THE COST OF SAFETY
June 9, 2005

The Department of Transportation released a report Wednesday saying the Federal Aviation Administration's safety inspectors are not keeping up with potential risks posed by airlines trying to save money. Following a background report, Margaret Warner speaks with Marian Blakey, head of the FAA, about the report's findings. Background Discussion

 

July 23, 2002: The Congress debates aviation security. June 21, 2002: A check-up on the state of airport security. Feb. 12, 2002: Federal efforts to bailout troubled airlines. Jan. 7, 2002: The state of civil aviation Dec. 25, 2001: The future of the airline industry Oct. 2, 2001: An overview of aviation security amid new proposals for airport and airline safety. April 12, 2002: Secretary of Transportation Norman Mineta on the troubled airline industry. Browse the NewsHour's coverage of federal agencies and transportation   News for Students: Lesson Plan: Reconstruction of Iraq     Federal Aviation Administration U.S. Department of Transportation Aircraft Owners and Pilots Association	MARGARET WARNER: The Federal Aviation Administration's safety inspectors are not keeping pace with the new risks posed by cost-cutting throughout the airline industry. That's the word from the Transportation Department's inspector general in a report publicly released yesterday. The inspector general spent two years examining the FAA's safety oversight system as it applied to ten airlines. Five were major carriers, most of them financially distressed, some even struggling with bankruptcy: American, Delta, Northwest, United, U.S. Airways. Five were low-cost airlines that have been rapidly expanding: Airtran, ATA, Frontier, JetBlue and Spirit. The IG'S conclusion: that FAA Inspectors were not able to effectively use the oversight systems to monitor the rapidly occurring changes. We begin with a closer look at the report's findings, with the help of Sarah Goo, who's been covering the story for The Washington Post. Sarah, welcome. First of all, explain the landscape for us. Why does the IG believe that the changes that we're seeing in the airline industry, to both the big carriers and the new discount ones, pose new safety risks? SARA GOO: Well, thanks Margaret, it's nice to be here. As you know, there's been major changes in the industry in the past few years. On one hand we have major network carriers who have been around a long time who are losing record amounts of money and are cutting their staff, which results in the crew members who are still there working longer hours. They are closing down maintenance facilities, which means outsourcing a lot of those jobs to third party vendors. And on the other side have you the new low-fare carriers, many new carriers that didn't exist even a year ago, who are now serving, you know, dozens of new cities and hiring thousands of new employees, and what that does is create new safety risks that the IG finds the FAA hasn't properly kept on top of.
	Outsourcing of airplane maintenance work
	MARGARET WARNER: And tell also little more about the outsourcing. I was surprised to read that not only are 50 or 60 percent of the repair work in many of these airlines now being outsourced, but some overseas. What kind of repair work, and to whom? SARA GOO: That's right, in the past few years U.S. carriers have closed 42 maintenance facilities in the United States. A lot of that work is going to third party vendors in this country, but a lot of it also is going overseas to places like Asia and in Europe, where the labor rates are a lot more cost-effective for the airlines. And a lot of the work that's going overseas is really the labor intensive work where the airlines have to strip down the air carriers every couple of years as they age. The work that has remained, though, is a lot of the high-tech maintenance, such as engine repairs, and, you know, this is a global environment where in fact some carriers in the United States are even in sourcing some of that work, that is to say doing that work for foreign carriers in the United States. So just because it's a third party maintenance doesn't mean that it's unsafe necessarily. But the report found that there are an inadequate number of FAA inspectors whose job it is to oversee this work overseas, and shifting to keep up with this trend. MARGARET WARNER: So tell us what else, in what other ways, did the IG find that the FAA inspectors and inspection system is falling short in terms of taking into account these changes? SARA GOO: Well, the inspector general looked at other things such as, you know, for example, 90 percent of all the maintenance work that is done on airplanes is done overnight, obviously when the planes are not flying. Yet the FAA's inspectors only spend about 10 percent of their total time on the job during that period. They also looked at other things, such as whether they have enough inspectors; the FAA is cutting because of budget cuts the number of inspectors they have. They have several thousand, but I think that number is going to go down by a couple hundred or two this year just alone. So the real question is whether they're managing these new safety challenges and putting the resources where they need to be. MARGARET WARNER: And did the IG also have some criticisms about how timely or untimely the FAA is in taking into account or counting as a risk factor a change that might occur with an airline? Let's say an airline suddenly downsizes and closes several plants, or suddenly expands for that matter and adds a lot of new routes and new people. Wasn't the IG saying that in the system that the FAA has devised for assessing risk, that isn't quickly accounted for? SARA GOO: Right. It's really a matter of keeping up with the very rapid pace that this is all taking place. And I should say that in context, you know, we are going through an unprecedented level of aviation safety in this country, where we haven't had a major accident, a fatal passenger accident in the past three years. But having said that, I think that there have been some trends indicated in the past that the inspectors are still working on an old traditional system where they focus on the carrier, for example, not necessarily the third party company that is doing the work on the actual airplanes. Nor I think -- and this IG report points out -- that they're spending the adequate time doing the safety checks that need to be done at the times, for example, overnight when they need to be done. MARGARET WARNER: All right, Sara Goo of the Washington Post, thank you so much. SARA GOO: Thanks.
	The FAA's reaction to the report
	MARGARET WARNER: And now the FAA's reaction to the IG's report, and for that I'm joined by the head of the FAA, Marion Blakey. And Administrator Blakey, welcome, thanks for coming. MARION BLAKEY: Thank you for having me. MARGARET WARNER: So your reaction to this report card? MARION BLAKEY: Well, I think it's fundamentally flawed. In fact we see it as a very old fashioned approach to looking at safety oversight because in fact these days it's not about standing over someone's shoulder in the middle of the night and seeing if they're turning the wrench in the right direction. It's a really about looking to see that the carriers, that the repair stations, those who are providing this kind of service, have very strong safety systems in place. And it's about analyzing the data to see what the data tell us about where there really is risk. MARGARET WARNER: But as you say, your system depends on analyzing this data. And I think what the IG was saying in this report is, sometimes the data is slow to get in. I'll give you one example, there was one of the new carriers, there are no names mentioned, but one of the five new carriers, one year it added 60 percent to its personnel and 60 percent to its routes, three times the number of destinations, cut maintenance by 14 percent. But none of that had been factored in, the IG says, as a risk factor, wasn't seen as a risk factor by the FAA. MARION BLAKEY: You know, the IG's report is full of anecdotes, but when you look again at what is actually happening in terms of safety in the system, there's not supporting evidence for that. We are very much tracking each of these carriers on a variety of levels, everything from finding out early on when they are planning to make business decisions that may affect whether they are retaining maintenance in-house or moving it out, and the day in and day out work of looking at flight data recorder information, looking for actual operational changes that we may be seeing straight off the computer. So at every level that's happening. MARGARET WARNER: So are you saying that the IG's just wrong? For instance, another example, when you gave this example, you said three carriers, which were in deep financial trouble, the inspectors didn't really request the financial data and start taking a look at the personnel cuts until these airlines were basically talking about bankruptcy. But in fact, a lot of the cutbacks and the things that could be risks have been going on for months. Is that wrong? MARION BLAKEY: Well, again I think they're just wrong. And, in fact, one of the concerns we have is that when you rely on anecdotes, when you rely on an example here, an example there, without looking systematically across what's happening, it really can present a very skewed picture. We work very, very closely to be sure that we are staying up with the changes that are current. Remember that the fact that the changes are going on with financially troubled carriers, the one thing they cannot compromise is safety. Obviously that would be a terrible thing, not only from the standpoint of the safety of the flying public and their mission, but also from the standpoint of their business. And remember, you've got newer aircraft because they've retired many; you've got more experienced pilots because of the furloughs. There are a lot of countervailing pressures in the system that are giving us the safest period in aviation history, and that's indisputable.
	Problems with the FAA's safety inspections
	MARGARET WARNER: All right. Let me give you just one other anecdote. I take your point about anecdotes. But they did go out and document these. There was another major carrier, again no name, in financial difficulty, high turnover, this is back in fiscal year 2003, and this raises another point. That the FAA does not even complete some 25 percent of inspections, planned inspections don't get done, I guess, I'll ask you about that in a minute. So, at this particular facility, even though they had a high turnover in the maintenance, they never sent anyone out to take a look at the new repair facility and the new repairmen. Ten months later they go and find that there are a couple of repairmen completely unqualified to be working on the parts they're working on. Doesn't that tell you something? MARION BLAKEY: Well, what I do not know of course is the very specifics on that, and again we're talking about something where I don't know any of the circumstances because of the way it's accounted for. But what I would say is this: Certainly are there errors, or the things that go wrong, that's the reason we have a 3,400 inspector work force out there, but from time to time there certainly are going to be issues that arise. And, again, we're trying to oversee those. But the idea that we're doing this on some sort of mechanical checklist basis is just a very old fashioned approach. It is the approach that we had many years ago. We have very much shifted to looking at where we see risk and then following that. MARGARET WARNER: The IG gives you credit for going to this risk based approach, just saying that you're not factoring in enough of the risk in a timely way. MARION BLAKEY: I think the data don't support it. Again, looking at the safety record, looking at the way we're applying resources, looking at the fact that when you go across the board, we're looking at computer data; we are looking at a vastly larger amount of information than we ever had in recent years. So the information that we have is really terrific in terms of being able to know what's going on. The idea of not having been out in a facility the particular time is kind of going back to this idea of were you standing over someone's shoulder and are you checking all the boxes on a list? MARGARET WARNER: So you don't think there's a problem that if 90 percent of maintenance is done at night, maintenance work, and IG inspectors at most, from 1 to 7 percent, I know you all say ten percent, go at night. And according to the report they don't like meeting after 1:30 PM. You don't think that's a problem? MARION BLAKEY: I think that's selling our work force way short to begin with. We are working 24-7 and that always is the case. What I do think, though, is the idea that you're trying to stand on the floor of a repair station or in a maintenance facility and visually observe, and that's the only way to do safety oversight, is again not the way that any industry these days that's really cutting edge involved in safety issues does it. It's interesting that the medical field has come to the FAA looking at the way we are doing our risk analysis and safety oversight, looking at the system of safety that we have put in place, and they see that as where they would like to go. So it tells you a lot right there.
	Shifting more safety inspections overseas
	MARGARET WARNER: All right. Tell us now about the outsourcing. The IG, and by the way, we did invite the IG to come and he declined -- the IG doesn't really come to a conclusion about outsourcing because I think they're still working on another report, but they did give some examples. All these airlines are outsourcing more and more, as Sara Goo just described, there was one major carrier that's now up to 50 percent of its work is done not in-house, but out of house. Yet 98 percent of the FAA inspections of that airline are still done on the in-house facilities. Why would that be? MARION BLAKEY: We're shifting our work force as we find that there are shifts in where the work force needs to be and where the work is being done. But, in fact, we have very vigorous oversight of our repair stations and that is independent of the work we do for specific carriers as well. MARGARET WARNER: And are you going to be doing more overseas? MARION BLAKEY: We will do as much overseas as we have the resources and really believe we need to do. Remember, we don't certify a facility overseas that we cannot support with continued oversight. But the idea that outsourcing somehow is less safe is again a flawed idea. You're talking often about much more specialized work than would be possible to do in-house as avionics, as engines become much more sophisticated -- often they're going back to the original manufacturer to get the work done, and it's a global industry. A lot of these parts, these aircraft, are made overseas. MARGARET WARNER: Now, though you say you don't like this report or you don't agree witness, at the end of the report the FAA's response was in fact you were going to institute a number of changes to respond to it, to comply with this. What are those changes? MARION BLAKEY: We are involved in an ongoing safety improvement ourselves. No one can say that we can eliminate all risk out of the system. It's the safest period in aviation history, but the fact of the matter is that we're continually making improvements, and we'll certainly respond to any of the recommendations that look like they're going to raise the safety bar, that's what we want to do. MARGARET WARNER: And can you do it while cutting 300 inspectors this year? MARION BLAKEY: We don't know the number that will drop, but remember that, again, that was an inaccuracy in the report. It's more like 80 people in the field to begin with, and what we're doing is shifting people from certifying new products, new airlines, new places, which means they cannot perform the work, and we are maintaining our ongoing safety oversight. There's no lack of safety there, and there's no diminution. MARGARET WARNER: Administrator Marion Blakey, thank you so much. MARION BLAKEY: Sure.