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Planes, Trains and Automobiles – A Weekend of Transport Disasters

There were an extraordinary number of fatal transport incidents in North America over the weekend.  Early on Saturday a runaway train carrying crude oil exploded in Lac-Megantic, Quebec; shortly afterwards a Boeing 777 crash-landed at San Franciso Airport; then on Sunday an air-taxi crashed in Alaska, killing 10 people.

Few details have emerged yet about the incident in Alaska but the other two events are following a familiar pattern of public incredulity that these things could have happened; and media pressure for an immediate, straightforward explanation.  Unfortunately the reality is that such tragic incidents usually result from the interaction of numerous factors; and simple categorisations such as ‘mechanical failure’ or ‘human error’ are of little use in understanding how to prevent similar incidents in the future.

There has already been much reporting of the fall in the share price of Asiana, operator of the Boeing 777 that crash-landed.  Research carried out by Oxford Metrica in 2005 into the share price effect of mass-fatality events (including 22 aviation disasters) found that the share price of the company involved usually continues to fall for at least a couple of weeks after the event, as the full impact is realised.  Thereafter companies either begin to recover, the average ‘recoverer’ ending the year with a share price 10% up; or continue to decline, on average ending the year with their share-price down 15%.  One of the key differentiators between ‘recoverers’ and ‘non-recoverers’ was the sensitivity and compassion with which they deal with victims and their families.