[Senate Hearing 110-1126]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1126

                     OVERSIGHT OF FOREIGN AVIATION 
                            REPAIR STATIONS

=======================================================================

                                HEARING

                               before the

       SUBCOMMITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 20, 2007

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation












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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington           JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey      JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas                 JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
   Christine D. Kurth, Republican Staff Director and General Counsel
Kenneth R. Nahigian, Republican Deputy Staff Director and Chief Counsel
                                 ------                                

       SUBCOMMITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY

JOHN D. ROCKEFELLER IV, West         TRENT LOTT, Mississippi, Ranking
    Virginia, Chairman               JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            GORDON H. SMITH, Oregon
BILL NELSON, Florida                 JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey      JIM DeMINT, South Carolina
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware           JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota







                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 20, 2007....................................     1
Statement of Senator Dorgan......................................    58
Statement of Senator Lautenberg..................................     3
Statement of Senator Lott........................................    53
Statement of Senator McCaskill...................................     2
Statement of Senator Rockefeller.................................     1

                               Witnesses

Barimo, Basil J., Vice President, Operations and Safety, Air 
  Transport Association of America, Inc..........................    36
    Prepared statement...........................................    38
Brantley, Tom, President, Professional Airways Systems 
  Specialists (PASS), AFL-CIO....................................    46
    Prepared statement...........................................    47
Filler, Marshall S., Managing Director and General Counsel, 
  Aeronautical Repair Station Association (ARSA).................    24
    Prepared statement...........................................    26
Gilligan, Margaret, Deputy Associate Administrator for Aviation 
  Safety, FAA....................................................    15
    Prepared statement...........................................    17
Roach, Jr., Robert, General Vice President of Transportation, 
  International Association of Machinists and Aerospace Workers..    20
    Prepared statement...........................................    22
Scovel III, Hon. Calvin L., Inspector General, U.S. Department of 
  Transportation.................................................     5
    Prepared statement...........................................     7

                                Appendix

Rockefeller IV, Hon. John D., U.S. Senator from West Virginia, 
  prepared statement.............................................    75
Response to written questions submitted by Hon. John D. 
  Rockefeller IV:
    Marshall S. Filler...........................................    77
    Margaret Gilligan............................................    76
    Hon. Calvin L. Scovel III....................................    75

 
                     OVERSIGHT OF FOREIGN AVIATION 
                            REPAIR STATIONS

                              ----------                              


                        WEDNESDAY, JUNE 20, 2007

                               U.S. Senate,
  Subcommittee on Aviation Operations, Safety, and 
                                          Security,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:36 p.m. in 
room SR-253, Russell Senate Office Building, Hon. John D. 
Rockefeller IV, Chairman of the Subcommittee, presiding.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. My apologies. I've been in the Senate 
for a number of years and this is the first time I've ever been 
late for anything. I'm just sorry it had to be you.
    This is an important oversight. Aviation safety is one of 
the Subcommittee's primary responsibilities and we, the 
Subcommittee, interestingly, there aren't that many that come. 
Claire McCaskill is one, John Thune is another, Trent Lott, and 
myself come, but aviation, as you know, is a very difficult 
subject and if you're not into the terminology and the weeds of 
that and with all the other things people have going on. I'm 
always a little bit embarrassed when we have a hearing on such 
an important manner, but Claire and I are here and that's--
actually you got a pretty good deal on that.
    The Government has absolutely no more important role in 
making sure that our Nation's aviation systems remain the 
safest in the world. I met with the former Prime Minister of 
Ireland this morning where we discussed this general subject in 
his new capacity. I want to thank Senator McCaskill for 
requesting this hearing, which she did. It was she that 
requested it and she is aggressively seeking to improve our 
Nation's aviation safety.
    Now, I would like to thank our other witnesses for coming 
today, as well. That's all of you.
    I have a few brief remarks and then we'll ask other 
Senators if they have opening statements and I know of at least 
one who will.
    First, I want to state that I firmly believe that the 
United States has the safest and the best air system in the 
world. I say that in spite of the fact that we have an analog 
air traffic control system, which embarrasses me every single 
day of my life, since we're the only people in the 
industrialized world that have that. And we're trying to cure 
that in the bill, which we passed through Congress with various 
people objecting for what I call wholly insufficient reasons.
    I do not want to give anyone the impression that I believe 
it's unsafe to fly, but the aviation industry continues to 
change rapidly in light of unrelenting competitive pressures. I 
am concerned that the quickly changing nature of the commercial 
aviation industry, coupled with the FAA's declining level of 
resources, threatens the agency's ability to maintain the 
necessary level of oversight of air carriers' foreign repair 
stations and upgrade the existing safety infrastructure at our 
own airports. It's a massive problem. There have been huge 
layoffs because of budget cuts by the Administration.
    Although I understand why many commercial airlines are 
contracting out an increasing amount of their maintenance work, 
I am concerned that this work is being sent to foreign 
countries where governmental oversight for both the home nation 
and the FAA may be weak or nonexistent. That is a much larger 
source of energy and concern than many of you will, at first, 
accept. You will accept this, you'll hear the statement, but 
you need to understand this is a, the profound concern of, not 
just this Committee, but generally in Congress.
    Compounding the industry's trend to outsource much of the 
significant maintenance work, is the inability of the FAA to 
certify and closely monitor an ever increasing number of 
foreign repair stations. I do not question the Agency's 
commitment to safety. I believe that is due mainly to a lack of 
resources. I'm deeply concerned that the FAA is losing a number 
of its most senior safety inspectors and does not have the 
ability to replace them.
    This Committee, as it begins evaluating the future of the 
FAA, should be spending a considerable amount of its time 
making sure that the agency is able to meet its foremost 
mission, which is the safety of the traveling public.
    Again, I want to thank Senator McCaskill for her leadership 
on this issue and I call on her for any statements that she may 
wish to make.

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Thank you, Mr. Chairman. And, I want to 
thank you for calling this hearing. I think it is incredibly 
important. I think if the American people understood some of 
the safety and security issues surrounding foreign repair 
stations, they would march on Washington with pitchforks. I 
began down this road simply by reviewing a summary of the IG 
report, the FAA IG reports of both 2003 and 2005. And, as I 
began to pull that thread, I was surprised by what I learned 
and I hope today I will have the opportunity to ask some very, 
I hope, penetrating questions in four different areas.
    First, on safety--if, in fact, qualified and certified 
inspection sites are important in the United States of America, 
then why aren't they important in other countries? We can not 
have a double standard. We can not decide that you have to get 
to a certain level in the United States, but not care about 
those safety levels in other countries. If drug and alcohol 
testing are important in the United States of America, they 
should be important in every location where someone has access 
to the physical operation of an airplane.
    In the security area--if background checks are important 
and perimeter security is important in some FAA-certified 
sites, they should be important in all sites. In June of 2007, 
the State Department put out its latest report on terrorism, 
excuse me, in June of 2006, this was released on April 30, 
2007. The following countries where FAA-certified foreign 
repair stations are located, these countries are located as 
terrorist safe havens; the tri-border region of Argentina, 
Brazil, Columbia, Indonesia, and the Philippines. If we are 
allowing foreign repair stations to be located in nations that 
have been deemed safe havens for terrorists by our own State 
Department, then the standard should be very high in deed for 
security checks, background checks, and perimeter security.
    The third area that I think we have to talk about today is 
accountability. If the Congress passes laws, including their 
most recent authorization act, and requires certain rules to be 
promulgated and certain action to be taken by FAA and TSA, then 
it is imperative that those rules be promulgated, it is 
imperative that those laws be followed. If we don't force 
accountability for the laws that Congress has already passed, 
then one could ask, what is the point of us being here to pass 
another FAA authorization act.
    And finally funding--and it is forced because it is the 
least important. Safety and security are the most important, 
accountability of FAA and those people in the Homeland Security 
Department are incredibly important, but funding is also 
important. Should the taxpayers be funding any part, should we 
be subsidizing in any way the effort to inspect foreign repair 
stations? Is that fair to those companies who are not going to 
the lowest wage and are continuing to repair their airplanes 
and maintain their airplanes here in the United States of 
America.
    Once again, Mr. Chairman, I thank you very much for holding 
this hearing and I look forward to hearing the testimony of the 
witnesses. I appreciate them all being here, as I know you do, 
and I look forward to having these questions answered.
    Thank you.
    Senator Rockefeller. Thank you, Senator McCaskill.
    Senator Lott, do you have--Co-Chair of this Subcommittee.
    Senator Lott. Well, thank you Mr. Chairman, glad to be here 
and appreciate you having a hearing so we can fully understand 
all the ramifications of this issue. I'd like to withhold any 
comments at this time so we can hear the testimony of the 
witnesses. And maybe I'll have some questions and some comments 
after that.
    Thank you.
    Senator Rockefeller. That means you'll have a lot of 
questions.
    [Laughter.]
    Senator Rockefeller. Senator Lautenberg.

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thank you, Mr. Chairman. I just need a 
moment to get organized.
    Senator Rockefeller. Well, we're just going to sit here and 
look right at you and wait for you to be ready.
    Senator Lautenberg. I respect that.
    OK, thanks very much, Mr. Chairman, I congratulate our 
colleague from Missouri for her inquiry into the bill and 
examining the problems that we see, and as with other 
industries across the country work like this, being outsourced 
in the aviation industry.
    Ten years ago, airlines outsourced 37 percent of their 
maintenance work according to the DOT's Inspector General. 
Today, they outsource 64 percent, it's quite incredible. The 
more repair work the airlines choose to send overseas, the less 
of that work gets inspected by FAA.
    But in 2003, an Air Midwest plane crashed, killing 19 
passengers and 2 crew members, and the NTSB investigated and 
found, specifically, that a lack of Federal oversight over 
maintenance had contributed to the accident.
    Seven hundred and sixty million people will fly this year, 
and by the year 2015, the number's expected to hit 1 billion. 
And yet, while the number of passengers is increasing, the 
amount of maintenance work that the FAA inspects is decreasing. 
As of February, the FAA had only three more aviation safety 
staffers than it had 3 years ago. It doesn't sound like it's 
keeping up to date. And those inspectors used to travel 
primarily to staff facilities within the country, but now 
they've got to go to aviation repair facilities as far away as 
China, without additional resources.
    So, I also want to mention my concern about the safety of 
the work done at repair stations not certified by the FAA. With 
the summer season travel upon us, long-term agenda in air 
travel trends shows no sign of slowing. This is not the time to 
take any extra risks with the safety of our aviation system. 
FAA needs to outline what, if any, work it will allow at these 
facilities, for the safety of our passengers and the viability 
of our economy, we need to know that our aircraft are being 
repaired responsibly, and those repairs are being overseen by 
the FAA.
    Mr. Chairman, thanks very much for the opportunity to chat 
with you here.
    Senator Rockefeller. Thank you very much, Senator 
Lautenberg.
    I'm going to introduce the panelists, and then we're going 
to do something a little bit different. Senator McCaskill, who 
has been the driving force behind this, is going to come sit 
here, and chair the hearing, and I will take her place, and 
stay and ask questions.
    Our witnesses are Calvin Scovel, U.S. Department of 
Transportation Inspector General; Peggy Gilligan, Deputy 
Associate Administration for Aviation Safety, FAA; Robert 
Roach, General Vice President, International Association of 
Machinists and Aerospace Workers; Marshall Filler, Managing 
Director and General Counsel, Aeronautical Repair Station 
Association; Basil Barimo who is Vice President of Operations 
and Safety, Air Transport Association (ATA); and Tom Brantley, 
President, Professional Airway Systems Specialists (PASS). So, 
just hold for 1 second.
    Senator Lott. Are we going to have the testimony of the 
witnesses now, beginning with Mr. Scovel, I guess across the 
table?
    Senator McCaskill. Please, go ahead, thank you.

STATEMENT OF HON. CALVIN L. SCOVEL III, INSPECTOR GENERAL, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Scovel. Mr. Chairman, Madame Chairman, members of the 
Subcommittee, we appreciate the opportunity to testify on FAA's 
oversight of foreign repair stations and facilities.
    Air carriers have outsourced, or contracted out, 
maintenance for years to both domestic and foreign repair 
stations. However, in recent years, use of external repair 
facilities has become more prevalent in the industry.
    From 1996 to 2006, air carriers increased the percentage of 
maintenance dollars spent on outsourced maintenance from 37 
percent to 64 percent. In 2006, $3.7 billion of the $5.7 
billion spent on maintenance was outsourced.
    Neither FAA nor the Department maintain information on how 
much maintenance air carriers outsource to foreign facilities, 
but our work shows that the number of foreign, FAA-certificated 
repair stations repairing U.S. aircraft has increased from 344 
in 1994 to 698 in 2007.
    As we have emphasized in the past, however, the issue is 
not where maintenance is performed, it is that maintenance 
requires effective oversight.
    We see three areas that are key in FAA's efforts to 
effectively oversee outsourced air carrier maintenance, 
including maintenance performed by foreign repair stations and 
facilities. First, FAA must strengthen its risk-based systems 
for safety oversight. During the past 8 years, FAA has taken 
important steps to move its safety oversight for air carriers 
and repair stations to risk-based systems. FAA's new oversight 
system applies to both domestic and foreign repair stations. It 
is designed to help FAA inspectors focus their outsourced 
maintenance oversight on areas that pose the greatest safety 
risks. Risk-based oversight should significantly enhance FAA's 
ability to focus its inspections. However, we have identified a 
number of concerns that FAA must address.
    In July 2003, we reported that FAA oversight had not 
shifted to where the maintenance was actually being performed. 
Instead, inspectors continued to focus inspections on in-house 
air carrier maintenance. We also reported, that at that time, 
138 repair stations in Germany, France, and Ireland were not 
inspected by FAA at all. Under bilateral agreements with the 
aviation authorities of these countries, FAA permitted foreign 
authorities to inspect FAA-certificated repair stations on its 
behalf.
    Since our 2003 report, FAA officials have worked closely 
with the aviation authorities of other countries, to improve 
the surveillance they perform on FAA's behalf. We are concerned 
that FAA is still not regularly visiting the facilities and the 
countries where agreements exist with other aviation 
authorities. For example, FAA international field office 
inspectors had not conducted any spot inspections of one major 
foreign engine repair station in 5 years between 2001 and 2006.
    Recently, FAA has made significant progress in improving 
its repair station oversight. Since October 2005, inspectors 
have been required to review 15 areas within repair station 
operations to obtain a baseline assessment of each facility. 
Using this information, inspectors can focus their oversight on 
risk areas identified within the facility.
    For the new oversight system to be successful, FAA needs to 
ensure that its inspectors receive the training they need to 
properly implement these new processes.
    Second, FAA must know the location and type of maintenance 
that is being performed. In July of 2003 and December of 2005, 
we reported that FAA did not have good systems for determining 
which repair facilities air carriers were using to perform 
their most critical maintenance. Air carriers are required to 
provide--and FAA must approve--a list of repair stations that 
can conduct major repairs on air carriers' aircraft. However, 
the information that air carriers were providing did not always 
represent the facilities they actually used or show the 
quantity of work they sent to each facility.
    This fiscal year, FAA developed new inspector guidance and 
air carrier processes to address this problem, but these 
efforts still fall short of providing FAA with the information 
it needs.
    For example, air carriers do not include all repair 
stations that provide critical component repairs in their 
quarterly utilization reports. Also, FAA does not validate the 
information provided.
    Further, in December 2005, we reported that FAA was not 
aware that non-certificated repair facilities were performing 
critical repairs for U.S. air carriers. Our review of 19 air 
carrier maintenance vendor lists showed that all 19 carriers 
used non-certificated repair facilities to some extent. We 
identified over 1,400 non-certificated repair facilities 
performing maintenance, and more than 100 of these facilities 
were located in foreign countries.
    I see that I am almost out of time; if I may have, perhaps, 
another 2 minutes, I should be able to wrap up.
    Senator McCaskill. Take the 2 minutes.
    Mr. Scovel. Thank you.
    Non-certificated facilities are not required to have the 
same quality controls and oversight systems that exist in FAA-
certificated repair stations. Yet, there are no limitations on 
the scope of work they can perform. Further, FAA cannot rely on 
air carrier oversight programs for non-certificated repair 
facilities, because the carriers we visited did not provide 
adequate oversight of the work performed. FAA's efforts to 
improve its oversight in this area are still underway.
    Third, FAA must ensure that its inspectors are well-
positioned to adequately oversee maintenance outsourcing. FAA 
has approximately 3,821 inspectors located in offices around 
the world to oversee both domestic and foreign aspects of air 
carrier maintenance operations. However, FAA does not have a 
staffing model to determine the number of inspectors needed and 
where they should be placed.
    FAA has hired an independent contractor to conduct a study 
to determine the most effective staffing mechanism, but 
completion of this process is likely years away.
    The important implications of the changing U.S. and global 
aviation environment that we have discussed today are expected 
to be key drivers of future inspector staffing needs. Air 
carrier outsourcing of aircraft maintenance, FAA's shift to a 
systems safety oversight approach, and safety inspectors' 
attrition and retirement are all significant changes that must 
be considered in determining staffing needs. Until FAA develops 
an effective staffing model, it will not be able to determine 
where inspectors should be placed to make the most effective 
use of its resources.
    This concludes my statement. I would be pleased to address 
any questions that you or other members of the Subcommittee may 
have.
    [The prepared statement of Mr. Scovel follows:]

  Prepared Statement of Hon. Calvin L. Scovel III, Inspector General, 
                   U.S. Department of Transportation
    Mr. Chairman and members of the Subcommittee:
    We appreciate the opportunity to testify on the Federal Aviation 
Administration's (FAA) oversight of foreign repair stations and 
facilities. Our testimony today is based on a number of our previous 
reports as well as our ongoing work. At the outset, it is important to 
note that while the United States has the most complex aviation system 
in the world, it is also the safest. Multiple layers of controls in air 
carrier operations and maintenance processes, along with FAA's 
oversight, are largely responsible for the high level of safety that we 
have seen in the last 5 years.
    This safety record is a remarkable accomplishment given the many 
changes occurring within the industry. For example, air carriers 
continue to struggle for profitability and are aggressively working to 
cut costs by reducing in-house staff, renegotiating labor agreements, 
and increasing the use of external repair facilities--many of which are 
located in foreign countries.
    Today's aviation environment continues to evolve. Since 2001, eight 
commercial air carriers have gone through bankruptcy and one has ceased 
operations. Fuel prices remain high, and this makes cost control a key 
factor in both the sustained profitability and overall survival of an 
airline. Personnel and aircraft maintenance are also significant cost 
areas within an air carrier's operations, and air carriers have been 
outsourcing, or contracting out, more maintenance to domestic and 
foreign repair stations to reduce these costs. Outsourcing maintenance 
is also a means for air carriers to accommodate the increasingly global 
nature of air travel. That is, having maintenance contracts with 
facilities around the world permits air carriers to readily obtain 
needed maintenance repairs and services.
    Air carriers have outsourced maintenance for years to both domestic 
and foreign repair facilities. These facilities can complete repairs 
for less cost and provide services in areas (such as engine repair) 
that would otherwise require air carriers to have specialized equipment 
and staff. Many air carriers outsource their engine work to the 
original equipment manufacturers because of the level of expertise and 
the product warranties that the manufacturers can provide. However, in 
recent years, use of external repair facilities has become more 
prominent. From 1996 to 2006, while total maintenance costs fluctuated, 
air carriers continued to increase the percentage of maintenance 
dollars spent on outsourced maintenance--from 37 percent to 64 percent. 
In 2006, $3.7 billion of the $5.7 billion spent on maintenance was 
outsourced (see figure 1).
Figure 1. Percentage Increase in Outsourced (Contract) Maintenance 
        Expense for Major Air Carriers \1\ From 1996 to 2006
        

        
    Neither FAA nor the Department maintain information on how much 
maintenance air carriers outsource to foreign facilities, but our work 
shows that the number of foreign FAA-certificated repair stations 
repairing U.S. aircraft has increased from 344 in 1994 to 698 in 2007. 
We have emphasized that the issue is not where maintenance is performed 
but that maintenance requires effective oversight.
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    \1\ Alaska Airlines, America West Airlines, American Airlines, 
Continental Airlines, Delta Air Lines, Northwest Airlines, Southwest 
Airlines, United Airlines, and US Airways.
---------------------------------------------------------------------------
    However, we have identified challenges in FAA's ability to 
effectively monitor the increase in outsourcing. For example, in July 
2003, we reported \2\ that FAA had not shifted its oversight of 
aircraft maintenance to the locations where the maintenance was 
performed. Although air carriers were using external repair stations to 
perform more of their maintenance work, FAA was still focusing most of 
its inspections on the maintenance work that air carriers performed 
within their own facilities.
---------------------------------------------------------------------------
    \2\ OIG Report Number AV-2003-047, ``Review of Air Carriers' Use of 
Aircraft Repair Stations,'' July 8, 2003. OIG reports and testimonies 
can be found on our website: www.oig.dot.gov.
---------------------------------------------------------------------------
    FAA has taken a number of steps to improve its oversight, and we 
will discuss some of those improvements today. However, the continuous 
growth in outsourcing underscores the need for FAA to remain vigilant 
in continually improving its oversight.
    Today, I will begin by briefly discussing the regulatory 
differences between foreign and domestic repair stations. I will then 
move to two areas that we see as key in FAA's efforts to effectively 
oversee outsourced air carrier maintenance--including that performed by 
foreign repair stations and facilities.

   Regulatory differences between domestic and foreign repair 
        stations: FAA-certificated maintenance facilities are referred 
        to as repair stations. FAA has certificated (or licensed) 698 
        foreign repair stations to perform work on U.S. aircraft. The 
        issuance of an FAA certificate means that FAA has determined 
        that the facilities have the equipment, personnel, and 
        inspection systems to ensure that repairs are completed 
        according to FAA standards. Unlike U.S. repair stations, 
        foreign repair stations must first demonstrate a need to obtain 
        an FAA certificate--that is, the facility must show that it has 
        potential customers with U.S.-registered aircraft. Also, 
        foreign repair station certificates are only valid for a 1- to 
        2-year period.

        These requirements are more stringent than those mandated for 
        domestic repair stations. However, foreign repair stations are 
        currently exempt from some FAA requirements that domestic 
        repair stations must meet. For example, FAA requires domestic 
        repair stations to have drug and alcohol programs to 
        periodically test employees performing maintenance but does not 
        require foreign repair stations to perform drug and alcohol 
        testing on their employees.

   Strengthening safety oversight of repair stations and non-
        certificated repair facilities: During the past 8 years, FAA 
        has taken important steps to move its safety oversight for air 
        carriers and repair stations to risk-based systems. FAA's new 
        oversight system applies to both domestic and foreign repair 
        stations. It is designed to help FAA inspectors focus their 
        outsourced maintenance oversight on areas that pose the 
        greatest safety risks. FAA is clearly on the right path; 
        however, the risk-based systems are not yet at an end-state.

        FAA cannot effectively implement a risk-based system for 
        oversight of aircraft maintenance if it does not know where the 
        maintenance is performed. In July 2003 and December 2005,\3\ we 
        reported that FAA did not have good systems for determining 
        which repair facilities air carriers were using to perform 
        their most critical maintenance. FAA has developed new 
        inspector guidance and air carrier processes to address this 
        problem, but these efforts still fall short of providing FAA 
        with the information it needs. For example, FAA has developed a 
        voluntary process for air carriers to report the top 10 
        critical maintenance providers used each quarter. However, as 
        long as the process is voluntary, FAA cannot be assured that it 
        is getting the accurate and timely information needed to 
        determine where it should focus its inspections. Further, we 
        reported that FAA was not aware that non-certificated repair 
        facilities performed critical repairs for U.S. air carriers. 
        Our review of 19 air carrier maintenance vendor lists showed 
        that all 19 air carriers used non-certificated repair 
        facilities to some extent. We identified over 1,400 non-
        certificated repair facilities performing maintenance, and more 
        than 100 of these facilities were located in foreign countries. 
        FAA's efforts to improve its oversight in this area are still 
        underway.
---------------------------------------------------------------------------
    \3\ OIG Report Number AV-2006-031, ``Review of Air Carriers' Use of 
Non-Certificated Repair Facilities,'' December 15, 2005.

   Ensuring that inspectors are well-positioned to adequately 
        oversee maintenance outsourcing: FAA has approximately 3,821 
        inspectors located in offices throughout the United States and 
        in other countries. FAA inspectors must oversee both domestic 
        and foreign aspects of air carriers' maintenance operations--a 
        task made more difficult by the rapidly changing aviation 
        environment. The pace of these changes makes it imperative for 
        FAA to maintain a sufficient number of inspectors to perform 
---------------------------------------------------------------------------
        safety oversight and place them in the right locations.

        In the next 5 years, 51 percent of the current inspection 
        workforce will be eligible to retire. However, this is only one 
        of the challenges that FAA faces with its inspectors. For 
        example, FAA does not have a staffing model to determine the 
        number of inspectors needed and where they should be placed. 
        Until FAA develops a staffing model, it will not be able to 
        make the most effective use of its resources.

    I would now like to discuss the changes occurring in the aviation 
industry, regulatory differences, and these two key areas in further 
detail.
Recent Trends in Outsourcing
    We are conducting a review of the type and quantity of maintenance 
that air carriers are outsourcing; we plan to report on this review 
later this year. We are finding that the amount, or quantity, of 
maintenance that air carriers outsource continues to climb. Further, 
the work that U.S. air carriers outsource includes everything from 
repairing critical components, such as landing gear and engine 
overhauls, to performing heavy airframe maintenance checks, which are a 
complete teardown and overhaul of aircraft. As shown in figure 2, nine 
major air carriers \4\ we reviewed increased the percentage of heavy 
maintenance they outsourced to certificated repair stations from 34 
percent in 2003 to 67 percent in 2006.
---------------------------------------------------------------------------
    \4\ The carriers represent a cross-section of nine of the largest 
network and low-cost air carriers and included: AirTran Airways, Alaska 
Airlines, America West Airlines, Continental Airlines, Delta Air Lines, 
JetBlue Airways, Northwest Airlines, Southwest Airlines, and United 
Airlines. Because American Airlines, the largest U.S. air carrier, has 
retained its heavy maintenance as opposed to making a significant shift 
to outsourcing, we did not include it in our review.
---------------------------------------------------------------------------
Figure 2. Percentage of Heavy Airframe Maintenance Checks Outsourced 
        for Nine Major Air Carriers From 2003 to 2006
        

        
    Of the heavy maintenance outsourced by the nine carriers in 2006, 
35 percent was sent to foreign maintenance providers, up from 21 
percent in 2003. The trend in outsourcing is significant and 
underscores the need for FAA to ensure that it has accurate information 
on where critical maintenance is performed so it can target its 
inspection resources.
    Repair stations certificated by FAA are located worldwide, as shown 
in figure 3. There are currently 4,216 domestic and 698 foreign FAA-
certificated repair stations available for use by U.S. air carriers.
Figure 3. Locations of FAA-Certificated Repair Stations



    In addition, there are approximately 900 repair facilities in 
Canada that could be used by U.S. air carriers. Under a reciprocal 
agreement with the United States, Canadian officials certify and 
monitor operations at these facilities. FAA oversees work performed on 
U.S. aircraft. At least two major U.S. carriers use Canadian facilities 
to perform heavy airframe maintenance, and, as I will discuss later, 
air carriers also use domestic and other foreign non-certificated 
repair facilities to perform aircraft maintenance.
Regulatory Differences Between Domestic and Foreign Repair Stations
    FAA has approved 698 repair stations in countries around the world 
to perform work on U.S. aircraft. While FAA verifies that the repair 
stations have the equipment, personnel, and inspection systems to 
ensure that repairs are completed according to FAA standards, the 
repair stations are under the regulatory control of a foreign 
governmental authority. As a result, there are some requirements that 
FAA does not impose on the facilities. For example, FAA does not 
require foreign repair stations to conduct background checks or drug 
and alcohol testing on their employees. There are also other 
differences between foreign and domestic repair stations (see table 1).

   Table 1. Regulatory Differences Between Domestic and Foreign Repair
                                Stations
------------------------------------------------------------------------
                    Domestic FAA-
   Regulatory        Certificated      Foreign FAA-Certificated Repair
   Difference      Repair Stations                 Stations
------------------------------------------------------------------------
Duration of FAA   Certificate lasts  Certificate must be renewed every 1
 Certificate       indefinitely                              to 2 years
Fees for          Do not pay FAA          Pay FAA for certification and
 Certification     for                                    renewal costs
                   certification
Drug and Alcohol  Required to have       Not required to have a program
 Testing Program   a program
Certificated      Certain              Personnel are not required to be
 Mechanics         personnel, such                     FAA-certificated
                   as return to      (Note: Personnel must meet certain
                   service and               training and qualification
                   supervisory           requirements. Mechanics may be
                   personnel, must         certificated by the aviation
                   be FAA-            authority where they are located)
                   certificated
Security          Repair stations    Repair stations are not subject to
 Regulations       on commercial             U.S. security requirements
                   airport property
                   are subject to
                   security
                   requirements
------------------------------------------------------------------------
Source: OIG

    As table 1 demonstrates, foreign repair stations must comply with 
more stringent requirements, in some respects, than domestic repair 
stations to get and maintain their FAA certification. For example, 
foreign repair station applicants must show the need to obtain an FAA 
certificate. That is, applicants must be able to show that they have 
customers with U.S.-registered aircraft or customers with parts used on 
U.S.-registered aircraft. U.S. repair station applicants do not have to 
meet these criteria. Also, an FAA foreign repair station certificate is 
only valid for a 1- to 2-year period.
    Foreign repair stations must pay for comprehensive annual or 
biannual FAA-required inspections in order to maintain, or renew, their 
certificate, whereas domestic repair stations can hold their 
certificates indefinitely. Conversely, in some areas, such as personnel 
requirements, domestic repair stations are held to more stringent 
provisions than their foreign counterparts. For example, U.S. repair 
stations must employ FAA-certificated mechanics to approve all repairs; 
foreign repair stations are not held to this requirement.
    However, some foreign countries may have their own mechanic 
licensing requirements that are just as stringent as those required of 
FAA-certificated mechanics. For example, one country we visited 
requires its mechanics to be at least 21 years old and have a minimum 
of 48 months of aviation experience. Also, this country's mechanics are 
certificated for a specific size of aircraft. In contrast, FAA-
certificated mechanics must be at least 18 years old and have a minimum 
of 30 months of aviation experience; also, they can work on aircraft of 
any size.
    In 2003, we identified another difference between foreign and some 
domestic repair stations--repair stations located on commercial U.S. 
airport property must comply with U.S. security requirements. Repair 
stations located on foreign airport property in foreign countries are 
not subject to U.S. security requirements. The level and depth of 
security programs in other countries, including background checks, are 
subject to the government requirements in the country where the repair 
station operates.
    To address security concerns at aircraft repair stations, Congress 
included a provision in the Federal Aviation Reauthorization Act 
(Vision 100),\5\ which required the Transportation Security 
Administration, in consultation with FAA, to issue a final rule 
imposing security standards on foreign and domestic repair stations by 
August 2004. The rule has not yet been issued.
---------------------------------------------------------------------------
    \5\ Vision 100--Century of Aviation Reauthorization Act, Pub. L. 
No. 108-176 (2003).
---------------------------------------------------------------------------
Strengthening Safety Oversight of Repair Stations and Non-Certificated 
        Repair Facilities
    FAA has strengthened its repair station oversight through 
implementation of a risk-based oversight system for both domestic and 
foreign repair stations. The system is designed for inspectors to use 
information obtained from data analysis to focus their oversight on 
areas with the greatest safety risks. In our view, a risk-based system 
is even more crucial to FAA's ability to maximize its inspection 
resources and travel budget given the increasingly global nature of the 
airline industry. Risk-based oversight should significantly enhance 
FAA's ability to focus its inspections; however, we have identified a 
number of concerns that FAA must address to continue advancing the 
program.
FAA Must Ensure That Its New Risk-Based Oversight System for Repair 
        Stations Is Effective
    In July 2003, we reported that FAA oversight had not shifted to 
where the maintenance was actually being performed. Instead, inspectors 
continued to focus inspections on in-house air carrier maintenance. For 
example, inspectors completed 400 inspections of in-house maintenance 
at 1 air carrier but only 7 inspections of repair stations. This 
occurred even though this carrier contracted out nearly half of its 
maintenance that year.
    We also reported that 138 repair stations in Germany, France, and 
Ireland were not inspected by FAA at all. Under a bilateral agreement 
with the European Joint Aviation Authorities, FAA permitted foreign 
authorities to inspect FAA-certificated repair stations on its behalf 
to prevent duplicative inspections and reduce the financial burden on 
foreign repair stations. However, FAA did not have an adequate method 
to monitor the surveillance performed by other authorities. For 
example, most of the inspection files we reviewed that FAA received 
from the foreign authorities were either incomplete, written in a 
foreign language, or otherwise difficult to comprehend.
    Since our 2003 report, FAA officials have worked closely with the 
aviation authorities of other countries to improve the surveillance 
they perform on FAA's behalf. For example, FAA is no longer limited in 
the number of inspections it can perform to verify the quality of 
foreign aviation authority inspections. However, we are concerned that 
FAA is still not regularly visiting the facilities in the countries 
where agreements exist with other aviation authorities. For example, 
FAA international field office inspectors had not conducted any spot 
inspections of one major foreign engine repair station in 5 years 
(2001-2006). In addition, FAA inspectors for 1 air carrier that used 
the repair station had not visited the facility within the same 5-year 
period, even though the repair station had performed maintenance on 39 
(74 percent) of the 53 engines repaired for the air carrier.
    In recent years, FAA has made significant progress in improving its 
repair station oversight. For example, under FAA's old inspection 
system for repair stations, inspectors were instructed to perform one 
inspection of each facility per year and could review any aspect of the 
repair station's operations. Inspectors were not required to provide 
detailed information on the areas they inspected or the issues 
identified. Since October 2005, inspectors have been required to review 
15 areas within repair station operations to obtain a baseline 
assessment of each facility. Using the information from this 
assessment, inspectors can focus their oversight on risk areas 
identified within the facility. Further, the information generated from 
this oversight will be available for review by all FAA inspectors to 
assist them in targeting their inspections more effectively.
    For the new oversight system to be successful, FAA needs to ensure 
that its inspectors receive the training they need to properly 
implement the new processes. FAA must also ensure that it has reliable 
processes for determining where maintenance is performed.
FAA Must Have Adequate Processes for Determining Where the Most 
        Critical Maintenance Is Performed and How it Should Be 
        Monitored
    In 2003, we reported that FAA inspectors did not have effective 
procedures for determining which FAA-certificated repair stations air 
carriers were using to perform maintenance that could impact the 
airworthiness of their aircraft. In December 2005, we reported that FAA 
was unaware of air carriers' use of non-certificated repair facilities 
to perform critical maintenance.\6\ These facilities are not covered 
under FAA's routine oversight program and do not have the same 
regulatory requirements as repair stations that obtain certification 
from FAA.
---------------------------------------------------------------------------
    \6\ In our December 2005 report, we identified critical repairs as 
those repairs categorized as Required Inspection Items by each air 
carrier. Required Inspection Items are mandatory maintenance activities 
that, due to the importance to the overall airworthiness of the 
aircraft, must be independently inspected by a specially trained 
inspector after the work is completed.
---------------------------------------------------------------------------
    Air carriers are required to provide--and FAA must approve--a list 
of substantial maintenance providers, which are repair stations that 
can conduct major repairs on the air carrier's aircraft. These 
procedures are designed to provide inspectors with information on where 
air carriers intend to send their substantial maintenance. However, the 
information that air carriers provided did not always represent the 
facilities they actually used or show the quantity of work they sent to 
each facility. For example, we identified one foreign repair station 
designated as a ``substantial maintenance provider'' for a major U.S. 
carrier even though it had not conducted any significant maintenance 
work for the air carrier in almost 3 years. FAA's surveillance should 
be better targeted to those repair facilities that air carriers use 
regularly.
    FAA's new process for identifying certificated repair stations that 
air carriers use to perform maintenance is not effective. In response 
to our July 2003 report, FAA implemented a system in Fiscal Year 2007 
for both air carriers and repair stations to submit quarterly 
utilization reports. These reports are supposed to show the quantity, 
or volume, of critical repairs that maintenance providers perform for 
air carriers and repair stations. However, submission of this 
information is not mandatory. FAA's Flight Standards staff advised us 
that a new rule would be required to make volume reporting mandatory 
and that they believed air carriers would provide the requested 
information voluntarily. Early indicators show that air carriers are 
submitting the reports. Our review of FAA records for nine air carriers 
showed that as of March 23, 2007, seven of the nine air carriers had 
submitted quarterly utilization reports for the quarter ending December 
2006. FAA must ensure that air carriers file these reports in a timely 
manner.
    Our primary concerns with the reports are that (1) air carriers do 
not include all repair stations that provide critical component repairs 
and (2) FAA does not validate the information provided. Air carriers 
are only requested to report the top 10 substantial maintenance 
providers used--the ones most frequently used per quarter. The reports 
do not have to include repair stations that perform high-volume, 
critical component repairs on parts such as wheels and brakes because 
FAA's definition of substantial maintenance does not include component 
repairs. Further, without some form of data verification, FAA cannot be 
assured that air carriers have provided accurate and complete 
information. If the reports are to be an effective means for FAA to 
track and accurately target those repair facilities that air carriers 
use the most, a more thorough process will be needed.
    FAA needs to develop a mechanism to identify non-certificated 
repair facilities performing critical maintenance for air carriers. In 
December 2005, we reported that air carriers were using domestic and 
foreign repair facilities that were not certificated by FAA to perform 
critical and scheduled \7\ aircraft maintenance. FAA was unaware of 
this practice. Air carriers have used non-certificated facilities for 
years, but it was widely believed that these facilities principally 
performed minor aircraft work on an as-needed basis. However, we 
determined that both domestic and foreign non-certificated facilities 
can and do perform the same type of work as FAA-certificated repair 
stations, including scheduled and critical maintenance. We examined 
records at three air carriers and identified 6 domestic and foreign 
facilities that performed scheduled maintenance and 21 that performed 
maintenance critical to the airworthiness of the aircraft.
---------------------------------------------------------------------------
    \7\ This maintenance is required to be performed at regularly 
scheduled times, such as inspections required after the aircraft has 
flown a designated number of hours (e.g., inspections of crew and 
passenger oxygen, aircraft fuselage, wings, and engines).
---------------------------------------------------------------------------
    We are especially concerned that air carriers rely on non-
certificated facilities to perform scheduled maintenance tasks that the 
air carriers can plan for well in advance. For example, we identified 
an air carrier's use of a non-certificated facility to perform work on 
three aircraft that was required for compliance with an FAA 
Airworthiness Directive. Other critical repairs we found included 
adjustments to flight control systems and removal and replacement of an 
engine.
    FAA does not know how many non-certificated maintenance facilities 
air carriers currently use because it does not maintain a list of the 
facilities. We sampled 19 air carriers, and all 19 were using non-
certificated facilities to some extent. We identified over 1,400 non-
certificated repair facilities performing maintenance, and more than 
100 of these facilities were located in foreign countries, such as 
Aruba, Belize, Bermuda, Dominican Republic, El Salvador, Guatemala, 
Haiti, and Mexico. It is important to note that in many instances, air 
carriers contracted with facilities in these locations to ensure that 
they had a maintenance source in locations where there were no FAA-
certificated repair stations available.
    Nevertheless, permitting non-certificated facilities to perform 
critical maintenance is an important issue that FAA must address. To do 
so, FAA must first determine which non-certificated facilities perform 
critical and scheduled maintenance and then decide if it should limit 
the type of work these facilities can perform.
FAA Cannot Rely on Air Carrier Oversight Programs for Non-Certificated 
        Repair 
        Facilities
    FAA permits air carriers to use domestic and foreign non-
certificated facilities as long as the work is approved by an FAA-
certificated mechanic. However, this is not an adequate substitute for 
an FAA-certificated repair facility because non-certificated facilities 
do not have the safeguards and controls for maintenance repair and 
oversight that is required at FAA-certificated facilities. Differences 
in FAA requirements for these two types of maintenance operations are 
illustrated in table 2.

    Table 2. Differences in Requirements for FAA-Certificated Repair
                Stations  and Non-Certificated Facilities
------------------------------------------------------------------------
                          Certificated Repair        Non-Certificated
    FAA Requirement             Station              Repair Facility
------------------------------------------------------------------------
Annual FAA Inspections  Required                 Not Required
Quality Control System  Required                 Not Required
Report Failures,        Required                 Not Required
 Malfunctions, and
 Defects
Designated Supervisors  Required                 Not Required
 and Inspectors
Training Program        Required                 Not Required
Facilities and          Required                 Not Required
 Housing*
------------------------------------------------------------------------
* If authorized to perform airframe repairs, certificated repair
  stations must have facilities large enough to house the aircraft they
  are authorized to repair.
Source: OIG analysis.

    We found that air carrier quality systems under which these repairs 
were performed were not as effective as they should have been. This was 
particularly true in the areas of mechanic training and oversight of 
these facilities.
    Non-certificated repair facilities are not required to employ 
designated supervisors and inspectors to monitor maintenance work as it 
is being performed. Relying solely on the expertise of an individual 
mechanic to ensure that repairs are completed properly is an inadequate 
control mechanism. In our view, this is the reason FAA requires added 
layers of oversight, such as designated supervisors and inspectors, in 
its certificated facilities.
    In our December 2005 report, we stated that neither FAA nor the six 
air carriers we visited provided adequate oversight of the work 
performed at non-certificated repair facilities. The air carriers we 
reviewed relied primarily on telephone contact to monitor maintenance 
performed at these facilities rather than conducting on-site reviews of 
the actual maintenance work. In contrast, as an added level of quality 
control, air carriers often assign on-site representatives to monitor 
the work performed at certificated repair stations.
    Despite the differences in quality controls and oversight that 
exist between certificated and non-certificated maintenance facilities, 
there are no limitations on the scope of work that non-certificated 
repair facilities can perform. For example, we looked at critical 
repairs performed under special authorizations at 1 air carrier and 
found that over a 3-year period, 14 of the 19 (74 percent) repairs were 
performed at non-certificated repair facilities. Examples of the work 
performed include landing gear checks, lightning strike inspections, 
and door slide replacements. In contrast, FAA-certificated repair 
stations are limited to completing only the specific maintenance tasks 
that FAA has determined the facility is capable of performing.
    FAA agreed that it needs to place more emphasis on the oversight 
that air carriers provide to non-certificated facilities and that it 
needs to gather more information on the type of work these facilities 
perform. FAA's efforts in this area are still underway. If FAA is to 
achieve the planned improvements in oversight of outsourced 
maintenance, it will need to obtain definitive data on where air 
carriers are getting the maintenance performed, including critical and 
scheduled maintenance work done at non-certificated repair facilities, 
so that it can focus its inspections to areas of greatest risk.
Ensuring Inspectors Are Well-Positioned To Adequately Oversee 
        Maintenance Outsourcing
    In June 2005, we reported that FAA needed to ensure that its 
inspection workforce was adequately staffed. Currently, FAA has 
approximately 3,821 inspectors located in offices throughout the United 
States and other countries. FAA has assigned a portion of its inspector 
workforce to verify that foreign facilities used by U.S. air carriers 
continue to meet FAA standards. As shown in table 3, FAA has 86 
International Field Office inspectors. Of these 86 inspectors, 
approximately 47 are located abroad (i.e., Germany, England, and 
Singapore).

  Table 3. FAA International Field Office Inspectors and Their Areas of
                             Responsibility
------------------------------------------------------------------------
   International                                            Number of
   Field  Office       Number of           Area of       Foreign  Repair
       (IFO)           Inspectors      Responsibility        Stations
------------------------------------------------------------------------
Dallas IFO                       5   Mexico                          20
Frankfurt IFO                   26   Europe (excluding              300
                                      the United
                                      Kingdom), Africa,
                                      and the Middle
                                      East
London IFO                      13   United Kingdom                 162
Miami IFO                       20   South America,                  52
                                      Central America,
                                      and the Caribbean
San Francisco IFO               14   Australia, New                  61
                                      Zealand, Japan,
                                      Korea,
                                      Philippines,
                                      Fiji, Taiwan, and
                                      other Asian-
                                      Pacific Island
                                      Nations
Singapore IFO                    8   China, Hong Kong,              103
                                      India, Indonesia,
                                      Malaysia,
                                      Singapore,
                                      Thailand, and
                                      other Asian-
                                      Pacific Nations
------------------------------------------------------------------------
TOTAL                86 Inspectors   ..................      698 Repair
                                                               Stations
------------------------------------------------------------------------
Source: FAA data (as of June 10, 2007).

    FAA will never have enough inspectors to oversee every aspect of 
aviation operations. However, FAA faces challenges in balancing 
potential inspector retirements with the number of inspectors it is 
able to hire. This year, 27 percent (or 1,037 of the 3,821) of the 
current inspector workforce will be eligible to retire. By 2012, 51 
percent of the workforce will be eligible to retire. To counter this 
trend, FAA requested funding to hire an additional 203 aviation safety 
inspectors in its Fiscal Year 2008 budget submission. In 2006, FAA 
hired 538 inspectors, but lost 226 (181 to retirements and 45 for other 
reasons). However, FAA will need to know where to place inspectors to 
make the most effective use of its resources.
FAA Needs a Process To Determine Inspector Placement
    FAA does not have a process to determine the number of inspectors 
needed and where they should be placed. FAA has made at least two 
attempts to develop a staffing model to determine the appropriate 
number of and best locations for its inspectors. However, neither of 
the two models provided FAA with an effective approach to allocate 
inspector resources. During our review of FAA oversight of financially 
distressed and low-cost air carriers, we found inconsistencies in the 
way that FAA allocated inspectors among field offices. For example, two 
FAA offices had the same number of inspectors assigned to oversee the 
air carriers in their geographic areas even though one of those 
carriers had twice as many aircraft and 127 percent more flights than 
the other.
    Until FAA develops an effective staffing model, it will not be able 
to determine where inspectors should be placed to make the most 
effective use of its resources. The important implications of the 
changing U.S. and global aviation environment that we have discussed 
today are expected to be key drivers of future inspector staffing 
needs. Air carriers' outsourcing of aircraft maintenance, FAA's shift 
to a system safety oversight approach, and safety inspectors' attrition 
and retirement are all significant changes that must be considered in 
determining staffing needs. FAA advised us that it has hired an 
independent contractor to conduct a study to determine the most 
effective staffing mechanism. However, completion of this process is 
likely years away.
    Mr. Chairman, that concludes my statement. I would be pleased to 
address any questions that you or other members of the Subcommittee 
might have.

    Senator McCaskill. Thank you, Inspector General Scovel.
    Ms. Gilligan?

STATEMENT OF MARGARET GILLIGAN, DEPUTY ASSOCIATE ADMINISTRATOR 
                    FOR AVIATION SAFETY, FAA

    Ms. Gilligan. Thank you, and I'm pleased to appear before 
the Committee today to discuss aviation safety, because the 
system has never been so safe, and so there can never be a 
better time for us to focus on how we can continue to build on 
that safety record.
    While the focus for the Committee today is on the issue of 
aircraft maintenance, it is important to keep this issue in 
context. The truth is, in the recent past, we have suffered 
very few major accidents. That's because of concerted efforts 
by FAA and those involved in the aviation industry. We've been 
working through the commercial aviation safety team for the 
last decade, to establish safety requirements for things like 
new technology, training, and standard operating procedures. 
We've reduced the fatal accident rate significantly. The 
results speak for themselves.
    In the 1940s, we had about 1,300 fatalities, for 100 
million passengers and crew carried. By 1995, that number had 
dropped to about 47 fatalities. The average for the last 3 
years has been about 4 fatalities per 100 million passengers 
and crew carried. That accident rate is not one of fate or 
luck. It is the achievement, and the result of a lot of hard 
work.
    In fact, we compare ourselves to medicine, which also 
addresses public health and safety. Like medicine, we have 
virtually eliminated major causes of accidents. Just as 
dedicated physicians and researchers have eliminated smallpox 
and polio. This industry has virtually eliminated mid-air 
collisions, controlled flight into terrain accidents, and wind 
shear accidents. And I can assure you, we will not see those 
accidents as persistent, recurring accident types that they 
have been, historically.
    In those cases, we used a layered approach to address the 
safety risk. That's the same layered approach that we take to 
aviation maintenance.
    The first layer for establishing the safety of aircraft is 
in design and manufacture, and that we hold to the highest 
standards. We require designers to anticipate potential 
failures, and design safe solutions. We know that the people 
involved in the system--pilots and mechanics--will make 
mistakes. Our challenge is to anticipate those mistakes, and 
design for them. This makes the aircraft what we call ``air 
tolerant,'' and this is true whether the aircraft is 
manufactured in the U.S., in Canada, in Europe or in Brazil.
    Once the aircraft is introduced into service, we require a 
second layer of defense--an airline maintenance program. This 
includes identifying the facilities and equipment to perform 
the work, and training and detailed instructions for those who 
will do the work.
    It is true, we don't require the airline to provide all of 
those elements itself--it can contract with other companies to 
provide some of those facilities, or to perform some of the 
work. But the work must always be done in accordance with the 
airlines' training and maintenance programs.
    As we all know, there's a changing industry dynamic, as it 
relates to maintenance work. Airlines are contracting more 
often to have work done by third parties. Some airlines are 
developing their own areas of expertise, and performing 
contract maintenance in those areas for other airlines, and 
many are using providers all around the world.
    But the airline is always responsible for the work 
performed, and for the decision to return the aircraft to 
service after determining that it's safe.
    That's why our third layer is a requirement that the 
airlines have a continuing analysis and surveillance system. 
Simply put, this is a regulatory requirement that ensures the 
airlines track every aircraft's performance, and identify any 
failures. It also allows the airline to identify when a repair 
may not have solved the root problem.
    So, whether the airline maintains the aircraft, or uses 
contract workers, the airline is always monitoring the 
aircraft's performance, and evaluating the aircraft for its air 
worthiness.
    And, the fourth layer is FAA oversight. For many years, we 
did inspections based on inspector experience, and well-
educated gut reactions. And that worked fine for us, for a very 
long time.
    But now we have automated tools that allow our inspectors 
to focus their attention in areas of risk. And we've integrated 
our databases in response to Inspector General recommendations, 
so inspectors assigned to an airline, and the inspectors 
assigned at the repair station that might be used by that 
airline, are sharing up-to-the-minute data. This makes both of 
those inspectors more productive.
    All of these layers of requirements apply wherever the 
aircraft operates, and wherever the repair and maintenance work 
is done. And FAA inspectors share the same kinds of data, 
whether the inspector is in London, or in Lincoln, Nebraska, 
and whether the airline is using a repair station in Asia, or 
its own facility in Tulsa, Oklahoma.
    We're always looking for ways to enhance the safety of the 
system, and hearings like this one provide us another 
opportunity to continue the dialogue among all of us who are 
dedicated to aviation safety, so that we can improve on our 
safety record.
    I look forward to responding to any questions you may have 
this afternoon.
    [The prepared statement of Ms. Gilligan follows:]

Prepared Statement of Margaret Gilligan, Deputy Associate Administrator 
                        for Aviation Safety, FAA
    Chairman Rockefeller, Senator Lott, and members of the 
Subcommittee, I am pleased to appear before you to discuss the Federal 
Aviation Administration's (FAA) oversight of air carrier maintenance 
that is outsourced to foreign repair stations. (Just to be clear, 
outsourcing is any maintenance performed for an air carrier by any 
individuals who are not employed by the air carrier whether in the U.S. 
or abroad.) I know the industry trend to outsource more of its 
maintenance in recent years has been a concern for some of you. To 
some, outsourcing equates to cutting corners to save a few dollars. To 
some, less costly maintenance means less safe maintenance. To some, 
repair stations represent lesser quality maintenance. All these 
assumptions imply that safety is being compromised as more maintenance 
is outsourced. I am here today to reassure you that the quality of 
maintenance is not compromised simply because it is not being done by 
an air carrier. No less an authority than the former Department of 
Transportation Inspector General (IG), Ken Meade, testified before 
Congress that use of these stations is not a question of quality, but 
rather an issue of oversight. We agree, which is why the FAA is 
continually improving and refining our oversight of maintenance, no 
matter where it is performed or by whom.
    Let me start by stating the obvious. The system is safe. As this 
subcommittee well knows, we have achieved the highest safety standards 
in the history of aviation. Even so, our goal is--as always--to 
continue to improve safety. I would like to share with you a chart that 
goes to the heart of this hearing. (See the attachment at the end of 
the statement.) The lines represent the percent of maintenance that is 
being outsourced and the accident rate, per hundred thousand 
operations. I think this picture is worth a thousand words. Although 
the percentage of outsourcing has never been higher, the accident rate 
has never been lower. These statistics amply demonstrate that aviation 
safety is not dependent on airlines performing their own maintenance.
    Before I explain the specifics of FAA's oversight of outsourced 
maintenance, let me take a moment to describe the office of aviation 
safety. Last year, after years of hard work, the Office of Aviation 
Safety (AVS) achieved ISO 9001 certification. This certification 
ensures that, worldwide, FAA safety offices provide standardized 
service and products, and that we adhere to the same safety standards 
as those businesses we regulate. We are the only Federal organization 
of our size, scope and complexity to have achieved ISO certification 
under a single quality management system. It was through my employees' 
dedication and hard work that we achieved ISO certification. Not one 
milestone was missed on our road to certification. So, our oversight of 
maintenance is part of an independently validated approach to holding 
ourselves to some pretty high standards.
    Previously, our oversight was based largely on inspector knowledge 
and information that was available as the result of individual 
inspections. This approach was the best we could do at the time, but it 
was far from comprehensive. The effectiveness of our oversight could 
vary from facility to facility. What we are doing now is managing risk 
and requiring system safety. Just as we have worked the concept of 
system safety with the airlines, we are currently introducing the 
concept to repair stations.
    Let me explain what I mean by system safety. System safety is 
extremely comprehensive. It sounds like a simple list of requirements, 
but in reality, it is a sophisticated approach to ensuring that 
everything is in place to obtain the information that can identify 
vulnerability in time to address it before safety is compromised. 
System safety requires the following attributes. It must be clear who 
is responsible for different aspects of the operation. The responsible 
person must have the authority to take necessary action. There must be 
procedures in place to execute required actions. There must be controls 
in place to ensure that a consistent product or service is being 
provided. There must be oversight/auditing procedures in place to 
independently evaluate the effectiveness and consistency of the 
operation. And last, there must be interface procedures in place to 
ensure that different parts of the organization are effectively talking 
to each other. Consistency is the goal. Inconsistency signals the need 
for a closer look and can provide us the early warning we need to get 
ahead of problems that could affect safety.
    In addition, these attributes must be supported by a written Safety 
Policy expressing senior management's commitment to continually improve 
safety and includes safety risk management processes, safety 
assurances, and safety promotion. Safety risk management processes are 
used to assess system design and verify that safety risk management is 
integrated into all processes. Safety assurances continually identify 
new hazards and ensure risk controls achieve their intended objective. 
Safety promotion ensures an environment where action is taken to create 
a positive safety culture where people acknowledge their accountability 
and act on their own individual responsibility for safety.
    This is what we will require of all organizations for which we have 
safety oversight responsibility, whether it be an airline, a 
manufacturer or a repair station. With these elements in place, our 
inspectors can perform hazard analyses and identify risk so that 
threats can be pre-empted. Instead of relying solely on information 
from individual inspections alone, we now perform a sophisticated 
analysis of anomalies identified and entered into the system. The 
analysis can provide us trend information that effectively targets our 
oversight. This is a much more comprehensive approach than what we were 
able to do previously. It allows us to get in front of potential 
problems in order to prevent them. This is not only a better use of FAA 
resources, it enhances safety.
    The past few years have been about continuing forward and making 
adjustments to an already robust system. We have been working closely 
with the Department of Transportation Inspector General's (IG) office 
since their issuance in 2003 of the report ``Review of Air Carriers' 
Use of Aircraft Repair Stations.'' The report identified specific areas 
where the IG felt improvements could be made. In response to the 
report, we made a number of changes to our oversight of repair 
stations. In 2004, we revised the regulations that apply to repair 
stations. The rule improved quality control requirements, equipment 
requirements, and provided more detailed requirements on the use by 
repair stations of external maintenance providers. In 2005, we issued 
guidance to enhance oversight of repair stations based on system safety 
requirements and risk assessment. In 2006, we developed and implemented 
software to further enhance oversight, risk assessment, and risk 
management processes used in our oversight. We've improved our Safety 
Performance Analysis System to provide sharing of information between 
the inspectors assigned to the repair station, and those assigned to 
the air carrier. We've also improved the training requirements for 
certain repair station personnel.
    We are currently testing a different way to oversee the work 
performed by complex repair stations. We call this approach the 
Certificate Management Unit (CMU) concept. CMU is a model of oversight 
for complex repair stations that parallels the way we conduct oversight 
of air carriers. CMU will provide for dedicated inspectors providing 
oversight at the assigned repair station. This addresses the criticism 
that FAA has failed to adapt its oversight of repair stations to 
reflect their increasing use by air carriers. Having assigned 
inspectors at these repair stations will further reduce the differences 
between the way we oversee major repair stations versus major airlines. 
We will continue to evaluate, modify and expand this concept as 
appropriate.
    I mentioned at the outset that AVS is ISO certified. Part of what 
this means is that, as an organization, we must continually evaluate 
what we are doing to identify where we can improve. So I fully expect 
ongoing modifications to our oversight procedures and analyses as we 
learn more and develop new and better tools.
    I would now like to turn my focus to foreign repair stations 
because I know they have been of particular interest to this 
subcommittee. As is the case with domestic repair stations, there is an 
incorrect perception that a carrier's use of a foreign repair station 
is somehow unsafe or done solely to reduce maintenance costs. I know 
there have been a number of efforts to restrict a U.S. carrier's 
ability to use foreign repair stations, but I do not believe these 
efforts would enhance safety. It is important to understand that FAA 
only certifies a foreign repair station if a U.S. carrier wants to use 
it. Unlike a domestic applicant, a foreign applicant must provide 
evidence that a U.S. operator or manufacturer needs its services. The 
repair station must meet the same standards that we apply to repair 
stations in the United States or we will not certify it. Safety is 
addressed because we require that all aircraft that are registered in 
the United States be maintained to U.S. standards, regardless of where 
they operate. Due to the global nature of aviation, we must have repair 
stations that meet U.S. standards throughout the world. It is an 
essential element of the U.S. being a leading provider of international 
transportation services. Finally, keep in mind that, as is the case 
when a carrier uses a domestic repair station, the carrier has the 
ultimate responsibility to ensure that the maintenance is being 
performed appropriately. All of this adds up to a great deal of 
supervision. The repair station has internal controls, foreign 
government oversight, airline oversight, and FAA oversight.
    In three countries (France, Ireland and Germany) where we have 
Bilateral Aviation Safety Agreements (BASA), we have outlined 
Maintenance Implementation Procedures (MIP) to ensure that foreign 
inspectors are placing appropriate emphasis on the Federal Aviation 
Regulations when conducting review of work done on U.S. aircraft. We 
have a long history and experience with these aviation authorities. In 
these countries, we rely on the oversight of the aviation authority in 
addition to our periodic inspections. We are also working to ensure 
that these foreign aviation authorities inform us and seek FAA approval 
of changes to repair station operations if they directly impact FAA 
requirements.
    In response to the IG, we have also made some changes to our 
oversight of foreign repair stations. For example, we eliminated the 10 
percent sampling requirement on FAA's inspection of repair stations in 
countries where there is a BASA/MIP in place. In FY 2006, FAA conducted 
sampling inspections in 21 percent of the repair stations located in 
these countries. We have also developed and implemented policy and 
procedures in the BASA/MIP countries to capture the results from the 
inspections conducted by foreign authorities.
    It is also important to remember that, by its nature, aviation is 
truly an international enterprise. An aircraft, especially in 
commercial aviation, contains parts manufactured all around the world. 
The original equipment manufactures (OEMs) have a wealth of expertise 
in repairing their products. In addition, their parts may have 
warranties. It would be extremely unwise to restrict a U.S. carrier's 
ability to use OEM maintenance, even if the OEM is abroad.
    There are a number of other reasons for air carriers to choose to 
outsource some maintenance and repair activities. The expertise of OEMs 
is so considerable and their work is so consistent that maintenance is 
often outsourced to them, regardless of whether the maintenance being 
performed is on a part they manufactured. In other cases, overseas 
repair and maintenance facilities may provide a great deal of expertise 
for lower costs. Nevertheless, just as aviation safety is in no way 
compromised by allowing U.S. carriers to fly aircraft made in Europe, 
in Brazil, or in Canada, so too is safety in no way compromised by 
allowing other countries to conduct repair and maintenance on our 
aircraft.
    I would like to conclude this morning by saying that our work with 
the IG's office in the past few years has been productive. We have made 
a number of adjustments that I think have improved the effectiveness of 
our oversight. That can only improve safety. I think we generally agree 
that we are moving in the right direction. Certainly, the chart I 
talked about reflects that airline use of repair stations has not 
compromised safety.
    I understand and appreciate this subcommittee's concern about the 
increased use of foreign repair stations. Obviously, we share a common 
goal to find ways to improve safety at a historically safe period in 
U.S. aviation. I can assure you that my office is totally committed to 
making whatever adjustments the situation demands when it comes to 
safety oversight. Hearings like the one today continue a necessary 
dialogue. I do not claim to have all the answers. I think the changes 
we have made in recent years are good ones. But we can't sit still. 
There will always be ways to improve and we will continue to look for 
them.
    This concludes my statement. I will be happy to answer your 
questions at this time.




    Senator McCaskill. Thank you, Ms. Gilligan.
    Mr. Roach?

          STATEMENT OF ROBERT ROACH, JR., GENERAL VICE

           PRESIDENT OF TRANSPORTATION, INTERNATIONAL

        ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS

    Mr. Roach. Thank you, Madame Chair, and members of this 
Committee, for the opportunity to speak to you today. My name 
is Robert Roach, Jr., I'm the General Vice President of 
Transportation for the Machinists Union.
    I'm appearing on behalf of International President, R. 
Thomas Buffenbarger. The Machinists Union is the largest 
aviation union in North America, representing 180,000 airline 
and aerospace workers in almost every classification, including 
mechanics, flight attendants, ramp service workers, public 
contact employees and production workers.
    Since 2003, nine major U.S. carriers have increased the 
amount of outsource work. The percentages, as mentioned by 
Senator Lautenberg, are from 34 percent to 67 percent. The 
trend of U.S. airlines increasingly subcontracting work, 
aircraft maintenance work, jeopardizes safety, and security of 
our Nation's air transportation system. The lack of adequate 
Federal Aviation Administration oversight at certificated and 
non-certificated maintenance repair stations is unforgivable.
    Airlines utilize overseas facilities to take advantage of 
low wages and lax regulations available at overseas repair 
stations, when there are many U.S. repair station facilities 
available and underutilized, such as the state-of-the-art 
facility in Indianapolis, Indiana, a facility abandoned by 
United Airlines.
    Cutting back on food, pillows, or other in-flight amenities 
is a business decision that only inconvenienced the passengers, 
but cutting costs in aircraft maintenance has serious safety 
implications.
    Our mechanics have found aircraft returning from overseas--
overseas flight having departed with obvious mechanical 
problems. Our members have seen aircraft returned from repair 
facilities with flaps rigged improperly, engine fan blades 
installed backward, improperly connected ducting that resulted 
in pressurization problems, air speed indicator lines 
disconnected, inoperable thrust reversers, incorrect engine 
fuse pins installed, and over-wing exit emergency slides 
deactivated.
    These aircraft have been deemed ``airworthy'' by repair 
stations. Although these mistakes were noticed, and 
catastrophic accidents avoided, that is not always the case.
    FAA oversight of U.S. repair facilities is better than 
foreign repair stations, but is still not adequate. The NTSB 
faulted the FAA's lack of oversight of work being performed at 
an Air Midwest facility in West Virginia, as a contributing 
factor in the January 8, 2003 crash that killed 21 people.
    There is still a dangerous shortage of FAA inspectors. The 
FAA's Singapore Field Office alone, is responsible for 103 
stations, but has only four inspectors. An immediate increase 
of FAA inspectors, along with the resources they need--is 
necessary to safeguard the U.S. aviation industry.
    When inspectors are permitted to make a rare inspection of 
oversight repair stations, they must still give advance notice. 
Unscheduled surprise inspections, like those performed in the 
United States, are necessary to ensure compliance.
    Unlike U.S. air worker--United States workers--foreign 
maintenance persons are not required to undergo drug and 
alcohol testing, or pass criminal background checks, in fact, 
they're not even required to read English, which is the 
language in which aircraft manufacturers write their 
maintenance repair manuals. The FAA's oversight of certified 
repair stations is insufficient to ensure compliance and 
regulations.
    FAA oversight of non-certificated repair stations, however, 
is nonexistent. Non-certificated facilities operate without the 
same regulatory requirements as certificated repair stations 
and operate with no limit on the type or scope of work they can 
perform. The FAA does not monitor the maintenance performed at 
non-certificated facilities, and the air carrier's training and 
oversight of these facilities is inadequate.
    Hearings and investigations do nothing to increase safety 
unless it's followed with the action by both the FAA and the 
airlines who subcontract their maintenance work.
    Having U.S. aircraft repaired overseas also opens up this 
country to great security risks. It's not hard to imagine how 
overseas repair stations working on U.S. aircraft could provide 
terrorists with the opportunity to sabotage an aircraft, or 
components that will eventually re-enter the United States for 
domestic service.
    These stations should be immediately closed down so 
security audits can be conducted, and security vulnerabilities 
addressed. There should be one standard for safety and 
security, and FAA oversight at all aircraft facilities working 
on U.S. aircraft, regardless of where they are located. This 
must include the equivalent standards--criminal background 
checks, drug and alcohol testing of all workers, to tighten up 
security at the repair stations.
    The FAA does not have sufficient funding to hire an 
adequate number of inspectors to ensure aviation safety at home 
or abroad.
    Mr. Chairman--Madame Chair--Members of this Committee, let 
my testimony today serve as more than a warning that the 
oversight of contract maintenance of U.S. aircraft is almost 
non-existent. I am here to offer the assistance of the 
machinists union and all of our members who build and maintain 
aircraft to help safeguard our aviation industry.
    I thank this Committee for inviting us to participate in 
these proceedings and listening to our concerns, I look forward 
to your questions.
    [The prepared statement of Mr. Roach follows:]

  Prepared Statement of Robert Roach, Jr., General Vice President of 
      Transportation, International Association of Machinists and 
                           Aerospace Workers
    Thank you, Mr. Chairman, and Members of this Committee for the 
opportunity to speak to you today. My name is Robert Roach, Jr., 
General Vice President of Transportation for the International 
Association of Machinists and Aerospace Workers (IAM). I am appearing 
at the request of International President, R. Thomas Buffenbarger. The 
Machinists Union is the largest aviation union in North America, 
representing 180,000 airline and aerospace workers in almost every 
classification, including Mechanics, Flight Attendants, Ramp Service 
workers, Public Contact employees and production workers.
    Since 2003, nine major U.S. carriers (AirTran Airways, Alaska 
Airlines, America West Airlines, Continental Airlines, Delta Airlines, 
JetBlue Airways, Northwest Airlines, Southwest Airlines, and United 
Airlines) have increased their amount of outsourced maintenance from 34 
percent of total heavy aircraft maintenance checks to 67 percent.\1\ 
The trend of U.S. airlines increasingly subcontracting aircraft 
maintenance work jeopardizes the safety and security of our Nation's 
air transportation system. The lack of adequate Federal Aviation 
Administration (FAA) oversight of certificated and non-certificated 
maintenance repair stations is unforgivable.
---------------------------------------------------------------------------
    \1\ Statement of the Honorable Calvin L. Scovel III, Inspector 
General of the U.S. Department of Transportation before the House 
Transportation and Infrastructure Committee Subcommittee on Aviation, 
March 29, 2007.
---------------------------------------------------------------------------
    Many overseas repair stations exist only because U.S. airlines are 
constantly looking for ways to reduce their operating costs. Airlines 
utilize these facilities to take advantage of the low wages and lax 
regulations available at overseas repair stations when there are many 
U.S. repair facilities available and underutilized, such as the state-
of-the-art Indianapolis, Indiana facility abandoned by United Airlines, 
one of the most advanced repair stations in the world. Cutting back on 
food, pillows and other in-flight amenities is a business decision that 
only inconveniences passengers, but cutting costs in aircraft 
maintenance has serious safety implications.
    Our mechanics have found aircraft returning from overseas flights 
departed with obvious mechanical problems. When they tell FAA 
inspectors, the inspectors complain that their hands are tied. Budget 
constraints limit their ability to inspect overseas maintenance 
operations.
    A recent example of poor work performed by a maintenance vendor 
occurred at US Airways. The FAA recently issued an Airworthiness 
Directive requiring the replacement of the fuse pins that mount engines 
to Boeing 767 aircraft. A maintenance contractor for US Airways 
performed the modification, but installed the wrong fuse pins on three 
aircraft. These pins are designed to allow an engine to drop from the 
wing during an emergency to prevent excessive vibrations from causing 
the entire wing to break away from the aircraft. Such a catastrophic 
event would force the plane into an uncontrolled spiral toward the 
Earth. Our members have also seen aircraft return from repair 
facilities with the flaps rigged improperly, engine fan blades 
installed backward, improperly connected ducting that resulted in 
pressurization problems, airspeed indicator lines disconnected, 
inoperable thrust reversers and over-wing exit emergency slides 
deactivated. These aircraft had all been deemed airworthy by the repair 
stations. Although these mistakes were noticed and catastrophic 
accidents avoided, that is not always the case.
    FAA oversight of U.S. repair facilities is better than foreign 
repair stations, but still not adequate. On January 8, 2003, US Airways 
Express Flight 5481 crashed into a Charlotte, North Carolina hangar 
packed with IAM members, killing all 21 people onboard. The subsequent 
National Transportation Safety Board (NTSB) investigation faulted Air 
Midwest, which operated the aircraft, the facility that performed 
maintenance of the aircraft and the FAA.\2\
---------------------------------------------------------------------------
    \2\ NTSB Aircraft Accident Report, ``Loss of Pitch Control During 
Takeoff,'' Air Midwest Flight 5481, Raytheon (Beechcraft) 2000D, N233Y, 
Charlotte, North Carolina, January 8, 2003, NTSB/AAR-04/01.
---------------------------------------------------------------------------
    US Airways, then headquartered in Arlington, Virginia, sold the 
tickets to the flight and the aircraft displayed the carrier's logo. 
Air Midwest, based in Arizona, operated the flight and was responsible 
for the aircraft's maintenance. But Air Midwest subcontracted that 
maintenance to Raytheon Aerospace in Huntington, West Virginia, who 
then contracted with Structural Modification and Repair Technicians to 
supply the mechanic workforce.
    The NTSB determined that a mechanic improperly adjusted cables that 
helped control the pitch of the aircraft. The mechanic had never done 
the job on that type of plane before and with his trainer's approval, 
skipped steps that the NTSB said would likely have helped the mechanic 
catch his mistakes. FAA regulations require such flight critical work 
to be inspected, but in this case it was inspected by the same 
instructor who allowed steps to be skipped.
    NTSB Chairman Ellen Engleman Conners said at the time, ``I think 
the entire system here was broken down. There were errors at every 
level.'' \3\ Commenting on the airline's layers of subcontracted 
maintenance work, Aeronautical Repair Station Association Executive 
Director Sarah Macleod said, ``The more removed you get from the 
maintenance, the more training it takes. The more tiers, the closer 
you'd better be looking.'' \4\ The Machinists Union wholeheartedly 
agrees with both of these statements.
---------------------------------------------------------------------------
    \3\ Charlotte Observer, ``NTSB faults FAA and airline in US Airways 
crash'', February 26, 2004.
    \4\ Department of Energy Aviation Flight Safety Notice 03-002, 
``Subcontract Maintenance''.
---------------------------------------------------------------------------
    A July 2003 Department of Transportation (DOT) Inspector General 
Report highlighted the weak oversight of aircraft maintenance performed 
overseas by third-party contractors.\5\ In response to that report, 
Congress directed the FAA to submit a plan by March 12, 2004 to ensure 
that foreign repair stations working on U.S. aircraft are subject to 
the same level of safety and oversight as required here at home.
---------------------------------------------------------------------------
    \5\ DOT Inspector General Report, ``Review of Air Carriers' Use of 
Aircraft Repair Stations'', July 8, 2003 (AV-2003-047).
---------------------------------------------------------------------------
    Years past the deadline, the FAA finally submitted a plan that the 
Machinists Union believes is woefully inadequate. There is still a 
shortage of FAA inspectors, and when inspectors are permitted to make a 
rare inspection of an overseas repair station they must still give 
advance notice. Unscheduled surprise inspections, like those performed 
in the U.S. are necessary to ensure compliance. Unlike U.S. workers, 
foreign maintenance personnel are still not required to undergo drug 
and alcohol testing or pass criminal background checks. In fact, they 
are not even required to read English, which is the language in which 
aircraft manufactures write their maintenance repair manuals.
    A December 2005 DOT Inspector General report \6\ found that while 
foreign repair stations were widely used by U.S. carriers, some FAA 
certified foreign repair stations are not inspected at all by FAA 
inspectors because civil aviation authorities review these facilities 
on the FAA's behalf. Airlines are subcontracting their maintenance and 
the FAA is outsourcing their inspections. The Machinists Union believes 
this only degrades aviation safety and endangers the traveling public.
---------------------------------------------------------------------------
    \6\ Inspector General Report Air Carriers' Use of Non-Certificated 
Repair Facilities, December 15, 2005 (AV-2006-031).
---------------------------------------------------------------------------
    The FAA's oversight of certified repair stations is insufficient to 
ensure compliance with regulations. FAA oversight of non-certificated 
repair stations, however, is non-existent.
    The Inspector General's 2005 report found that non-certificated 
facilities operate without the same regulatory requirements as 
certificated repair stations and operate with no limit on the type or 
scope of work they can perform. The report also verified that the FAA 
does not monitor the maintenance performed at non-certificated 
facilities and the air carriers' training and oversight of these 
facilities are inadequate. The report further revealed that the FAA did 
not know the extent of maintenance performed at non-certificated repair 
facilities.
    The Machinists Union is thankful the Inspector General's office has 
repeatedly demonstrated the FAA's lack of oversight of contract 
maintenance facilities. However, hearings and investigations do nothing 
to increase safety unless it is followed with action by both the FAA 
and the airlines who subcontract their maintenance work.
    Having U.S. aircraft repaired overseas also opens up this country 
to a great security risk. It is not hard to imagine how overseas repair 
stations working on U.S. aircraft could provide terrorists with an 
opportunity to sabotage an aircraft or components that will eventually 
re-enter the U.S. for domestic service. These stations should be 
immediately closed down until security audits can be conducted and 
security vulnerabilities addressed.
    There should be one standard for safety, security and FAA oversight 
at all aircraft repair facilities working on U.S. aircraft, regardless 
of where they are located. This must include equivalent standards for 
criminal background checks, drug and alcohol testing of workers and 
tightening the security at repair facilities.
    The FAA does not have sufficient funding to hire an adequate number 
of inspectors to ensure aviation maintenance safety, at home or abroad. 
Even the recent hiring of additional FAA inspectors does little to 
improve oversight. As of January 2007, there were only 103 
international field inspectors for a total of 692 foreign repair 
stations.\7\ The Singapore field office alone is responsible for 103 
stations, but has only 4 inspectors. An immediate increase in FAA 
inspectors, along with the resources they need, is necessary to 
safeguard the U.S. aviation industry.
---------------------------------------------------------------------------
    \7\ Statement of the Honorable Calvin L. Scovel III, Inspector 
General of the U.S. Department of Transportation before the House 
Transportation and Infrastructure Committee Subcommittee on Aviation, 
March 29, 2007.
---------------------------------------------------------------------------
    Mr. Chairman, Members of this Committee, let my testimony today 
serve as more than a warning that the oversight of contract maintenance 
on U.S. aircraft is almost non-existent. I am here to offer the 
assistance of the Machinists Union and all our members who build and 
maintain aircraft to help safeguard our aviation industry.
    I thank the Committee for inviting us to participate in these 
proceedings and listening to our concerns.
    I look forward to your questions.

    Senator McCaskill. Thank you, Mr. Roach.
    Mr. Filler?

STATEMENT OF MARSHALL S. FILLER, MANAGING DIRECTOR AND GENERAL 
    COUNSEL, AERONAUTICAL REPAIR STATION ASSOCIATION (ARSA)

    Mr. Filler. Thank you, Madame Chairman, and good afternoon 
to Chairman Rockefeller and Senator Lautenberg as well.
    My name is Marshall Filler, I'm Managing Director and 
General Counsel for the Aeronautical Repair Station 
Association. I'd like to assure this Committee that in order to 
be a regular member of ARSA, you have to hold a certificate, 
and most of our members hold that certificate, we do have about 
1 percent that hold other kinds of authorities, and they're not 
voting members of ARSA.
    Foreign repair stations are also members of ARSA, and they 
are an essential part of aviation, and of aviation safety. In 
fact, without them, there would be no international travel. I 
say that, because under international law, the State of 
Registry of the aircraft is responsible for controlling the 
maintenance performed on that aircraft, and on any component to 
be installed thereon, regardless of where the aircraft is. So, 
if an aircraft is traveling in Europe, if it's got an N in 
front of it, and it's registered in the United States, the work 
must be performed by an FAA-certificated facility, or other 
certificated person.
    Although it is true that there are 700 repair stations 
located outside our borders, it is also true that 425 of them 
are in Europe. If you would compare the number of U.S.-based 
repair stations that are certificated by the European Aviation 
Safety Agency, it is almost 1,200. So, there are almost 3 times 
as many U.S.-based repair stations certificated to perform work 
under European jurisdiction as there are FAA-certificated to 
performed repairs in Europe.
    Many of these 700 foreign repair stations are owned by U.S. 
companies, by Pratt & Whitney, General Electric, Hamilton 
Sundstrand, Honeywell, and Nordam to name a few, as well as 
some of the most well-respected international air carriers such 
as Qantas. Also among our members are Lufthansa Technik, as 
well as SR Technics. These are highly respected, worldwide 
acclaimed repair facilities.
    When we talk about repair stations, I think it is important 
to distinguish the various types--we have line maintenance 
facilities that basically keep the aircraft flying during the 
day, and do simpler overnight checks. We have substantial 
maintenance providers where the aircraft is maintained for 
anywhere from a number of days, to weeks in a hanger-type 
facility, but most of the repair stations are actually 
component repair facilities, located miles from airports, 
presenting little security threats, located in places like 
industrial parks.
    Most of the rules that apply to foreign repair stations by 
the FAA are the same. Some of those differences are, there's a 
very good reason for them, because of international 
considerations, in fact, with respect to drug and alcohol 
testing, the FAA did propose to make this mandatory overseas in 
1994, but over significant protest from the international 
community, and I might add, our State Department withdrew that 
proposal in the year 2000.
    FAA has chosen, instead, to work through ICAO, the 
international body, which has adopted drug and alcohol testing 
as a recommended practice. ICAO also has an international 
standard that prohibits anybody from performing a safety-
sensitive function under the influence of a controlled 
substance.
    Some of the requirements of foreign repair stations are 
actually greater than they are domestically, such as the 
certificate that lasts only a year or two. In the domestic 
situation, once you get certificated, you keep it forever. In a 
foreign situation, the FAA has to conduct a re-inspection every 
12 to 24 months.
    With respect to security, I think it is important for 
members to know that ICAO also plays a very significant role in 
security performed in international locations. ICAO Annex 17 
provides for international security standards, that include a 
national security program, airport-specific programs for all 
airports serving international airlines, air operator security 
programs, background checks, perimeter security. All 189 
members of ICAO are required to follow these standards, or 
otherwise notify ICAO that they are not. So, while it is true 
that they are not subject to U.S. requirements, they are 
subject to ICAO requirements, and in fact, our TSA rules are 
very similar to the ICAO standards because--like all of the 
rest of the countries that are members of ICAO, we have to 
comply with those standards, as well. I think there's a danger 
here if you direct security resources at places where the 
threat is less.
    Madame Chair, I have two more minutes?
    Senator McCaskill. Yes.
    Mr. Filler. Thank you very much.
    If the--historically, background checks have been required 
when people need unescorted access to restricted security areas 
of the airport--that's where the threat is greatest. If we re-
direct those resources to places where--that are 20, 25 miles 
from an airport, that work on components that are tested and 
inspected before they leave the repair station, once again, 
functionally checked by the air carrier prior to installation, 
we are going to take resources away from the places where we 
think they're needed more.
    A couple of other things I would like to mention. We 
disagree with the notion that airlines will always go to the 
lowest cost maintenance provider. And the reason we disagree 
with that, is that if that maintenance is performed poorly, 
with a lack of reliability, that airplane will not move. FAA 
regulations require maintenance discrepancies to be addressed, 
or appropriately deferred. And, indeed, if work is performed in 
a shoddy fashion, and the maintenance discrepancy is written 
up, the cost of that flight delay or flight cancellation will 
far outweigh any savings that might accrue because of the use 
of, for example, lower paid workers.
    We also disagree with the notion that the FAA is 
responsible for ensuring safety. FAA regulations set up a 
structure in which safety can flourish. We, the certificate 
holders, are responsible for ensuring safety. Safety is good 
business, as demonstrated by the accident record that Ms. 
Gilligan mentioned. We don't believe foreign repair stations 
take U.S. jobs, we think only, you have to look at the 
situation between the U.S. repair stations and the European 
repair stations to know that, I think we actually get the 
benefit of that bargain--with 1,200 in Europe, rather, 1200 
U.S. repair stations that are certificated by EASA.
    We also don't think, well, I think I've used my 2 minutes, 
Madame Chair, so I think that I will not ask for any more time, 
but I do appreciate your indulgence. Thank you.
    [The prepared statement of Mr. Filler follows:]

Prepared Statement of Marshall S. Filler, Managing Director and General 
        Counsel, Aeronautical Repair Station Association (ARSA)
    Chairman Rockefeller, Ranking Member Lott, and members of the 
Subcommittee, thank you for inviting me to testify this afternoon about 
the role of foreign repair stations, and the safety of aviation 
maintenance.
    My name is Marshall Filler and I am the Managing Director and 
General Counsel of the Aeronautical Repair Station Association (ARSA). 
ARSA is a 670 member strong international trade association with a 
distinguished 22-year record of educating and representing certificated 
aviation maintenance facilities before the U.S. Congress, the Federal 
Aviation Administration (FAA), the European Aviation Safety Agency 
(EASA), and other national aviation authorities (NAA).
    ARSA's primary members are companies holding repair station 
certificates issued by the FAA under part 145 of the Federal Aviation 
Regulations (FARs). These certificates are our industry's ``license to 
do business.'' They authorize repair stations to perform maintenance 
and alterations on civil aviation articles, including aircraft, 
engines, and propellers, and on components installed on these products. 
These repair stations perform maintenance for airlines and general 
aviation owners and operators.
    In recent years, the profile of the contract maintenance industry 
has increased dramatically. With over 4,000 repair stations in the 
United States employing almost 200,000 people (Appendix A), this sector 
of the aviation industry continues to grow. We welcome the opportunity 
to discuss the important role our members play in the aviation industry 
here and abroad and to correct any misconceptions about the safety of 
maintenance performed by foreign repair stations.
Foreign Repair Stations Are an Essential Part of Aviation
    Foreign repair stations are a necessary part of the international 
aviation system. Any effort to restrict the use or number of such 
facilities would likely lead to retaliatory trade actions by other 
countries. Ultimately, U.S. aerospace manufacturers, air carriers and 
the flying public would be harmed.
    The Chicago Convention of 1944 and International Civil Aviation 
Organization (ICAO) standards require that the State of Registry (i.e., 
the country in which an aircraft is registered) oversee the maintenance 
performed on that aircraft and related components, regardless of where 
the work is performed.\1\ Consequently, a U.S. registered aircraft 
requiring maintenance while outside of the U.S. must have that work 
performed by an FAA-certificated maintenance provider. Indeed, a 
foreign applicant for a repair station certificate must also 
demonstrate to the FAA that its services are needed to perform work on 
articles subject to FAA jurisdiction.
---------------------------------------------------------------------------
    \1\ See, ICAO Annex 8, Airworthiness,  4.2.1(b).
---------------------------------------------------------------------------
    Similarly, when an aircraft of foreign registry requires 
maintenance while in the U.S., only a repair station certificated or 
validated by the relevant NAA may perform the work. For example, only 
an EASA-certificated repair station may perform maintenance on an 
aircraft of French registry within the U.S.
    This legal regime has proven beneficial to American repair 
stations. Currently, there are 698 FAA-certificated repair stations 
outside the U.S. (see Appendix B). At the same time, there are close to 
1,200 EASA-certificated repair stations in the U.S., and numerous other 
NAA-certificated repair stations inside our borders.\2\ Our aviation 
maintenance industry is highly-regarded worldwide.
---------------------------------------------------------------------------
    \2\ Data obtained on European Safety Agency (EASA) website, for 
``Foreign EASA Part-145 Valid Approvals for Organisations Located in 
the United States'' June 1, 2007.
---------------------------------------------------------------------------
Foreign Repair Stations Must Follow Strict Standards and Procedures
    Bilateral agreements are negotiated between two regulatory 
authorities to facilitate the airworthiness certification of new and 
used products imported and exported from the affected countries. The 
agreements are not a ``one size fits all'' proposition; they must be 
tailored to the specific oversight systems and capabilities of the 
respective authorities.
    Such agreements are only concluded after a lengthy evaluation 
process that assures that the two regulatory oversight systems are 
technically equivalent. In most cases, they are based on reciprocity. 
Bilateral agreements also eliminate redundant technical determinations 
that are not necessary in the interests of safety. Consequently, they 
allow the two authorities to more efficiently allocate their limited 
oversight resources. The FAA currently has about 30 bilateral 
agreements covering design, production and airworthiness approvals, 
primarily for new products.
    It is interesting to note that many more bilateral agreements apply 
to the airworthiness certification of mostly new products than to 
articles that have been maintained or altered. In relatively few cases, 
however, Maintenance Implementation Procedures (MIPs) have also been 
negotiated. Currently, there are MIPs in place with France, Germany and 
Ireland (soon to be expanded to other members of the European Union) 
and Canada. The MIPs set forth mutually acceptable procedures that 
apply whenever maintenance or alterations are performed on equipment 
under the jurisdiction of either authority. They also provide a means 
by which the authorities can cooperate in conducting surveillance and 
sharing the results of those findings.
    Except for Canada, facilities located in MIP countries receive an 
FAA repair station certificate. They are required to follow the rules 
of their home country and the designated FAA special conditions. The 
special conditions are areas where the two authorities' regulations are 
different and therefore must be followed when work is performed on 
articles subject to the other's jurisdiction.
    A list of countries in which FAA foreign repair stations are 
located, whether these countries meet ICAO standards, and the status of 
bilateral agreements with the U.S. is found in Appendix C.
FAA-Certificated Repair Facilities Located Abroad Are Not a Threat to 
        the U.S. Economy Or To Aviation Safety
    FAA-certified repair stations located oversees must meet the same 
or equivalent safety standards as domestic facilities. Unlike their 
domestic counterparts, however, foreign repair stations must renew 
their certificate with the FAA annually or, at the discretion of the 
FAA, biannually, following a safety inspection. This ensures that the 
FAA evaluates the housing, facilities, equipment, personnel, and data 
of each repair station located outside the U.S. at least once every 2 
years.
    In 2005, ARSA conducted a member survey, (see Appendix D) which 
revealed that the average FAA-certificated foreign repair station is 
audited more than 74 times each year by government regulators, 
customers, other third-parties, and the repair station's own quality 
assurance personnel, suggesting a high-level of combined oversight.
    Recent attempts at restricting the use of foreign repair stations, 
and specifically removing the FAA Administrator's ability to issue new 
certificates, would be highly detrimental. Many companies factor into 
their business plan the ability to open a new foreign repair station, 
and much time and effort goes into the application and certification 
process.
    Indeed, many U.S. companies have repair stations internationally. 
The FAA's list of foreign repair stations reveal that there are 
approximately 80 foreign repair facilities owned by U.S. aerospace 
companies, including Nordam, Pratt & Whitney, Hamilton Sundstrand and 
Honeywell.\3\ Additionally, international companies have repair 
stations located within our borders, such as Lufthansa Technik, 
Dassault, and BAE systems.
---------------------------------------------------------------------------
    \3\ Based on FAA Listing of Foreign Repair stations from Air Agency 
Data, June 10, 2007.
---------------------------------------------------------------------------
    The aviation maintenance industry is a global enterprise; thus, 
action taken domestically affects companies worldwide. A restriction on 
the use of foreign repair stations only punishes American companies, 
making them less profitable and competitive.
Although the Location of Work May Differ, Quality Does Not
    To operate in the civil aviation maintenance industry, certificated 
repair stations must demonstrate to the FAA, or other NAAs if 
applicable, that they possess the housing, facilities, equipment, 
trained personnel, technical data, and quality systems necessary to 
perform maintenance in an airworthy manner. Based upon satisfactory 
showings in these areas, a repair station is rated to perform certain 
types of maintenance.
    However, not all repair stations look alike and their capabilities 
vary significantly. Some provide line maintenance--the routine, day-to-
day work necessary to keep an airline's fleet operating safely. Some 
perform substantial maintenance, which includes more comprehensive 
inspection and repairs on airframes and overhauls of aircraft engines. 
Others offer specialized services for their customers such as welding, 
heat treating, and coating on a variety of aircraft parts. However, the 
vast majority of repair stations perform maintenance on components. 
Component maintenance usually occurs off the aircraft, typically away 
from an airport in industrial parks and similar facilities.
    Regardless of the location of the repair facility, the regulatory 
requirements are the same. Each item goes through a series of checks 
required by FAA regulation, before being placed on an aircraft.
Despite Limited FAA Resources, The Industry Ensures Safety
    Aviation safety does not begin and end with the FAA or any other 
regulatory body. Government inspectors will never be able to oversee 
each technician at every facility all the time. The industry has the 
ultimate obligation to ensure that the civil aviation system is safe. 
All evidence suggests that it is fulfilling that responsibility despite 
the FAA's limited oversight resources.
    In reports published in 2003 and 2005, the Office of the Inspector 
General of the Department of Transportation (DOT IG) expressed concerns 
about the FAA's oversight of the contract maintenance industry stating 
that the agency's oversight is currently insufficient for the amount of 
work independent repair stations perform for airlines.\4\ The FAA has 
responded to these findings by introducing a risk-based inspection 
program that identifies those repair stations doing the most work for 
airlines and monitoring their operations more closely. ARSA has 
continuously supported efforts to better utilize FAA resources to 
ensure the continued quality of contract maintenance here and abroad, 
and to demonstrate to policymakers and the public that our aviation 
system remains safe.
---------------------------------------------------------------------------
    \4\ See, Department of Transportation Office of Inspector General, 
Rep. No. AV-2003-047, Review of Air Carriers' Use of Aircraft Repair 
Stations, at 1 (July 8, 2003); Department of Transportation Office of 
Inspector General, Rep. No. AV-2005-062, Safety Oversight of an Air 
Carrier Industry in Transition, at 1 (June 3, 2005).
---------------------------------------------------------------------------
    We also note that despite the IG's observations, repair stations 
are subject to a tremendous amount of oversight by regulators, their 
customers, and other entities as shown in the 2005 ARSA member survey 
referenced above (Appendix D). A more recent membership survey 
conducted in March 2007 is summarized in Appendix E. The findings from 
this survey reaffirmed past survey results, including:

   42 percent of members surveyed reported 11 or more external 
        audits during 2006 by regulators, customers, and third-party 
        accreditation bodies.

   FAA resource issues are having an impact. A quarter of 
        survey respondents reported losing customers or foregoing 
        business opportunities because of inadequate FAA staffing.

    Thus, safety is not just the FAA's responsibility, but that of 
every aviation maintenance employee performing work on behalf of a 
certificated repair station, air carrier or other aviation business. It 
is the FAA's role to ensure that repair stations have the procedures in 
place to ensure the quality of the work performed and to ensure that 
procedures are followed. Indeed, FAA regulations treat repair stations 
as extensions of an air carrier's maintenance organization. This means 
that the maintenance provider, regardless of their location, must 
perform the work in accordance with the carrier's maintenance program 
and the applicable portions of its manual. It also requires the 
airlines to provide a level of oversight to make certain these 
standards are met.
    This holds true whether the work is being performed at an FAA 
certificated facility in Florida or France.
Security Is a Prime Concern of All Repair Facilities
    Security at contract maintenance facilities has drawn much 
attention. Domestically, many repair stations located on an airport are 
required to have their personnel undergo criminal background checks 
under TSA regulations if they require unescorted access to the 
designated airport security identification display area (SIDA). 
Therefore, a repair station employee that performs line maintenance for 
an air carrier would have the same 10-year criminal background check 
requirement as an airline mechanic. Many repair stations voluntarily 
implement additional security procedures since the quality and safety 
of their work directly affects their business.
    However, many U.S. repair stations are located miles away from 
airports and perform specialized work on component parts that have been 
removed from the airplane and sent to them for repair. These facilities 
are usually small-businesses; thus, imposing undue security burdens on 
them would in effect put an entire sector of specialized workers out of 
business. Our members understand the need for safety and security, 
since their livelihood depends upon it, and we ask that Congress 
recognize the difference in repair facilities, remembering that our 
industry shares their same goal: maintaining a high level of safety and 
security.
    Internationally, each country must implement the types of security 
procedures to be followed just as they must do in the safety area. 
These are based on ICAO standards contained in Annex 17 and thus are 
very similar to TSA regulations. They include, but are not limited to:

   A national civil aviation security program with continuous 
        threat monitoring and mandatory quality control procedures;

   Airport security programs for each airport serving 
        international carriers;

   Air operator security programs;

   Background checks for persons implementing security control 
        measures and persons with unescorted access to restricted 
        security areas; and

   Periodic ICAO security audits.

    The professionals at the TSA, ICAO and other countries' security 
oversight organizations have concluded that resources should be focused 
where the threat is greatest. Therefore, FAA foreign repair stations 
working on components and located miles away from an airport are not 
required to implement background checks for their employees. However, 
if they perform line maintenance at an international airport or 
otherwise require access to the ramp area, foreign repair station 
employees would be subject to similar security requirements to their 
FAA counterparts, including background checks.
    Neither domestic nor international security requirements are based 
on whether a person works for an airline or a repair station; they are 
dependent on the degree of access the individual has to the restricted 
security areas of an airport. Further, mandating additional security 
requirements where none are truly needed will reallocate limited 
oversight resources from areas where the threat is greater. This could 
have the unintended consequence of reducing the level of security for 
the traveling public.
Drug and Alcohol Testing
    FAA-certificated repair stations in the U.S. are required to 
conduct drug and alcohol testing for employees performing ``safety-
sensitive functions'' for U.S. air carriers. This means that an 
employee performing a maintenance task is tested for drug and alcohol 
use. Additionally, subcontractors used by the repair station are also 
required to undergo testing. It is important to note that FAA testing 
requirements do not apply outside the U.S. Therefore, employees of 
domestic airlines working outside the U.S. must remove their employees 
from the drug and alcohol pool when they leave the country.\5\ Once 
again, this has nothing to do with whether the individual works for an 
airline or a repair station; it is based on where the work is 
performed.
---------------------------------------------------------------------------
    \5\ 14 CFR part 121, Appendix I, section XII (Drug Testing) and 
Appendix J, section VIII (Alcohol Testing).
---------------------------------------------------------------------------
    While some have suggested that the U.S. mandate drug and alcohol 
testing for all aviation maintenance workers if they work on articles 
subject to FAA jurisdiction, several practical and legal issues arise 
based on the fact that many of the affected individuals are citizens of 
another state. Indeed, the FAA proposed drug and alcohol testing 
outside the U.S. in 1994 but withdrew it in 2000 preferring to develop 
a multilateral solution through ICAO.\6\ Currently, drug and alcohol 
testing is an ICAO recommended practice; the FAA continues to support 
making it a standard and thus mandatory for all ICAO members.\7\ In 
addition, a related ICAO standard prohibits individuals from performing 
safety-critical functions while under the influence of any psychoactive 
substance.\8\
---------------------------------------------------------------------------
    \6\ FAA Docket No. 27066; Notice 92-18, effective January 13, 2000.
    \7\ ICAO Annex 1, Personnel Licensing,  1.2.7.3 and ICAO Document 
9654-AN/945, Manual on Prevention of Problematic Use of Substances in 
the Aviation Workplace (1995).
    \8\ ICAO Annex 1,  1.2.7.1.
---------------------------------------------------------------------------
Conclusion
    Foreign repair stations are an essential part of the aviation 
community. Without them, maintenance could not be performed on aircraft 
overseas, and the ability of Americans to travel abroad would cease. 
The standards and procedures followed by foreign repair stations are 
essentially the same as those followed by domestic repair stations, if 
they are FAA-certificated and working on U.S.-registered aircraft.
    The use of foreign repair stations does not threaten the viability 
of domestic companies, or aviation safety. In fact, with many American 
businesses having facilities located worldwide, changes to the use of 
foreign repair stations will adversely affect domestic companies and 
encourage foreign countries to retaliate with similar measures. ARSA 
believes that the Congress should allow the international regulatory 
processes to work through the body established for that purpose, ICAO.
    Congress can help maintain the safety and vitality of this industry 
by providing the FAA with adequate resources to oversee the repair 
station industry, encouraging continued oversight by airline customers 
and other civil aviation authorities, and most importantly by ensuring 
that legislation and regulations are truly based on safety.
                               Appendix A

                      FAA Repair Stations by State
                         [Including Territories]
------------------------------------------------------------------------
                           Number of  Repair
         State                  Stations           Number of  Employees
------------------------------------------------------------------------
AK                                           53                      475
AL                                           56                    6,545
AR                                           43                    3,115
AZ                                          156                    6,469
CA                                          683                   30,811
CO                                           73                    1,219
CT                                          102                    7,730
DC                                            1                        7
DE                                            6                      823
FL                                          512                   16,356
GA                                          114                    9,840
GU                                            1                        6
HI                                           13                      113
IA                                           38                    2,985
ID                                           31                      399
IL                                           93                    3,346
IN                                           72                    3,506
KS                                          107                    7,109
KY                                           37                      581
LA                                           40                    2,251
MA                                           57                    1,893
MD                                           30                    1,100
ME                                           11                      857
MI                                          114                    4,469
MN                                           59                    2,204
MO                                           55                    2,643
MS                                           20                    1,019
MT                                           25                      336
NC                                           65                    3,704
ND                                           11                      101
NE                                           13                    1,213
NH                                           24                      590
NJ                                           69                    2,440
NM                                           21                      624
NV                                           30                      748
NY                                          129                    5,450
OH                                          142                    4,599
OK                                          139                   12,059
OR                                           48                    1,444
PA                                           99                    2,699
PR                                           18                      144
RI                                            9                      385
SC                                           32                    2,388
SD                                           14                       73
TN                                           51                    2,090
TX                                          428                   25,801
UT                                           29                      294
VA                                           45                    1,292
VI                                            1                        1
VT                                           11                      158
WA                                          119                    7,547
WI                                           46                    1,537
WV                                           12                    1,517
WY                                            9                       78
------------------------------------------------------------------------
Grand                                     4,216                  197,183
------------------------------------------------------------------------
Based on FAA Air Agency Data Dated: June 10, 2007.

                               Appendix B

             FAA Repair Stations on Foreign Soil by Country
------------------------------------------------------------------------
                           Number of  Repair
        Country                 Stations           Number of  Employees
------------------------------------------------------------------------
AE                                            4                    4,224
AR                                            8                    1,727
AS                                           13                    6,868
AU                                            1                    1,150
BA                                            1                        5
BE                                           12                    4,618
BR                                           15                    6,160
CH                                           30                   15,171
CI                                            4                      754
CO                                            4                    1,471
CS                                            3                      480
DA                                            2                      859
DR                                            2                       43
EC                                            2                      131
EG                                            1                    3,500
EI                                           12                    3,429
ES                                            1                    1,200
ET                                            1                    2,230
EZ                                            2                    1,213
FI                                            1                    1,800
FJ                                            1                       26
FR                                          101                   25,972
GM                                           53                   30,457
GR                                            2                      914
GT                                            2                       70
HK                                            7                    5,650
HU                                            2                      806
ID                                            2                    2,832
IN                                            2                      806
IS                                           13                    5,567
IT                                           20                    6,659
JA                                           20                   17,332
JO                                            2                      944
KE                                            1                        5
KS                                            9                    5,629
KZ                                            1                       33
LU                                            1                      329
MO                                            2                      995
MT                                            1                       42
MX                                           20                    4,279
MY                                            8                    4,107
NL                                           20                    7,034
NO                                            4                    1,052
NZ                                            4                    3,377
PE                                            4                      670
PM                                            1                      192
PO                                            2                    3,174
QA                                            1                       41
RO                                            2                      864
RP                                            8                    3,249
RS                                            1                    2,350
SA                                            5                    6,423
SF                                            4                    3,690
SN                                           48                   15,475
SP                                            6                    4,360
SW                                            8                    2,481
SZ                                            8                    4,524
TD                                            1                      153
TH                                            6                    5,650
TU                                            2                    3,006
TW                                            6                    4,844
UK                                          161                   23,998
UP                                            1                       91
VE                                            4                      304
WI                                            1                      100
YI                                            1                       --
------------------------------------------------------------------------
Grand                                       698                  267,589
------------------------------------------------------------------------
Based on FAA Air Agency Data Dated: June 10, 2007.

                               Appendix C

                           FAA Repair Stations on Foreign Soil by Country Code Listing
                                               [based on FAA data]
----------------------------------------------------------------------------------------------------------------
                                                                                Category 1 = Meets    Bilateral
                                                        Total      Number of    ICAO standards 2 =    Agreement
      Country Code                  Name               Repair      Employees    Does not meet ICAO    with the
                                                      Stations                      standards           U.S.?
----------------------------------------------------------------------------------------------------------------
AE                       United Arab Emirates                4         4,224                    1            --
AR                       Argentina                           8         1,727                    1           Yes
AS                       Australia                          13         6,868                    1           Yes
AU                       Austria                             1         1,150                    1           Yes
BA                       Bahrain                             1             5           Not Listed            --
BE                       Belgium                            12         4,618                    1           Yes
BR                       Brazil                             15         6,160                    1           Yes
CH                       China                              30        15,171                    1           Yes
CI                       Chile                               4           754                    1            --
CO                       Columbia                            4         1,471                    1            --
CS                       Costa Rica                          3           480                    1            --
DA                       Denmark                             2           859                    1           Yes
DR                       Dominican Republic                  2            43                    2            --
EC                       Ecuador                             2           131                    1            --
EG                       Egypt                               1         3,500                    1            --
EI                       Ireland                            12         3,429                    1            --
ES                       El Salvador                         1         1,200                    1            --
ET                       Ethiopia                            1         2,230                    1            --
EZ                       Czech Republic                      2         1,213                    1           Yes
FI                       Finland                             1         1,800                    1           Yes
FJ                       Fiji                                1            26                    1            --
FR                       France                            101        25,972                    1           Yes
GM                       Germany                            53        30,457                    1           Yes
GR                       Greece                              2           914                    1            --
GT                       Guatemala                           2            70                    2            --
HK                       Hong Kong                           7         5,650                    1            --
HU                       Hungary                             2           806                    1            --
ID                       Indonesia                           2         2,832                    1           Yes
IN                       India                               2           806                    1            --
IS                       Israel                             13         5,567                    1           Yes
IT                       Italy                              20         6,659                    1           Yes
JA                       Japan                              20        17,332                    1           Yes
JO                       Jordan                              2           944                    1            --
KE                       Kenya                               1             5           Not Listed            --
KS                       Korea                               9         5,629           Not Listed            --
KZ                       Kazakhstan                          1            33           Not Listed            --
LU                       Luxembourg                          1           329                    1            --
MO                       Morocco                             2           995                    1            --
MT                       Malta                               1            42                    1            --
MX                       Mexico                             20         4,279                    1            --
MY                       Malaysia                            8         4,107                    1           Yes
NL                       Netherlands                        20         7,034                    1           Yes
NO                       Norway                              4         1,052                    1           Yes
NZ                       New Zealand                         4         3,377                    1           Yes
PE                       Peru                                4           670                    1            --
PM                       Panama                              1           192                    1            --
PO                       Portugal                            2         3,174                    1            --
QA                       Qatar                               1            41                    1            --
RO                       Romania                             2           864                    1           Yes
RP                       Philippines                         8         3,249                    1            --
RS                       Russia                              1         2,350                    1           Yes
SA                       Saudi Arabia                        5         6,423                    1            --
SF                       South Africa                        4         3,690                    1           Yes
SN                       Singapore                          48        15,475                    1           Yes
SP                       Spain                               6         4,360                    1           Yes
SW                       Sweden                              8         2,481                    1           Yes
SZ                       Switzerland                         8         4,524                    1           Yes
TD                       Trinidad & Tobago                   1           153                    1            --
TH                       Thailand                            6         5,650                    1            --
TU                       Turkey                              2         3,006                    1            --
TW                       Taiwan                              6         4,844                    1            --
UK                       United Kingdom                    161        23,998                    1           Yes
UP                       Ukraine                             1            91                    2            --
VE                       Venezuela                           4           304                    1            --
WI                       Western Sahara                      1           100           Not Listed            --
YI                       Yugoslavia                          1            --           Not Listed            --
----------------------------------------------------------------------------------------------------------------
TOTAL                    65                                698       267,589                   60            27
----------------------------------------------------------------------------------------------------------------

                               Appendix D
         ARSA Repair Station Audit Surveillance Survey Results

                                      Domestic Repair Station Annual Audits
----------------------------------------------------------------------------------------------------------------
                                               Responses   Internal   Regulatory   Customer    3rd Party   Total
----------------------------------------------------------------------------------------------------------------
Total                                                183       3,301         663       1,361         235   5,560
Average                                                         18.0         3.6         7.4         1.3    30.4
----------------------------------------------------------------------------------------------------------------


                                      Foreign Repair Station Annual Audits
----------------------------------------------------------------------------------------------------------------
                                               Responses   Internal   Regulatory   Customer    3rd Party   Total
----------------------------------------------------------------------------------------------------------------
Total                                                 27       1,439         219         311          48   2,017
Average                                                         53.3         8.1        11.5         1.8    74.7
----------------------------------------------------------------------------------------------------------------


                                       Total Repair Station Annual Audits
----------------------------------------------------------------------------------------------------------------
                                               Responses   Internal    Authority   Customer    3rd Party   Total
----------------------------------------------------------------------------------------------------------------
Grand Total                                          210       4,740         882       1,672         283   7,577
Average                                                         22.6         4.2         8.0         1.3    36.1
----------------------------------------------------------------------------------------------------------------

                               Appendix E
       Analysis of the Aeronautical Repair Station Association's 
                           2007 Member Survey
Executive Summary
    In March 2007, the Aeronautical Repair Station Association (ARSA) 
conducted a major survey of its members. The purposes of the 2007 
survey were to:

   Develop a better understanding of the markets served by ARSA 
        members;

   Determine what factors most affect member costs of doing 
        business;

   Identify legislative and regulatory issues of common concern 
        to the membership;

   Determine what members perceive as the most important parts 
        of the ARSA value proposition; and

   Identify additional activities the association could 
        undertake to enhance value to members.

    This survey's major findings were as follows:

   ARSA's membership is dominated by privately-owned small 
        businesses. Nearly 70 percent of the survey respondents have 
        annual revenues below $10.5 million (Question 2); more than 67 
        percent have fifty or fewer employees (Question 3); and more 
        than 81 percent are privately-owned by a single individual, 
        single family, or group of partners (Question 12).

   The overwhelming majority of ARSA members (98.5 percent) 
        hold Federal Aviation Administration (FAA) repair station 
        certificates; however, more than two-thirds (68.42 percent) are 
        also European Aviation Safety Administration (EASA) approval 
        holders (Question 7).

   Commercial air carriers are overwhelmingly the most 
        important customer market for ARSA members, with general 
        (business aircraft) the second most important. The military and 
        general (light aircraft) markets are a distant third and fourth 
        (Question 9).

   Labor unions have low penetration in the repair station 
        industry. Fewer than twelve percent of survey respondents 
        report that their facilities are unionized (Question 13).

   The survey results suggest that the repair station industry 
        is thriving economically. More than two-thirds (71.43 percent) 
        of survey respondents said they plan to add positions and/or 
        hire new workers in the coming year. Not a single survey 
        respondent reported plans to eliminate positions. Additionally, 
        83 percent of survey respondents are optimistic about business 
        prospects for the coming year, only 9 percent are ambivalent, 
        and fewer than 8 percent are pessimistic (Questions 15 and 18).

   There is a considerable level of oversight of repair 
        stations, with 42 percent reporting 11 or more external audits 
        last year by regulators, customers, and third-party 
        accreditation bodies (Question 19).

   FAA resource problems are having some impact on the 
        efficiency of the contract maintenance industry. A quarter 
        (24.81 percent) of the survey respondents report losing 
        customers or foregoing business opportunities because of 
        regulatory delays resulting from inadequate FAA staffing 
        (Question 20.)

   Obtaining maintenance manuals from manufacturers remains a 
        major challenge for repair stations. Consistent with earlier 
        ARSA surveys, more than 70 percent of survey respondents report 
        having had some difficultly obtaining maintenance manuals from 
        OEMs. More than a third (37.59 percent) of respondents report 
        that maintenance manual availability is a consistent source of 
        frustration, and that their ability to serve customers is 
        undermined by manufacturers refusing to provide manuals and/or 
        charging exorbitant prices (Questions 21 and 22.)

   Rising health insurance costs have had a significant impact 
        on ARSA members and their employees, with approximately three-
        quarters (74.44 percent) of members reporting that they have 
        had to reduce benefits or ask workers to shoulder more of the 
        costs of health insurance in recent years (Question 25.)

   Close to 80 percent of survey respondents have had trouble 
        finding skilled technical workers. More survey respondents 
        cited the shortage of technical workers as the single greatest 
        challenge facing that aviation maintenance industry than any 
        other (Questions 26 and 30).

   ARSA members regard ARSA's advocacy activities on behalf of 
        the industry before U.S. regulators and Congress as the most 
        important parts of the ARSA value proposition. ARSA's 
        regulatory compliance publications, the hotline, and 
        maintenance industry networking opportunities are also highly 
        regarded (Question 33.)

   Survey respondents cite their desire to support ARSA's 
        advocacy activities and access to regulatory compliance 
        assistance as the top reasons for joining ARSA (Question 34.)

   A majority of survey respondents say that their company 
        employees have not yet participated in ARSA's Annual Repair 
        Symposium, suggesting significant opportunities to grow member 
        participation in ARSA's flagship event. Survey respondents are 
        ambivalent about restructuring the Symposium to take place 
        entirely on weekdays and about adding a trade show component to 
        the meeting (Question 40, 42 and 43.)
Survey Methodology
    ARSA's 2007 Member Survey was conducted between Feb. 26 and March 6 
using SDI Weblink's online survey system. The ARSA key contact for each 
repair station member and corporate member was invited to participate 
in the survey through three e-mails sent over the course of the week 
requesting input. Although the survey was anonymous, the survey system 
was configured to prevent duplicate responses from the same individual. 
Ultimately, 133 ARSA member companies participated in the survey out of 
a population of approximately 520 regular and 15 corporate members. The 
survey margin of error is 7.3 percent.

    Senator McCaskill. Thank you.
    Mr. Barimo?

                 STATEMENT OF BASIL J. BARIMO,

             VICE PRESIDENT, OPERATIONS AND SAFETY,

           AIR TRANSPORT ASSOCIATION OF AMERICA, INC.

    Mr. Barimo. Thank you and good afternoon.
    I'm Basil Barimo, Vice President of Operations and Safety 
of the Air Transport Association of America.
    I appreciate the opportunity to join you today, as you 
consider how the expertise of highly qualified third parties 
can be applied to air carrier maintenance programs.
    Long and varied experience confirms that contract 
maintenance can be both safe, and efficient, and we should not 
be hesitant in accepting its use. Before going any farther, 
though, I want to emphasize that the starting point for any 
discussion that has aviation safety implications is this--
safety is the constant, overriding consideration in our 
member's activities. They understand their responsibilities, 
and they act accordingly.
    The U.S. airline industry's stellar, and improving, safety 
record demonstrates that unflagging commitment. Maintenance 
contracting in the airline industry is undertaken in this 
overarching context of dedication to safety. It's no different 
than any other activity in our industry in that respect. 
Consequently, it's not a shortcut by which shoddy maintenance 
practices are tolerated, it's not a stray, cutoff from an 
airlines overall maintenance program, and it's not adrift, 
detached from regulatory moorings. More decisively, the safety 
data don't offer a reason to question the use of contract 
maintenance. Outsourcing has increased over the past decade, 
yet the U.S. industry's maintenance-related safety record is 
the best it has ever been. If there were systemic problems with 
contract maintenance, the safety data would have exposed it, 
and again, we're talking about NTSB data, not anecdotal claims.
    This favorable outcome is to be expected. Once again, 
context is crucial. Contract maintenance occurs in a highly 
structured, safety oriented environment, regardless of where 
it's done.
    To begin with, the decision to outsource is for each 
airline to make. An airline makes that decision as the 
certificate holder, the regulated entity that is ultimately 
responsible for the safety of its operations. If the airline 
elects to use third-party maintenance, the airline is not 
fluffing off any of its statutory or regulatory obligations. On 
the contrary, the airline's making a well thought-out 
determination that outsourcing will contribute--both in terms 
of results and efficiency--to the airline's maintenance 
program.
    Contract maintenance is common, and commonly accepted in 
the industry. Virtually every airline, to some degree, relies 
on contract maintenance--whether in the form of line, heavy, 
engine or component maintenance. Aircraft operators with 
demanding and sophisticated maintenance needs, including 
various branches of the U.S. military, contract for maintenance 
services. It's not an exotic practice, regardless of where it's 
done.
    The multi-layered and continuous oversight of contract 
maintenance does more than ensure a safe aircraft, it enhances 
a robust security system--a complex system of checks and 
balances, originally designed with safety in mind, are 
interwoven with security, and asset protection systems, to 
mitigate risks regardless of their nature.
    Oversight is fully integrated into FAA's regulatory 
structure, the FARs explicitly recognize it, and the FAA 
certificates repair stations, which must comply with the 
airlines FAA-approved maintenance program. In addition, as the 
certificate holder, the airline must monitor the quality of the 
maintenance that is performed. To do so, airlines conduct 
indepth and frequent audits of the repair stations that they 
use, they employ independent auditors, they assign their own 
onsite representatives to monitor repair station performance, 
and they measure the reliability of the products produced. 
Finally, the FAA has a compliance program that surveys the 
performance of both the airlines and the repair stations.
    Continued access to third-party maintenance is one 
ingredient in some airlines' efforts to remain competitive both 
here and abroad--that competitiveness is what enables 
passengers and shippers to receive the services they want, at 
prices they're willing to pay.
    Compromise of safety can never be tolerated, but neither 
should efforts to limit airlines' ability to obtain necessary 
services--consistent with the highest degree of safety--as 
economically as possible. This search for efficiency has meant 
that some airlines have shifted where their maintenance is 
done. Sometimes it meant moving the location of in-house 
maintenance facilities, other times it's meant contracting with 
a third party, perhaps even overseas, to perform some of the 
airlines' maintenance. Neither type of change is pleasant, both 
can adversely affect workers and their communities. It has, 
however, meant new job opportunities for some workers, and new 
economic benefits for some communities.
    Far from resulting in the export of the majority of U.S. 
maintenance jobs overseas, it has meant that we've been able to 
retain them in the United States. This is a key point in 
evaluating the effects of contracts maintenance.
    Thank you for allowing me to share our views today, and I'm 
glad to answer questions.
    [The prepared statement of Mr. Barimo follows:]

 Prepared Statement of Basil J. Barimo, Vice President, Operations and 
           Safety, Air Transport Association of America, Inc.
Introduction
    The Air Transport Association of America, Inc. (ATA), the trade 
association of the principal U.S. passenger and cargo airlines,\1\ 
appreciates the opportunity to submit these comments for the record on 
safety and other issues affecting the U.S. airline industry. ATA member 
airlines have a combined fleet of more than 4,000 airplanes and account 
for more than 90 percent of domestic passenger and cargo traffic 
carried annually by U.S. airlines.
---------------------------------------------------------------------------
    \1\ ABX Air, Inc.; Alaska Airlines; Aloha Airlines; American 
Airlines; ASTAR Air Cargo; Atlas Air; Continental Airlines; Delta Air 
Lines; Evergreen International Airlines; Federal Express Corp.; 
Hawaiian Airlines; JetBlue Airways; Midwest Airlines; Northwest 
Airlines; Southwest Airlines; United Airlines; UPS Airlines; and US 
Airways.
---------------------------------------------------------------------------
    Safety is the constant, overriding imperative in our members' 
activities. They understand their responsibilities and they act 
accordingly. The U.S. airline industry's stellar--and improving--safety 
record demonstrates that indisputable commitment.
Airlines Fuel Our Nation's Economy
    The U.S. airline industry is not simply an important sector of the 
national economy; its services fuel our entire economy. Air 
transportation is an indispensable element of America's infrastructure 
and our Nation's economic well-being. Individuals, businesses and 
communities depend on the national air transportation system. U.S. 
airlines transport more than two million passengers on a typical day 
and directly employ 550,000 persons to do so; they provide just-in-time 
cargo services; they are the backbone of the travel and tourism 
industry; and airlines link communities throughout our Nation and to 
the world.
    Moreover, the airline industry is the foundation of the commercial 
aviation sector, which comprises airlines, airports, manufacturers and 
associated vendors. U.S. commercial aviation ultimately drives $1.2 
trillion in U.S. economic activity and 11.4 million U.S. jobs. By any 
measure, the U.S. airline industry is a valuable national asset and its 
continued economic health should be a matter of national concern.
The Safest Airlines in the World
    Despite the unprecedented travails of the U.S. airline industry 
throughout the first half of this decade, its safety record has 
continued to improve. Our commitment to safety, even in the face of 
unprecedented financial adversity, has been unflagging and will remain 
so.
    Following $35 billion in losses from 2001 to 2005, 2006 was a much-
improved year for the U.S. airline industry from an economic 
standpoint. Including the all-cargo sector, the industry reported 
earnings of $3 billion for the year.
    While conditions have improved and the overall financial outlook is 
guardedly optimistic, debt levels remain high, leaving the airlines 
vulnerable to fuel spikes, recession or exogenous shocks (e.g., 
terrorism, pandemics, natural disasters), let alone ill-advised public 
policy decisions. The challenge we face is to achieve meaningful and 
sustainable profits, and to improve credit ratings to the point where 
airlines can weather normal economic turbulence while simultaneously 
investing in the future.


    Notwithstanding these financial challenges, airline safety has 
remained rock solid. NTSB figures show fewer accidents in 2006 compared 
to 2005 for all segments of civil aviation, with Part 121 carriers 
continuing to have the lowest accident rates. In 2006, Part 121 
carriers transported 750 million passengers more than eight billion 
miles and logged 19 million flight hours on 11.4 million flights. 
Tragically, there were two fatal accidents in 2006 which claimed 50 
lives. This yields an accident rate of 0.18 per 1,000,000 departures, 
down 30 percent from 2005. For comparison, the average rate for the 
five-year period of 2002-2006 was 0.36, and the 5 years prior to that 
saw a rate of 0.45 accidents per 1,000,000 departures. The trend 
continues in 2007 and, without question scheduled air service is 
incredibly safe, getting safer, and maintenance certainly plays a role 
in that remarkable achievement.
    The chart above clearly depicts the remarkable improvements in 
airline safety that have occurred over time. U.S. air carrier accidents 
are rare and random. A prominent reason for this is the extraordinary, 
long-standing collaboration among the FAA, NTSB, NASA, manufacturers, 
airline employees and their unions, airlines themselves, and of course, 
maintenance, repair and overhaul service providers (MROs). That 
collaborative relationship is firmly entrenched in the aviation 
community; indeed, it has strengthened over the years. Programs such as 
the joint government-industry Commercial Aviation Safety Team, Flight 
Operational Quality Assurance Programs, Aviation Safety Action 
Programs, and Line Operations Safety Programs are important, tangible 
results of that ongoing collaboration.
    These collaborative safety-improvement efforts have created a 
safety management system that is data driven and is based on risk 
analysis. That undistracted focus on data enables safety-related trends 
to be identified, often before they emerge as problems, and are 
properly resolved. This objective and measurable approach means that we 
apply our resources where the needs actually are, not where surmise or 
unverified assumptions might take us.
    We can and do spot these trends, whether they are operational or 
maintenance related. With respect to the long-standing practice in the 
airline industry to use the expertise of regulated contractors to 
perform maintenance services, the data quite clearly do not tell us 
that safety suffers.
Maintenance Contracting Is Not a New Concept
    In simple terms, contract maintenance is the process explicitly 
allowed by FAR 121.363(b) \2\ where airlines hire experts to perform 
maintenance tasks. The type of maintenance involved can range from 
minor servicing to major overhaul of components, engines or the 
airframe itself.
---------------------------------------------------------------------------
    \2\ FAR 121.363 Responsibility for Airworthiness states that:

      (a) Each certificate holder is primarily responsible for--

    (1) The airworthiness of its aircraft, including airframes, 
aircraft engines, propellers, appliances, and parts thereof; and

    (2) The performance of the maintenance, preventive maintenance, and 
alteration of its aircraft, including airframes, aircraft engines, 
propellers, appliances, emergency equipment, and parts thereof, in 
accordance with its manual and the regulations of this chapter.

    (b) A certificate holder may make arrangements with another person 
for the performance of any maintenance, preventive maintenance, or 
alterations. However, this does not relieve the certificate holder of 
the responsibility specified in paragraph (a) of this section.
---------------------------------------------------------------------------
    Airlines exist to transport people and goods. In order to survive 
they must do it safely, but to thrive in a fiercely competitive, global 
environment they must also do it efficiently. Safety need not be 
comprised because of considerations of efficiency; in fact, it can be 
significantly advanced in an environment where a focus on efficiency 
spurs a willingness to re-examine time-worn practices and encourage 
innovation that embraces newer--and improved--practices.
    The maintenance of commercial airliners is a complex, capital-
intensive business requiring specialized equipment and facilities along 
with highly-skilled personnel. One implication of this is that using a 
maintenance facility or facilities with specialized skills is likely to 
be considered. Complexity inevitably will lead a carrier to examine 
dividing maintenance functions; some airlines will elect to do so, 
while others will not. Either way, examining alternative sources in 
this type of environment is entirely reasonable.
    Moreover, current airline business models demand continual scrutiny 
of costs, commonly with a bias to shed non-core activities. In the case 
of maintenance, there are many incentives to utilize contract 
maintenance providers:

   Access to specialized repair facilities when and where they 
        are needed

   Avoidance of major capital investments (equipment and 
        facilities)

   Increased utilization of existing facilities

   Improved employee focus on core airline activities

   Optimization of flight schedules around customer demand 
        instead of maintenance infrastructure availability

   Exceptional quality at a reduced cost

    As expected, the level of contract maintenance utilized by 
individual airlines varies significantly based on factors such as the 
type(s) of aircraft used, geographic region of operation, business 
philosophy, labor agreement limitations, internal cost structure, and 
commercial relationships with airframe, engine and component 
manufacturers. Without exception, all airlines rely to some extent on 
contract maintenance providers. This is a point that should not be 
obscured: contract maintenance is a commonly accepted practice in this 
industry. The extent of it may vary from airline to airline but there 
is nothing out of the ordinary about its use.
    Airlines are by no means unique in their reliance on contract 
maintenance. In fact, many industries rely heavily on contract 
maintenance providers for a broad range of services. Trains, buses and 
cruise ships are predominantly maintained by companies other than those 
who operate them. The United States Department of Defense contracts 
with private companies for the maintenance of aircraft, in many cases 
the same companies utilized by commercial airlines. As this widespread 
pattern of relying on contract maintenance suggests, operators with 
very demanding and sophisticated needs routinely and successfully 
outsource maintenance.
Statistics Don't Lie
    Commercial airlines have utilized contract maintenance for decades. 
The industry's reliance on contract maintenance providers increased 
since 2001 as airlines restructured their business models. The 
implications of this change have been misunderstood. It does not signal 
a diminution in safety or a ``slippery slope.'' Critics of contract 
maintenance argue that ``If airlines don't perform all of the 
maintenance themselves, then they can't be safe.'' Independent data 
from the National Transportation Safety Board (NTSB) proves them wrong.
    Based on data compiled by the NTSB, maintenance-related accidents 
make up roughly 8 percent of all Part 121 accidents over the last 10 
years.



    The chart above clearly illustrates that U.S. airlines' use of 
contract maintenance has not been a detriment to safety. In fact, 
maintenance-related safety performance is the best its ever been. It is 
simply not reasonable, based on the data available, to consider the 
practice of maintenance contracting unsafe.
Effective Oversight Is the Key
    Air carriers understand that aircraft maintenance is vital to 
continued operational safety. Likewise, safe operations are elemental 
to compliance with regulatory requirements and ultimately to an 
airline's existence. Over time, the industry has developed a 
comprehensive, multilayered approach to oversight that ensures the 
highest levels of quality and safety regardless of who does the work or 
where that work is performed. This point cannot be overstated--safety 
is what counts, first and foremost.
    Initial levels of protection are contained in the Federal Aviation 
Administration (FAA) regulations, which provide a basic framework to 
ensure competence among those certificated to perform aircraft 
maintenance.\3\ Prior to granting certification, the FAA confirms that 
an entity or individual has fulfilled specific regulatory requirements.
---------------------------------------------------------------------------
    \3\ See, for example, 14 CFR parts 121, 145 and 65.
---------------------------------------------------------------------------
    Part of this approval process involves the issuance of Operations 
Specifications (OpSpecs) by the FAA. Air carrier OpSpecs contain a 
specific section to address aircraft maintenance, and repair station 
OpSpecs delineate the ratings and limitations of the maintenance that 
can be performed. In FAA Order 8300.10, Volume 2, Chapter 84, it is 
stated, in part, that:

        OpSpecs transform the general terms of applicable regulations 
        into an understandable legal document tailored to the specific 
        needs of an individual certificate holder. OpSpecs are as 
        legally binding as the regulations . . . (Citations omitted)

    Once certificated, air carriers and repair stations are inspected 
and monitored by the FAA to verify their continued conformity with the 
rules. This ongoing surveillance process can be viewed as the second 
layer of safety.
    Additionally, certificated air carriers acquire the non-delegable 
responsibility for the airworthiness of the aircraft in their fleet.\4\ 
The backbone of any air carrier's airworthiness is its Continuing 
Analysis and Surveillance System (CASS). CASS is a quality-assurance 
system required by FAR 121.373 consisting of surveillance, controls, 
analysis, corrective action and follow-up. Together, these functions 
form a closed loop system that allows carriers to monitor the quality 
of their maintenance. In a structured and methodical manner, the CASS 
provides carriers with the necessary information to enhance their 
maintenance programs.
---------------------------------------------------------------------------
    \4\ See 14 CFR 121.363 which provides that:

    (a) Each certificate holder is primarily responsible for--

    (1) The airworthiness of its aircraft, including airframes, 
aircraft engines, propellers, appliances, and parts thereof; and

    (2) The performance of the maintenance, preventive maintenance, and 
alteration of its aircraft, including airframes, aircraft engines, 
propellers, appliances, emergency equipment, and parts thereof, in 
accordance with its manual and the regulations of this chapter.

    (b) A certificate holder may make arrangements with another person 
for the performance of any maintenance, preventive maintenance, or 
alterations. However, this does not relieve the certificate holder of 
the responsibility specified in paragraph (a) of this section. 
(Emphasis added.)
---------------------------------------------------------------------------
    Aircraft maintenance is the primary ingredient of airworthiness and 
FAA regulations contain detailed maintenance program and manual 
requirements,\5\ which validate the related air-carrier processes and 
procedures. When work is sent to a repair station, it must follow the 
maintenance program of the air carrier with whom it has contracted.\6\ 
Combined, these duties comprise the third level of protection.
---------------------------------------------------------------------------
    \5\ See 14 CFR  121.365; 121.367; 121.369.
    \6\ See 14 CFR 145.205 which states, in part, that:

    (a) A certificated repair station that performs maintenance, 
preventive maintenance, or alterations for an air carrier or commercial 
operator that has a continuous airworthiness maintenance program under 
part 121 or part 135 must follow the air carrier's or commercial 
operator's program and applicable sections of its maintenance manual. 
(Emphasis added.)
---------------------------------------------------------------------------
    Apart from external FAA surveillance, and in line with their 
ultimate responsibility for airworthiness, airlines conduct in-depth 
initial and frequent follow-up maintenance vendor audits. As a rule, 
these audits are performed by air carrier quality, compliance or 
inspection department employees, but oftentimes may include outside 
counsel and/or consulting firms who specialize in air carrier 
maintenance. These audits create a robust fourth level of oversight.
    Industry protocol for conducting and substantiating independent 
audits of air carriers and repair stations is established by the 
Coordinating Agency for Supplier Evaluation (C.A.S.E.). In addition, 
guidance materials and inspection checklists created for FAA inspectors 
are frequently used.
    Typically, preliminary investigation of a potential repair station 
vendor by an air carrier would include:

   Review of repair station performance and quality metrics

   Feedback from past and current repair station customers

   Verification of repair station capabilities (OpSpecs)

   Review of FAA mandated Repair Station Manual, Quality Manual 
        and Training Manual

    If this repair station examination is satisfactory, it is normally 
followed by an on-site visit to verify compliance with applicable 
regulations, C.A.S.E. requirements and adherence to the repair 
station's own manuals. Some areas of investigation include:

   Validation of FAA certificates held by persons directly in 
        charge of maintenance and/or those who perform maintenance

   Inspection of training records of inspectors, technicians 
        and supervisors

   Examination of procedures for technical data, documentation 
        and maintenance record control

   Examination of procedures for work processing, disposal of 
        scrap parts, tool calibration and handling material with a 
        limited shelf life

   Review of repair station internal inspection, quality, and 
        security programs

   Review of previous inspection program results and corrective 
        actions

    If the repair station is selected to perform maintenance for the 
air carrier, similar on-site audits would be conducted on a regular 
basis.
    Finally, a fifth layer of oversight is provided by on-site air 
carrier representatives. These individuals monitor the day-to-day 
operations and coordinate the activities of the repair station related 
to the air carrier's equipment. Final inspections and, ultimately, air 
carrier approval for service are also normally accomplished by these 
on-site airline personnel.
    In essence, there are two separate but mutually reinforcing 
oversight schemes, one regulatory and one independent, both effective 
in ensuring satisfaction of applicable FAA regulations. However, air 
carriers have further incentive to provide adequate oversight through 
the potential negative impact--real or perceived--of safety related 
issues. Without question, air carriers continue to make safety their 
top priority. Safety is ingrained in our culture.
Safety and Security Layers Are Interwoven
    Security of repair station activities is a constant consideration. 
As in other areas of civil aviation security, the response to this 
issue is based on a layered approach.
    The subject of foreign repair station security measures has 
attracted attention recently. We wish to clarify a few points about 
those measures. As a preliminary matter, we support the Congressional 
instruction to the Transportation Security Administration to issue 
foreign repair station security regulations. We look forward to 
participating in the anticipated TSA rulemaking proceeding.
    Mutually reinforcing U.S. and host country regulatory requirements 
and carrier practices produce the layered security regime at foreign 
repair stations. This begins with a U.S. air carrier's evaluation of a 
potential service provider before it enters into a contract for 
maintenance, repair or overhaul services. This is an important first 
step for the carrier; it is looking to entrust an aircraft or high-
value components to a vendor. The carrier obviously wants to prevent 
unauthorized access to such equipment and to be confident that the 
potential vendor can do so. Beyond that very basic business concern, 
are the security requirements that the country's civil aviation 
authority and the airport authority impose. Those requirements are 
reinforced by periodic TSA foreign airport security inspections. 
Coupled with those requirements is the typical presence of a 
representative of the U.S. carrier at the foreign facility. Weaved into 
this array of measures is the FAA requirement that repaired or 
overhauled items be inspected when they are returned to the U.S. 
carrier and before they are returned to service aboard an aircraft. 
This means that multiple sets of trained eyes inspect a part that has 
been at a foreign repair station. Finally, before an aircraft is 
returned to passenger service from a foreign location, it must complete 
the aircraft security inspection procedures.
    These complementary procedures yield a layered approach, which is 
the hallmark of how aviation security is achieved today. We look 
forward to continue to work with U.S. and foreign regulators on these 
measures.
Global Competition, Local Politics
    U.S. airlines continually lead the world in virtually every 
performance metric, including safety. Their ability to compete 
effectively on a global scale is due, at least in part, to their 
ability to evolve with changing market conditions. Airlines across the 
United States and around the world have formed alliances that extend 
beyond their networks to many aspects of airline operations, including 
maintenance. These complex relationships involve airlines, aircraft 
manufacturers and a host of service providers.
    The loss of some 130,000 airline jobs since 9/11 has been well 
documented. As airlines downsized to meet a reduced demand for air 
travel, it became even more difficult for them to efficiently utilize 
their exhaustive maintenance infrastructure. Fleet reductions targeted 
older, maintenance-intensive aircraft, leaving too few aircraft being 
maintained at too many facilities, and airlines looked to contract 
maintenance providers as a way to secure quality maintenance while 
shedding the expensive infrastructure costs. Airlines were also forced 
to renegotiate labor agreements in an effort to reduce costs, bolster 
productivity and increase asset utilization. Scope clauses were 
modified to allow air carriers to more broadly leverage contract 
maintenance--a painful move for affected employees, but ultimately 
essential to the airline's survival. It is this impact on employees, 
particularly maintenance employees, that draws attention to the issue 
of maintenance contracting.
    The debate surrounding the issue of contract maintenance is best 
understood when broken down into several key points:

   Most statistics relating to the amount of maintenance 
        contracted are based on the amount an airline spends. The 
        amount `outsourced' is derived by dividing the amount spent on 
        contract maintenance by the total maintenance cost for the 
        airline. These include all costs associated with the 
        maintenance of airframes, engines and components.

   Engine maintenance is much more expensive per event than 
        airframe maintenance, due largely to the replacement of 
        expensive parts within the engine. The fact that virtually all 
        engine maintenance is performed outside the airline can skew 
        the numbers.

   Even the largest engines are readily transportable enabling 
        access to repair centers around the world. Engine manufacturers 
        such as GE, Pratt & Whitney, and Rolls-Royce rely on their 
        subsidiaries worldwide for maintenance of their products 
        although, as shown below, most of that work is performed 
        domestically. Large U.S. airline MROs also maintain engines for 
        foreign and domestic customers.
        

        
   ATA-member airlines continue to perform the majority of 
        airframe checks internally.\7\
---------------------------------------------------------------------------
    \7\ According to a 2005 survey of ATA member airlines, 70 percent 
of all heavy maintenance checks (`C' or higher) were performed 
internally by direct airline personnel.
---------------------------------------------------------------------------
   The majority of narrow-body aircraft maintenance work 
        contracted out in the past few years has stayed within North 
        America. Maintenance, repair and overhaul companies (MROs) in 
        Washington, North Carolina, Florida, New York, Georgia, 
        Tennessee, Arizona, Texas and Indiana are among those now 
        performing the work. Large airlines with available capacity 
        have also captured a portion, and the remainder is performed by 
        experts in Central/South America and Canada.
        

        
   Heavy airframe maintenance performed by MROs outside of 
        North America is limited primarily to wide-body aircraft. 
        Regularly scheduled operations enable these long-range aircraft 
        to routinely transit locations abroad that offer best-in-class 
        maintenance for these aircraft types. Asia and Europe do much 
        of this work.
        

        
Conclusion
    U.S. airlines have logged an exceptional safety record while 
steadily expanding their use of contract maintenance. So while critics 
charge that maintenance contracting undermines safety, independent 
government figures simply don't support that conclusion. When 
considered objectively, it is evident that the practice helps U.S. 
airlines compete effectively with their global counterparts. The 
ability to optimize maintenance practices to produce safe, reliable, 
customer-worthy aircraft at a competitive cost is essential to 
airlines' long-term health. Healthy airlines grow, adding service to 
new destinations and increasing service to existing ones. That growth 
requires new aircraft, creating new jobs within the airline for pilots, 
flight attendants, ramp and customer service personnel, and a wide 
range of support staff. Beyond the airline, the impact grows 
exponentially and is felt nationwide by manufacturers, ATC service 
providers, airports, caterers, fuelers--the list goes on and on. 
Contract maintenance has played and continues to play an important role 
in improving the health of the U.S. airline industry--in a way that is 
entirely consistent with our fundamental commitment to safety. It is 
imperative that this fact not be overshadowed by the movement of jobs 
from one state or district to another.

    Senator McCaskill. Thank you, Mr. Barimo.
    Mr. Brantley?

  STATEMENT OF TOM BRANTLEY, PRESIDENT, PROFESSIONAL AIRWAYS 
              SYSTEMS SPECIALISTS (PASS), AFL-CIO

    Mr. Brantley. Madame Chairwoman, Chairman Rockefeller, 
Senator Lott, and members of the Subcommittee, thank you for 
inviting PASS to testify today.
    PASS represents over 11,000 FAA employees, including 
approximately 2,800 Flight Standards aviation safety 
inspectors.
    In recent years, the aviation industry has experienced 
dramatic changes, including airlines increasing their reliance 
on outsourced maintenance work, and a large portion of this 
work is being performed at FAA-certificated foreign repair 
stations.
    PASS and the inspector workforce we represent, who are 
responsible for overseeing the certification of and the work 
performed at foreign repair stations, have serious concerns 
regarding the oversight of these facilities.
    Of primary importance, there must be an adequate number of 
experienced and trained FAA inspectors in place with budgetary 
and management support to properly oversee foreign repair 
stations.
    Inspector staffing has not kept pace with the exploding 
outsourcing business and nearly half of the workforce will be 
eligible to retire within 3 years. As such, PASS is requesting 
that Congress direct the agency to follow recommendations 
outlined in the recent study released by the National Academy 
of Sciences, and develop a staffing model for inspectors.
    Instead of addressing the inspector staffing issue, 
however, the FAA is working to expand the use of Bilateral 
Aviation Safety Agreements, which allow foreign authorities to 
provide oversight of the work performed at repair facilities. 
There are inherent problems associated with allowing non-FAA 
employees in foreign locations to perform work on behalf of the 
FAA. Primarily, the fact that the FAA does not have adequate 
oversight procedures in place to ensure the quality of these 
inspections.
    The FAA is entering into these bilateral agreements with 
other countries not to strengthen aviation safety, but instead 
to pass the responsibility for oversight onto another entity. 
It must be required and verified that inspections conducted by 
foreign authorities are done in line with the safety standards 
and regulations of this country. Until this issue is adequately 
addressed, additional agreements with foreign aviation 
authorities should not be allowed.
    In addition, inspectors tell us of several problems 
regarding the regulations governing foreign repair stations and 
the security at foreign repair stations, since the FAA does not 
require the same security screening or drug and alcohol testing 
of employees at foreign repair stations as are required in our 
own country.
    Furthermore, the process an inspector must go through, in 
order to gain access to a foreign repair station is so lengthy 
and tedious that by the time the inspector arrives at the 
facility, the repair station is fully aware of the visit and 
the element of surprise is nonexistent, rendering the 
inspection a simple formality.
    The FAA will argue steadfastly that it cannot impose 
standards on foreign countries for drug and alcohol testing of 
employees at foreign repair stations or demand that inspectors 
be allowed to conduct unannounced inspections. Clearly, the 
United States cannot insist that another country apply our 
standards and regulations, nor can we dictate the requirements 
under which a foreign business must operate.
    However, by requiring the same standards for foreign as it 
does for domestic repair stations, the FAA would not be 
mandating that a foreign government or business do anything 
since these foreign repair stations choose to voluntarily 
contract with U.S. carriers.
    The FAA's responsibility in this regard is to maintain 
oversight of all aspects of aviation safety, including where 
and how repair work is performed. To hold foreign facilities to 
lesser standards not only compromises safety, it gives an 
unfair advantage to foreign businesses that do not have to meet 
the same standards as those in the United States.
    Oversight of foreign repair station maintenance is in 
critical need of attention and improvement. The FAA must take 
immediate steps to increase staffing for its inspector 
workforce so they are able to continue to defend this country's 
reputation as having the safest aviation system in the world.
    Thank you, and I would be happy to answer any questions 
that you have.
    [The prepared statement of Mr. Brantley follows:]

  Prepared Statement of Tom Brantley, President, Professional Airways 
                  Systems Specialists (PASS), AFL-CIO
    Chairman Rockefeller, Senator Lott and members of the Subcommittee, 
thank you for inviting PASS to testify today on the oversight of 
foreign aviation repair stations. Professional Airways Systems 
Specialists (PASS) represents 11,000 Federal Aviation Administration 
(FAA) employees, including approximately 2,800 Flight Standards field 
aviation safety inspectors \1\ located in 103 field offices in the 
United States and eight international field offices in the United 
States and abroad. FAA inspectors are responsible for certification, 
education, oversight, surveillance and enforcement of the entire 
aviation system, including air operator certificates, repair station 
certificates, aircraft, pilots, mechanics, flight instructors and 
designees.
---------------------------------------------------------------------------
    \1\ As of February 2007, the FAA lists the number of Flight 
Standards inspectors as 3,593. This figure, however, includes first 
line field and office managers; the PASS figure only includes 
inspectors who actually perform inspection functions in the field.
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    In recent years, the overall dynamic of the aviation industry has 
experienced significant changes. One such change in practice is the 
outsourcing of maintenance work to repair stations in this country and 
abroad. Whereas much of this work was once done at the air carrier's 
facility, according to the Department of Transportation Inspector 
General, air carriers' use of outsourced repair stations has grown from 
37 percent of air carriers' maintenance costs in 1996 to 62 percent in 
2005, or nearly $3.4 billion of the $5.5 billion spent on maintenance. 
During the first three quarters of 2006, the amount of outsourced 
maintenance had already increased to 64 percent.\2\
---------------------------------------------------------------------------
    \2\ Department of Transportation Inspector General, Aviation 
Safety: FAA's Oversight of Outsourced Maintenance Facilities, CC-2007-
035 (Washington, D.C.: March 29, 2007), p. 1.
---------------------------------------------------------------------------
    A large portion of this work is being performed at facilities in 
foreign locations; there are currently over 690 foreign repair stations 
certified by the FAA. FAA inspectors at international field offices 
(IFOs) are charged with certifying these repair stations and then 
recertifying them approximately every 2 years. FAA inspectors at 
certificate management offices (CMOs) in this country provide oversight 
of the maintenance work performed on their assigned air carriers at 
FAA-certificated foreign repair stations. However, with the current 
state of the inspector workforce and the tedious and bureaucratic 
process behind inspecting foreign repair stations, many inspectors say 
that they are not confident with the level of oversight of foreign 
repair stations and that serious safety issues are not being addressed.
Airworthiness Inspectors
    The airworthiness inspector workforce consists of both avionics and 
maintenance inspectors, and there are two types of airworthiness 
inspectors--general aviation and air carrier:

   General aviation inspectors oversee both foreign and 
        domestic repair stations. Inspectors at IFOs are responsible 
        for certifying FAA-certificated foreign repair stations. There 
        are eight FAA IFOs located worldwide in Alaska, California, 
        Florida, New York, Texas, England, Germany and Singapore that 
        conduct certifications and surveillance of U.S. foreign repair 
        stations in a particular geographic area. When inspecting a 
        foreign repair station, the IFO inspectors examine several 
        important elements, including, among other things, ensuring 
        that the repair station has and continues to comply with the 
        Code of Federal Regulations Part 145 for their repair station 
        certificate and operation specifications, making sure repair 
        station manuals continue to meet Federal Aviation Regulations, 
        and examining the maintenance training, tools and equipment. 
        These inspections vary depending on the size and complexity of 
        the repair station, with the time to complete an inspection on 
        a foreign repair station ranging from a day to a week or more, 
        not including travel time.

   Air carrier inspectors are assigned to a specific air 
        carrier and examine the certificate-specific work on behalf of 
        the air carrier certificate to which they are assigned. An air 
        carrier inspector examines the actual work being done at the 
        air carrier's facilities or a repair station related to their 
        respective air carrier certificate and not the repair station 
        in general. This can include inspecting the aircraft, examining 
        technical data, and looking at housing and facilities. Air 
        carrier inspectors often ``spot check'' specific areas based 
        upon risk-assessment data, a process that can take a few hours 
        or several days depending on the area of concern.

    Following an inspection, both the general aviation and air carrier 
airworthiness inspectors enter the results of their inspections into 
specific FAA databases. General aviation inspectors use the Program 
Tracking Reporting System (PTRS) database, and air carrier inspectors 
enter information into either the PTRS database or the Air 
Transportation Oversight System (ATOS) database. This information is 
then available for all FAA inspectors through the Safety Performance 
Analysis System (SPAS), enabling inspectors to analyze areas of 
potential concern.
Inadequate Inspector Staffing
    A recent study released by the National Academy of Sciences called 
attention not only to insufficient inspector staffing but also to the 
FAA's lack of a viable staffing model to determine whether it has the 
correct number of skilled individuals in position to accomplish the 
responsibilities of the job. As noted by the Academies, ``The number of 
aviation safety inspectors employed by the FAA has remained nearly 
unchanged over the past several years, while aviation industries, 
especially the commercial air carriers, have been expanding and 
changing rapidly.'' \3\
---------------------------------------------------------------------------
    \3\ National Research Council, Committee on Federal Aviation 
Administration Aviation Safety Inspector Staffing Standards, Staffing 
Standard for Aviation Safety Inspectors (Washington, D.C.: The National 
Academies Press, 2006), p. 1-4.
---------------------------------------------------------------------------
    The increasing use of foreign repair stations has been drawing even 
more attention to the inspector staffing problem. As the industry 
continues to expand, the number of FAA inspectors has not kept pace; in 
fact, nearly half of the workforce will be eligible to retire by 2010. 
Unfortunately, for 2008, the FAA is only requesting funding to hire an 
additional 87 inspectors \4\ above attrition despite the looming surge 
in retirements and the fact that it takes two to 3 years to fully train 
an inspector.
---------------------------------------------------------------------------
    \4\ Government Accountability Office, Federal Aviation 
Administration: Key Issues in Ensuring the Efficient Development and 
Safe Operation of the Next Generation Air Transportation System, GAO-
07-636T (Washington, D.C.: March 22, 2007), p. 31.
---------------------------------------------------------------------------
    With airlines increasing their reliance on outsourced maintenance 
work, the workload of inspectors located at CMOs charged with 
overseeing this work has skyrocketed but inspector staffing has 
remained stagnant. A prime example of the problems with inspector 
understaffing and the increasing reliance on outsourced maintenance 
work is Delta Airlines. Since 2005, Delta has outsourced all of its 
heavy maintenance work. Inspecting the heavy maintenance work involves 
a thorough examination of an entire airplane. According to one 
inspector at the Delta CMO, when this work was performed at the Delta 
facility, an inspector could oversee the work by traveling a mere seven 
miles to the Delta facility. Now, inspectors are forced to travel from 
the CMO in Atlanta to places located hours away, such as Florida, 
Mexico or, as recently announced by Delta, China. To make matters 
worse, staffing figures are down considerably at the CMO--after losing 
four inspectors last year and another two this year with no 
replacements hired, the CMO is now staffed at 11 airworthiness 
inspectors with a few additional inspectors at different locations.
    Inspectors stationed at IFOs responsible for certifying repair 
stations also face several problems related to insufficient staffing. 
The number of foreign repair stations is on the rise as more and more 
air carriers outsource work to these less-expensive alternatives. A 
lack of inspector staffing, however, makes it difficult to perform 
these certifications and impossible to do any follow-up if a problem is 
detected. For instance, there are only eight airworthiness inspectors 
at the London IFO responsible for 165 certificates in England and 
Scotland. When one of these inspectors dedicated to avionics went on 
medical leave, this left only one avionics inspector to cover all 165 
of these repair stations. In another example, for years, a single 
inspector at the Miami IFO had been responsible for certifying the 14 
certificated repair stations in Brazil, many of which are expansive, 
complicated facilities. The need for additional staffing was finally 
addressed in this particular situation and another inspector has been 
assigned to the repair stations in Brazil.
    If the industry is going to continue to increase its use of foreign 
repair stations, it is essential to aviation safety that there are 
enough inspectors to ensure oversight of the repair stations and the 
work performed there. Many of our inspectors have told PASS that their 
workload is based on the number of inspectors available rather than the 
oversight that is needed. As such, PASS is requesting that Congress 
direct the agency to develop a staffing model for aviation safety 
inspectors and follow the recommendations outlined in the Academies 
study. The Academies staffing study also emphasized the importance of 
involving those who are affected by the staffing model in its 
development, specifically stating that aviation safety inspectors, as 
well as PASS, should be included in the process from the beginning and 
remain active participants through the model's design, development and 
implementation. In addition, the FAA should be required to report to 
Congress on a quarterly basis on its inspector workforce plan in order 
to ensure that the agency has an adequate number of inspectors to 
oversee the industry.
Funding Constraints
    Combined with the low staffing numbers, insufficient funding for 
travel obviously has a considerable impact on the FAA's ability to 
perform oversight of foreign repair stations. PASS is hearing from our 
inspectors of more and more instances in which FAA inspections of major 
repair stations that perform heavy maintenance work have been canceled 
or cut short due to lack of funds. According to inspectors in the 
field, the inspection process has become primarily budget driven rather 
than motivated by safety.
    CMO inspectors located in this country encounter numerous problems 
when trying to travel to foreign repair stations and are often 
questioned by FAA management as to the necessity of travel expenses 
needed to reach a location where maintenance is being performed. For 
example, a recent trip to a repair station in Germany was approved and 
then canceled at the last minute when the inspector was told that there 
was not enough funding to perform the inspection. In another situation, 
a CMO inspector responsible for examining air carrier outsourced 
maintenance work performed at repair stations in Singapore, China and 
Ireland is only able to get to these repair stations every four or five 
years. Even more disturbing, another CMO inspector responsible for work 
being performed in Scotland has never even been to the repair station. 
Although infrequently seen by the CMO inspector, it should be noted 
that these repair stations are still recertified by an IFO inspector 
approximately every 2 years.
    The ability to follow up once a problem is detected is an issue 
faced by both CMO and IFO inspectors, and both of these groups of 
inspectors say funding is the primary reason for not being able to 
follow up on an issue. One IFO inspector reports that they often have 
to wait until the following year to validate whether or not a problem 
has been corrected or pass on the issue to the next inspector traveling 
to that country. CMO inspectors are often only able to send the repair 
station a letter, depend on the repair station's response for closure, 
and wait until the next inspection in order to determine if the issues 
have been addressed and a long-term solution incorporated.
    It is impossible to ensure safe operations at these repair stations 
if inspectors are rushed in their inspections, unable to perform 
adequate follow-up or prevented from visiting the repair stations 
altogether. The IG specifically addressed the impact of the lack of 
resources on the oversight process, concluding that ``adequate 
resources need to be committed to air carrier oversight to ensure the 
continuity of safe operations, particularly as the airline industry 
makes significant and ongoing transitions in their operations.'' \5\ As 
such, PASS feels that it is imperative that the FAA allocate adequate 
resources for FAA inspectors to visit each foreign repair station at a 
minimum of twice a year.
---------------------------------------------------------------------------
    \5\ Department of Transportation Inspector General, Safety 
Oversight of an Air Carrier Industry in Transition, AV-2005-062 
(Washington, D.C.: June 3, 2005), p. 3.
---------------------------------------------------------------------------
Additional Concerns With Oversight of Foreign Repair Stations
    Inspectors in the field relay several problems associated with 
traveling to foreign countries to examine repair stations. The process 
for traveling overseas to inspect a repair station is so labor 
intensive, often involving State Department coordination and country 
clearances, that an inspector, on average, must give 60 to 90 days 
notice prior to their arrival at the repair station. In addition, 
inspectors must often travel in pairs when visiting specific countries 
that may be considered unsafe. When the inspector is finally able to 
get to the foreign repair station, the repair station is fully aware of 
the visit and the element of surprise is nonexistent, rendering the 
inspection a simple formality.
    Once the inspector has traveled to the repair station, inspecting 
the repair station or the work performed there introduces additional 
difficulties, including cultural and language issues, trouble accessing 
equipment, and inability to examine all processes and services used. In 
many cases, employees working at foreign repair stations cannot read or 
speak English; yet, the air carrier and repair station maintenance 
instructions are usually written in English. Inspectors traveling to 
foreign locations reveal that training is also a major problem overseas 
and that they often see maintenance employees working on aircraft 
without the proper training. For instance, inspectors report that 
personnel at foreign repair stations do not understand that an item 
with an expired shelf life cannot be used even if it still appears in 
good condition.
    There is also serious concern over the regulations governing 
foreign repair stations. For example, as opposed to domestic airline or 
repair station employees, workers at foreign repair stations are not 
required to pass drug and alcohol tests. In addition, criminal 
background checks are not required at foreign repair stations. There 
also continues to be major concerns regarding security at these 
facilities, with many of the repair stations lacking any security 
standards. It should go without saying that if a foreign repair station 
wants to work on U.S.-registered aircraft or any aircraft that operate 
in this country, those repair stations should be required to meet the 
same safety standards as domestic repair stations.
Increasing Use of Bilateral Aviation Safety Agreements (BASAs)
    Instead of addressing the inspector staffing and funding issues, 
the FAA continues to expand the use of bilateral agreements with 
foreign countries to oversee repair stations working on U.S. carriers. 
The Bilateral Aviation Safety Agreement (BASA) with Maintenance 
Implementation Procedures allows foreign authorities to provide 
oversight of the work performed at repair facilities with limited 
involvement from FAA inspectors. This eliminates the need for the 
inspector to travel to the repair station at all and entrusts 
responsibility entirely to a foreign entity. However, there are 
inherent problems associated with allowing non-FAA employees in foreign 
locations to perform work on behalf of the FAA, primarily the fact that 
the FAA does not have adequate oversight procedures in place to ensure 
the quality of these inspections. PASS's concerns regarding the FAA's 
use of bilateral agreements include the following:

   According to the Department of Transportation Inspector 
        General (IG), foreign inspectors do not provide the FAA with 
        sufficient information on what was inspected, the problems 
        discovered and how these problems were addressed. The IG goes 
        so far as to state that at least one foreign authority 
        representative said that ``they did not feel it was necessary 
        to review FAA-specific requirements when conducting repair 
        inspections.'' \6\
---------------------------------------------------------------------------
    \6\ Department of Transportation Inspector General, Review of Air 
Carriers' Use of Aircraft Repair Stations, AV-2003-047 (Washington, 
D.C.: July 8, 2003), p. v.

   The information provided to the FAA by foreign inspectors is 
        often incomplete, inaccurate or difficult to understand due to 
        language constraints. In fact, the inspection documents given 
        to the FAA were found to be incomplete or incomprehensible in 
        14 out of 16 files reviewed by the IG (88 percent).\7\ Although 
        the reports are supposed to be filed in English, this is often 
        not the case. Furthermore, the FAA does not even require that 
        these foreign aviation authorities provide the appropriate 
        amount of information in order to allow FAA inspectors to 
        verify that the work is being done.
---------------------------------------------------------------------------
    \7\ Id.

   As part of the bilateral agreements, FAA inspectors can 
        perform annual ``sample'' inspections of up to 10 percent of 
        facilities already reviewed by foreign inspectors. This system 
        of ``spot checking'' only highlights the serious deficiencies 
        with the bilateral agreement process. In one case cited by the 
        IG, when the FAA performed a sample inspection of a repair 
        station that had already been inspected by a foreign inspector, 
        the FAA inspectors found 45 problems, several of which were 
        directly related to FAA requirements.\8\ Foreign aviation 
        authorities rely on European requirements rather than adhering 
        to U.S. safety standards. Currently, other than these 
        ineffective sample inspections, the FAA primarily conducts 
        surveillance of foreign aviation authorities through desk 
        reviews of inspection documents, the quality of which has 
        already been highlighted as a major issue. In other words, the 
        FAA has no true way to ensure that the inspections at these 
        foreign repair stations are being conducted according to U.S. 
        regulations. In addition, inspectors report that the foreign 
        aviation authorities are not always reporting to the FAA 
        deficiencies found during their inspections, which leaves FAA 
        inspectors with the impression that there are no problems.
---------------------------------------------------------------------------
    \8\ Id.

   In order to visit a country holding a BASA, the inspector 
        must provide data to prove that a trip is necessary. However, 
        the foreign civil aviation authorities are often not providing 
        accurate data to the agency, making it impossible for the 
        inspector to show that a trip is warranted. In one case, there 
        was no information in the database on problems with a repair 
        station in Frankfurt, but when an inspector was finally able to 
        get to the facility, he noticed several serious violations that 
        had not been put into the system. If these countries are not 
        providing the United States with data, it is impossible to 
        ensure the safety of the facility or the work being performed 
---------------------------------------------------------------------------
        there.

    In 2003, the IG issued recommendations to enhance FAA oversight of 
foreign repair stations. Regarding the many problems with bilateral 
agreements, the IG recommended that the FAA modify inspection 
documentation requirements with foreign aviation authorities and 
develop procedures to ensure that foreign inspectors place appropriate 
emphasis on FAA requirements when conducting reviews on the FAA's 
behalf. The IG also advised that the FAA revise procedures for 
conducting sample inspections of repair stations to allow the FAA to 
conduct the necessary number of inspections to ensure the work is being 
completed properly. In recent testimony before the House Aviation 
Subcommittee, the IG stated that while the FAA has worked to improve 
the surveillance foreign authorities are performing on the FAA's behalf 
since the 2003 report, the IG remains nonetheless concerned that ``FAA 
is still not regularly visiting the facilities in the countries where 
agreements exist with other aviation authorities.'' \9\ The IG cited an 
example in which FAA inspectors for one air carrier had not visited a 
major foreign engine repair facility even though the repair station had 
performed maintenance on 39 (74 percent) of the 53 engines repaired for 
the air carrier. Furthermore, FAA IFO inspectors had not conducted any 
spot inspections of this facility in 5 years.\10\
---------------------------------------------------------------------------
    \9\ Department of Transportation Inspector General, Aviation 
Safety: FAA's Oversight of Outsourced Maintenance Facilities, CC-2007-
035 (Washington, D.C.: March 29, 2007), p. 9.
    \10\ Id.
---------------------------------------------------------------------------
    Without a doubt, the FAA must take steps to ensure that inspections 
conducted by foreign authorities are done in line with the safety 
standards and regulations of this country. Until this issue is 
adequately addressed, along with the IG recommendations, additional 
agreements with foreign aviation authorities should not be allowed.
Use of Non-Certificated Repair Facilities
    ``Non-certificated'' means that the repair facility does not 
possess a certificate issued by the FAA to operate under the Code of 
Federal Regulations Part 145 and is therefore not subject to direct FAA 
oversight. A certificated repair station meets the standards as 
outlined in the Federal Aviation Regulation and is therefore subject to 
direct FAA oversight to ensure that it continues to meet those same 
standards. The differences in regulatory requirements and standards at 
the two facilities are extremely troubling. For example, in an FAA-
certificated repair station, it is required that there be designated 
supervisors and inspectors and a training program. These items are not 
required at non-certificated repair facilities.\11\
---------------------------------------------------------------------------
    \11\ Department of Transportation Inspector General, Air Carriers' 
Use of Non-Certificated Repair Facilities, AV-2006-031 (Washington, 
D.C.: December 15, 2005), p. 4.
---------------------------------------------------------------------------
    Effective oversight of non-certificated repair facilities gained 
attention in the aftermath of the January 2003 Air Midwest crash in 
Charlotte, N.C. The National Transportation Safety Board determined 
that incorrect rigging of the elevator system by a contractor 
contributed to the accident and pointed to ``lack of oversight'' by Air 
Midwest and the FAA.\12\ The airline contracted out the work to an FAA-
certificated repair station, which then subcontracted to a non-
certificated repair facility. Under Federal regulations, the airline is 
ultimately responsible for ensuring that the work performed at a non-
certificated repair facility is done in accordance with standards and 
requirements.
---------------------------------------------------------------------------
    \12\ National Transportation Safety Board, Loss of Pitch Control 
During Takeoff, Air Midwest Flight 5481, Raytheon (Beechcraft) 2000D, 
N233YV, Charlotte, North Carolina, January 8, 2003, Aircraft Accident 
Report NTSB/AAR-04/01 (Washington, D.C.: 2004), p. x.
---------------------------------------------------------------------------
    A December 2005 IG report called attention to airlines' increasing 
use of non-certificated repair facilities to perform maintenance work, 
directing the FAA to improve its oversight of air carriers' use of 
these facilities. According to the IG, the FAA does not know how many 
non-certificated maintenance facilities air carriers currently use, but 
the IG identified ``as many as 1,400 domestic and foreign facilities 
that could perform the same work (e.g., repairing flight control 
systems and engine parts) a certificated facility performs but are not 
inspected like certificated facilities. Of those 1,400 facilities, we 
identified 104 foreign non-certificated facilities--FAA had never 
inspected any of them.'' \13\
---------------------------------------------------------------------------
    \13\ Department of Transportation Inspector General, Air Carriers' 
Use of Non-Certificated Repair Facilities, AV-2006-031 (Washington, 
D.C.: December 15, 2005), p. 6.
---------------------------------------------------------------------------
    The IG discovered that there are no limitations to the amount of 
maintenance work non-certificated facilities can provide, and that 
these facilities are performing far more work than minor services, 
including much of the same type of work FAA-certificated repair 
stations perform, such as repairing parts used to measure airspeed, 
removing and replacing jet engines, and replacing flight control 
motors. Some of these non-certificated facilities are even performing 
critical preventative maintenance. The IG identified 21 domestic and 
foreign non-certificated facilities that performed maintenance critical 
to the airworthiness of the aircraft. Even more alarming is that the 
FAA was unaware of the critical work being performed at these 
facilities. \14\
---------------------------------------------------------------------------
    \14\ Id., pp. 1-2.
---------------------------------------------------------------------------
    Despite the fact that these facilities are performing safety-
critical work, FAA oversight is practically nonexistent. In other 
words, these facilities are performing work pivotal to aviation safety 
with no guarantee that it is being done in line with FAA and air 
carrier standards. One inspector revealed that he learned of a repair 
station contracting out work to an automobile facility. Without having 
the ability to visit the facility, there was no way for this inspector 
to ensure that the work was being done according to regulations.
    Furthermore, inspectors are discovering numerous incidents 
involving outsourcing of maintenance for critical functions or 
``specialized services,'' an independent rating the FAA grants to some 
certificated repair stations for specialized and safety-critical 
functions, such as non-destructive testing, specialized testing of some 
components, plating, machining and welding. Specialized services, like 
other maintenance, can and is being contracted out to non-certificated 
repair facilities. Although recent regulatory changes state that 
certificated repair stations cannot contract out a specialized service 
unless they were issued that rating and are required to approve that 
work for return to service, inspectors have consistently found that it 
is almost impossible to determine whether that work was done correctly, 
completely and in accordance with technical data and regulations. 
Inspectors do not have the time or budget capability to adequately 
perform surveillance on certificated repair stations, let alone 
evaluate and monitor subcontracting to non-certificated facilities.
    It is obvious that there must be modifications made regarding air 
carriers' use of non-certificated repair facilities. PASS believes that 
the most effective way to correct the disparity between certificated 
and non-certificated repair facilities is for Congress to require that 
air carriers outsource maintenance work only to certificated repair 
stations, a standard that should apply to both domestic and 
international facilities. This is a feasible option that will ensure 
consistency and improved safety within the aviation industry.
Conclusion
    It is clear that oversight of foreign repair stations needs serious 
attention and improvement. With the FAA anticipating an estimated 1 
billion passengers per year by 2015, more inspectors are obviously 
needed in order to keep up with the rapid growth in the aviation 
industry. Since the FAA claims that it will be impossible for the 
inspector workforce to increase at the same rate the aviation industry 
is changing and expanding, it is moving toward a system-safety approach 
in which data, which has often been found to be incomplete or limited, 
will be the primary tool to determine risk. PASS believes that it is 
dangerous to rely heavily on a risk-based approach when it is obvious 
that our talented and skilled inspector workforce has kept the U.S. 
aviation system the safest in the world. In order to ensure continued 
safety within the aviation industry, there must be an adequate number 
of experienced and trained FAA inspectors in place with budgetary and 
management support to accomplish the agency's mission of safety 
oversight.
    PASS and the inspector workforce we represent remain solely focused 
on ensuring the safety of this country's aviation system. We hope that 
Congress will seriously examine the conditions surrounding the 
oversight of foreign repair stations and recognize that major changes 
need to be made in order to protect this country's reputation as having 
the safest aviation system in the world.

    Senator Lott. Madame Chair?
    Senator McCaskill. Yes, Senator Lott.

                 STATEMENT OF HON. TRENT LOTT, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Lott. Thank you, Madame Chair and Chairman 
Rockefeller, for having the hearing.
    Let me just say to the panel, I think this was a good 
panel, and you did a really good job. Most of the questions 
that would be asked, I think, you've commented on them, and 
answered them well.
    But maybe I can just crystallize some of them, rather than 
giving a statement by asking just two or three questions, if 
you would make your answers short, I think that should take 
care of it.
    First, what we're really worried about here and want to 
make sure of is safety and security, OK? I think airlines 
should have a right to have contract maintenance, but we need 
to make sure that it's done in an appropriate way. You know, I 
learned a long time ago when I get on planes, if the pilot 
doesn't want to fly, I don't want to fly. If the pilots want to 
fly, I usually feel pretty safe, because he's putting his life 
on the line, too. So, I think everybody wants this, the work 
done properly, we want safety, and we also now want security.
    Now, Mr. Scovel, has your office uncovered any evidence 
that maintenance work performed by foreign repair stations is 
consistently less safe than work performed at domestic repair 
stations?
    Mr. Scovel. Thank you, Senator Lott.
    Our studies from 2003 and 2005 show us that the location 
where maintenance is performed is far less important than the 
oversight exercised by FAA to guarantee safety. In other words, 
we have not found that repairs performed by overseas facilities 
are inherently less accurate or less complete than repairs 
performed by----
    Senator Lott. Well, do you believe that FAA has generally 
been responsive in correcting problems with foreign repair 
station oversight that's been identified by your office?
    Mr. Scovel. Generally, yes. It has been very slow. We have 
found that the vehicles that FAA has devised to measure the 
maintenance performed by repair facilities, both in the U.S. 
and overseas, have been less than fully effective to give the 
agency the information it needs to make its safety oversight 
systems truly effective.
    Senator Lott. Ms. Gilligan, do you believe that restricting 
the ability of U.S. carriers from using foreign repair stations 
will improve safety?
    Ms. Gilligan. Consistent with what the IG has just said, 
sir, our findings are the same--the work done at certificated 
repair stations meets all of the standards that we require.
    Senator Lott. And, Mr. Filler, you feel that your 
membership and the overall way that this is being handled, both 
the questions of safety and security are being adequately 
addressed?
    Mr. Filler. Yes, Senator, we do.
    Senator Lott. I think we've got to always be diligent. I 
think the FAA has got to continue to pursue their 
responsibilities. Yes, they probably are slow, I haven't found 
anything in the government that's not, but that's no excuse, 
because we're dealing with life or death and people's jobs 
here. And, I think it's also incumbent upon us to ask 
legitimate questions about the impact that this can have on the 
industry as a whole, and I'm always trying to look at it--not 
just from, you know, a regulator standpoint, or owners or 
managers, but also, you know, the workers, too.
    So, I think they've done a good job, and I appreciate the 
opportunity to hear you, and thank you for allowing me to get 
out of order a little bit, there, Madame Chair.
    Senator McCaskill. Thank you, Senator Lott.
    I would normally defer to the Chairman of the Committee for 
questions, first, but he has sent me a note and asked me to go 
ahead, so I want to focus in, first, Mr. Scovel, on the 
difference between certified and non-certified foreign repair 
stations. And I think that's a really important distinction for 
us to talk about.
    It is my understanding from your testimony and reading some 
of the background material in this area that the major carriers 
in the United States are utilizing non-certified, overseas 
repair facilities for all kinds of work. I mean, not just 
kicking the tires and checking the oil--but all kinds of work, 
is that correct?
    Mr. Scovel. That's correct, Senator.
    Senator McCaskill. OK, and so I was--as I direct my 
questions on this round of questioning, I am addressing now the 
non-certified repair stations. I don't want to talk about the 
certified repair stations, because that's a whole--that's 
apples and oranges. But we now have established that all of 
these carriers are using non-certified repair stations for 
major work--not just line maintenance--but major work.
    Ms. Gilligan, how many of those non-certified foreign 
repair stations are there?
    Ms. Gilligan. As you know, Senator, we don't keep a count 
of facilities that people may use that don't hold FAA 
certificates. Instead, we work through the airlines to 
determine that the airline has put in place the proper 
procedures, that they're providing the proper training and 
equipment and facilities to any facility that doesn't hold an 
FAA certificate.
    Senator McCaskill. So, so there is no inspection of those 
facilities by FAA?
    Ms. Gilligan. There is----
    Senator McCaskill. Correct?
    Ms. Gilligan. We have access to some, to third-party 
providers, but we don't have a scheduled plan for reviewing 
some of those operators--or some of those facilities.
    Senator McCaskill. Any of those facilities, correct, Ms. 
Gilligan? You all do not certify, you do not inspect an unknown 
number of repair facilities that are providing major work on 
major domestic airline carriers, isn't that true?
    Ms. Gilligan. It's correct, Senator, but that's because we 
are overseeing the carrier. And the carrier now has the 
responsibility--the carrier can pick a few different models. 
They can do the work internally. They can use a certificated 
repair station, and train that repair station personnel and 
provide the instructions to that repair station personnel, or 
they can hire certificated mechanics, for example, who hold an 
FAA certificate and provide that mechanic all of the materials 
and training and equipment that they need to perform the 
function. They can use any of those three models, and in the 
third, that last model, the individual holds an FAA 
certificate, but the company through which they may work, may 
not hold an FAA certificate.
    Senator McCaskill. And do you know how many of those 
certified mechanics are working--how many there are right now 
that are working at non-certified facilities? Do you even--does 
FAA keep track of that?
    Ms. Gilligan. No, ma'am. Well, no, we do keep track of 
everyone who holds a mechanics certificate, we issue those 
certificates. And so, then they have the authority to approve 
certain work, whatever it is they're qualified to do, and they 
do that under the air carriers program, which we do oversee 
through our inspectors.
    Senator McCaskill. But you don't match up--the certified 
mechanics to the locations of the uncertified repair centers?
    Ms. Gilligan. That's right.
    Senator McCaskill. You can't, there's no--there's no place 
we can go and check to see how many certified mechanics there 
may be in any of these uncertified repair centers?
    Ms. Gilligan. That's correct.
    Senator McCaskill. And so, if, in fact, the certification 
process that we have to do here in the United States--if, in 
fact, we have a certification process here, do you think the 
certification process is important to safety?
    Ms. Gilligan. Yes, ma'am, but airlines also use non-
certificated facilities using certificated mechanics, here in 
the U.S., as well.
    Senator McCaskill. Are they required to do any of the 
background checks, or any of the security checks that the 
certified facilities are?
    Ms. Gilligan. The airline is required to do those checks 
for its own employees, but not for mechanics that they hire on 
contract.
    Senator McCaskill. OK, well, then my question is, if we are 
certifying some facilities, but it's OK for the airlines to use 
any facility, regardless of whether it's certified, why are we 
certifying facilities?
    Ms. Gilligan. Again, it's one of several options. When the 
carrier uses a facility that does not hold an FAA certificate, 
the carrier itself must be in place to provide quality control, 
to provide training, to provide all of the tools and 
equipment--everything that's needed for the work. And they 
hire, generally, then, a certificated mechanic, and they 
provide that infrastructure.
    When they use a certificated repair station, while they do 
have to provide their training program, and their maintenance 
program to that repair station, they can take advantage of all 
of the facilities and equipment and everything else that the 
repair station already has under its approved certificate. So, 
it's just a matter of how it is that the carrier is going to 
make sure it is meeting the responsibility to have the work 
done in accordance with its maintenance program.
    Senator McCaskill. OK, so in the instances where it's a 
non-certified repair station, this is more a situation where 
you are trusting that the airlines are going to perform at a 
level--at the same level that you require of the certified 
repair stations?
    Ms. Gilligan. No, we see that the air carrier meets its 
standards. So, the repair station or the air carrier must 
meet----
    Senator McCaskill. Well, how--?
    Ms. Gilligan. I'm sorry, ma'am, if I'm confusing----
    Senator McCaskill. I'm confused as, how do you know if you 
never go there, and you never look at them? How do you know 
that they are up to those standards, if you don't inspect them?
    Ms. Gilligan. Because the airlines are continually 
analyzing the aircrafts themselves, and they are sharing that 
data with our inspectors. By regulation, we require that the 
carrier maintain a continuing analysis program, where they 
analyze every day how their aircraft are operating, and then 
they must address any discrepancies and our inspectors 
regularly are a part of that review process. So, we check the 
level of safety of the aircraft at the air carrier. And, 
because of the multple layers within the design and the 
manufacture and the maintenance of the aircraft, that provides 
us the opportunity to find discrepancies before they cause any 
kind of serious result.
    Senator McCaskill. Well, my time's up, and I want to make 
sure the other Senators have a chance for a round of 
questioning. I'll revisit this on the next round.
    Mr. Filler. Senator, would you mind if make one clarifying 
comment about, about security? Because one of your questions 
was, if a carrier contracts with an individual mechanic to do 
line maintenance at an airport.
    I didn't want you to be left with the impression that that 
person is not given a background check. If that mechanic has 
unescorted access privileges to the ramp of an airport, then he 
will have to have a background check and he will have to be 
appropriately badged and that will be done under the authority 
of the individual airport operator. So it doesn't matter, in 
that situation, whether or not it's contracted or it's an air 
carrier employee. The focus is on, what kind of access does 
that individual need to the designated security areas of the 
airport.
    Senator McCaskill. I appreciate that, Mr. Filler, but the 
question is, who is providing the oversight and accountability 
that that's occurring? Is it FAA or are we leaving it to 
someone else?
    Thank you.
    I believe, Senator Rockefeller, you're next.
    Senator Rockefeller. Thank you, Madame Chair.
    The, I agree very much with the Chair's line of questioning 
and I have these comments. If there are--and I think there's 
some variance in the FAA in this--of the 3,865 FAA inspectors 
who monitor more than 5,000--this is, Peggy to you, Ms. 
Gilligan, to you----
    Ms. Gilligan. Yes, sir.
    Senator Rockefeller.--5,000 repair stations used or owned 
by U.S. carriers worldwide, then we further know that 51 
percent of those FAA inspectors are eligible to retire in 2007. 
If you look at U.S. Government retirement, some stay on, but 
most don't. It's a stressful life. And, so that immediately, in 
essence, cuts the 3,865 into half. So, my question is, how many 
inspectors will the FAA hire in 2007? You have no budget, so I 
want you to answer around that. And how many inspectors does 
the FAA expect to lose this year? And, we'll start with that.
    Ms. Gilligan. OK. Thank you, Senator.
    First, if I could comment on the retirement. While it is 
true, a number of our inspectors are eligible for retirement, 
we do have a higher age bracket workforce. It's because most of 
the, not most of them, all of them come to us after years of 
experience in the industry. So, they actually, oftentimes, come 
to us as a second career. And so, while they are relatively 
soon eligible for retirement, very, very few of them retire 
when they're first eligible. Our retirement rate has been 
consistent at between five and 6 percent a year for a number of 
years, the past 10 years. And we do a yearly employee attitude 
survey, where we ask about retirement plans.
    Senator Rockefeller. If I could interrupt for a second----
    Ms. Gilligan. Sure.
    Senator Rockefeller.--I'd like to comment on that. I think 
there's a difference between jobs in general and jobs which 
involve saying, ``No,'' or, ``Do this differently.'' There is 
an energy level and, you know, there's simply a ferocity, a 
focus level, which changes. And I tell you this, say this by 
having carefully watched the FAA doing certification processes. 
It takes a younger, more ambitious, ferocious type of person to 
make sure that each and every one of the 13,000 parts that goes 
into a particular airplane is in my mind, to make sure that 
they're exactly right. Because they all have to be exactly 
right. Now, you could go into, you can go into an outsource 
repair station in some other country and have the same rules, 
and ``I'll get my next round of drinking,'' and unnoticed, 
unnotified inspections and the rest of it.
    But, I really, I really would--and I'd like the Inspector 
General to comment on this too--there's a difference in 
inspection, which is a highly technical, it's sort of like 
doing algorithms, I mean, it's a fugue, it's a work of love and 
precision.
    And, it's also a matter of life and death. And I'd like to 
have each of you comment on the age factor with those retiring, 
as your statement that, well, we've got people who are old who 
have more experience, as opposed to what I said.
    Ms. Gilligan. Certainly, sir. First of all, our data shows 
that, in our attitude survey we asked employees what you're 
retirement plans are and about 5 percent reported that they 
plan to retire within a year. So, we think that's consistent. 
And, you're absolutely right. These inspectors bring to this 
job a love of aviation safety that they've nurtured through 
their whole career and most of them come to FAA as, sort of, 
the pinnacle of what they'd hope to accomplish in the course of 
their careers. And, I believe that their age and experience is 
a valued asset that they bring to us.
    Senator Rockefeller. Without, interrupt again, but I want 
to get it to the IG before my time runs out.
    Ms. Gilligan. I'm sorry.
    Senator Rockefeller. I voted for having pilots go from 60 
to 65 years old. I think that is a world apart decision about 
age than, about not--you know, in a crisis these things become 
very important, but a lot of those are senior folks who are 
doing overseas flights, where it's avionics are automatic and 
all the rest of it. Inspecting parts, inspecting brakes, 
getting down on the ground in a hot Sierra Leone sun and 
looking for precisely that particular piece which could cause 
problems is a very different matter. Could you briefly comment 
on that?
    And, Mr. Scovel, could you briefly comment on that?
    Ms. Gilligan. Certainly. As I know you're well aware, our 
inspectors are not at the turning of every wrench and the 
inspection of every brake. They are there to oversee that the 
systems are being followed, that the people are trained, that 
the mechanics are, in fact, performing the function that 
they're supposed to perform.
    Senator Rockefeller. Now, this is not the data analysis, 
this is the----
    Ms. Gilligan. I'm sorry.
    Senator Rockefeller.--this is the oversight analysis.
    Ms. Gilligan. Yes, yes. Right.
    Senator Rockefeller. You referred to the data analysis.
    Ms. Gilligan. The data analysis.
    Senator Rockefeller. Data, I'm sorry.
    Ms. Gilligan. No, I'm misunderstanding your question, sir. 
I apologize.
    Senator Rockefeller. Well, I'll wait until my next round.
    Ms. Gilligan. I'm so sorry.
    Senator McCaskill. Senator Dorgan?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Senator McCaskill, thank you very much. I 
confess I don't know as much about this issue as I would like 
and I apologize for being delayed at this hearing.
    I want to ask a question, especially about overseas repair 
stations. I had written a piece about this a year and a half, 2 
years ago about an American carrier, was according to some news 
reports flying empty 320 aircraft, Airbus 320s empty to El 
Salvador to do their maintenance and then flying them back 
empty, as well. And I became curious about that and wondered 
what's the circumstance that would persuade someone to do that. 
And, of course, it is cost.
    And I became further curious to find out what are the 
standards with respect to a repair station in El Salvador 
versus a repair station in this country. And, as I began to 
look at it, I discovered that at that point nearly half of the 
maintenance was outsourced, some of it out of the country. And, 
I mentioned, I guess I'll mention to carrier because it was in 
the news at the time, it was JetBlue. It was flying empty 
Airbus 320s to El Salvador for maintenance.
    And so, I was wondering about the standards that exist at 
those stations and my understanding from that, I would ask the 
FAA whether it is the case, is that the folks at those repair 
stations are not required to have the same certification. Let 
me just read to you what I had learned at that point. Airplane 
mechanics in El Salvador are paid from $300 to $1,000 a month. 
About one-third of them have passed the FAA certification for 
airplanes mechanics that all U.S. mechanics are required to 
pass. Is that, is that the case or was it the case? Is it now 
the case?
    Ms. Gilligan. Sir, we're very familiar with the facility in 
El Salvador. About, something less than 200 of the employees 
there hold FAA certificates. The remainder of the employees 
hold the certificate issued by the El Salvadorian Government. 
As Mr. Filler mentioned earlier, all countries that are members 
of the International Civil Aviation Organization do meet a 
common set of standards before they can issue certificates to, 
whether it's mechanics or pilots or anyone who operates in the 
system. So, all of the employees hold certifications and almost 
200 of them hold FAA-issued certificates, which they are 
allowed to hold.
    Senator Dorgan. And, is it the case that, as Mr. Roach 
testified, that when inspectors are permitted to make an 
inspection of an overseas repair station, they must give 
advance notice?
    Ms. Gilligan. Generally, sir, we give advance notice even 
to domestic stations. These are, first of all, these are large 
complex organizations and it's not really very easy to hide 
something in at moment's notice.
    We want to make sure when we send inspectors, whether it's 
domestically or internationally, that the people who they need 
to meet are there, that the records are available, that, in 
fact, our time is well spent on inspection and not on waiting 
and trying to bring all the details and the facts together. So 
it's common practice for us to give notice, even to domestic 
repair stations, as well. Yes, we do notify the foreign repair 
stations when we are coming, again, so that we have the right 
information available for the inspectors to be, to be able to 
accomplish the inspection.
    Senator Dorgan. I don't want to suggest with my questions 
that there's diminished safety. I don't know the answer to 
this, but it seems to me strange. First of all, that we've 
rushed now to well over 60 percent of the maintenance for the 
airlines being contracted out, some of it offshore. It seems 
strange to me that a domestic airline would fly an empty jet to 
El Salvador for maintenance. It seems strange to me that the 
FAA, which would be required to evaluate the capabilities of 
that repair station would give them advance notice of when one 
is about to inspect. It seems to me with almost every 
circumstance of oversight, giving someone advanced notice that 
you're coming gives you a very different impression when you 
come.
    I've just been involved in this issue of China and, labor 
standards in China and the advanced notice given to Chinese 
manufacturing plants of when inspectors would show, which gives 
a very different picture of the plant the next day when the 
inspector shows.
    So, I'm very troubled and concerned about this rush to 
outsource, about whether there is accountability for 
outsourcing. And, it seems to me that there, that many of the 
airlines are now rushing to subcontract their maintenance to 
others and that, at least in some cases with respect to foreign 
repair stations, in addition to the airline subcontracting 
their repair, you are subcontracting, effectively, your 
oversight by going to the civil aviation authorities in those 
countries for oversight. I, somehow, it doesn't, it looks to me 
like these are pieces to a puzzle that don't fit. If you want 
accountability and oversight that gives you a strong feeling 
that everyone is meeting the same standards.
    Ms. Gilligan. If I may comment on your reference to 
contracting out the oversight. I think you're referring to 
those cases where we have a bilateral agreement with, and we 
have three of those in place right now with European countries. 
Before we enter that agreement, we evaluate the ability of that 
government and their inspectors to do those inspections on our 
behalf and we reach the determination that they have a level of 
confidence that we can accept. They then provide their 
inspection results to us and we make the decision whether or 
not the certificate holder can hold that certificate, whether 
we need to go in and spot check. And as the IG commented, we 
are increasing the amount of spot checking that we're doing.
    As Mr. Filler testified earlier, we provide that same kind 
of oversight to over 1,200 repair stations in the U.S. that 
hold European certification. Our inspectors inspect on behalf 
of Europe, 1,200 repair stations in the U.S. Our inspectors 
provide those results to the European authorities and the 
European authorities determine whether or not U.S. entities can 
continue to hold the certificate. So, we do, we do for the 
European authorities, the same kind of inspections that we have 
them do for us, but ultimately, the decision on whether someone 
or a company keeps a certificate. We retain that for our 
certificate holders and the Europeans retain that for their 
certificate holders.
    Senator Dorgan. But, if I might just finish two additional 
questions.
    Ms. Gilligan, there are, as I understand it, 103 
international field inspectors for nearly 700 repair stations 
and it seems to me to be terribly understaffed.
    Second, when you look at the Department of Transportation 
Inspector General reports of, for example, December 2005. They 
found that non-certificated facilities operate without the same 
regulatory requirements as certificated repair stations, 
operate with no limit on the type or scope of work they 
perform.
    I mean, I think, I have missed the comments of Senator 
McCaskill. I think I caught a bit of the flavor of her 
questions. I think there's substantial evidence here that this 
rush to outsource maintenance is not accompanied by the same 
kind of oversight that ought to, that passengers ought to 
expect, that the Congress ought to insist upon, and that we had 
previously had when those repairs and maintenance were done by 
a carrier on the site. Just speaking, just for myself, I 
understand why someone would fly an empty plane to El Salvador. 
That's about finding cheap labor, I assume, if any. Does 
anybody else agree with that? You fly an empty Airbus to El 
Salvador and set up cheap labor for maintenance.
    Mr. Barimo. Yes, I'd probably elaborate that there's more, 
more involved in the decision than just the labor rate.
    Senator Dorgan. Yes, the cost of the flight down and back 
with an empty plane.
    Mr. Barimo. And more importantly, the turn time and the 
quality of the aircraft produced. So, if the air carrier can 
trim 3 days off of a heavy check and get an airplane that is, 
in fact, more reliable than any of their competitor's aircraft, 
then it probably makes sense to go down there and do that. 
There's more that goes into the decision than just the labor 
rate.
    Senator Dorgan. All right. It's a fair point. I would 
accept that people sitting around the table evaluating where 
we're going to outsource or how are we going to outsource 
maintenance would not just look at labor rates. It's a fair 
point you make. I think that, it seems to me, likely, that 
labor rates are a compelling part of that, especially when you 
take a look at what I just cited, with respect to the cost of 
maintenance in El Salvador.
    I'm just picking out that issue because I happened to see 
it a couple of years ago and I followed it up to find out what 
is this about. I've taken more time than I needed to. Mr. Roach 
wanted to make a comment, if you wish.
    Senator McCaskill. Go ahead, Mr. Roach.
    Mr. Roach. Yes, in reference to flying planes down to El 
Salvador, it was JetBlue, but the type of aircraft that you 
mentioned, if you recall. I don't know where these planes have 
been, these particular JetBlue have serviced, those are the 
planes that had these emergency landings, with the nose gear 
that would not operate properly.
    Senator Dorgan. That was, actually, that plane was not a 
plane that was maintained in El Salvador. I did check on that, 
but that particular airplane was not one that was flown to El 
Salvador.
    Mr. Filler. Senator, if I could also.
    Mr. Roach. I'm not finished yet.
    Mr. Filler. I'm sorry.
    Mr. Roach. In addition, these surprise inspections, it is 
true that there are inspections in the United States that they 
forewarn people, but there are inspections where there are not 
people forewarned, they have surprise inspections in the United 
States, where outside the country they don't have them. So, 
there's a big difference there.
    Senator Dorgan. Is that true, Ms. Gilligan?
    Ms. Gilligan. I wouldn't call them surprise inspections. We 
do have people that are co-located more closely to some 
operators in the United States and they are there more on the 
day-to-day basis. And we do have the ability and the authority 
to do the same in a foreign repair station if we have the need 
to. So, we do have the ability to, we do need to notify the 
State Department. When U.S. citizens travel on official 
business into another country, they do notify the embassy, but 
we can then go to the repair station. We do find it more 
useful, generally, to provide notice of when we're going to be 
there.
    Senator McCaskill. Go ahead, Mr. Filler.
    Mr. Filler. Thank you, thank you, Madame Chair.
    I would like to also add, with respect to the advance 
notice, the procedures that repair stations and any 
certificated company has to have, Senator, are very extensive. 
I mean, manuals and forms and procedures that, even if, and 
I've done many audits myself and I've done it for many, many 
years in and out of the FAA, and I can tell you that if an 
entity has 2 weeks notice, 3 weeks notice the FAA is coming, 
they're not going to be able to change their culture. They're 
not going to be able to, all of a sudden, follow their repair 
station quality manual if they weren't following it before. 
It's just too much to turn around. And, I think that overlay of 
oversight that the FAA provides, it doesn't make a difference 
from a safety perspective, whether you know the FAA is coming 
or not.
    And then finally, with respect to looking at individual 
incidents or accidents, I would caution the Committee in using 
any specific accident analysis to prove the general rule. All 
accidents are, by nature, exceptions to the general rule. 
They're not the general rule and I can mention, and I don't 
think it advances the ball so I won't, but I can mention for 
every incident anybody can cite that occurred in a repair 
station, a contracted repair station, I can cite one that 
occurred inside an air carrier when maintenance people employed 
by the airline made a mistake that killed people. And, that's 
the reality of our business. Safety doesn't, no one's got a 
monopoly on safety, and nobody has a monopoly on complacency.
    Thank you.
    Senator McCaskill. I, let me, I've got a number of 
questions here, but let me start by saying I, the issue is not 
who is responsible for any individual accident, the issue is, 
is oversight and accountability the same, regardless of where 
an airplane is maintained and worked on. That's the issue.
    And, we have established that we have certified and non-
certified foreign repair stations. And, I'm trying to get at 
the difference between the two and the difference in the level 
of oversight and accountability for the non-certified repair 
stations, which we've already established are doing all the 
same kind of work as the certified repair stations. My 
understanding, in the first round of questioning, that in the 
instances of the use of non-certified repair stations, in these 
countries all over the world, that it is the airlines that have 
the responsibility for overseeing that, the level of training, 
background checks, and security that are going on at those non-
certified foreign repair stations. Is that correct, Ms. 
Gilligan?
    Ms. Gilligan. The airline is always responsible for the 
work that is being done on the aircraft and the airline is 
always responsible for determining that the aircraft or the 
product should be returned to service.
    Senator McCaskill. But they are the only ones responsible 
at the non-certified facilities, isn't that correct?
    Ms. Gilligan. But, then we're providing oversight of the 
carrier.
    Senator McCaskill. OK.
    Ms. Gilligan. We are, in fact, examining their processes 
and procedures that they are putting in place to meet their 
requirements.
    Senator McCaskill. Then how do you explain the fact in the 
2005 IG report, the IG found that there were six carriers that 
were looking, that were supposed to be overseeing work at non-
certified foreign repair stations and that they had done this 
by phone?
    Ms. Gilligan. We take those findings very seriously. It is 
because of those kinds of findings that we have put in place a 
number of corrective actions in response to the IG's 
recommendations. I believe that they made those findings, but 
we do know and the data shows, because the accident rate says 
that, in fact, we are following the standards. We and the 
airlines are following the safety standards. But please, make 
no mistake about it, those kinds of findings are very troubling 
to us and they are the reasons why we take steps to enhance our 
own oversight systems, as well.
    Senator McCaskill. Well, you know, it comes back to the 
point I tried to make the last time, is that if certification 
is important and if we believe certification helps safety, then 
allowing the airlines to use facilities that aren't certified 
comes with a certain inherent risk. And, if in fact, the IG has 
found that they were overseeing non-certified facilities by 
phone, then clearly the FAA, at that point in time and we have 
not increased by any notable percentage the number of safety 
inspectors since that point in time. I think you can understand 
the concern. And, what was interesting in your testimony just 
recently, I know that American says they get surprise 
inspections at FAA-certified facilities all the time. Would you 
disagree with that statement?
    Ms. Gilligan. No, as I commented, we do, we often are co-
located and the American office that oversees American Airlines 
is actually co-located with the American facilities and our 
inspectors are there on a regular basis. That's absolutely 
accurate.
    Senator McCaskill. And then you said, well, we can do it at 
foreign repair stations when we need to. Are you implying that 
somehow there is a more dire need to have spot inspections in 
the United States of America and not in foreign nations?
    Ms. Gilligan. No ma'am, all I meant to indicate was that in 
some places we're co-located and it's easier, but there are 
5,000 repair stations domestically and we don't, we are not co-
located by all of them and we don't do the kinds of oversight 
that we do at American Airlines at every one of the repair 
stations. In most cases, we notify people because we are 
traveling to come to the repair station and so it's consistent 
here in the United States and in the repair stations that are 
overseas.
    Senator McCaskill. Well, let's assume that we think spot 
inspections are important or you wouldn't be doing them in 
American Airlines, and let's assume that the reason you're not 
doing them at foreign repair stations is because of travel time 
and convenience. Wouldn't it be certainly appropriate and, in 
fact, I think you're policies would embrace the idea, that the 
carrier that is using that foreign repair station would pay for 
the additional time that inspector would stay or pay for, let's 
say they arrive and the paperwork's not there.
    By the way, I would think that would be something you'd 
want to know, if they had the paperwork onsite and available 
for inspection at any time.
    But, let's assume that an inspector traveled to a foreign 
repair station, got there, the right people weren't there, the 
right paperwork wasn't there. Isn't that airline responsible 
for paying the cost for that inspector to stay over as long as 
it takes to make sure that that facility is up to the same 
standards that we require of American-certified repair 
facilities?
    Ms. Gilligan. To date----
    Senator McCaskill. That is, U.S.A.-certified repair 
facilities.
    Ms. Gilligan. Right, to date we have charged fees to the 
repair station itself, when we do certification activities, 
when we issue their first certificate, when we do their yearly 
or biannual reviews. We have never charged anyone for the 
surveillance, that's the safety oversight function, because we 
believe that that's inherently a public good and it is 
something that the FAA, because we don't want to be limited in 
the amount of that kind of oversight we can perform, so we 
don't want to be limited by having people pay fees. To date, we 
have not, we have not charged fees to the airlines. We'd have 
to look at doing that, but we do charge fees to the repair 
stations themselves for our inspectors who are doing that 
certification work.
    Senator McCaskill. OK, for the repair stations, I mean, 
charge them for the extra days that are necessary to stay 
there. Is there any reason why that wouldn't be possible in 
order to have spot inspections in foreign repair facilities 
just like we have in the United States?
    Ms. Gilligan. Again, as a matter of policy, we have not 
wanted to charge fees for the safety oversight. We never wanted 
there to be any question that we didn't provide oversight 
because someone didn't pay a fee. So, we have always done that 
as part of our inherent governmental responsibility.
    Senator McCaskill. Well, I'm confused then, because when I 
offered my amendment in Committee that brought about this 
hearing, one part of my amendment would require the payment to 
the FAA for the cost of us having to travel. Since cost is a 
factor for these airlines, it certainly, I think, the notion 
that the American people should not have to underwrite them 
going to another location for lower costs. I don't think that 
most taxpayers would want to foot the bill for these airlines 
going to another country.
    When I, the comment that FAA provided in response to the 
draft of that amendment, said that currently, foreign repair 
stations that are, do hold certificates, must pay for all costs 
associated with FAA inspector oversight, including travel, 
salary, and benefits.
    Ms. Gilligan. Yes, ma'am. And unfortunately, that is 
correct, but not complete. It is correct that all those costs 
are paid when we do what we refer to as certification 
activities, not when we do what we call surveillance 
activities. And, I apologize because our staff in responding to 
the question, I believe, split the hair a little too closely. 
They do pay for all of the activities that allow a repair 
station to get a certificate. That includes the personnel cost 
and benefits for our inspectors, as well as their travel. But, 
when our inspectors are doing surveillance inspection, what we 
call safety inspections, foreign repair stations do not pay 
fees for that part of our work. Again, because we never wanted 
there to be any confusion that we were limited in the amount of 
oversight we could do based on the amount of fees that were 
paid. So, I apologize that we were, again I think, they were 
accurate in the way we use our terminology, but I believe it 
was confusing and I apologize for that.
    Senator McCaskill. So, if you take your airplanes to 
foreign countries, you are not going to have spot inspections 
and you can enjoy the lower costs of labor in those countries 
and the American public is, in fact, underwriting the cost of 
that outsourcing. Correct?
    Ms. Gilligan. The, well, the American public is paying for 
FAA's continued oversight of any of the U.S. aircraft that are 
operated around the world.
    Senator McCaskill. They're paying the extra, they are 
paying the extra amount of money that it's costing the FAA to 
do whatever, in fact, the amount that you have collected versus 
the amount that has been spent. You have collected some, I 
guess, what you're now saying today, for the certification 
process.
    Ms. Gilligan. That's correct. That's right.
    Senator McCaskill. But, the taxpayers are actually footing 
the bill for the extra amount the government is having to spend 
in order for these carriers to enjoy lower labor costs in other 
countries. Isn't that correct, Ms. Gilligan?
    Ms. Gilligan. The inspectors are providing oversight at 
those facilities for whatever reasons that the carriers choose 
to use them. And in some cases, as Mr. Barimo has acknowledged, 
that the element of the cost of the labor is a piece of it. 
From the FAA perspective, our inspectors, whether they are 
located internationally or located domestically, we are doing 
our oversight to determine that U.S.-registered aircraft meet 
the safety standards that our regulations require, wherever 
those aircraft operate in the world. And, that's how we have 
viewed it, that it's the same level of oversight necessary, 
wherever that aircraft is operated.
    Senator McCaskill. I think the point, obviously, I think 
you understand, and that is, the taxpayers are paying extra for 
safety in order for the airlines to enjoy lower labor costs. 
And, I would, well, my time's up and why don't you go ahead, 
Senator Rockefeller?
    Senator Rockefeller. Thank you, Madame Chair.
    I am going right back to where I left off. The idea of 
unannounced inspections is, in every single respect, offensive 
to me. We have a lot of coal mines in West Virginia. Ninety-
nine percent of West Virginians have never been in a coal mine, 
except if they happen to work there because they're not allowed 
in there. First Lady Eleanor Roosevelt did it, but almost 
nobody does. But, Governors and Senators can do that, so I've 
been in a lot of coal mines and it is just a fact of life, it's 
a fact of human nature, it's a fact of, in that case, corporate 
policy, and this case may be different or may be the same, that 
everything seems to look better. It's what they call rock 
dusting. The mine looks clean, everything is orderly. I've 
never ever, as either a Governor or a Senator, ever been down a 
coal mine when it just doesn't look absolutely terrific, for me 
because I'm heavily involved in energy issues.
    Now, I recognize, and I don't say this to denigrate you in 
any way, shape, or form, but you're under the restrictions of 
the Office of Management and Budget on how you answer 
questions. And, I do understand that and the audience, I'm 
sure, understands that. You do not have the freedom, maybe, to 
answer in the way that you choose to. And I, again, I don't 
criticize you for that. But, I do criticize you're defense and 
other's defense of, ``it doesn't make any difference if it's 
pre-announced or not.'' I think it makes all the difference in 
the world, and if people were to come in and find, let's say, 
somebody missing because there was a particular phase of an 
inspection, and then so be that. All right, so you don't get a 
perfect everybody lined up ready to, you know, show you what 
they're wares are. It is a wrong thing to do. It is a wrong 
thing to do. It is a more expensive thing to do, to announce 
it, but it's a wrong thing to do for air safety. I believe that 
with every fiber in my body.
    Along with Senator McCaskill, I chair this Subcommittee and 
I intend to follow through on that. I just, I feel so strongly 
about it that I can not tell you.
    Second, the whole question of, that was brought up by the 
union with respect to, and I just want to get clear on this, of 
people not being able to speak English. And then your answer 
was, ``Well, we can, we can do that by hands-on training.'' Any 
Senator, any busy executive, you, anybody who has complex 
problems before them, not only has to have an explanation, but 
they have to, probably have to have a binder, which they read 
on the trip over to remind them of that explanation. And so, 
the concept of actually people just learning things through 
hands-on training, that is assuming that both parties speak a 
common language and that both parties are qualified in every 
respect, is one that I also feel very strongly about. And, I'm 
not asking you, particularly, to comment on that. I am asking 
Mr. Scovel to comment on it.
    Mr. Scovel. Thank you, Senator. I must say we do not have 
research conducted by my office on that specific point. 
However, I would have to acknowledge the common sense in your 
statement that when a mechanic in a foreign country cannot 
speak English, and his or her instruction manuals are printed 
in that language and that language only, that puts the quality 
of the maintenance that he or she will provide at risk.
    Senator Rockefeller. Anybody else want to comment?
    Mr. Filler. Yes, Senator. I'd like to. The regulations 
require that persons that are supervising, inspecting, and 
approving for returns of service have to read, write, and 
understand the English language. There is no independent 
requirement to speak the English language. In the foreign----
    Senator Rockefeller. Regulations require.
    Mr. Filler. Yes, sir.
    Senator Rockefeller. Now, that's an interesting phrase, 
isn't it? How many times have I heard that? What does that have 
to do with follow-up? This is where the question of oversight, 
either----
    Mr. Filler. I thought you had asked about----
    Senator Rockefeller. I am.
    Mr. Filler.--speaking English.
    Senator Rockefeller. But, you helped me to expand my 
question.
    Mr. Filler. OK. I think it's relevant that individuals are 
required to read, write, and understand the English language in 
a foreign repair station, as well as in a U.S. repair station. 
But, there is no requirement that they have to speak it. In a 
foreign location, the technicians often are looking at manuals 
that have been, or work cards that have been translated into 
their native language. But, at the same time, FAA requirements 
are that the records must also be translated into English so 
they can be evaluated by FAA inspectors.
    Senator Rockefeller. Please.
    Mr. Roach. What he said was a little tricky. He said the 
people who signed the book have to have speak English. The 
people who do the work are not required to speak or write 
English. The people who are actually hands- on, the people who 
work it, the person who comes out after all the work is done, 
who's working at that repair station that has to sign the book 
because that individual has to be able to read and write 
English. But, the person actually tightening the screws and 
changing things, they don't have to read or write English to do 
the work. There's no certificate to my understanding, people 
who are working on aircraft, they're not required to have any 
particular certificate. Only the person who's over, who has to 
sign off the log book, which could be the person for an 
aircraft or a number of aircraft.
    Senator Rockefeller. Accepting what you say for the moment, 
Ms. Gilligan, would you care to comment on that and Mr. Scovel 
would you care to comment on that. And I beg the indulgence of 
the Chair.
    Ms. Gilligan. Yes, Senator. Actually, everything that both 
of these gentlemen have said is accurate. Individuals can work 
on aircraft that do not have to hold a particular certificate. 
They must then be under the supervision and overseen by people 
who hold proper certificates and authorizations. Whoever holds 
the certificate has to be able to read, understand, read and 
understand English, as Mr. Filler described. And, that has been 
the check and balance in the system. It is true that people who 
work on aircraft will have work cards, their instruction cards 
may be translated into whatever is their native language, but 
whoever's overseeing that work is fluent in both their 
language, both that native language and in English, so as to 
insure that the records are properly maintained to demonstrate 
the work that has been done.
    Senator Rockefeller. And there's always somebody with that 
person during the inspection?
    Ms. Gilligan. There is. The requirements for the work to be 
overseen by someone who's authorized to do that.
    Senator Rockefeller. That's not my question.
    Ms. Gilligan. I, they are monitoring the work. There may be 
more than one person doing work at a time. They may not be----
    Senator Rockefeller. Video or----
    Ms. Gilligan. It's not a one to one, it may not be a one to 
one relationship, but the person who's going to sign that work 
off, who takes that responsibility very seriously is monitoring 
the work and determines if the work has been properly 
accomplished in accordance with the instruction before signing 
the authorization for that.
    Senator Rockefeller. We'll come back to you Mr. Roach in a 
moment.
    Let me just say as a matter of philosophy that I think, I 
used the word fugue a moment ago, which probably seemed a bit 
bizarre--I'm a baroque music fan--but I, to me an aircraft, and 
I mentioned the 13,000 parts, which are individually accepted 
part by part before a first model of the five that have to be 
approved of a new aircraft are allowed to proceed. I consider 
the repair and maintenance work, not on perfectly new pieces of 
metal, but on potentially frayed pieces of metal and to what 
degree frayed, to a dangerous degree, not to a dangerous 
degree. This is a very subtle science, it's an art form. It's 
not something which comes from the bosom of one's heart to do a 
good job, it comes from an absolute knowledge and determination 
under 110 degree sun, presumably we know that's a little 
unfair, but sometimes inside a shed, it can be that way too, 
people can get tired and you have to be just as good, like a 
receptionist at any of our offices, at 6 o'clock in the evening 
as you do at 9 o'clock in the morning. I think that, that's my 
philosophy of repair and maintenance. Incredibly delicate, 
incredibly complicated, and incredibly, the kind of thing you 
do not make a mistake upon.
    Mr. Scovel?
    Mr. Scovel. I would concur, sir. If I may return to one of 
your earlier questions on FAA certification of mechanics 
working at U.S. stations versus foreign stations. It is our 
understanding that, under FAA requirements, supervisory and 
inspection personnel at a domestic, FAA-certificated repair 
station must be certificated by FAA.
    However, for a foreign repair station certificated by FAA, 
no personnel must hold a true FAA certificate. Personnel 
working on aircraft are required to fulfill certain training or 
experience requirements, such as 18 months of practical 
experience in work being performed, but they need not hold the 
actual FAA certificate. I think that is an important difference 
to note for the record.
    Senator Rockefeller. All right. Mr. Roach, to you and then 
final from my point of view, Madame Chair to you, Ms. Gilligan.
    Ms. Gilligan. Thank you, sir.
    Senator Rockefeller. Did you get, I think you cared to 
comment.
    Mr. Roach. Just on the, the language situation. The manuals 
that are translated in those foreign repair stations are not 
translated by the manufacturer. They are translated by the 
foreign repair station or the carrier and so the manuals that 
we work on domestically are the manuals that have been prepared 
by the manufacturer of that particular aircraft.
    Senator Rockefeller. Are you suggesting by that that 
they're more in pictorial form?
    Mr. Roach. No, I'm saying that the manuals, the manuals are 
prepared by the manufacturer for the maintenance of that 
aircraft, Boeing or Airbus whoever's handling, let's say 
Boeing. And those, Boeing does not translate that into any 
particular language, which means that it goes to another party, 
who then translate what Boeing meant by that manual to somebody 
else who doesn't necessarily have the training and skills in 
maintenance because they're not required to. Only the person 
who oversees or supervises work, who does not have to be on-
sight. They could be in a room, which happens quite frequently, 
they could be in a room someplace when they're told this 
particular work has been completed, to come out and look at it. 
So your people out there who do not speak English, who are 
reading manuals that have been translated third hand, who are 
performing this particular work. And, as you indicated, there 
are thousands and thousands of parts that are very important to 
the safety of that, to the airworthiness of that aircraft and 
so we think that reflects on the safety of the aircraft.
    Senator Rockefeller. I thank you, sir.
    Ms. Gilligan, please understand as I ask you, I seem to be 
peppering you with questions and I apologize, but one thing I 
really do understand is that all administrations, not just the 
present one, but the previous ones have vastly underfunded the 
Federal Aviation Administration. I mean, you look at our 
attendance here and you get a Congressional response. So that 
I, I understand, I mean, there's nothing you can do about 
funds. You can't complain about funds and you need funds--and I 
know that, and I know that you know that.
    So, my question for your last response on this is that I 
recognize you are very funds short and we've only partly helped 
you with the whole digital air traffic control system yet to 
build.
    Ms. Gilligan. Thank you, sir. And if I, actually, if I may 
comment on the resource issue. Actually, I'm here to thank the 
Congress because, in fact, for this year 2007 under the 
Continuing Resolution and for last year, 2006, we actually 
received in the safety program increases above the Presidential 
request. And we appreciate those and we understand that those 
are to make up for some short-falls, which we were able to 
demonstrate had occurred and, in fact, we took reductions in 
our workforce back in the year 2005. So, we are actually quite 
appreciative of Congress's understanding of the continued need 
to invest in the safety infrastructure that FAA needs to put in 
place. And, we appreciate that.
    I did want to comment on the Inspector General's comment 
about, at foreign-located repair stations it is true we do not 
require people to hold an FAA certificate, but our inspectors, 
when they are certificating that facility, make a finding that 
there are people in that facility that meet all of our 
standards in order to serve in that function. So, we do fill 
that gap. We don't require them to hold the FAA certificate, 
but we make a finding that they are competent and qualified to 
meet those same requirements.
    But, thank you for giving me the opportunity on the 
resource question because, in fact, Congress has been extremely 
supportive of the need for us to continue to build our safety 
infrastructure and we appreciate that.
    Senator Rockefeller. And that must continue.
    And I've doubled my time and I appreciate it, Madame Chair.
    Senator McCaskill. Thank you, Senator Rockefeller.
    I, unfortunately, have to be on the Chair to preside at 
4:30, so we only have 10 minutes. So, I will have questions 
that I will not have time to get to in the next 10 minutes and 
I will ask those of you in writing to add to the record. And, I 
will appreciate if people can keep their answers as brief as 
possible so I can try to get to as many of them as possible 
before we have to adjourn.
    I think after 9/11 in this country, there was an acceptance 
of the responsibility that the traveling passenger has as to 
what they have to go through to maintain safety and security on 
an airplane. My mother has two knee replacements, I have one. 
We accept the fact that we have to be personally wanded every 
time we fly. I think the American public is assuming that we 
are making the same kind of requirements of the mechanics that 
are working on these airplanes.
    And, I know this, that in the IG's report of February 2003, 
that during the investigation of the IG, you actually found a 
staff senior aircraft technician at a foreign repair station 
was a member of al-Qaeda. And, that your investigation revealed 
that that aircraft technician had been photographing the U.S. 
aircraft as potential targets for a terrorist attack. Have I 
accurately portrayed your report in that regard, Mr. Scovel?
    Mr. Scovel. Yes, although, truly Senator, modesty compels 
me to say that it was not our investigation that found the al-
Qaeda plant at that repair station. It was other law 
enforcement authorities. We note that in our report as an 
example of security vulnerabilities.
    Senator McCaskill. It was, do you know whether that foreign 
repair station was certified or non-certified?
    Mr. Scovel. It was certified, Senator.
    Senator McCaskill. OK. Let me ask, in 2003, Congress made 
some requirements of TSA in connection with FAA to, in fact, 
complete a rule imposing security standards on foreign and 
domestic repair stations and it was required that this rule be 
done by August of 2004. And, then those security audits of 
foreign stations were to be completed 18 months after the 
regulations were finalized. Am I correct that, to date, not 
even a proposed rule has been issued, let alone a final rule 
and that the agencies are now 30 months delinquent in meeting 
this Congressional mandate?
    Ms. Gilligan. It is true, Senator. The TSA has not issued a 
proposed rule for, to meet those security requirements.
    Senator McCaskill. I understand TSA is the lead agency, but 
I believe that there was, inherent in the legislation, a 
request that you work with its counterpart, your counterpart in 
TSA to move these rules forward. Have, in fact, you all, do you 
have any written correspondence or anything indicating that you 
have been pushing TSA to, to come out with rules concerning 
security at repair stations, both foreign and domestic?
    Ms. Gilligan. I don't know that there's a written record. 
There certainly have been discussions of the language in the 
legislation and of the requirement that TSA must issue their 
regulations and then make audit findings so that FAA could take 
the next step.
    Senator McCaskill. And, it's my understanding that your 
report, Mr. Scovel, not only dealt with background checks as a 
security vulnerability in foreign repair stations, but you also 
talked about access to the airport, that was, that you observed 
by vending machine personnel and other contract personnel. And, 
that you had pictures in your report of gaps in sensing, of 
failure to secure the perimeter. Could you briefly summarize 
the various security lapses that you witnessed at these, and 
then, and these are actually, I assume, the certified repair 
stations or were these also non-certified?
    Mr. Scovel. They were certified, Senator. I must say, 
however, that under Department rules, our report was not 
classified in the DOD sense but was marked as Sensitive 
Security Information. For that reason, I am not allowed to 
discuss all the details that you may be interested in on the 
record in an open hearing. However, I would be happy to discuss 
those with you and your staff in private.
    Senator McCaskill. I'd be anxious to visit with you about 
that. I think that this security issue is a major issue here, 
particularly in light of the fact that we've had reports that 
on the non-certified facilities, some of the oversight being 
provided by the airlines was done by telephone. I don't think 
that's the kind of oversight that's going to reassure the 
American public that we're doing all that we can do to make 
these airplanes secure and safe for travel.
    The 2004 report, FAA report to Congress states that FAA is 
further revising the repair station rules to update and 
modernize repair station ratings, and add a quality assurance 
program to complete the quality system requirements for both 
foreign and domestic repair stations.
    The notice for the proposed rulemaking for this effort is 
scheduled for publication by the end of the third quarter in 
Fiscal Year 2005. Was this notice of proposed rulemaking ever 
issued?
    Ms. Gilligan. Yes, I'm sorry, Senator, I just had to check.
    We did issue that proposal, and we have received comments, 
we are disposing of those comments. So we'll be moving to final 
rule.
    Senator McCaskill. And that was--it was supposed to be done 
by the end of the third quarter 2 years ago.
    Ms. Gilligan. That was the notice that was to be issued at 
that time. I can get you the specific schedule. I don't recall 
if we met that third quarter date, but it has been out for 
comment, the comment period has closed, and we are now 
reviewing those comments, and moving to final rule.
    Senator McCaskill. OK. Well, I think we've talked about the 
accountability in terms of a security audit that Congress 
mandated that has--they haven't begun to occur. And, we've 
talked about certified versus non-certified, and what kind of--
we've talked about spot inspections, and not spot inspections, 
I guess I would just ask for comments from any of the witnesses 
as we close.
    There's clearly--there are two standards in terms of repair 
stations. You have the standard that is here in certified-FAA 
repair stations in the United States of America, we have spot 
inspections, you have the certified mechanics, you have 
oversight by the FAA.
    And then you have a whole lot of repair stations that don't 
have that same level of scrutiny and that same level of 
oversight. And I would, since we now know that the majority of 
the maintenance work is now being done in those that have the 
lesser standards, I would like any of you who are comfortable 
and want to comment on this double standard to explain to the 
American traveling public why we would ever want a double 
standard as it relates to the maintenance of our aircraft, and 
therefore the safety and security of the aircraft?
    Mr. Barimo. I'm glad to address it from the airline 
perspective--there is no double standard. Airlines maintain 
airplanes to a certain standard, and that's universal across 
the board.
    So, I want to go back, even to the beginning of this 
hearing, where we talked about the scope of work being done by 
non-certificated entities. And what we're talking about is a 
group of licensed A&P mechanics who are working under the 
authority of the airline. Generally doing low-level, line types 
of checks. So, functional checks, servicing the airplane, 
things like that--not heavy maintenance. In every case, when 
ATA members are using foreign repair stations for heavy 
maintenance, it is certificated, Part 145 repair stations.
    So, I understand there were some deficiencies identified in 
the IG's report, I would consider those isolated events, and 
there are regulations that require carriers to manage that 
properly, and if--in certain cases--it wasn't managed properly, 
then there's a mechanism to go deal with that.
    Senator McCaskill. And I would say--we've got 4 minutes. 
So, I don't know how many of you want to comment--how many of 
you want to comment, raise your hand? OK, that gives you each 
about a minute.
    Mr. Brantley?
    Mr. Brantley. I believe the dual standard that we have is 
in the oversight that's provided by the FAA.
    Senator McCaskill. Right.
    Mr. Brantley. With regard to these foreign repair stations, 
oversight of the actual work performed is a responsibility of 
an inspector in a certificate management office, in the country 
here. So, for whatever airline they're tasked with providing 
oversight for, that would be their job to ensure that that work 
is performed properly. And, in order to do that, they are 
required to give 60 to 90 days notice--this isn't a short lead 
time we're talking about--60 to 90 days to even be able to go 
and do an inspection. And there's no guarantee that when that 
90 days is up and they get there, there's still an airplane in 
there having maintenance done, that they're responsible for.
    So, it truly is a nightmare for an inspector to try to do 
the oversight that they're charged with doing.
    Senator McCaskill. Mr. Filler?
    Mr. Filler. Senator McCaskill, thank you.
    I just would like to also emphasize the international 
component to a lot of the issues that we're discussing here 
today. ICAO exists because some very smart people over 60 years 
ago thought that we needed international safety standards, that 
would apply to the members of the international community. So, 
all of the things that we're here discussing today are all the 
subject of ICAO standards, including security and perimeter 
checks, and background checks. And there is some U.S. oversight 
of that, and my understanding is, TSA does do--as Mr. Barimo 
pointed out--security audits of some foreign locations. ICAO 
also does security audits to ensure compliance with ICAO 
standards.
    There's a practical reason, as well, why foreign repair 
station people that might have to be certificated if they 
worked here, do not have to hold individual A&P certificates. 
Some of these facilities, for example, one of our very 
prominent members, has 35 repair station certificates, from 35 
countries. That counts the E.U. as only one of those 35.
    If every one of those countries required their technicians 
to be certificated individually, under the regulations of that 
local authority as the State of Registry, it could get out of 
hand pretty quickly.
    I think, as Ms. Gilligan pointed out, the FAA has a 
performance-based rule, they evaluate these people, they make 
sure they can do their job, and if they're technically not up 
to the regulatory standard, then the FAA will say, ``Sorry, you 
need to put somebody else in place.''
    So, I think the oversight issue you raise is a legitimate 
issue, but I don't think the traveling public, or this 
Committee, should be concerned that there's a lower level of 
safety by the work performed by work stations in general, or by 
foreign repair stations versus domestic repair stations. Thank 
you.
    Senator McCaskill. I've got time for, half a minute, if 
anyone else wants to comment.
    Mr. Scovel. Half a minute, Senator, if I may.
    Our work has shown that non-certificated repair facilities 
located overseas are at the far end of the oversight spectrum. 
FAA oversight of those facilities is very thin, if not non-
existent in most cases.
    While safety has not yet been compromised in the form of an 
accident, we must question the quality of the oversight and 
determine what is still needed. We have urged FAA in our 
report, and in our testimony today, to directly confront the 
question of whether the current system should continue, or 
whether FAA should limit the type and scope of maintenance that 
is allowed to be performed at non-certificated facilities.
    Mr. Roach. I have 15 seconds, Senator.
    We have a bargain--the machinists union has a bargain 
relationship with every major carrier in this country, with the 
exception of Delta and American. And, in our discussions with 
the CEOs and CFOs, nobody's ever said to us, there can be work 
done better overseas, it's always been a cost factor.
    So, when somebody alluded to the fact that maybe 
something's happening overseas that's not happening here, we've 
never heard that from any major carrier, that, it's always been 
a cost factor, because they're getting the work done a lot 
cheaper, without benefits to workers, without any concern about 
human rights or anything of dignity in these other countries. 
Thank you.
    Senator McCaskill. Let me close by saying, I know there was 
reference made to an isolated incident. And, I understand there 
is a data-related look at performance of these airlines from a 
mechanical standpoint. But everyone should keep in mind, in 
terms of security that, what changed this nation, I think, 
could be characterized as an isolated incident.
    And I appreciate all of your attendance today, and the 
testimony you've given, and the hearing is adjourned.
    [Whereupon, at 4:30 p.m., the hearing was adjourned.]
                            A P P E N D I X

          Prepared Statement of Hon. John D. Rockefeller IV, 
                    U.S. Senator from West Virginia
    The oversight of aviation safety is one of this Subcommittee's 
primary responsibilities. The government has no more important role in 
making sure that our Nation's aviation system remains the safest in the 
world.
    I want to thank Senator McCaskill for requesting this hearing and 
aggressively seeking to improve our nation' aviation safety. And, I 
would like to thank our other witnesses for coming today as well.
    I have a few brief remarks and then will ask other Senators if they 
have opening statements.
    First, I want to state that I firmly believe that the United States 
has the safest and best air system in the world. I do not want to give 
anyone the impression that I believe it is unsafe to fly.
    But, the aviation industry continues to change rapidly in light of 
unrelenting competitive pressures. I am concerned that the quickly 
changing nature of the commercial aviation industry coupled with the 
FAA's declining level of resources threatens the agency's ability to 
maintain the necessary level of oversight of air carriers, foreign 
repair stations, and upgrade the existing safety infrastructure at our 
airports.
    Although I understand why many commercial airlines are contracting 
out an increasing amount of their maintenance work, I am concerned that 
this work is being sent to foreign countries where governmental 
oversight from both the home nation and FAA may be weak or non-
existent.
    Compounding the industry's trend to outsource much of its 
significant maintenance work is the inability of the FAA to certify and 
closely monitor an ever increasing number of foreign repair stations. I 
do not question the agency's commitment to safety. I believe that this 
is due mainly to a lack of resources.
    I am deeply concerned that the FAA is losing a number of its most 
senior safety inspectors and does not have the ability to replace all 
of them. This Committee, as it begins evaluating the future of the FAA, 
should be spending a considerable amount of its time making sure that 
the agency is able to meet its foremost mission--the safety of the 
traveling public.
    Again, I want to thank Senator McCaskill for her leadership on this 
issue.
                                 ______
                                 
 Response to Written Question Submitted by Hon. John D. Rockefeller IV 
                                  to 
                       Hon. Calvin L. Scovel III
    Question. How many inspectors will the FAA hire in 2007? How many 
inspectors does the FAA expect to lose this year? Given that these are 
highly skilled positions, are there enough well trained individuals who 
the FAA could hire to be inspectors if the Agency has the resources?
    Answer. FAA expects to hire approximately 290 aviation safety 
inspectors in FY 2007. During the same period, FAA expects to lose 
approximately 200 aviation safety inspectors, which would result in a 
net increase of 90 inspectors in FY 2007. Congress approved additional 
funding for these 90 inspectors in FY 2007, which was an increase over 
FY 2006 staffing levels.
    According to FAA's May 2007 Aviation Safety Workforce Plan, the 
Agency maintains a pool of about 5,000 qualified inspector applicants 
that can be hired quickly. These applicants have specialties in 
avionics, maintenance and operations. We do not know whether FAA's 
statements are valid since we have not performed a detailed evaluation 
in this area. However, as FAA recognizes in its workforce plan, the 
Agency faces the challenge of hiring people with the right skills, such 
as risk-based decisionmaking and data analyses. These skills are needed 
for inspectors to work effectively in the current aviation environment 
and with FAA's risk-based oversight systems.
    We have identified other shortcomings in FAA's goals to achieve a 
well-trained inspector workforce. For example, according to its 
workforce plan, in FY 2007:

   FAA's goal is to hire only 10 percent of new staff with the 
        competencies needed to perform inspections using risk-based 
        systems; and, the new staff only needs to possess two of the 
        nine competencies that are needed.

   FAA plans to train a minimum of 30 percent of existing 
        inspectors in only one course in risk-based competencies.

    Using risk-based oversight systems is a foundational part of FAA's 
plan to meet future oversight challenges. Therefore, in our view, the 
Agency needs to step up its hiring and training efforts if it is to 
maintain a sufficient number of inspectors with the right skill set to 
provide oversight of a dynamic aviation industry.
Supplemental Information
    According to our analyses of FAA records, as of July 21, 2007, FAA 
had hired 170 inspectors; but, 190 inspectors had retired. FAA will 
need to work aggressively to meet its goal to hire 290 inspectors by 
September 30, 2007. According to its workforce plan, FAA does most of 
its hiring during the last two quarters of the fiscal year because of 
funding delays.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                          to Margaret Gilligan
    Question 1. How many inspectors will the FAA hire in 2007? How many 
inspectors does the FAA expect to lose this year? Given that these are 
highly skilled positions, are there enough well trained individuals who 
the FAA could hire to be inspectors if the Agency had the resources?
    Answer. At the end of Fiscal Year 2007 FAA is projected to have 
3,740 ASIs compared to 3,662 at the end of Fiscal Year 2006. This is an 
increase of 78 new hires which will support new certification and 
surveillance activities related to the growth of existing operators and 
a backfill of 185 positions lost through attrition.
    An additional 81 ASIs are projected to be hired in FY 2008. This 
increase will support new safety initiatives along with continued 
operational safety (core business) to our customers. The increase will 
also support continuation of the transition of air carriers to a system 
safety approach to oversight.
    In order to ensure an adequate number of ASIs, FAA has developed a 
Human Capital Plan that is a proactive approach to succession planning 
for retiring inspectors. This plan takes into account various 
demographic and geographical data and identifies the appropriate skill 
sets required to perform the job. FAA has a centralized applicant pool 
with a registry of approximately 3,843 qualified applicants that we use 
to fill our vacancies.

    Question 2. I understand that the FAA is shifting away from a 
safety oversight system based on individual inspector's skills and 
knowledge to a more risk assessment approach based on data evaluation. 
No matter how sophisticated FAA's risk assessment approach becomes in 
identifying high priority sites to monitor, is there any real 
substitute to a human inspection?
    Answer. There will always be a need for inspectors to perform 
onsite inspections. What's important is that we establish what to 
inspect based on an assessment of risk. The Air Transportation 
Oversight System (ATOS) provides automated tools that analyze the data 
collected by our inspectors and point them toward elements of a 
carrier's system that might present a risk. In this way, we ensure the 
most efficient use of our safety oversight resources.

    Question 3. According to Mr. Brantley's testimony, insufficient 
funding for travel obviously has impacted the FAA's ability to perform 
oversight of foreign repair stations. Mr. Brantley asserts that 
increasingly FAA inspections of major repair stations that perform 
heavy maintenance work have been canceled or cut short due to lack of 
funds. According to inspectors in the field, the inspection process has 
become primarily budget driven rather than motivated by safety. Please 
comment on this statement. Has the FAA cut down on the inspection of 
heavy maintenance work?
    Answer. The FAA does not agree that inspections of major repair 
stations that perform heavy maintenance have been canceled due to lack 
of travel funds.
    In FY 2006 and 2007, Congress has provided substantial budget 
increases to allow us to hire additional inspectors. The cost of hiring 
an inspector includes the personnel costs and benefits required, as 
well as the costs for training and travel to make the inspector 
competent and effective. The FAA ensures that critical safety travel 
resources are available for inspectors to perform their safety 
oversight responsibilities. The FAA is not aware of any travel canceled 
due to funding issues.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                         to Marshall S. Filler
    Question 1. Representatives from your organization have stated in 
the press that the oversight of facilities in places such as Britain 
and Portugal was often more rigorous than in the United States. I would 
expect the European Joint Aviation Authority to have a rigorous safety 
system in place; but I am concerned that other countries whose aviation 
governance systems are not as mature may not be as thorough.
    Answer. All 189 member countries are required to follow 
International Civil Aviation Organization (ICAO) safety and security 
standards and virtually all foreign repair stations are located in 
Category 1 countries (i.e., countries that the FAA has found to be in 
compliance with ICAO standards.) More importantly, the FAA (not the 
foreign authority) is responsible for monitoring compliance with 14 CFR 
part 145.
    In those cases where a maintenance bilateral agreement exists (such 
as France, Germany, Ireland and soon to be expanded to other members of 
the E.U.), the FAA does rely on findings made by the foreign safety 
inspectors just as the foreign aviation authorities rely on the FAA's 
oversight findings of U.S. facilities to ensure compliance with the 
foreign government's requirements.
    However, in most cases, maintenance on U.S.-registered aircraft and 
related components is NOT governed by a bilateral agreement. Therefore, 
FAA inspectors personally oversee those facilities, wherever they are 
located. A foreign repair station's compliance with part 145 is ensured 
through normal surveillance and frequent recertification inspections, 
an activity that is not required domestically. ARSA urges the Congress 
to ensure that the FAA has sufficient funding to conduct surveillance 
activities at all repair stations, wherever they are located.

    Question 2. Does the Aeronautical Repair Station Association 
maintain minimum requirements for its members with regard to the level 
and quality of background checks? Are there any international standards 
for repair stations or can anyone who can find mechanics and planes to 
work on open a business?
    Answer. ARSA does not set a standard for members regarding 
background checks. Regulations issued by the country where the facility 
is located dictate the need for such checks depending primarily on the 
location of the facility. Domestically, many repair stations located at 
an airport are required to have their personnel undergo criminal 
background checks under TSA regulations if they require unescorted 
access to the designated airport security identification display area 
(SIDA). Therefore, a repair station employee that performs line 
maintenance for an air carrier would have the same 10-year criminal 
background check requirement as an airline mechanic. Many repair 
stations voluntarily implement additional security procedures since the 
quality and safety of their work directly affects their business.
    Internationally, the International Civil Aviation Organization 
(ICAO) sets standards for maintenance, security, and safety. Member 
countries must adopt or validate regulations that comply with those 
standards, including personnel licensing, certification of air 
operators and approved maintenance organizations. In fact, FAA 
regulations are based on ICAO standards.
    Each country must implement the types of security procedures to be 
followed just as they must do in the safety area. These are based on 
the standards contained in ICAO Annex 17 and thus are very similar to 
TSA regulations. They include, but are not limited to:

   A national civil aviation security program with continuous 
        threat monitoring and mandatory quality control procedures;

   Airport security programs for each airport serving 
        international carriers;

   Air operator security programs;

   Background checks for persons implementing security control 
        measures and persons with unescorted access to restricted 
        security areas; and

   Periodic ICAO security audits.

    The professionals at the TSA, ICAO and other countries' security 
oversight organizations have concluded that resources should be focused 
where the threat is greatest. Therefore, FAA-certificated foreign 
repair stations working on components and located miles away from an 
airport are not required to implement background checks for their 
employees. However, if they perform line maintenance at an 
international airport or otherwise require access to the ramp area, 
foreign repair station employees would be subject to similar security 
requirements as their FAA counterparts, including background checks.
    Neither domestic nor international security requirements are based 
on whether a person works for an airline or a repair station; they are 
dependent on the degree of access the individual has to the restricted 
security areas of an airport. Further, mandating additional security 
requirements where none are truly needed will reallocate limited 
oversight resources from areas where the threat is greater. This could 
have the unintended consequence of reducing the level of security for 
the traveling public.

                                  
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