Rob Kella - Chief Risk Officer

The Simplicity of Aviation Safety Management Putting Practical Ideas Into Practice - Airline Risk Management

Bringing Risk and Assurance Together

2

Jetstar

QantasEngineering

Finance& Strategy

People

Services(Airports and

Catering)

Qantas Airlines

Risk andAssurance

LoyaltyQantasFreight

Enterprises

The Group - “Sum of the Parts”

3Group Governance andRisk Management Model

Operations

Str

ateg

icFinancial

Segment Risk and Assurance Personnel

Risk and Assurance

Risk Review Group

Segment

Board of Directors

Board Safety, Environment and Security CommitteeBoard Audit Committee

Safety and

Environment

Mgmt Committee

Executive General Manager

“Scope to Reach Across

the Group”

Segment Risk/Safety Committees

Ongoing Management of Safety and Risks

Safety and Risk Leadership Committee (Exco)

4

Logical synergies across Risk and Assurance

• Aviation and occupational medical services

• Medical advice (employees and passengers)

• Environmental compliance and risk management

• Environmental improvement programs (inclusive of fuel and non-fuel initiatives)

• Internal compliance and control

• Corporate governance

• Occupational safety compliance and risk mgmt

• People safety improvement program

• Risk management advice, consulting and reporting

• Risk and assurance improvement program

• Aviation safety compliance and risk management

• Oversight of Group aviation safety standards

• Security compliance and risk mgmt

• Group security services

• Business resilience

Risk and Assurance

Chief Risk Officer

Aviation Medical Services

Internal AuditRiskSafety SecurityOccupationalHealth and

Safety

Environment and Fuel

Conservation

Established in March 2006

5

Increasing complexity of external risk environment

Continuous pressure to change - related impact on the risks of doing business

Management demand for more timely risk information

Increasing/changing demands from regulators; further compliance

requirements

Re-alignment of governance models within Group

Leveraging safety and risk management expertise across Group

Why?

6

• Oversighting operations

• Supporting Segments in complying with regulations and managing regulatory relationships

• Providing timely risk analysis/reporting/advisory and assurance services

Improve visibility and awareness of risk

Sponsor/manage risk and assurance improvement initiatives across business

through:

Objectives and Supporting Activities

7

Board Safety Board Safety CommitteeCommittee

Qantas Airlines Qantas Airlines Safety CommitteeSafety Committee

Management Safety Management Safety Review Committee Review Committee (Flight Operations)(Flight Operations)

Type Committees Type Committees (Each Fleet)(Each Fleet)

Escalate Risks & Trends

Risk and Assurance

Representation

Common Information

Source (AQD)

Case Study 1

Supporting Safety Management - Flight Ops

8

Input Process Output Outcome

Measure overall riskiness of operating

environment

Measure quality and effectiveness

of safety management

systems

Measure safety activity

Measure safety outcomes

Case Study 1

Measuring Safety Management Performance

9

2.1 Occurrence Risk Index

2.2 Findings Risk Index3.1 Safety System Assessment

3.2 Overdue Action Close Out

4.1 Occurrence Investigation

4.2 Safety Meetings

1.1 High Risk Occurrences

1.2 High Risk Findings

1.3 Damage Costs

Case Study 1

Measuring Safety Management Performance

10

From

Percentage Effort

2005/06

50

50

2008/09

To

Protect/Create Value

Value for Money

Decision Support

Fieldwork and Reporting

Case Study 2

Ongoing Transformation Challenge

11

Align/re-engineer R&A activities (risk assessments, investigations, audits, etc)

Work with Segments to re-align/re-engineer their related activities

Roll out information system strategy

Further redesign advisory services by leveraging risk information

Utilise integrated risk information to work with regulators (increase awareness

of risk management system); minimise potential for unnecessary regulation

Case Study 2

Current Improvement Initiatives

12

Audits

Business Performance

Incidents

Risk Assessments

Policy/Regulations

Investigations

Data Capture Where?

Integrated Management System (Control

Framework)

Why?

KRI Scorecard(Lead/Lag)

Rev

iew

Pro

cess

es

Business Behaviours,Business Processes and Infrastructure

Monitoring and Analysis

Es

ca

lati

on

Ma

na

ge

me

nt

Re

vie

w L

ev

el

of

De

tail

Case Study 2

Integrated Management System - Overall Design

13

Management review embedded in AOCs

Safety performance indicators developed

Mature safety information systems (eg, AQD)

Safety systems audit and safety investigation methodology and skills

Embedded operational risk assessment process

Expand scope to other operational areas across Group

Migrate to a broader risk control framework

Expand to provide interim/prototype solutions (eg, action tracking)

Develop common audit and investigation models

Integrate with a broader, common risk assessment model

Established SMS Process Elements IMS Process Elements

Case Study 2

Leveraging SMS Successes

14

Organisation that embraces change

Culture that empowers sharing

Continued support/advocacy from the top

Organisational positioning

Culture that empowers safety and risk ownership

Structured/disciplined processes

Ongoing Success Factors