Rule2024-08669
Safety Management Systems
Primary source
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Published
April 26, 2024
Effective
May 28, 2024
Issuing agencies
Transportation DepartmentFederal Aviation Administration
Abstract
The FAA is updating requirements for safety management systems and requiring certain certificate holders and commercial air tour operators to develop and implement a safety management system (SMS). This rule extends the requirement for an SMS to all certificate holders operating under the rules for commuter and on-demand operations, commercial air tour operators, production certificate holders that are holders or licensees of a type certificate for the same product, and holders of a type certificate that license out that type certificate for production. The FAA is publishing this rule in part to address a Congressional mandate as well as recommendations from the National Transportation Safety Board and two aviation rulemaking committees. Additionally, the rule more closely aligns the United States with Annex 19 to the Convention on International Civil Aviation. This rule will improve aviation safety by requiring organizations to implement a proactive approach to managing safety.
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[Federal Register Volume 89, Number 82 (Friday, April 26, 2024)]
[Rules and Regulations]
[Pages 33068-33109]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08669]
[[Page 33067]]
Vol. 89
Friday,
No. 82
April 26, 2024
Part VI
Department of Transportation
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Federal Aviation Administration
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14 CFR Parts 5, 21, 91, et al.
Safety Management Systems; Final Rule
Federal Register / Vol. 89, No. 82 / Friday, April 26, 2024 / Rules
and Regulations
[[Page 33068]]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 5, 21, 91, and 119
[Docket No.: FAA-2021-0419; Amdt. Nos. 119-21, 21-108, 5-2, 91-374]
RIN 2120-AL60
Safety Management Systems
AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
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SUMMARY: The FAA is updating requirements for safety management systems
and requiring certain certificate holders and commercial air tour
operators to develop and implement a safety management system (SMS).
This rule extends the requirement for an SMS to all certificate holders
operating under the rules for commuter and on-demand operations,
commercial air tour operators, production certificate holders that are
holders or licensees of a type certificate for the same product, and
holders of a type certificate that license out that type certificate
for production. The FAA is publishing this rule in part to address a
Congressional mandate as well as recommendations from the National
Transportation Safety Board and two aviation rulemaking committees.
Additionally, the rule more closely aligns the United States with Annex
19 to the Convention on International Civil Aviation. This rule will
improve aviation safety by requiring organizations to implement a
proactive approach to managing safety.
DATES: Effective May 28, 2024.
ADDRESSES: For information on where to obtain copies of rulemaking
documents and other information related to this final rule, see ``How
to Obtain Additional Information'' in the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT: For technical questions concerning
this action, contact Scott Van Buren, Office of Accident Investigation
and Prevention, AVP-4, Federal Aviation Administration, 800
Independence Avenue SW, Room 300 East, Washington, DC 20591, telephone
(202) 494-8417; email <a href="/cdn-cgi/l/email-protection#3063535f44441e66515e724542555e705651511e575f46"><span class="__cf_email__" data-cfemail="1e4d7d716a6a30487f705c6b6c7b705e787f7f30797168">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
List of Abbreviations and Acronyms Frequently Used In This Document
AC--Advisory Circular
ACSAA--Aircraft Certification, Safety, and Accountability Act of
2020
ANPRM--Advance notice of proposed rulemaking
ARC--Aviation Rulemaking Committee
ASAP--Aviation Safety Action Program
CAA--Civil Aviation Authority
CFR--Code of Federal Regulations
EASA--European Union Aviation Safety Agency
FAA--Federal Aviation Administration
FOIA--Freedom of Information Act
FRFA--Final Regulatory Flexibility Analysis
HTAWS--Helicopter Terrain Awareness and Warning System
ICAO--International Civil Aviation Organization
IRFA--Initial Regulatory Flexibility Analysis
LOA--Letter of Authorization
NAICS--North American Industry Classification System
NPRM--Notice of Proposed Rulemaking
NTSB--National Transportation Safety Board
OMB--Office of Management and Budget
OpSpec--Operations Specifications
PC--Production Certificate
PMA--Parts Manufacturer Approval
RFA--Regulatory Flexibility Act
RIA--Regulatory Impact Analysis
SBA--Small Business Administration
SMS--Safety Management System
STC--Supplemental Type Certificate
TC--Type Certificate
TSOA--Technical Standard Order Authorization
U.S.C.--United States Code
WBAT--Web-Based Analytical Technology
Table of Contents
I. Executive Summary
A. Purpose of the Regulatory Action
B. Changes Made in this Final Rule
C. Summary of the Costs and Benefits
II. Authority for This Rulemaking
III. Background
A. Statement of the Problem
B. Safety Management System Overview
C. Related Regulatory Actions
D. NTSB Recommendations
E. SMS ARCs
F. Aircraft Certification, Safety, and Accountability Act
G. International Movement Toward SMS
H. Summary of the NPRM
I. General Overview of Comments
IV. Discussion of Comments and the Final Rule
A. Applicability to Part 135 and LOA Holders Under Sec. 91.147
B. Applicability to Part 21 Foreign Entities
C. Expansion of Proposed Applicability
D. Compliance Timelines and Submission Requirements
E. Use of the Term ``Person''
F. System Description
G. Notification of Hazards and Protection of Information
H. Recordkeeping--Communications regarding Hazard Information
Notifications
I. ``Hazard'' Definition
J. Scalability
K. Code of Ethics
L. FAA and Industry Readiness for SMS
M. Aviation Organizations With an Existing SMS
N. Employee Reporting
O. Summary of Confidential Employee Reports
P. Emergency Response Planning
Q. Safety Risk Management
R. Part 135 Pilot and Duty Rules ARC
S. Consistency with ICAO
T. Safety Policy
U. Miscellaneous Amendments
V. Benefits and Costs
W. Severability
V. Regulatory Notices and Analyses
A. Summary of the Regulatory Impact Analysis
B. Regulatory Flexibility Act
C. International Trade Impact Assessment
D. Unfunded Mandates Assessment
E. Paperwork Reduction Act
F. International Compatibility
G. Environmental Analysis
H. Regulations Affecting Intrastate Aviation in Alaska
VI. Executive Order Determinations
A. Executive Order 13132, Federalism
B. Executive Order 13175, Consultation and Coordination With
Indian Tribal Governments
C. Executive Order 13211, Regulations That Significantly Affect
Energy Supply, Distribution, or Use
D. Executive Order 13609, Promoting International Regulatory
Cooperation
VII. Additional Information
A. Electronic Access and Filing
B. Small Business Regulatory Enforcement Fairness Act
I. Executive Summary
A. Purpose of the Regulatory Action
A safety management system (SMS) provides an organization-wide
approach to identifying safety hazards, assessing and managing safety
risk, and assuring the effectiveness of safety risk controls. An SMS
provides a set of decision-making processes and procedures that can
improve safety by assisting an organization in planning, organizing,
directing, and controlling its aviation-related business activities.
Currently, the SMS requirements of part 5 of title 14 of the Code of
Federal Regulations (CFR) apply only to air carriers certificated under
part 119 and conducting operations in accordance with part 121 (part
121 operators). This final rule extends the applicability of the SMS
requirements in part 5 to include additional entities to enhance
safety, respond to a Congressional mandate, and more closely align the
FAA's SMS requirements with International Civil Aviation Organization
(ICAO) Annex 19.
Historically, the approach to aviation safety was based on the
reactive analysis of past accidents and the introduction of corrective
actions to prevent the recurrence of those events. An SMS, in contrast,
helps organizations proactively identify potential hazards in the
operating environment, analyze the risks of those hazards, and mitigate
those risks to prevent an accident or incident. In 2015, the FAA
promulgated
[[Page 33069]]
14 CFR part 5, which required part 121 operators to develop and
implement SMS and set out the basic requirements for those systems. The
next step in improving aviation safety is to extend the SMS
requirements in part 5 to additional organizations that play a critical
role in the design, manufacturing, and operation of aircraft (i.e.,
part 119 certificate holders operating under part 135, Letter of
Authorization (LOA) holders operating commercial air tours under Sec.
91.147, and certain certificate holders under part 21). These aviation
organizations are in the best position to prevent future incidents and
accidents because they are closest to the hazards, and they know the
most about their operations and products.
An SMS provides a structured, repeatable, systematic approach to
proactively identify hazards and manage safety risk. With
implementation of an SMS, these aviation organizations will be better
able to develop and implement mitigations that are appropriate to their
environment and operational structure. SMS can be used to avoid or
mitigate future aviation accidents. This final rule is based on the
recommendations of two previous Aviation Rulemaking Committees
(ARCs),\1\ the National Transportation Safety Board (NTSB),\2\ and the
Joint Authorities Technical Review of the Boeing 737 MAX Flight Control
System,\3\ and consideration of public comments received during the
comment period.
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\1\ The SMS ARCs are discussed in Section III.D.
\2\ NTSB recommendations are discussed in Section III.C.
\3\ Joint Authorities Technical Review (JATR), Boeing 737 MAX
Flight Control System: Observations, Findings, and Recommendations,
Washington, October 11, 2019.
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Further, the Aircraft Certification, Safety, and Accountability Act
of 2020 (Pub. L. 116-260, 134 Stat. 2309, hereafter referred to as
ACSAA), enacted on December 27, 2020, mandated the application of SMS
regulatory requirements to holders of both a Type Certificate (TC) and
a Production Certificate (PC) issued under part 21.\4\ Congress further
mandated that the FAA include certain requirements in its implementing
regulations. The amendments to part 5 are in accordance with this
legislation.
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\4\ Section 102(a)(1) of ACSAA.
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Lastly, requiring SMS for certain commercial operators and design
and manufacturing organizations more closely aligns the FAA's SMS
requirements with ICAO Annex 19; therefore, this final rule increases
U.S. alignment with other civil aviation authorities (CAAs) that are
also implementing SMS requirements in accordance with ICAO Standards
and Recommended Practices.\5\
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\5\ Several major civil aviation authorities have established or
are in the process of establishing SMS requirements for air
operators, air traffic management, airports, and maintenance
organizations, including the European Union Aviation Safety Agency
(EASA), Brazil, Canada, Japan, New Zealand, and Australia. Fewer
countries have design and manufacturing organizations and,
therefore, they have not established SMS requirements for those
entities. However, New Zealand, Japan, and EASA have established SMS
requirements for design and manufacturing organizations.
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The FAA emphasizes that the requirements of this rule are limited
to those activities that directly affect aviation safety. Therefore, to
the extent the organizations covered by this rule also engage in
activities that do not directly affect aviation safety (e.g.,
processing consumer payments, mitigating slip-and-fall accidents on
company property, administering employee payroll), those activities
need not be covered by an SMS required by this rule (but an
organization is not prohibited from covering such activities by its
SMS, if it chooses to do so).
B. Changes Made in This Final Rule
After considering the information provided by commenters, the FAA
is making several changes in this final rule from what was proposed in
the notice of proposed rulemaking (NPRM).\6\ Table 1 below summarizes
the changes. The changes are discussed in more detail in Section IV.
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\6\ 88 FR 1932.
Table 1--Summary of Regulatory Text Changes
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Proposed 14 CFR section Summary of final rule
affected Description changes from NPRM
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5.1(e) and 5.1(f)............. Applicability of ``For the same
part 5 to part product'' (aircraft,
21 certificate aircraft engine, or
holders. propeller) is added
to Sec. 5.1(e) and
Sec. 5.1(f) to
clarify that part 5
does not apply to
either a
supplemental type
certificate (STC)
holder or a PC
holder for an STC,
or PC holders that
only produce parts
or articles.
5.1(g) and 5.15(a)............ Applicability of Foreign holders of a
part 5 to validated TC issued
foreign under Sec. 21.29
manufacturers. are now excluded.
5.3........................... Definition of The proposed revision
``Hazard.''. to the definition of
``hazard'' is
partially adopted.
The terms
``incidents'' and
``objects'' are
incorporated as
proposed, but the
proposal to replace
the term
``foreseeably'' with
``potential to'' is
not adopted. The new
definition is:
``Hazard means a
condition or an
object that could
foreseeably cause or
contribute to an
incident or aircraft
accident, as defined
in 49 CFR 830.2.''
5.5........................... Scalability...... The proposal to
remove the
scalability language
in original Sec.
5.3 is not adopted.
The language is
retained and placed
in Sec. 5.5(a) to
provide a better
understanding
related to
scalability.
5.5(b), 5.95(c)............... Organizational The ``system
system description''
description. proposed in Sec.
5.5(b) is renamed to
``organizational
system
description.'' The
requirement is moved
to Sec. 5.17 and
is now applicable
only to covered part
21 entities (Sec.
Sec. 5.11(a),
5.13(b)(1),
5.15(b)(1), and
5.15(c)(1)). The
proposed regulatory
language is revised
to make explicit
that only a summary
of information in
the organizational
system description
is required. Also,
the proposal to
require SMS
documentation of the
system description
in Sec. 5.95(c) is
not adopted.
[[Page 33070]]
5.7(a)........................ Part 121 The FAA proposed in
submission Sec. 5.7(a) that
requirements. existing part 121
operators would be
required to submit
to the FAA for
acceptance revisions
to their SMS
necessary to meet
the new requirements
in part 5. In the
final rule, existing
part 121 operators
with acceptable SMS
are required to make
revisions to their
SMS. However, in
alignment with the
requirements for new
part 121 applicants,
part 135 operators,
and LOA holders
under Sec. 91.147,
FAA acceptance of
the SMS and
revisions made by
existing part 121
operators will not
be required.
5.7(b), 5.9(a) and (b), and Statement of The FAA proposed that
91.147(c)(8). Compliance. existing part 135
operators and LOA
holders under Sec.
91.147 submit a
statement of
compliance. In the
final rule, the name
is changed from a
statement of
compliance to a
declaration of
compliance.
The requirement to
submit a statement
of compliance was
also proposed for
applicants for part
121 or 135
operations and LOAs
under Sec. 91.147.
This requirement is
not adopted in the
final rule.
5.9(a)(1) and (a)(2).......... Part 135 The compliance
operators and timeline for
Sec. 91.147 existing operators
air tour is extended from 24
operators months to 36 months.
compliance
timeline.
5.9........................... Single-pilot Part 135 operators
operators. and part 91
commercial air tour
operators are
required to have an
SMS, as proposed;
but some SMS
requirements have
been determined not
to be applicable to
certain single-pilot
operators. New Sec.
5.9(e) enumerates
the exceptions for
certain single-pilot
operators.
5.11; 5.13; 5.15.............. Requirements for For existing part 21
part 21 certificate holders,
certificate the deadline for
holders. submission of SMS
implementation plans
is changed from
December 27, 2024,
to no later than 6
months after the
final rule's
effective date. SMS
must be implemented
by these entities no
later than 36 months
after the effective
date. For PC
applicants or TC
holders entering
into a licensing
agreement, the
deadline to
implement SMS is
changed to no later
than 36 months after
submission of the
implementation plan.
Finally, the sequence
of the requirements
is changed to move
development of the
implementation plan
before development
of the SMS.
5.17.......................... Implementation The implementation
plan. plan requirements in
proposed Sec. 5.17
are moved to Sec.
5.19 to more
logically follow the
``organizational
system description''
requirements (now
Sec. 5.17).
Language is added to
require that the
implementation plan
be based on the
organizational
system description.
5.71.......................... Safety In the NPRM, the FAA
performance proposed removing
monitoring and the word
measurement. ``operations'' from
Sec. 5.71(a) and
(b) to clarify the
requirement and
avoid confusion with
the term
``operator.'' The
FAA does not adopt
that change in the
final rule.
5.94 and 5.97(d).............. Notification of The proposed Sec.
hazards to 5.94(a) requirement
interfacing for notification of
persons. hazards is moved to
subpart C--Safety
Risk Management, in
new Sec. 5.57. The
term ``interfacing
persons'' is now
clarified to be
``those who
contribute to the
safety'' of a
covered
organization's
``aviation-related
products and
services.'' In
addition, a
requirement is
included in subpart
D--Safety Assurance
(new Sec.
5.71(a)(8)) to have
a process for
investigating hazard
notifications that
have been received.
Thus, the
requirement in
proposed Sec.
5.94(b) to develop
procedures for
reporting and
receiving hazard
information is
removed. Section
5.97(d) is updated
to replace the
reference to ``Sec.
5.94'' with ``Sec.
5.57.''
119.8......................... Requirement to Section 119.8 is
meet part 5 for changed to:
part 121 and 135 ``Certificate
operators. holders authorized
to conduct
operations under
part 121 or 135 of
this chapter must
have a safety
management system
that meets the
requirements of part
5 of this chapter.''
This change corrects
an inadvertent error
in the NPRM.
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C. Summary of the Costs and Benefits
As presented in the NPRM, the FAA estimated quantified annualized
costs of $47.4 million using a 7 percent discount rate over a 5-year
period of analysis. The costs represent resources to develop and
implement an SMS. Mitigation costs to reduce or eliminate any hazards
identified by an SMS, which are yet to be identified and thus unknown,
are not quantified in the analysis. The FAA evaluated benefits
qualitatively. The benefits are the value that would result from
avoided fatalities, injuries, aircraft damage, and investigation costs.
The analysis of costs and benefits reflects changes in the final rule
from the NPRM. See Section V.A. for more information.
II. Authority for This Rulemaking
The FAA's authority to issue rules on aviation safety is found in
title 49 of the United States Code (U.S.C.). Subtitle I, section 106
describes the authority of the FAA Administrator. Subtitle VII,
[[Page 33071]]
Aviation Programs, describes in more detail the scope of the Agency's
authority. 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.
In 2010, Congress mandated that the FAA conduct rulemaking to
require part 121 operators to implement an SMS in the Airline Safety
and Federal Aviation Administration Extension Act of 2010 (Pub. L. 111-
216, 124 Stat. 2366).
Subsequently, Congress enacted ACSAA, on December 27, 2020. Section
102, titled ``Safety Management Systems,'' requires the FAA to initiate
a rulemaking to require manufacturers that hold both a TC and a PC
issued pursuant to 49 U.S.C. 44704 have an SMS consistent with the
Standards and Recommended Practices established by ICAO and contained
in Annex 19 to the Convention on International Civil Aviation (61 Stat.
1180) for such systems, and ensure their SMSs are consistent with, and
complementary to, existing SMSs. Section 102 of ACSAA requires the
implementing regulations to include a confidential employee reporting
system through which employees can report hazards, issues, concerns,
occurrences, and incidents without concern for reprisal for reporting,
and a code of ethics. The regulations in the final rule are in
accordance with those requirements.
Additionally, the FAA is using its discretion under the following
authorities to proactively extend SMS requirements to part 119
certificate holders authorized to operate under part 135, LOA holders
operating under Sec. 91.147, and certain TC or PC holders not covered
under section 102 of the ACSAA.
This rulemaking is promulgated under 49 U.S.C. 44701(a)(5) (``The
Administrator of the Federal Aviation Administration shall promote safe
flight of civil aircraft in air commerce by prescribing regulations and
minimum standards for other practices, methods, and procedure the
Administrator finds necessary for safety in air commerce and national
security''); 44701(a)(2)(A) (``The Administrator of the Federal
Aviation Administration shall promote safe flight of civil aircraft in
air commerce by prescribing regulations and minimum standards in the
interest of safety for inspecting, servicing, and overhauling aircraft,
aircraft engines, propellers, and appliances''); 44702(a) (``The
Administrator of the Federal Aviation Administration may issue airman
certificates, design organization certificates, type certificates,
production certificates, airworthiness certificates, air carrier
operating certificates, airport operating certificates, air agency
certificates, and air navigation facility certificates''); and
44704(a)(1) (``The Administrator of the Federal Aviation Administration
shall issue a type certificate for an aircraft, aircraft engine, or
propeller, or for an appliance specified under paragraph (2)(A) of this
subsection when the Administrator finds that the aircraft, aircraft
engine, propeller, or appliance is properly designed and manufactured,
performs properly, and meets the regulations and minimum standards'').
Additionally, this rulemaking is consistent with the requirements of 49
U.S.C. 44701(d)(1)(A) (``When prescribing a regulation or standard
under [49 U.S.C. chapter 447], the Administrator shall consider the
duty of an air carrier to provide service with the highest possible
degree of safety in the public interest'').
Finally, 49 U.S.C. 44701(c) directs the Administrator to ``carry
out this chapter in a way that best tends to reduce or eliminate the
possibility or recurrence of accidents in air transportation.'' Among
other things, this rulemaking requires certain entities whose
activities affect safety in air transportation to develop and maintain
an SMS to improve the safety of their operations. SMS enables persons
to proactively identify and mitigate safety risk, thereby reducing the
possibility or recurrence of accidents in air transportation consistent
with the mandate in section 44701(c). For these reasons, the
regulations identified in the final rule are within the scope of the
FAA's authority and are consistent with Congress's mandate that the FAA
exercise its authority proactively--not just reactively--to promote
safe flight of civil aircraft and to reduce or eliminate hazards that
could result in accidents in air transportation.
III. Background
A. Statement of the Problem
As described in the NPRM, over the last few decades, accidents
involving commercial aviation operators have decreased.\7\ Despite an
overall reduction in accidents, the FAA determined that many of the
accidents involving part 135 and Sec. 91.147 operators could have been
effectively mitigated by the presence of an SMS. These accidents
highlight the systemic improvement opportunities to safety, which are
described in the Regulatory Impact Analysis (RIA) for this rulemaking.
According to NTSB data, from 2015 to 2019, there were 215 accidents
involving part 135 operators, with a total of 121 fatalities,\8\ as
well as 33 accidents involving air tour operators operating under Sec.
91.147, with a total of 16 fatalities.\9\ Of these accidents, the FAA
identified 35 involving part 135 operators and four involving Sec.
91.147 operators that resulted in fatalities and serious injuries that
could have been mitigated had those operators implemented an SMS.
Additional accidents not involving fatalities or serious injuries may
also have been avoided. The FAA also identified several accidents
across part 91, 121, and 135 operations involving design and production
issues that resulted in fatalities and serious injuries that could have
been mitigated or prevented if the design and manufacturing
organizations involved had implemented an SMS. A full listing of each
accident used to inform the analysis of this rulemaking is included in
Appendix A to the RIA.
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\7\ U.S. Air Carrier Safety Data, <a href="https://www.bts.gov/content/us-air-carrier-safety-data">https://www.bts.gov/content/us-air-carrier-safety-data</a>. Accessed March 22, 2022.
\8\ National Transportation Safety Board. US Civil Aviation
Accident Rates. 2022. Available at: <a href="https://www.ntsb.gov/safety/Pages/research.aspx">https://www.ntsb.gov/safety/Pages/research.aspx</a>.
\9\ Data file of sightseeing accidents provided by the NTSB
April 2020.
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Given the rapid development, growth, and increasing complexities of
the airspace, the FAA is extending SMS requirements to parties that
play critical roles in the design, manufacturing, and operation of
aircraft. ACSAA requires the FAA to include holders of both a TC and a
PC among those organizations that should be required to implement an
SMS. Applying SMS to commuter and on-demand air carriers, air tours,
and the manufacturers responsible for design and production of products
will continue to reduce incidents, accidents, and fatalities. This
extended application will improve safety in aviation by requiring these
organizations to proactively identify hazards, assess risk of those
hazards, and develop and implement mitigations, as necessary. ICAO,
other CAAs, industry advisory groups, and the NTSB all agree that the
use of an SMS improves safety. An SMS has been implemented by each part
121 operator, and many other aviation organizations have implemented an
SMS within the context of the FAA's voluntary SMS programs.
B. Safety Management System Overview
An SMS is a formal, top-down, organization-wide approach to
managing safety risk and ensuring the effectiveness of safety risk
controls. It includes systematic procedures, practices, and policies
for the management of safety risk. An SMS is
[[Page 33072]]
a management system integrated into an organization's operations that
enforces the concept that safety should be managed with as much
emphasis, commitment, and focus as any other critical area of an
organization.
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. An SMS must include the following
four components: Safety Policy, Safety Risk Management, Safety
Assurance, and Safety Promotion. For additional information on these
components and other elements of SMS see the ``Safety Management
Systems for Domestic, Flag, and Supplemental Operations Certificate
Holders'' final rule (80 FR 1309).
The purpose of an SMS is to reduce incidents, accidents, and
fatalities by aiding aviation organizations in identifying hazards and
mitigating the risk of those hazards before they lead to an incident or
accident. An SMS can work to reduce incidents, accidents, and
fatalities in many different ways. For example, an SMS may:
<bullet> Increase safety of products or services by identifying and
addressing problems before they result in an incident, accident, or
fatality.
<bullet> Improve data-informed decision making to prioritize
resource allocation.
<bullet> Enhance communication regarding safety by using common,
consistent terminology within the organization and throughout the
industry.
<bullet> Strengthen the organization's safety culture.
SMS increases safety by requiring an organization with a part 5 SMS
to ``connect the dots'' in a way that it may not do without an SMS. An
SMS integrates discrete processes and procedures, such as
organizational safety promotion, designation of safety roles and
responsibilities, hazard identification, risk assessment and control,
and performance assessment, into a comprehensive system to address
aviation hazards. For example, consider an air carrier whose pilots
suddenly start noticing that landings at a specific airport have
recently become more difficult. Under SMS, those pilots are encouraged
to communicate their individual observations to their management. Their
management, upon noticing several reports have been received, would
assess the situation and trigger their Safety Risk Management
processes. These processes would then trigger a notification of the
hazard to the airport. If the carrier does not have an SMS program, the
carrier's pilots may not communicate their individual observations, the
management may not have known of the hazard, and the systemic airport
problem would not have been identified or addressed.
As another example, consider the scenario of an aircraft production
line where a tool is calibrated improperly. The aircraft assembly
technician was unaware of the improperly calibrated tool and completed
the assembly process. During operation, an air carrier's pilots
identified minor and repeated flight control issues and reported these
issues to their management. Under an SMS, the air carrier's management
would report the hazard to the aircraft manufacturer. The aircraft
manufacturer, upon receipt of the hazard report, would assess the
situation and trigger its Safety Risk Management processes. This
analysis would identify that the flight control problems were caused by
an improperly calibrated tool. The manufacturer would then implement
safety risk mitigations to correct the tool calibration process and
increase tool inspection. In addition, the manufacturer would identify
all delivered aircraft that may have been assembled with the improperly
calibrated tool and issue maintenance instructions to all operators.
Without SMS, the potential hazard may go unrecognized, unreported, and
unmitigated, presenting a safety issue for each aircraft in service.
Anecdotal evidence from FAA voluntary SMS program participants
indicates that SMS improves the safety of aviation organizations.\10\
The FAA's Voluntary Program started as a pilot project in 2007 with a
primary focus on part 121 operators, and it was based on the ICAO's SMS
framework in Annex 19. In 2015, with the publication of part 5, the
pilot project was transitioned to what is now called the FAA's SMS
Voluntary Program, and it is based on part 5.\11\ As of October 31,
2023, the SMS Voluntary Program had 72 participants, which included 45
part 135 operators, two part 141 pilot schools, one part 142 training
center, and 24 part 145 repair stations. As of October 31, 2023, there
were 30 part 21 certificate holders participating in the associated
voluntary program for design and production organizations, which
includes 5 part 21 certificate holders with accepted SMSs. Recognizing
this, the FAA has implemented SMS within many of its own organizations.
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\10\ As described in the RIA, for example, one participant noted
that the compressed executive awareness time of new safety related
issues resulted in formal management actions occurring in less than
90 days for low-risk issues and within hours for high-risk issues.
Another participant noted that they have a seen a substantial drop
in the major risk categories that they track.
\11\ 80 FR 1308. The FAA published technical amendments on
January 13, 2015 (80 FR 1584) and May 25, 2017 (82 FR 24009) to
correct a date and a reference in the rule, respectively.
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Further, expansion of the SMS requirements increases U.S. alignment
with other CAAs that are also implementing SMS requirements in
accordance with ICAO Standards and Recommended Practices. With an SMS,
a U.S. company may have an enhanced ability to operate internationally
due to improved alignment with ICAO Standards and Recommended
Practices.
To date, SMS requirements have mainly focused on internal
identification and mitigation of risk within an aviation organization.
However, the FAA augmented these requirements in this rule to encourage
a collaborative approach in which persons required to have an SMS share
hazard information with each other and work together to identify and
address hazards and safety issues. To enable collaboration, this rule
requires persons to share hazard information with other aviation
organizations to ensure that relevant information reaches the person in
the best position to address the hazard. The expanded applicability and
hazard information sharing among interfacing organizations will enable
a network of aviation organizations working collaboratively to manage
risk, thereby enhancing the safety benefits of SMS by assuring that
hazards are communicated and mitigated effectively.
Accordingly, expanding the implementation of SMS in the aviation
industry, as well as requiring the notification of identified hazards
to those best positioned to address them, will increase safety
throughout the industry.
C. Related Regulatory Actions
1. Safety Management Systems for Domestic, Flag, and Supplemental
Operations
On July 23, 2009, the FAA published an advance notice of proposed
rulemaking (ANPRM) to solicit public comments on whether certain 14 CFR
parts 21, 119, 121, 125, 135, 141, 142, and 145 certificate holders,
product manufacturers, applicants, and employers (product/service
providers) should be required to develop an SMS.\12\ On August 1, 2010,
Congress subsequently enacted the Airline Safety
[[Page 33073]]
and Federal Aviation Administration Extension Act of 2010 (Pub. L. 111-
216, 124 Stat. 2366), which directed the FAA to conduct rulemaking to
``require all part 121 air carriers to implement a safety management
system.'' \13\ To meet the rulemaking deadlines mandated by the Act,
the FAA decided not to immediately address SMS for product/service
providers other than part 121 air carriers.\14\ Accordingly, the FAA
limited the SMS rulemaking project to part 121 air carriers, issued an
NPRM on November 5, 2010,\15\ and subsequently withdrew the ANPRM.\16\
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\12\ ANPRM, ``Safety Management Systems,'' 74 FR 36414. July 23,
2009.
\13\ See Sec. 215(a).
\14\ See ``Safety Management System; Withdrawal,'' 76 FR 14592.
March 17, 2011.
\15\ 75 FR 68224.
\16\ See id.
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On January 8, 2015, the FAA published the ``Safety Management
Systems for Domestic, Flag, and Supplemental Operations Certificate
Holders'' final rule (SMS for part 121 final rule) requiring operators
authorized to conduct operations under part 121 to develop and
implement an SMS to improve the safety of their aviation related
activities.\17\ The final rule added part 5 to title 14 of the CFR,
creating the SMS requirements for part 121 certificate holders, modeled
on the ICAO SMS framework in ICAO Annex 19 and consistent with the 2009
ARC recommendations (as discussed in Section III.E.1.). The FAA crafted
the requirements in part 5 to be applicable to aviation organizations
of various sizes and complexities, as well as to be adaptable to fit
the different types of organizations in the air transportation system
and operations within an individual company. By 2018, all part 121
operators had met the requirement to have an SMS acceptable to the FAA.
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\17\ 80 FR 1308. The FAA published technical amendments on
January 13, 2015 (80 FR 1584) and May 25, 2017 (82 FR 24009) to
correct a date and a reference in the rule, respectively.
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2. Safety Management Systems for Part 139 Airports
On February 23, 2023, the FAA published a final rule \18\ updating
14 CFR part 139 that requires certain airport certificate holders to
develop, implement, maintain, and adhere to an airport SMS.
Certificated airports that qualify under one or more of the following
criteria are required to develop an SMS under this final rule: are
classified as large, medium, or small hubs based on passenger data
extracted from the FAA Air Carrier Activity Information System; have a
3-year rolling average of 100,000 or more total annual operations,
meaning the sum of all arrivals and departures; or serve any
international operation other than general aviation. This rule expanded
SMS requirements to certain certificated airports and furthered the
FAA's aviation-wide approach to SMS implementation to address safety at
an organizational level. This rule became effective on April 24, 2023.
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\18\ 88 FR 11642.
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D. NTSB Recommendations
The NTSB first recommended in 1997 that transportation
organizations implement an SMS, and early recommendations were aimed at
improving safety in the maritime industry. Since then, a number of NTSB
investigations related to various modes of transportation, including
aviation, have cited organizational factors contributing to accidents
and resulted in recommendations that SMS be used as a way to prevent
future accidents and improve safety. The NTSB issued 18 recommendations
regarding SMS for aviation organizations over a 15-year period,
spanning 2007 through 2021.\19\ These recommendations covered
commercial operations under 14 CFR parts 121 and 135, revenue passenger
carrying business operations under part 91, and certificate holders
under part 21. Eight of the 18 NTSB recommendations were issued to the
FAA.\20\
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\19\ NTSB Safety recommendations: A-07-010 (2007), A-09-016
(2009), A-09-089 (2009), A-09-098 (2009), A-09-106 (2009), A-12-062
(2012), A-12-063 (2012), A-14-105 (2014), A-14-106 (2014), A-16-036
(2016), A-19-028 (2020), A-19-036 (2019), A-19-038 (2019), A-20-025
(2020), A-21-007 (2021), A-21-013 (2021), A-21-014 (2021), and A-21-
048 (2021).
\20\ NTSB Safety recommendations: A-07-010 (2007), A-09-089
(2009), A-09-016 (2009), A-16-036 (2016), A-19-028 (2020), A-21-013
(2021), A-21-014 (2021), and A-21-048 (2021).
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The NTSB publishes a Most Wanted List that ``highlights
transportation safety improvements needed now to prevent accidents,
reduce injuries, and save lives.'' \21\ The NTSB 2021-2023 Most Wanted
List recommended that the FAA ``Require and Verify the Effectiveness of
Safety Management Systems in all Revenue Passenger-Carrying Aviation
Operations.'' \22\
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\21\ 2021-2023 NTSB Most Wanted List of Transportation Safety
Improvements, <a href="http://www.ntsb.gov/mwl">www.ntsb.gov/mwl</a>.
\22\ 2021-2023, NTSB Most Wanted List of Transportation Safety
Improvements, Require and Verify the Effectiveness of Safety
Management Systems in all Revenue Passenger-Carrying Aviation
Operations, <a href="https://www.ntsb.gov/Advocacy/mwl/Pages/mwl-21-22/mwl-as-01.aspx">https://www.ntsb.gov/Advocacy/mwl/Pages/mwl-21-22/mwl-as-01.aspx</a>.
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E. SMS ARCs
Prior to publishing the 2015 SMS rule, the FAA chartered two ARCs
to provide advice on implementing SMS in aviation regulations. The
industry stakeholders on these ARCs included individual companies and
associations representing operators, design and manufacturing
organizations, repair stations, and training organizations. These ARCs
expressed industry support for SMS and recommended that the FAA publish
rules requiring the use of SMS.
The FAA chartered the first ARC in 2009, after publishing an ANPRM
seeking public input on requiring certain part 21, 119, 121, 125, 135,
141, 142, and 145 certificate holders to develop an SMS.\23\ The ARC
recommended the FAA issue regulations on SMS and that those regulations
apply to certificate holders under 14 CFR parts 21, 119, 121, 125, 135,
141, 142, and 145, as well as operators under 14 CFR part 91 subpart
K.\24\ The ARC also recommended phased promulgation of SMS regulations
and that the FAA prioritize new SMS regulations based on the potential
safety benefit, as well as industry experience and regulatory oversight
readiness. The rulemakings implementing SMS for part 121 operators and
airports certificated under part 139 are addressed in more detail in
Section III.C. of this preamble.
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\23\ 74 FR 36414, July 23, 2009.
\24\ Safety Management System (SMS) Aviation Rulemaking
Committee; Order 1110.152, Washington, DC. Available at: <a href="https://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/SMSARC-2122009.pdf">https://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/SMSARC-2122009.pdf</a> (as of March 15, 2022).
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The FAA chartered a second ARC in 2012 \25\ to evaluate
improvements to the effectiveness and efficiency of existing
``certification procedures for products and parts,'' and the benefits
of incorporating SMS in the design and manufacturing environment. The
FAA received the ARC's final report in October 2014.\26\ The ARC
recommended establishing regulatory requirements for implementing SMS
for design and production approval organizations that would be
consistent with the part 5 requirements.
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\25\ 14 CFR 21/Safety Management Systems Aviation Rulemaking
Committee Charter. Available at: <a href="https://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/Part21ARC-10052012.pdf">https://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/Part21ARC-10052012.pdf</a> (visited March 15, 2022).
\26\ Part 21/Safety Management Systems (SMS) Aviation Rulemaking
Committee to the Federal Aviation Administration: Recommendations on
Certification Procedures for Products and Parts. October 5, 2014.
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For more information about both ARCs' recommendations and the FAA's
responses, see Section IV.A of the NPRM preceding this final rule.
[[Page 33074]]
F. Aircraft Certification, Safety, and Accountability Act
The Lion Air and Ethiopian Airlines accidents involving the Boeing
737 MAX resulted in several investigations, not only of the accidents,
but also of the FAA's oversight and certification processes. One such
investigation, convened by the FAA in April of 2019, was the Boeing 737
MAX Flight Control System Joint Authorities Technical Review. The Joint
Authorities Technical Review included representatives from the National
Aeronautics and Space Administration, the FAA, and several foreign
CAAs. One of the Joint Authorities Technical Review recommendations was
that the FAA encourage applicants to have a system safety function,
such as an SMS, that is independent from their design organization.\27\
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\27\ Joint Authorities Technical Review (JATR), Boeing 737 MAX
Flight Control System: Observations, Findings, and Recommendations.
October 11, 2019.
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Subsequently, on December 27, 2020, Congress enacted ACSAA, which
set forth a variety of reforms intended to address certain safety
standards relating to the aircraft certification process. Section 102
of ACSAA required the FAA to promulgate rules that require holders of
both a TC and a PC issued under 14 CFR part 21 to implement an SMS.
ACSAA also established a timeline for those certificate holders to
adopt an SMS (i.e., no later than 4 years after the date of enactment,
December 27, 2020), and it established certain requirements for the
rulemaking, including a confidential employee reporting system through
which employees can report hazards, issues, concerns, occurrences, and
incidents without concern for reprisal for reporting, and a code of
ethics.
G. International Movement Toward SMS
ICAO Annex 19, Safety Management, establishes a framework for
member States to develop and implement SMS requirements within their
respective State's rules. Several member States, including the United
States, started developing and implementing SMS requirements within
their countries after Annex 19 First Edition was published in July 2013
and became applicable in November 2013.\28\ Annex 19 currently requires
States to establish requirements for SMS for international commercial
air transportation, design and manufacturing, maintenance, air traffic
services, training organizations, and certified aerodromes, as well as
SMS criteria for international general aviation operators of large or
turbojet airplanes.
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\28\ The Second Edition of Annex 19 was published in July 2016
and became applicable in November 2019.
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Member States continue to make progress in developing,
implementing, and maintaining requirements for SMS that are aligned
with ICAO's SMS Standards and Recommended Practices, including
certificating authorities in Canada, Brazil, the United Kingdom, Japan,
Australia, and Europe (EASA). For example, in the EASA regulatory
framework, SMS is mandatory for certificated operators of airplanes and
helicopters authorized to conduct commercial air transportation.
Additionally, EASA also adopted rules for EU-part 145 organizations,
which became applicable on December 2, 2022, and for design and
production organizations (EU part 21), which became applicable on March
7, 2023.
H. Summary of the NPRM
On January 11, 2023, the FAA published the NPRM for Safety
Management Systems.\29\ The FAA proposed to update the SMS requirements
in part 5 and extend the requirement to have an SMS to all certificate
holders operating under the rules for commuter and on-demand operations
(part 135), LOA holders operating commercial air tours under Sec.
91.147, PC holders that are holders or licensees of a TC for the same
product (part 21), and holders of a TC who license out that TC for
production (part 21). The FAA proposed several amendments and new
requirements to part 5 intended to increase the effectiveness of SMS.
The FAA also proposed amendments to certain regulations in parts 21,
91, and 119 to conform with, and enable the implementation of, the
proposed requirements in part 5.\30\ The comment period was originally
60 days and was scheduled to close on March 13, 2023. In response to
commenters' requests for extensions, the comment period was extended by
30 days and ultimately closed on April 11, 2023.\31\
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\29\ 88 FR 1932.
\30\ 88 FR 1933.
\31\ 88 FR 5812.
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I. General Overview of Comments
The FAA received 186 comment submissions 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. The FAA received comments from the following:
Aerospace Industries Association (AIA), Air Charter Safety Foundation,
Air Line Pilots Association (ALPA), Air Medical Operators Association
(AMOA), Airbus Commercial Aircraft (Airbus), Aircraft Electronics
Association (AEA), Aeronautical Repair Station Association (ARSA),
Aircraft Owners and Pilots Association (AOPA), Alaska Air Carriers
Association (AACA), Ameristar, Association for Uncrewed Vehicle Systems
International (AUVSI), Association of Air Medical Services, Cargo
Airline Association, Commercial Drone Alliance, Commission on
Accreditation of Medical Transport Systems (CAMTS), Delta Air Lines,
Embraer S.A., European Union Aviation Safety Agency (EASA),
Experimental Aircraft Association (EAA), GE Aerospace, General Aviation
Manufacturers Association (GAMA), Gulfstream Aerospace Corporation
(Gulfstream), Helicopter Association International (HAI), Lockheed
Martin, Minnesota Business Aviation Association, Modification and
Replacement Parts Association (MARPA), National Business Aviation
Association (NBAA), National Transportation Safety Board (NTSB),
NetJets Association of Shared Aircraft Pilots, Piper Aircraft, Pratt &
Whitney, Regional Air Cargo Carriers Association (RACCA), Transport
Canada Civil Aviation (TCCA), Rolls-Royce, Regional Airline Association
(RAA), Small UAV Coalition, Transport Workers Union of America,
Transportation Trades Department--AFL-CIO, WYVERN, Zipline, as well as
multiple individuals and smaller operators.
The FAA received comments on multiple aspects of the proposal. The
comments and the FAA's responses are discussed in Section IV.
IV. Discussion of Comments and the Final Rule
A. Applicability to Part 135 and LOA Holders Under Sec. 91.147
In the NPRM, the FAA proposed to apply part 5 to all operators
under part 135 and air tour operators under Sec. 91.147. Specifically,
proposed Sec. 5.1(b) stated that part 5 would apply to certificate
holders or applicants authorized to conduct operations under part 135.
Proposed Sec. 5.1(c) provided that part 5 would apply to applicants
and LOA holders under Sec. 91.147.
1. Discussion of the Final Rule
The FAA is applying part 5 to all part 135 operators and air tour
operators with a LOA issued under Sec. 91.147, as well as to
applicants for these operations. This amendment is designed
[[Page 33075]]
to further improve aviation safety for passenger-carrying and cargo
operations conducted for compensation or hire. As detailed more
thoroughly in the NPRM, the FAA identified a number of accidents
involving part 135 operators and Sec. 91.147 LOA air tour operators
that resulted in fatalities and serious injuries that could have been
mitigated through SMS.
After considering comments, the FAA adopts this applicability as
proposed. However, for the reason discussed in the FAA Response
section, the FAA decided not to require certain requirements within
part 5 for those operators where a single pilot is the sole individual
performing all necessary functions for the safe operation of the
aircraft. Section 5.9 is revised from the NPRM to add paragraph (e),
which identifies the requirements in part 5 that are not applicable to
certain single-pilot organizations. These requirements generally focus
on identification of designated management personnel, employee
reporting, and communication across the aviation organization and are
explained in more detail in section IV.A.3.
2. Summary of the Comments
Several commenters indicated that requiring part 135 operators and
Sec. 91.147 LOA holders to comply with the part 5 SMS requirements
would impose a significant burden resulting in little safety benefit.
Commenters, including the CAMTS, NATA, NBAA, and RACCA suggested part 5
was designed for large air carriers, not for smaller operators, nor for
the diversity of operations conducted under part 135. The commenters
also argued part 5 is too prescriptive to accommodate the variation of
size and scope of part 135 operations. For these reasons, commenters
recommended that the FAA develop separate SMS requirements for part 135
operators that are less complex than part 5 and are truly scalable for
organizations with limited resources. As an alternative, NBAA
recommended the FAA apply specific regulations to entities based on
size or complexity, using criteria similar to the complexity criteria
identified by the Safety Management International Collaboration Group.
Commenters also expressed concern about the difficulty for small
businesses to implement SMS. NBAA indicated that the FAA should
consider EASA and TCCA SMS models, and the feedback both entities
received, highlighting the difficulties that small organizations face
when implementing SMS. NBAA further noted that its experience with
other regulatory frameworks has illustrated the need for additional
full-time personnel or external contractors to manage the system.
NATA stated the FAA needs to recognize the challenges for small
business and ensure that guidance and training address this issue. NATA
noted that SMS solutions for small businesses must not be cost-
prohibitive or so burdensome as to drive businesses to close, further
stating that the FAA has the responsibility to impose SMS regulations
on small operators only if it can be done in a way that enhances safety
and minimizes burdens. NATA also stated that there have been no pilot
programs or specialized analysis conducted to support the concept of
SMS for smaller operators.
Some commenters asserted that air tour operations already have
stringent requirements in place, and that imposing the part 5
requirements would negatively harm these small businesses and cause
inadvertent negative safety effects by diverting resources. Other
commenters suggested that certain air tour operators should be excluded
from the requirement, such as Sec. 91.147 LOA holders operating fewer
than 100 flights per year or air tour operators with fewer than five
employees.
Several commenters recommended excluding single-pilot operators
from the SMS requirements. These commenters argued the requirements are
impractical, unnecessary, and overly burdensome, citing the
confidential reporting system as an example. Commenters noted SMS may
be beneficial for larger organizations because a team is involved, but
it does not make sense for a single pilot operator because that
individual is already conducting all the functions that would be
required under part 5. According to one commenter, requiring single-
pilot operators to document their decisions, for example, is counter-
productive and may distract them from important duties.
An individual commenter questioned the FAA's justification for
requiring single-person operators to implement SMS. The commenter
argued that the real-world accident descriptions in the NPRM did not
provide evidence that an SMS would have prevented any of the accidents
involving single-person operators. The commenter also noted the FAA did
not present statistical evidence to justify making this regulatory
change for single-person operators.
Other commenters, however, supported the proposed rule, stating
companies requiring payment for service should have an SMS. For
instance, the NTSB stated that it supports the proposed expansion of
SMS to include all part 135 operators and all operators conducting air
tours under Sec. 91.147. The NTSB noted that if the proposed
requirements were adopted, the rule could possibly satisfy the intent
of Safety Recommendations A-16-36 and A-19-28. The NTSB also stated
that the particular methods an operator uses to implement an SMS are
not prescribed in the proposed rule; therefore, the current SMS
framework provides sufficient flexibility to small operators under both
part 135 and Sec. 91.147, and no alternatives exist that would achieve
the same safety objectives as SMS.
3. FAA Response
The FAA understands the concerns expressed by the commenters
regarding the impact to small operators. Part 5 was designed to be
scalable and flexible so aviation organizations could design and
implement an SMS that fits their operations. Scalability was discussed
at length in the preamble to the NPRM, discussed further in Section
IV.J. of this preamble, and is addressed in Advisory Circular (AC) 120-
92 and AC 21-58.\32\ Appendix G in AC 120-92 includes implementation
strategies and examples regarding how small operators could comply with
part 5 requirements.
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\32\ Guidance, including ACs, to support this rule will be
available at the FAA's Dynamic Regulatory System (<a href="https://drs.faa.gov">https://drs.faa.gov</a>) approximately 30 days after publication in the Federal
Register.
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The public expects safe carriage from operators offering flight
services for hire irrespective of whether an operator employs one pilot
or many. Regardless of size, all companies have the responsibility to
conduct safe operations. Accordingly, the FAA has determined SMS will
be applicable to all part 135 operators as well as commercial air tours
conducting their operations with a LOA under Sec. 91.147 because they
are all engaged in the transportation of passengers or cargo for
compensation or hire. This expanded applicability also meets, in part,
the NTSB's recommendations for commercial aircraft operations to have
an SMS.
There is risk in aviation operations regardless of the size or
complexity of the organization. A fundamental element of SMS is the
identification of hazards and mitigating the risk of those hazards.
Therefore, SMS is intended to be used to mitigate the risk in these
operations, including the risk not currently addressed by existing
regulations. Even though aviation organizations must ensure compliance
with the relevant regulatory standards,
[[Page 33076]]
they should use their SMS to identify and address the underlying causes
of regulatory or procedural noncompliance and invest resources and
efforts to preclude their recurrence.\33\
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\33\ An SMS does not excuse noncompliance with existing
regulations.
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The FAA concludes that all commercial operators authorized under
part 135 or Sec. 91.147 can benefit from implementing an SMS because
it increases safety by supporting a proactive, predictive method of
managing safety to identify and address problems before they result in
an incident or accident. SMS is not a comprehensive solution but serves
as an additional preventive measure in the evolution of aviation
safety.
In addition, the FAA recognizes that there is a spectrum of
organizational sizes and complexities across the aviation industry.
There are relatively low-cost implementation resources available to
assist persons to meet part 5 requirements, including online platforms
such as the Web-Based Analytical Technology (WBAT) platform. This
platform is a federally funded software system that was originally
created to support data collection and information technology for FAA
voluntary safety programs. WBAT has since evolved, and it can now be
used to assist organizations in meeting SMS requirements. The platform
has modules to support all aspects of an SMS and it includes the
following tools: SMS implementation manager, safety risk management,
safety assurance, employee reporting, and data sharing. Basic access to
the WBAT platform is free. Additional support is fee-based, and the
platform has multiple tiers of service enabling organizations to decide
which tier best fits their operations.
In response to NBAA's suggestion that the FAA use criteria similar
to the Safety Management International Collaboration Group for small
organizations, the FAA decided not to adopt these criteria because part
5 is already designed to be scalable based on the size and complexity
of the aviation organization. Safety Management International
Collaboration Group criteria are discussed further in AC 120-92 and may
provide useful guidance for aviation organizations to use when
implementing their SMS. However, the FAA is not codifying these
specific criteria in this rule because the rule should allow for
various ways to scale SMS implementation.
The FAA agrees with commenters that certain part 5 requirements may
be impractical or illogical for many single-pilot organizations. As a
result, the FAA adds a new paragraph (e) to Sec. 5.9 to enumerate
those SMS provisions that the FAA has determined shall not apply to
certain single-pilot operations conducted under part 135 or an LOA
issued under Sec. 91.147 (specifically, Sec. Sec. 5.21(a)(4),
5.21(a)(5), 5.21(c), 5.23(a)(2), 5.23(a)(3), 5.23(b), 5.25(b)(3),
5.25(c), 5.27(a), 5.27(b), 5.71(a)(7), 5.93, and 5.97(d)). These
exceptions are limited to entities with a single pilot who is the sole
individual performing all necessary functions in the conduct and
execution related to, or in direct support of, the safe operation of
the aircraft. All necessary functions would generally include:
operational control, refueling, ground handling of the aircraft, flight
planning, weight and balance calculations, performance of preventive
maintenance, coordination of maintenance activities, pre-flight and
post-flight activities, and financial decisions related to operating
the aircraft safely, in addition to operating the aircraft. The FAA is
removing requirements relating to employee reporting for these aviation
organizations because the person reporting would be the same person
receiving the reports. In addition, the requirements for communication
within the aviation organization are also not necessary for these
organizations; nor do they need to identify and designate various
management personnel because the same person would be fulfilling those
roles.
The FAA provides additional guidance in AC 120-92 to help these
single-pilot organizations navigate the exceptions. The FAA is also
providing additional time for compliance, as discussed in Section IV.D.
Commenters' concerns regarding the cost and the perceived lack of
benefits are discussed further in Section IV.V.
B. Applicability to Part 21 Foreign Entities
In the NPRM, the FAA proposed to apply the SMS requirements in part
5 to any TC holder that allows another person to use the TC to
manufacture the product under a PC. The proposal did not distinguish
between TC holders where the United States is the State of Design \34\
and TC holders where a foreign country is the State of Design. Under 14
CFR 21.29, the FAA may issue a U.S. TC to a foreign manufacturer for an
import product by ``validating'' the original TC issued to the
manufacturer by the relevant foreign CAA. For the holder of a validated
TC issued by the FAA, the foreign country (or jurisdiction) remains the
State of Design because that country has regulatory authority over the
original TC and TC holder. As proposed in the NPRM, part 5 would be
applicable to a foreign holder of a TC issued under Sec. 21.29 that
licenses its TC to another person to manufacture the product in the
United States. This applicability would therefore impose part 5
requirements on a holder of a TC issued under Sec. 21.29, even though
the United States is not the State of Design. The FAA did not intend
for this provision to apply to these TC holders.
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\34\ As defined in Sec. 21.1(b)(8) of 14 CFR, the term ``State
of Design'' means ``the country or jurisdiction having regulatory
authority over the organization responsible for the design and
continued airworthiness of a civil aeronautical product or
article.''
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1. Discussion of the Final Rule
The FAA intends for this rule to require SMS for TC and PC holders
where the United States is the State of Design or State of
Manufacture.\35\ In the final rule, the FAA makes changes to Sec.
5.1(g) to address any ambiguity regarding to which entities the rule
applies. Specifically, the FAA is revising Sec. 5.1(g) and Sec.
5.15(a) to exclude foreign holders of a validated TC issued under Sec.
21.29 that allow another person to use the TC to obtain a PC to
manufacture the product in the United States.\36\
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\35\ As defined in Sec. 21.1(b)(9) of 14 CFR, the term ``State
of Manufacture'' means ``the country or jurisdiction having
regulatory authority over the organization responsible for the
production and airworthiness of a civil aeronautical product or
article.''
\36\ Note that if the validated TC holder obtains a PC to
manufacture the product itself, then it is subject to the rule.
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2. Summary of the Comments
Embraer S.A. commented that the requirement as proposed in Sec.
5.1(g) did not distinguish between a U.S. TC holder and a foreign TC
holder with a validated TC issued under Sec. 21.29. As a result,
Embraer noted that one could interpret the provision to mean that the
FAA would regulate a design organization for which the United States is
not the State of Design. Embraer noted that this seems to be an
unintended effect, based on information in the NPRM and the FAA's
stated intention of seeking alignment with ICAO Annex 19, including
section 4.1.5 of Chapter 4 of the Annex, which states ``the SMS of an
organization responsible for the type design of aircraft, in accordance
with Annex 8, shall be made acceptable to the State of Design.''
3. FAA Response
The FAA agrees that it did not intend for this rule to apply to a
design
[[Page 33077]]
organization for which the United States is not the State of Design.
Rather, the FAA intended to require SMS for TC and PC holders where the
United States is the State of Design or State of Manufacture. In the
final rule, Sec. 5.1(g) is revised to exclude foreign holders of a TC
issued under Sec. 21.29 that allow another person to use the TC to
obtain a PC to manufacture the product in the United States. For
purposes of this rule, the term ``production certificate'' in Sec.
5.1(g) and in Sec. 5.15 continues to refer to a production certificate
issued by the FAA under part 21 or a production certificate or
equivalent authorization issued by a foreign aviation authority.
C. Expansion of Proposed Applicability
The NPRM proposed to apply part 5 to part 135 operators, air tour
operators operating under Sec. 91.147 LOAs, and certain certificate
holders under part 21. Several commenters suggested expanding
applicability beyond the proposal. In addition, the FAA specifically
asked the public for input regarding a possible future rule to apply
part 5 to part 145 repair stations, as well as input regarding whether
part 5 should apply to all design and production approval holders
(i.e., all holders of a TC, PC, technical standard order authorization
(TSOA), supplemental type certificate (STC), or parts manufacturer
approval (PMA)). The FAA also asked the public for input on whether
part 5 applicability should be limited for certain subsets of the part
145 or part 21 entities.
1. Discussion of the Final Rule
The FAA has decided not to expand the applicability of this rule
beyond the original proposal. The current applicability was chosen
because the FAA believes this scope will capture segments of the
aerospace system that have a large impact on safety without unduly
delaying the effective date of the rule. Rather than expanding the
scope of this rule, the FAA will continue to encourage voluntary
implementation of SMS in segments of the aerospace system not covered
by part 5.
2. Summary of the Comments
Commenters suggested expanding the applicability of the proposal in
various ways. Some commenters pointed out areas in the aerospace system
where they thought risk existed and could benefit from SMS. Other
commenters focused on covering entities that charged a fee for service
or covering all entities that ICAO Annex 19 requires have an SMS.
For the air transportation industry, the NTSB noted that FAA only
proposed to apply the SMS requirements to air tour operations conducted
under Sec. 91.147 rather than applying the requirements to all revenue
passenger-carrying operations conducted under part 91 as the NTSB
recommended. The NTSB stated the proposed rule does not go far enough
to meet the intent of Safety Recommendations A-21-13 and -14,
reiterated its position that SMS is necessary to improve the safety of
all part 91 revenue passenger-carrying operations, and urged FAA to
include all revenue passenger-carrying operations conducted under part
91 in the final rule.
NATA commented that including fractional ownership programs would
be consistent with the reasons the FAA decided to regulate part 91
subpart K operations.
TCCA and EASA expressed their support for expanding SMS to other
areas within part 21.
For the aviation maintenance industry, the FAA asked in the NPRM
whether it should consider a future rulemaking project to expand the
applicability of part 5 to include repair stations certificated under
part 145. Commenters that supported extending the application of part 5
to repair stations, included the NTSB, EASA, Air Charter Safety
Foundation, ALPA, Transportation Trades Department--AFL-CIO, Transport
Workers Union of America, and Airbus Commercial Aircraft, as well as
individuals and operators. The NTSB indicated that SMS should be
applied to part 145 repair stations to address Safety Recommendation A-
21-48. EASA, Airbus Commercial Aircraft, GE Aerospace, and others cited
the importance of harmonizing with ICAO and other CAAs as a reason to
require part 145 repair stations to have an SMS.
Other commenters, including AEA, ARSA, and Pratt & Whitney, did not
support extending the application of part 5 to part 145 repair
stations. AEA and ARSA stated that the addition of part 5 to existing
safety standards for repair stations is redundant, expensive, and
unnecessary. Pratt & Whitney recommended that part 145 repair stations
remain in the voluntary program.
A few commenters recommended applying SMS to part 145 repair
stations to facilitate certificate acceptance by a foreign CAA.
For the aviation design and manufacturing industry, the FAA sought
comment in the NPRM as to whether part 5 should apply to all holders of
a TC, PC, STC, TSOA, or PMA. The FAA also requested input on whether
any exceptions should be made to these holders and for commenters to
provide supporting information and data on the safety benefits or
impact of the broadened applicability. Some commenters noted that
limiting part 5 applicability (for design and manufacturing entities)
to holders of a TC or a PC leaves gaps in safety and requested that SMS
be extended to certain design and manufacturing entities that produce
safety-critical components. The commenters, however, did not provide
any data or information supporting the benefit of extending
applicability to STC, TSOA, and PMA holders.
3. FAA Response
Although the FAA agrees with many commenters that other areas of
the aerospace system could benefit from SMS, the Agency is not
expanding the applicability of this rule beyond the original proposal.
With regard to expanding the rule to include STC, TSOA, and PMA
holders under part 21, the FAA's decision not to expand this final rule
simply maintains the existing level of safety in part 21 applicable to
those entities. Before making changes, the FAA would first establish
that a safety justification (the safety ``gap'' as characterized by one
commenter) exists. At this time the FAA does not have sufficient
information to support a safety justification for expanding this rule
to STC, TSOA, and PMA holders. The FAA would also need to take these
steps to expand the applicability of part 5 to additional part 91
revenue passenger-carrying operations.
With respect to part 145 repair stations, the FAA acknowledges the
comments received on whether the Agency should consider future
rulemaking to cover these organizations under part 5. The FAA
recognizes the significant impact repair stations have on aviation
safety; the recommendations of the NTSB for the FAA to require
organizations that maintain aircraft to establish SMS; and the
applicability of ICAO Annex 19 to maintenance organizations. The
comments received from the NPRM offer a diverse set of viewpoints
across the aviation sector, all of which must be taken into account
should the FAA consider a future rulemaking to require part 145 repair
stations to develop and maintain an SMS. The FAA continues to collect
and evaluate data to determine whether the benefits would justify the
costs and will continue to pursue and promote part 145 repair station
involvement in the FAA's SMS Voluntary Program.
[[Page 33078]]
In summary, applying SMS requirements to part 145 repair stations,
additional part 21 design and production approval holders, and other
entities as recommended in the comments requires careful and
deliberative consideration by the FAA of many factors, including safety
benefits, costs, and other priorities. The time needed to fully
evaluate these considerations and to develop and apply the most
appropriate SMS requirements for additional entities would inhibit the
FAA's ability to finalize this rulemaking expeditiously. The FAA will
continue to encourage voluntary implementation of SMS by aviation
organizations not covered by part 5. The FAA acknowledges and
appreciates the input provided by commenters in response to the
questions posed on SMS applicability and may explore expansion of part
5 applicability in future initiatives, which could include future NPRMs
for which the FAA would solicit additional public input.
D. Compliance Timelines and Submission Requirements
In the NPRM, the FAA proposed to require existing part 135
operators and Sec. 91.147 air tour operators to develop and implement
an SMS in accordance with part 5 and to submit a statement of
compliance no later than 24 months after the effective date of a final
rule. The FAA also proposed to require any new applicant for
authorization to conduct operations under part 135 or for a LOA under
Sec. 91.147 to submit a statement of compliance as part of the
certification or LOA process. In the NPRM, existing part 121 operators
were required to revise their SMS to meet the new proposed requirements
in part 5 and submit those revisions for acceptance by the FAA no later
than 12 months from the effective date of the rule. The FAA also
proposed to require any new applicant for authorization to conduct
operations under part 121 to submit a statement of compliance as part
of the certification process.
In addition, the FAA proposed that existing part 21 certificate
holders be required to submit an implementation plan no later than
December 27, 2024, and implement their SMS by December 27, 2025. For
companies that apply for a PC, have a pending application for a PC, or
have a TC and enter into a licensing agreement in accordance with Sec.
21.55, the FAA proposed similar compliance timelines to maintain parity
with the compliance timelines proposed for existing certificate
holders. More specifically, the FAA proposed to require TC holders who
enter into a licensing agreement to submit an implementation plan for
FAA approval when providing a written licensing agreement to the FAA.
The FAA also proposed to require PC applicants to submit an
implementation plan for FAA approval during the certification process.
In the proposal, PC applicants, as well as TC holders who enter into a
licensing agreement, were required to implement their SMS no later than
1 year after the FAA's approval of the implementation plan.
1. Discussion of the Final Rule
i. Existing Part 135 Operators and LOA Holders Under Sec. 91.147
In the final rule, the FAA has increased the compliance timeframe
from the proposed 24 months to 36 months for part 135 operators and LOA
holders under Sec. 91.147 in response to comments received.
In addition, the FAA is changing the title of the document to be
submitted for existing part 135 certificate holders as well as existing
LOA holders under Sec. 91.147 from ``statement of compliance'' to
``declaration of compliance.'' Submitting a declaration of compliance
to the FAA serves to document that the aviation organization has
developed and implemented an SMS meeting the applicable requirements of
part 5. The FAA will assess the aviation organization's compliance with
SMS requirements during routine surveillance. Aviation organizations
are required to make their SMS processes and procedures available in
accordance with Sec. Sec. 5.9(d) and 5.95 to FAA personnel for review.
Upon implementation of an SMS, if revisions to manuals are necessary,
the aviation organization will submit those changes in accordance with
applicable regulatory requirements.
ii. Existing Part 121 Operators
After further consideration, the FAA decided to remove the proposed
requirement for existing part 121 operators to submit the changes to
their SMS to meet the new requirements in part 5 to the FAA for
acceptance. Specifically, part 121 operators are required to revise
their SMS to meet the new requirements proposed in Sec. Sec.
5.21(a)(7) (Safety Policy Code of Ethics), 5.53(b)(5) (Safety Risk
Management Interfaces), 5.57 (Hazard Notification), 5.71(a)(7)
(Employee Confidential Reporting System), 5.71(a)(8) (Investigating
Hazard Notifications), and 5.97(d) (SMS Records). The FAA will validate
compliance with these new requirements using existing oversight methods
and tools.
Part 121 operators are still required to make available all
necessary information and data that demonstrates that they have an SMS
that meets the requirements in part 5, in accordance with Sec. 5.7(d).
Therefore, the proposed requirement (Sec. 5.7(a)(2)) is unnecessary,
and the FAA has removed it.
iii. Applicants for Part 121 or 135 Operations or for an LOA Under
Sec. 91.147
The FAA makes minor changes to the submission requirements for
anyone who applies to operate under part 121 or 135 or for an LOA under
Sec. 91.147 after the effective date of this rule. In the NPRM, the
FAA proposed that these applicants submit a ``statement of compliance''
with their certificate or LOA application. After further consideration,
the FAA concluded that it was not necessary to make this submission a
regulatory requirement as a part of this rule. To be clear, the FAA
will require part 121 and 135 and Sec. 91.147 LOA applicants to
implement SMS. However, instead of requiring these applicants to submit
a ``statement of compliance,'' the FAA will include its assessment of
the applicant's SMS using the same processes and procedures it uses to
assess the applicant's compliance with other FAA requirements. Removing
the requirement is consistent with how the FAA evaluates compliance
with other regulatory requirements and aligns with terminology used in
traditional air carrier and air operator certification, thereby
reducing the potential for confusion.
Specifically, the general certification requirements in Sec.
119.35 direct the air carrier or operator certificate applicant to
submit an application with the necessary information and in a form and
manner prescribed by the Administrator. The FAA provides guidance (AC
120-49) describing how to prepare and submit application materials and
document compliance with regulatory requirements. This guidance
includes information on how to document compliance with regulations
that the applicants must comply with, including part 5. Similarly, for
applicants requesting issuance of an LOA under Sec. 91.147, the FAA
will verify part 5 compliance during the application process. New Sec.
91.147(b)(3) adds compliance with part 5 as a requirement for obtaining
an LOA. This additional requirement, supported with requirements in
Sec. 5.9(c) and (d), provides sufficient assurance
[[Page 33079]]
that Sec. 91.147 LOA applicants implement and maintain an SMS.
iv. Part 21 Certificate Holders
In response to comments, the FAA revises the compliance deadlines
for covered part 21 entities to be based upon the effective date of the
final rule. Existing certificate holders will have 6 months from the
final rule effective date to develop and submit an implementation plan
to the FAA and 36 months from the effective date to implement their
SMS. PC applicants are required to submit an implementation plan for
FAA approval during the certification process, and to implement the SMS
no later than 36 months after submission of their implementation plan.
Holders of a TC entering into a licensing agreement in accordance with
Sec. 21.55 are required to submit an implementation plan to the FAA
when providing written licensing agreements, and to implement the SMS
no later than 36 months after submission of their implementation plan.
2. Summary of the Comments and FAA Response
i. Part 135 Operators and LOA Holders Under Sec. 91.147
a. Summary of the Comments
Industry associations, regulated entities, and several individuals
submitted comments regarding implementation timeframes. Most of these
commenters felt the 24-month timeframe was inconsistent with ICAO and
other SMS implementation and maturity models, and that 24 months is
insufficient to develop and implement SMS.
Commenters, including HAI, NBAA, and Jet Linx Aviation, recommended
extensions ranging from 36 months to 5 years for development and
implementation of the SMS. Individual commenters cited the 36-month
timeframes for existing part 121 SMS and SMS for airports, which
permits up to 5 years in some circumstances.
EAA, AMOA, NATA, AOPA, and LifeFlight of Maine recommended a phased
(staged) approach to the timeline of SMS implementation instead of a
rigid 24-month requirement. In particular, they cited no opportunity
for operators to consult with the FAA before SMS acceptance and
oversight, which could lead to noncompliance. These commenters noted
the phased approach would also allow FAA inspectors to become familiar
with SMS processes, procedures, and oversight. An individual commenter
said that a more measured timeline would reduce the burden on business
aviation operators.
b. FAA Response
The FAA agrees with the commenters that extending the compliance
timeframe would be beneficial and in the final rule extends the
timeframe by 12 months for part 135 operators and LOA holders under
Sec. 91.147, as well as provides pending applicants 36 months to meet
part 5. This extension will allow more time for operators to obtain a
comprehensive understanding of SMS. In addition, the 36-month timeline
is more consistent with the timeframes provided to part 121 operators
and airports, as well as the part 21 certificate holders covered by
this rule (as discussed in Section IV.D.2.ii.).
Although the FAA has chosen not to follow a phased approach as
suggested by the commenters, the extended compliance timelines adopted
in this final rule will help address their concerns over the lack of
FAA consultation. The FAA and many industry stakeholders have gained
significant experience with SMS principles in the years since part 5
was originally published. The FAA, industry associations, and third-
party service providers have resources to help stakeholders with
implementation, which are further discussed in Section IV.L.2.
Stakeholders will continue to have the opportunity to contact the FAA
for compliance assistance, as appropriate. The change from 24 months to
36 months for compliance provides operators with the necessary time to
implement SMS effectively.
ii. Part 21 Certificate Holders
a. Summary of the Comments
Commenters, such as Pratt & Whitney, Piper Aircraft, Aviation
Safety Solutions, Gulfstream, and GAMA/AIA noted that the timeframes
proposed in the NPRM would provide insufficient time to implement an
SMS and emphasized that the compliance deadlines should not be based on
pre-established calendar dates. Commenters referenced timeframes
recommended by the 2012 part 21 SMS ARC and the compliance deadlines
established for part 121 operators under the part 5 rule issued in
2015. Pratt & Whitney, Piper Aircraft, Aviation Safety Solutions,
Gulfstream, and GAMA/AIA requested additional time for submitting an
implementation plan and fully implementing SMS, ranging from 6-12
months for submitting the implementation plan, and 24-48 months for
fully implementing SMS.
Airbus asked why the timeframes are different across different
sections of the NPRM for part 21 entities.
Individual commenters remarked on the requirement for PC applicants
to submit an SMS implementation plan as a prerequisite to obtaining or
amending a PC. Some commenters asked for the FAA to clarify that the
submission of the implementation plan is the only part 5 prerequisite
to obtaining or amending the PC and that companies are not expected to
have the SMS fully implemented to obtain or amend a PC. GAMA/AIA
requested an exception for TC holders that apply for a PC less than 1
year after the final rule becomes effective, recommending that these
applicants should be given 1 year after PC approval to submit their
implementation plan.
TCCA asked if 1 year to implement SMS is reasonable and indicated
that the provision does not seem to consider the size and complexity of
organizations, suggesting that large organizations may need more time
to fully implement their SMS due to organizational structuring or re-
structuring. TCCA suggested that the FAA consider an implementation
schedule based on the size of the organization, factoring in any
existing voluntary programs. EASA noted that the proposed compliance
timelines for part 21 are close to the compliance timeline for full
implementation of SMS in the European regulatory framework (March 7,
2025) and that extending timelines beyond those as proposed may delay
FAA's SMS compliance with ICAO Annex 19 and may delay harmonization
with other CAAs.
b. FAA Response
The FAA acknowledges the need to provide design and manufacturing
companies adequate time to plan and implement their SMSs. Further, the
FAA recognizes the challenges posed by establishing compliance
deadlines for existing holders based upon fixed calendar dates that may
be impacted by delays in the publication of the final rule. Based on
the feedback the FAA received, the FAA is extending the time for design
and manufacturing companies to implement SMS. Under the final rule,
existing part 21 certificate holders that come under this final rule
will be afforded 6 months after the rule's effective date to develop
and submit an implementation plan and 36 months after the rule's
effective date to implement their SMS in accordance with the FAA-
approved implementation plan. This approach is consistent with the
approach in the original part 5 for part 121 operators, as well as
EASA's
[[Page 33080]]
SMS rule and the recommendations from the 2012 part 21 SMS ARC.
New and pending applicants for a PC will be required to submit
implementation plans as part of the production certification process
(as was proposed in the NPRM). The FAA will not issue a PC until the
Agency has received the required implementation plan. Submission of the
implementation plan is the only prerequisite under part 5 before an
applicant may be issued a PC. Once an implementation plan has been
submitted to the FAA, applicants will have 36 months to implement their
SMSs rather than the 12 months previously proposed.
As a result of these changes, the timeframes for existing
certificate holders and future and pending applicants will be
consistent. Regarding GAMA/AIA's request to extend the requirement for
TC holders that apply for a PC less than 1 year after the final rule
becomes effective, the FAA does not agree that an extension is
warranted because development of the implementation plan itself need
not be complex. In addition, the FAA has provided information and
materials in AC 21-58 to aid in the development of the plan.
E. Use of the Term ``Person''
In the NPRM, the FAA proposed to amend various sections in part 5
to change the term ``certificate holder'' to ``person.'' The FAA
proposed this revision as a non-substantive conforming change. Prior to
this rule, part 5 had only applied to part 121 certificate holders, and
the reference to ``certificate holder'' in part 5 was appropriate. The
FAA proposed to expand applicability beyond certificate holders to
include Sec. 91.147 LOA holders. With that change, ``certificate
holder'' would no longer be accurate and the FAA proposed replacing it
with ``person.''
1. Discussion of the Final Rule
This rule adopts the proposal to use the term ``person'' in place
of ``certificate holder.''
2. Summary of the Comments
Commenters, including Airbus, Alaska Seaplanes, Ameristar Air
Cargo, Cargo Airline Association, Delta Air Lines, RAA, NBAA, U.S.C.
Aviation Safety Management, U.S.C., and three individuals objected to
or sought clarification regarding the change to use the term ``person''
instead of ``certificate holder.''
3. FAA Response
The term ``person'' is defined in 14 CFR 1.1 as: ``an individual,
firm, partnership, corporation, company, association, joint-stock
association, or governmental entity. It includes a trustee, receiver,
assignee, or similar representative of any of them.'' This definition
includes certificate holders, service providers, or other types of
individuals or business entities and is used throughout 14 CFR. As a
result, the term ``person'' is not only appropriate, but also
consistent with existing FAA use. Accordingly, the FAA replaces
``certificate holder'' with the term ``person,'' as proposed.
F. System Description
In the NPRM, the FAA proposed in Sec. 5.5 that any person that is
required to have an SMS must develop a system description. The proposed
description included, at minimum, the person's aviation-related
processes, procedures, and activities; the function and purpose of the
aviation products or services provided; the operating environment; and
the personnel, equipment, and facilities; as well as identifies the
interfacing persons that contribute to the aviation-related products
and services provided.
1. Discussion of the Final Rule
In the final rule, the FAA adopts a system description requirement
with a number of notable changes from the NPRM. First, the requirement
to develop a system description applies only to part 21 certificate
holders. Second, the FAA removes the system description requirement
from Sec. 5.5. Instead, the FAA is moving most of these requirements
to Sec. 5.17. Section 5.17 now expressly states that only summary
information must be included in the system description. The FAA is not
adopting the proposed requirement for the system description to include
information concerning the aviation organization's interfacing persons.
Finally, the term ``system description'' is renamed to ``organizational
system description'' to clearly denote that this requirement applies to
the aviation organization and to avoid any confusion with the ``system
analysis'' in Sec. 5.53.
As a result of these changes, the requirements for developing and
maintaining an organizational system description are now in the
sections specific to the part 21 entities (Sec. Sec. 5.11(a),
5.13(b)(1), 5.15(b)(1) and 5.15(c)(1)) and the documentation
requirement in proposed Sec. 5.95(c) is removed.
2. Summary of the Comments
Several commenters expressed concern that the proposed requirements
in Sec. 5.5(b) to develop and maintain a system description creates an
administrative burden without a corresponding safety benefit.
Commenters, including Pratt & Whitney, GE Aerospace, and University of
Southern California Aviation Safety and Security, said it would be a
significant administrative burden to maintain a system description that
lists all interfacing entities because the list is continuously
changing given the fluidity of aviation operations. In addition, an
individual indicated the requirement was unnecessary and Delta Air
Lines requested clarification regarding the FAA's expectations.
Baldwin Safety and Compliance noted that system descriptions are
not required by most other CAAs and suggested the requirement be
removed from the final rule to better align with the ICAO Annex 19
Appendix 2 framework and other CAAs. TCCA suggested a system
description may be better as a recommendation within guidance, rather
than a required document, because it may be burdensome for small
operators without enhancing their safety.
Some commenters expressed concern about how the system description
requirement would affect part 121 operators. Delta Air Lines said the
system description could create significant administrative work. RAA
and Cargo Airline Association acknowledged system descriptions may be
helpful for new adopters of SMS, but strongly recommended the FAA
remove the requirement for part 121 operators or limit it to new
applicants.
3. FAA Response
The FAA acknowledges the concerns by some commenters on the
potential impacts to operators, large and small. Upon further
evaluation, the FAA has determined that developing a system description
should not be a requirement for operators (Sec. 91.147, part 135, and
part 121) because the information required by the proposed provision is
already documented by part 121 and 135 operators in their Operations
Specifications and in the LOA application for Sec. 91.147 operators.
Production organizations holding or applying for a production
certificate have certain organizational description requirements in
Sec. 21.135 (requiring the PC holder or applicant to provide a
document describing how its organization will ensure regulatory
compliance and describing assigned
[[Page 33081]]
responsibilities, delegated authorities, and organizational
relationships for quality). However, there are no organizational
requirements associated only with a type certificate. This difference
may cause some aviation organizations to believe that SMS is applicable
only to production activities and not to other activities such as
design. As a result, the FAA retains the organizational system
description requirement for part 21 organizations to ensure that SMS is
applied to design, certification, production, and continued
airworthiness activities.
In response to commenters' concern that developing a system
description would be overly burdensome and difficult to maintain, the
FAA is requiring in the final rule that only a ``summary'' of these
processes, procedures, and activities need to be included in the
organizational system description. Therefore, a part 21 design and
manufacturing organization should include a summary of the following
processes in their organizational system description: design,
certification, production, and continued operational safety; however,
it does not have to list every process individually. AC 21-58 includes
guidance regarding developing the organizational system description.
The FAA acknowledges the concerns over the potential burden related
to the proposed requirement in Sec. 5.5(b) for an aviation
organization to include in its system description information on
``interfacing persons that contribute to the safety of the aviation-
related products and services provided.'' The list of interfacing
persons for a large company could number in the thousands, but most of
those persons may never actually be involved with a safety hazard. As a
result, in the final rule, the FAA is removing the requirement to
include information about interfacing persons from the organizational
system description. The design or production organization will engage
with the proper interfacing persons during safety risk management
through the requirement that the organization ``consider interfaces''
in Sec. 5.53(b)(5) and the ``hazard notification to interfacing
persons'' requirement in the new Sec. 5.57 (discussed in the following
section). This change will allow the covered aviation organization to
identify the proper interfacing persons on an as-needed basis rather
than developing and maintaining a listing of all interfacing persons
that could theoretically be involved in safety risk management.
G. Notification of Hazards and Protection of Information
In the NPRM, the FAA proposed to add a new section (Sec. 5.94) to
require the person who identifies a hazard to notify the interfacing
person in the best position to address that hazard or mitigate the
risk, and also to develop and maintain procedures for reporting and
receiving such hazard information.
1. Discussion of the Final Rule
The FAA is retaining the intent of proposed Sec. 5.94 but is
making regulatory text changes to better integrate sending and
receiving hazard information with other functions in the SMS. To that
end, the FAA has decided to remove proposed Sec. 5.94, instead placing
these requirements in subparts C--Safety Risk Management and D--Safety
Assurance. Specifically, the requirement to provide notification of
hazards is added to Sec. 5.57, which is also amended to include
language clarifying that ``interfacing persons'' are those who
contribute to the safety of the aviation-related product or service.
In addition, the FAA has added to Sec. 5.71(a)(8) a requirement to
investigate hazards received from external sources to clarify that the
aviation organization must investigate any hazard information received
and process the investigation results through its safety assurance and
safety risk management processes. Proposed Sec. 5.94(b) required a
process to receive the hazard notification but did not require the
aviation organization to do anything upon receipt of a hazard
notification. While the proposed regulation implied that the aviation
organization should investigate, it did not explicitly require such
action. The final rule makes it clear that an aviation organization
must investigate and address through its safety assurance and safety
risk management processes all hazard notifications it receives.
Finally, Sec. 5.97(d) is updated to replace the reference to ``Sec.
5.94'' with ``Sec. 5.57'' to ensure aviation organizations retain
records regarding the hazard communications.
2. Summary of the Comments
Several commenters requested clarification regarding the proposed
notification of hazards to interfacing persons requirement. Some
commenters asked for clarification regarding who the ``interfacing
person'' would be and the actions the interfacing person would be
required to take.
Pratt & Whitney recommended the FAA clarify ``interfacing persons''
be limited to those stakeholders outside the organization's quality
management system having airworthiness decision-making responsibilities
because this would result in a manageable list of stakeholders while
realizing the hazard notification benefits. GE Aerospace noted a person
who identifies a hazard may not have the requisite knowledge or
information available to identify which persons are best able to
address or mitigate the hazard. It recommended that the FAA either
delete this requirement or revise it to require the person to notify
the appropriate holders of FAA design, production, or maintenance
approvals.
Other commenters requested that the FAA clarify what hazards must
be reported under the notification requirement. Airbus Commercial
Aircraft suggested the requirement should only require relevant safety
hazards to be shared with interfacing persons. RAA stated not all
hazards rise to the level of risks, or at least may not rise to that
level equally across all carriers as a standard deviation, and noted it
is not convinced that this requirement will enhance aviation safety.
Cargo Airline Association noted that this requirement raises many
questions concerning the practicality and scope of the requirement. It
also expressed concern that this requirement could have a chilling
effect on voluntary reporting and ``just culture.''
Collins Aerospace Division of Raytheon Technologies supported the
sharing of hazard information with stakeholders; however, it also
stated that additional formal documentation and recordkeeping could
impede timely information transfer and could preclude reporting in
certain situations.
Other commenters expressed concern about protecting proprietary
data related to sharing of hazard information. Some commenters raised
concerns about whether or how the hazard information disclosures would
be protected from public release. They noted that 49 U.S.C. 44735
protects certain SMS information from disclosure under the Freedom of
Information Act (FOIA) when submitted to the FAA voluntarily, but they
wondered what protections would exist when disclosure to the FAA is
mandated by this rule. Other commenters asked whether there is any way
to protect proprietary information given that hazard information
notification would require them to disclose information to private
parties. Commenters indicated that unintended liabilities or other
legal consequences could arise between private parties as a result. For
example, once a person reports a hazard to a (non-FAA) third-party,
nothing would prohibit that party
[[Page 33082]]
from releasing that information to the public or to other government
regulators. While many commenters supported the concept of reporting
hazards to interfacing persons, most objected to disclosing proprietary
information to third parties without disclosure protections. For
instance, GAMA asserted the notification requirement is vague and said
the FAA provided no direction for how proprietary data will be handled,
or how Export Administration Regulations would be handled in the case
of interfaces with international organizations. This commenter noted
some US-based companies contract with foreign Original Equipment
Manufacturers to build proprietary components and have been granted an
Export Control Classification Number license for rotor systems or
transmissions, suggesting that sharing technical data with them may not
be legal, and recommended the FAA consider international business
communication mandates that may conflict with other U.S. Government
restrictions.
3. FAA Response
The FAA seeks to encourage a more collaborative approach in which
persons required to have an SMS share hazard information with each
other and work together to identify and address hazards and safety
issues. Hazard information sharing would enable a network of aviation
organizations working collaboratively to manage risk, thereby enhancing
the safety benefits of SMS by assuring that hazards are communicated
and mitigated effectively. Therefore, the FAA is retaining the intent
of the requirements, but making regulatory text changes to better
integrate the sending and receiving of hazard information with the
other functions in the SMS. To that end, the FAA moved the requirement
to provide notification of hazards to subpart C--Safety Risk Management
(Sec. 5.57). The FAA moved the receipt of hazard notifications to
subpart D--Safety Assurance (Sec. 5.71), requiring the aviation
organization to investigate hazard notifications received from external
sources.
The FAA acknowledges the commenters' concerns regarding sharing
information outside an aviation organization. Commenters requested
clarification regarding whether the FAA could protect FOIA information
disclosure. If an aviation organization reports hazard information to
the FAA because the Agency is the interfacing person who could address
the hazard, the information is not protected from FOIA disclosure. Once
a report is required, FOIA disclosure protections in 49 U.S.C. 44735 no
longer apply. However, the FAA would redact trade secret or
confidential commercial or financial information before release. If an
aviation organization discloses hazard information to a third party,
the FAA cannot protect the information. The protection under 44735 only
safeguards against public release by the FAA under the FOIA and does
not extend to release by other governmental entities or private
parties. One option for safeguarding information includes entering into
non-disclosure agreements with the interfacing person. Aviation
organizations may explore other ways to communicate information about
hazards without disclosing proprietary or confidential elements.
Sharing hazard information is an important part of improving safety
from which all participants in the aviation eco-system can benefit. The
FAA does not expect that sharing hazard information would require the
sharing of proprietary or confidential information; it would only
require the aviation organization to adequately describe the hazard.
The FAA still expects that in instances where the hazard cannot be
adequately described without the use of proprietary information, the
aviation organization itself would likely be in the best position to
address that hazard, and therefore, information sharing probably would
not be necessary.
Some commenters raised questions about what would happen if they
made a report to a third-party interfacing person and then subsequently
reported that same information to the FAA. Under this hypothetical, the
third party is an interfacing person, but the FAA is not. This means
that the report to the third party would be mandatory, but the
subsequent report to the FAA would be voluntary. That voluntary report
to the FAA would be excluded from release under the FOIA, except as
allowed under section 44735 (i.e., de-identified information).
In addition, the requirement limits reporting of information to
``interfacing persons,'' which creates limits on which information the
aviation organization must report. Section 5.57, which is newly adopted
in the final rule, is limited to interfacing persons that, to the best
of the notifying person's knowledge, could address the hazard or
mitigate the risk. Section 5.57 clarifies further that interfacing
persons are only those that contribute to the safety of the
organization's aviation-related products and services. In practical
terms, these limitations will effectively limit the hazard reporting
requirement to organizations with which the aviation organization
already has a relationship. This limit addresses some of the
commenters' concerns regarding the scope and practicality of providing
and receiving notification of hazard information to third parties. For
example, interfacing persons for a part 135 operator or Sec. 91.147
air tour operator could be any organization that the operator conducts
business with, such as a fixed base operator, a repair station,
airports where operations are conducted, or the aircraft manufacturer.
An operator's customers, however--such as revenue passengers in a
passenger-carrying operation--would not ordinarily be considered
interfacing persons because passengers are not responsible for or
expected to contribute to the safe operation of the aircraft (besides
not interfering with the operation). The interfacing person for a
design and manufacturing organization providing an aircraft, engine, or
propeller would typically be suppliers of parts or engineering services
for the aircraft, engine, or propeller. A competing manufacturer, on
the other hand, would not be considered an interfacing person because a
competitor to a TC and PC holder would not generally have any
contribution to the design or production of the product provided by the
TC and PC holder.
As an example of hazard information sharing, consider a part 135
air ambulance operator that identified a hazard with the helicopters it
is operating. The investigation of one of its helicopters that was
involved in a near controlled flight into terrain, identified that the
volume of the audio warnings in the helicopter terrain awareness and
warning system (HTAWS) fluctuated so the warnings were barely audible
at times.
In applying Sec. 5.57, the part 135 operator first determines, to
the best of its knowledge, which interfacing person(s) could address
the hazard or mitigate the risk. The air ambulance operator examines
the HTAWS for wiring damage or wear and tear and, seeing none,
determines that the issue is more likely the result of a design or
production defect than a maintenance concern. Next, the part 135
operator confirms that the helicopter manufacturer contributes to the
safety of the air ambulance services. In a call with the manufacturer's
representative, however, the operator learns that the HTAWS was not
part of the original helicopter design, but rather, was installed a few
years after production by the previous owner through an STC. The
operator does some research to
[[Page 33083]]
ascertain the identity and contact information of the STC holder, the
manufacturer of the particular HTAWS unit. Prior to sending the hazard
notification to the HTAWS manufacturer, the air ambulance operator
removes any proprietary or confidential information from the hazard
report, including proprietary or confidential information involved with
how the hazard was identified (e.g., as a result of internal
investigation of a near accident), who identified the hazard (e.g., the
names of the pilots and crew involved), or any risk mitigating actions
the part 135 operator has implemented. Note that the air ambulance
operator is not required by Sec. 5.57 to provide notification of the
hazard to other helicopter operators that use the same HTAWS model in
their helicopters because these other operators do not contribute to
the safety of the services provided by the part 135 operator. This
example illustrates how aviation organizations can meet the hazard
information sharing per Sec. 5.57 without compromising confidential
business or personal information, by: (1) identifying the interfacing
person who could address the hazard or mitigate the risk; (2)
confirming that the interfacing person contributes to the safety of the
products or services provided by the aviation organization; and (3)
removing any proprietary or confidential information other than the
hazard details from the report prior to sending it to the interfacing
person.
The FAA emphasizes, however, that providing notification of hazard
information to an interfacing person in accordance with Sec. 5.57 does
not replace any other regulatory obligations to report or provide
notification of safety issues, such as requirements under 14 CFR
135.415 (service difficulty reporting), 49 CFR 830.5 (notification and
reporting of aircraft accidents and incidents), or 14 CFR 21.3
(reporting of failures, malfunctions, and defects).
Finally, section 102(a)(2)(B) of the ACSAA mandates that the SMS
regulations required to be issued under the statute include
``provisions that would permit operational feedback from operators and
pilots qualified on the manufacturers' equipment to ensure that the
operational assumptions made during design and certification remain
valid.'' The hazard information sharing requirements established in
this rule create the structure for the type of feedback Congress
intended for part 21 certificate holders.
H. Recordkeeping--Communications Regarding Hazard Information
Notifications
In the NPRM, the FAA proposed to amend Sec. 5.97(d) to require the
retention of records of all communications that occur under the hazard
reporting requirements of proposed Sec. 5.94, for a minimum of 24
consecutive calendar months.
1. Discussion of the Final Rule
The proposed requirement for notification of hazards to interfacing
persons in Sec. 5.94 has been incorporated into the safety risk
management and safety assurance within subparts C and D (Sec. Sec.
5.57 and 5.71(a)(8)) (as discussed in Section IV.G.). The FAA is
updating Sec. 5.97(d) in order to reference the new Sec. 5.57, but
the amendment is otherwise adopted as proposed. Section 5.97(d) now
requires covered aviation organizations to retain records of all
communications involving the notification of hazards to interfacing
persons, as required by Sec. 5.57, for a minimum of 24 consecutive
months.
2. Summary of the Comments
Commenters expressed concern regarding the requirements to maintain
records of communications pertaining to notifying interfacing parties
of hazards. Further, commenters requested additional information and
clarification regarding what the FAA's expectations are for compliance,
and urged flexibility, noting that recordkeeping could be burdensome
for some organizations. NATA commented the FAA should allow operators
to use third-party electronic systems that facilitate their
participation in SMS. In addition, it indicated that the FAA should
ensure that all businesses are able to use electronic systems for their
SMS records without requiring them to obtain FAA approval (via
Operations Specifications) for an electronic recordkeeping system.
TCCA suggested that the 24-month minimum period for record
retention could be too short. TCCA said disposing records after that
period could lead to the loss of pertinent information on hazard
reporting and prevent the ability to identify historical trends.
3. FAA Response
The new documentation and recordkeeping requirement is necessary
because of the requirement for all persons under part 5 to provide
notification of hazards. Maintaining records of communications
regarding notification of hazards provides objective evidence of
compliance similar to the records that are maintained for internal
safety communications conducted in accordance with Sec. 5.93. As with
the other performance-based and scalable requirements, aviation
organizations should determine how they meet these requirements in a
way that fits their organization.
Commenters indicated that the FAA should be flexible in allowing
aviation organizations to determine how to maintain records. As stated
in the NPRM, the operator chooses how it maintains the required SMS
records, which can be electronically or in paper format. Regarding
NATA's comment on allowing operators to use third-party electronic
systems without requiring them to obtain FAA approval (via Operations
Specifications or OpSpec) for an electronic recordkeeping system, the
FAA has determined that the requirements of Sec. 5.97(d) do not
present any unique challenges to justify deviation from standard
practices currently applicable to part 135 operators. Authorizations to
use electronic recordkeeping are issued to certain operators via OpSpec
A025 when they elect to maintain required records electronically. If a
certificate holder operating under part 135 seeks to develop and
maintain its SMS records utilizing a electronic system (whether third-
party or internally developed), and does not already have OpSpec A025
authorization, it should follow the standardized process for obtaining
OpSpec A025 for electronic recordkeeping.\37\ In contrast, if an air
tour operator with an LOA under Sec. 91.147 chooses to maintain its
SMS records via an electronic system, the FAA has determined that, as
of the publication date of this final rule, no specific authorization
via an OpSpec will be needed. Due to the low volume of documentation
LOA holders under Sec. 91.147 are required to maintain, creating a
special authorization for these operators related to electronic
recordkeeping is not warranted as it creates additional work for the
operator and the FAA with no added value. For more information
regarding the use of services provided by third parties, see Section
IV.L.2.iv. For more information regarding scalability, see Section
IV.J.
---------------------------------------------------------------------------
\37\ The FAA notes that the procedures for obtaining operations
specifications, including the necessity for many operators to obtain
OpSpec authorization for electronic recordkeeping, are under
continuous review and are subject to change in the future.
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TCCA commented that a 24-month retention period may be too short
and could lead to the loss of pertinent information on hazard
reporting. The 24-month retention period applies to the
[[Page 33084]]
records of communications. Any records of outputs of safety risk
management processes must be retained for as long as the control
remains relevant to the operation. As a result, information regarding
identified hazards is not limited to the 24-month retention period
related to communications.
I. ``Hazard'' Definition
In the NPRM, the FAA proposed to revise the definition of
``hazard'' to align it more closely with ICAO Annex 19. The definition
in original part 5 (Sec. 5.5) reads as follows: ``Hazard means a
condition that could foreseeably cause or contribute to an aircraft
accident as defined in 49 CFR 830.2.'' In Annex 19, ICAO defines
``hazard'' as ``a condition or an object with the potential to cause or
contribute to an aircraft incident or accident.'' \38\ The FAA proposed
to further align with the ICAO definition by adding after ``a
condition'' the phrase ``or an object,'' replacing the phrase ``that
could foreseeably'' with ``with the potential to,'' and inserting
``incident'' before ``aircraft accident,'' such that the definition
would read as follows: ``Hazard means a condition or an object with the
potential to cause or contribute to an incident or aircraft accident,
as defined in 49 CFR 830.2.''
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\38\ International Civil Aviation Organization, Annex 19 to the
Convention on International Civil Aviation, Safety Management,
Second Edition, pp. 1-2 (July 2016).
---------------------------------------------------------------------------
1. Discussion of the Final Rule
To better align with the ICAO Annex 19 definition, the FAA is
adopting the changes to the definition of ``hazard'' as proposed in the
NPRM, with the exception of the proposed change from ``foreseeably'' to
``potential to.'' The definition now reads as follows: ``Hazard means a
condition or an object that could foreseeably cause or contribute to an
incident or aircraft accident, as defined in 49 CFR 830.2.'' With these
changes, particularly the inclusion of the term ``incident,'' the final
rule clarifies that anything that affects or foreseeably could affect
the safety of aviation operations is included in the definition of
hazard, not just those conditions or objects that could result in
serious injury, death, or substantial damage.
2. Summary of the Comments
RACCA, AMOA, Ameristar Air Cargo, GE Aerospace, Small UAS
Coalition, RAA, MARPA, and GAMA/AIA expressed opposition to elements of
the proposed revision of the definition of ``hazard.'' Some commenters,
like AMOA, were opposed to the replacement of the word ``foreseeably''
with ``with the potential to.''
Delta Air Lines supported the FAA's proposed modification of the
definition of ``hazard'' to include incidents as well as accidents. It
said the FAA's proposed changes would boost safety by expanding the
scope of potential hazards to address.
MARPA, GE Aerospace, Pratt & Whitney, and an individual expressed
concern that the expanded scope of hazards contemplated by the proposed
inclusion of ``incidents'' might introduce additional safety risks as
organizations spend more resources on concerns less likely to yield
increased safety benefits. Pratt & Whitney urged the FAA to use a
consistent definition of ``incident'' in other guidelines and
requirements to help maintain a focus on issues that have a potential
for an accident.
MARPA said the NTSB's definition of ``incident'' in 49 CFR 830.2 is
purposefully defined broadly because it is intended to give the NTSB
flexibility in pursuing investigations into aircraft incidents,
reflecting a very different context than that of the proposed SMS rule.
MARPA said the FAA's proposed definition would encompass many incidents
affecting the safety of operations that would be entirely beyond the
control of a production approval holder; even though they might be
considered foreseeable under an SMS, it would be unreasonable to expect
production approval holders to anticipate and mitigate these incidents.
Phoenix Air Group, LLC said the FAA's estimate of the cost and
effort of SMS implementation fails to account for companies whose SMS
applies across their entire organization, and whose definition of
hazard, therefore, encompasses far more than potential causes of
aircraft accidents. It advised the FAA to introduce a separate
definition for the term ``accident'' to cover instances of injury to
personnel or damage to aircraft, equipment, or facilities not
associated with an intention for flight, as well as refine the
definition of ``hazard'' to go beyond aircraft accidents or events
associated with the operation of an aircraft. For example, the
commenter said a puddle of oil on a hangar floor is clearly a hazard in
its SMS, but it does not meet the definition of a hazard under the SMS
rule or Annex 19.
3. FAA Response
The FAA disagrees that the inclusion of the word ``incident'' in
the definition expands the scope of ``hazard.'' As stated in the NPRM
preamble, many of the same circumstances that result in an incident
could just as easily result in an accident. The ``conditions'' and
``objects'' that could ``foreseeably cause or contribute'' to an
aircraft accident, such as a mid-air collision, have been found to be
the same conditions and objects that cause or contribute to near mid-
air collisions (i.e., incidents).\39\ Under the previous definition, an
aviation organization that applies the SMS requirements may have
identified conditions in its systems that could foreseeably result in
an aviation accident. Under the revised definition, the same aviation
organization will, in general, identify that the same conditions are
present that could foreseeably cause or contribute to either incidents
or accidents. From the FAA's experience, it would be highly unlikely
that the aviation organization would discover new conditions that can
cause or contribute to an incident but not an accident. Therefore, the
change would not create an additional burden or divert resources to
efforts that would not yield safety benefits.
---------------------------------------------------------------------------
\39\ See Tinsley, Catherine H., Robin L. Dillon, and Peter M.
Madsen. How to Avoid Catastrophe. Harvard Business Review, <a href="https://hbr.org/2011/04/how-to-avoid-catastrophe">https://hbr.org/2011/04/how-to-avoid-catastrophe</a> (2011).
---------------------------------------------------------------------------
The final rule changes to the definition, notably the addition of
``incident,'' do not result in a substantial expansion in the scope of
hazards that a covered person needs to address. First, aircraft
incidents are already covered to a large extent under the original part
5 SMS framework, even if the term ``incident'' was not expressly
included in the ``hazard'' definition. The part 5 safety assurance
processes require investigations of both incidents and accidents (Sec.
5.71(a)(5)) and subsequent analysis (Sec. 5.71(b)) and assessments to
identify new hazards (Sec. 5.73(a)(4) and (5)). The safety assurance
processes and systems must also include a confidential employee
reporting system in which employees can report incidents (in addition
to hazards, issues, concerns, and occurrences) (Sec. 5.71(a)(7)).
These changes are consistent with the original SMS rulemaking in 2015,
which was designed to improve safety by addressing underlying
organizational issues that may result in accidents or incidents.\40\
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\40\ 80 FR 1308.
---------------------------------------------------------------------------
The FAA disagrees that the term incident is not defined. The term
``incident'' is defined in 49 CFR 830.2 (as is ``aircraft accident'').
As defined, ``incident'' means ``an occurrence other than an accident,
associated with the operation of an aircraft, which affects or could
affect the safety of operations.''
[[Page 33085]]
The FAA is not adopting the recommendation to introduce separate
definitions for the terms ``accident'' and ``hazard'' to cover non-
aviation-related concerns to avoid extending SMS requirements to
subject areas such as workplace safety that extend beyond the intended
scope of this rule. As noted in the NPRM, however, some aviation
organizations might choose to extend their SMS to their non-aviation
related activities, such as security and occupational safety and health
issues. If an aviation organization elects to do so, the FAA will only
conduct oversight of the SMS related to its aviation functions.
The FAA acknowledges the concerns by commenters that the phrase
``with the potential to'' could imply that the definition of hazard
includes a boundless set of situations that could not be reasonably
foreseen. The FAA agrees that ``with the potential to'' is too open-
ended. Thus, the FAA is not adopting the proposal to replace the term
``foreseeably'' with ``potential to.'' The FAA recognizes that keeping
the phrase ``that could foreseeably cause'' does not mirror the ICAO
definition of hazard (which uses the phrase ``with the potential to'').
The principal reason for proposing the changes to the definition of
``hazard'' was to align with the internationally recognized definition
of hazard established by ICAO in Annex 19. The FAA seeks to align with
ICAO where feasible. Although the FAA aspires to align with ICAO, the
Agency also recognizes there may be situations, such as this, in which
full alignment may not be the best solution. In addition, using the
term ``foreseeably'' is consistent with the Agency's definition of
hazard in the recently published Airport SMS rule.\41\
---------------------------------------------------------------------------
\41\ 88 FR 11642.
---------------------------------------------------------------------------
J. Scalability
An SMS is designed to be scalable to the size and complexity of the
aviation organization, and to not be unduly burdensome. When part 5 was
originally promulgated in 2015, the FAA clarified that small air
carriers would not be expected to have an SMS as complex as one for
large carriers. Further, the FAA stated in the original Sec. 5.3 that
the SMS must be ``appropriate to the size, scope, and complexity'' of
the aviation organization.\42\ To emphasize the scalability of SMS to
the new types of aviation organizations covered under the proposed
rule, the NPRM for this rule included examples of how small aviation
organizations, such as a single-pilot operator, could scale
implementation of their SMS requirements to the size and complexity of
their organization.\43\ Because the SMS requirements are performance-
based and scalable, the FAA proposed to remove as unnecessary the
scalability language in former Sec. 5.3.
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\42\ 80 FR 1310.
\43\ 88 FR 1952-53.
---------------------------------------------------------------------------
1. Discussion of the Final Rule
In this final rule, the FAA has decided to retain the express
requirement for the SMS to be appropriate to the size, scope, and
complexity of the aviation organization, in order to provide a better
understanding of scalability as a result of the comments received. This
text is moved, along with the other general SMS requirements in former
Sec. 5.3, to Sec. 5.5.
2. Summary of the Comments
Commenters, including NBAA, EAA, and AOPA, expressed the need for
scalable and flexible requirements. Commenters indicated part 5 is
prescriptive and would be difficult for small operators to implement.
Commenters also requested clarification regarding how an SMS can be
scaled in application, and stated the FAA provided limited explanation
or examples.
Several commenters suggested the FAA provide more guidance to small
organizations on how to comply with the proposed SMS requirements. The
NTSB said it issued Safety Recommendation A-22-15 to address confusion
about how SMS applies to smaller operators. The NTSB said the proposed
rule's treatment of scalability does not appear to follow its
recommendation's call for scalability guidance to include specific
details, such as methods and techniques as well as examples addressing
several operational sectors. The NTSB also said more explicit guidance
on strategies and methods applicable to smaller operators would make it
easier for a range of operators to comply with the proposed
requirements, as well as help the FAA inspectors in evaluating
compliance by smaller operators. It further suggested that the FAA
compile an inventory of SMS strategies and methods used by operators of
different sizes, noting that the Agency could take advantage of its
experience working with the FAA's voluntary SMS program participants,
as well as overseeing part 121 operators.
Several commenters recommended that the final rule include an
explicit statement establishing that the SMS is intended to be
scalable. TCCA, Ameristar Air Cargo, Inc., GAMA, and AIA noted that
scalability language in current 14 CFR 5.3(a) (``The SMS must be
appropriate to the size, scope, and complexity of the certificate
holder's operation. . ..'') was omitted from the proposed rule. These
commenters urged the FAA to retain this language to ensure that the
rule contains a clear statement of intent to incorporate scalability.
3. FAA Response
The FAA agrees with the commenters that SMS implementation should
be appropriately scaled to the aviation organization. Part 5 was
designed to be scalable and flexible. Aviation organizations should
scale their SMS implementation to fit their operations. This concept is
addressed in detail in the NPRM preamble and guidance material.
Appendix G in AC 120-92 includes implementation strategies and examples
regarding how small operators could comply with part 5 requirements.
The FAA, in an effort to address scalability, has designed part 5
to allow for flexibility in solutions used to meet the requirements.
The rule specifies a basic set of processes to form a framework for the
SMS but does not specify particular methods for implementing these
processes. Aviation organizations can use solutions that are
appropriate for their size and complexity. For example, smaller or less
complex aviation organizations may use standard word processing
software, Excel spreadsheets, email, notebooks, and whiteboards rather
than more complex software solutions to document the system, policies,
processes, and procedures. Larger or more complex aviation
organizations may need more involved solutions that might include
databases and layered hierarchical analysis and decision-making.
The following example illustrates how a small operator could scale
implementation of SMS to fit its organization. The organization would
document its safety policy; again, this could be done on paper or in a
digital file. The example provided in the appendix in AC 120-92 could
be used as a starting point, but there are also various examples
available on the internet that could be used as a starting point.
To meet safety risk management and safety assurance requirements,
the operator could use a tool such as the Web-Based Analytical
Technology (WBAT) platform which is FAA-supported software, to support
employee reporting and SMS. The platform could also be used to meet
recordkeeping and documentation requirements. However, simpler options
such as digital files on a computer or
[[Page 33086]]
paper files could be used as well. For instance, AC 120-92 provides
worksheets that the operator could use to meet most safety risk
management requirements. To meet safety assurance requirements in a
simpler way in a small operator, a person could observe how an
operation is working and identify trends in real-time. If there are
issues, the individual could take appropriate action and reevaluate the
results. Any operational process could be observed and does not
necessarily require formal audits or forms. Again, all of this could be
documented on paper or in a digital file.
To meet communication requirements a small operator might use
existing email applications to share information within its
organization and with interfacing organizations, as appropriate. To
meet documentation and recordkeeping requirements, the organization
could use paper or digital files just as they might do for other areas
of their operations such as invoicing, service, and rental agreements,
etc. The organization could document this using a medium of their
choosing, including something as simple as a notebook.
The following example illustrates how SMS might operate in a small,
low complexity operator. This example company has two helicopters and
four pilots, and it provides air tour services within a 25 nautical
mile range of its home airport. The company has developed a safety
policy under Sec. 5.21 that reminds everyone safety is the company's
number one priority. It contains in bold letters at the bottom, ``If
you see something unsafe, say something.'' This policy statement is one
page, signed by the company owner, and posted inside the office for all
to see.
After a flight, one of the pilots reports to the air tour
operator's home base that there is a new hazard in the flightpath of
their desired tour route. The hazard is a power line across a canyon
and there are no visibility markers on that line. The report of the
hazard is the start of the safety risk management process under Sec.
5.51(d). Under Sec. 5.53, the air tour operator researches the
location and height of the power line relative to the flight path in
the area. The operator calls the power company and learns that the line
is \1/2\-inch thick and an expected date of installation for the
markers is unknown due to manufacturing delays. This information is
recorded in a notebook or digital file. Even the process for conducting
this analysis under Sec. 5.53(c) can also be located in the notebook
or in a digital file.
Under Sec. 5.53, the air tour operator determines the unmarked
power line is an operational hazard. Knowing that helicopters and
unseen power lines are a high risk and realizing that the company's air
tour route places them in the exact spot of the canyon where the
unmarked power line exists, makes this particular risk assessment easy.
The air tour company determines the severity of hitting that power line
would be catastrophic and the likelihood of encountering that power
line is high due to their route of flight. Using a risk matrix, the
operator qualitatively determines that the risk of conducting tours
with the presence of the unmarked power line is unacceptable and
requires risk controls be implemented to reduce the risk to an
acceptable level. All this information is placed into the notebook. The
operator develops risk controls under Sec. 5.55(c), which, in this
case, is a deviation to the planned air tour route. The evaluation of
the risk acceptance under Sec. 5.55(d) is done by talking to other
employees, brainstorming, or engaging with other operators. The records
of meetings or conversations, as well as the risk controls themselves,
are documented using a medium of their choosing, including something as
simple as a notebook or digital file consistent with the recordkeeping
requirements of Sec. 5.97.
The operator's next step is to monitor the controls it put into
place through its safety assurance program. The operator will check on
the deviation to the route it put in place under Sec. 5.71(a)(1)
through (a)(7). This can be done by tracking the flight path or
auditing the new procedures and keeping those notes in the notebook.
Under Sec. 5.93, the operator will promote safety by informing the
pilots of the hazard and communicating the safety action taken, which
was providing the air tour route with a deviation. Each pilot can be
issued a safety alert via a memo that can be handed to them upon check
in and perhaps sent via email before the flight starts.
Just as existing part 5 requirements are performance-based and
scalable, each revision proposed in the NPRM was also intended to be
scalable. The FAA did not intend for the proposed removal of the
scalability language to alter that stance. Based on the comments
received, however, the FAA understands that the proposed removal caused
confusion regarding its position on SMS scalability. Therefore, the FAA
has decided to retain the scalability language, with minor adjustments
to conform to general requirements language in Sec. 5.5(a).
K. Code of Ethics
In the NPRM, the FAA proposed requiring a code of ethics be
included in an aviation organization's safety policy. This proposal was
in response to section 102(f) of ACSAA, which mandates: ``the
regulations issued under subsection (a) shall require a safety
management system to include establishment of a code of ethics
applicable to all appropriate employees of a certificate holder,
including officers (as determined by the FAA), which clarifies that
safety is the organization's highest priority.'' While Sec. 102 of
ACSAA is applicable only to certain part 21 certificate holders, the
FAA proposed to apply the code of ethics requirement to all certificate
and LOA holders that would be required to meet part 5 requirements.
1. Discussion of the Final Action
The FAA is adopting the code of ethics requirement as proposed. The
code of ethics must clarify that safety is the aviation organization's
highest priority. Having a code of ethics, applicable to all employees
of the aviation organization, influences the safety culture of that
organization and is beneficial to overall safety. As a component of an
aviation organization's safety policy (Sec. 5.21(a)(7)), the new
requirement helps ensure that every officer, manager, and employee in
the organization is aware that safety is a core value for that
organization and that safety risk should be reduced to the extent that
it is practicable to do so. If employees see their management engaged
with safety as the highest priority, then that same safety attitude
will likely prevail throughout the entire organization. Therefore, all
persons required to have an SMS benefit from having a code of ethics
that confirms safety is the aviation organization's highest priority.
2. Summary of the Comments
Several commenters requested that the FAA either remove or modify
the proposed requirement in Sec. 5.21(a)(7) to include in an
organization's safety policy a code of ethics, applicable to all
employees, clarifying that safety is the organization's highest
priority. Piper Aircraft and NBAA stated that it would be more
appropriate for the code of ethics to state that safety is a ``core
value'' of the company.
Commenters also indicated that safety cannot be a company's
``highest priority'' and safety must be balanced with production or the
provision of the service they provide. For instance, NBAA stated that
organizations are not
[[Page 33087]]
in the business of manufacturing safety and that an organization's
highest priority is to sustain the business through maximizing profit
balanced against appropriate risk control.
Commenters also expressed concern that the requirement may cause
confusion or conflict with existing practices. For example, GAMA and
AIA noted that the language could be misconstrued as creating a new
standard of care or a new performance requirement and requested that
the definition be revised to require the company to state their highest
priority is compliance with applicable safety standards. Collins
Aerospace Division stated that the language in the regulation may
create a misunderstanding and lead to actions inconsistent with the
FAA's current approach that allows continued temporary air operations
with certain non-conformance or non-compliance. It recommended that the
FAA reconsider the language to allow more flexibility to applicants to
demonstrate in the code of ethics that safety is prioritized. Lockheed
Martin Corporation also commented that the FAA should not mandate the
use of specific words or phrases in this context.
Additionally, commenters requested clarification regarding the
FAA's expectations for the code of ethics. Gulfstream suggested that
the FAA clarify whether the code of ethics must be explicitly
identified as a ``Code of Ethics'' or if the requirement is satisfied
as long as the prescribed statement is present in the safety policy.
AACA also asked if compliance would involve adding language to an
organization's safety policy that mandates all employees prioritize
safety above all else, or if the FAA expects each organization to
create a document titled ``Code of Ethics.'' Zipline suggested that the
FAA clearly define the expectations of the new code of ethics
requirement, or if no additional clarification is provided, remove it.
AMOA's comment recognized the ACSAA mandate for the code of ethics
was directed at design and manufacturing organizations and requested
that different provisions be created for air transportation operators.
3. FAA Response
The addition of the code of ethics to an aviation organization's
safety policy ensures that every officer, manager, and employee in the
aviation organization is aware that safety is a core value for that
organization and that safety risk should be reduced to acceptable
levels. The FAA recognizes there is inherent risk in aviation. An SMS
includes processes for aviation organizations to identify hazards and
to assess and mitigate the risk associated with those hazards. It is
not possible to completely eliminate risk in aviation. However, it is
essential for aviation organizations to consider safety and the
reduction of risk, and they should use their SMS to reduce safety risk
to acceptable levels. As stated earlier in this preamble, an aviation
organization is in the best position to mitigate the risk of its
products or services. When providing products and services, the
aviation organization must consider safety and, if there is a conflict
between safety and other considerations, safety must not be
compromised.
Section 5.21(a)(7) requires a code of ethics be included in a
covered aviation organization's SMS safety policy. The FAA does not
expressly require that the code of ethics be a separate document or be
entitled ``Code of Ethics.'' Nonetheless, the FAA expects the aviation
organization to make clear to its officers, managers, and employees, as
well as to reviewing FAA personnel, that this component of the aviation
organization's safety policy is a matter of ethics. The addition of
this code of ethics does not create a new standard of care or new
performance requirement for compliance with part 5. The safety hazard
or risk may be identified, addressed, and mitigated using the existing
processes and procedures for safety risk management, assurance, and
promotion as required by part 5 (as amended by this rule). The addition
of the code of ethics does, however, establish a new expectation for an
aviation organization to prioritize safety over other concerns in the
performance of its SMS processes and requirements.
The FAA acknowledges that section 102(f) of ACSAA requires the FAA
to apply the code of ethics requirement to only part 21 design and
manufacturing certificate holders. The FAA does not agree with some
commenters, however, that the regulatory requirement should be limited
to design and manufacturing organizations. Nothing in the ACSAA,
express or implied, suggests that the FAA cannot or should not extend
the code of ethics to other entities. The FAA seeks consistency in the
SMS requirements to the greatest extent possible and, therefore, is
extending this requirement to all aviation organizations required to
comply with part 5. In general, the changes to part 5 are added to
assist in maximizing the potential of an SMS to increase safety across
the aerospace system and, as a result, fall within the scope of the
FAA's broad safety mandate.
There is benefit to aviation organizations documenting their
ethical commitment to safety. If this requirement were limited to only
design and manufacturing organizations, the FAA would be concerned
about implying some aviation organizations should make safety their
highest priority, but others should not. In addition, ethical decision-
making in the management of safety should be foundational to any SMS.
L. FAA and Industry Readiness for SMS
Several commenters asserted the FAA lacks the ability to adequately
support and oversee the certificate and LOA holders required to develop
and implement an SMS as proposed in the NPRM. In addition, several
commenters recommended various ways to ensure adequate training is
available to industry.
1. Summary of the Comments
Several commenters expressed concern about the FAA's ability to
accept and monitor new, mandatory SMS programs in a timely, effective
manner. A commenter asserted that the FAA would need to significantly
increase staffing to review and approve implementation plans, arguing
that Flight Standards District Office staffing levels are critically
low. Other commenters suggested that the FAA is not prepared to support
part 135 and Sec. 91.147 companies, citing past experience with FAA
staffing shortages, lack of effective training for inspectors and
industry, unclear inspector guidance, and inconsistent inspector
interpretation of guidance. Commenters, including NATA, NBAA, and AMOA,
focused on inspector staffing levels, SMS expertise, and ability to
oversee part 5. Commenters, including NBAA, and Alaska Air Carriers
Association, also expressed concern about the consistency of guidance
and the interpretation of guidance.
Several commenters recommended various ways to ensure adequate
training is available to industry. Commenters, including WYVERN, Air
Charter Safety Foundation, and Priester Aviation/Mayo Aviation LLC,
focused on the FAA working with industry to provide training.
Commenters, including WYVERN and NBAA, proposed creation of FAA-
approved SMS consultant and designee programs, as well as the FAA pre-
approving SMS services provided by third-party vendors.
2. FAA Response
The SMS training for FAA inspectors and engineers addresses
validation of
[[Page 33088]]
operators' regulatory compliance through normal surveillance and
oversight activities. The FAA continues to update and prepare its
workforce to validate aviation organizations' implementation of SMS in
support of this rule. The FAA also updated appropriate policy and
guidance regarding oversight for part 5 compliance. To support an
aviation organization's implementation of SMS, the FAA expects to
conduct outreach with industry to facilitate understanding and
implementation of SMS.
Finally, as SMS requirements expand to other aviation
organizations, the FAA anticipates more third-party providers will
offer services to aid aviation organizations in developing and
implementing their part 5 compliant SMSs. Aviation organizations may
work with a third party to develop or implement an SMS that meets the
regulatory requirements. A third-party SMS provider could include the
provider developing the SMS and training the operator to use it. Other
options could include not only development and training, but the third-
party could also operate some parts of the SMS on behalf of the
aviation service provider.
However, there are some aspects of an SMS that must be performed by
the aviation organization. For instance, the accountable executive
responsibilities and roles cannot be delegated to a contractor. An
aviation organization may choose to use third-party providers and other
industry resources to assist and support SMS integration and
development, as appropriate, but that aviation organization remains
fully responsible for regulatory compliance. The FAA does not endorse
the use of any specific product or third-party provider, nor does it
pre-approve any specific service to meet the regulatory requirements.
For more information regarding the use of third-party service
providers, please see AC 120-92.
The NPRM did not propose the establishment of a designee or similar
program for SMS. At this time, the FAA is not adopting such a program.
M. Aviation Organizations With an Existing SMS
Numerous commenters requested more information regarding how the
FAA would approach compliance for existing SMS processes, programs, or
certifications.
1. Summary of the Comments
NBAA and other commenters requested that the FAA accept third-party
SMS as a means of compliance with part 5, while others requested credit
for early adoption of an SMS. NBAA noted that some third-party SMS
programs are compliant with ICAO Annex 19, and therefore, should be
accepted by the FAA. Individual commenters raised questions about how
part 5 relates to other SMS frameworks, and whether demonstration of
compliance to ICAO Annex 19 could replace compliance with part 5
requirements.
Other commenters, including GAMA, TCCA, AACA, AMOA, CAMTS, PHI
Health, Alaska Seaplanes, and Pratt & Whitney, indicated the need for
clarification and assistance in bridging from voluntary SMS to
mandatory SMS. They also expressed interest in how the FAA will
consider existing voluntary SMS programs. Commenters expressed concerns
with restarting the certification process and indicated the NPRM did
not address FAA's voluntary SMS programs.
2. FAA Response
The FAA asserts that aviation organizations having an SMS that is
certified, approved, or accepted by another entity or through the FAA's
voluntary SMS programs does not replace the mandate to meet all
applicable part 5 requirements. Companies are nonetheless encouraged to
leverage existing processes and procedures to help meet part 5
requirements.
The FAA encourages companies to conduct a gap analysis to identify
the areas where their aviation organization complies with part 5 and
where requirements are unmet. Additional information about conducting
gap analyses is available in AC 21-58 and AC 120-92.
Companies are encouraged to leverage existing SMS processes and
procedures to help meet part 5 requirements and to utilize all
available industry resources such as educational institutions,
international organizations, as well as FAA guidance and support.
However, the FAA will not be endorsing the use of any specific product
or third-party provider to meet the regulatory requirements.
Ultimately, the responsibility for ensuring compliance with part 5
remains with the organization.
N. Employee Reporting
Section 102(e) of ACSAA requires the FAA's SMS regulations to
include a confidential employee reporting system through which
employees can report, ``without concern for reprisal'', hazards,
issues, concerns, occurrences, and incidents. Original part 5, under
Sec. 5.71(a)(7) of subpart D--Safety Assurance, already required a
confidential employee reporting system, applicable to all covered
entities, but did not expressly provide that the system be without
concern for reprisal. The FAA proposed to add the text ``without
concern of reprisal for reporting'' to the Sec. 5.71(a)(7)
confidential employee reporting system requirement, to respond to the
mandate in section 102(e) of ACSAA.
1. Discussion of the Final Rule
In the final rule, the FAA is maintaining the revision to the
employee reporting system requirements in Sec. 5.71(a)(7). This
requirement is applicable to all persons required to comply with part
5, except as identified in Sec. 5.9(e).
2. Summary of the Comments
Several commenters expressed concern or suggested changes to the
proposed requirements in Sec. 5.71(a)(7) regarding developing and
maintaining a confidential employee reporting system and that employees
can report ``without concern of reprisal for reporting.''
NATA commented that the concept of confidential reporting of
hazards is critical but becomes unachievable as business size
decreases. NATA stated that the FAA should ensure that guidance and
training recognizes this issue, as well as educate operators on best
practices when business size limits the confidential reporting of
hazards.
NBAA stated the proposed Sec. 5.71(a)(7) requirement to implement
and maintain a confidential reporting system is a prescriptive
requirement, noting that some organizations may wish to implement an
anonymous reporting system over a confidential one to provide more
comfort in reporting. In addition, NBAA questioned how either a
confidential or anonymous reporting system would work in a one or two-
person organization.
Cargo Airline Association expressed its support for the proposed
change because it increases safety and leads to a just culture. Cargo
Airline Association also noted this requirement is consistent with the
intent of other voluntary reporting systems, including the Aviation
Safety Action Program (ASAP), and that it would support additional
information in the guidance materials to provide safeguards like those
under ASAP.
Multiple commenters expressed concern regarding not being able to
act upon intentional malicious acts that are reported in the employee
reporting system due the addition of the clause ``without concern of
reprisal.''
[[Page 33089]]
3. FAA Response
As described in the original part 5 preamble, the confidential
reporting system in Sec. 5.71(a)(7) is a conduit for employees to
raise aviation safety issues ``without fear of reprisal'' (see 80 FR
1307, 1318). Although the FAA did not include that express language in
the text of original Sec. 5.71(a)(7), the Agency's intent has always
been that the confidential reporting system be non-punitive in nature.
In this rulemaking, the phrase ``without concern of reprisal'' makes
explicit what was already implicit, while also meeting the requirements
of section 102(e) of the ACSAA.
With respect to concerns that aviation organizations would not be
able to act upon intentional malicious acts by employees, the FAA
emphasizes that the addition of the phrase ``without concern of
reprisal'' does not alter or supersede the requirement in existing
Sec. 5.21(a)(5) for covered aviation organizations to establish policy
that defines unacceptable behavior and conditions for disciplinary
action. The FAA recognizes that there are instances where disciplinary
action is warranted (e.g., the behavior indicates a willful disregard
to comply with company procedures or regulations). Confidential
reporting and disciplinary action requirements have historically co-
existed to address different concerns and behaviors. This allows the
aviation organization to gather safety information from employees in a
confidential manner while maintaining the freedom to address
unacceptable behavior, ultimately supporting a just culture. Nothing in
this final rule alters that.
The FAA also notes that although the ACSAA mandate to add the text
``without concern of reprisal for reporting'' to the confidential
employee reporting system requirement is specific to part 21
certificate holders, this requirement applies to all persons that must
comply with part 5. Protecting employees from reprisal for reporting
aviation hazards, issues, concerns, occurrences, or incidents is
critical for safety regardless of the type of aviation organization.
Further, some aviation organizations already have reporting systems
in place, such as an ASAP. An ASAP would satisfy the confidential
reporting program requirement for those aviation organizations that
have a memorandum of understanding with the FAA for the specific
employee groups. The FAA expects that these programs will continue to
be used and be leveraged in the development and implementation of SMS.
For employee groups that are not covered by an existing ASAP, the
aviation organization must have an alternate means of compliance for
confidential employee reporting.
Regarding the comments about a confidential reporting system versus
an anonymous reporting system, the requirement does not prohibit an
aviation organization from accepting anonymous reports. An anonymous
reporting system, if correctly implemented, would satisfy the Sec.
5.71(a)(7) requirements for confidentiality and non-reprisal; however,
anonymous reporting is not necessarily the better or preferred system
for employee reporting. For instance, with anonymous reports, an
aviation's ability to obtain additional information is more difficult
as the original reporter would remain unknown. Accordingly, the FAA is
not adopting recommendations from commenters for the FAA to require
anonymous reporting rather than confidential reporting.
Regarding the comments on the difficulty of maintaining
confidentiality in a small aviation organization, the FAA acknowledges
that maintaining confidentiality in a small organization may be more
challenging. But these challenges do not outweigh the safety benefits
of an employee reporting system for hazards and other aviation safety
issues. Even if absolute confidentiality is not always possible due to
the small numbers of employees in some aviation organizations, the FAA
determined that organizations, regardless of size, can establish and
communicate formal workplace policies for maintaining confidentiality
and for non-reprisal of employee reports under Sec. 5.71(a)(7).
Aviation organizations, especially small ones, should strive for a just
culture and reporting culture to encourage employees to report hazards
and openly share information.
The FAA recognizes, though, that the confidential reporting system
is unnecessary in aviation organizations where the pilot is the sole
individual performing all necessary safety functions. Thus, employee
reporting is not required for certain single-pilot operators, which is
discussed further in Section IV.A.
O. Summary of Confidential Employee Reports
In proposed Sec. 5.71(c), the FAA addressed the ACSAA section
102(e) requirement that the FAA require TC and PC holders to submit to
the FAA, at least twice a year, a summary of the employee reports
received through the confidential reporting system. Summaries of
confidential employee reports submitted by certificate holders with
both a TC and a PC are protected from public disclosure by 49 U.S.C.
44735(a)(2) if the summaries are requested under the Freedom of
Information Act. The FAA did not propose to extend this requirement to
all persons required to have an SMS because the information would not
be protected under 49 U.S.C. 44735(a)(2) for persons that are not
covered by the ACSAA requirement.
1. Discussion of the Final Rule
In the final rule, the FAA is maintaining the requirement in Sec.
5.71(c) as proposed and per ACSAA requirements. Specifically, holders
of both a TC and a PC for the same product will be required to submit
to the FAA a summary of confidential employee reports received every 6
months.
2. Summary of the Comments
Commenters focused on the chilling effect this requirement may have
on existing reporting systems and expressed concerns that employees may
be hesitant to raise issues if they believe they may be personally
subjected to scrutiny by a regulator. MARPA maintained that these
reports create a burden on the holder, drawing resources away from
addressing the actual risks raised in these reports. MARPA also
maintained that the requirement imposes a burden on the FAA without a
directive to do more, stating it is unclear what, if anything, the FAA
should do with these reports. U.S.C. Aviation Safety Management Systems
Course 23-3, Piper Aircraft, Inc., Gulfstream, and a member of GAMA/AIA
highlighted the disparity of this reporting requirement across those
required to comply with part 5. They asserted that the requirement
should apply equally for those required to comply with part 5 or should
not apply at all.
3. FAA Response
This final rule adopts the reporting requirement to part 21
organizations holding both a TC and a PC for the same product because
the FAA is statutorily required to promulgate the requirement. Section
102(e) of the ACSAA does not give the FAA discretion with regard to
whether this requirement should be imposed on TC/PC holders for the
same product. The FAA understands the concerns surrounding
confidentiality but reiterates that these semi-annual reports are
specifically protected from disclosure under 49 U.S.C. 44735(a)(2). The
reports submitted to the FAA should not contain any confidential or
proprietary information.
[[Page 33090]]
The FAA has determined that this requirement should be applicable
only to part 21 organizations holding both a TC and a PC for the same
product because 49 U.S.C. 44735(a)(2) protections apply only to those
entities. Requiring all covered aviation organizations to compile and
submit semi-annual summary reports would result in the inconsistent
treatment among regulated entities, because only the part 21 reports
would be protected from public disclosure. Therefore, the FAA is
limiting this requirement to only those entities specifically covered
by the ACSAA requirement.
P. Emergency Response Planning
In the NPRM, the FAA proposed non-substantive edits to the
requirements in Sec. 5.27, Coordination of emergency response
planning. Specifically, the FAA added a comma that was missing in the
introductory text, removed the semi-colon format, and replaced
``certificate holder'' with ``person'' (or, in the case of paragraph
(c), simply removed the term) in alignment with the change discussed in
Section IV.E.
1. Discussion of the Final Rule
The FAA adopts the edits as proposed. As explained in the FAA
response to comments that follows and in AC 21-58, the Agency clarifies
that emergency response plans would not ordinarily be necessary for
part 21 certificate holders.
2. Summary of the Comments
Several commenters expressed concern about the requirements to
coordinate emergency response plans. NBAA asserted that the
requirements are unclear, impractical, and burdensome for many part 135
operations and expressed concern regarding the number of interfacing
organizations with which a part 135 operator might need to coordinate.
The part 21 commenters indicated that the requirements should not apply
to design and manufacturing organizations.
3. FAA Response
The FAA clarifies that the emergency response planning requirements
of Sec. 5.27 are not, in general, needed by part 21 organizations.
Section 5.27 provides that an emergency response plan is required
``[w]here emergency response procedures are necessary.'' As explained
further in AC 21-58, a part 21 certificate holder may be involved in
the investigation of aircraft accidents or incidents but is likely not
involved in the emergency response to the aircraft accident or
incident. For this reason, the FAA has determined that emergency
response planning is not ordinarily necessary for part 21 certificate
holders.
With respect to the concerns from NBAA, the FAA notes that many
part 135 operators already have emergency response plans that may be
used to fulfill this requirement. One of the primary intents of an
emergency response plan is to provide procedures for management
decision-making and actions in an emergency, and not necessarily to
require the creation and coordination of specific emergency plans for
every airport a part 135 on-demand operator might serve. The FAA
provides further guidance in AC 120-92 with examples of how various
types of operators, including part 135 on-demand operators, interface
and coordinate with other aviation organizations. In response to
comments related to emergency response plans being impractical and
burdensome, the FAA has excepted requirements of Sec. 5.27(a) and (b)
for certain single-pilot operations.
Q. Safety Risk Management
In the NPRM, the FAA proposed a new requirement under Sec.
5.53(b)(5) to consider the interfaces of the system when conducting a
system analysis as part of the safety risk management process.
Interfaces are a point where two or more operations, systems, subjects,
or organizations connect and interact. Interfaces can be internal to an
aviation organization, or they can be external (e.g., between
organizations, between the system being analyzes and other systems, or
between a human using the system and the system itself).
1. Discussion of the Final Rule
The FAA adopts the requirement to consider interfaces of the system
when conducting a system analysis as proposed in Sec. 5.53(b)(5).
Hazards can exist with interfacing aviation organizations, processes,
or systems in the way the two interfacing parts interact with each
other. Understanding the interfaces while conducting a system analysis
is important because the system analysis serves as the basis for
identifying and analyzing hazards and their associated risk. As the
aviation system becomes more complex, dynamic, and integrated,
understanding these interfaces can assist in the identification of
related hazards and improve safety overall.
2. Summary of the Comments
Several commenters were concerned with whom and how the safety risk
management processes will be accomplished. Other commenters were
concerned that requiring organizations to consider external interfaces
during safety risk management processes could be too burdensome and may
not add value because they do not control the activities of external
organizations. Baldwin Safety and Compliance asserted that the
requirement in Sec. 5.53(a) requiring a system analysis when
``applying safety risk management'' is prescriptive and limiting.
3. FAA Response
Regarding the comments concerned with the burden and value of
having to consider external interfaces during safety risk management
processes, the FAA emphasizes, as it did in the NPRM, that an SMS that
looks both inward and outward is more effective at identifying hazards,
which is a core function of any operational SMS. Developing a good
system analysis provides aviation organizations an opportunity to
identify internal and external interfaces and will aid in the analysis
process of the safety risk management by providing a whole system view.
That said, the FAA does not expect external aviation organizations that
do not have an input into the process or support the aviation activity
to be included in the system analysis or safety risk management
process. The system analysis is intended to limit the system only to
those areas where the hazard was identified, and mitigations could be
implemented. By reaching out to other aviation organizations that may
be affected by the hazard, or have input to the system, substitute
risks or residual risks to the system could be identified and more
easily addressed.
Furthermore, the FAA is not requiring aviation organizations,
through Sec. 5.53(b)(5), to compel external interfaces to participate
in risk analysis and system-related safety management, but rather, only
to consider those interfaces when conducting system analysis. Aviation
organizations are in the best position to determine whether those
external interfaces should participate (and would be willing and able
to participate) in an aviation organization's risk analysis activities.
Because part 5 is a performance-based regulation, the aviation
organization can determine how to meet the requirements, which allows
the organization to scale and adapt the methods used for safety risk
management. The aviation organization can design the process to fit the
organization's size and complexity. For more information regarding
scalability, see Section IV.J.
[[Page 33091]]
R. Part 135 Pilot and Duty Rules ARC
In the NPRM, the FAA included the statement:
The identification of hazards through SMS may include analyzing the
potential risk associated with crewmember fatigue when compounded by
variations in individual part 135 operations, such as scheduling
variances, frequency of operations, distance, and number of pilots.\44\
---------------------------------------------------------------------------
\44\ 88 FR 1940.
Footnote 44 was linked to this statement and said: See report from the
Part 135 Pilot and Duty Rules Aviation Rulemaking Committee dated July
2, 2021, a copy of which has been placed in the docket for this rule.
1. Summary of the Comments
NBAA, NATA, and NJASAP expressed concern and asked questions
regarding whether the FAA intends for the rule to address the ARC
recommendations.
2. FAA Response
While addressing hazards related to crew fatigue would be a part of
a mature SMS, the FAA did not intend to imply that the ARC's
recommendations would be covered by this rule. The FAA is evaluating
the Part 135 Pilot and Duty Rules ARC's recommendations and weighing
options to address them, which would need to be accomplished through a
separate regulatory initiative.
S. Consistency With ICAO
The FAA noted throughout the NPRM that the proposed rule would more
closely align the United States SMS requirements with ICAO Annex 19.
1. Summary of the Comments
Commenters expressed concerns about elements of the proposed rule
that differ from ICAO Annex 19. Specifically, the Business Aviation
Safety Consortium (BASC) noted that some elements of the proposed rule
differ from the existing ICAO framework, which could lead to
difficulties for flight departments that operate domestically and
internationally where they must adhere to Annex 19. BASC asked whether
these operators would need to operate two separate SMS programs or one
hybrid program and cautioned that focusing on compliance with two
separate frameworks could jeopardize safety when safety excellence
already exists.
University of Southern California Aviation Safety and Security said
that requiring an SMS that departs radically from the ICAO standards
could require international service providers to maintain two SMS
programs, which would be an unacceptable burden and could diminish the
effectiveness of SMS. The commenter indicated that the FAA cannot be
exercising international leadership in aircraft safety if it departs
substantially from ICAO Annex 19, and that the current part 5
requirements should be standardized to reflect ICAO Annex 19 and
Document 9589 more closely. Aviation Safety Solutions also said the
FAA's reliance on a Quality Management System, rather than ICAO Annex
19, for its SMS rule could create disadvantages for international
operators. Minnesota Business Aviation Association recommended that
requirements be identically worded to ICAO to facilitate the approval
process for ICAO-compliant SMS operators in the United States.
NBAA recommended returning to AC 120-92B because AC 120-92D is too
prescriptive and inconsistent with ICAO Annex 19. It noted that several
countries (Australia, Canada, Hong Kong, Saudi Arabia) applied Annex
19, Appendix 2 to their respective regulatory frameworks, which helps
avoid challenges for international operators. NBAA highlighted the
accountable executive requirement as an example where the proposed rule
is less flexible than under ICAO, and also cited the code of ethics,
data sharing, and systems description requirements as ``outside the
scope'' of Annex 19.
2. FAA Response
ICAO Annex 19 directs member States to develop State safety
programs for safety management and includes minimum requirements.
Ultimately, each State is responsible to develop SMS regulations to
implement this requirement. Part 5 fulfills this responsibility for the
United States. An important distinction between Annex 19 and part 5 is
that Annex 19 applies to the member States and part 5 applies to
individual operators. As a result, each member State implements the
Annex 19 SMS framework in accordance with its own processes and legal
systems; accordingly, Member State regulations can vary to some extent.
They meet Annex 19 requirements, however, if they include all of the
elements in ICAO's framework. To be clear, Annex 19 does not apply
directly to individual entities; its purpose is to direct member States
to regulate those entities. Accordingly, the FAA developed part 5 to
align with the SMS framework in ICAO Annex 19.
Part 5 includes all the elements in ICAO's Annex 19 framework,
which means that the United States and, by definition, U.S. entities
compliant with part 5 are in compliance with Annex 19.
Finally, the FAA issued AC 120-92D to be consistent with part 5. As
a result, it is also consistent with Annex 19.
T. Safety Policy
In addition to comments regarding proposed amendments to the safety
policy, which are addressed in other sections of the preamble, several
commenters expressed concern about various safety policy requirements
in subpart B of part 5, which were not amended, including the required
contents of the safety policy and the responsibilities of the
accountable executive.
1. Summary of the Comments
Pratt & Whitney said that the prescriptive list of requirements in
Sec. 5.21 for the safety policy requires a lengthy legal document that
would not bring about the desired behaviors. The commenter requested
industry latitude to develop safety policies, possibly from multiple
sources, that satisfy the proposed list of requirements.
Small UAV Coalition questioned why Sec. 5.25(a) requires a single
individual to satisfy all four functions of the accountable executive,
noting that some companies have specialized executives (e.g., CFOs,
Chief Human Resource Officers) that might better oversee a particular
function. The coalition also said the requirement in Sec. 5.25(c) for
the accountable executive to ``designate sufficient management
personnel'' is vague and questioned whether small companies could
comply with this requirement if they designated all responsibilities to
one person.
The U.S.C. Viterbi School of Engineering noted that the requirement
for an accountable executive to review the safety policy is stated in
both Sec. 5.21 and Sec. 5.25 and suggested it need only be stated in
Sec. 5.25. The commenter also recommended specifying how often this
review should be conducted and suggested that annual reviews be
required.
2. FAA Response
In response to the comments, the FAA notes that the only
substantive addition to Sec. 5.21 is the code of ethics now required
under new paragraph (a)(7) (discussed in Section IV.J. of this rule).
The other requirements in Sec. 5.21, which were promulgated in the
original part 5 rulemaking, are performance-based and are designed to
provide the aviation organization with latitude in developing its
safety policy. The FAA has included additional explanation in AC 120-92
and AC 21-58 providing suggestions for
[[Page 33092]]
designating the accountable executive and management personnel,
defining unacceptable behavior and conditions for disciplinary action,
and the expectations for compliance in small entities.
With respect to the concern regarding possible duplication of
requirements, the FAA notes that, in some cases, similar language is
necessary to tie one SMS component to another SMS component to achieve
the desired closed-loop system. For example, although Sec. Sec. 5.21
and 5.25(b) use similar language, Sec. 5.21 prescribes requirements on
the aviation organization while Sec. 5.25(b) prescribes the
responsibilities of the accountable executive.
Neither Annex 19 nor part 5 specifies a set time interval,
applicable to all covered entities, for reviewing the safety policy.
Section 5.21(c) requires that the safety policy be documented and
communicated throughout the aviation organization. This is where the
aviation organization specifies the interval the safety policy is to be
reviewed by the accountable executive, in a timeframe appropriate for
its organization.
U. Miscellaneous Amendments
After further consideration, the FAA decided to add ``for the same
product'' to Sec. 5.1(e), Sec. 5.1(f), and Sec. 5.1(g) to clarify
the applicability of part 5. The additional text clarifies that part 5
does not apply to either an STC holder or a PC holder for an STC
because these design and production approvals are for modifications to
a product and not for complete products. Similarly, there are persons
who may hold a TC and a PC to produce parts or articles only. The final
rule does not apply because the PC is only for the production of a part
or an article and not for the same product.
In addition, in the NPRM the FAA proposed removing the word
``operations'' from Sec. 5.71(a) to clarify the requirement and avoid
confusion with the term ``operator.'' In retrospect, this change
created additional confusion. As a result, the FAA is retaining the
original part 5 language.
Finally, the FAA proposed amending Sec. 119.8 to clarify that part
119 certificate holders authorized to conduct part 121 or 135
operations must have an SMS that meets part 5 requirements. On further
review, the FAA determined that the amended language would have
prohibited all operations while not in compliance with part 5,
resulting in a new violation each time. This was not what the FAA
intended. Accordingly, the FAA removed the language that would have
provided for a per-operation violation. Section 119.8 now reads:
Certificate holders authorized to conduct operations under part 121 or
135 of this chapter must have a safety management system that meets the
requirements of part 5 of this chapter. This change ensures the FAA's
approach to Sec. 119.8 is consistent with past practices as well as
other provisions in this rule.
V. Benefits and Costs
1. Comments in Support of Benefits
i. Summary of Comments
NetJets Association of Shared Aircraft Pilots claimed that the
safety benefits of SMS have been well established over the years. The
NTSB stated that in the 15 years since its first aviation safety
recommendation for SMS in 2007, its investigations have consistently
shown the need for aviation safety providers to implement SMS to ensure
its benefits to industry and the public are realized. Aviation Safety
Solutions also indicated that it anticipates substantial safety
benefits from part 5. The commenter claimed that International Standard
for Business Aircraft Operations Stage 3 operators have not had a fatal
accident in 20 years, the result of industry-wide safety culture
enhancements, continual data analysis, and ensuring that safety is the
operator's top priority. Another commenter noted that the level of
benefits required to breakeven for certain part 21 design and
production approval holders is not much of a challenge.
ii. FAA Response
The FAA agrees with these comments and the potential benefits from
SMS (the FAA does not have operator-specific information on
International Standard for Business Aircraft Operations stage 3 to
confirm the accident rate). SMS identifies hazards so mitigations can
be implemented to reduce the potential of an accident occurring. By
managing hazards in an operational environment, the potential for an
accident is significantly reduced.
2. Comments Contesting Benefits
i. Summary of Comments
Phoenix Air Group asserted that an SMS does not mitigate or reduce
the number of accidents in any known definition or study of such
programs. One commenter questioned if there are studies that show SMS
would have any effect on accident rates or overall safety. One
commenter stated that the NPRM shows no data proving that the present
SMS has improved safety. Another commenter found the actual accident-
based case the FAA made for applying SMS mandates to single-person
operations to be unsupported. Finally, one commenter expressed concern
about the resources needed to implement an SMS and the lack of
realistic practical benefits for certain small part 21 operations, for
example, hot air balloon manufacturing.
ii. FAA Response
The FAA acknowledges the lack of studies documenting reduced
accident rates under SMS. As stated previously, SMS assists aviation
organizations in identifying hazards that could result in an accident
so the organization can implement mitigations to reduce accident
probability.\45\ The FAA has determined that the requirements would be
beneficial even applied to small entities, including small
manufacturers, and implementation can also be scaled accordingly, as
discussed in Section IV.J.
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\45\ In the data for recent years (2020-2021), the FAA
identified an additional 9 part 135 accidents and 1 Sec. 91.147
accident (resulting in 27 fatalities and 8 serious injuries) in
which SMS could potentially have prevented the accident. These
accidents include the 2020 helicopter crash in Calabasas, CA
resulting in 9 fatalities (the NTSB determined that a contributing
factor to the accident was the lack of use and oversight of the
company's SMS). These accidents also include single-pilot operations
(NTSB accident number CEN20CA119).
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3. Comments on Costs
i. Summary of Comments
Phoenix Air Group, Inc. stated that incompatibility between the
rule and ICAO Annex 19 Standards and Recommended Practices would
require the company to maintain two different safety programs,
increasing costs by 75%. It stated that it has a third-party provided
SMS that meets the ICAO Annex 19 requirements for all its operations
under multiple CFR parts. The commenter stated that the current annual
cost would be much higher than the RIA estimate, and the costs after
the addition of part 5 would also be much higher. Regarding the cost of
risk mitigations, Phoenix Air Group stated the company's mitigations
have ranged from no cost actions to actions that added hundreds of
thousands of dollars requiring the company to modify one or more
aircraft, including the purchase of a supplemental type cert
[…truncated; see source link]Indexed from Federal Register on April 26, 2024.
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