Certified Aviation Manager (CAM) Practice Test

When assessing risk potential after a CEO begins flying with key management, which method is most effective?

1. Obtain recent accident reports

2. Evaluate loss magnitude and maintenance reliability

3. Analyze activity frequency and loss severity

4. Work with an aviation attorney

The correct answer is: Analyze activity frequency and loss severity

When assessing risk potential, especially in a scenario where a CEO begins flying with key management, analyzing activity frequency and loss severity is crucial. This method focuses on two key aspects of risk management: how often a particular activity occurs (activity frequency) and the potential impact of adverse events (loss severity). By analyzing activity frequency, you can understand how often flights take place and the behaviors associated with those flights, such as factors that could contribute to a higher risk of accidents, like flight time hours or the conditions under which flights are conducted. Simultaneously, evaluating loss severity allows you to gauge the potential impact of accidents or incidents that may occur during these flights, giving insight into the financial and operational implications of potential risks. This comprehensive approach enables the organization to identify not only the likelihood of incidents occurring but also the potential consequences, allowing for better-informed decision-making in terms of risk management strategies. It provides a more holistic view of the operational environment than just focusing on recent accident reports, loss magnitude, maintenance reliability, or legal considerations alone. Consequently, this method allows leadership to implement appropriate safety measures, training programs, and operational policies that can mitigate risks effectively as they manage the executive’s travel arrangements.