Air Canada A320 accident at Halifax

[Numero1]

What do you professionals think of this?


Air Canada Flight 624 class action statement filed in Halifax - Nova Scotia - CBC News

[peekay4]

Indeed, AC (and whoever else owns the plane) has probably made a substantial profit on this hull and will have already received the cheque! ...
BA got paid immediately and in full, for example, when a perfectly serviceable 747 was stranded in Kuwait after the Iraqi invasion. It was the oldest hull in the fleet and earned the company a nice profit. .

I believe this is incorrect. Unfortunately people compare aviation insurance to their more familiar car (auto) insurance policy, and make wrong conclusions.

Cars rapidly depreciate. The old joke is, as soon as you drive a new car off the lot, you've lost 50% of the car's value. So car insurance works with this concept in mind. In case of a total loss, the payout is based on Actual Cash Value, which takes into account the age of the car, wear and tear, mileage, etc. All these things are subtracted from the car's replacement value (depreciation).

In aviation, things work very differently. The replacement value of an airplane doesn't follow your typical depreciation scale. Even a Cessna 172 sold for $20k back in 1975 might be worth $45k today.

So in aviation, instead of using Actual Cash Value, the payout is based on a fixed Agreed Value. I pay $X dollars premium, and the insurance company agrees to pay me $Y dollars if there's a loss. There is no depreciation involved.

People conclude: wow, if I crash a 30 year old plane, the insurance company will still pay me $Y dollars, which must be way above the depreciated value of the airplane!

But we've already shown that that's wrong, with the Cessna example. At the time of the claim, the replacement cost of the airplane might actually be greater than the Agreed Value.

Companies like Air Canada (or British Airways) do not like to under-insure or over-insure. If they under-insure, then they have to shoulder tons of expenses if there's an accident. If they over-insure, then they are overpaying their premiums.

So periodically, airlines will get experts to re-appraise every aircraft in their fleet, and re-adjust their insurance requirements accordingly. So if the value of an aircraft drops over time, they will re-insure the aircraft at a lower Agreed Value, and pay less premiums.

Thus in reality the delta between the Agreed Value and the replacement value of the aircraft isn't very large, unless either the airline or the insurance company hasn't been doing their job.

[oblivia]

That makes more sense. I was trying to find the article where I'd read all this stuff. It's here:

The big money surprise about Malaysia Airlines - Fortune

But on re-reading I'm pretty sure it's gotten things a bit back to front.

[peekay4]

The article quotes an "expert" stating "he knows no airline" which doesn't insure all risks at "full replacement value".

But we can easily find actual airline insurance terms from SEC filings by doing a simple Google search.

You'll see insurance agreements related to numerous past and current airlines, including Delta, United, Skywest, American Airlines, Aloha, etc.

All of them use "agreed value" as I described above, and not "full replacement value".

The only exception I know is if an airline self-insures. Otherwise "agreed value" is standard practice world-wide.

[BeechNut]

In aviation, things work very differently. The replacement value of an airplane doesn't follow your typical depreciation scale. Even a Cessna 172 sold for $20k back in 1975 might be worth $45k today.

So in aviation, instead of using Actual Cash Value, the payout is based on a fixed Agreed Value. I pay $X dollars premium, and the insurance company agrees to pay me $Y dollars if there's a loss. There is no depreciation involved.

This is exactly my experience with insuring my own aircraft (a 1979 Beech Sundowner 180). Although the market for GA aircraft has tanked in my part of the world and the Agreed Value has declined.

The caveat here is that the insurance company will balk if you ask to insure for an Agreed Value greatly above the true market value of the aircraft. They don't want to pay out for much greater than true market value (at my end of the scale the premium difference on a $10k delta in agreed value is fairly small). And of course I don't want to pay excessive premiums, so it's in both of our best interests to assess a fair Agreed Value.

Two things have affected the Agreed Value on my aircraft: one, the market (which has been pretty poor since 2008); the other, as I run down the time to TBO on my engine.

While I don't know if I can extrapolate this to airliners, I'm pretty sure that as an aircraft approaches a major check, it's market and hence agreed value adjusts accordingly. Since I bought my aircraft, I've reduced the agreed value as my engine approaches TBO.

[Ian W]

Check Altimeter

There is one major difference that should be highlighted between ILS, GLS and LPV (and variants). With ILS the aircraft is following a glidepath beam from antennae on the ground, with GLS the aircraft is following a glidepath based on GPS alt corrected by Ground Augmentation - both of these are accurate glidepaths to the runway elevation. However, with LPV the glidepath is based on a distance/altitude calculation and the aircraft glidepath is 'barometric aided' in other words your vertical displacement from the runway elevation is based on your altimeter setting, you are not flying a ground referenced glidepath but an altimeter referenced glidepath. So the altimeter setting needs to be checked and rechecked. (unless you want to fly an EGPWS aided approach of course)

In ASRS missetting the altimeters in the aircraft is one of the most common incident reports. So from experience of the reporters to ASRS, LPV has far more potential risk than ILS or GLS, particularly if the crew are lulled into a false sense of security as the LPV presentation can look so much like a normal ILS

[Jet Jockey A4]

@ Ian W...

Not sure I understand your comment.

Maybe I’m wrong (not as tech savvy as others on this forum) or was thought wrongly but this is the way I understand the different GPS/RNAV approaches…

As far as I know with the LPV approach you are not using a "barometric altimeter" to fly the assumed G/S like you would on a LNAV or LNAV/VNAV approach.

The LPV approach uses a GPS/WAAS derived altimetry to fly a very precise angular type G/S like an ILS and never changes regardless of the altimeter setting set on the altimeter nor does it change with the OAT, so there is no need to actually change the crossing altitudes over the various fixes on the approach like on a LNAV/VNAV approach to keep the proper ground clearance.

If you were to fly a LPV approach and you didn't set the proper altimeter setting (whether high or low) or if you did not "TEMP COMP" you would still be on that "proper and correct" G/S (like on an ILS) but your crossing altitudes over every fix on that approach would be either higher or lower than is written on the approach chart. You should still mentally do the “TEMP COMP” to have a correct idea of the “new” crossing altitudes over the fixes to double check but it does not need to be programmed in the FMS unlike a LNAV/VNAV approach.

Finally, you still need to readjust your DA (or MDA) to a higher minimum in the colder temperatures to keep that correct ground clearance.

[peekay4]

From a vertical guidance perspective:

LNAV -- no vertical guidance. Does not require WAAS.

LP -- no vertical guidance. Requires WAAS.

LNAV/VNAV -- with vertical guidance, using baro-VNAV systems. WAAS may be used instead of baro-VNAV.

LPV -- with vertical guidance, using WAAS. (WAAS required).

GLS -- with vertical guidance, using GBAS.

[YRP]

This is exactly my experience with insuring my own aircraft (a 1979 Beech Sundowner 180). Although the market for GA aircraft has tanked in my part of the world and the Agreed Value has declined.

The caveat here is that the insurance company will balk if you ask to insure for an Agreed Value greatly above the true market value of the aircraft. They don't want to pay out for much greater than true market value (at my end of the scale the premium difference on a $10k delta in agreed value is fairly small). And of course I don't want to pay excessive premiums, so it's in both of our best interests to assess a fair Agreed Value.

Slightly off topic because this likely does not apply to airlines (possibly excepting Qantas ):

The other factor for GA aircraft is that you really do not want to overinsure your aircraft. The insurance company decides on write-off vs repair based on a certain percentage of the insured value. If you overinsure, they could decide to repair a plane that should have been written off. You are left owning a plane worth much less than it was previously because of the damage history. Some insurance policies have a "value correction" clause to avoid this situation.

[peekay4]

It's been 30 days now since the crash... hopefully the Annex 13 preliminary report be made available soon.

I'm a bit surprised that we haven't heard anything more about this crash. Often, (but not always), lack of news points to the dreaded "pilot error". Navigation equipment malfunction, windshear, etc., tend to get leaked to the media.

[L39 Guy]

JetJockey A4, you are correct. Both lateral and vertical positioning with WAAS/LPV is based upon satellite derived values including elevation. It is insensitive to altimeter settings, non-standard atmospheres (both hot and cold), etc.

In fact, whereas barometric altimetry is advertised to be +/- 50 ft (16m), WAAS vertical position accuracy is typically in the 0.5 m range.

With the imminent implementation of Galileo, not just North America, Japan and India but the entire world will have this augmented satellite navigation source thus permitting an "ILS-like" approach with localizer-like and glide-slope-like qualities to any airport in the world.

With GLS, a separate roughly $3 million box will be required near the airport - it too will provide the same level of accuracy, integrity, etc as WAAS/Galileo but will also require significant avionics improvements including VHF radios for the datalink, etc.

Hands down, WAAS/Galileo and LPV/APV is a far better solution for the aviation community anywhere in the world and for any size and type of aircraft.

[Geosync]

To bring the insurance conversation back full circle, the basic foundation of insurance is that it deals with "pure risk", which is the chance of loss or no loss, but no chance of gain. As others have mentioned, insurance companies aren't dumb, they typically won't over insure an aircraft. Does it happen? Sure, now and then, but typically no. In the airline world polices have deductibles just like your homeowners, or your Cessna 172 policy and they usually are between $1,000,000 and $500,000 dollars depending on model, body type, etc. So the airline will eat that first chunk of money before insurance kicks in. If there are upgrades to the aircraft the value is adjusted. If there is damage that is being repaired, the value is lowered until the repairs are complete. So in the end, the insureds typically don't make a profit in the event of a total loss, insurance has plenty of checks and balances that naturally prevent that. Has it happened? Yep, I've seen it(and believe me, the fallout isn't pretty for the underwriters) but it is rare. And if there is suspected fraud involved, insurance companies will do a deep investigation; they have lawyers on staff and they'll hire outside counsel if need be. Chances are the insurance companies has been doing this much longer than the insured has been around, so they're not to be messed with.

[GlobalNav]

Quoted: "From a vertical guidance perspective:

LNAV -- no vertical guidance. Does not require WAAS.

LP -- no vertical guidance. Requires WAAS.

LNAV/VNAV -- with vertical guidance, using baro-VNAV systems. WAAS may be used instead of baro-VNAV.

LPV -- with vertical guidance, using WAAS. (WAAS required).

GLS -- with vertical guidance, using GBAS."

Nice summary. Still, all provide guidance in the instrument segment to some minimums - MDA, DA or DH - and the pilot must make a decision to continue descent and operate into the visual segment to land.

The pilot must be capable of making a safe decision and skillfully use the flight visibility and visual references to visually control the airplane to land. The main problem, as I see it, is safely conducting the visual segment which means, to begin with, not accepting less than then necessary visual cues. The safety of every instrument approach, except Cat III autoland, requires this.

[slast]

The pilot must be capable of making a safe decision and skillfully use the flight visibility and visual references to visually control the airplane to land. The main problem, as I see it, is safely conducting the visual segment which means, to begin with, not accepting less than then necessary visual cues. The safety of every instrument approach, except Cat III autoland, requires this.

That is 100% correct and is the nub of the matter. And the decision must be that those "necessary visual cues" to continue below DH have ALREADY "been in view for sufficient time for the pilot to have completed an assessment of the aircraft position and rate of change of position, in relation to the desired flight path."

But we know that this assessment is very difficult in the vertical plane, and needs sight of at least a point of "low relative motion" (i.e. the aiming point). That is in no way guaranteed to be visible by DH, and is not even theoretically available in limiting conditions. Unfortunately the industry has for decades glossed over this inconvenient fact and trained pilots to believe that far less visual reference will be OK.

That means that the pilot's actual ability to "visually control the airplane to land" may have been fatally compromised without him even realising it. 99% of the time we get get away with it, but every now and again some unfortunate individual does not and is held responsible for making a "pilot error".

[scud]

1.Scud: for a non-precision approach (i.e. minimums as low as 250 ft) there is no requirement of sophisticated lighting, hold short lines, etc. For 99% of the runways out there particularly at airports with an existing CAT II or CAT III ILS, LPV can provide approach limits to 250 ft with the only improved airport infracture is insuring the Glideslope Qualification Surface (GQS) - the region between DA and the runway is free of obstacles above a protected surface (I won't burden you with the calculation of this surface but it is roughly a 2 degree slope for a 3 degree Flight Path Angle (FPA). In Halifax's case, all four runway ends have LPV approaches with limits between 250 and 259 ft (DA value rounded up to the next highest 10 ft - TDZE). Neither Runway 05 or 32 have fancy lighting. The problem in this case is that the AC A320's don't have GPS and even if they did, they and virtually every other transport category aircraft (Airbus, Boeing, etc) don't have WAAS making these procedures unable.

L39 guy, you're misconstruing my point.

The only cost-effective alternative for Air Canada's A320 fleet for runway 05 in Halifax, that would have prevented this accident would have been the installation of an electronic Glide Slope. That's because Air Canada's A320 fleet does not have GPS (I know because I've got over 4000 hours on them), and therefore unable to do LPV approaches that would have given them a precision type of approach (with a reliable glide path). The cost of installation of a Glide Slope, plus the addition of enhanced approach and runway CAT I lighting is still far more cost-effective than the installation of GPS/WAAS/LAAS on a fleet of over 40 aircraft, not to mention the other types that don't have GPS (none of the 767's... and yes, I've got over 4000 hours on those too).

The point being is that, you can have all manner of LPV/GLS equipped airplanes, but it's not cost effective at all if you can't reduce the DH below 250 feet because you don't have at least CAT I approach and runway lighting. That was my point.

[peekay4]

As others have mentioned, insurance companies aren't dumb, they typically won't over insure an aircraft. Does it happen? Sure, now and then, but typically no. In the airline world polices have deductibles just like your homeowners, or your Cessna 172 policy and they usually are between $1,000,000 and $500,000 dollars depending on model, body type, etc.

Geosync you might be surprised that both of the above assertions are not universally true for aviation insurance.

First, since aviation insurance uses "agreed value", it's very common for insurance companies to de facto "over insure" an aircraft. And they don't really care, since the insured is paying enough premium to cover the "agreed value". In other words, over insurance hurts the aircraft owner, not the insurance company. It's up to the aircraft owner to periodically get a new appraisal and reduce the "agreed value" if necessary.

The insurance company sure wont complain collecting higher premiums!

YRP also brings up a very important point above. If the aircraft is "over insured", then the insurance company may elect to repair a substantially damaged aircraft instead of simply writing it off and paying out the full agreed value. This can be highly detrimental to the aircraft owner.

In the airline industry this becomes important because, as you know, a large percentage of airliners are leased. (E.g., I believe the accident Air Canada aircraft was leased).

In a dry lease arrangement, the lessee is typically required to insure the aircraft with an "agreed value" not exceeding the aircraft's replacement value, to prevent over insurance. Otherwise, in case of an accident the lessor (owner) might get stuck with a "repaired" aircraft with a substantial damage history and severely diminished value. Again, this restriction to prevent over insurance is from the aircraft's owner, not from the insurance company.

Regarding deductibles, many aircraft insurance these days are written with ZERO deductibles. Remember that deductibles were designed for things like car insurance where there tends to be frequent but relatively small claims -- fender benders, cracked windshields, dings on doors, etc. Aircraft insurance is the exact opposite: there's rarely have a claim, but when there is one it's usually catastrophic.

So compared with car insurance, deductibles play a smaller role in aviation insurance. Sometimes there is a fixed deductible and the insurance company will not give an option of a higher deductible in exchange for a reduced premium. And if there is a deductible, the deductible has to be very high (over 10% of the agreed value) to make the premium reduction worth the extra risk.

[slast]

Pilot decision making

In the context of visual cues, by chance I was just reading this in the report of the Air France Toronto over-run in 2005, page 122: may turn out to have some relevance....

"Much has been written on the issue of pilot decision-making processes regarding landing. Nevertheless, this occurrence and others give a clear indication that there are still risks associated with this task. The Board believes that the ability to capture and interpret cues that are essential in the decision-to-land process is inadequate, especially when the cues are
ambiguous or not immediately compelling. Consequently, pilots will continue to land in deteriorating weather once the landing decision has been made, in spite of cues that indicate that a go-around or balked approach should be executed.

Therefore, the Board recommends that:
The Department of Transport mandate training for all pilots involved in
Canadian air transport operations to better enable them to make landing
decisions in deteriorating weather. (A07-03)

[JFZ90]

https://fortunedotcom.files.wordpres...jpg?quality=80

One observation of that insurance article - their own article contradicts the assertion that payouts are always at "replacement value".

The chart shows the hudson A320 having a payout of only $24M. I recall a new A320 is around €100m a pop, so thsi is far far away from the real replacement value.

(I'm assuming the hudson A320 was scrapped, not repaired, surely....?)


EDIT - turns out it is in a musuem.

[Retired DC9 driver]

slast,
regarding the Air France over-run, in CYYZ, an ICAO standard run out zone in Toronto would have likely saved the A-340 aircraft from breaking up at all. Fortunately a very professional in-flight crew evacuated all the passengers before the fuselage was consumed by fire.
Previously a DC-9; following a blown tire and rejected TO had an overrun in the same area. When the DC-9 went into the ravine, two passengers were killed when the fuselage buckled, but there was no fire..

[slast]

Hi DC9, after 30+ years as an IFALPA rep, you certainly won't find me arguing against the implementation of ICAO SARPS !
My thought was though it will be long while before the final report comes out, it's odds-on that the enquiry into this (Halifax) will find reason to question the crew's decision making, whatever the other contributory causes - they almost always do. And the individual crew members are already facing several class action lawsuits.
The report into the AF accident made a lot of play about decision making in changing conditions:

On the other hand, a decision to continue and land when the visible cues are very faint at best at DH is a stressful one for a pilot. Should visual cues then diminish or disappear after the decision to land has been made, the first feeling or impression on the part of pilots is one of incomprehension, followed by a period of inaction, where they wonder what just happened,
and where they wish that things will get back to normal soon. This lack of reaction while waiting for the runway environment to re-appear is because the brain becomes task saturated at that very moment, unless the pilot has been trained to react instinctively and immediately to the threat. Naturally, the correct action must be an immediate go-around. The Board believes that, if more training could be done in this respect, the rate of these types of accidents would decrease.

So I wondered if anything changed in AC's training after that (or anyone else's, come to that). I suspect not much.