GAO to FAA: Look for Airline Performance Metrics to Improve MRO Oversight

By Juliet Van Wagenen | August 16, 2016
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[Avionics Today 08-16-2016] Additional airline data and performance metrics could benefit FAA-regulated Maintenance, Repair and Overhaul (MRO) stations, according to a new U.S. Government Accountability Office (GAO) report. The government watchdog report, released in late July, examines airlines’ maintenance contracting practices and FAA’s oversight of domestic and foreign repair stations. The report points to missed opportunities by the FAA to improve oversight and operations by collecting airline data regarding the amount of work performed repair stations; it also suggests there is lagging supervision at foreign MROs.

Technicians work on an aircraft
Technicians work on an aircraft. Photo: Southwest

Safety Assurance

Airlines worldwide spent about $62 billion on maintenance in 2014, representing around 9 percent of total operational costs, according to the GAO report. While commercial airlines perform most of their light maintenance in-house, the carriers often contract out heavy maintenance activities, such as airframe, heavy engine and component maintenance, to the nearly 4,800 FAA-regulated repair centers globally. Contracting these activities to third-party repair centers allows the airlines to reduce costs, align those activities with their routing structures, and leverage specialized capabilities available in particular locations, either domestically or in other countries.

While the FAA has taken steps to implemented and improve the Safety Assurance System (SAS) for maintenance shops, a system that aims to standardize how its inspectors identify safety risks in planning and conducting oversight, GAO found it could be doing more regarding evaluating the effectiveness of this system. The FAA began implementing SAS for repair stations and airlines in fiscal year 2014, and completed an initial rollout in January 2016, but hasn’t yet established measurable goals to streamline repair station operations.

“FAA has undertaken major changes to its oversight model for repair stations by the transition to SAS, but has yet to develop specific and measurable program goals and measures,” the GAO report recommends.

The FAA disagreed with this recommendation in a response letter include in the report, however, noting that it “considered other volume-related data,” but it said that the agency would look to improve risk-based oversight

Airline Metrics

Moreover, GAO considers the FAA can improve its efforts to pull in airline data, which the report identified as a missed opportunity to improve repair station operations.

“Without incorporating data on the volume of maintenance work performed for U.S. airlines into FAA’s repair station oversight process, FAA’s ability to administer a comprehensive risk-based oversight system could be limited,” the report states, noting that this information would help determine trends in airlines’ use of contractors and identify the often-used repair stations. “FAA is missing an opportunity to better leverage its limited resources by collecting such data as a potential indicator in performing its risk assessments of repair stations.”

The FAA disagreed with the GAO’s recommendation, noting that while the FAA does not specifically assess volume of work as a primary factor in demining risk at repair stations, the agency monitors several risk indicators associated with volume of work, such as “rapid growth or downsizing of an organization, changes in aircraft complexity/programs, air agency ratings, changes in management, and high workforce turnover.”

Foreign Oversight

The report also identified issues with the FAA’s oversight of foreign repair stations, an issue that will become paramount as growing fleets in emerging countries are expected to substantially contribute to an increasing maintenance market over the next decade. For U.S. airlines, contracting to third parties has remained relatively steady in the last five years. According to the report, 61 percent of their aircraft maintenance spending in 2014 was contracted to domestic and foreign repair stations, and the overall level of spending for contracted maintenance remained steady from 2010 through 2014.

While growth in the North American maintenance market is expected to be minimal due to limited anticipated aircraft growth among airlines in this region, countries such as China, India, Latin America and the Middle East will see significant uptick in their maintenance markets. For example, for engine maintenance, the Asia-Pacific region is expected to surpass North America and become the largest market for that type of maintenance by 2025, while North America is expected to remain the largest market for airframe and component maintenance by 2025.

“Regulatory requirements for foreign repair stations differ from those of domestic repair stations, including the certification process, renewal of the repair station certificate, personnel requirements, and drug- and alcohol-testing requirements,” the report states. Moreover, “intergovernmental and other restrictions have generally precluded FAA inspectors from conducting unannounced inspections at foreign locations."

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