Transcript

Flying Cheaper Jan. 18, 2011

MILES O'BRIEN: [voice-over] A year ago, we investigated a commuter crash that shed light on a sea change in the airline industry.

FRONTLINE NARRATOR: -the Buffalo crash of Continental 3407, the deadliest U.S. air accident in eight years-

MILES O'BRIEN: Major carriers were outsourcing more and more flights to independent regionals-

FRONTLINE NARRATOR: -a major transformation in the airline industry.

MILES O'BRIEN: -raising serious questions about safety. After the broadcast, we heard from hundreds of pilots, and airline mechanics, too.

LETTER: ``As an aircraft maintenance technician with United Airlines, I'd like you to follow up on this story with an investigation on aircraft maintenance.''

LETTER: ``The flying public has no idea what shenanigans go on behind the curtain.''

LETTER: ``Much of this heavy maintenance work is being done by the lowest bidder. As a former airline pilot with 25 years in the industry, this scares me the most.''

TOWER: You can land at Teterboro.

Capt. CHESLEY SULLENBERGER, US Airways Pilot: We may end up in the Hudson.

MILES O'BRIEN: We also talked to the co-pilot who helped safely land flight 1549 into the Hudson River. He's worried about airline maintenance, too.

JEFF SKILES, Pilot, US Airways: Ten years ago, maintenance was virtually all done in house by the airline that's flying the airplane. Now heavy maintenance is mostly done by people who are unrelated to the airline that's flying- that's flying you as a passenger, and sometimes not even in this country.

MILES O'BRIEN: So we decided to examine the airline maintenance industry and started here at its annual convention here in Phoenix. They call themselves MROs, for maintenance, repair and overhaul. It's a highly competitive business. MROs from all corners of the globe were here, trying to drum up business with U.S. airlines.

[on camera] So what's the advantage? Why would a U.S. airline fly an airplane all the way to Turkey to get maintenance done? What's the advantage to going to Turkey and your company?

TURKISH VENDOR: Firstly, the quality is very high. And secondly is that the pricing- the pricing is very reasonable for the-

MILES O'BRIEN: Labor is cheaper in Turkey?

TURKISH VENDOR: Yes, the labor is cheaper.

MILES O'BRIEN: [voice-over] Most major airlines now outsource the majority of their heavy maintenance, some as much as 70 percent or more. It's all to keep the airlines competitive and efficient, says MRO spokesperson Sarah MacLeod.

SARAH MacLEOD, Exec. Dir., Aeronautical Repair Station Assn.: What I would look at is, What business am I in? Am I in the business of flying passengers or cargo, or am I in the business of maintaining my fleet?

MILES O'BRIEN: [on camera] The core business is to ensure a safe trip, though, isn't it?

SARAH MacLEOD: Absolutely, I mean, but that's a given. I mean, I'm not going to stay in business very long if I'm going to be crashing aircraft. So part of your business is obviously to keep airworthy aircraft. But if I can have you do it more efficiently, it's kind of foolish for me not to.

[www.pbs.org: Where is your plane fixed?]

MILES O'BRIEN: [voice-over] One carrier that led the way into this new era is United Airlines. it Used to do virtually all of its major maintenance in house. But facing bankruptcy and competitive pressure from industry upstarts like Southwest, United began outsourcing more of its repair work. Now about 60 percent of its maintenance is contracted out to independent MROs.

BILL McGEE, Consumer advocate to Dept. of Transportation: Maintenance traditionally has been sacrosanct. It was one area where the industry collectively said, ``No, that's not something we can cut.'' In recent years, we've seen a change, and I don't think that we've yet seen all the manifestations of that change.

JOHN TAGUE, President, United Airlines: At United, first and foremost, we had to get our own house in order-

MILES O'BRIEN: At the MRO conference, United's then president, John Tague, spoke about the economic challenges facing the airline industry, and I asked him about this outsourcing trend.

[on camera] What can you say to the public about that trend and whether that ultimately could erode the possibility of continued safety in the airline business?

JOHN TAGUE: You know, I think it's wholly unrelated. I would ask them to take a journey with me to Ameco in Beijing. We have to get past this view that any work that's done in the U.S. is de facto done better. It's just not true.

MILES O'BRIEN: I'd like to take you up on that offer. Would you take us to Ameco?

JOHN TAGUE: Sure. Absolutely.

MILES O'BRIEN: [voice-over] We thought that was a great idea. Ameco is one of Asia's largest MROs, doing maintenance on United wide-body jets since 2005. We arranged a visit with Ameco in China. We got visas and tickets. Then, just days before our trip, Ameco suddenly canceled.

But we knew about another place here in the U.S., where United has moved its maintenance, and I flew to Mobile, Alabama, to take a look. This is one of the larger independent repair facilities in the U.S. It's owned by a company called ST Aerospace.

BILL McGEE, Consumer advocate to Dept. of Transportation: According to statistics I've seen, ST is the largest of all of the MROs, the outsourced facilities worldwide. This is a Singapore-based company that has opened maintenance facilities in the United States.

MILES O'BRIEN: Since 2002, ST has been doing a lot of maintenance here in Mobile for major airlines like United, Delta and US Airways, carriers that used to do almost all of their maintenance in house.

ST would not allow us to visit or grant an interview, but we talked to many ST workers, from line mechanics to supervisors. Here at Papa Buddha's, a bar in Mobile, we heard a lot about long hours, hard working conditions and the pressure mechanics were under to ``move the planes.''

A few agreed to talk, but only if we would protect their identities.

[actual words read by actors]

``JOHN'': To be honest, if you have one inspector-

MILES O'BRIEN: One - we'll call him ``John'' - worked at a major airline for many years before joining ST.

[on camera] What were your marching orders when you were inside ST?

``JOHN'': It was typically ``push.'' I mean, you know, you were given X amount of time to accomplish a task, and they wanted to keep moving forward faster and faster, you know? ``Whatever it takes to get it done, get it done.''

MILES O'BRIEN: Though ST wouldn't let us in, secretly, we did get footage from inside the facility. It's a place where another veteran mechanic told us about a shortcut he'd seen used, called ``pencil-whipping.''

``BOB'': If I was pencil whipping a job, that means I'm just going to sign it off without doing the maintenance, and lie about what I did so that we don't lose time, you know, fixing it.

MILES O'BRIEN: [on camera] You whipped the problem with a pencil, not a wrench.

``BOB'': That's right. You beat it right on down. That's pencil whipping.

MILES O'BRIEN: [voice-over] We showed what the mechanics at ST had told us to veteran FAA inspector Linda Goodrich.

LINDA GOODRICH, V.P., FAA Inspectors Union: It's just devastating to hear things like that because it's just- you know it happens. It's- you know, and it's- and just for the exact reasons that he said, but you can't take shortcuts. This is an industry you can't take shortcuts. It will come back to bite you.

MILES O'BRIEN: This kind of shortcut was discovered at ST last spring. According to an internal company document obtained by FRONTLINE, US Airways found fuel leaks in three of its planes that had been serviced at ST Mobile. An investigation found that mechanics had signed off the work as completed, when, in fact, the work was not, failures that could have resulted in serious aircraft mishaps.

LINDA GOODRICH: This is very serious. And because if they're willing to do it for something as important as that is, then they're willing to do it on just about any level. I mean, this is the tip of an iceberg type of a situation, and not a good one, for sure.

MILES O'BRIEN: Other company documents show multiple maintenance failures at ST last year- a misrouted flight control cable, the failure to install a navigation box, landing gear with a broken hydraulic line.

One of the biggest issues with the quality of the work at independent MROs is the quality of the workforce. At the largest major airlines, the vast majority of mechanics are licensed by the FAA, but not at independent MROs, like here at ST, where about two thirds of the nearly 1,200 mechanics are unlicensed. That's because the FAA regulations don't require that all airline mechanics hold a license or certificate.

[on camera] Why isn't everybody who is working on the airplane licensed to work on airplanes?

PEGGY GILLIGAN, Head of Aviation Safety, FAA: Because the system has demonstrated that, in fact, people can perform the functions that are a part of repairing an airplane that don't rise to the level of needing that certificate.

MILES O'BRIEN: But wouldn't it be better if they were all licensed?

PEGGY GILLIGAN: They're certainly able to be licensed. We don't require that.

MILES O'BRIEN: Why not?

PEGGY GILLIGAN: Because, again, we've- the system has demonstrated that we can meet the safety standards because our inspectors go in and establish that the individuals are competent to do the work they're doing.

MILES O'BRIEN: [voice-over] This FAA licensing policy has implications for the workforce at ST, where the company has brought in less experienced and less expensive workers. Mechanics start at about $14 an hour.

They've also gone global, bringing in foreign labor to work on airplanes in Mobile.

``JOHN'': They're issued work visas, and they're brought in from the Philippines, South America, the Ukraine, Africa. They're brought in from everywhere and anywhere.

MILES O'BRIEN: ``Tom'' has worked at ST for more than 10 years.

``TOM'': A lot of these guys can't speak, read or write English, you know? I'll see these guys practicing their ABCs.

MILES O'BRIEN: [on camera] So they're practicing their ABCs and they're supposed to be able to read a- you know, a Boeing 757 manual.

``TOM'': Exactly. Yeah.

JEFF SKILES, Pilot, US Airways: Mechanics use a lot of the same things that we use in the cockpit. They use- they have to follow checklist procedures. They have to follow maintenance manuals. If you've got somebody who doesn't speak English, they can't be following the checklist to make the repair. They've got to essentially be winging it

MILES O'BRIEN: [voice-over] In a written response to FRONTLINE, ST said that foreign nationals make up less than 10 percent of their workforce and all are assessed for language skills. And before hiring all mechanics, they conduct a thorough review of their work history and a verification of their background.

But ``John'' says that's not what happened when he was hired.

``JOHN'': I applied on line with a contracting company. I sent them my resume. And within a couple of days, they called me up and asked me when I could be there.

MILES O'BRIEN: [on camera] So what did that tell you?

``JOHN'': Well, I thought- I was pretty apprehensive of that. I expected an interview at least when I got there. But I was just told, ``Show up. You've got the job.'' I didn't even have to present any of the documents of any of my training. I mean, it was- they took me on my word.

MILES O'BRIEN: [voice-over] Multiple FAA reports cite repeated concerns about the quality of the workforce at ST- a shortage of qualified maintenance personnel, concerns about English fluency, a lack of proper training, and repeated questions about management's commitment to safety.

According to FAA records, the agency has levied 15 enforcement actions against ST Mobile since 2003. Only one resulted in a fine- of $11,000.

[on camera] If you've got 15 enforcement actions, one $11,000 fine and the same write-ups over and over again, happens again and again, that's a problem isn't it?

PEGGY GILLIGAN: It's the responsibility of the inspectors. As they do their write-ups, they are getting corrective action. They are recommending enforcement actions. Those enforcement actions are pursued, if we have the evidence. Based on their expertise, I'm satisfied that they are satisfied that this is a company that's meeting our standards.

LINDA GOODRICH, V.P., FAA Inspectors Union: It's not working. And you do this enough, and we're a joke. Inspectors become a joke. We come in there, and they're going, ``Yeah, yeah. Sure, sure, whatever. We'll just continue doing what we're doing because there hasn't been a consequence big enough to change our attitude on this.''

MILES O'BRIEN: [voice-over] One of the most troubling things I heard at ST involved a major FAA inspection here last April.

[on camera] Tell me about this particular inspection. How much warning did everybody have?

``BOB'': Probably a little more than two weeks that we knew this was going to happen.

MILES O'BRIEN: Two weeks of warning. And did the FAA indicate what it was looking for?

``BOB'': We had meetings and we were informed on the things that we needed to go ahead and prepare for.

MILES O'BRIEN: [voice-over] Several workers told us that in preparation for the FAA inspection, there was a massive clean-up.

``BOB'': It was amazing all the stuff that was thrown out. We had dumpsters full of stuff carried out of there constantly.

MILES O'BRIEN: [on camera] What kind of stuff were you throwing away?

``BOB'': Aircraft parts that were unmarked, the trackability on there. If the trackability of an aircraft part is invalid, then that part is no good and it's supposed to be destroyed and got rid of.

MILES O'BRIEN: So wait a minute. So these are parts that are illegal.

``BOB'': That would be the easy way to say it, an illegal part.

MILES O'BRIEN: [voice-over] According to FAA reports, one of the most pervasive problems at ST has been its handling of airplane parts. Since 2004, ST has been cited repeatedly for failing to properly tag, document and track parts through its maintenance system. Several workers told us that prior to the FAA inspection, untagged, illegal parts were moved to this rented warehouse not far from ST.

[on camera] This is the place which supposedly is just loaded up with parts that are undocumented and illegal, right?

In the trash here are some papers that are linked to United Airlines for a controlled part of some kind. So clearly, this is a spot that ST is using for something.

[voice-over] Several workers told us that after the inspection, some of the illegal parts were taken back to ST.

[on camera] So eventually, what is happening is parts that don't have the paperwork, parts that are illegal, end up on airplanes that fly passengers around this country.

``TOM'': Correct.

MILES O'BRIEN: I think that would shock a lot of people.

``TOM'': That would- yeah, that would shock me, and it did shock me.

MILES O'BRIEN: [voice-over] In response, ST wrote FRONTLINE that it does not have untagged or undocumented parts, that all parts used on aircraft are properly documented and that its records are regularly audited by the FAA and airlines.

[on camera] Based on what we've showed you with documentation and interviews, how would you characterize ST Mobile as an operation?

LINDA GOODRICH, V.P., FAA Inspectors Union: I think I- I would be deeply concerned over their viability to be any kind of consistent organization, with the stuff I've seen here, to the point where, pending investigations, they should be suspended. Something's seriously wrong here and this is- we need to investigate this.

[www.pbs.org: Watch this program again on line]

MILES O'BRIEN: [voice-over] Our investigation of ST focused on just one facility in the vast $29 billion global MRO industry. But many insiders say the trend lines with maintenance are clear.

[on camera] What we hear time and again from people who are in the field, in the trenches, as it were, is that over the years, with this wonderful system we've created- we've created this huge margin for safety, and that what is happening because of all the pressures here in the airline industry in general, and specifically in maintenance, is we're kind of eating away at that margin. We're borrowing from the margin. What do you say to that?

PEGGY GILLIGAN, Head of Aviation Safety, FAA: Well, I would say over the last 10 or 12 years, we've actually reduced the risk in aviation by over 80 percent for fatal accidents. So if anything, we've expanded the safety margins, we haven't eaten away. But the idea that- that we might affect the safety margins is a very high concern for the FAA. It is what we focus on.

MILES O'BRIEN: Is the industry borrowing from its safety margin?

BILL McGEE, Consumers Union: I think there's no question. It's simply not good enough to say, ``Well,'' you know, ``let's look at the safety record and let's look at the statistics'' as a way of not addressing what could be problems that are fomenting now. The FAA says that everything is fine. I think there are an awful lot of experts in the industry that I've spoken to that question that.

MILES O'BRIEN: How much evidence is there, if at all, that safety is being compromised by this system of repair and maintenance?

``JOHN'': It's going to be at the expense of a smoking hole at the end of the runway. I mean, I hate to see it come to that point, you know? It's going to be more reactive than proactive. And the down side is, is there's going to be people that're going to die. And I hate to see that happen.

MILES O'BRIEN: [voice-over] Of course, no one can predict a crash, but industry insiders are increasingly sounding the alarm about the high cost of flying cheaper.

Update April 19, 2011

MILES O'BRIEN: Just last week there was a new development in our investigation into airline maintenance. A lawsuit was filed against st mobile by pilots and flight attendants at us airways. They allege that they were exposed to toxic fumes due to faulty work performed during seven weeks of maintenance at st mobile. The plaintiffs claim the problems with toxic fumes occurred on several flights of this Boeing 767, tail number 251, not long after it was serviced at st mobile.

ATTORNEY ROBERT SPOHRER: Immediately following that scheduled heavy maintenance, the aircraft began experiencing what are called fume events, which is contamination of the air in the cabin of the aircraft because of burning engine oil and hydraulic fluid.

MILES O'BRIEN: The most serious incident took place in january, 2010, when 8 passengers were treated and 7 crew members were hospitalized for respiratory problems. Some crew members say the problems continue to affect their health today.

ATTORNEY ROBERT SPOHRER: ST Aerospace should have found the causes of these problems. There were a number of issues that should have been red flags to them. Instead this aircraft was signed off by ST Aerospace as being airworthy when it was not.

MILES O'BRIEN: In response to the lawsuit, st mobile told frontline they are confident that their work was not responsible for fume events on plane 251. As for us airways, they had no comment on their crew members’ lawsuit and the airline says that safety has not been compromised by the use of third-party maintenance facilities, like ST Mobile. We contacted the FAA, but it had no comment on the lawsuit either. As this story develops we’ll continue to update the FRONTLINE website.