Bernie Madoff, in 2008 the New York Post called him ”The Most Hated Man in New York.” Why? Because Bernie Madoff organized and directed a $50 billion financial investment empire which was found out, after many decades of operation, to be the largest Ponzi scheme the world had ever seen.
But how did Bernie get away with his schemes for so long in an industry as regulated as the financial investment industry? This answer is simple: No one, not the individual small investors, nor the large banks and investment firms, not even the SEC itself, wanted to change the fact that Madoff Investments was paying steady and reliable returns, even when the volatile stock market would go through its many ups and downs.
The reason? Bernie Madoff being a crook and running a Ponzi scheme was an inconvenient truth that no one wanted to face when all the investment firms using Bernard L. Madoff Investment Securities were paying reliable returns to their own investors thanks to their investment with Bernie. Everyone, it seemed, was making money when they invested with Madoff Securities.
Today, in business aviation, single aircraft operators, large multi-aircraft flight departments, even FAR Part 135 certificate holders and aircraft sales and management companies continue to profit despite having to use, and rely on, dysfunctional paper records for an aircraft’s history and proof of its Airworthiness.
This is aviation’s inconvenient truth.
Maintenance, of course, is most negatively affected by paper records. But, at the same time, maintenance is also its biggest beneficiary. Millions of dollars are spent every year by aircraft brokers, accountants, legal departments and the operators themselves for skilled maintenance personnel to seemingly and somewhat magically, glean information needed from an aircraft’s chaotic paper record in order to prove the aircraft’s Airworthiness. Aircraft whose records can’t pass the muster are simply destined to be sold at reduced prices. Many times, these same aircraft resurface as FAR 135 candidates whose value is then restored once the aircraft passes through the gauntlet of FAR 135 configuration and is on certificate. Again, it is maintenance that requires the enormous amount of money and manpower needed to make this happen. This not only equates to job security of skilled maintenance personnel, but in a somewhat disquieting manner seems to justify employment and salaries in the minds of these skilled merchants of Airworthiness.
More often than not, paper records do not become a factor in an aircraft’s daily flight readiness. Every operator uses its dysfunctional paper recordkeeping system in the same manner, with company ordained coping mechanisms. Often this means the records are locked away in an office or cabinet, not to be consulted for the all-important flights the aircraft will make. In this way, the paper recordkeeping system does not interfere with, or disqualify an aircraft in its day-to-day operations.
The reality is that most aircraft owners are unaware, and are never made aware, that so much of their money is spent accomplishing the business of their aircraft’s administration because of our use of such a grossly obsolete and dysfunctional recordkeeping system.
But just the same as with the Bernie Madoff syndrome; when so many are benefitting in spite of an inconvenient truth, that truth is often minimized in order to keep the status quo. Acknowledging the truth and doing something about it frequently means disruption on a grand scale. More often than not, only eminent disaster is enough to get the attention the truth deserves.
And so, it is in business aviation; we continue to use paper records to buy, sell, operate, and prove the Airworthiness of an aircraft, despite the cost to the aircraft’s owner and the hardship if places on everyone involved. Why? Because it’s working. And everyone it seems, is making money in our industry with a paper recordkeeping system in place. So why change?
As an industry, we need to ask ourselves, is this the best we can do? Are we willing to continue to accept this inconvenient truth? Or are we ready to disrupt the status quo and move from paper records to digital before eminent disaster appears on the horizon and forces us to change.
That shouldn’t even be a question in an industry responsible for creating and operating aircraft that fly faster, travel farther, and operate more efficiently than ever before. Technology helped us get these aircraft to where they are today. Isn’t it about time we apply this same technology to recording the important maintenance history and airworthiness of these amazing machines?
Larry Hinebaugh is currently the executive director of a non-profit company called The Foundation for Business Aircraft Records Excellence. Hinebaugh was instrumental in creating this company after seeing so many aircraft operators inconvenienced, and aircraft owners financially harmed, by our industry’s poor logbook practices. A 40-year veteran of the business aviation Industry, Hinebaugh started his career as an A&P technician in a small jet maintenance shop in California and has since worked as a field service representative for Gulfstream Aerospace, director of maintenance for several corporations operating large business aircraft, and president of Aviation Consulting Group providing maintenance and completion representation to companies operating aircraft from Cessna’s to Boeing’s; before accepting his position with Business Aircraft Records (BAR).
