**Vulcanair AD Initial Regulatory Flexibility Analysis**

Daniel Leach Final Draft

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- 2013 **Introduction and Purpose of This Analysis** The Regulatory

Flexibility

Act of 1980 (Public Law 96

- 354) (RFA) establishes “as a principle of regulatory

issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. ” To achiev e this principle, the RFA requires agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are seriously considered .” The RFA covers a wide

- range of small entities, including small businesses, not

- for
-profit organizations, and small governmental jurisdictions. Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. I f the agency determines that it will, the agency

must prepare an initial regulatory flexibility

anal ys is (IRFA) as described in the RFA. Section 603(a) of the RFA requires that each initial regulatory flexibility

analysis contain: (1 ) a description of the reasons action by the agen cy is being considered; (2 ) a succinct statement of the objectives of, and legal basis for, the proposed rule; (3 ) a description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply; (4 ) a description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and (5 ) to the extent practicable, an identification of all relevant Federal rules which may duplicate, overlap or conflict with the proposed rule. (6 ) Each IRF

A shall also contain a description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statues and which minimize any significant economic impact of the proposed rule on small entities.2

**1. A Description of the Reasons A**  **ction by t he Agency Is Being C**  **onsidered** This proposed AD results from mandatory continuing airworthiness information (MCAI) ori ginated b y EASA and would supersede existing AD 2008

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- 11. The existing AD established safe limits for the wing structure of Vulcanair P.68 Series airplanes and requires repetitive inspection and repair o f the wing and stabilator structures when the airplanes reach safe life limits . Operation beyond existing conservative safe limits (with inspections and repair) is allowed pending establishment of final safe limits and a terminating action. The proposed AD significantly increases wing structure life limits (in a few cases requiring kit modification of the wing structure ) , but establishes a terminating action requiring replacement of the wing structure and wing fuselage attachments and bolts when new establ ished safe limits are reached. Prior to the wing structure safe life limit being reached, the proposed AD also requires special inspections of the wing structure with time limits , since new, of 6,000, 12,000, and 18,000 flight hours
. 1 **2. Objectives of, an d Legal Basis for, the**  **Proposed Rule**  Title 49 of the U.S. Code specifies the FAA’s authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the FAA’s authority. We are issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of ci vil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on the airplanes identified in this AD. **3. A Description of and an Estimate of the Number of Small Entities**  **to which the**  **Proposed Rule**  **Will Apply**  This proposed rule would affect 67 U.S.

- registered airplanes , of which 40 are owned by corporatio ns, 8 by

individuals, 2 by

the Federal G overnment, and 17 b y state governments. Of the 48 airplanes held by

private sector parties, one financing firm owns two of them, and two operators each own two of them. The remaining 36 airplanes are owned by 36 corporations and

1 After the first special inspection subsequent inspections must be every 6000 flight hours thereaf ter.3

individuals. The FAA believes that all, or nearl y al l, of these private sector owners are privately held small firms, for which we cannot obtain financial records. We conclude that the proposed rule would affect a substanti al number of small entities. **4. Reporting, Record Keeping, and Other Compliance Requirements**  **of the Proposed Rule** Small entities will incur no new reporting and record

- keeping requirements as a result of this rule. The additional requirements of the proposed AD compared to the existing AD are the special wing structure inspections at 6,000, 12,000, and 18,000 flight hours, the terminating action to replace the wing structure when the wing structure safe limit is reached, and , for airplanes with serial numbers 1

- 256 for which a spar crack was found under previous Vulcanair SB 65 , replacement of the four main spar lower cap angles using Vulcanair Kit SB162. The cost s of the required actions provided in the proposed AD are as follows:
**Requirement Work**  **** **hour s**  **Labor**

**Cost Cost of** 

**Materials Total** 

**Cost** Special inspections 60 $ 5,100 Wing structure replacement 300 $ 25,500 $ 443,406 $ 468,906 Replacement of lower spar cap angles with kit SB162 (S/N 1

- 256) 120 $ 10,200 $ 2,595 $ 12,795 Note s : 1. Labor cost per hour is $85. 2. The cost of crack repair is not provided in the proposed AD. The requirement to replace the wing structure , at considerable cost , occurs when the airplanes are old and have low value , often less than the cost of wing s tructure replacement
. Therefore, in many cases airplane retirement is the least cost alternative, in which case the effective cost of the requirement is the loss in airplane value net of salvage value
. The requirement to replace the lower spar cap angles a

pplies to at most ten U.S.

- registered airplanes and only if a front spar crack was previously found under SB No. 65
. The expected present value cost of this requirement is thus minimal. The requirement for special inspections at 6,000, 12,000, and 18,000 f light hours applies to all AD

- affected airplanes
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Economic Impact on Small Entities Since we have no financial information of the privately held firms that constitute most of the operators of the affected airplanes, we assess the economic impact of the proposed rule using airplane values. As the Vulcanair P.68 airplanes are not listed in the Aircraft Bluebook Price Digest, we undertook an internet search and found that the resale value of older P.68 airplanes, manufactured between 1975 and 1984 ranged from about $80,000 to $ 300 ,000. Many of these airplanes will be subject to the special inspection at 6,000 miles or even the special inspection at 12,000 miles. Using a significant economic impact criterion of 2% of airplane value, for operators of many o f these airplanes there is a significant economic impact based on just one $5,100 inspection. Taking into account the present value cost of 2
- 3 possible future inspections and possible repair, as well as the present value cost of forced earl y retirement, there is a significant economic impact on mos t if not all of these operators
. We therefore conclude that this proposed rule will have a significant impact on a substantial number of firms. **5. Duplicative, Overlapping or Conflicting Federal Rules**  The FAA is unaware of any Federal rules that duplicate, overlap, or conflict with this proposed rule. **6 .**  **Significant Alternatives to the Proposed Rule** Because of an unsafe condition that is likely to exist or develop on the airplanes identified in this proposed AD, there is no feasible significant alternative to requiring the actions of this proposed AD. The FAA invites public comment on this determination.