ABSTRACT
The benefits of safety are undeniable – not only from a moral standpoint, but also from an economic standpoint. Some of the potential economic benefits of aviation safety include strengthened consumer demand, strengthened labor supply, reduced insurance costs, lower cost of capital, lower liability risk, and reduced costs associated with government fines or penalties. Increases in safety are optimal only when the benefits of safety justify the costs; thus, minor increases in safety that impose major costs are never cost-efficient. Prior to discussing the topic of aviation safety, it is useful to understand some basic aviation safety terminology, since several terms are used synonymously but may contain different meanings. A fatal aviation accident is one that results in fatalities. The fatalities could involve passengers, crewmembers, or people on the ground. The final major incentive for aviation safety is not a true market incentive; however, the threat of government penalties provides another real incentive.
