International Journal of Aviation,

Aeronautics, and Aerospace

Volume 9 Issue 4 Article 1

2022

Aviation Risk Management

Tracey M. Richardson
WW/Decision Sciences, richart2@erau.edu
Jim W. Marion Jr. PhD
WW/Decision Sciences, marionj@erau.edu
Rachel Vigness
Embry-Riddle Aeronautical University, vigne00a@erau.edu

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Scholarly Commons Citation

Richardson, T. M., Marion Jr., J. W., & Vigness, R. (2022). Aviation Risk Management. International Journal
of Aviation, Aeronautics, and Aerospace, 9(4). Retrieved from https://commons.erau.edu/ijaaa/vol9/
iss4/1

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 Richardson et al.: Aviation Risk Management

In an increasingly complex global ecosystem, organizations face a growing

number of risk factors. While risk is inherent in all industries, aviation projects are
subject to enhanced scrutiny given the necessity to ensure safe, timely, and fiscally
responsible outcomes. As a result, the acceptance of project management concepts
within aviation projects has been widely adopted (Flouris & Lock, 2016). Failure
to manage risk factors is observed in examples of unsuccessful projects – some with
catastrophic outcomes involving NASA’s Space Shuttle Challenger and the Boeing
737 MAX, and the delayed open of Berlin’s Brandenburg airport. In the two
instances tragically, lives were lost (Allen et al., 2016; Herkert et al., 2020), and the
second example the airport’s $7 billion cost was three times more than the original
project budget (Wagner, 2017). These examples underscore the importance of
improved risk management practice throughout the aviation supply chain – from
manufacturing to airport design and beyond. In an industry fraught with high-stakes
risk factors, the inconsistent implementation of risk management practices (Taroun,
2014) suggests the need for focused research into how risk is managed within
aviation projects. This focused examination of risk management in aviation projects
provides practical insight in an industry where the unknown must be managed to
minimize tragedy and capitalize on opportunity.

Literature Review
The aviation ecosystem involves a complex network of organizations
(Ermakova et al., 2019) undertaking risk-sensitive projects (Flouris & Lock, 2009).
Risk events in aviation run the gamut from those that are favorable to that which,
though infrequent, have the potential to result in catastrophic outcomes. For that
reason and amidst heightened uncertainty in the air transport industry, there exists
an immediate need to explore and understand the implications and management of
risk in aviation projects. The literature review examines the body of knowledge
regarding risk management and the extent to which it is observed in research
involving aviation-oriented organizations.
Uncertainty in Projects
All organizations face risk. Risk, within the context of project management
is described as “an uncertain event or condition, that if it occurs, has a positive or
negative effect on a project's objective” (Project Management Institute, 2021, p.
117). Understanding that risks cannot be eliminated (Rios Insua, 2018; Weaver,
2008) and in some cases should be exploited, successful project oversight involves
managing risk (Padalkar & Gopinath, 2016). Underpinning risk management is the
complexity theory which concedes the impossible task of accurately predicting the
future (Turner & Baker, 2019; Weaver, 2008). Given this challenge, effective risk
management involves the use of tools and techniques designed to identify and
manage future risks that could potentially impact the project (Gerstein et al., 2016).

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Risk Management Strategies

The practice of risk management – that is risk identification, analysis,
response, and monitoring – is challenging, yet critical at every stage of the project
(Szymański, 2017). Examples of tools and methods used within the risk
management cycle include: (a) brain storming, (b) Delphi method, (c) SWOT
analysis, (d) Ichikawa method, (e) sensitivity method, (f) modelling and computer
simulations, (g) risk matrix, (h) PERT method, (i) decision trees, (j) probabilistic
methods and probability theory, (k) Fuzzy sets, and (l) artificial neural networks.
Scholars have gone to great length to evaluate and compare risk assessment tools
and techniques (Afzal et al. 2021; Cioaca, 2011; Kanki & Hobbs, 2010; Ostrom et
al. 2019), yet according to Taroun (2014) there are gaps between the theory and the
actual practice of risk management.
Just as no two projects are the same, it goes to reason project risk factors
and management also differ. Prabhakar (2009) surmised that projects vary
according to the industry, as well as the organization’s type, size, and location. For
instance, some industries such as banking and insurance are more readily concerned
and prepared to manage risk. The question follows, to what extent does risk
management differ in aviation-oriented projects?
Managing Risk in Aviation Projects
The aviation value delivery chain is comprised of multiple entities each
playing a role in ensuring a safe and efficient air transport service. From aircraft
production to airport construction efforts and the information technology systems
involved, the number of projects within the aviation industry are plentiful (Flouris
& Lock, 2009). Burdina and Bondarenko (2022) recommend the use of project
management practices to increase the likelihood of project success. Uncertain
events or factors impacting aviation projects stem from the following: a) supply
chain risk, b) financial and schedule risk, c) human capital risk, d) organization and
management risk, e) external dependency risk, f) political risk, and g) technical risk
(Gerstein et al., 2016).
Given the nature of risk and its consequences, there is an opportunity to
further explore the factors that lead to project success and failure (Padalkar &
Gopinath, 2016) and how those risk events are managed in aviation projects
(Flouris & Lock, 2009). Managing risk through qualitative and quantitative analysis
techniques is common, however, projects often rely on human inputs including but
not limited to estimates, assumptions, and judgement (Flouris & Lock, 2009). This
challenge supports the call to examine risk management lessons in aviation
projects, with a keen focus on project recovery and project failures. A discovery
into these topics will advance the body of knowledge around the similarities and
differences of risk management in aviation projects.

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Methodology
This study applied the constructivist paradigm using a phenomenological
strategy to explain the aviation project manager's experience with risk management.
The primary purpose of this research was to understand risk management in the
aviation industry and what can be learned by asking practitioners. The 56
participant's experiences and feedback provided key information and insight to the
research questions.
By using the constructivist mindset, the authors used the aviation project
managers’ perceptions to reconstruct a risk management framework (Guba &
Lincoln, 1994). Additionally, the phenomenological approach was utilized. The
authors identified both researcher and participant presuppositions about aviation
risk management to set them aside to understand the true phenomenon impacting
risk management in aviation (Osborne, 1994). For this study, interviews were
conducted with 56 practicing project managers who self-identified in the aviation
industry. The data gathered was analyzed to understand and create participant
perceptions of aviation risk management. The interviews with professional project
managers solicited answers to questions regarding both risk management and
successful and failed project execution, examples of project failure (in the context
of risk), and opinions about what makes aviation unique with respect to risk and
execution. For this paper, the results of project risk are included. The methodology
was based on the primary research question:
What Lessons Can You Share About Project Risk Management?
The research design adopted the key informant technique to identify
participants, who were individually recruited by project management graduate
students, based on position in organizations and aviation expertise to provide
insight into the roles of a project manager (Marshall, 1996). The series of one-to-
one semi-structured interviews was conducted using the study's theoretical and
foundational knowledge and the observations of experience explored with the
participant (Schmidt, 2004). The interviewers collected data in the form of field
notes to minimize personal bias and unintentional errors of omission due to memory
lapse (Hofisi et al., 2014). The researchers acknowledge that professional
experience as project managers could influence data interpretation (Mehra, 2002).
To minimized personal bias, the researchers conducted peer debriefing (Seale,
1999) and substantiated findings with relevant quotes.
The literature suggests that qualitative research sample size is to be small
(Miles et al., 2019) with recommended ranges from 5 to 25 participants (Creswell,
2017). Qualitative research sample size seeks “saturation”, the point at which
additional participants uncover no new information (Strauss & Corbin, 1998).
Consistent with qualitative research practice, the number may be increased to reach
saturation (Marshall, 1996; Strauss & Corbin, 1998), but in this case, it was not
necessary.

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Interview analysis was organized in three phases. First, the interview

transcripts were examined, noting persistent themes, quotes, and examples
significant to aviation risk management (Merriam & Tisdell, 2015). The researchers
individually performed multiple transcript reviews and jointly assessed themes for
distinction and consistency (Merriam & Tisdell, 2015). Second, the unstructured
interview data was organized and analyzed using nVivo qualitative coding software
and hierarchical coding (Ozkan, 2004). The proximity of emerging themes was
identified using frequency analysis. The thematic analysis led to the development
of a conceptual framework emerging from the interview transcripts of aviation
project managers involved in managing project risks. Following the nVivo
qualitative data analysis, the interview transcripts were systematically analyzed
using the SAS Enterprise Text Miner. The SAS Text Miner applies advanced
mathematical techniques to extract topics from text documents using the dimension
reduction methodology of Singular Value Decomposition (SVD) (Albright, 2004).
The results of the SAS Text Miner were used to ground the nVivo analysis with a
neutral and objective generation of topics that are used to compare with researcher-
generated text coding associated with qualitative data analysis.

Analysis of Research Results

Phase One: nVivo Qualitative Analysis
To begin the qualitative data analysis, a word frequency analysis was
performed within nVivo to gain an understanding of words most frequently
employed by project risk managers working within aviation projects. The themes
were ranked according to the number of interviews in which they appeared along
with the overall number of instances in which they appeared. The themes identified
themes used in this study were limited to the top ten themes, Table 1.

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Table 1
Top Ten Themes Ranked by Frequency of Appearance

After the themes were ranked, nVivo was then used to determine the word
similarity of each code. In this cluster analysis generated by NVivo (Version 10,
QSR International, 2018), the correlation coefficients measuring the relationships
of common words found between themes are illustrated in Figure 1. For example,
in the dendrogram, it is observed that the themes fall into two major streams. The
first stream is associated with risk identification early in the project followed by
communication of risks and contingency plans to project stakeholders. The second
stream of related themes involves the intense focus on the assessment of risk within
a capital-intensive and inherently dangerous industry.

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Figure 1
nVivo Themes and Excerpts: Stream 1-Early Risk Identification and
Communication

This stream of related themes highlights the important of early identification as well
as the preparation of plans for addressing risk to minimize impact there possible.
Contingencies (11 documents [20% of respondents] / 13 instances / ranking 143)
The risk strategy of contingency planning is a focus of this identified theme.
Given the severe impact of risk in the aviation industry, project managers actively
seek to either blunt the impact of the risk or eliminate it altogether using
contingency planning. The following interview excerpts from this theme capture
this intent as follows:
“Risks need to be carefully analyzed and appropriately measured to ensure the
proper contingencies are in place for a project.”
“…a great majority of risks can be captured and communicated to the stakeholders
to ensure proper contingencies or mitigations are in place…”
Communication (17 documents [30% of respondents] / 18 instances / ranking
306)
Risks in the world of aviation can be insidious. Often something very small
creates a cascading chain of events that could lead to disaster. Constant

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communication by team members seeking out such risk is paramount as illustrated

by interview excerpts as follows:
“You manage risks by communication. Under-communicating leads to failure.”
“Sometimes, we don’t see a risk until it hits us – so having regularly conversations
about observations and quality assurance measures (proactive, consistent, evolving)
– brings risk management into the conversation regularly. “
Early Identification (20 documents [36% of respondents] / 22 instances / ranking
440)
Continuing with the idea of aggressive seeking out of risk, the focus of this
theme stresses the importance of identifying risk at a very early stage. Excerpts
from transcripts associated with this theme described this.
“Risks are to be identified and dealt with as early as possible in the project.”
“…good management structure identifies risk as early as possible and manages it
every single day…”
Life Cycle (9 documents [16% of respondents] / 9 instances / ranking 81)
The project lifecycle is an important area of focus—particularly considering
that risk identified early in the lifecycle may be minimized and cost less to manage
than risks that arrive later in the project. Yet, the possibility of risk emergence
always exists throughout the project lifecycle and this idea is expressed in excerpts
associated with this theme.
“Formalized risk management exists as a deliberate process that spans the life cycle
of a project, from concept to grave…”
“Project risk management now includes not only identifying, mitigating, and
controlling risks but also identifying, exploiting, and utilizing opportunities that
may arise throughout the project life cycle. “

nVivo Themes and Excerpts: Stream 2-Intensive Risk Assessment Within an

Inherently Dangerous Industry
The inherent danger involved with aviation puts aviation project managers
and team members on guard throughout the project lifecycle. This places a clear
focus on being alert, constantly scanning the project environment, and frequent
assessment of risks.
Probability and Impact (11 documents [20% of respondents] / 15 instances /
ranking 165)
The impact of aviation project risks comes in the form of cost as well as
danger. The identified risks are carefully assessed and classified according to
probability and impact so that the risk with the highest likelihood and most severe
impact remain in clear focus. The excerpts from this theme attest to this.
“…ensuring that the primary threats the crews encountered routinely could be
captured and weighted accordingly. The final “risk number” then drives risk
acceptance to the appropriate level of command authority…”

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“…sometimes we have a lot of inputs, so we break them down between the

likelihood and impact and assigning each a probability/score of Low, Medium, and
High. “
Aviation is Dangerous (11 documents [20% of respondents] / 12 instances /
ranking 132)
The significant responsibility associated with aviation project managers
make risk management and aspect of project management that is given more
emphasis than in other project categories. Theme excerpts captured in interviews
illustrate the overriding concern with the lives of passengers and crews.
“Risk management is a massive part of any aviation project. It is understood that
there is an inherent risk involved in any project. Still, in aviation operations, it is
paramount that risk is held to the lowest possible levels as it can put people's lives
in danger.”
“Under FAA guidelines risk management is important because we are responsible
for million-dollar assets (planes), and people's lives…”
Proactive (8 documents [14% of respondents] / 9 instances / ranking 72)
Risks, by definition, differ from issues in that they have yet to happen.
However, the significance of risk impact in aviation puts significant focus on
constantly looking ahead and being prepared. This emphasis emerges clearly in
excerpts from this theme.
“The lesson from all this like in most any aspect of the PM line of work is not
waiting for something to happen and reacting in haste, but the be preemptive and
try as best you can to foresee all possible scenario’s and develop a plan to attack if
any scenarios were to occur.”
“Risk managers look at things before they happen.”
Regular Monitoring (12 documents [21% of respondents] / 13 instances / ranking
156)
It is common practice for project teams to monitor risks and adjust the risk
register and contingency plans as necessary. Aviation projects are not different in
this respect—albeit possibly more intensive as the theme excerpts suggest.
“Risk management meetings are done on a bi-monthly time frame with new risks
being added to the matrix constantly as the project moves along the timeline.
Trackers, written down everything, and being open to past failures is key to a
successful project.”
“Periodic meetings to review and monitor mitigation plans to completion is critical
to successful project execution.”
Past Experience and Projects (8 documents [14% of respondents] / 10 instances
/ ranking 80)
The experience of the project manager within the aviation industry as well as in
previous projects is essential for the identification and management of aviation
project risks. It is the experience of the project manager and team members that

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 Richardson et al.: Aviation Risk Management

focus the project effort to identify, assess, communicate, monitor, and mitigate.
This emphasis is clearly observed in the excerpts from this theme.
“We conduct research to see if we have done similar projects in the past to help
guide us.”
“With that all being said, efficient and effective project risk management is a skill
that takes experience and time to master. “
Over Budget or Costs (10 documents [20% of respondents] / 10 instances /
ranking 100)
Aviation is not only dangerous—it is also very costly. Developing,
manufacturing, and maintaining airplanes is extremely expensive. Also, risk
management and contingency plans lead to significant costs that must be factored
into the project budget as the theme excerpts illustrate.
“I worked for a large aerospace company that approved projects based on the
estimated cost plus the projected overrun as modeled by a 56 question "red flag"
assessment of risk.”
“Reducing risk, though, normally costs money, so there is a struggle between those
dedicated to profit and cost management, and those dedicated to risk reduction.”
Mitigation (28 documents [50% of respondents] / 39 instances / ranking 1092)
The focus on risk in aviation is active rather than passive with intensive
focus on the reduction of risk likelihood and impact via the use of mitigation plans.
As the theme excerpts suggest, the focus is continuous.
“Mitigating risks during a project requires the manager to develop many layers of
their response plan in an effort to lower the risk to the lowest possible level without
impact mission effectiveness”.
“…good management structure identifies risk as early as possible and manages it
every single day with solid mitigation strategies…”

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nVivo QDA Resulting Conceptual Framework

Figure 2
nVivo QDA Resulting Conceptual Framework

Phase 2: SAS Text Miner Analysis

The SAS Text Miner uncovered five major topics based upon mathematical
analysis of word clustering and strength of associated topics. Each topic is
presented by the text miner application as a cluster of terms that exhibit strong
relationships and appear often together. The clustered words identified by the text
miner algorithm (SVD-Singular Value Decomposition) vary the most from the
remaining text in the documents thereby together comprising the essence of a
distilled topic. The + symbol in the string of terms indicates the presence of stem
words. SAS identifies related words that may be spelled differently or appear in
different combinations of other words. SAS then uses a single term along with the
+ symbol to identify the collection.

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Table 2
SAS Topics Ranked by Frequency of Appearance

Text Miner Topic #1: Response to issues and opportunities constrained by scope
and regulation
Text Miner Clustered Terms: +issue,scope,+opportunity,+arise,government
As uncovered in the qualitative data analysis, aviation projects are costly.
This can be a source of constraints for project risk management. Also, government
regulation is also a significant source of project risk management constraints.
“My aviation projects have a great deal of risk inherently, but a cost risk is less
frequent, unless a new requirement arises, but in that event, there is usually a delta
scope proposal issued. Since they are service contracts, all of the risk is mitigated
by us or the government somehow”.

Text Miner Topic #2: Planning to minimize risk impact

Text Miner Clustered Terms: +mitigation,always,+plan,+risk,+time
The text mining algorithms identified a focus on planning for risk as well
as the creation of mitigation plans. The emphasis, as was the case in themes
identified in the nVivo qualitative data analysis, is on looking ahead and being
proactive.
“Properly identifying, mitigation, and controlling a risk before it even happens will
greatly increase the projects chances of success. Just like in the Army, although it
may be tough, being proactive is always better than being reactive”.

Text Miner Topic #3: Company activities to minimize risk impact

Text Miner Clustered Terms: +manage,+company,training,+employee,+area
The company sponsoring aviation projects bears the ultimate responsibility
for the impact of risks should they occur. This leads to company activities to better
prepare employees for the significant risks associated with aviation.
“…these areas have additional hazards that can affect the employee, so we attempt
to manage those risks to the best of our ability by providing training and working
in groups. Also, my company goes to great lengths to train employees on the proper
techniques to practice in order to avoid damaging customer owned aircraft…”

Text Miner Topic #4: Understanding context to determine likelihood and impact

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Text Miner Clustered Terms: +occur,analysis,+understand,+strategy,+cost

One of the themes identified in nVivo Qualitative Data Analysis was
associated with the importance of experience. Text miner topic #3 exposes one of
the underlying reasons for this importance. Experience enables an understanding of
the overall context and supports a holistic understanding of the risk environment.
“Risk management is not just a check in the box. It is about understanding your
project, the things that can occur and derail your project, and having risk reduction
and mitigation techniques available”.

Text Miner Topic #5: High risk inherent to aviation

Text Miner Clustered Terms: risk,aviation,+level,+develop,+job
As in the case of themes emerging from qualitative data analysis, the text
miner topic #4 captures the fact of underlying danger with respect to aviation
projects.
“There are always times when the risk could be catastrophic but is very unlikely for
the project. This can be true in a construction or aviation project as they are all high
risk”

Figure 3
Overview of Text Miner Analysis Themes

Combined Conceptual Framework

The combined conceptual framework, Figure 4, places the topics produced
by the text mining analysis in the context of the nVivo qualitative data analysis

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 Richardson et al.: Aviation Risk Management

derived conceptual framework. It is observed that no contradictions are evident.

Rather, both methodologies appear to complement and reinforce each other.

Figure 4
Combined Conceptual Framework

Discussion
The challenging environment of the aviation industry places project risk
management in a position of prominence that may not exist to the same degree in
other industries. The cost and the potential danger to human lives forces project
managers and team to take a proactive role in risk and to take steps to minimize
cost and danger. The themes and topics emerging from interviews with aviation
project managers illustrate how important it is in aviation projects to think ahead,
to understand the context, to communicate and seek to mitigate these risks where
possible. The risks faced by aviation project teams is also recognized by sponsoring
companies who seek to prepare employees to deal with the extreme cost and danger
inherent in aviation project risks.

Conclusion
This current study will benefit aviation project management practitioners,
mentors of project managers, and the collective project management profession.
The following paragraphs suggest a series of aspects about aviation risk, which, if

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studied further, will continue to fortify the theoretical foundation of project

management.
This research effort involved a qualitative study to understand risk
management in the aviation industry. The results align with literature, confirming
the high stakes involved in aviation projects given their costly and risky nature.
Thus, risk assessment and planning play an integral role in forecasting the impact
of uncertain events. Throughout the project life cycle, communication and
proactive mitigation strategies are necessary to continuously manage emerging
threats and opportunities. In aviation, risk management must be more than just “a
check in the box” and theory, rather it must be embraced within the organization.
It is further observed in that aviation is guided by a rigorous set of regulatory
and industry requirements. Current events inform us that lives are at stake when
such requirements are not met. History serves as a harsh reminder of the
consequences associated with aviation project failures such as NASA’s Challenger
and, more recently, the human and economic loss associated with Boeing’s 737
MAX, suggesting that future research is needed in aviation project risk
management designing a new lens for managing project risk and avoid a surface-
level adoption of regulatory. The continued effort to understand the factors
influencing project risk will better inform the oversight of aviation projects, thereby
increasing the likelihood of success.

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