I Bet You Didn’t know the FAA was Privatized – Are we Safer?

I realize that a good blogger’s main goal is getting people to read a catchy article that grabs their attention and makes them think and hopefully, draws a few people in. Since I am not a good blogger I have instead decided to write a 1600+ word piece on the finer points of the aviation certification industry.

If you even casually follow politics you have heard the debate over privatization versus publicly controlled entities. A few that I hear about regularly are: Post Office; Healthcare; Education; Banks; Defense.

I have seen all of the debates and I have evaluated a number of the positions. I am not sure I want to get deep in to each but I think it is a worthy discussion and each could probably be a suitable blog topic at some point. Too often the extreme ends of both parties incorrectly appear to take a position no matter what. Some want to cut everything; others appear to be able to defend about any government program imaginable. I really think the correct critical thinking approach is to evaluate each by its own merit and determine if this particular task would best be handled publicly or privately on a societal level.

There is one privatization initiative in this country that you may be less familiar with, but that I actually am intimately familiar with. That is the privatization of the Federal Aviation Administration (FAA). I have worked my entire 15+ career in the field of aircraft system engineering and certification. I thought it might be interesting for readers to hear about the privatization of the FAA from an insider including, why we needed it, and why I believe it is not necessarily working particularly well.

In my field, the FAA establishes the aircraft regulations and oversees the compliance. They make sure that aircraft that carry public passengers are safe and in accordance with established guidelines. Pretty much standard government stuff, if there is such a thing. I think most agree that aircraft do need to adhere to a certain standard of safety and quality. The debate is rather or not an airline can be trusted to police themselves. I intend to share my experience and will let you decide for yourself.

It is not that the FAA was necessarily doing a bad job as much as they just were not able to act fast enough based on the demand. Companies that had done everything by the book were waiting way too long to receive certification and approval from the FAA on good and new aircraft innovations. Some of the innovations getting hung up in red tape were actually aircraft systems that would themselves increase aircraft safety. Obviously this does affect business, the economy, and safety and it needed to be addressed. But since no one wants to pay taxes in this country, privatization became the push from the industry. So they put in place (and are expanding) a system where the FAA appoints private entities to act on behalf of the FAA for certification. The main crew is still in charge at the Federal level but more and more of the individual inspections, approvals, and data sign offs are now coming from paid outside contractors or from within a company itself rather than the government. Very little changed except that instead of the tax payer, the aviation industry now has the option to directly pay for the FAA personnel that regulates them. But why would the industry be interested in paying for something the government formally provided?

So here is how the whole thing works, at least for me: If a company wants to design, certify and install an electronic system for use on an aircraft, they hire a corporation like the one I own. My company designs the electrical system integration and completes a series of drawings and compliance documents which cover the installation and show compliance to the required FAA regulations for a particular aircraft. One of my sub-contractors with FAA authority to “approve”, signs it off and I pay them for their FAA signature blessing. Even though they are paying more, my customers are happy because they get exactly what they want and because they are paying us, they can stipulate the time frame and make all kinds of other demands that were simply not feasible when dealing with the government. And for me and my FAA private contractors, we were thrilled too. The sky is the limit for what a business jet owner will pay when he needs to get to Honk Kong to close a deal in 24 hours and his jet is hung up waiting on a signature. The Feds didn’t give a crap about that guy’s deal in Hong Kong and they couldn’t take his money anyway. But we could! For a good number of years we have been working ethically and steadily under this model. My corporation and the people I work with are thorough, reasonable and ethical and the model was working, at least for us. We had no incentive to bend the rules whatsoever. We were very busy and turning more work down than we were doing anyway.

Things were great! Limited government backed by private companies working together at their capitalistic best!

Then the economy took a dive , the recession set in and corporate budgets tightened significantly and my industry like so many others took a big hit.  Because of the hit to the big companies and airlines, a great number of previously employed aviation engineers flooded the open consulting market as the layoff and unemployment numbers mounted.

I all of the sudden had a lot more competition in my business and a lot fewer customers to boot. My new competition had been previously unemployed and they got pretty aggressive in their marketing. What happens when supply outweighs the customer demand? Well, like in any capitalistic business, things get competitive between competing companies. Customer incentives drive an increasing picky customer base to the supplier offering the best deal. One problem, this is not Wal-Mart; How do you incentivize your business when your corporation sells regulatory signatures? The aircraft system is either in accordance with the regulations or not. Use your imagination. I am not writing a whistle blower piece but I can tell you that my opinion has soured on the debate over the privatization of aviation certification.

I have absolutely watched dozens of certification decisions made or altered based on purely financial matters. I have turned more work down in the last four years than the previously 11 combined. But it is not because I am too busy it is because the projects were not good and my corporation does not pencil whip an FAA certification. But that is exactly what my customers were looking for; or more accurately, shopping for. We are the FAA and we have an obligation to uphold a standard and abide by the law. Previously, when the FAA was running the show, if they said a project was a “no-go” it was a “no-go”. Now customers that have a questionable project have a new option. They can simply open up a directory and go shopping. They could easily call 20 private certification companies and get turned down 20 times and then find one desperate group that is willing to do whatever they need to, to turn a profit, make payroll, or pay some overdue bills. There are a great majority of us that still do hold ethics and safety as a top priority, but don’t think for a minute that I haven’t had a VIP’s firm grip on my shoulder reminding me of “just how important it is that we get that aircraft in the air tomorrow”.  Believe me; these conversations just do not happen with a direct FAA representative.

Regardless, I don’t know about you, but I don’t personally get to fly on private jets for travel. I fly on the bankrupt ones that can only afford to serve me a quarter of a whole beverage on a three hour flight that I paid $750 for. Do you think they are picky about the FAA personnel that they get to hire to approve their aircraft systems? The big airlines have FAA certification guys with offices right in their airline and they are paid a salary right from the airline itself. How hard is it for a company to buy off or silence the FAA when they are actually direct employees of the airline itself? What if that FAA appointed, but airline paid individual finds a safety problem that would potentially cost the airline millions of dollars and even cost him his own job because the place has to shut down? I would bet the VIP grip on his shoulder is a little tighter than the ones I have had on mine!

There are checks and balances and I pray that the system is still working.  The privatization idea works on paper, but it is hard to ignore the fact that whenever you introduce the all mighty dollar into a capitalistic system, the objective inevitably changes. The actual objective such as “healthcare” or “aviation safety” is now longer the top priority. Now it is a business and a businesses’ job is to make profit not provide healthcare or provide aviation safety. The scary part about it is that the people involved don’t even realize their objective changed over time. But it sure has in my industry. How safe is the aircraft you are traveling on and who should be in charge making sure that it is? Can or should an airline be trusted to regulate itself? That is a question you should ask yourself before your next flight.

Welcome aboard!



    1. jwhitacre says:

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