FEDERAL AVIATION ADMINISTRATION

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3RD ANNUAL FAA INTERNATIONAL AVIATION

SAFETY FORUM

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BREAKOUT SESSION D:

AIR TRAFFIC CONTROL SERVICES

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THURSDAY

NOVEMBER 2, 2006

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CHANTILLY, VIRGINIA

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The session convened at 2:30 p.m. in room

Grand Dominion VI of the Westfields Marriott, 14750

Conference Center Drive, Chantilly, Virginia, Kevin

Hilliard of Global Aerospace, Inc., moderating.

Panelists:

RUSSELL G. CHEW Federal Aviation Administration

VICTOR M. AGUADO EUROCONTROL

WRENELLE D. STANDER ATNSC, South Africa

KATHY FOX NAV CANADA

TONY FERRANTE Federal Aviation Administration

A G E N D A

Opening ‑ Ms. Grace Smith . . . . . . . . . . . . .3

Introductions ‑ Mr. Kevin Hilliard. . . . . . . . .3

Mr. Russell Chew. . . . . . . . . . . . . . .4

Mr. Victor Aguado . . . . . . . . . . . . . .7

Ms. Wrenelle Stander. . . . . . . . . . . . 10

Ms. Kathy Fox . . . . . . . . . . . . . . . 11

Mr. Tony Ferrante . . . . . . . . . . . . . 12

Panel Discussion. . . . . . . . . . . . . . . . . 17

Closing ‑ Mr. Kevin Hilliard. . . . . . . . . . . 89

P‑R‑O‑C‑E‑E‑D‑I‑N‑G‑S

2:38 p.m.

MS. GRACE SMITH: Good afternoon. I\'m Patty Grace Smith, FAA Associate
Administrator for Commercial Space Transportation and I have the honor
of kicking off this panel on Air Traffic Control Services.

What is the role of safety certification and regulation in the
development of a privatized ATC services industry?

Well, what is the role? This is an excellent question especially now
with the movement around the world towards privatization of air traffic
control services.

What a timely discussion and one that promises to be an informative and
provocative session. We hope that we\'ll get lots of questions after the
panel is finished.

With that challenge, I\'ll turn the panel over to our distinguished
panel and our monitor Kevin Hilliard, Executive Vice President, Director
of Claims for Global Aerospace.

Kevin.

MODERATOR HILLIARD: Thank you very much and good afternoon everyone.

As Patricia said, we\'ve got an interesting panel here today. We\'ve got
experts from Canada, South Africa, Belgium and the United States to
discuss the issues.

My name is Kevin Hilliard as Patricia said and I\'m with Global
Aerospace which is a large aviation insurance company. We do exclusively
aviation risks, airlines, manufacturers and general aviation as well as
some air traffic control facilities around the world.

I run the claims department. If you buy a policy, I\'m the last guy you
want to see, but my experience in terms of the air traffic control
situation or circumstances are somewhat limited because I have been in
the industry for about 35 years or so. When I was in the Air Force, I
was a user then. Now, I\'m in the passenger seat. So, I don\'t get to
hear the conversations very much. But, I\'ve studied up a little bit for
this.

And to my right we\'ve got Russ Chew, Victor Aguado, Wrenelle Stander,
Kathy Fox and Tony Ferrante and I\'m just going to have them introduce
themselves briefly and we\'ll start with Russ.

MR. CHEW: My name is Russ Chew. I\'m the Chief Operating Office for the
Air Traffic Organization.

And about a little under three years ago, we reorganized the FAA\'s air
traffic part to be \"a performance‑based organization.\" Now, what that
means is we split the service side of the FAA in terms of air traffic
control from the safety side. Not that we don\'t provide a safety
service because that\'s the very definition of the service we provide,
but we look at ourselves as a service primarily. As a safety service
providing services to customers who actually want to use the airspace
and want a service that keeps their airplanes from conflicting with each
other.

Now, when you do that, you start setting your goals around safety ‑‑ any
kind of safety or service organization, you have to have oversight. So,
one of the more important parts of the way we\'re structured is that the
safety oversight piece actually moved over to the other part of the FAA
who\'s in charge of regulating safety. Namely, what we call AVS or
aviation safety.

Under aviation safety, my colleague over there, Tony Ferrante, who leads
that ‑‑ who heads that organization is responsible to make ‑‑ for
insuring that I am operating a safe air traffic service and when I say
safe, there\'s a target level of safety that the FAA uses to evaluate
whether or not the services ‑‑ whether they\'re provided by the Air
Traffic Service System or even the airlines in it are operating at the
right level of safety and that part of the FAA oversees the level of
safety I provide inside the service which, of course, goes to all of the
safety management systems and reporting and documentation that goes with
it.

So, the Air Traffic Organization also has its own safety organization
which is an internal audit organization which responds to the FAA
external or the FAA independent audit system for safety that occurs
under Tony down at the end of the table.

It sets up an interesting paradigm. It is not ‑‑ it\'s still within the
FAA. That is, the arbitrator of that ultimately rests with the
Administrator who really is the ‑‑ over both the aviation safety and the
Air Traffic Organization and although there are other organizations that
have split that further, it actually functions so far very well. Because
we don\'t always get along with our oversight person there, but we are
all interested in the safety aspects of what we do and I think that
actually works here with the independence we have.

MODERATOR HILLIARD: Victor, perhaps you could just give yourself a brief
introduction in terms of background and maybe run that down the length
of the table before you go into your organization.

MR. AGUADO: Okay. Thank you. Victor Aguado, Director General,
EUROCONTROL.

As a matter of fact, EUROCONTROL was created more or less at the same
time as the FAA after some safety problem in the sky between civil and
military traffic and some accidents that happened, and they learned that
it was President Eisenhower that launched at the point of time the ADF
here in this FAA.

More or less at the same time in Europe, this creation of EUROCONTROL
was launched and in 1960, the Convention of EUROCONTROL was signed by
six states. There was Germany, UK and France. Six states that they have
been extended to 37 states today in Europe.

And while in 1960, the idea was to have one European sky with one
service provider, this has evolved with the time and so, it\'s having a
uniform ATM system in Europe that is safe enough for traffic to be
conducted.

Let me tell you that this idea of ‑‑ you asked about privatization and
it has to be clear that we have to understand the same things about
privatization. For us when we ‑‑ when speak about privatization, is to
have a de facto running in the organization. So, it\'s to sell the
operations to investors. While probably most of the times we speak about
commercialization or corporatization. It is a kind of a separation of
operations from the government in itself.

The idea of commercialization in Europe was initiated in the late \'80s
and as a matter of fact, this separation that Russ was speaking about
the ones that conduct the operations or the services and the ones that
they do the oversight, this separation was already enshrined in the
EUROCONTROL Convention signed in 1987.

It was in the year 2004 when they conceived the open sky regulations,
they were approved, is when it is not a matter only for EUROCONTROL as
an organization to have a separated approach to this. It is for the
states themselves in the European Union to separate it. So, a
requirement to have a separated function from what is service provision
and what is regulation oversight. Indeed this separation can be done in
many ways and many formats that I ‑‑ if I have the time I will go
through it and relate them.

But, indeed, this is enshrined in the European Union legislation already
approved in the year 2004 although the ideas, they come from late \'80s
and today, out of 37 states in the EUROCONTROL membership, there are
only probably three that they don\'t have this commercialized approach
to air traffic operations.

Thank you.

MODERATOR HILLIARD: I have two very modest men here. They don\'t want to
tell us about themselves. Maybe I want to start over here again and let
Russ give a little bit of background.

MR. CHEW: You want the background.

MODERATOR HILLIARD: I want a little background.

MR. CREW: Not our organization.

MODERATOR HILLIARD: You first.

MR. CHEW: Oh, okay.

MODERATOR HILLIARD: I\'ll get that organization after that.

MR. CHEW: My background, of course, I was here to start the Air Traffic
Organization the last three years. Prior to that, I spent 18 years at
American Airlines. Everything from technical operations, regulatory
affairs and things like that up to system operations controller. I
managed the daily operation for the airline.

Prior to that, actually civilian background, grew up in civil aviation
not military aviation where I earned my pilot\'s license and ratings and
things. Actually, hired by American Airlines initially as a pilot and
ultimately went up through management.

MODERATOR HILLIARD: Victor.

MR. AGUADO: Yes, I am an aeronautical engineer as a background and also
a Master\'s in Science in the Management of Technology. A financial
management background also. I\'ve working in the Department of Transport
in Spain and in Department of Defense. I run as the Chief Executive
Officer a consulting company. I\'ve been the President of the Air
Navigation Commission in ICAO and I\'ve been Director of the EUROCONTROL
since first of January 2001.

MODERATOR HILLIARD: Thank you. Wrenelle.

MS. STANDER: Yes, my name is Wrenelle Stander and I\'m the Chief
Executive Officer of the Air Traffic and Navigation Services Company.
I\'ve been there for the last 18 months and it forms part of about ten
years of experience in the aviation sector. I\'ve served in the
Department of Transport of South Africa as well as the South African
Civil Aviation Authority.

I have a BA degree via honors degree from the University of Capetown and
a Master\'s degree from Oxford‑Brooks University in the United Kingdom.

Prior to the being in the aviation industry, I served in the energy
sector.

So, I think my sort of broad‑base of experience.

MODERATOR HILLIARD: Kathy.

MS. FOX: Thank you. My name is Kathy Fox and I\'m the Vice President of
Operations for NAV CANADA which means I\'m responsible for the
day‑to‑day provision of their navigation services in Canada.

I started my career in 1974 as an air traffic controller and was a
controller in a number of control towers in the province of Quebec
culminating in ‑‑ as a controller at the Dorval now currently at Trudeau
Airport in Montreal and then worked as an IFR controller in Montreal
Area Control Center.

I had a ‑‑ and then worked up through various management positions
within Air Traffic Services.

I worked for TRANSPORT CANADA until November 1, 1996, ten years ago
yesterday, when I was one of 6,000 civil servants transferred to NAV
CANADA and we\'ll talk more about that later.

But, I\'ve also had a parallel career as a pilot. In fact, I wanted to
be a pilot first, but couldn\'t afford it. So, I thought if I can\'t be
a pilot, I\'ll be an air traffic controller and tell pilots where to go.

But, I did become a pilot and I do hold a valid air transport rating and
still fly commercially as a flight instructor and pilot test examiner.

MODERATOR HILLIARD: Tony.

MR. FERRANTE: Hi. Good afternoon. I\'m Tony Ferrante and I want to thank
Russ for the introduction there because I kind of see myself many times
as Russ\' best friend as he tries to modernize our air traffic system
and get all the benefits and the moves we can in order to facilitate
further growth while I\'m there reminding him that we have to make sure
we do this safely at the same time.

My background is in air traffic. In fact, I started in 1976 with the Air
Force and joined the FAA in 1982 and worked in a variety of facilities
as well.

I made the switch into headquarters about 12 years ago starting out in
the procedures field incidentally in another organization called the ATO
that sort of went away in the late 1990s, but by then I had made the
switch into safety and once I was there, I was hooked.

In fact, I worked for Russ Chew when he first started the Air Traffic
Organization in the safety field there and as we started the Air Traffic
Safety Oversight Service, I moved into that arena where I am now.

MODERATOR HILLIARD: Thank you, everyone. Now, when I got the assignment
to participate and I saw that it had to do with privatization, I
naturally thought that this was something that has to do with Wall
Street investors and putting money into a venture that\'s going to reap
a lot of reward for them and in getting together with these folks here,
they put me on a different path of thinking and that\'s why we wanted to
have them explain their model a little bit and Russ and Victor have
explained a little bit what their organizations are like and so, I\'d
just like Wrenelle and Kathy to do that same.

MS. STANDER: Thank you very much, Kevin.

I think maybe before starting to talk about ATNS I should just
contextualize the transformation of organizations in South Africa.

Over the last ten years, the Air Traffic and Navigation Service\'s
Company was established as a commercial entity. The South African Civil
Aviation Organization was also commercialized believe it or not and in
fact, it operates on a user pays principle.

Our Air Force Company was initially commercialized and then, in fact,
privatized, but the government has since ‑‑ oh, not the government. The
Italians have since sold their shares to another shareholder. So, we do
have a partially privatized Air Force Company.

ATNS has been as I\'ve indicated commercialized for the last 13 years.
We all run on commercial principles with professional managers. Apart
from the safety regulator which oversees our safety performance, we also
have an economic regulator which grants us permission to either increase
or decrease our tariffs. They also have jurisdiction over the extent to
which we can terminate a service at any of the airports where we provide
services. We also ‑‑ our finances are from government and we are able to
raise capital on the private market.

Currently, the regulator is not comfortable with more than a 50 percent
gearing and then within South Africa I think which is very unusual and I
think it\'s going to be challenge going forward I think for the FAA, but
in South Africa, the user pays principle is firmly entrenched. So, users
pay for absolutely everything.

The only part of our industry where there is some kind of subsidization
is in the area of general aviation. Obviously, internally within our own
system, we have three airports which are profitable. The rest are, in
fact, cross‑subsidized. So, there is some kind of cross‑subsidization
within the system.

And I then I think obviously we\'ll get onto all of the other issues,
but apart from I think the one challenge that we certainly face in South
Africa is that the safety regulator was established sometime after the
service providers and I think probably it may be similar, I\'m not sure,
but we certainly find that our safety regulator is challenged in terms
of overseeing us to the extent that they would like to.

But, I will certainly comment on our safety performance going forward.

MODERATOR HILLIARD: Kathy.

MS. FOX: Thank you. NAV CANADA is a fully privatized non-share capital
corporation which owns, manages and operates the Canadian Civil Air
Navigation System since November 1, 1996. NAV CANADA purchased the
assets of the Air Navigation System for the cost of one and a half
billion Canadian dollars in 1996.

The important thing to note about NAV CANADA is we are a non‑share
capital corporation. There are no shareholders. There is no equity.
Nobody owns NAV CANADA.

Nor are we a government agency or in anyway related to government.

We have a stakeholder board of directors. Four directors appointed by
commercial aviation. One director appointed by general aviation. Two
directors appointed by the employee unions. Three directors by
government. Four independent directors and then they appoint the 15th
member of the board who is the president and chief executive officer and
who\'s a different person than the chairman.

So, it is a stakeholder board representing all of the constituent
stakeholders interested in the Air Navigation System, but with a balance
so that no one party has a preponderance of votes.

We provide air traffic control services. We provide flight information
services, aviation weather services, aeronautical information services
as well as owning and operating all of the navigation aids. We\'re the
second largest air navigation service provider in the world after the
United States operating 11 million movements per year. About seven
million of that is IFR.

We recover all of our costs from our customers who pay a variety of fees
primarily terminal, en route, oceanic or telecommunication\'s fees. The
en route fees are derived based on ICAO standards as a function of
weight and distance flown in the system.

We operate on a not‑for‑profit basis, but we must recover all of our
operating costs including depreciation and financing costs.

We are regulated by TRANSPORT CANADA. TRANSPORT CANADA regulates us for
our safety performance only. It provides safety oversight and there are
regulations which did not exist prior to privatization which govern the
Air Navigation System in Canada.

So, that in a nutshell is our model.

MODERATOR HILLIARD: Thank you, Kathy.

I wanted to mention to anybody, too, that ‑‑ everyone that if you have
any questions or comments, feel free to participate in the discussion.
If somebody says something that is ‑‑ that you\'d like to challenged,
think is wrong, please do so.

I also would suggest to anybody out there who is a user of air traffic
control services, if you have any complaints, let\'s hear them, too.
Because maybe that would give us some idea of some of the issues that
come up that would enable us to view them from a safety as well as a
customer service perspective.

And at this point though, I would like to ask Wrenelle that since South
Africa has gone to this model and is no longer a government agency, have
you experienced any differences with regard to safety? Are you as safe
as you were originally? Are you safer? What is your perspective on that?

MS. STANDER: Kevin, I\'d like to ‑‑ you know, I\'d like to believe that
we are a lot of safer. I think that commercialization for South Africa
has enabled us to, in fact, invest in safety.

After 1994, I think most people would know that our traffic ballooned
and because of commercialization, we were able to respond to traffic
growth of 160 percent over a period of time of course.

Within out context, as the executive management of ATNS, safety is not
negotiable and so, apart from looking at with all the intensively
focusing on the safety ratio which is the number of incidents in 100,000
movements, we are certainly more interested in looking at safety in a
very much holistic approach and that starts with our board of directors
who have, in fact, insisted that the first strategic imperative is about
safety: the continuous improvement of our safety performance. That is
our first objective and I\'m quite confident now that after spending 18
months going around the country if you asked any ATNSer they\'d be able
to tell you what the first strategic imperative is and hopefully the
other four as well.

So, apart from that commitment right from the top, as an organization,
we have also established more recently a safety management system. We
have a very mature ISO system, a quality system which we ‑‑ which we
oversee.

More recently, we had also put in place a risk management committee
which is really the executive committee chaired by myself. We raise
issues of risk and also the mitigating the circumstances or the
mitigating actions.

We have also ‑‑ I mentioned earlier that because of the challenge that
we have with the safety authority being able to oversee us to the extent
that they would like, we have done the very responsible thing and, in
fact, we have established within ATNS a safety oversight function and,
in fact, we have expanded that more recently to look at not only ATM,
but also CNS.

So, I think that, you know, from where we\'re sitting the ‑‑ our target
for the safety ratio is 2.5 incidents per 100,000 movements. The global
target.

We\'re not quite there, but we\'re very close and, in fact, it is
monitored by our board on a quarterly basis.

So, you know, safety for us is about having the right number of people.
It\'s about having the right equipment. It\'s about a ‑‑ so, it\'s a
very holistic approach to safety.

Over the last ten years, we\'ve been able to completely renew the entire
air navigation system within the country. Right now, we\'re obviously
looking at expanding capacity and ‑‑ and that is ‑‑ and obviously
introducing new technology. So, that is the focus going forward.

But, all of that I can honestly say has been the result of
commercialization and, of course, a commitment from management.

MODERATOR HILLIARD: I think I\'d like to ask Tony a question. To comment
on something there because I think I would agree philosophically that
safety is not negotiable. But, is that a reality?

MR. FERRANTE: Yes and no if you want the straight answer. Safety, of
course, has to be our first consideration and our first priority, but
you also have to weigh the benefits of what we\'re changing and what
we\'re trying to accomplish against the greater good.

And so, look at some of the examples that you have around the system. We
know that there are some ways that we can prevent runway incursions, but
some of the mitigations to that may actually cause the system to be less
safe. So, you have to look at both the pros and the cons or weigh the
benefits of that and make the best decision in the basis of overall
safety.

MODERATOR HILLIARD: Kathy, maybe you could give us a little insight as
to the changes from the government agency to NAV CANADA and I was just
wondering, too, as part of your answer if you could tell us whether you
measure yourself in the same fashion that you did at the time you were
government agencies. Are your definitions of incidents the same or have
they changed?

MS. FOX: Okay. Let me start by saying that our mission is to facilitate
the safe movement of aircraft efficiently and cost effectively on a
long‑term sustainable basis. So, as with the other service providers,
safety is our top priority.

One of the things that in my mind privatization has done to improve the
safety of the system is by the separation of the regulatory role from
the service provision role which removed the fundamental structural
conflict of interest that existed prior to the privatization of the Air
Navigation System, and I say that as a proud federal civil servant for
22 years. The fact is we were regulator and service provider and with
the creation of NAV CANADA, new regulations were put into effect and
there was this separation of regulator from service provider.

There is far more safety oversight in the system than there was 10 years
ago. Not only do we have TRANSPORT CANADA as the safety regulator, we
have the Transportation Safety Board in Canada that monitors
performance, that investigates incidents and accidents and points out
potential safety deficiencies.

Internal to NAV CANADA, we have our board of directors. We have a safety
committee of the board that monitors safety performance and the
management ‑‑ effective management of safety. We have an office of
safety and quality with a vice president who reports directly to the
chief executive officer and who is responsible for internal safety
oversight of our performance. So, there is far more safety oversight
than there was ten years ago.

We\'ve also incorporated a safety management system which you hear a lot
about throughout this conference. Because it really is an integrated
approach to managing safety that recognizes as Wrenelle said that it\'s
not a simplistic approach to safety management. It really is how
everything from corporate policies and governance to financial policies
to HR policies to operational procedures, technology training, how all
of that fits together to insure safety management.

Yes, we do measure our safety performance and there are some measures
that are fairly common. Unfortunately, they\'re not necessarily
comparable from one service provider to another.

Our definition of an incident, we call it an operating irregularity, is
one of the broadest that we\'re aware of of any other service provider,
and that is a situation where air traffic services are being provided
and less than minimum separation existed or safety may have been
jeopardized or both.

So, yes, we measure incidents where separation was actually lost. I\'m
talking about the airspace to be protected around two IFR aircraft. We
measure those, but we also report and investigate and measure those
incidents where an error may have occurred on the part of the air
traffic controller even though it didn\'t actually result in
jeopardizing safety or in losing separation.

The challenge we have as an industry because we do have different
definitions around the world is to how do we compare ourselves? How do
we benchmark ourselves and organizations like CANSO the civil ATNS
organization as well as the individual service providers are working
hard to come up with some common definitions so that we can benchmark
ourselves.

MODERATOR HILLIARD: Anybody else like to comment on some of the ‑‑

MR. FERRANTE: I think what Kathy said is really a good way to look at
that because that really ties it back into a safety management system.
Because she measures not only the actual loss or separation which is the
last link in the chain that has now been formed, but when you look at
all the precursors to that and try to identify what happened, what led
up to that and seek the corrective actions before the incident has to be
reported. It\'s like the big triangle. If you look at the top of the
triangle being he reported events and as the triangle widens out at the
bottom, all the other events that take place that didn\'t result in a
reportable incident, but yet have the information that you can use to
prevent that reportable incident from ever occurring.

MODERATOR HILLIARD: Victor.

MR. AGUADO: Yes, I think it\'s very interesting what has been said, but
at the end, once you go through the path of commercialization or
privatization, you have to have an equation that is balanced and the
equation needs to have the regulator and sometimes this is missing in
many occasions.

So, if someone wants to go through that path of separating and also to
have a commercialized operation, they have to start thinking from the
beginning that you need the regulator because it is not enough for a
company or an organization to say that they are safe. Is that the ‑‑ the
state that again has the ultimate responsibility of providing services.
They need to insure that the public that ‑‑ it is implemented and the
airspace is safe.

So, it is good for the company to have all kinds of arrangements, but it
is for the state to insure that this is in place.

So, the regulator even if it looks a little bit bureaucratic, it is
necessary to balance the question and as we know even from our
experience in Europe, it is probably the weak link in the process. While
you can have a service provider that is very efficient and also has very
high rate of let\'s say safety, the resources allocated through the
regulatory process, they\'re not to the standard.

So, this question as I mentioned before needs to be balanced from the
beginning.

MODERATOR HILLIARD: Of course, you as a service provider want to please
your customers, get the job done, get the traffic on the ground and, of
course, that creates tensions perhaps sometimes as to what you can and
can\'t do safely and maybe that\'s something that is between Russ and
Tony. You could maybe give us some idea of when those tensions arise.

MR. CHEW: Well, I mean the customers want me to get them on the ground,
but they want ‑‑

MODERATOR HILLIARD: Right.

MR. CHEW: ‑‑ me to get them on the ground without hitting another
airplane.

MODERATOR HILLIARD: Right.

MR. CHEW: Right. So, in a sense, I came from the airline business
before. It\'s different. Right. Because in the airline business, I was
to get a passenger from A to B and there\'s a lot of things that affect
the safety of an airplane, but ultimately, if you didn\'t get the
passenger from A to B, you didn\'t provide a service.

In the job I\'m in now, I\'m still providing a service, but it\'s a
safety service. If, in fact, two airplanes collide with each other, I
didn\'t even provide the basic level of service. So, it\'s a risk‑ based
system.

So, it\'s much easier for me to provide this service. I\'m not
interested in doing things that would degrade the level of my service.
To the extent it makes it inconvenient for my customers, the job is to
try to reduce or minimize that inconvenience to the customer.

That\'s when you run into the safety metrics because the reality is the
safety metrics of today are sort of driven by the old arcane standards
with which we measure them. Right.

So, in the en route environment, we say that airplanes get within five
miles of each is a loss of separation. Now, if those airplanes have a
loss, they\'re four and a half miles apart, but they\'re heading in
opposite directions, they\'re never going to hit each other and yet,
that counts as an error.

On the other hand, if they\'re heading right for each other, that\'s not
a lot of time.

So, we haven\'t caught up with the way of measuring what really we\'re
trying to measure which is the risk of two airplanes that might collide
with each other. Instead, we\'re still measuring how close they were and
that\'s not the right way to measure. Nevertheless, that\'s what we have
and unfortunately, most of the conflict I see is about that. The
regulation says five miles, but they weren\'t going to hit each other
anyway. So, then I\'ll go and argue with Tony that said it wasn\'t
unsafe, but you broke the regulation. But, it wasn\'t unsafe and that\'s
the core of where we need to go next. All right.

How are we going to measure safety? Because if you have a safety
regulated oversight role, you got to look at data. Without data, it\'s
just my word against your word whether it was safe or not and the data
today doesn\'t provide you enough details, you have to dig down to each
one, to tell you whether or not it was more risky or less risky and
whether or not the risk that was incurred was at or above whatever that
minimum level of risk that the traveling public deserves.

So, I think that\'s the only reason we see these conflicts today.

MR. FERRANTE: Russ, I think we can focus on that by looking at the
events that occur and actually measure those events that have four and a
half miles as yes, it\'s a violation of our standards. Yes, it must be
reported and it must be looked at, but it doesn\'t have to be looked at
in the same way and ‑‑ those two that are opposite direction that we end
up with 1.5 miles which obviously much riskier event.

But, at the same time that we do that, we need to look at all of the
factors that we can identify in those events to determine what caused it
to happen in the first place and how we can prevent that. Because if we
can start to prevent the ones on the outside, we\'ll eventually get
those ones that are on the inside of that safety bubble to be on the
outside of it as well.

MR. CHEW: I would agree.

MODERATOR HILLIARD: Well, what things have to be done in order ‑‑ go
ahead. Have a question over here.

SPEAKER: I\'m just wondering whether we should still be thinking in
terms of five miles. As we move into RNP, as we move into better
navigation, five miles seems extraordinarily large separation.

And there\'s almost the feeling which I sense that we shouldn\'t go
below five miles unless we\'re ‑‑ we\'ve received some heavenly guidance
to do so.

We\'re moving towards that surely quicker than most people expect.

MR. FERRANTE: I think I could offer you two schools of thought on that.
The first one is many people will tell you that the five‑mile standard
was developed when the DC‑6 was the fastest moving airplane in the
fleet. Right.

So, we\'ve made quantum leaps in technology and in speeds of aircraft.
So, is five miles still the right number? Should the number be larger?
We need the data that says what we need to focus on.

So, where we look at today is we look at five miles is that standard and
we need to focus on a violation of that standard as what we have to ‑‑
we currently look to seek ways on how to mitigate that. Yet, at the same
time that we\'re doing that, we also have to have an eye on that future
technology, the RNAV, the GPS and the much more precise ways of
measuring the distance between the aircraft as well as the required
navigation performance of the aircraft and I think we\'ll find ways to
bring those levels down.

SPEAKER: Are those now on their way?

MR. FERRANTE: One of the areas that the focus is on the next generation
air transportation system, we\'ve touched briefly on and there\'s
probably an exhibit on it. What we refer to now as NextGen, looks at
those aircraft that will actually self‑separate from other aircraft and,
you know, the air traffic system of the future may be looking at a big
bubble that we\'re separating from another bubble and within that bubble
are a number of aircraft with these high‑tech navigation systems that
are able to self‑separate.

SPEAKER: Yes, I appreciate that, but is anyone right now looking at the
typical way the traffic is being separated or is separating itself and I
don\'t mean that in self‑separation, but is, in fact, remaining on a
track or staying very closely to the desired track. Is anyone doing any
sort of analysis like that? Say we find that airplanes are 1.75 miles
plus or minus tracks at 95 percent of occasions. Is anyone doing that?

MS. FOX: We\'ve made progress in the last few years. If you look at
reduced vertical separation minima, it used to be that you had to
separate two aircraft vertically by 2,000 feet at flight level 290 and
above and in 1997, we went to 1,000 feet vertical over the North
Atlantic and since then, it\'s expanded to Europe, to North and South
America and other parts of the world where we\'re only using a thousand
feet because of improvements in technology and altimetry and so on.

So, we have made improvements and that has increased the capacity based
on technology, but I agree with Tony that we really have to look at all
of the assumptions surrounding some of those basic separation standards.
Because we\'re talking five miles. In a terminal environment, it\'s
three miles.

Right now in Northern Canada, it\'s ten minutes between two aircraft one
following the other. Well, at those speeds, it\'s 80 miles, but with the
implementation of things like automatic dependant surveillance, we\'re
going to be able to reduce that down to five miles. Well, that\'s a huge
gain in efficiency and capacity even if five miles seems like a long
distance apart.

MR. CHEW: Now, we are stuck with our old models. Okay. And I mean just
think about the latest air traffic management accident that we had in
Brazil. Two airplanes on the same route. Highly accurate navigation
systems collide.

Why are they on routes in the first place? Routes were developed so we
would prevent aircraft collisions. Right. And it\'s against the old
model that the old aircraft navigation systems were not that accurate.
So, we would ‑‑ and we couldn\'t just have them wandering all over the
place. So, we had to actually predict where they might be. So, we\'d
establish routes and paper strips to tell us where they were and about
what time. Have them position report so that we can hear where they are
and say hey, you better slow down. You better speed up.

We\'re in a whole different era, but we have the same rules. We still
have routes and what it says is geez, if we have all the airplanes with
advanced navigation systems, which is not the case today, but if they
were all that way, then it doesn\'t make sense to have ten‑ mile‑wide
routes anymore and we should offset them so that they\'re going off in
different directions, but we don\'t do that today because we don\'t have
all the airplanes doing that.

So, we\'re in a period of transition which we\'re actually challenging
those models. I think every time we have an incident, we challenge the
model, but we really can\'t do anything until all the airplanes are
there because we always have to follow up with the lowest common
denominator which is problematic for moving forward.

But, it is a paradox. We\'re at sort of a paradoxical situation. We put
aircraft on exactly the same route where they can hit each other to make
sure that we have control so they don\'t hit each other.

MS. STANDER: I think if I could just also comment.

I think you\'re talking about five nautical miles separation in en
route. In our neck of the woods, it\'s still ten nautical miles
separation for en route and obviously, I have the challenge to try and
reduce that and change mind sets and then on final approach, we sit ‑‑ I
mean I sort of sit at airports and watch in amazement the way, you know,
the traffic\'s moving. Our separation\'s still five nautical miles on
final approach and obviously, part of my challenge is to get the guys
down to three nautical miles.

But, I think what might be different in our context is that we still
have to provide services for both your conventional aircraft as well as
your more modern aircraft and so, it\'s that constant need to mix the
different types of technologies and certainly in order to encourage our
customers or clients to, you know, upgrade, we also obviously offer RNAV
routing for equipped aircraft, et cetera, et cetera.

So, I think it\'s, you know, so ‑‑ five nautical miles is from ‑‑ sounds
like a good idea, but we still have some way of ‑‑

MR. AGUADO: Let me tell you that a few years ago, for example, this was
the situation in Europe. Different in the states. We\'ll have different
separation minima and this is very practical in a complex continent with
very small airspaces. The separation was different from one to the
other.

So, there has been a huge step forward in order to standardize and to
have common procedures and common practices all over the continent and
at the end, you reach yes, the limits. But, I\'m pretty sure with RNAV
and at the end with separation thinking of the next generation of
systems, we will be able to we think ‑‑ we think the way we do business
today that there\'s no question at all.

SPEAKER: I don\'t want to monopolize this, but clearly, if we\'re
talking about doubling and tripling the traffic over the next 10/15
years, you got to reduce separation. You\'ve got to do it. You can\'t
otherwise cope.

So, that\'s why I\'m puzzled that to me ‑‑

MR. FERRANTE: I think we\'re all trying to agree with you, but I think
what we\'re trying to also say is we have to do that safely. Because
there are other standards that you have to look at as well. Okay. So,
how does wake turbulence play into that. Because by and large, the fleet
has gotten bigger and heavier and generating a much more significant
wake behind it today.

So, how do we reduce the wake turbulence criteria at the same time?
What\'s the appropriate standard there?

And I\'ll tell you that in certain atmospheric conditions it doesn\'t
make sense to use five miles. You may need seven miles and in other
atmospheric conditions, three miles may be appropriate. But, we don\'t
have the technology now that tells us when we have those atmospheric
conditions were we might be able to reduce it.

So, I think there\'s a lot of investment being made around different
systems, the Europeans, the United States, but we\'re not there yet.

MODERATOR HILLIARD: But, it\'s coming rapidly at you though I think is
the point. Is it not? With the very light jets permeating the airspace
and, you know, you have to have some answers pretty quickly.

MR. FERRANTE: And that introduces another challenge yet again with the
very light jets behind some of the non‑wake category aircraft. Is five
miles the appropriate interval there?

MR. AGUADO: Could I come back to your question about the tension between
the regulator and the provider? Here we have at the table different
organizations that they are ‑‑ they say they ‑‑ they have the user pays
the cost. What about when there\'s a profit in the operations? Is the
extension going to be different or not? And that will be my question to
‑‑ for the panel and for the audience.

MS. FOX: I\'ll take that on if you\'d like.

As I indicated to you previously under NAV CANADA\'s financial model, we
charge fees to our customers sufficient to recover all of our operating
costs, financing costs and depreciation and in the early years of NAV
CANADA, we reduced the charges that the aircraft, the operators, were
paying. Now, of course, we went from a model in which the passengers
paid an air ticket tax to a model in which the operators, the owners of
aircraft paid system. So, it\'s not ‑‑ it\'s difficult sometimes to
compare, but the bottom line is when we instituted our fees fully in
1999, we reduced our fees by about 10 percent until 2001 and during that
period because of growth, we actually over‑ collected. We recovered more
money than it cost us to operate the system.

So, NAV CANADA maintains a rate stabilization account which is another
term for what would be a rainy‑day fund to mitigate against downturns in
traffic. Because the thing you don\'t want to do is be increasing your
fees in a time of downturn if you can avoid it. So, we established a
rate stabilization account, essentially a reserve, to cover off and
mitigate against those situations where traffic might decrease.

And in 2001, that was at \$75 million and fortunately, it was there.
Because in the immediate aftermath of the tragic events of September 11,
2001, we experienced a 10 percent decrease in traffic and associated
revenues and were able to draw on that account and thereby not avoid a
rate increase but certainly mitigate the effect of a rate increase.

So, the way we deal with situations where we may collect more than it
costs us to provide service in a given year, it we maintain that rate
stabilization account in an amount approved by the board of directors
and we reduce our fees. So, next year, people benefit from that through
reduced fees and, in fact, we have just announced a 1.8 percent
reduction in our fees effective September 1st, 2006.

So, our motive is not profit. It\'s to break even, but it\'s important
and we look at it from two perspectives.

Obviously, our customers like to keep what they pay us to a reasonably
low level, but we have to invest enough in the system to make sure that
we\'re providing the efficiencies that the customers need to operate.
Because if we are inefficient in the way we ‑‑ we operate, they will pay
more in fuel cost. If there are delays in the system, that has
tremendous impact in the terms of missed connections and so on and so
forth.

So, it really is a balance between keeping your fees at a level that are
reasonable and keeping your fees and your investment in the system at a
level that\'s going to improve the efficiency and the capacity which is
what we\'ve been focusing on for the last ten years.

MODERATOR HILLIARD: The motives are not profit. I think everybody says
to my right and I would ask the question though, airlines operate for
profit and they are regulated and they have to comply. What is exactly
the difference, you know, between an airline and say an air traffic
control system if, in fact, the motive for some company to come in and
say I can manage your air traffic control system at such and such a
price which seems very attractive and the reason they\'re doing it is
because they want to make money?

MS. STANDER: I think ‑‑ personally, I think, you know, to ‑‑ and I have
never operated an airlines so I don\'t know, but I think in order to
start ‑‑ the sort of start‑up costs are a lot lower. Because you can
actually lease an aircraft and you can ‑‑ you can bring in, you know,
staff under contract, et cetera.

But, if you\'re wanting to provide a radar service in a big piece of
airspace, there\'s a lot of investment that goes into that. So, I think
it\'s a very different business model. You know, there\'s the airline
business and the air navigation business. I think it\'s a very different
model.

But, if I could maybe just use the opportunity to respond to the
question that Victor raised. Certainly in our context over‑recovery
causes a lot of tension with our clients and, you know, being a user
pays principle organization obviously reinforces the client as the major
partner not the government anymore. So, your major partners are the
airlines and as a result, they begin to ‑‑ they want to participate in
some of the business decisions.

And in our legislation, in fact, customer consultation is written into
the legislation. So, we\'re obliged to consult with the customers on new
services and tariff increases, et cetera.

We have a tariff setting process every three years and part of that
tariff processing setting process is the investment requirements of
business. The regulator sits us an ROCE. Generally, ATNS is unrecovered
or under achieved in terms of the ROCE, but our sister company which is
the APUTS Company Selectria that was over‑recovered. Causing a lot of
tension.

In our model, the way that it works is that if there\'s an over‑recovery
as we\'ve had for the last two years, we basically then offer a zero
percent tariff increase. We have been able to.

In fact, and I hope my clients are not sitting here, but we probably
could have offered an even, you know, we probably could have offered a
negative tariff increase. But, you know, we were cautious I suppose. So,
for the last two years, we\'ve gone in the zero percent tariff
increases.

In the case of the APUTS Company, the regulators actually clawed back
some of the profits. So, it\'s quite a ‑‑ but, very, very ‑‑ and I think
what Victor was saying about safety regulation in our context economic
regulation also has to be fairly rigorous.

MODERATOR HILLIARD: Question back there.

MR. FAREA: My name is Mohammed Farea. I\'m from the General Civil
Aviation Authority of, Saudi Arabia.

I hate to go back to the previous discussion on RNP, but I would like to
know from Mr. Chew what\'s the RNP applied nowadays and ATO?

MR. CHEW: Our position on RNP?

MR. FAREA: Yes.

MR. CHEW: Well, you know, we are in partnership with the regulatory side
to develop standards of RNP over the last several years. In fact, we see
this as not only an increase in safety, but an increase in the
efficiency of the system and that\'s the thing. They\'re not always in
balance. They\'re not always trade‑offs against each other.

Most of the things that we\'re looking into in Next Gen is about
increasing safety and efficiency and cost effectiveness all at the same
time. They don\'t have to be antagonists to each other.

RNP is one of those things that can do that. There are other things,
too, that we\'re looking at that can do that as well.

Nevertheless, I think it\'s always ‑‑ at any particular moment in time,
there\'s always a balance of risk and economic well‑being in that.

I think the reason non‑profit works so well is, you know, in this
business because we\'re a safety business, you always want your risk of
maintaining safety to be lower than you risk of economic failure and if
you\'re in a situation where you have really no risk of economic
failure, in cost recovery, all you have to do is focus on the safety
side.

When you\'re in the airline business, you have to focus on both at the
same time and they\'re sort of in movement at the same time and it\'s
harder. So, it\'s a lot easier to be in a not‑for‑profit or even a
government organization because you don\'t have to really measure your
risk of economic failure.

The other part is that we\'re still sort of a monopoly business. Even
though we may all be in business, you know, we don\'t overlap each
other.

So, as long as we don\'t overlap and we\'re a monopoly, it\'s very hard
for the customer\'s to accept profitability. I mean there\'s a lot of
pressure on that profitability component because your customers are, in
fact, trying to balance economic well‑being and safety well‑being all
the time.

So, I think that\'s why that model works so well. It really does. I
think profitability as ‑‑ adds ‑‑ not ‑‑ and it\'s not excessive
profitability, but some incentive to increase safety capacity,
efficiency and cost‑effectiveness at the same time is really good, but
you don\'t have to be profitable or you don\'t have to have
profitability to be incentivized to do that.

MR. MAUGO: Thank you, Mr. Moderator. My name is Mtesigwa Maugo. I come
from Tanzania Civil Aviation Authority. It is also responsible for
providing both as a regulator and the provide air navigation services
and the responsibility of regulating the air navigation is ‑‑ falls upon
my responsibility.

Now, I would like from the panelists I can see two models of structure
which are currently reflected in the world. One is that the service
provider is completely out of the regulator and the regulator is
independently regulating the service provider. The other model is that
we have the regulator and the service provider in the same organization,
but trying somehow now to separate the two function.

I would like to from the experience of the panelists to see what are the
challenges in the two systems and which one actually probably would be
working best in the sense as NAV CANADA did say removing the conflict of
interest. So, which one works best?

And according to the discussion I suppose also to say who will be
providing that certification? If we do the same organization now, we are
talking about the Director General probably of Civil Aviation who is
responsible for providing the service and also regulating.

It is all kind certifying ourselves or whatever. Who is responsible to
provide that certification?

MR. AGUADO: Can I start?

MODERATOR HILLIARD: Please.

MR. AGUADO: Okay. As I mentioned at the beginning, in the case of Europe
as a whole, basic requirement for the separation of the regulator and
the service provider and this requirement is enshrined in European Union
law. The issue is how this separation and what type of separation is to
be implemented and here comes the different models.

But, the concept of separation is already there and it is already there
because we believe that it is the right way to proceed in order for
address all the questions that already were addressed during our
interventions. Is that separation is a must.

How you do the separation it is the question and to answer your question
also is that normally while you are able to separate your service
provider, let\'s say easily, the difficulty is to retain the regulatory
side with the dimension capability experience. That it is a balance to
the operation of the service provider as a whole. Because at the end, as
I mentioned, the state retains the responsibility to insure the public
at large that the system not only is sufficient, but it is safe.

MS. FOX: I\'ll jump in if you like. I\'m not going to compare if it\'s
better. I can only tell you what works in the Canadian context.

And that is that TRANSPORT CANADA regulates us in the same way it
regulates airlines maintenance operations. We have an operating
certificate. We\'re subject to audits and inspections.

TRANSPORT CANADA doesn\'t have to ‑‑ it looks at us from a safety
perspective, but doesn\'t have to look at us from a perspective of
service or regional economic development or other considerations that
sometimes drive decision making.

As an independent private company, we have access to capital markets.
We\'ve made over a billion dollars of investments in technology. We\'ve
increased our operational controllers by 250. All of that in the context
of a stakeholder board and governance.

We\'re not subject to political interference. We\'re not subject to the
fiscal policies of the day. There\'s a clear distinction between the
operation of the system and the safety oversight of the system and I
think our results over ten years where we\'ve improved safety, reduce
delays, improved service, added more operational staff even as we were
reducing our total staff complement, invested a lot in technology
training has worked for us.

MODERATOR HILLIARD: How do you go about setting your standards, Kathy?
Is it something that you might initiate and then make an application to
the regulator or is it something that you jointly work on to come to
some agreement if you can?

MS. FOX: Okay. First of all, we work under a performance‑based
regulatory scheme. So, let me give you some ‑‑ two or three key
examples.

The separation standards, we were talking about five miles, three miles,
ten miles, a thousand feet, et cetera, those separation standards which
follow ICAO standards are imbedded in the standards in the regulations
which are established by TRANSPORT CANADA.

So, we cannot arbitrarily establish a new separation standard. That is
something we would discuss with the regulator and ultimately, that\'s
imbedded in the regulation.

Our levels of service whether we have to provide control services or
not, advisory services or not, we provide the same services that
TRANSPORT CANADA provided on the day of transfer. However, because the
industry is dynamic and changing, if we want to change service, so, for
example, if we find at an airport there\'s no longer a requirement for a
control service, we do a hazard identification and risk analysis. We
consult with customers and stakeholders. We make a determination that we
can redo or withdraw a service and they\'ll be no negative impact on
safety. We then present that to the regulator and the regulator has the
final say on whether we can withdraw that service, but only from a
safety perspective.

So, those are things that are imbedded in regulation, but within that
context, we have complete authority to manage the system.

We\'re required by law to report safety incidents. Not only operating
irregularities, loss of separation, but aircraft emergencies, bird
strikes. Anything that affects the system.

So, those are the things that are imbedded in the system, but as a
performance‑based regulation.

MODERATOR HILLIARD: My understanding was though that although ICAO sets
certain standards that sometimes there are differences or exceptions
that are requested and that\'s what I was wondering. Was whether you
might make that request and then you have to get your own regulator\'s
approval.

MS. FOX: Correct. If ‑‑

MODERATOR HILLIARD: Or whether you work on those jointly.

MS. FOX: ‑‑ if we want to ‑‑ and we work very closely with TRANSPORT
CANADA. We have a very good working relationship. If there\'s some
reason why we feel that CANADA should file an exception with ICAO, then
we work with the regulator, but it\'s up to the regulator to actually
file the exception. But, we work with them to establish what is the
safety case and why that\'s appropriate to do so.

MR. FERRANTE: Kevin, if I can add, I think it needs to be a
collaborative system in the development of standards. Because, for
example, we\'ve accepted the standards that have been in existence for a
number of years and we consider those the baseline. So, it would be
unfair for me to arbitrarily want to raise those standards unless I had
the data that indicated why we needed to do that.

So, I wouldn\'t go to Russ and say I want you to run seven miles because
I think it\'s better and at the same time, if Russ wanted to come to me
and say I think I can reduce my standards to three miles, I\'d ask the
same question. Show me your data. Show me how it\'s safe to do that and
we\'d entertain that.

MODERATOR HILLIARD: So, you would say that generally you can resolve
these things without ever having to exercise your authority as the
regulator and say sorry, that\'s it.

MR. FERRANTE: I\'d certainly hope we can. I ‑‑ you know, Russ at the
beginning of a presentation made a comment about our relationship in
terms of we work for the same administrator. I think Russ and I both
know that if we ever get to an impasse that has to go to the
administrator to be arbitrated, he and I probably would both be fired.

MR. CHEW: So, I just want to answer this gentleman\'s question because I
think it\'s an interesting one. Given that, you know, I\'ve only been in
the government three years and so, I was on the outside and one of the
things I wondered when I came in was would the people within the
government respond to the same kind of incentives and goal setting that
we had in the private sector because, you know, you don\'t know. It
seems like the government organization runs very differently and I have
to say that what I found is they did.

So, really, what is better in terms of separation of service? It isn\'t
what is better. It\'s how well can you set ‑‑ clearly set your goals and
measure them. That\'s what better or worse is. Right and part of that is
the management effectiveness. Part of it is the governance.

There are things in government in the governance of an agency in
government that don\'t necessarily lead to the clarity of setting of
goals or the reaching of goals and there are things in government that
add expense to reaching those goals as well.

So, to the degree that the governance adds an excessive amount of
limitations or cost, then that model isn\'t as good as one that does
less as long as you can clearly set, measure and in the organization,
everybody understands their goals.

The separation of service and safety is one of the most important and
easy to do things to set and clarify goals. Because once you say I\'m
the service, you have one set of goals and then once you say to Tony,
you\'re suppose to monitor the safety of the service, then he has a very
clear set of goals. But, when they\'re mixed up, nobody\'s quite sure
whose goals they\'re shooting for on any particular day.

Now, we\'ve separated in the FAA. We\'re still part of the government.
The question is whether the U.S. Government process of governance and
dollars and appropriations causes us to do it in a less efficient way
than the South African government or the European government or the
Canadian government and there\'s a lot of different models, but I think
we\'re all striving for the same thing. I think in the end if we could
all measures ourselves exactly the same way in terms of safety and risk,
then we would begin to understand that it costs you this many dollars or
euros for this much safety.

Because I\'ll tell you right today if I said I could make the system
twice as save, but it would cost \$33 trillion, nobody would want me to
do that.

MODERATOR HILLIARD: Well, that gets kind of back to what ‑‑ if I might
just mention that Nick Sabatini was saying this morning that only 5
percent of the data really gets to ‑‑ I guess to the decision makers or
the analysts and I was just wondering. That may be true with regard to
airlines who are separate corporations and things and they have maybe
their own particular reasons why they\'re careful with this data, but
what about with air traffic control organizations around the world? Do
they share that kind of information with, you know, greater ‑‑ to a
greater degree than 5 percent?

MR. FERRANTE: Is the question does he share it with the regulator or
does he share it among the service providers?

MODERATOR HILLIARD: Among themselves and if not, why not?

MR. AGUADO: Well, I think that in the case of ‑‑ I\'m referring also to
the European model. They are required to provide information that can be
shared with the rest of the ‑‑ of the service providers and with the
rest of the ‑‑ of the government.

The issue is if that information is enough and this is the question. Is
that enough and are we getting the right information to drive actions to
improve safety for the future? And this is a big question that we have
today regarding the just culture and the non‑blame reporting of things
like this.

So, indeed, we have information coming from each service provider and we
have information that we share with the rest and it\'s information that
most of it it is public.

But, is that enough? In order to go to the next stage of safety and this
is the issue that we have to address today.

MS. STANDER: I think if I could just add. Being a member of the
commercial air navigation, well, civil air navigation organization, we
also share data amongst the participating ASPs and obviously one of the
issues of acting with this how do we define the different metrics? You
know, definition is really, really critical.

Because I think what is important is to compare apples with apples and I
think there\'s still a long way go, but I think that we\'ve put our foot
‑‑ one foot in front of the other. We reach and at least we\'re
beginning to collect some data even if it\'s not directly comparable and
then I think the next step is obviously to agree on those definitions
and then hopefully, we can ‑‑ we can make some sense of the plan
forward, but we certainly are doing that.

MODERATOR HILLIARD: Well, what mechanisms do the air traffic control
systems of the world have for meeting together to engage in that
dialogue and to try and determine definitions and ‑‑

MS. FOX: Well, CANSO is the big one. Yes, that is certainly one that
brings the service provider today to try and standardize and as I
indicated, there is a lot of work going on within CANSO now to benchmark
on things like safety.

But, let me bring something here on this whole notion of data and again,
it just goes to show what can happen when you separate regulator from
service provider. When we were part of government, if a pilot did
something wrong, for example, didn\'t level off at an assigned altitude
or something, very often that would get worked out between the
controller and the pilot or between the shift manager and the pilot and
there was never any documentation of it. It just was resolved.

With commercialization or with privatization and with now regulations
with respect to reporting of occurrences, far more data gets reported
today than ever got reported before.

Now, if one were to look at it, I\'m not talking just about ANS or about
NAV CANADA statistics. I\'m talking about overall reporting in the
aviation system. If you were to look at the number of reports back in
1996 compared to today, you\'d see a lot more reporting. It\'s not that
the system is less. If anything, it\'s much safer. But, the fact is that
people are reporting things now that previously didn\'t get reported.
There\'s much more richness of data which can we shared with NAV CANADA,
TRANSPORT CANADA and with the users of the system to try and find
solutions to safety problems. Runway incursions is a very good example.

So, again, I think that there\'s a lot to be said for that separation
because it tends to bring to the surface more reporting at least in our
context than may have been the case before because of that blurring of
roles.

MODERATOR HILLIARD: Well, how does that get worked out these days then
in terms of, you know, people having a willingness to report information
and knowing that whether they will get in trouble or not for reporting
themselves for a violation or something?

MR. AGUADO: That is the paradox. I mean is the main issue. Well, if ‑‑ I
mean it was ‑‑

MODERATOR HILLIARD: Excuse me.

MR. AGUADO: Yes.

MODERATOR HILLIARD: Just to clarify a bit. You know, they were talking
earlier today about the fact that sometimes certain countries are
spring‑loaded to start a criminal proceeding very early and maybe that
was a reason why people wanted to be careful with their information and
I would think it\'s probably true that nobody wants to be spring‑loaded.
You want to investigate the facts and circumstances because you want to
see if somebody had an intent, a mind set or something to do something
intentionally wrong which might be criminal, you know. But, as far as
making errors go, isn\'t that something that if ‑‑ you know, I report
myself, but I\'m only going to get maybe remedial training or something
as a result as opposed to losing my job or something to that affect.

MR. AGUADO: Well, indeed, I mean the issue of just culture is a
fundamental issue and it is a culture in the corporation. Is a culture
of the organizations and it is ‑‑ at the same time, it is imbedded in
the legislative process of certain states and again, from our own
perspective, we have different situations in different European states.

What is clear is that just culture is needed in order to get that
information that will provide with the clues in order to go to the next
stage of safety. But, indeed this just culture, well, it kind of
justifies, for example, negligence or misconduct. That it is intended.
So, it has to be a clear separation, but this is a fundamental issue in
order to get information.

MR. FERRANTE: I think it ties into the conversation morning about a lot
of that data is out there and what you do with that data will indicate
the willingness of people to provide that to you.

We\'ve talked about a number of different things as far as a
performance‑based system in which we aren\'t spring‑loaded to seek that
enforcement‑type penalty because we want to get the data because from
that we can learn and from learning, we can move forward.

MR. SMOUT: Ashley Smout, Airways New Zealand.

Just to answer your question, a couple of experiences from New Zealand.
One I suppose is that we regard non‑reporting as far more serious than
the actual incident itself and through staff surveys, particularly the
first result that I look for in the staff survey is how confident I feel
as a controller or as anyone to report incidents without fear or favor
and if that metric starts to drop below a certain number or if the trend
starts to go the wrong way, you know you\'re getting into an environment
where the controllers are more concerned about the impact of any of your
disciplinary action as opposed to incident investigation. So, the staff
survey in that respect is very important.

The other point I suppose we made through experience is the importance
of separating ‑‑ in an incident separating the investigation of the
incident from any disciplinary action and we\'ve had a lot of
discussions with our union about that. I suppose based on the
Westminster principle of guilty until proven innocent. The people
involved in an incident investigation will be completely separate to
those involved in a disciplinary approach in order to insure that there
is a clear line between the two aspects of it.

I think those sort of things combined we\'ve seen in New Zealand at
least a much healthier reporting culture and I\'m pleased to say we\'ve
seen an increase in incidents because we\'re getting more reporting and
we know that, in fact, there happening and all that\'s happening now is
we\'re actually getting a reality check if you will and I think as many
of the panelist\'s have said, that\'s the best way to gather data to
prevent an incident becoming an accident.

MR. MCGRAW: Paul McGraw from the Air Transport Association.

My question for the various ANSPs and it kind of goes back to what was
questioned earlier, is there a process in place to reexamine safety
procedures and processes such as separation standards before we have all
the data, before total equipage occurs and those kinds of things? I mean
I think everyone sees the system\'s going to change and may change
dramatically in the next 15 years or so, 10/15 years, and do the various
ANSPs have processes in place to reexamine safety standards?

MS. FOX: In Canada, we have a continuous process of reviewing our
procedures. We look very carefully at what\'s happening in other
jurisdictions. Whether it\'s here in the U.S. or in Europe to adopt
international best practices in order to improve the efficiency of the
system and anytime ‑‑ and we have changed a number of our procedures
over the years to improve efficiency or to apply standards differently,
again, in collaboration with a regulator and we always do a hazard
identification and risk analysis to look at any potential hazards
associated with the change, what are the risks and can we mitigate them
to meet our objective which is to keep risk to as low a level as is
reasonably achievable. Recognizing that we won\'t ever eliminate all the
risk.

So, yes, we are doing that, but in terms of, for example, mitigating
three miles down to something less than that, there are standards now in
ICAO that allow you to go below three miles if you have a runway
occupancy time of 50 seconds or less.

Sometimes we find that we can\'t get lower standards because of aircraft
performance, pilot performance, turbulence. Those kind of things.

MR. FERRANTE: But, I guess from the regulator perspective, we are always
looking for those types of things and a recent example would be ADSB
separation is Alaska.

So, we had a system in place in which we were using ADS on a
controller\'s display using a five‑mile standard between that. Yet, at
the same time, we were using manual separation between an ADS‑generated
target and a radar‑generated target and so, we\'ve examined the data
from both of those environments and we now have a five‑mile standard
that applies to ADS to ADS or ADS to radar.

MR. CHEW: Yes, and there\'s another one. Is that ‑‑ it\'s not just the
standard itself. It\'s the behavior around the standard. So, if the bell
rings at five miles, no one\'s going to separate airplanes at five
miles. If the bell rings at a different, you know, or if we have some
variance around it that we allow.

So, one of the things we\'re doing right now is collecting data and a
lot of our approach areas where airplanes are just following each other
down a final approach and maybe the bell\'s suppose to ring at three
miles, but the reality is nobody can hold exactly three miles. So,
we\'re presenting data to Tony to say, you know, they vary a little bit
around that, but there is no risk of collision here that\'s appreciable
there. So, we need to analyze that statistically and prove that and once
we do, then we can run them at three miles instead of 3.3 miles and get
basically to the separation standard that\'s there now.

If you were to look at a route today, the problem in many cases is not
five miles. The problem is our ability to not break five miles. So,
we\'ve separated seven.

So, the first element is just how you behave around the standard. The
next one is the standard itself.

Now, globally, that is not standard. So, if you were to look at me I\'m
looking to ask my oversight ‑‑ safety oversight organization to consider
plus or minus 10 percent and if you go to the UK, it\'s plus or minus 30
percent.

Now, you know, maybe it\'s mix of traffic. We haven\'t really been able
to look at that, but the question is geez, how come they can do it
safety at 30 percent and I have to do a 10 percent? So, all those things
are ‑‑ we\'re just starting to compare that through the Civil Air
Navigation Service Provider Organization which is a good place to start
with that networking and start to look at what data others have and even
outside that organization, FAA has agreements with EUROCONTROL, with
Australia, with others so we can exchange on a personal basis when we
have data that\'s more proprietary. So, I think that\'s the starting
point.

If I were to judge where we are compared to where I was, we collected
far more safety data in the airline industry than I do as a air traffic
control provider. Mainly because we were made to by the regulator. I
mean we had to put flight data recorders that collected all the things
that the control movements made, but I don\'t have anything that says
how many times does the controller turn the rate knob or the distance
knob in a minute or something. Just don\'t have that ‑‑

MR. AGUADO: And anyway if I may, any new information that comes to the
attention of the system and new technology should be the basis of
reviewing and challenging the separation standards and this is the
issue. If you have new information or new technology, it is the time to
review and challenge the separation standards. Then you go and share
practices and analysis, but at the end, you have to reach an
international standard and this is the issue.

At the end, I think we need to go through the process to reach a new
stage of international standards, but it is only when you have new
information about your practices or a new technology to be incorporated
into the system. Thank you.

MR. LUTCHMEDIAL: Chairman, my name if Ramesh Lutchmedial from Trinidad
and Tobago.

On the question of new technologies specifically ADS-B, I know that the
EFRI is ‑‑ they have a program to replace their radars with ADS-B. I
would like to find out what is the plan with respect to ADS-B
implementation in EUROCONTROL and NAV CANADA and what\'s the time frame?

MR. AGUADO: I didn\'t understand to answer.

MR. FERRANTE: The question is the expansion of ADS-B or the use of ADS-B
in EUROCONTROL and in NAV CANADA.

MR. AGUADO: Okay. Well, again, ADS-B is a new technology that can
provide us with the information that we require on the ground and in the
cockpit that could derive on the different standards for the future in a
context of a certain airspace and I\'m thinking about in the case of
Europe, for example, a technology that can be used in areas of not very
complex and dense airspace in the northern/in the southern part of
Europe. But, it is a question for us today if the ADS-B technology will
be applied in the central part, in the core part of the continent.

So, certainly, we will be analyzing the application of this technology
with different communication links of course. First in areas in which
the density of traffic is not as intense as in the core part of the
continent.

MS. FOX: In Canada, we\'ve announced that we will be implementing ADS-B
over the Hudson Bay area where we currently have a surveillance gap.
We\'ll be installing stations there in the next two years and we expect
after that to expand the ADS-B north into our northern airspace. Further
north were we don\'t have radar coverage.

We look at it in the longer term as a replacement for radar. That is not
to say that we would eliminate radar because there are technical issues
when you\'re using the same system for both navigation and surveillance
particularly in high density areas. So, at our major airports, for
example, I wouldn\'t say at this point in time that we would completely
replace radar with ADS-B, but certainly in the north and in the medium
to longer term as a replacement for radar with the exception as I said,
and we\'ll have to see how the technology evolves, when it comes to the
very high density areas in Canada.

MR. HODGSON: George Hodgson, Orville Commerce Project.

I\'m king of a stranger here. The red‑headed stepchild. I\'m involved in
the commercial space ‑‑ the private commercial space.

What you guys have been talking about is a mature industry, airlines.
Everybody knows how airplanes fly.

How are you guys going to deal when spacecraft start sharing your
airspace? You have the regulatory side separated out from the service
provider. How is that going to affect it? How is it going to affect the
next generation of navigation and control systems?

MR. CHEW: So, we separate it from space shots today, but we ‑‑ I would
say because of some uncertainties around the spacecraft themselves, we
have to leave a large amount of space in both time and distance for
those space shots.

If they become more frequent and start to impose themselves on a lot of
civil traffic, then they\'ll be a lot of pressure to reduce the size and
time that is associated with space launches today.

MR. HODGSON: To give you an example of what I\'m talking about, my
company when we\'re up and running, we\'re planning on doing two space
shots a day. They\'re sub‑orbital. So, you know, they\'re not the same
energy as the space shuttle, but we\'re planning on doing two flights a
day six days a week.

There\'s other providers out there that are planning on doing three or
four flights a week. So, this is going to impact your airspace very
quickly.

Right now, you got us kind of isolated in specific areas, but it\'s
spreading more and more all the time.

So, how are you guys going to ‑‑ with the regulatory side and the
service side, is there any plans on starting to deal with this? Do you
guys have anything in place to deal with new technologies, new vehicles,
new flight profiles?

MR. AGUADO: Okay. If I may, someone referred before to the next
generation of air traffic management system in which a vehicle will have
like a bubble that will be protected. The dimension of this bubble will
depend on what type of a vehicle it is. For example, on the performance
of a vehicle, in your case probably will be larger than a small aircraft
and at the end, you will have to be able to avoid those bubbles, they
touch each other. So, this is the fundamental way in which we will
proceed thinking on the future in a traffic management system.

In any case, today, what we see is that ‑‑ what it is being done is the
protection of certain airspace in which you can use and then you open it
again. So, it is a bubble, but in a different approach.

I see that the future system will have to take into consideration that
of course and it will be ‑‑ any vehicle like yours will be part of the
system. So, without any question.

MR. FERRANTE: And I think a lot of the answers are going to be dependent
upon what the vehicle is capable of doing. Is it maneuverable? Is it
something that has a pilot that can, you know, fit in with existing air
traffic or separation standards or is it something that requires
something altogether different and that will depend on what vehicle is
offered.

Some of the challenges I\'d suggest are not going to be that much
different from integrating unmanned aircraft systems into the airspace.
Currently, they don\'t have an ability that they can integrate with a
civil fleet in terms of see‑and‑avoid and rules such as that. So, we
have requirements where we have to restrict the airspace to insure the
safety of both the civil side as well as the unmanned aircraft.

MR. CHEW: The answer is, it is being worked. Okay. And it is, but there
‑‑ if you start to launch a thousand of those every month, there will be
‑‑ the regulatory side of the agency will have to start to look at the
equitable access to airspace issue in more detail, but, you know, you
don\'t address that until you know exactly what the ‑‑ what the
performance characteristics of the vehicle are. You know, what kind of
fuel\'s in it so that if it exploded. How big a ‑‑ I mean there\'s so
many things that are associated that we\'re learning now as we undertake
already out protection zones around space shots today. So, those are ‑‑
those are being discovered now.

You know, the thing is that currently a lot of the space shots we do are
the traditional ones and those big space shuttles and things, they\'re
going to have a lot of fuel. They come in for reentry and they cover a
lot of space. You know, a suborbital launch doesn\'t cover near the
footprint or in terms of fuel at breakup the kind of footprint that they
would have with the space shuttle.

So, it\'s not ‑‑ it\'s going to be vehicle dependent. Very much so.

MODERATOR HILLIARD: Okay. I was just, you know, maybe was wondering too
that we are all I think safety conscious in terms of a philosophy. You
know, it\'s the way we do our work, but how do we ‑‑ and maybe some of
you could tell me about your own organizations because I\'m assuming
that regulators are basically looking at standards and seeing if
there\'s compliance, but what do you all do within your organizations to
instill the safety attitude? Because I believe, you know, you have the
philosophy of safety, but then you\'ve got to live it. You got to have
an attitude about it and what do you do internally to try and make that
happen?

MS. FOX: I\'ll start. In NAV CANADA, we, as I indicated earlier, have a
safety management system which is integrated into our operation. Not
only operationally, but also throughout the company because we integrate
operational procedures with HR and finance. So, we have corporate
policies ‑‑ corporate safety policies.

As far as I know, we were the first service provider to publish a
corporate safety plan. Our first corporate safety plan was published in
1998. Where we actually publish safety objectives and then reported on
our achievement of those objectives each year in a very public document.

Internally, we have a number of processes. For example, our incident
investigation process, all of our incidents are reported. The
Transportation Safety Board in Canada reserves the right to investigate.
If they don\'t investigate, we do, but all of them are investigated.

We have a cyclical review of all of our operating facilities to make
sure they\'re operating in compliance with the civil aviation
regulations, our manuals of operations and procedures.

We have a confidential safety reporting system so that any employee
anywhere in the company can identify a safety issue and that comes right
up to the executive level for a response.

So, we share safety data, incident data across the company and as I
said, with our stakeholders.

I mean safety is about ‑‑ is what we\'re all about and that\'s
inculcated into our employees from the day they join the company.

We just a year and a half ago conducted a safety survey to measure the
effectiveness of our safety culture and that was very positive in terms
of the feedback. So, all of those things we do to insure that people
understand that our first responsibility is the safety to our customers.

MS. STANDER: Maybe if I could just come in there as well, Kevin.

I think over and the above the sort of traditional things like the
safety management system, et cetera and accidental incident
investigation, we actually very actively try and keep the safety
awareness high.

So, we have regular campaigns and the last campaign that we ran was
something called Surge which stood for safety urgency and we had our
executive financial service delivery together with her team going around
the country to talk about safety, et cetera.

We have a safety newsletter. All of the incidents that occurred in the
prior months, we actually discussed those in detail in the safety
newsletter.

On one occasion, I\'m afraid to say only one occasion, we had an
incident‑free month countrywide and we then distributed movie tickets to
all of our staff for themselves and their partners.

Of course, safety data is discussed across the organization and more
recently and I have not yet seen the results of that, but we\'ve
conducted a safety survey just to get a feel for what\'s happening in
the organization.

So, we try to be innovative as well as traditional with you.

MODERATOR HILLIARD: So, people really embrace it then as ‑‑

MS. STANDER: Yes. Yes.

MODERATOR HILLIARD: ‑‑ something that is really part of their lives.

MS. STANDER: Yes.

MR. FERRANTE: It\'s one of the basic tenets of a safety management
system. People look at it as the hazard analysis or the risk assessment
that\'s associated with it. But, the real benefits that you get from a
safety management system in addition to that are, of course, the safety
promotion and the safety culture that you\'re able to expand through the
organization.

MR. AGUADO: Add to that, indeed, safety policy within the corporate
strategy and corporate culture. This is a must.

But, also what we do is to bring safety into the new concepts and new
systems. Is that new systems for the future we need to have a safety
case net. So, anything we do has to have a safety case from the
beginning as we do with a security case and also an environmental impact
case.

So, thinking on the future, this already should be included in our
plans.

MR. CHEW: And I think ‑‑ and I\'ll just add a little bit to what Tony
said. Because, you know, we\'re only two and a half years old.

We\'re focusing mainly on first of all the sort of best practices in
both policy and practices. That includes putting every manager in charge
‑‑ facility manager in charge of having actual safety checklists and
safety practices that are documented and signed off on an annual basis
with the surveillance and oversight that goes along with that.

We\'ll be moving ahead on what we call credentialing which is equivalent
to the licensing of controllers. So, we\'re going to expect the
controllers in both training and certification not only initially but on
an ongoing basis to be required to pass certain kinds of performance
tests in order to maintain and keep a license or a credential to
practice air traffic control and considering monitor and surveillance
and analysis and investigation that Tony mentioned earlier as a key
part. Especially in the beginning when today we don\'t have as much data
as we\'d like to have and so, investigation generally speaking produces
more questions sometimes that we need to go back and collect data which
would then go on to set up more standardized and automated data
collection processes that would lead to much larger data sets for
monitoring and surveilling safety.

So, I think these are all the things that we\'re orbiting around. We
share this information and we\'re looking for best practices.

Keeping in mind that the system is unbelievably safe today. One of the
reasons it hasn\'t been even I think probably focused on as much as we
were looking at our group performance just this last year. We\'re down
to six controller errors that would result in a lost of separation per
million opportunities. That\'s an extraordinary level of human
performance.

I think if you want a safer system in the long run, you have to start
reducing the opportunities not just for the error but if a controller
makes an error that something serious is not likely to happen anyway and
that\'s what we really need to move to.

Because to ask human beings to never make an error. How many of you
could live up to that standard? So, really, safety is about, you know,
sort of reducing the reliance on human beings not making mistakes and
building systems that are human friendly so that if a human being makes
an error, nothing horrible\'s going to happen and then we\'ll probably
have far fewer controllers who are worried about reporting an error in
the first place.

MS. CORCORAN: Thank you. I\'m Sue Corcoran with Lockheed.

My question is really concerning funding rather than safety, but for
those privatized agencies, I guess generally accepted outside the U.S.
is a collection of user fees and user fees are generally based on
distance flown and weight and I\'m just wondering amongst your
stakeholders, board members, has there been any discussion over whether
or not this is an equitable way to collect fees for your services as
opposed to be based on what the actual cost of that service is? For
example, to a business jet versus a commercial.

MS. FOX: Again, if I can speak from the Canadian context, that principle
if you will being based on distance and weight really comes from
international principles, from ICAO principles and it\'s based on the
concept of the value of the service to the operator as being a function
of the size of the aircraft and therefore, the number of passengers that
are on board.

There may be other people in the audience who can explain it better than
that, but that\'s essentially how I understand it.

If you take NAV CANADA, we have ‑‑ our en route fees are based on that
concept of take‑of weight and distance, but on the other hand, our fees
for general aviation and I\'m talking the recreational side, is an
annual fee. So, in our country a Cessna ‑‑ the owner of a Cessna 172
pays \$72 a year and they get full access whether it\'s IFR, VFR,
weather, flight planning, whatever. They don\'t ‑‑ that\'s it. That\'s
what they pay.

Other operators may pay a quarterly fee or a daily charge and we try and
give them the best deal in terms of their type of operation. So, it\'s
not all just weight and distance, but I believe the basis for that was
on the issue of the value of the service for the type of operation.

MS. CORCORAN: As opposed to the cost of providing the service?

MS. FOX: Correct.

MR. AGUADO: But, I think this is an issue that it is repeated
systematically. It comes to our attention almost every year and, of
course, there are all kinds of opinions coming from different parts of
the industry.

At the end, we don\'t reach any other better solution and we leave with
what we have at this point of time.

MS. STANDER: I think if we went to the actual cost of the service, we\'d
make the service unaffordable for quite a big community. Because your
services at your smaller airports will depend very much on the level
traffic and, therefore, would be ‑‑ we\'d have to close it down. So,
that is a real problem to us which is why we\'ve just stuck with the
traditional model.

But, what we have introduced is congestion pricing. So, at certain times
of the day at certain airports and where there are no alternatives, we
certainly have an additional tariff for busy airspaces.

SPEAKER: One of the objections you hear to user fees is it involves a
large administrative bureaucracy. In your opinion, is that correct or
not correct?

MR. AGUADO: Not at all. I mean I can react immediately to that. Not at
all. This is a very minor fraction of the entire operation. Very minor,
0.18 percent of the entire cost. With computers, with automatic
processing, with air traffic control centers that they have all the
information, they can process that in a very easy way and it is not at
all bureaucratic machine. But, on the contrary is a very efficient way
or providing financing mechanisms for the infrastructure of air traffic
management.

SPEAKER: Well, what about a country with a larger general aviation
population? How does Canada find this?

MS. FOX: Well, again, as I indicated, it\'s for the ‑‑ if you look at
the ‑‑ what we charge for the recreational aviation community as an
example, there are many airports where we don\'t have scheduled services
and if we were ‑‑ we don\'t run site specific charging. If we were to,
those airports would probably be running at a financial deficit because
the revenues generated are not ‑‑ they don\'t offset the cost of
providing it. But, in terms of the collection, we\'ve automated it to an
extent that it\'s a very, very small percentage of our total operating
costs even for the small airplanes.

MR. CHEW: Yes, there are actually new road toll systems that don\'t
require registered vehicles. Actually, it takes pictures of license
plates and things to charge people through. So, I mean I think
technology does help with that. That\'s probably not a ‑‑ if anything,
it\'s a transitional argument and not a long‑term problem.

SPEAKER: Some people do sort of give you the impression it\'s a massive
task.

MS. FOX: No massive task. No, it\'s not.

MR. AGUADO: It is not. It is not.

MS. FOX: No.

MR. AGUADO: Not at all. And if I ‑‑ I had ‑‑ can tell you. Europe, you
know, that we have one system for all the European states. One system.
One bill. One currency. One distribution. And this is very efficient
because, of course, it is done for the entire continent. So, at the end,
it\'s a question of data processing and this is cheaper and cheaper all
the time. So, it is not at all. I mean it is a very, very efficient
machine.

MR. CHEW: And we in the United States have one currency.

MR. AGUADO: You have an advantage, but we have to go a long ways in this
case.

MODERATOR HILLIARD: Well, I\'m running a little low on questions here.
One other thing that I did have a note about in my own questions and it
came up this morning with regard to criminal prosecutions and again the
fact that some countries seem to be spring‑loaded in that direction and
I know that I heard this morning that a letter was being composed, a
policy proposed that this not occur. Although, I\'m not really sure who
those letters are addressed to and what the intent is.

Because I can imagine that although you don\'t want to begin to
criminally prosecute someone just because an accident occurred, it does
seem to me that there could possibly be circumstances where someone did
do something that, you know, was so reckless. They may not have intended
to harm anyone, but maybe their actions would be judged to be so
reckless that maybe after investigation a criminal prosecution might be
appropriate and I was just wondering how people felt about that.

MR. AGUADO: Well, as I mentioned before, there is a question of
negligence and misconduct. Probably there was not a misconduct, but it
was a negligence and if it\'s a gross negligence, at the end, you have
to be subject to the investigation, but if it was not, there has to be a
flow of information that goes towards enhancing safety.

But, in the case that those two dimensions are identified, then some
action has to be taken. There\'s no question at all.

MODERATOR HILLIARD: Anybody else have any comments or statements they\'d
like to make?

MS. STANDER: Well, it\'s a very difficult issue. In fact, in South
Africa right now and this is why I don\'t really want to comment too
much on it, but we actually have an air traffic controller that is being
charged with manslaughter as a result of an accident that happened three
years ago and three people were killed and it\'s very difficult, you
know, because as the CEO of the company when the guy was arrested, the
rest of my controllers went into panic mode, you know, because now it
was a sort of, you know, is this what\'s going to happen to us.

So, I think it\'s a very, very difficult issue and I think one ‑‑
however, I agree with Victor in some ways that if there\'s a case of
clear negligence or clear misconduct, then I\'m thinking it has to be
dealt with.

But, whether we want to criminalize it, I\'m not sure. I think that is
probably for me the challenge. I think that\'s the difficulty.

MR. SMOUT: Yes, first, sorry. First a quick advertisement and then a
question, Mr. Chairman.

Firstly, for my ‑‑ we talked about the Civil Air Navigation
Organization, CANSO, if there are any countries in the room that would
like more information about that and safety benchmarking, please see
myself, Wrenelle or Russ.

My question I suppose is to ‑‑ is to the panel. Is in terms of ‑‑ I
think, Russ, you mentioned earlier risk. I think as we mature more we
get away from the incident into more the early warning indicators and I
suppose the question is does the panel have any experience of what I
call these upstream indicators that start to give us earlier and earlier
warnings of, you know, a change in the safety culture, a change in the
controllers aptitude or a change in system safety, if you will, that can
help particularly as other organizations develop down that path to help
us to mature in that area?

MS. FOX: Speaking for Canada, we\'ve just implemented the Normal
Operations Safety Survey which is a technique that\'s used to basically
observe air traffic controllers in there under normal operations. Not
post‑incident/post‑accident, but under normal operations and identify
how they manage threats and errors and basically, the good things they
do to avoid or contain errors and that is something which certainly ICAO
and IFATCA are pushing as a way to look below the iceberg and identify
the precursors to incidents.

So, we\'ve done that and I\'ve been very impressed to date with the data
that we received from those surveys and also, the way in which the
controllers themselves have embraced it because it\'s non‑punitive, non‑
threatening. We also have an agreement with our regulator that if an
incident occurred during that which wasn\'t reported through normal
means that the controller and the company won\'t be held liable, et
cetera, et cetera.

So, that is a technique which I think shows some promise in terms of
getting underneath and looking at precursors to events.

MR. FERRANTE: That\'s an effort that is gaining momentum, too. I believe
Airservices has done that as well. As well as the Australian system. So,
there\'s a lot of movement around that type of environment now.

And I think one of the comments that was made earlier was in order to be
able to get to those, you need to have those non‑punitive reporting
systems with the other caveat in there that somebody mentioned that
it\'s far more important or a worse event actually for failure to report
or trying to cover up the event than actually being involved in the
event.

MR. CHEW: Yes, the other is we are ‑‑ you know, we\'re looking at our
off‑loaded radar data. Sort of like flight recorded data in airplanes
and we\'re just starting to collect all that and there\'s a voluminous
amount of this data, but we\'re putting analytical processes in place.
First of all, to try to help us understand what terminal error is.
Terminal error, loss of separation are. Because right now, it\'s very
hard to measure because you have visual separation and you have all
kinds of things.

But, as we do that, you can actually survey that for practices. You can
look at it to see whether or not two parallel runway approaches are
being merged at different altitudes/same altitude. You can do all kinds
of things. So, we\'re looking to that system to measure not only whether
an error occurred or not, but whether or not we have risks ‑‑ higher
risk than we want to have, whether the practices are being followed or
whether, you know, practices ‑‑ both efficient practices are being
followed as well.

So, having that data will actually provide us, I think, a larger data
set for us to analyze as precursors. We don\'t have to wait for the
error to occur. We can watch the operation post‑operation and do
analysis to see how well our separation standards are holding up and our
practices are holding up.

Oh, we also do phraseology. You know, so, one of the things we rate our
controllers on is their standardization of phraseology. So, a lot of
them are very proud that they take a random segment of recording from
their shift and we\'ll listen to them and we\'ll count up the number of
times that they use nonstandard phraseology and use that as a measure as
well. Hear back, read back problems and things.

MR. JONES: Chilton Jones, National Air Traffic Services as was NATS now.

We\'ve recently implemented an activity which we\'re calling collection
of day‑to‑day safety measures where we\'re not just looking at things
that are going wrong, but trying to look at things that go right. So,
for example, things like the number of detected incorrect read backs
from pilots.

So, we\'re looking at establishing metrics of things that are done well
as well as focusing on errors that are made. I think that\'s giving us a
much clearer idea of the whole picture as opposed to just focusing on
what goes wrong. He\'s also focusing on what goes well and you can then
do trend analysis on things that are improving as well as looking at
things that might be getting worse.

MR. FERRANTE: Far more difficult area to measure. I think we can use
computers to say that we had 2.9 miles or 3.01 miles, but it\'s not so
easy to use the same systems to say we got a bad read back and
therefore, prevented the occurrence.

MR. JONES: I mean that\'s absolutely right and that\'s some of the big
challenges that we\'re facing at the moment as to what is the right set
of day‑to‑day safety measures? How do you go about collecting them and
analyzing them?

And obviously, one of the concerns that we have about observing people
is that people tend to behave differently when they\'re being observed
as opposed to when they\'re not.

MR. FERRANTE: Absolutely.

MODERATOR HILLIARD: Okay. If there are no more questions, I\'d like to
thank the panel for sharing with us their knowledge and experience and I
also want to thank you all for your attention and interest and
participation and hope you enjoy the rest of the conference.

Thank you for coming.

(Whereupon, the meeting was concluded at 4:29 p.m.)