**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 - for profit 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

anal ys is as described in the Act. This proposed rule would have a significant impact on a sub stantial number of small entities of p art 135 operators and smaller air services businesses. The U.S. Small Business Administration (SBA) classifies businesses as small based on size standards, t ypicall y expressed as number of employees. T he FAA identifie d 609 part 13 5 operators that meet the Small Business Administration definition of a small entity ( entities with 1,500 or fewer emplo ye es ) which would be affected by this proposed rule . Of these 609, the FAA identified 2 09 small part 135 operators on which the rule w ould have a significant economic impact. We consider this a substantial number of small entities. In addition, w e estimate that more than 2 ,000 smaller air services businesses would be affected by this propos ed 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. T he 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 cy linders at an average of 1,000 hours instead of at the average TBO of 1,700 hours. This means that the al lowable life is only

1 , 000 of the original 1,700 hours , or at 58.82% of the current life . The refore 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 en gine (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 th e operators impact ed, total compliance costs range between $6 thousand to $5 25 thousand per small entity encompassing one to eight y - 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 man y of these operators . Based on this information the FAA decided that the rule would have asignificant economic impact on a substantial number of entities . Therefore, we have performed a

re gulatory

flexibility

analy sis for the se small entities . **Initial Regulatory Flexibility Analysis** Under Section 603(b) of the RFA, the initial anal ysis 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 le aking aluminum cylinder heads. This AD would apply to certain Airmotive Engineering Corp. replacement PMA cylinder assemblies marketed by ECi, used on the Continental Motors, In c. ( CMI ) model 520 and 550 reciprocating engines, and all other engine models approved for the use of CMI models 520 and 550 cy linder assemblies such as the CMImodel 470 when modified by supplemental ty

pe 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 safet y. Subtitle I , section 106, describes the authorit y of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency 's authority .We are issuing this r ulemaking 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 b y prescribing regulations for pr actices, methods, and procedures the Administrator finds necessary for safet y 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 I O - 520, TSIO - 520, IO - 550, and IOF - 550 reciprocating en gines and all other engine models approved for the use of CMI models 520 and 550 cy linder assemblies (such as the CMI model 470 when modified b y 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 employ ees; and conduct a variet y 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 hourl y 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 $6 16 .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. Som e commenters requested withdrawal of this NPRM because of excessive cost with only negligible safet y gains . In response to comments about proble ms with repetitive compression/ soap test, the FAA agrees that these tests are not reliable and the costs associated with such ongoing tests outweigh the safet y benefit. This SNPRM has removed the requirement for repetitive compression/soap inspection tests. We also considered the se 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 reliabl y detect existing cracks and the rate of crack growth to separation is unknown and variable .  F orced removal with periodic inspections

– As stated above, such periodic inspections may not r eliably

detect cracks and the rate of crack growth to separation in unknown and variable.