Union and Consumer Group Criticize Airline Maintenance Outsourcing

A powerful labor union and a consumer group have called on the Federal Aviation Administration (FAA) to do a better job monitoring aircraft maintenance performed overseas. The call came from the Teamsters Union and the Business Travel Coalition, which co-sponsored a national summit on aircraft maintenance...

For immediate service; more information; and multi-user access (site license), non-profit organization, educational institute pricing, contact Karen Garner kgarner@accessintel.com at (301) 354-1612.

This story is only available to paid subscribers. Please login below with your username and password if you are a subscriber.

Username:
Password:
	What is my password?

Subscribe     Trial

A powerful labor union and a consumer group have called on the Federal Aviation Administration (FAA) to do a better job monitoring aircraft maintenance performed overseas.

The call came from the Teamsters Union and the Business Travel Coalition, which co-sponsored a national summit on aircraft maintenance outsourcing on Feb. 11 in Washington, DC.

The Teamsters, which represent mechanics at major U.S. airlines, have long criticized the practice of U.S. airlines sending maintenance overseas where the work is done cheaper. Air safety advocates, members of Congress, and current and former members of the National Transportation Safety Board (NTSB) also voiced their concerns at the summit.

The summit drew nearly 200 participants from the aviation industry, government agencies and the aviation industry. Sen. Claire McCaskill (D-Missouri) and Rep. James Oberstar (D-Minnesota) gave videotaped presentations at the event.

Oberstar, chairman of the House Transportation and Infrastructure Committee, said legislation the House passed last year to reauthorize the FAA would require the agency to raise the requirements on overseas facilities. The legislation is still pending in the Senate.

McCaskill, a member of the Commerce and Homeland Security Committees, said she found it "kind of weird" that passengers can't carry shampoo on an airline flight yet there are lax security standards for overseas repair shops.

We can't wait for the smoking hole. We can't be waiting for an accident. We have to get in front of it," said John Goglia, a former NTSB member.

Speaking on a panel, Deborah Hersman, a current Safety Board member, noted that the NTSB can only recommend that the FAA adopt tougher rules to prevent airline accidents. But often better procedures or practices aren't adopted by the FAA until after a serious mishap, she said." At the end of the day, unfortunately, as we've seen too many times, it does take an accident to change people's minds. It does take a death toll before issues are corrected," she stated.

At the summit, Greg Feith, a former NTSB investigator, moderated panels in which invited speakers debated the current state of outsourcing. Feith urged the speakers to discuss possible solutions to the safety and security issues.

Some of the legislative ideas that were considered include: increased frequency and depth of FAA inspections to domestic and foreign repair stations; required criminal background checks for repair station employees; mandated drug and alcohol screenings; and harmonized standards for U.S. airlines for all repair stations.

Teamster mechanics are urging Congress to impose a moratorium on any further outsourcing of airplane repairs and maintenance by the country's airlines until there are uniform maintenance standards and FAA oversight, saying they are concerned about the dangers to passenger safety and national security that the practice poses.

"Teamster aviation mechanics are worried about the non-stop rush to outsource. They see firsthand the shoddy and dangerous work that comes back from poorly qualified, badly regulated contractors. Mechanics tell us that they won't even let their own families fly on airlines that outsource heavily. That should be a wake-up call to Congress and the airlines," said Teamsters General President Jim Hoffa.

"We need to call for a moratorium of all overseas maintenance. We need a moratorium and we need it now. This moratorium should not be lifted until every one of the 700 (overseas) repair facilities meet our standards," he added.

The mechanics union says major U.S. domestic carriers dramatically increased outsourcing in recent years, and now spend nearly two-thirds of their maintenance dollars on contract repair stations here and abroad, including facilities in operations in China, El Salvador, Mexico, and the Philippines. Foreign repair stations are not required to have the same number of FAA-certificated mechanics, or the same security rules, as airline-owned repair facilities in the U.S., the union noted.

The concern is over the outsourcing of airline maintenance in the absence of a single, high standard, and an equally high level of FAA oversight.

The U.S. Department of Transportation Inspector General's office has documented problems in this area over several years.

The increasing outsourcing of aircraft maintenance by U.S. carriers alarms DOT IG Calvin Scovel because gaps remain in FAA supervision of foreign repair stations.

In a recent congressional hearing, Scovel said that the U.S. airline safety record "is a remarkable accomplishment given the many changes occurring within the industry." He said air carriers continue to struggle for profitability, cutting costs by reducing in-house maintenance and increasing the use of external repair facilities, many of which are located in foreign countries.

While U.S. air carriers have outsourced maintenance for years to both domestic and foreign repair facilities where repairs are cheaper, the practice has grown in recent years.

From 1996 to 2006, air carriers continued to increase the percentage of maintenance dollars spend on outsourced maintenance---from 37 percent to 64 percent. In 2006, $3.7 billion of the $5.7 billion spent on maintenance was outsourced, said the DOT IG. Of the heavy maintenance outsourced by nine U.S. airlines in 2006, 35 percent was sent to foreign maintenance providers, up from 21 percent in 2003.

"The trend in outsourcing is significant and underscores the need for the FAA to ensure that it has accurate information on where critical maintenance is performed so it can target its inspection resources," Scovel stated.

The work taking place overseas includes everything from repairing landing gears, engine overhauls to heavy maintenance checks.

Outsourcing of maintenance is a booming business with the DOT IG noting that the number of foreign FAA-certificated repair stations working on U.S. aircraft has increased from 344 in 1994 to 698 in 2007. "We have emphasized that the issue is not where maintenance is performed but that maintenance requires effective oversight," Scovel testified.

The DOT IG has identified "challenges in the FAA's ability to effectively monitor the increase in outsourcing...the continued growth in outsourcing underscores the need for the FAA to remain vigilant in continually improving its oversight."

Consumer Reports published a damning investigative report in March of 2007, and most recently, the Teamsters released its own report detailing the dangers of outsourcing.

The summit was the first of several high-profile events the Teamsters and the Business Travel Coalition plan to hold on the subject of outsourcing maintenance work.

The two groups have formed the Coalition to Legislate Aircraft Maintenance Outsourcing Reform (CLAMOR). This reform package will stem from a set of principles that ensures the highest standards of aircraft maintenance.

Kevin Mitchell, chairman of the Business Travel Coalition, said that the summit was the first national forum on the outsourcing controversy.

Aircraft maintenance outsourcing reform principles debated at the conference were:

• A single and highest maintenance standard should be emplaced for airlines' in-house facilities and domestic-U.S. and foreign repair facilities.
• FAA oversight of domestic-U.S. and foreign repair facilities should be increased to a level that is commensurate with the volume and complexity of current outsourcing practices.
• The full cost of FAA inspections and audits should be borne by airlines that choose to outsource to overseas repair facilities.
• Airlines that outsource to overseas repair facilities should hold such facilities to high environmental standards with respect to disposal of toxic wastes and other processes associated with aircraft maintenance.
• Domestic-U.S. and foreign repair facilities should have adequate safeguards in place regarding the background of personnel, aircraft access and parts inventory to frustrate terrorists who might exploit an opportunity to do harm to the U.S. or other countries.

For its part, the FAA says overseas repair stations are closely regulated and monitored. The agency requires air carriers to ensure that their contract maintenance and training programs, and the contractors themselves, fully comply with federal regulations.

There are approximately 4,187 domestic and 709 foreign FAA-certified repair stations performing "outsourced" maintenance under tough FAA standards.

Some air carriers contract out aircraft maintenance. For example, it may be more efficient to have an original manufacturer perform engine overhauls, repair of components or warranty work. Airlines must meet stringent FAA requirements if they rely on contract maintenance.

• Air carriers have to ensure that all contractors follow the procedures specified in the air carrier's maintenance program.
• Air carriers must list all contractors on a vendor list; only substantial maintenance providers have to be approved in the air carrier's operation specifications.
• The airline must show that the provider has the capability, organization, facilities and equipment to perform the work.

Both the air carrier and the FAA inspect work done at repair stations. The air carrier conducts oversight through its Continuing Analysis and Surveillance System, which requires audits of the facilities working on the carrier's aircraft.

Inspection requirements come from the National Work Program Guidelines (NPG) order issued annually, and is based on risk analysis of results from the previous year's surveillance. The NPG establishes a base level of surveillance data that should be evaluated, including areas such as facilities, maintenance processes, technical data and training programs. The FAA uses risk assessments tools to retarget resources and develop the following year's inspection program.

FAA inspectors perform on-site visits and review air carrier audits. An FAA inspector is not required to give notice prior to an inspection. The inspector presents any issues found to the repair station informally during a briefing prior to leaving the facility. A formal letter of findings follows, and the FAA may start enforcement actions for violations of regulations.

Many U.S. air carriers rely on foreign repair stations outside the United States for at least some of their maintenance. These facilities are certified annually by the FAA, and a repair station may lose its certificate if it does not comply with FAA requirements.

The agency only certifies the number of foreign repair stations it can effectively monitor. Oversight is conducted by FAA inspectors assigned to field offices in London, Frankfurt, Singapore, New York, Miami, Dallas and San Francisco.

FAA standards for foreign and domestic repair stations are the same. Just as for domestic repair stations, the FAA conducts at least one comprehensive, in-depth inspection annually for renewal of the repair station's certificate. The FAA notifies a repair station prior to an inspection to meet the repair station's security requirements, make sure the appropriate personnel are available, and allow the facility to do any needed coordination with remote work sites or contractors. The agency also notifies the appropriate U.S. embassy and the country's national aviation authority.

Using risk analysis tools, FAA inspectors identify potential safety hazards and target inspection efforts on areas of greatest risk. During the inspection, the FAA verifies that the facility and personnel are qualified to perform the maintenance functions requested by the air carrier or listed in their operations specifications. The entire inspection is done during a single visit; the size and complexity of the repair station may require several days and several inspectors to complete the work.

The United States has bilateral aviation safety agreements with France, Germany and Ireland. These agreements eliminate duplicate efforts by the FAA and the national aviation authorities, and specify that each authority perform certification and surveillance activities on behalf of the other.

The FAA audits these national aviation authorities, reviews their inspector guidance materials, inspector staffing levels and training programs, and performs joint repair station audits with the authorities' inspectors. Under these agreements, the FAA conducts sample inspections of repair stations located in these countries.