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The Cost of Compliance

Increased operating costs continue to be one of the biggest concerns for owner/operators.


July 18, 2007
By David Carr

Increased operating costs continue to be one of the biggest concerns
for owner/operators. Fuel prices are volatile and will likely remain so
until the fallout from the war in Iraq is fully realized. Insurance
premiums also continue to skyrocket, with operators complaining of 30
to 50% rate hikes 18 months after September 11, 2001.

The
industry has been down this road before and survived, albeit with
casualties. Fuel prices will stabilize and are expected to creep
downward. Soaring insurance premiums will return to earth – hopefully,
before too many helicopters are grounded because operators either
cannot afford the latest rate increase or are tired of flying for their
insurance company. Further consolidation will create new efficiencies
and tighten supply to the point where a machine will start going out
and earning its full keep once again.

But while fuel and
insurance charges may soon level out, what about the cost of regulatory
oversight? Consider the case of one carrier of dangerous goods who was
told by an inspector that he must place an up-todate copy of the
International Civil Aviation Organization (ICAO) Emergency Response
Guide onboard each aircraft, even though there appears to be no such
requirement. The guide itself is not a huge expense. But as with most
things in the cockpit, the cost does not stop with the initial
investment. There is now a requirement for this operator to organize a
system to keep track of ICAO changes and whether each copy of the guide
has been amended, in order to comply with a requirement that does not exist.


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