US airlines send out more repairs, oversight lags

WASHINGTON, March 29 Thu Mar 29, 2007 3:53pm EDT

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WASHINGTON, March 29 (Reuters) - Big U.S. airlines use outside companies for nearly two thirds of aircraft maintenance, but regulators do not have an adequate process for vetting contractors and the quality of their repairs, a government watchdog said.

Transportation Department Inspector General Calvin Scovel told Congress on Thursday ahead of a hearing that outsourcing to domestic and overseas maintenance companies is increasing and includes minor fixes, engine repairs and entire aircraft overhauls.

"Outsourcing maintenance has been a primary tool that air carriers have used in recent years to reduce costs," Scovel said in a written review of maintenance practices submitted to the House of Representatives aviation subcommittee.

Scovel's investigators have yet to complete their assessment, but he told lawmakers that outside contractors performed 64 percent of airline maintenance through the first nine months of 2006. The percentage was about half in 2004.

There are more than 4,200 domestic and 692 overseas maintenance facilities certified by the FAA, government statistics show.

Outsourcing of heavy maintenance, usually scheduled and the most expensive work, doubled in three years to nearly 70 percent in 2006, Scovel said.

Carriers sending big jobs to contractors include United Airlines UAUA.O, Continental Airlines CAL.N, Southwest Airlines (LUV.N), Northwest Airlines NWACQ.PK and Delta Air Lines DALRQ.PK. Delta and Northwest are in the final stages of bankruptcy restructuring.

American Airlines AMR.N does its heavy maintenance in house.

FALLING SHORT

A third of heavy maintenance was sent to Canadian-based companies or other overseas contractors, a point underscored by Scovel when assessing the quality of oversight by the Federal Aviation Administration.

"FAA still falls short in its oversight of oursourced airline maintenance," Scovel said.

For instance, Scovel said the regulator sought voluntary information from airlines about the volume of critical repairs by the end of 2006, but not all of the carriers had complied as of last week.

Carriers do not have to identify all of their maintenance contractors. Nor does the FAA verify what has been submitted.

"Without some form of verification, FAA cannot be assured that air carriers have provided accurate and complete information," Scovel said. He recommended a more thorough process.

Nicholas Sabatini, the FAA's senior safety official, said there is always room for improvement but that oversight is effective.

"The quality of maintenance is not compromised simply because it is not being done by an air carrier," Sabatini said in testimony to the subcommittee.

Sabatini said the agency has revised maintenance regulations to improve quality control and is developing risk management strategies for identifying design flaws or mechanical glitches so that inspections can be targeted.

Scovel also raised concerns about a shortage of federal maintenance inspectors and the use by airlines of repair facilities that are not certified by the FAA, meaning regulators have not signed off on a contractor's equipment, staff qualifications, capabilities for doing specific work and quality control.

Scovel repeated a warning his office issued in 2005 about airlines using non-certified facilities for major work. Historically, uncertified repair stations were used for changing tires or other minor tasks, but airlines have been scheduling bigger jobs in recent years.

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