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34–794 PDF 2007

THE FEDERAL AVIATION

ADMINISTRATION’S OVERSIGHT OF OUTSOURCED

AIR CARRIER MAINTENANCE

(110–23)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

AVIATION

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 29, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

JUANITA MILLENDER-MCDONALD, 

California 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON AVIATION

JERRY F. COSTELLO, Illinois, Chairman 

BOB FILNER, California 

LEONARD L. BOSWELL, Iowa 

RICK LARSEN, Washington 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

DANIEL LIPINSKI, Illinois 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa 

HARRY E. MITCHELL, Arizona 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

JUANITA MILLENDER-MCDONALD, 

California 

ELLEN O. TAUSCHER, California 

TIM HOLDEN, Pennsylvania 

MICHAEL E. CAPUANO, Massachusetts 

DORIS O. MATSUI, California 

MAZIE K. HIRONO, Hawaii 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

SAM GRAVES, Missouri 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Barimo, Basil J., Vice President, Operations and Safety, Air Transport Association of America, Inc. ........................................................................................ 32

Brantley, Tom, President, Professional Airways Systems Specialists, AFLCIO ........................................................................................................................ 32

Campbell, David, Vice President for Base Maintenance at Alliance Fort Worth 

and Kansas City, American Airlines .................................................................. 32

Filler, Marshall S., Managing Director and General Counsel, Aeronautical 

Repair Station Association .................................................................................. 32

Goglia, John J., Director, Center of Integrated Emergency Management, 

Parks College of Engineering, Aviation and Technology .................................. 32

Little, James C., International President, Transport Workers Union ................ 32

Sabatini, Nicholas, Associate Administrator for Aviation Safety, Federal Aviation Administration, Accompanied by: James J. Ballough, Director, Flight 

Standards Service, Federal Aviation Administration ....................................... 5

Scovel III, Hon. Calvin L., Inspector General, United States Department 

Of Transportation ................................................................................................ 5

Valeika, Raymond, Independent Aviation Advisor ............................................... 32

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 51

Cohen, Hon. Steve, of Tennessee ............................................................................ 52

Costello, Hon. Jerry F., of Illinois .......................................................................... 53

Johnson, Hon. Eddie Bernice, of Texas .................................................................. 56

Kagen, Hon. Steve, of Wisconsin ............................................................................ 61

Matsui, Hon. Doris O., of California ...................................................................... 62

Mitchell, Hon. Harry E., of Arizona ....................................................................... 63

Oberstar, Hon. James L., of Minnesota ................................................................. 68

Salazar, Hon. John T., of Colorado ........................................................................ 71

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Barimo, Basil J. ....................................................................................................... 72

Brantley, Tom .......................................................................................................... 84

Campbell, David ...................................................................................................... 94

Filler, Marshall S. .................................................................................................... 99

Goglia, John J. ......................................................................................................... 115

Little, James C. ........................................................................................................ 120

Sabatini, Nicholas .................................................................................................... 128

Scovel III, Hon. Calvin L. ....................................................................................... 137

Valeika, Raymond .................................................................................................... 155

SUBMISSIONS FOR THE RECORD 

Filler, Marshall S., Managing Director and General Counsel, Aeronautical 

Repair Station Association, FAA Repair Stations on Foreign Soil by Country Code Listing ................................................................................................... 113

ADDITIONS TO THE RECORD 

Federal Aviation Administration, Aviation Safety/Flight Standards - Repair 

Station Inspections and Results, response to request for information from 

Subcommittee ....................................................................................................... 163

Page

VI

International Federation of Professional and Technical Engineers AFL-CIO 

& CLC, remarks of Louis Lucivero, Vice President, IFPTE Local 20 .............. 226

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(1)

HEARING ON THE FEDERAL AVIATION

ADMINISTRATION’S OVERSIGHT OF 

OUTSOURCED AIR CARRIER MAINTENANCE 

Thursday, March 29, 2007

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

SUBCOMMITTEE ON AVIATION, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Jerry F. 

Costello [Chairman of the Subcommittee] presiding. 

Mr. COSTELLO. The Subcommittee will come to order. The Chair 

will ask all Members, staff and everyone in the room to turn off 

electronic devices or turn them on vibrate. 

The Subcommittee is meeting today to hear testimony on the 

Federal Aviation Administration’s oversight of outsourced air carrier maintenance. Let me say that the Chair will give an opening 

statement. We will call on the Ranking Member for his opening 

statement or comments. 

I want to make note of the fact that the Ranking Member takes 

his responsibilities so seriously with this Subcommittee that instead of going to the White House this morning, he is here to hear 

your testimony. We appreciate Mr. Petri being here. 

I welcome everyone to this hearing on the Federal Aviation Administration oversight of outsourced air carrier maintenance. This 

hearing is the first in a series of hearings on aviation safety and 

the Federal Aviation Administration’s oversight of outsourced 

maintenance. 

Although the United States has the safest air transportation system in the world, we must not be complacent about our success. 

The Department of Transportation’s Inspector General lists aviation safety, performing oversight that effectively utilizes inspection 

resources and maintains aviation system safety, as one of the Department of Transportation’s top 10 management challenges. Over 

the last 10 years, there is a growing trend by airlines looking to 

trim costs to outsource their maintenance work to both domestic 

and foreign repair stations. 

The DOT IG will testify today that over the last 10 years, air 

carriers continue to increase the percentage of costs spent on 

outsourced maintenance from 37 percent to 62 percent in that 10 

year period. The IG also notes that more and more work is being 

outsourced to foreign repair stations. 

2

A July 2005 Wall Street Journal article stated that U.S. carriers pay between $65 and $75 per hour, including wages and benefits, 

while outside repair stations in North American, Europe and Asia 

pay about $40 to $50 an hour, and Latin American repair stations 

pay as little as $20 to $26 an hour. As a result, U.S. airlines are 

relying more heavily on foreign contractors to perform everything 

from routine maintenance to major overhauls. We must make certain that the FAA has a sound system to oversee maintenance 

work conducted outside the United States. 

According to the FAA, there are 4,231 domestic and 697 foreign 

FAA-certificated repair stations with approximately 801 FAA safety inspectors overseeing them. Both the DOT IG and the Government Accountability Office have expressed concerns about potential 

attrition in the FAA’s inspector workforce. I am told that over onethird of the FAA inspectors will be eligible to retire by the year 

2010. I am also told that since the end of fiscal year 2006, the FAA 

has already lost 77 inspectors. 

In addition, I am concerned about the level of staffing in the 

FAA’s international field offices, which are responsible for overseeing foreign repair stations. The Singapore IFO only has 7 inspectors to oversee 103 repair facilities. In September of last year, 

this Subcommittee held a safety hearing where we had Mr. 

Sabatini who testified, among others. I asked the question at that 

time if in Mr. Sabatini’s opinion we had adequate inspector staffing 

in Asia out of the Singapore office to inspect the 103 repair facilities. The answer was that we could always use more staff, but we 

have adequate staffing. When I asked the question, can you in fact 

tell this Committee that each of those facilities, the repair stations, 

the 103, had a physical visit, on-site visit by one inspector in a 12 

month period, he could not say that that was the case. When I 

asked if he could testify that those 103 facilities at least had a 

visit, physical visit, one time in a 2 year period, a 24 month period, 

he could not state that they had. 

There is no question that we must make the investments in the 

FAA’s work force now, so that they can meet the new challenges 

for maintaining the highest level of safety in this changing aviation 

environment, including ensuring proper oversight of domestic and 

foreign repair stations. Last year, the National Research Council 

reported that the FAA lacked staffing standards for inspectors and 

recommended that the FAA undertake a holistic approach to determine its staffing needs. It is incumbent upon the FAA to act on 

this recommendation, so that we can have a sufficient number of 

inspectors in the right places. 

Over the last few years, the DOT IG has made several recommendations with regard to the FAA’s oversight of foreign and 

domestic repair stations, suggesting that inspectors focus their 

oversight on high-risk areas. The FAA has since moved to a highrisk based system for maintenance oversight. But full implementation has not happened yet. 

In a December 2005 report from the DOT IG, they found that an 

increasing amount of scheduled airline maintenance is being performed at non-certificated repair facilities and that the FAA was 

unaware of the extent of this practice. Non-certificated facilities are 

not required to meet the same standards, such as quality assurance 

3

and training programs, as certificated FAA repair stations. The 

DOT IG made a recommendation to the FAA that it should consider limiting the type of work that these contractors can perform. 

I look forward to hearing from both the IG and FAA on the 

progress of that recommendation. 

The FAA inspector workforce has also raised concerns about 

staffing and insufficient funding for travel and their impact on conducting inspections, as well as moving to a risk-based oversight 

system. Mr. Tom Brantley, the President of the Professional Airway System Specialists, PASS, represents the FAA safety inspector 

workforce. He is here today and we will hear from him in greater 

detail about these concerns as he testifies on the second panel. 

Some have suggested that perhaps moving to some form of a 

standardized maintenance practice might improve safety. Each airline has different standards for maintaining their aircraft with repair stations required to perform their maintenance work in accordance with each individual air carrier’s manual and maintenance program. I would like to hear from our witnesses as to how 

they feel about moving to some type of a standardized system. 

In contrast to the growing maintenance outsourcing trend, Mr. 

David Campbell from American Airlines has a commendable story 

to tell, as American performs 100 percent of their own heavy maintenance in-house. In addition, American has actually in-sourced 

work and I think we will hear his testimony this morning that in 

fact American will do about $175 million in third party revenue 

this year. So we look forward to hearing his testimony on quite a 

success story at American Airlines. 

In March of 2005, a joint team from American’s aircraft maintenance and overhaul base in Tulsa announced a breakthrough goal 

to generate $500 million in value creation which would turn the 

maintenance facility base into a profit center. The Tulsa base announced just last month that it had reached the $501 million mark, 

exceeding its goal. American’s innovation and cooperation between 

the airline and its unions demonstrates that in-house maintenance 

is working and is profitable. 

We must provide proper funding, close oversight and real standards of accountability to ensure that our aviation system remains 

the safest in the world. 

With that, I want to thank all of our witnesses for being here 

today and I look forward to hearing their testimony. 

Before I recognize the Ranking Member for his opening statement, I would ask unanimous consent to allow two weeks for all 

Members to revise and extend their remarks and to permit the submission of additional statements and materials by Members and 

witnesses. Without objection, so ordered. 

At this time, the Chair would recognize the Ranking Member for 

his opening statement or comments, Mr. Petri. 

Mr. PETRI. Thank you, Mr. Chairman. I appreciate your holding 

this important hearing. 

Today we will explore how air carriers conduct and the Federal 

Aviation Administration oversees aircraft maintenance. We are 

holding this hearing at a time when the Nation’s aviation system 

is the safest it has ever been in our Nation’s history. 

4

Nevertheless, safety must be the number one priority for this 

Committee, for the FAA, for the airlines and for repair stations. 

Therefore, I look forward to hearing from representatives of all 

these groups today. 

It is no surprise that in reaction to and recovering from September 11th, severe acute respiratory syndrome, increasing air fuel 

prices, bankruptcies, a $35 billion net loss for 2001 through 2005 

as well as other impacts to the marketplace, the airline industry 

has made adjustment to how they conduct their business. Due to 

aggressive restructuring, we have a leaner airline industry, 800-

plus fewer airplanes taken out of the system, 28 percent fewer airline employees and 26 percent less airline debt, sometimes through 

bankruptcy restructuring. 

At the same time, the aviation industry has become one of the 

most global-oriented markets in the world. U.S. carriers buy foreign-manufactured aircraft and foreign air carriers buy U.S.-manufactured aircraft. Both of the major commercial aircraft manufacturers have component parts made all over the world. The international influence of the industry is also present in aircraft maintenance. Aircraft repair facilities are a highly regulated and vital 

part of our economy, employing over 195,000 people in each of our 

50 States and approximately 697 foreign FAA-certificated repair 

stations. There are also over 1,000 European aviation safety agencies, certificated repair facilities, in our Country. Air carrier restructuring has also seen a shift in how aircraft maintenance is 

conducted by air carriers. 

While reducing costs is one reason for the shift, an argument is 

made that repair stations provide specialized expertise in areas 

such as engine repairs that the air carriers do not have in-house. 

According to the Bureau of Transportation statistics, in 2005 combined major national and regional air carriers, including cargo carriers, spent 35 percent of their $13.8 billion maintenance spending 

on outside maintenance companies. According to the National 

Transportation Safety Board, since 1997, only 8 percent of all commercial, commuter and on-demand air carriers accidents were attributable, at least in part, to maintenance issues. 

Representatives of the FAA and air carriers are here today to explain how maintenance oversight for both domestic and foreign repair stations is conducted in light of the changing and internationalized marketplace. I understand that in the past there have been 

some questionable maintenance practices at facilities, both in the 

United States and elsewhere. Obviously, the FAA should take appropriate and swift action in these situations, and I look forward 

to hearing how they address such situations. 

Likewise, I hope to gain better understanding of the allegations 

that the FAA does not have the manpower to inspect repair stations, particularly foreign repair stations. While these issues are 

not new to the Subcommittee, it is important that we receive periodic updates from the FAA and the industry, particularly in light 

of the changing marketplace. 

I look forward to hearing the witnesses’ testimony, and Mr. 

Chairman, I yield back whatever time I have remaining. 

Mr. COSTELLO. I thank the Ranking Member for his opening 

statement. 

5

Let me say to all Members that we did a unanimous consent request to enter opening statements into the record and we would 

ask you to do so. Is there any Member at this time that has an 

opening statement they want in the record? Mr. Carnahan, I understand you have a statement that you will enter into the record. 

Mr. CARNAHAN. Yes, Mr. Chairman, thank you. 

Mr. COSTELLO. Thank you. 

Let me introduce our first panel of witnesses. Mr. Nick Sabatini, 

who has been with us many times, is the Associate Administrator 

for Aviation Safety at the FAA. He is here and has brought another 

valued member of his team at the FAA, Mr. Ballough. We also 

have the Inspector General of the U.S. Department of Transportation, who has testified before this Committee before, Mr. Scovel. 

I would ask at this time, Mr. Sabatini, you will be recognized. 

Your full statements all will be entered into the record. We have 

your statements and I have had an opportunity to review them. So 

we would ask that you summarize your statements in five minutes 

or less, so that we can have plenty of time for questions from Members. 

So at this time, Mr. Sabatini, you are recognized. 

TESTIMONY OF NICHOLAS SABATINI, ASSOCIATE ADMINISTRATOR FOR AVIATION SAFETY, FEDERAL AVIATION ADMINISTRATION, ACCOMPANIED BY: JAMES J. BALLOUGH, DIRECTOR, FLIGHT STANDARDS SERVICE, FEDERAL AVIATION ADMINISTRATION; THE HONORABLE CALVIN L. SCOVEL, III, INSPECTOR GENERAL, UNITED STATES DEPARTMENT OF 

TRANSPORTATION 

Mr. SABATINI. Good morning, Mr. Chairman Costello, Congressman Petri, Members of the Subcommittee. As you said, I am assisted here today by Jim Ballough, the Director of the Flight 

Standards Service. 

I am pleased to appear before you once again, this time to discuss FAA oversight of air carrier maintenance that is outsourced 

to repair stations, both domestically and abroad. I know the industry trend to outsource more of its maintenance in recent years has 

been a concern for some of you. The concern is that carriers are 

making maintenance decisions to cut costs, and that less costly 

maintenance is less safe maintenance. 

This assumption implies that safety is being compromised as 

more maintenance is being outsourced. I am here today to reassure 

you that the quality of maintenance is not compromised simply because it is not being done by an air carrier. No less an authority 

that the former Department of Transportation Inspector General, 

Ken Meade, testified before Congress that use of these stations is 

not a question of quality of maintenance, but rather an issue of 

oversight. We agree, which is why the FAA is continually improving and refining our oversight of maintenance, no matter where it 

is performed or by whom. 

Let me start by stating the obvious: the system is safe. As the 

Subcommittee well knows, this is the safest period ever in the history of aviation. Even so, our goal as always, is to continue to improve safety. I would like to share with you a chart that goes to 

the hearing of this hearing. The lines represent the percentage of 

6

maintenance that is being outsourced and the accident rate per 

100,000 departures. I think this picture is worth 1,000 words. 

Although the percentage of outsourcing has never been higher, 

the accident rate has never been lower. These statistics amply 

demonstrate that aviation safety is not dependent on airlines performing their own maintenance. In recent years, we have refined 

the way in which we provide maintenance oversight. Previously, 

our oversight was based largely on inspector knowledge and information that was available as a result of individual inspections. 

This approach was the best we could do at the time, but it was far 

from comprehensive. The effectiveness of our oversight could vary 

from facility to facility. 

What we are doing now is managing risk and requiring system 

safety. Let me explain what I mean by system safety. System safety is extremely comprehensive. It is a sophisticated approach to ensuring that everything is in place to obtain the information that 

can identify areas of vulnerability in time to address it before safety is compromised. It must be clear who is responsible for different 

aspects of the operation. The responsible person must have the authority to take necessary action. There must be procedures in place 

to execute required actions. There must be controls in place to ensure that the system consistently provides the service or product it 

was designed to produce. 

There must be oversight and auditing procedures in place to 

independently evaluate the effectiveness and consistency of the operation. And lastly, there must be interface procedures in place to 

ensure that different parts of the organization are effectively talking to each other. Consistency is the goal. 

I would now like to turn my focus to foreign repair stations, because I know they have been of particular interest to this Subcommittee. As is the case with domestic repair stations, there is an 

incorrect perception that a carrier’s use of a foreign repair station 

is somehow unsafe or done solely to reduce maintenance costs. I 

know there have been a number of efforts to restrict U.S. air carriers’ ability to use foreign repair station. 

But I do not believe that these efforts would enhance safety. The 

foreign repair station must meet the same standards that we apply 

to repair stations in the United States, or we will simply not certify 

them. Safety is addressed because we require that all aircraft that 

are registered in the United States be maintained to U.S. standards, regardless of where they operate. Due to the global nature of 

aviation, we must have repair stations that meet U.S. standards 

throughout the world. 

Finally, keep in mind, as is the case when a carrier uses a domestic repair station, the carrier has the ultimate responsibility to 

ensure that the maintenance is being performed appropriately. All 

of this adds up to a great deal of supervision. The repair station 

has internal controls, foreign government oversight, airline oversight and FAA oversight. In fact, it is important to remember that 

by its nature, aviation is truly an international enterprise. 

An aircraft, especially in commercial aviation, contains parts 

manufactured all around the world. The original equipment manufacturer, the OEM, has a wealth of expertise in repairing their 

products. In addition, their parts have warranties. It would be exVerDate 0ct 09 2002 10:32 Feb 28, 2008 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\DOCS\34794 HTRANS1 PsN: JASON
7

tremely unwise to restrict a U.S. air carrier’s ability to use OEM 

maintenance, even if the OEM is abroad. In fact, the expertise of 

OEMs is so considerable and their work so consistent that maintenance is often outsourced to them regardless of whether the maintenance being performed is on a part they manufacture. 

Just as aviation safety is in no way compromised by allowing 

U.S. carriers to fly aircraft made in Europe and Brazil or in Canada, so too is safety in no way compromised by allowing other countries to conduct repair and maintenance on our aircraft. I understand and appreciate this Subcommittee’s concern about the increased use of repair stations in this Country and abroad. Obviously, we share a common goal to find ways to improve safety at 

a historically safe period in U.S. aviation. 

I can assure you that my office is totally committed to making 

whatever adjustments the situation demands when it comes to 

safety oversight. Hearings like the one today are a necessary dialogue. I think the refinements we have made to how we oversee 

maintenance in recent years are good ones. But we cannot sit still. 

There will always be ways to improve, and we will continue to look 

for them. 

This concludes my statement, Mr. Chairman. I will be happy to 

answer your questions at this time. 

Mr. COSTELLO. We thank you, Mr. Sabatini. Are you prepared to 

make a statement as well, Mr. Ballough? 

Mr. BALLOUGH. No, Mr. Chairman. 

Mr. COSTELLO. Very good. The Chair then recognizes the Inspector General, Mr. Scovel. 

Mr. SCOVEL. Chairman Costello, Ranking Member Petri, Members of the Subcommittee, we appreciate the opportunity to testify 

this morning. At the outset, it is important to note that while the 

United States has the most complex aviation system in the world, 

it is also the safest. Multiple layers of controls and air carrier operations and maintenance process, along with FAA’s oversight, are 

largely responsible for the high level of safety that we have seen 

in the last five years. Air carriers have outsourced maintenance for 

years, because external repair facilities can complete repairs for 

less cost and provide services such as engine repair that would otherwise require air carriers to have specialized expertise and staff. 

However, in recent years, the use of external repair facilities by 

air carriers has become prevalent. From 1996 to 2005, nine of the 

largest air carriers increased the percentage of their outsourced 

maintenance from 37 percent to 62 percent, or nearly $3.4 billion 

of the $5.5 billion spent on maintenance. 

Mr. Chairman, it is important to note that the issue is not where 

maintenance is performed, but that maintenance requires effective 

oversight. Our past efforts have identified challenges in FAA’s ability to effectively monitor the increase in outsourcing. For example, 

in July 2003, we reported that FAA had not shifted its oversight 

of aircraft maintenance to the locations where maintenance was 

being performed. FAA has taken a number of steps to improve its 

oversight. 

However, the continuous growth in outsourcing underscores the 

need for FAA to remain vigilant in its efforts to continually improve oversight. Today I would like to discuss three areas for 

8

strengthening FAA’s oversight of outsourced air carrier maintenance. 

First, advancing risk-based oversight systems. FAA recognizes 

the challenges posed by increased outsourced maintenance, and has 

taken steps to move its oversight for air carriers and repair stations to risk-based systems. Both systems are designed to help FAA 

inspectors focus their oversight on areas that present the greatest 

safety risks, based on analysis of data. FAA is clearly on the right 

path. 

However, the risk-based systems are not yet at an end state. 

FAA’s risk-based system for air carriers must be more comprehensive. In March 2006, FAA issued new guidance to aid inspectors in 

evaluating air carrier changes. By the end of this year, FAA plans 

to complete implementation of this risk-based system to all carriers. Currently on 57 of the 118 commercial air carriers are subject to it. As more air carriers are added, effective use of the riskbased system will become even more important. 

In September 2006, FAA began using an automated risk-based 

oversight system for repair stations. To avoid repeating the implementation problems experienced with its air carrier system, FAA 

must ensure that inspectors are well trained on the new system 

and effectively use it to oversee repair stations. 

Second, FAA must determine where the most critical maintenance is performed and how it should be monitored. FAA cannot 

effectively implement a risk-based system for oversight of aircraft 

maintenance if it does not know where the maintenance is performed. In July 2003 and December 2005, we reported that FAA 

did not have good systems for determining which repair facilities 

air carriers were using to perform their most critical maintenance. 

There are over 4,000 domestic and nearly 700 foreign FAA-certified repair stations. In addition, there are about 900 repair facilities in Canada that can be used by U.S. carriers. Air carriers also 

use domestic and foreign non-certificated repair facilities. In response to our 2003 report, FAA implemented a system in fiscal 

year 2007 for air carriers to report the top 10 critical maintenance 

providers used each quarter. However, this process is ineffective, in 

our estimation, because the reports are voluntary and FAA does 

not have inspectors to verify that information. As long as the process is voluntary, FAA cannot be assured that it is getting the accurate and timely information needed to determine where it should 

focus its inspections. 

FAA must also develop a mechanism to identify non-certificated 

repair facilities performing critical maintenance for air carriers. 

Prior to our December 2005 review, FAA was unaware that air carriers were using non-certificated facilities to perform critical repairs, such as engine replacements. FAA does not know how many 

non-certificated maintenance facilities air carriers currently use. In 

our review, we sampled 19 air carriers and found that all 19 were 

using non-certificated facilities to some extent. FAA must determine which non-certificated facilities perform critical and scheduled maintenance and then decide if it should limit the type of 

work these facilities perform. 

Mr. Chairman, if I may ask for another minute? Thank you, sir. 

9

Third, ensuring inspectors are well positioned and properly 

trained to adequately oversee maintenance outsourcing. FAA has 

approximately 3,865 inspectors located in offices throughout the 

United States and in other countries to oversee air carrier maintenance operations, a task made more difficult by the rapidly changing aviation environment. This makes it imperative for FAA to 

maintain a sufficient number of inspectors to perform safety oversight. By 2010, 44 percent of the work force will be eligible to retire. 

However, maintaining an adequate work force is only one of the 

challenges FAA faces with its inspectors. FAA needs a process for 

determining the number of inspectors needed and where they 

should be placed. We found some inspectors were not assigned to 

locations where they were needed most and we also found inconsistencies in inspector work loads. 

At the request of this Subcommittee, in September 2006, the National Research Council completed a study of FAA’s current methods for allocating inspector resources. The Council found FAA 

needs to develop an effective staffing model. The Council stressed 

that FAA must ensure that its safety inspectors are sophisticated 

data base users with knowledge of system safety principles and an 

analytical approach to their work. 

This concludes my statement, Mr. Chairman, and I would be 

happy to answer any questions that you or other Members of the 

Subcommittee may have. 

Mr. COSTELLO. We thank you for your testimony. 

Mr. Sabatini, before I ask some questions, let me respond to a 

comment you made in your opening statement. You indicated that 

there is a perception that foreign repair stations are not safe and 

that you would contend that they in fact are. Let me just say that, 

let me go back to the point that, I don’t think anyone is saying that 

there are repair stations that are unsafe. 

But the fact of the matter is that the last time you testified before this Subcommittee, in September, when I asked you the question, foreign repair stations, 7 inspectors for 103 facilities, could 

you tell this Subcommittee that in fact, physically each of those 103 

facilities received a physical inspection on-site by an inspector at 

least one time in a year, and you could not tell us that. And number two, when I asked the question, could you in fact testify and 

tell this Subcommittee that in a two year period that each of the 

three facilities had an inspector on-site and you could not tell us 

that. 

So it leaves the impression, certainly to me, and I think many 

others, that foreign repair stations do not come under the same 

scrutiny as domestic repair stations here in the United States. If 

it is because you do not have adequate staff, then we ought to get 

to that point and try and address it. 

But having said that, let me get into questions. We are going to 

have, I understand, our first vote at 10:45. So I would ask you, I 

have a series of questions, I would ask you to be very brief if you 

could in your answers. 

First, I am going to submit to you a list of questions and ask you 

to give us a written reply to the Committee. I plan on submitting 

several questions requesting data about foreign repair stations, the 

10

inspections, on-site inspections, locations of facilities and a number 

of other questions. We will get those to you and ask that you respond to them in a very short period of time. 

Mr. COSTELLO. My first question today though is, you have heard 

the IG just state here again, he stated in his testimony and stated 

here that the FAA has to develop a process to determine where air 

carriers are sending their critical maintenance. Without this maintenance information, where the facilities are located, you cannot effectively come up with a risk-based oversight system that works. 

One, what have you done to identify, what has the FAA done to 

identify where these foreign repair stations that are performing 

critical maintenance are located? 

Mr. SABATINI. Thank you, Mr. Chairman. We have done a number of things, and we certainly welcome the recommendations that 

are made by the Office of the Inspector General. 

In a moment I would like to turn to Jim Ballough, the Director 

of Flight Standards, to address the specifics in terms of what we 

have done. But if I may, Mr. Chairman, on the points that you 

made from my earlier testimony, my response was, as you described it, accurately, sir, I will add, that in the moment, while I 

believe personally that we do have FAA presence on an annual 

basis, I did not have the data before me to answer for the record 

that in fact we do. 

Having followed up on that question, I can tell you that today, 

we have at the very least, presence once a year at repair stations. 

I would ask Jim to expand on that question you asked. 

Mr. BALLOUGH. Mr. Chairman, in regard to the oversight of foreign repair stations and our once, at least once a year visit, there 

is a requirement on foreign repair stations to renew for the first 

time after 12 months and then 24 months thereafter. So that process is in place. We also have a requirement which we call——

Mr. COSTELLO. Let me interrupt you. I understand the processes 

in place. But the question is, have in fact those facilities had an 

inspector physically go to those 103 facilities at least one time in 

the first year and at least one time in a two year period? 

Mr. BALLOUGH. Yes, Mr. Chairman. I can definitely state for the 

record that we have a metric in place that our regions review the 

amount of completion. I can tell you that the activities for oversight 

of repair stations would indicate a 99 percent, without checking the 

data and presenting the data in front of you, but I can tell you that 

our metric shows 99 percent completion of all of our required inspection items for repair stations, yes, sir. 

Mr. COSTELLO. So your testimony is that those 103 facilities received at least one physical inspection by one of the 7 inspectors 

in a 12 month period? 

Mr. BALLOUGH. Yes, Mr. Chairman, and I can provide that data. 

Mr. COSTELLO. We would request that you please do that. 

Let me follow up on that point. The data that you have at the 

FAA as far as physical and on-site inspections, how far does it go 

back? Is it your testimony that this has been a process that has 

been taking place for some time or just in the last year or so? 

Mr. BALLOUGH. The process has been in place for many years. I 

rely, obviously, on our management and our inspectors to fulfill the 

11

requirements that we put in front of them in policy. So I would expect that that was carried out, yes. It has been in place for years. 

Mr. COSTELLO. Just so I understand here. You are relying on 

your managers, I understand that. Do you have records that indicate where they have filled out forms or some type of evidence that 

those facilities did receive a visit by an inspector? 

Mr. BALLOUGH. Yes, we would have a record of that, sir. 

Mr. COSTELLO. How far do those records go back? 

Mr. BALLOUGH. I would say, the real time we could probably provide five years worth of that information and archive, I would say 

we could go back almost ten years. 

Mr. COSTELLO. I would request that you go back five years and 

give us that data, to show us each facility, when they were visited 

in the five year period. You can go ahead and continue to answer 

the question that was posed to you by Mr. Sabatini. 

Mr. BALLOUGH. Okay, so that is the response to the oversight we 

have of the repair station. 

In terms of the recommendations the OIG made to us in their 

two audits, we have concurred with those recommendations and 

have resolved a number of them. Let me state that the regulatory 

structure is in place today for us to know where that work is done. 

The carrier is required to list in its manual system every contract 

or every person that they arrange to perform maintenance on their 

aircraft. It is true that our inspectors don’t have a copy of that in 

our field office. However, at a request of the carrier, they can certainly review that list and find out every carrier or every contractor 

that that carrier uses. 

Mr. COSTELLO. Would you clarify that point for me? You were 

saying that the process is in place for the FAA to know where these 

facilities are located. But the question is, do you know? 

Mr. BALLOUGH. A field office could not identify where each and 

every case, where that maintenance is performed, no, sir. They 

would have to go to the carrier and ask, request to see the list and 

go through the list themselves. 

Mr. COSTELLO. So you would rely on the carrier to tell you where 

these facilities are located that are doing the maintenance in foreign repair stations? 

Mr. BALLOUGH. The foreign repair station information we would 

have, what I was referencing is all the contractors that that air 

carrier users. We know every foreign repair station, our data will 

show every foreign repair station and what carrier uses that repair 

station. My previous reference was to a non-certificated facility, sir. 

Mr. COSTELLO. The IG talked about the need for the FAA to determine which non-certificated facilities are performing critical and 

scheduled maintenance. Mr. Sabatini, what is your response to 

that, and what have you done to implement their recommendation? 

Mr. SABATINI. Well, the Flight Standards organization, under 

Jim’s leadership, has undertaken positive steps to assure that the 

carriers share that information with the local field office. So we 

have procedures in place that are explicit, sufficiently explicit to 

make it clear that a field office is expected to know when they ask 

of an air carrier where these certificated or non-certificated entities 

are located and what type of work they are performing. 

12

So to address just a little bit of what Jim was speaking of, an 

air carrier certainly can contract for services either with a repair 

station or another facility that performs certain very specific functions, such as welding or coating of certain components. We know 

where those are, and if we don’t have an active list at the point 

in time, we can certainly get it from the air carrier. So an inspector 

can, at any time, require the air carrier to provide that information. 

Mr. COSTELLO. Mr. Scovel, this will be my last question, at least 

on this round. I have many others. There are other Members who 

have questions. 

Mr. Scovel, you just heard what the process is at the FAA. Is 

that sufficient? 

Mr. SCOVEL. Thank you, Mr. Chairman. No, we don’t believe it 

is. And if I may refer back to an earlier statement in this hearing, 

it was offered for the record that domestic certified repair stations 

and foreign certified repair stations have equivalent standards in 

all respects. For the record, our research shows that that is not the 

case, in fact, because employees at foreign-certified repair stations 

are not required, generally, to undergo drug and alcohol testing. 

Employees at U.S.-based repair stations are required to undergo 

that kind of testing, and we think it is a good idea. We understand 

that for sovereignty reasons, it may not be entirely possible to impose that requirement on repair stations in foreign countries, but 

nevertheless, we would be in favor of it in every case where it is 

possible. 

To directly answer your most recent question, sir, from our July 

2003 report, we recommended that FAA develop a process to effectively determine where air carriers send their maintenance. The 

FAA representatives here today have referred to a list that air carriers are required to provide which indicates substantial maintenance providers. My staff has reviewed those lists and we find that 

they are incomplete. In fact, in one instance, a carrier listed as a 

maintenance provider a repair station that it hadn’t sent maintenance to in three years. 

So in fact, what we think some carriers have done in order to 

satisfy FAA’s requirement is simply to list all facilities and repair 

stations where they may have contracts and where they may intend to send business. But there is no showing that they have indeed done so. 

So when we are talking about the integrity of the risk-based 

oversight system, and FAA’s ability to target its limited resources 

on the actual locations where maintenance is being performed, this 

substantial maintenance provider list is inadequate. In addition, in 

the first quarter of fiscal year 2007, FAA instituted a request, if 

you will, that carriers provide quarterly utilization reports. The 

first such report was due December 31st. 

We do not believe that that is adequate to address our recommendation, either. The reason for that is first, as I mentioned, 

this has been a request from FAA, it is not mandatory. Until it is 

mandatory and until FAA has in place a system to validate or 

verify the information, perhaps only on a sampling basis, the information that has been provided by air carriers, then the agency 

can’t be assured that the information is accurate. We know that as 

13

of the end of last week, two of the nine carriers who had been requested to provide this information had not done so. Those seven 

carriers who had provided information on the quarterly utilization 

reports had been inconsistent and incomplete in the information 

that they were providing to the agency. 

For those reasons, sir, we don’t consider that either the standardized substantial maintenance provider list or the quarterly utilization reports satisfies our recommendation. 

Mr. COSTELLO. That is a pretty troubling report, Mr. Sabatini. 

Do you want to respond? 

Mr. SABATINI. Let me begin by saying, Mr. Chairman, that this 

is an incredibly complex and dynamic industry. This safety record 

that has been achieved has been achieved because of the responsibility the individual certificate holders place upon themselves. We 

primarily have in this Country a system of voluntary compliance. 

I would offer to you, Mr. Chairman, that what the IG is describing 

would require essentially that I have FAA inspectors at the turning 

of every wrench. That would simply not be physically possible. 

We are striving and working very hard to respond to the recommendation that has been made where we can ascertain where 

the maintenance is being done. It seems to me that there has been 

an impugning of the integrity of the individual carriers who may 

have listed repair stations, or facilities that they may choose to use 

but have chosen not to use as to indicate some sort of nefarious 

reason for doing so. I really question that, because that is not an 

unsafe practice. 

And as far as standards are concerned, Mr. Chairman, all the 

safety standards that are required of a U.S. repair station are precisely the same as those required of a foreign repair station. Insofar as drug testing is concerned, if we could, we would do so, Mr. 

Chairman. Sovereignty is an issue and it goes far beyond the authority that the FAA has to impose that requirement. 

Mr. COSTELLO. Let me say that I didn’t take the IG’s comments 

by any means to impugn anyone’s character at any of the airlines. 

But let me ask just a final question, and I have other questions 

that I will go to on a second round. 

Is it your testimony today that the FAA gives the same scrutiny 

to foreign repair stations as domestic repair stations? 

Mr. SABATINI. I would say that the oversight and the approach 

that we take to ascertain, in combination, when we are talking 

about foreign repair stations, we not only rely on our own inspectors providing the oversight, which is equivalent to what we have 

here in the States. In fact, a foreign-based FAA inspector has less 

responsibility than a domestic-based inspector. Someone based 

abroad has the sole responsibility for the oversight of those repair 

stations. So when one draws an analogy of numbers to repair stations, one needs to keep that in mind. 

Mr. COSTELLO. Is that a yes or a no? 

Mr. SABATINI. I would say, yes, sir, it is affirmative that we have 

the same oversight of those repair stations and apply the same 

standard. 

Mr. COSTELLO. Very good. The Chair recognizes at this time the 

Ranking Member, Mr. Petri. 

Mr. PETRI. Thank you very much, Mr. Chairman. 

14

It is a fascinating subject. I am sitting here listening, and I think 

there may be an elephant in the room that no one is talking about, 

and that is that all of these people who lease and own airplanes 

have insurance. There is a huge international insurance industry 

whose money is very much at risk if a plane goes down or there 

is a crash. They would not insure a plane if it is was poorly maintained or operated unsafely. 

So there has to be a big system of private regulation that you are 

not even really mentioning that hopefully you are coordinating 

with. They are not going to rely on occasional government inspection, whether it is the American Government or Italian government 

or any other government. They are going to have their own systems 

and they may coordinate with you if it is cost-effective and they are 

sure it is going to produce good results. 

Could you discuss how that is working? There are billions of dollars involved for the insurers if there is an airplane crash with a 

lot of passengers. I would think that duplicating or doing something that is secondary and not as effective as what is already 

going on in the industry doesn’t make a whole lot of sense. Or are 

they just happily writing insurance policies for a billion dollars on 

a plane without any confidence that they are well maintained and 

insured? Could you comment on that, Mr. Scovel or Mr. Sabatini? 

Mr. SCOVEL. Thank you, Mr. Petri. I regret I do not have the research available to answer your question directly. I believe that 

your point is very well taken, however, and the private insurers in 

this Country and elsewhere would not underwrite insurance for 

aircraft were they not satisfied that maintenance was being properly done. 

Mr. PETRI. So before recommending that we hire more inspectors 

and we do all this sort of thing, shouldn’t we at least sort of see 

what is going on in the real world, so that we don’t waste a lot of 

taxpayers’ money duplicating in a less efficient way what is already 

being done? 

Mr. SCOVEL. That is an outstanding suggestion, sir. I would welcome the comments of the FAA representatives to see whether they 

have undertaken that study and have attempted to coordinate their 

oversight efforts with those of the insurance industry. 

Mr. SABATINI. Mr. Chairman, I don’t have a study that I can 

refer to, since we have not undertaken that type of a study. But 

it is a point well taken. Certainly I can tell you that in the operations world, before pilots would even be considered to be employed, they have to demonstrate that they have a level of experience required by the insurance companies that are far and above 

what we require for initial entry into a particular level of pilot certification. I do know, although I cannot provide you with factual information, but anecdotally and from my personal experience, certainly insurance plays a very significant role in the equation that 

is at play for safety when one is operating an airplane, maintaining 

an airplane or transferring parts across the Country via air carrier. 

Mr. PETRI. I guarantee you, the reinsurers in the aviation industry or the insurers directly, will quote much higher rates or will not 

insure unless there are various standards that are met. And it 

would be cost effective for the carriers to meet those standards. 

That is a pretty efficient way of having a flexible but modern insurVerDate 0ct 09 2002 10:32 Feb 28, 2008 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\DOCS\34794 HTRANS1 PsN: JASON
15

ance regulatory mechanism that keeps up with technology. They 

are competing with each other, so it is a competitive regulatory regime, which can be much more sensitive than what we can do 

where we review things every five years or the like. 

Yes, I think you are doing something like that with your ISO or 

certification or procedures there, if you would care to discuss that, 

Mr. Sabatini. 

Mr. SABATINI. Thank you, Congressman Petri. 

In fact, this past August, the Aviation Safety Organization 

achieved what is a world-renowned international standard, ISO 

9001, which basically is an international standard that distinguishes organizations that have achieved such standardization in 

terms of consistency and standardization in the processes that are 

in place. In essence, what has really taken place here is 6,500 inspectors, well, not 6,500 inspectors, but 6,500 employees in the 

Safety Organization are now under a single quality management 

system, which means we have documented processes and have 

metrics applied to it so that we can in fact determine how well we 

are performing against what it is that we say we are doing. 

So we have a process in place that is recognized by an international body that has granted certification to the AVS organization which I will tell you is unprecedented in the Federal service. 

No other government entity has, given the size, scope, complexity 

and diversity of services and products, and the dispersion of our 

folks spread around not only the United States but also globally 

that have been granted that accreditation. 

So it has metrics in place, it has customer feedback for the internal customer, it has customer feedback for the external customer 

and it is constantly being audited. I would use as an example an 

organization like the Flight Standards Organization, where approximately one-third of that organization on an ongoing basis is 

going through the audit process in order for us to sustain and 

maintain this accreditation. 

Mr. PETRI. My time is up, but let me just say that I visit a lot 

of manufacturing facilities in my district. I am very familiar with 

the ISO standards, that are global standards in a variety of different business processing operations. They are international and 

companies have to get their records, every procedure in place so 

that parts, what they do can be audited, and it is at the highest 

and a uniformly high standard. This is something companies will 

take five or six years struggling with to achieve, because once they 

achieve it, everyone who deals with them knows they are a first 

class outfit and there a lot of overheard costs that can be eliminated over time by getting to these common standards between 

manufacturers. You have done this, so you should be congratulated 

for it. 

Mr. SABATINI. Thank you. 

Mr. COSTELLO. The Chair thanks the Ranking Member and recognizes the gentleman from Oregon, Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

I would like to go to the point that was raised by the IG when 

we talked about whether or not we can track where the planes are 

going. We know a lot more planes are going to facilities that are 

not certificated in the United States for critical procedures. And, as 

16

I understand it Mr. Sabatini, we do not inspect those facilities, is 

that correct? 

Mr. SABATINI. Well, the answer to that question, Congressman 

DeFazio is, we can, we do, but we are not required, because they 

are not certificated under our——

Mr. DEFAZIO. That’s correct, okay. That’s fine. I think we have 

a problem here between certificated and non-certificated. Why 

should someone who is doing critical work be non-certificated? Certificated has to have a quality control system, establish and maintain a quality control system. Non-certificated, no requirement. Report failures, malfunctions and defects. Required at a certificated 

facility. Not required at a non-certificated facility. Personnel, got to 

have supervisors, inspectors, wow, supervisors and inspectors? No, 

that is not required at non-certificated. Training program? It is required at certificated. Not required at non-certificated. There has 

to be one FAA certified mechanic wandering around the facility 

somewhere. And we aren’t regularly inspecting them, are we? We 

are not, we don’t go in and regularly inspect them? 

Mr. SABATINI. Well——

Mr. DEFAZIO. How many are there, non-certificated, that are 

doing critical work on aircraft components? 

Mr. SABATINI. We can get that data, but I would have to provide 

it for the record. 

Mr. DEFAZIO. Okay, so we don’t know how many there are. That 

is a little disturbing. And of those who are doing critical work, can 

you tell me every one that does critical work has been inspected on 

a regular basis, like a certificated facility? Why would someone 

want to be at a certificated facility, if you can do the same work 

over here? The trend is, the airlines are pushing this stuff downstream, and they are pushing it downstream because it is cheaper. 

That is how ValuJet happened. It is waiting to happen again. 

Yes, you have some great trend lines there. It only takes one 

ValuJet to kind of blow that whole thing out of the water. And I 

really just can’t understand why we have a parallel system of noncertificated facilities doing critical work. Why don’t we just say 

non-certificated facilities cannot do critical work? Why do we 

have—or why don’t we just say, since the airlines you say are responsible, why don’t we just do away with the whole system? Why 

certificate some and not certificate a whole bunch of others who are 

doing the same work? Why? Why? Just give me a brief answer if 

you could. 

Mr. SABATINI. Well, uncertificated entities is really a misnomer. 

One can require work or ask that work be done, but that work will 

ultimately be done by a certificated mechanic. 

Mr. DEFAZIO. Or overseen by a certificated mechanic? 

Mr. SABATINI. No, actually performed by a person who has an 

A&P. So I would like to ask Jim to give you——

Mr. DEFAZIO. So if we aren’t there watching them, how do we 

know that is going on? 

Mr. SABATINI. We do have a percentage of that system that is 

known to us, and we do perform surveillance——

Mr. DEFAZIO. Known? A percentage is known? I would hope that 

100 percent is known. Nick, I just don’t understand it. You can’t 

17

tell me that the airlines aren’t pushing stuff to—are the non-certificated facilities cheaper, generally, than the certificated facilities? 

Mr. SABATINI. Well, sir——

Mr. DEFAZIO. Is the maintenance work less expensive? Yes or no. 

Mr. SABATINI. Well, I don’t have financial data. I will tell you 

this——

Mr. DEFAZIO. But the point is, why would the FAA tolerate that 

kind of a system? Why would you allow that to exist? If we need 

these things to be certified at certified repair stations, why don’t 

we just say, well, you can be certificated if you just have an A&P 

mechanic do the work? I mean, why? Why do you have a parallel 

system? 

Mr. SABATINI. We really don’t have a parallel system. A certified 

repair station is authorized to do specific work. No one else can do 

that kind of work. That——

Mr. DEFAZIO. Yes, but isn’t critical, critical work—work that 

would be in category 1, that could take a plane down—done at noncertificated facilities? 

Mr. SABATINI. Well, someone introduced the choice of word of 

critical work. That has a very specific meaning and——

Mr. DEFAZIO. Well, you have a category 1, category 2 and those 

sorts of things in terms of parts. So how about we use that for 

maintenance? Category 1 is a critical component if it fails, it could 

cause emergency procedures or the plane to go down for an unapproved part. Let’s apply that to air stations. Do we allow work that 

would be the same as a category 1 unapproved part be done at noncertificated facilities? Yes or no? 

Mr. SABATINI. We would not permit someone who is not qualified——

Mr. DEFAZIO. No, but do we allow it at the non-certificated facilities? Yes or no? 

Mr. SABATINI. The answer is that we would not allow anyone 

who was not properly authorized and certified to perform a work 

on a particular component. Now, someone can send a blade to be 

coated to a facility that doesn’t need to have FAA certification to 

do plasma coating. 

Mr. DEFAZIO. I know, but you can’t trivialize this concern. I 

think as just sort of, again—my time has expired. But we, a noncertificated facility with an A&P mechanic could do critical component work on an airplane that could take a plane down if it failed, 

and that is true, is that correct? 

Mr. SABATINI. I disagree, Mr. DeFazio. 

Mr. DEFAZIO. Oh, they couldn’t do the work? It wouldn’t be allowed? Is it barred? 

Mr. SABATINI. I would disagree with how you characterized that 

question, sir. 

Mr. DEFAZIO. No, I am not characterizing. I am just asking, over 

here at a certificated facility, you can do this work. It goes to a critical component, you have all these other requirements in place. But 

that same plane could be taking to a non-certificated facility, yes, 

correct? And an A&P mechanic, without any of these other strictures or controls in place that are required at certificated facilities, 

could do that same work if they were trained in that? Yes, that’s 

true, isn’t that correct? 

18

Mr. SABATINI. I would answer, sir, that an A&P mechanic who 

is on call for service to be provided to an air carrier would receive 

the instruction and the training that is required to do that very 

specific work. And an A&P mechanic is qualified to do that work? 

Although that person may not work in a facility that we would call 

a repair station. 

Mr. DEFAZIO. I know, but the point is, you have to look at it one 

or two ways. You say it is ultimately the carrier or owner’s responsibility for the aircraft. If we are just having a faith-based system 

here that they are going to do what is necessary and they are going 

to oversee it, then why bother to have certificated repair stations 

at all? Why maintain that structure if the same work can go to a 

non-certificated—that is the point I am trying to get at here, and 

I just don’t understand that. Because if we need these things to 

make things work out right at a certificated station, doing the 

same work, why don’t we need all of those same things at a noncertificated station? I just don’t think that that is right. There is 

a lot to ask, I will have another round on foreign stations. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you. 

The Chair recognizes the gentleman from Wisconsin, Mr. Kagen. 

Mr. KAGEN. Thank you, Mr. Chairman. I apologize from the beginning, my voice has been transported elsewhere. 

Mr. Sabatini, thank you for being here. You have a very challenging and difficult job, and I certainly wouldn’t want to be sitting 

in your chair, at least today. It is certainly very difficult, everyone 

here in the room would agree that it is hard and perhaps impossible to inspect places when you don’t know where they are. So it 

would be a great idea to find out where all these facilities are, to 

at least identify what needs to be inspected. 

Others here, our job as I see it as Congresspeople, our duty really 

is to help guarantee the safety of the traveling public and the people that work in the transportation industry. It really isn’t to guarantee the profits of insurance companies or the airlines themselves. 

So having heard the testimony of our Inspector General, will you 

recommend that the quarterly utilization reports become mandatory? That’s a yes or no. 

Mr. SABATINI. At this point in time, it is not required by regulation to report where these uncertificated entities may be located. It 

is being provided to us on a voluntary basis. 

Mr. KAGEN. So will you recommend that it will become mandatory so we can move it away from a voluntary participation? 

Mr. SABATINI. We will certainly consider that. 

Mr. KAGEN. So that is not yes. 

Mr. SABATINI. Well, rulemaking is a significant undertaking and 

we would like to assess the risk-based foundation upon which we 

would make such a recommendation, whether it would be warranted or not. 

Mr. KAGEN. Thank you. In your mind, is there any difference between a licensed and non-licensed inspector or a licensed or nonlicensed mechanic? 

Mr. SABATINI. That is a difficult question to answer the way it 

was asked. 

19

Mr. KAGEN. Well, I can tell you, being a physician, there is a real 

difference between a licensed specialist and non-licensed specialist. 

Mr. SABATINI. Of course, a repair station is certificated and has 

been granted authorization because they have demonstrated they 

have the competency and the qualifications. An individual holding 

a pilot’s license, a doctor’s license, can certain operate as an individual or can certainly operate within the context of a repair station. Each are properly certified to do the work that they would be 

doing. 

Mr. KAGEN. So when you go to the doctor and have a procedure 

or a surgery performed, you would like someone who is very well 

skilled and licensed in that process, wouldn’t you? 

Mr. SABATINI. I would choose a general practitioner for general 

health and a specialist if I needed a specialist. 

Mr. KAGEN. Okay. Is it true that the FAA really has no process 

to determine the number of inspections that are necessary and 

where these people should be placed, is that true? 

Mr. SABATINI. Well, sir, I am assuming you might be referring 

to the recent study that was provided to us by the National Research Council of the National Academies. They have pointed out 

how we can improve in our staffing models. And I would agree, it 

is a science, and we need to improve on the methodology that we 

have today. 

Mr. KAGEN. All right, thank you. I yield back my time. 

Mr. COSTELLO. I thank the gentleman. 

The Chair now recognizes the gentleman from Missouri, Mr. 

Carnahan. 

Mr. CARNAHAN. Thank you, Mr. Chairman. 

And to the panel, while I think we are all pleased to see the 

trend lines of safety and accidents going down, I don’t think anyone 

would be satisfied until those numbers get down or approach zero, 

that that is a continuing effort. I guess what strikes me is that 

there appears to be giant loopholes in the system that oversees our 

maintenance in terms of where it is done, how it is done, different 

standards in how things receive oversight. 

Ronald Reagan had a great phrase back during his presidency, 

trust but verify. We can’t have a system that we just think is getting safer, and if we can identify areas that need improvement, we 

need to do that. I guess I would like to ask to Mr. Sabatini, what 

does the FAA intend to do to consider limiting the work that can 

be done at non-certificated facilities and how that will be, what 

kind of oversight and inspections that process would have? 

Mr. SABATINI. We have taken the recommendations along those 

lines that the Inspector General has made. We have put in place 

some procedures to begin to address that. I would like to turn to 

Mr. Ballough to give the specifics on what is what is being done 

in the Flight Standards Service. 

Mr. BALLOUGH. Mr. Carnahan, in the IG’s report on repair station oversight, it made nine recommendations. Of those nine, we 

concur, and we have closed all but two. Those two we are still 

working with the IG to come up with a solution we both would 

agree to. 

Mr. CARNAHAN. What are those two? I am curious. 

20

Mr. BALLOUGH. One dealt with financial data and who should be 

collecting financial data. The second one is to develop a process to 

identify repair stations and carriers that perform aircraft maintenance. That is the recommendation we feel we have agreement on 

our approach, but we continue to work with the IG to close that 

one out as well. 

And the other seven are closed out with numerous things, or accomplishments that we have made regarding policy correction, policy enhancement, with better ways to analyze data with our safety 

performance and analysis system. That was one of the criticisms in 

that report, was that repair station data that was recorded by inspectors are overseas repair stations and air carrier data that is recorded by inspectors that oversee the air carriers, that both inspector work forces couldn’t see the other data. The data was not 

merged, so to speak. 

We have enhanced that to where now, we can take a repair station such as Haeco in Hong Kong and identify every carrier that 

uses that facility, everybody that has been there. So that has been 

a huge enhancement for us in the past. 

Mr. CARNAHAN. Hold that thought, because I want to get a 

chance for the IG to weigh in on this as well. And I guess I would 

like you to comment on those outstanding items that were mentioned and any other items that were not in terms of limiting that 

scope of work at non-certified facilities. 

Mr. SCOVEL. Thank you, Mr. Carnahan. 

Our major concern was the second outstanding recommendation. 

As I mentioned in an earlier response to a question, we do not consider FAA’s efforts to address our concerns adequate. I refer to the 

quarterly utilization reports and to the vendor or contractor lists 

which carriers are required to provide. We don’t consider that answers our concerns in order to identify, first, where maintenance 

is going and second, which non-certificated facilities are performing 

critical maintenance. 

A point was made by Mr. DeFazio and Mr. Kagen, and I know 

it is a concern of yours, sir, with regard to non-certificated facilities. Before our December 2005 report, we surveyed 19 carriers. All 

19, as I mentioned in my oral statement, had used non-certificated 

facilities to some extent, 1,400 of them, in fact, 1,400 different noncertificated facilities. One hundred four of those were overseas. Of 

the 1,400 facilities, we found that 21 had performed critical maintenance. Of the overseas facilities, non-certificated, FAA inspectors 

had never visited them. 

Mr. CARNAHAN. Is there any safety data that would distinguish 

those different types of facilities? 

Mr. SCOVEL. I would need to check with my staff, sir. I can tell 

you generally that it is a concern of ours that as we go along the 

maintenance continuum, if you will, looking first from in-house 

maintenance performed by carriers themselves and moving along 

the axis to repair stations, certificated repair stations, and further 

out when we talk about non-certificated repair facilities, the level 

of oversight becomes more diffuse. As I mentioned in my statement, it is not where the maintenance is performed that is of concern for us, it is the oversight and the degree that is appropriate 

in order to ensure the safety of the traveling public. 

21

Mr. CARNAHAN. Thank you. I see my time has run out. But I 

would request, Mr. Chairman, that if your staff could gather any 

of that safety data that makes a distinction along that maintenance 

continuum, I think it would be helpful to this Committee. Thank 

you. 

Mr. COSTELLO. I thank the gentleman from Missouri. We will announce to the Members that there is a vote on the Floor right now. 

We are down to about five minutes, so we will recess, go over. My 

understanding is we should expect one vote only, and come back 

immediately and continue our questions for the first panel. 

The Committee stands in recess. 

[Recess.] 

Mr. COSTELLO. The Subcommittee will come to order. 

We would ask the witnesses to be seated and the Chair recognizes the gentleman from Oregon, Mr. DeFazio on a second round 

of questions. I have some questions but I am going to hold them 

until Mr. DeFazio is finished with him. 

Mr. DEFAZIO. Thank you, Mr. Chairman. I did want to get to the 

overseas issue. 

But I just want to return, Nick, we are having a failure to communicate, as they would say in Cool Hand Luke. Let me read from 

the IG’s report and maybe this will make my point. Page 14, it is 

talking about non-certificated facilities. In our view, it goes on to 

say, non-certificated facilities are not required to employ designated supervisors, inspectors, while their maintenance is being 

performed. Relying solely on the expertise of an individual mechanic to ensure the repairs are completed properly is an inadequate control mechanism. In our view, this is the reason FAA requires added layers of oversight, such as designated supervisors, 

inspectors and certificated facilities. 

That is one point I was trying to make. Perhaps I didn’t articulate it well. 

Then the second point is critical work is being done in these noncertificated facilities, and they go on to use an example where people died. The importance of this issue became evidence in the aftermath of the January 2003 Air Midwest crash in Charlotte, North 

Carolina. Independent contract mechanics, certificated by FAA and 

working for a non-certificated company, completed maintenance on 

the aircraft the day before the accident. Mechanics incorrectly adjusted a flight control system that was ultimately determined to be 

a contributing cause of the crash. This work was approved by an 

FAA-certified mechanic employed by the non-certified company. 

We didn’t have the other levels of fail-safe that we have at certificated facilities. That is the point I am trying to make. So the 

question is, why do we allow, I mean, given that crash, and the potential problems, why wouldn’t we just say to the airlines, we certificate facilities for a reason, we believe it gives us a higher level 

of assurance that the work is supervised and reviewed, there is less 

possibility of killing people as we did at this case. And we are going 

to tell you that you can’t take anything that involves critical components to a non-certificated facility. 

Now, why can’t we do that? Congress could mandate that. Why 

doesn’t the FAA do that as the safety watchdog? 

Mr. SABATINI. We in fact have very good controls over that. 

22

Mr. DEFAZIO. Well, what happened in this case? They died. People died, and this was an—this is making my point, Nick. Stop defending the indefensible at the agency. Just give me an honest answer. Why should we have this secondary system that can do—I 

mean, you want to have them out there and they want to take care 

of the seats or they want to do this or they want to wax the plane 

or paint it, I don’t care. But why allow, people died in this case. 

I think it is arguable that if that had been done at a certificated 

facility that had supervisors and more regular work procedures 

that they might not have died. Why do we allow that to exist? 

The only reason the aircraft operators are going there is because 

it is cheaper. And you won’t admit that, either. It is cheaper to go 

to a non-certificated facility. They don’t have the overhead. They 

don’t have that pesky supervisor. They don’t have all these other 

requirements. 

Can’t you just tell me that the system would be safer if we said, 

if the work is on a critical component, something that can cause 

either emergency procedures to be required or the aircraft to fail 

in flight, it must be performed at certificated facilities? Wouldn’t 

that give us a safer system? 

Mr. SABATINI. I am all for putting in place any procedures that 

will continue to improve on the system safety. But I must tell you, 

Mr. DeFazio, that we have absolute control over the air carrier, 

and it is the air carrier’s responsibility, or the repair station’s responsibility, who is contracting out for that service with an entity 

that may not hold an FAA certificate. That product or component 

that has been repaired by that entity or that person must go 

back——

Mr. DEFAZIO. I understand. But what is the recourse of the people who have died? Do we put anybody in jail because of this? Did 

we give someone the death penalty because of this? No. The point 

is, this is an industry that is desperately trying to survive or make 

a profit. They are going to seek out the cheapest maintenance they 

can find and they are going to hope, it is their responsibility, they 

are going to hope it holds together and works, or at least until that 

chief executive officer gets his bonus and moves on somewhere else. 

Mr. Scovel, since this is in your report, can you answer that 

question I asked? Would we have a system that had potentially a 

higher level of safety if we required critical work, as I have defined 

it, to be done at certified facilities? 

Mr. SCOVEL. Thank you, Mr. DeFazio. Before the recess, when 

you posed the question concerning non-certificated facilities and repairs and so forth, of course, our example from our testimony came 

to mind, the Air Midwest tragedy from several years ago. 

Mr. DEFAZIO. Not so many, only four. 

Mr. SCOVEL. Too recent, indeed. The question of what type of 

work non-certificated facilities should perform and whether it 

should be limited by law or regulation I believe is a policy question 

for you and for the Administration. I view the role of the IG as to 

pose that question and to pose it repeatedly. I don’t view it as my 

role, however, to take a stand on that particular policy question. 

To the extent that we can, if we can provide data, safety-related 

data to show that repairs performed by certificated facilities, especially with regard to critical maintenance, are indeed done more 

23

frequently, correctly, then we can bring that kind of information to 

the debate. 

Mr. DEFAZIO. Okay, thank you. My time has again expired. The 

Chairman has been generous. I assume that the Chairman will get 

more into the foreign facilities, or the full Committee Chairman I 

think will visit that issue. 

Mr. COSTELLO. I thank the gentleman, and the Chair now recognizes the distinguished Chairman of the Full Committee, Chairman Oberstar. 

Mr. OBERSTAR. Thank you, Mr. Chairman, for the very substantial work you put into crafting this hearing, gathering the data, 

setting the stage. Mr. DeFazio, for your ever-persistent advocacy of 

ever higher standards of maintenance and maintenance oversight. 

I think the context in which this hearing takes place is that of 

airline losses of over $35 billion over the last years since September 11th, elimination of 27,000 airline maintenance jobs at the 

mainline carriers since September 11th, closing of maintenance 

bases at the principal commercial airliners, outsourcing of maintenance. And what is particularly troubling is outsourcing of heavy 

maintenance, which now is reaching over 40 percent, 42 plus percent of the $9 billion-plus that airlines are spending. That is a considerable amount of money. In the beginning of the 1990s, there 

was about $5 billion being spent by the airlines on maintenance. 

But we are seeing in the IG’s report up to 60-plus percent of 

heavy maintenance outsourced by the airlines, by our commercial 

carriers. That was unthinkable in the 1980s. In the early and mid1980s, airlines were the source of maintenance business coming to 

the United States from foreign carriers, being performed by the 

U.S. because of the high quality of maintenance performed at U.S. 

shops. United, American, Northwest, Delta, all were looking to foreign airliners as a source of business. 

Only American Airlines, among the major carriers, has kept its 

maintenance in-house, working with the Transportation Workers 

Union, they have set a goal of saving half a billion dollars in costs 

of operation. But they have done it in-house. Why the others have 

chosen to outsource is a continuing puzzlement to me. But it is 

clear that if you look at the contractual arrangements by other carriers, their costs of outsourced maintenance compared to doing it 

in-house is half. The answer to the question Mr. DeFazio asked of 

Mr. Sabatini is that indeed, cost is a huge factor. It is the reason 

they are outsourcing. The breakdown of the International Association of Machinists Union internally resulted in outsourcing by carries to other facilities. 

So in looking at the volume of outsourcing, the amount, we have 

4,200-plus MROs in the domestic U.S. and nearly 700 foreign repair stations. That is up from 440 in about 1990. And only 734 domestic inspectors. Is that right, Mr. Sabatini? 

Mr. SABATINI. Yes, sir. 

Mr. OBERSTAR. After the investigations that we conducted in the 

Subcommittee investigations and oversight on significant aviation 

failures due to maintenance in the 1980s, the then-Chair of the authorizing committee, I was Chair of the Investigations Subcommittee, Mr. Mineta and I took to the Floor an appropriations 

24

bill, an increase of over $10 million a year to hire up to 1,000 inspectors. We succeeded. The inspector workforce was increased. 

But then, in your own testimony, that number is down, so you 

have gone to a risk-based and even that was recommended by the 

IG’s office, not as an option but in light of the circumstances of a 

smaller workforce, more outsourcing of maintenance. In 2003, the 

IG said, well, you could do this job by shifting to what internally 

is known as ATOS, or a risk-based system. 

I like your statement, Mr. Sabatini, that you have achieved the 

ISO 9001 certification. But I am troubled that you say, we adhere 

to the same safety standards as the businesses we regulate. That 

is not good enough. FAA is the standard. Those businesses you regulate are not. You are the standard. You make them come up to 

FAA. 

The opening paragraph of the 1958 organic act creating the FAA 

says, ‘‘Safety shall be maintained at the highest possible level,’’ not 

the level airlines can afford, not what they want to pay, not what 

they can outsource to pay, but the highest possible level. FAA is 

that guardian. You say consistency is the goal, inconsistency is 

troubling. But the inconsistency is in the IG’s report, as Mr. 

DeFazio has insisted on, where you have different standard for differing facilities. In the non-certificated and certificated—are you 

going to reconcile those two? 

Mr. SABATINI. Absolutely, Mr. Chairman. There is in essence no 

different on safety standards between a foreign repair station or a 

domestic repair station. The only difference that was pointed out 

this morning was that we require drug and alcohol testing in our 

Nation and that is not required in other sovereign states. If we 

could impose that, we would. 

Mr. OBERSTAR. In the foreign repair station arena, it is, the mode 

of operation of FAA is to accept a country’s own standard, if they 

adhere to the ICAO standards, right? And accept the host country’s 

certification of a facility? Is that correct? 

Mr. SABATINI. Not correct, sir. What we do in foreign, in issuing 

a certificate to a foreign repair station, that applicant at that point 

in time must demonstrate to the FAA that they in fact meet the 

very same regulatory requirement, FAR Part 145, to be certificated 

as a repair station abroad. So the certification rules are precisely 

the same, whether it is domestic or foreign-based. 

Mr. OBERSTAR. Now, does that mean that in that repair station 

that not only the facility must be certificated and meet U.S. FAA 

standards and ICAO standards, and that all of the maintenance 

personnel must be A&P equivalent certificated maintenance providers? 

Mr. SABATINI. Take a country like France, certainly a sophisticated and advanced society in terms of aviation safety, built some 

very fine airplanes and again, very sophisticated. That particular 

country does not require that they have what would be in our parlance an A&P certificate. But rather, it is an education level in the 

discipline of aviation maintenance. 

So in that regard, they would not require an A&P of that person 

there. 

Mr. OBERSTAR. How about El Salvador? 

25

Mr. SABATINI. Well, you know, Mr. Oberstar, Mr. Chairman, several weeks ago you brought that to my attention. Following that 

conversation, I asked Jim Ballough to go down to El Salvador and 

validate what we know from data to be data that suggests that it 

is performing in accordance with expected standards. I asked Jim 

if he would go down there and make a personal visit, and with your 

permission, sir, I would like to have Jim tell you about that visit. 

Mr. OBERSTAR. Proceed. 

Mr. BALLOUGH. Thank you, Mr. Chairman. As Nick mentioned, 

I visited the TACA facility a few weeks ago and I would be glad 

to share what my views and thoughts were on that issue. Before 

I begin that, I would just like to make the point that regardless of 

what type of outsource or contract maintenance we are talking 

about, there are definite responsibilities for three entities. And I 

will demonstrate that when I talk about AEROMAN. Those three 

entities are obviously, the air carrier that is using that facility, 

they have some responsibilities. They can’t just wash their hands 

of the activity because it is going to a repair station. Obviously a 

major role for the repair station as well, in making sure that they 

have the properly trained personnel, the equipment, and all the 

manuals and all the things that are required by our certification. 

And thirdly, it is our FAA oversight. We play a major role in 

making sure——

Mr. OBERSTAR. That is all accepted. Tell me about what you 

found in El Salvador. 

Mr. BALLOUGH. Very good. In that facility, you mentioned the 

certificated mechanics. Every technician, every mechanic that 

works on an airplane in that facility, is certified under the El Salvadoran process. That process is not a mirror image of ours, but 

it is closely aligned with the requirements that we have——

Mr. OBERSTAR. Do they have an A&P mechanic certification system? 

Mr. BALLOUGH. Yes, sir. Yes, they have——

Mr. OBERSTAR. On what system is it patterned, since El Salvador—I made trips to El Salvador in the early 1980s, in the days 

of human rights abuses. I am quite familiar with this country. So 

tell me, where are they getting this? 

Mr. BALLOUGH. It is based on our system. Not necessarily a mirror image. 

But they go a step further as well. They have 25 percent of their 

technicians, their mechanics, and they would do more if they could 

obtain more visas, but they have 25 percent of their mechanics 

they have sent to the U.S. who have tested and have received A&P 

certificates. So out of a workforce, mechanic workforce of 879, they 

have 167 that are in fact certificated A&P mechanics. They would 

like to have more certificated A&P mechanics. So we are working 

with them to see what it would take to provide them the opportunity to certificate more of those folks. 

Also, they are an ISO 9001 certified organization as well. They 

achieved that certification in 2003. They are a certified Airbus 

MRO network maintenance organization. If you think of the Airbus, the global nature of aviation today, Airbus recognizes just a 

handful of facilities that are qualified to repair their aircraft. And 

they recognize them as an Airbus MRO network operation. 

26

Mr. OBERSTAR. FAA performs oversight of that facility then, from 

the Miami FSDO, you call it something else? 

Mr. BALLOUGH. Yes, sir, the Miami IFO. We in fact, my inspectors are in that facility once a quarter, they visit that facility. 

Mr. OBERSTAR. Once every three months? 

Mr. BALLOUGH. Once every three months, they are there, yes, sir. 

Mr. OBERSTAR. But those inspectors from the Miami, you call it 

IFO now——

Mr. BALLOUGH. International Field Office, Mr. Chairman. 

Mr. OBERSTAR. I still call them FSDO. For 53 facilities in Central 

and South America? 

Mr. BALLOUGH. Yes. We have, the number of personnel we have 

in the Miami office are 16 inspectors. 

Mr. OBERSTAR. They are on the road a lot going to one of these 

every quarter. 

Mr. BALLOUGH. Yes, they are. In fact, fortuitous as my visit was, 

the inspectors were there when I was on scene as well. They do 

spend an awful lot of time on the road, yes, sir. 

Mr. OBERSTAR. Well, coming back to your personal observations 

and what you reported about, you are saying that the Salvadoran 

maintenance personnel, at least one-fourth of them have been 

trained in the U.S., FAA A&P standards? 

Mr. BALLOUGH. Yes, sir. 

Mr. OBERSTAR. And they have an A&P certified supervisor in the 

shop who is overseeing the work, signing off on the work? 

Mr. BALLOUGH. Yes, sir, Mr. Chairman. Also, there is another 

element here are as well. There are two major air carriers that use 

that facility today. And both of those air carriers have been seven 

and eight personnel on scene, so that every moment that airplane 

is in a check, they have their own airline personnel on staff, overseeing the work as well. 

Mr. OBERSTAR. Have you completed a written report on this for 

Mr. Sabatini? 

Mr. BALLOUGH. No, I have not, sir. 

Mr. OBERSTAR. Are you going to? 

Mr. BALLOUGH. I will, yes, Mr. Chairman. 

Mr. OBERSTAR. When you do that, submit that to the Committee. 

I think it is very important for us to have the facts. That would 

be very useful and we would like to evaluate it. 

There are facilities, though, MROs in the U.S. where there, 

where not all the mechanics are A&P certificated, where the FAA 

considers it sufficient for a supervisor to sign off. Is that not the 

case, Mr. Sabatini? 

Mr. SABATINI. There are circumstances where work can be performed by someone who may not have an A&P certificate, in a repair station context, who is trained and has been issued a repairman’s certificate. But sign-offs are done under the supervision of a 

supervisor who would have authorization, such as an A&P and also 

authorized by the procedures manual to do that particular kind of 

oversight and sing-offs. 

Mr. OBERSTAR. I am concerned about that type of arrangement. 

I think FAA needs to raise the bar for those facilities, especially 

when you have so few inspectors. I will consult with Mr. Costello, 

the Chairman of our Subcommittee, and with the Ranking MemVerDate 0ct 09 2002 10:32 Feb 28, 2008 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 P:\DOCS\34794 HTRANS1 PsN: JASON
27

ber, about moving in the appropriation process to increase funding 

for the inspector workforce. I think you are way understaffed. 

Mr. Scovel, in the history of FAA oversight maintenance, recordkeeping is critical. When an airline has either gone out of operation 

or has outsourced its maintenance, all the maintenance records, 

boxes and boxes of them, were transferred. In this day of electronics, however, I suppose those are CDs that are transferred. 

And now you have major airlines contracting maintenance out to 

the lowest cost provider. And then they re-bid the contract a year 

or so or two years later, sometimes it is three years. And the 

records are supposed to be transferred. Are you watching, is FAA 

watching over the transfer of records to be sure that they go from 

one facility to the next, and that trend lines are being followed and 

that down to the last detail, the surveillance is in place? 

Mr. SCOVEL. Thank you, Mr. Oberstar. I can speak from our experience in conducting surveys at a number of carriers. We have 

found that the carrier’s maintenance records generally are good. 

And we are able to determine how their maintenance has been contracted out back over a number of years. It is based on that research that we have been able to determine when, for instance, 

non-certificated facilities have been used on certain repair operations versus repair stations, either here or overseas. And back to 

the days when some carriers were using in-house maintenance 

more extensively. 

Mr. OBERSTAR. So you are confident that, and Mr. Sabatini, are 

you confident that record-keeping is being transferred and sustained by subsequent maintenance providers as aircraft, airlines 

increasingly bid out their maintenance jobs, including heavy maintenance? 

Mr. SABATINI. Mr. Chairman, I am convinced that there are complete records on aircraft, no matter where that aircraft maintenance is performed or who owns that airplane. But I would ask Jim 

to give you more specifics on how that system works. 

Mr. BALLOUGH. In the case of the AEROMAN visit, Mr. Chairman, there are records that are transferred both electronically in 

the moment as well as every hard copy record goes with that aircraft as it leave the check. More globally, when our certificate management office inspectors review the maintenance records, they will 

look at a work package, regardless of whether it is done in the 

States, done in-house or done overseas. So that is a responsibility 

that our certificate management office inspectors have as well, 

looking at those records. And they in fact make visits to those facilities as well. 

Mr. OBERSTAR. I think that is a very critical aspect, and I am 

not totally comfortable with ATOS, or risk management systems, 

that will increasingly rely upon record-keeping rather than handson. It is emblazoned in my mind, testimony that came in a hearing 

in the 1980s, from, well, I am quite sure it was the Miami FSDO, 

who said, we are so overworked, we are only looking at paperwork, 

we are not looking physically at engine work and airframe work. 

We are not on the shop floors as we need to be. And when the FAA 

oversight becomes distanced from the shop floor and is relying only 

on records, then you lose contact with the reality that this is an 

aircraft, not a piece of paper, not a document popping up on a comVerDate 0ct 09 2002 10:32 Feb 28, 2008 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 P:\DOCS\34794 HTRANS1 PsN: JASON
28

puter screen. And I am much more comfortable with the hands-on 

than I am with the fingers on the keyboard and pop-up screens. 

Mr. SABATINI. Mr. Chairman, to put it perspective, we initiated 

risk-based before it was suggested that we continue in that direction. ATOS was introduced in 1998, which is system safety. It was 

an evaluation of what we have been doing for many years. And 

what we have today is a combination of touching metal and kicking 

tires, because that is how inspectors collect on-site information. 

But what is also very important to understand, that in a global, 

complex system like ours, where it is based on a system of voluntary compliance, where air carriers, repair stations, any entity 

that is certificated by the FAA is required by regulation to provide 

us with records which they must maintain. And it is a combination 

of looking at records, being on the shop floor and also rolling it up 

into what we call today system safety. 

And what we have required of the airlines is to redesign their 

system such that there are those attributes of system safety that 

come to play each and every moment, so that the system design 

produces the service or product in a consistent way. Unlike what 

we did in the past, when we see data, a combination of data collected by ourselves and combination of data provided because of the 

records that are required to be provided to us, we identify areas of 

risk and that is where we focus our attention. 

So we are smarter about where we bring our people. So it is a 

combination of in fact, touching metal and kicking tires, as well as 

the sophistication of system safety that brings auditing to bear. 

Mr. OBERSTAR. Thank you. 

Mr. Chairman, you have been generous with the time here, and 

I appreciate the opportunity to spend some time on this. It will 

take a good deal more inquiry. 

Just a parting thought, and that is, reconcile the differences in 

FAA certificated repair stations and non-certificated, bring those 

together so there is no gap, as you said earlier. Consistency is the 

key to success in aviation safety oversight. Increase, we will work 

to increase the inspector workforce, to ensure that they have adequate numbers of inspectors and that the oversight work is being 

performed in a consistent manner. 

Thank you very much. Thank you, Mr. Chairman. 

Mr. COSTELLO. Thank you, Chairman Oberstar. 

As Chairman Oberstar indicated, it will take a number of hearings in the future to address some of these issues. As I said from 

the outset, this is the first in what we expect to have other safety 

hearings concerning the outsourcing of maintenance as well as 

other issues. 

At this time, the Chair recognizes the gentlelady from Oklahoma. 

Ms. FALLIN. Thank you, Mr. Chair. 

In Oklahoma, we have a maintenance repair organization for 

American Airlines. I had the opportunity to visit with them yesterday about their inspections and the FAA. They were staying that 

usually they have around 37 FAA inspectors who come to that facility and inspect it at different times. And they were also visiting 

with me about the outsourcing and maintenance to foreign countries. 

29

My question is, and I may have missed some of the testimony already and I apologize, but how to we assure, between the FAA inspectors in America versus the FAA inspectors who are going out 

of the country to inspect the foreign outsourcing of maintenance, 

how do we assure the same level of inspection? 

Mr. SABATINI. The regulation upon which a repair station is certified is the very same regulation that is used here in the States 

and abroad. The inspectors receive the very same training and the 

inspectors abroad are dedicated to solely oversight of those repair 

stations that they are responsible for in that geographic area. Here 

in the States, we do not have inspectors who have the sole responsibility for the oversight of a repair station. They may have a combination of other responsibilities as well. 

So in essence, the oversight is using the same standard, the 

same training, the same policies across the board. There are no differences. And as you said, you missed an earlier point that was 

made. There is a distinction between here and abroad. We require 

drug and alcohol testing here. We cannot impose that upon another 

sovereign state. And if we could, we would. But we don’t have the 

statutory authority to do that. 

Ms. FALLIN. Mr. Chairman, if I could do a follow-up. Is the ratio 

between the inspectors here and the inspectors in foreign countries, 

are they the same as far as numbers of inspectors? 

Mr. SABATINI. We do have some data, and I will ask Jim to share 

that with you. 

Mr. BALLOUGH. Ms. Fallin, what I would like to mention is, the 

domestic repair station world, and I will make a distinction between repair station and air carrier oversight, since you mentioned 

American Airlines, in a moment. 

Domestically, we have 801 inspectors that oversee 4,231 repair 

stations. Overseas, we have 697 repair stations, and they are overseen by 67 inspectors. So the ratio, and it is much more complicated than just dividing out and coming up with a ratio. Because 

the work assignments are very different. The folks in the States 

that have repair station oversight responsibility are inspectors, also 

have responsibility for FAR Part 135 operators, maybe flight 

schools, so a host of other activities. The inspectors that are assigned strictly to foreign repair stations, that is their primary work 

function. They have additional duties that may require oversight of 

a designated airway and its representative or another inspection 

authorization mechanic, but not near the complexity or the amount 

of certificates for the domestic repair station oversight personnel. 

But the issue that you raised regarding American Airlines and 

the 37 folks, those folks are from what we term a certificate management office or CMO. So there is a large number of folks that 

are inspectors dedicated for oversight of all of American Airlines. 

So in this case, where they use Tulsa, the program managers that 

have responsibility for certain fleet types visit Tulsa. In the case 

of an airline that outsources their heavy checks, outside the U.S., 

those same program managers also have a responsibility for oversight even though those checks go out of the Country. 

So no matter where those checks are done, and I will admit, not 

near to the level that you would see in Tulsa with it being such 

close proximity, but nonetheless, the oversight does get done by the 

30

certificated management office as well when that work is 

outsourced, that heavy check. 

Ms. FALLIN. Mr. Chairman, if I could have one more. That brings 

up another interesting point, if the levels are a little different, have 

you ever compared or audited the safety records of the aircraft, the 

incidents that they might have, compared to the foreign operations 

and maintenance versus the U.S. operations and maintenance? 

Mr. BALLOUGH. In the case of, I will use one example, one experience that I witnessed. That is the facility in El Salvador. When the 

checks leave that facility, that repair station, as well as the airline, 

tracks that aircraft for 30 days. And they track that aircraft to see 

what type of discrepancies are written, what kinds of malfunctions 

the aircraft is having, to assure themselves that the quality of the 

work coming out of that repair station is as good as it can get. As 

a result, they do a customer survey of every customer that uses 

that repair station and consistently, they score in the 9.4 out of 10 

in terms of the quality of product being released by that repair station. So the repair station also takes an active role in looking at 

the quality of the maintenance that is done once it leaves that facility. 

Ms. FALLIN. One more question, Mr. Chairman. 

The cost of the inspectors going to the foreign MROs, what is the 

cost to the United States as far as the FAA and having those inspectors travel out of the Country? 

Mr. SABATINI. There are some figures that we do have, and just 

generally speaking, a domestically based inspector, fully loaded figure, would be approximately $100,000 a year, on average. A foreign-based inspector is slightly over $200,000 per year. 

Ms. FALLIN. So there are some that just live in the foreign country that inspect? 

Mr. SABATINI. I’m sorry? 

Ms. FALLIN. There are some that just live in the foreign country 

that inspect? 

Mr. SABATINI. We have inspectors who live abroad. We have inspectors who are assigned to those geographic areas, in Frankfort, 

London, Singapore and well, those locations. 

Ms. FALLIN. Thank you. 

Mr. COSTELLO. The Chair thanks the gentlelady and recognizes 

now the gentlelady from Hawaii. 

Ms. HIRONO. Thank you, Mr. Chairman. 

Since oversight is critical to the system and we clearly don’t have 

enough inspectors, we need to deploy our resources as effectively as 

possible. The IG in his testimony noted that FAA needs to develop 

an effective staffing model. I would like to know whether you are 

in the process of developing such a staffing model as described the 

IG, and two, if you are doing that, whether you are involving affected persons such as the current aviation inspectors, and three, 

what would be your time frame for completing this model? 

Mr. SABATINI. We have followed up on the recommendation, and 

we are following the recommendations made by the National Research Council, which is a group within the National Academies of 

Sciences. I will turn it over to Jim, who was directly responsible 

in leading this effort for the contracting of the services to do exactly what you have asked. 

31

Mr. BALLOUGH. We have recently entered into a contract with an 

organization that will begin to work, they have done some preliminary work for us already. So that will be in full swing here shortly. 

We had a few issues early on with the continuing resolution and 

we now have the contract in place and the work has begun. Ma’am, 

right now, I do not have an estimated time of completion of that. 

I would expect to have that and could supply that to the Committee at a later date, when I get that information. 

Ms. HIRONO. What about my question relating to involving the 

people who would be impacted by such a staffing model, i.e., the 

aviation, the inspectors, safety inspectors? 

Mr. BALLOUGH. I think that they will have to be involved. Obviously for a contractor to be able to develop for us a staffing model, 

they have to certainly understand our complexity and the contractor that is doing the work for us, has involved our work for us 

in some of the activities that they have been doing recently. So I 

fully expect that the stakeholders, all our inspectors will be involved. 

Ms. HIRONO. I am a little bit confused as to why you would enter 

into a contract that does not have a completion time frame. So 

what is your time frame? 

Mr. BALLOUGH. At this point in time, we have modified the statement of work, and they have not come back to us at this point in 

time yet with what a time line or what the action plan is to complete the activity. This is all recent developments, in the last 

month, once we receive our budget. 

Ms. HIRONO. Mr. Chairman, since this model is very critical to 

the oversight capability of FAA, I would like to ask the Chair for 

you to follow up with FAA and give us that time frame for this 

model to be completed. 

Mr. COSTELLO. The Chair will make that request and announce, 

I mentioned earlier that we will have written questions to submit 

to the FAA. We will put a time frame as to when we want the response back. I have several questions, five or six, that I am going 

to put in writing and we certainly will add your request to that as 

well. 

The Chair would like to thank all three of our witnesses for 

being here today and presenting their testimony. We look forward 

to additional responses from the FAA. At this time, the first panel 

is dismissed and we would ask the second panel to come forward. 

Thank you. 

I will begin introductions as the witnesses are moving forward, 

in the interest of time. The second panel will consist of Mr. Tom 

Brantley, the President of the Professional Airways Systems Specialists, AFL-CIO; Mr. James Little, International President of the 

Transport Workers Union; Mr. John Goglia, the Adjunct Professor 

of Aviation Science, Parks College of Engineering, Aviation and 

Technology, St. Louis University; Mr. Basil Barimo, the Vice President of Safety and Operations, Air Transportation Association of 

America; Mr. Marshall Filler, Managing Director and General 

Counsel of the Aeronautical Repair Station Association; Mr. David 

Campbell, the Vice President for Base Maintenance at Alliance 

Fort Worth and Kansas City, with American Airlines; and Mr. Ray 

32

Valeika, the Independent Aviation Advisor, Senior Vice President 

of Technical Operations with Delta Air Lines, Retired. 

Let me say to our witnesses, first, we welcome you and we thank 

you for being here today. You have submitted your written testimony and it will be entered into the record in full. Let me ask you, 

in the interest of time and so that we can get to questions, we have 

a number of questions, and hopefully in your remarks you will address some of the issues that were brought up with the first panel. 

But I would ask you to summarize your written statement in five 

minutes or less. The Chair will recognize Mr. Brantley for five minutes. 

TESTIMONY OF TOM BRANTLEY, PRESIDENT, PROFESSIONAL 

AIRWAYS SYSTEMS SPECIALISTS, AFL-CIO; JAMES C. LITTLE, 

INTERNATIONAL PRESIDENT, TRANSPORT WORKERS UNION; 

RAYMOND VALEIKA, INDEPENDENT AVIATION ADVISOR; 

JOHN J. GOGLIA, DIRECTOR, CENTER OF INTEGRATED 

EMERGENCY MANAGEMENT, PARKS COLLEGE OF ENGINEERING, AVIATION AND TECHNOLOGY; BASIL J. BARIMO, 

VICE PRESIDENT, OPERATIONS AND SAFETY, AIR TRANSPORT ASSOCIATION OF AMERICA, INC.; MARSHALL S. 

FILLER, MANAGING DIRECTOR AND GENERAL COUNSEL, 

AERONAUTICAL REPAIR STATION ASSOCIATION; DAVID 

CAMPBELL, VICE PRESIDENT FOR BASE MAINTENANCE AT 

ALLIANCE FORT WORTH AND KANSAS CITY, AMERICAN AIRLINES 

Mr. BRANTLEY. Thank you. Chairman Costello, Congressman 

Petri and Members of the Subcommittee, thank you for inviting 

PASS to testify today. 

PASS represents approximately 11,000 FAA employees, including 

approximately 2,800 flight standards aviation safety inspectors. In 

addition to other oversight responsibilities, airworthiness inspectors are responsible for ensuring that maintenance work performed 

at more than 4,900 certificated repair stations in the United States 

and overseas is done in accordance with airline and/or manufacturer instructions and FAA regulations. 

In recent years, the overall dynamic of the aviation industry has 

been one of dramatic change, including airlines’ increasing their reliance on outsourced maintenance. In fact, the IG has stated that 

the outsourcing of air carrier maintenance to repair facilities has 

grown to 62 percent of air carriers’ maintenance costs in 2005. 

PASS and the inspector workforce that we represent have serious 

safety concerns regarding this escalating trend and the FAA’s ability to oversee the outsourced work. Of primary importance, there 

must be an adequate number of experienced and trained FAA inspectors in place with appropriate support to accomplish the agency’s mission of safety oversight. Inspector staffing has not kept 

pace with the explosion of outsourcing and nearly half of the inspector workforce will be eligible to retire by 2010. 

The FAA claims that it is impossible for the inspector workforce 

to increase at the same rate that the aviation industry is changing 

and is moving toward a risk-based approach in which data will be 

the primary tool to determine potential safety threats. We agree 

that the changing environment makes it essential to focus on anVerDate 0ct 09 2002 10:32 Feb 28, 2008 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 P:\DOCS\34794 HTRANS1 PsN: JASON
33

ticipating risks. However, that does not reduce the need to raise 

staffing levels for the inspector workforce. As explained in our written testimony, risk analysis is only as good as the data upon which 

it is based. When inspectors are not doing enough inspections, the 

amount of needed data is simply not available. 

Therefore, PASS is requesting that Congress direct the agency to 

develop a staffing model for inspectors and follow the recommendations outlined in the recent study by the National Academy of 

Sciences with a deadline for completion. The inadequate level of inspector staffing is making it even more difficult to address other 

problems, with oversight of outsourced air carrier maintenance. For 

example, there are over 690 foreign repair stations certificated by 

the FAA. However, due to a lack of inspector staffing and the abundance of bureaucratic red tape an inspector must cut through to 

gain access to these repair stations, many inspectors say they are 

not confident with the level of oversight. 

After an inspector waits a month or longer for authorization to 

visit a country, the repair station is fully aware of the visit and the 

element of surprise is non-existent, reducing the visit to a tour 

rather than an inspection. In addition, inspectors tell us of problems regarding the regulations governing foreign repair stations 

and the security at these facilities. If a foreign repair station wants 

to work on U.S.-registered aircraft or any aircraft that operate in 

this Country, those repair stations should be required to meet the 

same safety standards and regulations as domestic repair stations. 

Part of the growing threat is that repair stations are themselves 

sub-contracting out more and more maintenance work to other facilities, many of which are not certificated by the FAA and are 

therefore not subject to direct FAA oversight. 

Recent IG reports have highlighted the dangers involved with 

the escalating use of non-certificated repair facilities, empathizing 

that these facilities are performing far more work than minor services, with some even performing maintenance critical to the airworthiness of the aircraft. Despite the fact that these facilities are 

performing safety-critical work, FAA oversight is practically nonexistent. This practice cannot continue without a significant increase in risk to aviation safety. PASS believes the most effective 

way to correct the disparity between work performed at certificated 

and non-certificated repair facilities is for Congress to require that 

air carriers outsource maintenance work only to certificated repair 

stations, a standard that should apply to both domestic and international facilities. 

Oversight of outsourced maintenance is in critical need of attention and improvement. For too long, the FAA has responded to critical IG and GAO reports with sophisticated plans but no real action. In order for inspectors to continue to provide adequate oversight for the aviation system, the FAA must take immediate steps 

to increase staffing and funding for its inspector workforce so they 

are able to continue to ensure this Country’s status as having the 

largest, safest and most efficient aviation system in the world. 

Thank you, and I would be happy to answer any questions. 

Mr. COSTELLO. We thank you, Mr. Brantley. 

Mr. Little, you are recognized for five minutes. 

34

Mr. LITTLE. Thank you, Mr. Chairman, and thank you, Members 

of the Subcommittee. I appreciate the opportunity of being here 

today. 

In 1989, the TWU testified before this same Subcommittee 

against the FAA elimination of our long-established geographical 

restrictions on performance of scheduled maintenance in favor of 

legislation to reverse that rule change. At that time, we predicted 

that the elimination of limits on movement of maintenance would 

result in the outsourcing and loss of tens of thousands of jobs to 

overseas facilities. The FAA would not have the capacity to follow 

the overseas work, and the work and the workers who performed 

it would not be subject to the same regulatory requirements that 

U.S. mechanics must function under. 

At that time, we were accused by the FAA and industry officials 

of grossly exaggerating those possibilities. I would suggest to the 

Committee that if it reviews the testimony it would find that in virtually every concern we expressed, unfortunately it has been validated. In particular, as pointed out in today’s written testimony, 

the majority of heavy maintenance accomplished for scheduled U.S. 

carriers is no longer performed by those carriers, but is outsourced, 

and an ever-increasing portion is outsourced overseas. 

As my brother from PASS points out, this situation has been 

generated, at least in part, by the absurd system of double standards the FAA has created. Carriers seeking to limit exposure to 

costly regulations governing the performance of maintenance can 

do so by outsourcing the work, especially overseas. 

Rules comparable to the FAA rules on drug and alcohol testing 

is only one thing. Security, background checks, exposure to unannounced, and I underscore unannounced checks, are covered by 

legal enforcement which subjects persons performing maintenance 

to not only licenses suspension, there is revocation, there are fines 

for improper performance, either do not exist or are not really as 

rigorous as those in this Country. 

The system of double standards is an increasing disservice to 

U.S. airmen, the flying public and as PASS points out, makes the 

job of their Members far more difficult. At American, after extraordinarily difficult negotiations that were conducted in the shadow of 

potential bankruptcy filing, the TWU managed to secure contractual protections that maintained aircraft maintenance work inhouse. There are 18 heavy checks performed at American, all are 

done in-house in bases of Tulsa, Kansas City and Alliance Fort 

Worth. I believe at present, American is one of the only major carriers that still does the majority of its own maintenance. 

However, while our contract protects such work over the long 

term, it is under continuing jeopardy if we retain the present regulatory system. Likewise, the chances of bringing work, as we have 

successfully done, in-house will be more limited over the long term. 

If this Committee believes that the desire of the situation we 

should continue the regulatory status quo. However, I believe that 

is not acceptable. We ask the Committee to comprehensively examine and remedy the system of double standards, and re-impose 

some sensible limits on the movement of aircraft. 

Again, I thank you for the opportunity to address this Committee, and I welcome any questions you may have. 

35

Mr. COSTELLO. The Chair thanks you, Mr. Little, and would recognize under the five minute rule Mr. Valeika. 

Mr. VALEIKA. Good afternoon, Mr. Chairman, Members of the 

Committee. Thank you very much for the opportunity to air my 

views about aircraft maintenance and the changes and challenges 

that are occurring. 

First of all, just a brief background. I have spent 40 years in aircraft maintenance, 20 of those years plus running maintenance operations at three major airlines, the last of which was Delta Airlines, where I retired as senior vice president. By the way, we did 

$300 million worth of in-sourcing before I left. Just to let people 

know that the streets have two lanes on it, going both directions. 

I have been involved in all of those activities that created this 

great maintenance system, such as MHG, aging aircraft, human 

factors, et cetera, over my career. 

The issues of outsourcing are not new. What is new is that the 

airlines in the past had extensive in-house capability that they are 

shedding in a very dramatic fashion. The other factor that is new 

is that it is happening on an unprecedented level in a very, very 

short period of time. Lastly, it is much more global than at any 

other time before. 

In the past, outsourcing from the major carriers occurred on an 

ad hoc basis and usually for very specific items. Labor agreements 

prevented wholesale outsourcing and most of it was accomplished 

either in the U.S. or Europe. Now, however, the scope, both in the 

content and geography has changed. There are many reasons for 

this, but most of them boil down to economics, obviously. Since deregulation, two types of airlines have existed: the legacy airlines, 

which have the burden of infrastructure and entrenched high costs; 

and the so-called low cost carriers, which do not. To shed costs, airlines have taken extreme measures and the results in many cases 

have been to outsource maintenance. 

Unfortunately, maintenance was burdened with many intractable 

rules and regulations, and management and labor were at odds, 

often resulting in bitter battles. For a variety of reasons, focus in 

the U.S. on in-house maintenance is diminished greatly. At the 

same time, globally it has flourished in parts, especially where lowcost maintenance is available. If you look at the investments in 

maintenance, the Middle East and the Far East and certainly Europe are making major investments in airline maintenance, where 

in the United States, for the most part, we have been diminishing 

those investments. 

As stated by most of the testimonies, the safety system which we 

have created has not been impaired, as witnessed by all the available data. This is due to many layers of safety and oversight that 

is in place. First of all, the quality of maintenance that is performed is very important. The standards that the airlines have 

had, the cushions that have been built into these airplanes of 

course is very important. The aircraft, and this has not been said 

too much today, but we really do have very good aircraft today, 

compared to what we relate to in 1989 and so forth. We are looking 

at airplanes that are fundamentally much better, much easier to 

maintain and require fewer man hours and they are much safer. 

So there is a big change in aircraft. 

36

When you look at engines, it is phenomenal what an engine does 

today. When I was at Pan Am, we used to remove an engine every 

600 hours or 700 hours in a 747. An engine now can go for 30,000 

hours without a removal. These factors are phenomenal. So there 

is a big change. 

It is also very important to point out that much of the work that 

is performed or outsourced is not critical from a safety standpoint. 

Most of the hours spent on a heavy check on aircraft are restorative, such as cabin upgrades, cleaning, opening and closing. Thus, 

treating outsourcing generally as being all critical misses the point. 

But there are many critical functions, and these must have the 

highest standards and oversight. And these are the areas that need 

focus and specific attention. 

Part of the economic problem that U.S. carriers have faced is the 

cost of the lower skill tasks versus the higher skill tasks. We tended to blur that distinction, and that is where a lot of our labor and 

management issues occurred, because for many of the lower skill 

tasks, we were paying very high wages. These were creating high 

costs. 

Outsourcing is here to stay, and in my opinion will grow even 

more as the new generation of aircraft and engines come on board. 

The issue clearly is not who does the maintenance but how it is 

done. In the past, it was quite easy to oversee the performance and 

maintenance as it tended to be accomplished at one or two locations under uniform standards and procedures. Now it is being dispersed and under different standards, procedures, different languages and different cultures. Most of the regulations in the past 

evolved from the way we did maintenance. Thus, the FAA evolved 

its many rules based on best practices, and these were relatively 

easy to enforce since most of the airlines were both centralized in 

their work performance and record keeping. 

What airlines have created was an integrated system approach 

of providing total support, albeit for themselves. What is currently 

happening is the disintegration of that system. The path that the 

airlines are taking today is dispersing the various functions and no 

one is amalgamating them into a one stop shop. As the airlines 

outsource more——

Mr. COSTELLO. If you could summarize very quickly, we have a 

vote on the Floor and we are going to try to get to Mr. Barimo as 

well. 

Mr. VALEIKA. Let me just get to what the FAA, in my opinion, 

really needs to do. The current operating specifications, which are 

totally in the house of the airlines, I believe, need to be expanded 

to the providers. It is clear now to me that the rules and the regulations have to include the providers of maintenance, so the reliability of maintenance programs, engineering, your question on 

standardization, a lot of these things have to change. The providers 

of maintenance will have to share much more in the information 

technology, record keeping and so forth, which right now is only in 

the airlines’ purview. 

Mr. COSTELLO. We will have some questions concerning those 

issues. 

Mr. VALEIKA. One last point I do have to make, though. 

Mr. COSTELLO. It has got to be quickly. 

37

Mr. VALEIKA. It is very quick. I think that with good information 

technology, there is no reason why the United States cannot be the 

premier provider of maintenance services. I think we are arguing 

over labor rates, not arguing over the cost of the process. 

Mr. COSTELLO. Thank you. 

Mr. Barimo, if you could summarize in five minutes or less. We 

do have a vote on the Floor, we are going to get your testimony in, 

and if you can do it in less than five minutes, we will go vote, there 

will be one vote on the Floor, we will immediately come back and 

resume the hearing. 

Mr. BARIMO. We will do an on-time arrival. 

Good afternoon. I am Basil Barimo, Vice President of Operations 

and Safety for the Air Transport Association of America. I appreciate the opportunity to join you this morning as you consider how 

the expertise of highly qualified third parties can be applied to air 

carrier maintenance programs. Long and varied experience confirms that contract maintenance can be both safe and efficient, and 

we shouldn’t be hesitant to accept its use. 

Before going any further, though, I want to emphasize that a 

starting point for any discussions that have aviation safety implications is this: safety is the constant, overriding consideration in our 

members’ activities. They understand their responsibilities and 

they act accordingly. The U.S. airline industry’s stellar and improving safety record is evidence of that. 

Thus, we have a commitment to safety, we have the operational 

and regulatory structures to fulfil that commitment, and the results, our safety record, confirm that commitment. Maintenance 

contracting in the airline industry is overtaken in this over-arching 

context of dedication to safety. It is no different than any other activities in our industry in that respect. 

Consequently, it is not a shortcut by which shoddy maintenance 

is tolerated. It is not a stray cutoff from an airline’s overall maintenance program. And it is not adrift, detached from regulatory 

moorings. More decisively, the safety data don’t offer a reason to 

question the use of contract maintenance. Outsourcing has increased over the past decade, but as this chart clearly shows, and 

this chart in fact goes to zero, the U.S. airline industry’s maintenance safety record is the best it has ever been. If there were a systemic problem with contract maintenance, the safety data would 

have exposed it. This favorable outcome is expected and once again, 

context is crucial. Contract maintenance occurs in a highly structured, safety-oriented environment. 

To begin with, the decision to outsource is for each airline to 

make. An airline makes that decision as the certificate holder, the 

regulated entity that is ultimately responsible for the safety of its 

operations. If the airline elects to use third party maintenance, the 

airline is not sloughing off any of its statutory or regulatory obligations. On the contrary, the airline is making a well thought-out determination that outsourcing will contribute both in terms of results and efficiency to the airline’s maintenance program. 

Contract maintenance is common and commonly accepted in the 

industry. Virtually every airline to some degree relies on contract 

maintenance, whether in the form of line, heavy or engine maintenance. And aircraft operators with demanding and sophisticated 

38

maintenance needs, including the various branches of the U.S. 

military, contract for maintenance services. 

We should also understand that highly respected aviation firms, 

including airlines, one of which is seated next to me today, performs third party maintenance. It is not an exotic practice wherever it is done. Oversight of contract maintenance is multi-layered 

and continuous and fully integrated into FAA’s regulatory structure. The FARs explicitly recognize it. The FAA also certificates repair stations which must comply with an airline’s FAA-approved 

maintenance program. 

In addition, as a certificate holder, the airline must monitor the 

quality of the maintenance that is performed. To do so, airlines 

conduct in-depth and frequent audits of the repair stations that 

they use. They employ independent auditors, they assign their own 

on-site representatives to monitor repair station performance. Finally, they measure the reliability of the products produced. Then 

the FAA has a compliance program that oversees both the performance of the airlines and the repair stations. 

Continued access to third party maintenance is the one ingredient in some airlines’ efforts to remain competitive both here and 

abroad. That competitiveness is what enables passengers and shippers to receive the services that they want at prices that they are 

willing to pay. Compromise of safety can never be tolerated. 

But neither should efforts to limit airlines’ ability to obtain necessary services consistent with the highest degree of safety as economically as possible. This search for efficiency has meant that 

some airlines have shifted where their maintenance work has done. 

Sometimes it meant moving the location of in-house facilities, other 

times it has meant contracting with a third party to perform certain maintenance functions. 

Neither type of change is pleasant. Both can adversely affect 

workers and their communities. It has, however, also meant job opportunities for some workers and new economic benefits for new 

communities. Far from resulting in the export of the majority of 

U.S. maintenance jobs overseas, it has meant that we have been 

able to retain those jobs in the United States. This is a key point 

in evaluating the effects of contract maintenance. 

Thank you for allowing me to briefly express our views this 

morning, and we look forward to more discussion. 

Mr. COSTELLO. We thank you, and the Subcommittee will stand 

in recess. I would expect if we have the one vote and no unexpected 

votes, we will be back in about 20 minutes. The Subcommittee 

stands in recess. 

[Recess.] 

Mr. COSTELLO. The Subcommittee will come to order, please. 

The Chair recognizes Mr. Campbell. 

Mr. CAMPBELL. Thank you, Mr. Chairman, and good afternoon. 

Thank you for inviting American Airlines to participate in today’s hearing on outsourced air carrier maintenance. My name is 

David Campbell, I am the vice president responsible for two of our 

three maintenance bases at Alliance Fort Worth and in Kansas 

City, Missouri. Our third maintenance base is located in Tulsa, 

Oklahoma. 

39

I cannot emphasize enough that safety is American’s number one 

priority. As such, we welcome the diligent and continuous oversight 

of the FAA, and believe that it is an important component of our 

commitment to safety. I will explain in a moment our day to day 

activities with the FAA. 

First, however, I would like to describe how we have taken a substantially different path than other airlines in an industry where 

outsourcing is a trend. With employee cooperation and productivity 

improvements, we have been able to avoid bankruptcy and restore 

our company to a position of financial stability. We still have substantial amount of debt. We have been able to greatly improve our 

balance sheet and our economic future. 

We have achieved this financial turnaround in large part because 

of the partnership that we formed with the Transport Workers 

Union, or the TWU. Three years ago, American Airlines and the 

TWU committed to transforming our maintenance business from a 

cost center to a profit center. Today, we perform over 90 percent 

of all maintenance work, and 100 percent of our heavy maintenance work at American Airlines facilities. Approximately 9,750 

employees are working at our three maintenance bases, repairing 

and maintaining our fleet of 700 large aircraft, as well as working 

on aircraft for dozens of other carriers. 

By partnering with our employees and by implementing continuous improvement processes, we have reduced costs, gained efficiencies and optimized operations. We have also been able to acquire and perform maintenance work for other airlines, despite the 

fact that we pay higher salaries and better employee benefits than 

virtually non-airline vendor. 

Two years ago, a joint team from our Tulsa maintenance base 

announced a breakthrough goal to generate $500 million in value 

creation. Last month, a Tulsa team proclaimed that they not only 

made the goal, but they beat it by $1 million. This year, we have 

a target of $175 million of additional third party revenue. In order 

to make that happen, I am proud to announce and pleased to announce that our board of directors agreed yesterday to invest $100 

million into our maintenance and servicing groups. Over the next 

five years, American will update its maintenance facilities, invest 

in technology, make process improvements and increase productivity in order to offer world class, state of the art technical service 

and attract new customers. In other words, while many of our competitors have outsourced work to low labor cost regions around the 

world, we have actually in-sourced work from many of those same 

regions and look forward to acquiring more work. 

Now I would like to turn to our relationship with the FAA. The 

United States Code states that it is the duty of the air carrier to 

provide service with the highest possible degree of safety in the 

public interest. To assure that we meet this obligation, we work 

very closely with the 37 inspectors assigned to American Airlines. 

Every morning at 8:15, a safety-related conference call is held with 

the FAA three principal inspectors. On this call, we have representatives from our maintenance and engineering team, flight, safety, 

security and environmental departments. We discuss mechanical 

issues, safety issues and any other relative concerns of the day. 

40

These same departments also participate in a weekly call where 

long-term issues and concerns are addressed. 

In addition to that, we also have executive roundtable meetings 

that we hold with senior management or senior executives from 

American and the principal inspectors. Inspectors who are assigned 

to American maintenance bases are dispatched from the agency to 

Dallas Fort Worth airport’s certification office. They often arrive at 

our bases unannounced. Our employees know that the inspectors 

may talk to whomever they wish and review all records and logs 

without interference. 

We also agree with the FAA to adhere to a safety risk management program that allows our records and reports to be shared to 

enhance the oversight of the carrier by identifying risks and mitigating hazards. Inspections, unannounced reviews and oversight by 

the FAA are an integral part of our continuous improvement process, and we welcome their involvement. We believe that rigorous 

FAA oversight should be a critical part of any maintenance program, regardless of where the maintenance is being performed and 

by whom. 

I will be happy to take any of your questions. Thank you. 

Mr. COSTELLO. Mr. Campbell, thank you for your testimony. 

Mr. Goglia, you are recognized under the five minute rule at this 

time. 

Mr. GOGLIA. Thank you, Mr. Chairman. It is a pleasure to be 

here in front of you today. 

I would like to announce to you that I have conducted a thorough 

review of the paperwork that you provided to us today outside on 

the table. I have observed your operation here today and I certify 

you to go forward for the next year and conduct these hearings. 

[Laughter.] 

Mr. GOGLIA. And that is about as thorough as a foreign repair 

station gets from the FAA, because we can’t come back again, because we don’t have any travel money, and we can’t stay overnight, 

because we are not going to get reimbursed on the per diem. So as 

we talk about what the FAA does, keep that in mind, because that 

scenario is accurate. 

Now, we had a nice chat up in the hall in the very beginning 

about safety standards, safety records. A gentleman by the name 

of Jerome Lederer, who happened to be the person who founded the 

Flight Safety Foundation, is known as Mr. Safety. He passed away 

not to long ago at 100 years old. He came back from retirement to 

do the Challenger accident in the 1980s. He has said repeatedly, 

and I don’t know if this was an original statement of his or not, 

but he said that the absence of an accident is not an indicator of 

a safe operation. That is 100 percent correct. 

Although I am a firm believer that the ATOS system and the 

SMS system is needed, that we can make great gains with it, it 

doesn’t replace the physical presence. You have hit around the 

edges of it, but I want to share something with you. In my past, 

working for an air carrier, one of the tasks that I performed virtually every day at the end of the shift was a review of the paperwork. Because we were dinged repeatedly by the FAA on paperwork violations. So that paperwork, when it left my hands, was 

41

pristine, signatures in every box. I got creative writing 101 down 

to a science. Everything was done. 

If you base your monitoring system, ATOS, SMS, on what came 

out of my hands, you would think that operation was perfect and 

pristine. It was far from that. The operation was just like everyone 

else’s operation, we had problems. So the paperwork review is not 

the only answer. You have to be there. Those inspectors have to be 

there when the work is done, and when the airplane, if it is nose 

to tail work, is finished. The number of complaints or gigs or nonroutines that occur after we think the airplane is done and we start 

checking it, maybe a taxi check, maybe a ferry flight, a maintenance ferry flight to check things out, the number of items that 

come back from those events can be staggering. Yet most of them 

don’t ever find their way into the data collection system. That is 

why the physical presence of an inspector is so important at the 

end. 

Now, maintenance is based upon good paperwork. That paperwork foundation comes from the instructions for continued airworthiness found in the certification requirements that are imposed upon the manufacturer. In the past, right to this minute, all 

the previous airplanes have lots of problems with those manuals. 

We call them maintenance manuals. Those maintenance manuals, 

those procedures are not verified, they are not validated. Unlike 

the flight deck, before a pilot can use a procedure, it is thoroughly 

vetted. The maintenance procedures are not vetted. Some are, but 

they are not 100 percent vetted. 

That gives us, as a mechanic, and you go through the process, 

and you can’t follow the procedures, after a while you don’t even 

look at the procedures, whether or not they are good or not. Because you know how to do your job. We have become very good at 

doing our job looking at the illustrated parts catalog, we are very 

good at taking things apart and putting them back together the 

way we did it. The problem there comes from when I take it apart 

and he puts it together. There is a big disconnect there. And we 

have had a lot of problems in that area. 

To the FAA’s credit, they have been working on this. There is a 

partnership in the works with SAE, which is an engineering organization, not for profit, PAMA, the Professional Aviation Maintenance Association, they are working on voluntary standards with 

the industry to try to raise that. But there needs to be a requirement up front that those procedures are validated, verified and 

known to be good. That was the reason why we killed those people 

in Charlotte, the Air Midwest crash that Congressman DeFazio 

mentioned earlier. That is why we killed a couple of people, with 

the exact same issue a few months later, in Hyannis, Massachusetts. 

The list goes on, I could go on and on about the fatals and the 

accidents and the role of procedures and manuals. We need to get 

a handle on it. SMS will help, but it needs to be robust. The FAA 

needs to get a higher buy-in in that process than they have today. 

We need to get more involvement by people, be it ASIs, the inspectors, involved with that system, especially the ones that don’t agree 

with it. 

And I know I am out of time. I am a Washington windbag. 

42

[Laughter.] 

Mr. COSTELLO. We thank you for your testimony and we will 

have some questions for you. 

The Chair recognizes Mr. Filler under the five minute rule. 

Mr. FILLER. Thank you very much, Mr. Chairman. 

A couple of points I would like to make at the outset. I am Marshall Filler, Managing Director and General Counsel of the Aeronautic Repair Station Association. I have spent my 34 years in 

aviation and safety regulation, that is my line of work. I know it 

is very tempting to look at certain accidents as perhaps proving a 

global point. But I do want to just point out to the Subcommittee 

that no one, no one aspect of our industry has a monopoly on accidents. Indeed, when accidents happen and people are killed because of mistakes by anybody, it is tragic. Whether those mistakes 

are made by certificated mechanics, employees of a repair station, 

people who design aircraft or produce them, it is all something that 

we need to look at. 

So I think we just need to be careful about examining or giving 

too much credence perhaps to single events as possibly proving a 

greater point. 

I would like to also mention, Mr. Chairman, that you were very 

interested this morning with the FAA in where the air carriers contract out their maintenance to. One thing that I don’t think came 

across as loudly as it should have is that every airline that I have 

ever been around has something called an approved vendors list, 

an AVL. That approved vendors list includes all of their maintenance vendors. Most of them, or virtually of them, have to undergo 

a pre-qualification audit. This is part of the FAA maintenance program that every airline has. 

I know that some carriers, even some in this room, provide on 

a quarterly basis to their FAA office a copy of that approved vendor 

list, showing them in very neat, nicely divided sections which of 

their vendors do substantial maintenance, which of them do component maintenance, et cetera. So I think that the FAA could certainly ask the airlines for this information. 

Another point that came up was the notion of critical work being 

done by these so-called non-certificated repair facilities. I do want 

to point out that there is a built-in limitation under Part 65 of the 

regulations so that when work is done by a certificated A&P mechanic under his own certificate, that person may not approve a 

major repair or a major alteration for return to service. So that 

must be done by a repair station, or it must be done by an air carrier. So that is a built-in limitation in the regulations. 

With respect to the Charlotte accident, there was a required inspection item which is by definition a critical inspection in Part 121 

that was indeed performed by certificated people individually, not 

affiliated with the repair station. And certainly one of the things 

this Committee could explore is whether they wanted to expand 

that limitation in part 65 to include required inspection items. The 

vast, vast majority, Mr. Chairman, are done by repair stations and 

airlines’ own employees. 

As far as foreign repair stations go, I know there is an awful lot 

of interest in this. A couple of points I would like to make about 

that. In Europe, and more than half of the foreign repair stations 

43

are actually located in the European Union, they require type ratings for their technicians, type ratings. We don’t require that here. 

So that is an example, you can make an argument, that perhaps 

that is a higher level of safety. We look at it at ARSA as that is 

an equivalent level of safety. It is simply a different system. But 

it certainly gets us to where we need to be from a safety perspective. 

We disagree that an airline will go to a low-cost provider simply 

because they are a low-cost provider. If you are dealing in particular with airplanes, if that low-cost provider does shoddy work 

and something breaks, then by law what breaks has to either be 

fixed or deferred, as a matter of law. When that airplane has to 

be fixed and taken out of service, it doesn’t make money. 

So before you know it, the air carrier that may have saved some 

money by contracting out to a cheaper provider, be it a U.S. or a 

foreign provider, now has eaten up that entire savings, if you will, 

because they have paid for it on the back end. 

I wanted to make the point also, and I know my time is—can I 

have one more minute, Mr. Chairman, and I will wrap it up? 

Mr. COSTELLO. How about 30 seconds. 

Mr. FILLER. All right, I will take 30 seconds. Thank you. 

With respect to security, the background check requirement in 

our security regulations attaches because people have unescorted 

access to the security identification display area at an airport. So 

if I work for a repair station and I need to have access to that 

SIDA area, I have to have a background check, every bit as much 

as if I were an airline mechanic. If I work in an industrial park 

25 miles away, working on components, the risk from a security 

perspective is different. So we just should avoid the one size fits 

all tendencies sometimes that are based on, well, there is no security requirements for repair stations as there are for carriers. 

I know that I have exceeded my time. I would be very happy to 

answer any questions you have. Thank you, sir. 

Mr. COSTELLO. Thank you. We wish that we had unlimited time 

as well, because there are a lot of issues we need to go into. That 

is why we are going to hold additional hearings at a later date. 

Let me begin by asking a few questions. Mr. Brantley, in your 

testimony you talk about when a problem is detected that because 

of a lack of time and reduced staffing that it is very difficult to follow up to make sure that the problem is corrected. I wondered if 

you might expand on that and tell us what can be done to change 

that, so when a problem is detected there is sufficient time and sufficient personnel. 

Mr. BRANTLEY. Thank you, Mr. Chairman. 

What we are being told by our inspectors in the field is that one, 

the inspections of a repair facility, an outsource facility, are going 

to be pretty rare, maybe one or two a year, maybe a handful where 

they are able to get there more often. And when they go, they are 

not going to be there for a few days to do anything in-depth. They 

are going to be going for the day, which means with travel time, 

it really cuts down the amount of time they can spend at the facility. 

So if they do find something, one, they need to do their investigation and gather any materials they need, whatever they think they 

44

are going to need to follow up with at that time, because they are 

not going to be there tomorrow and they are not going to come back 

next week. And then depending on the problem, the appropriate actions will be taken. But it is very rare that the inspector will be 

allowed to go back and actually see if the problem has been corrected. It is identified, but it is not something that is followed up 

on by the agency. 

Mr. COSTELLO. The issue of insufficient funding for travel, you 

brought it up in your testimony and Mr. Goglia brought it up in 

his testimony. I wonder if you might touch on that and tell us, is 

that in fact a problem, the lack of sufficient travel funding available? 

Mr. BRANTLEY. Yes, absolutely, Mr. Chairman. Again, it is, there 

are times when an inspector is going to a facility that they, they 

actually plan out an inspection ahead of time based on why they 

are going there. It may be that two or three people are needed, at 

a minimum maybe two, a maintenance and an avionics inspector 

and that they are going to need a couple of days to do the kind of 

in-depth review that they feel they need to do. 

And more often than not, if they are allowed to go, they are told, 

one of you are going, you are going to go for the day. And they are 

told it is because there is not enough money for the travel. 

Mr. COSTELLO. So you are actually told, the inspectors are told 

that, look, you can go, but you can only go for a day because we 

don’t have enough travel money? 

Mr. BRANTLEY. Yes, sir. Many times they are told, there is not 

enough money for it. 

Mr. COSTELLO. Does this happen on a regular basis, or is it at 

a particular time of year, at the end of the fiscal year, or is it a 

constant problem? 

Mr. BRANTLEY. No, sir, it is a constant problem. An inspector will 

say they request the funds to go do an inspection. It may take a 

couple of months even before they are told no. But it is a continuous problem. 

Mr. COSTELLO. You talked about some of the repair facilities, and 

they may be visited once or twice or a few times a year. Are there 

unannounced visits ever? Do they always notify the facility that 

hey, we are coming next Wednesday, or do they ever do unannounced visits? 

Mr. BRANTLEY. Something I would like to touch on that I heard 

from the FAA this morning, several times, that they can do unannounced inspections or the regulations allow unannounced inspections. That is true. But what I am talking about is what they actually do. It is extremely rare for an inspector to do an unannounced 

inspection. 

Quite frankly, if they do, they are more likely than not to be punished for it. A customer service initiative can be filled out against 

them, claiming they are disrupting the operation showing up unannounced. And that inspector is going to be reassigned, they won’t 

be going to that facility any more. So they have learned that regardless of what the regulations say, this is how you are going to 

conduct business. 

45

Mr. COSTELLO. Mr. Goglia, I wonder if you might follow up on 

that question, both the issue of unannounced inspections and also 

the travel, lack of funding for travel, both of those issues. 

Mr. GOGLIA. I will start with the travel. Oftentimes the travel 

budgets are stripped out of some of these FSDOs to fund other 

projects within the agency. Sometimes that can occur very early in 

the fiscal year. 

The unannounced visits, it is very difficult for an inspector to 

just start an unannounced visit. But under the CMO, certificate 

management office process that the FAA has, there is much more 

latitude. There is one little bright spot in what is going on in the 

FAA today, in that Mr. Ballough is actually trying the certificate 

management office process for a larger repair station. I happen to 

believe that the certificate management office concept should be at 

every repair station that does nose to tail work. Nose to tail means 

the airplane is in the hangar when they are working on it. Not that 

you have taken an engine off and sent it to a repair facility or any 

component and sent it to a repair facility, because that is a different oversight process. I think that we do a pretty decent job of 

that. 

But the nose to tail work is where we see the biggest number of 

problems. It is the most difficult to oversee, and it is the one where 

the FAA really needs to have a presence while that work is going 

on. 

Mr. COSTELLO. Let me follow up with a couple of quick questions, 

then I will go to Mr. Petri and Mr. DeFazio. I mentioned in my 

opening statement that it has been suggested that we should 

standardize the procedures and the manuals in order to save time 

and to bring more efficiency to the process. I wonder if you might 

comment on that. 

Mr. GOGLIA. That has been a goal of the Air Transport Association and many in the industry for a long time. Many of the airlines 

believe that they are unique, that they need their own set of procedures to do things. It has been my experience when I have visited 

facilities and look at people accomplishing certain tasks that I have 

accomplished as a mechanic or as an inspector myself, that regardless of the paperwork, we tend to do them all the same. In other 

words, the work is accomplished the same way, regardless of what 

the paperwork says. I think we can benefit by a real concerted effort to standardize procedures. 

Mr. COSTELLO. Mr. Barimo, a quick question. PASS has suggested that air carriers should only be allowed to outsource their 

maintenance to certificated repair stations. I wonder if you might 

comment on that. 

Mr. BARIMO. I am glad to, Mr. Chairman. I have read the IG report that addresses non-certificated repair stations. We have gone 

back to our members and confirmed that ATA members are using 

that type of maintenance service for strictly low level, on-call service type of repairs, not scheduled maintenance, not critical maintenance, as it has been defined today. 

So let me start by saying, I think we have a misconception out 

there that this is a widespread practice. Having said that, air carriers use certificated mechanics for ad hoc work. It is at locations 

where an airplane might break and they need to just move the airVerDate 0ct 09 2002 10:32 Feb 28, 2008 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 P:\DOCS\34794 HTRANS1 PsN: JASON
46

plane to the next station, and we are talking about maybe deactivating a system, checking fluid levels, something very straightforward. 

I am not familiar with any of our members out there changing 

engines or replacing critical flight controls using this type of lowlevel maintenance service. 

Mr. COSTELLO. The Chair recognizes the Ranking Member, Mr. 

Petri. 

Mr. PETRI. Thank you very much. 

I apologize for missing the underlying testimony. So maybe the 

questions have been asked already, but I have a couple of questions. I don’t know if you are exactly the people to ask them of. 

Mr. Campbell, I am kind of interested in the issue of safety and 

maintenance of planes and Government inspection, I guess, as the 

subject of this hearing. American Airlines clearly insures its 

planes, people who will lose money if they crash have some interest 

in the safety of the operations and the maintenance of the operations. Are you at all familiar with that? 

Mr. CAMPBELL. No, sir, I am not. 

Mr. PETRI. Okay. Well, because it seems to me that there is a 

whole, huge, regulatory private system out there, there has to be. 

They are not going to insure a plane unless they are pretty confident everything is being done to make sure it is operated as safely as possible. That airline gets a lower rate if they do that, and 

they are going to pay a high rate or not get insurance if they don’t. 

Yes, sir? 

Mr. GOGLIA. Mr. Petri, while I was at the NTSB, and after the 

ValuJet accident in 1996, I had the opportunity to see the precursor to ATOS, which was a work that was done out of Rutgers 

University and TSI was a contractor at Volpe in Massachusetts, 

where I live. So I was interested in that process. And they actually 

had ten areas which they could identify risk in any airline. Those 

indicators showed at that point in time that ValuJet was a ten 

times greater risk than U.S. Air. 

So I found that to be more than fascinating. And I pursued that 

line of thought that you just had with the insurers, starting with 

USAIG and AAAU in New York, and quickly found out that it had 

to go to a higher level, which meant Lloyds in the secondary market. Over about a two year period of time, I made repeated visits 

to London, to Lloyds, pitching this program at the very highest levels of the underwriting. And the bottom line to all of that is that 

they would accept the certification of the FAA as the standard, if 

you had a certificate, that is all they looked for. 

One of the things that I found really painful was the fact that 

their own attorneys said that if they were to stick their nose in and 

require their assureds to collect this information and report it to 

the CEO, was what I was asking, because he has the fiduciary responsibility for the corporation, that they would then become involved in the lawsuits. So it was just a total hands-off from the insurers. As long as they held a certificate from the FAA, that is as 

far as they wanted to go. 

Mr. PETRI. You are not aware, then, of any insurance industry 

councils or studies or, you would think there would be some feedback, they would at least want some input on what those standards 

47

are. And they insure, of course, fleets all over the world. You would 

think there would be a competitive advantage for one of these insurers as opposed to another to select the safer flights. They must 

have some way of doing that, or maybe they just decide they will 

take that risk without—it doesn’t make sense to me. 

Mr. GOGLIA. It didn’t make sense. And they do have some internal looks that they do, but nowhere near the depth that we are 

talking about here today. 

I will share with you one other thing that was said to me during 

those meetings. It was after the hurricane hit Homestead, Florida 

and we had all that devastation. One of the people that was 

present, in a rather small group of that insurance group, I am talking about senior management, one of them had taken a considerable hit with payments in Florida. He had low-balled his bid to a 

U.S. operator for the insurance. A U.S. operator that I knew, that 

I worked for, and I don’t hold in high regard. He told me face to 

face that he was rolling the dice because he could use the premium 

money. 

So that is a whole different set of drivers in that business that 

doesn’t make sense to you and me to go off and buy insurance in 

this rate shots and this risk and all of that. It doesn’t equate in 

this business. 

Mr. PETRI. Mr. Valeika? 

Mr. VALEIKA. In my role both at Delta as a senior VP and Continental and Pan Am, all three where I was in charge of maintenance, we did have meetings, the insurance people would meet 

with me. I would, I don’t want to say certify, but they certainly 

would verify some of the data where the maintenance was done, 

things of that nature. We did have those meetings. It was part of 

a standard operating procedure. I can only speak for those airlines 

because that is where I was involved in it. 

But I personally, as the head of the maintenance division, met 

with the insurers, usually on an annual, maybe a semi-annual 

basis. And the questions would be asked, where are your airplanes 

maintained, what kind of problems you have had, just a general 

kind of discussion. But that did happen on a routine basis. 

Mr. COSTELLO. The Chair thanks the gentleman and recognizes 

the gentleman from Oregon, Mr. DeFazio. 

Mr. DEFAZIO. I thank the Chair. 

So Mr. Barimo, then is it the ATA’s position that it would be acceptable for the FAA and/or Congress to restrict non-certificated facilities from doing what I earlier described as critical maintenance? 

Mr. BARIMO. Sir, I would argue that based on the feedback that 

I have received to date, that is already happening. The restriction 

is there. 

Mr. DEFAZIO. Well, it is not happening on the part of the FAA, 

clearly. To them it is like, as long as there is an A&P mechanic 

there, it is okay, it doesn’t matter. And even when I cited an instance where people died, it is still okay, that met all the rules. I 

am just trying to nail you down here. We do have testimony here 

from Mr. Brantley saying that there are 21 domestic and foreign 

non-certified facilities that perform maintenance critical to the airworthiness of the aircraft. And we just worry about the slippery 

48

slope down here. So anyway, it seems like yes, you would support 

that. 

Mr. BARIMO. Really, from our standpoint, we talk about insurance providers. We are talking about FAA oversight. The carriers 

take their safety responsibilities very seriously. 

Mr. DEFAZIO. I understand that. But there is always a bad apple 

in the barrel, often there is. I remember when Mr. Lorenzo kept 

trying to drag the industry down. We have to worry about those 

sorts of things. 

So Mr. Goglia, I am disturbed about the manuals, which as I understand it are called the Instructions for Continued Airworthiness. 

It sounds pretty important to me, sometimes called maintenance 

manuals. You are saying they are neither validated, verified nor 

validated, meaning they contain procedures that won’t work, don’t 

work or won’t ensure the continued airworthiness of the aircraft, 

is that correct? 

Mr. GOGLIA. That is correct, they are not 100 percent verified or 

validated, unlike the flight manuals. 

Mr. DEFAZIO. Okay. I guess I can think back to that Chicago 

crash, DC-10, where the engine dropped off. That would have been 

perhaps a problem in the manual? 

Mr. GOGLIA. It was an attempt to circumvent the manual proceedings. 

Mr. DEFAZIO. So in that case the manual was correct and the 

maintenance was incorrect? 

Mr. GOGLIA. Right. 

Mr. DEFAZIO. Okay. But we do require that the flight operation 

manual that the pilots have up there to refer to does, is verified 

and validated? 

Mr. GOGLIA. Yes. In fact, the pilots cannot use a procedure unless has been vetted. 

Mr. DEFAZIO. So what would be the bar to getting better manuals? 

Mr. GOGLIA. All it is is a process, sir. When you build an airplane, you have to fly it for about a year, the manufacturer. It is 

a nice new airplane, nothing much breaks. When something does 

break, when they have occasion to change an engine, a wheel, a 

brake, anything, at that point they will verify those procedures. 

But because it is new, they don’t get to do a lot of that. What 

happens is after it is in service with an airline, now the procedures 

that have been written by some person within their organization 

get to be done by the average person on the line, the average maintenance person. At that point, we find the problems. 

Mr. DEFAZIO. The jack screw on the DC-9 issue, that one? 

Mr. GOGLIA. I was afraid of that. That was the most painful accident I have ever worked. From a maintainer’s point of view, to kill 

88 people because we couldn’t grease—excuse me. 

Mr. FILLER. Mr. DeFazio? 

Mr. DEFAZIO. Yes. 

Mr. FILLER. If I could just add to what Mr. Goglia said, with respect to the certification process and the development of ICAs, all 

focusing on the ICAs at least at the airplane level or aircraft level, 

they are all based on so-called approved technical data, which is 

49

data that has been shown to comply with the airworthiness standards. So if it is a large airplane, Part 25. 

In addition to that, when the maintenance manuals are created, 

there is a unit of the FAA called the aircraft valuation group that 

specializes in the review of ICAs. Now, do they go out and actually 

try every repair that is listed in the airplane maintenance manual? 

No, they don’t. But they do review it, and they are reviewed by people who are knowledgeable about maintenance procedures. It is one 

of those things that we just have not achieved perfection yet. 

Mr. DEFAZIO. Well, but I mean, if you make a plane, you think, 

okay, I am making this plane, it will take a year to certify, I will 

take one of them over here, I will take the engines off an align, I 

will take this part out, I will do that, and I will verify what I am 

telling people they should do to remove those parts and maintain 

them. 

Apparently that is not being regularly done. Mr. Goglia had an 

example of Airbus and Jet Blue and the fact that they were having 

problems with engine changes. They were following the manual, it 

just didn’t work. Then apparently, finally, Airbus, after many people complained, finally sent a team over, and they said, oh, yes, you 

are right, it doesn’t work, we will rewrite the manual. 

Mr. FILLER. In some cases, you are absolutely right, sir, that 

does exist. These manuals are——

Mr. DEFAZIO. I would think that would be part of the certification process, you made it, you take it apart, put it back together 

and you verify what you put down here as directions. That does not 

seem unreasonable to me. I was a bike mechanic, not a plane mechanic. But the manuals pretty well worked for me. Someone had 

vetted that stuff. 

Mr. FILLER. Repair development engineers do engage in that 

practice. But if the question is, does the FAA review all these repairs to make sure that they actually work, the answer to that is 

just no. There are just too many of them, sir. 

Mr. DEFAZIO. Okay. 

Mr. GOGLIA. But you know, they all have to review them beforehand. Maintenance is a process. Don’t lose sight of the fact that everything we do has order in it. If you have a list of, let’s say the 

list is 500 items long, they are in the maintenance manual, procedures in the maintenance manual, you simply can ask the airlines, 

as a manufacturer, the first time you accomplish any one of the 

items on this list, to report back to us that it worked or didn’t 

work, and improvements. 

Mr. DEFAZIO. Sort of like we do with doctors and drugs. 

Mr. Brantley, I was just really disturbed, we had allegations and 

Mr. Goglia I think was sort of making fun, but is it accurate to say 

we are really constraining our actual physical inspections because 

there aren’t enough people, there is huge concern about overtime 

and there is not an adequate travel budget? You talked about people just trying to go from one State to another, let alone a foreign 

country. 

Mr. BRANTLEY. Yes, sir, that is absolutely accurate. It is a 

shame, because it doesn’t need to be that way. Again, if the agency 

were truly looking at the work that needed to be done, the resources needed to do it, and where people needed to be to apply 

50

those skills, much of that could be avoided. They would be asking 

for the money they need rather than asking for the money they are 

willing to ask for. Those are two very different numbers, as you 

well know. 

Mr. DEFAZIO. It has been a frustration, and I am just summarizing here, Mr. Chairman. My entire time in Congress I keep having regulators come before me and I say, look, I know you are being 

threatened by your political bosses, but just tell us what we need, 

not what they will let you ask for over at OMB. I am very sorry 

to hear that in this critical area of inspections and safety, that that 

prevails. I hope we can pry an honest number out of FAA on what 

they need and we can authorize it in the upcoming bill. I would 

love to have contributions from your folks on what they think we 

need. 

Mr. BRANTLEY. Thank you, sir. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

Mr. COSTELLO. The Chair thanks the gentleman from Oregon. 

We thank all of our witnesses today for your testimony. It has 

been very interesting. As we go through the reauthorization process, we certainly will take into consideration what we have learned 

here today. 

With that, the Subcommittee stands adjourned. 

[Whereupon, at 1:33 p.m., the Subcommittee was adjourned.]

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