1

U.S. Department of Transportation

FEDERAL AVIATION

ADMINISTRATION

NOTICE OF PROPOSED RULEMAKING 

REGULATORY EVALUATION

Transport Airplane Fuel Tank and System Lightning Protection

14 CFR Part 25

OFFICE OF AVIATION POLICY AND PLANS

ECONOMIC ANALYSIS DIVISION

Martin K. Zhu, Ph.D.

June 23, 2014
2

Executive	Summary

This rule is a retrospective regulatory review rulemaking under Executive Order 

13563. The current regulations contain certain airworthiness provisions that are not 

always practical for transport category airplanes regarding lightning protection of fuel 

tanks and systems. The FAA proposes to amend fuel tank structure and system lightning 

protection related regulations by removing previsions containing impracticality and 

redundancy while adding and clarifying new requirements to meet current knowledge 

about lightning and state-of-the-art airplane design. In addition, the FAA proposes to 

simplify regulations considered to be burdensome and unrealistic through this proposed 

rule. As a result, this rule would be relieving for both government and industries with the 

estimated net benefits. We assess regulatory benefits based on resources saved for 

reducing regulatory burden on industry and the FAA. The total combined regulatory

savings would be $624 million or $451 million present value at a 7% discount rate. The 

lower and the higher estimates of the total combined regulatory savings would be 

between $384 million and $863 million ($283 million and $618 million present value at a 

7% discount rate, respectively). The proposed rule would maintain achieved safety 

levels related to fuel tank structure and system lightning protection commensurate with 

the current requirements. 
3

Regulatory	Evaluation

I. Introduction/Background	

Consistent with Executive Order 13563, the FAA proposes to simplify these regulations 

considered to be burdensome through this rule. In particular, § 25.981(a) (3) contains three 

levels of redundancy in lightning protection features, based on assumptions that all fuel tanks are 

flammable at all times and all lightning strikes are critical, which are unrealistic. This 

impracticality has led applicants to petition for exemptions and for the FAA to impose special 

conditions to achieve the intended level of safety. The current lightening protection regulation 

has created a regulatory burden on industries and the FAA.

The FAA proposes to amend fuel tank structure and system lightning protection related 

regulations by removing previsions containing impracticality and redundancy while adding and 

clarifying new requirements to meet current knowledge about lightning and state-of-the-art 

airplane design. Specifically, this NPRM would amend §25.981, by eliminating ambiguity as to 

the necessary methods of compliance with the previously established requirements of §§ 25.901 

and 25-1301. Further, this NPRM would eliminate the regulatory redundancy resulted from two 

separate requirements §25.954 and §25.981 by consolidating lightning protection regulations for 

fuel tanks and systems into §25.954.

The proposed rule revises the previously established requirements based on 

recommendations made by Aviation Rulemaking Committee Report, “Large Airplane Fuel 

System Lightning Protection Rulemaking Recommendations”, dated May, 2011. 

II. Assumptions	and	Data	Sources

 Data related to industry savings mainly come from airplane manufacturers
4

 Data related to requests for exemptions and special conditions come from FAA internal 

data source and the agency’s experts judgments

 The FAA would process 4 special conditions and 7 exemptions in the next 10 years in the 

absence of this rule1

 Domestic airplane manufacturers would petition for 2 special conditions and 3 

exemptions before reaching their cost-benefit steady-state2

 Approximately 184 airplanes would be produced per year for 10-years based on airplane 

models being approved for exemptions and special conditions for lightening protection3

 Computational weights of composite wing airplane would change from current 

15%~25% level linearly increasing to 50% level for a 10-years production cycle4

 Airplanes have service life-span for 30 years5

 Projected impacts on manufacturers and the government are for a 10-year period from 

2015 to 2024

 All monetary values are expressed in 2014 dollars

III. Costs

Manufacturers would not need to do anything new to be in compliance. The FAA 

expects this rule would reduce costs against the current practice. 

 

1

FAA internal data source and the agency’s experts judgments

2

Ibid

3

“Fleet Discovery” 2000-2004 Penton, provided by Aviation Week Intelligence Network, data through the end of 

April 2014Ibid

4

Ibid

5

Ibid 1 and 2
5

IV. Benefits

This proposed rule would benefit both the FAA and industry. One of the benefits would 

relieve manufacturers from working alternate structural lightning protection requirements to 

14CFR 25.981(a)(3) via petitions for exemption or special conditions. As a result both the FAA 

and industry would not have to expend resources to process exemptions and special condition

requests.

The FAA estimates cost-savings/benefits of processing exemptions and special 

conditions herein based on the FAA’s internal records of petitions and requests submitted by

manufacturers to the FAA. Estimating the regulatory impact on the administration and assuming 

no growth of such activities, the FAA uses the historical data to determine the numbers of

requests for exemptions and special conditions from domestic and foreign manufacturers. The 

FAA anticipates processing and issuing about an additional 7 exemptions and 4 special 

conditions that would be necessary based on the current regulations in the absence of this 

proposed rule. With this rule finalized as proposed, the FAA expects that petitions for 

exemptions and special conditions would not be needed. The elimination of administering 

exemptions and special conditions would result in a cost-saving. Further, the FAA expects such 

benefits would be dissipating as such impact would reach its steady-state in 10 years. The FAA 

believes the projected numbers of exemptions and special conditions in the coming years may be 

low as the estimates assume no growth from the past. 

Estimated numbers of the agency hours come from the actual hours spent by FAA 

engineers, administrative managers and legal experts on evaluating petitions, technical writings 

and legal reviewing related to processing exemptions and issue special conditions. The FAA 

spends between 60 and 128 hours depending on the complexity of issued exemptions on a 
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petition for exemption. We estimate the average time spent on exemptions to be 74.31 hours. 

The FAA time to administer special conditions ranges from 114 hours for a small jet to 288 

hours for a large airplane. We estimate the average time spent on special conditions to be 155.5 

hours. The hourly labor cost6including benefits of federal employees is between $66.53 and 

$92.49, with an average hourly cost of $79.21. Multiplying the average wage cost by the hours

expended, we estimate the average agency’s cost-savings to be $5,886 for processing exemption 

and $12,318 for processing special condition. Further, multiplying average cost-savings by the 

numbers of exemptions and special conditions, the total 10-year FAA saving would range from 

$69,391 ($48,737 present value at a 7% discount rate) to $162,229 ($113,943 present value at a 

7% discount rate). The average saving to the FAA would be $90,474 ($87,000 present value at a 

7% discount rate).

7

Currently, the industry allocates resources to petition for exemptions and special 

conditions for single and latent assessment of fuel tank systems for lightning protection. 

Eliminating this certification work would result in nonrecurring and recurring cost savings. The 

FAA has requested and received airplane manufacturers inputs on impacts associated with this 

proposed rule. In response, the airplane manufacturers identified nonrecurring and recurring cost 

reductions varying with airplane structures by composite wing or metal wing in the following 

areas: 

• Simplified analysis and documentation related to certification or petition for 

special conditions and exemptions

• Production cost savings resulting from reducing labor and materials

 

6 Based on pay-rate between Federal GS-13-5 and Federal GS-15-5, OPM 2014 Federal wage table of DC area, 

http://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2014/DCB_h.pdf

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For this calculation, the average savings = $5,886 x 7 for exemptions + $12,318 x 4 for special conditions.
7

• Operational cost savings resulting from fuel efficiencies and technical 

improvements

Based on discussions with manufacturers, the FAA estimates the cost savings in the 

above three categories by factoring in computational weights of composite wing airplane from 

current 15% linearly increasing to 50% level within the next 10 years. The FAA observes not all 

airplane production programs would need to petition for exemptions or special conditions 

because some popular production runs have been around for decades and will continue without

expecting to amend type of certifications or to petition for exemptions or special condition 

papers. 

While foreign manufacturers may benefit also from this proposed rule, the FAA has no 

direct regulatory authority over these entities and therefore possible compliance cost and benefit 

to foreign companies are not estimated. Of the all past exemptions and special conditions related 

to fuel systems and structures, five were issued to domestic manufacturers. The estimated 

domestic industrial cost savings in designs, documentations and analyses equal the number of 

petitions for special conditions or exemptions multiplied by an average hourly wage rate.8 The 

FAA estimates the number of processing special conditions and exemptions related to fuel tank 

and system lightning protection to be 2 (40%) and 3 (60%),

9

respectively, for the next 10-year 

period. The FAA applies the above estimates to calculate one-time cost-savings due to 

eliminating petitions for each request of exemption and special condition. 

Domestic manufacturers spent 95 thousand to 246 thousand labor hours to petition for 2

special conditions in a 10-year period varying with types of airplanes.

10 The proposed rule 

 

8 An average salary derived from aviation and avionic engineers wage rates is approximately $71 per hour including 

other employee hourly benefits, see http://www.bls.gov/oes/current/naics4_481200.htm#11-0000

9

FAA’s internal records

10 Based on information that the FAA collected from airplane manufacturers through informal inquiries
8

would result in nonrecurring cost savings to manufacturers by eliminating formal special 

condition requests ranging from approximately $7 million to $17 million, multiplying the 

average wage rate by labor hour savings.

11

 

Similarly we estimate industrial cost reduction associated with removing the basis of 

exemption requests. Domestic manufacturers spent 142 thousand to 369 thousand labor hours to

petition for 3 exemptions in a 10-year period varying with manufacturers’ production 

programs.12 The cost-savings contributed by eliminating exemption requests range from about 

$10 million to $26 million. 

Combined onetime savings related to petitions for exemptions and special conditions 

with an estimated mid-point would be approximately $30 million ($21 million present value at a 

7% discount rate). The lower and the higher estimates would be approximately $17 million and 

$44 million ($12 million and $30 million present value at a 7% discount rate, respectively).

Secondly, there would be recurring cost savings associated with the production of each 

airplane that would be impacted by this proposed rule. The production process would benefit

from a simpler process with fewer parts required to meet the current regulations. The proposed 

requirements would reduce recurring cost by reducing labor and material expenses spent on each 

airplane. According to aviation industry sources, the combined 5 historical petitions for 

exemptions and special conditions impacted production lines of 1,837 airplanes over a 10-year

period, of which 22% were delivered to the domestic market.

13 The FAA assumes the future 

numbers of petitions and productions would be similar to the past and thus estimates impacted 

domestic production would be annually 184 airplanes. In addition, the FAA assumes that each 

 

11 See computational tables in Appendix 

12 Ibid 9

13 “Fleet Discovery” 2000-2004 Penton, provided by Aviation Week Intelligence Network, data through the end of 

April 2014
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type certification or amended type certification has an average production cycle of 10 years.

14

 

The FAA applies the above assumptions and estimates to calculate recurring cost-savings due to 

labor and material reductions for each airplane production. 

Airplane manufacturers have a long history of constantly improving their productivities. 

As a result, their unit production costs are trending down for repetitively manufacturing each part 

of an airplane. Because of the repetitiveness of each production line, direct labor man-hours 

necessary to complete a unit of production will decrease. Learning curve theory15 captures this 

decreasing-cost process. For a simplistic application of this model, we use an 80 per cent 

learning curve until the learning rate reaches its steady state of 20%. The FAA estimates the 

recurring production cost savings for the 10-year period by multiplying the recurring cost

saving16 per unit by the expected number of the domestic airplane production associated with

changes in lightening protections regulations times the learning curve. The estimated mid-point

of production cost savings would be approximately $570 million ($423 million present value at a 

7% discount rate). The lower and the higher estimates of production cost-savings would be

between $361 million and $779 million ($267 million and $579 million present value at a 7% 

discount rate, respectively).

Finally, the FAA uses an average airplane size with about 145 seats representing a 

manufactured “typical” airplane that would benefit from this proposed rule. Based on the

domestic delivery rate around 22%, the FAA estimates the domestic delivery is roughly 41 

 

14 An average derived from FAA internal studies, based on multiple airplane manufacturers’ publications, data 

through April 30, 2014. 

15 A learning curve is geometric with the general form Y = aXb

, where Y = cumulative average time per unit or 

batch; a = time taken to produce initial quantity; X = the cumulative units of production, b = the learning index or 

coefficient. 

16 Information on recurring cost savings per airplane was provided by airplane manufacturers. See computational 

tables in the appendix. 
10

airplanes (184 airplanes per year times 22%).

17 Since some potions of airplanes fleet are 

imported, the U.S. airline carriers would also benefit from those imported airplanes by this 

proposed rule on the operational basis. Based on FAA records, foreign manufacturers petitioned 

for 6 exemptions and special conditions, which would result in lowering the operating cost for 24 

imported new airplanes per year.

18 Combined domestic and foreign manufactured airplanes, the 

total deliveries would be 65 (41 domestic + 24 foreign) “typical” airplanes19 per year to the 

domestic market. The FAA assumes a “typical” airplane has an average service life-span of 30 

years.20 The FAA considers those are best available data to calculate an operational fuel savings 

on the basis that not all delivered airplanes to the domestic market would benefit from the 

proposed rule but only those airplanes reducing their structural weight attributable to this 

proposed rule. 

Airplane manufacturers identified service operation cost savings that would be 

contributed by reducing fuel burn from weight savings attributable to the simplification of design 

elements under proposed requirements relative to current practice. The FAA received weight 

saving per airplane information from manufacturers. The weight savings would be likely

between 100 pounds and 200 pounds for a composite wing airplane and between 50 pounds and 

100 pounds for a metal wing airplane. The operational cost saving would apply to 65 airplanes 

delivered by both foreign and domestic manufacturers. The FAA expects the operational cost 

saving would be generated by every flight hour during an average 30-year airplane services. The 

FAA derives the fuel consumptions by using the following model.21

 

17 Ibid 9 and 13, data through April 2014

18 Ibid

19 Ibid

20 Ibid

21 GRA, Incorporated, Economic Values for FAA Investment and Regulatory Decisions, A Guide, revised 2007, pp 

6-6. 
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Fuel consumption22= weight saving x fuel burn x flight hour per year x delivered 

airplanes to domestic market

The FAA estimates weight savings by multiplying the jet fuel prices per gallon23 by fuel 

consumptions in each year from 2015 to 2044. The estimated mid-point of operation cost 

savings would be approximately $10 million ($6 million present value at a 7% discount rate). 

The lower and the higher estimates of production cost-savings would be between $6 million and 

$13 million ($4 million and $9 million present value at a 7% discount rate, respectively).

Benefit-Cost	Summary

The governmental would receive savings of $90,474, or $87,000 present value at a 7% 

discount rate. The estimated compliance benefits attributable to the industry cost reductions 

would be $30 million in petitions for special conditions and exemptions, $570 million in 

production lines and $10 million in fuel-burn. The average present values benefiting to 

industries at a 7% discount rate would be about $21 million, $423 million and $6 million, 

respectively.

This rule would be relieving for both government and industries with the estimated net 

benefits. The total combined regulatory savings would be about $610 million as the mid-point 

estimate or $450 million present value at a 7% discount rate. The lower and the higher estimates 

of the total combined regulatory savings would be between $384 million and $836 million ($283

million and $618 million present value at a 7% discount rate, respectively). Additional detailed 

categorical benefits are presented in the following summary table and other computing tables are 

presented in appendix.

 

22 Ibid, Table 6-1 on pp 6-7, the FAA uses two-engine narrow-body (B737-300) as the forecasted average airplane 

size with seats between 141.3 and 148.7 to calculate the operational fuel savings or weight savings.

23 FAA Aerospace Forecast Fiscal Years 2014-2034, Table 18, pp 109
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Benefits (1 x million dollar)

Value in 2014 dollar Present value at 7%

Average

Lower

bound

Upper

bound Average

Lower

bound

Upper

bound

Government benefits (sub-total) $0.1 $0.1 $0.2 $0.1 $0.1 $0.1 

Industries benefits (sub-total) $610 $384 $836 $450 $283 $618 

 Exemptions and special conditions $30 $17 $44 $21 $12 $30 

 Productions $570 $361 $779 $423 $267 $579 

 Operations $10 $6 $13 $6 $4 $9 

Total Societal Benefits $610 $384 $836 $451 $283 $618 

The proposed rule would maintain achieved safety levels related to fuel tank structure and 

system lightning protection commensurate with the current requirements and provide costsavings/benefits. 
13

Appendix

Table 1 Government Savings (2014 constant dollar)

sub-total 5-year period average savings Low bound High bound

exemptions $5,886 7 $41,204 $33,270 $70,975 

Special conditions $12,318 4 $49,270 $36,121 $91,254 

Total $90,474 $69,391 $162,229 

Table 2 Industry Exemption and Special Condition Savings ( in millions)

Year

Weights 

for 

Composite 

wing

Weights 

for metal 

wing

Low 

Range 

Composite 

Wing

High 

Range 

Composite 

Wing

Low 

Range 

Metal 

Wing

High 

Range 

Metal 

Wing

Subtotal 

low

range

Sub-total 

high 

range

2015 19% 82% 0.56 1.30 0.82 2.45 $1.4 $3.7 

2016 22% 78% 0.66 1.54 0.78 2.34 $1.4 $3.9 

2017 26% 75% 0.77 1.79 0.75 2.24 $1.5 $4.0 

2018 29% 71% 0.87 2.03 0.71 2.13 $1.6 $4.2 

2019 33% 68% 0.98 2.28 0.68 2.03 $1.7 $4.3 

2020 36% 64% 1.08 2.52 0.64 1.92 $1.7 $4.4 

2021 40% 61% 1.19 2.77 0.61 1.82 $1.8 $4.6 

2022 43% 57% 1.29 3.01 0.57 1.71 $1.9 $4.7 

2023 47% 54% 1.40 3.26 0.54 1.61 $1.9 $4.9 

2024 50% 50% 1.50 3.50 0.50 1.50 $2.0 $5.0 

Total $16.9 $43.7 

Note: TC and ATC = 5 for a 10-year period, or 45% of all 11 exemptions and special conditions related to lightening 

protection.

Table 3 Industry Production Savings (in millions)

Year

Weights for 

Composite 

wing

Weights 

for metal 

wing

Learning 

Rate (Cost 

Reduction 

Rate)

Low Range 

Composite 

Wing

High 

Range 

Composite 

Wing

Low 

Range 

Metal 

Wing

High 

Range 

Metal 

Wing

Subtotal 

low 

range

Subtotal 

high 

range

2015 19% 82% 85% 29 58 25 64 $54.4 $121.6

2016 22% 78% 71% 29 57 20 51 $49.1 $108.4

2017 26% 75% 58% 27 54 16 40 $43.1 $94.2

2018 29% 71% 50% 27 53 13 33 $39.7 $86.0

2019 33% 68% 43% 26 51 11 27 $36.4 $78.1

2020 36% 64% 37% 25 49 9 22 $33.2 $70.8

2021 40% 61% 32% 23 47 7 18 $30.4 $64.3

2022 43% 57% 27% 22 43 6 14 $27.4 $57.6

2023 47% 54% 23% 20 40 5 11 $24.6 $51.4

2024 50% 50% 20% 19 37 4 9 $22.4 $46.8

Total $360.8 $779.3

'Number of production = 184 per year or 1837 for 10-years period
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Table 4 Services Operational Savings (in millions)

Data 

Source: 

Boeing 

Weights 

for 

Composite 

wing

Weights 

for 

metal 

wing

Projected 

fuel 

Price

Low 

Range 

Composite 

Wing

High 

Range 

Composite 

Wing

Low 

Range 

Metal 

Wing

High 

Range 

Metal

Wing

Subtotal 

low

range

Subtotal 

high 

range

2015 19% 82% 2.74 0.04 0.08 0.09 0.17 0.13 0.25

2016 22% 78% 2.71 0.05 0.09 0.08 0.17 0.13 0.26

2017 26% 75% 2.78 0.06 0.11 0.08 0.16 0.14 0.27

2018 29% 71% 2.87 0.06 0.13 0.08 0.16 0.14 0.29

2019 33% 68% 2.97 0.08 0.15 0.08 0.16 0.15 0.31

2020 36% 64% 3.07 0.09 0.17 0.08 0.15 0.16 0.33

2021 40% 61% 3.15 0.10 0.19 0.07 0.15 0.17 0.34

2022 43% 57% 3.22 0.11 0.22 0.07 0.14 0.18 0.36

2023 47% 54% 3.29 0.12 0.24 0.07 0.14 0.19 0.38

2024 50% 50% 3.36 0.13 0.26 0.07 0.13 0.20 0.39

2025 50% 50% 3.42 0.13 0.27 0.07 0.13 0.20 0.40

2026 50% 50% 3.49 0.14 0.27 0.07 0.14 0.20 0.41

2027 50% 50% 3.57 0.14 0.28 0.07 0.14 0.21 0.42

2028 50% 50% 3.64 0.14 0.28 0.07 0.14 0.21 0.43

2029 50% 50% 3.71 0.14 0.29 0.07 0.14 0.22 0.43

2030 50% 50% 3.79 0.15 0.30 0.07 0.15 0.22 0.44

2031 50% 50% 3.87 0.15 0.30 0.08 0.15 0.23 0.45

2032 50% 50% 3.95 0.15 0.31 0.08 0.15 0.23 0.46

2033 50% 50% 4.03 0.16 0.31 0.08 0.16 0.24 0.47

2034 50% 50% 4.11 0.16 0.32 0.08 0.16 0.24 0.48

2035 50% 50% 4.2 0.16 0.33 0.08 0.16 0.25 0.49

2036 50% 50% 4.28 0.17 0.33 0.08 0.17 0.25 0.50

2037 50% 50% 4.37 0.17 0.34 0.09 0.17 0.26 0.51

2038 50% 50% 4.46 0.17 0.35 0.09 0.17 0.26 0.52

2039 50% 50% 4.55 0.18 0.36 0.09 0.18 0.27 0.53

2040 50% 50% 4.65 0.18 0.36 0.09 0.18 0.27 0.54

2041 50% 50% 4.74 0.18 0.37 0.09 0.18 0.28 0.55

2042 50% 50% 4.84 0.19 0.38 0.09 0.19 0.28 0.57

2043 50% 50% 4.94 0.19 0.39 0.10 0.19 0.29 0.58

2044 50% 50% 5.04 0.20 0.39 0.10 0.20 0.29 0.59

Total $6.48 $12.96