AFS

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- E Exemption No. 10607A

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC 20591

In the matter of the petition of

DESIGN PROFESSIONALS

, LLC Regulatory Docket No. FAA

- 2012

- 0 480

for an exemption from § 135

. 15 2 ( j ) and Appendix F of Title 14,

Code of Federal Regulations

DENIAL OF PETITION FOR RECONSIDERATI ON

By letter dated October 22

, 2012 , Mr. Steven M. Cherniak

, Chief Operating Officer

, Design Professionals, LLC ( D esign P rofessionals )

, 750 Lexington Avenue, 28 th Floor, New York, New York 10022

, petitioned the Federa l Aviation Administration (FAA) for reconsideration of Denial of Exemption No. 10602 dated August 24, 2012. The proposed exemption, if granted, would allow D esign P rofessionals to continue to operate its Bombardier Global Express BD700

- 1A10 aircraft without the digital flight data recor der (DFDR) that uses the sampling rate required by 14 CFR § 135.152(j) and Appendix F of part

135.

The petitioner requests relief from the following regulation:

Section 135.152(j) prescribes that “ all turbine

- engine

- powered airplanes with a seating

confi guration, excluding any required crewmember seat, of 10 to 30 passenger seats, that are manufactured after August 19, 2002 the parameters listed in paragraph (a)(1) through (a)(88 ) of this section must be recorded within the ranges, accuracies, resolutions , and recording intervals specified in Appendix F of this part. ”

The petitioner supports its request for reconsideration with the following information:

In its request, the petitioner asserted that the FAA:

• Made a factual error;

• Incorrectly applied law, r egulations and precedent by characterizing the actions of the
aircraft manufacturer and the petitioner as business decisions;2

• Incorrectly characterized the petitioners request as for a permanent exemption rather

than time

- limited;

• Provided no basis for its dismissal of analogous exemptions ;

• Provided no basis for requiring modifications not contemplated by the regulation ;

• Made an additional factual error regarding relief pending an aircraft modification

.

The FAA determined that good cause exist ed for wa iving the requirement for

Federal Register publication because the exemption, if granted, would not set a precedent, and any delay in acting on this pe tition would be detrimental to Design Professionals

.

The FAA’ s analysis is as follows:

As historical ref erence, the DFDR regulation from which the petitioner seeks relief was proposed for part 135 aircraft in February 2005. Following full notice and comment rulemaking, the final rule was published on March 7, 2008, with a compliance date of April 7, 2010. Aircraft manufactured after April 7, 2010, were required (among several things ) to meet the higher DFDR sampling rate from which relief is being sought. In late 2009, several manufacturers petitioned the FAA to extend the compliance date for the rule up

t o an additional two years. On January 7, 2010, the FAA published a Notice of Proposed Rulemaking to extend the compliance date. On April 5, 2010, the FAA published a final rule extending the compliance date for some of the requirements. The compliance t ime for the

DFDR sampling rate at issue was extended to December 6, 2010. Aircraft manufactured after December 6, 2010, would have to use the DFDR sampling rate that was required in the 2008 rule. The petitioner’s aircraft was manufactured January 6, 201 1.

A. FAA’s assessment of the petitioner’s actions

The petitioner contends that the FAA erred in characterizing its (and Bombardier’s) actions as a business decision, and that it took “all reasonable efforts” to ensure that its aircraft “was compliant with a ll applicable regulations.” The petitioner states that the “manufacturing process was a long one

, ” and although it expected that the aircraft would receive its certificate of airworthiness before the compliance date, the certificate was not granted until January 6, 2011. The petitioner states that what occurred were not business de cisions, but the

manufacturer’s “good faith efforts” to develop a compliant avionics suite beginning in 2005. Further, the petitioner states that the delays associated with cer tification of a new avionics

suite that le d to the petitioner receiving a non

- upgradeable suite “were outside of [the petitioner’s] control.” The petitioner states that the new recitation of Bombardier’s efforts in the current petition , including the “pro hibitive time and cost required to design and certify a compliant program” for the aircraft, and the delay in certification of the new avionics suite, constitute new facts that support its request of reconsideration. The petitioner considers the new expla nation of Bombardier’s efforts along with the “obstacles faced” regarding the upgrade of the avionics suite lead to the conclusion that “justifiable grounds exist to grant a

time

- limited exemption for Aircraft 9428.”3

The FAA disagrees that the petitioner’ s submission contained any new facts. While it may have included more detail than previously presented to the FAA concerning the manufacturing process, the expanded explanation from Bombardier is essentially no different from that which Bombardier present ed when it petitioned the FAA to change the rule for the

nine aircraft it manufactured after the compliance date. The petitioner appears convinced that “best efforts” of a manufacturer are a basis for exemption to an operating rule , even though

the manufa cturer failed to meet a manufacturing compliance date that had already been extended by regulation following industry request. Bombardier had previously argued to the FAA that it was originally going to have 17 aircraft manufactured after the compliance d ate, but managed to reduce that number to nine after the compliance date was extended.

Bombardier asserted it should get credit for this effort in the form of a regulatory change that gave the nine aircraft a pass on the enhanced sampling rate that was re quired for all aircraft operating under part 135.

The FAA found then and confirms here that such action is a business decision on the part of the manufacturer to produce the airplanes with the older avionics suite. The FAA has no

control over when a ma nufacturer institutes a design change, from the initial idea through to

the time an airworthiness certificate is able to be issued. The FAA has no way to know when a manufacturer makes these decisions or plans its manufacturing , and will not change regul ations based on after the fact explanations of process

. Bombardier was subject to the same initial requirements

-- and the same relief provided by the extended compliance date

-- that w ere available to all manufacturers. It decided to complete the manufa cture of the nine airplanes after the compliance date for part 135 operation , leaving the aircraft compliant with only part 91 . The fact that the aircraft it produced are of less market value because they are not compliant with part 135 is the result of t he choice to manufacture them with full knowledge of the regulation. If the petitioner’s expectation was that it w ould receive a

p art 135 compliant aircraft

, that expectation remains a contractual issue existent between Bombardier and the petitioner, and has nothing to do with the FAA. Accordingly, the manufacture of the aircraft and the petitioner’s choice to purchase it are business decisions that do not affect the FAA’s adoption and enforcement of the regulation. There is no public interest in grant ing an exemption to an operator that may have a dispute with a manufacturer over what it purchased.

B. Time

- limited v. permanent exemption

The petitioner asserts that the FAA erred in characterizing its request as for a permanent exemption rather than a ti me

– limited one. This characterization in turn resulted in a factual error and a misrepresentation of the regulation and of precedent. The petitioner states that it requested an exemption for a “24

- month time

- limited exemption,” noting that the FAA has

g ranted similar exemptions for that length of time.

The petitioner is mistaken in its characterization of “time limited” as opposed to “permanent.” When the FAA grants time

- limited exemptions for equipment requirements, it is usually done with a petition er’s assurance that they need the time to complete an equipment installation or repair. Most commonly, this is done at the beginning of a compliance time for parts4

shortages, or when required equipment becomes inoperable for an extended time. This is als o why such exemptions, as the petitioner noted, are granted without an opportunity to extend. They also generally include some indication that the requesting party has committed by contract to an equipment upgrade. In the petitioner’s case, no mention wa s made of the petitioner making the subject aircraft compliant. It sought only to be given permission to operate without being compliant for two years. The fact that the request was not to operate

‘forever’ does not make it time

- limited. The limit appli ed for suggested only that the petitioner wanted to increase the revenue base of the aircraft as equipped, not that it was committed to making the subject aircraft compliant since both the petitioner and the manufacturer acknowledged that the aircraft c ann ot be upgraded.

This fact is underscored by the petitioner’s statement in the reconsideration that it and Bombardier “have agreed to replace the aircraft with [an upgraded aircraft] that is compliant

with Part 135. Aircraft 9428 will be removed from serv ice under part 135 and effectively prohibited from future operation by any other Part 135 operator.” This statement more than suggests that the requested exemption is for the sole benefit of the petitioner since the aircraft would, if granted

, somehow ‘re vert’ to non

- 135 operation non

- compliant . It also reinforces the finding that the noncompliant aircraft was a business decision, since it will be another business decision that cures the problem for the petitioner in procuring a different aircraft.

The petitioner states that “[a]fter the exemption period, [it] would then operate an aircraft that is fully compliant with the current DFDR regulations under part 135,” and that in the interim, the exemption would provide “the most effective an d expedient mean s to provide a compliant aircraft to Design Professionals.” The FAA does not grant exemptions to “provide compliant aircraft” between manufacturers and operators; compliant aircraft are required by regulation. Exemptions are meant for temporary relief whi le bringing aircraft into compliance, not for

relief from business decisions that do not work out.

C. Analogous Exemptions

The petitioner stated that the FAA erroneously concluded that the examples of exemptions provided by the petitioner as precedent were not relevant, stating that they were “suitable examples.” The FAA had found that the cited exemptions for datalink recordation were not

similar to the petitioner’s request and were unrelated to DFDR parameters. The petitioner says they are, because altho ugh datalink recording is part of the cockpit voice recorder requirements not the DFDR, the equipment “serves similar purposes” in accident investigation, and that datalink recording was part of the same rulemaking as the DFDR requirements noted here. The petitioner cited the grant to Avianca Airlines for datalink and DFDR sampling upgrade for 18 months, saying its request is “no different.”

The petitioner has ignored the basic premises of the Avianca decision

. First, datalink recordation is part of th e CVR system, and is required under a different regulation. The FAA granted several datalink exemptions when the requirement was first adopted because of a worldwide issue in providing compliant equipment. The agency recognized that several

operators wer e faced with the inability to put new aircraft in service, and could not comply because of an unavailability of equipment. Second, the datalink recording capability is5

unique in that datalink capacity is not required ; o nly if it is voluntarily installed on aircraft does the recording requirement take effect. Since operators chose to have datalink equipment installed voluntarily, and thus upgraded the safety of the aircraft, the FAA did not penalize them for the delay in the installation of the recording equipment that needed only a software fix, as was the case for Avianca.

The Avianca exemption is nothing like the petitioner’s case. The DFDR equipment required

for the petitioner to operate after December 2010 was neither tied to a voluntary system no r was it unknown technology. And again, the petitioner here was not requesting time to complete installation as was Avianca, but simply the opportunity to get an economic benefit

from its noncompliant airplane before replacing it with a compliant airplane . The fact that the

FAA found that the datalink situation required temporary relief was unrelated to the petitioner’s issue. There is no case to be made that equipment “serves similar purposes” as a basis for exemption. T he grant to Avianca regarding it s DFDR recording rates was for a committed aircraft upgrade , and Avianca was granted an exemption not to part 135 but to part 121. Avianca reported through Airbus that the required software to upgrade the recording rates had encountered a certification d elay that would require the aircraft to be retrofitted, which was expected to take six months. The aircraft, an Airbus 320, represented an overall safety upgrade in the commercial carrier’s fleet and on balance was considered in the public interest to all ow into service for the six months planned for the software upgrade to a voluntary system. By contrast, Bombardier built an aircraft that could not be upgraded to meet part 135. The delay in the certification of newer avionics may have affected its decis ion to build the subject aircraft as equipped, but once again that was Bombardier’s decision.

D: Public Interest

The petitioner states that its exemption would be in the public interest. It states that since the aircraft complies with the previous D FDR requirements, “it is in the public interest to allow this newer, more fuel

- efficient aircraft to operate for a limited time period until it can be replaced with an aircraft with [an upgraded avionics suit] that is compliant to Part 135.” The petitione r goes on to state that it is also in the public interest to grant the exemption “to remedy an arbitrary penalty against Design Professionals which did not control the manufacturing delays of its aircraft.”

There was no arbitrary penalty levied against the petitioner or the manufacturer. As explained above, the genesis of the requirement dates to a proposed rule in 2005 that went through full notice and comment rulemaking. The final rule was published in 2008, with a 2010 compliance date that was then extended, and still the manufacturer failed to meet the extension. The argument that the manufacturer “made every reasonable effort” has no bearing on public interest. The only entities that stand to gain from a grant of exemption are

the manufacturer an d the petitioner, which would be able to use the non

- compliant aircraft in revenue service when no similarly situated 135 operator could use a contemporaneously

manufactured non

- compliant aircraft. The fact that this is a business matter between the

manuf acturer and the petitioner is on c e again reinforced by the petitioner’s statement that it is planning to replace the aircraft with a part 135 compliant aircraft “within two years, a time

-6

frame that is dictated by the next available slot in the production o f new [compliant] aircraft.” Aircraft availability to a particular operator is not a basis for exemption, nor is the number of aircraft that may already be operating under the previous requirement . “Just one more” is not a valid basis for allowing any in dividual operator the right to operate a noncompliant aircraft

when another is not , and it is distinctly not in the public interest.

E: Modifications not required by the final rule

The petitioner states that the FAA misinterpreted its own regulation be cause the final rule requiring the upgraded DFDR did not intend to require extensive equipment modification.

The petitioner would be correct if the subject was an aircraft retrofit r equirement , but it was not. It was promulgated as (and is enforced as) a requirement for newly manufactured airplanes. There is no dispute that the subject airplane was manufactured after the compliance date. The petitioner cannot now claim that the preamble to the rule supplies justification for exempting an aircraft that n ever met the primary intent of the rule as written. The FAA’s point in discussing the possibility of upgrade centered around the circumstances of relief that

we have considered in other instances. It cannot now be used as a basis for relief from

knowin g noncompliance at manufacture.

F: Failure to seek relief when the aircraft was scheduled for modification

The petitioner cited one sentence from the FAA’s denial of its original petition. “Neither Bombardier nor Design Professionals sought relief while the aircraft was scheduled for modification to comply.” The petitioner says this is “plainly wrong” since the aircraft was too far into the manufacturing process to change to a compliant part 135 DFDR. The petitioner

has misunderstood the nature of the s entence and removed it from context

. It was used following the comparison that neither Design Professionals nor Bombardier sought relief for an aircraft that would be upgraded, which is one of the primary bases the FAA uses to grant equipment relief. The FAA is well aware that the aircraft was not upgradeable and was comparing it to the instances cited by the petitioners in which an aircraft could be upgraded to compliance. The requirement in part 135 had been present since 2010 and was eventually

extend ed an additional eight months

, and was thus well known at the time Bombardier chose

to continue the airplane’s manufacture. The FAA was merely drawing a distinction between this and other petitions; at no time did the FAA mean that there was a petition wi ndow that

would have allowed a different outcome in this instance. When the FAA denied Bombardier’s petition for rulemaking in March 2012, we made particular note that we were unlikely to grant any exemptions to operators of the airplanes since it was cle ar that no modification could be expected. We reiterated that petition s for operating exemptions were “expected to incorporate a firm commitment to equipment upgrade that brings the airplanes into full compliance with the regulation.” Instead, the petitio ner chose to claim impossibility of upgrade with a regulation that required not an upgrade, but a requirement at the time of manufacture. This argument was not acceptable when Bombardier petitioned the agency for relief, nor has it become more acceptable when the petitioner requested an operating exemption, nor in this request for reconsideration.7

T he FAA notes that the petitioner did not compare its situation to exemption requests that the agency has denied as business decisions not in the public interes t. Further, the petition for

reconsideration makes only a general statement about the airplane meeting an equivalent level of safety. The argument that an airplane meet ing a previous standard is thus equivalent to

other compliant aircraft produced at the time of the manufacturing requirement changed is

incorrect

.

The material from Bombardier submitted with the reconsideration merely confirms the FAA’s position that Bombardier’s original plan for manufacture of the subject aircraft fell short of

the tim e required by the original regulation, and was in fact not even accomplished by the

time of the extension. Bombardier manufactured nine aircraft after the extended compliance date, and then petitioned the FAA to exempt those nine aircraft permanently from the regulation. Bombardier’s petition was denied as a business decision to knowingly manufacture aircraft that could not meet Part 135 requirements well after the compliance date. Finally, n either Bombardier nor the petitioner has shown why this situati on is unique. The existence of eight other similarly noncompliant airplanes leaves open the possibility that a grant of exemption in this case would be followed by eight more petitions for exemption for the remaining aircraft , none of which could be expec ted to satisfy the criteria for an exemption in the public interest.

The FAA’s Decision:

In consideration of the foregoing, I find that this grant of exemption would not be in the public interest and that the case presented on reconsideration does not w arrant a change to the original conclusions. This request for reconsideration for an exemption from 14 CFR §135.152(j) is denied. The petitioner may have submitted additional detail about the manufacture process of its airplane, but nothing presented her e changes the underlying fact that the petitioner has an issue with what the manufacturer provided to it. Such business matters are not an appropriate basis for exemption, present no basis for the petitioner demonstrating that it is different from other r egulated entities, and present no case for public interest in the operation of the subject airplane in part 135 service. Therefore, pursuant to the authority contained in 49 U.S.C. §§ 40113 and 44701

, reconsideration of the petition of Design Professional s , LLC fo r an exemption from 14 CFR § 135

. 152(j ) and Appendix F is hereby denied.

Issued in Washington, DC, on November 26, 2013.

/s/

Michael P. Huerta

Administrator