As airlines contract out work, safety issues rise

For the first time, more than half of aviation repair work will be done this year by outside companies.

The night before an Air Midwest commuter plane crashed last January, a mechanic-in-training at an independent repair station improperly adjusted a set of cables that control the pitch of the plane.

That small error made it extremely difficult for the pilot to control the aircraft on takeoff. The National Transportation Safety Board found that to be a primary cause of the crash, which killed 21 people.

While any mechanic could make such an error, the fact that it was done by a contractor, instead of a certified, union airline employee, has helped revive concerns about the airline industry's outsourcing of repair work. It's a trend that started a decade ago, but has accelerated rapidly in the past two years as the major carriers have struggled to survive financially.

In 1992, the nation's 10 largest carriers outsourced just more than 30 percent of their repair work, according to a report by Back Aviation Solutions, an aviation consulting company. This year, for the first time, more than half of aviation repair and overhaul work will be done by lower-paid outside contractors. Some major carriers will outsource as much as 70 percent of their maintenance work.

That has raised alarms among union members and some safety experts, who contend that outside contract employees, who aren't necessarily certified, pose potential safety risks to the flying public.

Where the errors happen

It has also raised alarms at the Office of the Inspector General of the Department of Transportation. In a recent report, it found that 86 percent of the "discrepancies" it found went undetected at the repair stations where outsourced work is done in both the US and other countries.

Those discrepancies included the use of improper parts and equipment, improperly calibrated instruments, and "insufficient documentation that workers were properly qualified and trained to do repairs," according to the OIG's report.

But both the OIG and the Federal Aviation Administration (FAA) insist that this move toward outsourcing has not affected passenger safety. They note that in 2002, there was not a single commercial aviation fatality, making it one of the safest years in history. They also point out that there are many layers of redundancy, so that work done by repair stations is checked by certified mechanics and airline personnel.

Still, the government acknowledges it could do a better job of policing such repair work. As a result of the OIG's report, the FAA has committed to increasing its oversight and inspections of outsourced work. Many experts also argue that particularly in this safety- and security-sensitive environment, it's incumbent on the airlines themselves to ensure that there is more stringent oversight of the outsource repair process.

"As part of their commitment to safety, the airlines are going to have to increase their own oversight of the outsourcing process," says Darryl Jenkins, director of the Aviation Institute at The George Washington University in Washington, D.C. "It for their own well-being, both financially and safetywise."

In 1996, the ValuJet crash sparked one of the most intense debates about the safety and appropriateness of outsourcing. The accident was caused by a fire, which was ultimately blamed on a contractor that improperly loaded oxygen canisters into the hold. One hundred ten people were killed and the airline nearly went bankrupt, although it did emerge later as AirTran.

As a result of that investigation, the FAA instituted a new system of overseeing airline maintenance in 1998, called the Air Transportation Oversight System. But as of last year, the inspector general found that it wasn't yet fully operational. And in the new report, it found the FAA continues to focus too much on the major airlines' in-house maintenance operations.

"In FY 2002, certificate management inspectors completed an average of 220 inspections of in-house maintenance procedures for the major carriers," the report states. "For the same year, they completed an average of only 7 inspections of outsourced maintenance facilities used by these carriers."

The FAA is quick to note that it does have inspectors assigned only to repair stations. Of its 1,745 maintenance inspectors, 708 oversee the repair stations. But the union that represents the inspectors insists there are still not enough people to oversee the 5,250 repair stations properly, particularly since 650 of them are overseas. Union officials who represent mechanics at the nation's major airlines also contend that a lot of sloppy work slips through at the repair stations.

'It's alarming because the FAA usually doesn't go very deep into anything when they do their inspections, so the things they did find must be pretty superficial," says Frank Bokfanske, safety and standards director for the Aircraft Mechanics Fraternal Association in Hanover, N.H.

How the two sides see it

The mechanics union has surveyed supervisors at the major airlines who report that it's routine to see crossed cables, improperly tightened bolts, and other such errors when planes return from contractors. But supporters of outsourcing argue that in-house mechanics can make errors as well. They say outsourcing may even be safer because another layer of safety is built into the system: Work done in repair shops is usually double-checked by the carriers' own mechanics.

But arguments aside, even union members acknowledge that outsourcing is here to stay. It can save carriers as much as 40 percent in maintenance costs and allows them to build flexibility into their high fixed costs, according to Frank Werner, an aviation finance expert at Fordham Business School in New York.

Indeed, most of the low-cost carriers, which have set the benchmark for cost savings in the industry, outsource as many of their services as they can, according to Steven Casley of Back Aviation Solutions. "US Airways and United were able to secure concessions [from unions to allow more outsourcing] in bankruptcy," he says. "That has put pressure on other unions to give concessions to allow their carriers to compete effectively."

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