Ready or not, SMS is here

 - March 1, 2011, 8:10 AM

According to news reports, when the Deepwater Horizon oil-drilling platform suffered a catastrophic well-head blowout then burned and sank in the Gulf of Mexico last April, workers on the rig hesitated to implement multiple safety processes that might have helped save some or all of the 11 lives lost in the ensuing explosion and also prevent the spilling of millions of gallons of oil.

The operation was covered by a safety management system (SMS), yet the accident underscores a key weakness of any safety program: it depends on the people involved. And that illustrates the core issue facing the business aviation as it becomes increasingly clear to the industry that SMS is going to be mandatory some day: no matter how many safety programs are implemented, if the key players do not support the concept and make it part of their everyday operation, the SMS is not going to offer any benefit, other than enabling an operation to meet whatever regulatory requirements led to the creation of the program.

There is a cost-benefit to SMS. Fundamentally, once SMS becomes a legally enforceable prerequisite of operating in a particular region, the cost of non-compliance means not being allowed to operate in that region. The ultimate cost-benefit is the age-old call for safety: can you really afford an accident? The obvious answer, of course, is no.

Somewhere between those two wide-ranging parameters lies a solution, and hundreds of operators, especially charter companies, have already adopted an SMS. Others are balking, fearing that the SMS will become just another manual gathering dust on a shelf, created in a burst of enthusiasm then left to molder as day-to-day concerns take precedence over ticking off boxes on yet another checklist.

No matter what, SMS is likely to be mandatory at some point. The FAA has already issued notices of proposed rulemaking for Part 139 airports and Part 121 airlines. Part 135 may be next, then Part 145 repair stations and eventually Part 91 operators.

Fundamentally, this is all you need to know about SMS: if you operate under Part 91, think that youπre plenty safe and donπt fly outside the U.S., then you could stop here. But if you plan to fly outside the U.S., you arenπt afraid of learning a new way to continuously improve your safety efforts, you want to take advantage of potential insurance discounts and you want to understand what this SMS business is all about, read on.

Who Needs SMS?

You might already manage safety in a way that is much like an SMS: evaluating hazards before trips, figuring out how to minimize the risks caused by those hazards then following up later and regularly to find any new hazards and either halt the risky activity or figure out a way to make the activity meet your company's risk parameters. Adopting an SMS will be easy for you because youπre already more than halfway there.

Or maybe youπre like this ≥not really a flight department≤ that a friend recently told me about. A wealthy individual decides to buy some airplanes. Prices are too good to resist. He now has a fleet of jets and turboprops and one key employee trying to manage the unstructured operation. Contract pilots help fly, but there is no structure to the operation, no training on standard procedures, no discussion of safety issues and no plan for what to do if something goes seriously wrong. The airplane owner has no idea of the risks he is taking, and the one full-time pilot has no good way of communicating these issues to his boss.

Does this seem like a safe way to operate? The operation hasnπt had an accident yet. Does that make it safe?

Would you let your loved one fly with this operation?

ICAO Leads the Push

According to Ray Rohr, director of regulatory affairs at the International Business Aviation Council (IBAC), SMS for aviation stems from a 2005 International Civil Aviation Organization (ICAO) meeting of directors general of civil aviation regulators. ≥It was a result of a series of accidents in Africa and Eastern Europe,≤ he said. ≥There was a strong recommendation out of the meeting that SMSs be created for all operators.≤

The idea was not just to help operators develop a system to identify hazards, analyze risks, develop mitigation techniques and track the results, but also to create a system that regulators could oversee more easily rather than auditing each operator. It is impossible for regulators to spend time with every entity that they regulate, and there are many examples of operators who get no attention that should and those who get lots of attention but donπt need it. ≥This is a more focused approach,≤ he explained, ≥to see what the company is doing for the management of safety and help identify shortcomings in a more efficient manner.≤

A 2006 amendment to ICAO Annex 6 requires that countries implement SMS standards, beginning with commercial operators (Part I). Specifically, ICAO requires that ≥An operator shall establish and maintain a safety management system that is appropriate to the size and complexity of the operation.≤ And ICAO recommends that an SMS should include:

Ä a process to identify actual and potential safety hazards and assess the associated risks;

Ä a process to develop and implement remedial action necessary to maintain an acceptable level of safety; and

Ä provision for continuous monitoring and regular assessment of the appropriateness and effectiveness of safety management activities.

ICAO standards arenπt directly binding on operators but by agreement through the Chicago Convention on International Civil Aviation, member countries pledge to adopt the standards as law. According to NBAA, ≥What this means is that, in the near future, an SMS will likely be necessary to operate into many countries.≤

The first country to implement an SMS requirement for general aviation operators was Bermuda. Operators of aircraft weighing more than 12,500 pounds and all jets will have to show compliance beginning April 1. Next in line are European Union countries, and the EASA SMS requirement is expected next year, according to Rohr.

The FAA was unable to develop SMS requirements in time for ICAO deadlines and filed a difference to give it more time. However, other countries do not need to abide by these differences and can set their own requirements. And as NBAA points out, ≥Part 91.703 of the FARs states that U.S.-registered operators must comply with the applicable regulations of the foreign country in which the aircraft is operated.≤

Incidentally, while much of the focus on SMS has been on Part 91 operators, SMS affects all types of aviation organization. The FAAπs first regulatory SMS effort is for Part 121 operators, and the agency has already released a notice of proposed rulemaking (NPRM) for airlines. Note that the FAA isnπt responding just to the ICAO mandate but also to NTSB recommendations and a stipulation in an FAA funding extension by Congress, that the FAA issue an NPRM and implement a final SMS rule by July 30, 2012.

The comment period for the NPRM was extended to March 7. Interestingly, a joint request to extend the comment period came from non-airline alphabet groups, including NBAA, AOPA, EAA, ARSA, NATA and others. Basically, the signers of the request believe that the Part 121 SMS rule will have a significant impact on SMS rules for other types of operation and the groups wanted more time to collect data and formulate comments.

Specifically, the groups are concerned about one aspect of the NPRM, a proposal to create a new Part 5 in Title 14 of the code of federal regulations, where the FAA notes that ≥Although this proposal extends only to Part 121 operators, the FAA has developed these general requirements with the intent that in the future they could be applied to other FAA-regulated entities, such as Part 135 operators, Part 145 repair stations and Part 21 aircraft design and manufacturing organizations and approval holders.≤ Many of these groups did participate in an aviation rulemaking committee formed to help frame the SMS regulatory effort. But they believe that ≥the process has been rushed and the haste of the process has made it impossible to provide the Administrator with fully formed ideas and recommendations.≤

The letter from the alphabet groups contains a warning that should be underlined: ≥It is a truism of regulatory development that when a regulatory system is in place, it is often difficult or impossible to significantly alter the fundamental structure of that system. This means that the fundamental structure of any Part 5 regulations that are developed for air carriers, but then subsequently applied to other certificate holders, will probably be difficult or impossible to significantly alter, even if the fundamental structure impedes or undermines optimal approaches to safety.≤

In other words, what organizations such as ICAO, FAA and NTSB think is good for airlines is about to get forced onto the rest of aviation. Not everyone agrees this is a good idea.

Whatπs the Benefit?

No one disputes the benefits of safety. But it is interesting to read the Part 121 NPRM to see what problems the FAA thinks SMS will fix. The NPRM mentions two specific accidents and how SMS programs would have helped. Nowhere in the NPRM does the FAA analyze accidents that have occurred to operations that have an established SMS.

The FAA examined 172 accidents from 2001 through 2010 (FAA fiscal years) ≥that could have been mitigated if air carriers had implemented a safety management system to identify hazards in their daily operations and developed methods to control the risk.≤

The two representative accidents include Air Midwest Flight 5481, a Beech 1900 that crashed on Jan. 8, 2003, in Charlotte, N.C. Improperly rigged elevator controls were the primary cause of this accident. The FAA supposes that had the system hazards associated with this accident been identified and assessed, maintenance management ≥would have considered the worst credible outcome of the performance of the maintenance at that facility under those conditions,≤ then would have determined that those risks were unacceptable and ≥appropriate risk controls would have been implemented.≤

The second accident is the wrong-runway takeoff of Comair Flight 5191 on Aug. 27, 2006, at Lexington, Ky. (The CRJ taxied onto shorter Runway 26 instead of the correct and longer Runway 22.) The FAAπs explanation of how an SMS would have helped seems convoluted, an attempt to make the facts fit a supposition to justify a regulation. The explanation is nevertheless interesting and worth reading (see!documentDetail;D=FAA-2009-0671-0095)

Certainly, preventing the enormous cost of any accident points to the benefits of any safety program. But does SMS really help? A study commissioned by IBAC by R. Woodhouse ( concluded that SMS would have clear benefits. The study looked at 297 business jet and turboprop accidents between 1998 and 2003 and noted, ≥It was concluded that between 35 and 55 percent of the accidents could have certainly or probably been prevented by implementation of IS-BAO [the international standard for business aviation operations].≤

Bizav Cost-benefit

Notwithstanding the above information, SMS is not only coming, itπs already here. Many Part 135 charter companies have already implemented SMS programs, as have Part 91 operators. The FAAπs advisory circular on SMS–AC 120-92A–has been available since June 2006. The SMS concept is a staple of the safety community and SMS programs are under way in a variety of industries. It is only a matter of time before the FAA proposes rules for other operators to implement SMS programs. And if SMS is required eventually for most of aviation, is it a benefit that more new pilots and mechanics and other aviation workers learn about formal concepts of safety earlier in their careers?

≥As time goes on, this will filter down to flight training organizations,≤ said Joe Moeggenberg, president of Argus International, which performs audits on flight operations, gathers and analyzes operational data and offers assistance with SMS development through its Prism program.

Phil Gibson, a consultant for Aviation Management Systems (AMS), agrees. ≥Graduates are coming out of universities and training with SMS in mind.≤ And William Quinn, AMS chairman and founder, noted, ≥Major universities are building that into the framework of [their programs].≤ More fresh college graduates joining the ranks of flight operations are going to push for SMS, regardless of the regulatory requirement, because they see the benefit.

Added IBACπs Rohr, ≥New ICAO requirements on flight training introduce cockpit resource management and safety management right in basic training. Some of the new schools that are taking students and putting them through college-type programs, itπs different from when you and I took flight training. The discipline of CRM, threat and error management and safety management principles are getting through. The European standard on flight training requires training schools to have SMS, and anybody who operates any type of operation is required to have SMS. Canadian rules are the same way.≤

≥We firmly believe that an SMS offers real and measurable benefits to flight departments of all sizes and types,≤ Quinn said. ≥Weπre noticing that the motivation for pursuing an SMS is starting to change from åwe need to have SMS because of pending regulationsπ to åthis really does work.π An SMS program does have benefits that are measurable. The pending regulations are secondary.≤

One of the most immediately apparent benefits of SMS comes from the insurance industry. Insurance underwriters (the companies that cover the cost of accidents and have a direct financial stake in safety) are rewarding operators with lower rates in some cases.

≥If you want reasonable insurance coverage,≤ said Quinn, ≥[the insurance company is] going to tell you to get an SMS.≤ According to Don Baldwin, president and CEO of Baldwin Aviation, which develops SMS programs, ≥A lot of our clients have received insurance reductions beyond what our cost is. Itπs a win-win for everybody.≤

≥Insurers donπt like to be pinned down,≤ said Steve Witowski, Prism program manager for Argus, ≥but I know of several instances of people receiving discounts for having an active and vibrant SMS.≤

IBACπs Rohr is deeply involved in his organizationπs efforts to help companies become registered under IS-BAO. IBAC is an international non-governmental organization, formed by a group of business aviation associations (currently 15), with permanent observer status with ICAO. ≥We often get feedback from [IS-BAO]-registered operators that they gave their insurance broker a briefing and as a result got a better rate,≤ Rohr said. ≥The material you put together to meet IS-BAO gives you an effective tool to negotiate a good rate.≤ IBAC has helped more than 400 operations become IS-BAO registered, more than half in the past year and most non-commercial operations. There are about 200 IS-BAO auditors, but about 50 do most of the work, according to Rohr.

He added that IS-BAO-registered operators find they save money because they are more efficient. ≥If you donπt have a program that looks at hazards and assesses risks to make sure what you do is appropriate and effective, you tend to overspend on resources,≤ he said. ≥You donπt have a measure of the value youπre getting from training and so on. If you have a procedure to evaluate this, you can [deploy] scarce resources of people, time and money much more effectively. Those who are against it are all talking about the cost in time and money, but the feedback is saying itπs saving money.≤

Lower insurance premiums might be a short-term benefit, said Bart Gault, a pilot and mechanic who runs a small flight department headquartered in Egypt (he moved the airplane to Jordan during the recent troubles). ≥Long-term, itπs going to reduce accidents. If we look at corporate accidents, had things been identified before [using a risk assessment], they might have been prevented.≤ Gault has developed an SMS for his department and also went to the trouble of becoming an IS-BAO auditor, and he offers auditing services as well as consulting for SMS setups. He canπt audit an operation for which he has helped develop an SMS, however.

So What Is SMS?

≥What an SMS brings is structure, communication and a lot of involvement,≤ said Baldwin. ≥If you look at before and after SMS [implementation], a clearly identifiable change goes on within an organization. With implementation of SMS, itπs a much better performing organization. Expectations are absolutely clear. People are working on the same sheet of paper. The structure within the organization is clear. This applies even to two-people flight departments. Iπve seen differences before and after with the small guys.≤

Baldwin uses a pothole analogy to explain how an SMS can improve safety. A small pothole in a road gets deeper and deeper, yet no one reports it. Finally a car hits the pothole, blows a tire, runs off the road head-on into another car and causes a fatal crash. ≥If you can identify potholes early and fix them then you wonπt have a significant event later on,≤ he explained. ≥That's what a safety management system is about, finding all those potholes. An organization that does that is going to significantly reduce its exposure versus an organization that sits back and keeps on driving [past a pothole].

≥If you don't know what the hazards are and where to find them, youπll never know. SMS brings them out. You go looking for issues and end up with a much more aware flight organization. The more youπre aware, the opportunities for mitigating and identifying risks are much better.≤

There are four basic elements to any SMS: the safety policy and objectives, risk assessment, safety assurance and safety promotion. The basic idea is first to get everyone in the organization on board with the SMS. Risk assessment means identifying hazards that could pose a risk to the operation. Ensuring safety means figuring out ways to control or mitigate those risks. And finally, safety must be promoted and supported throughout the organization by ongoing analysis and communication.

Creating a process to manage this is what takes time and resources, and this is what is generating a lot of strong criticism from operators who donπt see the benefit of an SMS.

The IS-BAO was created by IBAC in response to an NBAA safety committeeπs concerns, according to Rohr, ≥as an industry code of practice to reflect what a well run flight department would do.≤ In looking at best practices among flight departments, IBAC found that they all had operations manuals, clearly defined organization and job descriptions with duties and responsibilities, a dispatch control system, maintenance control program and they addressed security and issues such as fatigue, transport of dangerous goods and occupational health. IBAC developed the IS-BAO to apply to all sizes of flight departments.

One small flight department created its SMS in about 10 person-days, according to Rohr. Another found that it was able to cut its operations manual down to a third of the original size because no one had looked at the manual in a long time and they were able to remove procedures that didnπt need to be there. ≥It weeded out a lot of crap,≤ he said, ≥and saved a lot of money.≤

For many operations, the biggest chunk of time will be spent on learning the basics of SMS. Rohr recommends doing some research and attending an NBAA SMS workshop. ≥Then they should be able to pull things together without a huge effort. A lot depends on how mature the operator is.≤

AMSπs Quinn is well aware of complaints about SMS from business aviation operators, but he thinks that much of this is based on lack of knowledge. ≥A lot of it is just hype,≤ he said. ≥They donπt understand how simple it can be. And the majority already have a big chunk of whatπs necessary in place. You just have to do it once. Once itπs done and documented, itπs more a matter of tweaking and changes. People create mountains out of molehills.≤

Ultimately, SMS ≥is a badge of this is who we are and what weπre all about,≤ he explained. ≥Itπs not complicated. People make too much out of it. Itπs just memorializing what you do.≤ One critic speculated that putting safety practices into writing in an SMS might open avenues for lawsuits if an accident happens. ≥Thatπs ridiculous,≤ Quinn said. ≥I believe thereπs no way to put any credence in people who fight this. Ultimately insurance companies are going to latch on and tell you to get an SMS if you want reasonable coverage for a jet or complex aircraft with [a certain underwriter].≤

And once an SMS is implemented, it must be used, according to Argusπs Witowski. ≥Thatπs the big challenge with SMS, and thatπs why itπs intimidating and disorienting. Even if itπs the best SMS ever written, thatπs a great starting point.≤ But what happens subsequently, after the operator uses the SMS to develop some risk assessments and internal evaluations? ≥What do I need as an operator on an ongoing basis?≤ he asked. ≥The SMS owes me some answers. Thatπs the real strength of Prism; we provide a way to organize activities so we can link them together.≤ Argusπs Prism program includes an online resource for SMS participants, including a hazard reporting database, flight risk assessment tool and internal evaluation program.


A big concern for flight departments is the auditing associated with SMS. There is currently no requirement for auditing, but those who choose to go the IS-BAO route will find that audits are part of the process. The audit for an initial (phase 1) IS-BAO SMS usually takes about two days, according to auditor and pilot Gault. ≥There are two benefits of IS-BAO,≤ he said. One is having an outside expert look at the flight departmentπs safety practices and the other is that IS-BAO is recognized as an international standard and makes it easier to prove SMS compliance. ≥If youπre going to Europe or the rest of the world in the next couple of years, you will need it,≤ he said. Audits also help improve safety and may look better to the insurance provider.

Argus will audit to whatever standard the customer chooses, said Moeggenberg, ≥but if an operator has been audited to IS-BAO, that is proof that an SMS is in place, and it has been accepted in many countries.≤

Baldwin Aviation has helped about 400 customers develop an SMS. But of those, only about 30 percent have decided to implement IS-BAO and are being audited, according to Don Baldwin. For operators that need an SMS to meet regulatory requirements, he said, ≥Itπs up to the operator to show evidence that it has implemented the SMS.≤ Baldwin Aviation doesnπt do audits but helps companies develop SMS programs.


One corporate pilot, who doesnπt wish to be identified, said that he was quoted $7,000 for an initial audit plus incorporation of an SMS chapter into his departmentπs existing NBAA-based operations manual. But he warned that while companies like these are promoting that their non-IS-BAO SMS will meet ICAO requirements, there is no assurance that these SMS will be accepted internationally. ≥Until the FAA delineates its own requirements,≤ he asserted, ≥I think thereπs a certain level of uncertainty that will cause many operators to sit back and wait. In the meantime I can tuck a åfour-pillarπ SMS into our manual nearly as well as one of these providers–and for a lot less money and wasted paper.≤

The pilot pointed out a common thread among those who criticize the move to SMS in aviation: ≥This does nothing to enhance safety.≤ He also wonders about the ≥åmoney trailπ resulting from IBACπs seemingly cozy relationship with ICAO (they share the same headquarters building in Montreal). The promotion of the SMS concept originated with IBAC and its IS-BAO program. IBAC receives registration money when an entity embarks on IS-BAO certification. The IS-BAO, as promoted by IBAC, goes way beyond safety practices and, in effect, spells out how flight departments are to be managed. Many flight department entities have submitted to this false doctrine because they see no other way of gaining their own SMS approval that will be recognized internationally,≤ he said.

Instead of adding yet another procedural layer to flight operations, the pilot wonders ≥why the real cause of most aircraft accidents is not addressed in the discussion: there are simply some people occupying pilot seats or maintenance positions who shouldnπt be where they are–or at least should be kept in lesser roles until theyπve demonstrated the level of competency and experience that has traditionally been a hallmark of the pilot/aviation community (competency and experience that enables one to evaluate and mitigate risks through a built-in thought process and SOPs, not a superficial checklist called a flight risk analysis tool, flow charts or additional paperwork).≤

The fees IBAC charges for IS-BAO toolkits cover the cost of developing and supporting these products, according to Ray Rohr. ≥IS-BAO is self-funding.≤

≥The fear everybody has is that this is bureaucratic garbage,≤ said Gault. ≥It doesnπt have to be if we as an industry grab hold of it.≤

≥If youπre going to do SMS,≤ said Rohr, ≥do it for your own benefit, not for the regulator. If you do it for your own benefit, youπll benefit from it, but do it for the regulator and you probably wonπt.≤ o