Lawyerslog
| Home / Blog
Slow to learn: regulatory oversight of the safety of outsourced aircraft maintenance in the USA

Slow to learn: regulatory oversight of the safety of outsourced aircraft maintenance in the USA

Category:
Posted by-Lawerslog
Member Since-29 Dec 2015

Introduction 

 Several workplace disasters have been caused by a lack of regulatory oversight. Recent examples include the U.S. mine disasters (Upper Big Branch mine, April 20101) and elsewhere (the New Zealand Pike River mine disaster, November 20102) Similar conclusions were made about explosions and fires at BP Texas City's refinery in 20063 as well as the Deepwater Horizon oil rig. 4 Investigations revealed gaps in regulatory coverage that could have prevented or covered hazards that were not known. Investigations revealed that safety violations were often not detected or addressed for long periods due to inadequate resources, poor inspections, or failure to penalize noncompliance. Researchers such as Haines are focusing more attention on the problem of regulatory deficiencies and how to fix them. Five major changes in work organization over the last 40 years have made it more difficult to correct regulatory deficiencies. These include restructuring and increased use of outsourcing, subcontracting, and supply chains. Modifications to work organization can change risk patterns, sometimes with devastating consequences. The 2001 explosion and fire at Toulouse's AZF chemical plant in France was caused by fragmentation of safety-critical tasks resulting from multi-tiered, subcontracting. These inquiry results are consistent with increasing research that links contingent work to serious adverse health and safety outcomes. These work arrangements also undermine regulatory regimes, according to other studies. Bernstein et. al. (9), argue that precarious work has led to regulatory failures in the areas of standard coverage and enforcement, as well as disparate treatment of different workers. Studies have also shown that changing work structures can lead to more complicated webs of duty holders, which can obfuscate regulatory responsibility, reduce worker participation and place additional demands on already stretched inspectorates. These issues are addressed in this paper, which examines the US aviation industry. The 1970s saw significant changes in the airline industry, with the rise of low-cost carriers, which included overheads through leasing aircraft and outsourced maintenance. The long-established major airlines (also known as "legacy airlines") were under increasing competition and had to adopt cost-cutting measures. Major carriers outsourced 64% more maintenance between 1996 and 2008. This was a significant increase in the cost of maintenance. The global shift to outsourcing maintenance by US carriers was a key factor in the rise of a globally dispersed maintenance and repair sector. 12 Outsourcing has many advantages, including technical specialization and skilled workers. However, cost savings are a major driver. This allowed for smaller repair shops to be opened and maintenance can be outsourced at a competitive price. In-house repair stations that are unionized in industrialized countries had higher labor costs than those in nonunionized areas. Additionally, offshore maintenance providers in countries like Brazil, China, and the Philippines had lower labor costs (from 10% to 50%) than those in the USA, Australia, and the UK. 12 Concerns were raised from the beginning about the safety of outsourced aircraft maintenance. The USA saw six serious incidents involving aircraft between 1995 and 2009. These include the May 1996 flight crash of ValuJet 592 in Florida, which killed all 105 passengers and five crew members. The January 2003 crash on Air Midwest Flight 5481 in Iowa (which killed all 21 people on board), were just two examples. The 13 National Transport Safety Board (NTSB), which investigated these incidents, found that there were 

                                       

 failures in organizational structure (poor supervision and management systems), regulatory oversight, and inadequate inspection and enforcement. There also was evidence of financial and economic pressures due to the outsourcing and subcontracting of other industries. 14 The problems with regulatory oversight can be magnified when work is outsourced to fix stations in another country. This is especially true for countries with weaker regulatory regimes (in terms of law, inspectorates, enforcement, governance) and governance. This paper examines the response of the Federal Aviation Administration (US air safety enforcement agency), to these issues. It also discusses the oversight of its activities by the government review body - the Transportation Department Office of Inspector General and the Government Accountability Office (previously the 'General Accounting Office, GAO) - along with the House of Representatives subcommittees on aircraft. This study reveals how slow the FAA responded to these issues and also outlines wider challenges in moving to systems-based regulatory regimes. These changes are worldwide and the study raises questions about the response of aviation safety regulators in other countries to them. The potential for safety in maintenance has increased with the increase in outsourcing aircraft maintenance. However, it wasn't just outsourcing that caused safety concerns. The potential safety hazards posed by the use of older aircraft or leased aircraft from low-cost carriers, and financial pressures that come with increased market volatility were also issues that needed to be addressed. 15 Kenneth Mead (then Director of Aviation Issues at GAO), a body responsible for reviewing the effectiveness of government agencies, gave evidence to the US House of Representatives Subcommittee on Aviation in September 1991 about the newly enacted Aging Aircraft Safety Act. The Act required FAA safety inspections and maintenance records reviews for aircraft older than 15 years. The FAA also issued regulations on structural fatigue and airframe inspections. Mead16 reported on a GAO survey that examined carrier and independent repair stations' compliance with new regulatory requirements. It found that airlines were unable to complete repairs to their aging aircraft until the end of the compliance period due to the recession. GAO called on the FAA for a more active role in monitoring fleet maintenance. GAO's subsequent report called FAA monitoring of the aging fleets of aircraft 'questionable. 17 There were multiple concerns raised by the emergence of lolow-costarriers. Another GAO report 18, which was published in October 1996, the year of ValuJet's crash, found that new carriers had more incidents and enforcement actions rates during their first five years. GAO claimed that the FAA's inability to address this was due to long-standing issues with its inspection program. Officials from the FAA were unable to provide any explanations, but they suggested that these carriers' rapid growth might have outpaced their ability to train staff and maintain their fleets. 18 The GAO stated that there were other factors to be considered, such as the extent to which outsourcing activities like maintenance have led to the loss of control. Any consideration of the safety of airlines should include an assessment of the effectiveness and efficiency of safety regulatory agencies, including their enforcement strategies, organizational structures, resourcing, and the expertise and experience that its inspectors. We will discuss the background and evolution of the FAA as a regulator, and how it has responded to outsourcing maintenance activities. Finally, we will examine the most recent regulatory initiatives and compare them with other developments. The paper concludes with some observations and a discussion. There have been long-standing concerns about the FAA's effectiveness as a safety regulator. In March 1997, Gerald Dillingham (19, the GAO's Associate director of Transportation Issues) stated that the FAA's culture, long-term structural issues plaguing it, and instabilities in senior management positions were some of the obstacles to the implementation of the White House Commission on Aviation Safety and Security's recommendations. A series of critical reviews were conducted on FAA enforcement activities. 20-23 OIG 21 audits US Department of Transportation agencies. In 2007, the OIG reviewed the response of an inspector to the allegations of unsafe maintenance practices at Northwest Airlines. The OIG urged the FAA's internal procedures to be improved. OIG 22 also criticized the FAA's response in 2007 to additional whistleblower complaints made by FAA inspectors. These inspectors were then reassigned following making complaints. This report was a damning assessment of regulatory oversight at Southwest Airlines. The airline had been violating an airworthiness directive that required inspections of the fuselage for up to nine months. The FAA failed to detect the violation and did not order the grounding of 46 aircraft. 22 The OIG continued to be concerned about the FAA Voluntary Disclosure Reporting program and its ability to ensure independence in investigations and inspections. The FAA's excessively collaborative approach towards carriers led to the breakdown of the regulatory partnership program. 22 A second OIG report 23 criticized the FAA's implementation in 2009 of its Aviation Safety Action Program. This joint industry and FAA initiative allow airlines to self-report safety incidents without fear of reprisal. This scheme encouraged reporting of incidents that were not covered under mandatory reporting requirements. It was recognized as a valuable preventive tool. 

Share