1308 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

1 Initially, the analysis identified 172 accidents, 

but this number was based on comments to the 

notice of proposed rulemaking. The accident 

analysis is discussed further in the Final Regulatory 

Evaluation. 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Parts 5 and 119 

[Docket No. FAA–2009–0671; Amendment 

Nos. 5–1 and 119–17] 

RIN 2120–AJ86 

Safety Management Systems for 

Domestic, Flag, and Supplemental 

Operations Certificate Holders 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: This final rule requires each 

air carrier operating under 14 CFR part 

121 to develop and implement a safety 

management system (SMS) to improve 

the safety of its aviation-related 

activities. SMS is a comprehensive, 

process-oriented approach to managing 

safety throughout an organization. SMS 

includes an organization-wide safety 

policy; formal methods for identifying 

hazards, controlling, and continually 

assessing risk and safety performance; 

and promotion of a safety culture. SMS 

stresses not only compliance with 

technical standards but also increased 

emphasis on the overall safety 

performance of the organization. 

DATES: This final rule becomes effective 

March 9, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Scott Van Buren, Chief System Engineer 

for Aviation Safety, Office of Accident 

Investigation and Prevention (AVP), 

Federal Aviation Administration, 800 

Independence Avenue SW., 

Washington, DC 20591; telephone: (202) 

494–8417; facsimile: (202) 267–3992; 

email: scott.vanburen@faa.gov. For legal 

questions, contact Alex Zektser, 

Regulations Division, Office of the Chief 

Counsel, Federal Aviation 

Administration, 800 Independence 

Avenue SW., Washington, DC 20591; 

telephone: (202) 267–3073; facsimile: 

(202) 267–7971; email: alex.zektser@

faa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Authority for This Rulemaking 

The Federal Aviation 

Administration’s (FAA) authority to 

issue rules on aviation safety is found in 

Title 49 of the United States Code. This 

rulemaking is promulgated under the 

authority described in 49 U.S.C. 106(f), 

which establishes the authority of the 

Administrator to promulgate regulations 

and rules and 49 U.S.C. 44701(a)(5), 

which requires the Administrator to 

promulgate regulations and minimum 

standards for other practices, methods, 

and procedures necessary for safety in 

air commerce and national security. 

In addition, the Airline Safety and 

Federal Aviation Administration 

Extension Act of 2010 (the Act), Public 

Law 111–216, sec. 215 (August 1, 2010), 

required the FAA to conduct 

rulemaking to ‘‘require all 14 CFR part 

121 air carriers to implement a safety 

management system.’’ The Act required 

the FAA to issue this final rule within 

24 months of the passing of the Act (July 

30, 2012). 

Table of Contents 

I. Overview of the Final Rule 

II. Summary of the Costs and Benefits of the 

Final Rule 

III. Background 

A. Summary of NPRM 

B. Summary of Comments 

IV. Discussion of Final Rule and Comments 

A. Scalability 

B. Scope and Definition of Hazard 

C. Protection of Information/Data From 

Disclosure Under Freedom of 

Information Act (FOIA) 

D. Enforcement 

E. Scope of SMS and Compliance With 

Administrative Procedure Act 

F. Duplicative Rulemaking 

G. Credit for Pilot Project Participants and 

Adoption of Third Party/Accredited SMS 

H. Applicability, Subpart A— 

Implementation Plans 

I. Subpart B, Safety Policy—Designation of 

a Single Accountable Executive and 

Sufficient Safety Management Personnel 

J. Subpart C, Safety Risk Management 

(SRM) 

K. Subpart D, Safety Assurance 

L. Subpart F, Recordkeeping and 

Documentation Requirements 

M. Flow-Down of Requirements 

N. FAA Capability To Manage Oversight 

O. Guidance Material 

P. Determination of Acceptable Levels of 

Safety 

Q. Performance Based v. Process Based 

Regulation 

R. Employee Reporting Systems 

V. Regulatory Notices and Analyses 

VI. Executive Order Determinations 

VII. How To Obtain Additional Information 

I. Overview of the Final Rule 

This final rule requires air carriers 

authorized to conduct operations under 

14 Code of Federal Regulations (CFR) 

part 121 (part 121) to develop and 

implement a safety management system 

(SMS) to improve the safety of their 

aviation-related activities. SMS includes 

an organization-wide safety policy; 

formal methods for identifying hazards, 

controlling, and continually assessing 

risk; and promotion of a safety culture. 

When systematically applied, SMS 

provides a set of decision-making tools 

that air carriers can use to improve 

safety. SMS improves safety by 

addressing underlying organizational 

issues that may result in accidents or 

incidents. 

This final rule is part of the FAA’s 

efforts to continuously improve safety in 

air transportation by filling gaps through 

improved management practices. SMS’s 

proactive emphasis on hazard 

identification and mitigation, and on 

communication of safety issues, will 

provide air carriers with robust tools to 

improve safety. Congress, in the Airline 

Safety and Federal Aviation 

Administration Extension Act of 2010 

(Pub. L. 111–216, August 1, 2010), 

directed the FAA to issue a notice of 

proposed rulemaking within 90 days of 

enactment, and a final SMS rule by July 

30, 2012. In addition, the National 

Transportation Safety Board (NTSB) has 

recommended the FAA pursue 

rulemaking to require all part 121 

operators to implement an SMS. 

Further, the International Civil Aviation 

Organization (ICAO), in its March 2006 

amendments to Annex 6 part I, which 

addresses operation of airplanes in 

international commercial air transport, 

established a standard for member states 

to mandate that each air carrier establish 

an SMS. This regulation will comply 

with the statutory requirement, fully 

address the NTSB recommendation, and 

harmonize U.S. requirements with ICAO 

standards for air carriers operating 

under part 121. 

While the commercial air carrier 

accident rate in the United States has 

decreased substantially over the past 10 

years, the FAA has identified a recent 

trend involving hazards that were 

revealed during accident investigations. 

The FAA’s Office of Accident 

Investigation and Prevention identified 

123 accidents involving part 121 air 

carriers from fiscal year (FY) 2001 

through FY 2010 for which identified 

causal factors could have been mitigated 

if air carriers had implemented an SMS 

to identify hazards in their operations 

and developed methods to control the 

risk.1 This type of approach allows air 

carriers to anticipate and mitigate the 

likely causes of potential accidents. This 

is a significant improvement over 

current ‘‘reactive’’ safety action 

emphasis, which focuses on discovering 

and mitigating the cause of an accident 

only after that accident has occurred. In 

order to bring about this change in 

accident mitigation, as well as the other 

reasons discussed throughout this 

document, the FAA is requiring part 121 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1309 

2Hazards may also be identified through safety 

assurance functions, as well as by analyzing a 

proposed change to the air carrier’s system. 

3As of December 1, 2011, the ATA changed its 

name to Airlines for America (A4A). 

air carriers to develop and implement 

an SMS. 

The requirements in this rule function 

as follows. Air carriers authorized to 

conduct operations under part 121 must 

develop and implement an SMS within 

3 years of the effective date of the final 

rule. To demonstrate that the air 

carrier’s SMS will be fully implemented 

by the end of this three-year period, the 

air carrier will be required to submit an 

implementation plan within 6 months 

of the effective date of the final rule. 

The implementation plan should 

include any existing programs, policies 

or procedures the air carrier intends to 

include in its SMS, such as continuing 

analysis and surveillance systems, 

aspects of quality management systems, 

and employee reporting systems. This 

implementation plan must be approved 

by the FAA within 12 months of the 

effective date of the final rule. 

The air carrier’s SMS must contain 

the following four major components: 

Safety policy, safety risk management, 

safety assurance, and safety promotion. 

To satisfy the safety policy component, 

the air carrier must establish a policy 

which, among other things, defines the 

air carrier’s safety objectives and 

commitment toward achieving those 

objectives. The air carrier will also be 

required to designate an accountable 

executive who is ultimately responsible 

for the safety performance of its 

operations, as well as sufficient 

management personnel who will be 

responsible for the coordination, 

implementation, and maintenance of the 

SMS, as well as integration of SMS 

processes across the air carrier. 

Under safety risk management, air 

carriers must develop processes to 

analyze existing and potential systems 

and use the resulting system analyses to 

identify hazards that may impact the air 

carrier’s aviation operations.2 Air 

carriers will then analyze the risk of a 

consequence arising from the hazard 

occurring and determine if the 

associated safety risk is acceptable. If it 

is not acceptable, the air carrier must 

develop risk controls for 

implementation. 

Through safety assurance, the air 

carrier will develop and implement 

processes to monitor the safety 

performance of its aviation operations. 

The processes must include means to 

monitor and audit operational 

processes, investigate incidents and 

accidents, and allow for confidential 

employee reporting of hazards as well as 

proposing solutions for safety 

improvement. The air carrier will also 

conduct evaluations regarding its safety 

performance to review the effectiveness 

of risk controls that are implemented as 

well as to identify any changes in the 

operational environment that may 

introduce new hazards. 

Under safety promotion, air carriers 

will be required to train their employees 

(including managers) and develop the 

tools to communicate necessary safety 

information. Involvement of the air 

carriers’ employees is essential to the 

success of its SMS. The employees must 

be properly informed of their 

responsibilities and trained regarding 

their duties relevant to the safety 

performance of the air carrier. In 

addition, they must be made aware of 

necessary safety information resulting 

from the various SMS analyses. 

II. Summary of the Costs and Benefits 

of the Final Rule 

This rule requires part 121 air carriers 

(domestic, flag, and supplemental 

operations) to establish an SMS. SMS is 

a tool designed to help air carriers 

effectively integrate formal risk control 

procedures into normal operational 

practices to improve safety for all part 

121 air carriers. It is expected that the 

requirements of the rule will help 

airlines to identify safety problems, and 

if airlines take steps to mitigate these 

problems it is estimated that the benefits 

from that mitigation could be between 

$205.0 and $472.3 million over 10 years 

($104.9 to $241.9 million present value 

at 7 percent discount rate). Costs of the 

rule’s provisions (excluding any 

mitigation costs, which have not been 

estimated) are estimated to be $224.3 

million ($135.1 million present value at 

7 percent discount rate) over 10 years. 

ESTIMATED COSTS AND BENEFITS FOR ALL PART 121 CARRIERS—2014–2023 

[Millions of 2010 dollars * (discounted at 7% discount rate)] 

Costs ................................................................................................................................. Rule Implementation Costs: $135.1. 

Mitigation Costs: Not quantified, estimates not included. 

Benefits from Provisions of the Rule and any Consequent Safety Mitigation Actions ** $104.9–$241.9. 

* Table values have been rounded. Totals may not add due to rounding. 

** Given the range of mitigation actions possible, it is difficult to quantify potential benefits. This range reflects the potential benefits resulting 

from examples of possible mitigation actions. 

III. Background 

A. Summary of NPRM 

On November 5, 2010, the FAA 

published a notice of proposed 

rulemaking (NPRM) on SMS for part 121 

certificate holders (75 FR 68224). In the 

NPRM, the FAA proposed to require 

these certificate holders to develop and 

implement an SMS to improve the 

safety of their aviation related activities. 

In response to several commenters’ 

requests, the comment period was 

extended and ultimately closed on 

March 7, 2011. 

B. Summary of Comments 

The FAA received 69 comment 

documents in response to the NPRM 

from a variety of commenters, including 

air carriers, aircraft designers and 

manufacturers, trade associations, 

emergency medical transport services, a 

non-profit safety organization, a 

university, and private citizens. 

Commenters included Aerospace 

Industries Association (AIA)/General 

Aviation Manufacturers Association 

(GAMA), Air Charter Safety Foundation 

(ACSF), Aircraft Electronics Association 

(AEA), Aircraft Owners and Pilots 

Association (AOPA), Air Line Pilots 

Association, International (ALPA), Air 

Medical Operators Association (AMOA), 

Air Transport Association of America, 

Inc.3 (ATA), American Association for 

Justice (AAJ), Association of Air 

Medical Services (AAMS), Association 

of Flight Attendants (AFA), 

Communications Workers of America, 

AFL–CIO, Aviation Safety Council of 

Alaska (ASCA), Aviation Suppliers 

Association (ASA), The Boeing 

Company (Boeing), Bombardier Inc. 

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1310 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

4The Pilot Project was established for operators 

to develop implementation SMS strategies and 

oversight interfaces necessary for SMS, as well as 

gain experience for FAA and operators regarding 

SMS implementation. 

5 IEP is a comprehensive program for evaluating 

an air carrier’s operational systems as well as its 

assurance programs. It builds on the auditing 

programs of the internal audit function and 

provides management with an additional level of 

assurance that is independent of the operational 

sub-organizations’ audits and reviews. IEPs provide 

many of the auditing and evaluation safety 

assurance processes required in the rule. 

(Bombardier), Cargo Airline Association 

(CAA), Cessna Aircraft Company 

(Cessna), Clark County (Nevada) 

Department of Aviation (CCDOA), Delta 

Air Lines, Inc. (Delta), DTI Training 

Consortium (DTI Training), 

Experimental Aircraft Association 

(EAA), FedEx Express (FedEx), Futron 

Corporation (Futron), GE Aviation (GE), 

Gener Ibita Topacio, Hawker Beechcraft 

Corporation (Hawker Beechcraft), 

Helicopter Association International 

(HAI), JetBlue Airways (JetBlue), 

Modification and Replacement Parts 

Association (MARPA), National Air 

Carriers Association (NACA), National 

Air Transportation Association (NATA), 

National Transportation Safety Board 

(NTSB), Omni Air International (Omni 

Air), Pinnacle Airlines Corp. (Pinnacle), 

Regional Airline Association (RAA), 

Rockwell Collins Inc. (Rockwell 

Collins), Southwest Airlines (SWA), 

StandardAero, True-lock, United Parcel 

Service Co. (UPS), United Technologies 

Corporation (UTC), University of 

Southern California (U.S.C.), School of 

Engineering, the U.S. Small Business 

Administration’s (SBA) Office of 

Advocacy, and 24 individuals. 

IV. Discussion of Final Rule and 

Comments 

The FAA is adopting the final rule, as 

proposed, with minor modifications 

based on the comments discussed 

below. The rule requires part 121 

certificate holders to submit a plan for 

implementation of SMS and fully 

implement an SMS within 3 years of the 

effective date of the final rule. 

A. Scalability 

The SBA raised concerns about the 

scalability of this rule and its impact on 

small business entities. The SBA, along 

with True-lock, AEA, MARPA, and 

ASA, indicated that this rule would be 

too costly for small businesses to 

implement. The SBA suggested limiting 

the final rule to incident management, 

strategic decision-making, and 

notification of incidents to the FAA. 

The FAA has decided not to limit this 

rule as suggested by the SBA because 

adopting the SBA’s proposal would only 

partially enact the safety assurance 

component and none of the other 

requirements that the FAA considers to 

be necessary for an effective SMS. The 

four parts of an SMS (safety policy, 

safety risk management, safety 

assurance, and safety promotion) work 

together to stress management 

accountability and decision-making 

based on forward looking hazard 

identification and mitigation of risks, 

rather than a retrospective review of 

conditions that have already caused 

accidents and incidents. The four 

components working together provide 

the tools necessary to allow strategic 

decision-making. 

However, the FAA recognizes the 

perceived impact that this rule may 

have on small businesses. As of January 

6, 2012, there were 90 part 121 

certificate holders. The size, scope, and 

complexity of the operations of each of 

these certificate holders vary greatly. 

For example, a third of the part 121 

certificate holders have 10 or fewer 

airplanes, while 10% have more than 

270 airplanes. 

Given the variance in these types of 

operations, the FAA designed these 

requirements to be applicable to air 

carriers of various sizes, scopes, and 

complexities, as well as adaptable to fit 

the different types of organizations in 

the air transportation system and 

operations within an individual air 

carrier. The FAA does not anticipate, 

nor expect, that small air carriers would 

require an SMS as complex as one for 

large air carriers. To further clarify this 

issue, the FAA has revised 14 CFR 5.3 

in the final rule to state that the SMS 

must be appropriate to the size, scope, 

and complexity of the certificate 

holder’s operations. As such, it is 

scalable to the size of a small entity. 

The FAA has also revised the 

guidance material that was published 

for comment with the NPRM. The 

revised guidance material provides a 

variety of examples of how to 

implement the SMS processes and 

procedures that an air carrier may 

develop based on the size, scope, and 

complexity of its operation. The 

examples outlined in the guidance 

material are not intended to limit an air 

carrier to only these methods of 

compliance. The following outlines 

different approaches, based on 

processes and procedures developed by 

air carriers participating in the Flight 

Standards Service (AFS) Voluntary SMS 

Pilot Project (‘‘Pilot Project’’), which 

may be adapted to fit the operational 

needs of an air carrier based on the size 

of its operation.4

Larger air carriers participating in the 

Pilot Project typically use their existing 

divisional structures as a foundation for 

SMS management. The flight safety 

organization or equivalent provides a 

source of standardization, oversight, and 

reporting directly to a corporate 

accountable executive. Each division 

typically establishes a management 

review process with a committee 

chaired by the most senior manager 

(generally a senior vice president) in the 

division. This senior manager may be 

one of the management personnel that is 

already required of an air carrier 

conducting operations under part 121 

under 14 CFR 119.65. These committees 

are most often supported by a staff-level 

working group that attends to day-today safety management functions, and 

advises the senior management 

committee. These working groups are 

usually made up of existing safety and 

quality assurance personnel, along with 

representatives from the functional 

areas within the division. They are, in 

turn, supported by the members of the 

flight safety organization which may 

also manage corporate level data 

management and analysis functions. To 

provide coordination and integration 

across the air carrier, most large air 

carriers have a corporate level 

committee made up of the division 

managers and including the most senior 

managers in the air carrier (e.g., Chief 

Executive Office, President, Chief 

Operating Officer). 

Using this framework, a large air 

carrier has established a team of 

sufficient management personnel 

responsible for the daily oversight of 

SMS and communication to the 

accountable executive, to ensure that 

informed decisions regarding the safety 

performance of the air carrier’s 

operations are being made. This existing 

framework can be used to satisfy the 

management structure requirements in 

this final rule. 

At medium size air carriers, the 

decision making and information 

process flows are similar to those of 

larger air carriers, but the supporting 

functions are often integrated under the 

Director of Safety. These structures are 

similar to what are traditionally used to 

accomplish the requirements of an 

independent evaluation program (IEP), 

which most part 121 air carriers already 

have in place.5

At small air carriers, there will likely 

not be the multiple tiers of decision 

making and structures that exist in 

larger air carriers. For small air carriers, 

convening ad hoc committees might be 

an appropriate SMS mechanism. In 

these cases, the Director of Safety may 

be the sole support staff available. Using 

the Director of Safety in this capacity 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1311 

would be an acceptable means of 

compliance with the management 

structure requirements of this final rule 

for a small air carrier. 

Another example of scalability stems 

from management’s need for continued 

access to information about the air 

carrier’s operational processes. Larger 

air carriers may, as part of safety 

assurance, have full time safety and 

quality auditors who conduct internal 

audits, or, particularly in smaller 

divisions, these audits may be 

performed by personnel from inside the 

divisions as collateral duties. In 

addition, automated data entry, record 

keeping, retrieval, and analysis are 

nearly universal at larger air carriers. 

Software may be developed by or for the 

air carrier, or may be selected from a 

variety of specialty safety and quality 

system software providers. Larger air 

carriers typically also have specialized 

information technology (IT) staffs that 

may be used to monitor and complete 

the recordkeeping requirements of the 

final rule. 

Managers of medium to small air 

carriers certainly need the same type of 

information to make decisions. 

Typically, though, the volume of 

information is smaller because the 

operation is smaller and not as complex. 

The frequency of the air carrier’s 

operations may also affect the rate at 

which information must be updated and 

audits must be conducted. Medium and 

small air carriers often purchase 

uniform software packages sold by third 

parties rather than invest in custombuilt packages that require hiring inhouse staffers to implement, design, and 

maintain the software. Very small air 

carriers may use basic desktop software 

(e.g., spreadsheet and basic database 

products) to track information. Smaller 

air carriers often use line personnel to 

perform audits as a collateral duty. 

Analysis of individual audits typically 

is performed as part of the auditing 

activity with trend analysis being done 

by the Director of Safety and, if 

available, safety and quality staff. Using 

these existing tools are acceptable 

means of compliance with the 

requirements of this final rule. 

Another example of the scalability of 

SMS can be seen in the employee 

reporting system required by this rule. 

The FAA anticipates that smaller air 

carriers will have to deal with 

significantly fewer reports from the 

employee reporting system than larger 

air carriers. Also, larger air carriers are 

more likely to satisfy this requirement 

through one or more aviation safety 

action programs’ (ASAP) employee 

group applications. These systems for 

large employee groups might be more 

costly than the minimum requirements 

imposed by this rule. ASAP is an 

employee reporting system that air 

carriers may use to gather information 

from employees on safety compliance 

and performance issues. Approximately 

two-thirds of air carriers conducting 

operations under part 121 have 

implemented some type of ASAP 

program. While ASAP originally was 

limited to pilots and flight engineers, 

some air carriers have expanded the 

program to include their flight 

attendants, dispatchers, and mechanics; 

and one air carrier has an ASAP for 

ground service personnel. 

To further ensure that the SMS is 

scaled to fit the needs of the air carrier’s 

operations, the FAA recommends each 

air carrier evaluate its existing 

management systems and regulatory 

compliance programs and then 

incorporate those systems and programs 

that exemplify the key components of 

SMS as appropriate. The FAA designed 

the final rule to allow for this flexibility. 

The FAA acknowledges that many air 

carriers already have quality 

management systems (QMS) and other 

processes currently in place to monitor 

performance of their operations. In 

addition, some current regulatory and 

voluntary programs, like the continuing 

analysis and surveillance system (CASS) 

and ASAPs, can be incorporated into 

the SMS and used to meet the safety 

assurance requirements of the final rule. 

Incorporating those existing systems 

that already meet the performance 

objectives of this rule will only serve to 

expedite an air carrier’s implementation 

of SMS, and allow for a smoother 

transition for employees expected to 

participate in the air carrier’s SMS 

because of their familiarity with their 

employers’ existing systems. 

In addition to the flexibility 

incorporated in the final rule and the 

ability to leverage existing processes to 

meet SMS requirements, the FAA has 

offered a tool to air carriers that will 

facilitate SMS implementation and data 

management. It is important to note that 

this rule does not specifically require 

automated information technology 

systems. However, several SMS 

processes will require management of 

varying amounts of data, depending on 

the size and complexity of the air 

carrier’s organization. Currently, air 

carriers have free access to the FAA’s 

web-based application tool (WBAT) to 

assist in satisfying the data collection 

and management aspects of the final 

rule. WBAT is a federally developed 

and funded software system that may be 

used to assist the air carriers with data 

management. 

WBAT began as an ASAP and 

incident reporting tool. Its use was 

expanded to contain functions that more 

broadly support SMS. Specifically, 

WBAT currently has modules that 

support the data management needs of 

safety risk management and safety 

assurance functions (e.g., employee 

reporting, audits, investigations, and 

evaluations). WBAT also contains an 

SMS implementation plan manager 

module, which supports the air carrier’s 

implementation of SMS by providing a 

tool to guide air carriers though a gap 

analysis and implementation planning 

process. The results of the gap analysis 

and implementation planning are also 

documented and stored in WBAT. 

While WBAT data are treated as 

proprietary to the air carrier, permission 

can be given to the FAA to access it and 

review draft plans online and provide 

feedback, greatly expediting the review 

and approval process. WBAT is 

currently used by approximately 64 air 

carriers authorized to conduct 

operations under part 121. Of those 64 

carriers, 55 use WBAT to support their 

SMS implementation as part of their 

participation in the Pilot Project. 

While the FAA is not requiring air 

carriers to use WBAT, it is one option 

that is available and it reduces the costs 

of developing and implementing a 

separate platform. The FAA has made a 

commitment to continue to support 

WBAT for basic services as a result of 

the comments submitted to the NPRM. 

B. Scope and Definition of Hazard 

ATA, AIA/GAMA, and Delta asserted 

that the rule was too broad and could be 

applied to areas beyond the FAA’s 

oversight authority. To address this 

issue, the commenters suggested 

revising the final rule to limit the SMS 

to those areas of a certificate holder’s 

business that have a direct operational 

impact on aviation activities. 

To address the commenters’ concerns 

regarding the FAA’s oversight of SMS, 

the FAA has incorporated the 

suggestions of the commenters to limit 

that oversight to the air carrier’s aviation 

activities conducted under part 121. 

While some air carriers may narrowly 

tailor their SMS to address only these 

activities, the FAA acknowledges that 

some air carriers may opt to extend their 

SMS to other aviation related activities 

for which they hold certificates, such as 

14 CFR part 145 (part 145) repair station 

activities, or 14 CFR part 142 training 

center activities. Some air carriers might 

also extend their SMS to their nonaviation related activities, such as 

security and occupational safety and 

health issues. If an air carrier elects to 

do so, the FAA would only conduct 

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1312 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

oversight of the SMS activities related to 

its aviation operations that the air 

carrier conducts in accordance with the 

provisions of part 121. In the final rule, 

the FAA has revised the regulatory text 

to limit the application of SMS only to 

the aviation-related activities conducted 

under the air carrier’s 14 CFR part 119 

(part 119) certificate. 

The FAA also limited the scope of 

SMS, in part, by defining hazard more 

narrowly. There were thirteen 

comments related to the definition of 

‘‘hazard.’’ U.S.C. stated that the 

definition of hazard should be 

expansive enough to include nonoperational elements (e.g., human 

resources, finance, information 

technology) of an organization. Twelve 

commenters (including SBA, ATA, AIA/ 

GAMA, GE, and MARPA) suggested 

limiting the term ‘‘hazard’’ to the 

aviation operational environment. 

Specifically, these commenters were 

concerned about the scope and depth of 

expectations regarding hazard 

identification. They stated that the SMS 

should focus solely on conditions 

affecting the safety of aviation 

operations and not occupational safety 

or environmental protection, as could be 

inferred in the definition proposed in 

the NPRM. Other commenters asked 

whether certificate holders would be 

expected to track every conceivable 

hazard, even those instances in which 

exposure to the hazard is remote or the 

likelihood and/or severity of potential 

outcomes would be negligible. 

Upon review of the comments, the 

FAA recognizes that the scope of the 

hazard and risk analysis and control 

processes required of the SMS must be 

consistent with the FAA’s statutory 

authority and the intended scope of the 

SMS. Therefore, the FAA has amended 

the definition of ‘‘hazard’’ to limit it to 

a ‘‘condition that could foreseeably 

cause or contribute to an aircraft 

accident as defined in 49 CFR 830.2.’’ 

This definition more clearly limits the 

potential events to be considered to 

those directly related to aircraft 

operations and the potential severity of 

those events to aircraft accidents, which 

is consistent with the FAA’s statutory 

authority in 49 U.S.C. 44702. The FAA 

definition, though it is tailored 

specifically to aviation, is consistent in 

intent and application with long 

standing industry system safety 

definition and practice. The revised 

definition also incorporates the NTSB’s 

definition of ‘‘aircraft accident,’’ as 

provided under 49 CFR 830.2. 

According to 49 CFR 830.2, an ‘‘aircraft 

accident’’ means an occurrence 

associated with the operation of an 

aircraft which takes place between the 

time any person boards the aircraft with 

the intention of flight and all such 

persons have disembarked, and in 

which any person suffers death or 

serious injury, or in which the aircraft 

receives substantial damage. 

C. Protection of Information/Data From 

Disclosure Under Freedom of 

Information Act (FOIA) 

AMOA, AOPA, ASA, ATA, Boeing, 

Bombardier, CAA, EAA, FedEx, GE, 

HAI, JetBlue, MARPA, NACA, UTC, and 

RAA all raised concerns that if SMS 

data is not protected from disclosure 

under FOIA, the FAA’s oversight over 

SMS could be compromised due to a 

lack of data being submitted to the FAA. 

ATA and GE, while supporting the 

FAA’s approach in the NPRM to not 

require the physical submission of any 

data, asserted that this is not adequate 

protection. These commenters indicated 

that protection of this data is vital to 

ensuring this information is shared with 

the FAA. 

Exposing submitted safety data to 

public scrutiny may have a chilling 

effect on reporting practice. ATA 

acknowledged that this information 

should be shared only with the FAA. 

JetBlue suggested the FAA develop a 14 

CFR part 193 (part 193) protection 

order, extending the same protections to 

SMS data that currently exist for ASAP, 

the Flight Operational Quality 

Assurance Program (FOQA), the Line 

Operations Safety Audit (LOSA), etc. 

AAJ opposed the protection of 

information beyond existing FOIA 

protections because of the impact the 

protection may have on the ability to 

gather information during discovery 

processes. 

The FAA recognizes that protection of 

certain safety information is vital to 

ensuring that employees and air carriers 

provide sufficient data to the FAA to 

ensure effective oversight over SMS. 

Section 44735 of title 49 of the United 

States Code, as amended by the FAA 

Modernization and Reform Act of 2012, 

Public Law 112–95 (Feb. 14, 2012), 

specifically contemplates the protection 

of voluntarily submitted reports, data, or 

other information produced or collected 

for purposes of developing and 

implementing a safety management 

system acceptable to the Administrator. 

It is important to note, however, such 

protection could not be afforded to 

information that is required to be kept 

to satisfy compliance with other 

regulatory requirements, such as 

crewmember training records or 

maintenance service records. 

To further clarify the extent of 

protection that may be afforded under 

the statute, the FAA notes that any 

record or other documentation that is 

required to show compliance with other 

regulatory requirements would not be 

protected. Protection also would not 

extend to records that must be made 

available under the provisions of 14 

CFR 119.59. Furthermore, any 

information protected under the statute 

is only protected from release by the 

FAA. If the information is submitted or 

released by the air carrier to another 

government entity, the protections of 

the statute are not binding on these 

other entities. Nor are these documents 

necessarily protected from discovery in 

civil litigation, although the carrier 

would be free to ask the court for 

whatever protections would be 

appropriate under the rules of the 

relevant jurisdiction. 

D. Enforcement 

ACSF, AEA, and DTI Training raised 

concerns about the manner in which the 

FAA plans to enforce the requirements 

of the new rule and address issues of 

noncompliance identified through SMS 

policies and procedures. ACSF 

recommended that the FAA publish its 

plan for compliance and enforcement, 

and provide industry the opportunity to 

comment. 

In regard to enforcement of the 

provisions of 14 CFR part 5 (part 5), the 

FAA acknowledges that each SMS will 

be uniquely designed to meet the needs 

of that air carrier’s operations. 

Determining compliance with the 

requirements of part 5 will be 

dependent on the specific facts of each 

case. As such, the FAA will exercise its 

discretion in deciding to pursue 

enforcement of the requirements of part 

5. 

The FAA also recognizes that a 

fundamental concept of SMS is for air 

carriers to identify and correct their own 

instances of noncompliance and invest 

resources and efforts to preclude their 

recurrence. This concept is not new to 

FAA enforcement policy. Many air 

carriers are currently addressing these 

issues under the voluntary disclosure 

reporting program (VDRP). When an 

apparent violation is detected through 

SMS processes and procedures, the FAA 

encourages air carriers to use VDRP as 

appropriate to disclose the violation. 

E. Scope of SMS and Compliance With 

Administrative Procedure Act 

AOPA, ASA, MARPA, NATA, SBA, 

and True-Lock raised concerns that the 

FAA could use SMS to extend 

regulatory requirements without going 

through notice and comment 

rulemaking as required under the 

Administrative Procedure Act (APA), 5 

U.S.C. 552. Specifically, concerns were 

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raised with regard to the requirement 

under the rule that the certificate holder 

develop risk controls for those hazards 

that require mitigation as identified 

under the certificate holder’s safety risk 

management analysis. 

This issue is not unique to SMS. 

Many regulations impose performance 

requirements that may be met in 

different ways. For example, certificate 

holders are required under 14 CFR 

121.135 to develop and document 

certain procedures, methods, and 

instructions to personnel. This 

provision sets forth areas that must be 

addressed by these procedures, but does 

not prescribe the exact procedures that 

must be incorporated into the certificate 

holders’ manuals. This discretion is 

evident in the requirement of 14 CFR 

121.135(b)(15), which requires the 

manual to include ‘‘procedures for 

operating in periods of . . . potentially 

hazardous meteorological conditions.’’ 

As the regulation does not establish a 

prescriptive, exclusive list of hazardous 

meteorological conditions for which 

procedures must be developed, the 

certificate holder must identify those 

conditions that are likely to impact its 

operation and address them 

appropriately in its manual. If these 

procedures are incorporated in the 

certificate holder’s required manual, the 

certificate holder must ensure 

compliance with the procedures it 

develops and documents in its manuals. 

A practical outcome of the safety risk 

management and safety assurance 

components of SMS is that procedures 

developed and documented under 14 

CFR 121.135 may need to be revised, or 

new procedures added, to mitigate risk 

from identified hazards. It is not the 

intent of this rulemaking to alter the 

existing regulatory standards or the 

approval and acceptance processes that 

already apply to each certificate holder. 

In some instances, the FAA may 

determine that a particular mitigation is 

necessary for all certificate holders 

based on the identification of a systemwide hazard. If the FAA identifies the 

need for such mitigation, the FAA 

would conduct rulemaking in 

accordance with the APA in order to 

apply the standard to all certificate 

holders. 

F. Duplicative Rulemaking 

ACSF, EAA, and NATA raised 

concerns about the different set of SMS 

requirements for airports and suggested 

combining these two rulemaking actions 

into one to ensure consistency. ASA and 

MARPA asserted that the FAA should 

not create a general part 5, but rather 

should incorporate the proposed 

requirements into a new subpart for part 

121. This would allow for SMS 

requirements to be tailored to each 

specific part to address technical issues 

that are unique to the regulated entities. 

As stated in the NPRM, the FAA 

developed the framework of the rule as 

a means of harmonizing with ICAO 

standards, while establishing a uniform 

standard that could be extended to 

apply to 14 CFR part 135 (part 135) 

certificate holders, part 145 repair 

stations, and design and manufacturing 

entities. The uniform standard is 

necessary because some of these 

regulated entities may hold more than 

one FAA certificate and may need or 

want to create one SMS to encompass 

all of their aviation-related activities. 

The general standards set forth in part 

5 would permit such integration with 

only minor modifications. Any 

extension of the applicability of part 5 

required by the FAA will be made 

through the APA notice and comment 

rulemaking process. 

In regard to the separate standards for 

airports, the FAA notes that both SMS 

rules are structured in accordance with 

the ICAO SMS framework, which is 

identical in Annex 6 (air operators) and 

Annex 14 (airports). However, the FAA 

recognizes that there are inherent 

differences in the operation of an airport 

and an air carrier. Based on a review of 

these differences, the FAA determined 

that the rulemakings should proceed as 

separate projects. 

Although there may be two separate 

regulations addressing SMS, the FAA 

encourages air carriers and airports to 

communicate with one another when 

hazards are identified through their 

respective SMS procedures and 

processes. In that way, they can 

determine which SMS may best address 

the hazard. For example, if an air 

carrier’s employee identifies a hazard on 

the movement area of the airport, the air 

carrier’s employee would likely report 

the hazard through the air carrier’s 

employee reporting system. Once 

reported, the FAA recommends that the 

air carrier notify the airport of the 

identified hazard so the airport is aware 

of the issue and can analyze the risk 

accordingly. In addition, the air carrier 

may also analyze the risk of the hazard 

and determine if it warrants any sort of 

mitigation through the revision or 

further development of the air carrier’s 

procedures. This type of communication 

will serve to ensure that hazards, 

whether unique to the certificate holder 

or more systemic to the airport, are 

being addressed effectively by all 

parties. 

G. Credit for Pilot Project Participants 

and Adoption of Third Party/Accredited 

SMS 

ATA, Delta, NACA, and StandardAero 

suggested grandfathering in the 

participants in the Pilot Project, or 

otherwise providing credit for their 

progress in developing and 

implementing an SMS based on the 

framework set forth in AC 120–92A. 

Delta requested additional guidance for 

those certificate holders transitioning 

from the levels of validation in the Pilot 

Project to satisfying the requirements of 

part 5. In addition, ASA and 

StandardAero requested that they 

receive credit for third party systems 

that are similar to SMS that they have 

implemented, such as QMS, IEP, or 

International Standard for Business 

Aircraft Operations (IS–BAO). 

The FAA developed the requirements 

in the NPRM based on the ICAO SMS 

framework in Annex 6 and the 

guidelines for developing a voluntary 

SMS described in AC 120–92A, 

Appendix I. Despite the attempt to 

harmonize the proposed regulatory 

standards with the ICAO framework and 

guidance material, there may be some 

differences between what the air carriers 

have done in the Pilot Project and what 

would be required under part 5 once the 

rule becomes effective. Rather than 

exempt the Pilot Project participants 

from the requirements of part 5, the 

FAA believes that these air carriers 

would benefit from reviewing their 

existing implementation plans, and 

comparing the plans with the final rule. 

If gaps are found, the carriers would 

update the implementation plans to fill 

the gaps identified and submit their 

plans to the FAA for approval to satisfy 

the requirements of 14 CFR 5.1(b). 

Some air carriers completed SMS 

implementation through the Pilot 

Project under the framework of AC 120– 

92A and their SMS has been validated 

by the FAA. To comply with the 

implementation plan requirements of 14 

CFR 5.1(b), these air carriers will need 

to conduct a gap analysis of the systems 

currently in place under their SMS and 

the requirements of the final rule, and 

identify any gaps that will need to be 

addressed to bring their existing SMS 

into compliance with the requirements 

of the final rule. However, they may not 

have to repeat the entire gap analysis 

and planning process in areas where 

there are no differences between the 

final rule and Pilot Project guidance. 

In regard to the request for credit for 

implementation of third party systems, 

like International Air Transportation 

Association (IATA) Operational Safety 

Audit (IOSA), International Standards 

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Organization (ISO)–9000/AS–9100, 

these systems have not been subject to 

review and acceptance by the FAA. It 

would be inappropriate to provide 

credit or waive compliance 

requirements to these air carriers who 

have implemented these third party 

systems. These systems may include 

some elements of an SMS, but may not 

contain all the necessary elements. 

These third-party systems may be 

incorporated into an air carrier’s SMS if 

the systems satisfy the requirements set 

forth in the final rule. If an air carrier 

plans to incorporate these other systems 

into its SMS, the air carrier should 

outline the incorporation of these 

systems in its implementation plan. 

Given these avenues for incorporating 

existing processes and procedures, the 

FAA has not revised the final rule to 

allow credit for Pilot Project 

participants, nor other air carriers who 

have implemented third-party SMS 

systems or other management tools. 

H. Applicability, Subpart A— 

Implementation Plans 

ACSF, ATA, Bombardier, NACA, and 

RAA requested the timeframe for 

submission of the implementation plans 

be extended from 6 months to anywhere 

from 9 to 18 months. ASCA, ATA, 

Bombardier, FedEx, Omni Air, and RAA 

expressed concern with the FAA’s 

ability to manage the 90 submissions it 

will receive, as well as the FAA’s ability 

to establish a consistent process for 

review and acceptance of the plans. 

Bombardier, EAA, and RAA asserted 

that an extension of this time is needed 

because the FAA would not be held to 

a timetable for accepting the 

implementation plans. FedEx suggested 

the FAA consider a timetable of three 

months to approve the implementation 

plan, or, in the alternative, to simply 

accept the plan. ASCA, Bombardier, and 

FedEx requested that the time to submit 

and wait for the FAA to approve an 

implementation plan should not be 

included in the 3-year implementation 

timeframe. 

In addition, ATA, AOPA, ASCA, and 

Bombardier indicated that three years 

was not adequate for carriers to develop 

and implement an SMS. In contrast, 

AFA, ALPA, NTSB, Omni Air, and SWA 

acknowledged that the proposed 

timeframes for implementation plan 

approval and SMS acceptance were 

reasonable. 

The FAA notes that 24 of the part 121 

certificate holders participating in the 

SMS Pilot Project have submitted an 

SMS implementation plan as part of the 

pilot project. The typical 

implementation plans received in the 

pilot projects indicated that full 

implementation of SMS could be 

achieved within three years. None of the 

participants indicated the need for more 

time during development of their plans. 

Because this timeframe is consistent 

with the comments received from AFA, 

ALPA, NTSB, Omni Air, and SWA, as 

well as the lessons learned from other 

Civil Aviation Authorities (CAAs), the 

FAA has determined that three years is 

an adequate timeframe for 

implementation of SMS. 

However, upon review of the 

comments, the FAA has revised 14 CFR 

5.3 to require submission of the 

implementation plan for review within 

6 months of the final rule’s effective 

date, and for approval of the plan no 

later than 12 months after the effective 

date of the final rule. As of January 11, 

2012, 72 of the approximately 90 part 

121 certificate holders are participating 

in the Pilot Project. Of these, 17 have 

completed implementation plans, which 

have been validated by the FAA. The 

average time for completing and 

receiving approval of these plans is 

approximately one year. Based on this 

average, the FAA expects that certificate 

holders will be able to meet this 

requirement. Certificate holders that 

already have a validated 

implementation plan through the Pilot 

Project will not be required to resubmit 

their original implementation plan for 

approval, but rather may submit an 

abridged analysis that identifies the 

areas in their existing implementation 

plans that need to be revised to comply 

with the new regulatory requirements. 

Many Certificate Management Teams 

(CMTs), which are the FAA field offices 

responsible for managing individual 

part 121 certificates, have been exposed 

to these implementation plans due to 

their work with the Pilot Project and, 

therefore, there should be no extended 

delays in reviewing and ultimately 

approving these plans. Accordingly, the 

FAA believes this timeframe is 

sufficient and will not cause undue 

burden on either the affected certificate 

holders or the FAA. 

Pinnacle disagreed with the proposal 

to require implementation plans be 

approved. Due to the dynamic nature of 

the airline industry, Pinnacle asserts 

that these plans must be routinely 

modified to accommodate changes to an 

airline’s organization or environment. If 

a plan requires approval, an airline 

would not be able to proceed with a 

change to a plan until the FAA reviewed 

and approved each change. Bombardier, 

while not objecting to the requirement 

to have the plans approved, 

recommended some minimum 

requirements for the content and level 

of detail for the implementation plan. 

The FAA recognizes the dynamic 

nature of an air carrier’s operations, and, 

thus, maintains that the SMS should be 

accepted rather than approved to allow 

the air carrier to make the necessary 

changes to address issues in its 

operations. However, to ensure that the 

SMS is properly developed within the 

required timeframe, some measure of 

additional oversight control is 

necessary. One of the foremost 

acknowledged sources of hazards is 

change in an air carrier’s operation, and 

it is one of the principal reasons for 

special or expanded oversight by the 

FAA. The FAA, therefore, has not 

revised the requirement that the 

implementation plan must ultimately be 

approved. Any changes to the 

implementation plan and SMS will be 

documented and submitted to the FAA 

by the air carrier. If a modification is 

required, the FAA will provide 

additional guidance to the air carrier to 

ensure that the SMS remains in 

compliance with part 5 and is 

implemented within 3 years of the 

effective date of the final rule. 

ATA suggested extending the effective 

date of the final rule because the 

proposed 60-day period is not sufficient 

time to review the rule and understand 

what is required to be in the 

implementation plan before the time for 

submission of the implementation plan 

begins to run. In contrast, AFA, NTSB, 

Omni Air, and SWA stated that the 60- 

day effective date was reasonable. 

The FAA has determined that the 60- 

day effective date is appropriate. The 

changes to the final regulatory text are 

not significant and, again, more than 

50% of the part 121 certificate holders 

already are engaged in developing and 

implementing an SMS. Therefore, the 

60-day effective date is a reasonable 

timeframe for certificate holders to 

conduct their review of the final rule 

and initiate compliance. 

I. Subpart B, Safety Policy—Designation 

of a Single Accountable Executive and 

Sufficient Safety Management Personnel 

a. Single Accountable Executive 

Bombardier raised concerns that 

proposed 14 CFR 5.25 does not permit 

any flexibility for the certificate holder 

to delegate tasks to more than one 

executive or other management 

representatives as appropriate, based on 

the size and complexity of the 

organization. ATA recommended 

further clarifying the role of the 

accountable executive, and removing 

the requirement that the accountable 

executive be responsible for 

implementation of the SMS. ATA, 

NACA, and RAA asserted that this 

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responsibility is better suited for the 

safety management representative. 

ALPA supported the designation of a 

single, accountable executive. Cessna 

and Futron recommended that the 

authority to make operational decisions 

and the authority to allocate resources 

should be better defined for the 

accountable executive, or otherwise 

removed from this paragraph. Futron 

asserted that the accountable executive 

should be outside of the normal safety 

chain and directly involved in the 

operational chain. 

As proposed, 14 CFR 5.25 defines 

both the accountable executive and the 

management personnel. The 

accountable executive must be a single, 

identifiable person having final 

authority and responsibility for the 

safety performance of the air carrier. 

This ensures that executive management 

is integrally involved in the oversight of 

the air carrier’s safety performance. The 

FAA has not revised this requirement in 

the final rule. 

To address the commenters’ concerns 

about the accountable executive’s 

responsibilities, the FAA has clarified 

the criteria and responsibilities set forth 

in 14 CFR 5.25. As prescribed, the 

accountable executive needs to be able 

to organize, direct, and control the air 

carrier’s activities, as well as allocate 

resources to make safety controls 

effective. The accountable executive 

must also develop the documented 

safety policy proposed under 14 CFR 

5.21, communicate the policy 

throughout the air carrier, and regularly 

review the safety policy and safety 

performance of the air carrier. The 

accountable executive must review 

safety information to assess the overall 

performance of the air carrier and make 

necessary changes. 

b. Management Representative 

Delta suggested that the involvement 

of a part 119 management position in 

the efficient working of an SMS must 

suffice as a required resource for the 

implementation of the SMS. Other 

commenters questioned the need to 

require only one management 

representative and suggested revising 

the rule to allow for the certificate 

holder to determine how to structure a 

management team responsible for 

monitoring the daily operation of the 

SMS. 

Part 119 identifies various 

management personnel needed for an 

air carrier to function and maintain a 

certificate. The FAA does not believe it 

is necessary to restrict part 121 air 

carriers from using only the Director of 

Safety or another part 119 management 

personnel position to perform the duties 

specified in 14 CFR 5.25(c). The 

requirement to have a designated 

management representative was 

intended to ensure coordinated and 

consistent implementation of a fully 

integrated SMS throughout the air 

carrier’s aviation related activities, as 

well as to provide adequate support for 

continued operation and maintenance of 

the SMS. 

Upon review of the comments, it 

appears that either one person, or a 

combination of personnel, could 

perform the function of the management 

representative as proposed in the 

NPRM. The FAA does not expect that 

the accountable executive will always 

perform every day-to-day activity that 

the function of the management 

representative requires. As air carrier 

operations are diverse, one method of 

managing implementation and 

continued operation of an SMS cannot 

be exclusively defined. To do so may 

stifle innovation and creativity. 

Although a single management 

representative, designated by and 

reporting directly to the accountable 

executive, is conceptually the most 

direct means of establishing a point of 

responsibility for an integrated system, 

this does not represent the only means. 

Depending upon the size and 

complexity of the air carrier, the 

functions of the management 

representative or personnel may range 

between being a collateral duty of the 

accountable executive, to a team of 

representatives working under the 

guidance and coordination of a team 

leader who is responsible for the 

effectiveness of the team. Accordingly, 

the FAA has revised 14 CFR 5.25(c) to 

allow the air carrier to designate 

sufficient management personnel 

responsible for the coordination and 

implementation of the SMS. 

Whatever structure is implemented by 

the air carrier, 14 CFR 5.25(c)(4) 

requires that these personnel regularly 

report to the accountable executive. 

Personnel designated to perform this 

function must be in positions in the 

organization of sufficient independence 

to have direct access to the accountable 

executive to report on the safety 

performance of the operation and 

recommend any necessary 

improvements. 

c. Role of Line Employees 

AFA raised concerns that the line 

employees are not defined as having a 

key role in the decision-making process 

and that they are merely a reporting 

mechanism for the SMS. AFA asserted 

that these employees should also have 

input into the decision- making process. 

For an SMS to be effective, input and 

active participation is essential from all 

levels of employees in an air carrier. 

Many air carriers have different 

decision-making processes, some of 

which include line employees. Roles 

that employees play within that air 

carrier’s SMS must be identified and 

documented in the safety policy as 

described in 14 CFR 5.21. If line 

employees are identified to participate 

in safety boards, working groups or 

audit review teams, they must be 

trained to actively support the safety 

policy of the accountable executive as 

well as comply with all established 

organizational safety initiatives. 

Another aspect of SMS that requires line 

employee participation is the employee 

reporting system. The participation of 

line employees is critical in developing 

improvements in functions that directly 

impact their job tasks. 

J. Subpart C, Safety Risk Management 

(SRM) 

AIG, ASA, ATA, Boeing, GAMA, 

MARPA, Pinnacle, and RAA recognized 

the importance of SRM, but requested 

clarification regarding when the SRM 

processes and procedures are triggered 

and what constitutes a ‘‘system.’’ The 

commenters also suggested reorganizing 

14 CFR 5.51, 5.53, and 5.55, to 

emphasize hazard identification and to 

eliminate system analysis. 

The FAA has revised the regulatory 

text to clarify how safety analyses must 

be used under safety risk management. 

With regards to this rule, the term 

‘‘system’’ is used to describe the 

operational components used to deliver 

aviation-related services. Systems may 

include hardware, software, people, 

procedures, resources, or functions 

directly related to the delivery of air 

transportation services. For example, a 

system would include, among others: 

The aircraft, the crewmembers, crew 

training, crewmember duty time 

tracking programs, dispatch functions, 

maintenance of the aircraft, fueling, 

servicing, and flight operations. The 

term ‘‘system’’ does not include those 

people, procedures, resources, 

hardware, and software that are not 

directly related to the delivery of air 

transportation services (e.g., advertising, 

building maintenance, payroll). The 

FAA’s use of the term ‘‘system,’’ in this 

rulemaking, is consistent with longstanding use of the term within the 

industry. 

As part of the SRM process, air 

carriers need to consider the operational 

environment directly related to the 

delivery of air transportation services. 

The operational environment that 

should be considered includes not only 

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the physical environment (e.g., terrain, 

weather, geographic location) but also 

any constraints on the air carrier’s 

actions due to business needs and other 

laws or regulations that may affect the 

air carrier’s air transportation services. 

Regarding when SRM would be 

triggered, 14 CFR 5.51 (Applicability.) 

requires that the SRM process be 

applied under the following conditions: 

Planning for and implementation of new 

systems; revision of existing systems; 

development of operational procedures; 

or identification of hazards or 

ineffective risk controls through the 

safety assurance processes in subpart D 

of part 5. Some examples of these 

triggers are outlined below. 

Changes to an air carrier’s operation 

could include addition of new routes, 

opening or closing of line stations, 

adding or changing contractual 

arrangements for services, additions of 

new fleets or major modifications of 

existing fleets, addition of different 

types of operations such as extendedrange operational performance 

standards operations, or a change in the 

software for operational systems such as 

flight planning and dispatch. Any of 

these additions or changes would trigger 

the use of the SRM process. 

A further trigger for SRM would be 

cases when the safety assurance 

processes reveal hazards that have not 

been addressed or instances when the 

procedures that have been specified fail 

to control risk. For example, an air 

carrier might discover through 

employee reporting or internal auditing 

that procedures for loading data into the 

airplane flight management computer 

are confusing. This would result in 

action such as the air carrier modifying 

the procedures themselves or the 

training and checking process in use. In 

another example, an analysis of internal 

audits could reveal that a maintenance 

tracking and control program failed to 

identify required inspections, resulting 

in some of them being missed or 

overdue. In this case, the air carrier may 

decide that the program itself is 

defective and must be reengineered, 

again, requiring the application of SRM. 

These are just some examples of systems 

and triggers for the SRM processes of 

subpart C of the final rule. 

RAA suggested that 14 CFR 5.53(c) 

include the requirement to track 

hazards. This practice would prevent 

hazards from being identified and 

recorded without further action. The 

FAA has reviewed this suggestion and 

determined that the purpose of the 

suggested revision is already met under 

the final rule. Subpart C, SRM, and 

Subpart D, Safety Assurance, work 

together such that identified hazards 

must be tracked in addition to being 

identified. Thus, the FAA has not 

adopted this suggested revision in the 

final rule. 

K. Subpart D, Safety Assurance 

AIG, ASA, ATA, Boeing, Cessna, 

GAMA, MARPA, Rockwell Collins, and 

U.S.C. agreed on the importance of 

safety assurance practices, but 

recommended the FAA clarify the 

applicability of safety assurance and the 

definition of ‘‘system’’ to mirror the 

definition of ‘‘system’’ for SRM. Boeing 

also suggested revising 14 CFR 5.71 and 

5.73 to limit the scope of the SMS to the 

aviation-related activities of the 

company. In addition, Boeing, GAMA, 

MARPA, and Rockwell Collins 

recommended replacing the term 

‘‘operation’’ with ‘‘system’’ because 

operation implies the activities of an air 

carrier, and would require modification 

if these provisions were extended to 

other types of operators in future 

rulemakings. 

AIA/GAMA, Boeing, Cessna, and 

Rockwell Collins all questioned using 

the terms ‘‘continuous’’ and ‘‘periodic’’ 

in 14 CFR 5.71. The commenters 

asserted that the terms are ambiguous 

and do not establish a frequency for 

adequate monitoring. For example, one 

commenter stated that the continuous 

monitoring requirement could imply 

monitoring the system 24 hours a day, 

which could be burdensome. 

Because different systems will require 

different monitoring processes, the FAA 

has removed the terms continuous and 

periodic from 14 CFR 5.71. Additional 

clarification of the monitoring 

requirements is also provided in the 

advisory material associated with this 

final rule. In regards to the suggestion to 

define the term system for safety 

assurance, the FAA has determined that 

such a definition would not be 

necessary in the regulatory text because 

the list in 14 CFR 5.71(a) provides the 

scope of safety assurance activities. 

Further, as stated in section J, the term 

‘‘system’’ is used to describe the 

operational components used to deliver 

aviation-related services. Systems may 

include hardware, software, people, 

procedures, resources, and functions 

directly related to the delivery of air 

transportation services. The systems 

addressed by this rule do not include 

those elements that are not directly 

related to the delivery of air 

transportation services. 

L. Subpart F, Recordkeeping and 

Documentation Requirements 

AIA/GAMA, Boeing, Bombardier, 

Omni Air, and Rockwell Collins 

asserted that the record keeping and 

documentation requirements for SMS 

are too prescriptive and onerous. ATA 

and Delta advocated the retention 

requirement be scalable and flexible 

according to the certificate holder’s 

policy and that outputs of the SMS 

should be retained for as long as 

deemed necessary by the air carrier. 

EAA questioned the operational reason 

for mandating the retention of SMS 

records beyond existing industry 

standards and requirements. NATA 

requested clarification on the types of 

documents that must be maintained 

under the proposed standards. 

Bombardier and Boeing suggested 

revising recordkeeping provisions in 14 

CFR 5.97 to require certificate holders to 

maintain these records for 5 years. AIA/ 

GAMA also supported a 5-year retention 

requirement for outputs of SRM 

processes. NACA acknowledged that the 

recordkeeping requirements were 

acceptable as proposed. 

Neither the proposed rule text nor the 

preamble implies that an air carrier 

would have to undergo a complicated 

and expensive revamping of its 

organization to accommodate document 

and record retention requirements. The 

required records can be kept 

electronically or in paper format. For 

SRM outputs, the timeline associated 

with the retention of the documents 

must be scalable to the air carrier’s 

operation. The outputs of SRM 

processes should be kept for as long as 

they remain relevant to the air carrier’s 

operation to allow the air carrier to 

evaluate whether the controls put in 

place under SRM are effective and 

needed. Once the action that triggers the 

development of the control is no longer 

present in the air carrier’s operation, the 

air carrier may determine that the 

records no longer need to be kept. Thus, 

it is important that the air carrier 

exercise discretion to determine how 

long SRM output records are kept. 

Similarly, this rule requires a 

certificate holder to retain records of 

SMS-required training that is 

administered to the accountable 

executive, members of the certificate 

holder’s management, and other 

employees for as long as the individual 

who received the training is employed 

by the certificate holder. Once the 

individual who received the training is 

no longer employed by the certificate 

holder, there is no longer a need for the 

certificate holder to retain these records. 

The recordkeeping requirements 

associated with the safety assurance’s 

processes and procedures serve a 

different purpose. The goal of safety 

assurance is to collect historical data on 

an operating system for analysis. The air 

carrier needs to have sufficient 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1317 

6For more information regarding the Consistency 

and Standardization Initiative please refer to: http:// 

www.faa.gov/about/office_org/headquarters_

offices/avs/consistency_standardization/. 

historical data to review. The 5-year 

period proposed in the NPRM is 

reasonable and will provide the air 

carrier with adequate records to conduct 

analysis. The FAA has determined that 

the proposed recordkeeping retention 

requirements are appropriate and has 

retained the requirements in the final 

rule. 

M. Flow-Down of Requirements 

ALPA asserted that an air carrier must 

exercise some oversight of those entities 

providing services to them and that the 

proposed rule would naturally have 

some flow down effect. ALPA asserted 

there should be a requirement to 

develop and document an avenue for 

the reporting of hazards from 

subcontractor field employees to the air 

carrier. This may include establishing a 

liaison that would communicate 

necessary safety information to the 

subcontractor and take corrective action 

as necessary. 

RAA stated that, even though the FAA 

will not expand these existing 

requirements to entities other than 

certificate holders authorized to conduct 

operations under part 121, it can be 

expected that air carrier SMS programs 

will produce positive trickledown 

benefits to the operational safety of 

contractors. Under this scenario, air 

carriers will provide safety-enhancing 

guidance and oversight (at some level) 

to relevant elements of their contract 

service providers operations, and 

contractors will share information with 

the air carriers on the risks or safety 

trends that the contractors may from 

time to time identify. 

Bombardier stated that it is expected 

that SMS regulated entities will 

determine what aspects of the SMS need 

to be passed on to non-regulated 

suppliers and pass those requirements 

along through business requirements. 

Inevitably, this will then result in 

additional burden on the regulated 

entities to provide support and 

increased oversight to ensure 

compliance of these suppliers, 

contractors and sub-contractors with 

these SMS related requirements. The 

SMS rule should be carefully 

constructed to allow those part 121 or 

135 carriers to accept their part 145 

certificated suppliers’ SMS without 

deviation. Otherwise, inconsistent 

requirements will be passed on from 

different operators. 

ASA and MARPA stated it is normal 

in the industry for air carriers and other 

certificate holders to flow-down their 

requirements to their suppliers, even 

without a regulatory requirement. For 

example, many certificate holders may 

decide to use their suppliers as data 

sources for their SMS (e.g., reports of 

identified hazards). There is nothing in 

the regulation that prevents the FAA 

from stating that once the flow-down is 

in the manual, the supplier becomes 

part of the SMS system and thus 

becomes subject to SMS oversight. They 

recommended that the rule specify that 

a company may rely on its business 

partners as data sources for its SMS, but 

even if it does so, this act alone would 

not impose SMS regulations (or FAA 

SMS oversight) on the business partner. 

NACA agreed, asserting that it is not 

necessary to require contractors or 

subcontractors to develop an SMS at 

this time. They should be permitted to 

let data flow into a part 121 carrier’s 

program when handling their aircraft. 

This would add valuable information to 

SMS and produce a more 

comprehensive program. 

AOPA strongly disagreed with the 

FAA’s assessment and believed the FAA 

has greatly underestimated the trickle 

down implications for contractors and 

subcontractors of regulated certificate 

holders. The more functions a certificate 

holder contracts out, such as fueling, 

deicing, and pilot training, the more 

critical it is that the certificate holder 

include its contractors in its SMS 

process. Although the FAA is not 

seeking regulation of these contracted 

entities, AOPA asserted that FAA 

should not discount the potential effects 

of this proposed regulation on these 

entities. AOPA is concerned that this 

ripple effect would become even more 

apparent when the FAA expands the 

requirements of 14 CFR part 5 to 

encompass part 135 certificate holders. 

Delta Air Lines did not see a 

significant impact or flow down effect of 

the development of SMS and its 

implications on vendors and contractors 

providing services to the operator. The 

comprehensive implementation in all 

levels of the organization has allowed 

the vendors and contractors to be 

assessed under the safety assurance 

component of its SMS and findings and 

observations are mitigated under a riskbased system documented and tracked 

according to the SMS requirements and 

SRM techniques. 

Boeing said that the product/service 

provider should be allowed to 

determine the level of integration based 

on business needs and operational 

efficiency, without incurring undue 

compliance burden. 

The SMS requirements of the rule are 

intended to be applied to individual air 

carriers. This rule does not require the 

air carrier to require SMSs on the part 

of contractors, code-share partners, or 

other business affiliates. This rule 

permits the use of contractors as a data 

source, but will not mandate this 

requirement. Associated policy and 

advisory documents will not specify or 

imply these requirements as conditions 

of acceptance. An air carrier may 

include SMS in its negotiated business 

arrangements, consistent with the 

common practice in industry where air 

carriers require registration under such 

programs as AS 9100, IOSA, and 

Coordinating Agency for Supplier 

Evaluation (C.A.S.E.) audits. Contractual 

requirements for arrangements do not 

relieve the air carrier from its 

responsibilities under this rule. 

N. FAA Capability To Manage Oversight 

AIA/GAMA, AOPA, Hawker 

Beechcraft, JetBlue, Omni Air, and RAA 

asserted it is essential that the FAA 

develop and deploy appropriate training 

and guidance material for the inspector 

workforce involved in SMS assessment 

and oversight. Hawker Beechcraft and 

Omni Air questioned whether the FAA 

would be able to handle the significant 

surge in plan submissions as the 

deadline nears. 

FedEx suggested that the FAA 

consider a process by which differences 

in interpretation, applicability, and 

direction between a carrier and the FAA 

approval authority can be elevated 

within the FAA for resolution. 

Clear and comprehensive guidance 

documents have been developed and 

will be provided to the Aviation Safety 

Inspectors (ASIs) prior to this rule’s 

effective date to ensure standardization. 

The SMS Program Office is also 

available as subject matter experts to 

assist the field office inspectors. 

Training is also currently underway for 

part 121 ASIs. This training includes the 

principles and precepts of SMS. 

Additional training is being designed to 

enhance the ASI’s knowledge and 

ability to assess the compliance of an air 

carrier’s SMS with part 5. 

Air carriers also will be able to use the 

Consistency and Standardization 

Initiative 6 to appeal decisions related to 

the review of their SMS. The FAA will 

consider a process by which differences 

in interpretation, applicability, and 

direction between an air carrier and the 

FAA approval authority can be elevated 

to the applicable FAA office for 

resolution. 

O. Guidance Material 

ACSF, AOPA, Boeing, GE, Hawker 

Beechcraft, and NATA suggested 

rescinding draft FAA Order 8900xx and 

reissuing simplified guidance material 

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1318 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

7The FAA acknowledges that Advisory Circular 

120–92 is not binding. 

because the draft order is too 

prescriptive. The commenters were 

concerned that the guidance material 

and orders significantly expands the 

regulatory requirements in proposed 

part 5. Commenters noted that the draft 

order contained material that was too 

academic and should be revised for 

clarity. 

Upon review of the comments, the 

FAA has revised the guidance material 

to ensure that there is a clear 

delineation between regulatory 

requirements and other information.7

The FAA has also revised the draft 

guidance for inspectors to provide 

instruction on various methods that may 

be employed to satisfy the requirements 

of this rule. 

P. Determination of Acceptable Levels of 

Safety 

AEA, AOPA, ASCA, and ATA asked 

for a definition of acceptable level of 

safety. They expressed concern that 

lacking a clear definition of this term 

would leave the industry and the FAA 

in a position where inspectors would be 

defining what constitutes an acceptable 

level of safety. This would lead to 

inconsistent application across the 

industry. The SBA also asserted that the 

FAA should conduct a gap analysis of 

its regulations and fill any holes to 

establish standardized acceptable levels 

of safety through the regulations that 

can be uniformly applied throughout 

the industry. 

The term ‘‘acceptable level of safety’’ 

is only used in the preamble of the 

NPRM and is only mentioned when 

referencing ICAO standards/framework 

and an NTSB recommendation. In 

determining the safety performance 

measurement for the air carrier’s 

operation, each air carrier should use 

the regulatory minimums set forth in 

Chapter I, Title I, of 14 CFR as the 

baseline. 

Q. Performance Based v. Process Based 

Regulation 

ASA and MARPA stated that the 

proposed part 5 was a process-based 

rule. In contrast, AIA/GAMA and 

Bombardier stated that the proposal was 

a performance-based rule. All of these 

commenters expressed a strong desire to 

avoid a prescriptive-based rule because 

of the dynamic nature of air carrier 

operations. They were also concerned 

that a performance-based rule could 

lead to wide variances in interpretation 

as to what is acceptable for an SMS. 

The ARC, ATA, and GE expressed a 

strong desire for a rule that closely 

matched the ICAO framework to allow 

for increased acceptance of an air 

carrier’s SMS by foreign civil aviation 

authorities. They stressed the need to 

balance prescription with the need for 

adequate description and flexibility to 

develop multiple solutions in the 

interest of increased innovation. They 

stated that the proposed requirements 

met all of these needs. 

Changing the regulatory text to a pure 

performance-based rule would deviate 

from the ICAO SMS requirements. This 

increases the risk that the FAA’s SMS 

rules would fail to meet the 

requirements of other sovereign nations, 

and thus jeopardize the ability of U.S. 

air carriers to operate in countries where 

compliance with these standards is 

enforced. This final rule specifies a 

basic set of processes to form a 

framework for the SMS, but does not 

specify particular methods for 

implementing these processes. This 

provides a balance between 

standardization and a robust SMS 

structure while allowing considerable 

flexibility for how an individual air 

carrier chooses to establish its SMS. 

R. Employee Reporting Systems 

Proposed 14 CFR 5.21(a)(4) states 

there must be an employee reporting 

system, and that the reporting system 

must be confidential as per 14 CFR 

5.71(a)(7). AFA, ALPA, RAA, and SWA 

were concerned that unless an explicit 

restriction is imposed to prevent abuse, 

disclosures of safety improvement 

opportunities, concerns, or issues 

submitted by any employee may be used 

against the reporting employee in a 

disciplinary manner. They suggested 

that the employee reporting system be 

non-punitive. 

The confidential reporting system in 

14 CFR 5.71(a)(7) is a conduit for 

employees to raise safety issues without 

fear of reprisal. There is a distinction in 

a non-punitive reporting system and the 

requirement in 14 CFR 5.21(a)(5) to 

require the certificate holder to establish 

a policy that defines unacceptable 

employee behaviors. There are some 

instances where disciplinary action is 

warranted (e.g., the behavior indicates a 

willful disregard to comply with 

company procedures or regulations) and 

14 CFR part 5 recognizes this fact. 

Therefore, the rule requires a certificate 

holder to establish a confidential 

employee reporting system and define 

unacceptable behaviors. This allows the 

confidential gathering of safety 

information from employees while 

maintaining the certificate holder’s 

freedom to address unacceptable 

behavior. 

V. Regulatory Notices and Analyses 

A. Regulatory Evaluation 

Changes to Federal regulations must 

undergo several economic analyses. 

First, Executive Order 12866 and 

Executive Order 13563 directs that each 

Federal agency shall propose or adopt a 

regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs. 

Second, the Regulatory Flexibility Act 

of 1980 (Pub. L. 96–354) requires 

agencies to analyze the economic 

impact of regulatory changes on small 

entities. Third, the Trade Agreements 

Act (Pub. L. 96–39) prohibits agencies 

from setting standards that create 

unnecessary obstacles to the foreign 

commerce of the United States. In 

developing U.S. standards, this Trade 

Act requires agencies to consider 

international standards and, where 

appropriate, that they be the basis of 

U.S. standards. Fourth, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4) requires agencies to prepare a 

written assessment of the costs, benefits, 

and other effects of proposed or final 

rules that include a Federal mandate 

likely to result in the expenditure by 

State, local, or tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more annually (adjusted 

for inflation with base year of 1995). 

This portion of the preamble 

summarizes the FAA’s analysis of the 

economic impacts of this final rule. We 

suggest readers seeking greater detail 

read the full regulatory evaluation, a 

copy of which we have placed in the 

docket for this rulemaking. 

In conducting these analyses, FAA 

has determined that this final rule: (1) 

Has benefits that justify its costs, (2) is 

not an economically ‘‘significant 

regulatory action’’ as defined in section 

3(f) of Executive Order 12866, (3) is 

‘‘significant’’ as defined in DOT’s 

Regulatory Policies and Procedures; (4) 

will not have a significant economic 

impact on a substantial number of small 

entities; (5) will not create unnecessary 

obstacles to the foreign commerce of the 

United States; and (6) will not impose 

an unfunded mandate on state, local, or 

tribal governments, or on the private 

sector by exceeding the threshold 

identified above. These analyses are 

summarized below. 

i. Total Benefits and Costs of This Rule 

This rule requires Part 121 operators 

(domestic, flag, and supplemental 

operations) to establish an SMS. It is 

expected that the requirements of the 

rule will help airlines to identify safety 

problems, and if airlines take steps to 

mitigate these problems it is estimated 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1319 

that the benefits from that mitigation 

could be between $205.0 and $472.3 

million over 10 years ($104.9 to $241.9 

million present value at 7 percent 

discount rate). Costs of the rule’s 

provisions (excluding any mitigation 

costs, which have not been estimated) 

are estimated to be $224.3 million 

($135.1 million present value at 7 

percent discount rate) over 10 years. 

ESTIMATED COSTS AND BENEFITS FOR ALL PART 121 CARRIERS—2014–2023 

[Millions of 2010 Dollars * (Discounted at 7% Discount Rate)] 

Costs ................................................................................................................................. Rule Implementation Costs: $135.1. 

Mitigation Costs: Not quantified, estimates not included. 

Benefits from Provisions of the Rule and any Consequent Safety Mitigation Actions ** $104.9–$241.9. 

* Table values have been rounded. Totals may not add due to rounding. 

** Given the range of mitigation actions possible, it is difficult to quantify potential benefits. This range reflects the potential benefits resulting 

from examples of possible mitigation actions. 

ii. Who is potentially affected by this 

rule? 

All Part 121 Operators 

iii. Assumptions 

• All costs and benefits are presented 

in 2010 dollars. 

• All costs and benefits are estimated 

over a 10-year period from 2014 through 

2023. 

• Benefits of SMS implementation 

would begin to accrue in 2017. 

• Costs to air carriers would begin to 

accrue in 2014. 

• The present value discount rate is 7 

percent. 

• The Value of Statistical Life = $8.9 

million in 2010$. 

iv. Benefits of This Rule 

The benefits of this final rule consist 

of the value of averted fatalities, 

casualties, aircraft damage, accident 

investigation costs, and reduced 

employee compensation claims. These 

benefits are a result of identifying safety 

issues, spotting trends, implementing 

necessary safety mitigations, and 

communicating findings before they 

result in a near-miss, incident, or 

accident. Over the 10-year period of 

analysis, it is estimated that the benefits 

from averted accidents, reduced 

employee compensation claims, and 

safety mitigations could range between 

$205.0 and $472.3 million ($104.9 to 

$241.9 million present value at 7 

percent discount rate). 

v. Costs of This Rule 

Each air carrier will be required to 

develop an SMS that includes the four 

SMS components: Safety Policy, Safety 

Risk Management, Safety Assurance, 

and Safety Promotion. To support each 

component, the FAA projects that the 

compliance cost of this rule will come 

from the initial development and 

documentation of the carriers’ SMS, 

implementation and continuous 

operating costs to include the 

modification or purchasing of new 

equipment/software, additional staff 

and promotional materials, and training. 

Costs increase with the size of the 

carrier and the type of operations that 

they provide. However, medium and 

large operators have existing quality 

management systems which will lower 

their estimated compliance costs. Costs 

of the rule’s provisions (excluding any 

mitigation costs, which have not been 

estimated) are estimated to be $224.3 

million ($135.1 million present value at 

7 percent discount rate) over 10 years. 

B. Regulatory Flexibility Determination 

The Regulatory Flexibility Act of 1980 

(Pub. L. 96–354) (RFA) establishes ‘‘as a 

principle of regulatory issuance that 

agencies shall endeavor, consistent with 

the objectives of the rule and of 

applicable statutes, to fit regulatory and 

informational requirements to the scale 

of the businesses, organizations, and 

governmental jurisdictions subject to 

regulation. To achieve this principle, 

agencies are required to solicit and 

consider flexible regulatory proposals 

and to explain the rationale for their 

actions to assure that such proposals are 

given serious consideration.’’ The RFA 

covers a wide-range of small entities, 

including small businesses, not-forprofit organizations, and small 

governmental jurisdictions. 

Agencies must perform a review to 

determine whether a rule will have a 

significant economic impact on a 

substantial number of small entities. If 

the agency determines that it will, the 

agency must prepare a regulatory 

flexibility analysis as described in the 

RFA. Section 603 of the Act requires 

agencies to prepare and make available 

for public comment an initial regulatory 

flexibility analysis (IRFA) describing the 

impact of proposed rules on small 

entities. 

As required by Section 603(a) of the 

RFA, we prepared and published an 

initial regulatory flexibility analysis 

(IRFA) as part of the NPRM for this rule 

(75 FR 68240, November 5, 2010). As a 

result of that analysis we determined 

this rule would have a significant 

impact on a substantial number of small 

entities for the following reasons: We 

estimated that 64 operators were small 

entities. Even though the proposed rule 

responds to the PL 111–216 

Congressional requirement, we 

structured the requirement such that 

small entities could meet the 

requirements with lower costs than a 

larger firm. 

Section 604 of the RFA also requires 

an agency to publish a final regulatory 

flexibility analysis (FRFA) in the 

Federal Register when issuing a final 

rule. Section 604(a) requires that each 

FRFA contain: 

• A statement of the need for, and 

objectives of, the rule; 

• a statement of the significant issues 

raised by the public comments in 

response to the initial regulatory 

flexibility analysis, a statement of the 

assessment of the agency of such issues, 

and a statement of any changes made in 

the proposed rule as a result of such 

comments; 

• the response of the agency to any 

comments filed by the Chief Counsel for 

Advocacy of the Small Business 

Administration in response to the 

proposed rule, and a detailed statement 

of any change made to the proposed rule 

in the final rule as a result of the 

comments; 

• a description of and an estimate of 

the number of small entities to which 

the rule will apply or an explanation of 

why no such estimate is available; 

• a description of the projected 

reporting, recordkeeping and other 

compliance requirements of the rule, 

including an estimate of the classes of 

small entities which will be subject to 

the requirement and the type of 

professional skills necessary for 

preparation of the report or record; and, 

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1320 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

8U.S. Department of Transportation Form 41 

(Schedule P1.1, and P1.2), and Form 298–C 

(Schedule F1). For carriers not reporting a full year 

of CY 2011 operating revenues, the most recent four 

consecutive quarters of data was used. 

• a description of the steps the agency 

has taken to minimize the significant 

economic impact on small entities 

consistent with the stated objectives of 

applicable statutes, including a 

statement of the factual, policy, and 

legal reasons for selecting the alternative 

adopted in the final rule and why each 

one of the other significant alternatives 

to the rule considered by the agency 

which affect the impact on small 

entities was rejected. 

A Statement of the Need for, and 

Objectives of, the Rule 

The objective of Safety Management 

Systems (SMS) is to proactively manage 

safety, to identify potential hazards, to 

determine risk, and to implement 

measures that mitigate the risk. The 

FAA envisions operators being able to 

use all of the components of SMS to 

enhance a carrier’s ability to identify 

safety issues and spot trends before they 

result in a near-miss, incident, or 

accident. For this reason, the FAA is 

requiring carriers to develop and 

implement an SMS. 

A Statement of the Significant Issues 

Raised by the Public Comments in 

Response to the Initial Regulatory 

Flexibility Analysis, a Statement of the 

Assessment of the Agency of Such 

Issues, and a Statement of any Changes 

Made in the Proposed Rule as a Result 

of Such Comments 

AEA commented that the FAA failed 

to analyze alternatives and stated that 

small carriers do not have enough 

incidents to make SMS cost-beneficial. 

The FAA maintains that SMS is 

congressionally mandated and we did 

look at two alternatives. For the final 

rule we discussed: (1) Extending the 

timeframe for development of SMS 

implementation plans; and (2) 

extending the timeframe for 

implementation of SMS. However, as 

stated above, the FAA ultimately 

determined that delaying the 

implementation of SMS delays the 

safety benefits and this delay in benefits 

is not offset by the small, delayed 

compliance cost. Upon a review of these 

costs, the FAA determined the 

compliance costs are not a significant 

economic impact. 

The Response of the Agency to any 

Comments Filed by the Chief Counsel 

for Advocacy of the Small Business 

Administration in Response to the 

Proposed Rule, and a Detailed 

Statement of any Change Made to the 

Proposed Rule in the Final Rule as a 

Result of the Comments 

The Small Business Administration 

(SBA) commented that an SMS would 

be burdensome for a small carrier, plus 

SMS may be more suitable for larger 

carriers because it aids in reducing silos 

which many not be an issue because of 

size for many smaller carriers. The FAA 

maintains the program is flexible and 

there are several existing programs that 

small carriers can leverage to make SMS 

less expensive. For example, many 

small and medium sized carriers 

reported that they would use the WebBased Application Tool (WBAT), which 

is an FAA sponsored tool, to report and 

house their data. In addition, carriers 

that are currently pursuing an SMS 

reported benefits similar to their larger 

counterparts. 

A Description of and an Estimate of the 

Number of Small Entities To Which the 

Rule Will Apply or an Explanation of 

why no Such Estimate is Available 

Under the North American Industry 

Classification System (NAICS) codes 

481111 and 481112, for scheduled air 

transportation, small entities would be 

all part 121 carriers with less than 1,500 

employees. The FAA estimates that 

there are approximately 90 part 121 

operators and 60 of these operators meet 

the definition of a small entity; therefore 

the FAA believes that there are a 

substantial number of small entities 

impacted by this rule. 

A Description of the Projected 

Reporting, Recordkeeping and Other 

Compliance Requirements of the Rule, 

Including an Estimate of the Classes of 

Small Entities Which Will be Subject to 

the Requirement and the Type of 

Professional Skills Necessary for 

Preparation of the Report or Record 

An SMS is a formalized approach to 

managing safety by developing an 

organization-wide safety policy, 

developing formal methods of 

identifying hazards, analyzing and 

mitigating risk, developing methods for 

ensuring continuous safety 

improvement, and creating 

organization-wide safety promotion 

strategies. Each air carrier would be 

required to develop an SMS that 

includes the four SMS components: 

Safety Policy, Safety Risk Management, 

Safety Assurance, and Safety Promotion. 

To support each component, the FAA 

projects that the compliance cost of this 

rule would come from the initial 

development and documentation of 

their SMS, implementation and 

continuous operating costs to include 

the modification or purchasing of new 

equipment/software, additional staff 

and promotional materials, and training. 

Costs increase as the size of the carrier 

increases. However, carriers have the 

ability to use existing programs such as 

an Aviation Safety Action Programs 

(ASAP) or the Web-Based Application 

Tool (WBAT) to meet these 

requirements. 

The FAA estimated the average 

annual compliance cost during the first 

three years the rule is in effect for the 

60 carriers identified as small entities 

and compared these costs to calendar 

year 2011 operating revenues (the most 

current data available).8 The compliance 

cost for small entities was then averaged 

for three groups based on carrier fleet 

size (small, medium, and large). Carriers 

with a fleet of 9 or less aircraft are in 

the ‘‘small’’ group; carriers with 

between 10 and 47 aircraft are in the 

‘‘medium’’ group; and carriers with a 

fleet size greater than 47 aircraft are in 

the ‘‘large’’ group. 

Each of the 29 carriers in the ‘‘small’’ 

group fits the criteria of a small entity. 

The compliance cost for this group of 

carriers will average $164,500 per year. 

For the 26 small entities in the 

‘‘medium’’ group, the compliance cost 

will average $206,400 per year. The 

compliance cost for the five carriers 

identified as small entities in the 

‘‘large’’ group will average $408,000 per 

year. Each carrier’s compliance cost will 

vary from the averages presented here 

due to carrier size (in terms of employee 

headcount), and the extent to which a 

carrier already has an ASAP or other 

safety program already in place. 

Of the 60 carriers classified as small 

entities, 54 reported operating revenues 

on Form 41. For these 54 reporting 

carriers, annual compliance costs during 

the first three years the rule is in effect 

were less than two percent of their 

calendar year 2011 operating revenues. 

A determination for the six remaining 

small entities was not possible because 

financial data was not publicly 

available. 

A Description of the Steps the Agency 

Has Taken To Minimize the Significant 

Economic Impact on Small Entities 

Consistent With the Stated Objectives of 

Applicable Statutes, Including a 

Statement of the Factual, Policy, and 

Legal Reasons for Selecting the 

Alternative Adopted in the Final Rule 

and Why Each One of the Other 

Significant Alternatives to the Rule 

Considered by the Agency Which Affect 

the Impact on Small Entities Was 

Rejected 

To relieve the burden of this rule on 

small entities, the FAA considered 

extending the timeframe for 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1321 

9MITRE Corporation conducted a study of the 

pilot project participants and concluded that it 

took, on average, approximately one year for pilot 

project participants to complete implementation 

plans. 

10While many pilot project participants are not 

small carriers, the large and mid-size carriers that 

make up a large portion of the pilot project 

participants had to build an SMS from the ground 

up. The typical implementation plan received from 

these carriers showed that they would be able to 

fully implement an SMS within three years. 

Because SMS is scalable, a small carrier’s SMS will 

be less complex than a large or mid-size carrier’s 

SMS. Accordingly, the FAA does not expect small 

carriers to need more time to implement an SMS 

than the large and mid-size carriers that were part 

of the pilot project. 

development of SMS implementation 

plans. In making this determination, the 

FAA considered longer and shorter 

terms. However, it settled on one year 

based on information from the SMS 

Pilot Project, which showed that an 

average of one year was sufficient to 

develop and approve an implementation 

plan.9 As part of its analysis, the FAA 

noted that pilot project participants 

ultimately had differing levels of SMS 

implementation. However, because all 

pilot project participants had initially 

developed (and received FAA validation 

on) an implementation plan that 

provided for full SMS implementation, 

the FAA was able to use this data to 

estimate how long it would take a 

certificate holder to develop such a plan 

and get the plan approved by the FAA. 

The FAA also considered extending 

the timeframe for implementation of 

SMS. However, the FAA ultimately 

concluded that three years for full 

implementation of SMS is appropriate. 

In making this determination, the FAA 

considered longer and shorter terms. 

Based on information from the SMS 

Pilot Project, as well as lessons learned 

from other Civil Aviation Authorities 

(CAAs), which showed that three years 

was an appropriate timeframe for 

implementation of an SMS, the FAA 

decided that three years was the best 

interval to allow carriers to prepare and 

begin implementation.10 With regard to 

both of these alternatives, the timelines 

chosen for implementation plans and 

final implementation of SMS are 

mitigated for small entities to the extent 

that SMS plans and programs must be 

appropriate to the size, scope, and 

complexity of the certificate holder’s 

operations, and are therefore scalable to 

the size of the small entity. 

In conclusion, while the FAA found 

this rule will affect a substantial number 

of small entities, we found annual 

compliance cost was less than two 

percent of annual revenue for the firms 

with public data. As the compliance 

cost is less than two percent of annual 

revenue, the FAA concludes there will 

not be a significant economic impact. 

Therefore, as the FAA Administrator, I 

certify this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

D. International Trade Impact 

Assessment 

The Trade Agreements Act of 1979 

(Pub. L. 96–39), as amended by the 

Uruguay Round Agreements Act (Pub. 

L. 103–465), prohibits Federal agencies 

from establishing standards or engaging 

in related activities that create 

unnecessary obstacles to the foreign 

commerce of the United States. 

Pursuant to these Acts, the 

establishment of standards is not 

considered an unnecessary obstacle to 

the foreign commerce of the United 

States, so long as the standard has a 

legitimate domestic objective, such the 

protection of safety, and does not 

operate in a manner that excludes 

imports that meet this objective. The 

statute also requires consideration of 

international standards and, where 

appropriate, that they be the basis for 

U.S. standards. The FAA has assessed 

the potential effect of this final rule and 

determined that it uses ICAO 

international standards as its basis and 

therefore is in compliance with the 

Trade Agreements Act. 

E. Unfunded Mandates Assessment 

Title II of the Unfunded Mandates 

Reform Act of 1995 (Pub. L. 104–4) 

requires each Federal agency to prepare 

a written statement assessing the effects 

of any Federal mandate in a proposed or 

final agency rule that may result in an 

expenditure of $100 million or more (in 

1995 dollars) in any one year by State, 

local, and tribal governments, in the 

aggregate, or by the private sector; such 

a mandate is deemed to be a ‘‘significant 

regulatory action.’’ The FAA currently 

uses an inflation-adjusted value of 

$143.1 million in lieu of $100 million. 

This final rule does not contain such a 

mandate; therefore, the requirements of 

Title II of the Act do not apply. 

F. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. 3507(d)) requires that the 

FAA consider the impact of paperwork 

and other information collection 

burdens imposed on the public. 

According to the 1995 amendments to 

the Paperwork Reduction Act (5 CFR 

1320.8(b)(2)(vi)), an agency may not 

collect or sponsor the collection of 

information, nor may it impose an 

information collection requirement 

unless it displays a currently valid 

Office of Management and Budget 

(OMB) control number. 

This final rule will impose new 

information collection requirements. 

The estimated burden of those 

requirements is discussed below. As 

required by the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3507(d)), the 

FAA has submitted these information 

collection requirements to OMB for its 

review. Notice of OMB approval for this 

information collection will be published 

in a future Federal Register document. 

Under this final rule, each certificate 

holder operating under part 121 will 

develop an SMS, tailored to its unique 

operating environment, comprised of 

the four key components: Safety policy, 

safety risk management, safety 

assurance, and safety promotion. 

Collection and analysis of safety data is 

an essential part each carrier’s SMS. The 

FAA has identified the following areas 

that will create information collection 

burdens under this final rule: 

Development and implementation of the 

SMS; implementation plan and 

documentation; recordkeeping 

requirements associated with the safety 

policy, safety risk management and 

safety assurance processes; training 

records, and communication records. In 

addition, based on comments received 

to the proposed rule, the FAA has also 

identified information collection 

burdens associated with expanding 

existing programs that may be used to 

satisfy the requirements of the final rule. 

For all information required to be 

submitted, documented, or collected 

under this final rule, the FAA does not 

specify how, or in what media, the 

documents and records must be 

maintained relative to the requirements 

of the final rule. Air carriers are 

encouraged to use existing mechanisms 

and systems to minimize the burden of 

the final rule. These burdens are 

outlined below. The cost estimates 

associated with these burdens are based 

on comments from the ARC, 

information from the SMS pilot program 

participants, and comments received in 

response to the NPRM. 

i. Expansion of Existing Programs 

The FAA has strongly encouraged air 

carriers to use existing programs, such 

as the Aviation Safety Action Program 

(ASAP), and the Internal Evaluation 

Program (IEP), to satisfy some of the 

requirements for the safety assurance 

component of SMS. The FAA expects 

that the 59 air carriers with existing 

ASAP programs will expand their 

programs to cover those employees 

currently not covered, to satisfy the 

employee reporting system requirement 

of the final rule. For the 31 remaining 

air carriers, the FAA expects that these 

carriers will use the employee reporting 

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1322 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

11http://www.faa.gov/about/initiatives/asap 

(August 23, 2011). 

12ATA response to NPRM ‘‘Request for 

Comments’’ (Docket No. FAA–2009–061), Figure 3, 

page 35. 

13 Ibid. 

14http://www.bls.gov/oes/current/naics3_

481000.htm, http://www.bls.gov/news.release/pdf/

ecec.pdf, BLS reports in Table A. Relative 

importance of employer costs for employee 

compensation, June 2011 that additional employer 

compensation per employee is roughly 31% of an 

employee’s salary 

15 Ibid. 

16 Ibid. 

17 Ibid. 

tools in the Web-Based Application 

Tool (WBAT), which is a federally 

developed and funded software system 

that can be used, for example, to 

develop an implementation plan, 

document hazards, and create an 

employee reporting system. Because this 

is a federally funded system, the FAA 

estimated a minimal burden for those 31 

carriers using WBAT. The information 

collection costs for air carriers 

expanding existing programs to comply 

with this rule are as follows. 

a. Estimate Annual Cost of Expanding 

Existing Programs 

59 .............................................................................................. Part 121 Carriers with an ASAP for one or more employee groups 11

1 ................................................................................................ Full Time Employee (FTE) = 2000 hours per year 

2 ................................................................................................ FTEs per additional ASAP @ 0.2 FTE each 12 = 800 hours per ASAP 

3 ................................................................................................ Pilot ASAPs 

14 .............................................................................................. Mechanic and Engineering (M&E) ASAPs 

18 .............................................................................................. Dispatcher ASAPs 

+ 32 ........................................................................................ Flight Attendant (FA) ASAPs 

67 .............................................................................................. Total Employee Group ASAPs 

$2,000 ....................................................................................... Hardware/software, administration, and meeting logistics per group 13

× 67 .......................................................................................... Total Employee Group ASAPs 

$134,000 ............................................................................ Material Cost per Year 

Employee group Annual salary Hourly salary 

Airline pilots/copilots/flight engineers salary: 14 ........................................................................................... $151,248 $75.6239 

Maintenance staff salary: 15 ......................................................................................................................... 73,606 36.8031 

Dispatchers salary: 16 .................................................................................................................................. 70,250 35.1249 

Flight attendants salary: 17 ........................................................................................................................... 54,290 27.1452 

3 Pilot ASAPs * 800 hours: ............................................................................................................................................................ 2,400 hours. 

14 M&E ASAPs * 800 hours: ......................................................................................................................................................... 11,200 hours. 

18 Dispatcher ASAPs * 800 hours: ................................................................................................................................................ 14,400 hours. 

+ 32 FA ASAPs * 800 hours: ......................................................................................................................................................... 25,600 hours. 

Total Labor Hours per Year ...................................................................................................................................................... 53,600 hours. 

Hours * labor rate In 000’s 

3 Pilot ASAPs ........................................................................... 2,400 hr * $75.6239 ................................................................... $181.497 

14 M&E ASAPs ........................................................................ 11,200 hr * 36.8031 ................................................................... 412.195 

18 Dispatcher ASAPs .............................................................. 14,400 hr * 35.1249 ................................................................... 505.798 

+ 32 FA ASAPs ........................................................................ 25,600 hr * 27.1452 ................................................................... 694.917 

Total Labor Cost per Year ............................................................................................................................................................ 1,794.408 

+ Total Material Cost per Year ............................................................................................................................................................ 134.000 

Total Cost per Year for Expanding Existing Programs ......................................................................................................... 1,928.408 

b. Estimated Implementation Cost of 

Expanding of Existing Programs 

The FAA assumes that the 59 carriers 

expand these programs over 3 years. A 

third of the expansion will be 

completed in year one, two-thirds of the 

program will be completed in year two, 

and the program will be fully 

operational by the third year. 

Year 1 ....................................................... 53,600 hours * 33.3% .................................................................................................. 17,848.8 

Year 2 ....................................................... 53,600 hours * 66.6% .................................................................................................. 35,697.6 

+ Year 3 .................................................... 53,600 hours * 100.0% ................................................................................................ 53,600.0 

Total Labor Hours for 3 Years ... ....................................................................................................................................... 107,146.4 

In 000’s 

Year 1 ....................................................... $1,928.408 * 33.3% ..................................................................................................... $ 642.160 

Year 2 ....................................................... $1,928.408 * 66.6% ..................................................................................................... 1,284.320 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1323 

18Bureau of Labor Statistics, http://www.bls.gov/ 

oes/current/oes152031.htm. 

19 Initial Regulatory Evaluation Voluntary 

Program Participant’s Survey. 

In 000’s 

+ Year 3 .................................................... $1,928.408 * 100.0% ................................................................................................... 1,928.408 

Total Cost for 3 Years ....................... ....................................................................................................................................... 3,854.888 

c. Estimated Total Costs of Expanding 

Existing Programs 

Implementation Cost: 107,146.4 labor 

hours and $3.9 million over 3 years. 

Average Annual Cost: 35,715.5 labor 

hours and $1.28 million per year. 

ii. Implementation Plan, SMS 

Documentation and Implementation 

All 90 certificate holders will be 

required to develop and submit an 

implementation plan. The 

implementation plan will guide the 

certificate holder’s implementation of 

SMS, as well as provide the basis for 

FAA’s oversight during the 

development and implementation 

phases. The SMS implementation plan 

is the only document or data that the 

certificate holder must submit to the 

FAA. It is a one-time submission due six 

months after the effective date of the 

final rule. 

All 90 certificate holders must also 

develop and maintain documentation 

that describes the safety policy for the 

certificate holder. The safety policy 

must address, among other things, the 

certificate holder’s safety objectives, 

statements about the necessary 

resources for the implementation of the 

SMS, a safety reporting policy that 

defines requirements for employee 

reporting of safety hazards or issues, 

and an emergency response plan. 

In addition to the safety policy, all 90 

certificate holders are required under 

this rule to develop and maintain 

documentation of SMS processes and 

procedures, including safety risk 

management processes and safety 

assurance processes. Given that these 

processes and procedures will depend 

on the size and scope of each air 

carrier’s operation, the amount of 

documentation will vary greatly 

amongst these certificate holders. 

a. Estimated Cost of Implementation 

Plan and SMS Documentation 

One Full Time Employee (FTE): ................................................................................................................................... 2,000 hours/yr 

Research Analyst Salary: 18 ........................................................................................................................................... $92,958/yr or $46.479/hr 

Material Documentation Cost (3 years): 19 ................................................................................................................... Small $24,000 

Medium 95,000 

Large 337,500 

Hours 

30 Large Carriers * 4,256 hrs/yr of labor per carrier: ....................................................................................................................... 127,680 

31 Medium Carriers * 2,732 hrs/yr of labor per carrier: ................................................................................................................... 84,692 

+ 29 Small Carriers * 3,045 hrs/yr of labor per carrier: ...................................................................................................................... 88,305 

Total Labor Hours per Year for 90 Carriers ................................................................................................................................. 300,677 

Total Labor Hours for 90 Carriers over 3 Years ................................................................................................................... 902,031 

Total Labor Hours per Year ................................................................................................................................................................. 300,677 

× Research Analyst Hourly Wage ...................................................................................................................................................... $46.479 

Total Labor Cost/Per Year for 90 Carriers ................................................................................................................................... $13,975,166 

Total Initial Labor Cost for 90 Carriers over 3 Years ........................................................................................................... 41,925,498 

30 Large Carriers * $337,500 material cost over three years: ......................................................................................................... $10,125,000 

31 Medium Carriers * $95,000 material cost over three years: ....................................................................................................... 2,945,000 

29 Small Carriers * $24,000 material cost over three years: ........................................................................................................... 696,000 

90 Carriers Initial Material Cost Over 3 Years .......................................................................................................................... 13,766,000 

Initial Labor Cost for 90 Carriers over 3 Years ................................................................................................................................... 41,925,498 

× Initial Material Cost for 90 Carriers over 3 Years ........................................................................................................................... 13,766,000 

Initial Cost Burden Over Years 1–3 ............................................................................................................................................. 55,691,498 

b. Estimated Annual Cost of SMS 

Documentation 

In comments to the NPRM, ATA 

estimates that small carriers will spend 

$10,000 a year, medium sized carriers 

will spend $15,000, and large carriers 

will spend $30,000 on SMS manual 

revision. 

30 Large Carriers * $30,000/yr per carrier ..................................................................................................................... $ 900,000 

31 Medium Carriers * $15,000/yr per carrier ................................................................................................................ 465,000 

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1324 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

20Bureau of Labor Statistics, http://www.bls.gov/ 

oes/current/oes152031.htm. 

21 Initial Regulatory Evaluation Voluntary 

Program Participant’s Survey. 

+ 29 Small Carriers * $10,000/yr per carrier .................................................................................................................... 290,000 

Document Update Costs per Year for Years 4–10 .................................................................................................... $1,655,000 

iii. SMS Recordkeeping Requirements 

This rule requires air carriers to 

record outputs from their safety risk 

management (SRM) processes, safety 

assurance (SA) processes, safety 

communications and SMS training. 

Records of outputs for SRM processes 

must be maintained for as long as the 

outputs remain relevant to the 

certificate holder’s operation. Outputs of 

safety assurance processes must be 

maintained for 5 years. Training records 

must be kept for as long as the 

individual is employed by the certificate 

holder and all SMS communication 

records under § 5.93 must be kept for 24 

months. The scope and breadth of these 

recordkeeping requirements will 

depend on the size and complexity of 

the certificate holder’s operation. To 

mitigate these burdens, the FAA has not 

specified how, or in what media, these 

records must be maintained, and has 

also encouraged the use of existing 

mechanisms. For example, the FAA has 

estimated the burden of maintaining 

employee SMS training records to be 

minimal since 121 certificate holders 

are already required to maintain training 

records. 

Based on this information, the FAA 

maintains that only one additional 

employee will be required for carriers 

with several existing safety programs, 2 

full time employees for large and 

medium carriers with few pre-existing 

programs, and a part-time employee for 

small carriers. The FAA also maintains 

that there will be minimal additional 

material costs and training record costs 

since all part 121 certificate holders 

already maintain training records. 

Operating costs will begin after the 

development, documentation, and 

implementation of an SMS. 

a. Estimated Annual Cost of SMS 

Recordkeeping Requirements: 

90 Operators 

One Full Time Employee (FTE) = 2000 

hours per year 

Research Analyst Salary 20 = $92,958 per 

year = $46.479 per hour 

Hours 

59 Large/Medium Carriers * 1 FTE * 2,000 hours ............................................................................................................................. 118,000 

9 Large/Medium Carriers * 2 FTE * 2,000 hours .............................................................................................................................. 36,000 

+ 22 Small Carriers * 0.5 FTE * 2,000 hours ..................................................................................................................................... 22,000 

Total Recordkeeping Hours per Year for 90 carriers (Years 4–10) ............................................................................................ 176,000 

Total Recordkeeping Hours per Year for 90 carriers ...................................................................................................................... 176,000 

× Hourly Wage—Research Analyst .................................................................................................................................................... $46.479 

Total Recordkeeping Cost per Year for 90 Carriers (Years 4–10) .............................................................................................. $8,180,304 

Promotional material per year per carrier 21 .................................................................................................................................... $833 

× 90 Carriers ....................................................................................................................................................................................... 90 

Total Promotional Material Cost per Year for 90 Carriers (Years 4–10) ................................................................................. $74,970 

Total Recordkeeping Cost per Year for 90 Carriers (Years 4–10) ..................................................................................................... $8,180,304 

+ Total Promo Material Cost per Year for 90 Carriers (Years 4–10) ................................................................................................. $74,970 

Total Annual Cost (Years 4–10) ................................................................................................................................................... $8,255,274 

b. Estimated Total Annual Cost of SMS 

Recordkeeping Requirements 

176,000 labor hours and $8.3 million 

per year (Years 4–10). 

iv. Estimated Costs to the Federal 

Government 

This rule requires air carriers to 

implement an SMS acceptable to the 

Administrator within 3 years of the 

effective date of the final rule. The FAA 

offers a federally developed and funded 

software system, WBAT, which serves a 

variety of functions in addition to aiding 

carriers with their ASAPs and SMS. The 

FAA estimates at most that it costs $2.6 

million per year to maintain WBAT. 

v. Summary of Total Burden 

a. Implementation Cost 

Years 1–3 ................................................ Develop, Implement, Document SMS-Initial Cost Burden .................................. $55,691,498 

+ Years 1–3 ............................................. Cost to Expand Existing Programs ........................................................................ 3,854,888 

Years 1–3 ......................................... Total Implementation Cost .................................................................................... 59,546,386 

b. Annual Cost 

+ Years 1–10 ........................................... Federal Govt Cost—WBAT .................................................................................... $ 2,600,000 

Years 4–10 .............................................. Staffing and Promotional Material ........................................................................ $8,255,274 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1325 

Years 4–10 .............................................. ASAPs ..................................................................................................................... 1,928,408 

+ Years 4–10 ........................................... SMS Manual Updates ............................................................................................ 1,655,000 

Years 4–10 ....................................... Total Cost Per Year ................................................................................................ 11,838,682 

Years 1–10 .............................................. $ 2,600,000 * 10 years ........................................................................................... $26,000,000 

Years 4–10 .............................................. $11,838,682 * 7 years ............................................................................................. 82,870,774 

G. International Compatibility 

In keeping with U.S. obligations 

under the Convention on International 

Civil Aviation, it is FAA policy to 

conform to International Civil Aviation 

Organization (ICAO) Standards and 

Recommended Practices to the 

maximum extent practicable. The FAA 

has reviewed the corresponding ICAO 

Standards and Recommended Practices 

and has identified the following 

differences with these proposed 

regulations. Amendment 30 to Annex 6 

part I Section 3.2 Safety Management, 

Paragraph 3.3.6 effective 1 January, 2009 

requires that a Flight Data Analysis 

Program be in the SMS standard. The 

FAA will file a difference with ICAO. 

ICAO Annex 6 part I includes a 

provision that part 121 air carriers 

operating airplanes having a maximum 

gross takeoff weight in excess of 27,000 

kg (approximately 59,400 lbs.). ‘‘. . . 

shall establish and maintain a flight data 

analysis programme as part of its safety 

management system.’’ Flight Data 

Analysis Program (FDAP) is a general 

term encompassing a number of means 

by which routine flight operations data 

may be acquired, recorded, analyzed, 

and shared. Flight Operational Quality 

Assurance (FOQA) is one such program. 

FOQA is a formal voluntary program 

which has been implemented by 41 air 

carriers conducting operations under 

part 121. FOQA specifications include 

installation of extensive flight data 

recording systems which facilitate rapid 

transfer of recorded data, deidentification of that data, and 

agreements between pilot organizations 

and the air carriers which define how 

this information may be used. 

The part 121 fleet is diverse in terms 

of size, complexity, and age, as well as 

the size of the air carriers that operate 

them. Many of the older aircraft would 

require extensive modifications to adapt 

them to the technical requirements of a 

FOQA program. The investment and 

expense of implementing and 

maintaining such a system exceeds the 

financial capability of many smaller air 

carriers. There are a number of ways to 

meet the requirements of an FDAP. 

Therefore, the FAA will not require 

FOQA in this rule. 

H. Environmental Analysis 

FAA Order 1050.1E identifies FAA 

actions that are categorically excluded 

from preparation of an environmental 

assessment or environmental impact 

statement under the National 

Environmental Policy Act in the 

absence of extraordinary circumstances. 

The FAA has determined this 

rulemaking action qualifies for the 

categorical exclusion identified in 

Chapter 3, paragraph 312d and involves 

no extraordinary circumstances. 

I. Regulations Affecting Intrastate 

Aviation in Alaska 

Section 1205 of the FAA 

Reauthorization Act of 1996 (110 Stat. 

3213) requires the FAA, when 

modifying its regulations in a manner 

affecting intrastate aviation in Alaska, to 

consider the extent to which Alaska is 

not served by transportation modes 

other than aviation, and to establish 

appropriate regulatory distinctions. In 

the NPRM, the FAA requested 

comments on whether the proposed rule 

should apply differently to intrastate 

operations in Alaska. The agency did 

not receive any comments, and has 

determined, based on the administrative 

record of this rulemaking, that there is 

no need to make any regulatory 

distinctions applicable to intrastate 

aviation in Alaska. 

VI. Executive Order Determinations 

A. Executive Order 13132, Federalism 

The FAA has analyzed this final rule 

under the principles and criteria of 

Executive Order 13132, Federalism. The 

agency determined that this action will 

not have a substantial direct effect on 

the States, or the relationship between 

the Federal Government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government, and, therefore, 

does not have Federalism implications. 

B. Executive Order 13211, Regulations 

That Significantly Affect Energy Supply, 

Distribution, or Use 

The FAA analyzed this final rule 

under Executive Order 13211, Actions 

Concerning Regulations that 

Significantly Affect Energy Supply, 

Distribution, or Use (May 18, 2001). The 

agency has determined that it is not a 

‘‘significant energy action’’ under the 

executive order and it is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy. 

VII. How To Obtain Additional 

Information 

A. Rulemaking Documents 

An electronic copy of a rulemaking 

document may be obtained by using the 

Internet— 

1. Search the Federal eRulemaking 

Portal (http://www.regulations.gov); 

2. Visit the FAA’s Regulations and 

Policies Web page at http://

www.faa.gov/regulations_policies/ or 

3. Access the Government Printing 

Office’s Web page at http://

www.gpo.gov/fdsys/browse/

collection.action?collectionCode=FR. 

Copies may also be obtained by 

sending a request (identified by notice, 

amendment, or docket number of this 

rulemaking) to the Federal Aviation 

Administration, Office of Rulemaking, 

ARM–1, 800 Independence Avenue 

SW., Washington, DC 20591, or by 

calling (202) 267–9680. 

B. Comments Submitted to the Docket 

Comments received may be viewed by 

going to http://www.regulations.gov and 

following the online instructions to 

search the docket number for this 

action. Anyone is able to search the 

electronic form of all comments 

received into any of the FAA’s dockets 

by the name of the individual 

submitting the comment (or signing the 

comment, if submitted on behalf of an 

association, business, labor union, etc.). 

C. Small Business Regulatory 

Enforcement Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996 requires FAA to comply with 

small entity requests for information or 

advice about compliance with statutes 

and regulations within its jurisdiction. 

A small entity with questions regarding 

this document, may contact its local 

FAA official, or the person listed under 

the FOR FURTHER INFORMATION CONTACT

heading at the beginning of the 

preamble. To find out more about 

SBREFA on the Internet, visit http://

www.faa.gov/regulations_policies/

rulemaking/sbre_act/. 

List of Subjects 

14 CFR Part 5 

Air carriers, Aircraft, Airmen, 

Aviation safety, Reporting and 

recordkeeping requirements, Safety, 

Transportation. 

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1326 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

14 CFR Part 119 

Administrative practice and 

procedure, Air carriers, Aircraft, 

Aviation safety, Charter flights, 

Reporting and recordkeeping 

requirements. 

The Amendment 

In consideration of the foregoing, and 

under the authority of 49 U.S.C. 106(f) 

and 44701(a)(5), the Federal Aviation 

amends chapter I of title 14, Code of 

Federal Regulations, as follows: 

■ 1. The heading for subchapter A is 

revised to read as follows: 

Subchapter A—Definitions and General 

Requirements 

■ 2. Add part 5 to subchapter A to read 

as follows: 

PART 5—SAFETY MANAGEMENT 

SYSTEMS 

Subpart A—General 

Sec. 

5.1 Applicability. 

5.3 General requirements. 

5.5 Definitions. 

Subpart B—Safety Policy 

5.21 Safety policy. 

5.23 Safety accountability and authority. 

5.25 Designation and responsibilities of 

required safety management personnel. 

5.27 Coordination of emergency response 

planning. 

Subpart C—Safety Risk Management 

5.51 Applicability. 

5.53 System analysis and hazard 

identification. 

5.55 Safety risk assessment and control. 

Subpart D—Safety Assurance 

5.71 Safety performance monitoring and 

measurement. 

5.73 Safety performance assessment. 

5.75 Continuous improvement. 

Subpart E—Safety Promotion 

5.91 Competencies and training. 

5.93 Safety communication. 

Subpart F—SMS Documentation and 

Recordkeeping 

5.95 SMS documentation. 

5.97 SMS records. 

Authority: Pub. L. 111–216, sec. 215 (Aug. 

1, 2010); 49 U.S.C. 106(f), 106(g), 40101, 

40113, 40119, 41706, 44101, 44701–44702, 

44705, 44709–44711, 44713, 44716–44717, 

44722, 46105. 

Subpart A—General 

§ 5.1 Applicability. 

(a) A certificate holder under part 119 

of this chapter authorized to conduct 

operations in accordance with the 

requirements of part 121 of this chapter 

must have a Safety Management System 

that meets the requirements of this part 

and is acceptable to the Administrator 

by January 8, 2018. 

(b) A certificate holder must submit 

an implementation plan to the FAA 

Administrator for review no later than 

September 9, 2015. The implementation 

plan must be approved no later than 

March 9, 2016. 

(c) The implementation plan may 

include any of the certificate holder’s 

existing programs, policies, or 

procedures that it intends to use to meet 

the requirements of this part, including 

components of an existing SMS. 

§ 5.3 General requirements. 

(a) Any certificate holder required to 

have a Safety Management System 

under this part must submit the Safety 

Management System to the 

Administrator for acceptance. The SMS 

must be appropriate to the size, scope, 

and complexity of the certificate 

holder’s operation and include at least 

the following components: 

(1) Safety policy in accordance with 

the requirements of subpart B of this 

part; 

(2) Safety risk management in 

accordance with the requirements of 

subpart C of this part; 

(3) Safety assurance in accordance 

with the requirements of subpart D of 

this part; and 

(4) Safety promotion in accordance 

with the requirements of subpart E of 

this part. 

(b) The Safety Management System 

must be maintained in accordance with 

the recordkeeping requirements in 

subpart F of this part. 

(c) The Safety Management System 

must ensure compliance with the 

relevant regulatory standards in chapter 

I of Title 14 of the Code of Federal 

Regulations. 

§ 5.5 Definitions. 

Hazard means a condition that could 

foreseeably cause or contribute to an 

aircraft accident as defined in 49 CFR 

830.2. 

Risk means the composite of 

predicted severity and likelihood of the 

potential effect of a hazard. 

Risk control means a means to reduce 

or eliminate the effects of hazards. 

Safety assurance means processes 

within the SMS that function 

systematically to ensure the 

performance and effectiveness of safety 

risk controls and that the organization 

meets or exceeds its safety objectives 

through the collection, analysis, and 

assessment of information. 

Safety Management System (SMS) 

means the formal, top-down, 

organization-wide approach to 

managing safety risk and assuring the 

effectiveness of safety risk controls. It 

includes systematic procedures, 

practices, and policies for the 

management of safety risk. 

Safety objective means a measurable 

goal or desirable outcome related to 

safety. 

Safety performance means realized or 

actual safety accomplishment relative to 

the organization’s safety objectives. 

Safety policy means the certificate 

holder’s documented commitment to 

safety, which defines its safety 

objectives and the accountabilities and 

responsibilities of its employees in 

regards to safety. 

Safety promotion means a 

combination of training and 

communication of safety information to 

support the implementation and 

operation of an SMS in an organization. 

Safety Risk Management means a 

process within the SMS composed of 

describing the system, identifying the 

hazards, and analyzing, assessing and 

controlling risk. 

Subpart B—Safety Policy 

§ 5.21 Safety policy. 

(a) The certificate holder must have a 

safety policy that includes at least the 

following: 

(1) The safety objectives of the 

certificate holder. 

(2) A commitment of the certificate 

holder to fulfill the organization’s safety 

objectives. 

(3) A clear statement about the 

provision of the necessary resources for 

the implementation of the SMS. 

(4) A safety reporting policy that 

defines requirements for employee 

reporting of safety hazards or issues. 

(5) A policy that defines unacceptable 

behavior and conditions for disciplinary 

action. 

(6) An emergency response plan that 

provides for the safe transition from 

normal to emergency operations in 

accordance with the requirements of 

§ 5.27. 

(b) The safety policy must be signed 

by the accountable executive described 

in § 5.25. 

(c) The safety policy must be 

documented and communicated 

throughout the certificate holder’s 

organization. 

(d) The safety policy must be 

regularly reviewed by the accountable 

executive to ensure it remains relevant 

and appropriate to the certificate holder. 

§ 5.23 Safety accountability and authority. 

(a) The certificate holder must define 

accountability for safety within the 

organization’s safety policy for the 

following individuals: 

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Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 1327 

(1) Accountable executive, as 

described in § 5.25. 

(2) All members of management in 

regard to developing, implementing, 

and maintaining SMS processes within 

their area of responsibility, including, 

but not limited to: 

(i) Hazard identification and safety 

risk assessment. 

(ii) Assuring the effectiveness of 

safety risk controls. 

(iii) Promoting safety as required in 

subpart E of this part. 

(iv) Advising the accountable 

executive on the performance of the 

SMS and on any need for improvement. 

(3) Employees relative to the 

certificate holder’s safety performance. 

(b) The certificate holder must 

identify the levels of management with 

the authority to make decisions 

regarding safety risk acceptance. 

§ 5.25 Designation and responsibilities of 

required safety management personnel. 

(a) Designation of the accountable 

executive. The certificate holder must 

identify an accountable executive who, 

irrespective of other functions, satisfies 

the following: 

(1) Is the final authority over 

operations authorized to be conducted 

under the certificate holder’s 

certificate(s). 

(2) Controls the financial resources 

required for the operations to be 

conducted under the certificate holder’s 

certificate(s). 

(3) Controls the human resources 

required for the operations authorized to 

be conducted under the certificate 

holder’s certificate(s). 

(4) Retains ultimate responsibility for 

the safety performance of the operations 

conducted under the certificate holder’s 

certificate. 

(b) Responsibilities of the accountable 

executive. The accountable executive 

must accomplish the following: 

(1) Ensure that the SMS is properly 

implemented and performing in all 

areas of the certificate holder’s 

organization. 

(2) Develop and sign the safety policy 

of the certificate holder. 

(3) Communicate the safety policy 

throughout the certificate holder’s 

organization. 

(4) Regularly review the certificate 

holder’s safety policy to ensure it 

remains relevant and appropriate to the 

certificate holder. 

(5) Regularly review the safety 

performance of the certificate holder’s 

organization and direct actions 

necessary to address substandard safety 

performance in accordance with § 5.75. 

(c) Designation of management 

personnel. The accountable executive 

must designate sufficient management 

personnel who, on behalf of the 

accountable executive, are responsible 

for the following: 

(1) Coordinate implementation, 

maintenance, and integration of the 

SMS throughout the certificate holder’s 

organization. 

(2) Facilitate hazard identification and 

safety risk analysis. 

(3) Monitor the effectiveness of safety 

risk controls. 

(4) Ensure safety promotion 

throughout the certificate holder’s 

organization as required in subpart E of 

this part. 

(5) Regularly report to the accountable 

executive on the performance of the 

SMS and on any need for improvement. 

§ 5.27 Coordination of emergency 

response planning. 

Where emergency response 

procedures are necessary, the certificate 

holder must develop and the 

accountable executive must approve as 

part of the safety policy, an emergency 

response plan that addresses at least the 

following: 

(a) Delegation of emergency authority 

throughout the certificate holder’s 

organization; 

(b) Assignment of employee 

responsibilities during the emergency; 

and 

(c) Coordination of the certificate 

holder’s emergency response plans with 

the emergency response plans of other 

organizations it must interface with 

during the provision of its services. 

Subpart C—Safety Risk Management 

§ 5.51 Applicability. 

A certificate holder must apply safety 

risk management to the following: 

(a) Implementation of new systems. 

(b) Revision of existing systems. 

(c) Development of operational 

procedures. 

(d) Identification of hazards or 

ineffective risk controls through the 

safety assurance processes in subpart D 

of this part. 

§ 5.53 System analysis and hazard 

identification. 

(a) When applying safety risk 

management, the certificate holder must 

analyze the systems identified in § 5.51. 

Those system analyses must be used to 

identify hazards under paragraph (c) of 

this section, and in developing and 

implementing risk controls related to 

the system under § 5.55(c). 

(b) In conducting the system analysis, 

the following information must be 

considered: 

(1) Function and purpose of the 

system. 

(2) The system’s operating 

environment. 

(3) An outline of the system’s 

processes and procedures. 

(4) The personnel, equipment, and 

facilities necessary for operation of the 

system. 

(c) The certificate holder must 

develop and maintain processes to 

identify hazards within the context of 

the system analysis. 

§ 5.55 Safety risk assessment and control. 

(a) The certificate holder must 

develop and maintain processes to 

analyze safety risk associated with the 

hazards identified in § 5.53(c). 

(b) The certificate holder must define 

a process for conducting risk assessment 

that allows for the determination of 

acceptable safety risk. 

(c) The certificate holder must 

develop and maintain processes to 

develop safety risk controls that are 

necessary as a result of the safety risk 

assessment process under paragraph (b) 

of this section. 

(d) The certificate holder must 

evaluate whether the risk will be 

acceptable with the proposed safety risk 

control applied, before the safety risk 

control is implemented. 

Subpart D—Safety Assurance 

§ 5.71 Safety performance monitoring and 

measurement. 

(a) The certificate holder must 

develop and maintain processes and 

systems to acquire data with respect to 

its operations, products, and services to 

monitor the safety performance of the 

organization. These processes and 

systems must include, at a minimum, 

the following: 

(1) Monitoring of operational 

processes. 

(2) Monitoring of the operational 

environment to detect changes. 

(3) Auditing of operational processes 

and systems. 

(4) Evaluations of the SMS and 

operational processes and systems. 

(5) Investigations of incidents and 

accidents. 

(6) Investigations of reports regarding 

potential non-compliance with 

regulatory standards or other safety risk 

controls established by the certificate 

holder through the safety risk 

management process established in 

subpart B of this part. 

(7) A confidential employee reporting 

system in which employees can report 

hazards, issues, concerns, occurrences, 

incidents, as well as propose solutions 

and safety improvements. 

(b) The certificate holder must 

develop and maintain processes that 

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1328 Federal Register / Vol. 80, No. 5 / Thursday, January 8, 2015 / Rules and Regulations 

analyze the data acquired through the 

processes and systems identified under 

paragraph (a) of this section and any 

other relevant data with respect to its 

operations, products, and services. 

§ 5.73 Safety performance assessment. 

(a) The certificate holder must 

conduct assessments of its safety 

performance against its safety 

objectives, which include reviews by 

the accountable executive, to: 

(1) Ensure compliance with the safety 

risk controls established by the 

certificate holder. 

(2) Evaluate the performance of the 

SMS. 

(3) Evaluate the effectiveness of the 

safety risk controls established under 

§ 5.55(c) and identify any ineffective 

controls. 

(4) Identify changes in the operational 

environment that may introduce new 

hazards. 

(5) Identify new hazards. 

(b) Upon completion of the 

assessment, if ineffective controls or 

new hazards are identified under 

paragraphs (a)(2) through (5) of this 

section, the certificate holder must use 

the safety risk management process 

described in subpart C of this part. 

§ 5.75 Continuous improvement. 

The certificate holder must establish 

and implement processes to correct 

safety performance deficiencies 

identified in the assessments conducted 

under § 5.73. 

Subpart E—Safety Promotion 

§ 5.91 Competencies and training. 

The certificate holder must provide 

training to each individual identified in 

§ 5.23 to ensure the individuals attain 

and maintain the competencies 

necessary to perform their duties 

relevant to the operation and 

performance of the SMS. 

§ 5.93 Safety communication. 

The certificate holder must develop 

and maintain means for communicating 

safety information that, at a minimum: 

(a) Ensures that employees are aware 

of the SMS policies, processes, and tools 

that are relevant to their responsibilities. 

(b) Conveys hazard information 

relevant to the employee’s 

responsibilities. 

(c) Explains why safety actions have 

been taken. 

(d) Explains why safety procedures 

are introduced or changed. 

Subpart F—SMS Documentation and 

Recordkeeping 

§ 5.95 SMS documentation. 

The certificate holder must develop 

and maintain SMS documentation that 

describes the certificate holder’s: 

(a) Safety policy. 

(b) SMS processes and procedures. 

§ 5.97 SMS records. 

(a) The certificate holder must 

maintain records of outputs of safety 

risk management processes as described 

in subpart C of this part. Such records 

must be retained for as long as the 

control remains relevant to the 

operation. 

(b) The certificate holder must 

maintain records of outputs of safety 

assurance processes as described in 

subpart D of this part. Such records 

must be retained for a minimum of 5 

years. 

(c) The certificate holder must 

maintain a record of all training 

provided under § 5.91 for each 

individual. Such records must be 

retained for as long as the individual is 

employed by the certificate holder. 

(d) The certificate holder must retain 

records of all communications provided 

under § 5.93 for a minimum of 24 

consecutive calendar months. 

PART 119—CERTIFICATION: AIR 

CARRIERS AND COMMERCIAL 

OPERATORS 

■ 3. The authority citation for part 119 

is revised to read as follows: 

Authority: Pub. L. 111–216, sec. 215 

(August 1, 2010); 49 U.S.C. 106(f), 106(g), 

1153, 40101, 40102, 40103, 40113, 44105, 

44106, 44111, 44701–44717, 44722, 44901, 

44903, 44904, 44906, 44912, 44914, 44936, 

44938, 46103, 46105. 

■ 4. Add § 119.8 to read as follows: 

§ 119.8 Safety Management Systems. 

(a) Certificate holders authorized to 

conduct operations under part 121 of 

this chapter must have a safety 

management system that meets the 

requirements of part 5 of this chapter 

and is acceptable to the Administrator 

by March 9, 2018. 

(b) A person applying to the 

Administrator for an air carrier 

certificate or operating certificate to 

conduct operations under part 121 of 

this chapter after March 9, 2015, must 

demonstrate, as part of the application 

process under § 119.35, that it has an 

SMS that meets the standards set forth 

in part 5 of this chapter and is 

acceptable to the Administrator. 

Issued in Washington, DC, under the 

authority provided by 49 U.S.C. 106(f), 

44701(a)(5) and Sec. 215 of Pub. L. 111–216, 

124 Stat. 2350 (49 U.S.C. 44701 note) on 

January 5, 2015. 

Michael P. Huerta, 

Administrator. 

[FR Doc. 2015–00143 Filed 1–7–15; 8:45 am] 

BILLING CODE 4910–13–P 

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