Inspecting the Inspectors


Flying Blind, Flying Safe, by Mary Schiavo, New York: Avon Books, 373 pages, $25.00

If you've been paying any attention to airline safety during the past year, you could hardly have missed Mary Schiavo. The controversial former inspector general of the U.S. Department of Transportation was a frequent guest on TV talk shows in the wake of the ValuJet and TWA crashes, and advance publicity for her book this spring included a major segment on 60 Minutes and extensive excerpts in Time.

To some, Mary Schiavo is a courageous bureaucracy fighter who has finally told the public the truth about the incompetence of the Federal Aviation Administration. To others, including many aviation veterans, she is a "loose cannon." The truth is that she's some of each. Which makes her book, Flying Blind, Flying Safe, both valuable and frustrating.

Only an outsider-insider like Schiavo could provide ordinary people with authentic accounts of how badly off-track the FAA has gotten in its job of looking after aviation safety. As both a private pilot and a powerful Transportation Department bureaucrat armed with subpoena power, she knew enough to ask the questions that needed to be asked and to find the skeletons in the FAA's closet. But as a woman and a nonmember of the old boys' network of retired generals and admirals who circulate in the FAA's upper echelons, she was able to bring a fresh perspective to this troubled agency.

Thus, this is the first popular book to lift the veil and show air travelers how the FAA really operates. Schiavo shows the agency's corporate culture in action–starting with the administrator's butler, ceremonial office, and unlimited access to cockpit time in the agency's huge fleet of planes. More substantive are her accounts of Inspector General's Office investigations of such safety issues as shoddy FAA inspection practices and the use of "bogus" aircraft parts (parts not made by approved vendors and possibly made of inadequate materials). She provides chilling evidence of an agency whose people all too often simply go through the motions of regulating, but whose overriding concern appears to be throwing a comforting security blanket over air travelers.

Noting the very small number of violations turned up by FAA inspectors (less than 0.5 percent of inspections identified a violation), Schiavo learned that it was routine for the inspectors to call the inspectees in advance to let them know when they were coming. By contrast, special inspections, which used inspectors from other FAA regions, generally turned up far more violations. A number of General Accounting Office reports had criticized FAA inspection practices, but nothing had been done to change things.

That leads to another virtue of Schiavo's account: her exposure of the game playing that goes on in the name of congressional "oversight." She recounts several heartbreaking experiences of sharing in advance the details of I.G. investigations with leading House Aviation Subcommittee members, only to be sandbagged at the subsequent hearing by a senior FAA official who'd obviously been tipped off about the findings so he could prepare an obfuscating response. She also recounts grandstanding over FAA issues by members of Congress who had done nothing (and intended to do nothing) to solve the problem.

Schiavo provides a detailed account of the I.G. investigation into the FAA's squandering of $1.6 million to force more than 4,000 senior managers to endure New Age training seminars run by a devotee of a cult-like guru and spiritual "channeler." The seminar manager was ultimately jailed for fraudulent billing, but the responsible FAA managers were given a slap on the wrist.

The book also includes seven chapters of practical safety advice to air travelers, presenting hitherto unavailable information on the relative safety records of specific airlines and types of planes, and generally useful (though overly conservative) advice on minimizing your risks when flying on airlines and using airports. For example, many aircraft accidents are survivable if you can get out quickly, before smoke and fumes kill you. Reserve an aisle seat, as close to an exit as possible–and, if possible, ask at the airport to be moved to an exit row seat.

If the book simply stopped there, Schiavo would have done a great public service. Unfortunately, she goes on to offer well-meaning but dangerous policy advice. Her fundamental mistake is to argue that the FAA should pursue safety literally at all cost. Again and again she castigates the agency for attempting to weigh the possible benefits of proposed safety regulations against the cost they would impose on aircraft makers, airlines, and the traveling public. As she puts it baldly, "The truth is, no one needs government officials to put a dollar value on his or her life, or on the lives of loved ones. We consider ourselves priceless. So should the FAA."

In fact, there's solid economic research showing that most people do not put an infinite value on their lives. Harvard economist W. Kip Viscusi, for example, has shown repeatedly that people will accept risky occupations in exchange for higher pay, putting an implicit value on their lives. Such research has produced a range of values with a midpoint of about $5 million. Yet the plethora of new safety and security procedures recommended by the Gore Commission after the crash of TWA Flight 800 would cost more than $200 million for every life saved, according to estimates by Robert Hahn of the American Enterprise Institute. Safety at all cost is a recipe for national impoverishment.

Furthermore, in some cases regulations intended to save lives can end up actually costing lives. Consider the question of whether airlines should be forced to require that parents put infants in separate child-restraint seats rather than carry them on their laps. The FAA's analysis showed that, by forcing parents traveling with babies to buy another ticket, such a rule would impose an additional $1 billion in airfare expenses on families over a 10-year period. Because of the additional cost, 20 percent of the families would shift to driving, and because of the higher death rate associated with driving, there would be a net increase of 82 infant and adult fatalities over a 10-year period–as a predictable result of imposing this "safety" mandate. But Schiavo, like Ralph Nader, just can't abide this kind of analysis. She would impose any regulation that promises to improve air safety in the smallest degree, regardless of the ultimate cost.

This kind of naivet√© about the real world undermines Schiavo's credibility as a reformer. So do the book's factual errors about aviation–misidentifying the SR-71 Blackbird as the SR-171 (no such plane exists), calling Frank Whittle the inventor of rocket (rather than jet) propulsion, calling the Air Transport Association the Airline Transport Association, and so on. These sloppy mistakes give aviation insiders grounds for attacking Schiavo's claim to be knowledgeable enough about aviation to be a reliable critic of FAA mismanagement.

Even worse, Schiavo confuses two aviation funding mechanisms: 1) the 10 percent airline ticket tax, which is sent to Washington as the main source of funding for the FAA's air traffic control and airport grant programs and 2) the $3.00 passenger facility charge, which airports are allowed to impose to fund local improvements. Her entire Chapter 6 is thus a hopelessly confused mishmash which does more to mislead than enlighten the reader.

So what should be done about aviation safety? Schiavo is right to argue that the FAA's air traffic control system, which accounts for more than two-thirds of its budget and staff, is essentially a high-tech business which should be converted to an independent corporation. That would leave the remaining FAA free to focus on becoming a better safety regulator.

Doing so would require a major overhaul of its corporate culture–but not by throwing out the government-wide requirement for cost-benefit analysis of proposed regulations, as Schiavo proposes. A new layer of top management, recruited from outside the old boys' network, would help, but a fundamental problem would remain. For the FAA has always seen a major part of its job as reassuring the public that all airlines are equally safe, and much of its corporate culture has evolved in response to that premise.

In fact, as Schiavo makes clear, that is not and never has been the case. The major airlines and manufacturers have a powerful self-interest in operating and building safe planes. She recounts how the technical features of the Boeing 777 and McDonnell Douglas MD-11 were beyond the expertise of FAA's certification people; Boeing and M.D. essentially regulated and certified these new planes themselves. As Schiavo notes, "safety may be more important to Boeing than to the FAA or any other government agency….Boeing would destroy its credibility…if it allowed poorly designed planes to leave its hangars." And product liability lawyers would have a field day.

But, contrary to naive free market theorizing, there are parts manufacturers and less reputable airlines out there, willing to spend less on safety and take the chance that they will be able to either beat the odds or somehow escape liability. Consider the comparative 1991-95 accident and incident rates Schiavo cites in Chapter 13. American, Delta, and United had rates of 5.9, 6.3, and 4.7 accidents and incidents per 100,000 takeoffs, respectively, while much criticized ValuJet was only slightly higher at 7.1. Then look at the 15.7 for Arrow Air, 48.9 for Tower Air, 52.9 for Rich International, and 109.4 for Miami Air. Yet the FAA security-blanket approach tells travelers that if an airline meets its minimum standards, it is "safe." Full disclosure of this kind of safety information–as Schiavo recommends and the FAA has now begun to do on the Internet (http://nasdac. faa.gov/internet/)–would permit air travelers to weigh the trade-offs between lower fares and safety levels for themselves.

But what's really needed is a different approach to safety regulation altogether, one that aligns incentives with the desired results. If the regulator's own funds were at risk when safety was neglected, there would be much stronger incentives for both sensible (i.e., cost-effective) regulations and effective enforcement. That's why, after the next several attempts to reform the FAA end in failure, this vital task should be delegated to an arm of the insurance industry. With their own funds at risk, the insurance companies would have a powerful incentive to do the right thing.