An investigation of bird strike cases in the aviation sector with a novel approach within the context of the principal-agent phenomenon: Bird strikes and insurance in the USA

Filiz Ekici, Öner Gümüş, Ahmet Uslu, Utku Kale

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

Bird strikes, a risk factor in the aviation industry, are a common problem in certain states of the USA, while they are extremely rare in other states. Similarly, the seasonal distribution of bird strikes is not proportional. This situation poses an unfair situation in the aviation insurance of airline companies in terms of routes taken. The current study, detecting a literature gap related to the principal-agent problem within the aviation sector, evaluates the possible differences in aviation companies' insurance costs, assuming bird strikes are spatially and temporally analyzed in the US, and airline companies are provided with complete information regarding bird-strikes. In this research, QGIS software served in spatial model mappings. In terms of the threshold value, the study results show that making bird-strike insurance aircraft in twenty-one states which were below the threshold value increased the aviation costs of these airline companies, while in the remaining twenty-nine states, non-insurance raised the cost. In this context, as of 2022, it has been determined that not paying an extra premium for bird strikes in twenty-one states below the threshold value will create efficiency, while expending an above-average insurance premium in twenty-nine states and the District of Columbia above the threshold value will create efficiency. The research seeks to answer the following question: Is it fair for airlines operating on routes with low or high bird strike risks to pay the same amount of insurance cost?
Original languageEnglish
Article numbere18115
Pages (from-to)1-12
JournalHeliyon
Volume9
Issue number7
DOIs
Publication statusPublished - 1 Jul 2023

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