Module N° 5 –

Risks

By PARAMITA
Objective

• At the end of this module, participants will be

able to apply the fundamentals of risk
management through a case study
Outline

• Definition of risk
• First fundamental – Risk management
• Second fundamental – Risk probability
• Third fundamental – Risk severity
• Fourth fundamental - Risk index/tolerability
• Fifth fundamental – Risk control/mitigation
• Risk management warm-up exercises
• Points to remember
• Questions and answers
Definition of risk
• Risk – The assessment, expressed in terms of
predicted probability and severity, of the
consequence(s) of a hazard taking as reference
the worst foreseeable situation
• A wind of 15 knots blowing directly across the runway
is a hazard
• A pilot may not be able to control the aircraft during
takeoff or landing is one of the consequences of the
hazard
• The assessment of the consequences of the potential
loss of control of the aircraft by the pilot expressed in
terms of probability and severity is the risk
 First fundamental – Risk
management

• What is it?
• The identification, analysis and elimination, and/or
mitigation to an acceptable level of risks that threaten
the capabilities of an organization
• What is the objective?
• Aims at a balanced allocation of resources to address all
risks and viable risk control and mitigation
• Why is it important?
• A key component of safety management systems.
• Data-driven approach to safety resources allocation, thus
defensible and easier to explain
 Risk management

The risk is
Unacceptable region
unacceptable
at any level

As The risk is
acceptable
Low based on
As Tolerable region mitigation.
Cost benefit
Reasonably analysis
Practicable is required.

Acceptable
region The risk is
acceptable as it
currently stands
Cost-benefit analysis
• Direct costs
• The obvious costs, which are easily determined. The
high costs of exposure of hazards can be reduced by
insurance coverage
• Purchasing insurance only transfers monetary risk, does
not address the safety hazard
• Indirect costs
• The uninsured costs. An understanding of uninsured
costs (or indirect costs) is fundamental to
understand the economics of safety
Cost-benefit analysis

• Indirect costs may amount to more than the

direct costs resulting from exposure to hazards:
• Loss of business
• Damage to the reputation
• Loss of use of equipment
• Loss of staff productivity
• Legal actions and claims
• Fines and citations
• Insurance deductibles
Second fundamental – Risk
probability
• Definition
• Probability – The likelihood that an unsafe
event or condition might occur (frequency)
Second fundamental – Risk
probability

• Questions for assessing the probability of an

occurrence:
• Is there a history of occurrences like the one being
assessed, or is the occurrence an isolated event?

• What other equipment, or similar type components,

might have similar defects?
Second fundamental – Risk
probability

• … questions such as:

• What number of operating or maintenance
personnel must follow the procedure (s) in
question?

• How frequently is the equipment or procedure

under assessment used?
 Second fundamental – Risk probability
Probability of occurrence
Qualitative
Meaning Value
definition

Frequent Likely to occur many times (has occurred frequently) 5

Occasional Likely to occur some times (has occurred infrequently) 4

Remote Unlikely, but possible to occur (has occurred rarely) 3

Improbable Very unlikely to occur (not known to have occurred) 2

Extremely
Almost inconceivable that the event will occur 1
improbable
Third fundamental – Risk severity

• Definition
• Severity – The possible effects of an unsafe event or
condition, taking as reference the worst foreseeable
situation
Third fundamental – Risk severity

• Define the severity in terms of effects for:

• Property
• Finance
• Liability
• People
• Environment
• Image
• Public confidence
Third fundamental – Risk severity
• Questions for assessing the severity of an
occurrence:
• How many lives may be lost?
• Employees
• Passengers
• General public
• What is the environmental impact?
• Spill of fuel or other hazardous product
• Physical disruption of natural habitat
Third fundamental – Risk severity
• … questions such as:
• What is the severity of the property or financial damage?
• Direct operator property loss
• Damage to aviation infrastructure
• Third party damage
• Financial impact and economic impact for the State
• Are there organizational, management or regulatory
implications that might generate larger threats to public well-
being?
• What are the likely political implications and/or media interest?
 Third fundamental – Risk severity
Severity of occurrences
Aviation definition Meaning Value
➢Equipment destroyed.
Catastrophic ➢Multiple deaths. A
➢A large reduction in safety margins, physical distress or a
workload such that the operators cannot be relied upon to
Hazardous perform their tasks accurately or completely. B
➢Serious injury.
➢Major equipment damage.
➢A significant reduction in safety margins, a reduction in the
ability of the operators to cope with adverse operating
conditions as a result of increase in workload, or as a result C
Major of conditions impairing their efficiency.
➢Serious incident.
➢Injury to persons.
➢Nuisance.
Minor ➢Operating limitations.
➢Use of emergency procedures. D
➢Minor incident.
Negligible ➢Little consequences E
Fourth fundamental – Risk
index/tolerability
Fourth fundamental – Risk
index/tolerability
Fifth fundamental – Risk
control/mitigation
• Definition
• Mitigation – Measures to address the potential
hazard or to reduce the risk probability or severity
• Risk mitigation = Risk control
• (Mitigate – To make milder, less severe or less harsh)

Hazard Unsafe Event Consequence

Prevention (Reduce the Protection (Reduce

probability of an unsafe the severity of
event to occur) consequence)
Fifth fundamental – Risk
control/mitigation

• Strategies
• Avoidance – The operation or activity is cancelled
because risks exceed the benefits of continuing the
operation or activity
• Operations into an aerodrome surrounded by complex
geography and without the necessary aids are cancelled
Fifth fundamental – Risk
control/mitigation

• Strategies
• Reduction –The operation or activity is subject to
limitations, or action is taken to reduce the
magnitude of the consequences of the accepted
risks
• Operations into an aerodrome surrounded by complex
geography and without the necessary aids are limited to
day-time, visual conditions
Fifth fundamental – Risk
control/mitigation

• Strategies
• Segregation of exposure – Action is taken to isolate
the effects of the consequences of the hazard or
build-in redundancy to protect against it
• Non RVSM equipped aircraft not allowed to operate into
RVSM airspace
• Operations into an aerodrome surrounded by complex
geography are limited to aircraft with
specific/performance navigation capabilities
 Safety risk management at a
glance
Hazard
Equipment, procedures, organization, etc.
identification

Analyse the likelihood of the consequence Risk analysis

occurring Probability

Evaluate the seriousness of the consequence if it Risk analysis

does occur Severity

Risk assessment
Is the assessed risk(s) acceptable and within the and tolerability
organization’s safety performance criteria

No, take action to Risk control

Yes, accept the risk(s) reduce the risk(s) to an
acceptable level /mitigation
Risk mitigation – Defences
• Remember that the three basic defences in
aviation:
• Technology

• Training

• Regulations
Risk mitigation – Defences

• As part of the risk mitigation, determine:

• Do defences to protect against such risk (s) exist?
• Do defences function as intended?
• Are the defences practical for use under actual
working conditions?
• Is staff involved aware of the risks and the defences
in place?
• Are additional risk mitigation measures required?
 Risk mitigation at a glance
Hazard/consequence Assessment of the Control and Accepting the
identification defences within the mitigation of the mitigation of the
and risk assessment safety system risk(s) risk(s)

H H H H ➢Does it address the

Intolerable region risk(s)?
➢Is it effective?
Each
consequence ➢Is it appropriate?
➢Is additional or
Tolerable region different mitigation
R R R R warranted?
➢Do the mitigation
Acceptable
region
strategies generates
additional risk(s)
Each Risk

Feedback (Safety assurance)

 As a reminder
• There is no such thing as absolute safety – In aviation it is not
possible to eliminate all risks
• Risks can be managed to a level “as low as reasonably practicable”
(ALARP)
• Risk mitigation must be balanced against:
• time
• cost
• difficulty of taking measures to reduce or eliminate the risk (i.e.
managed).
• Effective risk management seeks to maximize the benefits of
accepting a risk (a reduction in time and cost) while minimizing the
risk itself
• Communicate the rationale for risk decisions to gain acceptance by
stakeholders affected by them
 BOW TIE
• Each hazard identified - and its subsequent unfolding
scenario – should be logged (in a Hazard register
document for instance).
• Each combination of hazard – unsafe event should
be dealt with separately and reflected in its own
worksheet, but BOW TIE diagram is the format to
reflect each combination, the benefit are :
• Overall unfolding scenario illustrated in just 1 picture
• Can be used even where a quantitative approach of risk
assessment may not be possible or desirable
• -Easy to understand and thus effective tool to explain and
to disseminate safety-related information throughout the
airport organization
 BOW TIE COMPONENT

• https://www.cgerisk.com/industries/aviation/
 Risk management process at a
glance
Feedback and
record the hazard A safety concern is perceived
identification and
assessment and Identify hazards/consequences
risk mitigation and assess risks
Define the level Define the level
of probability of severity
Define the risk index and
tolerability
Take action
and continue YES Is the risk index acceptable? NO
the operation

Take action
and continue YES Can the risk be eliminated? NO
the operation

YES Can the risk be mitigated?

Take action
and continue Can the residual risk be Cancel the
YES accepted? (if any) NO operation
the operation
Points to remember

1. The risk index/tolerability

2. The risk assessment criteria table
3. Risk mitigation: avoid, reduce, segregate