The U.S. Federal Aviation Administration (FAA) issued a final rule that requires most U.S. commercial airlines to have Safety Management Systems (SMS) in place by 2018.
The rule builds on the programs many airlines already use to identify and reduce aviation risk. The rule requires airlines to implement a safety management system within three years. They must submit their implementation plans to the FAA within six months. The rule also requires a single accountable executive to oversee SMS. An SMS defines “what” is expected rather than “how” the requirement is to be met. This allows each air carrier to design an SMS to match the size, complexity and business model of its organization. An SMS does not take the place of regular FAA oversight, inspection and audits to ensure compliance with regulations.
SMS is the formal, top-down, organization-wide approach to managing safety risk and assuring the effectiveness of safety risk controls. SMS gives airlines a set of business processes and management tools to examine data gathered from everyday operations, isolate trends that may be precursors to incidents or accidents, take steps to mitigate the risk, and verify the effectiveness of the program. SMS requires compliance with technical standards but also promotes a safety culture to improve the overall performance of the organization. It uses four key components – safety policy, safety risk management, safety assurance, and safety promotion.
The FAA estimates the rule will cost the airlines $224.3 million over 10 years ($135.1 million present value). The agency estimates the benefits will range from $205 million to $472.3 million over 10 years ($104.9 to $241.9 million present value).