AFS-14-436-E Exemption No. 11120

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, DC 20591

In the matter of the petition of

THE LIBERTY FOUNDATION Regulatory Docket No. FAA-2004-17662

from §§ 91.315, 91.319(a)(2), 119.5(g), and 119.21(a) of Title 14, Code of Federal Regulations (14 CFR)

DENIAL OF EXEMPTION

By letter dated August 22, 2014, Mr. Stuart A. Goldstein petitioned the Federal Aviation Administration (FAA) on behalf of The Liberty Foundation, Inc. (hereafter “the Foundation”) for an extension of Exemption No. 8565, as amended. An extension of the petitioner’s exemption from §§ 91.315, 91.319(a)(2), 119.5(g), and 119.21(a) of Title 14, Code of Federal Regulations (14 CFR), if granted, would have allowed the Foundation to operate Boeing B-17 N3703G (Serial No. 44-83456) to carry passengers for compensation or hire on local flights for educational and historical purposes. The Foundation also petitione d that a Curtiss P-40 (registration N2416X) be removed from the exemption because the aircraft had been sold. Subsequent to the filing of the petitioner’s request and the filing of this answer, Exemption No. 8565, as amended, expired on

November 30, 2014.

The petitioner requests relief from the following regulations:

Section 91.315 prescribes, in pertinent part, that “No person may operate a limited category civil aircraft carrying persons or property for compensation or hire.”

Section 91.319(a)(2) prescribes, in pertinent part, that “ (a) No person may operate an aircraft that has an experimental certificate— (1) For other than the purpose for which the certificate was issued; or (2) Carrying persons or property for compensation or hire.”

Section 119.5(g) prescribes, in pertinent part, that “(g) No person may operate as a direct air carrier or as a commercial operator without, or in violation of, an appropriate certificate and2 appropriate operations specifications. No person may operate as a direct air carrier or as a commercial operator in violation of any No person may operate as a direct air carrier or as a commercial operator in violation of any deviation or exemption authority, if issued to that person or that person's representative.

Section 119.21 (a) prescribes, in pertinent part, Each person who conducts airplane operations as a commercial operator engaged in intrastate common carriage of persons or property for compensation or hire in air commerce, or as a direct air carrier, shall comply with the certification and operations specifications requirements in subpart C of this part, and shall conduct its:

The petitioner supports its request with the following information:

In its petition, the Foundation notes that the reasons and purposes for continuing to operate the B17 are the same reasons and purposes that have been recognized in previous past exemptions and set forth in the original exemption (No. 8565, dated June 10, 2005) and continuing exemptions. The Foundation further states that it will continue to adhere to its Aircraft Inspection Program (AIP), inspection and maintenance procedures prescribed by the aircraft manufacturer, and all applicable military Technical Orders. The Foundation emphasizes that “the excellent safety record in the operation of its aircraft for more than a decade demonstrate that the very highest level of safety and concern for the public is paramount” and that “maintaining the very highest level of safety is The Foundation's primary objective.”

The FAA has determined that good cause exists for waiving the requirement for Federal Register publication because the exemption, if granted, would not set a precedent, and any delay in acting on this petition would be detrimental to the Foundation.

The FAA's analysis is as follows:

The FAA has reviewed the Foundation’s safety record and does not agree that it demonstrates the very highest level of safety, as supported by the petitioner. The FAA has safety and compliance concerns relevant to the Foundation’s petition for renewal of its exemption.

On June 13, 2011, the Foundation’s Boeing B-17G "Flying Fortress" airplane (N390TH) experienced an in-flight fire and emergency landing near Oswego, Illinois. One passenger sustained a minor injury. The remaining three flight crew members and three passengers were not injured. The airplane was destroyed because of the post-crash fire. The day before the accident, while engaged in Living History Flight Experien ce (LHFE) education and demonstration flights, the aircraft experienced a fuel leak, which interrupted the scheduled flights. A mechanic associated with the Foundation evaluated and repaired the fuel leak and, following a final inspection of the repair the morning of the accident flight, returned the aircraft to service. During the initial climb after takeoff, an in-flight fire developed on the left wing. This necessitated the pilots to shut down the No. 2 engine, discharge the fire bottles, and then execute an emergency off-airport landing. The fire, which was not exti nguished and ultimately destroyed the aircraft, was caused by an inadequate repair of the fuel tank that allowed the fuel leak to continue, ultimately resulting in an in-flight fire. 1

The Foundation modified the aircraft’s fuel tank system in late February 2011. These modifications were not and are not described in any maintenance manual or instructions for

1 NTSB Report CEN11FA383, April 10, 2014.3 continued airworthiness for the B-17. The methods, techniques, and practices used by The Foundation in modifying the aircraft were not submitted to the FAA for review, nor were they conducted in accordance with 14 CFR regulatory requirements. 2 Moreover, the aircraft was improperly returned to service.

Of particular concern to the FAA is that at the time of the accident, the Foundation was required to operate in accordance with a number of conditions and limitations under its LHFE exemption. These conditions and limitations were specifically included as part of the exemption in order to establish an equivalent level of safety to that of the regulation being exempted from. Based on findings of the FAA and the NTSB accident investigation, it is likely that the petitioner did not comply with at least two of these conditions and limitations, Nos. 2 and 22.

Condition and Limitation No. 2 of Exemption No. 8565C required the Foundation to maintain its Limited Category airplane in accordance with: (1) the maintenance requirements as specified in the appropriate type certificate data sheet, as

amended; and (2) the FAA-approved maintenance inspection program that meets the requirements of §§ 91.409(e), (f)(4) and (g); and (3) the appropriate military technical manuals (Technical Orders).

Based on the discussion above concerning the June 2011 accident and the unapproved modifications made to the aircraft, compliance with this limitation is in doubt.

Condition and Limitation No. 22 of Exemption No. 8565C required the Foundation to notify the

Atlanta FSDO within 24 hours of: (1) each in-flight fire in any system or area that requires activation of any fire suppression system or discharge of a portable fire extinguisher; and (2) except for training, each occurrence of engine shutdown or propeller feathering, and the reason for such shutdown or feathering; and (3) each failure or malfunction, of the fuel system, tanks, pumps, or valves; and (4) each malfunction, failure, or defect in any system or component that requires taking emergency action of any type during the course of any flight.

A review of FAA records indicates that th e Foundation did not report the above-mentioned malfunctions as required by the exemption.

The accident led to an FAA enforcement action, which is currently in litigation. The issues being considered are directly related to the Foundation’s ability to safety operate the B-17. The June 2011 accident also brings into question the Foundation’s compliance with the conditions and limitation of the Exemption 8565, as amended, which directly relates to making an equal level of safety finding for an extension of the that exemption. There is only an equal level of safety when all conditions and limitations are followed. An apparent, inappropriate modification to the fuel system and operating the aircraft in violation of the

2 The aircraft did not conform to its type certificate or type design because it ha d not been restored to its original or proper ly

altered condition. The aircraft did not conform to its type cer tificate or type design because the alteration performed was not an approved or acceptable form of alteration. The aircraft did not conform to its ty pe certificate or type design because the mechanic did not have the Inspection Authorization required to re turn the aircraft to service after a major alteration. The

aircraft did not conform to its type certificate or type design because no FAA Form 337 was executed for the major

alteration. The aircraft did not conform to its type certificate or type design because no approved techni cal data was used in performing the alteration.4 specific conditions and limitations provides the FAA with sufficient reason to deny the Foundation’s petition to extend Exemption No. 8565, as amended.

The FAA’s Decision:

In consideration of the foregoing, I find that, since Exemption 8565, as amended, expired on November 30, 2014 and cannot be extended, a grant of a new exemption would not be in the public interest. Therefore, pursuant to the authority contained in 49 U.S.C. §§ 106(f), 40113, and 44701, delegated to me by the Administrator, the petition of The Liberty Foundation, Inc. for an exemption from Title 14, Code of Federal Regulations (14 CFR) §§ 91.315, 91.319(a)(2), 119.5(g), and 119.21(a) is hereby denied.

Issued in Washington, D.C. on December 10, 2014.

/s/ John Barbagallo Acting Director, Flight Standards Service