### U.S. Department Of Transportation FEDERAL AVIATION ADMINISTRATION Washington, D.C.

REGULATORY IMPACT ANALYSIS

FINAL RULEMAKING
CERTIFICATION OF PART 23 TURBOFAN OR TURBOJET POWERED AIRPLANES AND MISCELLANEOUS AMENDMENTS (TITLE 14, CODE OF FEDERAL REGULATIONS, PARTS 1 & 23)

Office of Aviation Policy and Plans Operations Regulatory Analysis Branch
George R. Thurston

November 1, 2010

1

### Table of Contents 1.0 Introduction/Cost Benefit Summary
2.0 Background
3.0 Estimation of Part 23 Equipage Costs
3.1 Cost Assumptions 3.2 Fleet Discussion 3.3 Cost Discussion
4.0 Benefit Discussion
4.1 Efficiency Benefits 4.2 Safety Benefits 5.0 Benefit/Cost Summary Appendices

21.0 Introduction/Cost Benefit Summary

This regulatory evaluation estimates the co sts and benefits of the final rule to amend safety and applicability standards to the regulations affecting newly certificated part 23 airplanes. This final rule primarily affects new part 23 tur bojet certificates, but will also revise several standards to new part 23 turboprop and reciprocating engine airplane certifications. The final rule reflects the current needs of industry, accommodates future trends, addresses emergi ng technologies, and provides for future part 23 aircraft operations. Th e final rule standardizes and streamlines the certification of part 23 reciprocal engine, tur boprop, and turbojet airplanes. The intent of the changes to part 23 certification requirements is to e liminate the current workload of processing exemptions, special conditions, and equivalent levels of safety (ELOS) necessary to certificate new part 23 airplanes.

The estimated cost of this final rule ranges from a low of $65.2 million to high of $72.9 million in nominal dollars ($22.9 million to $26.7 million at seven percent). The total benefits are equal to the sum of the sa fety and efficiency benefits. The estimated safety benefits of avoiding 26 accidents on newly certificated and delivered part 23 airplanes over the 57-year analysis interv al are estimated at about $187.1 million ($46.5 million for the seven percent present value rate). The estimated efficiency benefits to streamline the part 23 certification process are valued at about $965 thousand, in nominal dollars, for five special cond itions per aircraft certific ation to about $1.5 million, in nominal dollars, for eight special conditions pe r aircraft certification. The total benefits

3range from a low of about $188.1 million to high of about $188.6 million in nominal
dollars. Table 1 shows these results.

2.0 Background

The FAA currently issues type certificates (TC) for certain part 23 turbojets using exemptions, extensive special conditions, and equivalent safety findings. Issuance of certificates has not been significant until now because there were few part 23 turbojet projects. However, in the past seven year s, the number of new turbojet certification programs in part 23 has increased more th an 100 percent over the program numbers of the past three decades. The need to incorporate these exempti ons, special conditions, and equivalent safety findings into part 23 stems from both the existing and expected number of future turbojet programs. Codifying these additi onal requirements will allow manufacturers to know the requirements during their design phase instead of designi ng the turbojet and then having to apply for special conditions th at may ultimately require a redesign. Codification will also reduce the manufacturers and FAA’s paper process required to certificate an airplane and reduces the potenti al for program delays. These changes will

4also clarify areas of frequent non-standardiz ation and misinterpretation, particularly for electronic equipment and system certification. On February 3, 2003, we published a noti ce (68 FR 5488) to create the part 125/135 Aviation Rulemaking Committee (ARC). The ARC completed its work in 2005 and provided recommendations to the FAA for safety and applicability standards to reflect the current industry, i ndustry trends, emerging techno logies, operations of parts 125 and 135, and associated regulations. As part of the ARC, a part 23 certification working group was formed to address part 23 turbojet design sta ndards. The working group reviewed existing part 23 requiremen ts, all the extra requirements levied on turbojets, and applicable hi gh performance airplane accidents. The proposal from the working group included 41 recommendations af fecting part 23 airplanes. The FAA accepted 39 of the 41 original ARC recommendations. The FAA believes it is necessary to impose the higher standards in this final rule to remain consistent with the current level of safety required through speci al conditions, exemptions, and e quivalent levels of safety. These changes, as well as several additional proposed part 23 changes, were coordinated with the ARC. With few exceptions, the ARC recommendations validated the FAA’s long-held approach to the cer tification of part 23 turbojet , turboprop and reciprocating engine airplanes. On August 6, 2009, the FAA issued a no tice of proposed rulemaking (NPRM), “Certification of Tur bojets”, and published it for public comment (74 FR 41556). On December 16, 2009, after a one month extens ion, the comment period for the NPRM closed.

5The part 23 revisions include general de finitions, error correction, and specific requirements for performance and handling ch aracteristics to ensure safe operation of part 23 normal and commuter category airplanes. The revisions will affect the following sections:

 §23.3 Airplane Categories,

 §23.45 General,

 §23.49 Stalling speed,

 §23.51 Takeoff speeds,

 §23.53 Takeoff performance,

 §23.55 Accelerate-stop distance,

 §23.57 Takeoff path,

 §23.59 Takeoff distance and takeoff run,

 §23.61 Takeoff flight path,

 §23.63 Climb: All engines operating

 §23.67 Climb: One engine inoperative,

 §23.73 Reference landing approach speed,

 §23.77 Balked landing,

 §23.177 Static directional and lateral stability,

 §23.181 Dynamic stability,

 §23.201 Wings level stall,

 §23.203 Turning flight and accel erated turning stalls,

 §23.251 Vibration and buffeting,

 §23.253 High speed characteristics,

 §23.255 Out of trim characteristics,

6 §23.561 General,

 §23.562 Emergency landing dynamic conditions,

 §23.571 Metallic pressurize d cabin structures,

 §23.629 Flutter,

 §23.703 Takeoff warming system,

 23.735 Brakes,

 §23.777 Cockpit Controls,

 §23.807 Emergency Exits,

 §23.831 Ventilation,

 §23.841 Pressurized cabins,

 §23.853 Passenger and crew compartment interiors,

 §23.856 Thermal/Acoustic insulation materials,

 §23.903 Engines,

 §23.1165 Engine ignition systems,

 §23.1193 Cowling and nacelle,

 §23.1195 Fire extinguishing systems,

 §23.1197 Fire extinguishing agents,

 §23.1199 Extinguishing agent containers,

 §23.1201 Fire extinguishing systems materials,

 §23.1301 Function and installation,

 §23.1303 Flight and navigation instruments,

 §23.1309 Equipment, systems, and installations,

 §23.1310 Power source capacity and distribution,

 §23.1311 Electronic display instrument systems,

7 §23.1323 Airspeed indicating system,

 §23.1331 Instruments using a power source,

 §23.1353 Storage battery design and installation,

 §23.1431 Electronic equipment,

 §23.1443 Minimum mass flow of supplemental oxygen,

 §23.1445 Oxygen distribution system,

 §23.1447 Equipment standards for oxygen dispensing units,

 §23.1505 Airspeed limitations,

 §23.1545 Airspeed indicator,

 §23.1555 Control markings,

 §23.1559 Operating limitations placard,

 §23.1563 Airspeed placards,

 §23.1567 Flight maneuver placard,

 §23.1583 Operating limitations,

 §23.1585 Operating procedures,

 §23.1587 Performance information, and

 Part 23 Appendix F.

3.0 Estimation of Part 23 Equipage Costs

This section starts by defining a set of assumptions underlying the estimated cost analysis for each of the final rule’s part 23 addition or change. We then discuss the average production run, averag e life of an airplane, and methodology that generates the

8expected affected part 23 fleet . Lastly, we explain the methods used to estimate the part 23 costs added by the final rule.

3.1 Cost Assumptions

The FAA received no comments from the assumptions made in the NPRM’s regulatory evaluation. Since the NRPM re gulatory evaluation analysis, the U.S. Department of Transportation has raised the value of a save d life (VSL) from $5.8 million to $6.0 million. The assumptions for the final rule’s cost evaluation are:

1. The base year is 2010. 2. The average life of a U.S. operate d part 23 airplane is 32 years. 3. The average part 23 airplane production life cycle is 25 years. 4. The analysis period extends for 57 (32 + 25) years. 5. The value of a fatality avoided is $6.0 million.

3.2 Fleet Discussion

This section discusses the average part 23 airplane production run, average life of a part 23 airplane, and the me thodology that generates the exp ected affected part 23 fleet of turbojet, turboprop, and reci procating engine airplanes. Part 23 regulations include airplanes operating with turbojet, turboprop and reciprocating engines in normal, utility, acrob atic, and commuter categories. This final rule primarily affects new part 23 turbojet certificates, but will also revise several standards to part 23 turbopr op and reciprocating engine airplane certifications. The term “very light jet”, or VLJ, is a marketing and ope rational term and therefore used in numerous reports and data sources we used for this regulatory

9evaluation. Part 23 does not r ecognize the terms “very light jet” or VLJ, nor does the definition relate to certifica tion categories. All turbojets certificated under part 23 are considered small airplanes. However, we will use the VLJ terminology when referencing data and external sources. We estimated the average production life cy cle length for new part 23 certificated airplane models by analyzing the start and end dates from historical deliveries of part 23 airplanes. We obtained hist orical airplane delivery repo rts for the years 1947 through 2009 from the General Aviation Manuf acturers Association (GAMA). From these GAMA delivery reports, we created a fleet database. First, we deleted all part 23 airplanes built by non-U.S. companies from the fleet database. 1 In the NPRM comments, we were informed that Sino Swearingen is now Emivest Aerospace and is foreign owned. Therefore, we have adjusted th e analysis in this regulatory evaluation to reflect this. Next, we delete d all part 25 airpla nes. We then added a field for the airplane’s Type Certificate Data Sheet (TCDS) from information on the FAA website 2

. Next we eliminated any airplane that wa s in production prior to 1947 or after 2009 and had less than 10 years of delivery history af ter 1947 or before 2009. On average, we calculated the part 23 airpla ne’s production life cycle is approximately 25 years. Appendix 1 shows airplane models, manuf acturers, TCDS, and Maximum Take Off Weight (MTOW) we used to develo p the average production cycle length.

1 Executive Order 12866 directs Federal Agencies to promulgate regulations to protect the American people. Further, 12866 states that “agencies should assess all costs an d benefits of available regulatory alternatives” that affect the Ameri can people, including American privat e markets. Therefore, this RIA will address costs and benefits to American owned businesses producing part 23 aircraft and their operators. 2 http://rgl.faa.gov/Regulatory_and_Guidance_Lib rary/rgMakeModel.nsf/MainFrame?OpenFrameSet

10We estimated the average life of a part 23 airplane by analyzing the ages of all US-operated airplanes from Table 7.3 of the 2008 General Aviation and Part 135 Activity Survey . Table 7.3 shows 132,975 airplanes in 5-y ear age groupings from 1 to over 60 years old. On average these airplanes were 32 years old. We assumed that the average age of 32 years will represent the average lif e of a part 23 airplane. In the NRPM’s regulatory evaluation, we includ ed a sensitivity analysis by increasing the average age of a part 23 airplane to 40 years. The result of th is sensitivity analysis was that the benefits exceed the costs for both the base-case average age of 32 years and the high-case 40 years. Since we received no comments on these results, the final rule analysis will not include a sensitivity analysis on the average age. In order to calculate the grow th of the expected affected future part 23 fleet, we analyzed the annual airplane deliveries result ing from new airplane certifications for U.S. manufacturers from 1998 through 2009. 3 For each airplane ma nufacturer, we calculated the average number of airplanes de livered from 1998 through 2009. Based on manufacturers’ delivery hi story between 1998 through 2009, we calculated the average number of new part 23 airplanes per type certificate delivered each year. 4 Table 2 summarizes our estimate of part 23 U.S. airplanes that manufacturers would certificate and produce over a 10-year time period. Appendix 2 shows the details we used to derive the estimates for the numbe r of new part 23 certifi cations and airplane deliveries.

3 “GA Airplane Shipment Report” on the GAMA website. 4 Appendix 2

11Based on our earlier calculat ion of an average 25-year part 23 certification production life cycle and 32 years average part 23 airplane service lif e, 920 reciprocating engine, 92 turboprop, and 177 turbojet airpla nes would be produced annually, by U.S. manufacturer’s beginning in model year one through year 25. From the second through the twenty-fifth year the part 23 fleet grows by a total of 1,189 airplanes annually. From the twenty-sixth thr ough the thirty-second year, the ne wly certificated part 23 fleet remains constant. In the thirty-third year, the model airplanes that are 32 years old start to retire. By the fifty-seventh year all airplanes produced from the original part 23 certificates are retired. Appendix 3 show s our forecast of the number of newly certificated part 23 airplanes a ffected by this final rule over the 57-year analysis interval. Because of the recent advent of smaller part 23 VLJ airplanes, in the NPRM regulatory evaluation we adjusted the future number of new part 23 turbojet airplanes new certificated and delivered upward. The ma rket for VLJ airplanes is not what we originally envisioned while doing the benefit cost analysis for the NPRM; therefore the analysis for the final rule will not include an upward adjustment of future part 23 turbojet airplane deliveries a nd new certifications based on VLJ airplanes. The final rule also adds certification requirements for certain part 23 airplanes with a MTOW less than 6,000 pounds, and other part 23 airplanes with a MTOW greater than 6,000 pounds. Based on the GAMA reco rds for the number of 1998 through 2009 part 23 airplane deliveries, we calculated the historical perc entage of airplanes with a

12MTOW of 6,000 pounds by reciprocal, turboprop or turbojet engine airplane. Table 3 shows these results: 5

Certain sections of the final regulations only affect part 23 airplanes operating in commercial revenue service. Any part 23 airpla ne could be used as either a commercial airplane to haul passengers and cargo or a priv ate airplane for persona l use. In order to estimate the costs to the part 23 airplanes us ed for commercial service, we estimate the commercial versus personal use of a pa rt 23 airplane with Table 3.1 of the 2008 General Aviation and Part 135 Activity Survey . Table 3.1 breaks out the 2008 General Aviation reciprocal engine, turboprop a nd turbojet airplanes by person al and commercial use. We assume that all of the following categor ies in Table 3.1 would operate in commuter (commercial) service: business, corporate, instructional, aerial applications, aerial observations, aerial other, external load, other work, sight see, air me dical, other, part 135 Air Taxi, Air Tours, and Air Medica l. Table 4 shows these results.

5 Appendix 2

133.3 Cost Discussion

This section discusses the de velopment of the cost estimate for the final rule. The total cost estimate is based on bot h the fleet data discussed in the Fleet Discussion section and the additional regulatory cost per certi fication, production and operating expense. Herein we discuss industry involvement, agreement and cost-estimating guidance. Most of the part 23 special conditions that the FAA applied and accepted came either from the part 23 Commuter or part 25 regulations. Special conditions are aircraft specific and the final rule will regulate the spec ial conditions for all part 23 airplanes. From our discussions with the part 23 i ndustry, we discovered companies producing part 23 airplanes have accepted most of the ex isting special conditions. When industry accepts these existing aircraft specific special conditions, we assume codifying these special conditions results in no additional costs to industry. When industry informed us that a special condition will impose a cost, we included their cost estimate. This evaluation estimated the costs in terms of the addi tional requirements above the industryaccepted aircraft specific special conditions that have been typically applied to the part 23 airplanes currently in production.

14Industry has been extensively involved with this final rule, through past certification, the development of recommende d changes, and their NPRM comments. Based on industry input, we discuss sections that incr ementally add (or subtract) certification or operating costs by increasing/decreasing design or flight testing times, adding weight, or reducing payload. Lastly we discuss the methodology used to estimate the total costs of this final rule. Our disc ussion includes the sources used for cost data and the methodology used to estimate the incr emental certification a nd operational costs the final rule adds to the pa rt 23 certification process. The part 23 airplane manufacturing industr y and the FAA have worked together to develop common certification airplane requirements in this final rulemaking. In some cases, the changes were editori ally clarifying, and thus impose no additional costs. In other cases, the changes impose additional cost s or savings. We aske d, and received, part 23 airplane manufacturers and an industry association for either the incremental cost or hour estimates for each of the final rule’s section change.

There are nine U. S. owned aircraft manu facturers who delivered part 23 airplanes in the 1998-2009 analysis interval. Thes e manufacturers are American Champion, Cessna, Cirrus, Hawker Beechcraft, Liberty, Maule, Mooney, Piper, and Quest. Also, there are two U.S. owned part 23 aircraft ma nufacturers who delivered airplanes in the 1998 through 2009 analysis interval, but no l onger do. These manufacturers are Adam and Eclipse. 6
Many of the ARC members, from the pa rt 23 domestic aircraft manufacturing community, collaborated and filed a joint cost estimate for both the NPRM and final rule.

6 Ibid.

15In addition, the FAA received cost comments from industry on the NPRM. We base our estimates of the incremental costs for this final rule on the cost estimates received from industry collaboration through the ARC and from the NPRM comments. The first group of regulations that will impose costs on the part 23 industry are §§ 23.1193(g), 23.1195(a), 23.1197, 23.1199, and 23.1201 addressing Cowling and Nacelle, Fire Extinguishing Systems, Fire Extinguishing Agents, Fire Extinguishing Agents containers, and Fire Extinguishing Agents materials 7 . Industry informed us these sections will add 50 additional f light test hours and 25 extra pounds to the current part 23 commuter category turboprop airpla ne certification process. The second group of regulations industry believes could impose additional costs on part 23 airplanes are §§ 23.63, 23.67, and 23.77 addressing Climb, General, Climb - One Engine, and Balked Landings. Industry in formed us that these sections will reduce payload by 10% for all future deliveries of newly certificated part 23 multi-reciprocal engine airplanes with a MTOW over 6,000 pounds, and turboprop and multiengine turbojet airplanes with a MTOW under 6,000 pounds.

The next final rule section that will impose costs on the part 23 industry is § 23.703 addressing Take-Off Warning Systems. I ndustry informed us that this regulation will add 1,000 additional design hours and 25 additional flight testing hours to the certification process for all future deliveries of newly certificated part 23 multi-reciprocal engine airplanes with a MTOW over 6,000 pounds, all turboprops, and multiengine turbojet airplanes with a MTOW under 6,000 pounds.

7 See the Preamble for detailed discussion of the sections and the final rule language.

16We note that there has been no part 23 multi reciprocal engine airplanes with a MTOW over 6,000 pounds certificated in the 10-year interval from 1998 through 2007. Examples of multi reciprocal engine ai rplanes with a MTOW over 6,000 pounds are the Piper PA-31, certificated in 1966, the Ce ssna 401, certificated in 1966, and the Aero Commander 500 series, certificat ed in 1955. Due to the production of the more cost efficient multi-engine turboprop a nd turbojet airplanes, and th e last part 23 certification for a new multi reciprocal engine airplane s with a MTOW over 6,000 pounds was almost 40 years ago. We believe that these airplane s will no longer be certif icated. Therefore, since the part 23 reciprocal engine airplane s in Appendix 3 are single-engine airplanes with a MTOW less than 6,000 pounds, and si nce we received no comments during the NPRM comment period; this final rule will add no costs to newly certificated part 23 multi-engine reciprocal airplanes.

The next section we discuss is § 23.777 which addresses the Cockpit Controls. Industry believes the rule language changes will save 25 hours of design time in the certification process for all future part 23 turbojet, turboprop and reciprocating engine airplanes. Finally, from the NPRM comments indus try submitted, we discovered that there are three additional sections that will impose costs. The first section is § 23.831 which addresses the airplanes ventilation system on part 23 turbojet airplanes. Industry believes the rule will add an average of $300,000 in cer tification costs and an average of seven pounds in equipment weight to newly certificated part 23 turbojet ai rplanes. The second
section is § 23.1309(a)(3) which addresse s all part 23 airplane equipment systems and design. Industry informed us that the fina l rule will add an av erage of 550 hours of

17certification time to newly certi ficated part 23 turbojet, tur boprop, and reciprocal engine airplanes. The third section that will add costs is § 23.1353 which addresses batteries on part 23 airplanes. Industry believes th e rule will add approximately $1000 for each battery and the weight impact will add an aver age of 30 pounds to newl y certificated part 23 airplanes. Industry has informed us that the remain ing final rule requirements are either clarifying, error correction, or w ill add only minimal to no costs.

Table 5 shows the results of the final ru le regulations that add (or subtract) incremental costs, to newly certificated part 23 airplanes, by increa sing design or flight testing times, adding weight, or reducing payload. 8

In the Fleet Discussion section we estimated the percen tage of part 23 airplanes in total service, commercial and private se rvice, and both below and above 6,000 pounds MTOW. We applied these percentages to the pa rt 23 airplane delivery table in Appendix

8 We note that although the final rule may apply to all part 23 airplanes in a specific category, when a special condition is applied to a subset of the airplane s in any category, only the subset of airplanes are in compliance with the proposal. Therefore we assume th e rule will add no additional costs to the subset of airplanes certificated with a special condition.

183. Table 6 shows the estimated number of fu ture part 23 airplanes for U.S. operators, by category, affected by this final rule.

1920To preserve manufacturer’s proprietary cost inform ation, we used publically available data sources to calculate the addi tional certification and flight operation costs the final rule will add based on airplanes delivered from new part 23 certifications. The next section discuss’ the s ources of the cost data and the methodology we employed to estimate the additional certification and operational costs of this final rule.

We obtained the certifica tion design hourly rate from the Bureau of Labor Statistics’ Table 7.1. Table 7.1 shows data for aircraft manufacturing labor rates and benefits costs, per hour, for aeronautical engin eers. These rates include wages, salaries, and benefits. The total compensation for an aeronautical engineer , including overhead, is $77.21. 9 We estimated the initial certifi cation and design costs by multiplying the estimated number of new certifications (lis ted in Appendix 2), by the incremental number of certification design hours this final rule wi ll add, by the hourly rate for an aeronautical engineer.

We obtained the certification cost for the flight test hourly ra te from Table 4.1 of the Economic Values For FAA Investment and Re gulatory Decisions, A Guide . This table lists data by airplane type for GA and Ai r Taxi Operating and fixed costs, but not by airplane groups of reciproca ting engine, turboprop and turboj et airplanes. We calculated an average cost of the flight test hourly ra te for each part 23 airplane group. Table 7 details these hourly expenses.

9 Department of Labor, Bureau of Labor Statistics. Occupational Employment and Wages, Table 7-1A: Burdened Hourly Labor Rates of Aeronautical Engineers and Aviation Mechanics (2010). The hourly rate includes overhead costs.

21We estimated the additional flight test costs by multiplying the estimated number of new certifications, by the incremental number of the flight test hours this final rule will add, by the flight test ho urly rate from Table 7. The airplanes fuel burn expenses increas e due to the additional weight added by the fire extinguishing system, ventilation, and ba ttery final rule sections. To estimate the costs incurred by this additional weight, we used data from Table 6.1 in the Economic Values For FAA Investment a nd Regulatory Decisions, A Guide . Table 6.1 provides the incremental fuel burn, per pound, per flight hour by U.S. Gallons for General Aviation and Air Taxi Aircraft. We obtained the aver age annual flight hours, per airplane, from Table 3.10 in the Economic Values For FAA Investme nt and Regulatory Decisions, A Guide . Table 3.10 lists the estimated annual active General Aviation Aircraft and Hours flown for General Aviation and Air Taxi Airc raft. Again, since our data sources lack sufficient details to provide separate estimat es for each reciprocating engine, turboprop and turbojet airplane group, we calculated an average for each part 23 airplane group. Table 8 details the incremental fuel burn, pe r pound, per flight hour by U.S. gallons and hourly utilization rates for GA and Air Taxi airplanes.

22The gallons of additional fuel burn equal the product of the incremental fuel burn per flight hour, per pound, the average annual ho urly utilization rates, and the number of newly certificated part 23 airplanes delivered from Table 6. Lastly, we multiply this product by the FAA 2010 fuel forecast 10 and the incremental number of pounds this final rule will add to obtain an estimate of annual cost of the added wei ght over the analysis interval. The 2010 FAA fuel forecast extends to 2030. We extrapolated the fuel forecast by applying the average annual growth from 200 9-2030 to the end of our 57-year analysis period.

As discussed earlier the sections on c limb and balked landings will impose costs by reducing the payload, by 10%, for all newly certificated part 23 reciprocal engine airplanes with a MTOW great er than 6,000 pounds, and turbopr op and turbojet airplanes with a MTOW under 6,000 pounds. 11 These sections on climb and balked landings will only affect airplanes operating in commercial service, and not for personal use. The 2008 General Aviation and Part 135 Activity Survey (Table 4) shows less than one-third of the reciprocating engine airplanes and almost all turboprop and tu rbojet airplanes operate in commercial service.

10 FAA Aerospace Forecast Table 18. “U .S. Mainline Air Carrier Forecast As sumptions, Jet Fuel Prices”. 11 §§ 23.63, 23.67, and 23.77

23GA flights are rarely operated with great er than 90% capacity. Available data on GA revenue and capacity is sparse, especia lly for cargo carried. Table 3.15 of the Economic Values For FAA Investment and Regulatory Decisions, A Guide provides an estimate for GA capacity and utilization by equipment group. Across all equipment groups, the table lists that an average GA airp lane has about 3.7 seats and flies about 50% full. Table 9 reproduces part of Table 3.15.

The Economic Values For FAA Investment and Regulatory Decisions, A Guide does not show similar statistics for the per cent of total cargo GA ai rplanes carry. Table 3.5 of the Economic Values For FAA Investment and Regulatory Decisions, A Guide shows that for all cargo carriers, the car go load factor is 60%. Assuming the GA operators have a similar cargo lo ad factor, and an average pa ssenger load factor of about 50%, we conclude that the 10% reduction in payload caused by the fi nal rule’s sections on climb and balked landings will have a minimum cost impact on GA airplanes. We assume no costs as the low case for the value of the 10% reduction in payload.

24A reduction in payload becomes a binding c onstraint when someone wants to fly an airplane at 90% or above capacity. The reduction in a flight’s payload can be potentially accommodated through less baggage or fuel. Most of the time airplanes are not operated at full capacity. Although we believe any additional capacity, on airplanes with a load factor over 90%, would be di stributed over other fli ghts in the operator’s network, we estimate the value of a 10% payload capacity reduction as follows. A straight-forward measure of a 10% reduction in payload is the expected reduction in the value of a new airplane. This measure is a one-time reduction in value at the time the airplane is sold. The value of a 10% reduction in payl oad can be calculated by solving for X in the following equation fo r turbojet, turboprop and reciprocating airplane groups. (#S * Frequency* 0.1)/X = (#S/P)

where:

 #S is the average number of seats by airplane group,

 Frequency are the percentage of flights operating at or above 90% load factor,

 0.1 is the 10% reduction in payload,

 X is the value of a 10% reduction in pa yload per affected airplane group, and

 P is the average price of an airplane in an airplane group.

Table 5.5 of the Economic Values For FAA I nvestm ent and Regulatory Decisions, A Guide contains the maximum estimated value for part 23 General Aviation airplanes. 12 Table 10 shows our calculation of th e estimated average weighted market values we used for the P.

12 We used the maximum estimated value because the fu ture airplanes delivered from new certifications affected by this proposal will be new and therefore so ld at the highest value in an airplanes life-cycle.

25We used data from Table 9 to compute the average number of seats and the load factor for part 23 airplane groups. Table 11 shows these results.

Across all equipment groups, Economic Values For FAA Investment and Regulatory Decisions, A Guide lists that an average GA ai rplane has about 3.7 seats and flies about 50% full. Given the number of future new production airplanes, we can assume these airplanes will have load factors that are normally distributed. Given a mean load factor and the area under th e normal distribution curve, we can solve for the standard deviation. For the load factor mean of 52.93, 45.38 and 51.20% and with 99.73% of the area under the curve, the (+/-) three standard deviations ar ound the mean results in a standard deviation of 0.1560, 0.1812, and 0.1618. Us ing these standard deviations, we can calculate the Frequency parameter as the percentage of the norma l distribution to the right of a 90% load factor for each of the reciprocating engine, turboprop and turbojet airplane groups. Table 12 shows the results of the three part 23 airplane groups using Table 12 load factors.

26Using the values of Table 12 for the Fre quency variable in the formula above, we estimated the 10% value of a reduction in payloa d to each of the part 23 airplane groups. Table 13 shows these values.

Since we received no comments from industry to the NPRM for this methodology, these cost estimates provided the foundation for the FAA total cost estimates discussed next. The cost analysis period is based on the average length of the airplane model’s production run and the average life of an airp lane. We assigned the expense of all new part 23 certifications in the fi rst year of the 57-year analysis period. As discussed earlier, the average production run of newly certificated airplane models is 25 years and these airplanes remain in servi ce for 32 years creating a 57 year analysis interval. 13

We estimate the additional fixed certif ication costs by adding the additional certification design hour costs with the flight test hour costs.

13 Fleet Discussion section

27We calculated the additional certification design cost by taking the product of the number of new part 23 airplane certifi cations, by group, from Appendix 2, with the number of additional design hours from Tabl e 5 and the $77.21 hourly rate from the Department of Labor. Lastly, we summed the certification design costs ($300,000) from § 23.831 with the product of the additional certif ication hours, hourly rate and the number of new airplane certifications. We calculated the additiona l the flight test hours by taking the product of the number of new part 23 airplane certifi cations, by group, from Appendix 2, with the number of additional flight test hours from Ta ble 5 and the flight test hourly rate from Table 7. We estimate the additional flight oper ation’s variable cost by summing the additional fuel burn cost, caused by the added weight, in pounds from Table 5, with the 10% reduction in payload costs. We calculated the additional fuel bur n costs by taking the product of the incremental fuel burn per fli ght hour per pound of weight a dded from Table 8, with the average annual hours per group also from Table 8, with the number of newly certificated part 23 airplanes from Table 6, with the APO fuel forecast, by year, with the number of additional pounds from Table 5. We estimate the loss in value due to the 10% loss in payload capacity that occurs to the part 23 airplanes for each of the low and high case new certification’s production life cycle as discussed above. The estimated fixed certification costs fo r the final rule are about $1.3 million in
nominal dollars. We assume these fixed certif ication costs will be incurred in the first

28year of the analysis interval. Note the lo w and high value of a 10% reduction in payload is a variable flight operation cost and therefore does not a ffect the fixed certification

costs. The estimated variable flight operation costs range from a low of about $64.0 million to a high of $71.6 million in nominal dollars. The difference in the low and high case cost range is the low cost estimate assumes no loss in capacity costs where the high case estimates the cost of the 10% loss in capacity as a function of the airplane’s value. Appendix 5 and 6 shows the low and high case cost estimates detailed by the fixed certification costs and the flight operation costs. Table 14 shows the our estimate for the ne w part 23 fixed certification costs and the low and high cost estimates for the fi xed flight operation costs over the 57-year analysis period.

We estimated the three and seven present value of the total lo w and high case for this part 23 final rule. Table 15 shows the de tails of these present value and total costs.

Table 16 shows the breakout of the total estimated costs by part 23 section.

29304.0 Benefit Discussion
Business turbojets, both part 23 and 25, have traditionally weighed 10,000 pounds or more. New engines and avionics have ch anged the cost equation and allowed for the creation of a new market segment with pa rt 23 turbojets as light as 5,800 pounds. Engines and composites advances have also allowed the development of smaller and lighter turbojet airplanes. The small part 23 turbojets ar e lighter than historically produced business jets and are expected to be frequently used in commercial service as air taxis. With new tech nology, allowing for lower cost jets, entrepreneurs saw an opportunity to operate these sm all part 23 turbo jets in ai r taxi service creating a new market for the aviation industry. Part 23 turbojet manufacturers have developed and received certification for small jet airplane s through exemptions, special conditions and equivalent levels of safety to address th is emerging technology and provide for future airplane operations. An efficiency benefit of the final rule is the standardizing and streamlining the certification of the part 23 tu rbojets and other part 23 airpla nes. By codifying special conditions, manufacturers will know the requir ements during the design and testing phase for the certification of a pa rt 23 turbojet and other pa rt 23 airplanes. A known certification process will also reduce the part 23 manufacturers and FAA’s part 23 airplanes certification process, effectivel y reducing the potential for delivery delays. Lastly, the FAA will be able to better manage and assign resources to the certification of part 23 airplanes. Knowing the part 23 airp lane certification requi rements, reducing the paper process and better managing and assi gning resources to the part 23 airplane

31certification process will save both industry and the FAA a c onsiderable amount of time, money, and effort. In addition to these efficiency benefits, we expect to obtain safety benefits by imposing greater requirements for one engi ne inoperative climb performance on multiengine part 23 airplanes because of the accident history rate associated pilots maintaining airspeed after shutting down an engine or suffering an engine failure. Even though one engine inoperative climb performance on multi- engine part 23 airplanes are addressed by special conditions, industry has informed us that the final rule imposes greater requirements than the special conditions. Also, we expect to obtain safety bene fits by increasing the power requirements on batteries. Increasing th e power requirements will provide electrical power to loads that are essential to continued safe flight and landing in the ev ent of a compete loss of the primary electrical power. The benefit of c ontinued safe flight and landing will be the avoidance of accidents, fatalities, and injuries in the affected part 23 fleet. The potential part 23 fleet incurring costs and safety benef its is higher in the final rule because NPRM commenters identified additional sections that will add costs. We include the additional quantified costs and safety benefits obtained from the NPRM commenters in this final rule analysis. In the following sections, we estimate th e efficiency benefits to the FAA and industry from streamlining the certification process. We will then estimate safety benefits from avoiding accidents and av erting fatalities where turboprop and reciprocating engine airplanes that do not have the single engine climb performance to

32maintain flying airspeed afte r shutting down an engine, suffe ring an engine failure, or a power loss.

4.1 Efficiency Benefits
We estimate on average the FAA director ate and Aircraft Certification Office (ACO) will save 40 hours each for every new part 23 airplane certificated based on decreased paperwork and improved streamlinin g of the certification process. In the Estimation of Part 23 Equipage Costs section above, we estimate the number of new part 23 airplanes certificates ove r a 10-year period. We use $77.21 for the total hourly compensation for an aeronautical engineer, including overhead. 14 Table 16 shows the cost savings to the FAA acro ss part 23 airplane types.

Industry recognizes a know n certification process re duces uncertainty and potential disagreement resulting in final certif ication delays. They informed us that on average each special condition adds 250 hours fo r each part 23 airplane certificated. We used the same aeronautical engineer tota l hourly compensation of $77.21 and the same numeric estimate of future part 23 certificates as discussed in the Estimation of Part 23 Equipage Costs . There are currently between five to eight special conditions necessary to certificate a new part 23 airplane.

14 Department of Labor.

33Since we assumed in the Estimation of Part 23 Equipage Costs section that all certificates will occur in the first year of th e analysis interval, industry costs savings for each of the new part 23 airplane certificates would also occur in year one. Since these costs occur in year one of the analysis in terval, the total nominal and present value benefits will be the same. Table 17 shows the benefit of the cost savi ngs to industry as sociated with a known certification process. Table 17 also show s that the range of our benefit estimate of the industry cost savings by streamlining the certification process is between about $965 thousand for five special c onditions and about $1.5 million for eight special conditions.

4.2 Safety Benefits This final rulemaking will include provisions to avoid future accidents related to single engine climb requirements for larger multi-engine piston twins and turboprops, and turbojets with a maximum take off wei ght (MTOW) less than 6,000 pounds. Increased single engine performance will offer more power to the pilot to maintain airspeed after shutting down an engine or suffering an engine failure. Increasing the power requirements on batteries would provide electri cal power to loads that are essential to continued safe flight and landi ng. We are trying to prevent accidents where the airplane simply does not have the single engine performance to mainta in flying airspeed to land

34safely at an airport or the pow er needed to operate or land th e airplane safely. Frequently in this situation, the flight e nds in a stall with the pilot losing cont rol and the airplane impacting the ground. Accidents related to sh utting down an engine, suffering an engine failure, or primary power losses are often fatal. The FAA examined the National Transpor tation Safety Board (NTSB) Aviation Accident Database & Synopses where the NT SB determined single engine climb or power loss was either a cause or a factor. We examined accidents for part 23 airplanes that operated in 135 service between 2001 thro ugh 2009. We then calc ulated the average number of casualties, airplanes replaced and investigations by summing the casualties, airplanes replaced and investigation and divi ding by the number of accidents. Table 18 shows there are nine single engine climb re lated accidents or power loss accidents that may have been prevented if this final rule had been in effect. Table 18 also shows the average number of casualties, airplanes replace d and investigations of the nine accidents.

These nine accidents resulted in eight fa talities, one serious injury, and 23 minor injuries. In addition, all of the airplanes involved in the a ccidents were either destroyed or received substantial damage. The estimated costs of a future averted accident form the quantitative basis of future benefits. We used the following values: $6.0 million for an avoided fatality,

35$521,000 for a serious injury (assumed to be the average of a severe, serious, and moderate injury), and $12,000 for a minor injury. 15 The additional associated medical and legal costs’ for a fatality is $265,400, for a serious injury (assumed to be the average of a severe, serious, and moderate in jury) $93,267, and for a minor injury $5,000. 16 In addition, using the Economic Values for FAA Investme nt and Regulatory Decisions, A Guide , we calculated the average replacement cost of a destroyed part 23 airplane and for an NTSB or FAA accident investigation. Th e average replacement cost of a destroyed part 23 reciprocal engine airpla ne is $77,371, $937,907 for a turboprop, and $2,568,083 for a turbojet. The weighted average NTSB accident investigation costs for general aviation is about $7,700, and about $16,200 for the FAA accident investigation.
Based on these economic values, and the av erage number of casua lties, airplanes replaced and investigations from the nine acc idents listed in Tabl e 18, we estimated the average value of avoiding a single engine failu re related accident, where the airplane is destroyed, is approximately $5.7 million plus the replacement price of an airplane. Table 19 shows these results.

15 Office of the Secretary of Transportation Memorandum, "Treatment of Value of a Statistical Life in Departmental Analysis – 2009 Annual Revision”, March 2009. 16 Appendix 4.

36Based on the average number of casualties, airplanes replaced and investigations from Table 18, we estimated five separate acc ident and casualty rates for each part 23 airplane group. Each rate equa ls the average losses per fatal ity, injury, airplane replaced or investigation divided by the total number of active GA airplanes from Table 4. 17
Table 20 shows the results of these calculat ions.

We estimated the safety benefits of th is final rule by ta king the accident and casualty rates from Table 20 and applying them to the total number of new part 23 reciprocal engine, turboprop, a nd turbojet airplanes, delivere d from the future part 23 certifications estimated in the Table 2 of the Fleet Discussion Section.

17 In the NPRM, we estimated benefits only for commercially operated part 23 airplanes. From the NPRM comments, we determined that private operated part 23 airplanes will also be affected by this final rule; therefore benefits are estimated for both private and commercial part airplanes in this analysis.

37Based on this methodology, in the absence of the final rule, we expect over the 57-year analysis period, approximately five accidents will occur on newly certificated part 23 reciprocating engine airplanes, eight accidents on part 23 tur boprop airplanes, and 13 accidents on newly certificated part 23 tu rbojet airplanes. These accidents are expected to result in approximately four fatalities, one seriou s injury, and 12 minor injuries on newly certificated part 23 reciproc ating engine airplanes. We expect seven fatalities, one serious inju ry, and 21 minor injuries on newly certificated part 23 turboprop airplanes and 11 fatalities, one seri ous injury, and 33 mi nor injuries on newly certificated part 23 turbojet ai rplanes over the 57-year analys is interval. Table 21 shows these results.

The estimated safety benefits of avoidi ng 26 accidents on newly certificated part 23 airplanes over the 57-year analysis inte rval are estimated at about $187.1 million, $46.5 million at a seven percent present value, and $88.1 at three percent. Table 22
shows these results.

Appendix 7 shows the details of the estimat ed total, three and seven percent value safety benefits for this final rule.

38Table 23 shows the details of the total industry efficiency plus safety benefits for the final rule.

5.0 Benefit-Cost Summary

The estimated cost of this final rule ranges from a low of $65.2 million to high of $72.9 million in nominal dollars ($22.9 m illion to $26.7 million at a seven percent present value).
The total benefits are equal to the sum of the safety and efficiency benefits. The estimated safety benefits of avoiding 26 accide nts on newly certificated part 23 airplanes over the 57-year analysis interval are es timated at about $187.1 million ($46.5 million at a seven percent present value). Historica lly, part 23 manufacturer s have developed and received certification for sm all turbojet airplanes through exemptions, special conditions and equivalent levels of safety. A benefit of this final rule is the standardizing and streamlining the certification process for the pa rt 23 turbojet and othe r part 23 airplanes. The estimated efficiency benefits to streamlin e the part 23 certificat ion process are valued at about $965 thousand for five special conditio ns per aircraft certification to about $1.5 million for eight special conditions per aircraft certification.
The total benefits range from a low of about $188.1 million to high of about $188.6 million in nominal dollars. Table 24 shows these results.

39From 2001 through 2009 there have been at l east nine in-flight part 23 airplane accidents. Without this final rule, it is likely that future related accidents on part 23 airplanes will occur. Based on history, we estimated that enacting this final rule could prevent 26 future accidents ove r the 57-year analysis interv al. These averted accidents can result in the pr evention of about 22 fatalities, three serious injuries, 66 minor injuries and 26 newly certificated part 23 airplanes destroyed or substantially damaged, along with incidental expenses included NTSB a nd FAA accident investigation costs, over the 57-year analysis period. As shown in Table 24, the estimated low and high nominal, seven and three percent present value be nefit range of the final rule exceeds the estimated low and high nominal, seven, and three percent present va lue cost range. Thus we conclude the benefits of the final rule justify the costs.

40Appendices

4142434445Appendix 4

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