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							                                                                              1
                   FEDERAL AVIATION ADMINISTRATION

                             +   +    +   +   +

                 INTERNATIONAL AVIATION SAFETY FORUM

                     “SAFETY FROM TOP TO BOTTOM”

                             +   +    +   +   +

                            GENERAL SESSION

                      THURSDAY, OCTOBER 2, 2006

                             +   +    +   +   +

                         Westfields Marriott
                    17450 Conference Center Drive
                      Chantilly, Virginia 20151




ROBERT A. STURGELL Deputy Administrator, Federation
                    Aviation Administration
MARY E. PETERS      Secretary,     Department      of
                    Transportation
MARION C. BLAKEY    Administrator, Federal Aviation
                    Administration
ROBERTO KOBEH GONZALEZ President of the Council,
                    International   Civil    Aviation
                    Organization
GIOVANNI BISIGNANI  Director   General    and   Chief
                    Executive                Officer,
                    International                 Air
                    Transportation Association
JOSEPH H. BOGOSIAN  Assistant    Administrator    for
                    International Aviation, Federal
                    Aviation Administration




                            C-O-N-T-E-N-T-S

                              NEAL R. GROSS
                      COURT REPORTERS AND TRANSCRIBERS
                          1323 RHODE ISLAND AVE., N.W.
(202) 234-4433            WASHINGTON, D.C. 20005-3701    www.nealrgross.com
                                                                         2

AGENDA ITEM                                               PAGE

Welcome
      Robert A. Sturgell                                       3
      Mary Peters                                              8

The Challenge
      Marion C. Blakey                                       16

Keynote Address
      Roberto Kobeh Gonzalez                                 28

The Global Perspective on Aviation Safety
      Giovanni Bisignani                                     42




                         NEAL R. GROSS
                 COURT REPORTERS AND TRANSCRIBERS
                     1323 RHODE ISLAND AVE., N.W.
(202) 234-4433       WASHINGTON, D.C. 20005-3701    www.nealrgross.com
                                                                                       3
1                             P-R-O-C-E-E-D-I-N-G-S

2                                                                     8:53 a.m.

3                      MR.       STURGELL:       Great,        good     morning,

4    everybody.         If I could ask you to take your seats,

5    we'll get started here.             Thanks.       I'd like to welcome

6    everybody        to     the    third    annual     FAA      International

7    Aviation Safety Forum.              For those of you joining us

8    for the first time, it's a pleasure to have you here,

9    and for our repeat performers, thanks for coming back.

10    We've got a great program lined up.

11                     It's a privilege to have so many people

12   here from so many parts of the world who are committed

13   to making air travel even safer than it is today.                           And

14   this       International        Form     would    certainly         not      be

15   possible without the support from the Air Transport

16   Association,          and     the   International          Air   Transport

17   Association.          And I'd also like to thank our generous

18   corporate        sponsors      as   well,       Boeing,      Airbus,        the

19   National         Business      Aircraft      Association,          American

20   Airlines,         Bombardier,          FedEx,     General        Electric,

21   Honeywell, Southwest Airlines, UPS, Zuchert Scout &

22   Rasenberger,            the     Aeronautical         Repair         Station

23   Association, JetBlue, SAE International, TDG Aerospace

24   and the Airline Pilots Association.                      Thanks very much

25   to all of you for your continued support and for your

                                    NEAL R. GROSS
                           COURT REPORTERS AND TRANSCRIBERS
                               1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433            WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                        4
1    commitment to aviation safety.                     Thanks.

2                            (Applause)

3                            This morning, we are very privileged to

4    have the President of ICAO, Roberto Kobeh Gonzalez, to

5    deliver          the     keynote     address    and   also   Mr.    Giovanni

6    Bisignani of IATA will provide a global perspective on

7    aviation safety.                This afternoon, I think we've got a

8    real treat at the luncheon.                     Elon Musk will be here

9    and he's going to talk about the rapidly evolving

10   space tourism industry.                  After that concurrent panel

11   sessions start at 2:30 and we've got a great group of

12   panelists on hand to talk about such subjects as the

13   safety management system, emerging risks in airport

14   safety,           globalized         nature     of    manufacturing          and

15   maintenance and an issue that we get asked about a lot

16   here in the United States which is safety and the

17   privatization of air traffic control services.

18                           And also, please don't forget to check out

19   the exhibits over the next two days that right out

20   here to my right.               You'll see what's on the horizon in

21   terms of research and development, new technologies,

22   procedures, and safety practices.                       And I think that

23   you'll           find    them    most    informative.        All     of      the

24   information you need on the exhibits is right in your

25   program so please reference that.                        I think what is

                                        NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701     www.nealrgross.com
                                                                                          5
1    different          this     year     is   we've      included     some       more

2    sessions on general aviation and I think that's an

3    area that's growing worldwide.                      It's certainly a huge

4    population here in the United States and I hope that

5    discussion will be of interest to everybody as well.

6                        We've      got    a    very     impressive      array       of

7    international         safety         talent     here    today     and      we're

8    looking          forward       to     high     level     and    provocative

9    discussions during both the plenary and breakout panel

10   sessions.          Now, to save time, we're introducing our

11   panelists in print.                 So in your registration packet,

12   you'll find a booklet with the biographies of today's

13   speakers and they're all listed in order of their

14   appearance on today's program.                       In addition, we are

15   documenting today's proceedings and will be making

16   them available on line.

17                       Now, if you have any questions, we've got

18   FAA staff members on hand who are going to be happy to

19   help you.           And if you look for the people that are

20   wearing the staff ribbons, that's where you need to

21   take        your    questions.               Most    important       are       the

22   evaluation forms that are in your registration packet.

23    We've done this for the last two years and what we

24   rely on are your comments in those evaluations forms

25   to make this conference suitable to your desires and

                                       NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                          6
1    the things you want to get out of it.

2                         So please take the time to fill those out

3    for us and drop them in the box just outside of this

4    room.            This year, again, because of the great number

5    of international attendance and representation, we're

6    providing            simultaneous             interpretation        in       five

7    languages;           Arabic,        Chinese,       French,     Russian         and

8    Spanish.           And also for presentations in any of these

9    languages, you can hear it in English by using the

10   translation equipment.                    Again, for more information,

11   please reference your program or ask one of the staff

12   members for assistance.

13                        If      you        are    using     the    translation

14   equipment, please leave it in the room as you leave

15   the room.            We have that in every one of the rooms

16   where       we're     going        to   have    sessions     over   the      next

17   couple of days.             So please leave the equipment behind.

18   And the last thing I'll say is if you have cell phones

19   or pagers, please turn then off during the sessions or

20   put them in the silent mode.                       We'd appreciate that.

21   Two more housekeeping items here.                      If you need airport

22   transfers, just check with the hotel desk and we will

23   also be taking questions from the audience during all

24   the sessions over the next two days.                             We'll have

25   microphones on hand so everyone can hear your question

                                        NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                            7
1    and please don't be shy.

2                           So now, let's get to the real reason why

3    we're here and that is to talk about safety.                            Aviation

4    is really an incredible way to travel.                         But we know we

5    can and we must continue to make air travel safer and

6    that's           the        whole     idea     behind     this    conference,

7    assembling the best minds in aviation safety, putting

8    together a provocative program, placing key issues on

9    the table and building safety partnerships.                                So I'm

10   very pleased to kick things off by introducing our

11   first speaker who may be new to many of you but she's

12   certainly no newcomer to transportation.

13                          Mary         Peters     brings      a     lifetime         of

14   experience             to    transportation        issues      from   both       the

15   private and public sectors.                        From 2001 to 2005, she

16   served           as     the         head     of    the     Federal       Highway

17   Administration where she led efforts to improve safety

18   and security, reduce traffic congestion, and modernize

19   America's roads and bridges.                       She encouraged the use

20   of new technologies that reduced construction time and

21   expense, resulting in safer, longer-lasting highways.

22   On the state level, Mary Peters previously served as

23   the      top      executive           at     the   Arizona     Department         of

24   Transportation               from     1998    to   2001   where    her     duties

25   included not just surface transportation, but also

                                          NEAL R. GROSS
                                 COURT REPORTERS AND TRANSCRIBERS
                                     1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                  WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                          8
1    responsibility for the state's airports, including one

2    of the fastest growing in the region.

3                         When   President      Bush     nominated          her      to

4    become Secretary of Transportation he had this to say,

5    "She's an innovative thinker, she knows how to set

6    priorities and solve problems.                   Mary will work closely

7    with state and local leaders to insure that America

8    has a state of the art transportation system that

9    meets the needs of our growing economy.                        So ladies and

10   gentlemen, please join me in welcoming the 15th U.S.

11   Secretary of Transportation, Mary Peters.

12                        SECRETARY PETERS:           Bobby, thanks so much

13   for that kind introduction and I certainly am very

14   pleased to have the opportunity to be here with you

15   today.           I    wanted      to   stress      that        my   one-month

16   anniversary as Secretary is tomorrow, so coming to

17   this event to be with you here today was so important

18   to me that I wanted to make sure it happened in my

19   first month.

20                        On behalf of President Bush and on behalf

21   of the United States of America, and of course, the

22   U.S.      Department        of   Transportation,          it   is   my     great

23   pleasure to welcome you here today to the third annual

24   International Safety Forum.                As we gather here today,

25   news of Sunday's tragic crash in Abuja, Nigeria is

                                      NEAL R. GROSS
                            COURT REPORTERS AND TRANSCRIBERS
                                1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433             WASHINGTON, D.C. 20005-3701          www.nealrgross.com
                                                                                                 9
1    fresh in our thoughts.                     This, and other incidents,

2    including           the     jet    that     went     down         in     Lexington,

3    Kentucky          in     August,     are   reminders         of    why       we     must

4    always           keep    safety     clearly     on    all         of     our      radar

5    screens.            So many precious lives can be lost in a

6    single moment and our hearts certain ache for the

7    victims of these tragedies and for their families.

8                            I had an opportunity to visit with Senator

9    McConnell shortly after the airline crash in Lexington

10   and he mentioned how the whole community was grieving

11   because so many of those aboard the plane that day

12   were folks well-known throughout the Lexington area.

13   At the same time our resolve to become stronger than

14   ever to make sure that we build safety considerations

15   into every transportation decision, all of us, all of

16   the time.

17                           So it's an honor to be here with so many

18   leaders from the world aviation community and I would

19   like         to         especially      welcome       our          distinguished

20   international guests to the United States.                                I want to

21   also thank Administrator Blakey for all that she and

22   her       team,          including     Deputy        Administrator                Bobby

23   Sturgell, have done to make sure that this conference

24   is a great success.                Congratulations and thank you to

25   both of you as well.                As many of you know, as the head

                                        NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701              www.nealrgross.com
                                                                              10
1    of Federal Aviation Administration, Marion Blakey was

2    a driving force in establishing this safety forum.

3    Her background, both at the National Highway Traffic

4    Safety Administration and the National Transportation

5    Safety Board, make Marion uniquely qualified to lead

6    this effort and someone who knew how important it was

7    to have this safety forum.

8                     When the idea was proposed, three years

9    ago, some asked whether we needed such a forum and

10   whether or not it would add value.                Well, today that

11   answer is clear.           Looking across this room it is

12   evident that there is a strong interest in all aspects

13   of global aviation in the aviation community coming

14   together to advance safety.             In fact, Marion told me

15   that this conference was over-subscribed, more people

16   wanted to come than there was room for even in this

17   great hall here today.            Nearly 500 top leaders are

18   attending this conference, representing 50 nations and

19   the breadth of the aviation and aerospace community.

20                    As Bobby said, our proceedings are being

21   translated       from     English       into      five     languages,

22   demonstrating       the    importance       of    this     conference

23   worldwide.       But most important the numbers speak for

24   themselves and the benefit of coordinated industry and

25   government efforts to improve safety.                    The rate of

                                NEAL R. GROSS
                        COURT REPORTERS AND TRANSCRIBERS
                            1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433         WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                    11
1    major       aviation       accidents      has    decreased      across        the

2    globe by 25 percent during the period of 2001 to 2005

3    as compared to the previous five-year period and even

4    with the recent crashes that I mentioned, 2006 is

5    shaping up to be the safest year ever in aviation

6    around the globe.               Here in the United States aviation

7    today        has    enjoyed      an    unparalleled         safety    record.

8    Prior to the Lexington crash a record, 2.7 billion

9    passengers flew without a single onboard fatality on

10   American commercial flights.                    I owe thanks to all of

11   you for that incredible safety record.

12                       But we must continue to raise the bar.

13   When        I      was     honored       to     become       Secretary         of

14   Transportation last month, I let our employees know

15   that safety is the top of my list of priorities.                               We

16   are also committed to improving the performance and

17   the reliability of our nation's transportation system

18   and to apply 21st Century solutions for 21st Century

19   transportation challenges, including new approaches to

20   funding to deal with our aging infrastructure across

21   the broad spectrum here in the United States.                             But I

22   feel that we must always, always put safety first when

23   it comes to transportation priorities.                       That goes for

24   our      roadways,        our     pipelines,       most     certainly         our

25   runways and our skies as well.

                                      NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                    12
1                          Just yesterday I returned from the Midwest

2    where I had the opportunity to sit down with some

3    veteran air traffic controllers and to join some of

4    our newest recruits in training exercises.                             I came

5    away from that visit with a very deep appreciation for

6    the work that they do.                   It's intense, it's complex,

7    and      it      is    absolutely        vital    to    keeping     tens       of

8    thousands of flights moving through US air space daily

9    without incident.                 And that job promises to become

10   even more complex and challenging in the future.

11                         Passenger     volumes       in   this   country         are

12   racing to the one billion mark within this decade.

13   Meanwhile companies like Cessna, whose assembly line I

14   also visited in Kansas, are preparing for delivery of

15   thousands of new very light jets, which will usher the

16   largest increase in air traffic since the 1960s.

17                         Many   of    the    planes       will   be    operating

18   outside of the United States, as the global demand for

19   aviation continues to climb.                     So it's no coincidence

20   that we have a significant general aviation presence

21   in this forum here today, from participation on panels

22   to tomorrow's guest speaker, Phil Boyer, President of

23   the Aircraft Owners and Pilot's Association.                                When

24   President Bush swore me in, he noted that our nation

25   is fast outgrowing our aviation capacity.                          He charged

                                       NEAL R. GROSS
                             COURT REPORTERS AND TRANSCRIBERS
                                 1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433              WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                       13
1    me with modernizing our airports and our air traffic

2    control system to meet that growing demand and we're

3    certainly making steady progress in doing so.                                    The

4    United           States   Government       has    plans      to   hire     almost

5    12,000 new controllers over the next 10 years to keep

6    up with the growing air traffic demand.                              And we're

7    working on equipping these incoming controllers with

8    the best modern technology to help them safely handle

9    the volumes of traffic that they will be charged with.

10                        Aviation safety, however, is not a charge

11   that can be answered by any one manufacturer or for

12   that      matter,         any   one   airline,      or    even     any     single

13   country.           Aviation is the most international form of

14   transportation.              Countless flights across our borders

15   link nations every day.                  And the passengers on board

16   on any given flight may have a variety of passports,

17   speak a multitude of languages and of course, the

18   airplanes themselves and many of the parts that go

19   into      them      have     diverse     origins     as      well,    and      when

20   something goes wrong, the implications effect all of

21   us.

22                        So safety is a responsibility that we all

23   must share.               Fortunately, because of organizations

24   like ICAO, we have a international standard for safety

25   that is unmatched across transportation modes.                                 ICAO

                                       NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701         www.nealrgross.com
                                                                                     14
1    facilitates communication, cooperation, and puts the

2    entire aviation community on the same page, so to

3    speak.           I had an opportunity to meet with President

4    Kobeh just yesterday in my office and I'm excited

5    about the plans for this organization.                        Both of us are

6    very enthusiastic about the opportunity we have to

7    build upon ICAO's strong foundation.                        Roberto, again,

8    congratulations            on    your    new       position     and    I     look

9    forward to working with you and thank you for being

10   here today.

11                       The same challenges that we're facing in

12   the United States, however, are being mirrored on a

13   global basis.             As other nations build their aviation

14   infrastructure and markets, particularly in many parts

15   of Asia, the number of passengers traveling is growing

16   expedentially while air cargo is increasingly a vital

17   part       of      our    domestic       and       international       freight

18   movement.            International         air      travel     continues        to

19   expand strongly, fueled by the growing liberalization

20   of     the        aviation      markets,       a   trend     that     is     both

21   desirable and inevitable.

22                       In the first eight months of this year

23   alone, traffic among international passenger carriers

24   grew by 6.1 percent compared to the same period last

25   year.            The bottom line is this; the modern global

                                      NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                  15
1    economy cannot function without aviation and aviation

2    cannot function without an underlying commitment to

3    safety.          Each of you has demonstrated by your presence

4    here today your commitment to safety.                       The next day

5    and a half you will receive in-depth in the substance

6    and the policies of today's safety challenges.

7                        I want to close by thanking you all for

8    being here and I look forward to working with all of

9    you as a find ways to work with you to build on

10   aviation's tremendous safety record and to advance the

11   safety agenda not only in your country but throughout

12   the world.              Thank you again, for your attendance.

13   Thank you for the opportunity to speak with you this

14   morning.           I do regret that I'm not able to stay.

15   Bobby, some of the sessions sound very exciting and I

16   wish I could stay a little longer and spend more time

17   with you today, but alas, I cannot.                               However,

18   I    will        look    very   much    forward      to    speaking       with

19   Administrator            Blakey     about      the    success     of      this

20   conference and I wish you all well.                   Thank you.

21                       (Applause)

22                       MR. STURGELL:        Thank you, Madam Secretary.

23    We appreciate very much those remarks.                      It's now my

24   pleasure          to     introduce       our     next      speaker,         the

25   Administrator of the Federal Aviation Administration.

                                     NEAL R. GROSS
                             COURT REPORTERS AND TRANSCRIBERS
                                 1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433              WASHINGTON, D.C. 20005-3701      www.nealrgross.com
                                                                                        16
1     As Secretary Peters said, Marion Blakey's passion for

2    aviation transportation safety led her to conceive

3    this conference three years ago, with a vision of

4    creating          a     forum    that      provided      the   international

5    aviation community a venue to address today's cutting

6    edge issues with straight talk, head on.                           I think that

7    vision is now a reality.                       Ladies and gentlemen, the

8    Administrator Marion Blakey.

9                           (Applause)

10                          ADMINISTRATOR BLAKEY:             Thank you, Bobby.

11   And I want to reiterate Bobby's comments, that we are

12   so very grateful that Secretary Peters took time out

13   of what is really an incredible schedule for her right

14   now to join us here, so that really kicked things off

15   with,       I     think,       setting     a    picture      for    us     of    the

16   challenge ahead.                And I do want to thank all of you

17   for      being         here.     You      know,      I   looked     it     up    and

18   apparently as best they can count it, there are 194

19   countries on this planet and we've got more than 50 of

20   them represented here, 50 very farsighted countries

21   when it comes to aviation.                      So I want to thank those

22   of    you        who    are    new    to this forum for coming and

23   joining us and for those of you who have been here

24   before, it's great to see you.

25                          Now, I've been asked to start things with

                                          NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701          www.nealrgross.com
                                                                                    17
1    a safety challenge this morning.                      And I think as those

2    of us in this business know, safety is just that, it's

3    a challenge.                 The task of moving people and goods

4    safely, efficiently and securely, that's tough.                            Point

5    A    to     Point       B,    day    in   and   day    out,   it's     a    true

6    challenge.            And what makes it even more so is that we

7    have been doing it very well.                         We've been able to

8    amass a safety record that is absolutely unparalleled.

9     So the safety challenge in a nutshell, how do you

10   take it to the next level? What will not only maintain

11   this unparalleled record but what will position us to

12   improve          as   the     operations     grow,     just   as   Secretary

13   Peters laid out?               I think the answer to that is safety

14   management systems, a topic for us over the next two

15   days, because they allow us to dig deep.                      They help us

16   uncover things and in so doing, they change the way we

17   look at our own operation.

18                         Now, I'll tell you a little story because

19   I    think       it's    a    case     in point, and that is about

20   Battery Park in New York City, one of the oldest

21   public spaces in all of Manhattan.                          Some of you in

22   fact, may have been there at one point or another on

23   your visits because the Battery has been around for

24   centuries.            And it's an area of about two dozen acres

25   that stretches right there along the shoreline of the

                                         NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                18
1    Hudson, a really beautiful spot.                   But recently, the

2    City of New York decided that they were going to have

3    to take steps to replace the subway, creating quite a

4    mess.        Now, that subway also has been around for about

5    100 years.         So enter the construction crews, this was

6    December of last year, 2005 and they were digging away

7    in the cold and ice, and they hit a wall, literally a

8    wall that was buried 10 feet below the surface, a wall

9    that unfortunately was perpendicular to the path they

10   needed to go for the subway.

11                     So guess what, as you'd expect, everything

12   stopped.         The burning question was, what the heck was

13   this?        And needless to say for the crews that were out

14   there in the snow and ice, they put it a little more

15   pointedly than that.          The "it" turned out to be a wall

16   that       the    archeologists      said    was    240     years       old.

17   Perhaps it have been built by the British, maybe by

18   the colonists, who took a backseat to what.                               The

19   answer was they had uncovered a subterranean wall that

20   was three feet high but get this, eight feel thick and

21   40 feel long.        So of course enter the conservationists

22   and rightly so.         But while they were making plans for

23   the identification, dismantling, relocation, a second

24   wall was discovered, longer, taller, except that this

25   one was built on logs at its base.                      Now hitting the

                                  NEAL R. GROSS
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1    wall is an American phrase that comes from marathon

2    runners in the 1970s.                 You don't think of it in terms

3    of construction sites.                   But in this case, you can

4    imagine how they felt when they hit wall number 3,

5    more than 100 feet long and nine feet thick.

6                        So the question remained, why was this

7    wall       put     there.       Considerable        conjecture       was      all

8    around but honestly no one knew.                      Now, I'm going to

9    keep that mystery to the end but my point in telling

10   you this story is that the deeper you dig, the more

11   you discover about what's going on, about what you're

12   doing.           You won't learn how you operate until you get

13   below the surface, and when you do, you find precious

14   pieces of data.             You learn about how things have been

15   done       and     you     learn    about    the    mistakes     that       were

16   covered over.

17                       There's a handful of issues that popped up

18   at Battery Park.              What was it?          How do you preserve

19   it?       Where do you put it?              How do you dismantle it?

20   Should you dismantle it?                    Who owns it?          Will this

21   jeopardize           our     funding?         Will     this    information

22   jeopardize our schedule?                    Maybe we should cover it

23   back up.           Let's just look the other way.              There's not

24   one of us here that doesn't see parallels in this

25   situation to aviation.                 We need to be sure we're not

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1    looking          the    other     way.       We    need     a    rigorous        and

2    formalized approach to identifying hazards, assessing

3    the related risks and identifying and prioritizing the

4    best way to then intervene.                        Then, we measure the

5    effectiveness of the actions we're taking.                                 It's a

6    continuous loop that's to a basic safety management

7    systems.           And make no mistake about this one; safety

8    management             systems    are     the     way     to    surmount          the

9    inevitable walls that seem impenetrable at the time,

10   the walls that just come out of nowhere, some below

11   the surface, just waiting to be discovered.

12                          Now, look, I know this is tough to do.

13   When we talk about S and S everybody says, "Ooh, this

14   it going to be hard", and that's true.                          But frankly, I

15   don't        think       we    have   a   choice.           Right       now,     the

16   commercial fatal accident rate in the United States is

17   about        two       fatal     accidents        for   every      10     million

18   takeoffs,          and    forecasts       anticipate        that     we     should

19   expect a doubling or tripling of traffic in the next

20   10 to 20 years.                The question is pretty elementary,

21   isn't it?              Is it acceptable to us or to the flying

22   public to have a doubling or tripling of accidents?                                     I

23   don't think so.                We know that the passenger numbers

24   are going to continue to climb.                         We're expecting a

25   billion by 2015.               We know, for example, that there may

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1    very well be 5,000 very light jets in the system by

2    that year.              NetJets, one of the United States' very

3    successful             fractional       ownership        operations,      has         a

4    larger fleet now than some US airlines.                         And we        know

5    we're         going      to    anticipate        the     emergence      of      the

6    unmanned          aerial      vehicles,     unmanned         aerial    systems,

7    pretty soon up there in the airspace as well.                                 Just

8    last       week    I     attended       really      an    amazing     event,          a

9    commercial space conference for the X Price Cup out in

10   New Mexico.             You know, those are the folks who brought

11   you Spaceship 1, the first private astronauts in space

12   just two years ago.                  And the guys with rockets, I'm

13   telling you, they are rapidly seeing their own come

14   into fruition as well.                  So it's another wrinkle to the

15   ever-expanding               national    and   international          airspace,

16   aerospace system.

17                          So with all that on the table, with a

18   system that's growing rapidly, more complex day after

19   day      we      can    no    long   rely      on   forensic      studies        of

20   accidents to determine our next steps.                        Forensics is a

21   straightforward approach.                 Accident occurs, we analyze

22   it.        Then we take steps to prevent its recurrence.

23   The forensic approach, I think it's fair to say got us

24   largely where we are today.                         And that's the world

25   standards for safety.                 The best of the best.               But to

                                       NEAL R. GROSS
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1    get      to       the    next    level,     we    need       to   move     beyond

2    forensics to data analysis, from the analysis of what

3    has happened, to an analysis of what the data show

4    might happened with a high degree of probability.

5                            It comes down to managing risk.                  And you

6    have to know the hazards, the consequences of what can

7    hurt us and then you have to analyze the likelihood

8    that it will happen, the risk, and then, of course,

9    the      severity.            The    purpose      of     Safety      Management

10   Systems is to provide a systematic way to eliminate,

11   mitigate or manage risk and to provide assurance that

12   those actions are going to be effective once we take

13   them.            The key to the future of aviation safety, I

14   believe, hinges on data that become information and

15   that information, this is key, it must be shared.                                 We

16   need       to      remove       impediments       that       would       prohibit

17   sharing.           ICAO calls this something that I think is a

18   very telling phrase.                 It's a just culture.                I think

19   they're absolutely right.

20                           ICAO reports, and I'm quoting here, "The

21   lack of full and open reporting continues to pose a

22   considerable barrier to further safety progress in so

23   many areas".             Let's face it, there's no place for fear

24   in safety.              A safety culture is a just culture.                       We

25   need to instill a mind set, a mind set that revolved

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1    around a safety culture.                   Continuous efforts on safety

2    improvements have to come from lessons learned from

3    all      of      us.       It's      the     byproduct        of    a     conducive

4    reporting environment, that things are brought to the

5    forefront and often to all of us to learn.                                 That's a

6    just culture.

7                           With that as context, the information we

8    gather and share is going to require a lot of hard

9    study and analysis as well.                       It will require that we

10   take a disciplined, a methodical approach, and that

11   we're all united against what I think is a part of

12   that fear that some time is lurking over here.                                     The

13   quick,            snap      judgments         or        those        who        would

14   sensationalize             the    data,      we    have      to    stand      united

15   against           that.        It     will     require         a    long,       hard,

16   continuous look at what's happening every day.                                      And

17   I'm      not       just     talking        about    airline         and     airport

18   operations          but     what     happens       in    our       operations        as

19   safety           oversight       authorities,           as   the        regulators,

20   that's if we want to take safety to the next level.

21                          I'm proud to say at the FAA, we're making

22   that move.             In fact, on October 16, just a few days

23   ago,       the      FAA's     Aviation        Safety         Organization           was

24   determined by an independent outside auditor to meet

25   the ISO 9001 Standards.                     We're the first government

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1    agency of the United States of our size and complexity

2    to       achieve           certification         to    this        prestigious

3    international standard.                 That means we've established

4    a     system        that      covers    multiple      services,          includes

5    national and international sites.                      In this case we're

6    talking about 6,462 employees that Mr. Sabatini here

7    supervises.             No small thing.        As many of you know, ISO

8    is      the        world's      largest      developer        of        voluntary

9    international standards and our certification covers

10   areas that are very familiar to all of you; flight

11   standards, aircraft certification, aerospace medicine,

12   rulemaking, accident investigation, air traffic safety

13   and       suspected           unapproved     parts      and    our        quality

14   integration.              So I am very proud and Nick, tip of the

15   hat to all of you on your team, that we have taken the

16   next step up.

17                           We're applying the same rigorous standards

18   to ourselves that we expect business to meet.                                    The

19   regulator and the regulated must toe the same line.

20   And let me say, as hard as that will be going forward,

21    because it's not just a question of getting there,

22   you've got to stay there, but that's exactly as it

23   should be.              I'm telling you this because data sharing

24   is an important part of our safety message.                               Sharing

25   safety           data    is   essential     to    achieving         a    stronger

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1    future for aviation safety.                 You know, I think as

2    we're talking about this the next two days, I think we

3    might as well be honest about a few of the challenges

4    here.        We don't even know how much safety information

5    there is out there and what's truly important and

6    relevant for us to collect; operators, manufacturers,

7    repair stations, suppliers, all the way across the

8    aviation community.          Nick tells me he thinks at this

9    point, we're probably collecting barely five percent

10   of the available data.

11                     Okay, so what about that other 95 percent?

12    We're the folks that are going to have to figure out

13   what do we do about that?            What's relevant and how do

14   we deal with it?          But if we're going to continue to

15   put downward pressure on the accident rate, we need

16   far        more    information       about       emerging       trends,

17   precursors.        We need to know more about what's going

18   on every day in operating, maintenance, manufacturing

19   environments.        When we share the information, we move

20   ourselves from the point where diagnostics becomes

21   prognostics.        Remember the low hanging fruit is gone

22   and sharing information of what we see, what we find,

23   has got to be the wave of the future.

24                     So here's where we are.              The system is

25   growing in the United States and everywhere you all

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1    are.             The    vehicles       are       changing.      Technology        is

2    changing.              And from a safety standpoint, we cannot

3    tolerate any increase in accidents despite all this

4    increase.              In fact, we have to drive the rate down.

5    Now, let me say in closing that the answer to the

6    safety challenge is not only technology, technology is

7    important and you'll see those technologies here on

8    exhibit.           As Bobby mentioned a few minutes ago, we do

9    have a great exhibit out there.                         From NEXGEN to RNF,

10   to RNP, ADS-B and ATOP, a sea of alphabets is out

11   there, but we're also going to be looking these two

12   days at international safety policies, the backbone of

13   any global aviation system.

14                           So you're going to hear about emerging

15   risk        of         airports,       in     global     manufacturing           and

16   maintenance              and     a    performance       based    air     traffic

17   control,               the      rule        of      safety      certification,

18   recertification and regulation and a privatized ATC.

19   Look, I've covered quite a bit of ground but the story

20   I raised right at the beginning is something we need

21   to keep in the forefront of this conference.                            The wall

22   that I talked about, archeologists now believe that it

23   came from the original gun fortifications, the battery

24   that gave Battery Park its name.                          So the deeper you

25   dig, the more you learn.                     For aviation, the deeper you

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1    dig, the more you learn, the safer you get.                        We can't

2    afford to be content with the status quo.                            For the

3    safest of all time, and as the runners say, "We can't

4    afford to hit the wall".                 Thank you very much.

5                      (Applause)

6                      SECRETARY PETERS:              Thank you very much.

7    Now,       of    course,      we    are    here    because      safety        is

8    paramount around the globe and the desire of each and

9    every one of us in this room to seek cooperation at

10   every level is in the forefront.                           What I've just

11   described is the vision of our keynote speaker this

12   morning because when it comes to going the extra step,

13   when it comes to making aviation safety the export for

14   everyone to share, his name is mentioned every time.

15   He's       now    the     president        of    the   Council       of      the

16   International Civil Aviation Organization since this

17   August and Roberto, I'm very proud that your first

18   official visit out of Montreal is to this prestigious

19    gathering of safety folks from around the globe.                             We

20   want to thank you for that.

21                     He's held a variety of positions over many

22   years        including      as     the    Director     General       of      Air

23   Navigation Services for Mexico, a career in aviation

24   that spans five decades, so when it comes to having a

25   historical view, the big context, it doesn't get any

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1    better.          We've very fortunate to have him today and

2    we're all eager to share his insights.                     Please join me

3    in welcoming Mr. Roberto Kobeh Gonzalez, President of

4    ICAO.

5                        (Applause)

6                        MR. KOBEH GONZALEZ:           Thank you very much,

7    Marion for such a warm introduction.                        It's always a

8    pleasure to see you and especially today.                             As you

9    mentioned, yes, this is my first public presentation

10   since I am taking office as President of the Council

11   of ICAO and I am delighted that this takes place

12   before such a distinguished audience and on a subject

13   of critical importance to global air transport, namely

14   aviation safety.

15                       By way of opening remarks, I would like to

16   pay     tribute      to    my   dear     friend    and     colleague,        Dr.

17   Assad Kotalte, for retired on 31 July of this year

18   after serving for 30 years as President of the Council

19   of ICAO.          It is an honor and privilege to succeed such

20   a pillar of the international civilian aviation for

21   whom the promotion of aviation safety was a lifelong

22   issue.           I would also like to notice your remarkable

23   contribution of the United States to the cause of

24   aviation          safety   over    the    years.          Right   from       the

25   creation of ICAO in 1944, the United States has been

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1    one of the most ardent supporters of the organization.

2                       When we speak of aviation safety, members

3    of      the      aviation        community       may       have       different

4    perspectives on the subject, yet for all of us this is

5    one common concern, that of saving and protecting the

6    lives of passengers, crews and persons on the ground.

7     Without         the   excellent      safety     record      that       we     have

8    worked together so hard to achieve over the past half

9    century and more, we would not enjoy the enormous

10   economic, social and cultural benefits of our vibrant

11   air transport industry.               The theme of this symposium,

12   "Safety from Top to Bottom," captures the essence of

13   how      to      maintain     and     improve      in      our      remarkable

14   performance, in a few words, what is required is a

15   firm commitment for senior management of airlines,

16   airports,              service        providers,            manufacturers,

17   regulators, and all other stakeholders no matter how

18   small for aircraft operation to be as safe as humanly

19   possible.

20                      The commitment to safety must flow down

21   from the top like a waterfall and permeate every part

22   of the organization.                 Everyone must be focused on

23   safety in the cockpit or behind the traffic control

24   screen, on the assembly line of manufacturers and in

25   the maintenance hangar, on board the aircraft or on

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1    the tarmac, in a government office or chief landing

2    body (phonetic) because safety begins in the mind.                                 It

3    is a mind set, an attitude and must be an integral

4    element of the organization's culture.                        In ICAO safety

5    has always been and will remain our top priority.                                  It

6    is enshrined in the Convention of International and

7    Civil Aviation.              Fifteen of the 18 annexes deal with

8    safety and efficiency in air navigation.                                  And the

9    annex of security is also related to safety since a

10   flight that is not secure is not safe.

11                        Safety is the focus of the first of six

12   objectives contained in our business plan and it calls

13   upon the organization to enhance global civil aviation

14   safety through a number of specific measures based on

15   prevention,              cooperation,         and         the           consistent

16   implementation            of    ICAO     Standards          and        Recommended

17   Practices,          SARPs.          After   more     than         40    years      in

18   national           and   international        civil       aviation,           I    am

19   convinced that many accidents would not have occurred

20   if ICAO SARPs contained in the annexes would have been

21   implemented uniformly and consistently.                           I am happy to

22   say that there is now within ICAO, a clear shift in

23   focus       toward       implementation       of    the     standards.             Of

24   course, existing standards will continue to be updated

25    where           necessary     to   keep    pace     with         the    evolving

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1    aviation industry.            And new standards will reflect

2    high       level   requirements      with    a   clear       benefit        for

3    safety.            Yet,   implementation         will   prevail         as        a

4    previous part to improve safety.

5                       The ICAO Universal Safety Oversight Audit

6    Program, USOAP, will play an integral role in this

7    global effort following the conference of Director

8    General of Civil Aviation in March of this year.                          In a

9    landmark decision, DCAGs from 153 participating states

10   agree to allow the ICAO to post results from USOAP on

11   the organization's public website as soon as possible

12   and no later than March 2008.

13                      At present, some 80 states have authorized

14   ICAO to publish the information without its target out

15   in the territories and so many reports can now be

16   consulted online.           I am sure that many others will

17   respond positively in the months to come.                         It is an

18   unprecedented         development      in    terms      of     increasing

19   transparency        and   sharing     of    information        among        the

20   estates as well as with industry and the traveling

21   public.          It should encourage the states to correct

22   more quickly the safety deficiencies and remain in the

23   -- that remain in the aviation systems and make it

24   easier for estates and donors to provide more rapid

25   and more effective assistance to those that require

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1    much needed financial and human resources.

2                      Transparency         and     sharing         of    information

3    are also at the heart of the unified strategy to solve

4    safety-related           deficiencies          adopted          by        the     35th

5    session of the ICAO assembly in 2004.                               The strategy

6    emphasized         that        free     flow        of     safety          related

7    information must be embraced by everyone involved in

8    air      transport       at     every     level          and     across         every

9    discipline.           This is essential condition to create or

10   strengthening          partnership       to     resolve          deficiencies,

11   essentially in the form of regional or sub-regional

12   safety organizations.                 ICAO, National Civil Aviation

13   Authorities, industry and the founding institutions

14   must cooperate in the provisional aviation technical

15   and financial assistance and guidance.

16                     A     good     example       of        the     potential          of

17   transparency for improving safety is Article 21 of the

18   Chicago Convention.              Article 21 prescribes that each

19   contracting state should undertake to supply to any

20   other        contraction       state     or    to        ICAO,       on    demand,

21   information regarding registration and ownership of

22   registered aircraft.              When this registration data is

23   shared, it can provide a clear picture of the status

24   of any given aircraft.                The states can then make more

25   informed         decisions       regarding          operations             by      the

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1    aircraft within the air space.                         ICAO will help to

2    process           along     with    a    proposal      to     facilitate        the

3    exchange of data concerning aircraft registrations and

4    some has already been posted in the ICAO website.                                At

5    the same time that we are moving in the direction of

6    more openness, the air transport industry is growing

7    consistently,               in      large      part      the     result          of

8    hybridization and exploding markets, most notably in

9    Asia.            The International Air Transport Association,

10   IATA,            reported        earlier     that      2006     international

11   passengers traffic for the first half of this year

12   grew 6.7, 6.7 percent over the same period in 2005,

13   and by the year 2015, ICAO expects that passenger

14   traffic will have grown to some 2.8 billion passengers

15   annually            and       30     million        aircraft       movements.

16   Concurrently, the privatization of airlines, airports

17   and air navigation services by making inspections of

18   operations more complex and more labor intensive.

19                        It is increasingly difficult to obtain the

20   requisite resources in terms of qualified people to

21   insure            proper      application         of    safety       oversight

22   practices as the regulatory and industry levels.                                The

23   answer, of course, lies in safety management system or

24   SMS, the most effective way to respond to the need for

25   effective supervision with relatively smaller force

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1    work.            Many ICAO member states are implementing or

2    exploring safety management system to compliment the

3    existing regulatory structure.                      We encourage them to

4    do so and ICAO offers concrete assistance in the form

5    of       standards,          related        guidance             material         for

6    establishing safety management system including a set

7    of aligned safety management provisions for aircraft

8    operations,          air     traffic      services          and     air       dromes

9    (phonetic) as well as model legislation to make it

10   easier to implement SMS.

11                       In     all    of    our     communications            on      the

12   subject, we insist on the fact that safety management

13   is not a matter of individual states alone.                               It must

14   be carried out in a coordinated and cooperative manner

15   based on the ICAO framework.                       All practicing both in

16   civil        aviation       have       responsibilities            for        safety

17   oversight          and   compliance.           I    know    that      there       are

18   translation in several languages.                         Then I am going to

19   shift to Spanish now.

20                                      La cooperación mundial es

21              esencial para enfrentar, con éxito, los

22              tremendos desafíos del futuro.                        Yo soy,

23              particularmente,            sensible       a     la     tenida

24              escasez           de     pilotos        calificados,           y

25              experimentados,          que       podría       sobrevenir,

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1               como resultado, del continuo aumento de

2               las     operaciones            de    las     líneas       aeras,

3               suscitado por el continuo incremento del

4               trafico de pasajeros.

5                                          A         si           mismo           el

6               cumplimiento de los requisitos relativos a

7               la    competencia              lingüística         que      serán

8               aplicables          en     Marzo       del   2008,        exigirá

9               esfuerzos           intensos         para      asegurar          la

10              instrucción apropria, y la certificación,

11              tanto     de        los        pilotos,      como      de       los

12              controladores de transito aéreo.

13                                         Cada        uno        de      ustedes

14              enfrentara          una       amplia    rama      de   desafíos

15              propios        de        su     industria,         o      de     su

16              responsabilidad.                 A   fin     de    liderar       la

17              comunidad           aeronáutica           mundial         en     un

18              esfuerzo de cooperación, colaboración, y

19              coordinación,                 para      enfrentar           estos

20              desafíos, la WASE, viene desde hace ya

21              algún tiempo, implantando su primer plan

22              de actividades diseñado para modernizar la

23              organización y a aumentar su eficiencia y

24              eficacia.

25                                         Nos         concentraremos             en

                                          NEAL R. GROSS
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1               programas   e    iniciativas            basados         en   el

2               rendimiento.       Aquellos           que     den   mayores

3               beneficios por la inversión del recurso

4               humano, de recursos humanos y financieros

5               limitados, mediante métodos de trabajo y

6               practicas   de    gestión,            que    lleven      a   la

7               obtención de resultados identificables.

8                                   La WASE será mas dinámica

9               en    responder        a     las        necesidades            y

10              expectativas       de            su         189     estados

11              contratantes.          En    pocas          palabras,        nos

12              centraremos       en         cumplir              con        las

13              responsabilidades          que    nos       incumbe,      como

14              organización     mundial,         en    los       siguientes

15              ámbitos clave.

16                                  La           implementación,               a

17              nivel mundial, de los sistemas de gestión

18              de la seguridad operacional, destinados a

19              lograr resultados mesurables, en el ámbito

20              de la seguridad de la aviación.

21                                  La elaboración, entre los

22              estados, de medidas globales de seguridad

23              de aviación, basadas en el rendimiento.

24              La    búsqueda    de        medidas         unificadas         y

25              coordinadas      para       reducir          los    efectos

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1               perjudiciales de la aviación civil en el

2               medio     ambiente,            y    la      implantación           de

3               sistemas       de    gestión        de      transito      aérea,

4               armonizados, y de mejoras en la eficiencia

5               basada en el rendimiento.

6                       Muchos       de     estos          temas    serán       objeto        de

7             debate      en        el    próximo           periodo       de        sesiones

8             ordinario de la Asamblea de la WASE, en 2007. Sé

9             que muchos de ustedes estarán ahí, y les invito a

10            empezar a reflexionar sobre su contribución a lo

11            que espero será una asamblea muy constructiva, y

12            con visión de futuro.

13                                        Damas        y     caballeros,            el

14              segundo        foro            anual         de         Seguridad

15              Operacional         de     la      Aviación        de    la     FAA,

16              celebrado el año pasado, por esta época,

17              contribuyo, significativamente, al debate

18              en torno a la seguridad operacional de la

19              aviación.       Espero, con interés, seguir el

20              desarrollo de esta tercera edición, que

21              nos       ofrecerá                 formas           igualmente

22              estimulantes, e innovadoras, de promover

23              la causa de cielos operacionalmente mas

24              seguros en todo el mundo.

25                                        La        comunidad            de         la

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1               aviación depende de reuniones como esta

2               para       encontrar          soluciones          realistas,     y

3               practicas,            ante     el     reto    global     de     la

4               seguridad operacional.                 Y estoy convencido

5               de     que       ustedes        sabrán       satisfacer       sus

6               expectativas para bien de todos nosotros.

7                 Les agradezco, de nuevo, su gentileza, y

8               la invitación, y la oportunidad que me

9               brindan, de participar en lo que confió

10              será       un       foro     muy    productivo.          Muchas

11              gracias.

12

13                         (English          translation      of     Spanish     portion

14   immediately above.)                           Global          cooperation            is

15   essential             to         confront,        with        success,          future

16   challenges.                I     am     particularly          sensitive     to      the

17   scarcity of qualified, experienced pilots that could

18   come       about      with        the    increased       operations,         by     the

19   airlines, brought about by the increased increment in

20   passenger traffic.

21                         I     am     also       aware     of    the    requirements

22   related          to        linguistic          competency        that      will      be

23   applicable            in    March        of    2008,     which      will    require

24   intensive efforts to ensure proper instruction, and

25   the      certification             of     both    the    pilots      and    traffic

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1    controllers.

2                      Each of you will face numerous challenges

3    in your industry, or in your area of responsibilities,

4    in     order     to    lead   the    global     airline    industry        to

5    cooperate, collaborate, and coordinate the facing of

6    these challenges.               WASE has been, since some time

7    back, implementing the first activity plan designed to

8    modernize the organization and to increase efficiency

9    and efficacy.

10                     We     will     concentrate       on    programs        and

11   initiatives based on the rendition of mayor benefits

12   from human resources, and limited financial resources,

13   based on work methods and management practice, which

14   will give us identifiable results.

15                     WASE will be more dynamic in responding to

16   the needs and expectations of its 189 contract states.

17      In other words, we will concentrate on fulfilling

18   the responsibilities that are incumbent upon us, as a

19   worldwide organization, in the following key fields.

20                     The implementation, on a world-wide basis,

21   of operational security management, destined to result

22   in measurable results, in the aviation security field;

23   the elaboration, between states, of global security

24   aviation measures, based on the findings; The search

25   to reduce the prejudicial effects on the environment

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1    by      civil       aviation,      and     the     implementation            of

2    management          transit     systems,        harmonized,       and       the

3    betterment of efficiencies based on the findings.

4                        Many of these themes will be subject to

5    debate in the next period of ordinary sessions of the

6    WASE, in 2007.          I know many of you will be there and I

7    invite you to start reflecting on your contribution so

8    that this will be a very productive meeting, and with

9    vision towards the future.

10                       Ladies and gentlemen, the second annual

11   forum on Operational Security of the FAA, which took

12   place        last    year     around     this    time,     significantly

13   contributed to the debate on the operational security

14   of aviation.           I wait, with interest, to follow the

15   development of the third edition, that will offer us

16   stimulating and innovative ways to promote worldwide

17   safety in our skies.

18                       The aviation community depends on meetings

19   such as this to find realistic and practical solutions

20   in the global challenge of operational security.                            And

21   I     am         convinced    that     you      will      satisfy       these

22   expectations for the well being of all of us.

23                       I thank you, once again, for giving me the

24   opportunity to participate in what I hope will be a

25   very productive forum.             Thank you very much.

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1                      (Applause)

2                      ADMINISTRATOR BLAKEY:             What an excellent

3    challenge, what an excellent opportunity we will have

4     in the next assembly.                 I think we're all getting

5    revved up for this.                And it's, again and indeed a

6    great honor to have with us today the Director General

7    and        CEO    of      the     International            Air       Transport

8    Association.           I think many of you know that Giovanni

9    Bisignani        brings       extensive     business        experience           to

10   IATA.        Before being named to his current post in 2002,

11   he launched and directed the first European airline

12   owned online travel agency breaking truly new ground.

13    Let me tell you, he's a may with an eye for the next

14   big thing and I have a feeling he can challenge us to

15   that in safety as well, because, of course he knows it

16   long and strong.

17                     He was previously the CEO and Managing

18   Director of Air Italia, no small feat itself.                                    In

19   short, our next guest has the broad experience you

20   need to cast the wide net of safety.                      He also have the

21   drive, the insight and I have to say the creativity to

22   make it happen.           Please join me in welcoming our next

23   distinguished guest, the Director and Chief Executive

24   Officer          of     the      International            Air        Transport

25   Association, Giovanni Bisignani.

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1                         (Applause.)

2                         MR. BISIGNANI:          Thank you, Marion, for

3    your kind invitation and for your very kind words.

4    And it's a pleasure to be again here with all of you,

5    among        great     friends     in    discussing        our    number           1

6    priority, safety.               IATA, as you know, represents 260

7    airlines, 94 percent of the scheduled international

8    traffic and our mission is we represent and serve air

9    transport.           Safety is at the core of our mission and

10   our industry can be proud on our achievements.

11                        Our industry has been in crisis, you all

12   know since 2001.             We are bleeding red ink.                Between

13   2001 and 2005 airline lost $40 billion.                          The crisis

14   was a catalyst to improve efficiency because since

15   2001, labor productivity increased 33 percent, sales

16   and distribution dropped 10 percent and non-fuel unit

17   costs reduced by 13 percent.                     In 2001, the industry

18   fuel       bill   was     443    billion     and    it     represented        13

19   percent of our total operating costs.                       Now, our bill

20   is $115 billion accounting for 26 percent of our total

21   operating cost.           Just in one year we had to increase -

22   - the bill increased of $24 billion.                       But remarkably,

23   airlines will still improve their bottom line from a

24   $3.2 billion loss last year to a $1.7 billion loss

25   this year, with US carriers posting operating profits.

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1     Next year, we expect a small profit of $1.9 billion.

2     That's just a .4 percent return on $450 billion, so

3    there's no reason to open champagne, but we are moving

4    in the right direction.                         The     crisis         in      those

5    numbers have not distracted the airlines from safety

6    because numbers tell a great story.                        The industry hull

7    lost rate for western built jets was cut in half in

8    the last 10 years, .76 hull lost rate per million

9    flights in 2005.                 IATA carriers benefiting from our

10   program did significantly better, .35 hull losses per

11   millions sectors.                In the industry target for 2005, is

12   .65 and we are on track achieving a .62 by the end of

13   September.            But these figures are important but ask

14   also some key realities that we have to face and

15   discuss.

16                         If    we   all    look    --    if      we   look     at     all

17   aircraft types and all accident, the figure is three

18   times higher, 2.1 per million sectors.                              Later we'll

19   discuss the situation in three areas; Africa, Russia

20   and Latin America.                My message is clear, we have to do

21   more.        We can be proud of our results, but we'll have

22   to look ahead and do more and we need a businesslike

23   approach         to    safety.          For    IATA,       that    means       first

24   setting achievable tough targets with deadlines.                                   Our

25   target for 2008, that was given us from abroad is to

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1    reduce a hull loss rate by a further 25 percent over

2    2006 and we also have similar targets for all aircraft

3    and for all the regions where we operate.                       As with any

4    other            business,     you    need      a    plan       to     achieve

5    challenging targets.

6                       Our plan is a six-point IATA strategy.

7    The first point is to use data effectively to guide

8    our efforts and Marion was very clear in underlining

9    the     importance      of    accurate    data       and    sharing        those

10   data.        The next three are to take action in areas of

11   infrastructure            including      ground       handling,            cargo

12   operation and flying operation.                     The last two points

13   are       to     implement      the     right        processes;          Safety

14   Management Systems.              Marion clearly underlined the

15   importance of this and auditing.                      Finally, we must

16   focus on the basic principle, global standards and

17   harmonization.            These are the three themes for my

18   discussion.

19                      Let me start with two success stories, the

20   global aviation safety roadmap and the IATA operation

21   safety audit and then I will address the other two

22   points.          Global      aviation    roadmap;        next     month        the

23   industry will deliver the final part of the global

24   aviation safety roadmap to ICAO.                      This is a clear

25   vision for an efficient and consistent global approach

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1    to safety.           It is the heart -- in it's heard a global

2    standard and harmonization.                      What the role in the

3    commitment           of     the     industry?          Eliminating         these

4    inconsistencies              in     safety    management       systems         and

5    strategies, regulatory compliances, and use of best

6    practices.               Closing gaps in the use of technology,

7    removing impediments to effective data analysis and

8    insuring the adequate supply of qualified personnel.

9                         States must eliminate inconsistencies in

10   application of international standards and oversight

11   practices and implement more effective reporting and

12   investigation of accidents and incidents.                       Many of you

13   helped in the roadmap and this is a great opportunity

14   to say to all of you, thank you very much but words on

15   paper do not always deliver results and the roadmap is

16   useless if it's not followed carefully.                        I signed the

17   roadmap along with the CEO of Airbus, Boeing, ACI,

18   CANSO,           FALPA    and   the   Flight     Safety      Foundation        and

19   IACA's acceptance is a commitment by the state.                                 So

20   there        is     no     excuse     for    anyone     to    get    lost       in

21   uncoordinated plans.

22                        Airlines are committed and moving forward

23   and we must have no patience for anyone who is not on

24   board.           The IATA operational safety audit, IOSA, is an

25   example of an action.                   IATA developed IOSA working

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1    closely with ICAO in individual states, US, Canada,

2    Australia.             We appreciate very much your support in

3    the initial stage and many of the players around this

4    table.           And        it   is     the    first     global        standard       for

5    airline audits and includes safety management systems,

6    a component of the roadmap.                          By the end of next year

7    we plan to five million in IOSA.                           And IOSA is at the

8    core of our efforts to raise the bar on safety in

9    rationalized audits.                     For those less familiar, IOSA

10   was     launched            in   2003     at    our AGM.          It measures a

11   collection of industry best practices complying ICAO

12   standards.             IOSA standards are offered free of charge

13   for any commercial airline in the world, IATA or not

14   IATA.

15                          Audits      are        conducted     by     a    competitive

16   market           of     eight           independent         commercial             audit

17   organizations and IATA managed quality to IOSA 9,000

18   processes.            Registration lasts two years and a list of

19   airlines on the registry can be seen on IATA's website

20   open, transparent for everybody.                           And government and

21   airlines              can        access        the       entire        IOSA        audit

22   documentation through a controlled process.                                     In our

23   2006       annual           general       meeting,       the      airlines         voted

24   unanimously             to       make     IOSA       a   condition         for       IATA

25   membership in 2008.

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1                           And for our association with 260 members,

2    it is a strong mark of commitment to quality.                                        And

3    IOSA      is      core       to    achieving        our   targets         to    further

4    improve safety.                   Already we have 121 airlines on the

5    registry, a quarter of those are non-IATA members and

6    now      over          2002        member      airlines        are   on    the      IOSA

7    process.          Alliances around the world are using IOSA as

8    a safety standard for membership and code sharing.

9    The     register         of       audit     results       has    already       avoided

10   nearly           400     audits          and     IOSA     compliments           ICAO's

11   universal safety oversight audit program.

12                          And        many      individual          governments           are

13   incorporating IOSA in their oversight activities.                                     The

14   FAA accepts IOSA data for US carriers code shares.

15   France includes IOSA in their label horizon program.

16   Switzerland expedites air rights to IOSA registered

17   carriers.              In    countries         as   Egypt,       Chile,        Lebanon,

18   Madagascar and many others have made IOSA a condition

19   for AOC.           And AOC made it a criteria for operations

20   two     and       from       the    Arab       region     so    I    encourage       the

21   governments to use IOSA effectively.                                  There is no

22   cost, it's open, transparent.                        It is at your service.

23    And Gunther Mather (phonetic) and his team are eager

24   to explore ways to work together.

25                          Another area in which we have started to

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1    tackle is ground damage and I'm pleased to report that

2    we     are        tackling     now    the    ground    damage.                  That

3    represents $4 billion for airlines in a similar manner

4    to IOSA.           There is no global standard for oversight in

5    auditing          of    ground    handling     companies,          so    IATA      is

6    developing one using the IOSA approach.                        Last week we

7    started          developing      standards      with    key    stakeholders

8    including logically our great cousins ICAO and the

9    ground           handlers,     and    Boeing       AirBus    Flight         Safety

10   Foundation have provided all the basic data to guide

11   our     initial         efforts.       The    target    is     to       start      to

12   conduct an audit in 2008.

13                          And I'm sure that I can count on your

14   support          to    contribute      to   this    development          of     this

15   initial stage of this audit criteria, and incorporate

16   this valuable tool into oversight programs.                                 That's

17   all good news and I want to thank you for your support

18   and I think as an industry we can be proud of the

19   results on safety, but let's open, look clearly and

20   frankly           to    the    many     challenges          that      we      have,

21   specifically            regional      differences,      foreign          operator

22   specification and air traffic management.

23                          Let's   start    with       regional    differences,

24   because          in    regional      differences      numbers        tell       very

25   powerful stories.                While the global average for all

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1    aircraft accident is 2.1 per million flights, Latin

2    America is 3.4.              Russia is 5.9 and Africa is off the

3    chart at 10.2.              This is not acceptable.               So the first

4    step to a solution is honestly recognizing that we

5    have a big problem in certain important areas of the

6    world.           And    I    applaud         to    ICAO    to     the    adopting

7    (phonetic)        of       the         IOSA       and   publication       of      the

8    results.         Roberto mentioned it but it was a great,

9    great step.            Europeans recently have implemented black

10   lists as part of their safety programs.                           To be frank,

11   black        lists      do       not    improve         safety.         In      more

12   transparent criteria and efforts as such an example

13   are needed to backup naming decision, but I welcome

14   the strong statement made on the performance of some

15   government, Swaziland, Sierra Leone, Djibouti Congo,

16   their       safety      record         is   an     embarrassment        for     this

17   industry.        And flags of convenience have no place in a

18   safe industry and we have taken action and I think

19   that everybody has to take action.

20                      IATA supports the Safe Skies for Africa

21   Program.         But we must see better results from Africa.

22    Our action is to help our members.                        IATA has taken an

23   action with the limited resources that we have with a

24   Partnership          for     Safety         Program.       It     prepares        all

25   carriers for IOSA by identifying and filling gaps.

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1    Our first targets are Africa and Latin America because

2    you saw the figures.              In Africa Partnership for Safety

3    has already trained 175 professionals, from 17 civil

4    aviation organizations and 46 airlines and we will

5    have a completed gap analysis on 26 IOTA members by

6    this year.         In Latin America, 110 representatives from

7    governments and airlines have been trained and five

8    gap analysis are complete with 13 more scheduled in

9    the following months.

10                      I've written to the Minister -- Russian

11   Minister Levitin and a second time to the President of

12   Nigeria,         offering      all     IATA's      assistance.              IOSA

13   standard         includes      consideration        from     Eastern-built

14   aircraft.          And we are examining actions under the

15   partnership's program.               Out budget for partnership for

16   this specific program is limited, 3 million in this

17   last six months but support from partners have been

18   quite frankly disappointing.                     But I appreciate the

19   support received from Pratt and Whitney and Boeing

20   contributing financially to those efforts.

21                      On    another       point,    our       industry's       meek

22   response to the French Government's United for Aid

23   proposals         is      also      very     disappointing.                 Why?

24   Alternative        funding       for    drug     purchase      is    a    noble

25   action but taxing aviation is counter-productive and

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1    contravenes ICAO principles.                         Aviation taxes must be

2    invested              in    aviation.           We   need      those       funds        and

3    regional              safety       needs       are   more       serious         funding

4    commitment for government could be a great opportunity

5    to improve.

6                               Another      area    in     which        we   are      a     bit

7    disappointed is the proliferating of foreign operator

8    specifications.                    In     addition      to     long-standing             US

9    requirements, China, Russia, Trinidad, Tobago, United

10   Arab Emeritus and other have recently announced their

11   own     programs             and     Europe,     Australia      and       Canada        are

12   expected to follow.                      If we continue to go down this

13   road, we will spend a lot of our budget managing

14   bureaucracy with little positive impact on safety.                                       It

15   makes        no        sense       to    add    complexity          to   regulation.

16   Safety           is    better        served     by   consistency          and      it    is

17   misguided at a time when we have all committed to

18   global standard.                   As an interim measure, I challenge

19   those            countries           with      specific      foreign           carriers

20   operation to harmonize.                         I look forward to seeing

21   results           from       either      the    ICAO    group        comprising          of

22   Europe,           US,       Canada      and    Australia       in    this      specific

23   area.

24                              And     ultimately          if      governments              are

25   concerned about safety oversight capabilities of their

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1    peers        in     specific       areas,   they     can      use     IOSA       for

2    specific needs and they can strengthen ICAO's role

3    putting even more teeth into the USOAP great program.

4

5                         Air traffic management; safe air traffic

6    management is also critical to this industry.                                  That

7    means        standard        rules,    procedures           and     technology.

8    Every variation in procedure, every change in unit of

9    measurement and every difference in required equipment

10   is an opportunity for a problem or a disaster.                             We are

11   working           with      governments       across        the      globe        on

12   implementing RNAV and other ATM enhancements but we

13   need to have a great big picture.                         The IATA one sky

14   global ATM roadmap initiative highlighted the need for

15   a grand plan and ICAO's global air navigation plan

16   reflects this results and we are congratulate ICAO.

17                        But I would like to move faster in the

18   direction of a common approach.                   The US Joint Planning

19   and Development Office is focused on next generation

20   air transport system based on US technology and the

21   Single           European    Sky    ATM     Roadmap       says,     SESAR,        is

22   focused on European technology and solutions.                              And in

23   parallel we have Boeing and AirBus have their own

24   initiative.           If we don't harmonize the result will be

25   not      positive.           We     must    build     a     future       of     air

                                       NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701          www.nealrgross.com
                                                                                    53
1    navigation where national egos and personal limit and

2    national support to local technology have no place in

3    a global picture.

4                         In July a memorandum of understanding was

5    signed by FAA and EUROCONTROL to cooperate.                        This is a

6    great story and I'm sure that we'll be working in the

7    same -- they will be working in order to achieve those

8    results.           But before concluding just a few comments on

9    security.           The way forward is exactly the same as of

10   safety, global standard and harmonization.                            Security

11   improved tremendously after 2001 but we missed at that

12   time       the      opportunity       to    harmonize.          The     recent

13   agreement           on   sharing     PNR   data     access     between        the

14   United States and Europe was an important step in the

15   right direction with the right approach.                         Similarly,

16   harmonization of rules for hand luggage across Europe

17   is a step in the right direction.

18                        But one must certainly question why we

19   cannot           agree   to   a   common    hand    luggage     requirement

20   everywhere and why we cannot have a common standard

21   for whole baggage screening so that we can eliminate

22   the need for rescreening at least with a country that

23   had the same kind of attention and equipment.                         This is

24   a waste of 100 million that could be meaningfully used

25   in other areas, safety for example.                         As a first step

                                       NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701       www.nealrgross.com
                                                                                            54
1    we     could       have       an    agreement         among     countries           with

2    similar standards.                 I realize that the purpose of this

3    conference             is      safety      but        let's     not       miss        the

4    opportunity to remind our security colleagues of the

5    success of global standards in data driven approach

6    and      safety        and     encourage        them     to    learn       from       the

7    excellent example that you are setting because safety

8    is a great story to tell.

9                           In    conclusion,         I    would     like       to     thank

10   Marion           and    the        FAA    for        organizing        this       third

11   International               Safety       Forum.          Marion,         with       your

12   passion, your commitment, and your great vision, have

13   brought an international approach to the FAA that has

14   made and old and great partner even better.                                   We want

15   to also recognize and support President Roberto Kobeh

16   Gonzalez and Dr. Cherif and ICAO for their great,

17   great efforts.                 We call them cousins because we work

18   really close to close and I have to compliment and

19   congratulate            for      how     effectively          they    handled         the

20   recent August London crisis.

21                          No    one    entity      can     delivery        success        in

22   safety, it must be a team effort.                         And the team is in

23   this room; industry, airports, air navigation server

24   providers,             airlines,          manufacturers           of       aircraft,

25   pilots, governments, ICAO and suppliers.                                Each of us

                                         NEAL R. GROSS
                                 COURT REPORTERS AND TRANSCRIBERS
                                     1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                  WASHINGTON, D.C. 20005-3701            www.nealrgross.com
                                                                                 55
1    has a role to play and a responsibility to learn and

2    to    share.       A    common     goal must be to achieve and

3    implement a harmonized set of global standards that

4    will make the safest form of transport even safer.

5    Thank you very much for your attention.

6                      (Applause)

7                      MR. STURGELL:         I think you can see now why

8    we're so pleased to have Giovanni with us today.                         He's

9    certainly somebody who knows how to stir the pot a

10   little bit and that's what this forum is all about.

11   So Giovanni, thank you very much and President Kobeh,

12   we are again very pleased that you're able to join us

13   here today.

14                     Before we take our first break, I just

15   want to remind everybody that 6:00 p.m. tonight on the

16   sunset terrace in the lower level, we will be having a

17   reception featuring American cuisine and we're also

18   going to liven it up a little bit with some Blue Grass

19   and Big Band music as well.                   So please join us for

20   that.        I do want to once again thank the Air Transport

21   Association        and      the    International          Air   Transport

22   Association for being our sponsors this year and I'd

23   also like to point out from my team, Virginia Krohn,

24   (phonetic) I don't see her standing around yet, but

25   Virginia, the Offices of Aviation Safety, Nick's group

                                    NEAL R. GROSS
                            COURT REPORTERS AND TRANSCRIBERS
                                1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433             WASHINGTON, D.C. 20005-3701      www.nealrgross.com
                                                                                   56
1    and      Joe's    group       at    the    Office     of     International

2    Aviation         for    their       assistance       in    putting          this

3    together.         And finally, we do have a number of FAA

4    international          reps    in   the    room     today.         If   I   can

5    quickly ask you folks to stand for us.                     We have people

6    come in from Brussels, Singapore, London as well as

7    some new folks going out to the field.                         So the FAA

8    international reps, please stand and everybody, please

9    introduce        yourself,      get   to    know    your     FAA    partners

10   internationally.           I know we're running just a little

11   bit behind, but I do want to give people a break.                             So

12   how about 10 minutes and we'll pick it back up right

13   here at 10:25.          Thanks very much.

14                     (Whereupon, at 10:15 a.m. a brief recess

15   was taken.)

16

17

18

19

20

21




                                    NEAL R. GROSS
                            COURT REPORTERS AND TRANSCRIBERS
                                1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433             WASHINGTON, D.C. 20005-3701        www.nealrgross.com

						
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