UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

2^ND^ ANNUAL FAA INTERNATIONAL AVIATION SAFETY FORUM

BREAKOUT SESSION PANEL A:

GLOBAL AVIATION IN THE 21^ST^ CENTURY

IS NEARLY A SEAMLESS OPERATION

THURSDAY, OCTOBER 20, 2005

The session came to order at 2:30 p.m. in the Lincoln Forum of the
Westfields Marriott Conference Center, 14750 Conference Center Drive,
Chantilly, Virginia, William R. Voss, moderator, presiding.

PRESENT:

WILLIAM R. VOSS, Director, Air Navigation Bureau, International Civil
Aviation Organization

JOHN C. CLARK, Director, Office of Aviation Safety, National
Transportation Safety Board

ANDREW J. HERDMAN, Director General, Association of Asia Pacific
Airlines

KENNETH J. HYLANDER, Vice President, Safety and Engineering, Northwest
Airlines

THE HONORABLE N. AMANYA MUSHEGA

Secretary General, East African Community

CHARLES E. SCHLUMBERGER, Principal Air Transport Specialist, The World
Bank

ING. RENZO C. ZAGHINI, Executive Director, Department of Civil Aviation
of El Salvador

A-G-E-N-D-A

[Page No.]{.underline}

**Global Aviation in the 21^st^ Century is Nearly** 3

**A Seamless Operation**

Passengers can get anywhere in the world and

assume that safety is the same throughout the

system. How can we better make use of our

resources to improve safety in critical areas

around the globe? Are the various auditing

programs beneficial?

**MODERATOR**: **WILLIAM R. VOSS**, Director, Air 4

Navigation Bureau, International Civil Aviation

Organization

**[Panel Members]{.underline}**:

**THE HONORABLE N. AMANYA MUSHEGA**, Secretary

General, East African Community

**CHARLES E. SCHLUMBERGER**, Principal Air

Training Specialist, The World Bank

**ING. RENZO C. ZAGHINI**, Executive Director,

Department of Civil Aviation of El Salvador

**ANDREW J. HERDMAN**, Director General, Association

of Asia Pacific Airlines

**KENNETH J. HYLANDER**, Vice President, Safety

and Engineering, Northwest Airlines

**JOHN C. CLARK**, Director, Office of Aviation

Safety, National Transportation Safety Board

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

2:32 p.m.

MR.BOGOSIAN: Good afternoon. Thank you for the continuation of \-- or
coming to the continuation of our program.

My name is Joe Bogosian. I am, as of three weeks ago, the new Assistant
Administrator for International Aviation at the FAA, and I have the
honor today of introducing to you an alumnus of our fine organization.
It seems that more and more people I meet have at one time worked for
the FAA, so I consider it almost like a graduate school for aviation
experts.

Bill Voss became Director of the Air Navigation Bureau of the ICAO in
January of 2004. As Director, Bill oversees the development of technical
studies for the Air Navigation Commission, as well as recommendations
for standards and recommended practices, related to safety, regulatory
and efficiency of international air navigation.

Prior to his appointment to the ICAO, Bill worked at the FAA for five
years. At the FAA, his efforts focused on air traffic management, air
traffic control, and applying business principles to the provision of
integrated terminal air traffic control capabilities.

So, with that, let\'s leave as much time as possible to the actual
discussion. I thank you again for coming, and, Bill, it\'s your show.

MR. VOSS: Okay, I\'m all equipped here, thank you, Joe.

Welcome everyone. It\'s my pleasure to be here, and my pleasure to be
working with a really great panel I think here, on a really great
subject.

We are here, basically, to talk about the seamless operation of the
global system, and a little bit about what passengers think about that
global system in this day and age. We\'ve already heard a little bit
about that in the other room this morning. And, we\'re going to get
around also to talking about what do we do about this, we can identify
the problems, we can also talk about how we apply the resources that
exist in order to deal with these issues.

I\'ll be introducing each of our panelists in turn briefly. Of course,
you have their complete resumes or CVs in your documentation so I\'ll
just do a very brief introduction and ask for a few simple points to
start things. Our goal here is to be very interactive. We have a lot of
people here, with a lot of viewpoints and passions on this panel, and we
hope to have a very frank discussion because we are talking about safety
here, and that\'s how safety happens, is through frank conversations.
And so, we are not going to be afraid to have those.

Let me start and offer a couple of viewpoints of my own before we begin.
I\'ve heard a lot of positive feedback about the broken window analogy
offered by the Administrator today. It\'s been a very interesting one,
and I have to say that where I live I see a few broken windows
occasionally in the aviation system that we have to deal with for sure.

I also am very concerned about how we all deal with this, since I work
on the regulatory side. It\'s very important when the window is broken
in the neighborhood how the police respond, and sometimes I do worry
that we have had times in our history as international aviation that the
police have been sort of walking by the window because they don\'t want
to embarrass the guy that was on duty when it got broken. And, that\'s
not a very effective way to deal with the issue, to manage life in that
neighborhood.

And then, there\'s also the other extreme, and I think we\'ve seen some
of that sometimes in the past few months after the recent string of
accidents, where I feel like the police have been standing out the
window fighting with each other on whose fault it was.

Neither of those alternatives do a lot for us, because it doesn\'t give
much conversation about who broke the window and how do we keep the next
one from being broken. And so, we have here a panel of people who are
from the real world, from the front line in different parts of the
industry, and I think we can talk about those real issues that really do
drive that broken window, the beginning of the unraveling of safety that
can occur, and so I\'m looking forward to that discussion. Hopefully,
we\'ll bring up a couple of the strategic issues and a few reasonable
solutions.

Well, speaking of reasonable solutions, one of the things is to add
money, and to my left is the banker on the panel, Charles Schlumberger,
who is a good friend and also rather qualified in the world of aviation,
a very experienced pilot in his own right, very informed on the issues
of civil aviation around the world, and a valued member of the team in
fixing the problems around the world.

Charles, would you like to make some remarks?

MR. SCHLUMBERGER: Thank you, Bill.

The World Bank has no mandate, in terms of aviation safety. The mandate
of the World Bank, which was founded in 1944, was the reconstruction of
Europe after we went into development, developing countries, reducing it
to the mandate of reducing poverty around the globe.

In reducing poverty, one instrument is economic development, and the
transport sector is a key element in that, roads, ports, and also the
air transport sectors are very important pillars for the economic
development.

In the old days, the World Bank financed airplanes of state-owned
airlines. That disappeared, and the aviation sector had up and downs
with infrastructure. We are going back into the infrastructure sector,
and we are focusing increasingly on air transport, which is still a very
small niche. Air transport has many components, the development of air
transport is complicating the country.

However, safety is not nice to have, it\'s a detailed sine qua non, and
it\'s a public health issue. Four hundred people dying in Africa every
year in air crashes is irrelevant in terms of public health. The killer
number one, malaria, kills millions. However, there are 30 times more
accidents in certain parts in Africa than in the United States. I don\'t
know how you insure aircraft, how you are competitive.

So, safety for us is one of the first hurdles, one of the key elements
for the development of air transport, which helps country in their
economic development.

The second important issue is that safety is not something that comes
from outside. It\'s not something that is only technology. It\'s not
something that the World Bank can finance on an ongoing basis. The first
thing is safety oversight. It\'s the role of civil aviation authorities
of the authorities. Then comes the airline, then comes technology.

But, what I\'m trying to say is, a functioning governmental body is
probably the key for an effective safety oversight regime. Or, on the
other hand, what makes \-- it doesn\'t make any sense that the World
Bank is lending a couple of million dollars to train the people to do
the law, and then they walk away, and the next day there\'s no money
coming from the World Bank, and the whole safety oversight collapses.

So, this leads me to the third statement. What is effective? What is
effective resources? How can we influence in a difficult environment
development of safety oversight? And, I think for us the answer is
sticks and carrots, more and more sticks and carrots. I know the
industry hates the black listing. I know that I hear states don\'t want
to be bad in order to be known to the public, the real one is on the web
site of the Civil Aviation Authority of certain countries, but the bad
one we don\'t talk about. But, the public more and more we hear this
morning wants to know, and more and more we\'ll single out the bad guys
to the good guys, and we have a ceremony of category one, as we are now,
and then we have the black listing of a whole country.

And, I think after all the external pressure is key when it comes to
influencing governments and government oversight.

MR. VOSS: All right, thank you, Charles.

We also have John Clark, who is the Director of the Office of Aviation
Safety, at the National Transportation Safety Board. And, if you take a
look at John\'s CV you\'ll see a rather remarkable history. Honestly,
John, I didn\'t know there were that many jobs as you\'ve done in the
NTSB, it\'s very impressive. And so, I can say you have a very broad
safety base, which, basically, spans your entire career.

And, I know you have some views on the global aviation safety issues, so
please, John.

MR. CLARK: I certainly want to thank FAA for the cordial invitation to
sit in on this symposium. A lot of their invitations to us aren\'t quite
as cordial, but we have a good healthy relationship with the folks we
work with at FAA.

To put things in perspective, we investigate accidents in the United
States and around the world. We, under Annex 13 ICAO rules, we
participate in accidents that involve U.S. manufacturers, U.S.
operators, and by some invitations to other countries.

Last year, we\'ve launched on 14 overseas major investigations, and
that\'s out of my staff of six IICs and 40 total investigators.

We\'ve also, in the month of July and August, launched eight times, and
out of that there\'s two themes that give us problems and worry us. We
have a good working relationship with almost all of the investigative
bodies out there in the foreign countries, but often the judicial system
has a primacy in those countries, and it greatly obstructs the safety
investigation effort, it slows it down, and takes a great amount of
effort and time on our part to break through that, to finally get the
free flow of information to pursue safety issues, and we\'re
particularly concerned about any safety issues that may arise in our
U.S. manufactured certified products.

The second issue is that the Office of the Av Controls hit on a little
bit, is that we do see a lot of operational issues in those
investigations, and some maintenance issues, and we need to balance the
field a little bit because I believe often it\'s relatively easy to make
suggestions about power plants, or configurations, or instrumentation,
or maintenance manuals, and for months and months the manufacturer may
be somewhat hanging in the wind. What we would really expect to see, or
like to see, and what we do try to do, working very closely with FAA, if
we see operational errors in the United States we try to get on those in
a hurry and get them fixed. If there are maintenance issues that we can
identify, we try to get on those in a hurry and get those fixed, and we
just don\'t see that intensity out there in some of these places we go
for some of these investigations.

There are some very good operations out there, but it goes to the
oversight, both within the company and the government, of providing some
pretty tough oversight of those countries. We\'ve heard of black lists
and things like that. We don\'t get into that too much, but what we
don\'t see is the concerted effort to go after the operation issues, to
go after the maintenance issues, and it\'s a little easier to sit there
and leave hanging the possibility of manufacturing issues.

MR. VOSS: All right, thank you, John.

We also have Andrew Herdman, from the Association of Asia Pacific
Airlines. And, Andrew has a long career in the Asia Pacific Region, in a
variety of capacities, including some significant time as part of the
Swire Group that oversaw Asia Pacific Airlines, and has had, as I said,
just lots of experience in their region, and some of the experience he
can share with us now to give us an incite of how this rapidly-growing
region is dealing with these challenges.

Andy?

MR. HERDMAN: Well, thanks very much, and thanks for this opportunity.

We heard a lot this morning about China, and rightly so, because it\'s
the fastest growing economy. It has a very rapidly expanding aviation
sector. But, it might be helpful if I \-- permit me to give you a brief
commercial about Asia Pacific Aviation more generally.

My members are drawn, 17 member airlines, are drawn from throughout the
Asia Pacific Region, stretching from Japan in the north to New Zealand
in the south. The mainland Chinese carriers are not members of my
association, so that\'s a gap, but I pretty much represent the bulk of
the rest of the Asia Pacific carriers.

Those carriers have a great reputation around the world for the quality
of their service and their financial success, generally, being
profitable, which marks them out compared to the situation here or the
situation in Europe.

A point that\'s often missed, however, is the sheer scale of Asia
Pacific aviation. The AAPA carriers collectively carry about one fifth
of the global passenger traffic measured in our PKs. In cargo terms,
they are even more significant. We carry about a third of global cargo
traffic.

The Chinese carriers, the current market is about \$100 million
domestic, \$20 million international. The Chinese carriers would
represent, the mainland Chinese carriers, would represent about 5
percent of global aviation at this point, but given those double digit
growth rates that they\'ve achieved in the past, and which are being
sustained, of course, we\'ll expect that share to grow.

So, if you combine AAPA members, plus the Chinese carriers, you are
talking about a quarter of global aviation now.

Now, if you look at the regulatory structure, the world is pretty much a
bipolar world. The U.S. market is so large that the U.S. regulatory
structure, and then turning to Europe, through the work of IASA and so
on, Europe itself is another very major block of commercial aviation,
with an integrated combined regulator, albeit transitioning from
previous arrangements.

When we look at Asia Pacific on the other hand, each country is a rule
unto itself, and we see tremendous variety in the size, degree of
development of those different countries. So, you see a variety of
different regulatory styles, even if they are trying to apply the same
ICAO standards. That\'s the world we live in.

Our business is very international. Our typical stage length is much
longer than a U.S. or European carrier. It would be 2-1/2 thousand
kilometers plus. We operate a fleet of mostly wide-bodied aircraft. We
are operating between 25 and 50 percent of all the major wide-bodied
types in the world, including the 380 and the 787 that are coming. So,
we are a very major player in terms of wide-bodied big aircraft, and
international operations.

The passenger, we heard some interesting remarks this morning about
what\'s the business we are in, and since the titled of the seminar is
safety we know we are in the safety business. But, someone mentioned
that actually we are in the risk management business, and someone else
mentioned that, whose measures should we be using, and there\'s a big
gap between the perceptions of the customers, the passengers, and our
perspectives in terms of managing safety as a technical issues. Ours is
calibrated with slide rules, computers, and decimal places, and
statistics, but human beings don\'t calibrate risk in that way. Human
beings use different methods to evaluate risk.

So, if we ask ourselves, our job is to maintain confidence in air
travel, which I think would be an overriding objective for both
commercial reasons and social reasons, socioeconomic reasons, given the
contribution it makes to any modern economy, we have to unpack that and
say, how do we maintain confidence? Maintaining a good, absolute safety
record is part of that, but managing the perceptions, confidence is
about perceptions, and managing that confidence, managing those
perceptions, is an important part.

And, when there was a show of hands as to what our backgrounds were,
many of us put up our hands because we have scientific backgrounds, and
if we took personality tests they would be pretty heavy on the thinking
and judgmental numerical scales, and pretty low on the emotional and
social and so on. And, we must not lose site of the fact that this is
not about chasing, you know, absolute safety down to from currently the
industry is running at about one loss per million flights. The U.S. is
under half that number; Europe, not quite in that league. But, to the
ordinary consumer, this is a fantastic industry. We are talking about
one loss in a million flights, and that\'s safe.

Against the benchmark of many other things that we indulge in every day,
it\'s not in the quantification, it\'s about the feeling. So, we come
back to that point. We\'ve got to be a little bit careful of chasing
absolute safety.

So, the last point I\'d make is that, from the point of view of
globally, whilst there is a perception that we have a global safety
system, the truth is to those who are working in the industry, is it\'s
a mirage, it\'s \-- underneath it is a patchwork of bilateral individual
states and bilateral relationships, and some ad hoc regional
relationships. And, I think the big theme I\'m hearing talking to people
at this conference, given the big turnout and variety of people, is how
do we think of innovative ways to improve the global consistency of how
we do things, and within the existing framework.

But, I detect that there is a will to do that, and from our point of
view we work closely with FAA within Asia Pacific Region, through the
Singapore Office in particular, organizing jointly conferences and so
on. It is a very international objective, and for those of you who are
based in the United States you may underestimate the extent to which the
U.S. is a leader in this regard, and in the same breath, of course, I
should mention our colleagues in Europe through EASA.

MR. VOSS: Thank you, Andy.

Before I introduce the next speaker, I\'m sitting here looking at lots
of people standing in the back, and lots of empty seats. So, you know
those 18-year old kids from Sea World that are always so perky, that are
telling you to scoot over and make room, if you have an empty seat in
the middle someplace, perhaps, you could adjust over, and, please, those
of you in the back feel free to come down. You won\'t be interrupting us
at all. We don\'t mind, we\'d like you to be comfortable, because we\'ll
be here for a while.

All right, now that I have that housekeeping out of the way, thank you,
I\'ll go to our next speaker, who can talk through the chaos.

Ken Hylander is the Vice President of Safety Engineering in Northwest
Airlines, he\'s the Chief Safety Officer of Northwest Airlines.

I\'ll wait just a second so people can settle down. We\'ll let the
murmuring subside. Okay, I feel better now. Okay.

So, Ken Hylander, as I was saying, is the Chief Safety Officer for
Northwest Airlines, and my favorite thing I\'ll note out of Ken\'s CV,
that I hope he\'s here to add value on, is the awardee of the 2002 Air
Transport Association Nuts and Bolts Award, because we really do need to
talk about the nuts and bolts of safety here, not just the broad ideas
and perceptions.

And so, Ken, I welcome your perspective, and I thank you for being here.
Please.

MR. HYLANDER: Thanks, Bill. I guess the one message is there\'s no
hiding if you are running the panel, everybody has got to come down.

Interesting, as I was \-- when I was asked to participate in this, and I
was preparing a little bit, I did a little bit of research and I pulled
out the FAA\'s 2005 flight plan update, and I noticed that this panel
and this conference really addressed two of the key issues in the flight
plan, both safety and international leadership.

And then I got to thinking, well, why would they want an operator,
because the rest of the panel is regulators or from very prestigious
organizations, and I represent a single operator. So, I guess my
comments are really geared from the perspective of somebody who actually
has to manage a safety program at an airline, and that\'s my job.

And, I know that there are a lot of my peers in the audience here today,
so, hopefully, I\'m sort of representing them as well in some of these
comments.

I want to start by saying, as you sit in a room like we had this
morning, and you hear the Administrator, and the Secretary of
Transportation, and everyone talking about safety, there\'s really quite
a bit of pressure on the airline when it comes down to that, because
when you get right down to it, it\'s the airline that is changing the
engine, or adding oil to the constant speed drive; it\'s the airline
that\'s pushing the throttles and having the airplane run down; it\'s
not the regulator, and it\'s not, you know, the other safety
organizations, but it\'s some mechanic at 2:00 in the morning, or a
pilot in a snowstorm, that is doing those activities.

And we recognize that, and when it comes to doing that globally, and
running a globally seamless operation, which is what this panel is, you
have to think, well, what does that really mean? And, for an airline
like my airline, that means it doesn\'t matter whether I\'m taking off
from Bismarck, North Dakota or Bangalore, India, I have to be doing it
the same way. I\'m using the same cadre of pilots. I\'m using the same
System Operations Control Center, in our case in Minneapolis, and the
same computer systems, and those are things that we put our energy into
towards managing.

And, you know, how do we do that, and what\'s important? This morning\'s
panel on perception of safety, and what does the public think versus
what do we think, as the guys that are working it, is it\'s really
challenge because as long as we live in a world where one accident is
one too many, and we\'ll all agree to that, but we cannot, as the
operator, and my airline does 1,500 flights a day, we cannot, as the
operator, react to every perception. We have to react to safety data.
Okay? And, to me, the name of the game is what is the right safety data?
What is the precursor data that we need to be looking for, and then, not
only do I have the data, what am I doing with the data? Okay?

I have to have a robust system that gathers the data, analyzes the data,
and drives the corrective action based on that data. So, I spend a lot
of our time doing that, and I think that\'s really a key.

Andy talked a little bit about a patchwork. I feel like we manage a
patchwork. If you think about what an airline does from a safety
perspective, we have airworthiness directors we manage. We have FAR
changes we manage. We have airspace enhancements driving new avionics,
changes in the airplanes, that we are managing, the infamous RVSM that
was talked about this morning. We have now security regulations, which
are impacting aircraft design that we are managing. We have CAST safety
initiatives that we are managing. We have ICAO state regulations, like
ELTs and things that we\'re managing. We have data sharing initiatives
that we are managing. We have IATA audits that we are managing. We have
Department of Defense audits that we are managing. We have FAA audits
that we are managing.

One of the things that we need to start thinking about is, what are the
priorities? Where are we putting the energy? How do we manage that?
It\'s very difficult for an airline to do all of that work.

Most recently, we are getting into what I\'d call a proliferation of
certifications that we need to do, 129 certifications for flying into
different countries. We have to start thinking about things that are
improving safety, and not giving us more administrative work to do. So,
that\'s a real priority for the airlines.

Let me just close my comments by saying, I think there are a couple of
things that we\'re doing, which are really quite beneficial. Certainly,
the new international code share audits and the standards that have
really, truly been developed by experts, and debated, I was in a meeting
where people were literally screaming at each other over what these
standards should be, very heartfelt, thought-out standards, that have
value. And, I think as they grow, and people begin to use them, with the
economic value to the airline of not being audited 26 times a year,
those things will definitely have value.

I also think that just alliances and co-chairs have value. My airline is
a member of a large global alliance, and it\'s really a fascinating
experience to sit in an alliance safety committee, where we\'ve got ten
airlines from all over the world talking about what is our safety, if
you are going to be a member of that alliance. And, I was a little
skeptical at first, because I said, well I assumed it would default to
the lowest common denominator, and, actually, what you are seeing is
it\'s rising up, where the lowest common denominators are pulling up,
and we\'ve learned a lot about that from our peer airlines.

So, I think there\'s some good and there\'s some bad, but there\'s quite
a bit that we\'ve got to focus on to get the priority right, so that the
poor guy that\'s sitting, you know, at 2:00 in the morning trying to
make it all figure out, he knows what to do.

MR. VOSS: All right, thank you very much.

And, this panel, I have to say, has a great balance. My credit to the
organizers, because on the other end of the spectrum I think we have to
also be able to talk about the political, from the perspective of the
ministries. And, if you take a look at the CVs of the Honorable Amanya
Mushega, it\'s difficult to think of anybody who has a more complete
background in the various parts of government, specifically, in Uganda,
several ministerial posts broadly across government, all the way into
the nuts and bolts of building a constitution.

And so, I think we can really talk here about this whole, how this
aviation industry now interfaces with the big picture in a state, and
with that, we\'d appreciate your viewpoints, Mr. Mushega.

MR. MUSHEGA: Thank you very much, and as you already stated I\'d like to
represent that I\'m not technical. My job is a conductor, the nearest
I\'ve been to being technical in the aviation industry is being a
passenger. So, my comments will be of that nature.

First of all, the aviation industry, my job is to conduct activities in
the three countries of Uganda, Kenya and Tanzania individually, and the
aviation industry in that region is still small and young.

Second, our economy is also still growing or developing. Therefore, our
main primary purpose in this area of the aviation industry and safety is
to put our resources internally, the material, the passenger, the
organization, so that the synergies to put our resources together will
achieve better results than if each country went on its own.

And, secondly, it\'s also to connect support from our people we work
with from outside.

My paper, you have it, so I\'ll mention a few areas in that and
emphasize the others as we discuss. The area of media, which was
discussed earlier, even first of all in our countries most of the news
day depend on the extent of networks. It is highly sensational, and,
therefore, you rarely hear the good news that takes place in Africa, and
East Africa in general, but there are a lot of things do happen, and we
need to address question of the media for the world to see a big picture
of what is taking place.

In the civil culture, you know, our cultural values and individual
values, general safety for everybody. It\'s quite an interesting area
because our people value their privacy right, but on the other hand also
there\'s a need for the public good. One example, people who were
traveling through here some time back, and then they later went through
a machine, and it kept making noise, they took off their gold rings,
their watches, their earrings, and it still continued making noise,
until they obtained a private room, only to discover that she was
wearing beads which had some gold in them, and that was quite an
intrusion, you know, to go into your waist to see what is taking place
there. So, we\'ve had problems occasionally, which we need to look at.

And, there is a question of sharing information on the database. There
is the need to, as I mentioned earlier, if we are to reach our
neighbors,

to connect our activities, that one already we bring very well, but our
records - our department \-- also to look at us as one unit, and I\'m
really grateful today to the FAA for the good job they have done for us,
an ability for us to generally look at East Africa as one unit, because
when one say you are trying to connect our efforts, then tomorrow hear
that somebody has been going to act on a statewide and do something
which would undermine the very folks who are trying to bring our
resources together.

Let me also mention about safety in relationship to civil wars and
terrorism. We in East Africa have had the misfortune of civil wars in
Burundi, there was a real one in Rwanda, which everybody knows about,
and the \-- Congo, which is still a problem, because there\'s no way we
can have safety in the region when in the neighborhood things are quite
chaotic. Therefore, there is need for both internal pressure and also
external pressure, on both the political and other leadership, to ensure
that the region is secure, because if it is not, and you have Somalia,
which is in the west, which even these are weak spots on \-- so that is
not good for the overall safety in our region, although within the three
countries we are practically safe, but you know in the western countries
what takes place in Uganda you think it is as close to Zanzibar,
although that is as far as they were from Hawaii to New York, that
perception is also a problem to us.

The other one is on terrorism. Quite often, they had in the morning,
people talk of terrorism starting with September 11^th^. After the first
country Bin Laden has struck was in August 1998 in Nairobi and \-- they
were targeting the American embassies, but we natives took the areas to
grow.

So, my theory is that when we are dealing with terrorism, we should not
apply double standards. Whether there was an attempt through Israeli Air
in Mombasa, in November, 2002, you get trouble universally that goes
through the region, it\'s not safe. First of all, we are soft targets.
So, when Bin Laden strike in Nairobi, trouble universally go out and
East Africa is not safe, but when he strikes on New York, or Madrid, or
London, then they say, no, that we must demonstrate that terrorism
cannot win. All of you come out and demonstrate these people that we
cannot be intimidated.

Yet, when the \-- then you say don\'t go there, the situation is bad.
So, my appeal to this gathering is that we should not apply double
standards. Terrorism is terrorism, and safety is safety, wherever you
talk of. So, if we say in New York let\'s go out and defeat terrorism,
we should do the same in Mombasa and Nairobi. I\'ll be making further
comments as we go along, and I thank you.

MR. VOSS: Thank you very much for those comments, and certainly you\'ve
underlined the global nature of the discussion we need to have.

Our next panel member is Renzo Carlo Zaghini. He has another great
background, and by the way from the neighborhood it appears, just down
the road at George Mason, so he\'ll tell you where to go for dinner.

But, he gives us a perspective from the Civil Aviation Authority from
the regulator, and also part of a regional safety oversight organization
that many people have talked about in this conference, and will continue
to talk about.

Renzo?

MR. ZAGHINI: Thank you, Bill.

It\'s certainly nice to be in the Washington area again. It brings a lot
of fond memories from college days, but I\'m here today to share with
all of you my vision of what safety is to the point of view of the Civil
Aviation Authority of a Latin American developing country.

We are, for those of you who are not familiar with El Salvador, we are
the smallest country in America, in the Americas, and very proudly a
member of one of the most successful regional organizations that are
emerging throughout the area. It\'s called ACSA. Ever since we started
to participate in this type of organization, we\'ve seen a lot of
improvement in our area, but what I wanted to do is to bring out a
couple of ideas, and I\'m really eager to get into the crossfire part of
our section.

The first thing that I would like to acknowledge is that there is
definitely a very big difference between seeking the enhancement of
safety and seeking the enhancement of safety perception.

I\'m not saying that the perception is not important, it definitely is,
especially for the economic parts of the industry, but as Civil Aviation
Authorities we would like to emphasize the importance in really focusing
on the actual enhancement of safety, what makes people get from point A
to point B safely and correct those problems.

There are \-- I want to use a word which I don\'t know if it translates
completely into English, but I think that enforcers, and a lot of weight
has been put on oversight during this session, and enforcers are the
ones who are responsible for this oversight. And, I would like to say
that it\'s important that we understand that enforcers should not be
contaminated with what the public opinion is, because that really
diminishes our power to do our job.

I\'m not sure you people like me using the word \"contaminated.\" Some
airlines probably think it\'s blasphemy.

MR. VOSS: Oh, that\'s quite all right.

MR. ZAGHINI: So, where is safety? We talk about managing safety. We talk
about how we are raising the safety bar. I would like to focus on the
fact that it\'s very important how we measure safety. Everybody
understands and believes that it\'s very good to raise the safety bar,
but I think it\'s more important to realize where the safety bar is at
this moment.

As we have started our development of our safety management systems in
Central America, we are discovering pretty important things. We are
discovering that statistical analysis is not good enough. It\'s
definitely not a good parameter for measuring safety. We need to find
the right type of indicators to let us know beforehand, not when the
accident has already happened.

So, where is safety? Where does it reside? Where shall we look as
enforcers, as Civil Aviation Authorities? And, I want to share a couple
of ideas that I\'ve deciphered. Safety, for us in Central America, as we
approach the new era of safety management system, resides on the next
decision made by every pilot, air traffic controller, mechanic. It\'s
not in the Civil Aviation Authority building. It\'s not at ICAO
Headquarters, or on the big, large volumes of annexes that we all have
in our offices, it\'s on that decision-making process where that safety
can really be enhanced.

We believe that we should try to develop the means to help every single
professional in the industry to make that right decision, just the next
decision. We\'ve identified three levels of action that we need to
discover and we need to realize where we are. The first level is
accountability. I think Charles mentioned that strong oversight is very
important. That is where we are right now in Central America, for
example, people do their jobs because they are afraid of the
consequence, because they have a very strong enforcement agency behind
them. That\'s not where we want to be, that does not help those
professionals make the right decision, the next decision.

We want to achieve the third level, we want to achieve the \-- we want
to create the safety culture, where you have this strong oversight
organizations, but everybody is creating the consequence, not just being
aware of them or being afraid of them.

So, this is more or less an overview of where we are and probably we can
continue our discussion.

MR. VOSS: All right. Well, thank you, and, well, since I\'m the
Moderator I get to react to one of those points that\'s a particular
favorite of mine, and that is the point about the values of annexes.
Since I am, after all, the guy that makes them, and I have to say that
there is a realization to the world, it\'s that I\'ve got 9,670
mandatory standards you have to comply with to be a \-- to run a Civil
Aviation Authority, and if you pay attention to everything you should
comply with, that being recommended practices, dangerous goods
regulation and so on, I\'d break 30,000 items on the checklist.

Guess what, if I go out and write another 500 standards to try to
address the accidents that happened this summer, it\'s not going to make
the system bit safer, it will make a lot of people work a little bit
harder. I think we\'ve already heard about how some people feel about
that.

So, there\'s no question from the regulators\' regulator, ICAO, on that
position. Just had to sneak that one in ahead of the rush.

All right, so let\'s now talk about how we get through the discussion
today. We have a goal here, to really probe the issue of how global the
system is, and you\'ve already heard some comments that are a precursor
that\'s a bit more of a patchwork maybe than seamless.

I know seamless doesn\'t translate in all the languages very well, but
let\'s just say there\'s a couple of bumps between the boundaries.

Okay, so we can explore that issue, and we can also \-- need to deal
with about the level of safety and the public confidence in the system,
and I think we\'ve heard a lot this morning about that, and I think we
can talk about more of that today. Are there really weak spots in the
systems? Do passengers still believe in the system?

And, with those couple of controversial questions, let me open up those
to my panel members. Any volunteers about talking about the weak spots
or the public confidence that exists today?

Who would like to go first?

MR. HYLANDER: You are looking at me?

MR. VOSS: I\'m looking at you, and you are moving. You moved first.

MR. HYLANDER: Well, I guess from \-- speaking from a U.S. operator
perspective, I think we believe there\'s public confidence in the
system. We\'ve seen certainly 40 percent of the U.S. air transportation
seats are in bankruptcy right now, and yet we\'re full, and my airline
is in bankruptcy and we are running 90 percent load factors on some
weekend days. So, it\'s kind of hard to believe that people are afraid
to fly because of an economic concern.

So, I think that, to me, translates to a message that was highlighted
this morning, that there is an inherent trust in what we do, and while
we are great press, and we are great media, safety is expected, and
it\'s given, and all those things, some of which I complained about,
drive to that level of a safety standard.

And, I think it\'s going to be very interesting to see, as we go
forward, and a large portion of the U.S. system restructures itself in
any number of ways, to more third parties, or less third parties, or
what\'s going to happen to that public confidence.

But, I would say based on what we see, we are such an integral part of
the system, and there is a high level of trust in what this system has
done today, that we don\'t see a huge impact right now.

MR. VOSS: Okay, so that\'s a good answer for the U.S. right now. They
are still full, and so they are voting with their wallets at this point.

Any perspective from a more international viewpoint, perhaps, on
particularly after this last summer.

Charles?

MR. SCHLUMBERGER: Let me talk about something here internally at the
World Bank. About a month or two months ago, we had four crashes in one
week of small aircrafts, or Antonov 26 in Congo. And, that triggered an
internal discussion at the World Bank, what should we do? Should we
start black listing airlines for World Bank staff to travel, because the
U.N. has a system and we don\'t.

And, I made the case very strongly that it doesn\'t make sense to
prohibit staff traveling on certain airlines, even if we know it\'s a
dangerous country, because we have a mission, we need to go there
anyway. And, what would they do? They would take the road, and that, we
know, is much more dangerous.

Now, we have missions, we go there. We know there are dangerous
environments, and we have lost one bank staff, in an agency of the World
Bank to my knowledge, in an aircraft that disappeared. We are losing
about three to five in car accidents a year, sometimes less, sometimes
more. It is really statistically, we know, irrelevant the danger.
However, the perception is very, very strong on the issue.

Now, if we wouldn\'t be the bank, the World Bank going to developing
countries, but we would be a Swiss bank who talks to a Swiss food
producer and he wants to build a factory in Congo, and they are deciding
if they want to give the credit, and then those four accidents happen
and somebody says, you want to go to this region, there were just four
airplanes crashed in one week. That might be the trigger to say, well,
no, I think, you know, I\'m not traveling there with them.

What I\'m trying to say, perception of safety in the developing world
may have a very big impact when it comes to economic development, not
justified because the risk is still very low, and we can\'t measure
that. We can\'t measure the investment decision that we are cancelled
because of a combination of issues, but also safety.

So, I think for us at the World Bank, when we look at development, we
need to factor that in, because beyond just having airlines of these
countries that operate safely, it goes to the whole concept of how we
perceive a country.

MR. VOSS: Thank you, Charles.

Let me see if I can focus a little bit more on the second half of that
question, or the other portion of the question, about the overall level
of safety in the world, and the level of safety oversight, and its
variability.

I\'ll make some of my own comments as the Moderator, saying that at
least from the ICAO perspective we watch this very closely and say,
yeah, there\'s variations out there, and there are sometimes some
significant variations where we spent a lot of our time trying to figure
out how to make things better.

And so, at least from my own perspective, the simple answer, are there
variations in level of safety out there? Yes. Are they visible? Yes. The
public is not imagining them, and we have to do something about making
\-- leveling that off among the world.

Are there any other panel members that might comment on their own
perspective of the safety levels and variability of such around the
world?

MR. ZAGHINI: Well, I would like to say that definitely the safety levels
of different countries are perceived and are, in fact, very different.
You take Latin America, for example, everybody thinks that it\'s united
by the same common language and probably then everybody thinks the same
way. And, I\'m pretty sure that you would find a very fragmented parts
of society in different countries and different regions.

As we seek safety, we do it by standardization, which is one of the
greatest north \-- the north that ICAO points us, but how to achieve the
standardization that\'s the difficult part. And, that\'s where regional
organizations come into place. They become a very good tool to try to
level off those patches of areas, and try to make more sinuous
operation, but are they working? Is every aspect of regional
organizations working?

Well, being a part of one, I can tell you that you have to realize that
a regional organization is just a tool. It\'s a way to get there, it\'s
not the answer, but it\'s definitely a good path. And, as we see them
evolve in different areas, probably this difference will be less, and
your answer in a couple of values could be, are there differences, yes,
but not that many.

MR. VOSS: Great, that\'s something to aspire to.

Ken?

MR. HERDMAN: Perhaps, I can just throw in a point. I had a few comments
about the different way of measuring and quantifying risk and making
comparisons amongst airlines or amongst jurisdictions.

There is a method, a model, out there. It\'s called the insurance
market. That\'s what insurance markets do for a living, they price risk,
and we have a very active aviation insurance market, who do a pretty
good job of pricing risk.

So, if you want to check on perceptions of risk, go to the insurance
market, look at how the premiums vary, what happens when a major carrier
has a loss, public confidence is one measure, the insurance market is
another.

And, when you look at the variations around the world, we are rigging
the game a bit because if you read the fine print on those charts to
improving safety it always says western-built jets, and usually above a
certain size. So, already focusing on the good area, because if you
extend the definition to non-western jets and to non-jets, the smaller
aircraft, and different modes of transport, then you\'d have a
completely different perception. You\'d understand, you know, aviation
safety is right up there.

To come back to the insurance point, we are an industry that has a
turnover of about \$400 billion. The global insurance premium per year,
all risks, is about \$2 billion. The payout has been on the order of
\$500-\$600 million. The insurance industry has to keep explaining what
it does with the other \$1.5 billion. Yeah. They play the odds, that\'s
what the odds are.

And, it\'s interesting, because of the black August, to talk to people
in the insurance business, and they take a very sanguine view, which
struck me as noteworthy. If you look at this year, they look at this
year as 2005, look at the trend, look at the long-run averages, they
don\'t think we\'ve moved out of our consistent downward trend in terms
of losses, i.e., improving safety.

Now, I hope they are right, because in September it didn\'t feel that
way, but I would say they just have to have an opinion, they have to
price. 70 percent of aviation insurance policies are renewed in the last
quarter of the year, so as we sit in this room around the world airlines
are negotiating premiums.

Someone mentioned the high risk in Africa, the Africa hull loss rate is
about ten, I think, compared to .5 or lower in the U.S. But remember,
what does that \$2 billion translate to? It\'s about a dollar a
passenger, \$1.30 if you want \-- if you don\'t get that good a deal.
So, even at the high risk end of the spectrum, the insurance market
prices at not a lot of money.

And, the last point I want to make, therefore, is that we have to remind
ourselves, there\'s no such thing as absolute safety, and as we try to
improve this fantastic safety record we have to recognize what is it
costing us to improve safety another notch. Because what the insurance
market is telling us is that we\'ve got it down to about \$2 billion is
generous in terms of the overall loss exposure annually, for a huge
industry, and the flip side of that is, we are definitely at the point
of diminishing returns. And, from an operator\'s point of view, apart
from the sympathy for the man who is doing an engine change at 3:00 in
the morning, and juggling so many of these simultaneous certifications,
and audits, and so on, when he complains about the burden of that it\'s
not simply economically driven. It\'s a question society has to ask, how
do we make these assessments? What do we prioritize? Where\'s the cost
benefit analysis? Where\'s the regulatory impact assessment? And, we
have to be careful about taking initiatives which \-- because we\'ve run
out of other initiatives, we take initiatives without asking ourselves,
look, this is going to cost \$10 billion over ten years, what\'s the
improvement in safety? Please don\'t show me a pros and cons where
intangible safety benefit is weighed against real billions of dollars.

These are tough choices, but we have to take those decisions every day
as a society.

MR. VOSS: All right, thank you.

Any other comments from the panel on the general subject of where the
safety picture is today?

MR. CLARK: If I could make one comment, with the rush of accidents that
we had in July and August, and I understand that I see Alan Levin and
Don Phillips here, who constantly complain that we don\'t release
information fast enough, part of my comments were that some of the
foreign countries don\'t release nearly as much as we believe there
should be, or that we would feel comfortable releasing information in an
investigation.

What we try to do is not unbalance the playing field out there, the
teeter totter, because once we release bad information, or really hit
one of the parties to the investigation really hard, you know, we never
recover to keep a good investigation going.

But, after all of the history of those investigations, we actually got a
call from the Russians wanting to know if we should ground the 737s, and
in all of those investigations we weren\'t seeing something that we
could jump on to fix or, perhaps, like an engine failure, could go find
out why an engine had failed. And, as we stepped in through what we knew
of the scenarios of each one of the accidents they felt more
comfortable. There is a big perception out there when there is a series
of accidents that raises concern, and it raises concerns among the Civil
Aviation Authorities around the world. So, we do try to answer those
questions, but we are very careful not to divulge information that is
held closely within an investigation within a country, because our
purpose there is to assist them, and not to be releasing information
that they would choose not to have out there.

MR. VOSS: All right, thank you.

Now, twice we\'ve heard two panel members mention \-- oh, I\'m sorry,
yes.

MR. MUSHEGA: I just wanted to make a small addition on these
perceptions, and the people who gather data. When you lump the whole of
Africa and you say Africa is 11 percent it is extremely unfair, because,
for example, things happen in Congo \-- you are talking about one
country, then you bring the whole Nigeria, plus South Africa, Botswana,
and put them together, I think those who gather statistics are unfair to
us. We must \-- yes, things are not happening so well, you cannot say
that because there was Katrina in Louisiana. Therefore, the whole of the
United States has been flooded.

So, I don\'t know we should have to be fair to Africa, you know, when it
suits us, we treat it as one village, and when it doesn\'t we are
treated as 53 countries. I think those who gather statistics on Africa
must have another yardstick, otherwise it makes a situation, which is
not very good, but which is not bad, look reasonable. And, I think our
safety standards within eastern Africa are quite favorable.

So, I don\'t those who create statistics, you know, including our
friends from the World Bank, I think have to have another parameter for
analyzing Africa, otherwise then we shall remain marginalized and all
the efforts we make, as I mentioned, one tourist is injured in Nairobi,
then a travel advisory goes out that the continent is on fire, \--
people are left, and then in New York they say, don\'t worry, this is
just a simple activity. So, how do we, if I may ask you, how do we \--
to proper, and the African continent is quite huge, you know.

MR. VOSS: I\'d like to take a shot at that, that issue myself, because I
think this is an illustration of the point I was trying to hint at as I
started, about the broken window, and what happens a lot of times in the
business I\'m in, looking after 189 contracting states now.

And, it\'s amazing, sometimes as bad things happen, like they did this
summer, what you see are the cops standing around the broken window
deciding whose fault it was, and that\'s what we can get into very
easily sometimes when we talk about the accident rates.

And, while we do that, we forget about figuring out who broke the
window. I think the more important question, other than the point of
impact of the wreckage, which is where the statistic is lodged, is where
did it go wrong, where what made that airplane ultimately crash? Where
was the system compromised?

And, my friends in the media are here, and I\'ll challenge them as well,
to sit down with a pile of registry information and spend half a day at
looking at where the airplanes are registered, who owns them, and
wonder, are all these Antonovs owned by the same people? Is it the fault
of Antonov the airplanes are crashing? Is it the fault of the state
where the airplanes are impacting, or do I maybe go to the post office
box where they are being financed out of and ask the guy there why all
his airplanes keep crashing?

I think that\'s the difference between the police arguing under the
window and trying to figure out who did it. And so, I\'ll just leave
that out there as a challenge for all of us, to make sure we think
through that conversation, because accidents aren\'t always caused where
they occur.

So, thank you.

Yes?

MR. SCHLUMBERGER: You raised a very important point. Not all countries
have the safety oversight responsibility, and they are all different.
I\'ve seen excellent examples in Africa and the World Bank is financing
Kenya, Tanzania, for instance, in your region, to enhance safety
oversight, and it\'s doing excellent progress.

I will answer the question as posed here, are the various auditing
programs beneficial? Absolutely. We need transparency. The only auditing
program that is accessible for the public is the American FAA/IASA
program, Category 1, Category 2 are not audited. Most of the countries
are not audited.

In Africa, we now have currently on the continent 52 countries, five
countries Category 1, and five countries Category 2, and 42 countries
are not rated. And, U.S. FAA cannot rate every country, why should they?
I mean, why should they rate a country that has no traffic to the United
States, nor will have. And, there I make the plea, or there I make the
suggestion, that we should come to point with the ICAO safety audit as
public domain, and it\'s on Internet accessible for everybody, the
safety. Security we can discuss, security reasons, but there we can very
clearly give motivation for countries and show these other good guys bad
guys.

And, it comes to a point we discussed yesterday at the World Bank, where
the Civil Aviation Authority, the Director, was sitting in the room for
African countries said, you know, the biggest support I ever got, that I
got the funds and support to put the system in place, was BBC commenting
badly about my country, bad safety record, black listed in the U.K. Then
my minister came and said, what do you do, what do you need, now we\'ll
support you.

So, I think this is one key element. We need to show the bad examples,
but we also need to show the good examples, and I tell you, the best
security I have ever seen in general aviation in the world is two weeks
ago in Tanzania, every FBO, all airports, you go to a private airplane,
you are checked, doesn\'t access the United States.

There are examples out there in Africa that are far better than even
here, we don\'t talk about the good things as we hear this morning.

MR. VOSS: All right, thank you, Charles.

Trying to get provocative, and so you put a hard question on the table,
what about transparency?

John, you are smiling at me, does that mean you want to talk? No, he\'s
not going to touch it.

Renzo.

MR. ZAGHINI: I would like to add and build a little bit on those
comments. What makes IASA such a great motivator for countries? Why is
it such a provocative subject when you start addressing issues on the
FAA program IASA? I think because it has consequences, and great, you
know where I\'m going.

MR. VOSS: Go right ahead.

MR. ZAGHINI: ICAO has a great audit program, and it\'s very thorough,
and we\'ve survived it a couple of times, and we\'ll survive it next
year also. But, what are the consequences?

Shouldn\'t we think about establishing also some consequence towards
your level of compliance as a country, or as a region, or as a Civil
Aviation Authority, just to put it on the table also.

MR. VOSS: Absolutely. I\'ll go there, but I\'m going to let other people
get a chance if they want to take a shot at that first, about audits,
about consequences, about industry pressure. You know, there\'s a lot of
things at stake here, because there\'s also the problem, as we said
insurance rates, the industry probably would have a hard time if the
ICAO audit was posted and their insurance rate went up 20 percent, but
then again, maybe they\'d talk to their agency about improving.

MR. HERDMAN: It\'s cheaper than being black listed, Bill.

MR. VOSS: There you go. So, all right, I\'ve got one answer. Anybody
else want to chip in on this one? Okay.

Well, let me take a turn then, since it\'s my audits that are secret.

Well, first of all, let me say that 188 states at the time made the
decision to keep the audits confidential, and there\'s the Secretariat
of ICAO, not ICAO. ICAO is all those states. I don\'t know if it\'s
worked out real well. And, the fact is, is that that\'s one of the
things that\'s going to be on the table when we call the Director
Generals together early this year, to talk about what the real strategy
needs to be for safety in the world. Going to hit a bunch of things.

We want to talk about the real topics, and one of them you just heard of
here is, do we get more transparent on this issue? What does that mean?

I think I\'ve heard from at least one Director General that might put
his report on the internet, but I need to sign up a few more, and I
think there\'s more than a few ready to go there, because when you work
at the Director General level you have people that really do care about
safety, and they care more about safety than their job, which I think is
a prerequisite for it.

And so, I\'m looking forward to that time, and I\'m looking forward to
good news on the issue soon.

Is there anything else we want to go in this area? Anymore comments on
the audits in general? I\'ve heard some praise for the IASA and the
consequences. I think, Ken, you already made some comments, I think,
that you found the COCHER audit being a pretty darn effective thing.

MR. HERDMAN: Uh-huh.

MR. VOSS: And so, I think we can agree with that.

So, let\'s tick that audit question off as saying, audits are a pretty
good thing, though, of course, I will also take on board the comment
that you can\'t have too many audits, you\'ve got to make sure audits
are doing the right thing.

Okay. Let\'s talk a little bit more about things that are working and
things that aren\'t in this industry right now, and things that are
making the safety a little bit better.

I mean, I\'ve already confessed to one issue, that it probably doesn\'t
help for me to generate more paper, and I think I\'ve heard that from
two or three of my industry colleagues.

Let\'s also talk about the challenges I think the industry has out
there. I\'ll put one on the table that bothers me very much, the issue
of virtual airlines, not only the growth of the industry, but the change
sometimes in the character of the industry, that we see increasingly
airlines appear in front of us that are not much more than a series of
contracts and wet lease agreements stapled together. You hire a mechanic
in one airport to make sure if you get a flat tire you can return, and
you wet lease one airplane from one source, and it makes a challenge in
the world.

I think the conversations about low cost at some time is about these
virtual airlines is one of the challenges.

And, I also think one of the challenges is, that we\'ve heard a few
times this morning, is the ongoing shortage of people, because at some
point we are going to run out of regulators, we are going to run out of
professionals, and it has been said here already, there\'s professionals
that need to really make the safety.

Anybody want to comment about those couple of challenges, where the
industry might be headed?

Ken?

MR. HERDMAN: Yeah, Bill, I think in other industries what you describe
would be called regulatory arbitrage, where someone goes shopping for a
jurisdiction in order to take advantage of more relaxed regulatory
oversight. In some cases, the regulators I hear come shopping for you
advertising just how user friendly they are. We\'ve seen that in the
shipping industry, everyone has heard of flights of convenience.
Everyone knows what the consequences were of that back in the \`50s and
\`60s. It is now better policed, but you do have still great variations
in the quality of oversight.

I think there is some evidence, it is not to malign new entrants, new
carriers, but there are certainly cases of, dare I say, in renegade
states that are, essentially, selling certification as an economic
activity, and I defy them to say that it stands up to international
standards.

But, they are, definitely \-- small numbers of black sheep.

There\'s another point I think that Bill has also mentioned, the idea of
outsourcing and off shoring. We heard examples early today that this is
a very international business when you buy a Boeing, an Airbus, if you
trace back where it\'s come from, it\'s an internationally-manufactured
and assembled airplane. When you look at any international airline,
it\'s a composite of their own employees, subcontractors, service
providers, you know, it\'s a quilt again.

I ask the question of whether the regulators are keeping up with that
internationalization, even domestically focused airlines are outsourcing
their maintenance, off shore in many cases, and whether the regulators
are keeping up with that internationalization in terms of where the work
is being carried out, who is carrying it out, under what \-- in which
jurisdiction, I think that\'s a pressure for the regulator.

The other pressure for the regulator is the way in which you regulate an
airline depends on the way that airline is run, how big is it? Is it a
virtual? Is it a semi-virtual? Are they doing things in house? How much
experience do they have? How did they get that experience? What\'s their
business model?

And, it\'s a real challenge apart from whether I get the resources as a
regulator. You need to approach the regulatory task in different ways
depending on the type of operator. With the big operators, you are
talking about massive resourced organizations, even after restructuring
and so on. You know, you are starting from a completely different
position in terms of having that debate about the operator/regulator
relationship, both learning from experience, discussing things and so
on.

When you look at start-ups, they are often trying to off load the
responsibility onto the regulators, saying tell me what I need to do, no
more, no less. And, I\'ve had conversations with a number of regulators,
very uncomfortable about that situation, where, you know, they are being
assigned accountability for safety and performance, when it has to be
the operator.

So, these are the challenges that face the regulators, the proliferation
of new entrance is not simply the sheer number, they\'ve got to be
audited and looked over, you need different systems, different
procedures, different approaches, and I\'m not sure the regulators are
keeping up with that, despite their best efforts, and I\'m not sure that
the global cooperation we talked about is necessarily keeping up.

I think these are some of the \-- if you thought it was complicated
before now, it\'s even more complex.

MR. VOSS: Oh, I\'m pretty sure that the regulators are struggling at
best to keep up with that situation, and so certainly do share the
concern.

And, I think maybe we may be able to perch a couple solutions, but I
think one critical thing that was said here again is that, safety isn\'t
with the regulator, safety is with the operator, and the regulator can
only make sure the systems are there.

And, with that, I\'ll go to Charles next, and then, John, I\'ll ask you
to probably kick in, because you\'ve been around just this year about 15
or so different investigations, and probably have a view on this.

Let me go to Charles first.

MR. SCHLUMBERGER: Yes, the word resources was mentioned, and that\'s
probably an issue why the World Bank is involved. And, it is absolutely
the key question, do we have the resources, both financial, human
resources, to do the safety oversight job? And, let\'s face it, you are
in a very poor country, America, Asia, Africa, and maybe there\'s
famine, there\'s health issues, and all financial resources are needed
for development, and not even talking corruption or buying weapons, I\'m
talking basic needs of the country, poverty.

Now, we need resources to do first world style, if we may say so, safety
oversight, in a country where people are dying on the street in an
extreme case. This is a very difficult environment.

Now, the regional element was brought into the picture, but again, how
do we finance it? In South America, we have the beauty that we have a
40-year old organization, which collects over five fees, and with those
fees they finance the regional agency, which provides services free of
charge for the moment to the different Civil Aviation Authorities. Many
countries don\'t have that.

We see our role in financing as a capitalist the establishment of the
Civil Aviation Authority, whatever it takes, training of the people, but
we only will do it if we see their sustainability, sustainability by the
financing. Some Civil Aviation Authorities cannot be financed with fees
for over flight or landing passes, only in the United States it\'s the
case. We need a budget allocation, and there comes what I heard
yesterday, if the minister sees it as a priority, because otherwise we
are blamed on BBC News or from the outside, he will allocate the
resources. Without resources, even the best safety system will not work
beyond the next budgetary period.

MR. VOSS: All right, thank you.

I\'ll go to John for a couple of comments, and then I think we\'ll be
opening up the floor here.

Go ahead.

MR. CLARK: The recent flurry of foreign investigations don\'t lend us,
or our involvement in those, to really try to sort out outsourcing
issues or how foreign operators maintain their airplanes, unless it
really comes directly to a problem with a specific part or piece.

But, with that I can talk about two or three prior investigations right
here in the United States. In one, it appeared that a very small airline
can move around the country and do a little bit of shopping within FAA
FSDOs, to find that FSDO that is maybe more favorable to them, or less
stringent, or less demanding. We believe that goes on a little bit.

Another case was the Air Midwest accident down in Charlottesville, where
Air Midwest Corporate Headquarters, and all the paperwork is in Wichita,
the maintenance records, and they had seven satellite maintenance
facilities scattered around the country, and they were run by
contractors. And, one of our recommendations out of that was that Air
Midwest needed a person out there on the floor when that maintenance was
being done, while it was being done to watch out for the interest of
that company.

Now, you go out to contractors, and they may have a different motive,
they need to turn an airplane, get it out the door, and I think most
contractors don\'t want to do stupid things out there, but their
interest is to get that airplane turned, get it on the line the next
morning, and you really need a company guy right there on the floor.

Air Midwest had a company guy in the facility, he was there during the
day, they did all the work at night. He would review the records, and so
he didn\'t have that eyeballs on type of operation out there when they
were every night mixing and matching, who is going to be the foreman
that night, who is going to be the guy that rigged the flight controls,
who is handling the power plants.

So, if you need oversight it needs to come from the company.

Now, in that same process, the FAA was actually, by their standards,
providing pretty good oversight of those facilities, and in a couple of
our investigations we found that \-- we kind of hammer on the FAA for
not providing oversight, whatever that may mean, but if they are not
there, and they are not there day in and day out looking at that, it\'s
really hard for them to go through and do a paperwork audit and find a
particular mistake that can be made out on the floor in the middle of
the night at some \-- if he shows up once every six months, you pick one
night in between that six months, in the middle of the night, if he\'s
not there he\'s not going to find it, and you need your company guy
right out there on the floor.

So, now as these operations move overseas, how do these airlines
distribute the air oversight into those facilities, and make sure it\'s
working well, or how do the foreign repair stations maintain their
certification standards? You really need the person there to make sure
all the paperwork, or all \-- not the paperwork, but the operation and
the process is in place.

MR. VOSS: All right, thank you, that\'s certainly a key point. Somebody
has got to make sure the \-- well, there\'s got to be an airline, and
the airline has got to be doing safety, and that\'s a challenge nowadays
when you have a situation where the airplane may be maintained in one
region of the world, being paid for out of another, certificate held in
another 10,000 miles away, and it doesn\'t add up to safety, but that\'s
the world we have to talk about and the challenges.

MR. HYLANDER: Can I make one comment on that?

MR. VOSS: Absolutely, one more.

MR. HYLANDER: I\'ve been sitting here quietly listening, and I agree
with everything that we\'re saying. I think, as the airline operator,
there\'s no doubt that we have the responsibility for safety, and I
think, you know, you can\'t delegate that to somebody else.

I think, to get back to my data point, you have to know what you need to
look at, and you have to have the good data.

MR. VOSS: Absolutely.

MR. HYLANDER: I come to view it as a systems management type of
exercise, and it\'s a little bit like the difference between \-- I\'m
not a pilot, I\'ll say it right up front, but when I jump seat around,
it\'s a difference that I see between flying a DC-9 and flying an A320.
You fly the airplane differently. In an Airbus you are talking on the
radio, and you are adjusting the autopilot, and you are managing the
various computer systems on the airplane. And, on a DC-9 you are pulling
the yoke stick and moving the throttles, et cetera.

So, I see that difference, and I think there is, in the restructuring
that\'s going on, airlines have to start to look at that from a slightly
different perspective, and say, where do we need to adjust, which
systems need to be tweaked, where do I need to have three people versus
two people, or one person overseeing the third shift at the maintenance
hangar. And, I think that\'s a real key element of the safety going
forward.

MR. VOSS: Absolutely, and regulators have to adapt to that, regulators
will have to know when to say no, which is what we are supposed to do
best.

With that, let me open it up to the crowd and say that we can cover any
of the topics we\'ve had here already, along with \-- I\'m all for
talking about the solutions at the same time.

I\'ll take the gentleman in the back who happens to be closest to the
microphone.

AUDIENCE: Thank you. The point I would like \-- well, the comments I
would like to make regards the problem of transparency. I think \--
well, personally, I support transparency, I think if there are some
discrepancies the only way these discrepancies can be resolved is that
the discrepancies become known by all the stakeholders.

But, but, it\'s not so easy. When, in the process of audits, if there
\-- as long as the data is confidential I think we can be pretty, pretty
confident that the auditors will have no self-restraint and that they
will express whatever their findings are they will express them.

Once the findings become public, there maybe, I would not say censorship
or inference, I would say restraint in the formulation of the finding,
and very possibly this would require to have some changes in the methods
and processes of auditors maybe by having two teams working in parallel
or some other methods, so that there is some \-- the contradiction can
be brought into the auditing process to make sure that there will be no
self-restraint in the expression of findings.

Thank you.

MR. VOSS: All right, thank you.

I don\'t know if there\'s any response from the panel on that, but I
will tell you is that managing an audit program, quality is everything,
because your credibility disappears in a hurry. And so, I think that\'s
a valid concern, and something we worry about every day, which is why we
are ISO certified for one.

Yes, the man with the microphone again. This is the selection process
I\'ll be using, if you haven\'t picked up on this. If you have a
microphone you are probably going to get the floor.

MR. WALLACE: Steve Wallace from \[FAA\] Accident Investigation. You
talked a lot about resources across the panel. I want to hear about
political will, and a few aspects of the question on political will. The
first one for John Clark, who I know has encountered in many accident
investigations a lack of political will to get to the truth in what
happened in an accident, and then that\'s one aspect; the other is the
political will to just simply spend the resources that are necessary.
And, we have our discussions about, you know, maybe in a nation\'s grand
scheme of priorities aviation safety isn\'t as critical an issue as
others. Resources are limited. And, the third question about political
will is, what can international organizations do to apply pressure to
increase the political will of member states?

MR. VOSS: Well, first I think you were called out, John, so I\'ll let
you take a dive at that.

MR. CLARK: Steve\'s free shot at me, I\'ll get one in a minute.

Our investigators do travel overseas, and a lot of the investigators are
with Steve, right out of Steve\'s office. He usually assigns one of his
four or five on many \-- all of our overseas investigations and many of
our investigations going on in the United States.

The political will, I\'m going to speak for myself, I think, and Steve
needs to jump right in, for the U.S. investigations I don\'t think
there\'s \-- the political will is simply not an issue, it really comes
down to me and Steve to push those investigations through. And, I will
say that we have virtually complete support of our Board members, and
certainly our chairman, and we\'ve had several chairmen over the last
five years or so, and one of the former chairmen is the Administrator of
the FAA.

That part of the political will, I don\'t see, but overseas I believe
there is an issue with political will, and in some of the smaller
companies there, perhaps, is issues of national pride, but there\'s also
some very good investigative agencies out there, certainly from the
larger countries, and many from the smaller countries. There are issues,
and that\'s part of what I was talking about, is the political will to
get in there and clean up the operations, the maintenance, and the
infrastructure on a number of the smaller countries.

But, I don\'t see it on our side in the United States, particularly.

MR. VOSS: Charles?

MR. SCHLUMBERGER: The second part of the question was the role of the
international organization. The issue of political will is, the
political will is motivated in developed countries by the public, by the
press. The press does reflect the public\'s opinion, they are very
concerned about safety after the accident in \-- and in France there was
pressure, political pressure, to do something.

And, in the developing world, where we have lots of people on the road,
or by \--, and \--, the issue of air safety is not creating political
will, it is just not creating political will. There are international
organizations, international audits, have replaced the pressure that
comes, for instance in the United States, from the people, replace the
\-- you put, and put the finger, you have to do something.

So, I think this is exactly the point, it is very important where there
are other priorities in certain countries.

MR. VOSS: Yes, Mr. Mushega.

MR. MUSHEGA: I just wanted to come in on the question of political will,
and the pressure by international organizations. I start with the one
about the countries I know better in East Africa, they always put
pressure on downsizing the civil service in order to save resources,
liberate the economy, even liberate politics, and those pressures work.

But, we are faced with another disaster as a continent, in times of
proliferation of some more arms, and now proliferation of junk planes.
When I was going through the list I could not see appropriate people
from Eastern Europe, and now you have China, now you have that of
Eastern Europe which was former Soviet Union, I don\'t know if it is
present in this meeting, but what, how do you bring them on board to act
responsibly, those from the Soviet Republic, because now the continent
is \-- with \-- and things that don\'t move, they just go up in the air
and come down, so they add to our statistics of poor record, but nothing
is being done to put pressure for those states to act responsibly.

I\'ve seen you putting the pressure of developing nuclear weapons in
Korea, in Iran, but if we are to be finished by these machines, so if I
don\'t know them, get them \-- so what is \-- when this opposition is
worse than drugs, at least a drug you can take it and rest a few months,
and a few years, and you may get to some clinic and get treated, but
these machines are luxury in the continent.

In my \-- because our primary job is to save lives when you talk about
\-- you cannot say my child is okay \-- but this one is already dying
because of a crash. And, those in the Congo when they come down, they
come down with a lot of people. The only ones you count is the one who
walked \-- whether it\'s British, or Chinese \-- not Chinese, French or
British citizen, the other ones are statistics. So, another 130 people,
but there was one American, and one French, and one Belgian. So, for us
who are just parts of Africa \-- international pressure on international
organizations, \-- to prevent them from saying \-- weapons of mass
destruction, because they are destroying masses, you know, they come
down in masses. What do we do about that?

MR. VOSS: Let me jump into that one here, because it\'s not \-- it\'s my
job now.

Interesting enough, the Council of ICAO has taken a different posture
last year than it had. There\'s a thing called Article 54j that allows
the council to act very aggressively and expose, which amounts to a
sanction in our business, serious problems in safety oversight. And, I
am required by the council to look into certain activities where there
are certain abuses.

MR. MUSHEGA: And, also put pressure on governments, which act
irresponsibly.

MR. VOSS: Yes.

MR. MUSHEGA: And, license these dangerous machines that destroy their
citizens, whether they come for money for food, those who have died
actually were feeding themselves, I wanted to combine the two so that
the pressure is on these aviation authorities which \-- one of the
directors is here, and the governments.

MR. VOSS: So, there\'s two pieces to it. One is, regulators have to be
supported and sometimes reminded they need to say no, because there is a
market, someone is selling certificates to people on airplanes and
Antonov 26s that are a double device cycle, and allowing them to operate
with impunity, with no oversight, double their gross weight, and it\'s
my business under Article 54j to have conversations with those people
and suggest ways they can say no, ways they can find a better way, and
ways they can be supported, even ways they can get the financial
resources they need if need be, in order to do it right. That\'s one of
the things we are doing right now.

And, as a matter of fact, I\'ve done some of that, and some of these
states have already entered into agreements with us promulgating
regulations, doing things differently, and so it\'s not an easy job. If
I\'m late tomorrow morning it will be because I\'m calling up a country
that is very pleased with the amount of money you can get on
airworthiness certificates, and doesn\'t realize they are putting their
entire tourism economy at risk by doing so.

So, I just wanted to let you know that it\'s very quiet, it needs to be,
but those conversations are starting to happen every day, because of
mandatory acts of the council, and I can tell you because I'm the one
making the phone calls.

And so, there\'s the other issue of what do you do about \-- and I was
alluding to this \-- there\'s another layer of transparency, another
layer of responsibility in political will that may be required in places
you don\'t realize.

There\'s a growing frustration, even among the states you mentioned,
some of who are here, just not on this panel today. I have the State of
Ukraine, is a state of manufacture for Antonov, and on my desk I have a
plea from them to please help start dealing with the operators that are
running their aircraft at double their life and crashing them in Africa,
and then their products are banned all over the world.

And, I think I\'ll see similar responses pretty soon from other major
airplane manufacturers, because they are running out of Antonovs. And,
they are now going to old model Boeings, and L-1011s, and the same
operators can crash anything you can build.

So, I need to make \-- we need, at some point, to find out who are these
operators. Well, we talked about two things. Who are the people handing
these people's certificates, and that\'s my problem to deal with, no
debate, not an easy job but it\'s being done. The second question is,
who is going to look out and deal with the fact where these people are?
What if the operator is in Texas? What if the operator is from some
other developed state? What if it\'s from another region of the world?
Where are those P.O. boxes where all the funds are coming for all these
old airplanes that are crashing around the world? That\'s something I
think I\'ll leave as a rhetorical question for the people in this
audience in general, because for all you know the people doing this may
be your next door neighbor, and they may be the source of some of this.
And so, that\'s what I\'m saying, take a look at registry data, look at
where these things go, and ask yourself the question, where\'s the money
coming from that\'s driving the accident rate. We need to build a system
that\'s not corruptible, no debate, but we can\'t forget to go after the
guy that broke the window.

Thank you for the opportunity for saying that. I was looking for a place
to work that in.

Now I think there are probably other people that have questions.

Mimuna has been very patient, even though she doesn\'t have the
microphone, but let me get it to you next, there\'s a microphone down
here.

Yes, sir. Or no, that\'s a correction, where is the microphone?

AUDIENCE: It\'s right here.

MR. VOSS: There you go, so let\'s do it in this order, down to my friend
Mimuna, please. We\'ll get to you in a moment, sir.

AUDIENCE: Thank you, Bill.

I think mine is more of a statement, not a question. I do recall The
Honorable Mushega talking about the percentage Africa, the percentage,
where is this figure coming from? Is it fair?

I tell you one thing, it is fair and it is a reality, totally. We have
the smallest share of the business globally, but we have most of the
accidents. That\'s terrible.

What we need to do is to sit down and take stock of ourselves genuinely.
Why 11 percent, yes, why 11 percent? Because as a reality coming from
Africa in my region, I know what the problems are, you probably know
where the problems are, lack of political will, it cannot be seen as a
Congo problem, there may be a Gambian problem, or whatever, but it
cannot be seen as that. It has to be seen as an African problem, so that
we can take responsibility as Africans to solve this problem, maybe
leave it up to our leaders. That\'s how serious we need to take safety,
safety oversight in our region.

Planes don\'t just stay in your country, they fly all over the place. If
you don\'t have the proper certification systems in your country, they
fly to my country it\'s a problem for me, especially when they crash in
my country. It\'s a problem.

So, that has to be seen as an Africa problem, and our leaders have to
take responsibility and discuss this up to even \-- I would love to see
that, maybe things would start changing.

I\'m saying that it\'s been stagnant forever, it seems the use of \--
there have been findings, and with, how do you call it \-- the follow-up
audit, there\'s been some improvements, but it could be more. We could
do more.

The pace as Ridgeway clearly \-- is too slow, it\'s not good enough, not
at all, and the main problem, too, is also political will, lack of it.
There\'s a serious lack of political will in our regions. We have the
Director Generals who want to do the right thing. They have the
expertise. They have the people there, but they don\'t get the support
from their ministries, or whatever it is, or they want to micro manage
them. They want to, in other words, resolve those issues when it\'s not
their responsibility. That is a problem, and we need to tackle that.

I\'m glad that we have been able to be honest with each other, and to
talk to each other. Who is asking me to accept an aircraft? Nobody
don\'t be forcing me to accept aircraft from anywhere around the world,
especially if I don\'t have the capacity. I think it\'s an embarrassment
to even say that, stop dumping these airplanes in Africa. You don\'t
have the capacity to do oversight on those airplanes, why are you saying
yes? Say no. And, if you have one, two, three or four people who would
say no, then things would change.

But, as I said yesterday, there is enough money being made in safety
oversight in our region, because of corruption, that\'s the bottom line.
You have operators like this huge problem we are finding with L-1011s,
there are problems we know. They are not doing the calendar sea check
requirement, they are only doing the hours, because sea checks, of
course, cost more, you have to do it to make sure the aircraft is safe.
But, they are not registering them in the United States or the United
Kingdom, are they? No, because they have the certificates in place and
they are accepting that.

Well, they\'ve been dumped on Africa, and we say yes, we\'ll take it,
just give me \$5,000 or something, and then we can forget about the
calendar limitation or we can do the hour limitation, and that\'s okay.
But, we are accepting it. Well, it\'s about time we stop accepting it
and do the right thing.

I\'m certainly happy about this unified strategy system that ICAO has,
it\'s going to make a difference, and with the cross cut projects we
have in place this is our chance to make a change and have an impact.
And, if we take it seriously, it should work. That\'s my comments.

MR. VOSS: Well, thank you, Mimuna.

(Applause.)

MR. VOSS: I have to say, working with the Deputy Director Generals of
Africa, I haven\'t found a shortage of leaders. Thank you. It\'s my
pleasure to follow.

Yes.

AUDIENCE: Thank you very much, Bill.

My name is Phillip Ombugu, coming from East Africa.

You, the panel, has mentioned quite often the issue of pooling of
resources. I do not know whether you have enough words for our parts of
the world to talk about pooling of resources.

Coming from that point, the \-- have sort of \-- deliveries, the
supervisions of sector, which we have done, and it is growing, but when
the airlines grow they are hunting now for qualified people as
regulators, so that you find you\'ve been developing the regulatory
aspect, the airline grows, but hunting out the regulators is a very,
very serious aspect.

So, unless the subgroups of these regulators come together and pool some
of their resources, there\'s not already ventures between flight safety
person and \-- and what \-- and airlines are being, is a dream world.
So, we need to really pool resources there.

The other aspect is, if we are to run a seamless operation, we need to
harmonize the regulations across countries, across groups of countries.
I am sure ICAO has really been in the forefront in calling for this
cooperation, and even developing models of regulations to implement the
annexes. But, it\'s not easy. It\'s not easy.

And for some of us, if you are in the United States, it\'s a huge
country, we, perhaps, have common regulations. You go to China it\'s the
same. South Pacific has done quite a bit in terms of harmonizing, and
South America. It\'s not easy to get these countries to harmonize their
regulations so that they can pool resources, licensing, it\'s not easy,
but we have to do it.

I then come back to the point, which was made here about the
contamination. I hope I did not get that word out of context, but I am
imagining that today we are a regulator in some parts of the world, you
want to work with the operators before you go and regulate them, because
in some cases they really \-- they cannot meet the standard because,
it\'s not that they don\'t want, but they do not have the capabilities.

So, I tend to think that it should not be an ambush, rather it should be
a very cleverly crafted way of having, like you just indicated, safety
to make sure that somebody is safe from point A to point B.

Now, perception different, but safety you must work with some of these
operators, to ensure that you don\'t put your hand in, but it\'s not
like you are in a classroom or students, I\'ll be examining you after
seven years, so you read and meet at class seven. So, it is a question
of other ways of working between regulators and operators.

And then, of course, I\'m seeing another aspect, we need to hold \-- in
both countries, because \-- you see the best, but we need to go to South
America, we need to go to South Pacific, we need to go to Africa,
because then you have more input. You call on these ministers, or groups
of ministers, to attend some of these forums.

We, the technicians, will tell our ministers that we\'re there, and this
is what they are doing, you\'ll see that develop well, but as soon as
you come to our places we sort of get that good will lasting for a
number of months, and that will get a number of things getting their
seal of approval.

But, I don\'t want to take a lot more time, but these are some of the
comments.

MR. VOSS: A lot of questions to answer. I see people jumping up and down
ready to go, but let me take my prerogative and take a first shot,
because you just hit about four or five of the strategic issues around
safety, and I\'m supposed to have the answers. So, let me start.

Resources have to be the number one issue we need to worry about
strategically across the globe. You\'ve heard it today from Mr. Yang as
well, you\'ve heard it from the FAA Administrator, you are hearing it
from me, when we looked at this data, everybody worries about it being
secret, one thing it tells you is there ain\'t enough people, and
there\'s not going to be anymore. So, there\'s the bottom line. The
industry is going to grow, absorb more of the people who are there to
regulate, and the human beings we need to do safety haven\'t been born,
and they are not going to suddenly appear, a miracle will not occur.

So, that means we need to go to a new regulatory model. We can\'t be
going out and checking the oil on the 727, we need to make sure the
airline has a system, and those people have the skills and the ability
to make that system happen, see safety happen, on the front lines.

That means you go to a world of safety management, because the truth is,
these states that have done this, they\'ve gone to safety management
principles, are finding they need far fewer regulators to generate a
higher level of continuous safety oversight, because they have systems
that do safety oversight, instead of a guy sticking \-- seeing if
there\'s a hydraulic leak on the left engine.

And so, this is a critical thing we need to grow into as an industry, or
fail to meet the rising demand. Likewise, safety management systems,
when imposed on an airline, within an airline, generate cost savings
typically. You may or may not agree, I\'ll let my industry counterparts
comment, but I know of fairly small operators that are looking at a
million dollars a month in irregular operation expenses averted. So,
there\'s a business case for safety, you don\'t have to sell it very
hard. So, that is one big strategy that we have to go by in order to
solve the problem.

The other big strategy we have to go along with, the other big strategy
we have to consider is regionalization, because it\'s just too hard to
keep these little pockets of qualified people, and it\'s tough when they
come to you and say, I\'ve got an L-1011, I want to base it here, and
your minister says this is a really good thing, and by the way I don\'t
have a guy that can do an L-1011. It would be a lot easier if you had
somebody in a regional organization that\'s been to L-1011 school that
can do a proper job of monitoring that airplane. But, it means you do
have to go and have proper regulations, common regulations, that are
harmonized, common is better, that means sometimes you have to give up
local pride and say, well, I did mine a little different than the other
guy, you\'ve got to give that up in a hurry.

You also need to look to putting an organization in place that does not
depend on any one country\'s civil service system, because they will
routinely pay people far below the market of the industry, and I think
\-- has got a million great examples. That\'s why I say, I don\'t have
enough time to finish your questions. I think a lot of people want to
comment on this, but that is the other main strategy we\'ll be seeing
within ICAO. That\'s part of the unified strategy we are talking about,
also aligning the support resources to make that happen.

So, our view is, safety management systems, a unified strategy that
gives you a regional organization and rationalizes support are the two
ways forward to meet the one strategic issue, because they are going to
run out of people real soon.

And, with that, Gunther has the microphone.

AUDIENCE: Well, thanks Bill, my name is Gunther Matschnigg from IATA.

Everything what you said is right on target. I would add one thing, is
to simplify the regulations. We have too many regulations and sometimes
even as we speak they are popping up like mushrooms, what we call the
operation spec in all the countries, we get a new one in China, we get a
new one in Trinidad, and we get another one. And, this is a lot of \--
and this is exactly what Ken said before, we are fighting paperwork
rather than safety.

So, we need to get back, and as one of the airlines members said once,
let\'s get back to basics. We probably have overdone it in some ways,
let\'s get back and let\'s try to harmonize those regulations.

The success of the IOSA, the Operational Safety Audit, is because we
have one set of standards amongst the member airlines. So, one out of 40
member airlines at the end of the year have gone through this, and they
stop auditing each other. So, that means it enhances safety and it is
better, and it is much better efficient what we do.

Safety management system is part of IOSA, it\'s implemented, so they
regulatory authorities need to do a similar approach, need to do risk
assessment, as you just proposed. I think that\'s the only way to cope.

The traffic growth in India, with 22 percent, 24 percent domestic, 18
percent in China, tell me one authority around the globe who is keeping
up with their resources what I just told you. There\'s nobody.

So, we need to think to do a different approach from authority, and it
is clear, it is airline\'s responsibility to run a safe airline, but we
need a strong regulator who can say no.

From our point of view, we are helping the weak airlines, and the
solution to pressure or to help governments is, offer them solutions,
offer them IOSA, offer them a safety management system, and work
together to make a better system. As an airline, you can\'t pressure an
authority, you can just cooperate and help them to get the standard.

Thanks.

MR. VOSS: Thanks, Gunther.

I\'m going to go back to the panel, because I didn\'t allow for comments
here, and, Renzo, you\'ve got to have something to say about this
regional organization, pay of inspectors, et cetera, regulations, knock
yourself out. I can\'t hold you back.

MR. ZAGHINI: I don\'t know, the gentleman is asking for the \-- I think
it\'s a follow-up to his comments about regional organizations, perhaps.

MR. VOSS: Okay, he\'s deferred, please. Where is the microphone?

MR. ZAGHINI: Because I know it\'s going to be on those same \--

MR. VOSS: Five minutes, okay. Yes.

AUDIENCE: Thank you very much. My name is Gando, and I\'m Director
General of Civil Aviation of Uganda, and, of course, I know my colleague
from El Salvador, because we\'ve been to ACSA and we\'ve seen that work
perfectly well. That\'s why Uganda \-- the East African community is
working on the regional safety oversight institution, which I think is
encompassing these issues that we\'ve been addressing in order to
achieve high level safety in airspace, at least in the three countries
\-- Uganda and Tanzania.

I wanted to just say a word or two about my sister, Mimuna\'s,
observation, regarding these aircraft, which are flying around Africa,
and we are referring them now as non-compliant.

It\'s good that there is going to be this conference in ICAO next year,
and I would suggest, and propose, and request that one of the main items
on the agenda should be those aircraft.

While my sister Mimuna is right that there is \-- you need to be strong
and say no, there is a problem in that the issue of countries which have
\-- they don\'t have strong regulatory regimes because of the political
state in that country, they allow these planes to fly around, to be
registered there, and licensed there.

And, because of the hardships in such countries, they are used to come
to collect provisions, or supplies, or relief, whatever they are called,
and before they take off from your airport it\'s down in the averted
country.

Now, the statistics show that those accidents occurred in that
particular country, but they are not licensed by you.

Now, secondly, we have to appreciate that we live in situations which
are for the combination of politics, finance and other issues, even
safety, they apply for a license in your country, and you put your foot
down and say I am not going to allow you because I don\'t have the
capability to carry out safety oversight, say over an Antonov 26. The
politician who is a friend of the investor in that so-called aircraft
comes and says, I think this \-- man has a different agenda, these
aircraft are allowed in country X, why are you preventing them?

So, I would request that at the next meeting, I will be sure that I
attend, that is if I am still there, is to apply this article 54j I
think strongly. The states which don\'t have capability to call out
safety oversight on the aircraft, and they go ahead and do that, should
really get censorship, because they are the causes of the 11 percent
level of accidents in Africa. They contribute a lot.

And, I think it\'s seldom you can talk \-- you can judge from Mimuna\'s
definite, that we feel very, very, very angry that we belong to all of
these red flag, simply because a few states are not observing the
licensing standards that are recommended by ICAO. So, I would propose
and request that this item at the next meeting in Montreal be close to
the top of the agenda, and I think we shall support you with your effort
to ensure high safety standards in the whole world.

Thank you.

MR. VOSS: Thank you very much, and that\'s the answer, if you can\'t
regulate don\'t, and it\'s my job to make that reminder. And, thank you
very much. That is exactly the approach we need to take together, and
the system was put in place with the idea of 189 now contracting states
regulating off of one common set of standards as a network to reinforce
each other.

When there\'s enough holes in that network, we get the accident rate we
have, and so the two answers, the states, they can\'t, shouldn\'t, and
will be reminded, and we still have to deal with the fact that all of
those airplanes are being funded by one guy.

Now \--

MR. ZAGHINI: Not that you got your comment in, and I want to tell you
that I feel very close to your process, because since we met since the
beginning, and we\'ve lived through a lot of those experiences
ourselves, and I personally know what it means to have a high ranking
political officer calling your office, and that\'s one of the biggest
things that you are going to gain from regional organization, from a
regional organization.

We\'ve mentioned political will. Political will, it\'s not in our
vocabulary at a technical level, but it\'s definitely there in the real
world. So, you need your friends near and your enemies even nearer, you
can think who they are, or tell who they are.

But, one of the things that really push political will, when it\'s the
public in some developed nations it\'s great, but in our nation
sometimes you need to have everybody on board and the airlines are very,
very strong ally, that when they understand that it\'s to their
advantage also to have a strong civil aviation they will be your best
ally on creating political will. And, no regional organization is going
to survive without that regional political will, and that\'s even more
difficult to get then a country\'s political will.

But, when you have it, you become shielded. That regional organization,
for some magical reason, becomes shielded from individual interventions
and, therefore, more credible.

So, your comments, I think, are probably on the right track, both to
ICAO and to other colleagues around the world that are striving in the
same direction as you.

Thank you.

MR. VOSS: I think we are out of time, so I\'ll give the last word to Mr.
Mushega.

MR. MUSHEGA: Thank you very much. I share the same sentiments of my
sister, Mimuna, but I want to insist on my original position. This
arrogant method cannot work, because they cannot raise strategies as
though they sentence all the children from the age of two to death, and
the actual one is skipped to Africa.

So, we should look at the point where the problem is, and you may not
blame the whole continent when or two are the cause of all these
disaster statistics. So, that\'s always according upon the international
organizations.

You mentioned area in the plane that you black list, the airlines I
think which operate poorly. The countries which are placed on the black
list are not kept separate, you can\'t keep evil and disaster secret. So
that, we don\'t \-- the good and the bad they all work together, and you
cover up evil. That\'s where I don\'t personally agree.

I see that they are bad, black list them, and punish them, and don\'t
hide it.

Secondly, in the experience I was in government, I know in one of the
civil aviation organizations where the whole system was forced to
license an aircraft that was not airworthy, and I think shortly after it
was involved in an accident. So, political pressure is stronger in weak
states.

My experience in the regulating organization, that when you handle
issues involving three, four, five countries, the chances of
transparency and accountability are enhanced, you have three serving
ministers with four serving technical people, and \-- each one does not
know the other. Their chance of signing a clean agreement are much
higher, I\'ve seen it, than when each one is seen separately. And, I
would like to appeal to the international organization, it\'s better and
whether they prefer to deal with the countries individually, than
regional organization, \-- but they also like to put pressure, when they
come to me now \-- budget \-- so they find it uneasy, how do they
squeeze you, so the \-- come better, if you don\'t do this, nobody is
separate, off to Nairobi.

Occasionally you do that, and then when things don\'t work out, you say,
Africa is failing. We need to succeed the first jump and say this is \--
so regional organizations are also a fetter, an obstacle to corruption
and they enhance transparency and accountability. I have no doubt about
it. They also need to put the needed resources, because that\'s the only
way we are going to make it.

So, I\'m appealing to you, to the World Bank, to stop this habit of
supporting the regional organizations in meetings like these, even
though they have grown; you are flitting from one country to another,
imposing separate conditions that undermine what you had agreed on
originally.

So, \-- Mimuna, I share your concerns, but it is collective good to
solve the problem, so where the problem is, if it is continental, yes,
we do continental. If it is country X, Y, Z, we deal with it, and do
have a system of black listing the countries that are dealing with their
people through licensing \-- because if you are dealing with marijuana
you are threatening with, what is the difference between being killed by
drugs and being in a plane that is destroyed. Actually, the other one is
worse, because it is involuntary, it is involuntary, so this is serving
the ministers, and serving Director General, should black list them and
stop them from troubling around the world, as you have done with some
countries.

That is my appeal to the international organizations. I thank you.

MR. VOSS: Well, thank you. I think we are going to have one heck of a
meeting coming up here in Montreal, and I\'ve got to say, I\'m proud to
go back to do my job.

So, thank you for that.

And, back to our host.

MR.BOGOSIAN: I would like to thank all of you for participating, for
your questions, for your comments, and maybe a round of applause for
this wonderful panel.

(Applause.)

MR.BOGOSIAN: I strongly encourage you, I strongly recommend, before you
go to your room when you leave here, just one floor up, until 6:00,
there are demonstrations of RNAV, RNP in Jeffersonian Salons III, IV, V,
and a demonstration of ADS-B in Jeffersonian Salon VI. It is a wonderful
exhibition of future technology of things that are coming into play
today to improve air traffic management tomorrow.

(Whereupon, the above-entitled matter was concluded at 4:35 p.m.)