How Safe Is That Plane?

Editor's note: This is the first article in a series examining the growing trend of outsourced aircraft maintenance.

CHARLOTTE, N.C. -- The last maintenance-related fatal commercial aviation accident involving a major U.S. carrier occurred more than four years ago, when a Beech 1900D crashed just after takeoff from Charlotte, killing all 21 people on board.

Considering that more than 40 million flights have departed and arrived at their destinations since, domestic airlines have continued to build on the enviable record of safety that already existed prior to the incident in January 2003.

However, at the same time, a number of carriers have dramatically increased their dependence on outside contractors to perform their maintenance rather than relying on in-house employees, and that's raising not insignificant safety issues.

The most notable transformations have come at United (UAUA Quote) and Northwest(NWA Quote), according to data from the government's Bureau of Transportation Statistics.

Last year, United outsourced 45% of its maintenance, spending $787 million. By contrast, in 2000, United outsourced only 16% of the work on its planes. Northwest, meanwhile, outsourced 70% of its maintenance in 2006, paying $624 million, up from 24% six years earlier.

Only two carriers, American, a unit of AMR(AMR Quote), and Frontier(FRNT Quote), resisted the trend. Both contracted out less than one-quarter of their work.

The rapid shift in the industry has tested the ability of the Federal Aviation Administration, which is charged with ensuring aviation safety, to keep up.

Spreading Blame

The Charlotte crash that killed 19 passengers and two crew members reflected a breakdown in the oversight of outsourced maintenance, not only by the FAA but also by an airline and a third-party contractor.

The Beech 1900D involved in the incident was being operated for the old US Airways by commuter carrier Air Midwest and maintained by contractor Raytheon Aerospace -- now L-3 Communications Vertex Aerospace -- at a Huntington, W.Va., hangar. Raytheon hired most of its mechanics from another firm, Structural Modification and Repair Technicians Inc., or SMART, of Edgewater, Fla.

Only two days before the crash, a mechanic hired from SMART improperly adjusted the flight control cables on the plane, the National Transportation Safety Board said after it reviewed the crash.

Although licensed, the mechanic had never before adjusted the cables on a Beech 1900. His instructor also inspected his work. And the FAA inspector charged with overseeing the hangar, who was based in Wichita, Kan., had visited just once since it began operating.

Maintenance Outlays For many airlines, spending on outside contractors is increasing.
Airline	Spending	% of maintenance outsourced in 2006	% outsourced in 2000
Northwest	$898 million	69.5	23.8
America West	$319 million	67.9	73.1
ExpressJet	$256 million	65.2	56.9
Southwest	$738 million	56.2	60
Alaska	$253 million	53.5	76.2
AirTran	$157 million	48.5	39.2
Continental	$909 million	48.1	46.6
United	$1.75 billion	44.9	16.3
JetBlue	$171 million	44.2	6.8
US Airways	$558 million	43.2	29.6
Comair	$163 million	41.9	n/a
Delta	$1.06 billion	38.8	18.8
Mesa	$161 million	35.2	n/a
American	$1.98 billion	22.8	23.4
American Eagle	$217 million	19	36.4
Source: Bureau of Transportation Statistics. Notes: Frontier spent $85 million on maintenance in 2006, outsourcing 16.8%. Reporting requirements did not apply to Mesa and Comair in 2000, because they did not operate planes with more than 60 seats.