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This rulemaking would require each certificate holder operating under 14 CFR part 121 to develop and implement a safety management system (SMS) to improve the safety of its aviation related activities. A safety management system is a comprehensive, process-oriented approach to managing safety throughout an organization. An SMS includes an organization-wide safety policy; formal methods for identifying hazards, controlling, and continually assessing risk and safety performance; and promotion of a safety culture. SMS stresses not only compliance with technical standards but increased emphasis on the overall safety performance of the organization. This rulemaking is required under Public Law 111-216, section 215.

Overall Description of Deadline: Congress passed Public Law 111-216 that instructs FAA to conduct a rulemaking to require all part 121 air carriers to implement a Safety Management System (SMS). This Act further states that the FAA shall consider at a minimum each of the following as part of the SMS rulemaking: (1) an Aviation Safety Action Program (ASAP); (2) a Flight Operations Quality Assurance Program (FOQA); (3) a Line Operations Safety Audit (LOSA); and (4) an Advance Qualifications Program.

Statement of Need:

This final rule requires each air carrier operating under 14 CFR part 121 to develop and implement a safety management system (SMS) to improve the safety of its aviation-related activities. SMS is a comprehensive, process-oriented approach to managing safety throughout an organization. SMS includes an organization-wide safety policy; formal methods for identifying hazards; controlling, and continually assessing risk and safety performance; and promotion of a safety culture. SMS stresses not only compliance with technical standards but also increased emphasis on the overall safety performance of the organization.

Summary of the Legal Basis:

The Federal Aviation Administration's (FAA) authority to issue rules on aviation safety is found in title 49 of the United States Code. This rulemaking is promulgated under the authority described in 49 U.S.C. 44701(a)(5), which requires the Administrator to promulgate regulations and minimum standards for other practices, methods, and procedures necessary for safety in air commerce and national security. In addition, the Airline Safety and Federal Aviation Administration Extension Act of 2010 (the Act), Public Law 111-216, section 215 (August 1, 2010), required the FAA to conduct rulemaking to require all 14 CFR part 121 air carriers to implement a safety management system. The Act required the FAA to issue this final rule within 24 months of the passing of the Act (July 30, 2012).

Alternatives:

To relieve the burden of this rule on small entities, the FAA considered extending the timeframe for development of SMS implementation plans. However, the FAA ultimately concluded that 1 year for the development and approval of implementation plans is appropriate. In making this determination, the FAA considered longer and shorter terms. However, it settled on 1 year based on information from the SMS Pilot Project, which showed that an average of 1 year was sufficient to develop and approve an implementation plan. As part of its analysis, the FAA noted that pilot project participants ultimately had differing levels of SMS implementation. However, because all pilot project participants had initially developed (and received FAA validation on) an implementation plan that provided for full SMS implementation, the FAA was able to use this data to estimate how long it would take a certificate holder to develop such a plan, and get the plan approved by the FAA.

Anticipated Costs and Benefits:

The FAA estimates the quantitative costs to be $135.1 million, and the quantitative benefits to be $142.8 million, with benefits exceeding costs.

Risks:

While the commercial air carrier accident rate in the United States has decreased substantially over the past 10 years, the FAA has identified a recent trend involving hazards that were revealed during accident investigations. The FAA's Office of Accident Investigation and Prevention identified 128 accidents involving part 121 air carriers from fiscal year (FY) 2001 through FY 2010 for which identified causal factors could have been mitigated if air carriers had implemented an SMS to identify hazards in their operations and developed methods to control the risk. This type of approach allows air carriers to anticipate and mitigate the likely causes of potential accidents. This is a significant improvement over current reactive safety action emphasis, which focuses on discovering and mitigating the cause of an accident only after that accident has occurred. In order to bring about this change in accident mitigation, as well as the other reasons discussed throughout this document, the FAA is requiring part 121 air carriers to develop and implement an SMS. SMS is a comprehensive, process-oriented approach to managing safety throughout an organization, and stresses not only compliance with technical standards, but increased emphasis on the overall safety performance of the organization. The potential reduction of risks would be averted causalities, aircraft damage, and accident investigation costs by identifying safety issues and spotting trends before they result in a near-miss, incident, or accident.