Due diligence takes priority over profits

Up-to-date training of pilots and crew, the best equipment and attention to detail are among numerous factors that underpin passenger safety and security whether the flights are to the world’s hotspots or to seemingly routine destinations. This feature starts a regular series examining the broker’s need to treat due diligence on client safety and security as a career-long obligation.

Charter brokers and operators who refer business have a professional obligation to their clients to take all reasonable steps to ensure that the aircraft chartered on their clients’ behalf are operated to acceptable standards, ensuring a safe journey.

Client safety must of course, be the first priority well before even the issue of competitive pricing can be addressed. However, though work may start with ensuring that the chosen operator has a first-class safety record and procedures, a broker needs to have an open-ended commitment to ensuring due diligence is as up-to-date and as comprehensive as possible.

The Aircraft Crashes Record Office (ACRO) in Geneva, Switzerland, points out that aircraft safety has come a long way in more than 100 years of ongoing refinement. Built-in safety features include evacuation procedures, computerised auto-recovery and alert systems, engine durability and failure containment improvements and landing gear that can be lowered even after loss of power and hydraulics. ACRO, which compiles statistics on aviation accidents of aircraft capable of carrying more than six passengers, not including helicopters, balloons or fighters, says: “When measured on a passenger-distance calculation, air travel is the safest form of transportation available.” But it adds: “However, when measured by fatalities per person transported, buses are the safest form of transportation and the number of air travel fatalities per person is surpassed only by bicycles and motorcycles. This statistic is the one used by the insurance industry when calculating insurance rates for air travel.” Safety issues are seemingly endless, ranging from pilot training to aircraft maintenance and from airport security to sensible destination and itinerary precautions. For the small broker, and even its global counterpart, there are numerous issues to be addressed in a finite amount of working time.

Mutual referral networks

Brokers and operators work through mutual referral networks and trustworthy personal contacts. Being able to rely on a business contact is critical in an industry where one mistake on even very routine issues can lose tens or even hundreds of thousands of dollars worth of business. There is an anecdote where an entrepreneur chartered private aircraft separately for his wife and his mistress who had very different tastes where flowers were concerned. The florist, out of stock of what was ordered, sent the wrong type of flowers to the wife’s aircraft and the unfortunate broker lost a valuable client.

The broker might not be held legally or professionally responsible for an operator taking on board sub-standard fuel in an out-of-the-way airport or for sub-standard maintenance by a technician with family issues. However, every broker needs to be as sure as possible that no such issues will be a disruptive or even business threatening problem.

Industry databases can help. For example Avinode, which has long carried ARG/US safety ratings in its marketplace, will be featuring Wyvern ratings as well. “This addition will allow members to make informed and reliable choices from an even wider array of operators,” Jim Betlyon, Wyvern ceo, says.

Wyvern, which is now a wholly-owned subsidiary of Avinode, has served the charter industry for more than two decades using bespoke methodologies. The services that now contribute to the Wyvern Standard were created to fulfil the needs of corporate flight departments and charter brokers wishing to conduct safety due diligence on their vendors. Betlyon explains: “These arrangements eventually grew into the formalised procedures carried out by Wyvern to ensure that companies operate within the Wyvern Standard. Initial operations and maintenance inspections tend to take about two days. Wyvern can also issue a Pilot and Aircraft Safety Survey, or PASS report, for each trip to verify that aircraft are legally operated, insurance is valid and flight crews have relevant flight experience.”

Operators who pass a recurrent Wyvern audit and maintain updated company, aircraft and crew data are issued a Wyvern recommendation. Kristina Jelenic, an Avinode product specialist, explained that the addition of Wyvern recommendations in the Avinode marketplace means that users now have a wider array of safety ratings to view. “By pairing Wyvern recommendations with ARG/US ratings we can now offer both our brokers and operators an even more secure and simple charter experience,” Jelenic said. The added availability of Wyvern data in the Avinode marketplace is the result of the merger of Avinode and CharterX earlier this year. Many brokers rely on their personal contacts and networks. Some rely on several, or even a multitude, of different small networks that they know from experience that they can trust. Prestige Aircraft, Real Executive and Corporatejets are an example of broker and charter organisations who have worked together to their mutual satisfaction.

Financial considerations

Whatever the approach, both the broker, either directly or indirectly, and the operator have to budget for the cost. Baldwin Aviation and Gray Stone Advisors, a change management consulting firm based in Knoxville, Tennessee, have invested in online, investigative analysis tool targeted at business aviation operators seeking to determine the financial impact of implementing a rigorous and formalised Safety Management System (SMS) on their flight operations. “Mandated SMS programmes are becoming the rule rather than the exception for flight departments conducting international flight operations in today’s global business environment,” says Don Baldwin, ceo and founder of Baldwin Aviation, “but demonstrating the reasons for investing in an SMS to non-aviation related executives within a company can still be an issue, so this ROI calculator is a simple way to shorten that conversation.”

“We have a lot of business aviation sector clients examining and implementing rigorous and formalised SMS programmes, and others who needed a tool just to help them start the discussion with the folks in finance and accounting,” adds Jim Lara, principal at Gray Stone Advisors. “When we didn’t find a tool on the web that was specific to business aviation, easy to use and didn’t require a purchase, we decided to create one, so we got together with Baldwin Aviation and developed this calculator.”

Baldwin Aviation, an IS-BAO registered SMS implementation company, says the practical benefits of proactive safety management and consistent, up-to-date training can be measured in dollars as well as in time savings and increased operational efficiency. Baldwin points out: “Insurance companies usually recognise the benefits of a well-defined programme by reducing their rates for operators. Consistent monitoring of procedures and overall management of operations usually translates into competitive advantages.”

FlightSafety International says its clients can now receive preferential pricing and preferred access to Argus International’s Prism SMS. Director of strategy and business development Chris Weinberg says it is aligned with the ICAO ‘four pillars of safety management’ concept and is fully IS-BAO compliant.

The EBAA is conducting a web-based survey into fatigue that will gather information to help EU-based pilots meet new regulations that become effective in June 2012. Brian Humphries, president and ceo, explains: “This study will collect crucial data from business aircraft pilots that will be used as the basis for customised EU flight time regulations. To date, business aircraft have operated with the same regulations as the airlines, though with some national variations. When the new regulations are introduced, national variations will not be allowed. But this study, which takes just 30 minutes and needs a minimum of 1,000 responses to validate the poll, will collect crucial data from business aircraft pilots which will be used as the basis for customised EU flight time regulations.” Mark Rosekind of California’s Alertness Solutions, a specialist in the effects of fatigue, is working with EBAA on the project.

Non-commercial business aircraft operators will need to have SMS in place to comply with ICAO requirements. This legislative requirement is driving the development of products and services. AeroEx says: “We now provide comprehensive SMS programme support including essential elements of SMS programmes, web-based SMS Pro applications and SMS manual preparations.”

The major focus of the broker and operator has to be on the aircraft, the airports used and any concerns about the chosen destination. The utmost caution was exercised by brokers and operators as Bangkok generated world headlines. The ASA Group, a charter operator, broker and an Asian vip aviation security specialist with a base in Bangkok, has been on regular high alert for weeks. Simon Wagstaff, ASA md (pictured on the front cover with colleague Julie Ambrose), advises clients to protect their assets as well as their person. “There are some airports where we recommend security measures that are in addition to those provided by the airport,” says Wagstaff. “It is obviously worth ensuring that a multi-million dollar private jet is protected from damage and any intrusions that might affect the client. ASA employs its own personnel but there are obviously situations where local expertise and manpower is also required. In those instances we use firms we know and trust and also employ our own personnel to check and ensure on the spot that the security is at all times to the standards we require.”

Wagstaff says that 2009 was tough but that business has picked up in 2010. ASA opened a new office in Singapore in January and has won a two-year security contract there. He says: “It pays to be cautious although Bangkok is safe for the average person. I have lived in Thailand for several years and people are generally patient and easy going. However, during these uncertain times, trouble could break out at any moment and it is wise to have strategies in place to avoid danger.”

Language skills

A decorated British soldier with three decades of experience underpinned by advanced aviation security management training, Wagstaff escorts clients who require the utmost discretion. These include heads of state. Local knowledge and language skills help ensure that clients do not get into trouble at hotspots. ASA started out by providing security services in the Far East in countries including Thailand, the Philippines and Indonesia. It has broadened its sphere of operations to include countries such as Japan and Korea and is diversifying its private aviation services.

Wagstaff says: “We recently had a client who wanted to ski in Japan. He needed a bodyguard who spoke English and Japanese and was a top skier. We provided what he needed. ASA gets all kinds of requests and these include those with some exceptional requirements. There are numerous scenarios ranging from the ordinary to the very unusual and much might depend on whether the client is travelling alone on business or incorporating a holiday with his family. Generally, however, for many people, it is largely a question of applying common sense and adhering to simple rules. It is always advisable in a foreign country to keep a low profile and not attract any undue attention. In some cases we might advise the client to use a lower profile airport or a hotel with particularly appropriate security procedures.”

Wagstaff points out that, although headquartered in the Far East, ASA operates worldwide with its core operational focus stretching from Turkey in the west to Japan and China in the East. “China is an interesting market with a great deal of potential and it is one that requires a large amount of specialist local knowledge,” Wagstaff says.

 

Heightened risk

These issues are also emphasised by many other security focused companies such as the ASI Group. Gabriella Cserei, the ASI Group’s intelligence analyst, responsible for the northern Africa region, points out that inadequate security measures at airports heighten the risk of operating flights in high-threat destinations.

Cserei says: “The airports in both Bangkok and Islamabad have problems with corruption and substandard monitoring systems. At Mumbai’s Chhatrapati Shivaji facility concerns are a primary threat. Although attempts have been made to secure the facility following the November 2008 terrorist attacks in the city, a number of security problems plague the airport, including corruption, poor training and management of personnel, as well as substandard facility security measures.” For example, she says, general aviation parking areas are not separately fenced or well lit, and security monitoring of various operational areas is not always adequate.

She adds: “Airport authorities vet contractors who have access to secure areas, though the contractors’ actual employees seldom undergo background checks and have been implicated in acts of vandalism against private aircraft. In addition, general terrorism concerns in India greatly increase the overall threat profile of the airport.”

Similarly, Murtala Muhammed airport in Lagos, Nigeria, another high risk destination, is also primarily characterised by substandard facility security. “Safety shortcomings have been prominent at this facility for years. While some security improvements have been made, including the installation of state-of-the-art security scanners, significant concerns remain. An incident in April 2010 in which a woman reportedly breached security and boarded a flight without a ticket demonstrated the continuing concerns at this facility,” Cserei says. “Corruption and scams are problematic at this facility. Local police and military personnel regularly solicit money, and con artists posing as immigration officers have been known to extort money from travellers and aviation personnel. Guards and criminals outside the airport are known to bully passengers, using intimidation to extort ‘fees’.”

ASI’s guards, she says, are selected with extreme due diligence and must follow ASI’s strict Post Orders for guarding aircraft. Guards are properly uniformed and are held to a higher standard based on the Post Orders that they must adhere to. ASI’s Intelligence Department also reviews the security conditions of international airports. Through the Intelligence Department, airport security briefings are available to assist clients in making their security decisions.

As with conditions at VABB, the secondary concerns of terrorism and local instability, combined with primary facility security concerns, make this location a higher threat to corporate air travel, Cserei warns.

Regardless of what primary security threat affects a given location, it is generally a combination of concerns that elevate a destination into the high risk category. “As these destinations highlight, security measures are often inadequate at the airports,” she points out. “The executive aviation industry must therefore approach such high risk destinations in just as stringent, if not even more elevated manner as the commercial sector.” She warns that flight operators must obtain detailed security assessments of destinations and airports in advance of departure.

 

Secure area

Brokers need to check that operators have a strong focus on ensuring aircraft parked at airports are safe – partly to protect their clients’ possessions left onboard, but also to ensure availability of the aircraft for the return leg.

Sri Luckshmanan, security services manager Universal Weather and Aviation, says: “When people go to a shopping centre, they typically try to park in a secure area, lock the doors, set the alarm and take their keys. But sometimes those same individuals travel to a foreign country and leave multi-million dollar aircraft unattended for several days.”

Another client once declined aircraft security and elected to use security tape as an alternative. Luckshmanan says: “When they arrived for departure the next morning, the tape had been tampered with, requiring a time consuming thorough check of the aircraft to ensure no explosives or other threats had been planted. I’ve also had clients that have had large amounts of cash stolen from aircraft that were thought to be in secure airports. This kind of thing can and does happen.”

Luckshmanan says the key is to understand the security risks of each airport that the private or charter aircraft will be using. “Universal can supply its clients with detailed information about each airport and then let them make their decision on whether to hire aircraft security. It is important to take a number of issues into consideration such as the amount of lighting in the area the aircraft will be parked, the quality of the fencing surrounding the airport, the airport’s policy on who can enter the parking area. We can ensure clients have all the information they need to make informed decisions.”

Matt Burdette, chief of intelligence for the ASI Group, says there remains an increased effort by operators to maintain heightened levels of security that were brought to pre-eminence by the 11 September 2001 attacks. However he warns that there is an increasing risk of complacency in recognising, evaluating and pre-empting new security concerns to aircraft, crew and passengers. “This is of particular relevance to charter brokers and operators who serve an ever-increasing number of potential clients and a wide range of destinations,” he points out.

There are many other safety issues which brokers need to study and be familiar with. Charter Broker will be examining these issues and more in forthcoming editions.

 

Important checks for the charter broker

There are numerous procedures that air charter brokers should carry out to ensure aircraft stay secure and safe. A few of the important checks include:

• Establishing a screening process and performing proper due diligence on charter operators
• Obtaining and reviewing reports from third-party independent safety auditors for operator, aircraft and crew.
• Verifying the charter operator has a current Part 135 operating certificate, the type ratings and qualifications/training of flight crew members, and that the liability insurance carried on potential aircraft is adequate
• Obtaining “day of flight” contact information for the client and passenger to get in touch with them directly in case issues arise during the trip
• Performing proper due diligence on all clients/passengers and provide information that the charter operator will need to conduct security-related vetting in advance of the flight
• Being alert to factors or indications that a flight might not be legitimate, and expressing any concerns you may have to the charter operator