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Title: AIN:Charter and Fractional

AIN Blog: FAA Needs to Focus On Maintenance Issues Raised by Mechanics

I'm really glad the FAA finally released the NPRM on small unmanned aircraft, those weighing 55 pounds or less. The U.S. has to move forward and catch up with many other countries-such as Canada and Japan-on providing a path for unmanned aircraft to fly commercially. I'm also hoping that getting the NPRM out will allow the FAA to focus on some other significant problems swirling around aviation that may have a much bigger impact on the flying public. It seems to me from conversations with people inside the FAA that the intense focus on UAS was sometimes too single-minded. Because of the media swirl around UAS, fed in part by some of the misleading data given by the FAA on UAS incident reports, it seems other issues more important from a safety perspective might have gotten short shrift.

One such issue is maintenance, particularly maintenance issues raised by mechanics and their unions at major airlines. One notably public dispute has gotten so contentious that a mechanics' union actually sued American Airlines, requesting that a federal judge enjoin the company from pressuring its mechanics to violate safety rules. While unions and airlines frequently have disputes, it is extremely rare for a maintenance union to sue an airline in federal court. Another troubling maintenance issue involves the settlement of a whistleblower complaint against Southwest Airlines by a mechanic who claimed he was disciplined for reporting cracks in a 737 that were significant enough for the aircraft to be withdrawn from service for repair.

The lawsuit by American's mechanics and union local in Chicago alleges that "to improperly keep airplanes in revenue service, aviation maintenance technicians [mechanics] at stations throughout the AA system have been subject to ongoing pressure from AA management representatives to commit maintenance fraud, disregard maintenance discrepancies, deviate from federally mandated maintenance procedures, abstain from lightning strike and bird strike inspections, and otherwise violate federal aviation standards." The lawsuit further alleges threats and intimidation against mechanics by the airline. American denies the allegations. 

But American's response to the lawsuit was somewhat curious. According to a written statement by an American spokesperson, the FAA had not alerted the carrier to any issues: "Our communication with the FAA is ongoing and frequent, and their oversight team has not alerted us to any current critical issues or concerns." Since when is the FAA responsible for alerting an airline to critical issues that it should be aware of from its own workforce? It is disturbing to me that these allegations resulted in a lawsuit.

Whistleblower Taken to Task

The Southwest case involves a mechanic who performed an inspection of a 737. The task card required a walk-around visual inspection of the aircraft. During the walk-around, the mechanic discovered two cracks in the fuselage and wrote them up. The cracks were significant enough that the aircraft was taken out of service for repair.

No, Southwest did not commend the mechanic for finding and writing up the cracks, as it should have. This was especially remiss of the airline when you consider that the airwaves in July 2009 were filled with the image of Flight 2294, a Southwest 737 that made an emergency landing after cracks in the skin of the fuselage caused a structural failure and rapid decompression. Instead, the mechanic was handed a Letter of Instruction citing him for working outside the scope of work of the task card. I guess the mechanic was supposed to do the visual check on the walk-around blindfolded so he didn't spot anything amiss. (As you can tell, as a former airline mechanic and long-time safety advocate, I find this type of case infuriating.)

To make matters worse, the original letter also warned the mechanic that future violations could lead to disciplinary action. When the mechanic protested that this letter constituted a violation of the AIR-21 statutory protections for airline employees who report safety issues, the airline fought him, making various claims, including one that the letter did not constitute prohibited conduct under the statute. In the end, the administrative judge reviewing the case found that the mechanic engaged in activities protected by the whistleblower statute and that Southwest was aware of it. Before a decision was reached on the actual merits of the case, Southwest settled, removing the Letter of Instruction from the mechanic's file and paying him $35,000 for attorney fees.

These two cases got me interested in finding out what the Aviation Safety Reporting System (ASRS, also known as "NASA reports" because that agency maintains the database) records would show on mechanics reporting intimidation. I requested the information from NASA for the past two years and promptly received the data. In less than a week, NASA was able to search the database for the keywords I had asked for related to mechanic reports of intimidation and threats and email me the information. (A far cry from other government aviation agencies that take much longer to respond, if they respond at all. Yes, FAA, that's you I'm referring to.) As you all know, the data is compiled from voluntary safety reports from pilots, mechanics, controllers and other aviation users. I received 76 separate reports and more than 200 pages of information related to those reports, which include airline mechanics reporting intimidation and threats from supervisors for reporting safety issues.

I am going through those reports now and will let you know what they indicate. While the information is de-identified-you can't tell who wrote the report, the airline involved or even the airport-the reports do indicate if the mechanic worked for an airline and the make and model of aircraft. While NASA gives many caveats about drawing conclusions from the data because they are voluntarily submitted reports that are not vetted for accuracy, one caveat stood out for me:  "One thing that can be known from ASRS data is that the number of reports received concerning specific event types represents the lower measure [emphasis in original] of the true number of such events that are occurring." This means, if anything, that the incidence of intimidation of mechanics is greater than the data shows here. And that is very troubling indeed.

April 1, 2015, 8:54 AM

2015 AIN FBO Survey: The Americas

As business aviation continued its slow rebound in 2014, there were indications that the industry has left the bottom of the trough in the rearview mirror and is slowly recovering. According to industry data provider Argus, the good news is that business aircraft flights in the U.S. and Canada recorded a 14th consecutive monthly increase in January. However, that activity varies significantly by sector: turboprops and large-cabin jets saw gains, while light and midsize jets experienced slight declines. "Most FBO operators I've been talking with are facing the fact that we have a slow recovery," said Stephen Dennis, president of FBO industry consultancy Aviation Resource Group International (ARGI). "They're still seeing some improvement driven by the oil cost reduction, and many of the FBOs have picked up more margin."

That assessment corresponds with the growing sense of optimism for this year conveyed by an annual survey of more than 200 FBO operators by the Aviation Business Strategies Group (ABSG). More than 60 percent of the survey respondents anticipated gains of at least 2.5 percent this year. "In our 2014 survey, the majority of respondents predicted at least a breakeven marketplace, with only about 40 percent projecting more fuel sales volume," noted ABSG partner Ron Jackson. Of those surveyed, 18 percent responded that they expect fuel sales to rise by 5 to 8 percent this year, a healthy improvement on the 10 percent who looked for such gains last year.

The Consolidation Kettle Continues To Bubble

While the pace of FBO industry consolidation slowed during the recession, it is heating up again as the economy stabilizes and business grows. "It's still not as good as it was in 2006 and '07, but business is stable so I think people are realizing they made it through a downturn," said Dan Bucaro, president and CEO of Landmark Aviation, which added 23 locations to its network over the past year (18 of those through its purchase of the Ross Aviation chain). They don't want to struggle through another downturn, "so there are more locations out there for sale."

The primary reasons driving each FBO operator to sell differ from location to location and owner to owner, according to Signature Flight Support president and COO Maria Sastre. "Some of them are ready to retire, and don't have an obvious successor," she said, adding that the recent improvements in the market might have spurred others to consider whether now is a good time to sell. One longtime FBO owner who sold recently told AIN that had he known the economic downturn would last so long, he would have sold years earlier. "Clients of ours have told us they did miss the golden opportunity of 2006-2007, and they regret not having done something at that time," said Dennis. A further consideration is whether owners have received offers in the past, as the seeds for such deals tend to be planted years in advance.

There are approximately 3,000 FBOs in the U.S., a number Dennis believes is too large. "I don't think there is enough market activity to support all the FBOs we have out there," he told AIN. "We're at the point where in the next three to five years we'll see another 10- to 20-percent consolidation of the industry." This math suggests several hundred FBOs will vanish, either through acquisition by the major chains or, for FBOs at smaller airports, by their rival independent locations. While the major chains will continue to grow, Dennis believes that process will slow as the available locations at the nation's top 100 airports are exhausted. Landmark's Bucaro echoes that sentiment. "We're not interested in the number of dots we have on the map. We're interested in making sure that the locations we add to our network really add value to our customers, and so that they are really relevant in what we do," he said.

In this year's FBO survey, AIN asked readers how they view the consolidation trend: nearly half the respondents were undecided as to whether a move from individually owned locations to those owned by chains is good or bad, while hundreds of comments supported the arguments for each side. While some characterized the consistency a chain provides as a plus, others viewed chains as lacking the personality a one-off location can offer. Regardless, Dennis believes the day of the independently owned FBO is far from over. "There's still going to be a huge number of FBOs out there that are not part of the domain of the primary networks." The recent rise of upper-tier "membership" networks of affiliated FBOs that emphasize service levels is one way such locations look to remain competitive. Such groups require member facilities to uphold defined levels of customer service as a condition of membership. Indeed, customer service remains key: 90 percent of survey respondents indicated it is their top consideration in selecting a facility. While the FBO chains offer loyalty and reward programs to attract and retain their customers, less than 7 percent of our survey respondents listed it as one of their most important factors in choosing a service provider.

April 1, 2015, 4:30 AM

Annual JetNet iQ Summit Lands in New York City in June

The fifth-annual JetNet iQ Global Business Aviation Summit will be held in New York City on June 23 and 24, just before the NBAA regional forum at nearby Teterboro Airport on June 25. JetNet iQ's summit promises to be a "data-rich gathering of industry thought leaders to discuss, deliberate and predict the state of business aviation markets."

Speakers and panelists include leaders from across the industry spectrum, including business aircraft OEM heads, aircraft sales and finance experts, Wall Street aerospace and defense analysts, aircraft owners/operators, aviation trade organization directors and ultra-high-net-worth-individuals' research professionals, the company said. JetNet vice president of sales Paul Cardarelli and JetNet iQ director Rollie Vincent will also present insights from their company's latest research and 10-year business jet delivery and fleet forecast, which is based on a survey of more than 8,500 respondents from 125 countries.

"Our past attendees are our strongest testimony for this extraordinary event," said Cardarelli. "They've called it ‘the best one-day conference in the industry.' We strive for nothing less, and this year's event will be another must-see for aviation professionals."

March 31, 2015, 5:03 PM

Lufthansa Insurers Prepare to Cover Germanwings Costs

Lufthansa's insurers today set aside $300 million to cover anticipated costs associated with the crash of an Airbus A320 operated by its subsidiary Germanwings on March 24. A spokeswoman confirmed that the amount has been "provisionally reserved" to cover costs such as compensation and care for bereaved families, the insurance value of the aircraft, associated legal costs, the task of recovering and disposing of the aircraft remains, securing the accident site and the work of emergency services.

"We are aware that we cannot compensate materially for the loss that the bereaved have suffered as a result of this tragic accident," said the airline. "However, we wish to offer them initial financial aid in a swift and un-bureaucratic manner."

Acting on behalf of Germanwings, Lufthansa is covering immediate expenses for bereaved families, assessed at €50,000 ($54,000) for each person killed in the crash. This emergency aid does not need to be repaid and will not affect any future clams.

Meanwhile, French prosecutor Brice Robin has yet to resolve what criminal charges his office might formally level in the Germanwings case. Marseille-based Robin was quick to state that co-pilot Andreas Lubitz deliberately crashed the aircraft, killing all 150 people on board. He made this assessment based entirely on the contents of the aircraft's cockpit voice recorder.

Later this week, Robin plans to appoint two magistrates to handle the anticipated committal proceedings in Marseille. However, his office indicated to AIN that it still hasn't determined exactly what charges it will bring. Options could include manslaughter, homicide or murder. 


March 31, 2015, 4:48 PM