Date: 201503
Local time of day: 0001-0600
Aircraft: B737 Undifferentiated or Other Model
Operator: Air Carrier
Operating under: Part 121
Mission: Passenger
Flight phase: Initial Approach
Airspace: Class G ZZZ
ATC / advisory: CTAF ZZZ
Aircraft component: Altimeter
Component problem: Improperly Operated
Reporter organization: Air Carrier
Reporter function: Captain; Pilot Flying
Reporter qualification: Flight Crew Air Transport Pilot (ATP)
Human factors: Situational Awareness; Other / Unknown
Second reporter function: Pilot Not Flying; First Officer
Anomaly: ATC Issue All Types; Deviation / Discrepancy - Procedural Published Material / Policy; Inflight Event / Encounter CFTT / CFIT
Detector: Person Flight Crew
When detected: In-flight
Result: Flight Crew Became Reoriented
Contributing factors: Human Factors; ATC Equipment / Nav Facility / Buildings
Primary problem: Human Factors

Narrative: The AWOS at ZZZ was out of service and Dispatch was providing hourly weather reports from an observer in ZZZ. The winds favored runway XX; and we were shooting the RNP XX approach. The previous hourly had a 500 foot broken layer; which would have made the approach iffy; since minimums for that approach are 651 feet AGL. When we called ZZZ to get an update from the weather observer; we were told that the 500 foot layer was gone; and only the 2000 foot overcast remained. All was normal during the approach until we broke out into VMC conditions - the GPWS started giving Terrain warnings; and we could see that we were low. The instruments all showed us on profile. We were VMC and had the terrain and runway in sight; so we completed the landing; only to see that our altimeters; set to 29.71 from the hourly; were reading about 450 feet. ZZZ is at 20 feet. When I went in to the office at ZZZ where the weather observation altimeters are located; they were; indeed; set at 29.71; but showed the same readings as the aircraft altimeters.It turns out that the weather observer was new; and although she had a certificate; she had only passed a written test; but had not been given any training. I had to show her how to set the altimeters to field elevation; check them for differences; and then read the altimeter setting; which turned out to be 29.25' at the time. There is another certified weather observer on the island who is supposed to have had training; but she was busy with another job; and was not at the airport.I recommend that ZZZ flights be cancelled when the AWOS is out of service; unless there is a properly certified and TRAINED! weather observer available.


Second narrative: We were given altimeter printout from dispatch and weather observer of 29.71; we broke out on RNAV to runway XX and realized we were low; leveled off with terrain insight and runway insight so we landed; our altimeters showed 450 higher than field elevation. The wrong altimeter was given to us by the weather observer.


Synopsis: During an RNAV approach; an air carrier flight crew experiences GPWS terrain warnings as the aircraft descends below 2000 feet in VMC. With the field in sight the approach is continued to landing. The AWOS was out of service and the altimeter setting came from the hourly weather provided by an observer. The observer had not been properly trained and the actual altimeter setting was 29.25 instead of 29.71; a 460 foot difference.