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Only airlines could become stockholders, and no one airline or affiliated group could own more than 20 percent of the stock. Users of ARINC services, including private planes, would be charged in proportion to their use at rates sufficient to cover all expenses. In its early years ARINC was something of a skeletal organization, existing primarily as the FRC/FCC licensee and operating mostly as a coordinating body. Airline personnel installed and operated all the actual communications equipment. ARINC, however, took a leading role in developing improved radio navigation equipment during the 1930s. Operating in the interest of all the airlines, it served as the interface with companies such as Western Electric, Bendix, and RCA that pioneered in developing the hardware. It was ARINC, rather than the government, that led the way in developing such systems as airborne VHF radio, omnidirectional navigation beacons (VOR), and “blind landing” systems (ILS), often overcoming the reluctance and conservatism of the Bureau of Air Commerce and later the CAA. From 1930 to 1934 ARINC provided the only voice communications between air and ground en route, during approach, and at airports. When the need for controlling traffic (“fight following”) became apparent in the Chicago area in 1934, it was ARINC that led the way in coordinating airline efforts. In 1935 ARINC set up interline agreements among the airlines serving Chicago and Newark to provide for a unified ATC procedure at each airport. The first Airway Traffic Control Center was set up at Newark on December 1, 1935, with costs shared among the airlines in proportion to airport use. Airline personnel trained at Newark for setting up other centers-the second one at Chicago (in April 1936) and the third at Cleveland (in June 1936). Each center controlled airline traffic within 50 miles of the airport, using the airline/mc radio operators at each field. The fledgling air traffic control system apparently worked quite well.
PARALLEL with these developments, however, pressures were building toward a greatly expanded federal role in aviation, pressures that would culminate in the Civil Aeronautics Act of 1938 with its substantial economic assistance to the depression-plagued airlines. As part of this gearing up, the Bureau of Air Commerce asserted federal responsibility to establish “a uniform and centralized system of airway traffic control...to direct and coordinate the progress of all flights, whether government, civil, or commercial, over the Federal Airways.”In line with this thinking, on July 6,1936, the bureau took over the three existing traffic control centers and by the end of the year had established five more. The airlines did not protest this take-over; indeed, they welcomed it. At the height of the depression, here was one less item they had to include in their hard-pressed budgets. ARINC, as a “subsidiary” of the airlines, was in no position to object to this loss of its fledgling ATC business. Besides, it had its hands full developing new forms of communications systems. ARINC was not out of the ATC business altogether, however. First of all, up until 1946, all CAA traffic controllers still communicated with ARINC, which transmitted their messages to the flight crews. Only in the late 1940’s and early 1950s did the CAA develop its own ATC radio links, leaving the ARINC channels strictly for company messages. But while losing one ATC role, the late 1940s firmly established ARINC in another. Until the late 1940s overseas flights still carried radio-telegraph operators, who sent and received Morse Code messages. The CAA was committed to continuation of this obsolete method and built new long-range radio-telegraph stations in San Francisco and New York. When United and Northwest received new routes from the West Coast to Hawaii in 1948, ARINC and the airlines decided the time was at hand to switch to voice communications. ARINC built four high-powered, high-frequency overseas stations—at Seattle, San Francisco, Los Angeles, and Honolulu. Needless to say, voice communications proved to be technically sound, and the change eliminated the need for a telegraph operator in the cockpit—a substantial cost savings to the airlines. Over the next few years this process was repeated in the Caribbean and then on the North Atlantic. The CAA eventually shut down its radio-telegraph stations and now contracts with ARINC for all ATC communications from the five overseas “gateways”: New York, Miami, San Juan, San Francisco, and Honolulu. ARINC also became further involved in ATC over seas during this period of time. It was ARINC that provided the advice and expertise leading to the formation of USA in Mexico and RACSA in Cuba. ARINC also worked with aviation groups in Venezuela, Colombia, Peru, and China to set up similar companies, not always with the same degree of success. Wherever an organization was successfully created (whether private or government), both communications and ATC services were provided, with funding based on user charges. Decades of interfacing with the bureaucratic CM had taught ARINC valuable lessons about the efficiency of government versus that of the private sector. Today, ARINC stands in marked contrast to the FAA. It is recognized as a world leader in aeronautical communications. Its specifications for standard avionics equipment are in use throughout the world. It continues to be a leader in advancing the state of the art and has set up a for-profit subsidiary, ARINC Research Corp., that does $10million a year in applied systems engineering. h c , or a company modeled after it, could readily take on the task of operating and upgrading America’s ATC system. The examples of ARINC, RAMSA, Radio Schweiz, and the others demonstrate quite clearly that ATC services can be provided by a fully private company, funded entirely by user charges. The risks of creating another Amtrak or US Postal Service by insisting on government participation in or sponsorship of an An:corporation are far too great. To ensure the highest degree of safety and cost effectiveness, a truly private-enterprise operation is clearly the only way to fly.
GIVEN THE FAA’S record with the ATC system,it’s not surprising to hear complaints, also, about its competence as a safety enforcer. Aside from its inherent limitations as a large government bureaucracy, what makes the agency ineffective asa safety regulator? Critics point out that the FAA is faced with a built-in conflict of interest. The Federal Aviation Act directs it to “encourage and foster the development of civil aeronautics and air commerce,” in addition to promoting safety. The FAA interprets this to mean looking after the economic well-being of the aircraft and airline industries. Yet in the day-to-day businesses of designing planes and running airlines, the potential for conflict between economics and safety is, unfortunately, very real.
The FAA’s safety efforts are embodied in its Federal Air
Regulations (FARs). The FAA’s role is to promulgate, via FARs, the
minimum required safety standards, leaving it to manufacturers and
operators, respectively, to decide whether and to what extent to
exceed the requirements. Any such system is only as good as the
adequacy of the standards themselves and the adequacy with which
they are enforced. The FAA can be faulted on both counts. The
airworthiness FARs (design standards) frequently lag far behind the
state of the art. For 14 years, from 1961 to 1975, the basic FARs
remained unchanged, while technology proceeded apace. To patch up
the gaps, the FAA issued various Special Conditions on an ad hoc
basis; as manufacturers came up with new design features, the FAA
thought up new Special Conditions that would accommodate them. The
design of the DC-10, for example, required 30 pages of Special
Conditions, covering such features as its unique three-bogie main
landing gear, its emergency exits, fire-proof materials, flight
controls, and propulsion system. The industry tail wags the FAA
design standard dog. As noted earlier, the FAA does not itself
carry out most of the detailed work of aircraft certification. On
large (transport) aircraft, about 70 percent of the inspection and
compliance work is delegated to the manufacturer; for light
aircraft there is up to 90 percent delegation. What this means is
that certain company personnel wear one hat during regular work
(for example, as test pilot) and another hat when acting as the
FAA’s representative (as FAA certification pilot). The potential
conflict of interest is clear.
One of the first public exposures of the inadequacies of the FAA-supervised design process occurred in 1970 when two young aeronautical engineers, associates of Ralph Nader, published a report on light-aircraft crashworthiness. On the basis of their carefully researched study, James Bruce and John Draper concluded that “one-half of all general aviation fatalities...were unnecessary,...the victims of negligence in the field of crash safety engineering.” Bruce and Draper noted that, although the human body can withstand loadings of up to 20 times the force of gravity (20g) vertically and 40g laterally, the FAA requires light aircraft cabin structures to be able to withstand only 3g upward, 9g forward, and 1.5g sideward. The standards, of course, are minimums, not maximums, and manufacturers are free to do better. Indeed, some do exceed the standards. Both Beech and Helio design their planes’ cabins using a tubular frame that can withstand high crash loads and configure the wings so that failure is possible only outside the fuselage. All fuel tanks are located in the wings, to minimize the danger of a cabin fire in the event of a crash. The other two major light-plane builders—Cessna and Piper—build their cabins out of sheetmetal, meeting only the minimum FAA crash-load criteria. It’s not that they don’t know how to build safer airplanes—both build cropdusters, in which crash survivability is an essential sales feature. But nobody mentions comparative safety levels in selling business and pleasure craft. So Cessna and Piper continue on their way, translating a lighter but less safe structure into slightly lower prices or slightly higher performance. The customer takes safety for granted because he knows all planes on the market have received a certificate from the FAA. He therefore assumes them to be equally safe. The light aircraft manufacturer’s trade group, GAMA, strongly opposes higher FAA design standards.
Despite Beech’s good record on crashworthy design, the company’s
safety consciousness leaves much to be desired. In 1961 it
discovered that during certain maneuvers the fuel intake ports on
its Bonanzes could become exposed, sucking in air instead of fuel
and causing the engine to fail. For four years the company did
nothing, meanwhile bringing to market a new luxury plane, the
Baron, using the same fuel system. Finally, in April 1965 it issued
a Service Letter (analogous to a Service Bulletin) describing the
problem in innocuous terms and stating, “This does not create a
hazard but can be disconcerting.” Six month later, in October 1965,
came the first of a series of Baron crashes, caused by unexpected
engine failure due to un- porting of the fuel intake. The CAB
investigator (the CAB investigated crashes prior to creation of the
NTSB in 1967) test-flew a Baron in February 1966 under minimum-fuel
conditions and identified the unporting problem. In January 1957
the CAB recommended an evaluation of the Baron’s fuel system
design. But the FAA was not impressed. It maintained that no FARs
had been violated in the Baron’s design and that the unporting
problem could only occur during maneuvers that the plane was never
intended to perform. Meanwhile, Barons continued to crash. Finally,
in 1968 an FAA test pilot flew a Baron, repeating the earlier CAB
pilot’smaneuvers. His recommendation: ground the Baron until a
design change could be made. But his report never saw the light of
day at the FAA. By the end of 1968, after five Baron crashes, the
FAA finally issued an AD: it required, not a design change, but a
warning placard in the cockpit. Although Beech finally changed the
design of all new Baron fuel systems in 1970, it was not until two
of the crash cases were litigated-one settled out of court for
$325,000 and the second resulting in a jury verdict of $21 million
that Beech in 1972 issued a modification kit to correct the problem
on pre-1970 Barons. The FAA did not require the modification, nor
did Beech provide it as a routine product improvement; owners who
wanted it had to buy and install it at their own expense. A similar
reluctance on the FAA’s part has been evident in cases involving
commercial transport aircraft. In July 1970 an Air Canada DC-8
crashed on landing at Toronto, killing 109 people. The first
officer had accidentally deployed the spoilers while the plane was
still 60 feet off the runway, causing it to slam into the
The spoilers are designed to kill the wing’s lift once the the aircraft has touched down; it is extremely dangerous to deploy them in flight. Yet The DC-8 design was not fail-safe in this regard; the spoiler handle could easily be moved into the “deploy” position instead of the “arm” position, as had occurred in the Air Canada crash. In August the manufacturer, Douglas Aircraft, sent a cable to all DC-8 operators warning that spoilers should be used only on the ground; no mention was made of the Air Canada crash. The FAA’s western regional office prepared an AD calling for a warning placard to be placed beside the spoiler handle in the cockpit reading “Deployment in Flight Prohibited .” Douglas, Eastern Airlines, and the Air Transport Association protested the AD as unwarranted, but it was nevertheless issued in December 1970. In October 1971 a European DC-8 crashed due to spoiler deployment 15 feet in the air; no lives were lost, though the plane was damaged. In November 1972 a Japanese Airlines DC-8 crashed near Moscow under conditions suggesting in-flight spoiler deployment; 61 people perished. In June 1973 an Icelandic DC-8 crash landed at JFK due to inadvertent spoiler deployment at 40 feet; 38 people were injured and the plane sustained major damage. In August 1973 the FAA’S eastern region drafted a proposed AD to make spoiler activation impossible in the air and sent it to the western region to be issued.
The western region rejected it, because Douglas was about to issue a Service Bulletinon its own. The SB was issued-as a routine product improvement,not a safety item—in October 1973.Finally, in January 1974, four years after the first crash, the western region gave in and issued an AD making the Douglas SB mandatory. The pressure on FAA regional offices to cancel ADs in favor of non publicized SBs can be intense, as the Turkish Airlines DC-10 and the DC-8 spoiler cases demonstrate. Captain Brian Power- Waters, a 22-year veteran of airline flying, cites additional recent cases in which proposed ADs were canceled after manufacturer protests: Lockheed L-1011 rudder pedals were jamming, causing serious control prob- lems. Lockheed L-1011 auxiliary power unit exhaust shroud seal was a potential fire hazard. Lockheed L-1011 passenger oxygen masks failed to deploy when needed. Boeing 747 escape slides failed to operate normally. The FAA takes the economic interests of the aircraft manufacturers very seriously. Consequently, one can wonder how objective FAA certification criteria would be even in the absence of the delegation- of-authority system.The FAA, in enforcing its design standards, gives every appearance of following the classic pattern of a regulatory agency captured by the industry it allegedly regulates. Aircraft and component manufacturers have built up long- standing relationships with FAA personnel and offices. One former FAA official notes that “the smart manufacturers shop different FAA districts to get their hardware certified because each district has a different attitude toward standards.” The FAA’s 1975 task force acknowledged the existence of this region-shopping problem.
IN RECENT YEARS the inadequacies of the FAA’s certification activities have been coming to light. In 1973 the General Accounting Office released the results of its year-long investigation of certification in the light-aircraft industry. The FAA’s failure to closely monitor the design process, said the GAO, “has contributed to design safety hazards in light aircraft.” Not only are planes with design defects certificated, but once the weaknesses are discovered, the FAA takes inordinately long to correct them, as we have seen. The GAO cited (without naming names) the Beech Baron case as one of several prime examples. It also pointed out that because the FAA does not itself participate in the design and test phase, it cannot influence the design until problems show up in the field, after the plane is in service. In 1974 the House Special Investigations Subcommittee, headed by Rep. Harley Staggers, issued a massive report documenting the failure of FAA safety efforts. The report cited numerous examples of what it called administrative foot-dragging by the FAA in requiring manufacturers to make changes to improve safety. Its actions to promote air safety “have been unreasonably delayed, or omitted entirely, because of an over solicitous attitude on the part of some within the agency concerning the economic well-being of the aircraft industry or the air carriers.” Other members of Congress agreed. Sen. Howard Cannon noted that the handling of the DC-10 cargo door problem “calls into question the entire regulatory relationship” between the FAA and the industry. Sen. Vance Hartke concluded simply, “The FAA is a prisoner of the industry it is supposed to regulate.” After the Turkish DC-10 crash, the GAO conducted another investigation, looking into the matter of “regulatory lag.” It documented the extent of the problem, finding, for example, that it took an average of 28 months from the time a safety rule was first proposed until the final version was issued and that the rule would typically have been under study for another year prior to the rule-making process actually beginning. During its one-year study GAO identified 47 NTSB recommendations “most critical to the preservation of life” that the FAA had not acted on and asked the FAA to report their status. It took the agency three months just to figure out their status and reply to the GAO!
Regulatory lag was still a live issue in 1977. After the collision of two 747s at Tenerife, Rep. Elliot Levitas reported finding 135 instances in the previous eight years in which the FAA rejected NTSB recommendations and 281 cases in which it agreed with the board but had not implemented them fully—including 95 dating back three or more years. Economic-hardship claims by the manufacturers and airlines were frequently the major factors in causing the delay, modification, or rejection of the recommendations. The same issues that apply to aircraft design—inadequate or outmoded FARs, delegation of authority, economics versus safety-also apply to airline operations. Various FARs define minimum qualifications for operating personnel, spell out what are considered to be safe operating conditions, and specify minimum maintenance requirements. How do these FARs measure up? To begin with, the FAA attempts to cover itself by making rules spelling out every thing possible.“We are regulated to death,” states Captain Power-Waters. But new FARs don’t replace old ones; they’re simply added on to an ever growing jumble. As a result, “Most of the regulations in use today are as ancient and useless as the landing aids that were put into operation 30 years ago. The 747s operate under the same regulations originally drafted for the DC-3,” says Power-Waters. Many are absurdly deficient on their face. FAR 121.687(b), for example, requires that every flight carry a copy of the “latest available” weather report for each stop. If the weather teletype is out of service and only last week’s weather is available, it is perfectly legal to use, so long as it’s the latest available! And with the proliferation of regulations, “There isn’t a pilot in the sky today who doesn’t break at least one regulation every time he flies. It is practically impossible to comply with one regulation without infringing on another.” One indication of the inadequacy of the FARs is provided by the FAA itself. The agency’s rules for operating its own fleet are far more stringent than the minimums required for commercial airlines. FAA pilots must have at least 48 hours of pilot time within the prior 12 months to legally fly a plane; there is no such air-time rule for commercial pilots. They need only have made three takeoffs and landings within 90 days; FAA pilots must have made five. All FAA pilots who fly jets over 25,000 feet must obtain physiological training—for example, simulated decompressions in a pressure chamber and other emergency procedures. No airline crews get such training. Other FARs set forth minimum maintenance standards. These cover both routine, scheduled maintenance and procedures for dealing with in-service failures. Maintenance is carried out by airline personnel; all such work must be at least supervised and signed off by a mechanic licensed by the FAA. The agency maintains a corps of inspectors who spot-check the airlines’ work, looking at log books and talking with supervisors.
It is impossible, given the FAA’s limited personnel, to check
out everything. Each of the --odd maintenance inspectors is
required to check only four aircraft logbooks per month, covering
only the previous two weeks. Inspectors work only a regular
eight-hour day, five days a week, while airline operations continue
round the clock. The system “works” (more or less) because airlines
can’t afford to take serious shortcuts, since this would end up
costing more than it saved; the overall record-keeping and
inspection system provides for tracing failures back to the
responsible parties in the event a problem is discovered; and the
FAA can penalize violators by fines of up to $l,OOO a day.
Nevertheless, many observers think the FAA is doing as sloppy job of maintenancesupervision. Some airlines are more conscientious about maintenance than others, but this information never becomes public. Mechanics who observe violations of safety regulations have no means of reporting to the FAA (unlike pilots, w h e a t least during certain years-have been able to report near misses and other incidents to the FAA under an “immunity” program).
THE CONFLICT between safety and economics makes itself felt most strongly when it comes to keeping flights on schedule. If certain aircraft components have become inoperative, the key question becomes, Is it safe to fly without item X, or must the flight be delayed while it is repaired or replaced? The Air Transport Association and the FAA have developed for each type of commercial aircraft a Minimum Equipment List. The MEL specifies the equipment that must be operational for a flight to proceed. Obviously, trade-offs must be made in establishing such lists-dollar losses in delayed flights and angry customers must be weighed against the potential of lost lives and destroyed planes. Critics charge that the FAA yields too readily to trade-group pressure in making up MELs that keep flights operating at the expense of safety. Crashes have occurred because flights have been dispatched with equipment that was inoperative but legal according to the MEL. Further problems occur when the MELs themselves are not strictly adhered to. The International Association of Machinists contended in recent testimony before the House Government Activities and Transportation Subcommittee that “in a lot of instances where scheduled departures (which are money) are involved, the manual and MELs go out the window....[The FAA inspectors] are rarely, if ever, around.
The check and balance system gets out of kilter when an over-eager management-level supervisor ignores or signs off an aircraft problem in order to make a scheduled departure.” Captain Power-Waters cites many examples of pilots of certain airlines being disciplined for refusing to depart on schedule due to inoperative equipment. When violations of FARs do come to light, the FAA too often responds with a mere slap on the wrist. In 1970 Mohawk Airlines received notice from the FAA that they had violated a number of FARs, covering such items as inspection of fire extinguishers, flap actuators, rudders, and navigation system components. Some of the required inspection intervals had been exceeded by hundreds of flight hours, and ILS was two and a half years overdue for inspection. Despite the seriousness of the violations and the FAA’s ability to to levy fines of up to $1,000 per day for each violation, it offered to settle for only $50,000. Even then, Mohawk was able to negotiate a settlement of $20,000. What we have, is a system whose incentives are badly out of whack. The manufacturers and the airlines have an economic incentive to cut corners—not in major, obvious ways, to be sure, but in those borderline areas where cost trade-offs must always be made. And the record makes clear that a number of these trade-offs have led to tragedy. The FAA has no clear-cut incentive to promote higher levels of safety. To begin with, it has the dual mission, by statute, of promoting both safety and aviation’s economic well-being. And then, of course, it is a government bureaucracy. That its basic motivation is, for the most part, self- preservation was candidly admitted two years ago by one FAA staffer during NTSB’S hearings on the crash of TWA 514. “Safety suffers when everybody is more interested in protecting their tails than trying to make air travel more safe,” he said. Why this attitude? “FAA is running from millions of dollars in liability,” he continued. “If changes are made, the assumption is made that the changes are an admission of responsibility. Consequently, change is resisted.”The FAA has painted itself into a comer.
As the government agency supposedly taking care of air safety, it is assumed to know what it is doing. Insurance companies and the travelling public assume that all airline and aircraft are equally safe, because they all have the FAA’s continuing seal of approval. Any sort of consumer consciousness of safety has been driven out of the system. All the while the FAA’s outdated, contradictory, minimum standards are exceeded by some, adhered to by others and flouted by still other. The crashes keep occurring. Lives continue to be lost. Twa 514 (92 lives); Turkish Airlines Flight 981(346 lives); Pan Am and KLM Boeing 747 sat Tenerife (581 lives) - and many, many others.The conscientious manufacturers and airlines are indistinguishable from the comer-cutters, in the minds of the public and the insurers, because the FAA has blurred the distinctions and cast its deceptive blessing over them all. We all pay for it-in higher fares thanks to higher insurance premiums, and in lives. Isn’t there a better way?
AGREEMENT that the FAA is failing in its safety responsibilities
is widespread outside of the agency. The FAA’s deficiencies are
just too glaring to be ignored. Yet suggested solutions are few,
and largely unsatisfying. Activist groups like the Aviation
Consumer Action Project and the staffs of various congressional
committees all favor “reforming” the FAA in some manner—finding
better managers, hiring more competent engineers, removing its
mandate to promote commercial success, etc.
But the bottom line of all these suggestions would still leave us with a government bureaucracy. It would still suffer from a civil service mentality. It would still be subject to political control. It would still rely largely on industry personnel. Even if it started out with a clean slate brand new FARs, completely new, well-qualified staff, a new charter, a bigger budget-it would be only a matter of time before the classic regulatory agency pattern repeated itself and we’d be faced with the same problem all over again. The fundamental problem is that of incentives. The incentives facing an agency like the FAA ultimately turn out to be those of self-preservation. It preserves itself best by developing smooth working relationships with the industries it regulates. The industries, in turn, are motivated by self-interest—to make profits selling planes and carrying passengers. The FAA’s only motivating tool, for either its own personnel or those of industry, is fear—fear of violating regulations. Yet fear is an ineffective motivator. Modem management has come to rely effectively on participative, rather than authoritarian, means of motivation, rewarding good performance rather than punishing mistakes. The incentive structure needs to be turned around so that both industry and the external entity are motivated by positive goal attainment rather than by fear of noncompliance. But is this possible? We are so used to thinking about forcing compliance with safety rules that the idea of motivating compliance’ may seem fanciful at first. Studied from this angle, the dimensions of a solution become apparent. If there were no government safety regulation, there might be lots of crashes; that would mean lots of lawsuits against airliness and aircraft producers; and then the insurance industry would be on the hook. Since aviation underwriters would be the ones ultimately accountable for the costs, it is they who would have the greatest economic incentive to make sure flying is safe.
IS THERE ANY REASON to think the insurance industry would be able and willing to do so? History provides an enlightening example. In the 1860’s the fire protection industry was in something of the state aviation was in during 1920s. Fire departments were relatively haphazard outfits, frequently thrown together by well-meaning but untrained volunteers or by small, undercapitalized companies. Fire insurance rates were chaotic, varying greatly from place to place and bearing no apparent relationship to actual loss potential. To bring some order to the industry, representatives of the major fire insurance companies got together in 1866 and organized the National Board of Fire Underwriters. At its first annual meeting, in 1867, NBFU urged its local affiliates to inspect buildings, fire departments, and water supplies as factors in determining insurance rates. In 1873 the seventh annual meeting recommended that local boards appoint standing committees to examine local fire departments and water supplies“and to endeavor to have needed improvements made therein.” Already, a feedback effect was taking place. In 1890 the national board appointed an inspector of fire departments, fire patrols, and water supply. The first such inspector began work on July 1,1890, inspecting 52 cities in his first 11 months on the job. But obtaining compliance was still a problem. NBFU resolved to work on methods of inducing cities to follow through on the inspector’s recommendations, noting that “until they do take measures for improvement, we are able to take such measures as are consistent with our own safety as underwriters, whether by means of rates, or a refusal to accept certain risks.”