Interview Peggy Gilligan

You've been in the business 30 years. Let's talk about how the industry has changed, big trends as it relates to maintenance. It's not the way it used to be, is it?

Like any industry, nothing is the way it was 30 years ago. I mean, this industry has had to adjust to a lot of different demands, and I think we've seen the airlines -- as we've seen, they've merged. The new low-cost carriers have emerged, so there's been a lot of changes. And along with that, where and how aircraft are maintained has continued to improve so that we can continue to build on our safety record.

You say 30 years ago when you got in the business, there were the big [airlines] called the legacy airlines. ... They all did their own maintenance, right, by and large?

Well, to a large extent they did.

I mean, they'd send the engines out, but a high percentage would be done in-house.

Southwest Airlines has never really done any of its maintenance in-house other than its line maintenance. But you're right: The model for those old legacy carriers, many of whom are out of business now, was for them to have a maintenance and engineering department internal to the airline.

Was that safer?

No.

Why not?

What really matters is whether and how the aircraft are being maintained, and as long as the aircraft are maintained to the safety standards that we have designed in our regulations, then they are going to provide safe transportation.

Now, that work can be done within the airline or at a repair station that holds an FAA certificate that has demonstrated it can meet our safety standards.

Now, United, for example, 60 percent of their heavy maintenance is now done outside. That's a big number, and I think that would surprise a lot of people that they're flying their airplanes to Beijing, for example, to do the heavy maintenance as opposed to doing it in San Francisco. Why are they doing that?

... Aircraft products are designed everywhere around the world, manufactured everywhere around the world, operated all around the world, and they are maintained all around the world.

It's just part of how we can keep this international system moving safely and efficiently.

All right. But if you have a choice between San Francisco and Beijing, why would a United choose Beijing?

Because they provide safe maintenance consistent with FAA standards.

But there's safe maintenance in San Francisco. What is the advantage to going to China?

You'll have to ask United why they might decide to use one market over a different market. What I look at is whether or not the aircraft that are operated by U.S. airlines are being maintained to FAA standards, and that's happening, whether it's in San Francisco or Beijing.

Well, it's cheaper to do it there, right?

I'm sure there are some business reasons why United and others do that. At the same time, their aircraft are operated to Beijing, so they are in that market. If there were to be something that broke down, obviously they'd need to be able to provide maintenance in that location. And beyond that, they have built a safe repair-station infrastructure around the world.

Tell me what you know about this facility there, AMECO. That's the main facility that United uses in Beijing. What do we know about it?

We know it holds a U.S. certificate issued by the Federal Aviation Administration. We know that FAA inspectors inspect that station regularly and that every year they do a complete base reinsertion to reissue the certificate, because at foreign stations as opposed to domestic stations, we actually require that that certificate be reissued every year, based on both a need for work to be done in that area on U.S. products and that they are able to demonstrate that they meet our standards.

How often do FAA inspectors get a chance to visit a place like AMECO?

We have inspectors located in Singapore, so they are relatively close, and they visit regularly. They do their yearly base inspection, and based on that, if they see discrepancies or issues or concerns, they will return to assure that corrective actions have been taken and that the corrective actions are effective.

We have about 100 inspectors around the world assigned to foreign repair stations. We have a little over 700 repair stations, so they've all got plenty of time to get to those facilities that they are responsible for.

One visit a year.

A mandatory base inspection, which can be several weeks. For example, AMECO is quite a large facility. It can be multiple days and multiple inspectors [there] to perform that one inspection. In addition, United, for example, that uses that base, [there] are inspectors who are responsible for United, [who] will also go and do inspections at that base to make sure that the United program is being implemented. And our inspectors share the results of those inspections.

The repair station itself is doing audits. The airline is doing audits, and other governments who may also allow work to be done in that facility are also doing audits. So there's a lot of review to make sure that safety standards are being met.

I'm not as concerned about what other agencies and airlines are seeing. I'm concerned -- as somebody who gets on these airplanes -- with what the FAA is seeing. There's no popping into these facilities by the FAA inspectors, is there?

We do coordinate, because we want to make sure that the people we need to talk to are there; that the records that we want to be able to review are there. But remember, this is a large, complex organization. It isn't the kind of thing where by getting notice a week or even a month in advance, they can somehow replicate all their records or correct all these failures.

We are regularly auditing, and we are seeing the work they are actually performing on a regular basis.

I've talked to some people along the way who say on the occasion of some of these inspections, it almost has the air of a bit of a dog-and-pony show. Everybody's got starched shirts; they're standing up straight; they're ready for the inspectors. Isn't it better just to kind of drop in every now and again and see how it's operating without the inspectors giving notice?

I talk to our inspectors, and what they see are professional organizations that are ready to be audited, who want to show that they are capable of meeting all the standards. But that doesn't pull the wool over our experienced inspectors' eyes. They go in; they know what they are looking for, and they, in fact, determine that standards are being met.

If they find a discrepancy, they get a corrective action. They evaluate the effectiveness of that, and if necessary, they take enforcement action. So we've got an experienced cadre of inspectors who are doing that oversight.

We met some guys with AMECO and an executive of United at a big conference for the MROs [maintenance, repair and overhaul], and we asked if we could come visit. And they said, "Fine," and they went about and booked a trip, got the visas, the whole thing. A week before, they pulled the rug out and said, "You cannot come." Why are they concerned about our cameras being inside that hangar?

I have no idea. But my inspectors get regular access. They cannot prohibit my inspectors from going in there, so I don't have that concern. We can go in any time we want, and we can inspect anything we need to inspect. ... And what we've seen is that this company performs all of its maintenance to our standards and that they are therefore qualified to hold an FAA certificate.

Going back to this notion of random inspections, pop-ins, domestically that still occurs, correct?

It does in some locations. So, for example, we have over 4,000 repair stations that hold our certificate in the U.S. We have 100 field offices. So clearly we're not co-located with every one of the 4,000 offices.

It is true we have offices near our major airlines, and there's more regular access in that regard.

If there is more regular access domestically, that implies that it's a good idea. Why not export that idea to China?

Well, we do. That's why we have an office in Singapore, and we keep inspectors.

But no, you just said they only visit once a year, there is a lot of notification and all that sort of thing.

No, I want to be really clear. I did not say they only visit once a year. I specifically didn't say that. I said they visit a mandatory base inspection once a year, and based on the results of that, they do continued oversight to assure that the standards are continually met. So I just want to be very clear that we do more than one inspection every year in all of these major facilities.

A physical inspection. There's one visit, and then the subsequent information is looking at papers, is it not?

No, no.

All right. So tell me how many times last year FAA inspectors went to AMECO.

I don't have the number right here, but I can tell you that they can go as often as they believe that the data shows them they need to go in and inspect. In addition, not only the inspector responsible for the repair station but the inspectors responsible for the airlines that have work done in that office, in that facility, will also travel to that facility during the year to do those inspections, and we share the data between our inspectors.

So these facilities are getting regularly [inspected].

So can you get us those numbers?

Sure.

So do you feel confident that the FAA has as much access visibility, if you will, inside these maintenance facilities overseas as they do with the domestic facility?

I feel confident that the inspectors assigned to those certificates are providing the level of oversight that they as professionals believe is necessary. I have no question that my inspectors are doing sufficient inspections of those facilities.

So how does the FAA go about figuring out where and how airlines are doing this maintenance? What is the process?

We actually require the airlines to inform us of what facilities they are using, and we keep that list or they keep that list, and our inspectors are therefore able to go and inspect not only the repair stations domestically, but the repair stations internationally that are being used by those airlines.

So you have a list of all these contract maintenance facilities?

Yes.

All right. Can we see it?

I'll check. I actually don't know whether or not that's releasable. Some of the information we receive from airlines is sometimes proprietary. But if it's releasable, you may certainly see it.

We did an FOIA [Freedom of Information Act] request for it. We were told no.

Well, then I guess it's proprietary.

Why is that proprietary? Why shouldn't the American public be able to know where these planes are being worked on?

It's proprietary because the individual airline is using particular locations for particular work, and it's possible that one of their competitors would benefit from knowing that, and there are laws that prohibit the FAA from releasing proprietary information, so that may be the basis.

It's kind of hard to keep a secret when you're flying a [Boeing] 747 into a hangar to get it fixed, isn't it? I mean, don't you think all these airlines know where everybody is doing business?

Well, I don't know that. The FAA certainly knows where all the airlines are doing their business, and we're providing oversight.

Don't you think it's reasonable, though, for the American public to know where this work is being done?

Again, they certainly know where work is available to be done. What particular airlines are doing work in what particular facilities, again, if there is a proprietary limitation on that, that's by law.

I guess this goes back to my previous point about how there is this veil of secrecy surrounding this industry, and I can't figure out why. Give me some insight on this.

There is no secrecy from my perspective.

No, no, no, you're in the FAA, though. You can see whatever you want. But as a member of the public -- you know, when I go to a doctor, I can check out a doctor online and see if he's a good doctor or a bad doctor, had any claims against him. When I get on a [Boeing 777], I have no idea where it's been fixed, how it's been fixed, if the facility is up to snuff or not.

Well, I can assure you it's up to snuff because if it's been fixed, it's been fixed at a facility that holds an FAA-issued certificate where inspectors with long years of experience are providing oversight.

But why not make that public? Why not let it breeze so we can see and make our own judgments on this?

Again, if it's legal to release it, I agree with you it should be released. If by law we are not able to release it, then unfortunately those limitations apply to the FAA.

Would you mind checking into it and seeing if maybe we can get that list?

Will do.

We have been told there is a quality ranking for these facilities on a scale of 1 to 10. Is that true?

No. ...

So how does the FAA -- is there a report card?

There are a set of standards that the repair station has to demonstrate that it meets. Those standards are published. They are federal regulations, and our inspectors, before they issue the certificate, make sure that all of the standards are demonstrated and are met, and when they do their oversight, they continually reinforce that the standards are being met.

So if you meet the standards, then you can have the certificate.

So to use report card analogy here, it's pass/fail, and everybody who is able to do work gets passed. There's no A, B, C, D ratings.

You either hold the certificate and then you can do work or you don't have a certificate. That's correct.

How often do you fail them?

We take enforcement action and actually in -- especially in the international setting -- there have been certificates that have not been renewed which, as I mentioned, is a requirement for international certificate holders that we don't have in the domestic market.

And we have taken revocation, removed a certificate if in fact they don't meet standards, or in the international market if they don't have a need to work on U.S. products. We only issue the certificate internationally when there is a need for work on U.S. products.

How often [do revocations, certificate suspensions] happen? ...

Very, very infrequently, very infrequently.

So what does that tell you?

It tells me that before we issue the certificate they have demonstrated that they meet the standard, and they continue to meet the standards while they do their work.

If we do find some discrepancies, we may issue a simple penalty or a letter of correction to come to make sure that we get the corrective action that we want. But by and large, we don't issue the certificate unless they have demonstrated that they meet all the standards, and then we continue our oversight to reinforce that they continue to meet those standards.

So this whole trend that you've witnessed right here over the last 30 years at the FAA of maintenance going from a handful of facilities right in the continental United States to hundreds all across the globe, you don't feel that's a challenge or a problem for the FAA to police all of that?

It's not a problem. It is a challenge. That's why we don't certificate any more international facilities than we can oversee. And we will get what our staffing is to make sure that we can provide the appropriate oversight.

So it is a challenge. But again, we have many more certificate holders domestically than we have internationally, and we provide the oversight here as effectively as we do in the international arena.

Let's move on to the issue of licensing of mechanics., the A&P, Airframe and Powerplant. My understanding is that the legacy carriers, to the extent that they still do this work, very high percentage of the people who turn wrenches on airplanes have this license, which is an FAA license, which requires some work to get. [When] you go to some of these outsource facilities and there are many, many fewer licensed A&P-certified, FAA-certified mechanics, is that a problem?

No. Again, the standards, the regulations that we have require that anyone who is going to sign to allow the product or the airplane to come back into the system has to meet those qualifications, but not everyone who works on the airplane necessarily needs to hold the certificate. In fact, around the world, there are many other models.

There are some countries where young people are selected to be what are called aircraft engineers, although they actually perform what we consider maintenance work, very early in their schooling, and they are schooled right up through their college equivalent to do this particular job. So they are very well trained, very well educated in the functions they perform, but that country may not issue a certificate.

So what we look at: Are the people working at the facility skilled and competent to perform the work? Sometimes they demonstrate that by showing they hold a certificate; sometimes they demonstrate that by demonstrating that they have the skill. In either case, the FAA inspector is determining that the facility has people sufficiently qualified to do the work.

But don't the rules require the guy or gal with the license to be supervising directly the work before that is signed off on the logbook of the airplane?

To be supervising the work, that's correct. It doesn't mean that they have to necessarily watch every moment of every action of every activity, but they do have to be responsible that the work has been properly completed and properly documented. So it's two parts. The work has to be done correctly, and they have to document that it's been done correctly and be able to establish that, in fact, people with sufficient skill perform the work.

So in your definition of "supervisory," they don't actually have to witness the work.

They don't have to stand over the shoulder every moment that the work is being done, performed, but they do have to be able to supervise that the work was properly completed.

So what does that mean?

It means that they have to exercise their technical expertise to determine that the individual is qualified, that the individual is performing the work appropriately and that the documentation is sufficiently completed to establish that the work has been completed.

We have stumbled upon some facilities that have less than a third licensed mechanics, and what we hear is that essentially they are overwhelmed with requests to sign off on various functions that occur in the process of fixing or maintaining an airplane. They can't possibly know how the work has been done. Shouldn't we be concerned about that?

That's something that our inspectors would look for when they go in and do their inspections. That's specifically something that we are interested in -- how is the work being supervised, how is the work being assigned, how is the determination made that the aircraft or the product is properly repaired so as to be returned into the system.

In addition, after the work is completed, the airline has to accept the product back in -- the airplane or the particular thing that's been worked on -- and so the airline has a responsibility for also establishing that the work is properly completed and properly documented consistent with their maintenance program.

Why isn't everyone who is working on the airplane licensed to work on airplanes?

Because the system has demonstrated that, in fact, [there are] people [who] can perform the functions of, are a part of repairing an airplane that don't rise to the level of needing that certificate. The safety record I think demonstrates that the maintenance system both within the U.S. and around the world is exceedingly safe. It's meeting standards. And so, based on that, we see that there is the ability for people to perform functions, for supervisors to supervise the performance of those functions, and for the airplane to re-enter the system very, very safely.

But wouldn't it be better if they were all licensed?

They are certainly able to be licensed. We don't require that.

Why not?

Because, again, 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. They may be doing painting or they may be doing repair work that doesn't rise to the level of affecting the safety of the aircraft per se, but it's work that needs to be done.

But even little things can lead to big things, as you well know, in aviation. So when you say that, maybe that's discounting something that could start a chain toward an accident.

Well, that would only be if it wasn't overseen by someone who is in fact certificated, so, you see, that's the --

What we're seeing is supervisors who really don't know what's going on in the hangar, and they are being forced under pressure to sign off by the paper, as they say, on work that they really don't know whether it's been done right or not.

Well, again, our inspectors are in the facilities. They are evaluating whether the work being done is competent. And if we find discrepancies, we take enforcement action, and we correct if there are circumstances that need to be corrected.

We also hear about, this is an industry that is under a lot of pressure, as you well know -- a lot of pressure to cut costs, get these planes out. We have talked to several mechanics who work at ST [Aerospace] Mobile who talk about these 12-hour workdays, six-day workweeks time and again, and sometimes even beyond that. How big a concern is it here at the FAA on higher levels, and for that matter inspectors [who] go into these hangars, that these facilities are virtually aviation sweatshops?

It is a concern. At that particular facility, I think you are aware that our inspectors are aware of the schedules. They have raised that concern. They are working with the management in the company to determine how to better manage those schedules because it can be a risk factor. Fatigue is a risk factor in aviation as it is in a number of human endeavors. We are very mindful of that.

And again, our inspectors are right on top of it. Those are just the kinds of risks that they want to look at working with the certificate holder to try to mitigate that risk.

You know we got some information on what goes on inside ST Mobile. These are some of the inspection reports from the inspector. ... These are recent. [A] 2010 inspection noted a shortage of qualified maintenance personnel, currently maintenance personnel on the United Airlines program, working 12-hour, six-day work shifts to maintain delivery schedules. ... The ratio of quality inspectors is 80 mechanics to 1 inspector. Is that enough supervision?

Well, you're right. Those were findings our inspectors made, and the company has since come back with a correction plan, and I believe the ratio is somewhat closer to 1-to-15 or 1-to-20. I don't recall the exact number. That's exactly what the role of our inspector is. Our inspectors go in; they evaluate whether or not the company that holds our certificate is meeting our standards as effectively as they could; they share those findings with the company, and they get corrective action, at all times assuring that the standards are being met.

One of the things that concerned me the most in this -- and if you want to look at these, feel free, although you have probably seen them, haven't you? Have you seen these?

I've seen some of them. I can't be sure I've seen them all.

"A failure of senior management to ensure that proper techniques and procedures are adhered to." Senior management -- this comes from on high. That's got to be of concern to the FAA, right?

It is, and I believe in that case there were changes in some of the senior management in that company. ...

Since 2003, there have been 15 enforcement actions specifically levied at ST Mobile. Do you know what the amount of fines levied happened to be?

I don't offhand, but again, that's a number that can be known. Several thousand.

Eleven thousand dollars.

Eleven thousand dollars. OK. ...

What I'm saying is that seems almost like less than a slap on the wrist to me, given the amount of money that's involved in this business, and also given the discrepancies and the problems that your inspectors have.

We have guidance on our enforcement program, and certain kinds of regulatory violations equate to a certain level of civil penalty, and as far as I know, those procedures were followed both by our inspectors and by our lawyers.

What's more important, and what our inspectors are really looking for, is corrective action. It's one thing to pay a penalty months later. What's more important is if we find a discrepancy, we share it with the management, they fix it, and we go in and evaluate that the fix is effective so that we can assure the public that the standards are being met. And in those cases, that corrective is or has been taken or is under way to address those concerns.

So everything is fine now at ST Mobile as far as you know?

There is always the need for us to stay on top of it and make sure that we are evaluating that there is full compliance, but based on the documentation I've reviewed, there are action plans in place. Our inspectors are closely monitoring it, and the company continues to hold our certificate.

The recent inspection involved a two-week notice from the FAA. Why were you giving them two weeks to clean up the hangar?

Well, again, the likelihood that if there are shoddy practices going on that it can all be fixed in two weeks is probably pretty unrealistic. But beyond that, we notified companies so that the right people can be there. We want to meet with the director of maintenance, the director of operations.

We want to meet with the people who are responsible for training. We want to know if there's a training class under way, perhaps, if that's what we are going to monitor. So in this case I don't know what specifically the inspectors were going for, but it makes sense to make sure that, when we go in, it's time well spent to establish whether or not standards are being met.

We were told by mechanics that there was a massive "Clean Up the Hangar" campaign, and specifically aimed at undocumented, untagged parts; that there were all kinds of parts where no one could understand their lineage that went out the door, either went into Dumpsters or in some cases went into trucks into other warehouses and then found their way back into the system.

I assume if you have that data, or the mechanics do, they have shared that with the FAA. We have programs where those kinds of safety concerns can be and should be reported. If those kinds of activities are happening, they should be reported to the FAA, and our inspectors will inspect.

Now, if untagged parts were thrown away, that would seem to be a safe practice, because we don't want untagged parts entering the system. That's correct.

But they were said to be put on the airplane.

I don't know that.

We've got a bunch of stuff on untagged parts here. Parts that are segregated for questionable reasons should have strict control on accessibility, and the shipping and receiving of parts, part tags and parts were water-soaked and completely unreadable. They weren't following proper tagging procedures. It goes on and on. Help us understand. Why is it so important to have these parts tagged properly?

Well, as you said, we want to establish the lineage of the part. Many parts in aviation have what we call "life limits." That is, they can only be used [for] a certain number of operations or a certain number of cycles, and so we have to have the record for those parts so that we can establish what the level of safety is and whether, in fact, they can still be used in the system. We like to have the history of repair work so that if, in fact, additional repair work needs to be done in the future, we understand what has already been changed, so that the mechanic or the engineer involved can evaluate whether additional repair work can be done.

So it's very important that we have, we understand the lineage of parts.

When you hear these reports on the untagged parts and the issue of the ratio of inspectors to mechanics and long workdays, and you start stacking that all up, is this a facility that should have its certificate still?

According to the inspectors' responsible for it, it is a facility that still meets the standard. At the same time, they continue to provide oversight. They continue to pursue enforcement if that's necessary, and they continue to get corrective action to make sure that in fact the product that's coming out of that the station meets standards.

But what we hear from inspectors is that they go in and they write these things up time and again, and there's this pattern time and again, the same problems cropping up. And what happens when it gets sent up the chain of command is there is this one $11,000 fine. In essence, they become paper tigers.

That's not the way the enforcement program works. In fact, if an enforcement report is sent forward, it's reviewed by our lawyers, and if there is sufficient evidence, then an enforcement action is initiated.

I know the FAA has this kind of "It's better to be the good cop than the bad cop," right?

No.

Well, isn't that the approach, though? You want to work with them. In the past it has been that these are your customers, right? Are these your customers?

They are. We call them the certificate holders. We issue a certificate; they have a responsibility to continue to show that they meet our standards. And yes, we prefer to get compliance. We want them to be in compliance because that is why we issued the certificate.

But if it's necessary to take enforcement, we take enforcement action. And both tools are part of what are in the inspectors' toolbox, as we call it. They can work to improve the performance, and they can take enforcement action at the very same time. …

So 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?

Again, 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, and at this point, the inspectors have not recommended that we take action against the certificate.

Based on their expertise, I am satisfied that they are satisfied that this is a company that is meeting our standards.

But what we hear from the inspectors is they recommend enforcement, and what they hear from their superiors is not what they wanted: less enforcement, lower fines. Why is that?

I don't know who they are hearing that from, because, again, we have an array of tools that we can use to assure that the safety standards are being met. And they go all the way from identifying corrective actions to taking civil penalty enforcement to revocation of the certificate if that's appropriate and we have the evidence. That case needs to be made by the inspector, and it needs to be brought to our lawyers. And if the case can be made, then we pursue the enforcement action.

You are backing up the inspectors.

We support our inspectors, yes.

They don't feel like they're being undermined in any way by on high.

I visited a number of our offices this year -- we actually have an initiative under way to visit all of our field offices -- with some of the executives from here in Washington, and I have not heard them say that they feel undermined in any way. They understand that they have an array of tools that they can use [and] that their responsibility is to determine that anybody who holds a certificate is meeting our standards, and they can do that in a variety of different ways.

So no, I have not heard our inspectors -- they have certainly not told me that they feel undermined.

Let's talk about the overall picture. ... Are we really talking here about one level of safety?

Yes, it's a common set of standards. If a company holds an FAA-issued certificate for a repair station, they meet the same safety standards. They are all published in one place, in the same book, under a particular part, and all the standards apply to all the stations.

One follow-up: This is a remarkably safe way to get from point A to point B. We can all agree on that.

It is remarkably safe to fly, absolutely.

It's extraordinary. 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 create 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?

I would say over the last 10 or 12 years, we have actually reduced the risk in aviation by over 80 percent for fatal accidents. So if anything, we have expanded the safety margins. We haven't eaten away. But that is a concern.

But it's not just fatal accidents. There are other issues beneath the surface, right?

But the idea that we might affect the safety margins is a very high concern for the FAA. It is what we focus on. That is why we have trained inspectors who issue certificates in the first place and who oversee the continued compliance of those companies with those certificates and who take enforcement action when that's the appropriate tool. So the system is remarkably safe -- but not by luck. It is by intent. It is by the hard work of FAA inspectors and everyone involved in the industry who understand that safety is the most important thing for this industry. ...