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Chapter 1 IntroductionBACKGROUNDIn 1998, the Bureau of Transport Economics published its Report 98—Costof Civil Aviation Accidents and Incidents 1 . That work reported on theeconomic costs of aviation accidents and incidents resulting from theoperation of Australian aircraft in Australia in 1996. It presented resultsin 1996 dollar values.Some of our stakeholders have wanted an update for some time—the averagevalues of an accident and of a fatality are important inputs for policy andprogramme purposes.Due to rising standards of living and productivity improvements, injuriesthat remove people from the workforce—either temporarily or permanently—will have a higher economic cost than in 1996. This provides a slow steadyincrease in costs associated with accidents. Further, albeit less smoothly,technology continues to advance, so the cost of reducing the risk of injuryor death continues to decline. This suggests a never ending task, foroperators and regulators, in balancing what safety can be provided andhow much safety people want to buy.1OBJECTIVEThis report provides an update of our previous analysis. It reflects thereported accidents and incidents for Australian registered aircraft, asrecorded in the ATSB’s Accident and Incident database 2 .The analysis is based on reports to ATSB in the 2003/04 financial year,and provides estimates of the total cost to Australia, as well as the cost perfatality and per accident.1 BTE (1998).2 BTE (1998) estimated ‘the economic costs of aviation accidents and incidents resulting from theoperation of Australian aircraft in Australia for 1996.’
Cost of Aviation Accidents and Incidents | btre report 1132ACCIDENT AND INCIDENT DEFINITIONSWhy and when certain aviation occurrences are reported to the ATSBis detailed on their website 3 .A serious injury means 4 an injury that requires, or would usually require,admission to hospital within 7 days after the day when the injury issuffered. A fatality as defined by ICAO is an injury resulting in deathwithin thirty days of the date of the accident 5 .An accident is a matter involving a transport vehicle 6 where:a) a person dies or suffers serious injury as a result of an occurrenceassociated with the operation of the vehicle; orb) the vehicle is destroyed or seriously damaged as a result of anoccurrence associated with the operation of the vehicle; orc) any property is destroyed or seriously damaged as a result of anoccurrence associated with the operation of the vehicle.Matters not involving a), b), or c) above are incidents. There were 267incidents involving minor aircraft damage and/or minor injuries in2003/04, resulting in 18 people receiving minor injuries. Estimatedcosts for these incidents have been included in the estimates.METHODOLOGYThis report updates key values to produce an estimate of the cost toAustralian society of the accidents and incidents that occurred duringthe 2003/04 financial year. The approach taken in analysing the majorcontributor to costs—the value of human life—is the same as that usedin BTE (1998). Some elements that were small or insignificant in thatreport (in monetary terms) are not valued comprehensively here. Rather,they are included in the overall results by applying a small contingencyallowance, based on the BTE (1998) results—see Chapter 3 for details.3 < http://www.atsb.gov.au/aviation/occurs/reporting.cfm> —for reference, these pages arereproduced in Appendix A.4 According to the Transport Safety Investigation Regulations 20035 Annex 13 to the Convention on International Civil Aviation.6 This definition is taken from the Transport Safety Investigation Act 2003 except that in thatAct, the definition begins “An accident is an investigable matter involving …” The change inthis report is to capture Category 5 matters, which are not investigated,even though they meet the a), b), or c) categories, above. ATSB’s website gives guidance on the 1 to 5categorisations — for reference, these pages are included in Appendix B.
Page 2 and 3: Cost of AviationAccidents and Incid
Page 4 and 5: ForewordIn 1998, the Bureau of Tran
Page 6 and 7: ContentsFOREWORDIIIEXECUTIVE SUMMAR
Page 8 and 9: Executive summaryThis report provid
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Page 14 and 15: Chapter 2 The Major TrendsThis chap
Page 18 and 19: Chapter 3 MethodologyThis chapter d
Page 26 and 27: Chapter 4 Cost EstimatesThis chapte
Page 32 and 33: Chapter 5 ResultsCOST OF AVIATION A
Page 38 and 39: Appendix AACCIDENT & INCIDENT REPOR
Page 46 and 47: Appendix BATSB INVESTIGATION CATEGO
Page 54 and 55: APPENDIX CSUMMARY OF ACCIDENTS, 200
Page 56: ReferencesAbelson, Peter 2003, “T

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