FEDERAL AVIATION ADMINISTRATION

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3^RD^ ANNUAL FAA INTERNATIONAL AVIATION SAFETY FORUM

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BREAKOUT PANEL SESSION ON THE SAFETY MANAGEMENT SYSTEM MODEL AND THE
SYSTEM OF THE FUTURE

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THURSDAY,

NOVEMBER 2, 2006

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The Panel convened at 2:30 p.m. in the Lincoln Forum of the Westfields
Marriott Hotel, 14750 Conference Center Drive, Chantilly, Virginia, Dr.
John K. Lauber, Moderator, presiding.

PRESENT:

DR. JOHN K. LAUBER, Moderator

MAJ. GEN. STANLEY GORENC

THOMAS A. GUNNARSON

MARINUS C.F. HEIJL

CAPT. HANK P. KRAKOWSKI

CAPT. TERRY McVENES

DR. STEVE PREDMORE

I N D E X

[INTRODUCTION]{.underline}

Jim Ballough 3

[OPENING REMARKS]{.underline}

Dr. John Lauber, Moderator 4

[PANEL DISCUSSION]{.underline} 13

[AUDIENCE PARTICIPATION]{.underline} 65

P-R-O-C-E-E-D-I-N-G-S

2:27 p.m.

MR. BALLOUGH: Okay. Good afternoon, everyone.

My name is Jim Ballough. I\'m the Director of the FAA\'s Flight Standard
Service. It\'s my distinct pleasure and honor to introduce this next
panel, Panel A, this afternoon. And I think one of the most exciting
ones of this conference.

We\'ve heard all the discussion this morning at the different sessions
and different keynote speeches regarding SMS and this is where you\'re
going to hear all about SMS from the experts and what it\'s going to
take for us to implement in the future.

We\'ve been hearing more and more about safety management systems for
the last couple of years and we should. They command their systems and
enable organizations to identify and manage risk.

Managing risk is a fundamental of what we do. And Safety Management
Systems enables us to manage that risk far better than ever before.
Initially our competing demands, tight budgets, high expectations, all
those things involved. Safety Management Systems are even more important
for any of us who have focused focus our limited resources on the
highest priority hazard. SMS will help us find, understand and
prioritize six problems and it\'s less expensive in both lives and
dollars.

This promises to be one of the most informative sessions of this
conference. It is my distinct pleasure to introduce the Moderator of
this Panel, Dr. John Lauber.

Dr. Lauber is the Senior Vice President, and Chief Product Safety
Officer for Airbus. I think we all know John. He\'s an icon in this
safety business going back from the NTSB days to the Delta days to the
Airbus training days, some said to be the father of CRM. Right?

MODERATOR LAUBER: Among other things.

MR. BALLOUGH: But anyway. Please let\'s give a warm welcome to John and
his Panel. MODERATOR LAUBER: Jim, thank you very much for that kind
introduction and also to Panel A on the subject of Safety Management
Systems.

We\'ve been given a few questions to address in the next two hours here,
including what are the safety challenges of regulators and the industry
as we conduct business in the future?

So, in keeping with the theme of this entire conference, they want us to
focus on not today, not yesterday, but what happens in the future.

What is the appropriate methodology to comprehensively evaluate changes
to the aerospace system to insure that we don\'t underrate safety. A
favorite topic of many of us who have been in the safety business for a
long time is how do we know, in fact, that the steps we\'re taking in
the interest of enhancing safety don\'t sometimes have unwanted or
inadvertent consequences that might actually work against the hopes and
objectives that we\'re trying to achieve? It\'s an important element
that we have to understand about our safety management programs.

And, finally, we\'ve been asked to address, how can we insure that the
right organizations identify and understand the risks and commit to
moderating those risks or to managing those risks? And so that will be
another dimension to the exploration of the concept of safety management
systems that we\'ll try to do this afternoon.

We\'ve got two hours, which seems like a lot of time. On the other hand,
we have a large panel of distinguished experts to address the questions
that have been posed to us. And I\'m sure that with the audience
participation, we\'ll end up with wondering at 4:25 or so where those
two hours have gone, because I expect that we will, in fact, engage in a
healthy, lively, spirited debate. And I hope in the same sense that
others have set the stage for us this morning in a provocative way to
address these issues.

I think we have a good turnout here and I noted Marion Blakey\'s remarks
this morning. Much of her opening address was about the subject of SMS.
And much of the first panel, the Plenary Session Panel that we hard this
morning, was also focused on the subject.

Before we get into the discussion, let me introduce the panelists,
although I think many of the people up here are well known to this
audience, but not all.

And I\'m going to start down at the far left.

Tom Gunnarson is the President of the Light Aircraft Manufacturers
Association. Tom has had an extensive career in Government, industry and
international things and has been associated with ultra-light aircraft
and small aircraft in one way or another. He\'s got extensive flight
experience and instruction experience and has been very actively
involved in the light aircraft side of our business.

Our next panelist coming over in my direction is someone that I know and
know very well. In fact, I think I hired him into two of the jobs. I
tried to hire him at Airbus, but he wasn\'t having anything to do with
it.

Dr. Steve Predmore, who has a degree from the University of Texas at
Austin and Penchoof Emright, one of the people who have been intimately
associated with the whole concept of CRM-related things and Steve is
currently the Vice President and Chief Safety Officer of JetBlue.

He was at Delta Airlines before going to JetBlue. Before that, spent
some time with the NTSB and is a knowledgeable and very capable
individual with regard to safety issues and the kinds of things we\'ll
be talking about this afternoon.

Captain Terry McVenes is likewise well known to this audience. He is
currently the Executive Air Safety Chairman for the Airline Pilots\'
Association. And Terry in his role as the Executive Air Safety Chairman,
he is basically the head of all safety-related activities within the
Airline Pilots\' Association. ALPA, as all of us know, have been active
promoters of aviation safety for all of the years of their existence and
Terry continues in the long line of excellent leadership in the air
safety area within ALPA.

He also flies the Airbus A320. We like that.

To my immediate right is Marinus Heijl. Marinus is the Acting Director
of the Air Navigation Bureau up at ICAO in Montreal.

Again, Marinus has had many positions and been associated with air
traffic and related kinds of issues for many years in various capacities
before he went up to ICAO and assumed his current post. And I noticed
that he probably enjoyed the luncheon speaker very much since he a
degree in physics and mathematics. So, we may have our own rocket
scientist on the panel this afternoon.

Captain Hank Krakowski is the Vice President of Flight Operations at
United Airlines and a person well known to many of us. Hank just
recently assumed his new duties as he pointed out after having served as
the Vice President of Safety, Security and Quality Assurance at United
for many years until the variety of positions within United Airlines
prior to taking the safety post. He\'s a 737 pilot.

And, finally, on the far right \-- to my far right is Major General
Stanley Gorenc, who is the Chief of Safety at the U.S. Air Force here in
Washington and is also Commander of the Air Force Safety Center at
Kirtland Air Force Base, New Mexico.

General Gorenc is responsible for all of the safety activities within
the U.S. Air Force and has had a long and distinguished career within
the Air Force as wing commander and squadron commander and has piloted
many different aircraft including one of my favorites, the F-4E, a lot
of that noise that you don\'t hear much anymore. But at any rate,
welcome, General Gorenc to our panel.

I thought I\'d set the stage for our discussion this afternoon by
drawing a comparison to something that some of us in this room have a
long association with and that was the development of the idea or the
concept of CRM in the aviation context.

One of the things that happened in the early days, right after when we
were at NASA at the time. Clay Foushee is here in the audience. I know
he was heavily involved as were others in this room.

We introduced the concept and it was concept that seemed to hit a
responsive chord and took off like wild fire in many ways within the
aviation industry. And within a few years, it was not possible to pick
up anything heavy to do with aviation safety and not see some reference
to CRM. And there were many entrepreneurs who got involved who were
offering CRM training and programs and then it wasn\'t long before the
FAA took a more active interest and started to talk about mandatory or
regulatory requirements for CRM training within the industry. And, of
course, many of us in this room know the rest of that history.

There was a time when CRM meant many different things to many different
people. There was no standard definition. It was being used in many
different ways depending upon the organization of the people who were
involved in it. And, it certainly, in the early days when talk of
regulation or making it mandatory first thing off, I actively opposed
that because I felt that the concept was not sufficiently well gelled in
order to be able to be required in a mandatory sense by regulation. I
felt that there was a longer period of development of the concept needed
before we could get to the point or before we would arrive at the point
where this was a concept that could be required from a mandatory point
of view and that there was some degree of standardization with regard to
the term CRM and what it meant and how it would actually be applied.

I\'m going to throw out to the panel a provocative statement. At least,
I hope it\'s provocative. And that is, that SMS is in many ways and in
some senses reliving that same history that every time \-- now, it
wasn\'t long ago when SMS was something you\'d see an occasional
reference to in a meeting. Now you can\'t go to a safety meeting or pick
up a safety journal or talk about safety issues in this industry, at
least, without having reference to SMS. Look at the panel this morning.

But this is just but one example of the proliferation, at least of the
use of the phrase, SMS. Last week some of us in this room took part in
the, I think it was the 59th annual Flight Safety Foundation
International Safety Symposium in Paris. We had a panel on SMS but it
wasn\'t really on SMS. It was on fatigue risk management systems. But it
was the SMS model applied to a very specific context and that was the
management of fatigue in flight operations.

IATA has just published a draft of something called Security Management
Systems or Security Risk Management Systems that again applies the SMS
model. So, we see lots of application of it. We hear more and more talk
about it and, in fact, in some countries there is a requirement \--
mandatory requirement now.

So, Steve, you were associated with the early history of CRM. Are we
reliving that in any way with regard to SMS?

DR. PREDMORE: Yes. I think the comparison is apt in a lot of respects. I
think in both cases we\'re talking about an evolutionary change to an
important part of the system.

I don\'t view SMS currently as a revolutionary change and you referenced
the marketing of SMS. And it\'s the buzz word now. It\'s the catch
phrase. But at least with regard, I think, to major carrier operations,
which I\'m most familiar with, we kind of have been doing this kind of
stuff and getting better at it over a period of years now. And I think
what SMS \-- what we\'re doing now is sort of putting some definition
behind it, packaging it, maybe a little bit different and doing a great
job of marketing. So, I think, you know, I think there\'s some parallels
there with CRM where we recognize the need to address some of these
issues in training. And so it sort of became how do we package this and
kind of sell it?

Another way, I think, that the two compare very favorably is the
approach taken by the regulator, specifically, the FAA, in terms of
soliciting involvement from all stakeholders in the industry and really
pulling everyone in together to define the concept, to develop the
guidelines and to implement a plan for execution that isn\'t over
burdensome and meets folks\' needs. So, I think drawing in industry is
another common element between them.

And then, you know, as I said, sort of just the approach to establishing
some uniform guidelines around what this thing is versus going in with
the mind set, let\'s develop a uniform program and sort of drop that
down into every operator.

So, I think there\'s a lot of commonalities between the approach taken
in both cases.

MODERATOR LAUBER: And I gather you think that in some ways we, as an
industry actually, learned from the early experiences with regard to CRM
in that regard. We\'re doing it a little bit better maybe than we did in
those early days.

DR. PREDMORE: Yes. I think we did learn and I we are doing it better,
maybe a little faster as well.

MODERATOR LAUBER: Terry McVenes, what\'s your view as an ALPA guy here?

CAPT McVENES: Well, I get an opportunity to talk with people from a lot
of different airlines. And when you start talking about SMS at different
airlines and, you know, you get the whole range of things. You get the
answer, well, we\'re already doing this. Or you get, you know, the deer
in the headlights look. I think there needs to be \-- you know, Steve\'s
right. A lot of airlines have been doing a lot of these things for
sometime now. They\'ve been maturing. There\'s a lot of the components
in place at many airlines, both the hard components like non-punitive
reporting programs and also the soft components of, you know, the right
culture that\'s going on at that airline.

But SMS is kind of going to be the glue that ties all those things
together and set some standards for these programs so that we can
eventually kind of get to a point where maybe there\'s even a little bit
of a checklist of what is involved with SMS? Does your airline or your
operation have these items truly do have an SMS at your operation?

MODERATOR LAUBER: Yes. That\'s very good comments.

General Gorenc, would you comment on the whole concept or the
application and development of the concept within the Air Force context?

GENERAL GORENC: Sure. Sure.

Well, I\'ll tell you from my standpoint as I look at this, I actually
see SMS as a continuing growth truly in the CRM program or in program
risk management program and the way we kind of view this entire
business.

My contention is and I think from my standpoint is as an Air Force guy,
the one thing that I have the ability to do is reach across a broad
spectrum of not just aviation safety, not just something happens on a
gray area, not on stuff that just happened in the area we have marked,
but I\'m able to reach across the entire broad spectrum of what are our
folks doing with both aviation, on duty, off duty and how does that all
fit into making sure that you have the right person at the right place
at the right time at the job. Whether it\'s a pilot, whether it\'s a
navigator, whether it\'s the crew chief or who, in fact, is running the
operation.

So, I see SMS as actually a holistic approach in making sure that our
bottom line of the productivity in the organization be as sound as
possible. And once you get that concept right, and I guess the example
that I\'ll use is, what\'s the difference between losing a mechanic who
happens to hurt themselves while parking a 747 or losing that mechanic
when they\'re off duty on a Saturday night getting into an auto
accident?

You as a company have lost the potential capability of that individual
to do the job for you. There\'s a lot of training associated with that
individual to get him up to the level of what you needed, all the
experience, all the expertise that you, as a company, are now forced
that loss and how are you going to handle that?

We tend to work out at the Air Force very closely because that
individual that I lost on Saturday night may be the same individual who
is going to be deploying to the Middle East on Monday and how I need
that guy to be replaced by someone who is qualified, who has \-- I just
got back from a deployment, and who needs to continue providing the air
quality that\'s expected out of that mechanic.

So, for us, it\'s a very holistic approach on how we do business. And I
think SMS is the perfect vehicle for it on how our business needs to be
done.

MODERATOR LAUBER: Good. Thank you. I like the concept of a holistic
approach and much of what you were describing, in fact, I think it\'s
fair to characterize your description of SMS in the airport\'s context,
at least, as being a structured formal way of managing not only but
largely many of the human factors issues that we have to deal with \--

GENERAL GORENC: Yes.

MODERATOR LAUBER: \-- regardless of whether we\'re talking about cockpit
or ground or \--

GENERAL GORENC: Well, let me just mention on another thing.

And it\'s important, I think, for us to know in the room. I mean, when
you look at it. I mean, you can initially look at this and go, gee, what
is that Air Force guy going to be able to tell me about this? I mean,
he\'s not working 747s. He\'s not working the \-- in reality, the United
States Air Force right now has got over 6,000 aircraft in its inventory.
More than a thousand of those are trainers flying within the same air
space that you\'re flying in.

We\'re flying every part of the globe just like you are. You\'re having
to deal with the same problems in Africa. You know, we deal with them
just like you do. We\'re trying to go into the same bases. And we\'re
working the same weather patterns, navigation issues and the language
barriers and the cultural issues.

So, for me as I get into the vent of this particular conference, it is
just such a clear reflection how really close we are with the military
and the civilian sectors how we deal with the same issues. It\'s the
same thing. Very interesting to me.

MODERATOR LAUBER: The parallels are remarkable. In fact, I would extend
it beyond the aviation context and would like to talk about high
consequence industries where you have an industry like aviation but
another example would be nuclear power where you\'re dealing with
managing risk in a high energy context. And you\'re highly dependent
upon the skilled performance of human beings in order to do this safely.
And I think that all of us who have been involved in that recognize that
there are parallels that extend from that world, petrochemical world to
medicine and to aviation. There are many, many parallels.

Hank, do you agree with what you\'re heard so far or do you want to
argue with somebody?

CAPT. KRAKOWSKI: I\'ll take a little bit of an exception actually.

MODERATOR LAUBER: Good.

CAPT. KRAKOWSKI: So, I think about the CRM experience and what my
observational difference is that with CRM we all developed CRM for our
individual cockpits within our individual culture of that airline.

But what has been disappointing about CRM is it\'s kind of stopped
there. It hasn\'t gone effectively into air traffic control, ground ops,
ramp out, even in the maintenance divisions of different companies and
certainly vendors.

What\'s different about SMS is we\'re talking about that last S, System.
And I could have a wonderful SMS within my airline, but if it doesn\'t
connect significantly to some sort of framework that\'s being worked at
air traffic control, with the very light jets coming out, with general
aviation, which I also fly general aviation, is as the general was
saying, we are flying this air space together. That is really the reason
we are here is to talk about how we\'re going to work within a framework
together more effectively.

I think about a serious incident we had at my airline a couple of months
ago where we had a near collision of a 747 and one of our 737s. That
issue was not an issue that I don\'t think I could have gotten to within
my own SMS system at my airline. That was a larger systemic issue that
is still bugging us today.

MODERATOR LAUBER: Thanks, Hank.

Steve Predmore, I\'ll ask you. Does CRM and SMS stop at the cockpit at
JetBlue?

DR. PREDMORE: That\'s a good question. Absolutely not. Actually, we
determine resource management at JetBlue and it doesn\'t stop there. All
of our major operational groups have exposure to concepts of CRM and are
expected to execute those in line. So, I think it stops there.

I do agree with Hank though. I think from the outset, again, you know,
sort of focusing on how the FAA in this particular case has moved this
along. There\'s been a recognition that this applies as much to the
regulator and all stakeholders in the systems as related to the
individual operator. So, I think that is a key, too.

MODERATOR LAUBER: Thanks, Steve.

Marinus, you\'re from an air traffic background. Do you agree with the
characterization that these concepts have not been applied quite so
successfully or perhaps pursued quite as much as in the flight operation
side? Or do you have a different point of view on that?

MR. HEIJL: Thanks. Air traffic control is a different world in a sense
from the cockpit. But there are also very many parallels. We work in a
team and one team members sees another team member make a mistake, he
can catch that in time and nothing will happen. And I think that\'s
similar to CRM. Is one is the boss and everybody listens to the boss
then the boss makes a mistake, nobody will dare to say, no. This is
going in the wrong direction.

So, that concept, I think, can be translated from a cockpit also into an
air traffic control environment.

I\'d like to just go back to your question on parallels when you\'re in
an evolution. I think we are automatically being pushed into and so has
amassed today, as a result of an evolution in thinking about safety.

In our ever continuous quest for higher levels of safety, accidents are
a major irritant. And we try to drive down those accidents.

What have we done in the past? Accident investigation gave us the cause
in many cases, but not in all. By now we have so many causes of
accidents that there is hardly anything more to be learned from
individual mistakes that are being made or individual technical causes.

And many years ago, it was easy to blame human error for accidents. And
if a pilot dies in the accident, then it is very tempting to say pilot
error was the cause. And it\'s not just the pilot who can make errors.
They are all human beings. But everywhere in the system those human
errors are being made and they contribute in a major way to over 80
percent of the accidents.

So, over the years, human factors have the attention because human error
is at the heart of accidents.

Now, that has migrated a little bit over the years towards a corporate
safety culture. Because the one individual that is at the end of the
line, the air traffic controller or the pilot may be boxed into a corner
maybe driven into a situation beyond his control or her control and,
therefore, cannot be solely blamed for an accident.

It is a corporate culture that sometimes forces this kind of thing so we
went from human factors to a corporate safety culture and now we have a
term for it and more structured method to look at safety, not as just a
safety culture and a commitment from top to the bottom in every aspect
of aviation. But we have a structure and a more formal way of doing it.

I think as a message is a product of evolution in thinking about safety
and it is also based on the understanding that regulation alone doesn\'t
do it. You cannot tell people to be safe and expect them if they follow
exactly your orders in how to do their job that it will be safe. You
have to engage the people from the ground up in everything they do that
there are safety consequences.

So, from a regulatory \-- sorry.

MODERATOR LAUBER: Go ahead.

MR. HEIJL: From a regulatory side, one more step please. And the
traditional model is, ICAO makes standards and the world agrees on them
and the world agrees to implement them. And that implementation is
incomplete. And, in fact, it is insufficient to have standards to
enforce safety. You cannot force it. You cannot force compliance and
have that as the only basis for aviation safety.

We found it very clearly in our universal safety oversight audit
program. Weaknesses remain in that system and we must look at remedies
and I believe SMS is one of the answers where safety oversight and
safety regulation can not do the job completely. Safety Management
Systems will build safety from the ground up instead of from the top
down. You need them both and they\'re part of the overall picture.

MODERATOR LAUBER: It sounds like you\'ve come back to Stan Gorenc\'
concept of a holistic approach that that\'s exactly what you\'re talking
about.

Terry, you wanted to \--

CAPT McVENES: Yes. Just to kind of build on what you said.

You talked about the role of risks and what get uncovered in a good
safety management system and as Jim Ballough said in his introductory
comments, Safety Management Systems is about managing the risks.

Now, historically and I\'m as guilty of this as anybody. And I like to
get in front of groups of people and talk about the accident rate and,
you know, how well we\'re doing as an industry. But as this thing
evolves, we\'re going to have to really be taking a look at what are we
doing with those risks? How are we identifying the risks that are out
there in the systems and what we can do about it? It\'s not about the
accident rate all the time.

The accident rate or accidents themselves are strictly outcomes of the
risks that are in the system. Safety Management Systems will help us
identify those risks in a very clear-cut way so that we can \-- by
identifying them and we do something about them before they become an
accident. So, that I think is the real power behind this. But we got to
\-- I think we need to start evolving away from talking about the low
accident rate and talking about what are the risks out there in the
system that we can mitigate?

MODERATOR LAUBER: Yes. And I thought Nick Sabatini this morning made
that point very well in his comments. And talked about the fact that
we\'d reached the limits of what you can do with a regulatory approach
that fix and fly is in fact in many ways responsible for where we are
now. But it\'s not enough to carry us into the next stage.

Tom Gunnarson, you represent a segment of the industry that\'s different
from everyone else up here. Most of this is heavy iron stuff and you
represent the very light end of the aviation spectrum at least in terms
of aircraft. How does your side of the industry apply these concepts of
SMS and structured approach to risk management?

MR. GUNNARSON: I think the concepts are all consistent because accessing
the air space and providing a product that requires a certain level of
safety must have some sort of oversight to make sure that the products
are going to have a good safety record. So, that when we look at SMS as
a concept, it\'s an easy sell.

Where we\'re at as a relatively young industry is that we really
haven\'t had the opportunity yet to absorb all this and really take full
advantage of it. And I think that forums like this will get a better
understanding of how we can apply this.

In many cases, we\'re self-regulatory in nature where we don\'t have the
same sort of pressures coming down on us to follow what is traditionally
already out there. So, for us, lots of the components of this are in
place, but we\'ve never really pulled it all together to have a
comprehensive system, which I think is something we\'ll strive toward.

MODERATOR LAUBER: I might ask you how you\'re going about doing that in
your segment of the industry? What are you \-- how do you approach this?
I mean, part of the advantage that we people in the major manufacturers
or the airlines or in air traffic have is we have large organizations
and, you know, there\'s a defined structure. In your end of the aviation
spectrum, that definition becomes pretty indefinite at best at times.
So, how do you deal with that in this amorphous vast thing that is the
light end of general aviation?

MR. GUNNARSON: We work, I think, more as a community than as individuals
in this respect. We\'ve got some companies that are very capable.
They\'re providing product for the aerospace industry and they\'re very
used to this kind of operation. But there are also lots of them that are
very small and they don\'t have the resources necessarily to develop
this.

So, what we\'re doing as an industry is to try to pool everybody\'s
resources together to be able to create some templates for manufacturers
and others to use to implement this kind of a system.

MODERATOR LAUBER: And has there been good reception at this point \--

MR. GUNNARSON: Yes.

MODERATOR LAUBER: \-- to some of these concepts?

MR. GUNNARSON: Yes. Yes. Very good. MODERATOR LAUBER: There\'s a
recognition that there\'s a self interest at stake here, I guess, in the
industry.

MR. GUNNARSON: Yes. Exactly.

GENERAL GORENC: John, something that struck me while Marinus was
talking. We just heard the last part too. Is this issue of grappling
with, you know, hey \-- regulatory issues and setting up regulations is
not enough. And that\'s true.

I think that as we go forward and I think where the SMS thing will
eventually lead us to is that you got to start with a certain set of
standards right up front, agreed to standards by the group of people who
are in the business who want certain things to happen.

And once you set those standards up, you have to have a set of
mechanisms to insure compliance with those standards. I think we\'re all
smart enough to figure that portion out. And if you don\'t have the
compliance aspect square or it\'s not pure in the sense of doing a good
job, you\'re going to have a problem to start with.

So, let\'s pretend we finally standardized and finally get the
compliance right. The issue then becomes an issue for me as I do with my
organization, then it becomes an issue of accountability. In other
words, if you are part of this group of people who have set a standard
who have a mechanisms for compliance, and you\'re accountable, Kathy is
no longer going to be held accountable for making sure that the stuff is
squared away the way it should be.

And then the last one I think that\'s worthwhile is once we know that
Kathy is accountable on here, there\'s going to be a set of consequences
for noncompliance, you know.

We\'re all flexible people. We want to make sure that everybody does
their thing. But I\'ll tell you, if that\'s the standard and found that
you\'re not in compliance and Kathy is responsible and she\'s had an
opportunity to fix it, there\'s going to be some consequences to not
fixing it.

It\'s either you\'re not going to fly in the air space. You\'re not
going to come to the place or whatever.

So, I think \-- but this is not just a leadership issue, although it\'s
a leadership problem for an organization. This is an issue, I think, at
every level within the organization, whether you\'re the seal or the
chief of staff in the United States Air Force for my situation. Or if
you are the one mechanic that just got hired to do the job.

The bottom line is, you know what the standard is. You know, in fact,
that you\'re supposed to comply with it, you are accountable for making
sure that you do it. And if you\'re not going to do it, you\'re going to
pay the consequences. And if you don\'t do that that way, it seems to me
you\'re going to run into an operation where you\'re never going to be
sure what you\'ve got going. And you\'re never going to be able to grow
to the level that you want or expect for the results that you want
long-term. You can do it temporarily and the leadership can go in there
and just keep onto the individual. But until that individual feels that
they\'re part of the team, part of the group, you\'re not going to get
the effect that you want, I think.

So, I think, that\'s why I like SMS. I think it forces everybody within
the organization to understand where they are, what they\'re responsible
for, what they\'re supposed to do and go forward. And once you get that
square with the individuals, and I tell you it\'s a leadership issue
like I say. You got to make sure you train the individual. Unless you do
it that way, you will never know what you\'re got going.

That\'s what I have found as we go forward in our operations.

MODERATOR LAUBER: Good comments.

Hank, you want to comment?

CAPT. KRAKOWSKI: You know, I think the word \"standard\" is interesting
because when we look at my company, about 80 percent of our increased
risk or failures are compliance issues. Either a noncompliance with
procedure, person not trained adequately, you know. So, I think about
the system aspect again. We\'re still struggling with phraseology across
the globe, different ATC procedures.

There\'s a lot of opportunity here but I\'m hoping the SMS concept to
actually get to these and the SMS framework will cause the discussions
that are absolutely essential so that we can actually get to this work.

MODERATOR LAUBER: Interesting comment.

Terry? You want to comment on that? CAPT McVENES: Yes. Certainly, the
whole concept of accountability is one of the foundations within SMS.
And if it does provide accountability to all aspects within the
organization, everything from the individual employee all the way up to
the CEO level. I think this is all very important because without that,
you \-- well, with it then, what you really do then is you make safety
everybody\'s business in the airline. It\'s not just the employees.
It\'s not just the safety departments business, it\'s everybody\'s. CEO,
employee, middle management. Safety is everyone\'s business and it helps
them to insure that the decisions that are made either on the front line
\-- by front-line employees or in the board room, are taking that safety
case as a part of making the entire business case. And, I think, that\'s
where that accountability becomes so important.

MODERATOR LAUBER: Any other panelist want to comment on that?

Marinus?

MR. HEIJL: Yes. I started with saying regulation alone is not enough.
And you so have demonstrated that. And I stick with that.

We are looking at all sort of remedies to complement each other. And
SMS, in principle, is one of the answers but not the only answer.

So, I\'d like to see SMS really in that context of a regulatory
framework that is one of the main foundations of safety. And it does not
always work, and yet you need that regulatory framework. You even need
it for mass implementation.

ICAO now has a standard for Safety Management Systems that are peaking
later this month. And that\'s in three areas. Operational aircraft,
airport operations, aerodromes, and air traffic services.

So, you need a basis to implement SMS, but how that is done there\'s
still a degree of variability. And that brings me to the idea of
uniformity.

And it is generally accepted, I believe, differences are confusing and
different ADC procedures, air traffic control, the approach procedures.
They are confusing and they are a potential cause of error and,
therefore, a latent cause for accidents.

So, uniformity is good. But uniformity cannot always be achieved 100
percent. And, I believe, you try to rally around that concept of a
common approach. But you also have to allow some variability just to
regional circumstances. MODERATOR LAUBER: So, you\'re saying that while
there may be a corps set of concepts that represent the basis SMS
system, that not one size fits all, to borrow from another expression
that\'s often used? Is that \--

MR. HEIJL: Yes. I think that \--

MODERATOR LAUBER: \-- a fair characterization?

MR. HEIJL: I think that captures it.

The framework is by and large the same everywhere you go. Sometimes the
terminology is a little different but the concepts are the same. ICAO
tries to contribute to that universal understanding by having their own
version of SMS in the world. And we actually have a Safety Management
Systems manual that can be accessed on-line free of charge on the ICAO
public website open for the public. And that is WWW.ICAO.INT for flight
safety information exchange.

So, we try to contribute to the uniformity but we know that absolutely
uniformity is not achievable and maybe not necessary. We just want a
common approach.

MODERATOR LAUBER: Thank you.

Steve?

DR. PREDMORE: John, sorry, I\'d like to come back to this question of
accountability for a second because it\'s getting boring. So, let me
throw a little wet dog in the elevator.

And I guess if I have a little bit of concern, it\'s clearly the notion
of a just culture is critical to SMS and the execution of SMS. But I\'m
a little bit concerned that there\'s somewhat of a perception that
somehow if we drop this SMS thing down into an operator that all of a
sudden we\'ll have a just culture and there will be sound accountability
and we\'ll all live happily ever after.

Where I guess I see this. You sort of have to have a just culture in
place or at least, you know, a strong foundation upon which to build a
just culture in order for SMS to be executed \-- MODERATOR LAUBER: Yes.

DR. PREDMORE: \-- well as the operator. And I don\'t think we\'re there.
I think we\'ve come a long way and I think there\'s pockets of
excellence and I think there\'s areas where we have a long way yet to
go. But I think that\'s going to be key to how successful this is and
how quickly it becomes successful.

MODERATOR LAUBER: I think, Steve, you\'re right on in that there\'s a
parallel again that can be drawn with CRM in when the attempt was made
to export the concept to different cultures with different points of
view about self-reporting of errors and the role of punishment and blame
and so on, that the concepts had to be modified in order to meet the
cultural requirements in the organizations to which it was applied.

So, Hank, you want to comment further on that?

CAPT. KRAKOWSKI: One other comment, I\'d like to reference the general
aviation colleague down the way.

What\'s worked well is we\'ve built the different programs at the air
carriers is that we\'ve had strong associations, union pilots,
mechanics, whatever, represented people along with the FAA that saw kind
of tripartite approach to this. So, we all figured out how to do this
together. And through that we built trust and we built trust in our
confidentiality.

I think it actually exist outside the airline industry, particularly in
general aviation with user groups of certain aircraft types, AOPA
obviously. So, I think that there\'s an opportunity as we talk about a
larger SMS system with the FFA infrastructure and the global
infrastructure that there are some ways that we can bring some of our
experience into those opportunities.

MODERATOR LAUBER: Good.

Tom?

MR. GUNNARSON: I agree. I think that\'s a critical component because we
are \-- when you get down to the general aviation level, we tend not to
have organizations representing, for instance, a manufacturer or
something like that. We\'re much more spread out, smaller, but there\'s
more of us. So, to have some way to bring that all to draw together I
think is important. That\'s one of the goals of manufacturing
association is to do just that.

MODERATOR LAUBER: Terry?

CAPT McVENES: One thing too about the accountability piece that Steve
kind of hit on with the just culture and the importance of having that
to make really SMS work. And we\'ve seen that in airlines just
establishing non-punitive reporting systems like ASAP and FOQA.

As much as I\'d like to think all ASAP programs are just running
smoothly and everything is work great, the fact of the matter is,
there\'s problems out there. And part of the problems that exist in the
actual operation of those programs is the difference in culture that
exist at those properties.

Some airlines have an extremely safety culture, program run very
smoothly. Other airlines are struggling with it. And part of that
involves the culture at that organization fundamentally of what\'s going
on. And so you have to also then be careful when you talk about the
accountability piece and not equate that to human error because it\'s
two different things.

Yes. I may know what\'s the right thing to do, but I may still make a
mistake. And so we got to make sure that we understand that when I make
that mistake, yes. I\'m accountable for it. But why did I make that
mistake? And that gets back then to the culture that exists at that
airline or that manufacturer. Wherever you\'re putting it into place, so
that I can explain why I made my error, why my accountability maybe
failed a little bit in making that error. But, you know, we need to
learn from it so that I don\'t make that error again.

MODERATOR LAUBER: I guess one way of looking at that would be to say
that we have to apply, when we\'re talking about the larger role of SMS
and the management of risk within an organization, we have to apply the
same principles to the analysis of error and accountability and related
kinds of things at that level as we do down at the level of the
individual mechanic or pilot or flight attendant or whoever else is
involved.

Steve.

DR. PREDMORE: Okay. Let\'s be provocative a little bit.

MODERATOR LAUBER: Good.

DR. PREDMORE: Yes. Why not?

Let me ask my good friend, Terry. Again, with sort of this marketing and
packaging of SMS, it\'s very organization intensive. I mean, we\'re
dealing with systems here.

Does it take the heat off the individual? I mean, as we look at, you
know, this sort of the next evolution of safety management. Are we too
organizationally focused and not focused on the individual? I throw that
out there.

GENERAL GORENC: Let me mention something about it because I\'ve had a
good talk and good discussion of this with some folks.

The issue is that many times we put ourselves into a situation where we
look at ourselves as the leadership in an organization and feel that we
have to solve the problem.

My attitude is that we have to set up an environment where people can
help solve their own problems and maximize their own ability to succeed.
So, I have a tendency to believe that there is this personal
responsibility aspect for each individual within the organization that
needs to be discussed and brought up to the level much more as we go
forward in the future.

So, my attitude, of course, and then you get into the issue of, well,
when all things fail, let\'s call it pilot error, you know. And I\'ve
been on enough accident boards. I\'ve done a couple of them myself where
we\'ve had fatalities. And at the end of day, someone flew that aircraft
into the dirt. Now, whether there was a mechanical failure or it was a
situational awareness or whatever, I have found that there are some
basic things when you call pilot error being a problem. And those are
going generally be either inattention, complacency, lack of training,
lack of currency or something, in fact, contributed to that individual
having a pilot error moment, you know.

So, I had an epiphany even today during the thing upstairs. I actually
wrote it down. I was looking for it for awhile. And when the pilot error
discussion came up, the thing that immediately struck is me as I was
looking at the SMS construct was this question. And I\'m going to have
our guys ask this question next time we do accident boards for
ourselves. Is, if we\'re saying something is a pilot error. In other
words, if you\'re saying that Vern Raburn over here flew that machine
into the dirt because he, in fact, was complacent, was inattentive,
lacked training and all these things, I\'m going to have our guys ask a
very basic question, which is: Why did the system, the leadership allow
Vern to become complacent, inattentive to detail, fly without currency
and things of that sort?

And there\'s a couple of second and third order questions that go on.
But as we talk SMS, that I think is a very fundamental premise here as
we go forward on personal responsibility but if you look and treat that
individual as a unit and something that is supposed to do a job, why did
the system let him fail?

You know, mechanically if it\'s failure, well, the blade was thrown, you
know, the engine. So, we go back and analyze the engineering aspect. So,
it failed. Why did this humanoid fail? And it would be an interesting
way of looking at it to make sure that we\'re asking the right questions
as we do our accident investigations.

Because technically speaking, to be provocative, there\'s no such thing
as pilot error.

MODERATOR LAUBER: Thank you, Stan. I would agree with that.

GENERAL GORENC: Take it for a pilot guy.

MODERATOR LAUBER: Terry McVenes, it was your comment that provoked Steve
Predmore.

You want to comment on it?

CAPT McVENES: Sure. It\'s not about taking the heat off the individual.

There\'s a certain level of expectation, certain level of
professionalism that I think that we expect. If you\'re an employer, you
expect it out of your employee. As an employee, I expect it out of
myself. If I fail in that, then it\'s not about my individual failure as
much as it is about why that failure occurred.

We all know for those of you who are familiar with the ASAP program,
there\'s the fine that you throw out when you\'re covered. So, you know,
a professional pilot or a professional mechanic, he doesn\'t get up in
the morning wanting to go out and make a mistake. He doesn\'t do that.
But he still does sometimes.

The LOSA audits that we\'ve done show us something like there\'s 1.7
errors occur in every flight. Why are those errors taking place? We need
to find out more about that. So, it\'s not about taking the heat off the
individual, it\'s going down one level deeper to find out why it\'s
happening.

MODERATOR LAUBER: Steve, are you happy with the discussion that you
provoked?

DR. PREDMORE: Well, yes. I mean, I don\'t think there\'s an answer to
it. I think it\'s going to be an interesting \-- I mean, it also
introduces another dimension to it. But, yes. I think it through healthy
tension that we find what that threshold is for accountability. And I
think we hit it most of the time pretty well and I think we certainly
hit it more often than we used to. But there\'s a lot of errorability
there.

CAPT McVENES: So, it\'s the outliers that are the tough ones?

DR. PREDMORE: Yes. That\'s right. It\'s the one office that we built
policy around that makes it difficult.

MODERATOR LAUBER: I want to ask Hank Krakowski to comment on this
question of accountability, but from a little bit different perspective.

In your former position as the head of safety for United, part of your
responsibilities were to set the accountabilities for the safety process
within United. And I assume that that included setting safety
accountabilities for the vice president of flight operations.

Now, that you\'re in that new position, how well did you do and does
this give you a different perspective on the question of management of
risk in the context we\'re talking about?

CAPT. KRAKOWSKI: That\'s a great question because I thought I was
accountable for safety at the airline and I found out I just became
accountable. Well, I was fooling myself all along. And this is a
discussion that\'s current at the airline right now because all too
often, particularly in an old company like ours that grew up in silos of
management and a real lack of rigor or communicating across lines.

We often forget that the front-line supervisors are really the people
responsible for safety. And where we have failures consistently is we
\-- when we drive a truck into an airplane because the rails are up. And
that\'s a non-negotiable safety violation.

What we find out consistently is our front-line supervisors are not
challenging people when they get away with it. And that\'s the
accountability problem, I think, that the industry struggles with and
it\'s become more complex as we\'ve lost control of this a little bit
more with vendor out-sourcing and things like that.

So, really it is the front-line supervisors. And now I\'m in charge of a
division. I\'m the accountable person, no question.

MODERATOR LAUBER: You captured very well one of the things that I noted
when I first went to Delta was that we had a rash of accidents out on
the ramp including a couple of instances where a truck drive drove a bag
train under the airplane and ripped a hole in the belly. And, of course,
the immediate response was fire him, you know. Fire the guy because we
damaged an airplane. You know, big damage, airplanes on the ground and
so on and so forth. But when you looked into what was actually going on
out there, you know, the big push was get the airplanes out on time. Get
it out on time. And everybody was rewarded when they got things out on
time, including if they drove the bag train under the airplane but
didn\'t rip the belly out, nobody said anything because they got away
it. They were meeting the production goals, but nobody was balancing the
safety goals. So that, to me, captures part of the dilemma very well.

Steve, you want to comment further or any of the panel? Stan?

GENERAL GORENC: No. That\'s a good point. That\'s exactly right. You got
to make sure you\'re measuring the right stuff.

MODERATOR LAUBER: Measuring the right stuff and setting the right
accountabilities and being consistent in the application of it is
critical.

DR. PREDMORE: I think that if there\'s an evolutionary piece to SMS, it
is that the shifts are focused to become outcome oriented to focus on
continuous improvement.

MODERATOR LAUBER: You bet.

DR. PREDMORE: We want to be better next year than we were this year,
independent of outcomes just in terms of how we do business.

MODERATOR LAUBER: Yes.

Terry? Tom? Comments?

I might open it up to the audience at this point before we change. I\'ve
got a couple of other areas I want to explore with the panel. Anybody
have any questions on the topics that we\'ve just been discussing?
We\'ve got some hands. We got a bunch of hands. So, we may not be able
to get everyone. I saw yours first, so let\'s get a microphone so that
\-- remember we\'re having simultaneous translation here. So, let\'s be
sure to use the microphones.

MS. DANEY: Rosala Daney with ATA Airlines.

Do you see a correlation or what\'s the relationship between ATOS and
system safety?

MODERATOR LAUBER: Hank? Who? Steve? Who wants to respond? Somebody?

CAPT. KRAKOWSKI: I think it\'s a work in progress. You know, you\'re
taking something that has been developed for many, many years with
varied application across the industry which is finally getting there.
But now we\'re trying to put it into a different box going forward. So,
I think there\'s some work to do here.

DR. PREDMORE: Yes. I would say ATOS and the execution of ATOS,
implementation of ATOS, I think pointed to some concerns we had
certainly with, is the FAA ready to take on this new role, this
redefined role?

And I think we still have some residual concerns as it applies to SMS
and the FAA\'s oversight of SMS as an operator. So, we\'ll have to see
how that plays out. But hopefully we\'ve learned from ATOS.

MODERATOR LAUBER: Any of the other panelists want to comment on that?

We had a hand in the back of the room here.

MR. AIKEN: Yes. I\'m Garmit Aiken from the Australian Civil Aviation
Safety Authority.

I recently attended a ICAO SMS course, the operations course, and I
complement ICAO on a fantastic initiative. But I thought that the
article was quite contemporary and it covered what I think are
contemporary incident concepts made for an integrated system. And the
need to manage risk to the concept that follow that was raised to be
impeccable. So, I compliment ICAO on that.

But I thought there was something missing. And I made this comment to
them and I just wanted to share that with the panel and get the panel\'s
reaction.

As we hear a lot about the term, it\'s the mix in aviation, but we
don\'t hear much about the safety case. Safety case, when we do hear in
aviation, we tend to talk about the need for a safety case when we
implement a new aircraft tie. Whereas, we look at inspiration from other
industry such as, I think, John used the term \"high consequence\"
industry such as Petrochemical, Energy, Mining, Rail. Those industries
are being underpinned by a safety case regime for a number of years.

So, I put this question, the same question I put to ICAO. Have we put
the cart before the horse? Do we actually need a safety case regime
before we can have SMS? Given that \-- really a safety case involved in
doing a whole system hazard analysis. From that hazard analysis that
determines what your SMS elements might be just like if we put in a CRM
program, to use the analogy of John. We would do a risk assessment on
the humanoid issues before we decide what our CRM program would look
like.

So, I ask the question again. Have we actually put the cart before the
horse here? MODERATOR LAUBER: So, who would like to respond? Stanley?

GENERAL GORENC: This is a very interesting question \--

MODERATOR LAUBER: Yes. It is.

GENERAL GORENC: \-- because it gets you to a very fundamental way of
looking at safety. And from my standpoint I run into this question a lot
in the sense of people actually believe that safety is a program in its
own right. It is something that is independent of effective, efficient,
sustainable operations.

I contend that that\'s not the case at all. I think that those are
interwoven so much and in an organization that has really got it right,
you\'ll find that those two things are blended so much that technically
you don\'t even need a program.

Now, the problems we\'re a humanoid kind of a society, of course, and
the bottom line is we\'re going to have to have continuous reminders.
We\'re going to have to have continuous training. Get the people into
the right culture mode.

But who comes first? I contend, you got to know what you want to do
first and then the safety aspect will come in if you are lending that
incorrectly within an organization and for it to be sustainable
long-term.

MODERATOR LAUBER: Steve, would you like to comment on the comment that
was made? I thought it was an interesting comment.

DR. PREDMORE: Yes. I would. As I listened to it, I sort of tied it to
the question \-- the earlier question about ATOS.

I think as we have worked through the ATOS process and sort of that
level of surveillance, implemented internal evaluation programs within
our own companies, I think we\'re in a much better position to know
where we fall short of SMS principles and guidelines and maybe where we
don\'t.

I don\'t think it\'s going to be a given. I guess, I\'m really speaking
for the larger operators. I don\'t think there will be any great
surprises in terms of how we match up against SMS.

MODERATOR LAUBER: Hank?

CAPT. KRAKOWSKI: So, when I think about the continuous improvement piece
a little bit, because we\'re starting to go into continuous improvement
initiative at United.

One of the interesting strength points I see coming up that we\'re going
to have to deal with is the continuous improvement gurus are telling me
that if this works, we won\'t need your auditing people anymore. We
won\'t need an internal evaluation program. You know, all of these other
double checks can go away and I reminded them the FAA probably would
have something to say about that.

But ultimately, they\'re right. But to the General\'s point, we are
human. And to expect us to be able to execute flawlessly with this every
day, you know, it\'s going to be long time before we get there, I
believe.

MODERATOR LAUBER: Yes.Terry?

CAPT McVENES: There was kind of two parts to your question. And one was,
I mean, more of a comment about the work ICAO has done in SMS and the
document that\'s been developed.

This is an excellent document ICAO has done some marvelous work in SMS.
We don\'t have to go out there and reinvent the wheel here. A lot of
work has been done for us. Use that document. I think it really help.

And the part that, I think, that in terms of the safety case, a lot of
times the safety case, is the safety risk analysis that you do about a
part of your organization.

I would offer that perhaps that\'s the weakest part of most
organizations\' work in SMS. How many safety risk analysis are really
done on an annual basis? And I think that\'s one place where we can all
improve at our individual organizations on that.

MODERATOR LAUBER: Thank you, Terry.

Any other comments from the panel?

Marinus?

MR. HEIJL: I just want to echo what Terry said.

The heart of SMS is the technical question of what is the safety risk
and how are you handling it? The rest is built around that central
theme. And if you assign accountability there but accountability has to
come with tools on how to achieve the results.

So, if you have no handle on how to assess the risks, then you don\'t
really have a restrictive program, only a make-believe facade almost.
And that will be self-defeating.

But I think if you look around and collect \"the experience\" that has
been obtained around the world in this area, you will find an enormous
richness of source material. And I don\'t think that we are premature
with launching this concept of SMS. It\'s not just a buzz word. I
believe it\'s a concept whose time has come. And we\'re right there now.

MODERATOR LAUBER: Thank you, Marinus.

Bill Lange was one of the next ones I saw with his hand up and then
we\'ll come over to this side of the room.

MR. LANGE: Thank you, John.

Bill Lange, Compass Airlines, Vice President of Safety.

I was interested particularly in hearing Steve say just now that SMS
principles and guidelines. Because there\'s a question in my mind as to
whether if I go to the store and I want to buy an SMS, what do I look
and what kind of a store do I go to?

We have within the airline, we have CAST programs which are within the
maintenance organization, but in fact have a whole lot of concepts as to
how you review and continuous improvement and so forth that, frankly,
ought to be applied entirely across an airline. And so maybe that grows
up or, you know, the internal evaluation programs which kind of do
another piece of it. ASAP programs provide some more information.

So, isn\'t SMS really a safety management system or is it as you
described it, a statement of principles and guidelines under which you
then have to collect the other kind of tools like I mentioned. And out
of that create something which looks different in every airline
potentially, but nonetheless drives toward the same goal?

I\'m not quite sure how to \-- how do you get the result out of this
after I\'ve made my statement and stood up and said, yes. I\'m going to
have one. Where do I buy it?

MODERATOR LAUBER: Dr. Predmore.

DR. PREDMORE: Yes. I\'m laughing because just as you were asking that
question I had this imagine going through my mind. I don\'t know where
it came from, but I arrived at the office on January next year and
there\'s five boxes from the FAA labeled SMS. And I just open them up
and there\'s my reporting system and I open this one up and here\'s my
just culture box. And just all of a sudden it arrives and it\'s here and
we put it into place and we go forward from there. When, in fact, we
know that\'s not the case. What we have to do is sort of evolve to this.
And I think it\'s a set of guiding principles and tools.

And I think the FAA has done a terrific job again working with industry
developing an advisory circular that\'s just in draft form or it out
now?

MODERATOR LAUBER: It\'s out.

DR. PREDMORE: The advisory circular is out there. There are guidelines
being adopted in the efforts around JPDO. There\'s a lot of work that\'s
going on. And, again, you know, I think all the major stakeholders have
been involved and so we\'ve been working toward this for sometime now.
And it\'s a set of tools and guiding principles and elements that all
put together and tailored to the individual operation, create this thing
called SMS. But it certainly isn\'t going to look the same \--

MODERATOR LAUBER: Right.

DR. PREDMORE: \-- for all the different places. That\'s early vision.

CAPT McVENES: If you\'ll bear with me, I\'ll read you something because
I knew this question was going to come up?

First of all, ALPA recently came up with some policy on what constitutes
an SMS. But in the interest of neutrality, I\'m not going to read you
ALPA\'s policy on it, but I am going to read you something that was
presented at the Flight Safety Foundation Conference last week in Paris.

And, actually, this is based on the ICAO manual. But these are the
functions inside of an SMS.

A written safety policy, a written process for planning and measuring
safety performance, a written process for insuring that personnel are
trained and competent, a process for identifying safety hazards and
evaluating and managing risks. A proactive process for internal
reporting and analysis of safety hazards, incidents and accidents in
order to take positive actions to prevent recurrence. A documentation of
all SMS processes and an education system to make personnel aware of
their responsibilities. A process for conducting reviews or audits of
the SMS on a periodic basis and a process of accountability.

Now, the ALPA policy on SMS covers exactly those same things. So, it\'s
not the box but it is part of the store anyway of some things that are
important to them.

MODERATOR LAUBER: But wait, folks. That\'s not all. For \$29.95 you not
only get \-- it\'s a very interesting question.

Marinus?

MR. HEIJL: I like that question a lot. It\'s going to the heart. I like
SMS. I heard enough about it to get me excited. Where do I buy it? And
the answer is you can\'t. You have to build it.

Now, that is hard work. And it is a specific solution for every
different environment. You have to apply the principles in your
environment and that is individual, hard labor to transform these
principles into where you actually work. You can learn about the
principles and ICAO is part of that knowledge base. And we are spreading
the knowledge. We\'ve been doing SMS trainers courses. And I sometimes
compare that with a snowball effect or a more impolite term, a pyramid
scheme without the criminal elements.

You start small and you spread the gospel and the world has to learn it.
Retrain the trainers and they train the others. We try to spread this
knowledge about the world.

But having the knowledge is only the beginning. You have to build it
after you know what to do. You have to apply it and \--

GENERAL GORENC: John, from our standpoint, I\'ll tell you.

We actually did have to go and build that. And, of course, the luxury
for us within out organization at the Safety Center out at Kirtland is,
we can look at a situation like this and actually make adjustments
pretty fast.

So, for example, we have in fact got a brand new data collection system
that will allow us to go back and start sharing information and tracking
things from all around the globe and anything and everywhere things
happen.

We\'ve had to re-shape the organization to get a real analysis division
set up with people and folks who do that on a daily basis. And that\'s
their responsibility.

We\'ve had to \-- so we\'ve got the data collection piece square and
there\'s a lot of things that you can actually see on the net that we
have available that we share with folks.

We\'ve actually taken another two prong approach and that is, we\'ve had
to set up a SAT teams is what we call them. Basically, safety assessment
teams that go out to organizations and looks at exactly what their
trends are, what they\'ve been doing and how they have been
\"complying\" with stuff that we say in our policy.

And then the last one, and this is the most fascinating one and the best
one for us that I am really excited about is OSAs, which are
Organizational Safety Assessments where you actually spend a week or two
with the organization, with human psychologists in there talking to the
folks and finding out where the communication gaps are and what the
training programs are set like and how people actually believe
everything that\'s going.

Now, that takes us two months worth of surveys and then two weeks worth
with the unit. But every place we\'ve ever gone within the United States
Air Force and we\'re doing one right now at Langley Air Force Base with
the F-22s, they have been invaluable for organizations to identify (1)
they have had a culture that they like or identify that they don\'t have
one at all. And if they don\'t have it, the best part is, when you do
this whole thing, you can actually go exactly to where the problem is
within that particular organization.

But the beauty is, again, it\'s a build an event kind of a driven
program for your organization. What are your resources that you have?
And it\'s a continuous flow to where we\'re not done and I know. But at
least it\'s a start. So, that\'s the way you\'re going to have to play
it.

MODERATOR LAUBER: Well, I guess the lesson, folks, is that if somebody
comes to you tomorrow and offers to sell you an SMS system, think twice
about it.

Let\'s pick on this side of the room for a bit.

Ed, Bill and then we\'ll come forward. You\'ve been trying to get in
there.

Ed.

MR. HEIJL: SMS failure right there.

MR. FELL: Can you hear me now?

Ed Fell, Pinnacle Airlines.

A question on the new draft AC, Advisory Circular from the FAA. Maybe
some of my FAA friends could answer this.

Number one, when will it be published final? And number two, what are
your expectations from the industry with regard to that advisory
circular? And, finally, a plea to the FAA. Don\'t throw that thing on
the street until you\'ve got your local FSDO folks aware and trained on
it so that they can apply their oversight responsibilities in that AC to
the carrier as well as the carrier implementing SMS.

MODERATOR LAUBER: We got just the guy to answer that question for you.

UNIDENTIFIED PERSON: First of all, for an extra 10 bucks, we\'ll throw
the oversight in there. And it\'s a little late for that. AC120.92, I
believe it is.

UNIDENTIFIED PERSON: I\'ve got x\'s. UNIDENTIFIED PERSON: 92, it\'s on
the street. Okay. And it was a result of \-- it really emanating from
the JSC, the General Aviation Joint Steering Committee and the need to
get some document out there. It really follows the principles of what
ICAO is doing. And it was written with us in concert with industry.

It puts forth some guiding principles on, you know, the GA folks. It
really applies to anybody that\'s an operator that they can, you know,
start implementing those kinds of things.

Just one more piece of this. When you look at all the systems that are
out here, especially in the 121 community, I think the building blocks
are all there. And I think Terry put it best when he said the SMS is the
glue that brings all those programs together.

You know, it may an internal evaluation program that migrates to a more
analytical method of looking at safety data within that organization.
But I think the building blocks are there. This is more tying it
together.

MODERATOR LAUBER: Jim I\'ve read the advisory circular coming over and I
thought it was a very well done document that pulls together the
concepts and explains them very, very well. I commend it to you all.

We had a question right here? And then another one here.

MR. BLICK: Yes. I\'m Steve Blick, [Airline Pilot]{.underline} magazine,
published by ALPA.

Would any of the panelists like to offer some thoughts about applying
SMS to two new emerging, rapidly growing areas of aviation; namely, very
light jets and unmanned aerial systems?

MODERATOR LAUBER: All right. Who wants to respond to that? And I might
call on an audience member to respond to that as well.

Hank or Stan or who? Anybody on the panel?

CAPT. KRAKOWSKI: Yes. If I may. I mean, because I fly both general
aviation and the airlines.

It\'s all out there and it\'s all getting more complicated. And I think
the real point here is we really do need to get to this like straight
away. And what\'s unique now is these are new emerging technologies. And
if we get on it now we can actually build some things with durability.
And I know people are looking at this going forward.

MODERATOR LAUBER: Vern, would you want to comment on it? Can we get a
microphone down here for Vern Raburn?

There we go.

MR. RABURN: This is a challenge and it\'s a challenge. I\'m going to
talk a little bit more about this tomorrow during the morning session.

It\'s a challenge in the sense that we\'re not dealing with a homogenous
organization. And, in fact, we\'re dealing with sort of the exact
reciprocal of a homogenous organization.

And so what we\'ve done besides trying to understand SMS and my
contribution to the discussion would be, it strikes me it\'s a lot like
lean manufacturing. You can\'t go buy a lean box either. You really have
to \-- it\'s a set of principles instead of approaches and you have to
evolve it for each individual organization.

But we\'ve tried to adopt an SMS approach. And the way we\'ve tried to
adopt that and implement it into our fleet is by increasing the touch
between us and our customers. The traditional relationship in the
general aviation industry between the manufacturer and the customer is
sort of give me a check. Here\'s your airplane. I\'ll see you when you
need some parts. And that\'s about the level of involvement.

And you can conceptualize it as a Ven diagram that barely, barely
touches. The two circles barely touch.

We\'ve taken a very different approach from the standpoint of starting
with training where we actually focus on dealing with a lot of these
kinds of issues, not just the nuts and bolts and gallons and bolts of an
airplane to dealing with everything from physiological issues to
emergency training. And then from there, we try to use a combination of
economic incentives. In other words, there\'s sort of means and motive
if you will in this process. And the means is to be able to give people
a chance to access the information, which again in the GA world is a
real tough problem. I think someone once said, the best learning method
in general aviation is by rumor.

And when you compare to what happens in the 121 world or the military
world, there\'s a lot of validity to that comment. So, we try \-- we\'re
trying to build in place a system that provides the means, both for our
customers to access the information and from a data standpoint because
we have the equivalent \-- it\'s actually a super flight data recorder.
We record about six megabytes of data per hour of flight into a two
megabyte storage unit. And then we download that and we already have a
FOQA program in place for our whole fleet, not just the fleet operators.

And then from a motive standpoint, we try to provide economic incentives
to our customers for change behavior, meaning we have a per hour
guaranteed cost of operation. That actually includes things like
navigation subscriptions, recurrency training, but you have to submit
yourself to the FOCA program. You have to submit yourself to recurrency
training. But if you don\'t, then the cost of operating the aircraft,
including insurance, goes up significantly.

So, we\'ve tried to provide both, as I said, the means and the motive
for our customers to change their behavior, which is our approach to
trying to implement an SMS across a very, very diverse and heterogeneous
fleet.

MODERATOR LAUBER: Thank you, Vern.

And I think that it\'s tying in the business case and melting it into
the safety case is one of the kind of distinguishing characteristics of
the SMS approach. It\'s very interesting.

Tom, did you want to comment further on that general question?

MR. GUNNARSON: I might just add to what Vern said.

One of the areas that we\'re spending all our time with right now is the
development of industry consensus standards for lights for aircraft,
which are very small and they don\'t have net engines.

But what is crucial for us in that is that in developing those
standards, we wanted to make sure that we included as many of the
components of the system. And when I says system, everything from the
pilot up through the manufacturer. So, there was some integration.

And, in fact, in one of our quality assurance document that we put
together, we actually included some language in there for which there
were the responsibilities of the owner in the continuing airworthiness
system. Almost like a contractual sort of thing where is somebody were
to buy one of these aircraft, part of their responsibility in doing so
was to report to the manufacturer if there were any safety flight
issues, which is, in my mind, kind of unique. I don\'t think I\'ve seen
that before in general aviation. Where it\'s not a regulation and it\'s
not coming down from FAA. It\'s actually built right into the standards
so that the manufacturer is actually responsible to make sure that the
owner knows that they have those responsibilities.

MODERATOR LAUBER: Enlightened self interest.

Terry, did you want to add something?

CAPT McVENES: Yes. Whether you\'re talking about integrating UAVs into
the system or very light jets or building a new runway or whatever it
might be, we\'re talking SMS at our individual organizations. But
there\'s also kind of the, you know, the mother SMS about how \-- how
the whole thing fits together.

MODERATOR LAUBER: Right.

CAPT McVENES: And, you know, making sure that we\'ve got the input from
the stakeholders and what all gets affected when you put in some of
these new components into the mass.

Somebody asked me recently when they were talking about building a new
runway somewhere. What do you think? I go, well, it\'s probably good.
But, how is it going to affect the airspace? How is it going to affect
the arrival patterns? All those things have to go into the equation
before you can really say it\'s a good thing or a bad thing. And
that\'s, again, the big SMS in the sky of how we\'re trying to look at
things from a total systematic approach to integrate things.

MODERATOR LAUBER: Because they\'re tightly coupled systems we\'re
dealing with.

Anyone else?

GENERAL GORENC: Yes. John, on this UAV and UAS discussion which is
actually very interesting for me. Right after 9/11 I was the wing
commander out at Beale where, of course, we had the U2s and Global
Hawks. Well, we didn\'t have the Global Hawks in California, but we had
them in other parts of the country and we had to deploy them out to the
Middle East.

And, of course, the issue was, how do you get it out there? You\'re not
going to truck it out. You\'re not going to ship it out. So, obviously
we flew it out. But it brought to me the initial problem associated with
how do you get this through the system without getting people hurt and
things of that sort?

And it is an issue we\'re going to have to deal with. I mean, you got
Global Hawks right now they are flying Predators, they are flying a
variety of other things that are flying. And we\'ve been okay up to now
because it\'s been done in combat zones or very restricted air space.
But now you start opening this up with Homeland Security, the potential
use for Katrina, it\'s going to really require us to think through how
much of a reward is this asset going to give us versus a manned machine
or manned aircraft?

So, I was talking to Fred Pease the other day up at the Pentagon and we
were talking this issue. Obviously, our FAA rep, link. And I go, hey,
you know, we\'re talking about how would we integrate this in the
system? I\'m going, well, actually from my standpoint, as a pre spider
guy it\'s actually pretty simple truly. The issue is, if I\'m flying an
F-15 or a strike \-- F-22 or something of that sort or a heavy aircraft
and it\'s zero, zero on the field I\'m taking off from and all of a
sudden I get airborne, gear up, flaps up, life is good and now I have an
emergency, a radio out. A simple radio out, which I know doesn\'t happen
anymore, but days of old when I used to fly before it did.

The issue is, I knew exactly where I was going to go. I was going to go
on my planned route. I was going to fly out to the base. I was going to
go in the holding pattern and I\'m going to wait for my time until I got
the time to go back in and land. Squawk 7776, go on down and basically
land. Life was good. And everybody stayed away. And especially if it was
pure IFR everywhere, you know.

Now, it\'s the same thing with a Global Hawk or a Predator as far as
that goes. The issue is, is the system flexible enough to tell everybody
to get out of the way, this is Global Hawk is flying around or the
Predator is flying around in an area that you wanted to work? So, then
the issue then becomes is, is the persistence and the intel that it
provides worth you not being able to do anything else in that area if
that is the procedure?

We\'re going to have to work through it. There\'s a lot of issues to
deal with, of course. And I\'m glad that the discussion is coming up and
I\'m glad that it\'s actually being brought up in a construct of an SMS
kind of a look because it really does need to be looked at from that
standpoint, otherwise we\'re going to miss the boat.

MODERATOR LAUBER: I agree and I think we could productively spend at
least a full day, maybe more, on that very subject.

I want to take one more question. I\'m sorry to all of you who have had
your hands up and then I want to switch gears for a little bit. And then
at the end if we have time, we\'ll come back for more questions.

MR. DENNIS: Thank you, John.

Jerry Dennis. I\'m with the Medallion Foundation out of Anchorage,
Alaska.

We\'re a nonprofit aviation safety organization focused on Part 135 in
GA.

Five years ago, I literally stole from the Australians, Kiwis, the
British and anybody else that I could find and we built, based on best
practices that we found in Alaska, we built an SMS as it turns out that
actually works.

The accident rate is down both in GA and in 135 and smaller 121. But
there\'s one thing that we have a problem with that everybody \-- the
gentleman alluded to the elephant in the room is management. Every
manager that we have approached and we have 77, every one looks at this
as to why do we have to do this? What\'s it going to do for me?

Now, I come from a military background as well and I can remember when
we had 18 accidents per 100,000 flying hours. That\'s pretty bad.
Everybody is down now, but how do we get to the manager? How do we
convince them that this is what we need to do?

MODERATOR LAUBER: Hank, you\'re management. Do you want to respond to
that?

MR. DENNIS: Go get them, Hank.

CAPT. KRAKOWSKI: Actually, I have a good example.

And last year I was before the insurance carriers to renew a lot of our
insurance. And because of the systems that I was able to describe and
our success in reducing our safety exposure and actually improving our
safety through a bankruptcy which is typically challenging, I was able
to effect an insurance cost saving which literally covered my entire
budget in my department. Okay. That got their attention.

When I can bring results back to the corporation like that, that\'s
significant. Now, the other side of this though that some of the
insurance guys were telling me, we really want your FOQA data too. Now,
that scared us too.

You know, so the point is that it\'s a tricky deal. But the point is,
there is a good business case and we were able to prove it last year.

MODERATOR LAUBER: And I think again that\'s one of the refreshing signs
that I see in this SMS movement is that there is a conscious application
of the business model to the whole process. And the bottom line is, in
fact, important.

Anybody else want to respond to that? You touched on an issue that I\'d
like to switch gears as I said to another question that\'s related to
this. And it was something you said, Hank, that applies to it.

It\'s not often that an Airbus guy will quote a Boeing guy particularly,
Allan Mullally, but he\'s no longer Boeing. So, I can quote him. But
Alan was the luncheon speaker at this event the first time around. And
one of the things that Allan said that I thought he said extremely well
and that always has resonated with me is that the data will set us free.

SMS is a data-driven concept. It\'s an approach that\'s based on data.
It\'s bounded on data. We have to make data-informed decision with this
and I thought Nick\'s comment this morning about from the FAA point of
view, at least, all they have is in his estimate five percent of what\'s
actually out there in the world. And he raised the point of disparity
between the amount of information that\'s available and the amount of
information that actually gets in the hands where it can do some good.

But there are a series of issues and Hang just touched on it here when
he said, and they want FOQA data too. And this is the problem and I want
to pose it to the panel, because to me it\'s a fundamental issue that
has to be resolved before we can see full widespread application of the
SMS concept.

Are the safety data adequately protected in order to enable the industry
to move forward in the way that it really needs to implement full-blown
SMS? Are we willing to do? As manufacturers? As airlines? As others in
the business? Are we willing to put all of that data on the table? Are
there sufficient protections in order to allow us to move forward with
the full implementation of this concept?

Hank, do you want to start on that? CAPT. KRAKOWSKI: That is a concern.
Within the close circle of an airline and the tripartite between FAA,
the unions in our case and management, we\'re able to keep that under
control. But I think the big challenge is as we expand this to a wider
audience and more connectivity between players. This is the big
challenge in my mind.

MODERATOR LAUBER: I share that.

Steve?

DR. PREDMORE: Yes.

MODERATOR LAUBER: Do you want to comment on it?

DR. PREDMORE: I think five percent is optimistic. And at the same time,
I think, we do a great job of collecting data. I mean, we got a lot of
data. We aren\'t quite sure what to do with it.

MODERATOR LAUBER: Right.

DR. PREDMORE: And, you know, the big questions going forward are, how do
we make good use of those data, turn it into information that helps make
the decisions?

In the last year, many of you may not be aware, we for the last time in
the last year, we put together a system that allows for the combination
of FOQA data across nine carriers. We\'re not close to a million flights
of FOQA data accessible for analysis.

And the NASA worked very closely with the FAA. NASA/Battelle folks in
doing that and they hate it when I say this. But sort of putting that
infrastructure together to collect the data was the easy part. Now, that
we\'ve got it, what do we do with it? And who analyzes it? And who
generates a report? And who decides what\'s meaningful? And who decides
what we use the data to look at? But those are the issues that we\'re
really struggling with now. And I think that\'s where SMS is very
quickly going to take us because it is data-driven. So, we have to
decided where\'s the data coming from, who is going to look at and what
are we going to do with it.

MODERATOR LAUBER: Terry McVenes, I know the pilots are always anxious to
put all the data out on the table.

CAPT McVENES: Why are you laughing? MODERATOR LAUBER: We\'re
sympathizing actually.

CAPT McVENES: Well, it\'s kind of interesting to watch the evolution of
the whole data piece in these programs. And certainly, I mean I like to
tell it, but some of you in the room have heard me tell this story.

But I remember being at a safety conference in Pittsburgh when I was
first getting involved in safety work and the guys came in from British
Airways and they were talking about taking recorded data off the
airplane and using it for safety purposes. And I said, you know, not in
my lifetime.

Now, I\'m a big proponent of it because I think there\'s so much benefit
that comes out of it. And certainly the protection piece to insure that
that data is used strictly for safety purposes is something that
initially in the front end of these programs, whether it was FOQA and
then ASAP in subsequent years, was something that we all worked very
hard for, both from as an employee association rep and working with the
airline and the FAA as well.

Now, that we\'re evolving to the point of actually sharing that across
stakeholders, we\'ve got kind of a new concept in data protection. And
that is, how do we protect the carrier itself?

And so a lot of the same arguments that those of us in ALPA were making
ten years ago, I\'m hearing the same things being said at the table from
the carriers. So, it kind of fun to watch. I don\'t have to talk
anymore.

MODERATOR LAUBER: The carriers aren\'t alone in that. We manufacturer
those too.

CAPT McVENES: As I say, absolutely, the manufacturers too.

But, you know, we\'ve reached a point, I think. I mean I honestly
believe we\'ve worked so hard for it, we\'ve been so sensitive to it and
it\'s been so successful that we are at a point that we can do this. And
we can take these FOQA and ASAP programs to the next level where we can
share it between stakeholders because it\'s so much more powerful when
you do that. So, I\'m a big proponent of it.

MODERATOR LAUBER: Stanley, does the Air Force environment make a
difference with regard to the issue of data protection?

GENERAL GORENC: Well, I don\'t think it makes a difference. For example,
the FOQA piece, we actually have aircraft right now also that are using
the system.

I have found that as long as people know right up front what they\'re
planning on using the data for, I have found it could be very effective.

If you track a squadron and that\'s where we\'re running one right now
down at Randolph, you can actually tell are the pilots doing the
maneuvers correctly? Are they over-g-ing? Are they running the oil
systems to a level that it shouldn\'t be? And from there, we have
actually been able to go back and make readjustments to how the aircraft
is flown. This was very nicely done with a newer aircraft that was
coming on board.

I think as we continue adapting and putting the hardware or the system
into additional aircraft, again, it\'s going to be a leadership issue on
how that information is going to be used.

My contention would be that you want to use it across all spectrums and
find out really what the trends are and what\'s going on. Because I\'ll
tell you one thing: If you\'re an operations officer in an organization
and you have one aircraft that is always getting out of limits with a
certain pilot on board doing a certain maneuver, you\'ve going to
probably figure out pretty quick that you need to do a little bit of
retraining here. And I think that\'s a great way to use the particular
system.

I don\'t think you can use the system to go out there and try to hammer
up on the pilots and things of that sort. I don\'t think that will work.
I think you\'re going to have more of a problem in the long term and the
culture will suffer very badly as a result.

MODERATOR LAUBER: Thanks, Stanley.

Hank, did you want to add to that?

CAPT. KRAKOWSKI: No, but clearly, we\'re struggling \-- as co-chair of a
CAST effort, this is the big issue we\'re dealing with. Because if
we\'re going to get out of our forensic approach to safety and go to a
predictive approach, we have to get into this data. We have to see
what\'s going on in the system and that creates a bigger issue for us
all.

MODERATOR LAUBER: I have to interject my own personal view on this. And
I raise this for a real reason.

My concern is that we really haven\'t tested the protections that have
been put in place at this point, because we haven\'t had major fatal
accidents, at least in the U.S.

In the legal environment that is created in the aftermath of a major
accident, you know, we all know that cockpit voice recorders are
protected data. We all know that NTSB findings are not admissible in
court cases.

Guess what? That prohibition sounds good when you say it fast. But, in
fact, it doesn\'t work quite the way the people who put the law together
had intended or any of us. So, my concern is that we really are \-- we
haven\'t fully tested this, that I\'m concerned that we\'re all \-- we
all agree on the fundamental importance of it, but I\'m not so sure that
we still have the adequate protections in place to deal frankly with the
plaintiff\'s bar, which is, in my opinion, is a threat to it.

Tom, did you want to comment further? MR. GUNNARSON: Yes. Just from a
little different direction.

If SMS is data-driven, when you look at the low end of our market which
is mainly recreational operations, you\'ve got a culture there where
people tend not to want to share their mistakes right to start with. And
so that I think when we talk about five percent, that\'s a real high
number possibly, so that it might be a little hard for us to be
effective in using the system is (a) we don\'t really have a lot of data
to work with and we\'ve got just a culture that doesn\'t really want to
go there.

MODERATOR LAUBER: Yes.

Marinus?

MR. HEIJL: I\'d like to take this also in a little different direction,
if I may.

As a message data-driven, and there are areas in the world where the
data are really not forthcoming. We\'re looking very often at highly
sophisticated operations, FOQA is an example. Western Aircraft,
Perryville maintained and so on and so forth and you are still driving
it as at a higher level.

But there is an area also at a lower level of operation. And I believe
SMS, if it\'s data-driven, must also work there.

Some accidents are not even reported. We think we have all the data and
we have all been fine with the data, but that\'s not true. Some
accidents are not reported in some countries.

So, what I\'m trying to move towards is that SMS should not be only for
the developed countries and for the highly sophisticated industry. SMS
should also be of benefit to the developing world where you can\'t have
a sophistication that we almost take for granted.

Aviation is good. It\'s an industry some people make money out of it.
But that\'s not the sole purpose of aviation to be in business.

I think aviation is an element that brings people around the world
together and that \-- we should not overlook that. There are areas in
the world that need the help and need to be able to apply some of the
knowledge and main principles \-- basic principles of this SMS story in
a simple form.

It\'s about people. People deserve to know what\'s going on. People
deserve the safety and they deserve information on safety as well.
That\'s part of the experience.

And accountability is mentioned very often. And it\'s true. To whom are
you accountable? To the chief executive officer of your airline or is
the accountability going a step beyond? And I think it goes beyond.

It goes to the people that use aviation. They have a right to fly safely
and to arrive at their destination with a minimum of discomfort.

SMS is one of the tools in the toolbox to make that happen and I hope we
don\'t overlook the developing world.

MODERATOR LAUBER: Yes. That\'s a very good point.

I\'m going to cut this off at this point and come back to the audience
for some questions. We\'ve got just about 15 minutes left. But before
they do that, I just want to toss out something. I\'ve been waiting to
use it and I never knew quite where to fit it in.

But to me it strikes at an issue that relates to a number of things
we\'ve talked about on the panel today with regard to the shifting
balance between the enlightened approach that is an SMS approach and the
more hard-nosed regulatory approach. And a number of people have alluded
to that.

I asked one of our Airbus people to put together a little background or
White Paper for me just so I could understand a lot of the background of
SMS. And there is the statement made in here and I don\'t know if
anybody from Canada can verify this or not. But to me it\'s very
interesting.

And this has to do with Justice Moshansky whose name many of you will
recognize as being the Justice who wrote the 12 volume, I think it was,
report on the Air Ontario accident at Dryden many years ago. And, you
know, many of us, myself included, consider that a landmark study of
organizational factors in accident causation.

Reportedly, according to this White Paper, Just Moshansky recently
criticized Transport Canada for starting to concentrate airline
oversight on the SMS at the expense of the direct oversight of actual
operations. I don\'t know if that\'s true or not, but I find it very
ironic if, in fact, that is the case.

With that, let me open it up for questions. We have a question right
here in the middle and then we\'ll go back there. We\'ll get a
microphone to you. And we\'re going to have to cut this off in about 12
minutes or so. All right?

MR. JAMES: Yes. My name is Rosemond James of the Eastern Carbon Division
Authority. And in my view the discussion so far has focused from the
perspective of industry. And I cannot help but note one of your
panelists made the point that having SMS in an airline, for example, is
not sufficient. You still have interface with the rest of the system.

Having said that and if we could extrapolate that concept, would it be
necessary to also implement SMS as the regulator or within the
regulator, perhaps at a different level but so those two can interface?

Thank you.

MODERATOR LAUBER: Well, my understanding is that the basic concept is
that there is a partnership between the operators, the manufacturers and
the regulators. I think that\'s a fundamental part of the whole concept.

Anybody on the panel want to disagree or amplify?

CAPT. KRAKOWSKI: I mean, one of the building blocks, the foundational
blocks of SMS are the successes we have had with ASAP and the FOQA
programs and all that. And all of that was built in cooperation and
really deep, good fidelity discussions with the FAA.

DR. PREDMORE: I would just say again, compliments to the FAA and the
advisory circle, they actually do talk about the interrelationship \--

MODERATOR LAUBER: That\'s right.

DR. PREDMORE: \-- and the operator and the overseer and the fact that
SMS applies in both domains and they have to interface effectively.

MODERATOR LAUBER: It\'s well described in the AC.

Next question?

MR. ASOKEY: Yes. Thank you. My name is Frank Asokey with Focus Air. And
I want to thank everybody here. SMS is, since I\'ve been in safety,
it\'s only been like five years. And I started out with the ATOS in
Oklahoma City and I bought off on it a little bit. And then as I\'ve
went to classes and went to some seminars and SMS and everything I\'ve
read on it, I drank the Kool Aid as using FAA and the threat/error
management with Shipella and some of the CRM you probably wrote is very
interesting and it\'s doable because we\'re a new airline.

We just went through the ATOS process. The reason I didn\'t come to the
first conference was because I was getting certified, if everybody knows
what I mean with ATOS. And we went through that process and a lady asked
that. And so now we\'re into the SMS.

And one thing that I haven\'t heard from the panel that kind of
interested me was that the Safety Management System it does start from
the top down and it\'s a culture. Okay. And then as you guys are big \--
I can tell that you're bigger airlines. You\'re talking about
integrating all these five systems and all the boxes on the table. And
right now I\'m a small airlines, four airplanes to 22 within three years
with a different type of aircraft.

MODERATOR LAUBER: Hold it. Mike.

MR. ASOKEY: It\'s a different type of aircraft. I\'m sorry. This is
where I\'m looking at now and this is a Safety Management System that is
so important and so integrated now.

And five years ago when I started, everybody in the safety industry
wanted to give us PowerPoints and do this and everybody was talking to
each other. Now it seems like, can I buy this for \$29.99 and this guy
comes up to me and he\'s a retired FAA or retired NTSB and I go, well.
That\'s not what I want. That doesn\'t fit my SMS.

I mean, before we used to share all these Powerpoints. Like I got one
from ALPA that very good, simple. I taught our management on it. It was
very good. And this is the stuff that we need to go on because we can\'t
depend on that. This has to be our industry and our people here to share
information.

If we could have something like that, that\'s the point I want to make
across because we have the people.

MODERATOR LAUBER: Thanks.

MR. ASOKEY: The brains of the \--

MODERATOR LAUBER: Let\'s you and I get together right after this and
we\'ll ink a deal.

I saw other hands. Yes? Ken? Yes. There is. We\'re getting a microphone.

KEN: I\'m not sure what Virgil Moshansky said recently. But there was a
big piece in the paper and he developed a whole lot of concerns.

My understanding of his concerns were not that he was opposed to SMS,
but that the concentration on SMS was leading us to take our eyes off
the other things that we used to control safety.

MODERATOR LAUBER: Yes. Which ties back to some concepts that people here
on the panel have talked about too is that we can\'t let this become the
panacea that will address all of our safety ills. That it\'s a tool that
has to be applied wisely and in the context of everything else that we
do.

So, I think that\'s a good observation and if that was what he was
saying, I think it\'s right on target.

We had more hands, I believe.

Yes. In the back of the room.

UNIDENTIFIED PERSON: Thank you.

Full disclosure asked me to throw a softball question up. I changed my
mind, Terry, sorry.

This might be a little beyond the scope of what we were doing today, but
your comments about the legal environment and then the discussion
earlier on the accountability.

If we want the industry to buy into the SMS system, incorporate it, live
by it, are we doing a disservice by having our accident investigations
by mandate find the cause?

MODERATOR LAUBER: Well, who would like to respond to that? I mean, that
as you know is a debate that has been going on for years and years and
years.

UNIDENTIFIED PERSON: If we ever do a \--

MODERATOR LAUBER: Excuse me?

UNIDENTIFIED PERSON: If we ever \--

MODERATOR LAUBER: We do. We do. Vice Chairman Sumwalt happens to be
here. Would you like to \-- you want to comment on it, Robert? We\'ve
got John Clark back here too, I think, somewhere. Or Tom Hauter is here.

Anybody want to comment on it? It\'s an interesting debate that could go
on for a long, long time.

There are a couple of ways of looking at it. When I was at the Board I
argued that, in fact, focusing on a probably cause was not all that bad
because while it\'s true there are list of things that are factors in
any accident, some are more important than others. And a probably cause
enables you to focus attention maybe on those that are more important or
more critical.

I\'m not saying that\'s always done, but that possibly exists.

GENERAL GORENC: John, let me mention something on that?

MODERATOR LAUBER: Okay.

GENERAL GORENC: Got to look at it from another way, I think. Instead of
thinking of it as a cause to highlight an individual and point to them
as an issue. One way of looking at it that I think is effective is
looking at the cause to find out what are the resources that I need to
fix the problem? Without that, it is very hard for me or for anyone to
go forward and say, hey. How do I get money to fix this issue? Because
at the end of the day, it\'s probably going to be some cash associated.
Whether it\'s a trading issue, a mechanical problem, procedural issue,
manpower, whatever.

So, instead of just looking at it, hey. By the way, it\'s your fault.
Really, let\'s go away from there. Let\'s think about the root causes
here to figure out how we can prevent it. So, it\'s a mishap prevention
resources allocation decision.

MODERATOR LAUBER: That\'s a very good point, Stan. And you\'re right.
You have to \-- you have to formulate these things so that they focus on
what you can do to address the underlying problem.

Just as a thought for those of you who haven\'t seen it yet and it\'s
not widely circulated is the report on the Helios accident that was put
together by a Akrivos Soulaki and the Greek Commission and they\'ve
taken an interesting approach because they have direct causes listed and
they have latent factors or direct factors and latent factors, which is
kind of interesting.

You\'ve been trying to get a question in all afternoon. It\'s now your
turn.

MR. DAVID: John David. I\'m the VP Safety at NAV CANADA.

I just wanted to support a comment first that Ken made about the Judge.

You have to realize that the Judge is a bit dated. When he did this he
was in his prime. SMS wasn\'t even on the horizon and he may have been
given some information that is less than accurate for some of the
comments that he made. So, keep that in mind as well.

But I think he meant well with what he was talking about.

The other issue that came up I wanted to get a comment on. There was a
gentleman asked over there about what about UAVs and what about the
ultralight jets and how are they going to be managed? Well, very simple.
The same as the rest of us.

We got an SMS system. There\'s processes in place, whether you\'re a
commercial operator, CBAA, military of NBAA, military, COPA, ATS
organizations. There are regulations that are in place for coming in for
Safety Management Systems and that they should have to abide by them.
And there\'s going to have to be somebody accountable for operating
ultralights and UAVs. It should be very simple and they shouldn\'t be
exempt from the process as we are.

So, that\'s an easy answer.

The one other just quickly, John.

I want to say that I found it very interesting here today because it\'s
clear that there\'s a lot of myths about SMS and a lot of people don\'t
know a lot about it and really don\'t have one in place.

I want to tell you that on our story we were directed to have a safety
program 10 years ago when we separated from Government. We put it in. We
realized it just wasn\'t going to work. James Reason told us at the time
that SMS is the way to go. So, we bought it at that time and we
developed it.

We\'ve been operating it for eight years. It\'s been fully integrated
for six years and I can tell you. It\'s very simple. It\'s not very
difficult.

There\'s five main elements in our process. It\'s safety planning,
operation risk management, exchange of information, safety performance
measurement, and safety management assurance. And it\'s embedded in a
human factor framework. You can\'t get rid of the people that are
playing with every day. You have to touch them with it. And none of this
works if you don\'t have a strong, positive safety culture.

And don\'t confuse that with one element of the safety culture being
just culture. Okay. Just culture is there for good reasons and you need
to have that. But if you don\'t have the positive safety culture and you
don\'t develop it, and with respect to accountability and
responsibility, yes. You got an executive that\'s accountable, but trust
me. You have to have accountability at every level. They need to know
what their responsibilities are and you have to define that for them and
you have to work with them.

It\'s as simple as that. It\'s not very complex, believe me. We\'ve been
living it and we like it.

MODERATOR LAUBER: Thank you very much. Good comments. Yes. And some
applause.

With that, we\'re going to wrap things up. We\'ve come to the end of the
session.

I would like to ask our panelists if there are any \-- oh, we\'re not
quite finished folks.

I would like to ask the panelists if they have any quick 30-second
comments that they want to add based on anything that\'s gone.

GENERAL GORENC: I have 30 seconds. You know, obviously, a pleasure for
me to be here with the group. There\'s a lot, interestingly enough,
it\'s funny how you know a lot of the people that you\'ve been either
training with before or have worked with in the past. Look forward to
working with you more as we go forward in the safety arena more and more
here.

There\'s a lot of issues to work. Glad to be part of the effort here.
And, again, it\'s a hand and glove event. We\'re there with you all the
way. So, we\'re glad to be part of that effort.

MODERATOR LAUBER: Thanks much.

Hank?

CAPT. KRAKOWSKI: I don\'t have \--

MODERATOR LAUBER: No. Marinus?

MR. HEIJL: A 30-second commercial for ICAO.

Look at our website. www.icao.int/fsix. Flight safety information
exchange. You can get for free what you would not believe.

That\'s one. And if you want a sample of our roll out program of the
SMS, inquire with us on the next course that we are giving. We\'ve had
three in Montreal and about 100 people have been trained. We have also
had two in regions and it\'s an ongoing program. That\'s the pyramid
scheme I was referring to. No charge.

MODERATOR LAUBER: Thank you very much.

Terry McVenes.

CAPT McVENES: Just quickly. S MS is \-- we\'re not going to turn a
switch and all of a sudden it\'s going to be there. It\'s going to be an
evolutionary process. We\'ve made great strides even getting to this
point. We\'ve got more strides to make as we go forward. And we will go
forward because we have to go forward as it is the right thing to do.

MODERATOR LAUBER: Good.

Steve?

DR. PREDMORE: It\'s hard to build on the last speaker\'s comments. I
think it\'s a great framework but we got to develop organically with our
own organizations and I don\'t think we could have done this 10 years
ago. I think we can do it now and I think we\'ve got a lot of success
ahead of us. A lot of challenges too.

MODERATOR LAUBER: Tom?

MR. GUNNARSON: I\'d only say that I hope that the concepts and
principles of SMS can be scaleable to come down to the lower levels as
well.

MODERATOR LAUBER: Good.

The panelists have been great. Thanks to all of you guys. And the
audience wasn\'t bad either.

(Whereupon, the above matter was concluded at 4:24 p.m.)