Reducing airline accident risk and saving lives: financial health, corporate governance, and aviation safety

What is it about?

This study explores how the financial health and management practices of airlines impact the safety of air travel. While aviation safety has generally improved, catastrophic accidents still occur, often with severe consequences. Surprisingly, little research has focused on how the financial and governance aspects of airlines contribute to these incidents. Our analysis, spanning a large number of countries over several decades, reveals that financially distressed airlines and those with lower corporate governance quality are more prone to accidents. This information is crucial for regulators, airlines, and stakeholders to identify and address areas of risk, ultimately enhancing aviation safety worldwide.

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