Safety Management Systems

The Company WestJet Culture Safety Management Plan Policies Organization Processes Training Communication SMS Benefits ($$$) Conclusion

WestJet Snapshot Ten years in operation More than 43 million guests flown since 1996 (average of 851,043 guests/month in Q4 2005) Eight year average revenue growth of 54% Nine year average growth: 50.0% (RPM) / 47.8% (ASM) Fleet of 54 Boeing 737 NG aircraft (63 aircraft in 2006) Over 5,000 WestJet employees

Available Seat Miles (Annual - billions)

Revenue (Annual - billions)

Culture – Aligning Interests “Turn employees into capitalists so they think and behave like owners” Employee Share Purchase Plan Dollar for dollar matching of employee contributions 86% participation with average of 12% of base salary Profit sharing - $73.9 million distributed over nine years Share options 86.6% outstanding held by pilots 3.7 million new grants to pilots in 2004

Culture – Aligning Interests Culture of ownership, caring, empowerment, teamwork WestJet vocabulary: Guests, WestJetters, Teams, Big Shots, Beanland, WestJettitude PACT – Pro-Active Communication Team employee association no unions PACT and Management seek mutually beneficial solutions for: the Company and its shareholders the Employees the Guests

Transport Canada regulations apply to: Implementing the Regulations Transport Canada regulations apply to: Aircraft Maintenance Organization Certificate Air Operator Certificate WestJet has made SMS a company-wide initiative Maintenance Flight Operations Inflight Airports Occupational Safety & Health Environment Corporate Divisions

WestJet differs from many airlines (perhaps your own) Business model Growth Equipment type(s) Route structure Employee relations CULTURE Airlines will also differ in Safety Management Systems common elements and components different programs, processes and infrastructures

Guiding document for implementation and operation of SMS Safety Management Plan Guiding document for implementation and operation of SMS Policies Safety Organization Roles and Responsibilities Processes Audit Training Communication Emergency Response

Policies – Fundamental Assumption of Risk Causation Human Error Caused by system design To be expected TEM Model System Review At-Risk Behaviour Caused by complacency time pressures condoned behaviour other human factors Must be actively measured and managed Individual Coaching Reckless Behaviour Willful non-compliance Cannot be tolerated Discipline

Operational Safety Organization CEO Accountable Executive Exec. VP Culture & Airports VP Flight Operations VP Airports Director Inflight Trng & Stds Administrator Database Coordinator FDM Analyst Maintenance Safety Officer Flight Safety Manager Inflight Safety Rep Airports Safety Rep Safety Advisors OSHE Group Director Flight Trng & Stds VP Operational Development VP Technical Services Director Safety Services Director Airport Operations Safety Action Committee Safety Representatives Safety Services

To support effective safety programs and proactive risk management by Safety Department Mission Statement To support effective safety programs and proactive risk management by promoting safety as an inherent value of WestJet’s culture

Safety Management Committee Safety Action Committee Safety Organization Accountable Executive Accountable Executive VP Technical Services VP Op. Development EVP People CFO EVP Culture & Airports EVP Marketing & Sales Director, Safety Safety Management Committee (meets monthly*) Director, Safety Maint. Safety Officer Manager, Flight Safety Airports Safety Advisor Inflight Safety Advisor SST Advisors SMEs Safety Action Committee (meets weekly*)

Executive Vice Presidents, Vice Presidents, Directors Roles and Responsibilities Accountable Executive Senior Managers Executive Vice Presidents, Vice Presidents, Directors Managers and Supervisors Front-line Employees Safety Department Safety Representatives Safety Committees Safety Action Committee, Safety Management Committee Lead Investigator Safety Review Teams

Reactive and Proactive Processes Hazard / Root Cause Analysis Safety Processes Reactive and Proactive Processes Hazard / Root Cause Analysis Risk Assessment Risk Mitigation SMS Database Safety Planning & Performance Change Management SMS Quality Assurance

Safety Management Systems Flight incident report Ground incident report Injury report FDM statistics Safety Management Systems Risk assessment Safety survey LOSA Job safety analysis Basic Risk Management Process

FDM Report

FDM Report

Organizational Error Profile (XX Airlines and LOSA Archive Comparison Airlines) LOSA Report LOSA Report

Risk Management Matrix Risk Management Matrix Risk Class Lead Investigative Responsibility Level of Investigation (Typical) CAP Development Timeline CAP Implementation Timeline Initial CAP Evaluation Timeline Close-out Authority Level 1 Department Safety Rep Single investigator using local resources Within 6 weeks of initial risk classification Within 3 months of initial risk classification Within 6 months of CAP implementation Responsible Manager Level 2 Department Safety Rep or Chair, Safety Review Team Single investigator using corporate resources. HF analysis optional. Within 1 month of initial risk classification Within 2 months of initial risk classification Responsible Manager Level 3 Chair, Safety Review Team Single investigator or investigative team using corporate resources and external resources as required. HF analysis mandatory. Short term CAP within 1 week of initial risk classification Long term CAP within 2 months of initial risk classification Short term CAP within 3 weeks of initial risk classification Long term CAP within 4 months of initial risk classification Short term CAP within 6 weeks of implementation Long term CAP within 6 months of implementation Safety Management Committee Level 4 Investigative team using internal and external resources. HF analysis mandatory. Short term CAP within 48 hours of initial risk classification Short term CAP within 4 weeks of implementation CAP – Corrective Action Plan HF – Human Factors

Database Findings / Causes / Actions Page

Managers & Supervisors Front line Employees Training Training must ensure: “… that personnel are trained and competent to perform their [safety management] duties…” Canadian Aviation Regulations 107.03(d) Safety Management Plan specifies initial and recurrent training standards for Safety Department Senior Managers Managers & Supervisors Front line Employees “…as appropriate to the individual’s responsibilities in the safety management system.” WestJet Safety Management Plan Section 9

Initial, update and recurrent training covers (as required): Organization structure Human factors analysis Roles and responsibilities Risk classification system SMS principles Corrective action plans Company safety management plan Emergency response Regulatory requirements Occupational safety and health Documentation processes Corporate safety database Safety reporting systems Safety communication plans Investigation techniques Changes to SMS regulations Proactive risk assessment Annual safety performance reports Delivery methods individual and group SMS briefings indoctrination training application training (eg. safety database) online self-study

Communication Safety Newsletter Corporate communications Executive presentations WestNet (company intranet) Base visits Indoctrination training Department meetings SAC, SMC meetings Jetsmarts (e-learning) Managers conference Job descriptions Performance appraisals

SMS VIDEO

You have many elements of SMS in place NOW Communication Easy to understand for ALL employees Dynamic introduction to SMS fundamentals focuses on proactive risk management Features many employee groups: Dispatch, Maintenance, Flight Crew, Scheduling Ramp Agents, CSAs, Training, FOQA You have many elements of SMS in place NOW

Examples of SMS Savings Fuselage Ice Occurrence (Reactive Risk Assessment) Repairs & Downtime: $30,000 $30,000 / yr. Single Agent De-icing (Proactive Risk Assessment) Each Occurrence: $50,000 $50,000 / yr Workers Compensation Premiums (Integrated Risk Management) Forecast Annual Savings: $100,000 - $500,000 / yr Category A or B Occurrence $$$$$$

Summary Safety Management Systems will: Formalize and document many current safety processes Introduce new and improved safety programs Force greater consistency and rigor in operational risk management Bring new challenges Evolve with new regulations, your company and the industry Change corporate culture

Safety Management Systems