Business Inferences and Risk Modeling with Machine Learning; The Case of Aviation Incidents

Machine learning becomes truly valuable only when decision-makers begin to depend on it to optimize decisions. Instilling trust in machine learning is critical for businesses in their efforts to interpret and get insights into data, and to make their analytical choices accessible and subject to accountability. In the field of aviation, the innovative application of machine learning and analytics can facilitate an understanding of the risk of accidents and other incidents. These occur infrequently, generally in an irregular, unpredictable manner, and cause significant disruptions, and hence, they are classified as "high-impact, low-probability" (HILP) events. Aviation incident reports are inspected by experts, but it is also important to have a comprehensive overview of incidents and their holistic effects. This study provides an interpretable machine-learning framework for predicting aircraft damage. In addition, it describes patterns of flight specifications detected through the use of a simulation tool and illuminates the underlying reasons for specific aviation accidents. As a result, we can predict the aircraft damage with 85% accuracy and 84% in-class accuracy. Most important, we simulate a combination of possible flight-type, aircraft-type, and pilot-expertise combinations to arrive at insights, and we recommend actions that can be taken by aviation stakeholders, such as airport managers, airlines, flight training companies, and aviation policy makers. In short, we combine predictive results with simulations to interpret findings and prescribe actions