Bankrupt carriers get ‘special emphasis’ by aviation safety inspectors
Federal oversight of safety is to be increased at financially distressed carriers. The watchwords for those carriers operating at the edge of solvency are “be prepared.”
“The concern for safety continues to be a dominant theme,” said Marion Blakey, head of the Federal Aviation Administration (FAA) at a recent briefing to reporters of steps the agency is taking to assure adequate oversight of the industry.
Nicholas Sabatini, associate FAA administrator for regulation and certification, whose office will spearhead the increased oversight, said, “We want to make sure the risk levels remain under control.”
The FAA initiative appears to be in response to a March 27 announcement by the Department of Transportation Inspector General (DOT/IG) of its intent to audit FAA safety oversight of financially distressed carriers (see ASW, March 31). In addition, anecdotal reports have indicated that safety margins are under pressure at bankrupt United Airlines [UAL] and at money losing Delta Air Lines [DAL] (see ASW, March 17 and April 14).
Before launching into the substance of his briefing, Sabatini joked, “Everything’s fine.” More seriously, he said, “I am satisfied today with what our inspectors are doing and how our carriers are doing.”
He said deferred maintenance is being watched, not only for parts stockage levels but also for any negative trends in deferred maintenance. “There has been a reduction in spare parts for those carriers in bankruptcy,” he said, adding, “We’re satisfied that they have sufficient stocks of spares.”
With respect to any increase in the amount of deferred maintenance, Sabatini said, “We monitor that closely against [the carrier’s] known profile.” On this front, he does not see any alarming trends.
The FAA also is watching the number of open items on aircraft minimum equipment lists (MEL). An uptick in the so-called “open MEL” rate could point to an erosion in timely maintenance. So far, Sabatini asserted, no negative trends in carriers’ open MEL rates have been observed.
Stress is safer
Indeed, the implied argument was made that financial stress can actually lead to an improved level of safety. Fleet sizes have been reduced, leaving fewer airplanes on which to concentrate maintenance, Sabatini said. With the retirement of older airplanes, leaving generally newer airplanes in service requiring less maintenance, that trend, too, allows for maintenance to be focused where it is most needed.
Sabatini said pilot layoffs also have led to an increased level of experience in the cockpit. Since the most junior pilots are the first to face layoffs, captains on larger jets may downgrade to the first officer seat in a smaller jet. In this situation, the average experience level goes up. One industry source said studies have shown that two captains in the cockpit may actually be less safe than a captain and a first officer, particularly with respect to crew resource management (CRM). Another source said there is some merit to the seniority issue, but downgraded captains do undergo first officer refresher training.
A source at the Air Line Pilots Association (ALPA) said the union has its own pilot reporting system. From this separate database, the ALPA official said, “Sabatini’s overall premise is generally accurate.”
“We haven’t seen anything of real concern coming out of the pilot groups at any of the airlines we represent,” the ALPA official said. However, he recalled the drop off in maintenance at failing airlines in the past and that the present situation bears close watching and, for this reason, ALPA supports the DOT/IG’s effort.
Sabatini said the number of quality assurance (QA) personnel at bankrupt United actually has been increased. And, more generally, Sabatini said, “We have an analyst now at every certificate management office.” This has not always been the case. During the hearings into the 1999 crash of an American Airlines [AMR] MD-83 twinjet at Little Rock, Ark., the principal FAA inspector for the airline testified that he did not have an analyst on his staff.
Data-free assurances
Despite Sabatini’s assurances, for a representative of an agency that touts the virtue of “data-driven safety,” his briefing was sparse on specifics.
The number of additional inspectors and money devoted to the “special emphasis” inspections was not stated.
There was no reference to the service difficulty report (SDR) system, and whether adverse trends in the frequency and types of these reports are occurring.
No data was presented on any trends regarding turnbacks and unscheduled landings. According to an ASW analysis, there is an upward trend in turnbacks and unscheduled landings. Nearly 700 such events were found in the SDR database for three carriers: United, USAirways, and American. The first two are in bankruptcy and American reported a $1 billion loss for the quarter just ended. The period of inquiry was from January 2002 through February 2003. The incidents follow a seasonal pattern, rising with the peak summer travel season, but the overall trend is slightly upward. The trend is not alarming, but it suggests that something is happening that requires a close watch and further analysis.
No data was presented on the number of ramp inspections conducted in the last 60 days and any findings from them.
No information was presented on management turnover at the airlines of concern and the number of safety-related positions that are presently vacant, or the instances of shared positions. In the wake of a fatal January 2000 crash of an Alaska Airlines [ALK] twinjet, attributed to deficient maintenance, FAA officials found that key safety billets had gone unfilled for months, and that other managers were attempting to fulfill the responsibilities of two functions. As examples, the director of maintenance position had been vacant for two years, the director of operations position was vacant, and the director of safety was also in charge of quality control and training.
No mention was made during the Sabatini briefing of observed trends in continuing analysis and safety systems (CASS). A carrier’s CASS program is one of the principal tools of FAA oversight. Again, the gross deficiencies in CASS found at Alaska almost resulted in the airline being grounded.
A handbook the FAA published in 1998 may be germane to the case. Titled “Monitoring Operators During Periods of Growth or Major Change,” that handbook contains detailed checklists for assuring safety during periods of growth or downturns. Industry sources say that risk levels can creep up if the changes are not watched. The handbook outlines four categories of concern, running from changes in fleet size and maintenance support, to management and operations. The handbook provided a detailed checklist of items to watch for in each of these areas.
If more than half of the elements indicate change in a negative direction, the principal FAA aviation safety inspector (ASI) “should be concerned,” the handbook said.
“This approach is similar to that of an aircraft’s minimum equipment list (MEL), where certain items may be listed as inoperative at any one time, but there is an increased risk if a relatively large number of items are deferred simultaneously,” the handbook explained.
“Similarly, each growth factor must be considered individually,” it said.
Of greater interest, the handbook said carriers should submit plans to assure adequate safety when changes exceed certain thresholds. For example, if a carrier expects to grow at a rate of 10-15 percent per annum, it should submit to the ASI a plan detailing how it expects to safely manage that growth over the next six months to one year.
Similar plans to maintain safety going into or coming out of bankruptcy also would be appropriate, although there is “no specific regulatory requirement” to present such plans to the FAA, the handbook noted.
Meanwhile, Sabatini said, “On a continuing basis, our aviation oversight system is a tool that allows us to identify signs of stress, such as high turnover.” The turnover rate was one of the checklist items in the handbook.
Blocks of clay
However, the building blocks of the FAA oversight system may be cracked. In March 27 testimony to the House Aviation Subcommittee, Michael Fanfalone, president of the Professional Airways Systems Specialists (PASS), said the FAA does not have enough inspectors for oversight of financially distressed carriers. PASS is the union of FAA technicians who install, maintain, troubleshoot and certify the country’s air traffic control system.
Fanfalone referred specifically to the FAA’s air transport oversight system (ATOS) as the vehicle for “systems safety” oversight of financially troubled carriers. He said ATOS implementation has been hobbled by a shortage of people:
“Unfortunately, ATOS has never been fully implemented. When ATOS is fully implemented in all Part 121 [i.e., scheduled] carriers, according to the FAA’s own estimation, the agency will have a staffing shortfall of approximately 259 inspectors. As a result of attrition and the agency shifting money to other priorities, inspector staff has now declined to numbers approximating those prior to the ValuJet accident [the May 11, 1996, fatal crash of ValuJet Flight 592].
“PASS is concerned that insufficient staffing, inadequate training, data analysis problems and lack of commitment by FAA management will continue to hamper full implementation of ATOS.
“Increased inspector staffing is necessary to meet the demands required to oversee a financially distressed industry, to increase aging aircraft inspections, to fully implement ATOS and to provide all of the current oversight responsibilities. Disappointingly, the president’s FY 2004 budget proposal requests only $3 million to hire an additional 20 aviation safety staff. Therefore, we ask this subcommittee to authorize the hiring of 300 additional flight standards field inspectors, 30 safety support staff and 50 additional manufacturing inspectors each year for the next three years.”
Fanfalone’s concerns are reflected in greater detail by the DOT/IG. Its most recent reviews of CASS and ATOS cited significant problems. Thus, not only is the FAA short of inspectors, their oversight tools appear deficient.
Be Watchful of Trends
“The operations of aircraft requires basic costs that cannot be reduced indiscriminately. Principal ASIs [aviation safety inspectors] should be watchful of practices that show trends toward reducing costs and avoiding investments in an air carrier’s fleet and support equipment. Such practices may not individually affect safety, however, in combination, the cost-cutting may strain the air carrier’s systems.”
Source: Monitoring Operators During Periods of Growth and Major Change, FAA Handbook Bulletin (HBAW 98-21), Dec. 17, 1998, p. 25
Trouble in the Toolbox
The DOT/IG on the FAA’s main tools for safety oversight:
Oversight of FAA’s Continuing Analysis and Surveillance Systems (CASS):
“The lack of effective oversight of air carriers’ CASS perpetuates a system where [the] FAA relies on its own inspectors to ensure carriers maintain their aircraft in airworthy condition. This system is ineffective because FAA does not have sufficient resources to physically inspect every aircraft … FAA must be more proactive in identifying deficiencies in air carriers’ CASS and ensuring those problems are corrected.” (DOT/IG Report # AV-2002-066)
Air Transportation Oversight System (ATOS):
“The system is not reaching its full potential, and significant challenges to full implementation still exist … FAA needs to finish developing … its processes for analyzing ATOS inspection results … FAA needs to better prepare inspectors to carry out ATOS … FAA needs to establish strong national oversight … to ensure consistent ATOS field implementation.” (DOT/IG Report # AV-2002-088)