Regulatory Flexibility Determination

The Regulatory Flexibility Act of 1980 (RFA) establishes “as a principle of regulatory issuance 

that agencies shall endeavor, consistent with the objective of the rule and of applicable statutes, 

to fit regulatory and informational requirements to the scale of the business, organizations, and 

governmental jurisdictions subject to regulation.” To achieve that principle, the RFA requires 

agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their 

actions. The RFA covers a wide range of small entities, including small businesses, not-forprofit organizations and small governmental jurisdictions.

Agencies must perform a review to determine whether a proposed or final rule will have a 

significant economic impact on a substantial number of small entities. If the agency determines 

that it will, the agency must prepare a regulatory flexibility analysis as described in the Act.

This proposed rule would have a significant impact on a substantial number of small entities of 

part 135 operators and smaller air services businesses.

The U.S. Small Business Administration (SBA) classifies businesses as small based on size 

standards, typically expressed as number of employees. The FAA identified 609 part 135

operators that meet the Small Business Administration definition of a small entity (entities with 

1,500 or fewer employees) which would be affected by this proposed rule. Of these 609, the 

FAA identified 209 small part 135 operators on which the rule would have a significant 

economic impact. We consider this a substantial number of small entities. In addition, we 

estimate that more than 2,000 smaller air services businesses would be affected by this proposed 

rule. This business segment also has a substantial number of small entities. The FAA is 

unaware of the assets or financial resources of these businesses. The FAA requests comments 

from these businesses regarding their economic impact. 
The FAA estimates the compliance cost from this AD to be the sum of the replacement 

cost per aircraft, plus the loss of use due to earlier replacement, plus minor paperwork 

cost. The labor cost to replace all six cylinder assemblies is the average labor rate $85 

per hour multiplied by the estimated 18 hours to complete the task. 

The FAA believes that a pro-rated value of the replacement cost of the cylinder 

assemblies is more accurate and reflects on the true cost to replacing the cylinder

assemblies. This AD would result in a loss-of-use as some cylinders would be replaced 

sooner than current practice. This AD requires removal of the cylinders at an average of 

1,000 hours instead of at the average TBO of 1,700 hours. This means that the allowable 

life is only 1,000 of the original 1,700 hours, or at 58.82% of the current life. Therefore 

the life value that is lost equals 0.4118 (1.0 – 0.5882). We estimate the pro-rated loss of 

life value for six cylinder assemblies to be about $4,200 per engine (1,700 x 6 x .4118). 

The loss-of-use expense implicitly includes the earlier purchase of the replacement 

cylinder assemblies.

Therefore the AD cost per aircraft equals the labor costs of $1,530 and the loss-of-service 

cost of $4,202, or about $6,000. Based on the number of aircraft owned by the operators

impacted, total compliance costs range between $6 thousand to $525 thousand per small 

entity encompassing one to eighty-eight aircraft.

To determine whether the compliance cost would be a significant economic impact, we measured 

the annualized compliance cost relative to the value of the aircraft. The estimated value of their

aircraft ranges between $22 thousand to $21 million. Using the preceding information, the FAA 

estimates that their ratio of annualized cost to asset value is higher than 5 percent for many of 

these operators. Based on this information the FAA decided that the rule would have a 
significant economic impact on a substantial number of entities. Therefore, we have performed a 

regulatory flexibility analysis for these small entities.

Initial Regulatory Flexibility Analysis

Under Section 603(b) of the RFA, the initial analysis must address: 

 Description of reasons the agency is considering the action

 Statement of the legal basis and objectives for the proposed rule

 Description of the record keeping and other compliance requirements of the proposed 

rule

 All federal rules that may duplicate, overlap, or conflict with the proposed rule 

 Description and an estimated number of small entities to which the proposed rule will 

apply

 Describe alternatives considered 

Description of reasons the agency is considering the action

This proposed AD was prompted by failure reports of multiple cylinder head-to-barrel 

separations and cracked and leaking aluminum cylinder heads. This AD would apply to certain 

Airmotive Engineering Corp. replacement PMA cylinder assemblies marketed by ECi, used on 

the Continental Motors, Inc. (CMI) model 520 and 550 reciprocating engines, and all other 

engine models approved for the use of CMI models 520 and 550 cylinder assemblies such as the 

CMI model 470 when modified by supplemental type certificate (STC).

Statement of the legal basis and objectives for the proposed rule

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. 

Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation 

Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, 

Section 44701: “General requirements.” Under that section, Congress charges the FAA with 

promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, 

methods, and procedures the Administrator finds necessary for safety in air commerce. This 

regulation is within the scope of that authority because it addresses an unsafe condition that is 

likely to exist or develop on products identified in this rulemaking action.

Description and an estimated number of small entities to which the proposed rule will

apply

We estimate that this proposed AD would affect about 5,000 Continental Motors, Inc. 

models IO-520, TSIO-520, IO-550, and IOF-550 reciprocating engines and all other 

engine models approved for the use of CMI models 520 and 550 cylinder assemblies 

(such as the CMI model 470 when modified by STC), installed on airplanes of U.S. 

registry. 

The FAA will affect 609 part 135 operators and more than 2,000 air service businesses 

for which the rule will have an economic impact. The affected entities fly fixed wing 

aircraft; employ less than 1,500 employees; and conduct a variety of air services such as 

fly passengers and cargo for hire. We estimate that the small part 135 operators have 

assets valued between $22 thousand to $21 million (range of 1 to 88 aircraft).

Description of the record keeping and other compliance requirements of the proposed 

rule

Public reporting for this collection of information is estimated to be approximately 5 minutes per 

response at an hourly wage rate of $85 per hour, including the time for reviewing instructions, 

completing and reviewing the collection of information. The paperwork cost for them is 

between $7 to $616. 
All federal rules that may duplicate, overlap, or conflict with the proposed rule

The FAA is unaware of any Federal rules that duplicate, overlap, or conflict with this 

rule.

Describe alternatives considered 

The FAA received comments concerning this AD. Some commenters requested 

withdrawal of this NPRM because of excessive cost with only negligible safety gains. In 

response to comments about problems with repetitive compression/soap test, the FAA 

agrees that these tests are not reliable and the costs associated with such ongoing tests 

outweigh the safety benefit. This SNPRM has removed the requirement for repetitive 

compression/soap inspection tests. We also considered these following alternatives:

 Do nothing – This option is not acceptable due to the number of failures of ECi cylinder 

head assemblies and the consequences of the failures.

 Periodic inspections only (no forced removals) - Though the NTSB recommends this 

option, the service history has shown that such inspections may not reliably detect 

existing cracks and the rate of crack growth to separation is unknown and variable. 

 Forced removal with periodic inspections – As stated above, such periodic inspections 

may not reliably detect cracks and the rate of crack growth to separation in unknown and 

variable.