Handout 1

Report
IND001: Industry – Aviation Industry
Session
April 28, 2014
2:00PM – 4:00PM
Recording of this session via any media type is strictly prohibited.
Page 1
General Aviation Risk Issues
April 28, 2014
Recording of this session via any media type is strictly prohibited.
Page 2
General Aviation Risk Issues
Speaker:
Steven W. Whitlock CIC, CRM, CAIP
Senior Vice President – AirSure Limited
B.S. / A.S. Degrees from Embry-Riddle
Aeronautical University
Former general aviation underwriter and risk
manager for a Miami-based National Airline
Recording of this session via any media type is strictly prohibited.
Page 3
General Aviation Risk Issues
What is General Aviation?
• Aircraft Owners & Pilots Assoc.: All Civilian flying
except scheduled passenger airline service
• National Business Aviation Assoc. & General
Aviation Manufacturers Assoc. (GAMA) jointly
through “No Plane No Gain”: Focus on Business
Aviation
• GAMA: All aviation other than military and
commercial airlines
Recording of this session via any media type is strictly prohibited.
Page 4
General Aviation Risk Issues
What is General Aviation (cont’d)
• Wikipedia: All civil aviation operations other than
scheduled air services and non-scheduled air
transport operations for remunerations or hire.
• Merriam-Webster: The operation of civilian aircraft
not under the direct control of a common carrier
Recording of this session via any media type is strictly prohibited.
Page 5
General Aviation Risk Issues
General Aviation Facts
• 360,000 aircraft including helicopters, pistonpowered airplanes, turboprops and long-range
business jets worldwide. (223,000 in the U.S.)
• 35,000,000 flight hours per year. (23,000,000 in the
U.S. – 2/3rds for business purposes)
• 166,000,000 passengers annually.
• Primary training ground for airline pilots
• 600,000 pilots in the U.S. (majority are comm’l)
Recording of this session via any media type is strictly prohibited.
Page 6
General Aviation Risk Issues
General Aviation Facts (cont’d)
• Employs more than 1.2 million people in the U.S.
• 74% of flights do not carry executives. Time critical
sales, technical, middle management.
• 5000 public-use airports in the U.S. Airlines serve
only about 550.
• Airlines serve only about 70 major hubs and have
abandoned nearly 100 mid-sized cities in just the
last year.
Recording of this session via any media type is strictly prohibited.
Page 7
General Aviation Risk Issues
Risk Classification
• Aircraft - Business & Pleasure
• Aircraft – Industrial Aid
• Aircraft – Commercial
Charter / Aircraft Management
o Training
o Pipeline / Powerline Patrol
o Medical Evacuation
o Government Contractor
o
Recording of this session via any media type is strictly prohibited.
Page 8
General Aviation Risk Issues
Risk Classification (cont’d)
• Rotorwing
Med Evac
o Offshore
o Heli-logging
o Industrial Aid
o Pleasure & Business
o Air Charter
o Training
o
Recording of this session via any media type is strictly prohibited.
Page 9
General Aviation Risk Issues
Risk Classification (cont’d)
• Fixed Base Operations
Line Services (fueling, parking, catering, car rentals)
o Aircraft maintenance
o Aircraft completions / paint
o Aircraft Storage
o Aircraft / Parts sales
o Charter
o Aircraft rental
o Aircraft training
o
Recording of this session via any media type is strictly prohibited.
Page 10
General Aviation Risk Issues
Risk Classification (cont’d)
• Corporate Non-Owned
• Airports
• Ground Handlers
• Caterers
• Maintenance, Repair, Overhaul (MRO)
• Manufacturing (Airframe, Engines, Avionics,
Components)
Recording of this session via any media type is strictly prohibited.
Page 11
General Aviation Risk Issues
Typical Pleasure & Business Aircraft
Recording of this session via any media type is strictly prohibited.
Page 12
General Aviation Risk Issues
Typical Industrial Aid or Air Charter Turboprop aircraft. May also be
Pleasure and Business if “owner flown”.
Recording of this session via any media type is strictly prohibited.
Page 13
General Aviation Risk Issues
Typical Industrial Aid or Air Charter mid-sized Business Jet
Recording of this session via any media type is strictly prohibited.
Page 14
General Aviation Risk Issues
Typical Industrial Aid or Air Charter large-cabin long-range Business Jet.
Recording of this session via any media type is strictly prohibited.
Page 15
General Aviation Risk Issues
Typical Rotorwing Emergency Medical Evacuation
Recording of this session via any media type is strictly prohibited.
Page 16
General Aviation Risk Issues
Typical Fixed Base Operation ramp and hangar
Recording of this session via any media type is strictly prohibited.
Page 17
General Aviation Risk Issues
Typical Fixed Base Operation underground fuel farm and truck
Recording of this session via any media type is strictly prohibited.
Page 18
General Aviation Risk Issues
Typical Aircraft Maintenance hangar
Recording of this session via any media type is strictly prohibited.
Page 19
General Aviation Risk Issues
Typical Helicopter maintenance facility
Recording of this session via any media type is strictly prohibited.
Page 20
General Aviation Risk Issues
Paint preparation
Recording of this session via any media type is strictly prohibited.
Page 21
General Aviation Risk Issues
Completion Center paint and interior preparation
Airliner configured for corporate business travel
Recording of this session via any media type is strictly prohibited.
Page 22
General Aviation Risk Issues
Textile preparation for interior installation
Recording of this session via any media type is strictly prohibited.
Page 23
General Aviation Risk Issues
Typical Aircraft Maintenance, Paint Prep, Paint, FBO and Aircraft Storage
in one location
Recording of this session via any media type is strictly prohibited.
Page 24
General Aviation Risk Issues
Typical Airframe Manufacturer
Recording of this session via any media type is strictly prohibited.
Page 25
General Aviation Risk Issues
Bad things can happen in an aircraft hangar
Recording of this session via any media type is strictly prohibited.
Page 26
General Aviation Risk Issues
Selection of Insurers of General Aviation Risks
USAIG / USAU
Global Aerospace
AIG Aviation
Starr Aviation
Allianz
XL
Swiss Re
QBE
Phoenix Aviation / Old Republic
Berkley Aviation
W. Brown & Associates / Catlin
Houston Casualty / USSIC
Aerospace Insurance Managers
ACE USA
Great American Insurance Co.
Meadowbrook
Recording of this session via any media type is strictly prohibited.
Page 27
General Aviation Risk Issues
Corporate Non-Owned Aircraft Liability
• Liability arising out of the use of aircraft not owned
in whole or part by the corporation.
• Typical risk profiles:
Your company charters aircraft from a FAA certificated
Part 135 Air Taxi operator, or
o You have an officer or employee who uses an owned,
borrowed or rented aircraft for company business
o
Recording of this session via any media type is strictly prohibited.
Page 28
General Aviation Risk Issues
Corporate Non-Owned Aircraft Liability (cont’d)
• Use of Air Charter services
Due Dilligence
o Third Party Auditors – IBAC / IS-BAO Certified
o
– International Standard for Business Aircraft Operations
– Established or developing formal SMS program
Air Charter Safety Foundation
o ARG/US (Aviation Research Group)
o Wyvern
o
Recording of this session via any media type is strictly prohibited.
Page 29
General Aviation Risk Issues
Corporate Non-Owned Aircraft Liability (cont’d)
• Use of Air Charter services (cont’d)
o
Minimum Insurance Standards
–
–
–
–
–
–
–
–
–
–
Aircraft Liability (Specify minimum limit)
Additional Insured
Aircraft Hull (not less than market value)
Waiver of Subrogation
Primary Insurance
Breach of Warranty
Set-offs
Insurance company at least A. M. Best A+
30 day Notice of Cancellation
Certificate of Insurance
Recording of this session via any media type is strictly prohibited.
Page 30
General Aviation Risk Issues
Corporate Non-Owned Aircraft Liability (cont’d)
• officer or employee who uses an owned, borrowed
or rented aircraft for company business
Consider restrictions or prohibition
o Published corporate policy
o Secure copy of primary policy
o Secure as much coverage under primary policy
o Consider purchasing a Corporate Non-Owned Policy
o
Recording of this session via any media type is strictly prohibited.
Page 31
General Aviation Risk Issues
Own or Operate a Business Aircraft
•
•
•
•
Evaluate insured value and liability limits
Flight crew – annual simulator-based recurrent training
Active SMS program
Available coverages:
o Diminution of Value
o Turbine Engine Mechanical Breakdown
o Extra Expense coverages with no minimum period or daily limit, not less than 120 days.
o Trip Interruption coverage. Evaluate costs to continue a road-trip with a leased or
chartered aircraft.
o Liability and Hull War Risks
Recording of this session via any media type is strictly prohibited.
Page 32
General Aviation Risk Issues
Owned Aircraft Managed & Insured by a Third
Party Management Company
• Management Agreement – Review
• What happens if the Management Company
damages the aircraft while towing in or out of the
hangar?
• What happens if the Management Company violates
terms & conditions of their insurance?
Recording of this session via any media type is strictly prohibited.
Page 33
General Aviation Risk Issues
Questions?
Thank You
Steve Whitlock – [email protected]
Recording of this session via any media type is strictly prohibited.
Page 34
Questions?
Thank You
Steve Whitlock –
[email protected]
Recording of this session via any media type is strictly prohibited.
Page 35
Air Methods
Recording of this session via any media type is strictly prohibited.
Page 36
Eric Marsh
Risk Manager Air Methods Corporation
2 years with Air Methods
10 years insurance broker
Master’s Degree Aeronautical Science
Private Pilot
Navy P-3 Orion Hydraulics and Airframes
Mechanic
MBA Student
Recording of this session via any media type is strictly prohibited.
Page 37
Air Methods
HEMS – HELICOPTER EMERGENCY MEDICAL
SERVICES
387 AIRCRAFT
321 HELICOPTERS
26 FIXED WING
4000 EMPLOYEES
OPERATE IN 37 STATES
Sundance Helicopters – Las Vegas tour operator
Blue Hawaiian – Hawaiian tour operator
Recording of this session via any media type is strictly prohibited.
Page 38
Safety Management System
Recording of this session via any media type is strictly prohibited.
Page 39
Enterprise Risk Management
Recording of this session via any media type is strictly prohibited.
Page 40
What is ERM
Enterprise Risk Management – RIMS defines
ERM as a strategic business discipline
supporting the achievement of an
organization’s objectives by addressing the full
spectrum of its risks and managing the
combined impact of those risks as an
interrelated portfolio.
Recording of this session via any media type is strictly prohibited.
Page 41
What is SMS
Safety Management System – the formal, topdown business approach to managing safety
risk, which includes a systemic approach to
managing safety, including the necessary
organizational structures, accountabilities,
policies and procedures (FAA Order VS
8000.367)
Recording of this session via any media type is strictly prohibited.
Page 42
DEFINITIONS
Risk
Safety
Possibility of loss or injury
peril
Freedom from harm or
danger
Someone or something
that creates or suggests a
hazard
The state of not being
dangerous or harmful
Recording of this session via any media type is strictly prohibited.
Page 43
ERM
Encompasses all areas of
organizational exposure to
risk
Provides a structured
process for the
management of all risks
Prioritizes and manages
those exposures as an
interrelated risk portfolio
SMS
SMS - safety decision
making throughout the
organization
A structured means of
safety risk management
decision making
Increased confidence in
risk controls though
structured safety
assurance processes
Recording of this session via any media type is strictly prohibited.
Page 44
ERM
Seeks to embed risk
management as a
component in all critical
decisions throughout the
organization.
SMS
A safety promotion
framework to support a
sound safety culture
Recording of this session via any media type is strictly prohibited.
Page 45
SO WHAT!
Recording of this session via any media type is strictly prohibited.
Page 46
SMS = ERM
Recording of this session via any media type is strictly prohibited.
Page 47
DO YOU EVER WALK
AWAY FROM A PRESENTATION
THINKING, “THAT WAS GREAT
INFORMATION BUT I HAVE
NO IDEA HOW TO GET
STARTED!”
Recording of this session via any media type is strictly prohibited.
Page 48
Getting Started
SMS
ERM
SAFETY MANAGEMENT
SYSTEM
(SMS)
IMPLEMENTATION GUIDE
ERM STARTER KIT
http://www.rims.org/resources/ERM/Pages/ERMStarterKit.
aspx
http://www.faa.gov/about/initiatives/sms/reference_library
/policy_and_requirements/
Recording of this session via any media type is strictly prohibited.
Page 49
GETTING STARTED
THE FAA WEBSITE HAS A PLETHORA OF
INFORMATION TO HELP A RISK MANAGER
PREPARE A FORMAL SMS/ERM PROGRAM
http://www.faa.gov/about/initiatives/sms/
Recording of this session via any media type is strictly prohibited.
Page 50
GETTING STARTED
SAFETY MANAGEMENT INTERNATIONAL
COLLABORATION GROUP
• RISK BASED DECISION MAKING PRINCIPLES
http://www.skybrary.aero/bookshelf/books/2077.pdf
• THE SENIOR MANAGERS ROLE IN SMS
http://www.skybrary.aero/index.php/The_Senior_Manager%27s_Role_in_SMS
Recording of this session via any media type is strictly prohibited.
Page 51
INTEGRATING SMS AND ERM
IF YOUR ORGANIZATION IS
IMPLEMENTING AN SMS OR ERM
PROGRAM CAPITALIZE ON THE
MOMENTUM TO INTEGRATE THE
OTHER!
Recording of this session via any media type is strictly prohibited.
Page 52
INTEGRATING SMS AND ERM
BOTH PROGRAMS LOOK TO ACHIEVE THE
SAME BASIC PREMISE:
BY UNDERSTANDING OUR RISKS, THE
COMPONENTS INVOLVED IN THOSE RISKS,
AND HOW THEY AFFECT OTHER PARTS OF THE
COMPANY WE ARE ABLE TO BETTER MANAGE
THE RISK AND AVOID SURPRISES
Recording of this session via any media type is strictly prohibited.
Page 53
SMS IMPLEMENTATION LEVELS
4
3
2
1
0
CONTINUOUS
IMPROVEMENT
PROACTIVE
PROCESS
REACTIVE
PROCESS
PLANNING AND
ORGANIZATION
ORIENTATION AND
COMMITTMENT
Recording of this session via any media type is strictly prohibited.
Page 54
RIMS ERM STARTER KIT
Recording of this session via any media type is strictly prohibited.
Page 55
INTEGRATED MODEL
ORIENTATION AND
COMMITTMENT
PROACTIVE
0
3
COMMITT
DESIGN
ACTIVATE
MONITOR
REVIEW
IMPROVE
1
2
4
PLANNING AND
ORGANIZATION
REACTIVE
CONTINUOUS
IMPROVEMENT
Recording of this session via any media type is strictly prohibited.
Page 56
EVEN MORE GRANULAR
Recording of this session via any media type is strictly prohibited.
Page 57
OBTAINING THE BOARD’S BUY IN
The Company relies heavily on technology and automated systems to operate
its business and any significant failure or disruption of the
technology or these systems could materially harm its business.
Billing investigations and audits – State and federal statutes impose
substantial penalties—including civil and criminal fines, exclusion from
participation in government programs, and imprisonment—on entities or
individuals (including any individual corporate officers or physicians deemed
responsible) that fraudulently or wrongfully bill governmental or other thirdparty payers for services.
Our operations are affected by adverse weather conditions and seasonal
factors.
Recording of this session via any media type is strictly prohibited.
Page 58
OBTAINING THE BOARD’S BUY IN
• THE BEST PLACE TO START IS THE RISK FACTORS
SECTION OF THE 10K
• IF YOU ARE NOT PUBLICALLY TRADED HAVE A
MEETING WITH SENIOR MANAGEMENT AND
DISCUSS THEIR RISK ISSUES
• LET SENIOR MANAGEMENT KNOW THERE NEEDS
TO BE SOMEONE RESPONSIBLE FOR
IMPLEMENTING CORPORATE WIDE RISK
MANAGEMENT AND THAT SOMEONE SHOULD BE
YOU Recording of this session via any media type is strictly prohibited.
Page 59
OBTAINING THE BOARD’S BUY IN
WHAT DO THE CEO’S OF OTHER COMPANIES
THINK OF ERM?
DAN AKERSON – CHAIRMAN ANC CEO
GENERAL MOTORS:
“I THINK RISK MANAGEMENT IS AN ELEMENT
OF ALL GOOD BOARDS AND EXECUTIVE
TEAMS AND IT WILL ENSURE THE VIABILITY IN
DOWNTURNS AND HIGH RISK PERIODS……
Recording of this session via any media type is strictly prohibited.
Page 60
OBTAINING THE BOARD’S BUY IN
“THERE IS PROVEN, SCIENTIFIC EVIDENCE
THAT ORGANIZATIONS THAT HAVE A HIGHER
RISK MATURITY HAVE STRONGER FINANCIAL
PERFORMANCE.” – LOGIC MANAGER
POINT OUT WHAT YOUR COMPETITION IS
DOING!
Recording of this session via any media type is strictly prohibited.
Page 61
GOING THROUGH THE SMS PROCESS
Tatonduk Outfitters LTD
Peninsula Airways, Inc.
Northern Air Cargo, Inc.
Era Aviation, Inc.
Coastal Helicopters, Inc.
Taquan Air
Temsco Helicopters
Ryan Air (ATS), Inc.
Northern Air Services
Federal Express Corp.
GoJet Airlines, LLC
Endeavor Air
Trans States Airlines, LLC
121
121
121
121
135
135
135
135
145
121
121
121
121
EagleMed, LLC
United Parcel Service Co.
Flight Safety International
Aviation System Standards FAA
Air Evac EMS, Inc.
SpiritJets, LLC
Corporate Flight Mgt, Inc.
Aviation System Standards FAA
EagleMed, LLC
CHAMPLAIN ENTERPRISES
PIEDMONT AIRLINES INC
ATLAS AIR INC
BALTIA AIRLINES INC.
135
121
142
135
135
135
135
135
135
121
121
121
121
http://www.faa.gov/about/office_org/headquarters_offices/avs/offices/afs/a
fs900/sms/media/sms_newsletter.pdf
Recording of this session via any media type is strictly prohibited.
Page 62
GOING THROUGH THE SMS PROCESS
US AIRWAYS INC
DYNAMIC AIRWAYS LLC
JETBLUE AIRWAYS, CORP.
MOUNTAIN AIR CARGO INC
SKYLEASE 1, INC.
HYANNIS AIR SERVICE
POLAR AIR CARGO
WORLDWIDE INC
US AIRWAYS INC
DYNAMIC AIRWAYS LLC
JETBLUE AIRWAYS, CORP.
MOUNTAIN AIR CARGO INC
SKYLEASE 1, INC.
HYANNIS AIR SERVICE
121
121
121
121
121
121
121
121
121
121
121
121
121
PSA AIRLINES INC
CHAUTAUQUA AIRLINES INC
FRONTIER AIRLINES INC
REPUBLIC AIRLINES INC
SHUTTLE AMERICA CORP
MN AIRLINES LLC
GULF AND CARIBBEAN
CARGO INC
KALITTA AIR LLC
ABX AIR, INC
USA JET AIRLINES, INC
AIR WISCONSIN AIRLINES
UNITED AIRLINES, INC
121
121
121
121
121
121
121
121
121
121
121
121
Recording of this session via any media type is strictly prohibited.
Page 63
GOING THROUGH THE SMS PROCESS
Airnet System Inc.
Aitheras Aviation LLC
Executive Air Taxi
Executive Jet Management, Inc.
First Wing Aircraft Charter & Mgmt
Mercy St. Vincent
Midwest Aero Club, LLC
NetJets Aviation, Inc
Oak Air, LTD.
Priester Aviation
Travel Management Co LTD.
Ultimate Jet Charters Inc.
Bowling Green State University
University of North Dakota
School of Aviation
135
135
135
135
135
135
135
135
135
135
135
135
141
141
Aviator College
F & E Aircraft Maintenance
AAR Aircraft Services, Inc.
Propulsion Tech
Precision Turbines, Inc.
A/C DUCTING REPAIR
ST AEROSPACE
Jack Harper
K&S Helicopters
Makani Kai Helicopters
Med-Trans Corporation
Pinnacle Air Charter LLC
Reach Air Medical Service LLC
Rogers Helicopters
Schubach Aviation
141
145
145
145
145
145
145
135
135
135
135
135
135
135
135
Recording of this session via any media type is strictly prohibited.
Page 64
WELL SAID
JEAN ROSE – EXECUTIVE DIRECTOR GLOBAL
HUMAN RESOURCES GENERAL MOTORS
“ERM IF DONE PROPERLY LOOKS AT A CROSS FUNCTIONAL VIEW…….ALL OF
THE FUNCTIONAL AREAS, REGIONAL AREAS WEIGHING IN ON WHAT’S
HAPPENING. VARIOUS SUBJECT MATTER EXPERTS WEIGHING IN. THEY
ARE CARRYING AROUND THAT INFORMATION THEY NEED TO
UNDERSTAND ABOUT THE COMPANY AND THEN THEY ARE SHARING IT IN
A FORMAT WHERE SOMEONE ELSE MIGHT SAY I’M HEARING SOMETHING
IN FINANCE THAT MIGHT IMPACT HR, OR SOMETHING IN HR THAT MIGHT
IMPACT MANUFACTURING. IT’S A FORUM THAT ALLOWS EVERYBODY TO
TALK ABOUT THE CRITICAL RISKS OF THE COMPANY.”
Recording of this session via any media type is strictly prohibited.
Page 65
Questions, Final Comments and
Contact Information
Eric Marsh, Risk Manager
Air Methods Corporation
7211 S. Peoria St.
Englewood, CO 80112
P: 303.792.7550
C: 720.272.1299
Recording of this session via any media type is strictly prohibited.
Page 66
Roundtable
Recording of this session via any media type is strictly prohibited.
Page 67
Please complete the session survey on the RIMS14 mobile application.
Recording of this session via any media type is strictly prohibited.
Page 68

similar documents