The U.S. commercial aviation industry, with less than one fatal accident per 5 million flights from 2002 through 2005 has an extraordinary safety record. However, when passenger airlines have accidents or serious incidents, regardless of their rarity, the consequences can be tragic. In addition, according to Bureau of Transportation Statistics data, flight arrival delays have increased from 15 percent in 2003 to 22 percent in 2006. Increases in flight delays can be viewed as evidence of strain in the aviation system, as a loss of efficiency in the air system is a symptom of increased strain. Losses of efficiency and the corresponding strain on the system could potentially result in hazards that decrease safety. In order to maintain a high level of aviation safety, it is critical to have well- established, efficient, and effective systems in place to provide an early warning of hazards that can lead to accidents. FAA has established a number of systems and processes to inspect and oversee various aspects of passenger airline safety, such as aircraft maintenance and flight operations. In 1998, the agency implemented the Air Transportation Oversight System (ATOS), which currently oversees 35 commercial airlines and cargo carriers; the goal is for ATOS to oversee all commercial passenger and cargo airlines. ATOS emphasizes a system safety approach that extends beyond periodically checking airlines for compliance with regulations to using technical and managerial skills to identify, analyze, and control hazards and risks. For example, under ATOS, inspectors develop surveillance plans for each airline, based on data analysis and risk assessment, and adjust the plans periodically based on inspection results. Our review of ATOS’s early implementation found weaknesses, which FAA addressed by improving guidance to inspectors and increasing data usefulness. FAA’s inspection process for the 81 commercial airlines not covered by ATOS has two components. The National Work Program Guidelines (NPG) is the original oversight program for these airlines. Under NPG, an FAA- wide committee of managers identifies an annual minimum set of required inspections to ensure that airlines comply with their operating certificates; this process is not risk-based. In 2002, FAA added another component, the Surveillance and Evaluation Program (SEP), to the inspection process to incorporate principles of ATOS into its oversight of commercial airlines. The two components are used together to establish the number and types of annual inspections for airlines. Inspections can encompass many different activities, such as visually spot-checking an airplane at a gate, monitoring procedures on a scheduled flight, or observing maintenance performed on an aircraft. Each year, FAA headquarters establishes a baseline number and type of inspections for each airline through NPG. Through SEP, teams of FAA inspectors analyze the results of an airline’s prior inspections at periodic meetings and, based on their assessment of specific risks, establish other inspections that may be needed. Since 1990, FAA has emphasized industry partnership programs that allow participants, such as airlines and pilots, to self-report violations of safety regulations and help identify safety deficiencies and potentially mitigate or avoid fines or other legal action. For example, the Voluntary Disclosure Program encourages the self-reporting of manufacturing problems and safety incidents by participants that can include air carriers and repair stations. When violations of statutory and regulatory requirements are identified through inspections, partnership programs, or other methods, FAA has a variety of enforcement tools that it may use to respond to the violations, including administrative actions (such as issuing a warning notice or a letter of correction that includes the corrective actions the violator is to take) and legal sanctions (such as levying a fine or suspending or revoking a pilot’s certificate or other FAA-issued certificate). The achievement of FAA’s mission is dependent in large part on the skills and expertise of its workforce, whose aviation safety activities include air traffic control, maintenance of air traffic control equipment, and certification and inspection of various industry participants. As of 2006, 714 of FAA’s approximately 3,400 inspectors were dedicated to overseeing the 35 airlines in ATOS. Approximately 1,100 inspectors oversee other entities and individuals, including the remaining 81 commercial airlines that are included in the SEP inspection program, about 5,200 aircraft repair stations, and approximately 625,000 pilots. FAA’s safety oversight programs for other aspects of the aviation industry—including manufacturers of aircraft and aircraft parts, repair stations, flight schools, aviation maintenance technician schools, pilots, and mechanics—involve certification, surveillance, and inspection by FAA’s safety inspectors, engineers, flight surgeons, and designated representatives. FAA authorizes about 13,400 private individuals and 218 organizations (called “designees”) to act as its representatives to conduct many safety certification activities that FAA considers to be nonsafety critical, such as administering flight tests to pilots, inspecting repair work by maintenance facilities, conducting medical examinations of pilots, and approving designs for aircraft parts. These designees are grouped into 18 different programs and are overseen by three FAA offices—Flight Standards Service, Aerospace Medicine, and Aircraft Certification Service—all of which are under the Office of Aviation Safety. In addition, FAA’s Air Traffic Organization (ATO) includes the approximately 16,700 air traffic controller workforce and nearly 7,200 field maintenance technicians responsible for maintaining ATO’s equipment and facilities, which include 21 air traffic control centers, 518 airport control towers, and 76 flight service facilities. While overall commercial aviation safety trends have been generally positive over the last several years, recent safety trends may warrant scrutiny. On the positive side, the number of serious runway incursions has decreased since fiscal year 2002. Specifically, in fiscal year 2002, there were 37 serious runway incursions, compared with 29 in fiscal year 2005. Recent fiscal year 2006 data also continue the downward trend, with 25 serious runway incursions as of August 1, 2006—fewer than at the same time in the previous fiscal year. However, with four fatal accidents in fiscal year 2006, FAA will not meet its performance target for fiscal year 2006 for commercial air carrier safety. Although general aviation accidents have decreased from 1,715 in 2002 to 1,669 in 2005, general aviation safety continues to be a concern because it represents a significant number of fatal accidents every year. (See fig. 1.) For example, 321 of the 1,669 general aviation accidents in 2005 were fatal. Additionally, the poorer safety records of cargo and air ambulances services, compared with the commercial passenger airline accident rate, point out the safety vulnerabilities in this area. According to FAA, from 1998 through 2005, the accident rate for scheduled air cargo operators declined significantly, but was still about 2.5 times higher than the accident rate for scheduled passenger operators. Further, in instances where there was not an isolated injury to a single individual, the accident rate for cargo was about 6.3 times higher than for commercial passenger aviation. In addition, from January 2002 to January 2005, there were 55 emergency medical services or air ambulance accidents, with 54 fatalities, the highest number of accidents since the 1980s. In addition, FAA did not meet its performance target with regard to operational errors for fiscal years 2003 through 2005. While operational errors continued an upward trend in 2006, FAA was below the fiscal year 2006 target of 4.27 operational errors per million activities as of June 2006. FAA’s safety oversight system has programs that focus on identifying and mitigating risk through a system safety approach, leveraging resources, and enforcing safety regulations, but the programs lack fully developed evaluative processes. As mentioned previously, FAA oversees commercial airlines by one of two programs—ATOS, which includes 35 airlines, and SEP, which includes the remaining 81 airlines. Both programs emphasize a system safety approach of using risk analysis techniques, which allow for the efficient use of inspection staff and resources by prioritizing workload based on areas of highest risk and require that inspectors verify that corrective actions are taken. For example, FAA has developed risk assessment worksheets for both programs that guide inspectors through identifying and prioritizing risks associated with key airline areas, such as flight operations and personnel training. Information from the worksheets is then used to target resources to mitigating those risks. In recent work we found that the benefits of FAA’s system safety approach for the inspection of airlines covered under SEP could be enhanced if FAA more completely implemented the program and addressed other challenges. Most of FAA’s inspections of those airlines were not risk- based. For example, as shown in figure 2 from fiscal years 2002 through 2004, SEP—a risk-based approach—guided only 23 percent of the inspection activities for the top 25 SEP airlines in terms of the number of enplanements. The remaining 77 percent of inspection activities were identified through NPG, a process that is not risk-based or system safety oriented. Although inspectors can replace NPG-identified activities with SEP-identified activities that they deem address a greater safety risk, we found that FAA inspectors interpret agency emphasis on NPG as discouraging this practice. To address this issue, we recommended that FAA improve communication with and training of inspectors in areas of system safety and risk management. In response to our recommendations, FAA revised its guidelines to require inspectors and managers to ensure that risk information is used and updated its SEP training course to reflect that change. Since FAA’s focus on system safety represents a cultural shift in the way the agency oversees the aviation industry, it will be important for FAA to monitor the implementation of system safety and risk management principles. We recommended that FAA establish a continuous evaluative process for its activities under SEP, but the agency does not intend to set up a process since it expects to eliminate the SEP program after December 2007, which is its deadline for moving all commercial airlines to the ATOS program. If the deadline slips, we believe our recommendation remains valid. Furthermore, FAA’s plans to dissolve the SEP program after moving all commercial airlines to ATOS will shift the inspectors workloads and present a challenge to FAA’s inspection oversight process.