Safety Management and Outsourcing

By Frank Boksanske, Aircraft Mechanics Fraternal Association (AMFA)

National Safety and Standards Director

"The Third Annual Aircraft Outsourcing Conference"

5-6March 2003

Zurich, Switzerland

The events of 911 and results from deregulation of the airline industry have fostered increased price competition causing operators to examine all possible ways to control costs. Aircraft maintenance is an area that has received particular focus from air carriers as it represents from 15 to 20 percent of direct operating costs.

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.

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.

Each air carrier in the United States is 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.

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.

Critical, from the safety perspective, is the relationship between the FAA and JAA regulatory authorities resulting from the current trend to provide for an international system of mutual recognition of standards for approved maintenance organizations.

In spite of this process of internationalism neither the, ICAO, FAA, nor JAA have the resources to properly monitor the standard of aviation maintenance around the world.

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.

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. United Airlines 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.

The certified aircraft technician employed by an air carrier is held to a higher standard than the non-certified worker at a 3^rd Party Maintenance Provider (3PMP) that is encouraged by the loose regulatory requirements of FAR 145 and the requirements of a maintenance program such as MSG-3.

The non-certified worker in a 3PMP facility is instructed to look at exactly what he is told and will document only what is in the assigned inspection area.

In contrast, the certified technician is required by federal law to report maintenance discrepancies and may be subjected to civil penalties and certificate action by the regulatory agency for non-compliance.

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 question may be asked as to the effectiveness of existing oversight programs.

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.

An analysis of an Aviation Subcommittee August 2002 hearing on Capitol Hill, titled Adequacy of FAA Oversight Passenger Aircraft Maintenance by AMFA points to flaws in CASS:

The reality is, that 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.

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 United States air carriers, and the chronic under-reporting of maintenance discrepancies, by requesting documentation from certified technicians in the field. Several 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, has recently submitted to AMFA, the FAA and the Department of Transportation Inspector General’s office hundreds of pages of documentation relating to maintenance safety incidents resulting from maintenance performed at independent sub-contractors in the United States. The documents showed unlicensed secretarial personnel 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, United 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.

In addition to the maintenance discrepancy data requested of the technicians, AMFA conducted two 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 aftershock from deregulation and the event 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. Some industry leaders feel that through specialization, 3PMP’s are able to apply learning about the maintenance of a certain aircraft type sooner than an individual carrier would. This is known as the learning curve effect or the experience curve when in reality the learning curve is inversely proportional to experience level, motivation and education.

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.

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.

Comments from a former United Airlines technician points to a system in need of overhaul:

The story of Thomas Regner, employed by a US air carrier, is a classic example of a system that ironically depends on the checks and balances provided by certified technicians. Upset that several aircraft hadn’t been properly repaired before they were put back into passenger service, he began reporting safety violations to the Federal Aviation Agency. He would later argue his FAA-issued license required him to take his obligation to safeguard the flying public seriously.

His employer didn’t see his actions in the same light. In April 1998, the company terminated him, contending that he was really participating in a mechanics’ work slowdown. Almost four years later, a federal arbitrator concluded that Regner had been motivated by concern for public safety and required Northwest to give him his job back with full back pay.

The violations Regner flagged run rampart in an industry plagued by perilously thin profit margins. In recent years spectacular crashes have been caused by seemingly small glitches. Ironically, the improper use of fire-containment tape that first prompted Regner to call the FAA adds to the big picture of complacency. Statistically, fires – and the resulting toxic smoke in the cockpit – cause just 4 percent of crashes, but that category accounts for two of the most notorious recent incidents: ValuJet in 1996 and Swissair in 1998.

In the United States, air carriers are concerned over outsourcing maintenance to other airlines, perceived to be, or are actual competitors for, primary business. The U.S. carriers continue to outsource to the independents.

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.

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"

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 recognizes 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".

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 FAA also issued a NPRM in June 1999 to rewrite Part 145. The proposal also encountered staunch resistance and remains mired in controversy.

Conclusion

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.