Conclusion That Regional Airlines Use More Outside Facilities Disputed

Regional airlines that outsource maintenance and repairs should make sure their quality-control people are keeping a sharp lookout. Federal Aviation Administration (FAA) inspectors are spread too thin and are not able to provide effective oversight, according to a July 8 report by the Department of Transportation's Inspector General (DOT/IG).

DOT/IG's review of FAA oversight of in-house and outsourced maintenance shows that the agency has too few inspectors spread across too broad a front, with an ineffective and porous database that does not point to problems in a timely manner for better targeting of scarce inspector resources.

In fact, the DOT/IG report presents staffing information suggesting how reassigning the FAA's inspector workforce could provide more oversight of outsourced maintenance work.

While the audit focused mostly on major carriers' use of aircraft repair stations, it took a limited look at outsourcing by other carriers. It singled out regional carrier Atlantic Southeast Airlines (ASA), a wholly owned subsidiary of Delta Air Lines [NYSE: DAL], implying that regional airlines may lead the majors in the use of outsourced maintenance facilities.

The report said that as of December 2002, major air carriers were using outsourced repair stations for 47 percent of their total aircraft maintenance costs. It pointed to ASA and said the airline "uses outsourced maintenance ... for two-thirds of its maintenance costs."

ASA disputed the claim, saying the figures used for total maintenance expenses fail to include salaries of maintenance personnel. If included, the percentage of outsourced maintenance costs versus total maintenance costs would go down, ASA's Kent Landers told CRAN.

ASA's total outsourcing costs have grown because its fleet has grown, he said. The airline recently celebrated the delivery of its 100^th regional jet, and its maintenance workforce has grown from 389 to 650 over the past two years, Landers said.

The report cites several maintenance facilities that it says have deficiencies. Landers said ASA uses none of those facilities listed, and relies on its own inspectors to monitor the maintenance vendors it uses.

"We're very confident in the outside vendors that we work with," Landers told CRAN. "We have an inspection process of our own ... and if those outside organizations don't meet our standards then they would not be our partners ... We're going to hold those companies to the same high standards that we would hold our own people to."

The FAA has no mechanism in place to collect information on how much repair work is outsourced, the report said. Debby McElroy, president of the Regional Airline Association, said her group does not keep records either.

The DOT/IG documented potentially fatal malfeasance at many of the facilities it checked over the course of its 16-month inquiry. "At 18 of 21 facilities checked by government investigators, contract mechanics used incorrect aircraft parts and improperly calibrated tools and had outdated manuals," the report reads. Improperly calibrated tools can easily put pilots and passengers at risk.

Improper procedures can do the same, as was the case in the Jan. 8 crash of an Air Midwest twin-turboprop in Charlotte, N.C. The elevator control cables had been improperly tensioned by the outside maintenance contractor, leaving the pilots with insufficient pitch control (CRAN, June 30).

"The type and extent of problems we found at domestic and foreign repair stations ... all relate to a lack of effective FAA oversight and, if not corrected, could lead to an erosion of safety," the report said.

FAA officials largely agreed with the DOT/IG's findings, but discounted any negative impact on safety. "There's no data in the report to support a safety issue," FAA Administrator Marion Blakey said.

But the audit was done, the DOT/IG said, as part of its ongoing reviews of "the FAA's oversight of aviation safety." The DOT/IG couched its findings in terms of a potential "vulnerability" to safety, due to the lack of data at the federal level on which to assess the safety of maintenance practices. This flies in the face of the FAA's often-touted commitment to "data-driven safety."

Principal findings from the report suggest that the erosion of safety oversight is well under way:

• Outsourcing. Airlines are increasingly outsourcing maintenance to repair stations both in the United States and overseas.
• More money spent. In 1996, major air carriers spent $1.5 billion (37 percent of their total maintenance costs) for outsourced aircraft maintenance. In 2002, the major carriers outsourced $2.5 billion (47 percent of their total maintenance costs).
• FAA focus remains fixed on in-house facilities. "Certificate management inspectors performed 199 reviews of one air carrier's internal maintenance operators and only 7 reviews of repair stations used by this carrier," the report said. "However, this air carrier outsourced 65 percent of its maintenance costs in 2002."
• Undetected discrepancies. Discrepancies in repair station operations went undetected at 86 percent of the stations visited. "FAA's oversight ... did not verify that repair stations used FAA-approved parts and properly calibrated equipment in 71 percent [of the] facilities we visited," the report said. Inspectors discovered some repair stations using outdated maintenance manuals and not segregating scrapped parts from usable parts.
• Overseas and out of sight. The FAA conducts few inspections of overseas repair stations and is unable to determine if they meet its standards.
• Unrequited recommendations. Because of 10 accidents tied to improper or mistaken maintenance, the NTSB recommended in 1997 that the FAA improve its oversight of in-house and outsourced repair stations. "While these recommendations were made over six years ago, we found that the same weaknesses in repair station oversight prevail today."
• Stretched thin. From the report: "The district office inspectors in the 9 offices we reviewed had oversight responsibility for an average of 23 operators, 9 of which were repair stations." One FAA inspector was assigned oversight responsibility for 21 repair stations, 21 agricultural operations, 12 service-for-hire operators, three general aviation operators, two helicopter operations, and one maintenance school.
• Swift and superficial. The report said: "FAA inspectors do in fact record thousands of ... inspections [but] the number of inspections recorded is misleading." (Emphasis in original). One inspector recorded completion of 10 different inspections in one day for a visit to one repair station, the report said, and inspectors generally conduct full facility inspections only once or twice a year.
• Data deficient. Key pieces of inspection information are omitted from the SPAS (safety performance analysis system) database, the report said, including the names of repair stations inspected and what was inspected at each repair station.
• Conclusion. "Air carriers' increased use of repair stations and the procedures FAA uses to provide oversight of these facilities have left vulnerabilities in the quality of aircraft repairs performed at these facilities," the report said.

The FAA claims it already has stepped up its inspections of contract repair stations. The agency said about 20,000 such inspections were conducted in fiscal year 2002. As of June 1, it had conducted 15,685 repair station inspections. This tally was at the two-thirds point in fiscal year 2003, indicating that the FAA already has completed 75 percent of the total number of inspections it conducted last fiscal year.

The FAA oversight workforce today numbers 1,745 inspectors. Of this number, 708 provide oversight of 5,250 repair stations doing 47 percent of the work. The remaining 1,037 inspectors provide oversight of 139 airline shops, which do 53 percent of the work.

-- David Evans, Editor-in-Chief of Air Safety Week, contributed to this report.

>>Contact: Kent Landers, ASA, 404-766-1400. The full DOT/IG report may be viewed at http://www.oig.dot.gov/item_details.php?item=1124 <<

One Perspective On Contract Maintenance

John Oxley, Air Midwest regional site manager, in a Jan. 31 interview with National Transportation Safety Board investigators, following the Jan. 8 crash of Air Midwest flight, in which faulty maintenance at the contractor maintenance facility in Huntington, W. Va., has been implicated (extracts):

Q: How do you feel about [maintenance personnel] who are contracted, as opposed to keeping --

A: I didn't like it. But ... we are trying to keep in business and the way things are now, I can see it is going to save money. I never did like it.

Q: Do you have any concerns about it?

A: Not particularly. I am just of the opinion we ought to do our own maintenance. It just has always been my opinion. I think that Air Midwest had their own QA [quality assurance] inspectors ... if we are going to have contract maintenance I think we ought to have our QA inspectors.

Q: [Is technician] turnover a problem?

A: Yes ... what is the use of somebody coming in here for a month and you are training for a month and he has gone? You have to start all over again. To get experience on the floor, that is what the benefits would be, to keep experience on the floor ... I probably have had more people quit than I had on the floor ... I probably had 15 files of people who quit, in six months. That is a high turnover rate.

Source: NTSB, see http://www.ntsb.gov/events/2003/AM5481/docket/default.htm