Safety Management Systems

1. Safety Management Systems

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

3. 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

4. Available Seat Miles (Annual - billions)

5. Revenue (Annual - billions)

7. 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

8. 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

9. 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

10. 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

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

13. 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

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

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

16. 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*)

17. 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

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

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

20. FDM Report

21. FDM Report

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

23. Risk Management Matrix Risk Management Matrix CAP – Corrective Action Plan HF – Human Factors

24. Database Findings / Causes / Actions Page

25. 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

26. Training Initial, update and recurrent training covers (as required):

27. 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

28. SMS VIDEO

30. 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

31. 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$$$$$$

32. 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

33. Safety Management Systems