DOT IG's Comments on Manufacturer's Suppliers

I spent a large part of last week at the NBAA Maintenance Management Conference in Florida where I had the honor of appearing on the agenda to speak on maintenance risk and legal issues both from the litigation and regulatory perspective. As always, NBAA put on a great conference. In preparing for my comments, there was needless to say a wealth of relevant news and information on maintenance issues involving Part 121 air carriers. I also was aware of the testimony of Department of Transportation Inspector General Calvin Scovel (29 year Marine Corps veteran) as he had several opportunities to appear before congressional committees in the last few weeks.

On April 10, he spoke before the Senate Committee on Commerce, Science and Transportation, Subcommittee on Aviation Operations, Safety and Security. His comments were entitled "Key Safety Challenges Facing the Federal Aviation Administration." The April 10th testimony focused on "the key actions that FAA and its stake holders will need to address over the next several years. These included (1 ) strengthening FAA’s oversight of the aviation industry, (2) improving runway safety, and (3) addressing attrition in two of FAA’s critical workforces–air traffic controllers and aviation safety inspectors."

One week later, on April 17, 2008, the Inspector General testified before the Senate Committee on Appropriations, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies. His comments, many of which were repetitive, were entitled "Key Safety and Modernization Challenges Facing the FAA." They focused on "(1) strengthening FAA’s oversight of the aviation industry, including its systems for monitoring air carriers’ use of outsourced maintenance and aircraft manufacturers’ suppliers; (2) keeping existing modernization programs on track, reducing risk with NextGen, and setting realistic expectations; and (3) addressing attrition within FAA’s air traffic controller and inspector workforces."

The IG's discussions in the April 17 testimony with respect to the importance of NextGen including ADS-B implementation ("a new satellite based surveillance system that has the potential to enhance safety and capacity") are very relevant to the air taxi industry. I have previously discussed the importance of NextGen.

However, with maintenance compliance in the news and the reliability of aircraft components always an issue, I wanted to highlight the IG's discussion on the FAA's oversight - or lack thereof - of the suppliers to aircraft manufacturers. Earlier this year in February, the DOT IG issued a report entitled "Assessment of FAA's Risk-Based System for Overseeing Aircraft Manufacturers' Suppliers." Many of the comments about suppliers in this month's testimony were based on the findings of this earlier audit report. Here are some insights as to current matters related to aircraft component suppliers that I thought were relevant to Part 135 and 91 operators, many of whom are utilizing new aircraft:

• FAA's current oversight of aviation manufacturers is based on a system that assumes the manufacturer has primary control over the production of their aircraft rather than trusting suppliers to design and manufacture a large portion of the aircraft.
• "FAA has not ensured that manufacturers are providing oversight of their suppliers. Manufacturers are the first line of defense in ensuring the products used on their aircraft meet FAA and manufacturers' standards."
• "FAA does not require inspectors to perform audits of suppliers to determine how well manufacturer's quality assurance programs are working."
• In the last four years, FAA "has inspected an average of 1 percent of the total suppliers used by the five major manufacturers [DOT] reviewed."
• At FAA's current surveillance rate, "it would take the inspectors 98 years to audit every supplier once."
• The DOT observed "systemic deficiencies" at the 21 suppliers it visited. "For example, nearly half (43 percent) of the suppliers had deficiencies in their tool calibration and employee training programs. Deficiencies in these areas could impact the quality of the parts of these suppliers."

One of my presentation "take-aways" was the importance of due diligence in outsourced maintenance in that although you can outsource the work, you cannot outsource the liability and ultimate responsibility for FAA compliance. That remains with the certificate holder and aircraft operator. With respect to component manufacturers and suppliers, I thought these comments on supplier oversight were somewhat noteworthy and relevant to Part 135 operators -- most of whom's business plans include new aircraft with a large number of components provided by outside suppliers.

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Florida:Next Gen's Testbed & ADS-B Update

At the 33rd Annual FAA 2008 Forecast Conference in Washington DC today, it was very positive that both Acting Administrator Sturgell and DOT Secretary Peters continued to discuss the mandate and urgent need for implementation of NextGen and ADS-B. This type of support and advocacy from the top of the DOT and FAA will be critical because it is clear from many of the comments filed in response to the ADS-B NPRM, that the proposed change is not welcome by many. At the Conference, Secretary Peters announced the following about NextGen:

"And I am announcing today that we have selected Florida as the test-bed for this transformational technology. The Southeast has a good mix of traffic and a good mix of weather – just the kind of place to put NextGen through the paces . . . . By putting the latest technology in our towers instead of the state’s theme parks, we’re going to make getting to and from Florida a model for the future. Starting this summer, we are going to roll out NextGen technology at Daytona Beach. In Miami, we will be employing a descent technique that saves fuel, noise, and emissions. The national debut of ADS-B technology – the backbone of NextGen – also will begin in Florida. Adding ADS-B coverage in the Gulf will allow planes to fly closer together without compromising safety. Today, we have to keep the planes far apart – anywhere from 10 to 15 miles. But with ADS-B, we can reduce that down to 5 miles, freeing up capacity."

I have previously discussed Florida as one of the states leading the way, so Secretary Peters' announcement is consistent with Florida's support of aviation innovation. Based on public comments and filings in the official FAA Docket, the FAA, the DOT, GAMA, the NTSB, Dayjet, Linear Air and SATSAir all are generally supportive and in favor of ADS-B. In fact, Dayjet and the NTSB urged the FAA to also consider the implementation of "ADS-B In" technology which would provide the cockpit with a multitude of information.

At the Forecast Conference, Secretary Peters today further stated: "We know the passengers are coming – over 1 billion by 2016. We know that, by 2025, revenue passenger miles are expected to more than double, increasing by an average of 50 billion a year. That is the equivalent of adding a carrier the size of Northwest to the system every 18 months."

Based on the large number of comments filed on the docket opposed to ADS-B, it will take some vision, insight, and fortitude to continue to move forward with its timely development and successful implementation. To sit idly by and not move forward or acknowledge the advantages of ADS-B in light of those staggering numbers would not be prudent. Air taxi operators, many of whom have leveraged the advantages of computer technology and software, surely understand that. At last year's FAA Forecast Conference, the air taxi industry was well represented by SATSAir's Steve Hanvey being a panelist. It's good to see that Dayjet's Malcolm Murphy is likewise scheduled to be a panelist tomorrow morning at the Conference. More on the FAA's 2008 air taxi forecasts soon.

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ADS-B, the Environment & Political Hold on Sturgell

As previously mentioned, the efficiencies gained with implementation of Automatic Dependent Surveillance - Broadcast (ADS-B) should decrease the aviation industry's overall fuel consumption. While it remains debated as to what total contribution (3% - 13%?) aviation has of greenhouse emissions worldwide, ADS-B will surely result in a decrease of those emissions. The recent Notice of Proposed Rulemaking on ADS-B contains some very concrete projections on the environmental benefits of ADS-B and anticipated decrease of these harmful emissions. Here are some quotes:

• The FAA estimates that between 2017 and 2035 ADS-B technology would allow more efficient handling of potential en route conflicts, which will result in a total of 410 million gallons of fuel savings in the national airspace system over that time period.


• This decrease in fuel use would result in about 4 million metric tons less carbon dioxide emissions.


• The increased use of continuous descent approaches that ADS-B would allow would lead to about 10 billion pounds of total fuel savings from 2017 through 2035. This would result in about 14 million tons less carbon dioxide emissions.


• Additionally, the FAA has estimated a decline in fuel use on airline flights over the Gulf of Mexico due to optimal routing because of this proposed rulemaking. This savings in fuel use would result in an additional cumulative decrease of 300,000 metric tons of carbon dioxide emissions over the 2012 to 2035 time period.

Vljs and air taxis are using the most advanced and most fuel efficient engines with sophisticated software and glass cockpit technologies in new aircraft. That equipment, further combined with ADS-B, will provide for significant improvements in fuel efficiency and greener aviation operations.

Disappointing, Politics Playing with Sturgell's Confirmation Hold

Today's unsuccessful confirmation hearing for Acting Administrator Sturgell was indeed disappointing. It was a display of pure partisan politics at its best. Hopefully, the Senate will stop playing politics with the confirmation of the FAA Administrator, so the proposed FAA budget including ADS-B and other much needed NextGen systems will be funded. Unfortunately, my sense is funding NextGen will be a tough battle based on the political antics of today with the Democratic Senators from New Jersey blaming Mr. Sturgell for the failings of a historically underfunded and overburdened air traffic system that Sturgell inherited and has tried very proactively since last October to address. There also appears to be some reluctance to appoint a new Administrator when there is a chance that leadership in the White House may change. Much of the New Jersey's delegations criticism of Sturgell was based on alleged impacts to New Jersey due to prudent, yet difficult decisions on local air traffic rerouting. Finally, one has to question the impact of the air traffic control labor unions when many of that organization see NextGen as a threat to their viability while simultaneously asserting claims of being stretched too thin.

In his press release announcing a hold on Sturgell's confirmation, Senator Lautenberg (D-N.J.) ironically stated: "The FAA needs a leader with a new perspective and new ideas to improve flight safety and performance. . . . Mr. Sturgell helped create the policies that left our air traffic controllers overworked and understaffed, our runways in dangerous condition, more air noise on our communities and the worst flight delays in our history. It’s time for President Bush to nominate an Administrator who solves transportation problems, rather than creating more of them.” Senator Bob Mendez joined (D-N.J.) in the criticism and hold.

With a budget proposal shifting towards NextGen and away from focusing on manpower intensive, less accurate, 1940's radar technology and simply laying more asphalt, it would appear to me that Sturgell is just that visionary leader with the "new perspective and new ideas." Unfortunately, Congress is itself going to have to embrace change. In fact, the largest impediment to NextGen -- in spite of its overwhelming benefits to safety, efficiency, costs savings and the environment -- will be Capitol Hill.

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The FAA Budget, Air Taxis, and NextGen Efficiencies

The FAA's Fiscal Year 2009 Budget of $14.6 billion was presented yesterday. Today, it received significant criticism because of the proposed cuts to the infrastructure-focused Airport Improvement Plan ("AIP") funding, but it more than triples the proposed budget for satellite-based Next Generation ("NextGen") air traffic control systems from $212 million to $688 million. While the budget proposal was strongly criticized by many trade organizations and will be vetted through Capitol Hill, ultimately the prioritization and focus on NextGen is appropriate. NextGen brings our antiquated 20th century air traffic control system into the 21st century. Acting FAA Administrator Bobby Sturgell states in the FAA's Budget In Brief, Fiscal Year 2009: "With the air traffic control system at capacity . . . , NextGen is the only way we can continue to meet demand. NextGen is intended to address today's constraints and comprehensively modernize and transform the air transportation system."

Former NASA scientist Dr. Bruce Holmes, who is now working for DayJet as its "Chief Strategist for Next Generation" discussed NextGen at the International Air Taxi Convention ("IATC") that wrapped up on Friday, January 25th. If you have researched the SATS program, you know that Dr. Holmes was planning and dreaming about "on demand" air services many years ago. In an 60 Minutes interview in April of 2005, Dr. Holmes stated: "The first wave in the transformation of air travel is coming fairly soon to an airport near you . . . in the next year or two . . . . It's the ability to hail a 'jet cab' and take it to your destination." He was right in 2005 as "on demand" air taxis are up and operating. As such, I like to listen to his predictions about the next few years. His IATC presentation focused on how the aircraft operating by air taxis are positioned to be the NextGen "earliest of early adopters" with respect to leveraging new technology.

In light of the technologically advanced state of the avionics systems incorporated in NextGen aircraft, Dr. Holmes stated that three components will allow for more efficient air travel and therefore the conservation of natural resources and less pollution. In other words, the industry can save a ton of fuel and reduce carbon emissions by utilizing this technology to enable more direct point-to-point routing and providing for the possibility of fewer missed approaches and diverts. The high tech equipment in the aircraft allows for implementation of such efficiencies. The three components that NextGen will employ are discussed below.

Required Navigation Performance

First, modern avionics equipment will allow for the implementation of Required Navigation Performance (RNP). These are "super precision" approaches that are guided by GPS inputs. RNP was explained years ago by the FAA's video "Highways in the Sky." A great innovative company in Washington state, Naverus, was started by a couple of bright Alaska Airlines pilots in early 2003. They had developed and realized the benefits of RNP on their flying in Southeast Alaska back in 1992.

Today, Naverus has developed many RNP procedures worldwide including for airlines in Canada, New Zealand, Australia, China. In fact, the Chinese government recognized the value of RNP years ago and hired Naverus. You can see a copy of the 2006 China certification flight on the Naverus website. On that video, the aircraft uses precision RNP to maneuver through the beautiful mountainous terrain of the 95 mile approach to the Lin Zhi airport in Tibet. Most of Naverus' customers are international although US carriers are finally coming on board. There are significant terrain avoidance safety and environmental benefits of RNP including fuel savings, lower emissions and less noise impact. With sophisticated avionics suites, NextGen aircraft like Eclipse are outfitted to utilize RNP. In fact, DayJet is currently working with the state of Florida and the FAA for approval of RNP routes.

Automatic Dependent Surveillance Broadcast

Second, the development and implementation of Automatic Dependent Surveillance Broadcast (ADS-B) will add further efficiencies. Replacing radar as the primary method of aircraft separation and control, ADS-B will provide both the cockpit and the control towers with real time, detailed displays of air traffic. Strongly supported by Captain Karen Lee and industry leader UPS for many years, ADS-B likewise means much more efficient separation, control, and direction of aircraft. It means decreased manpower costs. Last summer, the FAA awarded a $1.8 billion contract to ITT to build, own and operate the ADS-B ground stations. Dr. Holmes stated that ADS-B provides for 1000 times more accuracy than the current radar-based system at 1/1000 of the cost. That's a fairly significant differential.

As reported by Aviation Week, UPS will be utilizing ADS-B at its Louisville, Kentucky hub. By eliminating low altitude ATC vectoring, UPS expects to cut noise and emissions by approximately 30% and save 40-70 gallons of fuel for each arrival. Even more relevant, in light of the recent multiple reports of runway incursions, ADS-B also will allow the development of a companion ground-based surface aircraft location system. The new air taxi platforms will have ADS-B capability. The environmental and safety benefits recognized by UPS will be a "turn key" benefit of the air taxi market. The FAA has published a formal Notice of Proposed Rulemaking on the implementation of the ADS-B system on the federal docket. Comments are due in a month by March 8. 2008.

Digital Radio Communications

Third, providing for digital radio communication in the aircraft in Internet protocols will significantly enhance air taxi operations. Dr. Holmes described this as enabling a pilot to accomplish and communicate everything in the aircraft that one can accomplish today sitting at a desk with Internet connectivity. All essential communications -- clearances, weather, flight plans, NOTAMS, ATIS -- will be handled digitally thereby minimizing voice communications. That makes a lot of sense. Much of what used to be arranged by phone conversations, we now use and prefer to use the Internet. In fact, many get upset if an Internet reservations system is not available resulting in having to use the phone.

Conclusion

The NextGen system is enabled by implementation and utilization of existing technology in the aviation sector. The above technological enhancements will result in direct versus airways travel. They will decrease missed approaches due to errors in aircraft sequencing and separation or adverse weather. They will allow more efficient air travel and fuel savings while simultaneously enhancing safety. For example, a Cirrus can get 18mpg and an Eclipse with its Pratt & Whitney Canada PW600 advanced engines is currently carbon neutral compared to driving your SUV. With the implementation of RNP, ADS-B, and digital comms, Dayjet predicts its aircraft will be greener than driving. While there will continue to be significant debate on the proposed budget and some balance between funding AIP and NextGen is needed, the DOT's and FAA's strong desire for implementation of NextGen is entirely appropriate to push the system into the 21st century.

By the way, Acting Administrator Bobby Sturgell has a solid background. In fact, before going to the FAA, he was a Naval Officer and then an aviation lawyer, like me. His confirmation hearing is set for tomorrow morning.

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