Thank you, Sarah [MacLeod]. I always look forward to meeting with ARSA for at least a couple of reasons. One, you do things that matter—even though the average passenger doesn’t even know you’re there. And two, you do things that make a real difference in the system—and trust me on this, every passenger reaps the benefits of the professionalism ARSA members display each and every day.

As you’re aware, the FAA is working hard at becoming more nimble, more responsive to our stakeholders as this industry evolves. The Administrator has put four top initiatives in place, and he’ll be talking more about this tomorrow. But there is one of those initiatives—risk-based-decision-making—that I’d like to drill into a bit today.

Any discussion of how we’re learning to adapt has got to involve risk-based decision-making. This approach allows us to put our resources in the places where we’ll get the biggest reduction in risk. You’ll hear the phrase risk-based decision making many, many times in the future. We want to make use of the safety data available, determine areas of greatest safety risk, and prioritize our safety efforts accordingly.

Through our Risk-Based Decision Making efforts, we’re putting measures in place to be able to share safety data among all the players. This includes people inside the different lines of business at the FAA, industry, and our international peers.

This will lead to a broader spectrum of available data and put us in the place to make smarter decisions, be more informed. The more you use it, the more you realize that using data is a good thing, a smart thing.

The bottom line here is that risk-based decision making portends to be a game changer. It will help change how we oversee carriers. Flight Standards will be able to do more delegation. Certificate holders will be able to take responsibility for safety management. This will be a new day for all of us.

Now, with that as a backdrop, let me drill down into the impact of risk-based decision-making on safety audits. I’ve been thinking quite a bit about the overabundance, the duplication of effort, that I’ve been seeing with audits.

There’s little disagreement that safety audits can be an important safety tool, but there’s also little disagreement that the pendulum has swung too far.

Carriers are utilizing more contract MRO facilities to take care of their maintenance needs. Traditionally, surveillance of MROs has been conducted by both part 121 and 145 FAA certificate management offices, resulting in multiple inspections at some MROs—almost weekly. Regrettably, we’re faced with a queue conducting the audits: regulatory agencies and air carriers, internal audits conducted by repair facilities within the United States and regulatory agencies and air carriers globally.

Let me bring it home with an example, and, unfortunately for some of you, this won’t be as hypothetical as you wish it were. Let’s say I own ACME repair station. I have an FAR 145 certificate. I do heavy maintenance for United, for Delta, for American, for JetBlue and for Southwest. I’m a busy guy who’s running a busy shop.

Here’s where things get really busy. The FAA FSDO that oversees my 145 certificate has a schedule for conducting audits of my facility to ensure I am compliant. No argument there. I want my operation to be flying right. But, in addition to this, the CMO for each of the airlines I listed before also comes in and does separate audits equally of their own. Equally rigorous. Equally comprehensive. In addition to the FAA audits, the MROs conduct a series of their own internal safety audits.

And now, here comes another layer. I also do work for foreign operators. And naturally, their CAAs also come in and do audits. Equally rigorous. Equally comprehensive. You can see where this is going. Everyone wants to follow the rules, and this is how they follow the rules. And keep in mind that virtually all of these audits look at the same things, consideration of the results of any other audits.

If you were ill, and you had a cardiologist, a general practitioner, a rheumatologist, a nephrologist and a podiatrist, and they all ordered the exact same blood test a few days apart, well, you get the idea.

That’s a compelling example, and still, I can’t emphasize enough that auditing is an essential method for assessing compliance with aviation safety standards. Audits are foundational when it comes to providing a level of confidence that regulations and processes are being adhered to.

Audits are a good, but you can have too much of a good thing. The number of audits that you’re being asked to handle is going up, with no risked-based data decision-making to support safety or efficiency. We can’t have that. Multiple audits are more than just redundant. At a time when we’re all trying to do more with less, redundant audits are an inefficient use of resources. There’s an argument going on, and I think it has merit about whether these redundant audits are productive, or if they even have the desired effect of enhancing safety through oversight.

That example illustrates the FAA’s move to a more risk-based approach to system safety. When fully implemented, the FAA will be able to make smarter, risk-based decisions to improve safety in the aviation system within the United States and internationally. My hope is that these redundant audits will be removed just like you get rid of excess branches from a tree. You see what you don’t need, what’s just getting in the way, and you cut it off.

We’re developing and harmonizing the process and procedures to conduct streamlined auditing of MROs nationally and globally. We continue to meet with ICAO and the aviation industry to jointly establish common regulatory acceptance of oversight standards between regulators for audits. This is improvement on a global scale.

I’d be remiss not to mention that we’re also focusing on a safety oversight model for MROs called Safety Assurance System—SAS. It’s evolved into a risk-based, data supported decision-making process. As such, we will focus on risk-based inspections supported by data, in lieu of random or calendar based inspections.

We continue to work with industry and trade associations like ARSA to streamline the process and enhance the oversight based on the supported data. The end-game here is to put an end to an auditing philosophy that is based on the principle that we do it this way because we’ve always done it this way. I think that’s how we got to the place we’re at.

In point of fact, the safety oversight model used by the FAA’s Flight Standards Service is evolving into a risk-based, data supported decision making process. You work on what’s important, which makes your work much more focused and much more efficient. Flight Standards now is focusing on risk-based inspections supported by data, in lieu of random or calendar based inspections. It’s like those stickers you get in your car that tell you to change your oil every three months. Everybody knows that the calendar isn’t the best measurement to use in situations like that.

So Flight Standards is putting an inspection concept in place that will result in a process of sharing inspection data and reducing the number of unnecessary or repetitive inspections. This will support risk-based decision making for part 145 repair stations and the aviation safety inspectors with oversight responsibility of MROs.

One thing is clear, and that is this isn’t going to happen on its own. In a nutshell, we need you. We need MRO participation in the sharing of audit data. And we have to define how to quantify cost savings the program concept will generate, and how best to gather the information required to document the savings. You will play a big role there.

Arguably, the most important move we can make with all of this information comes in the form of data sharing. The mantra here is that there can be no secrets in safety. Not disclosing safety information is just like hiding a “bridge out” sign. You might be saving someone else’s life just by disclosing an issue that’s popped up on your hangar floor.

We get a lot of input from ASAP, but much of it comes from the airlines. We have 46 airlines participating in ASIAS sharing their ASAP data, but only three MROs. I’d really like to know why. Maybe the airline techs see success from the pilot side, and the MRO technicians don’t always have the opportunity. But I firmly believe that there is a wealth of professionalism, experience and wisdom on the shop floors of ARSA members, and we need to tap into that. The best risk-based decisions are made with a full understanding of the risk. Without your data, we don’t have that.

I’ve covered a lot of ground, and raised a number of points. Steve Douglas, manager of AFS’s Aircraft Maintenance Division, will sit on the 9:30 Maintenance panel, and he will be speaking about this in much more detail. The takeaway for today is that we’ve heard what you’ve had to say about audits, and we’re doing something about it. We’re moving toward a risk-based decision-making model, but that model depends on data input. And we need your help on that. Given the professionalism for which this organization is known, I think the best is yet to come, and I’m confident that we’re going to make a big leap in safety when it does. Thank you.