BBA Aviation - Risks Involved

BBA Aviation is made up of two groups: 

Our Flight Support division (Signature Flight Support and ASIG) provides specialist on-airport support services to the owners and operators of private, business and commercial aircraft. We aim to differentiate ourselves from our competitors through our customer relationships, the strength and relevance of our network, technical capability and market-leading customer service. 

Our Aftermarket Services division (Engine Repair & Overhaul and Legacy Support) is focused on the repair and overhaul of engines and the support of aerospace components, sub-systems and systems. We operate with high levels of intellectual property rights, derived from Original Equipment Manufacturer (OEM) authorisations and licences. In 2013 APPH, a landing gear and hydraulic sub-systems manufacturer, formed part of the Aftermarket Services division. This business was sold in February 2014. 

Our operating model supports our overarching objective to deliver exceptional, long-term sustainable value for all our stakeholders. 


The risks involved in the organisation are below - these can be out of the organisations control and can have a huge affect on the organisation, especially financially. It is important for an organisation to be aware of these risks and have a proactive approach, rather than being reactive. 

Risk	Potential Impact	Mitigation
General economic downturn	— Reductioninrevenuesandprofits as a result of reduced B&GA and commercial flying and military expenditure	—  Strongfinancialcontrolstomonitor financial performance and provide a basis for corrective action when required —  Lowfixedcostsallowcostbasetobe flexed to meet demand —  Mixtureofearlyandlatercyclebusinesses
Catastrophic global event (terrorism, weather) with a material impact on global air travel	— Reductioninrevenuesandprofits as a result of reduced B&GA and commercial flying	—  Strongfinancialcontrolstomonitor financial performance and provide a basis for corrective action when required —  Lowfixedcostsallowcostbasetobe flexed to meet demand
Legislative changes causing material increase to cost of B&GA flight relative to alternatives	— Reductioninrevenuesandprofits as a result of reduction in B&GA flying hours	— Activeparticipationinallrelevant industry bodies — Lowfixedcostsallowcostbase to be flexed to meet demand
Ability to attract and retain high-quality and capable people	— Lossofkeypersonnel — Lackofinternalsuccessorstokey management roles — Shorttomedium-termdisruption to the business	—  Remunerationstructuredesigned to reward superior performance and promote retention —  Successionplanningprocessembedded with review at Executive Management Committee and Board level annually —  Proactiveemployeedevelopment
Potential liabilities from defects in services and products	— Reputationalimpactwithassociated deterioration in customer relationships — Lossofearningsfromliabilityclaims	— Standardoperatingprocedureswith routine root cause analysis of all incidents — Liabilityinsurance
Intentional or inadvertent non-compliance with legislation	— Reputationalimpact — Exposuretopotentiallitigation or criminal proceedings	—  Clearcorporatepoliciesandeducation in major risk areas —  Semi-annualcompliancecertification by senior management —  Robustinternalcontrolenvironmentand regular review by internal and external audit
Environmental exposures	—  Lossofearningsfromcostto remediate or potential litigation —  Potentialforlossoflicencetooperate —  Greaterthanexpectedliabilities associated with historical operations	—  Strongproceduralcontrolsandphysical containment when working with fuel or other hazardous chemicals —  Activemanagementofknown environmental matters to minimise costs to resolve