Passenger airlines, air freight companies, and other air carriers in the United States spend almost $6.5 billion every year maintaining and repairing their aircraft, according to industry estimates. While these carriers have traditionally performed much of this maintenance and repair work themselves, many are now contracting an increasing portion of the work to about 2,800 repair stations in the United States and other countries. As the agency responsible for overseeing the aviation industry, the Federal Aviation Administration (FAA) has the primary responsibility for ensuring that repair stations are operating in accordance with laws and regulations. Commercial air carriers certified in the United States now operate more than 6,700 aircraft, nearly 1,000 more than in 1990. Operators include more than 150 airlines, freight carriers, charter firms, and other companies certified by FAA and operating under part 121 of the Federal Aviation Regulations. The aircraft they operate range from planes such as a Fairchild Metroliner III, which typically carries a maximum of 19 passengers or about 5,000 pounds of cargo, to planes such as a Boeing 747-400, which is capable of carrying more than 400 passengers or 122 tons of cargo. Some of the largest companies, like United Airlines or American Airlines, may have 500 or more aircraft. With more aircraft flying, the need for maintenance and repair services has grown. Air carriers spent almost $6.5 billion for maintenance and repair on their aircraft in 1996, according to an industry estimate. This amount is an increase of $1.2 billion, or 23 percent, over the estimate of $5.3 billion in 1990. The term “maintenance and repair” encompasses a wide variety of activities. Some activities involve frequent servicing, such as overhauling tires, wheels, and brakes. Others include more extensive renovation, such as airframe maintenance, that must be done as aircraft get older. FAA classifies maintenance and repair activities into six rating categories (see table 1.1), which it uses to designate the type of maintenance or activity it has certified a repair station to perform. Some major air carriers, such as American Airlines and United Airlines, have substantial maintenance facilities of their own. However, many air carriers, including smaller air carriers, have used third-party repair stations rather than invest in the additional staff and hardware needed to do the work in-house. Some new air carriers entering the passenger or air freight markets have chosen to rely heavily—and in some cases, almost exclusively—on repair stations. The term “repair station” spans a wide variety of operations. In 1996, there were almost 5,000 repair stations certified by FAA, about 2,800 of which performed maintenance work on aircraft used by air carriers. A repair station’s certificate specifies the types of maintenance it can perform. Some repair stations specialize in one particular maintenance and repair category, while others may conduct work in several categories. As figure 1.1 shows, the types of maintenance most often included in the certificates of these 2,800 repair stations were for accessories and airframes. In addition to specifying the types of maintenance a repair station can perform, FAA may limit the scope of a repair station’s activities. For example, whenever appropriate, FAA may issue a rating that limits a repair station’s work to maintaining or altering only certain types of airframes, power plants, propellers, radios, instruments, or accessories. Such a rating may be limited to a specific model of aircraft, engine, or constituent part or to any number of parts made by a particular manufacturer. FAA also issues limited ratings for specialized work, such as nondestructive testing, maintenance on landing gear or emergency equipment, or other specific areas not included in any of the six standard rating categories. Repair stations vary considerably in size and scope of operations. For example, Tramco, Inc., located in Everett, Washington, is one of the largest repair stations in the United States, with hangar facilities of 450,200 square feet and a workforce of more than 2,000. At one time, this facility can accommodate five wide-body aircraft, such as Boeing 747s, and five narrow-body aircraft, such as Boeing 737s. The repair station primarily conducts regularly scheduled maintenance and modifications, and it also modifies new aircraft when specifications are changed after manufacturing is completed. Figure 1.2 shows maintenance being done on a Boeing 727 at this facility. By contrast, Precision Avionics & Instruments in Atlanta, Georgia, is a much smaller repair station. It employs 35 workers and has a facility of 24,000 square feet where it primarily services instruments, electrical and electronic components and accessories. While most domestic repair stations are operated independently of commercial airlines, a few are in-house maintenance operations that conduct work for other airlines on a contractual basis. For example, at its own maintenance facilities, Delta Airlines performs power plant maintenance for such carriers as American Airlines, Air Jamaica, Trade Winds, and Aeroflot Russian International Airlines. Repair stations that work on the aircraft of U.S. carriers are found throughout the rest of the world, though not in as great a number as repair stations in the United States. In all, about 270 FAA-certified foreign repair stations perform repair work for U.S. air carriers. For example, Sabena Technic, the maintenance arm of Sabena Belgian World Airlines, does engine repair work for Federal Express and other carriers at its facility in Brussels. Sabena has FAA’s approval for work on airframes, power plants, radios, instruments, and accessories. FAA’s oversight of repair stations is divided into two phases—certification and surveillance. Certification initially involves a repair station’s applying to FAA for authority to perform certain types of maintenance on certain types of aircraft. FAA inspects the repair station to ensure that the applicant’s proposed procedures are effective and that the equipment meets regulatory requirements. In addition, FAA also inspects facilities, personnel, and material as well as the repair station’s inspection system. If FAA finds these things to be in order, it issues a certificate with a set of “operation specifications” that cover what maintenance activities the repair station is authorized to perform. Certification is handled in one of two ways, depending on whether the repair station is in the United States or abroad. FAA requires foreign repair stations to renew their certification at least every 2 years, but for domestic repair stations, certification is permanent unless it is surrendered by the applicant or suspended or revoked by FAA. Surveillance, usually in the form of inspections, follows certification. FAA’s guidelines require its safety inspectors to perform a facility inspection of each domestic and foreign repair station at least once every year. For many of the larger domestic repair stations, this inspection is broken into multiple visits. For example, FAA inspectors visited Evergreen Air Center, one of the larger repair stations we reviewed in depth, more than 20 times during fiscal year 1996. Located in Marana, Arizona, Evergreen employs about 590 workers who conduct all types of maintenance on most types of large transport aircraft. FAA divides repair station inspections into two categories, avionics and maintenance. Avionics inspections focus on a repair station’s overall program for aircraft electronic components, including personnel training, policies, and procedures. Maintenance inspections cover a repair station’s overall maintenance program, including personnel training, policies, and procedures. FAA’s certification and inspection activities are carried out by inspectors based in the United States and abroad (see table 1.2). On the domestic side, certification and inspection activities are carried out by more than 550 FAA inspectors, most of whom have many other responsibilities as well. Unless they are assigned to one of the largest operations, inspectors usually are responsible for more than one repair station. We examined the workloads of 98 inspectors at the FAA offices we visited and found that the number of repair stations these inspectors were responsible for ranged from 1 to 42, with a median workload of 12 repair stations. These repair stations varied in size and complexity. Most of the inspectors had many other surveillance responsibilities as well, such as overseeing training schools for pilots and mechanics, helicopter operators, agricultural operators, and air taxis. On the foreign side, about 50 FAA inspectors handle the oversight of repair stations, again with responsibility for multiple repair stations. Unlike their counterparts in the United States, however, inspectors in these offices generally have the oversight of repair stations as their primary responsibility. Under Federal Aviation Regulations, air carriers must ensure that repair stations are conducting work that conforms with the air carriers’ manuals and the applicable FAA regulations. As part of meeting this requirement, air carriers may use one or both of the following means: They may conduct their own audits of repair stations—generally every 2 years—to ensure that the facilities have the capability to perform the work in accordance with the air carriers’ maintenance policies, procedures, and requirements. They may rely on audits conducted by the Coordinating Agency for Supplier Evaluation, an international industry organization of major airlines and aerospace and marine contractors. These audits are conducted—again, generally every 2 years—by staff from member airlines who use a standardized approach that includes Federal Aviation Regulation requirements. Because many airlines use the same repair stations, these audits eliminate the expense of redundant evaluations of repair stations. Repair stations, both foreign and domestic, are also potentially subject to review by the regulatory agencies of other countries. Many of the national aviation authorities in countries where repair stations are located have developed their own extensive inspection, surveillance, evaluation, and certification programs for repair facilities. Like FAA, many of these agencies review repair stations in other countries as well (including the United States). Twenty-seven European nations have banded together to coordinate their efforts through an organization called the Joint Aviation Authorities (JAA), but many nations such as China conduct reviews on their own. Like FAA, these other regulators have set up their programs to help ensure compliance with their own national standards.