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The use of repair stations to complete aircraft maintenance is becoming as fundamental to air carriers’ maintenance programs as their own internal maintenance facilities. Although air carriers have outsourced portions of their maintenance work for years, this practice has recently become more pronounced. As a January 2003, major air carriers were using repair stations for 47 percent of their total aircraft maintenance costs. While major air carriers spent $1.5 billion on outsourced maintenance work in 1996, the amount spent on outsourced maintenance has increased to $2.5 billion in 2002. Teo Ozdener, vice president of technical and engineering for Morten, Beyer and Agnew tends that within 10 years, Part 121 air carriers in the United States will outsource 80% of their work. Three types of repair stations are defined as; independent repair stations, maintenance divisions of major carriers, or original equipment manufacturers (OEM’s). The basic types of maintenance services range from servicing, maintaining, or overhauling components to complete nose-to-tail maintenance services on the entire aircraft. Airline attempts to offer third party maintenance services were made in the United States in the 1980’s, and then in Europe in the 1990’s. Currently, a few U.S. carriers perform third party work such as the United Airlines engine facility in San Francisco and Delta Airlines in Atlanta. By contrast, almost all European flag carriers are involved in third party maintenance and several such as Lufthansa Technik, Air France Industries and Swiss Air Technics, are among the largest. Some air carriers in the United States continue to attempt to balance cost vs. safety by utilizing the language of FAR Part 145 that encourage outsourcing to low cost independent outsourcing facilities, both domestically and abroad, while others realize that if the quality is not there that profits will diminish. The question remains as to the effectiveness of current internal and regulatory oversight in the safety management process under current economic conditions when an air carrier does decide to outsource aircraft maintenance to an independent. The underlying message in today’s presentation is that concern for safety must be of paramount importance in the relationship between the air carrier and the outsourcing facility. Under no circumstances should an operator witness any difference in quality or reliability. Current regulatory agency oversight of outsourcing facilities in the United States will be critically examined and the present relationship of the aircraft maintenance technician in the outsourcing safety equation will be discussed concluding with safety recommendations. The practice of outsourcing has resulted in significant changes regarding how quality control and compliance are monitored. When a task is outsourced, the operator of the aircraft is still responsible for compliance of the Third Party Maintenance Provider (3PMP) with respect to the operator’s approved policies, procedures and requirements. This implies that the operator must spend additional time and resources auditing the 3PMP and inspecting aircraft for compliance. Moreover, FAA oversight of the operator requires an inspection process to include the third party maintenance facility that completes work for the operator. Inspectors located in FAA’s Flight Standards District Office have primary responsibility for oversight of repair station operations; however, they are only required to visit each facility once per year. In addition the function of the FAA Certificate Management Office, as part of their oversight of major air carriers, is to also conduct periodic inspections of repair stations. A report titled “Review of Air Carriers’ Use of Aircraft Repair Stations” was released July 8, 2003 by the Inspector General, U.S. Department of Transportation. Principal findings indicated that even though air carriers outsource close to half their maintenance expense, FAA has continued to focus its surveillance on air carriers’ in-house facilities with no comparable shift toward increased oversight of work performed at repair stations. So stretched are FAA’s ranks that in one instance the OIG discovered a single FAA inspector was assigned oversight responsibility for 21 repair stations, 21 agricultural operations, 12 service-for-hire operators, 3 general aviation operators, 2 helicopter operators, and 1 maintenance school. When the OIG visited 12 domestic and 9 foreign repair stations, it uncovered a litany of mistakes. At 18 of the 21 third-party providers it visited, mechanics employed incorrect aircraft parts and outdated maintenance manuals, and failed to properly calibrate tools. A conclusion of the findings was that the type and extent of problems found during the Inspector General’s inspection of both domestic and foreign repair stations were similar. These vulnerabilities all relate to a lack of effective FAA oversight and, if not corrected, could lead to an erosion of safety. Each air carrier in the United States is also required by Federal Air Regulation 121 to establish a system for continuous analysis and surveillance of its continuous airworthiness maintenance program, including work performed in accordance with the program by outside agencies. In addition, a Reliability Program functions to provide mechanical performance analysis that is a basic function required by FAR 121.
(b) Considerations. When issuing a certificate under this chapter the Administrator shall – (1) Consider – (A) The duty of an air carrier to provide service with the highest degree of safety in the public interest. Title 49 of the U.S. Code, Subtitle VII, Part A, Subpart I, Chapter 401, Section 40101 states in part that the Secretary of Transportation shall consider the following matters, among others, as being in the public interest and consistent with public convenience and necessity. Assigning and maintaining safety as the highest priority in air commerce. Preventing deterioration in established safety procedures, recognizing the clear intent, encouragement, and dedication of Congress to further the highest degree of safety in air transportation and air commerce, and to maintain the safety vigilance that has evolved in air transportation and air commerce, and has come to be accepted by the traveling and shipping public. Not only did the DOT-IG report state that FAA inspectors do not oversee third-party stations with the same regularity as they do of the Certificate Holder’s in-house operation but a recent Northwestern University report stated that third-party maintenance organizations do not employ the same number of certified technicians as the Certificate Holder. Having less oversight inspections and less certified technicians needed to insure compliance with the certificate holder’s maintenance program is not meeting the highest possible degree of safety in the public interest. In a July 2003 USA Today article it was stated that some of the largest U.S. airlines are posed to contract out more aircraft maintenance work than ever, which could make the safety of thousands of passenger planes harder for federal inspectors to ensure. Percentage of total aircraft maintenance spending paid to contractors by some of the largest U.S air carriers:
This year for the first time, half or more of all maintenance spending by the 10 largest passenger airlines will be paid to repair stations, says Back Aviation Solutions, a consulting firm that tracks the aircraft maintenance industry. By 2008, Back predicts, all U.S. passenger and cargo carriers as a group will outsource 60% of maintenance, a reversal from a decade ago, when about 60% of all work was done in-house. According to a recent report by the Transportation Center Northwestern University titled “Practices and Perspectives in Outsourcing Aircraft Maintenance” repair stations currently are facing several issues and challenges that will affect the quality of work they perform. One such issue is the shortage of qualified labor. The MRO industry is facing a critical shortage of qualified personnel to perform hands-on-tasks, as well as managers to supervise the technical workforce. (Aircraft Economics, 1999) George Ebbs, president of Embry Riddle Aeronautical University, has warned that the number of trained and experienced aircraft technicians is not keeping pace with industry expansion. Several factors contribute to this problem that include the high cost of obtaining an FAA Airframe and Power plant license, “archaic” training curricula, equipment that is “out of synch” with modern industry technologies and the current practice to outsource major maintenance to the lowest bidder. Certified technicians are leaving the profession for more lucrative technical career fields such as computers and electronics. Drury mentions a few comments on the rate of labor turnover and the impact on training: Repair stations are affected more by the aircraft maintenance technician shortage than air carriers. As Part 121 carriers have downsized internal maintenance operations – much of the experience has been lost to the industry altogether, as experienced aviation technicians have gone outside aviation or retired early. The aviation repair station industry seems to exhibit a migratory workforce, as workers move easily for small changes in conditions. Repair stations report a turnover rate of around 30-50% for aircraft technicians and 100% for managerial staff. Most aircraft maintenance technicians at repair stations are contractors – so there is economic pressure to minimize training for temporary personnel. Comments from a former airline technician points to a system in need of overhaul: I went to work for a 3rd party maintenance facility a few weeks back (I know, bad idea). But, I am in over my head with a family to feed. I am sure you can understand my position. I don’t want to name the facility, but suffice to say that they are looking for 200 contractors (unlicensed) now and they laid off the majority of their direct (licensed) people. I went to the facility for orientation/paperwork and was never asked for my license or to take a urinalysis. Nor was anyone else in the group asked for these things. I also wanted to add that many of the contractors barely spoke English. They were given picture cards for their jobs. I left the facility after just one week. On checkout I became aware of another situation. An aircraft maintenance employee of one of the other contract companies was being fired after 8 days on the job - the reason being that he could not legally work in the United States. I was floored that I was hearing this. He was from Argentina and was in the country on a vacation VISA. How can these companies bring these illegal into the maintenance facilities to work on a major airline’s aircraft without proper background checks? Or FAA required urinalysis testing? A May 10, 2001 article in the Wall Street Journal stated that the shortage of skilled technicians is playing out at the starter end of the industry: commuter airlines, independent maintenance contractors and the so-called general-aviation repair bases which equates to lower experience levels. A common response by the air carriers is that the data doesn’t confirm the idea that non-certified repair station workers are any less safe than certified technicians. The fact is that all maintenance data collected may not be available to the regulatory authority and cannot be used to make a statistically accurate determination. In undertaking maintenance operations, both airlines and repair stations must comply with relevant Federal Air Regulations (FAR). Air carriers operate under FAR part 121 regulations and maintenance providers/repair stations operate under FAR Part 145. Under Part 121, airlines have specific requirements for certification, training and qualification of maintenance personnel. Operating under Part 145, repair stations do not have the same level of specific and detailed requirements for certification and training. Goldsby (1998) concluded that the best the maintenance community had to offer was only available at the larger successful air carriers. A very real difference between the two is that accountability for work performed and experience level of the certified aircraft technician employed by an air carrier is held to a higher standard. The non-certified worker at a 3rd Party Maintenance Provider (3PMP) is encouraged by the loose regulatory requirements of FAR 145 and the requirements of a maintenance program such as Maintenance Steering Group Three (MSG-3). The non-certified worker is not trained in the Federal Air Regulations and is dependent upon the decision of management whether or not the regulations are being complied with. In addition, non-certified workers in an outsourcing facility may not be required to undergo Transportation Security Administration guidelines that require certified technicians to be subjected to random drug and alcohol testing, including the 10 year background check by the FBI. The Federal Aviation Administration and airline officials continue to insist there’s no evidence outsourcing is less safe than doing work in house but faulty work accomplished by contract firms known as repair stations has been blamed in past accidents. Signs of increased outsourcing to the independents, along with a recent U.S. Airways Express crash that investigators believe stems from a repair by contract mechanics, have revived longstanding concerns about FAA’s oversight of maintenance contractors. Below is a 737 operator that dispatched an aircraft after release from a vendor heavy check. All flight controls including the APU were changed during the vendor heavy check. This particular 737 experienced roll problems and had numerous deficiencies in the flap, slat and aileron systems; in addition fuel and air leaks were so severe that they were detected in the passenger cabin. This particular air carrier’s vendor oversight system must be seen as a failure since the airline has been unable to accomplish required inspection items with a chronological history of this problem
The question remains as to the effectiveness of existing regulatory oversight of not just the repair station but of the air carrier itself. Details of the FAA system of air carrier oversight in the United States may be found in a program titled the Continuing Analysis and Surveillance System (CASS). The CASS is a program designed to provide surveillance and analysis of the air carrier’s continuous airworthiness maintenance program for performance and effectiveness and to implement corrective action for any deficiencies. The checks and balances in the CASS program leaves the responsibility of compliance to the carrier itself that is merely reviewed by the FAA ATOS program guidelines. The agency is already overburdened and understaffed as stated in a April 9, 2002 Wall Street Journal article by the Transportation’s Department Inspector General, faulting the FAA for failing to carry out adequately, an enhanced inspection regime designed to keep close surveillance on the nation’s largest carriers. Of interest is the implementation of maintenance programs in the United States that stretch the limits of inspection intervals and component changes to the point of failure. The evolution of Maintenance Steering Group Three (MSG-3) maintenance program, introduced by the Air Transport Association and approved by the Federal Aviation Administration in 2001 allows the air carriers the flexibility to adjust maintenance, inspection, and overhaul intervals based upon reliability data collected without prior regulatory approval. The program requires three parameters to be used as a continuous review to determine when and if modification of the program is required – Aircraft performance, reliability and maintenance accomplished data. The National Transportation Safety Board’s investigation of Alaska Airlines Flight 261, that crashed in the Pacific Ocean 2.7 mi north of Anacapa Island, California over three years ago raised the question as to the reliability of the maintenance data collected in the MSG-3 program. An article from Air Safety Week stated in the December 16, 2002 newsletter, that the probable cause submission by the NTSB, as well as the Aircraft Mechanics Fraternal Association Alaska Airlines Flt 261 accident investigation team was the horizontal stabilizer acme nut wearing to the point of failure, due to inadequate lubrication of the jackscrew assembly. Contributing factors to the accident were: The design and certification of the DC9-83 horizontal stabilizer trim system was not redundant, in that a single failure resulted in the total loss of the longitudinal control of the aircraft. Alaska Airlines’ escalation of the decreased maintenance intervals over a continued period of time leaving the acme nut/screw threads without adequate lubrication. The FAA’s Air Transport Oversight System (ATOS) did not provide adequate surveillance to ensure that a recommended maintenance program met the requirements, as per FAR Parts 21.50, and Appendix of FAR Part 25. The following points to problems in any program that focuses maintenance tasks on limited areas of an aircraft which when placed in the environment of an independent outsourcing facility effectively removes the checks and balances from the system. A January 15, 2002 Yahoo newswire titled “AMFA Attorney Earns Victory for Aircraft Mechanic” highlights a most recent example of apparent inconsistencies in regulatory oversight of air carriers as well as the MSG-3 maintenance program. Airline mechanic George Gulliford, was reprimanded by the air carrier after reporting a crack in the frame of an aircraft that was not in the assigned inspection area. Gulliford filed a complaint with the Secretary of Labor Occupational Safety and Health (OSHA) and was afforded relief from discrimination from his employer. During a two year period no less than 14 mechanics filed “whistleblower safety complaints” with the FAA and OSHA against just one air carrier alone. In all incidences the complaint involved serious maintenance safety violations. In May 1996 a ValuJet DC-9 crashed in the Florida Everglades, killing all 110 people aboard. The NTSB said the FAA’s inadequate oversight of ValuJet, which hired contractors to do it’s maintenance, contributed to the accident. It also faulted the FAA for not closely enough overseeing aircraft repair stations like those using ValuJet. Following the May 1996 crash of a ValuJet DC-9 in the Florida Everglades, FAA announced new initiatives to upgrade the oversight of repair stations according to an October 1997 Aviation Safety report by the Department of Government Affairs titles “FAA Oversight of Repair Stations Need Improvement”. These initiatives have been implemented by the FAA but were directed at clarifying and augmenting air carriers oversight of repair stations, not at ways in which FAA’s own inspection resources could be better utilized. The Aircraft Mechanics Fraternal Association has recently conducted research into the maintenance practices of some United States air carriers, and the chronic under-reporting of maintenance discrepancies, by requesting documentation from certified technicians in the field. Technicians, including a former aircraft line maintenance mechanic, who also held the position of Warranty Coordinator in the Contract Administration Department for a major U.S. air carrier, have recently submitted to AMFA, the FAA and the Department of Transportation Inspector General’s office documentation relating to maintenance safety incidents resulting from maintenance performed at independent sub-contractors in the United States. The documents showed unlicensed secretarial personnel that were employed by the air carrier, illegally signing off as airworthy, maintenance discrepancies on aircraft being overhauled by maintenance outsourcing companies. The airline’s internal documents package also showed that its entire fleet of twenty-four Boeing 727 aircraft had been operating with unapproved engine generator breakers. The documentation highlights improper sign-off of deferrals, improper maintenance of flight controls, autopilot discrepancies, and other incidents involving faulty maintenance practices from Third Party Maintenance Providers (3PMP) such as, fuel tank repair, flight control cables crossed, and wire harnesses installed backwards. On April 1, 2002, an article appeared in Forbes Magazine highlighting serious concerns over United Airlines maintenance incidents caused by one such independent outsourcing contractor in North Carolina. Gassed up and loaded with passengers, flight 9921 was preparing to leave Dulles International for Boston on September 4, 2001, but for some reason the front passenger door on the Boeing 737 wouldn’t close. Called to the tarmac, the mechanic removed the inner door panel and found the answer; the door was falling off. “I saw all these faces looking out the little windows, and I thought What if this thing opened in flight?” he recalls. One of United Airlines maintenance subcontractors had forgotten to connect all the bolts when the jet was overhauled the week before. The subcontractor employees were disciplined, and controls were tightened. Both United and the sub-contractor told the Federal Aviation Agency, charged with regulating airline safety, about the problem yet no fines resulted. A typical contract with an outsourcer provides insight into the tremendous pressure placed on an outsourcing company to expedite maintenance. The terms state that the operator will fine the facility $12,500 for each day that an aircraft is overdue from a scheduled overhaul up to a maximum of $50,000 per aircraft. A bonus of up to $60,000 is also offered for early delivery. In addition to the maintenance discrepancy data requested of the technicians, AMFA conducted three surveys of certified technicians employed by 16 United States air carriers in 2002, finding a significant majority of the over 2000 respondents indicating that the system may promote unsafe maintenance practices. A few of the questions asked were; Have you experienced/discovered maintenance discrepancies (safety of flight issues) on aircraft shortly after being released from a maintenance check accomplished by a 3PMP (third party maintenance provider/repair shop)? Fifty-eight percent (58%) answered yes and thirty percent (30%) answered no. Yet, if the answer was yes: Do you feel your airline has taken corrective action to eliminate the problem? Ninety percent answered no. Critics argue that safety has deteriorated in the wake of the 1978 deregulation of the airlines. “Since deregulation, maintenance is just one more line item, just one more thing for the bean counters to take a whack at,” says the AMFA attorney, Lee Seham. As proof, he sites the lengthening of time between line checks. There is, he says an increased willingness to reason that “it flew in, it can fly out.” The contributing factor to the fatal crash of an Emery Worldwide DC8 in Sacramento California February 16, 2000 renewed concern regarding oversight of independent maintenance outsourcers. An elevator control rod bolt was found missing during the investigation which resulted in an uncontrollable pitch-up attitude. The doomed DC8 recently underwent extensive maintenance at an independent outsourcer in Alabama. Some United States air carriers with extensive overseas route structures in the Far East contract maintenance checks to the independents. Of interest is a recent incident of a major United States air carrier that was required to remove from service, a recently purchased used Boeing 747 after technicians discovered over 5,000 maintenance discrepancies after the aircraft returned to the United States from an acceptance check by an independent in Singapore. The Europeans, on the other hand, continue to separate primary business from the secondary business of providing maintenance support. Moreover, they will continue to use other airlines in their segments as maintenance providers. Many European airlines have built up very good outsourcing capabilities. For example, Lufthansa, Swissair, KLM and Air France, all have their own Maintenance Repair Operation business and outsource to varying degrees. Richard Jego, industrial strategy director, Air France Industries, says: “These airlines recognize that MRO is a business by itself, which contributes to the overall profit of the airline” In Europe, quality assurance is mandated. That’s the function of the European’s JAR-OPS 1.035, which requires that operators establish a quality system to monitor compliance. There is no similar mandate under the Federal Air Regulations. Although the European authorities require that operators establish a quality system, FAA Advisory Circular (AC) 120-59 (Air Carrier Internal Evaluation Programs) merely promotes a voluntary program. FAA attempted to mandate quality systems in its new Part 145 rule, but in the final Part 145.201, it withdrew the requirement of establishing and maintaining a quality assurance system. The FAA withdrew the requirement because of costs to repair stations, but it might try to revive the quality system issue in a subsequent Notice of Proposed Rulemaking (NPRM) in the future. For those that want to implement a quality system now, ISO 9000 is available. ISO 9000 is the International Organization for Standardization’s standards requirements for quality management systems. On June 1, 2001 the gulf between European and American standards for aviation maintenance widened dramatically according to a Study by Purdue University Professors Michael Leasure and Ronald Sterkenburg. While Europe’s aviation technicians embark on a new chapter in aircraft maintenance, their counterparts in the United States are following standards mandated by regulations formulated in 1962, and minimally updated since. The contrast between JAA requirements and FAA regulations is noteworthy. European aviation technicians are honing their expertise on digital avionics and advanced materials while U.S. technicians are forced to learn little-used techniques, like airframe fabric repair and applying dope but little to nothing about technology prevalent on today’s aircraft. The FAA recognized the dichotomy, and in 1998 it issued a notice of proposed rulemaking (NPRM) to update Parts 65 and 147. The opposition was so vitriolic that FAA withdrew the NPRM in 1999 and retreated to “study the issue internally”. A report titled Outsourcing Decisions in Aircraft maintenance prepared by Northwestern University in the United States under grant by the Federal Aviation Administration stated that there has been little progress to streamline the FAA regulatory change and review process in the United States. Other nations are able to make significant progress in the area of regulatory change while the United States moves very slowly with maintenance regulatory action. Political oversight and special action committees have not been effective at changing rules. Recent proposed changes to FAR 145 took three years to go through the Notice of proposed Rulemaking Process (NPRM) and were supposed to take effect April 2003, then set back to October 2003, and recently set back another 120 days. FAA 8310 Handbook for Airworthiness Inspectors still does not incorporate the changes and are only modified with bulletins. FAA Part 145 regulations are murky to say the least and fall far short of European standards. JAA-145 regulations require the approved maintenance organization must have appropriate aircraft type rated staff to support the category C certifying staff whereas current FAR-145 regulations merely require an individual with a repair certificate to direct the work performed by an undetermined number of non-certified workers under the repair station certificate.
The aftershock from deregulation and the events of 911 have created an environment in the aviation industry as one of survival, leading to cost cutting measurements unparalleled in the history of civil aviation. Given their specialization in procedures and aircraft types, the theory is that 3PMP’s are able to project cost savings in the three areas that are the primary cost drivers in the maintenance area: scale of the operation, labor rates, and productivity. In reality, maintenance personnel in the outsourcing community are regulated by the language of an antiquated FAR 145. This serves to reduce the checks and balances of certified maintenance professionals inherent to a Part 121 air carrier when maintenance is outsourced. The bottom line is the inherent design and certification requirements of an aircraft serve to balance the issues that follow during the operational life of an aircraft to reduce the probability of a catastrophic accident. Regardless of manufacturing controls, this critical balance of fail-safe engineering is subjected to regulatory issues, management decisions, implementation of relevant safety programs, and the experience level and qualification of technicians in the field
Recommendations Develop and implement regulations to require the establishment of a Maintenance Outsourcing Steering Group at each certified air carrier, comprised of air carrier flight safety management personnel, aircraft maintenance standards representatives, and the regulatory authorities. The Maintenance Outsourcing Steering Group would have the authority to monitor and ensure that corrective action has been taken to correct problems resulting from the outsourcing of the air carrier’s maintenance to 3PMP’s. Air carriers currently are not required to self-disclose data and the question arises as to how a problem is recognized and how regulatory oversight can be effective if maintenance data is incomplete. Develop a safety data reporting system exchanged between each air carrier; monitored by the Maintenance Outsourcing Steering Group, specifically designed that would address maintenance errors found on aircraft and equipment released by both the air carrier and independent outsourcing parties. The current regulatory structure does not provide for a seamless communication network between the air carrier, regulatory authority, and outsourcing facility Integrate the functions of the Maintenance Outsourcing Steering Group to interact with the regulatory agencies principal maintenance inspector (PMI) from both the air carrier and the outsourcing agency to review procedures and maintenance discrepancies regarding outsourcing. According to an outsourcing study by Northwestern University; all respondents to the study reported that there was very little communication between the principal maintenance inspector (PMI) of the vendor and the airline. In addition, no respondent said that they were involved in the audit when the FAA conducts an inspection of a vendor. Revise regulations to require that outsourcing facilities conform to the same air carrier certification requirements regarding technician qualifications as was approved by the regulatory authorities during initial approval of the air carrier’s operating certificate. This revision would standardize aircraft technician certification requirements to maintain the same personnel standards for both the air carrier and outsourcing facility. Develop and implement innovative change to the certification and training requirements of aviation technicians in the United States to require certified air carriers to conform to a training program, standardized by the regulatory authorities to revise and supplement initial certification. Experto Credite - Latin for: “Have faith in experience” has a very special meaning in the aviation maintenance environment. |
