ABSTRACT
It is obvious that aircraft accidents represent substantial financial loss. As we discussed in Chapter 1, the indirect costs associated with an airliner accident could be as high as four times the direct costs. Therefore, from a purely financial perspective, accidents can force an airline into bankruptcy. But before we get to accidents, there are several other significant losses due to lost-time-injuries, ground damage, flight delays and cancellations, air tum-backs, etc. Such losses drain the vital financial resources on a daily basis. The National Business Aircraft Association (2002) estimates that the annual ground damage direct costs to be $100 million. In another study by Paul Clark (2002), the damages for one major international airline are reported to be about $11.5 million in the year 2000. As such, any money saved by minimizing these losses could be made available to other areas such as training, equipment, and bottom-line survival of the company. Intuitively, one would agree that safety programs can reduce loss and thereby improve productivity/quality; however, it is not always easy to support such intuition with data. In this chapter, we present methods for calculating the return on investment (ROI) for Maintenance Resource Management (MRM) programs.
