=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/03/03/f= inancial0952EST0066.DTL ---------------------------------------------------------------------- Wednesday, March 3, 2004 (AP) Airlines are outsourcing more maintenance duties SCOTT MCCARTNEY, The Wall Street Journal (03-03) 06:52 PST (AP) -- Airlines are increasingly paying other companies to do their maintenance for them. But it has become painfully clear that the Federal Aviation Administration doesn't spend enough time checking up on these outside repair shops. Last week, the National Transportation Safety Board cited sloppy maintenance and lax federal oversight as contributors to last year's fatal crash of a US Airways commuter flight in Charlotte, N.C., operated by Air Midwest. It's not the first time: The safety board has also said federal maintenance oversight was an issue in the 2000 Alaska Airlines crash off the coast of California, which killed 88 people. Aircraft maintenance matters -- a lot. And while great safety strides ha= ve been made in many areas of aviation, the recent track record of maintenance oversight is a troubling one for travelers. In an effort to hold down costs, airlines now spend an average of 30 percent of their maintenance dollars at outside vendors. But the FAA has done little to keep tabs on all this work, according to a report last summer from the Department of Transportation's inspector general. Some 97 percent of inspections done by FAA officials who oversee specific airlines were of the carriers' in-house maintenance shops -- not third-party facilities -- in fiscal year 2002, the report said. While regional inspectors (as opposed to airline-specific staff) do get out to see more of the independent shops, they often have time for only cursory looks, the report said. Overall last year, the FAA says 16 percent of all its maintenance "surveillance activities" -- anytime an inspector looked at something -- were done at outside repair stations. Lower-cost carriers do the most outsourcing, spending an average about half of their maintenance money with third-party vendors. Higher-cost airlines are more likely to do work in-house, coming in at only 26 percent. As a rule, "outsourced" maintenance isn't inferior maintenance. Continental Airlines, for example, hires General Electric Co. to repair engines. After all, GE built the engines in the first place. It's also important to remember that airlines that rely heavily on outsourced maintenance aren't necessarily "unsafe" airlines, and aren't prone to more mechanical breakdowns and delays. Southwest Airlines, which hasn't had a fatal crash in 33 years of flying and which consistently ranks at the top of the industry in on-time performance and fewest cancellations, outsources more than half of its maintenance needs. If Southwest's planes were prone to breakdowns, the airline couldn't maintain such a strong operating record. The FAA points out that, by law, airlines are responsible for making sure maintenance work is done right. And the agency says it is making improvements in maintenance oversight. The FAA in recent years developed a system to assess risks and better target inspections at airlines; now it's trying to do the same thing at contract repair stations. "I think in the near future you're going to see changes made," said Jim Ballough, the FAA's director of flight standards. "The system is incredibly safe today, and we continue to look at improvements." But the current shortcomings are a serious concern. If regulators are looking at only part of the maintenance process, then trouble could happen. And it has. The NTSB said the Air Midwest Beech 1900 crashed as a result of incorrect rigging of the plane's elevator control system, which points the nose up or down, and because the aircraft was loaded with too much weight in the rear. Among contributing factors, the safety agency said, was a lack of oversight by both the airline and the FAA on the maintenance work done at the outside repair shop, Raytheon Aerospace LLC in Huntington, W.Va. Rigged incorrectly, the elevator's movement was restricted and limited pilots' ability to push the nose down as the tail-heavy plane pitched nose-up. "Carriers that use contractors to perform required inspection item maintenance tasks and inspections need to provide substantial and direct oversight during each work shift," the NTSB report said. Air Midwest has since brought its maintenance work in-house, says Jonath= an Ornstein, chairman of parent company Mesa Air Group Inc. A spokesman for Raytheon Aerospace, renamed Vertex Aerospace LLC and then acquired by L-3 Communications, declined comment. Industry practices on outsourcing vary widely. According to maintenance-spending figures for the 12 months ended in September, America West Airlines, a lower cost carrier, spent the biggest percentage, 68.5 percent, of its maintenance dollars at third-party shops. But ATA Airlines, another lower-cost carrier, had the lowest percentage of maintenance outsourcing among the major airlines at 15.8 percent. America West says it has employees who live near its major maintenance vendors to check work and conduct required audits. Even with 138 planes, the airline's fleet isn't large enough to try to have its own engine overhaul shop. Better to have GE and Rolls-Royce do the work, said Jeff McClelland, executive vice president of operations. Alaska Airlines ranks second among major carriers in outsourcing, spendi= ng nearly 60 percent of its maintenance dollars with outside vendors. Yet the crash of Alaska Flight 261 in January 2000 traced back to Alaska's own in-house maintenance, not contract work. In addition to problems in Alaska's maintenance, NTSB investigators also found the FAA oversight lacking. It's not clear if one way -- in-house or outsourced -- is systematically better than the other. But what is clear is that weak oversight of maintenance is dangerous, for the airlines, the FAA and passengers. ---------------------------------------------------------------------- Copyright 2004 AP