FAA Mandates SMS for Charter Operators—Now What?

The FAA now requires safety management systems (SMS) for all Part 135 operators, certain Part 91 air tour operators, and some type certificate and production certificate holders under Part 21. Part 135 operators include on-demand charter, commuter, and air ambulance operators. But for the operators, what does this mean? And are they ready?

The final rule was published on April 26, 2024. The number of affected organizations is significant, and now each has less than 36 months to comply with the new SMS mandate. The deadline for an operator to provide the FAA a Declaration of Compliance (14 CFR 5.9) is May 28, 2027. It’s important to note that from a regulatory compliance perspective, the Declaration of Compliance is the end of the SMS development and implementation process—not the beginning.

Business aviation industry groups and the NTSB are overwhelmingly supportive of the new SMS rule; however, some have brought up concerns.

Requiring and verifying the effectiveness of an SMS in all revenue passenger-carrying aviation operations has been a long-standing recommendation by the NTSB. The Safety Board first recommended SMS for Part 121 airlines in 2007, resulting in an FAA mandate for airlines and the establishment of Part 5 (SMS) in March 2015. Since then, the NTSB has consistently supported the adoption of SMS by other aviation service providers.

“Requiring more operators to implement proven strategies to protect the flying public is a positive step for safety, and one the NTSB has long supported,” said NTSB Chair Jennifer Homendy. Recently entering her second five-year term as the NTSB Chair, Homendy believes the SMS mandate “will go a long way toward protecting flight crews and passengers in our skies.”

NTSB member Michael Graham added, “This is a significant step forward for aviation safety. I’m pleased the FAA issued the final rule requiring all Part 135 operators and Part 91.147 air tour operators to implement a safety management system.” He continued by saying, “Operators are safer when they proactively and systematically identify hazards and mitigate their changing risks through an SMS.”

NBAA provided significant feedback to the FAA leading up to the new SMS rule. The final rule reflects much of that feedback, including scalability, an exclusion for single-pilot operations, and an expansion of the implementation timeline from 24 to 36 months.

“The business aviation community has always considered safety to be a core value and has led the way in voluntary adoption of SMS and other best practices,” said NBAA president and CEO Ed Bolen. He continued, “This final rule largely reflects comments from NBAA and hundreds of others who have noted that for an SMS to be effective, it must be tailored to the size and complexity of each operation.”

The National Air Transportation Association’s (NATA) position on the issue is: “NATA supports the adoption of SMS and believes that all operators can benefit from implementation. However, there are still hurdles to achieving the full promise of SMS.” The organization is concerned about a lack of training and resources available to FAA inspectors and industry. As such, NATA provides several educational resources and is working to provide operators with the information and materials needed to meet their regulatory requirements and realize the full potential of an effective SMS.

Cautionary Tales

Despite all of this, several business aviation safety professionals feel there will be a substantial impact on the charter and air tour community as operators prepare for SMS implementation.

“The most significant impact for business aviation and air tour operators will be allocating resources for the development, implementation, and ongoing management of the SMS,” said KB Solutions CEO Kodey Bogart. “This includes hiring or training staff dedicated to safety management and investing in software or systems for tracking and analyzing safety data as necessary.”

Bogart, a safety program consultant, educator, and former Black Hawk helicopter pilot, added, “The initial costs of SMS implementation can be significant, and smaller operators may find these costs particularly challenging. However, operators need to remember that an SMS does not have to be overly daunting and can be kept simple and scalable to the organization's size. While the initial costs and changes might be challenging, the long-term benefits of improved safety, operational efficiency, and market competitiveness are substantial.”

And, although Air Charter Safety Foundation (ACSF) president and CEO Bryan Burns generally does not see a significant departure from what should be in an operator’s SMS, he does voice some concerns. Burns and the ACSF have guided many operators through the SMS implementation process. “My concern is how the FAA will evaluate and assess for compliance once a Declaration of Compliance is submitted,” he said.

Burns believes that 36 months is an adequate amount of time to implement an SMS “as long as the operator starts now.” He added, “In my view, we should continue to focus on what reinforces an effective program with an emphasis on leadership, culture, and professionalism.”

Since the FAA published the final rule, the ACSF has experienced an uptick in requests for support, Burns said. “We receive two to three requests per week to demonstrate and view our SMS tools and platform.” ACSF offers a simple low-cost, customizable platform that is both scalable and flexible as it relates to FAA Part 5 compliance.

He added, “Much like the success of ACSF’s ASAP program, I suggest an operator retain a third party like ACSF to not only help with the implementation process but also assist in educating the FAA Flight Standards District Offices (FSDOs). Through its organizational-based ASAP program, the ACSF has established relationships and trust with over 65 FSDOs throughout the U.S.”

Sonnie Bates, CEO of the safety specialist Wyvern, has mixed views on the state of the business aviation community and its ability to adopt an SMS. Bates said, “Most air charter operators are scrambling to meet the requirements of this rule. Most of them do not have a viable SMS…or they have a documented SMS, but they lack the tools, training, and culture to make it work.”

Wyvern provides education, training, consulting, auditing, and safety intelligence solutions to business aviation operators. Bates, a former U.S. Air Force and corporate pilot, has been involved in developing and implementing auditing, safety management, and leadership development programs for over two decades and has two distinct views on how operators implement an SMS program; the unfortunate “copy and paste mode” or the more desirable “organic development mode.”

According to Bates, “The way it should be done (organic development) is for leadership to commit to having a positive safety culture and through that commitment require the implementation of an SMS and not do it because some outside entity required it. But that's not the reality here.” He added, “Those who have waited this long to implement an SMS because the FAA has finally mandated it are way behind the power curve as it's likely their leadership has not committed to ensuring a positive safety culture.”

Bates views the “copy and paste” approach as working backward. “Many air charter operators with a mature SMS began the same way, in a rush to implement an SMS so they could put a certificate of achievement on the wall to get more business without realizing the true value of a fully functional and effective SMS,” he said. “But over time, the operators who rushed to implement an SMS to gain Wyvern Wingman status or another status from a third party entity eventually saw the true value of having an SMS—which is to capture more safety-related data (internal and external), analyze that data and convert it into usable information, and share that information appropriately as safety intelligence, so the organization can continually learn and improve their policies, processes, procedures, and overall resiliency.”

Bates continued, “It is this continual learning process that can only be attained by having a just and overall positive safety culture, which takes time to develop if it's not already there.”

ACSF’s Burns agreed and believes the new rule is important to the charter industry. “It all starts with company culture,” Burns says. “Employee buy-in is crucial for the success of any safety program…not just your crews, mechanics, dispatchers, schedulers, but the entire staff.” He adds, “However, most importantly [for] senior management and leadership…without safety as a core value of an organization, the SMS program will not succeed.”

Wyvern’s Bates cautions operators from taking this mandate lightly, adding, “I think the operators who do not already have an SMS are thinking this will be easier than it really is. This is because the FAA has changed its approach to validating SMS implementation. Instead of the astronomically overdone approach the FAA has used in the past years with their voluntary program, with this new rulemaking, they have apparently taken a more simplified compliance approach that is like any other FAA regulation, so on the surface, the SMS requirement does not seem to carry any more weight than any other FAA regulation. But what the operators will soon realize is that SMS requirements are complex and require a cultural shift.”

Bates continued, “It will take time, both for operators and FAA, to become proficient with SMS. Operators who approach this new safety concept in collaboration with their FAA principles will set up a learning culture where operator personnel and FAA inspectors will learn together to better understand how to make SMS work for each unique operation.”

SMS Resources

KB Solutions’ Bogart thinks many operators are trying to determine what the new SMS rule means to their organization and suggests that a good first step is to have a discussion with a consultant. “Organizations are still trying to wrap their head around what the regulation means for their organization: How will they allocate resources, complete their research or RFPs for what companies to work with, and what is needed for their organization versus what they already have?”

Bogart continues, “Starting with a consultant is a great way to have a structured and efficient approach to understanding and implementing SMS. A consultant can provide tailored guidance, help identify gaps, and offer solutions that align with the organization's specific needs and existing practices.”

Beyond implementation challenges, Bogart sees some positive aspects of the new rule. “There is a myriad of reasons this rule is important for business aviation and air tour operators. The rule promotes higher safety standards, operational efficiencies, financial savings, and market competitiveness for operators,” Bogart said.

She added, “By mandating SMS, the FAA aims to ensure that all operators are equipped to manage safety risks proactively and effectively, ultimately enhancing the safety and reliability of the aviation sector as a whole.

“The fact is many operators believe they have a safe organization because they may not have had any incidents. This is not a realistic approach to safety. Many things below the surface that can lead to an event are unknown to management and stakeholders,” Bogart continued. “I have personally worked in an organization that believed they were safe. However, I could see they were only a few steps away from a significant event and they had no interest in changing anything—in addition, they definitely had a blame culture rather than a just culture. Operators need to look at work as done, not work as imagined, and make adjustments and improvements as necessary.”

She stressed the new rule is about fostering a proactive, data-driven approach to safety. This will protect the company and propel the industry.

Next Steps

Wyvern’s Bates provided some insight into how long it will take an operator—starting from scratch—to become compliant with the new SMS rule and be able to provide the FAA with a Declaration of Compliance.

“For those operators who have not implemented an SMS and now are in a rush to do so to meet the FAA mandate, they should begin with training and tools,” he said, noting that the training needs to be appropriate for all levels of the organization, from the senior executive team to the accountable executive and all the way to the newest frontline employee.

“The sooner they get into a comprehensive set of safety management tools (SMS software), the better because it takes time to become familiar with these tools and to use them effectively,” Bates said. “However, through the daily use of these tools and with proper training, each person in the organization will learn the value of SMS through daily practice of hazard identification, risk analysis, risk management, and sharing of lessons learned. Over a period of three years, if the leadership in the organization is committed to developing a safety culture and an effective SMS, they can achieve the FAA's objective.”

Further, KB Solutions’ Bogart provided additional insight for those who already have an SMS. “Operators with an existing SMS need to ensure their system aligns with FAA requirements through a thorough review and update process,” she said. “By conducting a gap analysis, updating documentation, performing internal audits, and submitting the necessary compliance documentation, operators can obtain the FAA's Declaration of Compliance, confirming that their SMS meets the required standards.”

Wyvern’s Bates feels that operators with their SMS supported and validated by a third party are ahead of the game. “Operators who have an effective SMS already will simply complete the proper documentation to self-declare,” he said. “This will be true for certified Wyvern Wingman operators and other operators who have implemented an effective SMS and had it validated by a professional third-party audit organization.”

Bates concluded: “As each operator declares compliance, they will embark on a new relationship with their FSDO inspectors, who are likely new to SMS themselves. There will be a learning curve both for operators and FAA inspectors. Operators who have engaged third-party assistance to align their SMS with 14 CFR Part 5 will have a leg up. By contrast, those operators who ignore this preparation prior to the mandate deadline will only find themselves struggling to demonstrate to their FSDO inspectors their method of compliance.”