awareness as well as real-time reports from aircraft ahead. Early applications will be text only.March 6, 201311Flight Crew Decision SupportPre-flight route & hazard analysis

Depicts events in real-time online & tablet

Courtesy WSI# 2013 AeroTech Research (U.S.A.), Inc.Further integrated tools available for pilots for pre-flight and en-route awareness.March 6, 201312recommendations# 2013 AeroTech Research (U.S.A.), Inc.March 6, 201313Recommendations & Next StepsQuantify costs & benchmarks of weather impacts on operations. Implement weather information technologies:Implement turbulence reporting software provided by avionics manufacturers.WSI will interface IT systems to manage downlinked information and uplink reports to aircraft.Provide guidance to pilots on use of uplink data as required.Provide access of information to ground users.Track costs and benefits.# 2013 AeroTech Research (U.S.A.), Inc.-

Flight Safety Foundation recently referred to this type of approach as a Financial SMS. Process follows and is well suited to SMS applications.March 6, 201314Contact Information

11836 Fishing Point Drive, Suite 200Newport News, VA 23606-4507, USAphone: + (757) 723-1300fax: + (757) 723-2980www.atr-usa.comemail: paulrobinson@atr-usa.comDr. Paul A. RobinsonPresident & CEO# 2013 AeroTech Research (U.S.A.), Inc.In conclusion:

1. I have shown you the components of typical encounters with bad weather/turbulence. The surprise factor due to lack of forewarning of the encounters leads to injuries.2. Low profitability of many airlines makes costs of these encounters expensive.

3. Technologies are available today that can mitigate the problem if integrated with airline ground and flight workflows.

4. Recommendation is, if implementing these tools, to quantify and track benefits.March 6, 201315, track 0/0, disc 0/00Blues15264.0eng -

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