Case Study Solutions Case Study Solutions | Page 8

MSC RISK MANAGEMENT8
aviation industry, since it depicts a collective result of business and economy and the stability of
the country’s economic system. (Rose, 1990), through her study it was found that there is
significant and direct relationship between the profitability of the airline with respect to
economic stability and lower accident rates. However, in the later studies, the research has been
modified by finding the strong relationship between the number of accidents with the size of the
airline. It was found that the number of accidents is indifferent to the size of the airline and
suggested the relationship between the maintenance and the performance of airline in terms of
managing the accidental rates. Narohna and Singal (2004) took the study to develop the rationale
between the financial stability of the airline and that of rate of accidents.
However, on concluding the results it has been found that the financial stability in terms
of bond rating have direct impact on the management of accidents in aviation industry. These
airlines irrespective of size and region which have high bond ratings to have more safe and
secure flight. Upon considering results more in-depth, it has been found that these ratings are
related to the performance of the airline as compared to other airlines in the consortium of
aviation The companies tends to secure high bond ratings in order to maintain the value and also
attract the substantial investments for the future expansions.
Savage (2012) studied the phenomenon from a different perspective. Through his
findings it is found that the financial bond ratings has a weak relation with the accidental issues
of the aviation industry. Upon digging the research deeply, it is found that the aim, vision,
objective and profitability of the company has impact on the accidents and safety of the aviation.
Since the more profitable companies would spend more on its services and maintenance of the
safety in order to attract the customers as compared to its competitors, the one with less profits