Southwest paid the FAA for work done during Shutdown —a possible long term source of FAA funding?

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Southwest paid FAA for work during Shutdown

Follows prior policy

Future way to fund FAA?

The “sturm und drang”[1] of the Partial Shutdown was the pressure cooker for many odd outcomes. The one described below may have created an interesting case for a different way of doing business with the FAA. This necessary “accident” may have as its putative father of this invention—Robert Poole 

 

Southwest Airlines Paid[2] FAA Inspector During Government Shutdown To Add Planes To Their Fleet

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“Southwest Airlines didn’t want the US government shutdown to slow its expansion.

To get around the issue of FAA inspectors working without pay, Southwest offered to pay one $3,150 to come in for three hours and approve three new aircraft for their fleet during the holiday period.

What are the details?

During the government shutdown in the US, many government services in the airline industry were placed on hold. Whilst essential team members working in air traffic control and airport security (TSA) were asked to work without pay, many other aviation workers were sent home without pay to spend their time waiting until the budget was approved.

The FAA (Federal Aviation Administration) during the shutdown only focused on maintaining any safety functions in US airspace, pausing any other regulatory approvals.

But for airlines, business keeps moving. Southwest wanted to add three additional Boeing 737 Max aircraft to their fleet during the holiday period but found that without the FAA open, they might have to wait weeks until their planes could fly.

There were apparently close to having approval too, with just a few more forms to double check before they would be given the rubber stamp. It’s because it was so close that they decided to contact the FAA management as ask, ever so nicely, if they could just finish off the approval.

After some late-night negotiations, the FAA management (who assumably [sic]were doing this for free) said yes and asked an FAA inspector on unpaid leave to come in to finish the work. This was on the condition that Southwest would actually pay his wages (and other administrative costs) until he got the work done. This amounted to $3,150 and took around three hours. One hour for each jet at $1050 USD, a bargain considering they were now able to fly.

However, not everyone has been happy…

Southwest rocks the boat during the shutdown

Other airlines have accused the FAA of being biased and showing favoritism, as their own attempts at getting aircraft approved failed during negotiations this month. One such airline, Delta, was waiting on approval to fly their four new Airbus A220 aircraft and had to delay their first flights until Feb 7th (which tickets have only now gone on sale). Naturally, the opportunity cost has been huge for these companies, as a $60 million dollar plane has sat idle for weeks.

“The FAA and Southwest entered into a reimbursable agreement to provide minimal time to complete aircraft certification services,

These services were completed only after meeting immediate operational safety needs.” – FAA Statement

The FAA also claimed that they had begun the work on the Southwest deal before the US Shutdown.

Members of the Professional Aviation Safety Specialists Union were outraged as well. Taken by surprise, Union officials claimed they “have never heard of anything like that before”. The union has complained that they were not involved in the negotiations (and unable to represent their member) and that the FAA had obviously shown Southwest a special courtesy not available to other airlines.

This whole situation has left us wondering why Southwest didn’t also pay the inspector to approve flights to Hawaii whilst he was in.”

 

 


ERRATUM


RETURN TO ARTICLE

“What do you think, is the FAA showing favoritism to Southwest?”

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ANSWER: NO -the local office in all likelihood did what it thought was proper and for sure, consulted neither with other FSDOs (like Delta’s in Atlanta, GA) nor Headquarters (with the Shutdown, it would have been hard to get a phone call answered).

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This accidental action raises an interesting policy question; as with use of the air traffic control, perhaps the users should pay for services. Mr. Poole certainly touted the benefits of charging for the actual costs. The cost accounting for determining the 25th departure (IFR) at ORD at 0900 versus the sole take-off (IFR) during a Tuesday evening   from Chandler, AZ plus the segments through various sectors and then a landing for each was debatable.

There are several regulatory transactions which confer GREAT VALUE to the applicant upon the FAA’s approval.

In the case highlighted by the article, the earning power of Southwest’s B-737 Max’s was ZERO sans the necessary FAA approvals. The nice, shiny aircraft were not permitted to carry fare-paying passengers unless the Aviation Safety Inspector found the vehicle airworthy.

The same benefit inures to a pilot who earns a Commercial License. A big airplane being assembled in North Charleston, SC or Toulouse, France increases its worth as each engineering innovation is added to its design and as another component is added to its fuselage as it moves down the assembly line. However, it is merely a large piece of high tech equipment unless and until the FAA issues a certificate of airworthiness.

To charge the applicant the difference before and after the FAA’s exercise of its authority would be confiscatory. Would it be appropriate, as with the Southwest case, to require a fee equal to the professional time and charges of the FAA employees working on the project? [Payment for work performed is a basic premise for the use of delegates.]

The public may be perturbed by the payment by the applicant for the services performed by the regulator. Again, there are instances in which such charges have been assessed, in particular an FAA certification of a foreign aircraft certification.

This pay-for-services concept might allow the applicant to decide how many staff experts should be assigned to the project. While not guaranteeing a timeline, the order for more people to be assigned as a surrogate for a possible completion date.

What is clear from the Partial Shutdown is that the aviation industry and to a degree, SAFETY, cannot tolerate closure of the FAA’s essential services. The only way that a government agency can avoid the vicissitudes of budgetary interruption is to find a source of funding which neither the President nor the Congress can toy with.

The pay-for-services model may be more radical than the electorate will tolerate. Now is the time for public policy mavens to publish their solutions to this horrendous problem. Maybe a crazy idea will make sense after this mess. Congress loves the attention generated by the Members meddling in the FAA’s affairs. The Shutdown mess may convince them that there are better ways to be noticed by the media and their constituents.

[1] For appropriate background music, Mozart Symphony No. 25 in G minor link

[2] Southwest DID NOT PAY the ASI; the compensation went to the FAA under applicable government policy. See To be Clear later in post!!!



 

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