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12/04/2014

Mitigating the High Cost of Ground-Handling Incidents

Flight departments should check to see if the FBOs they use meet the aircraft operator’s safety standards.

Business aviation has always been committed to safe operations, with safety management systems (SMS) being the latest product of continuing efforts to enhance safety. Hundreds of flight departments and air charter providers are in various stages of implementing an SMS, often choosing the International Standard for Business Aircraft Operations (IS-BAO). Many business aircraft operators also undergo third –party safety audits. And still more operators voluntarily implement various industry best practices. But do you know what safety policies and procedures your ground –handling provider has adopted?

“Many operators have invested substantial resources in growing their own safety management systems to improve safety and mitigate risk”, noted Mark Larsen, NBAA’s senior manager of safety and flight operations. “Operators should consider the safety of their asset when the pilot locks the door and walks away for the night”.

The Cost of Ground-Handling Incidents


Dr. Benjamin “BJ” Goodheart, director of aviation safety and claims management at AirSure Limited, a Golden, CO aviation insurance broker, said operators are often unaware of the high potential cost of ground-Handling incidents (see chart). AirSure’s historical average for general aviation ground-handling –related claims is $ 105,000. The highest general aviation ground-handling-related claim managed by AirSure in recent years was nearly $7.5 million.
“Aircraft operators are often surprised by the total value of a ground-handling-related claim, but the claim amount isn’t just for repair of the aircraft”, said Goodheart. Diminution of aircraft value vhen selling the airplane and loss of use of the aircraft while it is being repaired – which often means leasing or chartering another aircraft – make up a large percentage of ground-handling-related claims, he noted.
“Diminution of value of the [damaged] asset frequently ranges between 2 and 20 percent of the overall value of the aircraft, and knowing the true amount that an aircraft’s value has been diminished is difficult [to determine] until the actual sale, “explained Goodheart. “In a soft market, like we have know, damage history can make a big difference in the final selling price and length of time to sell the aircraft. If there are 20 aircraft for sale that meet the buyer’s requirements, why buy the one with damage history?”
Goodheart handles hundreds of claims a year, and approximately 80 percent of them are related to ground-handling-incidents, not flight-related-events. Although ground-handling events are not likely to be fatal or result in serious bodily injury, their frequency demands operator’s attention.

A New Ground-Handling Metric


In 2012, the international Business Aviation Council (IBAC), which manages the IS-BAO program, partnered with the National Air Transportation Association (NATA) to develop a new ground-handling audit standard – the International Standard for Business Aircraft Handling (IS-BAH), which was officially introduced in May. This new standard incorporates many of the guide-lines from NATA’s popular Ground Audit Standard, as well as elements of that association’s Safety 1st training program, but IS-BAH follows the format and existing procedures of the IS-BAO program.
“IS-BAH also gained a great deal of insight and guidance from the industry working groups that developed the initial drafts of the standard, “said Jim Cannon, IBAC’s IS-BAO program director. “IS-BAH will help ensure that registered ground-handling organizations are conducting their operations under a set o industry best practices. It will also help business aircraft operators using those facilities to verify that the organization has incorporated SMS processes”.
IS-BAH covers areas such as safety management, organization and personnel, training and proficiency, facilities and ramp procedures, and more. The standard is based on SMS principles of defined policies and procedures, risk management, safety assurance and safety promotion. The integration of NATA’s Safety 1st training concepts is a critical component.
“The IS-BAH standard mirrors the IS-BAO standard in format and intent but represents FBO/Handling agency industry best practices” said Cannon. “Like IS-BAO, IS-BAH integrates the principles of safety management systems based on ICAO [International Civil Aviation Organizations] standards”

Industry Support for an FBO standard


Goodheart is a strong supporter of IS-BAH. “ Many operators pay only cursory attention to a ground handler’s practices and procedures, but they are interacting directly with their own safety system. It makes sense for IS-BAO- compliant operators to look for IS-BAH- registered facilities because they speak the same language, follow the same processes and demonstrate the same commitment to safety and continuous improvement”.

Business aircraft operators have periodically subjected their own operations to third-party safety audits, but not many aircraft operators expect their ground-handling facilities to have been audited.

“Adequate and frequent training [of FBO personnel] is so important, “added Goodheart. “Business aircraft pilots typically attend extensive training twice a year. How often do line-service technicians attend training to operate the same equipment? Flight training has evolved dramatically in the past few decades, but ground training, aside from technological advances in delivery methods, remains essentially where it was 30 years ago.
There are some fantastic training tools available but frequency of training is often insuvicient”
“I am so pleased IBAC ha developed this new standard for FBOs, “said Steve Charbonneau, senior manager of aviation training and standards at Altria Client Services Inc. “The NBAA Safety Committee has been pursuing this type of initiative for years, and we’re happy to see forward movement through the new IS-BAH program”
“We’ve been tracking hazard and incident reports over the last few years and we’ve noticed a trend that the majority of our incidents are ground-handling related.” Charbonneau continued. “w are taking this risk very seriously. As a result of a recent incident, we are considering the possibility of starting a desk audit questionnaire to begin to discern which FBOs have done thorough training and might be on their way to meeting the new IBAC standard’.

Auditing FBOs


Aircraft operators for decades have periodically subjected their own operations to third-party safety audits, but not many operators expect their ground-handling facilities to have been audited. Larger and more sophisticated aircraft operator sometimes implement a proprietary audit to monitor their ground handlers’ operations and safety programs, but he typical flight department or air charter company simply does not have the resources to oversee organizations that provide ground handling.

“Aircraft operators often have a list of qualifications for choosing an FBO – Fuel price, loyalty points earned, quality of facilities and overall customer service”, said Goodheart. “ Safety often lies near the bottom of the qualifications list, and operators may not get that far. If the fuel prices is right and loyalty points are awarded by an FBO, that’s the winner”.

With the debut of IS-BAH, companies now have a new tool to vet the FBOs they use. There is also a good financial reason to look at a ground services provider’s insurance coverage. “If there is a ground-related claim and the FBO involved is underinsured or liability is unclear, the aircraft operator might find themselves taking the hit for the claim,” said Goodheart. “It pays to know who you’re doing business with”.

Develop a Standard, Ensure It Is Met


Regardless of what method an aircraft operator chooses to vet their ground-handling providers, operators should establish minimum safety, training and operational standards they require of their FBOs, and operators should implement procedures to verify those standards are being met on an ongoing basis.
“For business aircraft operators that have incorporated an SMS, the IS-BAH program provides an excellent model to monitor third-party vendors, such as FBO and handling agencies”, said Cannon.
And in the short time since IS-BAH was introduced, “the reaction from the FBO/handling segment of the industry has been tremendous, far more positive than we had anticipated”, said Cannon.

For more information
Visit NBAA’s IS-BAH resources page at www.nbaa.org/is-bah, and NBAA’s aircraft insurance resources at www.nbaa.org/insurance.

A Tiered Approach to Mitigating Ground Handling Risks
Dr. Benjamin Goodheart, director of aviation safety and claims management at AirSure Limited, recommends that aircraft operators consider a tiered approach to mitigating risk when choosing an FBO.
>Some Operators send a self-audit form asking basic questions about the FBO’s safety, training and security practices.
>Other Operators require that their flight crews complete FBO audit form at least once a year.
>Still others send their safety manager or another individual trained to conduct audits to do on-site audits of FBOs. However, because of the time and resources needed to conduct an on-site inspection, most operators that perform such audits only do so at FBOs used on a frequent basis or where their aircraft are based.

Source: NBAA Insider