a

GAO

United States Government Accountability Office

Report to the Ranking Democratic 

Member, Committee on Transportation 

and Infrastructure, House of 

Representatives

August 2005 AVIATION SAFETY

Oversight of Foreign 

Code-Share Safety 

Program Should Be 

Strengthened

GAO-05-930
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-930.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald 

Dillingham at (202) 512-2834 or 

dillinghamg@gao.gov. 

Highlights of GAO-05-930, a report to the

Ranking Democratic Member, Committee 

on Transportation and Infrastructure, 

House of Representatives 

August 2005

AVIATION SAFETY

Oversight of Foreign Code-Share Safety 

Program Should Be Strengthened 

In considering U.S. airlines’ requests to establish code-share arrangements 

with foreign carriers, DOT’s Office of International Aviation reviews, among 

other things, any safety and security objections from FAA and TSA. FAA 

assesses the safety of foreign civil aviation authorities and reviews reports of

the safety audits that U.S. carriers have conducted of their foreign airline 

partners. From fiscal years 2000 through 2004, DOT (1) authorized U.S. 

airlines to establish or maintain code-share arrangements with foreign 

carriers 270 times and (2) did not suspend any arrangements because of 

known safety concerns. According to FAA, however, U.S. airlines 

occasionally have decided not to pursue code-share arrangements with 

foreign carriers because they expected FAA would object, and FAA 

sometimes puts its reviews of proposed code-share arrangements on hold if 

the agency has safety concerns. FAA and TSA did not object to any of the 

authorizations during that period for safety or security reasons. Although 

not involved in the code-share authorization process, the Department of 

Defense (DOD) reviews the safety of foreign airlines that transport DOD 

personnel. For their separate programs, FAA and DOD are reviewing many 

of the same safety audit reports on foreign carriers. 

The Code-Share Safety Program, which calls for U.S. airlines to conduct 

periodic safety audits of their foreign code-share partners, incorporates 

selected government auditing standards involving independence, 

professional judgment, and competence. However, FAA’s reviews of the 

safety audit reports lacked management controls for reviewers’ 

qualifications, documenting the closure of safety audit findings, verifying 

corrective actions taken in response to findings, and documenting reviews. 

Eight U.S. airlines with foreign code-share partners have implemented the 

DOT program by conducting safety audits of their foreign partners. 

According to our review of a random sample of audit reports that FAA 

reviewed from fiscal years 2000 through 2004, the largest numbers of safety 

findings identified were in the categories of (1) flight operations and (2) 

maintenance and engineering. GAO estimates that for 68 percent of the 

findings, the documentation was insufficient to demonstrate that the 

findings were closed or were resolved. Airlines are beginning to adopt a new 

safety audit program that requires the documentation of findings and 

corrective actions. 

Aircraft Safety Inspection

Source: FAA.

U.S. airlines are increasingly 

relying on code-share partnerships 

with foreign carriers to provide 

additional sources of revenue. 

Code-sharing is a marketing 

arrangement in which an airline 

places its designator code on a 

flight operated by another airline 

and sells and issues tickets for that 

flight. To determine whether the 

foreign code-share partners of U.S. 

airlines meet an acceptable level of 

safety, in 2000, the Department of 

Transportation (DOT) established 

the Code-Share Safety Program, 

which requires U.S. airlines to 

conduct safety audits of their 

foreign code-share partners as a 

condition of code-share 

authorization. 

GAO's objective was to assess the 

federal government’s efforts to 

provide reasonable assurance of 

safety and security on foreign codeshare flights. GAO reviewed (1) 

the extent to which DOT's codeshare authorization process is 

designed to consider safety and 

security, (2) the Federal Aviation 

Administration’s (FAA) 

management of the Code-Share 

Safety Program, and (3) the 

implementation of the program by 

airlines and the results. 

What GAO Recommends

GAO recommends that DOT clarify 

procedures for airlines to follow in 

documenting corrective actions 

and improve management controls 

over FAA’s reviews of safety audit 

reports. DOT agreed to consider 

the recommendations. 
Page i GAO-05-930 Aviation Safety

Contents

Letter 1

Results in Brief 4

Background 7

DOT’s Office of International Aviation Relies on FAA for Safety 

Assessments and TSA for Security Assessments to Authorize 

Code-Share Arrangements 12

Code-Share Safety Program Incorporates Auditing Standards, but 

FAA’s Oversight of the Program Lacks Certain Management 

Controls 23

U.S. Airlines Are Auditing Foreign Partners’ Safety, and Partners Are 

Taking Corrective Action, but Documentation of Corrective 

Actions Is Often Lacking 31

Conclusions 40

Recommendations 41

Agency Comments 42

Appendixes

Appendix I: Objectives, Scope, and Methodology 44

Appendix II: U.S. Carriers and Their Foreign Code-Share Partners 50

Appendix III: Comments from DHS 53

Appendix IV: GAO Contacts and Staff Acknowledgments 54

GAO Contacts 54

Staff Acknowledgments 54

Table Table 1: Selected Government Auditing Standards Incorporated in 

the Code-Share Safety Program 24

Figures Figure 1: Percentage of U.S. Carriers’ Active Code-Share 

Partnerships, by World Region, as of May 2005 8

Figure 2: Aviation Accident Rates by World Region during 2004 11

Figure 3: Code-Share Authorization Process 13

Figure 4: FAA’s Process for Responding to DOT’s Office of 

International Aviation 14

Figure 5: Percentage of Findings by Audit Category 33
Contents

Page ii GAO-05-930 Aviation Safety

Abbreviations

DHS Department of Homeland Security

DOD Department of Defense

DOJ Department of Justice 

DOT Department of Transportation 

FAA Federal Aviation Administration

GSA General Services Administration

IASA International Aviation Safety Assessment 

IATA International Air Transport Association 

ICAO International Civil Aviation Organization 

IOSA IATA Operational Safety Audit 

SARS Severe Acute Respiratory Syndrome 

TSA Transportation Security Administration

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.
Page 1 GAO-05-930 Aviation Safety

United States Government Accountability Office

Washington, D.C. 20548

A

August 5, 2005 Letr

The Honorable James L. Oberstar

Ranking Democratic Member

Committee on Transportation and Infrastructure

House of Representatives

Dear Mr. Oberstar:

As the U.S. airline industry strives to improve its financial condition, many 

carriers are increasing their focus on international service to provide 

needed sources of revenue. To help expand their global market reach, U.S. 

airlines have established an increasing number of code-share arrangements 

with foreign airlines, and, as of May 2005, eight U.S. airlines had established 

foreign code-share partnerships. Code-sharing is a marketing arrangement 

in which an airline places its designator code1

 on a flight operated by 

another airline and sells and issues tickets for that flight. U.S. carriers must 

obtain authorization for foreign code-share operations from the 

Department of Transportation (DOT).

In 2000, DOT’s Office of the Secretary and Federal Aviation Administration 

(FAA) established the Code-Share Safety Program to ensure that the 

foreign code-share partners of U.S. airlines meet an acceptable level of 

safety. The program was established in response to safety concerns that 

arose after SwissAir Flight 111 crashed off the shores of Nova Scotia in 

1998, killing 229 passengers and crewmembers, including 53 Americans. At 

that time, SwissAir was a foreign partner of U.S.-based Delta Air Lines. 

Before the Code-Share Safety Program was established, DOT reviewed the 

potential competitive and economic impact of U.S. airlines’ code-share 

arrangements with foreign airlines, but regarding safety considerations, 

relied on the oversight by the home country. Now, under the Code-Share 

Safety Program, U.S. airlines must conduct periodic safety audits of their 

foreign code-share partners as a condition of code-share authorization. 

DOT designed the Code-Share Safety Program to rely on U.S. airlines to 

audit the safety of their foreign code-share partners because FAA does not 

have the authority to inspect foreign aircraft that do not enter the United 

States. The DOT program is similar to a safety audit program that the 

1

Designator codes are two-letter codes assigned by the International Air Transport 

Association, the international airline association, to the world’s airlines.
Page 2 GAO-05-930 Aviation Safety

Department of Defense (DOD) created in 1999 for foreign carriers that 

transport DOD personnel. 

You asked that we review the measures that the federal government is 

taking to provide reasonable assurance of safety and security when 

passengers travel on flights operated by foreign code-share partners of U.S. 

airlines. To do so, we addressed the following questions: 

• To what extent is DOT’s authorization of U.S. airlines’ code-share 

arrangements with foreign airlines designed to consider safety and 

security?

• How well has FAA managed the Code-Share Safety Program?

• To what extent have U.S. airlines implemented the Code-Share Safety 

Program, and what have been the results of their efforts? 

To determine how safety and security are considered in DOT’s 

authorization of U.S. airlines’ code-share arrangements with foreign 

airlines,2

 we reviewed the process that DOT follows in authorizing codeshare arrangements, Code-Share Safety Program guidelines, applicable 

aviation safety standards, and related legal authorities. Our review covered 

safety audit reports on foreign carriers that FAA reviewed and U.S. airlines’ 

code-share partnerships with foreign carriers that DOT has authorized 

since February 2000, when the Code-Share Safety Program was 

established, through the end of fiscal year 2004. We also examined how 

FAA’s assessments of foreign civil aviation authorities are used in the codeshare approval process. During our review of the Code-Share Safety 

Program, we found that DOD had a similar program designed to ensure the 

safety of foreign airlines that transport DOD personnel. Because our 

objective was to determine how the federal government is providing safety 

oversight of foreign airlines, we included DOD in our review. However, 

because DOD does not play a direct role in the authorization of foreign 

code-share arrangements, this report focuses on the DOT Code-Share 

Safety Program. Moreover, because security is a component of assessing 

airline safety, we determined what the Transportation Security 

Administration (TSA), the Department of Homeland Security agency 

2

This report pertains only to U.S. airlines’ code-share arrangements with foreign airlines for 

scheduled air service and not for charter or cargo air service.
Page 3 GAO-05-930 Aviation Safety

responsible for aviation security, has done to provide security information 

to FAA and DOD for their safety reviews of foreign airlines. 

Because the Code-Share Safety Program establishes an audit program, to 

assess how well FAA has managed the program, we reviewed whether the 

program’s design conformed with selected standards identified in 

Government Auditing Standards.3 In addition, because we were 

evaluating the management of a government program, we examined how 

FAA applied certain management controls in its reviews of the safety audit 

reports for the Code-Share Safety Program using Standards for Internal 

Control in the Federal Government.

4

 We discussed with FAA officials how 

they conducted the assessments of foreign civil aviation authorities and 

with TSA officials how they assessed the security of certain foreign carriers 

and airports. 

Finally, to determine the extent to which U.S. airlines have implemented 

the Code-Share Safety Program and the results, we interviewed safety 

officials at the eight U.S. airlines that were participating in the Code-Share 

Safety Program5

 and reviewed a random sample of reports of safety audits 

the airlines had conducted of their foreign code-share partners. We did not 

determine whether the airlines complied with international aviation safety 

standards but reviewed the safety audit reports to determine what types of 

findings were identified and whether corrective actions were documented. 

We also interviewed officials from the International Air Transport 

Association (IATA), the trade association that represents air carriers 

worldwide, to determine how IATA’s recent introduction of a new safety 

audit program for its members may affect the Code-Share Safety Program. 

We conducted our review in Arlington, Virginia; Atlanta; Denver; Eagan, 

Minnesota; Ft. Worth; Houston; Phoenix; Pittsburgh; Seattle; Washington, 

D.C.; and Montreal, Canada; from August 2004 through August 2005 in 

accordance with generally accepted government auditing standards. 

Appendix I provides additional information on our methodology.

3

GAO, Government Auditing Standards, GAO-03-673G (Washington, D.C.: June 2003).

4

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999) and GAO, Internal Control Management and 

Evaluation Tool, GAO-01-1008G (Washington, D.C.: August 2001).

5

Those airlines are Alaska Airlines, America West Airlines, American Airlines, Continental 

Airlines, Delta Air Lines, Northwest Airlines, United Airlines, and US Airways.
Page 4 GAO-05-930 Aviation Safety

Results in Brief In considering U.S. airlines’ requests to establish code-share arrangements 

with foreign carriers, DOT’s Office of International Aviation reviews, 

among other things, any safety and security objections from FAA and TSA. 

FAA assesses the safety of foreign civil aviation authorities and reviews 

reports of the safety audits that U.S. carriers have conducted of their 

foreign airline partners. According to DOT officials, on 270 occasions from 

February 2000—when the Code-Share Safety Program was established—

through the end of fiscal year 2004, DOT authorized or reauthorized U.S. 

airlines to establish or maintain code-share arrangements with foreign 

carriers and did not suspend any arrangements because of known safety 

concerns. However, according to FAA, U.S. airlines occasionally have 

decided not to pursue code-share arrangements with foreign carriers 

because they expected FAA would object, and on four occasions during 

that period, U.S. airlines suspended their code-share arrangements with 

foreign carriers because FAA was questioning the capabilities of the civil 

aviation authorities under which the foreign carriers were operating. In 

addition, FAA sometimes puts its reviews of proposed code-share 

arrangements on hold if the agency has safety concerns. Code-share 

arrangements may be periodically reauthorized, based on the terms of the 

initial authorization. To maintain code-share authorization, U.S. airlines are 

to conduct safety audits of their foreign code-share partners every 2 years. 

FAA provided DOT’s Office of International Aviation with memorandums 

indicating that it did not object to any of the proposed arrangements from 

February 2000 through the end of fiscal year 2004. DOT’s Office of 

International Aviation also receives security information from TSA, which 

assesses the security of foreign airlines that provide direct service to the 

United States and its territories and certain foreign airports. TSA provided 

security clearances for all proposed code-share arrangements from fiscal 

years 2000 through 2004 for which it had information on the foreign 

carriers. TSA does not assess the security of foreign carriers that do not 

provide direct service to the United States and its territories because it 

lacks that authority. Twenty-nine of U.S. airlines’ foreign code-share 

partners, or about one-third, do not provide direct service to the United 

States and its territories and therefore have not been assessed for security 

by TSA. DOD does not authorize code-share arrangements, but like FAA, it 

reviews the U.S. airlines’ safety audit reports of their foreign code-share 

partners. We found that DOD and FAA are reviewing many of the same 

audit reports and that TSA was not providing its foreign airport security 

assessments to DOD.
Page 5 GAO-05-930 Aviation Safety

The Code-Share Safety Program incorporates selected government auditing 

standards involving auditors’ independence, professional judgment, and 

competence. However, FAA’s management of the program did not 

incorporate certain controls relating to establishing reviewers’ 

qualifications, documenting the closure of safety audit findings, verifying 

corrective actions taken in response to the findings, and documenting its 

reviews. For example, FAA has not established the qualifications needed 

for agency staff who review the safety audit reports. In addition, FAA has 

not provided its reviewers or the airlines with definitions of “safety-critical” 

findings that the airlines must resolve immediately or “nonsafety-critical 

findings” that can be resolved after the audit is closed. Some airline 

officials told us they would like FAA to provide a definition of “safetycritical” findings that must be resolved immediately. Furthermore, in 

reviewing the safety audit reports, FAA frequently is not documenting its 

reviews. As a result, it cannot be determined which corrective actions that 

FAA verified were implemented by the foreign carriers. FAA’s lack of 

documentation about its reviews of the audit reports could impede trend 

analyses and comparisons of findings and prevents determining whether 

FAA reviewed those findings. 

The eight U.S. airlines have implemented the Code-Share Safety Program 

by conducting safety audits of their foreign code-share partners to 

determine whether the partners comply with international aviation safety 

standards. According to our review of a random sample of 149 audit 

reports, the largest numbers of safety findings that the U.S. airlines 

identified in auditing their foreign partners during fiscal years 2000 through 

2004 were in the categories of (1) flight operations, which govern the 

activities of the pilots, including training, and (2) maintenance and 

engineering, which involves the oversight of activities to maintain, repair, 

and overhaul aircraft, aircraft engines, and parts. The U.S. airlines followed 

the program’s guidelines by submitting written statements from their safety 

directors to FAA affirming that their foreign airline partners had complied 

with international aviation safety standards. However, we estimate that 68 

percent of the audit findings lacked complete documentation that 

corrective action had been taken. Without such documentation, FAA lacks 

evidence that the identified safety issues have been corrected. 

Furthermore, because FAA has not developed a definition of “safetycritical” findings, which FAA requires the airlines to resolve immediately, 

we could not identify those findings and, thus, were not able to determine if 

corrective action was documented. Increasingly, the airlines are adopting a 

new international audit program, which requires the documentation of 

identified findings and associated corrective actions. FAA accepted this 
Page 6 GAO-05-930 Aviation Safety

new international audit program as a methodology that would meet the 

Code-Share Safety Program guidelines. To the extent that the airlines 

substitute the new international audit program for their previous audit 

methodologies, they may improve their documentation of resolved findings 

and associated corrective actions because this audit program requires such 

documentation. Most U.S. airline officials said they believe the Code-Share 

Safety Program provides reasonable assurance of safety or is effective. One 

airline official, for example, said that the program has been effective 

because some foreign airlines, seeking to become code-share partners of 

U.S. airlines, have restructured programs, rewritten manuals, and instituted 

new management techniques.

We are making three recommendations to DOT and one to TSA. To improve 

the effectiveness of the program, we are recommending that DOT revise 

the Code-Share Safety Program guidelines to define “safety-critical” and 

“nonsafety-critical” audit findings, so that FAA reviewers and the airlines 

know which types of findings must be corrected immediately and which 

ones can be resolved later. In addition, we are recommending that FAA 

implement controls for reviewers’ qualifications, corrective action 

verification, and review documentation. Furthermore, because DOD and 

FAA are reviewing many of the same audit reports, we recommend that 

FAA explore with DOD potential opportunities to reduce duplication of 

efforts. Finally, because security is an important component of assessing 

airline safety, to improve DOD’s oversight of foreign carriers that transport 

DOD personnel, we are recommending that TSA develop a process for 

routinely coordinating with DOD regarding information on the security of 

foreign airports. 

In commenting on a draft of this report, overall, DOT generally concurred 

with our findings and agreed to consider our recommendations. DHS 

agreed with our recommendation regarding TSA. DOD and DOT provided 

some technical clarifications, which we incorporated into this report as 

appropriate. In addition, FAA provided general comments on the CodeShare Safety Program. 
Page 7 GAO-05-930 Aviation Safety

Background Each year, several million passengers travel on foreign airlines that have 

established code-share arrangements with U.S. air carriers.6

 Code-sharing 

is a marketing arrangement in which an airline places its designator code 

on a flight operated by another airline and sells and issues tickets for that 

flight. On foreign code-share routes, U.S. airlines and their foreign partners 

each place their respective designator code on flights operated by the other 

airline. Passengers can purchase one ticket from a U.S. airline that can 

include flight segments covered by one or more foreign partner airlines.7

Air carriers throughout the world form code-share alliances to strengthen 

or expand their market presence or ability to compete. Through codesharing, U.S. airlines can offer seamless service to additional international 

destinations without incurring the expense of establishing their own 

operations to those locations. Moreover, airline officials said that codeshare arrangements with foreign airlines have become important sources 

of revenue.8

 According to FAA, international markets are viewed as more 

attractive growth markets by mainline carriers because of more limited 

competition from low-cost carriers and greater profitability. 

In recent years, U.S. airlines have established an increasing number of 

code-share arrangements with foreign carriers to expand their service 

markets.9

 As of May 2005, eight U.S. airlines had established 108 

arrangements to place their designator codes on 85 different foreign 

carriers, up from six U.S. airlines that had established 39 arrangements to 

place their designator codes on 38 different foreign carriers in fiscal year 

6

According to information provided by the eight U.S. airlines participating in the Code-Share 

Safety Program, about 6.5 million tickets were purchased from them in 2004 for travel on 

flights operated by their foreign code-share partners. (See app. I for more information on 

how this information was compiled.)

7

U.S. and foreign airlines have established three main types of code-share arrangements: (1) 

the U.S. airline places its designator code on the foreign carrier’s flight, (2) the foreign 

airline places its designator code on the U.S. carrier’s flight, and (3) the U.S. and the foreign 

airline each place their designator code on the other’s flights. 

8

U.S. airline officials said that their reimbursement agreements with foreign carriers were 

based on route mileage, fare class, and selling commissions. 

9

Some U.S. airlines code-share with foreign airlines on selected routes only, while others 

code-share with foreign airlines on all of their routes.
Page 8 GAO-05-930 Aviation Safety

2000.10 As shown in figure 1, the majority of U.S. airlines’ code-share 

arrangements are with European airlines, representing over half, followed 

by airlines from Asia and the Pacific, accounting for nearly a quarter of the 

arrangements. Appendix II lists the U.S. carriers and their foreign codeshare partners. 

Figure 1: Percentage of U.S. Carriers’ Active Code-Share Partnerships, by World 

Region, as of May 2005

Note: Percentages do not total to 100 because of rounding.

In 1998, SwissAir Flight 111, which was a code-share flight with U.S.-based 

Delta Air Lines, crashed off the shores of Nova Scotia, killing 229 

passengers, including 53 Americans. Following that accident, the DOT 

Inspector General reviewed aviation safety under international code-share 

10DOT provided information on the number of U.S. airlines that had placed their designator 

codes on foreign carriers’ flights in fiscal year 2000 but indicated that the information was 

compiled informally and was not official.

Europe

Asia and Pacific

Latin America and Carribean

5%

Middle East

3%

Canada

2%

Africa

17%

22%

52%

Source: FAA.
Page 9 GAO-05-930 Aviation Safety

agreements and issued a report in 1999 recommending, among other things, 

that DOT develop and implement procedures requiring U.S. airlines to 

conduct safety audits of foreign carriers as a condition of authorization of 

code-share passenger services.11 Also in 1999, legislation was introduced in 

the House of Representatives that would have statutorily required U.S. 

airlines to audit the safety of their foreign code-share partners.12 Although 

that legislation was not enacted, in 2000, DOT’s Office of the Secretary and 

FAA established the Code-Share Safety Program, which included the 

development of guidelines for U.S. carriers to follow in auditing the safety 

of their foreign code-share partners as a condition of DOT’s authorization 

of code-share passenger services.

DOD’s safety audit program, called the Commercial Air Transportation 

Quality and Safety Review Program, expanded another program that DOD 

established in 1986 to check the safety of charter aircraft transporting its 

personnel, after an Arrow Air charter airplane transporting U.S. military 

personnel crashed in 1985, killing 256 passengers and crew. In 1986, 

Congress passed Public Law 99-661, which created a Commercial Airlift 

Review Board and prohibits DOD from contracting with an air carrier 

unless it meets certain safety standards and submits to a technical safety 

evaluation. A 1999 memorandum of understanding between DOD and the 

Air Transport Association, a U.S. airline industry association, allows DOD 

to review the safety audits that U.S. airlines have conducted of their foreign 

airline partners. 

DOD is a major customer of airlines that have established code-share 

arrangements through its participation in the General Services 

Administration’s (GSA) city-pairs program, under which the government 

negotiates service contracts for all federal government employees, 

including military personnel, to save the government money on air travel. 

The program requires federal employees and military personnel to fly with 

carriers under such contracts when they travel on government business. 

DOD is required to review the safety of all airlines that provide scheduled 

service to its personnel under the GSA city-pairs program, which include 

U.S. airlines’ foreign code-share partners. DOD’s program also has the 

11DOT Office of the Inspector General, Aviation Safety Under International Code-Share 

Agreements, Report No. AV-1999-138 (Washington, D.C.: Sept. 30, 1999).

12Aviation Codeshare Safety Act, H.R. 2024, 106th Congress (1999), introduced by 

Representative James Oberstar.
Page 10 GAO-05-930 Aviation Safety

effect of having the airlines comply with DOD requirements if they want to 

maintain the GSA contracts.

The safety of foreign carriers is also a concern because aviation accident 

rates vary considerably from one region of the world to another. According 

to data compiled by IATA, an international airline association, during 2004, 

the North American region had the lowest aviation accident rate (0.29 hull 

losses13 per million flight segments), while the Middle East had the highest 

(5.32 hull losses per million flight segments).14 Africa had the second 

highest rate, followed by South America, the Asia-Pacific region, and 

Europe. These accident rates are shown in figure 2.

13According to Aviation Safety Network, a database devoted to aviation accident and safety 

information and used by FAA in monitoring accident histories, a hull loss occurs when 

airplane damage is beyond economic repair and may include events in which (1) the 

airplane is missing, (2) the search for the wreckage has been terminated without success, or 

(3) the airplane is substantially damaged and inaccessible. IATA’s data on hull losses are for 

western-built jet aircraft. The 2004 world aggregate aviation accident rate compiled by IATA 

was 0.78 hull losses per million flight segments. 

14IATA’s regional boundaries for this information are not necessarily geographic. For 

example, Mexico is included in the South American region.
Page 11 GAO-05-930 Aviation Safety

Figure 2: Aviation Accident Rates by World Region during 2004

DOT’s Office of 

International Aviation 

Relies on FAA for 

Safety Assessments 

and TSA for Security 

Assessments to 

Authorize Code-Share 

Arrangements

DOT’s Office of International Aviation within the Office of the Secretary of 

Transportation authorizes U.S. airlines’ code-share arrangements with 

foreign airlines after considering, among other things, safety and security 

information from FAA and TSA. FAA provides DOT’s Office of International 

Aviation with a memorandum recording its “objection” or “no objection” to 

the foreign code-share partners of U.S. airlines. This memorandum is based 

on FAA’s assessments of foreign civil aviation authorities and reviews of 

safety audits conducted by U.S. airlines of foreign carriers. TSA assesses 

the security of foreign airlines that provide service to the United States and 

its territories and certain foreign airports. DOT also considers the 

competitive and antitrust implications of code-share arrangements. For its 

Africa and Indian Ocean - 5.2

Carribean/South America - 1.31

Europe 0.52

Middle East - 5.32

North

America

0.29

Asia/Pacific

0.94

Sources: IATA, MapArt.
Page 12 GAO-05-930 Aviation Safety

program, DOD reviews many of the same safety audit reports on foreign 

airlines that FAA reviews for the Code-Share Safety Program.

DOT Considers Information 

from Several Sources to 

Authorize Code-Share 

Arrangements 

To authorize a code-share arrangement between a U.S. and a foreign 

airline, DOT must find that the arrangement is in the public interest.15

Under the DOT guidelines, this public interest finding includes a 

determination of the foreign carrier’s level of safety and the economic 

impact of the arrangement. Before authorizing a code-share arrangement, 

DOT’s Office of International Aviation obtains (1) a memorandum of “no 

objection” from FAA, based on its review of the safety audits and other 

safety information available to FAA; (2) a clearance from DOT’s Office of 

Policy on aspects of security involving the foreign carrier, including 

information from TSA; and (3) a clearance from DOT’s Office of Aviation 

Analysis and Office of the General Counsel concerning the code-share 

arrangement’s competitive impact on the airline industry.16 The Office of 

International Aviation also obtains advice from the Department of Justice 

on potential antitrust issues.17 According to DOT officials, on 270 

occasions, from February 2000 through the end of fiscal year 2004, DOT 

authorized or reauthorized U.S. airlines to establish or maintain code-share 

arrangements with foreign carriers and did not suspend any arrangements 

15DOT is required to consider the public interest in authorizing code-share arrangements 

under 49 U.S.C. 41309. Although the law does not provide a specific definition of public 

interest in this regard, leaving the determination to the discretion of the Secretary of 

Transportation, the determination is guided by the public interest standards of 49 U.S.C. 

40101 as well as by the department’s precedents in this area.

16According to DOT’s Office of Aviation Analysis, since 2000, it has cleared the competitive 

aspects of all U.S. airlines’ code-share arrangements with foreign airlines. Before providing 

a clearance, this office reviews code-share applications for the degree of competition 

involved, the terms of the financial agreements between the U.S. airlines and their foreign 

partners, and the competitive impact on the carriers involved and the region affected. 

17According to the Justice Department’s Antitrust Division, since 2000, it has not advised 

DOT against approving any U.S. airlines’ unimmunized code-share arrangements with 

foreign carriers because of antitrust concerns (unimmunized code-share arrangements are 

those for which the Department of Justice has not provided immunity from antitrust 

actions).
Page 13 GAO-05-930 Aviation Safety

during that time.18 However, FAA officials also said that U.S. airlines have 

occasionally decided not to pursue code-share arrangements with foreign 

airlines because they expected FAA would object. Code-share 

arrangements may be periodically reauthorized based on the terms of the 

initial authorization. Figure 3 shows the DOT code-share authorization 

process. 

Figure 3: Code-Share Authorization Process

FAA Response Reflects 

Assessments of Foreign 

Civil Aviation Authorities 

and Safety Audit Reviews 

DOT’s Office of International Aviation solicits the views of FAA on the 

safety aspect of its code-share authorization decision because of FAA’s 

technical expertise in that area. FAA reviews reports of the safety audits 

that U.S. carriers have conducted on the foreign carriers and other safety 

information available to FAA, including its assessments of the capabilities 

of the relevant foreign civil aviation authorities. FAA provided DOT’s Office 

of International Aviation with memorandums of “no objection” on all 

foreign airlines being considered for code-share authorization during fiscal 

years 2000 through 2004. According to FAA officials, if FAA has safety 

18According to a DOT official, in some cases, the same code-share partners requested and 

received multiple approvals during this period (adding routings, for example), so the total 

number of authorizations granted by the Office of International Aviation exceeds the total 

number of safety audit reports that FAA reviewed.

U.S. carrier files 

a code-share 

application with 

DOT’s Office of 

International 

Aviation.

U.S. carrier 

conducts 

safety audit on 

potential 

foreign codeshare partner.

DOT’s Office of 

International 

Aviation requires 

information on 

safety, security, 

competitive 

impact, and 

potential antitrust 

implications to 

help make its 

decision.

FAA reviews safety audit 

reports, civil aviation 

authority assessments, 

and other information. 

DOT's Office of Policy 

reviews security 

information from TSA.

DOT's Office of Aviation 

Analysis and Office of 

the General Counsel 

review competitive 

impact information.

Justice Department 

reviews potential 

antitrust implications.

DOT’s Office of 

International 

Aviation 

receives 

clearances 

from FAA, DOT 

policy and 

economic 

analysis units, 

and antitrust 

advice from the 

Justice 

Department.

DOT’s Office of 

International 

Aviation 

decides 

whether to 

authorize the 

code-share 

arrangement.

Source: DOT’s Office of International Aviation and FAA.
Page 14 GAO-05-930 Aviation Safety

concerns, it puts a hold on its review of the proposed code-share 

arrangement, allowing time for the safety issues to be resolved; and on four 

occasions, from February 2000 through September 2004, U.S. airlines 

suspended their code-share arrangements with foreign carriers because 

FAA was questioning the capabilities of the civil aviation authorities under 

which the foreign carriers were operating. Figure 4 shows FAA’s process 

for providing information to DOT’s Office of International Aviation on U.S. 

airlines’ applications to establish code-share arrangements with foreign 

carriers.

Figure 4: FAA’s Process for Responding to DOT’s Office of International Aviation

Under the Code-Share Safety Program guidelines, DOT authorizes a U.S. 

airline’s code-share arrangement with a foreign carrier only if the foreign 

airline is from a country that is compliant with applicable international 

aviation safety standards under FAA’s International Aviation Safety 

Assessment (IASA) program.19 Under IASA, FAA reviews the capabilities of 

foreign civil aviation authorities by checking their compliance with 

standards established by the International Civil Aviation Organization 

19FAA’s authority to conduct the IASA program is facilitated through the requirements of 14 

C.F.R. part 129.11 (a), which require in part that operations within the United States be in 

compliance with International Civil Aviation Organization (ICAO) annex 6 part 1 (aircraft 

operations). 
Page 15 GAO-05-930 Aviation Safety

(ICAO), a United Nations aviation organization.20 Under IASA, FAA assigns 

countries’ civil aviation authorities either a category 1 rating—meets ICAO 

standards—or a category 2 rating—does not meet ICAO standards.21 During 

the IASA process, FAA personnel, typically from various international field 

offices, conduct on-site assessments of civil aviation authorities for 

compliance with ICAO standards in eight areas: (1) primary aviation 

legislation, (2) aviation regulations, (3) organization of the civil aviation 

authority, (4) adequacy of the technical personnel, (5) technical guidance, 

(6) licensing and certification, (7) records of continuing inspection and 

surveillance, and (8) resolution of safety issues. Each country with carriers 

serving, or wishing to serve, the United States in their own right or as part 

of a code-share arrangement with a U.S. airline must first have an 

assessment under the IASA program.

Although FAA’s plan is to reassess the category for each foreign civil 

aviation authority every 2 years, FAA officials said that this activity 

occurred less frequently because of a larger-than-anticipated number of 

reassessments and constraints on the agency’s resources. FAA data 

indicate that 67 of the 100 foreign civil aviation authorities in the IASA 

program, or about two-thirds, have not been assessed within the last 4 

years. According to FAA, some countries were not assessed within the last 

4 years because available data indicated that their rating categorization 

remained valid. FAA data also show that from January 1, 2000, through May 

1, 2005, FAA assessed or reassessed—because of safety oversight 

concerns—the capabilities of 33 foreign civil aviation authorities, 6 of 

which were assessed more than once.22 Of the 42 countries’ civil aviation 

authorities under which the foreign code-share partners of U.S. airlines are 

operating, 16 have required an IASA assessment or reassessment since 

2000 and 26 have not. 

20The 1944 Chicago Convention on aviation safety led to the establishment of ICAO, the 

United Nations organization that develops standards and recommended practices for 

aviation safety and security, and outlined the rights and responsibilities of civil aviation 

authorities. ICAO’s 18 annexes delineate internationally agreed-upon standards that 

signatories to the Convention (i.e., civil aviation authorities) must meet. Annex 1 (personnel 

licensing), annex 6 (aircraft operations), and annex 8 (aircraft airworthiness) serve as 

primary sources of international aviation safety standards.

21The IASA program and the Code-Share Safety Program use the same ICAO standards 

(annexes 1, 6, and 8) as evaluation criteria.

22Five of the six countries were ones that FAA had first given an IASA category 2 rating and 

later upgraded to category 1. 
Page 16 GAO-05-930 Aviation Safety

IASA results, along with the safety audits that U.S. airlines conduct of their 

foreign code-share partners, are FAA’s principle measures of the level of 

safety of the foreign carriers. According to the guidelines, the level of 

oversight and regulation that an airline receives from its regulatory 

authority is an important factor in assessing its safety. For this reason, DOT 

authorizes U.S. airlines’ code-share arrangements only with foreign airlines 

that are from IASA category 1 countries. As of May 2005, FAA had assigned 

IASA category 1 ratings to 71 countries’ civil aviation authorities and IASA 

category 2 ratings to 28; 94 other countries had not yet been categorized, 

generally because no carriers from those countries had applied to provide 

direct service to the United States.

DOT’s Office of International Aviation will not authorize a code-share 

application, and FAA will not review the safety audit report if flights that 

are intended to carry a U.S. carrier’s designator code would be operated by 

a foreign carrier from a country with an IASA category 2 rating. If a U.S. 

airline is seeking to establish a code-share arrangement with a foreign 

carrier that is from a country that does not have an IASA rating, FAA 

normally conducts the assessment before DOT’s Office of International 

Aviation considers the application. When FAA lowers a country’s IASA 

rating from category 1 to category 2, DOT’s Office of International Aviation 

contacts any U.S. airline that has a code-share partnership with an airline 

from that country to advise the U.S. airline of the lowered IASA rating so 

that the U.S. carrier can promptly remove its code from any passenger 

flights operated by that airline, according to agency officials. While DOT 

indicated that it could, at its option, order the removal of U.S. airlines’ 

designator codes under these circumstances, in practice, DOT has not 

needed to pursue that option because, when the airlines have learned about 

an IASA category change affecting their service, they have removed their 

operating codes from the foreign carrier. On four occasions since 2000, U.S. 

airlines have suspended their code-share arrangements with foreign 

airlines because FAA was questioning the capabilities of the civil aviation 

authorities under which the foreign airlines were operating.23 The program 

guidelines allow DOT to consider, on a case-by-case basis, continuing to 

authorize a U.S. airline’s code-share arrangement with a foreign carrier that 

23In three cases, the U.S. airlines suspended their code-share arrangements before FAA had 

lowered the respective IASA ratings from category 1 to category 2. In another case, a U.S. 

airline temporarily suspended its code-share arrangement with a foreign airline after FAA 

questioned the capabilities of that airline’s civil aviation authority, but FAA did not lower 

that country’s IASA rating. After FAA resolved its questions, the U.S. airline resumed its 

code-share arrangement with that foreign carrier.
Page 17 GAO-05-930 Aviation Safety

is from a country with an IASA rating that has been lowered from category 

1 to category 2. According to FAA, this case-by-case language was included 

to enable DOT’s Office of International Aviation to accord U.S. airlines a 

limited degree of flexibility needed to effectuate an orderly shutdown of 

their code-share services. However, DOT officials told us that they will not 

authorize the continuation of a code-share arrangement beyond the needs 

of such an orderly shutdown. 

FAA Reviews U.S. Airlines’ 

Methodologies for Auditing 

Their Foreign Code-Share 

Partners

FAA will not review a U.S. airline’s safety audit report on a foreign carrier 

until FAA has reviewed and accepted the airline’s audit methodology. 

According to the program guidelines, the U.S. airlines’ safety audit 

methodologies should incorporate ICAO standards on personnel licensing, 

aircraft operations, aircraft airworthiness, and security.24 The guidelines 

also describe how the U.S. airlines should conduct their safety audits, 

including what qualifications the auditors should possess, how the system 

for reporting and correcting findings should be devised, what audit results 

are satisfactory, how a safety monitoring system should be established, and 

how frequently audits should be conducted. At the same time, FAA officials 

said they provide the airlines with some flexibility in designing their audit 

programs, as long as the programs address all of the relevant ICAO 

standards. FAA reviewed and accepted an audit program for each of the 

eight U.S. airlines to participate in the Code-Share Safety Program. In 

designing their audit methodologies, some U.S. airlines include other 

standards and best practices, such as ones developed by DOD, in addition 

to the ICAO standards and recommended practices in the DOT program 

guidelines. Moreover, to audit the safety of their foreign code-share 

partners, six U.S. airlines have begun using standards from a new 

international safety audit program developed by IATA called the IATA 

Operational Safety Audit (IOSA), which incorporates the ICAO standards, 

plus many additional industry best practices. IOSA was developed by IATA 

to improve global airline safety and promote audit efficiency by reducing 

redundant audits. In 2004, FAA accepted the IOSA program as a 

methodology that would meet the Code-Share Safety Program guidelines. 

24The Chicago Convention provides that signatories to the Convention (countries), and thus 

the airlines under their oversight, must meet all the ICAO annexes containing international 

aviation safety standards. Including the United States, 188 countries are signatories to the 

Convention. 
Page 18 GAO-05-930 Aviation Safety

Under the Code-Share Safety Program guidelines, after the U.S. airlines 

have completed the audits and the foreign airlines have taken all corrective 

actions, the U.S. airlines’ safety directors (or similar officials) should 

provide written statements to FAA, known as compliance statements, 

affirming that the audits were conducted in accordance with the guidelines 

and that the foreign carriers meet the applicable ICAO standards. 

According to an FAA official, U.S. airlines filed compliance statements for 

all of the audit reports that FAA reviewed on foreign carriers.25 The 

guidelines also indicate that to maintain their continued code-share 

authorizations, U.S. airlines should audit the safety of their foreign codeshare partners and submit compliance statements to FAA every 2 years. We 

found that, for 12 out of 256 audit reports that FAA reviewed from February 

2000 through the end of fiscal year 2004, FAA granted the U.S. airlines 

extensions of time to submit compliance statements because delays had 

resulted from the outbreak of Severe Acute Respiratory Syndrome (SARS), 

the U.S. airline planned to cancel the code-share arrangement, or the 

foreign carrier needed more time to implement corrective actions. FAA 

generally granted the extensions for between 1 and 3 months, during which 

time the code-share arrangements continued. 

25We reviewed FAA’s files and did not find compliance statements that U.S. airlines had filed 

for 25 of the 256 safety audit reports that FAA reviewed from February 2000 through 

September 2004.
Page 19 GAO-05-930 Aviation Safety

TSA Clearances Reflect 

Security Assessments of 

Foreign Airlines That 

Provide Direct Service to 

the United States, Its 

Territories, and Certain 

Foreign Airports

Since 2000, DOT’s Office of Intelligence and Security and Office of Policy26

have provided security clearances to DOT’s Office of International Aviation 

for all U.S. airlines’ proposed code-share arrangements with foreign 

airlines. DOT’s Office of Policy receives security information on certain 

foreign carriers and foreign airports from TSA,27 which assesses the 

security of foreign airlines that provide direct service to the United States 

and its territories, as well as to certain foreign airports. TSA provided 

security clearances for all proposed code-share arrangements, from fiscal 

years 2000 through 2004, for which it had information on the foreign 

carriers. Because it lacks the authority,28 TSA does not assess the security 

of other foreign carriers that do not provide direct service to the United 

States and its territories. Twenty-nine, or about one-third, of the 85 foreign 

code-share partners of U.S. airlines do not provide service to the United 

States and its territories and therefore have not been assessed for security 

by TSA. 

DOT has also authorized U.S. airlines’ code-share arrangements with 

foreign airlines that serve many foreign airports that TSA has not assessed 

for security. As a result, passengers traveling on foreign code-share 

partners of U.S. airlines may be traveling to certain foreign airports that 

could have security risks. TSA has the authority to assess the security of a 

foreign airport (1) served by U.S. airlines, (2) from which a foreign carrier 

serves the United States and its territories, or (3) that “poses a high risk of 

introducing danger to international air travel.” Also, TSA can assess “other 

foreign airports the Secretary of Homeland Security considers 

appropriate.” TSA has assessed the security of the foreign airports from 

which domestic and foreign airlines provide direct service to the United 

States and its territories. However, in addition to the foreign airports that 

provide direct service to the United States and its territories, the foreign 

26DOT’s Office of Policy now includes security policy staff, formerly housed within DOT’s 

Office of Intelligence and Security, which provided the security clearance information for 

foreign airlines. 

27Before fiscal year 2002, when TSA was created and began conducting the security 

assessments, FAA’s Office of Civil Aviation Security was responsible for conducting them. 

28TSA has authority under 49 U.S.C. 44906 to regulate security aspects of foreign air carriers 

that provide service to the United States. TSA indicated that it does not have any special 

regulatory authority or requirements for the code-share partners of U.S. airlines. TSA 

requires foreign carriers in their operations to and from airports in the United States to 

adhere to security measures that are similar to those TSA requires of the U.S. carriers 

serving the same airports.
Page 20 GAO-05-930 Aviation Safety

code-share partners of U.S. airlines serve other foreign airports. TSA 

officials indicated they have begun to assess the security of other foreign 

airports. DOT has not always had comprehensive data on which foreign 

airports are being served by the foreign code-share partners, so we were 

unable to determine how many foreign airports have not undergone TSA 

security assessments.29 For one U.S. airline for which we had complete 

foreign code-share route information,30 we determined that the foreign 

partners served 128 foreign airports that did not provide direct service to 

the United States and its territories, and some of these 128 had yet to 

undergo TSA security assessments. 

In assessing the security of foreign airports,31 TSA rates them in categories 

and assesses airports in those categories as appropriate. DOT’s Office of 

International Aviation, which receives TSA’s security ratings through DOT’s 

Office of Policy, authorizes code-share arrangements for U.S. airlines with 

foreign carriers that serve foreign airports. According to DOT security 

officials, it is not a problem to authorize code-share arrangements with 

foreign airlines regardless of category because all airports must meet ICAO 

security standards32 and are assessed appropriately.33 Moreover, officials 

from TSA and DOT noted that both U.S. and foreign airlines can be required 

to implement additional security measures at those airports. For example, 

the TSA officials described an instance in which a bombing in a Middle 

Eastern country resulted in the implementation of additional security 

measures at an airport in that country. TSA officials said that because that 

airport met ICAO security standards, TSA had to rely on increased security 

measures voluntarily implemented by the carriers to help mitigate the 

threat in that area.

29In some cases, DOT’s documentation on foreign code-share routes refers to “destinations” 

or “points” within a foreign country without specifying which ones.

30We chose this U.S. airline because it has established code-share arrangements with one of 

its foreign partners for nearly all its flights.

31Under 49 U.S.C. 44907, TSA is required to assess the effectiveness of the security measures 

maintained at foreign airports from which a foreign carrier serves the United States.

32ICAO's annex 17 covers security standards.

33 TSA also indicated that regardless of category, airlines from ICAO signatory countries 

meet ICAO security standards and are assessed as appropriate.
Page 21 GAO-05-930 Aviation Safety

DOD Provides Additional 

Safety Oversight of Foreign 

Airlines

While not involved in DOT’s code-share authorization process, DOD 

reviews the safety of certain foreign airlines, thereby providing an 

additional layer of federal oversight. The DOD Commercial Air 

Transportation Quality and Safety Review Program is focused on ensuring 

that the airlines DOD contracts with—to transport DOD personnel—meet 

applicable safety standards. DOD requires U.S. airlines to audit the safety 

of their foreign code-share partners every 2 years, on the basis of ICAO 

standards, and monitor the safety of their foreign partners between safety 

audits. In addition, DOD considers FAA’s IASA ratings of foreign civil 

aviation authorities in determining whether to allow foreign carriers to fly 

on GSA city-pair routes. 

DOD requires that foreign airlines be assessed on the basis of standards 

that DOD developed called Quality and Safety Requirements, which are 

focused on system safety processes.34 According to a DOD official, these 

DOD standards include safety processes that are not ICAO requirements, 

which form the basis of the DOT program. A DOD official said, for 

example, that DOD requires airlines to have a safety audit program that 

analyzes and assesses trends of safety information, including feedback 

from crew members, for the purpose of enhancing safety, which is not an 

ICAO standard. Although DOT can suspend code-share authorizations for 

safety reasons, DOD can cancel, at any time, contracts with airlines that 

transport DOD personnel if it determines that they are not sufficiently safe. 

Between audits, DOD takes certain steps to monitor the safety of foreign 

carriers that FAA does not take, such as conducting semi-annual 

evaluations that include requiring foreign carriers that DOD contracts with 

to complete questionnaires about their safety. DOD does not consider TSA’s 

security assessments of foreign airports in its review. DOD officials said 

that they were unaware of TSA’s foreign airport assessments and would like 

TSA to provide the information for DOD to consider as part of its reviews.

We found that DOD and FAA review many of the same safety audit reports 

on foreign airlines. During fiscal years 2001 through 2004,35 DOD and FAA 

reviewed 203 of the same reports of safety audits that U.S. airlines had 

conducted of their foreign code-share partners. In reviewing these same 

34DOD looks at system safety as a means of reducing risk through early identification, 

analysis, elimination, and control of hazards.

35DOD had data on the reports that it reviewed from fiscal years 2001 through 2004, so we 

were unable to compare which reports FAA and DOD reviewed during fiscal year 2000. 
Page 22 GAO-05-930 Aviation Safety

reports, DOD and FAA reached the same conclusions about the safety of 

the foreign carriers involved. Because DOD and FAA are reviewing many of 

the same audit reports, the DOT and DOD safety programs are duplicating 

some efforts. In its 1999 report, the DOT Inspector General recommended 

that, in establishing a safety program on foreign code-share partners of U.S. 

airlines, FAA and DOT’s Office of the Secretary work closely with DOD to 

maximize the use of limited resources, avoid duplication, and establish 

protocols for exchanging information about the carriers’ safety 

assessments. A DOD official said that he communicates frequently with 

FAA Code-Share Safety Program officials, and that DOD has a full-time 

liaison in FAA’s Flight Standards Service, who meets weekly with FAA 

officials.36 However, FAA officials said that although DOD requests IASA 

reports on certain countries, FAA does not routinely communicate with 

DOD on its safety audit reviews of foreign carriers, and no set criteria spell 

out the circumstances under which FAA and DOD should communicate 

information on the safety of U.S. airlines’ foreign code-share partners.

When we discussed the possibility of reducing duplicative safety reviews 

with FAA and DOD officials, an FAA official said he did not consider their 

reviews to be duplicative because FAA and DOD have different objectives. 

The FAA official said that FAA is reviewing the reports from the 

perspective of a regulator, focusing on the carriers’ compliance with ICAO 

standards. Furthermore, the FAA official questioned whether FAA or DOD 

could assume each others’ responsibilities and report to different 

departments. A DOD official also said the potential for duplication should 

be considered from the perspective of DOD’s and FAA’s different objectives 

in conducting their reviews. The DOD official said that DOD’s objective is 

to ensure that its requirements for transporting DOD personnel are being 

met. Another DOD official said that FAA and DOD are not duplicating their 

efforts because neither agency has the expertise to conduct its reviews 

from the other agency’s perspective.

36In a 2002 report on FAA and DOD responses to aviation safety concerns, we found that 

FAA and DOD had gaps in their formal communication process, which caused delays in 

bringing critical safety information to the attention of key officials. GAO, Aviation Safety: 

FAA and DOD Response to Similar Safety Concerns, GAO-02-77 (Washington, D.C.: Jan. 22, 

2002). In that report, we recommended that FAA and DOD develop a memorandum of 

agreement for exchanging aviation safety-related information and research. In January 2004, 

FAA and DOD signed a memorandum of agreement for exchanging aviation safety-related 

information and research.
Page 23 GAO-05-930 Aviation Safety

Code-Share Safety 

Program Incorporates 

Auditing Standards, 

but FAA’s Oversight of 

the Program Lacks 

Certain Management 

Controls

The Code-Share Safety Program incorporates selected government auditing 

standards involving independence, professional judgment, and 

competence. According to FAA officials, FAA and DOT’s Office of the 

Secretary worked with the airline industry to recommend that the CodeShare Safety Program guidelines incorporate these standards. Government 

auditing standards provide an overall framework for ensuring that auditors 

be independent and exercise judgment, competence, and quality control 

and assurance in planning, conducting, and reporting on their work.37

However, FAA’s management of the program did not incorporate certain 

internal controls,38 which the Office of Management and Budget requires 

federal managers to use in assessing the effectiveness and efficiency of 

operations.39 These controls are related to establishing reviewers’ 

qualifications, documenting the closure of safety audit findings, verifying 

corrective actions taken in response to the findings, and documenting 

reviews. 

Code-Share Safety Program 

Incorporates Selected 

Government Auditing 

Standards

The Code-Share Safety Program guidelines recommend that the airlines 

incorporate certain government auditing standards in their safety audit 

reviews. FAA has reviewed the methodologies that the U.S. airlines follow 

in auditing the safety of their foreign code-share partners, which 

incorporate these auditing standards. Ensuring independence is critical, for 

example, because the U.S. airlines generally audit the safety of their foreign 

code-share partners themselves. Although we did not assess the airlines’ 

compliance with the independence standard, U.S. airline officials told us 

that they ensure independence by separating their safety and marketing 

departments organizationally to prevent any possible influence from the 

marketing staff on the safety audit results. In addition, safety officials at the 

U.S. airlines participating in the Code-Share Safety Program indicated that 

other airline departments do not have any input into their safety audit 

results. Moreover, some airline safety officials said they were not aware of 

the specific financial arrangements involved in their airlines’ code-share 

37GAO, Government Auditing Standards, GAO-03-673G (Washington, D.C.: June 2003).

38GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999) and GAO, Internal Control Management and 

Evaluation Tool, GAO-01-1008G (Washington, D.C.: August 2001).

39Office of Management and Budget, OMB Circular A-123, Management’s Responsibility for 

Internal Control, (Washington, D.C.: 1995).
Page 24 GAO-05-930 Aviation Safety

partnerships. The program guidelines allow the U.S. airlines to employ 

personnel or hire outside experts as consultants (contractors) to conduct 

the safety audits. FAA officials said they are not concerned about allowing 

the U.S. airlines to use their own employees to conduct the safety audits 

because of the importance to the airlines of conducting sound safety audits 

to limit the liability associated with establishing code-share arrangements 

with foreign airlines. Table 1 lists the program guidelines that incorporate 

the auditing standards.

Table 1: Selected Government Auditing Standards Incorporated in the Code-Share Safety Program

Source: Government Auditing Standards and Code-Share Safety Program guidelines.

FAA’s Reviews of the Safety 

Audit Reports Lacked 

Certain Management 

Controls

We found that FAA’s reviews of the safety audit reports lacked certain 

management controls—including establishing reviewers’ qualifications, 

verifying corrective actions, and documenting the reviews—but did employ 

some management controls for monitoring and measuring performance. 

Management controls are the continuous processes and sanctions that 

federal agencies are required to use to provide reasonable assurance that 

their goals, objectives, and missions are being met. These controls should 

be an integral part of an agency’s operations and include a continuous 

commitment to identifying and analyzing risks associated with achieving 

Auditing standard Program guidelines 

Independence: The audit organization and auditor should be 

free from personal, external, and organizational impairments 

to independence.

The guidelines indicate that the U.S. airlines’ safety auditors should have 

organizational independence to perform the audits and be free to 

objectively report to the airlines’ senior management.

The guidelines indicate that U.S. airline safety directors (or similar officials) 

should submit compliance statements to FAA affirming that their foreign 

code-share partners meet international aviation safety standards.

The guidelines indicate that the safety auditors should have no financial 

interest in or family affiliation with the foreign code-share partner airlines. 

Professional judgment: Professional judgment should be 

used in planning and performing audits and in reporting the 

results, including exercising reasonable diligence to maintain 

the highest degree of integrity, objectivity, and 

independence. 

The guidelines indicate that the safety audit report’s content should be 

independent, objective, fair and constructive, free of vagueness or 

ambiguity, and supported by competent and relevant audit evidence.

Competence: Auditors should have the knowledge, skills, 

and experience necessary for their work, and these 

elements should be addressed in the hiring process and 

through continuous development.

The guidelines indicate that the safety auditors should have the 

qualifications needed to conduct the safety audits and analyze the 

findings, including relevant training, experience in conducting safety 

audits, and knowledge of international aviation safety standards. 
Page 25 GAO-05-930 Aviation Safety

the agency’s objectives, establishing program goals and evaluating 

outcomes, and creating and maintaining related records. 

Effective management controls require that personnel possess and 

maintain a level of competence that allows them to accomplish their 

assigned duties. In addition, management must identify the knowledge and 

skills needed for various jobs, provide needed training, and obtain a 

workforce that has the skills that match those necessary to achieve 

organizational goals. However, we found that FAA has not established 

competence criteria and qualifications for the personnel who review the 

airlines’ safety audit reports. As a result, the FAA staff who are reviewing 

the audit reports have different backgrounds and training, which may lead 

to differing interpretations of the standards. The FAA headquarters official 

who has reviewed a large number of the safety audit reports has aviation 

experience as a military pilot and is trained as an ISO 9000 auditor40 but is 

not trained as an FAA inspector and was hired in an administrative 

capacity. Two other FAA headquarters staff who review the audit reports 

have been trained as aviation safety inspectors. Furthermore, five FAA field 

inspectors who are conducting many of the reviews41 have not had training 

in IOSA, which six U.S. airlines in the Code-Share Safety Program are now 

using as standards to audit the safety of their foreign code-share partners. 

As a result of inspectors not having this training, this could impede FAA’s 

review of the safety audits based on those standards. Moreover, the CodeShare Safety Program manager was transferred to a new position in 

February 2005, leaving the position vacant since that time. As of June 2005, 

40ISO 9000 is a certification process developed by the International Organization for 

Standardization, which develops standards for business, government, and technology based 

on quality management principles. An FAA official said that the agency uses the ISO 9000 

standards for the Code-Share Safety Program for data collection and retention, continuous 

improvement efforts, customer satisfaction, and performance measurement. This official 

said that, for example, the ISO 9000 standards are used to ensure consistency in how codeshare applications are processed, that the needed information is collected and provided to 

management to review the applications, and that performance goals are achieved.

41Although FAA program staff based in Washington, D.C., review the majority of the audit 

reports, FAA field safety inspectors review some of them, because staffing is limited for this 

program. FAA provided information indicating that one full-time-equivalent (FTE) position 

was dedicated for the Code-Share Safety Program during fiscal years 2000, 2002, 2003, and 

2004, and two FTEs were dedicated during fiscal year 2001. In addition, FAA indicated that 

five inspectors helped conduct safety audit reviews during those years on a part-time basis. 

FAA estimated that the time these five inspectors spent reviewing audit reports represented 

about 4 percent of an FTE’s time per year. FAA also indicated that about 2.3 FTEs were used 

on the IASA program per year during fiscal years 2000 through 2004, including the time 

spent by field office staff.
Page 26 GAO-05-930 Aviation Safety

FAA had not authorized this position to be filled and has denied a request 

for another full-time staff position dedicated to the program. Since the 

program manager’s departure, other staff in FAA’s International Programs 

and Policy Office, which administers the Code-Share Safety Program, have 

reviewed the safety audit reports in addition to performing their regular 

duties. FAA program officials said that since the program manager was 

transferred to another position, U.S. airlines must wait 3 to 4 weeks for 

FAA to review their safety audits of foreign carriers, compared with waiting 

1 day to 2 weeks before his transfer, and that U.S. airlines now must bring 

all of their safety audit reports to FAA in Washington, D.C., for review—a 

change that could hinder FAA’s review of documentation, such as safety 

monitoring systems, that may be located at the airlines’ facilities.42 An FAA 

management official said that because FAA’s Flight Standards Service,43 of 

which the Code-Share Safety Program is a part, imposed a hiring freeze in 

January 2005 for budgetary reasons, only critical positions are being 

replaced. The official said that because the vacant position for the CodeShare Safety Program was not considered to be critical, it was not filled.

Effective management controls also require the establishment of policies 

and procedures to verify that corrective actions have been taken in 

response to identified problems. According to FAA and airline officials, 

FAA staff review each audit report for about 2 to 4 hours, identifying any 

areas that need further clarification or resolution. Although FAA staff 

review the reports of all audits that U.S. airlines have conducted of their 

foreign code-share partners, normally they only spot check whether 

findings that were identified during the audit were resolved. According to 

an FAA safety official, FAA relies on the U.S. airlines’ compliance 

statements, signed by the airlines’ safety directors, which affirm that the 

audits were conducted in accordance with the guidelines and that the 

foreign carriers met the applicable ICAO standards, as proof that all 

findings have been resolved. However, FAA’s reliance on the compliance 

statements may not provide an effective management control to ensure 

that corrective actions have been taken in response to audit findings. For 

example, we found that FAA provided a memorandum of no objection to 

DOT’s Office of International Aviation about a foreign code-share partner 

that, according to an official from its U.S. partner, had not implemented all 

42FAA officials said that before the Code-Share Safety Program manager was transferred to a 

new position, U.S. airlines brought the safety audit reports of their foreign code-share 

partners to FAA in Washington, D.C., for review 90 percent of the time.

43FAA’s Flight Standards Service is part of the Office of Aviation Safety.
Page 27 GAO-05-930 Aviation Safety

of the corrective actions needed to resolve the findings. The safety audit 

identified dozens of findings, many of which were also found in a second 

audit 2 years later and, according to the airline, subsequently corrected. 

Furthermore, because FAA has not provided its reviewers or the airlines 

with a standard definition of “safety-critical” findings that must be 

corrected before the audit can be closed, it is unknown whether these open 

findings were safety critical. Moreover, the reasonableness of leaving open 

dozens of safety audit findings is questionable, as is FAA’s reliance on the 

airlines’ compliance statements as proof that all corrective actions have 

been made. Although the U.S. carrier temporarily suspended the codeshare arrangement with this foreign carrier, FAA officials said the 

suspension occurred because of FAA’s concern about the safety oversight 

of that foreign airline’s civil aviation authority, not because of the number 

of audit findings or their lack of closure. 

FAA uses compliance statements, which are based on the safety audit 

results, as reasonable assurance that the foreign airlines meet ICAO safety 

standards. However, FAA’s reliance on compliance statements may not 

provide such assurance because FAA has accepted compliance statements 

as proof that the carriers met ICAO safety standards, even in situations 

when it questioned the audit results. For example, FAA provided 

memorandums of no objection to DOT’s Office of International Aviation 

that were based on safety audits conducted by one airline contractor over a 

4-year period, many of which did not identify any findings,44 even though an 

FAA official told us that he had discussed with the airline FAA’s concern 

about the number of audits that did not identify any findings.45 

44We found that over half of the contractor’s audit reports had no findings. By comparison, 

we estimate that 25 percent of all audits were closed with no findings.

45The airline stopped using this contractor in 2003, after which the airline conducted the 

safety audits itself. The airline indicated that its decision to begin conducting the audits 

using its own resources was based on the opportunity to lower costs while expanding its 

auditing checklists to include elements from the IOSA program. In addition, the airline 

indicated that using its resources provided an improved opportunity to communicate with 

its counterparts at the code-share airline and exchange recommended safety practices. An 

official from the airline said that the airline shared FAA’s concern about the relatively low 

number of findings contained in the contractor’s audit reports, but explained that the airline 

had no basis for comparison since it was not conducting the audits itself. The official said 

that now that the airline has conducted several safety audits itself, there have been only a 

few instances when findings impacting the safety of flight have been discovered. In addition, 

the official said that many times findings are identified and resolved before the audit team 

concludes the audit and that most of the recent findings involve lack of documentation for 

established practices.
Page 28 GAO-05-930 Aviation Safety

According to the Code-Share Safety Program guidelines, U.S. airlines 

should not submit compliance statements to FAA until all corrective 

actions have been completed; the statements should not be predicated on 

future actions that are planned to be completed. However, FAA officials 

said that they allow “nonsafety-critical” findings identified during the audit, 

such as deficiencies in personnel training and omissions in manuals, to be 

addressed later. Because FAA has not provided the airlines with a standard 

definition of “safety-critical” findings that must be corrected before the 

audit can be closed, airlines could interpret the term inconsistently in 

documenting and resolving corrective actions. An FAA official indicated 

that developing a definition of safety critical would be difficult and time 

consuming. An aviation safety expert we consulted said that a definition of 

safety critical would require considerable study and criteria development 

because situations can be critical to safety in many ways. He added that a 

well-trained and experienced aviation safety inspector could identify a 

safety-critical situation. However, this same expert suggested that, as a 

quality assurance measure, FAA select several audits each year and check 

the underlying documentation in depth. Similarly, the DOT Inspector 

General recommended in 1999 that FAA conduct comprehensive audits of a 

sample of safety audits to confirm that carriers have applied agreed-upon 

standards and procedures in conducting the audits.46 However, even if FAA 

were to conduct such comprehensive audits, without a definition of safetycritical findings, the agency would still lack assurance that safety-critical 

findings were identified and resolved. 

FAA indicated that from August 2003 through July 2004,47 18 of the 50 audit 

reports on foreign airlines it reviewed were returned to U.S. carriers for 

further action and 4 were placed on hold pending the outcome of IASA 

reviews; the other 31 foreign carriers received memorandums of no 

objection. Furthermore, FAA officials said that, according to anecdotal 

information from some U.S. carriers, too many safety concerns were 

identified during some safety audits for the carriers to proceed with 

applications for code-share authorization. However, FAA officials said they 

do not know how many times the safety audits have prevented airlines that 

pose safety concerns from becoming code-share partners with U.S. airlines. 

46DOT Office of the Inspector General, Aviation Safety Under International Code-Share 

Agreements, Report No. AV-1999-138 (Washington, D.C.: Sept. 30, 1999).

47FAA did not maintain data on the number of audit reports that it reviewed and placed on 

hold for other years.
Page 29 GAO-05-930 Aviation Safety

In addition, effective management controls require that documentation be 

created and maintained to provide evidence of executing approvals, 

authorizations, verifications, and performance reviews. FAA devised a 

checklist for agency staff to complete while reviewing safety audit reports 

to check for compliance with the program guidelines, record information 

about findings, or report irregularities. FAA officials said that the checklist 

was developed to establish and maintain consistency in reviewing the audit 

reports. However, we found that the checklist did not consistently 

document what actions FAA took when reviewing the airlines’ audit 

reports, which findings it reviewed, and which corrective actions it verified 

were implemented. For example, in some cases, the checklist provided 

information about the closure of findings, but in other cases, no 

information was recorded about closure. FAA officials said that portions of 

the checklist may be left blank until the FAA reviewer has completed 

discussions with the airline and answered all of the concerns to his or her 

satisfaction, at which time the FAA reviewer will note that no irregularities 

were found. Officials said that in such cases, the checklist would not 

capture this process. However, not completing this information could 

hinder future reviews of the same airline by impeding comparisons 

between audits. Furthermore, because FAA often lacked documentation 

that it had verified the closure of findings, we were unable to determine 

how frequently FAA may have provided memorandums of no objection on 

foreign carriers that had not implemented all corrective actions in response 

to the findings, as occurred in the example discussed earlier. 

Effective management controls also include monitoring to assess the 

quality of performance over time. Management controls generally should 

be designed to ensure ongoing monitoring during normal operations and 

include regular management and supervisory activities, comparisons, 

reconciliations, and other actions people take in performing their duties. 

FAA officials said that the manager of the International Programs and 

Policy Division, which is responsible for administering the Code-Share 

Safety Program and is part of FAA’s Flight Standards Service, is briefed by 

the Code-Share Safety Program staff on the results of their safety audit 

reviews before a recommendation is made to the Director of Flight 

Standards to sign the memorandums of no objection that are sent to DOT’s 

Office of International Aviation. This procedure allows the International 

Programs and Policy Division manager to monitor the results and the 

decision-making processes involved. In addition to reviewing the audit 

reports, FAA monitors the safety of foreign carriers through other sources 

of information. FAA officials said they also review any accident and 

incident information from aviation safety databases, company financial 
Page 30 GAO-05-930 Aviation Safety

histories, ICAO reports on the countries’ civil aviation authorities,48 media 

reports, ramp inspection results,49 and information from FAA international 

field offices about their inspections of foreign aircraft when these aircraft 

enter the United States.50

According to the Code-Share Safety Program guidelines, the U.S. airlines 

participating in the program should have a process to monitor the safety of 

their foreign code-share partners on an ongoing basis, and FAA should 

review this monitoring process. FAA officials said they have reviewed the 

monitoring systems at seven of the eight U.S. airlines participating in the 

program.51 However, FAA had not documented its reviews of the 

monitoring systems, so we were unable to verify that activity. Furthermore, 

safety officials at three of the eight U.S. airlines said FAA had not reviewed 

their monitoring systems.52 Without an FAA review, deficiencies in these 

monitoring systems might not be identified. 

FAA does not maintain information on the types and frequencies of audit 

findings to provide a means of comparing the findings from initial and 

recurrent audits of the same airline, or perform trend analysis that could 

help identify problems across airlines or fleets. Trend analyses would be 

useful for monitoring, on an ongoing basis, the effectiveness of FAA’s 

internal quality control system. FAA officials said the checklists are not 

used for tracking or trend analysis and that FAA does not formally examine 

either the safety problems occurring most often or the geographic areas 

48ICAO’s Universal Safety Oversight Audit Program regularly audits countries that have 

signed the Chicago Convention of 1944, called ICAO Contracting States, to determine the 

status of the states’ implementation of safety oversight and relevant ICAO standards and 

recommended practices, associated procedures, guidance material, and safety-related 

practices.

49FAA conducts annual ramp inspections of foreign carriers entering the United States or 

monthly inspections (called the special emphasis list) when the results of inspections are 

repeatedly poor or the airline’s country of operation is placed in IASA category 2.

50Under 14 C.F.R. 129, FAA may inspect foreign airlines when they enter the United States, 

but FAA does not inspect foreign aircraft outside the United States. The Chicago Convention 

limits FAA and other civil aviation authorities to regulating or auditing foreign airlines 

within their own country’s airspace.

51An FAA official said that FAA had not observed the eighth U.S. airline’s monitoring system 

because it was a new participant in the Code-Share Safety Program.

52An official at another U.S. airline said that FAA had observed its system to track open 

safety audit findings but not its entire monitoring system.
Page 31 GAO-05-930 Aviation Safety

where problems are occurring most frequently. However, the officials said 

that the FAA program manager does want to have a general idea of the 

types of problems being found, and the checklist provides this information 

informally. According to one FAA official, the purpose of the checklist is to 

ensure that the DOT guidelines are met, rather than to create a database of 

findings. In our view, not maintaining such documentation could impede 

analyses of trends and comparisons of findings, as well as limit 

opportunities for assessing risks and prevents determining whether FAA 

reviewed those findings. 

Establishing performance measures is another component of effective 

management controls. The Government Performance and Results Act of 

1993 requires agencies to, among other things, set strategic and annual 

performance goals, and measure and report on performance toward these 

goals. Management controls play a significant role in helping managers 

achieve those goals. FAA has established certain performance goals for the 

Code-Share Safety Program, including reviewing at least 40 safety audit 

reports during fiscal year 2004. FAA exceeded this goal by completing 57 

reviews. In addition, FAA set a performance goal of meeting with major 

U.S. air carriers to request feedback on the Code-Share Safety Program. 

FAA met this goal in 2004. 

U.S. Airlines Are 

Auditing Foreign 

Partners’ Safety, and 

Partners Are Taking 

Corrective Action, but 

Documentation of 

Corrective Actions Is 

Often Lacking 

The eight U.S. airlines participating in the Code-Share Safety Program have 

conducted the safety audits of their foreign code-share partners and have 

monitored the safety of their code-share partners between audits, as 

specified under the guidelines. Through those audits, the U.S. airlines have 

identified numerous safety issues associated with their foreign partners’ 

operations. After completing the audits, the U.S. airlines have submitted 

written statements to FAA affirming their foreign code-share partners’ 

compliance with ICAO standards, as specified under the guidelines. 

However, the U.S. airlines have not always documented the 

implementation of actions taken in response to the findings. Many airlines 

are now moving to adopt the international safety audit program, IOSA, 

which contains procedures that would help to ensure that corrective 

actions implemented in response to audit findings are documented. Most 

U.S. airline officials said they believe the Code-Share Safety Program 

provides reasonable assurance of safety or is effective, but some officials 

also suggested various changes in its administration. 
Page 32 GAO-05-930 Aviation Safety

U.S. Airlines’ Safety Audits 

Primarily Identified 

Findings in Foreign 

Partners’ Flight Operations 

and Maintenance and 

Engineering

The U.S. airlines participating in the Code-Share Safety Program have been 

assessing the safety of their foreign code-share partners at least every 2 

years, as the guidelines specify.53 We estimate, based on the results of our 

sample of 149 randomly selected safety audit reports, that there are 2,047 

findings among the audits that the eight U.S. airlines conducted of foreign 

carriers, which FAA reviewed from February 2000 through September 

2004.54 The program guidelines define a finding as an instance in which “the 

performance of the standard does not meet the established criteria” under 

ICAO standards. We estimate that 75 percent of the audits of foreign 

carriers that the eight U.S. airlines conducted of foreign carriers and that 

FAA reviewed from February 2000 through September 2004 contained at 

least one finding. Airline officials told us that most findings related to a lack 

of documentation. Documentation is important to ensure the 

implementation of management controls, which should appear, for 

example, in management directives and operating manuals. However, we 

found that many of the safety audit findings were broader in scope than a 

lack of documentation and extended to a lack of underlying policies and 

procedures. We further estimate that findings related to deficiencies in 

policies and procedures accounted for 23 percent55 of all findings. 

The audits reviewed the carriers’ compliance in eight major categories 

(organization, flight operations, flight dispatch, maintenance and 

engineering, cabin operations, cargo and dangerous goods, ground 

handling, and security).56 As shown in figure 5, the findings spanned all 

eight categories, but the largest numbers were in two categories: (1) flight 

operations, which govern the activities of the pilots, including training, and 

(2) maintenance and engineering, which involves the oversight of activities 

53As discussed earlier, for 12 of the 256 audit reports that FAA reviewed from February 2000 

through September 2004, FAA granted the U.S. airlines extensions of time to submit 

compliance statements. In some cases, U.S. airlines conducted safety audits of their foreign 

partners more frequently than every 2 years. 

54We are 95 percent confident that the actual number of findings lies between 1,450 and 

2,643. All percentage estimates from the sample of audits have sampling margins of error of 

plus or minus 10 percentage points or less unless otherwise noted. All numerical estimates 

other than percentages have margins of error of plus or minus 10 percent of the value of 

those estimates unless otherwise noted. See appendix I for additional information on our 

sampling methodology.

55The 95 percent confidence interval surrounding this estimate ranges from 15 to 36 percent.

56Most of the audit reports that we reviewed were organized into these eight categories. 
Page 33 GAO-05-930 Aviation Safety

to maintain, repair, and overhaul aircraft, aircraft engines, and parts. In the 

flight operations category, the findings included a lack of drug and alcohol 

testing policies and a lack of documentation on flight time and rest 

requirements for flight personnel. In the maintenance and engineering 

category, one common type of finding related to the maintenance and 

calibration of tools and supplies, which could affect safety.

Figure 5: Percentage of Findings by Audit Category

Note: Percentages do not total to 100 because of rounding. 

Airlines Submitted 

Compliance Statements to 

FAA but Did Not Always 

Document the Closure of 

Findings

After U.S. airlines completed their audits, their safety directors submitted 

statements to FAA affirming their foreign code-share partners’ compliance 

with ICAO standards. FAA officials said they rely on these compliance 

statements as the primary evidence that the foreign code-share partners of 

U.S. airlines have resolved all safety-critical findings. However, on the basis 

of our review of a sample of the audit reports, we estimate that, for 68 

3%

Unknown

4%

Security

Cabin operations

Cargo and dangerous goods

Organization

Ground handling

Flight dispatch

Maintenance and engineering

Flight operations

5%

6%

6%

8%

10%

30%

27%

Source: GAO analysis of the safety audit reports.
Page 34 GAO-05-930 Aviation Safety

percent of the identified findings,57 the documentation was insufficient to 

demonstrate that the findings had been closed or were resolved. 

Specifically, the documentation either failed to indicate at least one of the 

following three elements:58 (1) what corrective action was taken, (2) who 

accepted the corrective action, and (3) when the corrective action was 

accepted or the documentation was insufficient to determine whether the 

findings were closed. An estimated 28 percent59 of the audit reports that 

contained findings had at least one finding that lacked all three elements 

documenting corrective actions.60 The Code-Share Safety Program 

guidelines do not indicate that U.S. airlines should have documentation 

available for FAA’s review to provide evidence of what corrective action 

was taken, who accepted the action, and when the action occurred in 

response to the findings identified in audits of their foreign code-share 

partners.61

We asked the eight U.S. airlines participating in the Code-Share Safety 

Program what types of systems they were using to track any findings that 

were not resolved when the safety audit was complete. We found that three 

of the U.S. airlines were using computer systems to track the closure of 

such open findings; three other airlines had computer systems that could 

track the closure of findings, but their foreign partners had no open 

findings; and two airlines indicated that they did not have systems to track 

open findings because their foreign partners did not have any open 

findings. At one U.S. airline that was using a computer system to track open 

findings, officials said that a computer malfunction resulted in the loss of 6 

57These findings were not categorized as being either safety critical or nonsafety critical. 

Furthermore, because FAA had not developed a definition of safety-critical findings, which 

FAA requires airlines to resolve immediately, we could not determine how many safetycritical findings lacked complete documentation of corrective action.

58We identified these three elements as sufficient evidence that the finding was resolved.

59The 95 percent confidence interval surrounding this estimate ranges from 16 percent to 44 

percent.

60An estimated 64 percent of the audit reports that contained findings had at least one 

finding that lacked at least one element documenting corrective actions.

61The program guidelines indicate that the U.S. carriers should ensure that their foreign 

partners have processes in place that identify “types of problems that may occur from 

common or special circumstances” and that corrective action takes into account, among 

other things, “the existence of documentation of the changes made to analyze the 

effectiveness of the corrective action.” 
Page 35 GAO-05-930 Aviation Safety

months of data.62 An official from this airline said that before 2004, the 

airline coordinated closure of any findings directly with the contractor. 

When asked to produce this information, the airline did not have finding 

closure documentation available for audits conducted before 2004. This 

contractor said that although his firm was asked a few times by the U.S. 

carrier to check on the closure of audit findings by its foreign partner, the 

U.S. airline was responsible for tracking the closure of findings. 

Airlines also lacked documentation on the closure of findings in part 

because an unknown number of findings were closed on-site during the 

audits and not documented. The FAA program manager said he 

discouraged closing out findings on-site without documentation during the 

audits because it does not leave an audit trail about what findings were 

identified. Documentation provides a record of the execution of 

management controls which, in this situation, relate to the implementation 

of corrective actions. 

We estimate that 25 percent of the audits were closed with no findings 

identified. According to an FAA official, audits that identify no findings are 

questionable because the airlines must comply with so many requirements 

under either ICAO or IOSA standards. One U.S. airline used a contractor to 

conduct 31 of the audits of foreign airlines in our sample from 1999 through 

2003, over half of which identified no findings.63 As described earlier, an 

FAA official told us that he had discussed with the airline FAA’s concern 

about the number of audits conducted by the contractor that did not 

identify any findings. The FAA official also said that he helped the airline 

revise its approach to conducting the audits as a part of its internal 

evaluation program. The contractor told us that it is common for the safety 

audits not to identify findings because the airlines have prepared for the 

audit, and the audit findings are sometimes resolved on the spot. The 

contractor also said that his firm often recommended best practices that 

the foreign carriers could implement, but these recommendations did not 

relate to violations of ICAO standards and, thus, were not considered to be 

62An official from this airline said that although the electronic data were lost, the airline still 

had the paper documentation of the information that was contained in the computer system. 

This official also said that the airline had implemented a new tracking system, which he said 

was an improvement over the previous system.

63From 2000 to 2004, six of the eight U.S. airlines used contractors to audit the safety of their 

foreign code-share partners, although three used them for only one audit. U.S. airline 

officials said they sometimes used contractors because of convenience (e.g., when 

contractors were located near the foreign airlines’ operations).
Page 36 GAO-05-930 Aviation Safety

findings. Furthermore, this contractor said that a representative from the 

U.S. airline, who accompanied the contractor’s auditors on the audits, kept 

the U.S. airline informed.

U.S. Airlines Also Monitor 

the Safety of Their Foreign 

Partners between Audits

The eight U.S. airlines participating in the Code-Share Safety Program have 

processes to monitor the safety of their foreign code-share partners on an 

ongoing basis, including their accident and incident rates, financial 

condition, equipment age, labor issues, and other issues, as called for in the 

program guidelines. Safety officials from the eight U.S. airlines said that, to 

their knowledge, no fatal accidents had occurred on their foreign codeshare routes since the Code-Share Safety Program began in 2000. We 

observed the systems and information sources that each U.S. airline used 

for monitoring. Airline officials showed us, for example, safety 

questionnaires that they sent to their code-share partners between formal 

safety audits, news subscription services, and aviation safety Web sites. 

Some airline officials also said they occasionally made on-site visits to 

monitor their partners’ safety. The airlines also indicated that they monitor 

any accident and incident data for their code-share partners. According to a 

safety official at one U.S. airline, a carrier’s past accident and incident 

record does not conclusively prove that a safety problem exists, but it can 

be an indicator of other deficiencies, such as gaps in training. Some 

officials from airlines that are part of global alliances also said that they 

share safety information about their mutual foreign code-share partners. 

Four U.S. airlines had created computer databases to maintain this 

monitoring information while the other four maintained paper files.

Use of International Safety 

Audit Program May Address 

Some Weaknesses in the 

U.S. Safety Audit Program

As U.S. airlines and their foreign code-share partners begin to use IOSA—a 

new safety audit program developed by IATA—some of the weaknesses 

that we observed in the Code-Share Safety Program may be addressed, and 

U.S. airlines may receive other benefits. Increased use of IOSAs may help 

to ensure that audit findings are resolved and corrective actions 

implemented. IOSA requires that findings that are identified during the 

audit be documented, excluding those that are corrected immediately onsite during an audit.64 In addition, IOSA requires documentation of closure 

64According to IATA, when an airline being audited implements immediate corrective action 

while the audit team is still on site, the audit team is permitted to exclude the recording of a 

finding only if it is able to verify full implementation of comprehensive and permanent 

corrective action.
Page 37 GAO-05-930 Aviation Safety

for findings, including the three elements we identified—(1) a description 

of the corrective actions taken, (2) who accepted the corrective actions, 

and (3) when the corrective action was accepted—as well as the reasoning 

used by the auditing organization to clear the findings. As noted, 

documentation of one or more of these elements was missing, or it could 

not be determined if elements were missing for an estimated 68 percent of 

the audit findings. 

Six of the eight U.S. airlines use IOSA standards to audit the safety of their 

foreign code-share partners, one may do so in the future, and one does not 

plan to use the standards to audit the safety of its foreign code-share 

partner.65 Moreover, according to some airline officials, U.S. airlines have a 

financial incentive to encourage their foreign code-share partners to 

undergo IOSAs because the auditing costs66 are shifted from the U.S. airline 

to its foreign partner. However, not all U.S. airlines plan to require IOSAs of 

their foreign code-share partners.67 For example, officials from one U.S. 

airline said that IOSAs may be too expensive for some small foreign 

carriers. Similarly, officials at another U.S. airline said that IOSAs are 

applicable to airlines with large fleets and major processes but may not be 

practical for smaller airlines. Officials at a third U.S. airline said they 

preferred to continue conducting the safety audits themselves, rather than 

using an auditing organization selected by IATA, because they wanted the 

assurance of examining their partners’ operations in person, rather than 

relying on an external organization. 

Finally, increased use of IOSAs may help standardize aviation safety 

auditing and streamline FAA’s review of audit reports. Under the IOSA 

program, the airlines can obtain the audit results of their mutual code-share 

partners. Of the eight U.S. airlines with foreign code-share partners, six 

share 18 of the same foreign code-share partners. FAA recently allowed 

U.S. airlines to submit for review audit reports that other U.S. airlines had 

65One U.S. airline was using an auditing organization accredited by IATA, which is an 

independent business unit of that U.S. airline. 

66An IATA official said the average cost of conducting a safety audit of a foreign airline was 

between $50,000 and $70,000.

67IATA originally set a goal of having all 265 of its members undergo IOSAs by January 2006, 

but it later revised that to having 140 airlines undergo IOSAs by the end of 2005. As of June 

2005, 88 IOSA audits had been completed worldwide, including 66 IATA members. In May 

2005, IATA’s Board of Governors decided in principle that all IATA members will have to 

undergo IOSA.
Page 38 GAO-05-930 Aviation Safety

conducted on a shared foreign code-share partner.68 Some U.S. airlines, as 

members of global airline alliances, plan to share their audit reports of 

foreign partners and reduce duplicative audits.69 The IOSA program should 

make it easier for airlines that are not in such alliances to share audit 

reports.70 Increased sharing of the reports could reduce the number of 

safety audits that the U.S. airlines would need to conduct of their foreign 

partners and could thus reduce the number of reports that FAA would need 

to review. 

Most U.S. Airline Officials 

Believe the Code-Share 

Safety Program Provides a 

Reasonable Assurance of 

Safety 

Officials at most U.S. airlines participating in the Code-Share Safety 

Program told us they believe that the program provides reasonable 

assurance of safety concerning their foreign code-share partners or is 

effective. One airline official described the program as an “ingenious 

technique” that has had the effect of raising aviation safety standards 

worldwide by ensuring that safety issues will be resolved. This airline 

official said that some foreign airlines, seeking to become code-share 

partners of U.S. airlines, have restructured programs, rewritten manuals, 

and instituted new management techniques—evidence, he said, of the 

program’s effectiveness. Another U.S. airline official said that, without the 

Code-Share Safety Program, U.S. airlines might not conduct safety audits of 

their foreign code-share partners. An official at another U.S. airline said the 

Code-Share Safety Program is a means to ensure that a carrier meets 

minimum ICAO-based international aviation safety standards and that the 

IOSA program creates a baseline of auditing standards to be followed 

worldwide. However, the official said that a safety audit, whether 

conducted by an auditing organization selected by IOSA or a U.S. airline, is 

only a snapshot of the carrier for the period in which the audit is 

68FAA requires that the audit be conducted using an FAA-accepted methodology and that the 

airline that is relying on the audit report submit a compliance statement to FAA.

69Five of the eight U.S. airlines participating in the Code-Share Safety Program belong to 

global airline alliances with other U.S. airlines in the program. Continental, Delta, and 

Northwest belong to the Sky Team Alliance, and United Airlines and US Airways belong to 

the Star Alliance. 

70According to IATA, any interested party, such as an airline or regulator, may make a 

request through IATA to view the audit report of an airline that is on the IOSA registry, which 

lists the airlines that have undergone IOSA. After a requester “qualification and verification 

process,” which includes the signing of a nondisclosure agreement and specific approval for 

release by the audited airline, the report is made available to the requesting party. The use of 

IOSA audit data by regulatory authorities was encouraged in November 2004, according to 

IATA.
Page 39 GAO-05-930 Aviation Safety

conducted. The airline official said that the carrier’s actions before the 

audit or after the audit may differ and cannot be adequately evaluated until 

additional safety information is collected from the carrier between safety 

audits or until the next safety audit. 

An official at another U.S. airline participating in the Code-Share Safety 

Program said that although a safety audit provides a very good assessment 

of an airline’s compliance with aviation safety standards, it does not 

guarantee the safety of the carrier’s operations. This official added that 

even if a safety audit were conducted on a carrier monthly, it would not 

guarantee that the carrier would never have an accident. Furthermore, an 

official at another U.S. airline said that the Code-Share Safety Program is 

not necessarily required to provide reasonable assurance of safety 

concerning the foreign code-share partners of U.S. airlines and that the 

airline does not necessarily believe that formal, FAA-approved safety audits 

are the only way to gain such assurance. This airline official said that U.S. 

airlines should not be required to conduct safety audits of foreign airlines 

that are operating out of countries that FAA rated as IASA category 1 and 

that U.S. airlines should be able to choose whether to conduct safety audits 

in countries that FAA has rated as IASA category 2 or has not rated. This 

airline official added that while the U.S. airline may continue to audit its 

partners on its own, it does not believe that FAA should oversee this 

process. However, an FAA IASA program official told us that the IASA 

program focuses on the capabilities of the foreign civil aviation authorities 

and does not ensure the safety of any carriers operating in IASA category 1 

countries. This FAA official also said that inconsistencies in aviation safety 

oversight can exist throughout the world, even in countries with “higher” 

standards, and that some countries exceed ICAO standards, while others 

do not. 

A safety official at one U.S. airline said he believed that the Code-Share 

Safety Program guidelines should be made regulations. Although officials 

from DOT’s Office of International Aviation and FAA said that making the 

program regulatory is not needed because it is working well, this airline 

safety official said that making the program regulatory would allow 

requirements to be applied more evenly to all airlines participating in the 

program. This airline official added that DOT is requiring the guidelines to 

be followed and therefore they are regulations in practice. A safety official 

at another U.S. airline questioned why DOT requires “guidelines” to be 

followed. He said that if DOT wants “rigid compliance” with the guidelines, 

it should make the program regulatory. A safety official at a third U.S. 

airline said the program’s requirements should be standardized, noting that, 
Page 40 GAO-05-930 Aviation Safety

for example, FAA was inconsistent about its requirements for reviewing 

auditors’ qualifications. An aviation safety expert we consulted also said 

that the program should be made regulatory, observing that both the CodeShare Safety Program and IASA suffer from a “lack of regulatory teeth” and 

that making them regulatory would provide clarity to the DOT 

requirements, which he said are “mere policies.” At the same time, this 

expert said that although the program is not regulatory, the Code-Share 

Safety Program guidelines clearly lay out what is expected of the airlines 

and set the standards that must be met. He added that under the guidelines, 

U.S. airlines are held accountable for the safety of their foreign code-share 

partners. 

Finally, officials at two airlines said that they would like FAA to provide a 

definition of safety critical or to define when an audit is considered to be 

closed so that it would be clear which findings must be resolved before 

closing an audit and submitting a compliance statement. As noted, FAA 

officials said that they allow nonsafety-critical findings identified during 

the audits to be addressed after the code-share arrangement is authorized. 

Conclusions The safety of foreign code-share partners of U.S. airlines is important 

because several million people fly on those foreign carriers using tickets 

purchased from U.S. airlines each year. Under the Code-Share Safety 

Program, the U.S. airlines are auditing the safety of their foreign code-share 

partners and identifying safety concerns, which the foreign carriers are 

addressing. However, FAA’s reviews of the safety audit reports lack 

management controls for establishing reviewers’ qualifications, verifying 

corrective actions, and documenting the reviews. FAA, for example, has 

not established the qualifications needed to review safety audit reports, 

and FAA field inspectors, who are reviewing many of the safety audit 

reports, have not been trained in the IOSA program—potentially impeding 

FAA’s review of audits that were conducted using those standards. In 

addition, the program guidelines do not provide clear direction to the U.S. 

airlines and FAA reviewers on which concerns are critical to safety and 

must be addressed before DOT’s Office of International Aviation will 

authorize or reauthorize a code-share arrangement. Without a definition of 

safety-critical concerns and complete documentation of the closure of 

findings, FAA lacks clear criteria for responding to requests from DOT’s 

Office of International Aviation about the safety of foreign carriers and 

lacks assurance that safety-critical concerns have been addressed. 

Furthermore, FAA is not using effective management controls when it fails 

to document its reviews of the airlines’ safety audit reports. Without 
Page 41 GAO-05-930 Aviation Safety

complete documentation, a determination cannot be made of what actions 

FAA took when reviewing the reports, which findings it reviewed, and 

which corrective actions it verified were implemented. Because 

documentation on FAA’s verification of the closure of findings was often 

lacking, we were unable to determine how frequently FAA may have failed 

to object to the authorization of code-share arrangements with foreign 

carriers that had not implemented all corrective actions in response to the 

findings. FAA also has not implemented a DOT Inspector General’s 

recommendation that it conduct a comprehensive examination of a sample 

of audit reports to verify the underlying documentation. Furthermore, 

FAA’s not collecting and tracking safety audit findings is an obstacle to 

conducting trend analysis or spotting anomalies. 

The airlines’ increasing adoption of the IOSA program as a worldwide 

safety auditing standard is likely to change how FAA conducts its safety 

reviews of foreign code-share partners of U.S. airlines. Moreover, IOSA 

requires that actions to correct all findings, except those that are corrected 

during an audit, be documented—a requirement that is lacking in FAA’s 

program. However, the adoption of the IOSA program is likely to be 

gradual, given that, as of June 2005, 66 of IATA’s 265 members had 

completed the program. 

Finally, although DOD and FAA officials said they have different program 

objectives, the two federal agencies are nevertheless duplicating efforts by 

reviewing many of the same audit reports. In addition, DOD is not receiving 

the foreign airport security assessment information from TSA that DOT is 

receiving. TSA’s information would provide DOD with more complete data 

for its safety reviews.

Recommendations To improve the safety oversight of foreign code-share operations, we 

recommend that the Secretary of Transportation direct the FAA 

Administrator to implement the following three recommendations:

1. Revise the Code-Share Safety Program guidelines to improve the 

effectiveness of the program and the clarity of the procedures that the 

airlines should follow in documenting and closing out safety audit 

findings. Because the audit guidelines indicate that the airlines should 

not submit compliance statements until all corrective actions have 

been completed, but FAA is allowing the airlines to resolve “nonsafetycritical” findings later, FAA should consider either following that 

guideline or defining “safety-critical” audit findings, so that the airlines 
Page 42 GAO-05-930 Aviation Safety

and FAA reviewers know which types of findings must be corrected 

before submitting the compliance statements.

2. Develop mechanisms to enhance FAA’s management controls over its 

reviews of the safety audit reports. In developing the mechanisms, FAA 

should consider standardizing the qualifications and training needed 

for agency staff to review the airlines’ safety audit reports; identifying 

ways to document its reviews of the airlines’ safety audit reports; 

increasing the scrutiny of audit reports that have an unusually high or 

low number of findings, periodically selecting a sample of safety audits 

to conduct a comprehensive review of the underlying documentation 

collected; and collecting and analyzing information on the audit 

findings for the foreign code-share partners of U.S. airlines so that the 

data can be more easily quantified and analyzed to spot possible trends 

and anomalies, should FAA decide such analyses are needed.

3. Finally, explore with DOD potential opportunities to reduce duplication 

of efforts in reviewing the same safety audit reports. 

Because security is an important component of assessing airline safety, to 

improve DOD’s oversight of foreign carriers that transport DOD personnel, 

we also recommend that the Secretary of Homeland Security direct the 

Assistant Secretary of Homeland Security for TSA to develop a process of 

routinely coordinating with DOD regarding information on the security of 

foreign airports for DOD to consider in reviewing the safety of foreign 

airlines. Such a process could be documented in a memorandum of 

understanding or other written procedures to ensure such coordination.

Agency Comments We provided drafts of this report to the Department of Homeland Security, 

(DHS), DOD, and DOT. DHS provided written comments, agreeing with our 

recommendation regarding TSA. DHS’s comments are reprinted in 

appendix III. DOD provided no comments on our findings or 

recommendations. DOD and DOT provided some technical clarifications, 

which we incorporated into this report as appropriate. We received 

comments from DOT officials, including FAA’s Deputy Associate 

Administrator for Aviation Safety. FAA generally agreed with the report and 

agreed to consider our recommendations. In addition, FAA provided 

comments on the Code-Share Safety Program, emphasizing that it is a 

collaborative effort between DOT’s Office of the Secretary, FAA, and the air 

carriers. FAA officials also said that the program established guidelines for 

approving international code-share operations, with the intent of 
Page 43 GAO-05-930 Aviation Safety

encouraging the highest possible levels of safety for international codeshare operations. According to FAA, the program outlines the necessary 

steps that U.S. air carriers must follow in seeking approval from DOT to 

conduct code-share operations with foreign air carriers. The officials added 

that the Code-Share Safety Program charges U.S. air carriers with the 

primary responsibility for ensuring that their foreign code-share partners 

comply with applicable international aviation standards.

As agreed with your office, unless you announce the contents of this report 

earlier, we plan no further distribution until 30 days from the date of this 

letter. At that time, we will send copies of this report to interested 

congressional committees; the Secretary of Transportation; the 

Administrator of FAA; the Secretary of Defense; the Secretary of Homeland 

Security; and the Assistant Secretary of Homeland Security for the 

Transportation Security Administration. Copies will also be available to 

others upon request and at no cost on GAO’s Web site at www.gao.gov. 

If you or your staff have any questions about this report, please call me at 

(202) 512-2834 or dillinghamg@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix IV. 

Sincerely yours,

Gerald L. Dillingham, Ph.D.

Director, Physical Infrastructure Issues
Page 44 GAO-05-930 Aviation Safety

Appendix I

Objectives, Scope, and Methodology ApApenednxidexiIs

Our objective was to review the measures that the federal government is 

taking to provide reasonable assurance of safety and security when 

passengers travel on flights operated by the foreign code-share partners of 

U.S. airlines. To accomplish this, we reviewed (1) the extent to which the 

Department of Transportation’s (DOT) authorization of U.S. airlines’ codeshare arrangements with foreign airlines is designed to consider safety and 

security, (2) how well FAA has managed the Code-Share Safety Program, 

and (3) the extent to which U.S. airlines have implemented the Code-Share 

Safety Program, and the results of their efforts. 

To determine how safety and security are considered in DOT’s 

authorization of U.S. airlines’ code-share arrangements with foreign 

airlines, we interviewed officials at DOT’s Office of International Aviation, 

Federal Aviation Administration (FAA), Transportation Security 

Administration (TSA), and the Department of Justice (DOJ) and reviewed 

the Code-Share Safety Program guidelines and related program 

documentation, applicable international aviation safety standards, and 

relevant legal authorities. Our review covered the U.S. airlines’ code-share 

partnerships with foreign carriers that DOT authorized from February 

2000, when the Code-Share Safety Program began, through fiscal year 

2004.1

 At DOT, we interviewed the officials who decide whether to 

authorize such partnerships about the authorization process, their sources 

of information, and how often they authorize the partnerships. To gain a 

better understanding of the authorization process and the information 

considered, we also reviewed a sample of code-share applications that U.S. 

airlines had filed to establish code-share partnerships with foreign carriers. 

Our sample consisted of one randomly selected application filed by each of 

the eight U.S. airlines participating in the Code-Share Safety Program. 

We also interviewed DOT security officials about how they provide security 

clearances for foreign carriers and how often they have provided those 

clearances for code-share authorization. Because TSA was the source of 

aviation security information for DOT, we interviewed TSA officials about 

how they assess the security of foreign airlines and airports. We also 

reviewed data from TSA about the results and frequency of its security 

assessments of foreign airports and related legal authorities. Based on our 

understanding of the data through interviews with TSA officials, we 

determined that the data were sufficiently reliable for our purposes. In 

1

Our review pertained only to U.S. airlines’ code-share arrangements with foreign carriers 

for scheduled air service, and not for charter or cargo air service.
Appendix I

Objectives, Scope, and Methodology

Page 45 GAO-05-930 Aviation Safety

addition, we interviewed DOT officials who review the competitive aspects 

of the code-share arrangements about how they conduct their reviews and 

how often they have provided those clearances for code-share 

authorization. Because these DOT officials received advice from DOJ on 

potential antitrust issues involving the code-share partnerships, we also 

interviewed DOJ officials who provided that advice about their process and 

sources of information.

At FAA, we interviewed officials about how they assess the capabilities of 

foreign civil aviation authorities through the International Aviation Safety 

Assessment (IASA) program and how those assessments relate to the 

Code-Share Safety Program. We also analyzed data on the results and 

frequency of IASA reviews since the Code-Share Safety Program was 

initiated. Based on our understanding of the data through interviews with 

FAA officials, we determined that the data were sufficiently reliable for our 

purposes. We reviewed documentation that FAA staff had prepared when 

they reviewed the airlines’ safety audit reports to determine how they 

documented their reviews. We also discussed with FAA officials how often 

FAA provided memorandums of no objection to DOT’s Office of 

International Aviation to support U.S. airlines’ applications for code-share 

arrangements with foreign carriers. 

Because the Code-Share Safety Program was designed to assess foreign 

airlines’ compliance with aviation safety standards established by 

International Civil Aviation Organization (ICAO), we interviewed ICAO 

officials about the standards, related international aviation safety issues, 

and the ICAO Universal Safety Oversight Audit Program, which assesses 

the capabilities of countries’ civil aviation authorities. In addition, because 

many airlines are planning to use a new international safety audit 

program—the International Air Transport Association’s (IATA) Operational 

Safety Assessment (IOSA) program—to assess the safety of their foreign 

partners, we interviewed IATA officials about how the program was 

developed, how airlines plan to implement it, and how it could affect the 

Code-Share Safety Program. For background information on how aviation 

safety varies internationally, we obtained data from IATA on aviation 

accident rates for different world regions. We did not review the reliability 

of IATA’s aviation accident data because we used this information only for 

background purposes. We also interviewed officials from the Air Transport 

Association—a U.S. airline association—about its involvement in 

establishing the DOD safety audit program and its views on the Code-Share 

Safety Program and FAA’s IASA program. Finally, because we found during 

our review that DOD had also established a program for reviewing the 
Appendix I

Objectives, Scope, and Methodology

Page 46 GAO-05-930 Aviation Safety

safety of foreign carriers, we interviewed DOD officials about the design 

and implementation of its program. In addition, we obtained information 

about the safety audit reports that DOD had reviewed from fiscal year 2001 

through fiscal year 2004 and the results, which we compared with the 

results of those that FAA reviewed. We also discussed with FAA and DOD 

officials the extent to which they have coordinated their efforts.

To determine how well FAA has managed the Code-Share Safety Program, 

we evaluated whether DOT’s Office of the Secretary and FAA incorporated 

selected government auditing standards in the program’s design and 

whether FAA effectively used management controls in reviewing the safety 

audit reports. Because the Code-Share Safety Program establishes an audit 

program, we reviewed whether the program’s design, as reflected in the 

program guidelines, conforms to certain standards identified in 

Government Auditing Standards.2 We reviewed selected general 

standards3

 that are contained in Government Auditing Standards 

(independence, professional judgment, and competence) to assess the 

program’s design. Although we examined the audit methodologies that the 

U.S. airlines had developed and submitted to FAA for review, we did not 

review them for conformance with government auditing standards because 

FAA had already conducted this review as a condition of accepting the U.S. 

airlines’ participation in the program. In addition, because we were 

evaluating the management of a government program, we examined FAA’s 

application of management controls, which is synonymous with the term 

“internal controls,” in its reviews of the safety audit reports using 

Standards for Internal Control in the Federal Government.

4

 We selected 

the management controls that were applicable to FAA’s review of the audit 

reports for establishing reviewers’ qualifications, verifying corrective 

actions, documenting the reviews, and monitoring and measuring 

performance. We also reviewed the recommendations contained in a 1999 

DOT Office of the Inspector General report on aviation safety under 

international code-share agreements to determine whether and to what 

2

GAO, Government Auditing Standards, GAO-03-673G (Washington, D.C.: June 2003).

3

We did not include the quality control and assurance general standard because it mainly 

relates to the process of peer review.

4

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999) and GAO, Internal Control Management and 

Evaluation Tool, GAO-01-1008G (Washington, D.C.: August 2001).
Appendix I

Objectives, Scope, and Methodology

Page 47 GAO-05-930 Aviation Safety

extent the report’s recommendations—about how a code-share safety audit 

program should be designed—were implemented. 

To determine the extent to which U.S. airlines have implemented the CodeShare Safety Program and the results, we interviewed officials at the eight 

U.S. airlines that were participating in the program about how they were 

assessing the safety of their foreign partners and reviewed a sample of the 

reports. We drew a stratified random probability sample of 153 reports of 

audits conducted by U.S. airlines of their foreign code-share partners. This 

sample was drawn from a population of documentation maintained by FAA 

for the 242 audit reports that the agency had reviewed from February 2000 

through September 2004. Of these 153 sampled audits, 2 were out of scope 

because the airlines withdrew them from consideration and 2 were in 

scope, but we did not complete our reviews of these reports. We ultimately 

collected information for 149 in-scope audits. With this probability sample, 

each audit report in the study population had a positive probability of being 

selected, and that probability could be computed for any audit. We 

stratified the population into nine groups on the basis of the U.S. airline 

conducting the audit, and further, for some of those airlines, whether the 

foreign airlines being audited were code-share partners with more than one 

U.S. airline or whether FAA’s records of its reviews of the audit reports 

contained comments about the findings. Each sampled audit was 

subsequently weighted in the analysis to statistically account for all of the 

audits in the study population, including those that were not selected. 

During our audit work, three airlines provided information about a total of 

14 additional audit reports that, according to the airlines, FAA had 

reviewed. These 14 audits were not included in the population from which 

we drew our sample because FAA’s files did not contain information about 

them. Estimates generated in this report pertain only to the 242 audit 

reports that, according to FAA’s files, the agency reviewed.

Because we followed a probability procedure based on random selections, 

our sample is only one of a large number of samples that we might have 

drawn. Since each sample could have provided different estimates, we 

express our confidence in the precision of our particular sample’s results in 

95-percent confidence intervals. These are intervals that would contain the 

actual population values for 95 percent of the samples we could have 

drawn. As a result, we are 95-percent confident that each of the confidence 

intervals in this report will contain the true values in the study population. 

All percentage estimates from the sample of audits have sampling margins 

of error of plus or minus 10 percentage points or less unless otherwise 

noted. All numerical estimates other than percentages have margins of 
Appendix I

Objectives, Scope, and Methodology

Page 48 GAO-05-930 Aviation Safety

error of plus or minus 10 percent of the value of those estimates or less 

unless otherwise noted.

We did not determine whether the airlines complied with international 

aviation safety standards. However, we performed a content analysis of the 

audit reports in our sample to determine what types of safety findings were 

identified regarding the foreign carriers. We recorded the findings and 

grouped them into eight categories: (1) organization, (2) flight operations, 

(3) flight dispatch, (4) maintenance and engineering, (5) cabin operations, 

(6) cargo and dangerous goods, (7) ground handling, and (8) security—

because the reports were generally organized into those categories. We 

then further divided those eight categories into at least six issue 

subcategories. Two coders independently categorized each finding, and any 

coding disagreements were resolved between the coders or by a third 

reviewer.

During our review of the audit reports, we also attempted to determine 

whether corrective actions taken in response to the findings were 

documented. To accomplish this, we looked for evidence of (1) what 

corrective action was taken, (2) who accepted the corrective action, and 

(3) when the corrective action was accepted. We considered these three 

elements to be sufficient evidence of documentation after observing how 

some airlines had documented the closure of findings and by reviewing 

Government Auditing Standards, which indicate that auditors should 

examine whether recommendations from previous audits have been 

implemented, and from Standards for Internal Control in the Federal 

Government, which require management to determine whether proper 

actions have been taken in response to findings and audit 

recommendations.

In addition to reviewing the audit reports at the airlines, we interviewed 

safety officials (typically the safety directors) at all eight U.S. airlines 

participating in the Code-Share Safety Program about how they assess the 

safety of their foreign code-share partners, including how they plan, carry 

out, and close the audits, as well as monitor the safety of their foreign 

partners between audits.5

 We also observed the monitoring systems that 

5

An independent business unit of one of the eight U.S. airlines participating in the CodeShare Safety Program is an auditing organization selected by IATA to conduct IOSAs. We 

had also interviewed staff from that organization about how the audits were conducted and 

their qualifications. 
Appendix I

Objectives, Scope, and Methodology

Page 49 GAO-05-930 Aviation Safety

they had implemented, as the program guidelines require, and sources of 

information that they used to monitor the safety of their foreign code-share 

partners. In addition, we asked the U.S. airline safety officials about their 

program-related interactions with FAA and DOT’s Office of International 

Aviation, whether and how they believe the program could be improved, 

and what they thought about the implications of the airlines’ increased 

adoption of IOSA by as an international aviation safety audit program. We 

also obtained the views of an aviation safety expert about the Code-Share 

Safety Program. We selected this expert because of his experience in 

aviation safety, which included helping to design FAA’s IASA program. 

Because some airlines had used contractors to conduct safety audits of 

their foreign code-share partners, we interviewed one contractor who said 

that he had conducted or helped to conduct safety audits for five of the 

eight U.S. airlines in the Code-Share Safety Program about how his firm 

conducted the audits and the qualifications of his staff. 

Finally, for background information on the extent to which passengers are 

traveling on foreign code-share partners of U.S. airlines, we asked the eight 

U.S. airlines to provide such data from 2000 through 20046

 using the same 

methodology, which was based on the number of tickets that the U.S. 

airlines sold for travel on their foreign code-share partners. For example, if 

a U.S. airline sold a single ticket for travel that included one or more 

foreign code-share partner flight segments, this ticket was counted once. If 

a U.S. airline sold separate tickets for travel that included more than one 

foreign code-share partner flight segment, each flight segment was counted 

as a separate ticket. Some airlines could not provide data for all 4 years, but 

all eight U.S. airlines were able to provide data for 2004, which we reported. 

We did not independently verify this information provided by the airlines 

because it was used only for background purposes. 

6

Annual data are in calendar years unless noted otherwise.
Page 50 GAO-05-930 Aviation Safety

Appendix II

U.S. Carriers and Their Foreign Code-Share 

Partners ApendxiI

U.S. carrier Foreign code-share partner

Alaska (1 partner) Helijet

America West (1 partner) Royal Jordanian Airlines

American (24 partners) Aer Lingus 

Aero Caribe

Air Pacific

BA CitiExpress

British Airways

Cathay Pacific

China Eastern

EVA Airways

Finnair

Gulf Air

Iberia

JAL

JALways

JetConnect Limited

LACSA

LAN Chile

Lan Express

Mexicana Airlines

Qantas 

SN Brussels

Swiss International Air Lines 

TACA 

TAM – Linhas Aereas

Turkish Airlines

Contintental (18 partners) AeroLitoral

Aeromexico

Air Europa

Air France

Alitalia

Brit Air 

COPA

CSA Czech

Emirates

EVA Airways

flybe.British European

KLM Cityhopper

KLM Exel Airlines

KLM Royal Dutch Airlines

Korean Airlines

Maersk Air

TAP Air Portugal

Virgin Atlantic
Appendix II

U.S. Carriers and Their Foreign Code-Share 

Partners

Page 51 GAO-05-930 Aviation Safety

Delta (21 partners) AeroLitoral 

Aeromexico

Air France

Air Jamaica

Alitalia Express

Alitalia Team

Avianca

Brit Air

China Airlines

China Southern

CityJet 

CSA Czech

El Al 

Emirates

flybe.British European

KLM Royal Dutch Airlines

Korean Airlines

Malev Hungarian Airlines

Regional

Royal Air Maroc

South African Airways

Northwest (11 partners) Aeromexico

Air Alps 

Air France

Alitalia

CSA Czech

KLM Cityhopper 

KLM Exel 

KLM Royal Dutch Airlines

Korean Airlines

Malev Express

Malev Hungarian Airlines

(Continued From Previous Page)

U.S. carrier Foreign code-share partner
Appendix II

U.S. Carriers and Their Foreign Code-Share 

Partners

Page 52 GAO-05-930 Aviation Safety

Source: FAA.

Note: Data as of May 2005.

United (23 partners) AC Jazz

Air Canada

Air China

Air Dolomiti 

Air Japan

Air New Zealand

Air Nippon

All Nippon Airways (ANA)

Asiana

Austrian 

British Midland (BMI)

LOT Polish

Lufthansa

Lufthansa Cityline 

Nakanihon Airlines

PrivatAir (Switzerland)

PrivatAir (Germany)

SAS

Thai Airways

The Fair, Inc.

Tyrolean

Varig

Virgin Blue

US Airways (9 partners) AeBal (Aerolineas de Baleares)

Air Dolomiti

BahamasAir

British Midland (BMI)

Eurowings

Lufthansa

Lufthansa CityLine

Spanair

Winward Island Airways 

(Continued From Previous Page)

U.S. carrier Foreign code-share partner
Page 53 GAO-05-930 Aviation Safety

Appendix III

Comments from DHS ApendxiI
Page 54 GAO-05-930 Aviation Safety

Appendix IV

GAO Contacts and Staff Acknowledgments ApendxiIV

GAO Contacts Gerald Dillingham (202) 512-2834

Teresa Spisak (202) 512-2834

Staff 

Acknowledgments 

In addition to the above individuals, Elizabeth Eisenstadt, Jessica A. Evans, 

Brandon Haller, Bob Homan, David Hooper, Casey Keplinger, Elizabeth A. 

Marchak, Sara Ann Moessbauer, Mark Ramage, and Sidney Schwartz made 

key contributions to this report. 

(540108)
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