Consultation on Safety Regulation of Aviation FAQs

  1. Why is the CAA thinking about changing the way it regulates aviation safety?
  2. What are the options?
  3. Why does the CAA recommend mandatory implementation of risk management systems?
  4. How does a risk management approach to regulation relate to SMS?
  5. What will a mandatory risk management approach mean for me?
  6. How much will it cost me?
  7. What would the Rule look like?
  8. If the CAA implements a mandatory approach, when will the changes occur?
  9. What is the CAA doing to prepare for the changes?
  10. What’s next?
  11. How do I have my say?

  1. Why is the CAA thinking about changing the way it regulates aviation safety?

    While our aviation system is one of the safest in the world, there is no public appetite for an increase in the total number of accidents or serious incidents, especially in commercial aviation. Risks that contribute to accidents are many and varied, and combined with the expected growth in the aviation industry1 the total number of accidents is likely to increase.

    The International Civil Aviation Organization (ICAO) has identified that it is increasingly difficult to make further safety gains under a regulatory system based on rules and compliance alone2. The challenge for New Zealand is to find ways to proactively manage risks to avoid them turning into accidents and other serious incidents.

    In addition, the current aviation safety regulatory regime is not:

    • delivering improved safety performance quickly enough
    • keeping up with technology change
    • allowing the CAA to have confidence that its resources are appropriately focused on the problem parts of the aviation industry and that it is intervening to best effect
    • responding to new international standards quickly enough, or
    • focusing the aviation industry on actively identifying and managing risk.

    The current system has served us well, but it is time to think about whether there is a better way to address these issues and reduce accident rates in a way that supports and encourages business development.

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What are the options?

The CAA considered four different options for moving aviation regulation forward:

  1. Maintain status quo: All parties continue with the current system

    No change to the current system.

  2. Increased inspections, audits and enforcement

    The Civil Aviation Authority would put extra resources into checking aviation businesses more often to ensure compliance with the Rules.

  3. Voluntary implementation of Risk Management Systems

    Operators would be encouraged to voluntarily implement a risk management system, such as a Safety Management System. The Civil Aviation Authority would continue to regulate aviation safety with standardised rules and quality checks, but it would make more use of risk analysis to deliver these functions.

  4. Mandatory implementation of Risk Management Systems

    Operators would be required to implement a risk management system, such as a Safety Management System. The Civil Aviation Authority would shift its focus to a risk analysis approach to surveillance and auditing roles and prioritising regulatory interventions in the aviation system.

The CAA recommends moving towards a mandatory risk management approach (Option 4).

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Why does the CAA recommend mandatory implementation of risk management systems?

To obtain the best value and efficiency possible, the entire aviation sector needs to work together to implement a risk management approach. If we do this we can:

  • Improve safety

    Evidence suggests that a consistent industry wide shift to a risk management approach will have the greatest effect on improving both safety and business efficiency. Countries that have already implemented risk management systems, including Canada, the United Kingdom and Singapore, have seen accidents and serious incidents decrease.

  • Reduce Costs

    Case studies of operators also illustrate that costs have decreased. All noted that there are initial costs to implement a risk management system, but these were moderate. In addition to a reduction in equipment losses and damage, Singaporean operators noted that other significant savings were made by reduced insurance costs and the spin-off benefit of identifying organisational inefficiencies.

  • Deliver best practise at home and abroad

    Risk management is also considered best practice internationally. The International Civil Aviation Organization has adopted a risk management approach to identify global safety trends and prioritise its support to member states. It expects member states and the global aviation industry to adopt a risk management approach to aviation safety. The Organization’s Council has recently adopted  a new Annex 19 to the Chicago Convention, setting standards for safety management systems. Applying these principles to both international and domestic operators ensures a more consistent and efficient approach to safety.

  • Maintain New Zealand’s reputation

    If New Zealand does not follow other countries in implementing this approach, there is a risk that influential safety regulators, such as the Federal Aviation Administration in the United States and the European Aviation Safety Agency, could downgrade New Zealand’s safety rating, limiting our access to their aviation markets.

  • Integrate better with existing safety systems

    A risk management approach to aviation safety regulation is compatible with other domestic regulatory systems that have already adopted risk-based approaches to safety. The Environmental Protection Authority assesses the risk of introducing new substances and organisms into the environment. Risk management in occupational health and safety is common across all New Zealand businesses. It calls for employers and employees to identify and eliminate or mitigate hazards around the workplace.

A risk management approach is well supported by the aviation industry. A number of different operators have already established safety management systems, and many aviation associations are supportive of this.

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How does a risk management approach to regulation relate to SMS?

A risk management approach to aviation safety regulation encompasses things like safety management systems, a CAA State Safety Programme (SSP), improved safety reporting, and a targeted and versatile approach to proactively addressing safety risks.

A SMS is the practical business-level risk management tool that the CAA will be asking all operators to implement in order to deliver a risk management approach at the operator level. We are focusing on SMS because this is the ICAO approved risk management tool. If an operator has a different but comparable system that achieves the same outcomes as SMS, we would like to hear about this as part of our consultation.

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What will a mandatory risk management approach mean for me?

Many aviation businesses, both globally and within New Zealand, have implemented risk management systems such as SMS to improve their safety, efficiency and profitability.  We are keen to hear what you think the outcomes for your business are in implementing a risk management approach.

You should see an improvement in safety because you will be proactively targeting the most relevant and significant risks specific to your organisation. In the long term, this will translate to an improvement of your business position. Put simply, reduced accidents and incidents improves your reputation and reduces business costs.

You should also see an improvement in your business efficiency. Taking a risk management approach, such as SMS, allows you to systematically review your business and operational systems to identify where the best opportunities for improvement lie. Clearly identifying and targeting the right risks means that you can be more assured that your money is being spent in the right places for the greatest benefit.

If a risk management approach is mandated, your SMS will become a core element of the CAA’s certification process, auditing and surveillance.

  1. Entry certification and renewal: No real change, except that your Safety Management System will be reviewed to ensure that it meets the standard.

  2. Auditing: The emphasis of CAA auditing will evolve from a quality control style check to a risk-based audit. There are three elements to this style of audit:

    • reviews of past history and sector risk
    • reviews of current compliance with your exposition, and
    • targeted risk assessment of your operation.

    Current quality-based auditing focuses on the first two elements while a risk-based audit also includes assessment of the specific risks associated with your particular operation. In practice, the CAA will do this, in part, by reviewing the risk register you have created as part of your SMS. It will assess the efficacy of your risk mitigation measures and how well you have succeeded at implementing a safety culture and achieving your safety targets. It is likely that the CAA will focus mostly on those risks that are identified as ‘requiring attention’ and work with you to address these. The CAA’s assessment will be based on both your own risk profile and wider Sector Risk Profiles.

  3. Surveillance: The CAA’s surveillance activities will still be guided by the regulatory operating model, which focuses on the highest risk operators. A sector-wide risk management approach will assist the CAA to more effectively pinpoint areas of greatest risk.

Implementation of SMS would need to be supported by a shift in approach across the whole aviation system, including within the CAA. This ensures the entire system is working from a mutually understood, cohesive approach to safety. The CAA would support this through the development of a State Safety Programme. Over time you can also expect to the following changes:

  • Development of a reporting culture: Assessment of risk and the design of quality regulation require a continual flow of accurate safety information. A risk-based system can only work effectively with a willing aviation community. The CAA will work on ways to improve the exchange of information with aviation organisations.
  • Wider range of regulatory approaches: In addition to Rules, which may become more flexible under the proposed approach, the CAA will also make greater use of risk analysis to prioritise other regulatory interventions in the aviation system. For example, after analysis of safety data the CAA may identify that for certain lower risk issues, other methods of encouraging behavioural change are appropriate, such as education, training, and surveillance, rather than imposing a Rule.

Non-commercial organisations would not be required to establish a SMS, but the CAA would still adopt a risk management approach to safety regulation for them.

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How much will it cost me?

To help advise Ministers on what this proposal means for industry, we need estimates of what you think it might cost you if this proposal is supported and approved. We encourage you to attend one of our SMS Forums, read our consultation material and the Advisory Circular and let us know what you think it means for you.

The costs to operators will differ widely depending on your operation’s size and complexity. There would likely be some initial SMS development costs, such as creating a safety policy and educating staff. Ongoing costs may include continued staff training, risk management activities, maintaining reporting and data analysis systems and implementing new systems to reduce risks if these are not already in place at your organisation.

The time taken for the CAA to conduct an average audit will not necessarily change if an operator has done a good job on its SMS and continues to demonstrate a good track record and compliance against quality checks. Most operators should see a shift in emphasis with less time spent on past history and reviews of current compliance and more on risk assessment. However, operators with poor history, and poor demonstration of compliance might expect higher audit costs, as the CAA adds a risk assessment to its safety auditing toolbox. Those who demonstrate good performance might expect less frequent auditing, although this may not be true for some operations where the consequences of failure are significant (companies operating large airliners, for example).

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What would the Rule look like?

If this proposal to mandate risk management frameworks for New Zealand aviation is accepted by the sector and approved by Government, we anticipate developing a new Civil Aviation Rule Part for Safety Management Systems and making relevant amendments to other Rules to refer to this.

A new SMS Rule would reflect the International Civil Aviation Organization’s (ICAO) new Annex 19 to the Chicago Convention, in particular Appendix 2.  This includes the framework and component parts of a SMS.  You can also read our SMS Advisory Circular to get an indication of what a new Rule might look like.

As is our usual practice, we would consult with you again on a draft Rule through the Notice of Proposed Rule Making (NPRM) process.

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If the CAA implements a mandatory approach, when will the changes occur?

If a risk management approach to safety is mandated, all rules involving commercial operations would be changed to require aviation organisations to operate a risk management programme such as Safety Management Systems.

Any rule changes to implement risk management would be grouped and commence over two phases to assist in the transition of the entire system.

All organisations would have 12 months to establish Safety Management Systems after the implementation date of their Rule group. New entrants would be required to have Safety Management Systems as part of their initial application to enter the system.

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What is the CAA doing to prepare for the changes?

First, we want to hear from you. We want to make sure this is done right, so we are interested in your feedback on whether you agree that a mandatory risk management approach to aviation safety is the best option going forward. We also want to make sure that we understand the implications, both positive and negative, for you and your business of implementing this approach.

In the meantime, we are also preparing the groundwork for implementation of a risk-based system within the CAA to help organisations proactively manage their risks. These are the changes that will happen whether or not there is a mandatory risk management approach taken. This includes:

  • changes to our organisation, including increasing intelligence, risk assessment and policy development capabilities
  • training for Civil Aviation Authority staff
  • development of an Advisory Circular and information booklets to industry with guidance on implementing Safety Management Systems, and
  • a series of industry seminars to promote proactive adoption of SMS, alongside this consultation.

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What’s next?

The CAA will be hosting seminars around the country to provide more information about Safety Management Systems. These are an opportunity for you to learn more about what SMS is and how it may be able to help your organisation. More information will be posted on our web site soon.

We are also taking this opportunity to hear your views first hand on our proposal to require a risk management approach system-wide. Following consultation, the CAA will use your input to develop a final proposal for the Minister of Transport.

If the proposal is approved by the Government, the CAA will seek amendments to the Civil Aviation Rules to implement the proposed changes. You will be consulted on the wording of the proposed amendments. A first draft of the Rule amendments will be available on the CAA web site.

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How do I have my say?

Feedback on these proposals should be provided to the Civil Aviation Authority by close of business on Monday, 8 Jul 2013 at:


Bryce Wigodsky, Policy Adviser
Civil Aviation Authority
PO Box 3555
Wellington 6140
New Zealand

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  1. Revenues approached $10 billion in 2010, growing 9.5% per annum over the previous five years. This is expected to grow to between $12.6 billion and $15 billion by 2015 (New Horizons: A report on New Zealand’s Aviation Industry. Knotridge Limited, 2010, p 17.)
Back Safety Management Manual (SMM), Second Edition, Doc 9859 AN/474, International Civil Aviation Organization, 2009, Part 2.3.