Aviation Audits

The value
of Aviation
Audits
The pursuit of
safety has created
new rules and
regulations imposed by
governments around
the world. However,
improvements in the
safety record all start
and stem from how an
operation is managed.
AviationAudits
Written By: Scott Liston and Bill Yantiss
ARGUS International, Inc.
April 12, 2011

The Need for an Audit
As private air travel continues to grow and gain popularity, so do the concerns for aviation
safety. The demand for safety is not unreasonable; however, the requests have forced
operators to have numerous audits performed to various standards causing economic
problems for each operator. How did we get to this point in the aviation industry and how
do we stop burdening operators with multiple audits without sacrificing safe and quality air
travel? To answer these questions, we must first look back at the basics.
An audit is an evaluation of an organization, system, process or product relative to an
accepted standard. Many are familiar with a financial audit, which is an established
process, commonly performed by a qualified third party, to confirm the integrity of an
organization’s accounting procedures and accuracy of financial reports. Aside from
financial audits, one of the most commonly performed audits is the quality audit. A quality
audit is performed to specifically verify conformance to set standards through a review of
objective evidence. Many aircraft service providers operate under a comprehensive quality
management system that may require an array of quality audits to:
• Verify the existence of objective evidence showing conformance to required
processes
• Assess how successfully established processes have been implemented
• Judge the effectiveness of achieving any and all defined target levels
• Provide evidence concerning the reduction or elimination of problem areas
• Be a hands-on management tool for achieving continual improvement in their operation
Many know quality management systems as they relate to the ISO-9000 standards. In the aviation industry, the manufacturing side of
the business embraced the idea of quality management systems. However, it wasn’t until the 1990’s when the various aircraft operating
segments began utilizing these types of quality management systems in an effort to create increased efficiencies, drive up customer
satisfaction, improve employee morale and satisfaction, increase international awareness, enhance marketing messages and often
times increase profitability.
The business aviation sector, defined herein primarily as those operations utilizing turbine-powered aircraft in an unscheduled,
4240 Airport Rd. Suite 300, Cincinnati, OH 45226 // 513.852.1010 // argus.sales@argus.aero // www.argus.aero -2-

on-demand commercial operation, have long suffered from numerous audits due to the absence of
an accepted global standard. It has become commonplace for aircraft operators to proactively seek
out an audit, by a respected auditing firm, against a standard that has been developed over time with
the participation of the industry. These audits should identify areas of improvement and provide some
positive recognition for the operator. This recognition allows the operator to market their operation in
a way that would differentiate them in a crowded and competitive landscape. Aside from this elective
audit, many operators also undergo numerous additional audits, at the request of specific customers.
The buyers of charter usually retain their own auditor to ensure that their specific requirements are
being met, making that operator eligible to receive charter service requests.
Commercial business aircraft operators have long been concerned with the number of audits they must
undergo. Audits are financially expensive for a business and take employees away from performing
their normal tasks. In recent years, some industry organizations have attempted to improve this
situation with the development of an audit program that would yield respect and buy-in from the marketplace. Unfortunately, this only
muddied the waters with the creation of yet another audit standard that some aircraft operators would have to endure.
Globalization of Aviation
The business aviation industry has marked significant growth around the globe since the
1990's. What was once an industry dominated by North America and Western Europe, is now
filled with aircraft being sold and delivered to customers throughout the world including the
developing markets of:
• The Middle East
• South America
• Eastern Europe
• China
• India
• The African Continent
The International Civil Aviation Organization (ICAO) was permanently established in 1947 as a means to

secure international cooperation at the highest degrees of uniformity
in regulations and standards, procedures, and organization regarding
civil aviation matters. As civil aviation around the world changes
and matures, ICAO has facilitated much of it. Even their mission has
evolved over the years focusing on three strategic objectives:
1. Safety – Enhance global civil aviation safety
2. Security – Enhance global civil aviation security
3. Environmental Protection and Sustainable Development of
Air Transport – Foster harmonized and economically viable
development of international civil aviation that does not unduly
harm the environment
ICAO’s Safety objective has resulted in the responsibility to develop
standards, recommended practices, procedures and guidance
material related to the operation, certification and airworthiness of
aircraft. One of the major safety initiatives in recent years is known as Integrated Safety Management. The ICAO Integrated Safety
Management initiative is dedicated to the development and implementation of safety management principles, policies and related
activities. Such activities are intended to cover prescriptive as well as performance based safety oversight
processes and tools. These processes and tools are implemented as part of an overall continuous
monitoring approach to safety management. An integrated safety management function will provide
ICAO with a focused and consistent framework to guide strategic decisions to assure continuous
safety improvements within the global air transportation system.
This initiative is rolling out in a large and visible way throughout all aspects of the international
aviation community. Integrated Safety Management is now more commonly referred to as Safety
Management Systems (SMS) and ICAO has developed standards, practices, and guidance material
for both the operational and regulatory side of this initiative. Although the ICAO compliance date for
commercial aircraft operators was November 2010, some countries around the world have implemented
SMS regulatory requirements while others have not. However, there is tremendous activity occurring in this
arena and it is believed that SMS will become a regulatory requirement around the world in the near future.
Business Aviation Integrated Safety Management

As the aviation community began to focus on safety initiatives, the business aviation operators
needed their own standard that met their unique needs. The business aviation specific organization
International Business Aviation Council (IBAC) occupies a seat at the ICAO table and has been
tasked with the responsibility of encouraging and promoting the development and implementation of
SMS around the world for the business aviation community. IBAC, in cooperation with the business
aviation industry, developed a standard entitled the International Standard for Business Aircraft
Operations (IS-BAO). IS-BAO is centered around the need for Integrated System Management and
was introduced to the industry in May, 2002.
As of mid-2011 there have been nearly 1,400 business aircraft operators who have taken the first
step towards IS-BAO compliance by purchasing the IS-BAO Tool-kit. The toolkit is designed to assist
business aircraft operators with developing and implementing Safety Management Systems that meet
the ICAO Standards and Recommended Practices (SARPS). Many flight departments implementing
IS-BAO may wish to obtain a Certificate of Registration from IBAC, thus demonstrating compliance with a
recognized international standard. IS-BAO Registration occurs with the successful completion of an audit performed by an IS-BAO
accredited third party audit organization. The audit progresses in three distinct stages of registration for the operators, with each stage
requiring the operators to demonstrate a more active and fully functioning SMS.
The IS-BAO standard was designed for all business aircraft operators around the world, including fully developed and developing
aviation markets and operators of all sizes and operational complexities. It is anticipated that many countries will consider IS-BAO
implementation and registration to be one of several ways by which an operator can achieve compliance with current and eventual SMS
regulatory requirements. Some countries, like Bermuda, have already announced this and many others have included similar language
in their published SMS guidance materials.
IS-BAO is proving to be an acceptable way of introducing the operating and regulatory communities around the world to the concept of
SMS. In fact, IS-BAO registration should be viewed as an excellent global minimum standard for buyers of commercial operations being
flown on business aircraft.
Utilizing Charter Services
In the early days of commercial operations for turbine powered business aircraft, there were basically two ways by which an individual
or corporation could utilize these services, 1) Purchase and operate their own aircraft, or 2) Arrange for a charter trip from a duly
authorized service provider and pay on a trip by trip basis.
What has occurred over the years is the global development of these two options as well as additional possibilities coming in the form

of fractional aircraft ownership and card programs. Fractional ownership
occurs when one purchases a portion of an entire aircraft and shares
the expenses and usage with other owners, while card programs are
prepaid charter commitments between customers and charter brokers
and operators whereby the customer is guaranteed certain service
expectations in exchange for their commitment of dollars and/or hours.
Card programs are ultimately flights carried out under commercial
regulations by certificated charter operators.
During this same time period many of the privately owned flight
operations, fractional programs, and charter operators have developed
world-class safety and service programs featuring highly trained flight
crew members, flying modern aircraft with advanced avionics systems,
and customer entertainment/business packages. This widespread
“raising of the bar” has forced commercial providers to emulate if they
were to be successful competing for this same client base. Many
flight departments, fractional companies, charter brokers and card companies have developed specific criteria requiring these same
characteristics for any charter services utilized in support of their specific needs.
While the IS-BAO standard has done an excellent job focusing on operational SMS requirements found at the core of the standard,
there is a need for a charter standard that goes above and beyond the IS-BAO. This charter standard would determine that not only
the operational requirements are being met or exceeded, but that other requirements of the entire operation are being satisfied. This
includes higher pilot experience and training minimums, safety history, insurance documentation and many other industry best practices
related to the overall customer experience, were being satisfied.
To meet this need, ARGUS International, Inc. developed the ARGUS Platinum Standard in 2000.
The Platinum Standard was created from the input of charter buyers and operators carrying the
requirements for extremely high levels of operational excellence as well as those other factors most
sought after by the experienced charter consumer. ARGUS’ Platinum standard works in conjunction
with ARGUS’ proprietary Charter Evaluation and Qualification (CHEQ) program. CHEQ not only
considers the outcome of a detailed audit performed against the Platinum standard, but it also
factors in the accident and incident history of the operator, its flight crew and charter aircraft. The
CHEQ program additionally receives a steady stream of input from charter companies regarding
their operation such as changes in pilot flight times, training accomplishments and certifications,

aircraft additions and deletions, and liability insurance documentation. The ARGUS
Platinum standard therefore exceeds the requirements of other audit programs, as it is
the only one to work with past and on-going information. This ensures the “moment
in time” perspective developed from an on-site audit remains consistent with the audit
outcome. More importantly, ARGUS CHEQ will notify the charter buyer when certain
changes have occurred with an operator that would not be consistent with maintaining
a positive reflection of a particular operation or aircraft/flight crew assignment to a
specific flight.
Confidence in the Audit: Auditor Selection,
Certification, and Standardization
The value of an audit report to a customer or civil aviation regulatory authority is
based on two important factors: 1) The content of the audit standard includes both
regulatory requirements and industry best practices, and 2) The rigor and consistency
in which the audit was conducted. Simply stated, the users of the audit report
must have absolute confidence in both the integrity of the standard, as well as the
competency of the audit team that performed the audit.
Industry and regulatory acceptance of an audit report for any service provider is dependent upon a number of aspects:
• Highest Performance Standard: The use of a comprehensive audit standard appropriate for the specific aviation sector
• Auditor Selection: A stringent auditor selection and initial training program
• Quality Control: An independent review of each audit report to ensure adherence to established auditing standards and protocols
• Auditor Standardization: Periodic assessment and critique of each auditor to validate auditor performance during all phases of
the audit—audit planning through audit closure
The first requirement of a comprehensive standard is achieved through the combined application of the IS-BAO and ARGUS
Platinum standards. IS-BAO was developed to assess the overall health of the organization’s management system with an
emphasis on Safety Management as the cornerstone of the standard. Similarly, the ARGUS Platinum Standard in conjunction

with CHEQ provides real-time assessment of the operational risk associated with each flight.
Integration of the IS-BAO and ARGUS Platinum Standards into a single on-site audit provides the
customer and regulatory authority with an objective operational assessment.
The second factor for consideration is the careful screening of auditors to ensure they possess
the personal traits to complement a strong skill base. To that end, auditor candidates must
be ethical, systematic, open-minded, mature, tactful, analytical, logical, discreet in managing
information, and open to alternative ideas and methods. In addition to these personal traits,
auditors are selected on the basis of possessing a general knowledge of ICAO Annexes and State
regulatory requirements, quality and safety audit principles, procedures and techniques, and technical
expertise in the areas of flight operations or aircraft maintenance management. IS-BAO and ARGUS’
Platinum accredited auditors have extensive operational and management experience, thus providing
the expertise required to make critical judgments on the operational health of an organization. Following selection, these auditors are
provided both initial classroom and on-site training to ensure a consistent application of the audit standard and preparation of the final
written audit report. A well-trained and disciplined auditor will produce consistent and thorough assessments as reflected in a factual
audit report.
The third critical factor provided by these audit programs are the inherent high standards associated with report preparation and
review. The structure and content of each audit report is based on years of operational experience, an understanding of State
regulatory requirements, industry best practices, and the unique needs of the end user. Once the on-site auditors complete
an audit report, each report undergoes at least two independent quality control reviews to ensure conformance to audit protocols and
report content. Ambiguities or errors are addressed directly with the on-site auditor to ensure the end user is provided with a detailed,
useful, and accurate assessment.
The fourth and final factor of importance to all stakeholders is auditor recurrent training, checking, and standardization.
Recurrent auditor training provides auditors with an update on interpretation of new standards, a review of potential audit report
deficiencies, and reminders of best auditing practices. Auditor standardization provides the user with assurance that the audit
was thorough, objective, and consistent.

The audit division of ARGUS, known as ARGUS PROS, has developed and implemented a
benchmark for a professional auditing firm utilizing all of the factors described above. The
ARGUS PROS audit program is strengthened through the requirement that audit teams
are composed of two auditors who specialize in the areas of flight operations and aircraft
maintenance. During the on-site phase of the audit, each auditor is dedicated to conducting
a “deep dive” into these respective disciplines, thus enhancing the customer’s confidence that
the audit is properly resourced and thorough. With more than 1,000 on-site audits performed
over the last decade, ARGUS PROS has defined the standard by which other auditing firms
aspire to obtain.
The Need for a Single Audit
Audits are a valuable tool for companies around the world. Organizations need and want to strive for excellence; audits provide the
feedback for continuous improvement enabling them to reach their goals. However, with the growing aviation industry we see new audit
standards being requested by charter buyers every day. This puts financial and employee stress on the flight departments as they try to
keep up with the various requested standards.
With the development of IS-BAO combined with the ARGUS Platinum audit,
operators can have two audits performed during one single visit. This
alleviates the need for multiple visit audits from auditing organizations and
saves the operator a significant amount of time and money.
ARGUS International, Inc. (ARGUS) is the industry leader in providing specialized aviation services to companies that manufacture, finance, operate,
maintain, and market commercial and business aircraft, as well as providing products and services to end user consumers worldwide. ARGUS is the
worldwide leader in performing on-site safety audits for corporate flight departments, charter operators, and commercial airlines. Key services include
Charter Evaluation & Qualification (CHEQ) and CHEQPoint, Professional Resources In System Management (PRISM), TRAQPak market intelligence data
service, aircraft operating cost reports, market research, and aviation and travel consulting. ARGUS is headquartered in Cincinnati, OH, with additional
offices in Denver, CO, Philadelphia, PA, and Columbus, OH.
4240 Airport Rd. Suite 300, Cincinnati, OH 45226 // 513.852.1010 // argus.sales@argus.aero // www.argus.aero

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