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Rise in outside repairs raises questions

Airlines' shift poses new challenges for safety oversight

From Drew Griffin

Airlines lost $8 billion last year alone, according to a trade organization.
Federal Aviation Administration (FAA)
Air Transportation
Financially Distressed Companies

(CNN) -- Airlines facing financial pressures have increased their use of outsourced maintenance, raising questions about the government's ability to provide effective oversight of the critical work being done by contractors and what that could mean for potential safety risks.

Those expressing the most concern over the outsourcing trend are the unions representing airline mechanics and Federal Aviation Administration inspectors. And the Department of Transportation's inspector general has expressed concern over the government's ability to oversee maintenance done by outside contractors.

But airline industry representatives and the FAA deny that using third-party repair stations increases safety risks. In fact, they note that even though major air carriers now outsource 51 percent of their maintenance, up from 37 percent in 1996, the fatality rate among major carriers is at the lowest level in years.

The September 11, 2001, terrorist attacks left the airline industry financially devastated, with airlines losing $8 billion last year alone, according to the Air Transport Association (ATA), a trade organization for the principal U.S. airlines.

Many outside contractors employ non-union mechanics; focus on specialized work and, according to the ATA, save airlines hundreds of millions of dollars a year. But that doesn't mean the cheaper work leads to a decrease in quality, safety or oversight, said the ATA's Basil Barimo.

"There is no distinction statistically when you talk about safety by work performed within the airline or work performed by a third party," Barimo said, though no one involved with this story provided definitive data.

Maintenance records provided to CNN by airline employees cite multiple instances of what people throughout the industry agreed was poor maintenance by outside contractors.

The documents show that on one flight an aircraft door wouldn't shut. On another, fuel leaked into cargo bays. On others, landing gear struts were worn through, hydraulic fluid leaked and wing flaps would not extend. On one airplane, the nose gear was so out of alignment, a mechanic wrote the airline was "lucky this plane didn't lose control on takeoff or landing."

There were no comparative records available for maintenance done by in-house contractors. Still, a November 2004 report issued by DOT Inspector General Kenneth Mead, following up on a more extensive 2003 review, said the increase in outsourcing has created new challenges for the FAA's ability to provide oversight.

"The type and extent of problems we found at domestic and foreign repair stations were similar," the 2003 report said. "These vulnerabilities all relate to a lack of effective FAA oversight and, if not corrected, could lead to an erosion of safety."

In the 2004 follow-up, the inspector general noted that some improvements had been made, but said more needs to be done: "While FAA has recognized that substantial changes to its oversight of repair stations are needed, proposed changes are still under development."

Many DOT programs are geared to regulating and being financed by a more stable industry, Mead wrote in a letter accompanying the November report.

The government "will need to adapt nimbly to these changing industry circumstances," he wrote, "to assure the public that financial distress does not compromise safety."

The FAA forecasts that low-cost and regional carriers could have over half the market share within a decade, the report said. To remain competitive, larger carriers are making "unprecedented changes," including increased outsourcing and using aircraft for more hours, the report notes.

But an FAA spokeswoman said the responsibility is primarily that of the airlines.

"It is the airlines' responsibility to ensure that the maintenance done on the aircraft is done in accordance with FAA standards," said Alison Duquette. "It has to be done to the same standard" whether in-house or not.

"The accident rate, which is at a historic low, to us that's evidence that the work is being done properly," she said.

Yet critics, including Minnesota Rep. James Oberstar, the senior Democrat on the Transportation and Infrastructure Committee, say the current accident rate does not mean there is no risk. "The next tragedy is just around the corner," Oberstar said.

"This is like an iceberg," said Ernie Kiss, head of safety for the largest mechanics union. "We only see the tip now."

The inspector general's 2003 report said the FAA's lack of focus on outside shops "left vulnerabilities in the quality of aircraft repairs."

FAA officials said they have taken steps to make the changes recommended in the inspector general's report, even before the report was issued. FAA administrator Nick Sabatini said the agency is increasing the number of inspections, which routinely include surprise checks.

But Linda Goodrich, vice president of the FAA inspectors' union, cited a lack of resources.

"We are lucky to go to each of these facilities once a year," she said. "We would love to do surprise visits. It's not possible."

Mead's November 2004 report noted that the "FAA has made noteworthy progress." But, it added: "We found the systems were not mature and refined enough."

But the record indicates no difference between in-house and outsourced work, said Sarah MacLeod, head of the Aeronautical Repair Station Association, which represents repair stations worldwide.

Officials at American Airlines, however, stressed the benefits of in-house work.

When the airline was trying to avoid bankruptcy, the union agreed to wage cuts to keep more maintenance in-house. Now, 80 percent of American's work stays with the airline, including all heavy maintenance.

"Having that control gives us greater ability to mitigate safety risks," said David Campbell, American's vice president of base operations.

Meanwhile, at Oberstar's request, the inspector general is conducting a new audit, this one reviewing shops that are not even certified by the FAA.

Mead's November report touched on that issue, saying a 2003 Air Midwest accident in North Carolina "highlighted" the use of shops "not subject to FAA's direct oversight." That crash killed 21 people and was blamed in part on faulty third-party maintenance.

CNN's Jeff Green contributed to this report.

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