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Part VI
Department of Transportation
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Federal Aviation Administration
14 CFR Parts 5 and 119
Safety Management Systems for Domestic, Flag, and Supplemental
Operations Certificate Holders; Final Rule
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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 5 and 119
[Docket No. FAA–2009–0671; Amendment
Nos. 5–1 and 119–17]
RIN 2120–AJ86
Safety Management Systems for
Domestic, Flag, and Supplemental
Operations Certificate Holders
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
Table of Contents
This final rule requires each
air carrier operating under 14 CFR part
121 to develop and implement a safety
management system (SMS) to improve
the safety of its aviation-related
activities. SMS is a comprehensive,
process-oriented approach to managing
safety throughout an organization. SMS
includes an organization-wide safety
policy; formal methods for identifying
hazards, controlling, and continually
assessing risk and safety performance;
and promotion of a safety culture. SMS
stresses not only compliance with
technical standards but also increased
emphasis on the overall safety
performance of the organization.
DATES: This final rule becomes effective
March 9, 2015.
FOR FURTHER INFORMATION CONTACT:
Scott Van Buren, Chief System Engineer
for Aviation Safety, Office of Accident
Investigation and Prevention (AVP),
Federal Aviation Administration, 800
Independence Avenue SW.,
Washington, DC 20591; telephone: (202)
494–8417; facsimile: (202) 267–3992;
email: [email protected]. For legal
questions, contact Alex Zektser,
Regulations Division, Office of the Chief
Counsel, Federal Aviation
Administration, 800 Independence
Avenue SW., Washington, DC 20591;
telephone: (202) 267–3073; facsimile:
(202) 267–7971; email: alex.zektser@
faa.gov.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
I. Authority for This Rulemaking
The Federal Aviation
Administration’s (FAA) authority to
issue rules on aviation safety is found in
Title 49 of the United States Code. This
rulemaking is promulgated under the
authority described in 49 U.S.C. 106(f),
which establishes the authority of the
Administrator to promulgate regulations
and rules and 49 U.S.C. 44701(a)(5),
which requires the Administrator to
promulgate regulations and minimum
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standards for other practices, methods,
and procedures necessary for safety in
air commerce and national security.
In addition, the Airline Safety and
Federal Aviation Administration
Extension Act of 2010 (the Act), Public
Law 111–216, sec. 215 (August 1, 2010),
required the FAA to conduct
rulemaking to ‘‘require all 14 CFR part
121 air carriers to implement a safety
management system.’’ The Act required
the FAA to issue this final rule within
24 months of the passing of the Act (July
30, 2012).
I. Overview of the Final Rule
II. Summary of the Costs and Benefits of the
Final Rule
III. Background
A. Summary of NPRM
B. Summary of Comments
IV. Discussion of Final Rule and Comments
A. Scalability
B. Scope and Definition of Hazard
C. Protection of Information/Data From
Disclosure Under Freedom of
Information Act (FOIA)
D. Enforcement
E. Scope of SMS and Compliance With
Administrative Procedure Act
F. Duplicative Rulemaking
G. Credit for Pilot Project Participants and
Adoption of Third Party/Accredited SMS
H. Applicability, Subpart A—
Implementation Plans
I. Subpart B, Safety Policy—Designation of
a Single Accountable Executive and
Sufficient Safety Management Personnel
J. Subpart C, Safety Risk Management
(SRM)
K. Subpart D, Safety Assurance
L. Subpart F, Recordkeeping and
Documentation Requirements
M. Flow-Down of Requirements
N. FAA Capability To Manage Oversight
O. Guidance Material
P. Determination of Acceptable Levels of
Safety
Q. Performance Based v. Process Based
Regulation
R. Employee Reporting Systems
V. Regulatory Notices and Analyses
VI. Executive Order Determinations
VII. How To Obtain Additional Information
I. Overview of the Final Rule
This final rule requires air carriers
authorized to conduct operations under
14 Code of Federal Regulations (CFR)
part 121 (part 121) to develop and
implement a safety management system
(SMS) to improve the safety of their
aviation-related activities. SMS includes
an organization-wide safety policy;
formal methods for identifying hazards,
controlling, and continually assessing
risk; and promotion of a safety culture.
When systematically applied, SMS
provides a set of decision-making tools
that air carriers can use to improve
safety. SMS improves safety by
addressing underlying organizational
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issues that may result in accidents or
incidents.
This final rule is part of the FAA’s
efforts to continuously improve safety in
air transportation by filling gaps through
improved management practices. SMS’s
proactive emphasis on hazard
identification and mitigation, and on
communication of safety issues, will
provide air carriers with robust tools to
improve safety. Congress, in the Airline
Safety and Federal Aviation
Administration Extension Act of 2010
(Pub. L. 111–216, August 1, 2010),
directed the FAA to issue a notice of
proposed rulemaking within 90 days of
enactment, and a final SMS rule by July
30, 2012. In addition, the National
Transportation Safety Board (NTSB) has
recommended the FAA pursue
rulemaking to require all part 121
operators to implement an SMS.
Further, the International Civil Aviation
Organization (ICAO), in its March 2006
amendments to Annex 6 part I, which
addresses operation of airplanes in
international commercial air transport,
established a standard for member states
to mandate that each air carrier establish
an SMS. This regulation will comply
with the statutory requirement, fully
address the NTSB recommendation, and
harmonize U.S. requirements with ICAO
standards for air carriers operating
under part 121.
While the commercial air carrier
accident rate in the United States has
decreased substantially over the past 10
years, the FAA has identified a recent
trend involving hazards that were
revealed during accident investigations.
The FAA’s Office of Accident
Investigation and Prevention identified
123 accidents involving part 121 air
carriers from fiscal year (FY) 2001
through FY 2010 for which identified
causal factors could have been mitigated
if air carriers had implemented an SMS
to identify hazards in their operations
and developed methods to control the
risk.1 This type of approach allows air
carriers to anticipate and mitigate the
likely causes of potential accidents. This
is a significant improvement over
current ‘‘reactive’’ safety action
emphasis, which focuses on discovering
and mitigating the cause of an accident
only after that accident has occurred. In
order to bring about this change in
accident mitigation, as well as the other
reasons discussed throughout this
document, the FAA is requiring part 121
1 Initially, the analysis identified 172 accidents,
but this number was based on comments to the
notice of proposed rulemaking. The accident
analysis is discussed further in the Final Regulatory
Evaluation.
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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations
air carriers to develop and implement
an SMS.
The requirements in this rule function
as follows. Air carriers authorized to
conduct operations under part 121 must
develop and implement an SMS within
3 years of the effective date of the final
rule. To demonstrate that the air
carrier’s SMS will be fully implemented
by the end of this three-year period, the
air carrier will be required to submit an
implementation plan within 6 months
of the effective date of the final rule.
The implementation plan should
include any existing programs, policies
or procedures the air carrier intends to
include in its SMS, such as continuing
analysis and surveillance systems,
aspects of quality management systems,
and employee reporting systems. This
implementation plan must be approved
by the FAA within 12 months of the
effective date of the final rule.
The air carrier’s SMS must contain
the following four major components:
Safety policy, safety risk management,
safety assurance, and safety promotion.
To satisfy the safety policy component,
the air carrier must establish a policy
which, among other things, defines the
air carrier’s safety objectives and
commitment toward achieving those
objectives. The air carrier will also be
required to designate an accountable
executive who is ultimately responsible
for the safety performance of its
operations, as well as sufficient
management personnel who will be
responsible for the coordination,
implementation, and maintenance of the
SMS, as well as integration of SMS
processes across the air carrier.
Under safety risk management, air
carriers must develop processes to
analyze existing and potential systems
and use the resulting system analyses to
identify hazards that may impact the air
carrier’s aviation operations.2 Air
carriers will then analyze the risk of a
consequence arising from the hazard
occurring and determine if the
associated safety risk is acceptable. If it
is not acceptable, the air carrier must
develop risk controls for
implementation.
Through safety assurance, the air
carrier will develop and implement
processes to monitor the safety
performance of its aviation operations.
The processes must include means to
monitor and audit operational
processes, investigate incidents and
accidents, and allow for confidential
employee reporting of hazards as well as
proposing solutions for safety
improvement. The air carrier will also
conduct evaluations regarding its safety
performance to review the effectiveness
of risk controls that are implemented as
well as to identify any changes in the
operational environment that may
introduce new hazards.
Under safety promotion, air carriers
will be required to train their employees
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(including managers) and develop the
tools to communicate necessary safety
information. Involvement of the air
carriers’ employees is essential to the
success of its SMS. The employees must
be properly informed of their
responsibilities and trained regarding
their duties relevant to the safety
performance of the air carrier. In
addition, they must be made aware of
necessary safety information resulting
from the various SMS analyses.
II. Summary of the Costs and Benefits
of the Final Rule
This rule requires part 121 air carriers
(domestic, flag, and supplemental
operations) to establish an SMS. SMS is
a tool designed to help air carriers
effectively integrate formal risk control
procedures into normal operational
practices to improve safety for all part
121 air carriers. It is expected that the
requirements of the rule will help
airlines to identify safety problems, and
if airlines take steps to mitigate these
problems it is estimated that the benefits
from that mitigation could be between
$205.0 and $472.3 million over 10 years
($104.9 to $241.9 million present value
at 7 percent discount rate). Costs of the
rule’s provisions (excluding any
mitigation costs, which have not been
estimated) are estimated to be $224.3
million ($135.1 million present value at
7 percent discount rate) over 10 years.
ESTIMATED COSTS AND BENEFITS FOR ALL PART 121 CARRIERS—2014–2023
[Millions of 2010 dollars * (discounted at 7% discount rate)]
Costs .................................................................................................................................
Rule Implementation Costs: $135.1.
Mitigation Costs: Not quantified, estimates not included.
Benefits from Provisions of the Rule and any Consequent Safety Mitigation Actions **
$104.9–$241.9.
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* Table values have been rounded. Totals may not add due to rounding.
** Given the range of mitigation actions possible, it is difficult to quantify potential benefits. This range reflects the potential benefits resulting
from examples of possible mitigation actions.
III. Background
B. Summary of Comments
A. Summary of NPRM
On November 5, 2010, the FAA
published a notice of proposed
rulemaking (NPRM) on SMS for part 121
certificate holders (75 FR 68224). In the
NPRM, the FAA proposed to require
these certificate holders to develop and
implement an SMS to improve the
safety of their aviation related activities.
In response to several commenters’
requests, the comment period was
extended and ultimately closed on
March 7, 2011.
The FAA received 69 comment
documents in response to the NPRM
from a variety of commenters, including
air carriers, aircraft designers and
manufacturers, trade associations,
emergency medical transport services, a
non-profit safety organization, a
university, and private citizens.
Commenters included Aerospace
Industries Association (AIA)/General
Aviation Manufacturers Association
(GAMA), Air Charter Safety Foundation
(ACSF), Aircraft Electronics Association
2 Hazards may also be identified through safety
assurance functions, as well as by analyzing a
proposed change to the air carrier’s system.
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(AEA), Aircraft Owners and Pilots
Association (AOPA), Air Line Pilots
Association, International (ALPA), Air
Medical Operators Association (AMOA),
Air Transport Association of America,
Inc.3 (ATA), American Association for
Justice (AAJ), Association of Air
Medical Services (AAMS), Association
of Flight Attendants (AFA),
Communications Workers of America,
AFL–CIO, Aviation Safety Council of
Alaska (ASCA), Aviation Suppliers
Association (ASA), The Boeing
Company (Boeing), Bombardier Inc.
3 As of December 1, 2011, the ATA changed its
name to Airlines for America (A4A).
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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations
(Bombardier), Cargo Airline Association
(CAA), Cessna Aircraft Company
(Cessna), Clark County (Nevada)
Department of Aviation (CCDOA), Delta
Air Lines, Inc. (Delta), DTI Training
Consortium (DTI Training),
Experimental Aircraft Association
(EAA), FedEx Express (FedEx), Futron
Corporation (Futron), GE Aviation (GE),
Gener Ibita Topacio, Hawker Beechcraft
Corporation (Hawker Beechcraft),
Helicopter Association International
(HAI), JetBlue Airways (JetBlue),
Modification and Replacement Parts
Association (MARPA), National Air
Carriers Association (NACA), National
Air Transportation Association (NATA),
National Transportation Safety Board
(NTSB), Omni Air International (Omni
Air), Pinnacle Airlines Corp. (Pinnacle),
Regional Airline Association (RAA),
Rockwell Collins Inc. (Rockwell
Collins), Southwest Airlines (SWA),
StandardAero, True-lock, United Parcel
Service Co. (UPS), United Technologies
Corporation (UTC), University of
Southern California (U.S.C.), School of
Engineering, the U.S. Small Business
Administration’s (SBA) Office of
Advocacy, and 24 individuals.
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IV. Discussion of Final Rule and
Comments
The FAA is adopting the final rule, as
proposed, with minor modifications
based on the comments discussed
below. The rule requires part 121
certificate holders to submit a plan for
implementation of SMS and fully
implement an SMS within 3 years of the
effective date of the final rule.
A. Scalability
The SBA raised concerns about the
scalability of this rule and its impact on
small business entities. The SBA, along
with True-lock, AEA, MARPA, and
ASA, indicated that this rule would be
too costly for small businesses to
implement. The SBA suggested limiting
the final rule to incident management,
strategic decision-making, and
notification of incidents to the FAA.
The FAA has decided not to limit this
rule as suggested by the SBA because
adopting the SBA’s proposal would only
partially enact the safety assurance
component and none of the other
requirements that the FAA considers to
be necessary for an effective SMS. The
four parts of an SMS (safety policy,
safety risk management, safety
assurance, and safety promotion) work
together to stress management
accountability and decision-making
based on forward looking hazard
identification and mitigation of risks,
rather than a retrospective review of
conditions that have already caused
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accidents and incidents. The four
components working together provide
the tools necessary to allow strategic
decision-making.
However, the FAA recognizes the
perceived impact that this rule may
have on small businesses. As of January
6, 2012, there were 90 part 121
certificate holders. The size, scope, and
complexity of the operations of each of
these certificate holders vary greatly.
For example, a third of the part 121
certificate holders have 10 or fewer
airplanes, while 10% have more than
270 airplanes.
Given the variance in these types of
operations, the FAA designed these
requirements to be applicable to air
carriers of various sizes, scopes, and
complexities, as well as adaptable to fit
the different types of organizations in
the air transportation system and
operations within an individual air
carrier. The FAA does not anticipate,
nor expect, that small air carriers would
require an SMS as complex as one for
large air carriers. To further clarify this
issue, the FAA has revised 14 CFR 5.3
in the final rule to state that the SMS
must be appropriate to the size, scope,
and complexity of the certificate
holder’s operations. As such, it is
scalable to the size of a small entity.
The FAA has also revised the
guidance material that was published
for comment with the NPRM. The
revised guidance material provides a
variety of examples of how to
implement the SMS processes and
procedures that an air carrier may
develop based on the size, scope, and
complexity of its operation. The
examples outlined in the guidance
material are not intended to limit an air
carrier to only these methods of
compliance. The following outlines
different approaches, based on
processes and procedures developed by
air carriers participating in the Flight
Standards Service (AFS) Voluntary SMS
Pilot Project (‘‘Pilot Project’’), which
may be adapted to fit the operational
needs of an air carrier based on the size
of its operation.4
Larger air carriers participating in the
Pilot Project typically use their existing
divisional structures as a foundation for
SMS management. The flight safety
organization or equivalent provides a
source of standardization, oversight, and
reporting directly to a corporate
accountable executive. Each division
typically establishes a management
review process with a committee
4 The Pilot Project was established for operators
to develop implementation SMS strategies and
oversight interfaces necessary for SMS, as well as
gain experience for FAA and operators regarding
SMS implementation.
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chaired by the most senior manager
(generally a senior vice president) in the
division. This senior manager may be
one of the management personnel that is
already required of an air carrier
conducting operations under part 121
under 14 CFR 119.65. These committees
are most often supported by a staff-level
working group that attends to day-today safety management functions, and
advises the senior management
committee. These working groups are
usually made up of existing safety and
quality assurance personnel, along with
representatives from the functional
areas within the division. They are, in
turn, supported by the members of the
flight safety organization which may
also manage corporate level data
management and analysis functions. To
provide coordination and integration
across the air carrier, most large air
carriers have a corporate level
committee made up of the division
managers and including the most senior
managers in the air carrier (e.g., Chief
Executive Office, President, Chief
Operating Officer).
Using this framework, a large air
carrier has established a team of
sufficient management personnel
responsible for the daily oversight of
SMS and communication to the
accountable executive, to ensure that
informed decisions regarding the safety
performance of the air carrier’s
operations are being made. This existing
framework can be used to satisfy the
management structure requirements in
this final rule.
At medium size air carriers, the
decision making and information
process flows are similar to those of
larger air carriers, but the supporting
functions are often integrated under the
Director of Safety. These structures are
similar to what are traditionally used to
accomplish the requirements of an
independent evaluation program (IEP),
which most part 121 air carriers already
have in place.5
At small air carriers, there will likely
not be the multiple tiers of decision
making and structures that exist in
larger air carriers. For small air carriers,
convening ad hoc committees might be
an appropriate SMS mechanism. In
these cases, the Director of Safety may
be the sole support staff available. Using
the Director of Safety in this capacity
5 IEP is a comprehensive program for evaluating
an air carrier’s operational systems as well as its
assurance programs. It builds on the auditing
programs of the internal audit function and
provides management with an additional level of
assurance that is independent of the operational
sub-organizations’ audits and reviews. IEPs provide
many of the auditing and evaluation safety
assurance processes required in the rule.
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would be an acceptable means of
compliance with the management
structure requirements of this final rule
for a small air carrier.
Another example of scalability stems
from management’s need for continued
access to information about the air
carrier’s operational processes. Larger
air carriers may, as part of safety
assurance, have full time safety and
quality auditors who conduct internal
audits, or, particularly in smaller
divisions, these audits may be
performed by personnel from inside the
divisions as collateral duties. In
addition, automated data entry, record
keeping, retrieval, and analysis are
nearly universal at larger air carriers.
Software may be developed by or for the
air carrier, or may be selected from a
variety of specialty safety and quality
system software providers. Larger air
carriers typically also have specialized
information technology (IT) staffs that
may be used to monitor and complete
the recordkeeping requirements of the
final rule.
Managers of medium to small air
carriers certainly need the same type of
information to make decisions.
Typically, though, the volume of
information is smaller because the
operation is smaller and not as complex.
The frequency of the air carrier’s
operations may also affect the rate at
which information must be updated and
audits must be conducted. Medium and
small air carriers often purchase
uniform software packages sold by third
parties rather than invest in custombuilt packages that require hiring inhouse staffers to implement, design, and
maintain the software. Very small air
carriers may use basic desktop software
(e.g., spreadsheet and basic database
products) to track information. Smaller
air carriers often use line personnel to
perform audits as a collateral duty.
Analysis of individual audits typically
is performed as part of the auditing
activity with trend analysis being done
by the Director of Safety and, if
available, safety and quality staff. Using
these existing tools are acceptable
means of compliance with the
requirements of this final rule.
Another example of the scalability of
SMS can be seen in the employee
reporting system required by this rule.
The FAA anticipates that smaller air
carriers will have to deal with
significantly fewer reports from the
employee reporting system than larger
air carriers. Also, larger air carriers are
more likely to satisfy this requirement
through one or more aviation safety
action programs’ (ASAP) employee
group applications. These systems for
large employee groups might be more
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costly than the minimum requirements
imposed by this rule. ASAP is an
employee reporting system that air
carriers may use to gather information
from employees on safety compliance
and performance issues. Approximately
two-thirds of air carriers conducting
operations under part 121 have
implemented some type of ASAP
program. While ASAP originally was
limited to pilots and flight engineers,
some air carriers have expanded the
program to include their flight
attendants, dispatchers, and mechanics;
and one air carrier has an ASAP for
ground service personnel.
To further ensure that the SMS is
scaled to fit the needs of the air carrier’s
operations, the FAA recommends each
air carrier evaluate its existing
management systems and regulatory
compliance programs and then
incorporate those systems and programs
that exemplify the key components of
SMS as appropriate. The FAA designed
the final rule to allow for this flexibility.
The FAA acknowledges that many air
carriers already have quality
management systems (QMS) and other
processes currently in place to monitor
performance of their operations. In
addition, some current regulatory and
voluntary programs, like the continuing
analysis and surveillance system (CASS)
and ASAPs, can be incorporated into
the SMS and used to meet the safety
assurance requirements of the final rule.
Incorporating those existing systems
that already meet the performance
objectives of this rule will only serve to
expedite an air carrier’s implementation
of SMS, and allow for a smoother
transition for employees expected to
participate in the air carrier’s SMS
because of their familiarity with their
employers’ existing systems.
In addition to the flexibility
incorporated in the final rule and the
ability to leverage existing processes to
meet SMS requirements, the FAA has
offered a tool to air carriers that will
facilitate SMS implementation and data
management. It is important to note that
this rule does not specifically require
automated information technology
systems. However, several SMS
processes will require management of
varying amounts of data, depending on
the size and complexity of the air
carrier’s organization. Currently, air
carriers have free access to the FAA’s
web-based application tool (WBAT) to
assist in satisfying the data collection
and management aspects of the final
rule. WBAT is a federally developed
and funded software system that may be
used to assist the air carriers with data
management.
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WBAT began as an ASAP and
incident reporting tool. Its use was
expanded to contain functions that more
broadly support SMS. Specifically,
WBAT currently has modules that
support the data management needs of
safety risk management and safety
assurance functions (e.g., employee
reporting, audits, investigations, and
evaluations). WBAT also contains an
SMS implementation plan manager
module, which supports the air carrier’s
implementation of SMS by providing a
tool to guide air carriers though a gap
analysis and implementation planning
process. The results of the gap analysis
and implementation planning are also
documented and stored in WBAT.
While WBAT data are treated as
proprietary to the air carrier, permission
can be given to the FAA to access it and
review draft plans online and provide
feedback, greatly expediting the review
and approval process. WBAT is
currently used by approximately 64 air
carriers authorized to conduct
operations under part 121. Of those 64
carriers, 55 use WBAT to support their
SMS implementation as part of their
participation in the Pilot Project.
While the FAA is not requiring air
carriers to use WBAT, it is one option
that is available and it reduces the costs
of developing and implementing a
separate platform. The FAA has made a
commitment to continue to support
WBAT for basic services as a result of
the comments submitted to the NPRM.
B. Scope and Definition of Hazard
ATA, AIA/GAMA, and Delta asserted
that the rule was too broad and could be
applied to areas beyond the FAA’s
oversight authority. To address this
issue, the commenters suggested
revising the final rule to limit the SMS
to those areas of a certificate holder’s
business that have a direct operational
impact on aviation activities.
To address the commenters’ concerns
regarding the FAA’s oversight of SMS,
the FAA has incorporated the
suggestions of the commenters to limit
that oversight to the air carrier’s aviation
activities conducted under part 121.
While some air carriers may narrowly
tailor their SMS to address only these
activities, the FAA acknowledges that
some air carriers may opt to extend their
SMS to other aviation related activities
for which they hold certificates, such as
14 CFR part 145 (part 145) repair station
activities, or 14 CFR part 142 training
center activities. Some air carriers might
also extend their SMS to their nonaviation related activities, such as
security and occupational safety and
health issues. If an air carrier elects to
do so, the FAA would only conduct
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oversight of the SMS activities related to
its aviation operations that the air
carrier conducts in accordance with the
provisions of part 121. In the final rule,
the FAA has revised the regulatory text
to limit the application of SMS only to
the aviation-related activities conducted
under the air carrier’s 14 CFR part 119
(part 119) certificate.
The FAA also limited the scope of
SMS, in part, by defining hazard more
narrowly. There were thirteen
comments related to the definition of
‘‘hazard.’’ U.S.C. stated that the
definition of hazard should be
expansive enough to include nonoperational elements (e.g., human
resources, finance, information
technology) of an organization. Twelve
commenters (including SBA, ATA, AIA/
GAMA, GE, and MARPA) suggested
limiting the term ‘‘hazard’’ to the
aviation operational environment.
Specifically, these commenters were
concerned about the scope and depth of
expectations regarding hazard
identification. They stated that the SMS
should focus solely on conditions
affecting the safety of aviation
operations and not occupational safety
or environmental protection, as could be
inferred in the definition proposed in
the NPRM. Other commenters asked
whether certificate holders would be
expected to track every conceivable
hazard, even those instances in which
exposure to the hazard is remote or the
likelihood and/or severity of potential
outcomes would be negligible.
Upon review of the comments, the
FAA recognizes that the scope of the
hazard and risk analysis and control
processes required of the SMS must be
consistent with the FAA’s statutory
authority and the intended scope of the
SMS. Therefore, the FAA has amended
the definition of ‘‘hazard’’ to limit it to
a ‘‘condition that could foreseeably
cause or contribute to an aircraft
accident as defined in 49 CFR 830.2.’’
This definition more clearly limits the
potential events to be considered to
those directly related to aircraft
operations and the potential severity of
those events to aircraft accidents, which
is consistent with the FAA’s statutory
authority in 49 U.S.C. 44702. The FAA
definition, though it is tailored
specifically to aviation, is consistent in
intent and application with long
standing industry system safety
definition and practice. The revised
definition also incorporates the NTSB’s
definition of ‘‘aircraft accident,’’ as
provided under 49 CFR 830.2.
According to 49 CFR 830.2, an ‘‘aircraft
accident’’ means an occurrence
associated with the operation of an
aircraft which takes place between the
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time any person boards the aircraft with
the intention of flight and all such
persons have disembarked, and in
which any person suffers death or
serious injury, or in which the aircraft
receives substantial damage.
C. Protection of Information/Data From
Disclosure Under Freedom of
Information Act (FOIA)
AMOA, AOPA, ASA, ATA, Boeing,
Bombardier, CAA, EAA, FedEx, GE,
HAI, JetBlue, MARPA, NACA, UTC, and
RAA all raised concerns that if SMS
data is not protected from disclosure
under FOIA, the FAA’s oversight over
SMS could be compromised due to a
lack of data being submitted to the FAA.
ATA and GE, while supporting the
FAA’s approach in the NPRM to not
require the physical submission of any
data, asserted that this is not adequate
protection. These commenters indicated
that protection of this data is vital to
ensuring this information is shared with
the FAA.
Exposing submitted safety data to
public scrutiny may have a chilling
effect on reporting practice. ATA
acknowledged that this information
should be shared only with the FAA.
JetBlue suggested the FAA develop a 14
CFR part 193 (part 193) protection
order, extending the same protections to
SMS data that currently exist for ASAP,
the Flight Operational Quality
Assurance Program (FOQA), the Line
Operations Safety Audit (LOSA), etc.
AAJ opposed the protection of
information beyond existing FOIA
protections because of the impact the
protection may have on the ability to
gather information during discovery
processes.
The FAA recognizes that protection of
certain safety information is vital to
ensuring that employees and air carriers
provide sufficient data to the FAA to
ensure effective oversight over SMS.
Section 44735 of title 49 of the United
States Code, as amended by the FAA
Modernization and Reform Act of 2012,
Public Law 112–95 (Feb. 14, 2012),
specifically contemplates the protection
of voluntarily submitted reports, data, or
other information produced or collected
for purposes of developing and
implementing a safety management
system acceptable to the Administrator.
It is important to note, however, such
protection could not be afforded to
information that is required to be kept
to satisfy compliance with other
regulatory requirements, such as
crewmember training records or
maintenance service records.
To further clarify the extent of
protection that may be afforded under
the statute, the FAA notes that any
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record or other documentation that is
required to show compliance with other
regulatory requirements would not be
protected. Protection also would not
extend to records that must be made
available under the provisions of 14
CFR 119.59. Furthermore, any
information protected under the statute
is only protected from release by the
FAA. If the information is submitted or
released by the air carrier to another
government entity, the protections of
the statute are not binding on these
other entities. Nor are these documents
necessarily protected from discovery in
civil litigation, although the carrier
would be free to ask the court for
whatever protections would be
appropriate under the rules of the
relevant jurisdiction.
D. Enforcement
ACSF, AEA, and DTI Training raised
concerns about the manner in which the
FAA plans to enforce the requirements
of the new rule and address issues of
noncompliance identified through SMS
policies and procedures. ACSF
recommended that the FAA publish its
plan for compliance and enforcement,
and provide industry the opportunity to
comment.
In regard to enforcement of the
provisions of 14 CFR part 5 (part 5), the
FAA acknowledges that each SMS will
be uniquely designed to meet the needs
of that air carrier’s operations.
Determining compliance with the
requirements of part 5 will be
dependent on the specific facts of each
case. As such, the FAA will exercise its
discretion in deciding to pursue
enforcement of the requirements of part
5.
The FAA also recognizes that a
fundamental concept of SMS is for air
carriers to identify and correct their own
instances of noncompliance and invest
resources and efforts to preclude their
recurrence. This concept is not new to
FAA enforcement policy. Many air
carriers are currently addressing these
issues under the voluntary disclosure
reporting program (VDRP). When an
apparent violation is detected through
SMS processes and procedures, the FAA
encourages air carriers to use VDRP as
appropriate to disclose the violation.
E. Scope of SMS and Compliance With
Administrative Procedure Act
AOPA, ASA, MARPA, NATA, SBA,
and True-Lock raised concerns that the
FAA could use SMS to extend
regulatory requirements without going
through notice and comment
rulemaking as required under the
Administrative Procedure Act (APA), 5
U.S.C. 552. Specifically, concerns were
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raised with regard to the requirement
under the rule that the certificate holder
develop risk controls for those hazards
that require mitigation as identified
under the certificate holder’s safety risk
management analysis.
This issue is not unique to SMS.
Many regulations impose performance
requirements that may be met in
different ways. For example, certificate
holders are required under 14 CFR
121.135 to develop and document
certain procedures, methods, and
instructions to personnel. This
provision sets forth areas that must be
addressed by these procedures, but does
not prescribe the exact procedures that
must be incorporated into the certificate
holders’ manuals. This discretion is
evident in the requirement of 14 CFR
121.135(b)(15), which requires the
manual to include ‘‘procedures for
operating in periods of . . . potentially
hazardous meteorological conditions.’’
As the regulation does not establish a
prescriptive, exclusive list of hazardous
meteorological conditions for which
procedures must be developed, the
certificate holder must identify those
conditions that are likely to impact its
operation and address them
appropriately in its manual. If these
procedures are incorporated in the
certificate holder’s required manual, the
certificate holder must ensure
compliance with the procedures it
develops and documents in its manuals.
A practical outcome of the safety risk
management and safety assurance
components of SMS is that procedures
developed and documented under 14
CFR 121.135 may need to be revised, or
new procedures added, to mitigate risk
from identified hazards. It is not the
intent of this rulemaking to alter the
existing regulatory standards or the
approval and acceptance processes that
already apply to each certificate holder.
In some instances, the FAA may
determine that a particular mitigation is
necessary for all certificate holders
based on the identification of a systemwide hazard. If the FAA identifies the
need for such mitigation, the FAA
would conduct rulemaking in
accordance with the APA in order to
apply the standard to all certificate
holders.
F. Duplicative Rulemaking
ACSF, EAA, and NATA raised
concerns about the different set of SMS
requirements for airports and suggested
combining these two rulemaking actions
into one to ensure consistency. ASA and
MARPA asserted that the FAA should
not create a general part 5, but rather
should incorporate the proposed
requirements into a new subpart for part
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121. This would allow for SMS
requirements to be tailored to each
specific part to address technical issues
that are unique to the regulated entities.
As stated in the NPRM, the FAA
developed the framework of the rule as
a means of harmonizing with ICAO
standards, while establishing a uniform
standard that could be extended to
apply to 14 CFR part 135 (part 135)
certificate holders, part 145 repair
stations, and design and manufacturing
entities. The uniform standard is
necessary because some of these
regulated entities may hold more than
one FAA certificate and may need or
want to create one SMS to encompass
all of their aviation-related activities.
The general standards set forth in part
5 would permit such integration with
only minor modifications. Any
extension of the applicability of part 5
required by the FAA will be made
through the APA notice and comment
rulemaking process.
In regard to the separate standards for
airports, the FAA notes that both SMS
rules are structured in accordance with
the ICAO SMS framework, which is
identical in Annex 6 (air operators) and
Annex 14 (airports). However, the FAA
recognizes that there are inherent
differences in the operation of an airport
and an air carrier. Based on a review of
these differences, the FAA determined
that the rulemakings should proceed as
separate projects.
Although there may be two separate
regulations addressing SMS, the FAA
encourages air carriers and airports to
communicate with one another when
hazards are identified through their
respective SMS procedures and
processes. In that way, they can
determine which SMS may best address
the hazard. For example, if an air
carrier’s employee identifies a hazard on
the movement area of the airport, the air
carrier’s employee would likely report
the hazard through the air carrier’s
employee reporting system. Once
reported, the FAA recommends that the
air carrier notify the airport of the
identified hazard so the airport is aware
of the issue and can analyze the risk
accordingly. In addition, the air carrier
may also analyze the risk of the hazard
and determine if it warrants any sort of
mitigation through the revision or
further development of the air carrier’s
procedures. This type of communication
will serve to ensure that hazards,
whether unique to the certificate holder
or more systemic to the airport, are
being addressed effectively by all
parties.
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1313
G. Credit for Pilot Project Participants
and Adoption of Third Party/Accredited
SMS
ATA, Delta, NACA, and StandardAero
suggested grandfathering in the
participants in the Pilot Project, or
otherwise providing credit for their
progress in developing and
implementing an SMS based on the
framework set forth in AC 120–92A.
Delta requested additional guidance for
those certificate holders transitioning
from the levels of validation in the Pilot
Project to satisfying the requirements of
part 5. In addition, ASA and
StandardAero requested that they
receive credit for third party systems
that are similar to SMS that they have
implemented, such as QMS, IEP, or
International Standard for Business
Aircraft Operations (IS–BAO).
The FAA developed the requirements
in the NPRM based on the ICAO SMS
framework in Annex 6 and the
guidelines for developing a voluntary
SMS described in AC 120–92A,
Appendix I. Despite the attempt to
harmonize the proposed regulatory
standards with the ICAO framework and
guidance material, there may be some
differences between what the air carriers
have done in the Pilot Project and what
would be required under part 5 once the
rule becomes effective. Rather than
exempt the Pilot Project participants
from the requirements of part 5, the
FAA believes that these air carriers
would benefit from reviewing their
existing implementation plans, and
comparing the plans with the final rule.
If gaps are found, the carriers would
update the implementation plans to fill
the gaps identified and submit their
plans to the FAA for approval to satisfy
the requirements of 14 CFR 5.1(b).
Some air carriers completed SMS
implementation through the Pilot
Project under the framework of AC 120–
92A and their SMS has been validated
by the FAA. To comply with the
implementation plan requirements of 14
CFR 5.1(b), these air carriers will need
to conduct a gap analysis of the systems
currently in place under their SMS and
the requirements of the final rule, and
identify any gaps that will need to be
addressed to bring their existing SMS
into compliance with the requirements
of the final rule. However, they may not
have to repeat the entire gap analysis
and planning process in areas where
there are no differences between the
final rule and Pilot Project guidance.
In regard to the request for credit for
implementation of third party systems,
like International Air Transportation
Association (IATA) Operational Safety
Audit (IOSA), International Standards
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Organization (ISO)–9000/AS–9100,
these systems have not been subject to
review and acceptance by the FAA. It
would be inappropriate to provide
credit or waive compliance
requirements to these air carriers who
have implemented these third party
systems. These systems may include
some elements of an SMS, but may not
contain all the necessary elements.
These third-party systems may be
incorporated into an air carrier’s SMS if
the systems satisfy the requirements set
forth in the final rule. If an air carrier
plans to incorporate these other systems
into its SMS, the air carrier should
outline the incorporation of these
systems in its implementation plan.
Given these avenues for incorporating
existing processes and procedures, the
FAA has not revised the final rule to
allow credit for Pilot Project
participants, nor other air carriers who
have implemented third-party SMS
systems or other management tools.
H. Applicability, Subpart A—
Implementation Plans
ACSF, ATA, Bombardier, NACA, and
RAA requested the timeframe for
submission of the implementation plans
be extended from 6 months to anywhere
from 9 to 18 months. ASCA, ATA,
Bombardier, FedEx, Omni Air, and RAA
expressed concern with the FAA’s
ability to manage the 90 submissions it
will receive, as well as the FAA’s ability
to establish a consistent process for
review and acceptance of the plans.
Bombardier, EAA, and RAA asserted
that an extension of this time is needed
because the FAA would not be held to
a timetable for accepting the
implementation plans. FedEx suggested
the FAA consider a timetable of three
months to approve the implementation
plan, or, in the alternative, to simply
accept the plan. ASCA, Bombardier, and
FedEx requested that the time to submit
and wait for the FAA to approve an
implementation plan should not be
included in the 3-year implementation
timeframe.
In addition, ATA, AOPA, ASCA, and
Bombardier indicated that three years
was not adequate for carriers to develop
and implement an SMS. In contrast,
AFA, ALPA, NTSB, Omni Air, and SWA
acknowledged that the proposed
timeframes for implementation plan
approval and SMS acceptance were
reasonable.
The FAA notes that 24 of the part 121
certificate holders participating in the
SMS Pilot Project have submitted an
SMS implementation plan as part of the
pilot project. The typical
implementation plans received in the
pilot projects indicated that full
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implementation of SMS could be
achieved within three years. None of the
participants indicated the need for more
time during development of their plans.
Because this timeframe is consistent
with the comments received from AFA,
ALPA, NTSB, Omni Air, and SWA, as
well as the lessons learned from other
Civil Aviation Authorities (CAAs), the
FAA has determined that three years is
an adequate timeframe for
implementation of SMS.
However, upon review of the
comments, the FAA has revised 14 CFR
5.3 to require submission of the
implementation plan for review within
6 months of the final rule’s effective
date, and for approval of the plan no
later than 12 months after the effective
date of the final rule. As of January 11,
2012, 72 of the approximately 90 part
121 certificate holders are participating
in the Pilot Project. Of these, 17 have
completed implementation plans, which
have been validated by the FAA. The
average time for completing and
receiving approval of these plans is
approximately one year. Based on this
average, the FAA expects that certificate
holders will be able to meet this
requirement. Certificate holders that
already have a validated
implementation plan through the Pilot
Project will not be required to resubmit
their original implementation plan for
approval, but rather may submit an
abridged analysis that identifies the
areas in their existing implementation
plans that need to be revised to comply
with the new regulatory requirements.
Many Certificate Management Teams
(CMTs), which are the FAA field offices
responsible for managing individual
part 121 certificates, have been exposed
to these implementation plans due to
their work with the Pilot Project and,
therefore, there should be no extended
delays in reviewing and ultimately
approving these plans. Accordingly, the
FAA believes this timeframe is
sufficient and will not cause undue
burden on either the affected certificate
holders or the FAA.
Pinnacle disagreed with the proposal
to require implementation plans be
approved. Due to the dynamic nature of
the airline industry, Pinnacle asserts
that these plans must be routinely
modified to accommodate changes to an
airline’s organization or environment. If
a plan requires approval, an airline
would not be able to proceed with a
change to a plan until the FAA reviewed
and approved each change. Bombardier,
while not objecting to the requirement
to have the plans approved,
recommended some minimum
requirements for the content and level
of detail for the implementation plan.
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The FAA recognizes the dynamic
nature of an air carrier’s operations, and,
thus, maintains that the SMS should be
accepted rather than approved to allow
the air carrier to make the necessary
changes to address issues in its
operations. However, to ensure that the
SMS is properly developed within the
required timeframe, some measure of
additional oversight control is
necessary. One of the foremost
acknowledged sources of hazards is
change in an air carrier’s operation, and
it is one of the principal reasons for
special or expanded oversight by the
FAA. The FAA, therefore, has not
revised the requirement that the
implementation plan must ultimately be
approved. Any changes to the
implementation plan and SMS will be
documented and submitted to the FAA
by the air carrier. If a modification is
required, the FAA will provide
additional guidance to the air carrier to
ensure that the SMS remains in
compliance with part 5 and is
implemented within 3 years of the
effective date of the final rule.
ATA suggested extending the effective
date of the final rule because the
proposed 60-day period is not sufficient
time to review the rule and understand
what is required to be in the
implementation plan before the time for
submission of the implementation plan
begins to run. In contrast, AFA, NTSB,
Omni Air, and SWA stated that the 60day effective date was reasonable.
The FAA has determined that the 60day effective date is appropriate. The
changes to the final regulatory text are
not significant and, again, more than
50% of the part 121 certificate holders
already are engaged in developing and
implementing an SMS. Therefore, the
60-day effective date is a reasonable
timeframe for certificate holders to
conduct their review of the final rule
and initiate compliance.
I. Subpart B, Safety Policy—Designation
of a Single Accountable Executive and
Sufficient Safety Management Personnel
a. Single Accountable Executive
Bombardier raised concerns that
proposed 14 CFR 5.25 does not permit
any flexibility for the certificate holder
to delegate tasks to more than one
executive or other management
representatives as appropriate, based on
the size and complexity of the
organization. ATA recommended
further clarifying the role of the
accountable executive, and removing
the requirement that the accountable
executive be responsible for
implementation of the SMS. ATA,
NACA, and RAA asserted that this
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responsibility is better suited for the
safety management representative.
ALPA supported the designation of a
single, accountable executive. Cessna
and Futron recommended that the
authority to make operational decisions
and the authority to allocate resources
should be better defined for the
accountable executive, or otherwise
removed from this paragraph. Futron
asserted that the accountable executive
should be outside of the normal safety
chain and directly involved in the
operational chain.
As proposed, 14 CFR 5.25 defines
both the accountable executive and the
management personnel. The
accountable executive must be a single,
identifiable person having final
authority and responsibility for the
safety performance of the air carrier.
This ensures that executive management
is integrally involved in the oversight of
the air carrier’s safety performance. The
FAA has not revised this requirement in
the final rule.
To address the commenters’ concerns
about the accountable executive’s
responsibilities, the FAA has clarified
the criteria and responsibilities set forth
in 14 CFR 5.25. As prescribed, the
accountable executive needs to be able
to organize, direct, and control the air
carrier’s activities, as well as allocate
resources to make safety controls
effective. The accountable executive
must also develop the documented
safety policy proposed under 14 CFR
5.21, communicate the policy
throughout the air carrier, and regularly
review the safety policy and safety
performance of the air carrier. The
accountable executive must review
safety information to assess the overall
performance of the air carrier and make
necessary changes.
b. Management Representative
Delta suggested that the involvement
of a part 119 management position in
the efficient working of an SMS must
suffice as a required resource for the
implementation of the SMS. Other
commenters questioned the need to
require only one management
representative and suggested revising
the rule to allow for the certificate
holder to determine how to structure a
management team responsible for
monitoring the daily operation of the
SMS.
Part 119 identifies various
management personnel needed for an
air carrier to function and maintain a
certificate. The FAA does not believe it
is necessary to restrict part 121 air
carriers from using only the Director of
Safety or another part 119 management
personnel position to perform the duties
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specified in 14 CFR 5.25(c). The
requirement to have a designated
management representative was
intended to ensure coordinated and
consistent implementation of a fully
integrated SMS throughout the air
carrier’s aviation related activities, as
well as to provide adequate support for
continued operation and maintenance of
the SMS.
Upon review of the comments, it
appears that either one person, or a
combination of personnel, could
perform the function of the management
representative as proposed in the
NPRM. The FAA does not expect that
the accountable executive will always
perform every day-to-day activity that
the function of the management
representative requires. As air carrier
operations are diverse, one method of
managing implementation and
continued operation of an SMS cannot
be exclusively defined. To do so may
stifle innovation and creativity.
Although a single management
representative, designated by and
reporting directly to the accountable
executive, is conceptually the most
direct means of establishing a point of
responsibility for an integrated system,
this does not represent the only means.
Depending upon the size and
complexity of the air carrier, the
functions of the management
representative or personnel may range
between being a collateral duty of the
accountable executive, to a team of
representatives working under the
guidance and coordination of a team
leader who is responsible for the
effectiveness of the team. Accordingly,
the FAA has revised 14 CFR 5.25(c) to
allow the air carrier to designate
sufficient management personnel
responsible for the coordination and
implementation of the SMS.
Whatever structure is implemented by
the air carrier, 14 CFR 5.25(c)(4)
requires that these personnel regularly
report to the accountable executive.
Personnel designated to perform this
function must be in positions in the
organization of sufficient independence
to have direct access to the accountable
executive to report on the safety
performance of the operation and
recommend any necessary
improvements.
c. Role of Line Employees
AFA raised concerns that the line
employees are not defined as having a
key role in the decision-making process
and that they are merely a reporting
mechanism for the SMS. AFA asserted
that these employees should also have
input into the decision- making process.
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For an SMS to be effective, input and
active participation is essential from all
levels of employees in an air carrier.
Many air carriers have different
decision-making processes, some of
which include line employees. Roles
that employees play within that air
carrier’s SMS must be identified and
documented in the safety policy as
described in 14 CFR 5.21. If line
employees are identified to participate
in safety boards, working groups or
audit review teams, they must be
trained to actively support the safety
policy of the accountable executive as
well as comply with all established
organizational safety initiatives.
Another aspect of SMS that requires line
employee participation is the employee
reporting system. The participation of
line employees is critical in developing
improvements in functions that directly
impact their job tasks.
J. Subpart C, Safety Risk Management
(SRM)
AIG, ASA, ATA, Boeing, GAMA,
MARPA, Pinnacle, and RAA recognized
the importance of SRM, but requested
clarification regarding when the SRM
processes and procedures are triggered
and what constitutes a ‘‘system.’’ The
commenters also suggested reorganizing
14 CFR 5.51, 5.53, and 5.55, to
emphasize hazard identification and to
eliminate system analysis.
The FAA has revised the regulatory
text to clarify how safety analyses must
be used under safety risk management.
With regards to this rule, the term
‘‘system’’ is used to describe the
operational components used to deliver
aviation-related services. Systems may
include hardware, software, people,
procedures, resources, or functions
directly related to the delivery of air
transportation services. For example, a
system would include, among others:
The aircraft, the crewmembers, crew
training, crewmember duty time
tracking programs, dispatch functions,
maintenance of the aircraft, fueling,
servicing, and flight operations. The
term ‘‘system’’ does not include those
people, procedures, resources,
hardware, and software that are not
directly related to the delivery of air
transportation services (e.g., advertising,
building maintenance, payroll). The
FAA’s use of the term ‘‘system,’’ in this
rulemaking, is consistent with longstanding use of the term within the
industry.
As part of the SRM process, air
carriers need to consider the operational
environment directly related to the
delivery of air transportation services.
The operational environment that
should be considered includes not only
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the physical environment (e.g., terrain,
weather, geographic location) but also
any constraints on the air carrier’s
actions due to business needs and other
laws or regulations that may affect the
air carrier’s air transportation services.
Regarding when SRM would be
triggered, 14 CFR 5.51 (Applicability.)
requires that the SRM process be
applied under the following conditions:
Planning for and implementation of new
systems; revision of existing systems;
development of operational procedures;
or identification of hazards or
ineffective risk controls through the
safety assurance processes in subpart D
of part 5. Some examples of these
triggers are outlined below.
Changes to an air carrier’s operation
could include addition of new routes,
opening or closing of line stations,
adding or changing contractual
arrangements for services, additions of
new fleets or major modifications of
existing fleets, addition of different
types of operations such as extendedrange operational performance
standards operations, or a change in the
software for operational systems such as
flight planning and dispatch. Any of
these additions or changes would trigger
the use of the SRM process.
A further trigger for SRM would be
cases when the safety assurance
processes reveal hazards that have not
been addressed or instances when the
procedures that have been specified fail
to control risk. For example, an air
carrier might discover through
employee reporting or internal auditing
that procedures for loading data into the
airplane flight management computer
are confusing. This would result in
action such as the air carrier modifying
the procedures themselves or the
training and checking process in use. In
another example, an analysis of internal
audits could reveal that a maintenance
tracking and control program failed to
identify required inspections, resulting
in some of them being missed or
overdue. In this case, the air carrier may
decide that the program itself is
defective and must be reengineered,
again, requiring the application of SRM.
These are just some examples of systems
and triggers for the SRM processes of
subpart C of the final rule.
RAA suggested that 14 CFR 5.53(c)
include the requirement to track
hazards. This practice would prevent
hazards from being identified and
recorded without further action. The
FAA has reviewed this suggestion and
determined that the purpose of the
suggested revision is already met under
the final rule. Subpart C, SRM, and
Subpart D, Safety Assurance, work
together such that identified hazards
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must be tracked in addition to being
identified. Thus, the FAA has not
adopted this suggested revision in the
final rule.
K. Subpart D, Safety Assurance
AIG, ASA, ATA, Boeing, Cessna,
GAMA, MARPA, Rockwell Collins, and
U.S.C. agreed on the importance of
safety assurance practices, but
recommended the FAA clarify the
applicability of safety assurance and the
definition of ‘‘system’’ to mirror the
definition of ‘‘system’’ for SRM. Boeing
also suggested revising 14 CFR 5.71 and
5.73 to limit the scope of the SMS to the
aviation-related activities of the
company. In addition, Boeing, GAMA,
MARPA, and Rockwell Collins
recommended replacing the term
‘‘operation’’ with ‘‘system’’ because
operation implies the activities of an air
carrier, and would require modification
if these provisions were extended to
other types of operators in future
rulemakings.
AIA/GAMA, Boeing, Cessna, and
Rockwell Collins all questioned using
the terms ‘‘continuous’’ and ‘‘periodic’’
in 14 CFR 5.71. The commenters
asserted that the terms are ambiguous
and do not establish a frequency for
adequate monitoring. For example, one
commenter stated that the continuous
monitoring requirement could imply
monitoring the system 24 hours a day,
which could be burdensome.
Because different systems will require
different monitoring processes, the FAA
has removed the terms continuous and
periodic from 14 CFR 5.71. Additional
clarification of the monitoring
requirements is also provided in the
advisory material associated with this
final rule. In regards to the suggestion to
define the term system for safety
assurance, the FAA has determined that
such a definition would not be
necessary in the regulatory text because
the list in 14 CFR 5.71(a) provides the
scope of safety assurance activities.
Further, as stated in section J, the term
‘‘system’’ is used to describe the
operational components used to deliver
aviation-related services. Systems may
include hardware, software, people,
procedures, resources, and functions
directly related to the delivery of air
transportation services. The systems
addressed by this rule do not include
those elements that are not directly
related to the delivery of air
transportation services.
L. Subpart F, Recordkeeping and
Documentation Requirements
AIA/GAMA, Boeing, Bombardier,
Omni Air, and Rockwell Collins
asserted that the record keeping and
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documentation requirements for SMS
are too prescriptive and onerous. ATA
and Delta advocated the retention
requirement be scalable and flexible
according to the certificate holder’s
policy and that outputs of the SMS
should be retained for as long as
deemed necessary by the air carrier.
EAA questioned the operational reason
for mandating the retention of SMS
records beyond existing industry
standards and requirements. NATA
requested clarification on the types of
documents that must be maintained
under the proposed standards.
Bombardier and Boeing suggested
revising recordkeeping provisions in 14
CFR 5.97 to require certificate holders to
maintain these records for 5 years. AIA/
GAMA also supported a 5-year retention
requirement for outputs of SRM
processes. NACA acknowledged that the
recordkeeping requirements were
acceptable as proposed.
Neither the proposed rule text nor the
preamble implies that an air carrier
would have to undergo a complicated
and expensive revamping of its
organization to accommodate document
and record retention requirements. The
required records can be kept
electronically or in paper format. For
SRM outputs, the timeline associated
with the retention of the documents
must be scalable to the air carrier’s
operation. The outputs of SRM
processes should be kept for as long as
they remain relevant to the air carrier’s
operation to allow the air carrier to
evaluate whether the controls put in
place under SRM are effective and
needed. Once the action that triggers the
development of the control is no longer
present in the air carrier’s operation, the
air carrier may determine that the
records no longer need to be kept. Thus,
it is important that the air carrier
exercise discretion to determine how
long SRM output records are kept.
Similarly, this rule requires a
certificate holder to retain records of
SMS-required training that is
administered to the accountable
executive, members of the certificate
holder’s management, and other
employees for as long as the individual
who received the training is employed
by the certificate holder. Once the
individual who received the training is
no longer employed by the certificate
holder, there is no longer a need for the
certificate holder to retain these records.
The recordkeeping requirements
associated with the safety assurance’s
processes and procedures serve a
different purpose. The goal of safety
assurance is to collect historical data on
an operating system for analysis. The air
carrier needs to have sufficient
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historical data to review. The 5-year
period proposed in the NPRM is
reasonable and will provide the air
carrier with adequate records to conduct
analysis. The FAA has determined that
the proposed recordkeeping retention
requirements are appropriate and has
retained the requirements in the final
rule.
M. Flow-Down of Requirements
ALPA asserted that an air carrier must
exercise some oversight of those entities
providing services to them and that the
proposed rule would naturally have
some flow down effect. ALPA asserted
there should be a requirement to
develop and document an avenue for
the reporting of hazards from
subcontractor field employees to the air
carrier. This may include establishing a
liaison that would communicate
necessary safety information to the
subcontractor and take corrective action
as necessary.
RAA stated that, even though the FAA
will not expand these existing
requirements to entities other than
certificate holders authorized to conduct
operations under part 121, it can be
expected that air carrier SMS programs
will produce positive trickledown
benefits to the operational safety of
contractors. Under this scenario, air
carriers will provide safety-enhancing
guidance and oversight (at some level)
to relevant elements of their contract
service providers operations, and
contractors will share information with
the air carriers on the risks or safety
trends that the contractors may from
time to time identify.
Bombardier stated that it is expected
that SMS regulated entities will
determine what aspects of the SMS need
to be passed on to non-regulated
suppliers and pass those requirements
along through business requirements.
Inevitably, this will then result in
additional burden on the regulated
entities to provide support and
increased oversight to ensure
compliance of these suppliers,
contractors and sub-contractors with
these SMS related requirements. The
SMS rule should be carefully
constructed to allow those part 121 or
135 carriers to accept their part 145
certificated suppliers’ SMS without
deviation. Otherwise, inconsistent
requirements will be passed on from
different operators.
ASA and MARPA stated it is normal
in the industry for air carriers and other
certificate holders to flow-down their
requirements to their suppliers, even
without a regulatory requirement. For
example, many certificate holders may
decide to use their suppliers as data
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sources for their SMS (e.g., reports of
identified hazards). There is nothing in
the regulation that prevents the FAA
from stating that once the flow-down is
in the manual, the supplier becomes
part of the SMS system and thus
becomes subject to SMS oversight. They
recommended that the rule specify that
a company may rely on its business
partners as data sources for its SMS, but
even if it does so, this act alone would
not impose SMS regulations (or FAA
SMS oversight) on the business partner.
NACA agreed, asserting that it is not
necessary to require contractors or
subcontractors to develop an SMS at
this time. They should be permitted to
let data flow into a part 121 carrier’s
program when handling their aircraft.
This would add valuable information to
SMS and produce a more
comprehensive program.
AOPA strongly disagreed with the
FAA’s assessment and believed the FAA
has greatly underestimated the trickle
down implications for contractors and
subcontractors of regulated certificate
holders. The more functions a certificate
holder contracts out, such as fueling,
deicing, and pilot training, the more
critical it is that the certificate holder
include its contractors in its SMS
process. Although the FAA is not
seeking regulation of these contracted
entities, AOPA asserted that FAA
should not discount the potential effects
of this proposed regulation on these
entities. AOPA is concerned that this
ripple effect would become even more
apparent when the FAA expands the
requirements of 14 CFR part 5 to
encompass part 135 certificate holders.
Delta Air Lines did not see a
significant impact or flow down effect of
the development of SMS and its
implications on vendors and contractors
providing services to the operator. The
comprehensive implementation in all
levels of the organization has allowed
the vendors and contractors to be
assessed under the safety assurance
component of its SMS and findings and
observations are mitigated under a riskbased system documented and tracked
according to the SMS requirements and
SRM techniques.
Boeing said that the product/service
provider should be allowed to
determine the level of integration based
on business needs and operational
efficiency, without incurring undue
compliance burden.
The SMS requirements of the rule are
intended to be applied to individual air
carriers. This rule does not require the
air carrier to require SMSs on the part
of contractors, code-share partners, or
other business affiliates. This rule
permits the use of contractors as a data
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1317
source, but will not mandate this
requirement. Associated policy and
advisory documents will not specify or
imply these requirements as conditions
of acceptance. An air carrier may
include SMS in its negotiated business
arrangements, consistent with the
common practice in industry where air
carriers require registration under such
programs as AS 9100, IOSA, and
Coordinating Agency for Supplier
Evaluation (C.A.S.E.) audits. Contractual
requirements for arrangements do not
relieve the air carrier from its
responsibilities under this rule.
N. FAA Capability To Manage Oversight
AIA/GAMA, AOPA, Hawker
Beechcraft, JetBlue, Omni Air, and RAA
asserted it is essential that the FAA
develop and deploy appropriate training
and guidance material for the inspector
workforce involved in SMS assessment
and oversight. Hawker Beechcraft and
Omni Air questioned whether the FAA
would be able to handle the significant
surge in plan submissions as the
deadline nears.
FedEx suggested that the FAA
consider a process by which differences
in interpretation, applicability, and
direction between a carrier and the FAA
approval authority can be elevated
within the FAA for resolution.
Clear and comprehensive guidance
documents have been developed and
will be provided to the Aviation Safety
Inspectors (ASIs) prior to this rule’s
effective date to ensure standardization.
The SMS Program Office is also
available as subject matter experts to
assist the field office inspectors.
Training is also currently underway for
part 121 ASIs. This training includes the
principles and precepts of SMS.
Additional training is being designed to
enhance the ASI’s knowledge and
ability to assess the compliance of an air
carrier’s SMS with part 5.
Air carriers also will be able to use the
Consistency and Standardization
Initiative 6 to appeal decisions related to
the review of their SMS. The FAA will
consider a process by which differences
in interpretation, applicability, and
direction between an air carrier and the
FAA approval authority can be elevated
to the applicable FAA office for
resolution.
O. Guidance Material
ACSF, AOPA, Boeing, GE, Hawker
Beechcraft, and NATA suggested
rescinding draft FAA Order 8900xx and
reissuing simplified guidance material
6 For more information regarding the Consistency
and Standardization Initiative please refer to: http://
www.faa.gov/about/office_org/headquarters_
offices/avs/consistency_standardization/.
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because the draft order is too
prescriptive. The commenters were
concerned that the guidance material
and orders significantly expands the
regulatory requirements in proposed
part 5. Commenters noted that the draft
order contained material that was too
academic and should be revised for
clarity.
Upon review of the comments, the
FAA has revised the guidance material
to ensure that there is a clear
delineation between regulatory
requirements and other information.7
The FAA has also revised the draft
guidance for inspectors to provide
instruction on various methods that may
be employed to satisfy the requirements
of this rule.
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P. Determination of Acceptable Levels of
Safety
AEA, AOPA, ASCA, and ATA asked
for a definition of acceptable level of
safety. They expressed concern that
lacking a clear definition of this term
would leave the industry and the FAA
in a position where inspectors would be
defining what constitutes an acceptable
level of safety. This would lead to
inconsistent application across the
industry. The SBA also asserted that the
FAA should conduct a gap analysis of
its regulations and fill any holes to
establish standardized acceptable levels
of safety through the regulations that
can be uniformly applied throughout
the industry.
The term ‘‘acceptable level of safety’’
is only used in the preamble of the
NPRM and is only mentioned when
referencing ICAO standards/framework
and an NTSB recommendation. In
determining the safety performance
measurement for the air carrier’s
operation, each air carrier should use
the regulatory minimums set forth in
Chapter I, Title I, of 14 CFR as the
baseline.
Q. Performance Based v. Process Based
Regulation
ASA and MARPA stated that the
proposed part 5 was a process-based
rule. In contrast, AIA/GAMA and
Bombardier stated that the proposal was
a performance-based rule. All of these
commenters expressed a strong desire to
avoid a prescriptive-based rule because
of the dynamic nature of air carrier
operations. They were also concerned
that a performance-based rule could
lead to wide variances in interpretation
as to what is acceptable for an SMS.
The ARC, ATA, and GE expressed a
strong desire for a rule that closely
7 The FAA acknowledges that Advisory Circular
120–92 is not binding.
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matched the ICAO framework to allow
for increased acceptance of an air
carrier’s SMS by foreign civil aviation
authorities. They stressed the need to
balance prescription with the need for
adequate description and flexibility to
develop multiple solutions in the
interest of increased innovation. They
stated that the proposed requirements
met all of these needs.
Changing the regulatory text to a pure
performance-based rule would deviate
from the ICAO SMS requirements. This
increases the risk that the FAA’s SMS
rules would fail to meet the
requirements of other sovereign nations,
and thus jeopardize the ability of U.S.
air carriers to operate in countries where
compliance with these standards is
enforced. This final rule specifies a
basic set of processes to form a
framework for the SMS, but does not
specify particular methods for
implementing these processes. This
provides a balance between
standardization and a robust SMS
structure while allowing considerable
flexibility for how an individual air
carrier chooses to establish its SMS.
R. Employee Reporting Systems
Proposed 14 CFR 5.21(a)(4) states
there must be an employee reporting
system, and that the reporting system
must be confidential as per 14 CFR
5.71(a)(7). AFA, ALPA, RAA, and SWA
were concerned that unless an explicit
restriction is imposed to prevent abuse,
disclosures of safety improvement
opportunities, concerns, or issues
submitted by any employee may be used
against the reporting employee in a
disciplinary manner. They suggested
that the employee reporting system be
non-punitive.
The confidential reporting system in
14 CFR 5.71(a)(7) is a conduit for
employees to raise safety issues without
fear of reprisal. There is a distinction in
a non-punitive reporting system and the
requirement in 14 CFR 5.21(a)(5) to
require the certificate holder to establish
a policy that defines unacceptable
employee behaviors. There are some
instances where disciplinary action is
warranted (e.g., the behavior indicates a
willful disregard to comply with
company procedures or regulations) and
14 CFR part 5 recognizes this fact.
Therefore, the rule requires a certificate
holder to establish a confidential
employee reporting system and define
unacceptable behaviors. This allows the
confidential gathering of safety
information from employees while
maintaining the certificate holder’s
freedom to address unacceptable
behavior.
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V. Regulatory Notices and Analyses
A. Regulatory Evaluation
Changes to Federal regulations must
undergo several economic analyses.
First, Executive Order 12866 and
Executive Order 13563 directs that each
Federal agency shall propose or adopt a
regulation only upon a reasoned
determination that the benefits of the
intended regulation justify its costs.
Second, the Regulatory Flexibility Act
of 1980 (Pub. L. 96–354) requires
agencies to analyze the economic
impact of regulatory changes on small
entities. Third, the Trade Agreements
Act (Pub. L. 96–39) prohibits agencies
from setting standards that create
unnecessary obstacles to the foreign
commerce of the United States. In
developing U.S. standards, this Trade
Act requires agencies to consider
international standards and, where
appropriate, that they be the basis of
U.S. standards. Fourth, the Unfunded
Mandates Reform Act of 1995 (Pub. L.
104–4) requires agencies to prepare a
written assessment of the costs, benefits,
and other effects of proposed or final
rules that include a Federal mandate
likely to result in the expenditure by
State, local, or tribal governments, in the
aggregate, or by the private sector, of
$100 million or more annually (adjusted
for inflation with base year of 1995).
This portion of the preamble
summarizes the FAA’s analysis of the
economic impacts of this final rule. We
suggest readers seeking greater detail
read the full regulatory evaluation, a
copy of which we have placed in the
docket for this rulemaking.
In conducting these analyses, FAA
has determined that this final rule: (1)
Has benefits that justify its costs, (2) is
not an economically ‘‘significant
regulatory action’’ as defined in section
3(f) of Executive Order 12866, (3) is
‘‘significant’’ as defined in DOT’s
Regulatory Policies and Procedures; (4)
will not have a significant economic
impact on a substantial number of small
entities; (5) will not create unnecessary
obstacles to the foreign commerce of the
United States; and (6) will not impose
an unfunded mandate on state, local, or
tribal governments, or on the private
sector by exceeding the threshold
identified above. These analyses are
summarized below.
i. Total Benefits and Costs of This Rule
This rule requires Part 121 operators
(domestic, flag, and supplemental
operations) to establish an SMS. It is
expected that the requirements of the
rule will help airlines to identify safety
problems, and if airlines take steps to
mitigate these problems it is estimated
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that the benefits from that mitigation
could be between $205.0 and $472.3
million over 10 years ($104.9 to $241.9
million present value at 7 percent
discount rate). Costs of the rule’s
provisions (excluding any mitigation
costs, which have not been estimated)
are estimated to be $224.3 million
1319
($135.1 million present value at 7
percent discount rate) over 10 years.
ESTIMATED COSTS AND BENEFITS FOR ALL PART 121 CARRIERS—2014–2023
[Millions of 2010 Dollars * (Discounted at 7% Discount Rate)]
Costs .................................................................................................................................
Rule Implementation Costs: $135.1.
Mitigation Costs: Not quantified, estimates not included.
Benefits from Provisions of the Rule and any Consequent Safety Mitigation Actions **
$104.9–$241.9.
* Table values have been rounded. Totals may not add due to rounding.
** Given the range of mitigation actions possible, it is difficult to quantify potential benefits. This range reflects the potential benefits resulting
from examples of possible mitigation actions.
ii. Who is potentially affected by this
rule?
All Part 121 Operators
iii. Assumptions
• All costs and benefits are presented
in 2010 dollars.
• All costs and benefits are estimated
over a 10-year period from 2014 through
2023.
• Benefits of SMS implementation
would begin to accrue in 2017.
• Costs to air carriers would begin to
accrue in 2014.
• The present value discount rate is 7
percent.
• The Value of Statistical Life = $8.9
million in 2010$.
iv. Benefits of This Rule
The benefits of this final rule consist
of the value of averted fatalities,
casualties, aircraft damage, accident
investigation costs, and reduced
employee compensation claims. These
benefits are a result of identifying safety
issues, spotting trends, implementing
necessary safety mitigations, and
communicating findings before they
result in a near-miss, incident, or
accident. Over the 10-year period of
analysis, it is estimated that the benefits
from averted accidents, reduced
employee compensation claims, and
safety mitigations could range between
$205.0 and $472.3 million ($104.9 to
$241.9 million present value at 7
percent discount rate).
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v. Costs of This Rule
Each air carrier will be required to
develop an SMS that includes the four
SMS components: Safety Policy, Safety
Risk Management, Safety Assurance,
and Safety Promotion. To support each
component, the FAA projects that the
compliance cost of this rule will come
from the initial development and
documentation of the carriers’ SMS,
implementation and continuous
operating costs to include the
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modification or purchasing of new
equipment/software, additional staff
and promotional materials, and training.
Costs increase with the size of the
carrier and the type of operations that
they provide. However, medium and
large operators have existing quality
management systems which will lower
their estimated compliance costs. Costs
of the rule’s provisions (excluding any
mitigation costs, which have not been
estimated) are estimated to be $224.3
million ($135.1 million present value at
7 percent discount rate) over 10 years.
B. Regulatory Flexibility Determination
The Regulatory Flexibility Act of 1980
(Pub. L. 96–354) (RFA) establishes ‘‘as a
principle of regulatory issuance that
agencies shall endeavor, consistent with
the objectives of the rule and of
applicable statutes, to fit regulatory and
informational requirements to the scale
of the businesses, organizations, and
governmental jurisdictions subject to
regulation. To achieve this principle,
agencies are required to solicit and
consider flexible regulatory proposals
and to explain the rationale for their
actions to assure that such proposals are
given serious consideration.’’ The RFA
covers a wide-range of small entities,
including small businesses, not-forprofit organizations, and small
governmental jurisdictions.
Agencies must perform a review to
determine whether a rule will have a
significant economic impact on a
substantial number of small entities. If
the agency determines that it will, the
agency must prepare a regulatory
flexibility analysis as described in the
RFA. Section 603 of the Act requires
agencies to prepare and make available
for public comment an initial regulatory
flexibility analysis (IRFA) describing the
impact of proposed rules on small
entities.
As required by Section 603(a) of the
RFA, we prepared and published an
initial regulatory flexibility analysis
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(IRFA) as part of the NPRM for this rule
(75 FR 68240, November 5, 2010). As a
result of that analysis we determined
this rule would have a significant
impact on a substantial number of small
entities for the following reasons: We
estimated that 64 operators were small
entities. Even though the proposed rule
responds to the PL 111–216
Congressional requirement, we
structured the requirement such that
small entities could meet the
requirements with lower costs than a
larger firm.
Section 604 of the RFA also requires
an agency to publish a final regulatory
flexibility analysis (FRFA) in the
Federal Register when issuing a final
rule. Section 604(a) requires that each
FRFA contain:
• A statement of the need for, and
objectives of, the rule;
• a statement of the significant issues
raised by the public comments in
response to the initial regulatory
flexibility analysis, a statement of the
assessment of the agency of such issues,
and a statement of any changes made in
the proposed rule as a result of such
comments;
• the response of the agency to any
comments filed by the Chief Counsel for
Advocacy of the Small Business
Administration in response to the
proposed rule, and a detailed statement
of any change made to the proposed rule
in the final rule as a result of the
comments;
• a description of and an estimate of
the number of small entities to which
the rule will apply or an explanation of
why no such estimate is available;
• a description of the projected
reporting, recordkeeping and other
compliance requirements of the rule,
including an estimate of the classes of
small entities which will be subject to
the requirement and the type of
professional skills necessary for
preparation of the report or record; and,
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• a description of the steps the agency
has taken to minimize the significant
economic impact on small entities
consistent with the stated objectives of
applicable statutes, including a
statement of the factual, policy, and
legal reasons for selecting the alternative
adopted in the final rule and why each
one of the other significant alternatives
to the rule considered by the agency
which affect the impact on small
entities was rejected.
A Statement of the Need for, and
Objectives of, the Rule
The objective of Safety Management
Systems (SMS) is to proactively manage
safety, to identify potential hazards, to
determine risk, and to implement
measures that mitigate the risk. The
FAA envisions operators being able to
use all of the components of SMS to
enhance a carrier’s ability to identify
safety issues and spot trends before they
result in a near-miss, incident, or
accident. For this reason, the FAA is
requiring carriers to develop and
implement an SMS.
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A Statement of the Significant Issues
Raised by the Public Comments in
Response to the Initial Regulatory
Flexibility Analysis, a Statement of the
Assessment of the Agency of Such
Issues, and a Statement of any Changes
Made in the Proposed Rule as a Result
of Such Comments
AEA commented that the FAA failed
to analyze alternatives and stated that
small carriers do not have enough
incidents to make SMS cost-beneficial.
The FAA maintains that SMS is
congressionally mandated and we did
look at two alternatives. For the final
rule we discussed: (1) Extending the
timeframe for development of SMS
implementation plans; and (2)
extending the timeframe for
implementation of SMS. However, as
stated above, the FAA ultimately
determined that delaying the
implementation of SMS delays the
safety benefits and this delay in benefits
is not offset by the small, delayed
compliance cost. Upon a review of these
costs, the FAA determined the
compliance costs are not a significant
economic impact.
The Response of the Agency to any
Comments Filed by the Chief Counsel
for Advocacy of the Small Business
Administration in Response to the
Proposed Rule, and a Detailed
Statement of any Change Made to the
Proposed Rule in the Final Rule as a
Result of the Comments
The Small Business Administration
(SBA) commented that an SMS would
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be burdensome for a small carrier, plus
SMS may be more suitable for larger
carriers because it aids in reducing silos
which many not be an issue because of
size for many smaller carriers. The FAA
maintains the program is flexible and
there are several existing programs that
small carriers can leverage to make SMS
less expensive. For example, many
small and medium sized carriers
reported that they would use the WebBased Application Tool (WBAT), which
is an FAA sponsored tool, to report and
house their data. In addition, carriers
that are currently pursuing an SMS
reported benefits similar to their larger
counterparts.
A Description of and an Estimate of the
Number of Small Entities To Which the
Rule Will Apply or an Explanation of
why no Such Estimate is Available
Under the North American Industry
Classification System (NAICS) codes
481111 and 481112, for scheduled air
transportation, small entities would be
all part 121 carriers with less than 1,500
employees. The FAA estimates that
there are approximately 90 part 121
operators and 60 of these operators meet
the definition of a small entity; therefore
the FAA believes that there are a
substantial number of small entities
impacted by this rule.
A Description of the Projected
Reporting, Recordkeeping and Other
Compliance Requirements of the Rule,
Including an Estimate of the Classes of
Small Entities Which Will be Subject to
the Requirement and the Type of
Professional Skills Necessary for
Preparation of the Report or Record
An SMS is a formalized approach to
managing safety by developing an
organization-wide safety policy,
developing formal methods of
identifying hazards, analyzing and
mitigating risk, developing methods for
ensuring continuous safety
improvement, and creating
organization-wide safety promotion
strategies. Each air carrier would be
required to develop an SMS that
includes the four SMS components:
Safety Policy, Safety Risk Management,
Safety Assurance, and Safety Promotion.
To support each component, the FAA
projects that the compliance cost of this
rule would come from the initial
development and documentation of
their SMS, implementation and
continuous operating costs to include
the modification or purchasing of new
equipment/software, additional staff
and promotional materials, and training.
Costs increase as the size of the carrier
increases. However, carriers have the
ability to use existing programs such as
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an Aviation Safety Action Programs
(ASAP) or the Web-Based Application
Tool (WBAT) to meet these
requirements.
The FAA estimated the average
annual compliance cost during the first
three years the rule is in effect for the
60 carriers identified as small entities
and compared these costs to calendar
year 2011 operating revenues (the most
current data available).8 The compliance
cost for small entities was then averaged
for three groups based on carrier fleet
size (small, medium, and large). Carriers
with a fleet of 9 or less aircraft are in
the ‘‘small’’ group; carriers with
between 10 and 47 aircraft are in the
‘‘medium’’ group; and carriers with a
fleet size greater than 47 aircraft are in
the ‘‘large’’ group.
Each of the 29 carriers in the ‘‘small’’
group fits the criteria of a small entity.
The compliance cost for this group of
carriers will average $164,500 per year.
For the 26 small entities in the
‘‘medium’’ group, the compliance cost
will average $206,400 per year. The
compliance cost for the five carriers
identified as small entities in the
‘‘large’’ group will average $408,000 per
year. Each carrier’s compliance cost will
vary from the averages presented here
due to carrier size (in terms of employee
headcount), and the extent to which a
carrier already has an ASAP or other
safety program already in place.
Of the 60 carriers classified as small
entities, 54 reported operating revenues
on Form 41. For these 54 reporting
carriers, annual compliance costs during
the first three years the rule is in effect
were less than two percent of their
calendar year 2011 operating revenues.
A determination for the six remaining
small entities was not possible because
financial data was not publicly
available.
A Description of the Steps the Agency
Has Taken To Minimize the Significant
Economic Impact on Small Entities
Consistent With the Stated Objectives of
Applicable Statutes, Including a
Statement of the Factual, Policy, and
Legal Reasons for Selecting the
Alternative Adopted in the Final Rule
and Why Each One of the Other
Significant Alternatives to the Rule
Considered by the Agency Which Affect
the Impact on Small Entities Was
Rejected
To relieve the burden of this rule on
small entities, the FAA considered
extending the timeframe for
8 U.S. Department of Transportation Form 41
(Schedule P1.1, and P1.2), and Form 298–C
(Schedule F1). For carriers not reporting a full year
of CY 2011 operating revenues, the most recent four
consecutive quarters of data was used.
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development of SMS implementation
plans. In making this determination, the
FAA considered longer and shorter
terms. However, it settled on one year
based on information from the SMS
Pilot Project, which showed that an
average of one year was sufficient to
develop and approve an implementation
plan.9 As part of its analysis, the FAA
noted that pilot project participants
ultimately had differing levels of SMS
implementation. However, because all
pilot project participants had initially
developed (and received FAA validation
on) an implementation plan that
provided for full SMS implementation,
the FAA was able to use this data to
estimate how long it would take a
certificate holder to develop such a plan
and get the plan approved by the FAA.
The FAA also considered extending
the timeframe for implementation of
SMS. However, the FAA ultimately
concluded that three years for full
implementation of SMS is appropriate.
In making this determination, the FAA
considered longer and shorter terms.
Based on information from the SMS
Pilot Project, as well as lessons learned
from other Civil Aviation Authorities
(CAAs), which showed that three years
was an appropriate timeframe for
implementation of an SMS, the FAA
decided that three years was the best
interval to allow carriers to prepare and
begin implementation.10 With regard to
both of these alternatives, the timelines
chosen for implementation plans and
final implementation of SMS are
mitigated for small entities to the extent
that SMS plans and programs must be
appropriate to the size, scope, and
complexity of the certificate holder’s
operations, and are therefore scalable to
the size of the small entity.
In conclusion, while the FAA found
this rule will affect a substantial number
of small entities, we found annual
compliance cost was less than two
percent of annual revenue for the firms
with public data. As the compliance
cost is less than two percent of annual
revenue, the FAA concludes there will
9 MITRE Corporation conducted a study of the
pilot project participants and concluded that it
took, on average, approximately one year for pilot
project participants to complete implementation
plans.
10 While many pilot project participants are not
small carriers, the large and mid-size carriers that
make up a large portion of the pilot project
participants had to build an SMS from the ground
up. The typical implementation plan received from
these carriers showed that they would be able to
fully implement an SMS within three years.
Because SMS is scalable, a small carrier’s SMS will
be less complex than a large or mid-size carrier’s
SMS. Accordingly, the FAA does not expect small
carriers to need more time to implement an SMS
than the large and mid-size carriers that were part
of the pilot project.
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not be a significant economic impact.
Therefore, as the FAA Administrator, I
certify this rule will not have a
significant economic impact on a
substantial number of small entities.
D. International Trade Impact
Assessment
The Trade Agreements Act of 1979
(Pub. L. 96–39), as amended by the
Uruguay Round Agreements Act (Pub.
L. 103–465), prohibits Federal agencies
from establishing standards or engaging
in related activities that create
unnecessary obstacles to the foreign
commerce of the United States.
Pursuant to these Acts, the
establishment of standards is not
considered an unnecessary obstacle to
the foreign commerce of the United
States, so long as the standard has a
legitimate domestic objective, such the
protection of safety, and does not
operate in a manner that excludes
imports that meet this objective. The
statute also requires consideration of
international standards and, where
appropriate, that they be the basis for
U.S. standards. The FAA has assessed
the potential effect of this final rule and
determined that it uses ICAO
international standards as its basis and
therefore is in compliance with the
Trade Agreements Act.
E. Unfunded Mandates Assessment
Title II of the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104–4)
requires each Federal agency to prepare
a written statement assessing the effects
of any Federal mandate in a proposed or
final agency rule that may result in an
expenditure of $100 million or more (in
1995 dollars) in any one year by State,
local, and tribal governments, in the
aggregate, or by the private sector; such
a mandate is deemed to be a ‘‘significant
regulatory action.’’ The FAA currently
uses an inflation-adjusted value of
$143.1 million in lieu of $100 million.
This final rule does not contain such a
mandate; therefore, the requirements of
Title II of the Act do not apply.
F. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)) requires that the
FAA consider the impact of paperwork
and other information collection
burdens imposed on the public.
According to the 1995 amendments to
the Paperwork Reduction Act (5 CFR
1320.8(b)(2)(vi)), an agency may not
collect or sponsor the collection of
information, nor may it impose an
information collection requirement
unless it displays a currently valid
Office of Management and Budget
(OMB) control number.
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1321
This final rule will impose new
information collection requirements.
The estimated burden of those
requirements is discussed below. As
required by the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507(d)), the
FAA has submitted these information
collection requirements to OMB for its
review. Notice of OMB approval for this
information collection will be published
in a future Federal Register document.
Under this final rule, each certificate
holder operating under part 121 will
develop an SMS, tailored to its unique
operating environment, comprised of
the four key components: Safety policy,
safety risk management, safety
assurance, and safety promotion.
Collection and analysis of safety data is
an essential part each carrier’s SMS. The
FAA has identified the following areas
that will create information collection
burdens under this final rule:
Development and implementation of the
SMS; implementation plan and
documentation; recordkeeping
requirements associated with the safety
policy, safety risk management and
safety assurance processes; training
records, and communication records. In
addition, based on comments received
to the proposed rule, the FAA has also
identified information collection
burdens associated with expanding
existing programs that may be used to
satisfy the requirements of the final rule.
For all information required to be
submitted, documented, or collected
under this final rule, the FAA does not
specify how, or in what media, the
documents and records must be
maintained relative to the requirements
of the final rule. Air carriers are
encouraged to use existing mechanisms
and systems to minimize the burden of
the final rule. These burdens are
outlined below. The cost estimates
associated with these burdens are based
on comments from the ARC,
information from the SMS pilot program
participants, and comments received in
response to the NPRM.
i. Expansion of Existing Programs
The FAA has strongly encouraged air
carriers to use existing programs, such
as the Aviation Safety Action Program
(ASAP), and the Internal Evaluation
Program (IEP), to satisfy some of the
requirements for the safety assurance
component of SMS. The FAA expects
that the 59 air carriers with existing
ASAP programs will expand their
programs to cover those employees
currently not covered, to satisfy the
employee reporting system requirement
of the final rule. For the 31 remaining
air carriers, the FAA expects that these
carriers will use the employee reporting
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tools in the Web-Based Application
Tool (WBAT), which is a federally
developed and funded software system
that can be used, for example, to
develop an implementation plan,
document hazards, and create an
employee reporting system. Because this
is a federally funded system, the FAA
estimated a minimal burden for those 31
carriers using WBAT. The information
collection costs for air carriers
expanding existing programs to comply
with this rule are as follows.
a. Estimate Annual Cost of Expanding
Existing Programs
59 ..............................................................................................
1 ................................................................................................
2 ................................................................................................
Part 121 Carriers with an ASAP for one or more employee groups 11
Full Time Employee (FTE) = 2000 hours per year
FTEs per additional ASAP @ 0.2 FTE each 12 = 800 hours per ASAP
3 ................................................................................................
14 ..............................................................................................
18 ..............................................................................................
+ 32 ........................................................................................
Pilot ASAPs
Mechanic and Engineering (M&E) ASAPs
Dispatcher ASAPs
Flight Attendant (FA) ASAPs
67 ..............................................................................................
Total Employee Group ASAPs
$2,000 .......................................................................................
× 67 ..........................................................................................
Hardware/software, administration, and meeting logistics per group 13
Total Employee Group ASAPs
$134,000 ............................................................................
Material Cost per Year
Employee group
Annual salary
Airline pilots/copilots/flight engineers salary: 14 ...........................................................................................
Maintenance staff salary: 15 .........................................................................................................................
Dispatchers salary: 16 ..................................................................................................................................
Flight attendants salary: 17 ...........................................................................................................................
$151,248
73,606
70,250
54,290
Hourly salary
$75.6239
36.8031
35.1249
27.1452
3 Pilot ASAPs * 800 hours: ............................................................................................................................................................
14 M&E ASAPs * 800 hours: .........................................................................................................................................................
18 Dispatcher ASAPs * 800 hours: ................................................................................................................................................
+ 32 FA ASAPs * 800 hours: .........................................................................................................................................................
2,400 hours.
11,200 hours.
14,400 hours.
25,600 hours.
Total Labor Hours per Year ......................................................................................................................................................
53,600 hours.
Hours * labor rate
3 Pilot ASAPs ...........................................................................
14 M&E ASAPs ........................................................................
18 Dispatcher ASAPs ..............................................................
+ 32 FA ASAPs ........................................................................
...................................................................
...................................................................
...................................................................
...................................................................
$181.497
412.195
505.798
694.917
Total Labor Cost per Year ............................................................................................................................................................
+ Total Material Cost per Year ............................................................................................................................................................
1,794.408
134.000
Total Cost per Year for Expanding Existing Programs .........................................................................................................
1,928.408
b. Estimated Implementation Cost of
Expanding of Existing Programs
2,400 hr * $75.6239
11,200 hr * 36.8031
14,400 hr * 35.1249
25,600 hr * 27.1452
In 000’s
The FAA assumes that the 59 carriers
expand these programs over 3 years. A
third of the expansion will be
completed in year one, two-thirds of the
program will be completed in year two,
and the program will be fully
operational by the third year.
Year 1 .......................................................
Year 2 .......................................................
+ Year 3 ....................................................
53,600 hours * 33.3% ..................................................................................................
53,600 hours * 66.6% ..................................................................................................
53,600 hours * 100.0% ................................................................................................
17,848.8
35,697.6
53,600.0
Total Labor Hours for 3 Years ...
.......................................................................................................................................
107,146.4
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In 000’s
Year 1 .......................................................
Year 2 .......................................................
$1,928.408 * 33.3% .....................................................................................................
$1,928.408 * 66.6% .....................................................................................................
11 http://www.faa.gov/about/initiatives/asap
(August 23, 2011).
12 ATA response to NPRM ‘‘Request for
Comments’’ (Docket No. FAA–2009–061), Figure 3,
page 35.
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13 Ibid.
14 http://www.bls.gov/oes/current/naics3_
481000.htm, http://www.bls.gov/news.release/pdf/
ecec.pdf, BLS reports in Table A. Relative
importance of employer costs for employee
compensation, June 2011 that additional employer
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$ 642.160
1,284.320
compensation per employee is roughly 31% of an
employee’s salary
15 Ibid.
16 Ibid.
17 Ibid.
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1323
In 000’s
+ Year 3 ....................................................
$1,928.408 * 100.0% ...................................................................................................
1,928.408
Total Cost for 3 Years .......................
.......................................................................................................................................
3,854.888
c. Estimated Total Costs of Expanding
Existing Programs
Implementation Cost: 107,146.4 labor
hours and $3.9 million over 3 years.
Average Annual Cost: 35,715.5 labor
hours and $1.28 million per year.
ii. Implementation Plan, SMS
Documentation and Implementation
All 90 certificate holders will be
required to develop and submit an
implementation plan. The
implementation plan will guide the
certificate holder’s implementation of
SMS, as well as provide the basis for
FAA’s oversight during the
development and implementation
phases. The SMS implementation plan
is the only document or data that the
certificate holder must submit to the
FAA. It is a one-time submission due six
months after the effective date of the
final rule.
All 90 certificate holders must also
develop and maintain documentation
that describes the safety policy for the
certificate holder. The safety policy
must address, among other things, the
certificate holder’s safety objectives,
statements about the necessary
resources for the implementation of the
SMS, a safety reporting policy that
defines requirements for employee
reporting of safety hazards or issues,
and an emergency response plan.
In addition to the safety policy, all 90
certificate holders are required under
this rule to develop and maintain
documentation of SMS processes and
procedures, including safety risk
management processes and safety
assurance processes. Given that these
processes and procedures will depend
on the size and scope of each air
carrier’s operation, the amount of
documentation will vary greatly
amongst these certificate holders.
a. Estimated Cost of Implementation
Plan and SMS Documentation
One Full Time Employee (FTE): ...................................................................................................................................
Research Analyst Salary: 18 ...........................................................................................................................................
Material Documentation Cost (3 years): 19 ...................................................................................................................
2,000 hours/yr
$92,958/yr or $46.479/hr
Small
$24,000
Medium 95,000
Large
337,500
Hours
30 Large Carriers * 4,256 hrs/yr of labor per carrier: .......................................................................................................................
31 Medium Carriers * 2,732 hrs/yr of labor per carrier: ...................................................................................................................
+ 29 Small Carriers * 3,045 hrs/yr of labor per carrier: ......................................................................................................................
127,680
84,692
88,305
Total Labor Hours per Year for 90 Carriers .................................................................................................................................
Total Labor Hours for 90 Carriers over 3 Years ...................................................................................................................
300,677
902,031
Total Labor Hours per Year .................................................................................................................................................................
× Research Analyst Hourly Wage ......................................................................................................................................................
300,677
$46.479
Total Labor Cost/Per Year for 90 Carriers ...................................................................................................................................
Total Initial Labor Cost for 90 Carriers over 3 Years ...........................................................................................................
$13,975,166
41,925,498
Large Carriers * $337,500 material cost over three years: .........................................................................................................
Medium Carriers * $95,000 material cost over three years: .......................................................................................................
Small Carriers * $24,000 material cost over three years: ...........................................................................................................
$10,125,000
2,945,000
696,000
30
31
29
90
Carriers Initial Material Cost Over 3 Years ..........................................................................................................................
13,766,000
Initial Labor Cost for 90 Carriers over 3 Years ...................................................................................................................................
× Initial Material Cost for 90 Carriers over 3 Years ...........................................................................................................................
41,925,498
13,766,000
Initial Cost Burden Over Years 1–3 .............................................................................................................................................
55,691,498
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b. Estimated Annual Cost of SMS
Documentation
30
31
In comments to the NPRM, ATA
estimates that small carriers will spend
$10,000 a year, medium sized carriers
will spend $15,000, and large carriers
will spend $30,000 on SMS manual
revision.
Large Carriers * $30,000/yr per carrier .....................................................................................................................
Medium Carriers * $15,000/yr per carrier ................................................................................................................
18 Bureau of Labor Statistics, http://www.bls.gov/
oes/current/oes152031.htm.
19 Initial Regulatory Evaluation Voluntary
Program Participant’s Survey.
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$ 900,000
465,000
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+ 29
Small Carriers * $10,000/yr per carrier ....................................................................................................................
290,000
Document Update Costs per Year for Years 4–10 ....................................................................................................
$1,655,000
iii. SMS Recordkeeping Requirements
This rule requires air carriers to
record outputs from their safety risk
management (SRM) processes, safety
assurance (SA) processes, safety
communications and SMS training.
Records of outputs for SRM processes
must be maintained for as long as the
outputs remain relevant to the
certificate holder’s operation. Outputs of
safety assurance processes must be
maintained for 5 years. Training records
must be kept for as long as the
individual is employed by the certificate
holder and all SMS communication
records under § 5.93 must be kept for 24
months. The scope and breadth of these
recordkeeping requirements will
depend on the size and complexity of
the certificate holder’s operation. To
mitigate these burdens, the FAA has not
specified how, or in what media, these
records must be maintained, and has
also encouraged the use of existing
mechanisms. For example, the FAA has
estimated the burden of maintaining
employee SMS training records to be
minimal since 121 certificate holders
are already required to maintain training
records.
Based on this information, the FAA
maintains that only one additional
employee will be required for carriers
with several existing safety programs, 2
full time employees for large and
medium carriers with few pre-existing
programs, and a part-time employee for
small carriers. The FAA also maintains
that there will be minimal additional
material costs and training record costs
since all part 121 certificate holders
already maintain training records.
Operating costs will begin after the
development, documentation, and
implementation of an SMS.
a. Estimated Annual Cost of SMS
Recordkeeping Requirements:
90 Operators
One Full Time Employee (FTE) = 2000
hours per year
Research Analyst Salary 20 = $92,958 per
year = $46.479 per hour
Hours
59 Large/Medium Carriers * 1 FTE * 2,000 hours .............................................................................................................................
9 Large/Medium Carriers * 2 FTE * 2,000 hours ..............................................................................................................................
+ 22 Small Carriers * 0.5 FTE * 2,000 hours .....................................................................................................................................
118,000
36,000
22,000
Total Recordkeeping Hours per Year for 90 carriers (Years 4–10) ............................................................................................
176,000
Total Recordkeeping Hours per Year for 90 carriers ......................................................................................................................
× Hourly Wage—Research Analyst ....................................................................................................................................................
176,000
$46.479
Total Recordkeeping Cost per Year for 90 Carriers (Years 4–10) ..............................................................................................
$8,180,304
Promotional material per year per carrier 21 ....................................................................................................................................
× 90 Carriers .......................................................................................................................................................................................
$833
90
Total Promotional Material Cost per Year for 90 Carriers (Years 4–10) .................................................................................
$74,970
Total Recordkeeping Cost per Year for 90 Carriers (Years 4–10) .....................................................................................................
+ Total Promo Material Cost per Year for 90 Carriers (Years 4–10) .................................................................................................
$8,180,304
$74,970
Total Annual Cost (Years 4–10) ...................................................................................................................................................
$8,255,274
b. Estimated Total Annual Cost of SMS
Recordkeeping Requirements
176,000 labor hours and $8.3 million
per year (Years 4–10).
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iv. Estimated Costs to the Federal
Government
This rule requires air carriers to
implement an SMS acceptable to the
Administrator within 3 years of the
effective date of the final rule. The FAA
offers a federally developed and funded
software system, WBAT, which serves a
variety of functions in addition to aiding
carriers with their ASAPs and SMS. The
FAA estimates at most that it costs $2.6
million per year to maintain WBAT.
v. Summary of Total Burden
a. Implementation Cost
Years 1–3 ................................................
+ Years 1–3 .............................................
Develop, Implement, Document SMS-Initial Cost Burden ..................................
Cost to Expand Existing Programs ........................................................................
$55,691,498
3,854,888
Years 1–3 .........................................
Total Implementation Cost ....................................................................................
59,546,386
+ Years 1–10 ...........................................
Federal Govt Cost—WBAT ....................................................................................
$ 2,600,000
Years 4–10 ..............................................
Staffing and Promotional Material ........................................................................
$8,255,274
b. Annual Cost
20 Bureau of Labor Statistics, http://www.bls.gov/
oes/current/oes152031.htm.
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21 Initial Regulatory Evaluation Voluntary
Program Participant’s Survey.
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Years 4–10 ..............................................
+ Years 4–10 ...........................................
ASAPs .....................................................................................................................
SMS Manual Updates ............................................................................................
1,928,408
1,655,000
Years 4–10 .......................................
Years 1–10 ..............................................
Years 4–10 ..............................................
Total Cost Per Year ................................................................................................
$ 2,600,000 * 10 years ...........................................................................................
$11,838,682 * 7 years .............................................................................................
11,838,682
$26,000,000
82,870,774
G. International Compatibility
In keeping with U.S. obligations
under the Convention on International
Civil Aviation, it is FAA policy to
conform to International Civil Aviation
Organization (ICAO) Standards and
Recommended Practices to the
maximum extent practicable. The FAA
has reviewed the corresponding ICAO
Standards and Recommended Practices
and has identified the following
differences with these proposed
regulations. Amendment 30 to Annex 6
part I Section 3.2 Safety Management,
Paragraph 3.3.6 effective 1 January, 2009
requires that a Flight Data Analysis
Program be in the SMS standard. The
FAA will file a difference with ICAO.
ICAO Annex 6 part I includes a
provision that part 121 air carriers
operating airplanes having a maximum
gross takeoff weight in excess of 27,000
kg (approximately 59,400 lbs.). ‘‘. . .
shall establish and maintain a flight data
analysis programme as part of its safety
management system.’’ Flight Data
Analysis Program (FDAP) is a general
term encompassing a number of means
by which routine flight operations data
may be acquired, recorded, analyzed,
and shared. Flight Operational Quality
Assurance (FOQA) is one such program.
FOQA is a formal voluntary program
which has been implemented by 41 air
carriers conducting operations under
part 121. FOQA specifications include
installation of extensive flight data
recording systems which facilitate rapid
transfer of recorded data, deidentification of that data, and
agreements between pilot organizations
and the air carriers which define how
this information may be used.
The part 121 fleet is diverse in terms
of size, complexity, and age, as well as
the size of the air carriers that operate
them. Many of the older aircraft would
require extensive modifications to adapt
them to the technical requirements of a
FOQA program. The investment and
expense of implementing and
maintaining such a system exceeds the
financial capability of many smaller air
carriers. There are a number of ways to
meet the requirements of an FDAP.
Therefore, the FAA will not require
FOQA in this rule.
H. Environmental Analysis
FAA Order 1050.1E identifies FAA
actions that are categorically excluded
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from preparation of an environmental
assessment or environmental impact
statement under the National
Environmental Policy Act in the
absence of extraordinary circumstances.
The FAA has determined this
rulemaking action qualifies for the
categorical exclusion identified in
Chapter 3, paragraph 312d and involves
no extraordinary circumstances.
I. Regulations Affecting Intrastate
Aviation in Alaska
Section 1205 of the FAA
Reauthorization Act of 1996 (110 Stat.
3213) requires the FAA, when
modifying its regulations in a manner
affecting intrastate aviation in Alaska, to
consider the extent to which Alaska is
not served by transportation modes
other than aviation, and to establish
appropriate regulatory distinctions. In
the NPRM, the FAA requested
comments on whether the proposed rule
should apply differently to intrastate
operations in Alaska. The agency did
not receive any comments, and has
determined, based on the administrative
record of this rulemaking, that there is
no need to make any regulatory
distinctions applicable to intrastate
aviation in Alaska.
VI. Executive Order Determinations
A. Executive Order 13132, Federalism
The FAA has analyzed this final rule
under the principles and criteria of
Executive Order 13132, Federalism. The
agency determined that this action will
not have a substantial direct effect on
the States, or the relationship between
the Federal Government and the States,
or on the distribution of power and
responsibilities among the various
levels of government, and, therefore,
does not have Federalism implications.
B. Executive Order 13211, Regulations
That Significantly Affect Energy Supply,
Distribution, or Use
The FAA analyzed this final rule
under Executive Order 13211, Actions
Concerning Regulations that
Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). The
agency has determined that it is not a
‘‘significant energy action’’ under the
executive order and it is not likely to
have a significant adverse effect on the
supply, distribution, or use of energy.
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VII. How To Obtain Additional
Information
A. Rulemaking Documents
An electronic copy of a rulemaking
document may be obtained by using the
Internet—
1. Search the Federal eRulemaking
Portal (http://www.regulations.gov);
2. Visit the FAA’s Regulations and
Policies Web page at http://
www.faa.gov/regulations_policies/ or
3. Access the Government Printing
Office’s Web page at http://
www.gpo.gov/fdsys/browse/
collection.action?collectionCode=FR.
Copies may also be obtained by
sending a request (identified by notice,
amendment, or docket number of this
rulemaking) to the Federal Aviation
Administration, Office of Rulemaking,
ARM–1, 800 Independence Avenue
SW., Washington, DC 20591, or by
calling (202) 267–9680.
B. Comments Submitted to the Docket
Comments received may be viewed by
going to http://www.regulations.gov and
following the online instructions to
search the docket number for this
action. Anyone is able to search the
electronic form of all comments
received into any of the FAA’s dockets
by the name of the individual
submitting the comment (or signing the
comment, if submitted on behalf of an
association, business, labor union, etc.).
C. Small Business Regulatory
Enforcement Fairness Act
The Small Business Regulatory
Enforcement Fairness Act (SBREFA) of
1996 requires FAA to comply with
small entity requests for information or
advice about compliance with statutes
and regulations within its jurisdiction.
A small entity with questions regarding
this document, may contact its local
FAA official, or the person listed under
the FOR FURTHER INFORMATION CONTACT
heading at the beginning of the
preamble. To find out more about
SBREFA on the Internet, visit http://
www.faa.gov/regulations_policies/
rulemaking/sbre_act/.
List of Subjects
14 CFR Part 5
Air carriers, Aircraft, Airmen,
Aviation safety, Reporting and
recordkeeping requirements, Safety,
Transportation.
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14 CFR Part 119
Administrative practice and
procedure, Air carriers, Aircraft,
Aviation safety, Charter flights,
Reporting and recordkeeping
requirements.
The Amendment
In consideration of the foregoing, and
under the authority of 49 U.S.C. 106(f)
and 44701(a)(5), the Federal Aviation
amends chapter I of title 14, Code of
Federal Regulations, as follows:
■ 1. The heading for subchapter A is
revised to read as follows:
Subchapter A—Definitions and General
Requirements
2. Add part 5 to subchapter A to read
as follows:
■
PART 5—SAFETY MANAGEMENT
SYSTEMS
Subpart A—General
Sec.
5.1 Applicability.
5.3 General requirements.
5.5 Definitions.
Subpart B—Safety Policy
5.21 Safety policy.
5.23 Safety accountability and authority.
5.25 Designation and responsibilities of
required safety management personnel.
5.27 Coordination of emergency response
planning.
Subpart C—Safety Risk Management
5.51 Applicability.
5.53 System analysis and hazard
identification.
5.55 Safety risk assessment and control.
Subpart D—Safety Assurance
5.71 Safety performance monitoring and
measurement.
5.73 Safety performance assessment.
5.75 Continuous improvement.
Subpart F—SMS Documentation and
Recordkeeping
5.95 SMS documentation.
5.97 SMS records.
Authority: Pub. L. 111–216, sec. 215 (Aug.
1, 2010); 49 U.S.C. 106(f), 106(g), 40101,
40113, 40119, 41706, 44101, 44701–44702,
44705, 44709–44711, 44713, 44716–44717,
44722, 46105.
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Subpart A—General
Applicability.
(a) A certificate holder under part 119
of this chapter authorized to conduct
operations in accordance with the
requirements of part 121 of this chapter
must have a Safety Management System
that meets the requirements of this part
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§ 5.3
General requirements.
(a) Any certificate holder required to
have a Safety Management System
under this part must submit the Safety
Management System to the
Administrator for acceptance. The SMS
must be appropriate to the size, scope,
and complexity of the certificate
holder’s operation and include at least
the following components:
(1) Safety policy in accordance with
the requirements of subpart B of this
part;
(2) Safety risk management in
accordance with the requirements of
subpart C of this part;
(3) Safety assurance in accordance
with the requirements of subpart D of
this part; and
(4) Safety promotion in accordance
with the requirements of subpart E of
this part.
(b) The Safety Management System
must be maintained in accordance with
the recordkeeping requirements in
subpart F of this part.
(c) The Safety Management System
must ensure compliance with the
relevant regulatory standards in chapter
I of Title 14 of the Code of Federal
Regulations.
§ 5.5
Subpart E—Safety Promotion
5.91 Competencies and training.
5.93 Safety communication.
§ 5.1
and is acceptable to the Administrator
by January 8, 2018.
(b) A certificate holder must submit
an implementation plan to the FAA
Administrator for review no later than
September 9, 2015. The implementation
plan must be approved no later than
March 9, 2016.
(c) The implementation plan may
include any of the certificate holder’s
existing programs, policies, or
procedures that it intends to use to meet
the requirements of this part, including
components of an existing SMS.
Definitions.
Hazard means a condition that could
foreseeably cause or contribute to an
aircraft accident as defined in 49 CFR
830.2.
Risk means the composite of
predicted severity and likelihood of the
potential effect of a hazard.
Risk control means a means to reduce
or eliminate the effects of hazards.
Safety assurance means processes
within the SMS that function
systematically to ensure the
performance and effectiveness of safety
risk controls and that the organization
meets or exceeds its safety objectives
through the collection, analysis, and
assessment of information.
Safety Management System (SMS)
means the formal, top-down,
organization-wide approach to
managing safety risk and assuring the
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effectiveness of safety risk controls. It
includes systematic procedures,
practices, and policies for the
management of safety risk.
Safety objective means a measurable
goal or desirable outcome related to
safety.
Safety performance means realized or
actual safety accomplishment relative to
the organization’s safety objectives.
Safety policy means the certificate
holder’s documented commitment to
safety, which defines its safety
objectives and the accountabilities and
responsibilities of its employees in
regards to safety.
Safety promotion means a
combination of training and
communication of safety information to
support the implementation and
operation of an SMS in an organization.
Safety Risk Management means a
process within the SMS composed of
describing the system, identifying the
hazards, and analyzing, assessing and
controlling risk.
Subpart B—Safety Policy
§ 5.21
Safety policy.
(a) The certificate holder must have a
safety policy that includes at least the
following:
(1) The safety objectives of the
certificate holder.
(2) A commitment of the certificate
holder to fulfill the organization’s safety
objectives.
(3) A clear statement about the
provision of the necessary resources for
the implementation of the SMS.
(4) A safety reporting policy that
defines requirements for employee
reporting of safety hazards or issues.
(5) A policy that defines unacceptable
behavior and conditions for disciplinary
action.
(6) An emergency response plan that
provides for the safe transition from
normal to emergency operations in
accordance with the requirements of
§ 5.27.
(b) The safety policy must be signed
by the accountable executive described
in § 5.25.
(c) The safety policy must be
documented and communicated
throughout the certificate holder’s
organization.
(d) The safety policy must be
regularly reviewed by the accountable
executive to ensure it remains relevant
and appropriate to the certificate holder.
§ 5.23
Safety accountability and authority.
(a) The certificate holder must define
accountability for safety within the
organization’s safety policy for the
following individuals:
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(1) Accountable executive, as
described in § 5.25.
(2) All members of management in
regard to developing, implementing,
and maintaining SMS processes within
their area of responsibility, including,
but not limited to:
(i) Hazard identification and safety
risk assessment.
(ii) Assuring the effectiveness of
safety risk controls.
(iii) Promoting safety as required in
subpart E of this part.
(iv) Advising the accountable
executive on the performance of the
SMS and on any need for improvement.
(3) Employees relative to the
certificate holder’s safety performance.
(b) The certificate holder must
identify the levels of management with
the authority to make decisions
regarding safety risk acceptance.
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§ 5.25 Designation and responsibilities of
required safety management personnel.
(a) Designation of the accountable
executive. The certificate holder must
identify an accountable executive who,
irrespective of other functions, satisfies
the following:
(1) Is the final authority over
operations authorized to be conducted
under the certificate holder’s
certificate(s).
(2) Controls the financial resources
required for the operations to be
conducted under the certificate holder’s
certificate(s).
(3) Controls the human resources
required for the operations authorized to
be conducted under the certificate
holder’s certificate(s).
(4) Retains ultimate responsibility for
the safety performance of the operations
conducted under the certificate holder’s
certificate.
(b) Responsibilities of the accountable
executive. The accountable executive
must accomplish the following:
(1) Ensure that the SMS is properly
implemented and performing in all
areas of the certificate holder’s
organization.
(2) Develop and sign the safety policy
of the certificate holder.
(3) Communicate the safety policy
throughout the certificate holder’s
organization.
(4) Regularly review the certificate
holder’s safety policy to ensure it
remains relevant and appropriate to the
certificate holder.
(5) Regularly review the safety
performance of the certificate holder’s
organization and direct actions
necessary to address substandard safety
performance in accordance with § 5.75.
(c) Designation of management
personnel. The accountable executive
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must designate sufficient management
personnel who, on behalf of the
accountable executive, are responsible
for the following:
(1) Coordinate implementation,
maintenance, and integration of the
SMS throughout the certificate holder’s
organization.
(2) Facilitate hazard identification and
safety risk analysis.
(3) Monitor the effectiveness of safety
risk controls.
(4) Ensure safety promotion
throughout the certificate holder’s
organization as required in subpart E of
this part.
(5) Regularly report to the accountable
executive on the performance of the
SMS and on any need for improvement.
§ 5.27 Coordination of emergency
response planning.
Where emergency response
procedures are necessary, the certificate
holder must develop and the
accountable executive must approve as
part of the safety policy, an emergency
response plan that addresses at least the
following:
(a) Delegation of emergency authority
throughout the certificate holder’s
organization;
(b) Assignment of employee
responsibilities during the emergency;
and
(c) Coordination of the certificate
holder’s emergency response plans with
the emergency response plans of other
organizations it must interface with
during the provision of its services.
Subpart C—Safety Risk Management
§ 5.51
Applicability.
A certificate holder must apply safety
risk management to the following:
(a) Implementation of new systems.
(b) Revision of existing systems.
(c) Development of operational
procedures.
(d) Identification of hazards or
ineffective risk controls through the
safety assurance processes in subpart D
of this part.
§ 5.53 System analysis and hazard
identification.
(a) When applying safety risk
management, the certificate holder must
analyze the systems identified in § 5.51.
Those system analyses must be used to
identify hazards under paragraph (c) of
this section, and in developing and
implementing risk controls related to
the system under § 5.55(c).
(b) In conducting the system analysis,
the following information must be
considered:
(1) Function and purpose of the
system.
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1327
(2) The system’s operating
environment.
(3) An outline of the system’s
processes and procedures.
(4) The personnel, equipment, and
facilities necessary for operation of the
system.
(c) The certificate holder must
develop and maintain processes to
identify hazards within the context of
the system analysis.
§ 5.55
Safety risk assessment and control.
(a) The certificate holder must
develop and maintain processes to
analyze safety risk associated with the
hazards identified in § 5.53(c).
(b) The certificate holder must define
a process for conducting risk assessment
that allows for the determination of
acceptable safety risk.
(c) The certificate holder must
develop and maintain processes to
develop safety risk controls that are
necessary as a result of the safety risk
assessment process under paragraph (b)
of this section.
(d) The certificate holder must
evaluate whether the risk will be
acceptable with the proposed safety risk
control applied, before the safety risk
control is implemented.
Subpart D—Safety Assurance
§ 5.71 Safety performance monitoring and
measurement.
(a) The certificate holder must
develop and maintain processes and
systems to acquire data with respect to
its operations, products, and services to
monitor the safety performance of the
organization. These processes and
systems must include, at a minimum,
the following:
(1) Monitoring of operational
processes.
(2) Monitoring of the operational
environment to detect changes.
(3) Auditing of operational processes
and systems.
(4) Evaluations of the SMS and
operational processes and systems.
(5) Investigations of incidents and
accidents.
(6) Investigations of reports regarding
potential non-compliance with
regulatory standards or other safety risk
controls established by the certificate
holder through the safety risk
management process established in
subpart B of this part.
(7) A confidential employee reporting
system in which employees can report
hazards, issues, concerns, occurrences,
incidents, as well as propose solutions
and safety improvements.
(b) The certificate holder must
develop and maintain processes that
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analyze the data acquired through the
processes and systems identified under
paragraph (a) of this section and any
other relevant data with respect to its
operations, products, and services.
§ 5.73
Safety performance assessment.
(a) The certificate holder must
conduct assessments of its safety
performance against its safety
objectives, which include reviews by
the accountable executive, to:
(1) Ensure compliance with the safety
risk controls established by the
certificate holder.
(2) Evaluate the performance of the
SMS.
(3) Evaluate the effectiveness of the
safety risk controls established under
§ 5.55(c) and identify any ineffective
controls.
(4) Identify changes in the operational
environment that may introduce new
hazards.
(5) Identify new hazards.
(b) Upon completion of the
assessment, if ineffective controls or
new hazards are identified under
paragraphs (a)(2) through (5) of this
section, the certificate holder must use
the safety risk management process
described in subpart C of this part.
§ 5.75
Continuous improvement.
The certificate holder must establish
and implement processes to correct
safety performance deficiencies
identified in the assessments conducted
under § 5.73.
Subpart E—Safety Promotion
§ 5.91
Competencies and training.
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The certificate holder must provide
training to each individual identified in
§ 5.23 to ensure the individuals attain
and maintain the competencies
necessary to perform their duties
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relevant to the operation and
performance of the SMS.
§ 5.93
Safety communication.
The certificate holder must develop
and maintain means for communicating
safety information that, at a minimum:
(a) Ensures that employees are aware
of the SMS policies, processes, and tools
that are relevant to their responsibilities.
(b) Conveys hazard information
relevant to the employee’s
responsibilities.
(c) Explains why safety actions have
been taken.
(d) Explains why safety procedures
are introduced or changed.
(d) The certificate holder must retain
records of all communications provided
under § 5.93 for a minimum of 24
consecutive calendar months.
PART 119—CERTIFICATION: AIR
CARRIERS AND COMMERCIAL
OPERATORS
3. The authority citation for part 119
is revised to read as follows:
■
Authority: Pub. L. 111–216, sec. 215
(August 1, 2010); 49 U.S.C. 106(f), 106(g),
1153, 40101, 40102, 40103, 40113, 44105,
44106, 44111, 44701–44717, 44722, 44901,
44903, 44904, 44906, 44912, 44914, 44936,
44938, 46103, 46105.
4. Add § 119.8 to read as follows:
Subpart F—SMS Documentation and
Recordkeeping
■
§ 5.95
(a) Certificate holders authorized to
conduct operations under part 121 of
this chapter must have a safety
management system that meets the
requirements of part 5 of this chapter
and is acceptable to the Administrator
by March 9, 2018.
(b) A person applying to the
Administrator for an air carrier
certificate or operating certificate to
conduct operations under part 121 of
this chapter after March 9, 2015, must
demonstrate, as part of the application
process under § 119.35, that it has an
SMS that meets the standards set forth
in part 5 of this chapter and is
acceptable to the Administrator.
SMS documentation.
The certificate holder must develop
and maintain SMS documentation that
describes the certificate holder’s:
(a) Safety policy.
(b) SMS processes and procedures.
§ 5.97
SMS records.
(a) The certificate holder must
maintain records of outputs of safety
risk management processes as described
in subpart C of this part. Such records
must be retained for as long as the
control remains relevant to the
operation.
(b) The certificate holder must
maintain records of outputs of safety
assurance processes as described in
subpart D of this part. Such records
must be retained for a minimum of 5
years.
(c) The certificate holder must
maintain a record of all training
provided under § 5.91 for each
individual. Such records must be
retained for as long as the individual is
employed by the certificate holder.
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§ 119.8
Safety Management Systems.
Issued in Washington, DC, under the
authority provided by 49 U.S.C. 106(f),
44701(a)(5) and Sec. 215 of Pub. L. 111–216,
124 Stat. 2350 (49 U.S.C. 44701 note) on
January 5, 2015.
Michael P. Huerta,
Administrator.
[FR Doc. 2015–00143 Filed 1–7–15; 8:45 am]
BILLING CODE 4910–13–P
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| File Type | application/pdf |
| File Modified | 2015-01-08 |
| File Created | 2015-01-08 |