FAA Regulation of Overseas Maintenance Providers Should Concern Everyone

Most U.S.-based aviation maintenance workers didn’t bat an eyelash when, on March 17, the Federal Aviation Administration (FAA) issued an Advanced Notice of Proposed Rulemaking (ANPRM) regarding controlled substance and alcohol testing of Part 145 repair station employees located outside the United States.

However, given the global nature of the industry, all repair stations must be alarmed; indeed, the FAA’s handling of this rulemaking will be closely monitored as the stakes are significant.

The agency’s actions are a direct result of a congressional mandate in the FAA Modernization and Reform Act (P.L. 112-95; enacted, Feb. 14, 2012). It’s troubling when Congress meddles in aviation policy generally, particularly international issues. Even more disconcerting is when it’s an aviation maintenance matter. Notwithstanding repair stations’ substantial economic impact on communities throughout the United States (and the world), it’s still the least visible and poorly understood segment of the aviation industry.

Ignorance of repair stations’ operations combined with unfamiliarity about the complexities associated with regulations from various civil aviation authorities, international agreements, and sovereign countries’ laws will produce negative outcomes here at home. Here’s how:

FAA (and congressional) intrusion in a sovereign country’s laws and regulations threatens current and future international aviation accords (Bilateral Aviation Safety Agreements (BASA)). BASAs are government-to-government arrangements that allow cooperation between aviation safety regulators in areas including design, production, flight operations, environmental certification, and maintenance. These agreements are an important factor contributing to the growth in domestic aviation services.


Economic impact of BASAs

BASAs dramatically reduce regulatory compliance costs for the aviation maintenance industry, make government oversight more efficient, help repair stations be more profitable, and ensure the continued global competitiveness of the U.S. aerospace industry. While the United States has concluded more than 30 BASAs, maintenance sub-agreements exist only with Canada and the European Union.

A 2011 study conducted for the Aeronautical Repair Station Association examined the economic impact of existing maintenance BASAs on certificated repair stations[1].The report found it costs repair stations significantly more (almost three times as much) to become certificated by “foreign” civil aviation authorities (CAAs) when the home country does not have a BASA. The study determined that initial FAA certification for a repair station located in the United States on average costs a little over $15,000. Approval by the European Aviation Safety Agency (EASA) for U.S. facilities costs slightly less (around $11,500). EASA certification is less expensive because the EU’s BASA with the United States allows the FAA certificate to serve as the basis for EASA approval. By contrast, the cost for a repair station in the United States to become certificated by the Civil Aviation Administration of China (CAAC) is more than $30,000.

Additionally, BASAs help make repair stations more profitable. On average, FAA certification renewal costs consume two cents of every dollar generated by the FAA certificate, while EASA renewal consumes about four cents. By comparison, renewing a CAAC certificate consumes 16 cents of the average revenue dollar it generates. In addition, non-BASA certificates typically generate lower revenues (relative to FAA/EASA business). High certification costs therefore make the work more expensive — and less profitable — for the repair station.


Government overreach

Unfortunately, U.S. government overreach can threaten these important accords. In fact, the U.S.-E.U. agreement was delayed (and almost collapsed) because of efforts to impose drug and alcohol testing on foreign maintenance providers in sovereign countries (despite strict laws prohibiting it). ARSA, industry allies, and international CAAs succeeded in moderating the FAA Modernization & Reform Act’s final language to ensure that drug and alcohol testing is consistent with the applicable laws of the country in which the repair station is located, allowing the U.S.-E.U. BASA to move forward. Now we must ensure the FAA follows the law as written and that our international agreements remain intact so the U.S. can forge more aviation alliances with our key trading partners.

Finally, national sovereignty is a backbone concept; other countries cannot tell the United States how to control or govern its citizens. We should afford similar respect to citizens of other countries or else we risk retaliatory measures that further impede domestic economic growth.

The entire aviation industry should actively engage the FAA and Congress on this rulemaking. It’s no longer acceptable to ignore international issues; all repair stations must stand together to prevent government micromanagement and ensure the continued use of (and adherence to) BASAs. Economic growth and global competitiveness are at risk, as is your repair station’s profitability.

[1] For the complete study see “Bilateral Aviation Safety Agreements: Reducing Costs for the Aviation Industry”, found on ARSA’s website at the following link: http://arsa.org/wp-content/uploads/2012/09/ARSA-BASAs-ReducingCostsForTheAviationIndustry.pdf.