Safety Management Paying Dividends at Air Transat

Risks down, costs down, incidents down, quality up, trends favorable

MONTREAL – Safety pays. More precisely, the time, effort and management discipline invested to improve safety translates into reduced costs.

For an attention-getting statistic, implementing a safety management system at Air Transat [Toronto: TRZ] has produced directly measurable cost savings of more than $1 million per month. This cost avoidance has been achieved at an airline specializing in vacation charter flights currently operating a fleet of 13 widebody aircraft, mostly Airbus A310 and A330 twinjets. For larger carriers, the potential cost savings are greater.

Air Transat’s success relates directly to the goal recently announced by the International Air Transport Association (IATA) to achieve a 25 percent reduction in accidents. One of the foundation stones of that effort is a call for half of IATA’s 270 member airlines to implement safety management systems (see ASW, Nov. 17). Air Transat’s experience implementing such a safety management system shows the potential benefit for the industry at large.

Capt. Michael Dilollo, the carrier’s flight safety director, told ASW, “If your safety culture is right, your quality is right, you’re improving steadily over time, and your trending is stable.”

This was not the situation three years ago, when Allen Graham was brought in as chief executive officer.

“When I took this position, the airline had all the basics in place, but the operation lacked focus. Safety is now the first item in the daily briefing,” Graham said.

As examples, deferred maintenance items were not being tracked, nor were open items on the minimum equipment list (MEL), Dilollo recounted.

“We wanted to be able to see things before scheduling fell apart, not react to it,” he said.

Initially, he conceded, “We underestimated the magnitude of the malaise.” Efforts begun were not completed. “We had to eliminate the ‘open everything and close nothing syndrome.’ “

Two events added impetus to the internal reform under way. The first was the Aug. 24, 2001, deadstick landing in the Azores of Air Transat Flight 236. The A330 with 306 passengers and crew aboard lost all fuel on a trans-Atlantic flight from Ontario to Lisbon and glided to a deadstick landing at Lajes airport in the Azores. A fuel leak and an open crossfeed valve led to loss of all fuel and shutdown of both engines. The pilots, Capt. Robert Pich� and First Officer Dirk de Jager, brought the airplane to a successful unpowered landing.

In the wake of that accident, Air Transat’s authority to conduct ETOPS (extended range operations) beyond 60-minutes for its three A330s was suspended by Transport Canada, and a $250,000 fine (U.S. $160,000) for maintenance deficiencies was imposed on the airline (see ASW, Sept. 10, 2001). Although full 120-minute ETOPS authority for its A330s has since been restored, the saga of Flight 236 was characterized by Dilollo as a “watershed event” that reinforced the commitment to improve safety across the board.

The terrorist attacks of Sept. 11, 2001, marked the second event spurring Air Transat’s internal reform – heightening the focus on security.

The overarching principle in its approach is that safety and quality go hand-in-hand. “Quality is defined as providing safe, reliable aircraft, on time, on budget, and snag- free,” Dilollo said.

Considerable effort has been devoted to establishing basic statistical controls over the maintenance operation. The goal has been to reduce lead time and rework, and to improve the accuracy of cost estimates. When Graham took the helm in the fall of 2000, maintenance activity costs were underestimated 44 percent of the time, and overestimated 41 percent of the time. In other words, costs were estimated correctly just 15 percent of the time. Five “S’s” guide activity on the shop floor: to sort, straighten, sweep, standardize and sustain the effort.

Air Transat created a fleet manager position for each of the aircraft types operated: A310, A320, A330, B757 and L-1011. The L-1011s will be phased out in spring 2004, as the carrier is trying to reduce the number of different aircraft types it operates.

“Our objective is to get two just two types of aircraft,” Dilollo said.

Major staff changes have occurred during the course of implementing a safety management system. The previous directors of maintenance and quality assurance have been replaced. New positions have been created: a director of maintenance, a director of powerplants, and a director of maintenance control.

Overall progress is tracked at weekly meetings. “You can bet that people come prepared to these meetings,” Dilollo said.

In terms of “data-driven” safety, Dilollo presented a number of indicators showing that Air Transat is operating more safely today. In terms of accidents and incidents, the number is down dramatically:

Further progress is expected. “Over the next 12 months we want to reduce the level of risk, to reduce accident and incident costs, and decentralize safety management, making the functional departments each take ownership of their safety management now that the culture is taking root,” Dilollo said.

Evidence that a reformed safety culture has found fertile soil comes from the number of safety action reports submitted by employees. At Air Transat, they are dubbed QSAP reports, for quality safety action program. The acronym is a variant of ASAP, for aviation safety action program, a program of confidential reporting instituted by many U.S. carriers, following the model established by American Airlines [NYSE: AMR].

As measured by the number of QSAP reports submitted per 100 flight segments, Dilollo said an average of 3-4 are being submitted, as compared to 1-2 in 2002. “The increased number of reports tells us the new safety culture has germinated and is growing,” he said.

Ground damage has been reduced dramatically. As an example, the flap canoes on the carrier’s A310s were being dinged at an average rate of 1.7 per month. “We’ve brought that rate way down. We have not had one flap ding in eight months,” Dilollo said proudly. Ramp damage costs U.S. carriers an estimated $2 billion per year and, given gaps in reporting, may cost twice as much (ASW, Oct. 6). The reduction in ramp damage is part of a 60 percent decrease in “irregular operations” at Air Transat (see ASW, Aug. 25).

In terms of open MELs per aircraft, the progress has been similarly impressive:

Similar progress has been made in reducing the number of cabin snags per aircraft:

“The picture tells us that we’re improving, but we want to be a world benchmark, that’s where we want to go as an organization,” Dilollo declared.

“There is a consistent, focused effort to drive the trends down,” he said.

Graham said, “The target is zero open MELs across the fleet, and the same for cabin snags.”

Describing safety and quality as “interdependent,” Graham said the cost savings from the safety management programs put in place amount to “several millions of dollars.” While the precise figure is proprietary, the amount is upwards of $1 million per month and over the course of a year gets well into the double-digit range. Graham pointed out that the overall improvement in the quality of the operation also “helps in negotiating with your insurer.”

Is the progress made at Air Transat “translatable,” as it were, to other carriers? The argument could be made that as a charter carrier for travelers on vacation, the carrier is not facing the relentless daily pressure of a scheduled airline. Graham demurred, saying that during the peak of the travel seasons in summer and winter his airplanes are operating 12-14 hours daily. That utilization is as demanding as for a scheduled carrier.

Dilollo said the carrier plans to have a flight data monitoring (FDM) program operational by February 2004. “We’ll be using a third party for analysis of the data and feedback,” he added. Dilollo said that with FDM, the carrier will have another tool to identify operational risks and to reduce them.

From the regulator’s perspective, a Transport Canada (TC) official lauded the carrier’s effort. “Air Transat is one of the leading companies establishing a safety management system,” he said. “We are working closely with Air Transat, and we’re fully confident this effort will improve the safety of [its] operations.” It should be noted that, per TC mandate, all Canadian airlines must have safety management systems in effect by the spring of 2005.

With the building blocks already in place at Air Transat, Dilollo said the view forward is one of “continuous process improvement.”

“This is not temporary in nature,” he said. “The argument for safety is that it’s important to measure where you are today against the baseline of where you were.”

By that measure, Air Transat is safer today than yesterday, and its management is committed to being even safer tomorrow. >> Dilollo, e-mail:[email protected]<<

‘Safety is good business’:The Safety Policy

Air Transat is committed to conducting its operations efficiently and in a manner that ensures the safety of its employees, customers, suppliers and aircraft. It is Air Transat’s policy that the safety management system be used to systematically reinforce safety as a corporate and individual core value. This will be achieved by institutionalizing the following principles:

• All incidents can be prevented.
• Management is responsible for the prevention of incidents.
• All hazards can be safeguarded.
• Training is essential.
• Safety is good business.
• Working safely is a condition of employment.
• Safety and quality are interdependent.
• Safe conduct will be recognized and rewarded.

Dated: Nov. 19, 2002