oversight

FAA Needs To Improve Its Oversight To Address Maintenance Issues Impacting Safety at Allegiant Air

Published by the Department of Transportation, Office of Inspector General on 2019-12-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

            FAA Needs To Improve Its Oversight To
            Address Maintenance Issues Impacting
                    Safety at Allegiant Air




Report No. AV2020013
December 17, 2019
FAA Needs To Improve Its Oversight To Address Maintenance
Issues Impacting Safety at Allegiant Air
Requested by Representatives Peter DeFazio, Rick Larsen, Nita Lowey, David Price, Mike Quigley, Katherine
Clark, Pete Aguilar, Cheri Bustos, and Senators Jacky Rosen and Bill Nelson

Federal Aviation Administration | AV2020013 | December 17, 2019

What We Looked At
Allegiant Air—the Nation’s 11th largest passenger airline—grew faster than the airline industry as a
whole in 2018 by carrying approximately 14 million passengers. However, incidents at this air carrier—
including a series of in-flight engine shutdowns, aborted takeoffs, and unscheduled landings—have
raised concerns about its maintenance practices.

FAA uses its Compliance Program to achieve rapid compliance with regulatory standards, eliminate
safety risks, and ensure positive and permanent changes that benefit the aviation industry. This
program is based on the concept that the greatest safety risk comes from an operator who is
“unwilling or unable” to comply with rules, rather than a specific event or its outcome.

Our objective was to assess FAA’s processes for investigating improper maintenance practices at
Allegiant Air. Specifically, we assessed FAA’s (1) oversight of longstanding maintenance issues
impacting safety at Allegiant Air and (2) process for ensuring Allegiant Air implemented effective
corrective actions to address the root causes of maintenance problems.

What We Found
Since 2011, FAA inspectors have not consistently documented risks associated with 36 Allegiant Air
in-flight engine shutdowns for its MD-80 fleet or correctly assessed the root cause of maintenance
issues. This was because inspectors did not follow FAA’s inspector guidance that requires them to
document changes in their oversight once they have identified areas of increased risk. Also, FAA’s
Compliance Program and inspector guidance do not include key factors related to carriers’ violations
of Federal regulations. Specifically, they do not contain provisions for inspectors to consider the
severity of outcomes when deciding what action to take following a non-compliance. As a result, FAA
is missing opportunities to address maintenance issues and mitigate safety risks in a timely manner.

Our Recommendations
We made nine recommendations to improve the effectiveness of FAA’s oversight of air carrier
maintenance programs. FAA concurred with eight of our nine recommendations and partially
concurred with one. We consider the eight recommendations resolved but open, pending completion
of planned actions. We are asking FAA to reconsider its actions for the partially-concurred
recommendation.


All OIG audit reports are available on our website at www.oig.dot.gov.
For inquiries about this report, please contact our Office of Government and Public Affairs at (202) 366-8751.
Contents
     Memorandum                                                               1

     Results in Brief                                                         3

     Background                                                               4

     FAA Did Not Effectively Oversee Longstanding Maintenance Issues
        Impacting Safety at Allegiant Air                                     6

     FAA Does Not Provide Inspectors With the Guidance and Comprehensive
        Training Needed To Ensure Allegiant Air Takes Effective Corrective
        Actions                                                              11

     Conclusion                                                              16

     Recommendations                                                         16

     Agency Comments and OIG Response                                        17

     Actions Required                                                        18

     Exhibit A. Scope and Methodology                                        19

     Exhibit B. Organizations Visited or Contacted                           21

     Exhibit C. List of Acronyms                                             22

     Exhibit D. Allegiant Air MD-80 Engine Events                            23

     Exhibit E. Air Carrier Maintenance Deficiencies at Allegiant Air’s
        Maintenance Provider                                                 24

     Exhibit F. Major Contributors to This Report                            25

     Appendix. Agency Comments                                               26




AV2020013
           U.S. DEPARTMENT OF TRANSPORTATION
           OFFICE OF INSPECTOR GENERAL




Memorandum
Date:            December 17, 2019

Subject:         ACTION: FAA Needs To Improve Its Oversight To Address Maintenance Issues
                 Impacting Safety at Allegiant Air | Report No. AV2020013

From:            Matthew E. Hampton
                 Assistant Inspector General for Aviation Audits

To:              Federal Aviation Administrator


                 Allegiant Air—the Nation’s 11th largest passenger airline—grew faster than the
                 airline industry as a whole in 2018 by carrying approximately 14 million
                 passengers. 1 However, incidents at this air carrier—including a series of in-flight
                 engine shutdowns, aborted takeoffs, and unscheduled landings—have raised
                 concerns about its maintenance practices. To ensure the safety of these air carrier
                 maintenance programs and the traveling public, the Federal Aviation
                 Administration (FAA) relies on a series of overlapping controls and responsibilities
                 shared with aircraft manufacturers and air carriers.

                 FAA employs more than 4,000 aviation safety inspectors to oversee the Nation’s
                 complex aviation system. These inspectors enforce Federal regulations and
                 promote safety using FAA’s new Compliance Program. This program—which
                 began in October 2015—is based on the concept that the greatest safety risk
                 comes from an operator who is “unwilling or unable” to comply with rules and
                 best practices for safety, rather than a specific event or its outcome. The goal of
                 the program is to achieve rapid compliance with regulatory standards, eliminate
                 safety risks and deviations from the standards, and ensure positive and
                 permanent changes that benefit the aviation industry.

                 Expressing concerns with both Allegiant Air’s maintenance practices and FAA’s
                 oversight of the carrier, Representatives Peter DeFazio, Rick Larsen, Nita Lowey,
                 David Price, Mike Quigley, Katherine Clark, Pete Aguilar, Cheri Bustos, and
                 Senators Jacky Rosen and Bill Nelson requested we conduct this audit. Our audit
                 objective was to assess FAA’s processes for investigating improper maintenance



1Allegiant Air’s passenger growth represents a 12-percent increase from 2017. Further, Allegiant’s passenger
enplanements grew faster than the industry as a whole, which saw domestic passenger enplanements increase by 4.9
percent during this same period.


AV2020013                                                                                                      1
            practices at Allegiant Air. Specifically, we assessed FAA’s (1) oversight of
            longstanding maintenance issues impacting safety at Allegiant Air and (2) process
            for ensuring Allegiant Air implemented effective corrective actions to address the
            root causes of maintenance problems. In a related review also at the request of
            Representatives DeFazio and Larsen, we plan to assess FAA’s oversight of
            American Airlines’ maintenance practices and issue the findings in a separate
            report.

            We conducted this audit in accordance with generally accepted Government
            auditing standards. To conduct our work, we interviewed FAA headquarters staff,
            managers, and inspectors responsible for overseeing Allegiant Air. We also
            interviewed key management officials at Allegiant Air to understand their air
            carrier maintenance programs and obtain their perspective of FAA’s oversight.
            Finally, we analyzed the FAA inspection data from 2012 to 2019 that were
            obtained from its inspectors, Hotline database, and Safety Performance Analysis
            System.

            We appreciate the courtesies and cooperation of FAA representatives during this
            audit. If you have any questions concerning this report, please call me at
            (202) 366-0500 or Tina Nysted, Program Director, at (404) 562-3770.


            cc:    The Secretary
                   DOT Audit Liaison, M-1
                   FAA Audit Liaison, AAE-100




AV2020013                                                                                   2
Results in Brief
                  FAA did not effectively oversee longstanding maintenance
                  issues impacting safety at Allegiant Air.

                  Since 2011, FAA inspectors have not consistently documented risks associated
                  with 36 Allegiant Air in-flight engine shutdowns 2 for its MD-80 fleet or correctly
                  assessed the root cause of maintenance issues. This was because inspectors did
                  not follow FAA’s inspector guidance 3 that requires them to document changes in
                  their oversight once they have identified areas of increased risk. Additionally, FAA
                  inspectors in key oversight roles for Allegiant Air did not complete required
                  training on how to use its new oversight system, which may have contributed to
                  inspectors ineffectively documenting and mitigating risks associated with in-flight
                  engine shutdowns. This occurred because supervisors were not aware of this
                  training requirement and the office did not have a training manager to support
                  inspectors. Lastly, in April 2016, an FAA national review team 4 evaluated Allegiant
                  Air due, in part, to concerns about ongoing in-flight engine shutdowns. However,
                  the team did not specifically focus on the increasing number of in-flight engine
                  shutdowns—one of the reasons they were asked to conduct their review of
                  Allegiant—because they believed that other teams were addressing the
                  problems, which they were not. Due to those oversight gaps, the in-flight
                  shutdowns continued until July 2018 and were only resolved 4 months later when
                  Allegiant Air retired the last of its MD-80 fleet. Therefore, FAA is missing
                  opportunities to address critical maintenance issues in a timely manner and could
                  not provide assurance that Allegiant Air is operating at the highest degree of
                  safety and properly mitigating identified risk.

                  FAA does not provide inspectors with guidance and
                  comprehensive training needed to ensure Allegiant Air
                  takes effective corrective actions.

                  FAA’s Compliance Program 5 and inspector guidance do not include key factors
                  related to carriers’ violations of Federal regulations. Specifically, they do not
                  contain provisions for inspectors to consider the severity of outcomes when
                  deciding what action to take following a non-compliance. Rather, its inspector
                  guidance focuses primarily on an operator’s underlying behavior instead of the



2 In-flight engine shutdowns are serious events that require pilots to take emergency action, such as return or divert
to other airports.
3 Federal Aviation Administration Order 8900.1, Volume 14, Compliance and Enforcement, November 4, 2016. For the

purpose of this report, we refer to FAA Order 8900.1 as “inspector guidance.”
4 FAA national review teams are used to verify that operators are complying with regulations and operating at the

highest degree of safety.
5 Federal Aviation Administration Order 2150.3C, FAA Compliance and Enforcement Program, September 18, 2018.




AV2020013                                                                                                                3
                  severity of outcomes. Also, inspector guidance is vague on how inspectors should
                  evaluate repetitive non-compliances in determining whether to initiate a
                  compliance action or an enforcement action. 6 According to FAA’s Compliance
                  Program guidance, inspectors should reserve enforcement actions for incidents
                  such as intentional or reckless conduct, conduct creating an unacceptable risk to
                  safety, or failure to complete corrective action. However, a 2015 maintenance
                  provider failure at Allegiant Air illustrates, in our view, how severe violations that
                  represent unacceptable safety risks or could result in catastrophic outcomes
                  should also warrant a more stringent oversight approach. In this case, a severe
                  maintenance issue, that put approximately 30,000 passengers at risk, was
                  characterized as egregious by an independent review. Yet, when inspectors
                  proposed a 30-day suspension for Allegiant Air’s maintenance provider—who
                  was unwilling to address non-compliances and provide meaningful risk
                  mitigation actions—FAA regional officials reduced the suspension to a
                  compliance action. Additionally, FAA inspectors closed out six of eight
                  compliance actions before ensuring that Allegiant Air actually took any corrective
                  actions. For example, an inspector closed an Allegiant Air compliance action for
                  weaknesses in its bird strike inspection process even though the air carrier stated
                  it needed approximately 2 more months to test the effectiveness of its proposed
                  actions. FAA also has not provided inspectors with comprehensive training
                  needed to help them analyze root causes of maintenance discrepancies. Without
                  comprehensive training and guidance for inspectors, FAA cannot be sure that
                  underlying safety concerns of maintenance problems are effectively resolved.

                  We are making nine recommendations to improve FAA’s oversight of air carrier
                  maintenance programs.




Background
                  Founded in 1997, Allegiant Air—a wholly-owned subsidiary of Allegiant Travel
                  Company—is an ultra-low cost 7 air carrier, which operates nonstop, scheduled,
                  and charter service to 122 U.S. cities and Puerto Rico on 450 flight routes. Though
                  Allegiant Air now operates an all-Airbus fleet, it began flying McDonnell-Douglas
                  DC-9 and MD-80 twin-engine aircraft until they retired the fleet in November
                  2018.



6 A compliance action is FAA’s non-punitive method for addressing unintentional deviations stemming from flawed
systems and procedures, simple mistakes, lack of understanding, or diminished skills. In contrast, a legal enforcement
action is punitive in nature and could result in civil penalties or suspension of operations. For purposes of this report,
we refer to legal enforcement action as an enforcement action imposed by FAA.
7 Bachwich, Alexander R. and Whittman, Michael D., The Emergence and Effects of the Ultra-Low Cost Carrier (ULCC)

Business Model in the U.S. Airline Industry, Journal of Air Transport Management, vol. 62, pgs. 155-164, July 2017.


AV2020013                                                                                                                4
            Allegiant Air’s business model is unique to the industry and has been consistently
            profitable every quarter since 2003. Unlike traditional air carriers, Allegiant Air
            primarily serves smaller destinations that are less frequented by other major
            carriers. It also keeps ticket prices low by operating less frequently than other
            carriers. The low ticket cost is further facilitated by not providing certain
            passenger amenities, such as frequent flier points or on-board entertainment. The
            carrier is also distinctive in that it offers air travel both on a stand-alone basis and
            bundled with other travel products like hotel stays and car rentals. In addition,
            Allegiant Air stated its ancillary sales revenue is a significant part of its business
            model. These sales include the purchase of products such as advance seat
            assignments, priority boarding, checked and carry-on baggage, and beverages.
            According to Allegiant Air, its business model differs from that of a traditional
            airline (see table 1). Despite these differences, Allegiant must still meet all FAA
            regulatory requirements for commercial air carriers.

            Table 1. Traditional Airlines vs. Allegiant Air Business Models

              Traditional Airline                  Allegiant Air


              Air Transportation                   Travel


              Business, Leisure                    Leisure


              Large Cities                         Small Cities


              High Frequency                       Low Frequency


              Fixed Capacity                       Variable Capacity


              High Cost Assets                     Low Cost Assets


              Competition                          Little Competition


              Unprofitable/Marginally Profitable   Highly Profitable

            Source: Allegiant Air

            To oversee air carriers, FAA relies on a risk-based oversight system, called the
            Safety Assurance System (SAS). SAS is intended to evaluate an air carrier’s ability
            to manage risk and ensure safe operations, as well as focus on air carriers’ safety
            systems and controls. In addition, it provides a risk-assessment tool for FAA
            inspectors to identify and document potential risks. SAS is also part of FAA’s
            broader Safety Management System, which is focused on enhancing safety
            through data analysis to better respond to changes in industry business models
            (i.e., growth and fleet changes).



AV2020013                                                                                         5
                   To identify safety issues and effectively correct them in a timely manner, FAA
                   shifted from an enforcement-based oversight model to one that stresses a more
                   collaborative approach in October 2015. According to FAA, it intends this
                   collaborative approach, called the Compliance Program, 8 to be an FAA inspector’s
                   first choice when trying to achieve rapid air carrier compliance with its
                   regulations. The program encourages the self-disclosure of compliance and
                   safety errors. It also emphasizes education and training over penalizing air
                   carriers—as long as the carrier is “willing and able” to take corrective action—as a
                   means to address non-compliances. When carriers self-disclose, the errors are
                   identified, reported, and analyzed without assigning blame so that just the
                   specifics of each case help FAA determine the appropriate corrective action. For
                   those instances where air carriers are unwilling or unable to correct issues
                   through the Compliance Program, inspectors may still use enforcement-based
                   oversight tools, such as assessing civil penalties or suspending operations.




FAA Did Not Effectively Oversee Longstanding
Maintenance Issues Impacting Safety at Allegiant
Air
                   FAA did not consistently document risks in SAS or properly analyze the root
                   cause of repeated in-flight engine shutdowns at Allegiant Air. This occurred, in
                   part, because inspectors in key roles did not receive training in the fundamentals
                   of SAS. In addition, FAA’s national review team did not evaluate significant
                   maintenance issues at the airline.



               FAA Did Not Consistently Document,
               Correctly Assess, or Identify the Root
               Cause Associated with Allegiant Air’s In-
               Flight Engine Shutdown Problems
                   FAA inspectors did not consistently document risks associated with a series of
                   Allegiant Air in-flight engine shutdowns on its MD-80 fleet (see exhibit D). These
                   shutdowns are considered emergency events and require the pilot to fly with one
                   engine. FAA inspector guidance requires inspectors to document changes in their
                   oversight once they have identified areas of increased risk. Inspectors did not



8   FAA changed the name of its “Compliance Philosophy” to “Compliance Program” in October 2018.


AV2020013                                                                                            6
                 document these changes because they believed SAS did not require it. Further,
                 SAS lacks a management control to ensure that inspectors continue to document
                 risks until the risks have been mitigated.

                 Specifically, in-flight engine shutdowns forced 21 aircraft to return or divert to
                 other airports over a 5-year period between 2014 and 2018. The air carrier
                 reported these events to FAA, but FAA inspectors did not consistently document
                 these risks in their risk planning assessment tools. According to FAA inspection
                 records, inspectors first documented in-flight engine shutdown risks in June and
                 September 2014 but did not track the problem again until January 2016.
                 However, this problem was then only tracked for another month—even though
                 Allegiant Air continued to experience in-flight shutdowns through July 2018.
                 Inspectors should have tracked the risk in their Certificate Holder Assessment
                 Tool (i.e., risk planning tool) until the problem was resolved as required by FAA
                 inspector guidance. During our review of FAA’s records, we could not find
                 documentation or evidence that inspectors consistently tracked the engine risk,
                 which incorrectly suggested that the carrier had successfully mitigated the risk.

                 Despite not tracking engine risk, FAA took the following actions to address the
                 increasing risk of MD-80 in-flight engine shutdowns at Allegiant Air:

                 First System Analysis Team—February 2016

                 In February 2016, FAA inspectors, engine manufacturer representatives, and
                 Allegiant Air officials formed the first of three independent teams—called the
                 System Analysis Team (SAT)— to determine the root cause of three recent engine
                 shutdowns and develop corrective actions. Allegiant Air had already experienced
                 28 in-flight engine shutdowns since 2011 with its MD-80 aircraft—mostly related
                 to loss of engine oil. However, by the time FAA convened the SAT, Allegiant Air
                 had already identified weakened oil lines as the likely cause of nearly half of the
                 shutdowns and planned to replace the faulty lines with re-engineered ones.
                 Meanwhile, FAA attempted to link elevated engine exhaust temperatures 9—
                 which had started to become a problem—to the in-flight engine shutdown
                 issues, even though there was no empirical evidence that suggested the
                 shutdowns were caused by elevated exhaust gas temperatures.

                 Second System Analysis Team—March 2016

                 Despite the lack of empirical evidence, in March 2016, FAA convened a second
                 SAT due to its concerns about elevated exhaust gas temperatures and to address
                 new concerns that arose as a result of the first SAT. An example of one of these
                 concerns is that Allegiant Air did not document certain exhaust gas temperature


9 Exhaust gas temperature is a measure of the temperature of gas exiting the rear of an engine. This reading is used
to monitor the health of an engine. Elevated temperatures—temperatures above the maximum allowable temperature
range—can be an indication of degraded engine performance.


AV2020013                                                                                                         7
            events because the engines did not exceed the manufacturer’s maximum
            temperature limits. Contrary to Allegiant Air’s analysis, FAA expressed concerns
            that extreme engine temperatures could lead to premature engine wear or
            simultaneous failure in both of the MD-80’s engines. FAA informed the carrier
            that it disagreed with Allegiant conducting visual inspections to look for damage
            related to increased engine temperatures instead of performing more
            comprehensive internal inspections. Ultimately, FAA and Allegiant Air agreed on
            six procedural changes designed to improve Allegiant Air’s engine monitoring
            program, and closed the second SAT in March 2016.

            The procedural changes developed by these SATs did not correct the elevated
            engine temperature or the engine shutdown problems. From January to August
            2017, FAA documented more than 150 instances of elevated exhaust gas
            temperatures.

            Third System Analysis Team—September 2017

            In September 2017, FAA initiated a third SAT because Allegiant Air continued to
            experience elevated engine temperature conditions. An FAA analysis revealed
            that Allegiant operated its engines in excess of the manufacturer’s maximum
            temperature requirements 11 times in the previous 8 months. Further, while the
            air carrier was monitoring these engines for instances of elevated engine
            temperatures, it operated 19 aircraft where both engines installed had already
            experienced high engine temperatures. To resolve the elevated temperature
            issue, Allegiant Air moved its MD-80 aircraft out of hot, arid operating
            environments—such as Las Vegas—to a more temperate airport locale. In
            October 2018, FAA closed the third SAT after Allegiant Air agreed to FAA’s call for
            changes to maintenance procedures. The agreement included more rigorous
            inspection and troubleshooting activities after an elevated exhaust temperature
            event.

            MD-80 Fleet Retired—November 2018

            Although Allegiant agreed to FAA’s call for changes during the third SAT, this
            agreement was only in place for about a month before Allegiant retired the last
            of its MD-80 fleet—an action that ultimately resolved the problem. From January
            2011 to the retirement of its MD-80 fleet in November 2018, Allegiant Air
            experienced 36 in-flight engine shutdowns, in part, because FAA was ineffective
            at assessing and identifying the root cause of the problem.


        FAA Inspectors in Key Roles Were Not
        Trained To Use SAS
            FAA inspectors did not receive mandatory training on how to use SAS effectively.
            This is because the Agency does not have the policies and procedures in place to


AV2020013                                                                                    8
                  monitor inspector compliance with training requirements. According to FAA’s
                  oversight office, supervisors were not aware of this training requirement, and
                  there is no training manager to support inspectors. FAA also lacks a policy and
                  tool for reminding managers when training is due.

                  In September 2018, FAA headquarters conducted a Flight Standards Evaluation
                  Program (FSEP) inspection. This inspection is required every 3 years to identify
                  and correct systemic weaknesses and identify program strengths within the Flight
                  Standards Service. The inspection revealed that three inspectors, in key positions
                  assigned to oversee Allegiant Air, did not complete required courses on the
                  fundamentals of SAS and safety data collection. One of these courses provides
                  inspectors with a foundational knowledge of SAS concepts, business processes,
                  and an understanding of how to operate the system. Another course also
                  explains how to accurately translate inspection observations into usable data to
                  support risk assessments. According to the FSEP team lead and our review of
                  program data, inspector failure to complete this training requirement is an
                  agency-wide problem.

                  These missed training requirements may have contributed to inspectors
                  ineffectively using FAA’s oversight system to assess risk, such as inspectors not
                  documenting and mitigating the risks associated with Allegiant Air’s series of in-
                  flight engine shutdowns.


             FAA’s National Review Team Did Not
             Evaluate Two Prominent Allegiant Air
             Maintenance Issues
                  In addition to three System Analysis Teams initiated to address the in-flight
                  engine shutdown issues, FAA also assigned a National Certificate Holder
                  Evaluation Process (CHEP) team 10 to review Allegiant Air. However, this national
                  team did not review two prominent maintenance issues. This is because FAA does
                  not have policies and procedures in place to require that CHEP teams report
                  whether air carriers meet FAA’s stated program goals. The goals of the CHEP
                  program are to verify that the operator complies with applicable regulations,
                  evaluate whether the certificate holder is operating at the highest possible
                  degree of safety in the public interest, and identify hazards and mitigate
                  associated risks.

                  CHEPs are program reviews conducted by inspectors independent of the FAA
                  oversight office for the air carrier being reviewed and are normally conducted


10According to FAA Inspector guidance, evaluation teams may consist of national, divisional, or Flight Standards
office personnel.


AV2020013                                                                                                          9
            every 5 years to evaluate air carriers’ abilities to adhere to Federal aviation
            regulations. However, at the request of the FAA regional office, in April 2016, FAA
            headquarters expedited its CHEP review of Allegiant Air due to concerns that the
            air carrier was experiencing repetitive in-flight engine shut downs. Despite those
            concerns, the team did not evaluate the very issues that prompted the early
            review.

               •   First, the evaluation team did not assess Allegiant Air’s engine shutdown
                   problem. According to the national review team lead, the local FAA
                   inspection office had already convened the SAT to address over-heated
                   engines and the team believed the SAT was addressing the issue.
                   However, it took more than 2 years before the SAT could agree on a plan
                   to mitigate the engine risk and ultimately the risk was not mitigated until
                   Allegiant Air retired the fleet.

                • Second, the CHEP team did not evaluate the repeated failure of an
                  Allegiant Air repair station to complete its required inspections (see
                  exhibit E). The local FAA inspection office provided this information to the
                  CHEP team, but it is unclear why the team did not examine the issue.
                  However, FAA inspectors continued to inspect the repair station and
                  identified similar problems to those that caused an incident in August
                  2015, in which a pilot almost lost control of the aircraft during takeoff
                  when it lifted off prematurely. Each time, the inspectors handled the
                  discrepancies without using enforcement action. By March 2017, more
                  than 18 months after the original incident, FAA inspectors concluded that
                  changes made at the repair station justified ending their increased
                  oversight. Had the CHEP team included this issue during its April 2016
                  inspection, it may have been resolved earlier.

            Overall, we found that—as a result of FAA’s lapse in oversight of key maintenance
            issues impacting safety at Allegiant Air—FAA missed opportunities to address
            longstanding maintenance issues in a timely manner. Further, because the
            national review team did not review these two key maintenance discrepancies, it
            could not determine whether the Allegiant Air was operating at the highest
            degree of safety and properly mitigating identified risk in accordance with its
            program goals.




AV2020013                                                                                   10
FAA Does Not Provide Inspectors With the
Guidance and Comprehensive Training Needed To
Ensure Allegiant Air Takes Effective Corrective
Actions
            FAA’s Compliance Program and inspector guidance do not provide enough detail
            for inspectors to conduct comprehensive oversight. As such, the severity of
            outcomes or reoccurrence of maintenance non-compliances are not factors in
            inspectors’ decisions when initiating a compliance action. Further, the Compliance
            Program allows FAA inspectors to close compliance actions before determining
            whether corrective actions were implemented and effective. Also, FAA inspectors
            did not take important training to aid in the assessment of the air carrier’s root
            cause analysis and corrective action plans to ensure maintenance discrepancies
            were addressed. Finally, FAA has not developed a process to incorporate
            historical compliance action data into its inspection database, leaving the local
            inspection office to develop its own method to compile the data.


        FAA’s Compliance Program Lacks Effective
        Oversight Guidance
            Key Factors Related to Violations Are Not Considered in
            FAA’s Guidance

            FAA inspectors did not consider the severity of outcomes when deciding what
            action to take when an air carrier violates Federal regulations. This is because
            FAA’s inspector guidance and Compliance Program guidance do not specifically
            address this condition. Instead, the Compliance Program guidance states that
            FAA should reserve enforcement actions for incidents such as intentional or
            reckless conduct, conduct creating or threatening to create an unacceptable risk
            to safety, or failure to complete corrective action. Conversely, a severe violation
            that FAA determined was not the result of intentional or reckless conduct, might
            also warrant a more stringent oversight approach, such as assessing an
            enforcement action. However, under FAA’s Compliance Program, FAA no longer
            considers the outcome of a violation when evaluating whether an enforcement
            action or a compliance action would be the right approach following a violation.
            Instead, FAA now focuses on individual behavior when determining whether to
            take an enforcement action. As a result, a violation that could result in a
            potentially catastrophic outcome may not end in an enforcement action.




AV2020013                                                                                    11
            To illustrate this point, in May 2015, Allegiant Air’s maintenance provider failed to
            insert a cotter pin on a critical flight control component on an MD-80 aircraft (see
            figure 1). The cotter pin is designed to prevent a nut from loosening. Once the
            aircraft was returned to service, Allegiant unknowingly operated the aircraft for
            almost 2 months on 216 flights. According to our analysis, approximately 30,000
            passengers were at risk during this time. On August 17, 2015, a pilot almost lost
            control of this aircraft during takeoff when it unexpectedly tried to lift off
            prematurely. Had the aircraft become airborne, a serious incident or accident
            could have occurred because the cotter pin was not installed. Nevertheless, the
            crew was able to abort the takeoff and safely return the plane to the terminal.

            Figure 1. Missing Cotter Pin




            The photo shows an MD-80 elevator rod (red arrow) dislodged from its mounting
            hole (blue arrow) because it was not properly secured with a cotter pin (not
            shown).

            Source: FAA

            Allegiant Air’s investigation determined that its maintenance provider not only
            failed to insert the cotter pin, but also failed to have another technician conduct a
            secondary inspection that is required to ensure it was installed. In addition,
            similar repetitive maintenance issues had occurred with this maintenance
            provider in the past (see exhibit E). As a result, the local FAA inspection office
            proposed an enforcement action, which—had it been upheld—would have
            prevented the repair station from performing work for up to 30 days.



AV2020013                                                                                     12
            After this incident occurred, in October 2015, FAA implemented its Compliance
            Program, which calls for FAA inspectors to collaborate with air carriers and repair
            stations to resolve discrepancies. As a result of the Agency’s new emphasis on
            collaboration, FAA regional staff who were responsible for reviewing enforcement
            proposals, disagreed whether the maintenance provider should receive a 30-day
            certificate suspension or a compliance action (i.e., non-punitive action). When the
            FAA regional staff completed their review in December 2015, they ultimately
            overturned the 30-day suspension proposal and directed the case to be closed
            under the Compliance Program—effectively resolving this case without punitive
            actions.

            The disparate proposed actions in this case occurred because FAA did not use a
            process to address disputes between FAA offices. According to FAA’s
            independent team assigned to review this case, the regional office lacked
            sufficient interdependence because it failed to consult inspectors responsible for
            oversight of Allegiant and its maintenance provider to gain insight into the
            maintenance provider’s compliance posture, willingness, and ability to implement
            an effective corrective action plan. Additionally, FAA staff did not consult with
            legal counsel to determine how to properly proceed with this case, despite their
            differences of opinion. Instead, the case was returned to the local inspection
            office for disposition. According to a senior FAA official, the case should have
            received legal review.

            The seriousness of this case raised questions within FAA about the effectiveness
            of the Compliance Program and whether the decision to address the severity of
            the violation with non-punitive action was consistent with FAA’s safety policy. As
            a result, FAA formed an independent team to review the case and later
            substantiated that a compliance action was “not consistent with the egregious
            nature of the violation, and the intentional disregard [by the maintenance
            contractor] for procedural compliance.” The independent team also stated that
            the maintenance provider “demonstrated patterns of behavior and performance
            that represented an unacceptable risk to safety.” Additionally, the team observed
            that FAA did not use a resolution process to address disagreements between FAA
            offices and suggested that FAA create an issue resolution process to ensure
            disagreements in handling non-conformances are dealt with consistently, using
            the most appropriate processes and all relevant information.

            Despite the findings of the independent team, FAA did not reverse its decision
            and initiate an enforcement action against the maintenance provider. Using the
            Compliance Program to resolve this case proved to be ineffective because FAA
            inspectors determined that similar discrepancies regarding missed mandatory
            inspections persisted, and FAA did not accept and close out the repair station’s
            corrective actions related to this case until March 2017.




AV2020013                                                                                   13
            A second factor FAA inspectors do not consider when determining what action to
            take following a non-compliance is the reoccurrence of maintenance
            discrepancies. For example, Allegiant Air’s maintenance provider repeatedly failed
            to complete required inspections, suggesting that the corrective actions were
            ineffective at addressing the root cause of the problem. This non-compliance
            persisted for 20 months, but inspectors continued to handle the non-compliances
            with compliance actions rather than pursuing a more stringent oversight
            approach. This occurred because FAA’s inspector guidance is vague on how to
            address recurring non-compliances. Conversely, FAA’s Compliance Program
            guidance states that inspectors should consider safety risks when determining
            the appropriate action to take when an air carrier has recurring non-compliances.
            In this case, FAA inspectors did not consider the safety risks that a maintenance
            provider’s repeated failure to complete required inspections could pose to the
            safe operation of the air carrier.

            FAA Inspectors Closed Out Compliance Actions Without
            Determining Whether Corrective Actions Worked

            FAA inspectors did not consistently determine whether Allegiant Air’s corrective
            action plans addressed the root cause of maintenance problems before closing
            compliance actions. This occurred because FAA inspector guidance does not
            specifically require it. Instead, the guidance suggests that an inspector’s decision
            to conduct an inspection (e.g., follow-up inspections conducted after closing out
            compliance actions) is based on whether the issue is complex or not. In
            comparison, a similar program—FAA’s Voluntary Disclosure Reporting Program
            (VDRP) used by air carriers to self-disclose errors to FAA—also requires root
            causes analysis and submission of comprehensive fixes to prevent future
            reoccurrence of problems. However, VDRP goes one step further than FAA
            inspector guidance by requiring inspectors to validate that comprehensive fixes
            address the problem before closing out the disclosure.

            Our analysis of eight compliance actions initiated between 2017 and 2019
            showed that six were closed out before FAA performed inspections of Allegiant
            Air’s corrective actions. For example, an inspector identified weaknesses in
            Allegiant Air’s bird strike inspection process and initiated a compliance action to
            address the issue. After the carrier submitted its corrective action plan to FAA, the
            inspector reviewed and approved the plan. The inspector then closed the
            compliance action—even though Allegiant Air stated it still needed to test the
            effectiveness of the plan. FAA reopened the case against Allegiant Air only after
            we inquired about this disparity.

            The lack of guidance and controls limits FAA’s ability to ensure that discrepancies
            are resolved in an effective and timely manner.




AV2020013                                                                                     14
        FAA’s Root Cause Analysis Training Is
        Insufficient
            According to FAA inspectors, they do not have the training they need to
            effectively evaluate whether proposed corrective actions will address the root
            cause of maintenance non-compliances. While FAA inspector guidance
            emphasizes the importance of inspectors using critical thinking in problem
            solving and correctly identifying root causes to recommend appropriate
            corrective actions to air carriers, inspectors stated that FAA does not provide
            comprehensive root cause analysis training. Also, root cause analysis is a key
            component of both the Safety Management System and FAA’s Compliance
            Program. However, our analysis showed that of the nine maintenance inspectors
            assigned to Allegiant Air, three have not been trained to conduct root cause
            analysis. Though three of the inspectors completed FAA’s 2-hour computer-
            based training course on this topic, two of these inspectors agreed that the
            course did not provide the level of detail needed to determine whether corrective
            action plans would effectively address root causes. According to an FAA
            inspector, other courses offered in the industry provide a much more detailed
            understanding of root cause analysis. FAA’s ability to identify and mitigate safety
            hazards is contingent upon its inspectors being comprehensively trained to
            analyze the root causes and ensure that the proposed corrective actions will
            prevent maintenance problems from recurring.

            The lack of root cause analysis training may result in identified problems not
            being effectively mitigated.



        FAA Has Not Provided Inspectors With an
        Effective Means To Track and Report
        Compliance Actions
            FAA inspectors cannot easily track and report the number or details related to
            compliance actions taken against Allegiant Air because FAA has not developed a
            process for inspectors to capture historical compliance action data. When asked
            to provide us with compliance action details for our analysis, an FAA analyst had
            to search separate databases, such as Safety Assurance System (SAS), Program
            Tracking and Reporting Subsystem, and their local SharePoint site to obtain
            historical and current information. The analyst then manually prepared a report
            for our review. The lack of a process to incorporate historical data into its
            inspection database inhibits FAA inspectors and managers from quickly and
            accurately counting or tracking compliance actions taken against Allegiant Air.




AV2020013                                                                                    15
Conclusion
            Effective and consistent oversight of aircraft maintenance is a critical element of
            maintaining the safety of commercial air carrier operations. FAA has made efforts
            to improve its inspections of air carriers through a risk-based approach to
            oversight and is working more closely with industry to achieve prompt
            compliance and eliminate safety risks through initiatives such as the Compliance
            Program. However, FAA’s Compliance Program is still evolving and currently does
            not provide the guidance and training inspectors need to ensure corrective
            actions are implemented and effective for air carriers, such as Allegiant Air.
            Moving forward with the Compliance Program, the Agency can capitalize from
            lessons learned at Allegiant to improve oversight at all air carriers system wide.




Recommendations
            To improve the effectiveness of FAA’s oversight of Allegiant Air’s maintenance
            program, we recommend that the Federal Aviation Administrator:

               1. Develop and implement a management control to require managers to
                  review and validate that known risks documented in the Safety Assurance
                  System Certificate Holder Assessment Tool are tracked until mitigated.

               2. Develop and implement policies and procedures to monitor inspector
                  compliance with Safety Assurance System training requirements.

               3. Revise its inspector guidance to require Certificate Holder Evaluation
                  Process teams to report inspection results to the local inspection office,
                  including a determination on whether the carrier is operating at the
                  highest possible degree of safety in the public interest and how the team
                  reached that conclusion.

               4. Revise its Compliance and Enforcement guidance and its Inspector
                  guidance to include the severity of outcomes as a factor in considering
                  whether inspectors should initiate compliance or enforcement actions.

               5. Develop and implement a resolution process to ensure disagreements in
                  handling non-compliances are dealt with consistently, using the most
                  appropriate processes and all relevant information.

               6. Revise its inspector guidance to clarify how inspectors address recurring
                  non-compliances as a factor in considering whether they should initiate
                  compliance or enforcement actions.



AV2020013                                                                                    16
               7. Revise its inspector guidance to require inspectors to determine that
                  corrective actions taken by air carriers are implemented and have
                  addressed known discrepancies prior to closing compliance actions.

               8. Perform a comprehensive review of FAA’s root cause analysis training to
                  ensure it meets Agency expectations. Modify training, as appropriate,
                  based on the review and require inspectors to complete the course(s) or
                  offer inspectors access to industry-based training programs.

               9. Develop and implement a process to incorporate historical compliance
                  actions in SAS for inspectors to track current and historical compliance
                  actions.




Agency Comments and OIG Response
            We provided FAA with our draft report on October 22, 2019, and received its
            formal response on November 27, 2019, which is included as an appendix to this
            report. FAA concurred with eight of our nine recommendations as written and
            provided completion dates for recommendations 1 through 3 and 5 through 9.
            FAA partially concurred with recommendation 4. Although it agreed to clarify its
            compliance and enforcement policy, we are requesting that FAA reconsider its
            actions for this recommendation, as detailed below.

            For recommendation 4, FAA partially concurred because the Agency does not
            believe “severity of outcome” should be a significant determinant of how best to
            return an air carrier to compliance. FAA further stated that the decision to
            implement a compliance versus an enforcement action is more appropriately
            based upon factors such as whether the conduct was reckless, intentional, or
            indicates an inability or unwillingness of the air carrier to comply with the
            regulations. We agree with FAA’s premise that reckless and intentional behavior
            should be a key determinant in deciding whether to take an enforcement action.
            However, we question how a regulatory violation that could have resulted in a
            potentially catastrophic outcome should not also be a key factor in making this
            determination. Moreover, FAA’s position is inconsistent with FAA’s Compliance
            and Enforcement guidance. Specifically, the guidance calls for taking enforcement
            action when conduct creates or threatens to create a significant risk to safety,
            which could lead to a severe outcome. While FAA has agreed to revise its
            guidance and enforcement policy in light of our draft report findings, it remains
            unclear how this will address our specific concerns regarding violations which
            could have catastrophic consequences. Therefore, we are requesting that FAA
            reconsider and, if necessary, clarify its actions concerning this recommendation.




AV2020013                                                                                    17
Actions Required
            We consider recommendations 1 through 3 and 5 through 9 resolved but open,
            pending completion of the planned actions. In accordance with DOT Order
            8000.1C, we request that FAA provide, within 30 days of this report, the additional
            information on recommendation 4.

            We appreciate the courtesies and cooperation of FAA representatives during this
            audit. If you have any questions concerning this report, please call me at (202)
            366-0500 or Tina Nysted, Program Director, at (404) 562-3770.




AV2020013                                                                                   18
Exhibit A. Scope and Methodology
            We conducted this performance audit between August 2017 and October 2019 in
            accordance with generally accepted Government auditing standards. Those
            standards require that we plan and perform the audit to obtain sufficient,
            appropriate evidence to provide a reasonable basis for our findings and
            conclusions based on our audit objectives. We believe that the evidence obtained
            provides a reasonable basis for our findings and conclusions based on our audit
            objectives.

            We initially planned to conduct an industry-wide audit of FAA’s oversight of air
            carrier maintenance programs. We began our audit work by visiting two air
            carriers and associated FAA oversight offices for JetBlue Airways and Alaska
            Airlines. However, we decided to refocus the next phase of the audit after
            determining that FAA had moved its oversight strategy from emphasizing
            enforcement actions to working with carriers collaboratively to address the root
            causes for violations of safety regulations. Furthermore, we received several
            requests from various congressional committees and members asking us to
            examine a range of issues associated with FAA’s oversight of Allegiant Air that
            had been highlighted in media reports.

            Given the increased congressional interest, we modified our audit objectives to
            assess FAA’s processes for investigating improper maintenance practices at
            Allegiant Air. Specifically, we assessed FAA’s (1) oversight of longstanding
            maintenance issues impacting safety at Allegiant Air, and (2) process for ensuring
            Allegiant Air implemented effective corrective actions to address the root causes
            of maintenance problems. In a related review, also at the request of
            Representatives DeFazio and Larsen, we plan to assess FAA’s oversight of
            American Airlines’ maintenance practices and issue the findings in a separate
            report.

            We conducted our audit work at FAA Headquarters and the FAA Pacific
            Certificate Management Office in Las Vegas, Nevada—which is responsible for
            overseeing Allegiant Air. We also interviewed key management officials at
            Allegiant Air to understand their maintenance programs and obtain their
            perspective of FAA’s oversight. To assess the Agency’s capability to investigate
            allegations of improper maintenance practices at Allegiant Air, we reviewed and
            evaluated FAA policies and procedures that govern the oversight of air carrier
            maintenance. We interviewed four of eight inspectors—who were available at the
            time of our visit—regarding Allegiant Air’s maintenance programs. We also
            reviewed correspondence exchanged between FAA and Allegiant. Additionally,
            we analyzed FAA inspection data for 2014 to 2018, obtained from its Safety
            Performance Analysis System and submissions to FAA’s Hotline database.



Exhibit A. Scope and Methodology                                                           19
            To determine whether FAA ensured Allegiant Air implemented effective
            corrective actions to address the root causes of maintenance problems, we
            analyzed FAA’s Compliance Actions. We obtained a listing of all compliance
            action records—16 in all—between 2017 and 2019 from FAA’s Safety Assurance
            System. We performed a file review of all eight closed records to determine if
            FAA inspectors conducted follow-up inspections of the Compliance Actions.




Exhibit A. Scope and Methodology                                                         20
Exhibit B. Organizations Visited or Contacted

          Department of Transportation
             FAA Headquarters, Flight Standards Service

             FAA Office of Audit and Evaluation

             Alaska Airlines Certificate Management Office

             Delta Air Lines Certificate Management Office

             New York Flight Standards District Office

             Pacific Certificate Management Office

             Western-Pacific Region Technical Standards Branch, Air Carrier

             Western-Pacific Region Technical Standards Branch, General Aviation



          Other Organizations
             Alaska Airlines

             Allegiant Air

             JetBlue Airways




Exhibit B. Organizations Visited or Contacted                                      21
Exhibit C. List of Acronyms
             AAE-1            Director, Office of Audit and Evaluation
             A/C              Aircraft
             AVS-1            Associate Administrator for Aviation Safety
             CHEP             Certificate Holder Evaluation Process
             DOT              Department of Transportation
             EIR              Enforcement Investigative Report
             EGT              Exhaust Gas Temperature
             FAA              Federal Aviation Administration
             FSEP             Flight Standards Evaluation Program
             IFSD             In-Flight Shut Down
             LOC              Letter of Correction
             MEL              Minimum Equipment List
             OIG              Office of Inspector General
             PAC CMO          Pacific Certificate Management Office
             RMP              Risk Management Process
             SAS              Safety Assurance System
             SAT              System Analysis Team
             VDRP             Voluntary Disclosure Reporting Program




Exhibit C. List of Acronyms                                                 22
Exhibit D. Allegiant Air MD-80 Engine Events




Exhibit D. Allegiant Air MD-80 Engine Events   23
Exhibit E. Air Carrier Maintenance Deficiencies at Allegiant Air’s
Maintenance Provider




Exhibit E. Air Carrier Maintenance Deficiencies at Allegiant Air’s Maintenance Provider   24
Exhibit F. Major Contributors to This Report
             TINA NYSTED                       PROGRAM DIRECTOR
             KEVIN GEORGE                      PROJECT MANAGER
             MARK PERRILL                      SENIOR ANALYST
             RUTH FOYERE                       SENIOR ANALYST
             WAYNE VAN DE WALKER               SENIOR AUDITOR
             TANIESHA WILLIS                   SENIOR ANALYST
             EBONI NOLAND                      AUDITOR
             SUSAN CROOK-WILSON                WRITER-EDITOR
             SETH KAUFMAN                      SENIOR COUNSEL




Exhibit F. Major Contributors to This Report                      25
Appendix. Agency Comments
                       Federal Aviation
                       Administration

  `


  Memorandum
  Date:        November 27, 2019
  To:          Matthew E. Hampton, Assistant Inspector General for Aviation Audits

  From:        H. Clayton Foushee, Director, Office of Audit and Evaluation, AAE-1
  Subject:     Federal Aviation Administration’s (FAA) Response to Office of Inspector
               General (OIG) Draft Report: FAA’s Oversight to Address Maintenance
               Issues Impacting Safety at Allegiant Air


  The FAA has initiated compliance actions at Allegiant Air that have improved safety for the
  flying public, are generally consistent with FAA’s Compliance Program, and are in
  accordance with Safety Assurance System (SAS) policies. Nonetheless, the FAA continually
  strives to enhance the agency’s oversight posture and, and we will work with the OIG
  regarding its draft report recommendations.

  We have reviewed the draft report and offer the following clarifications:
          •   The OIG draft report describes the actions taken by the FAA as insufficiently
              responsive to deficiencies at Allegiant Air. In addressing non-compliance
              concerns at Allegiant, inspectors within the Certificate Management Office
              (CMO) did track issues within the SAS. The CMO responded by convening
              Safety Analysis Teams (SATs) when elevated risk was identified and modified
              its approach as new information was obtained. In addition to conducting a
              Certificate Holder Evaluation Program (CHEP) review on Allegiant, the FAA
              conducted a separate SAT to address the engine maintenance concerns addressed
              in the report. These actions complemented one another. Through these elevated
              review processes, the FAA continued to focus on and engage with Allegiant Air.
              Between October 2015 and December 2018, the FAA completed 49 compliance
              actions related to airworthiness, along with initiating 3 enforcement actions
              relating to airworthiness. These actions increased safety for the public and
              improved the safety culture of the operator.


Appendix. Agency Comments                                                                      26
     •   The OIG draft report suggests that the “severity of an event” should be a key
         factor in deciding what action to take following an air carrier’s violation of the
         regulations. The FAA disagrees that severity should be a key factor in this
         determination. The Compliance Program was designed to address underlying
         behaviors and systems that are the root causes of deviations in determining what
         action(s) to take. Certain behaviors, such as intentionally acting contrary to the
         regulations or reckless behavior, represent the highest risk to safety, regardless of
         the severity of a particular violation.

Upon review of the recommendations, we concur with recommendations 1-3 and 5-9. We
will implement recommendation 2 and 8 by June 30, 2020 and recommendations 1, 3, 5, 6, 7
and 9 by October 31, 2020.

We partially concur with recommendation 4, because we do not believe “severity of outcome”
should be a significant determinant of how best to return an air carrier to compliance. The
FAA believes that the severity of a violation is often based upon chance and other factors
unrelated to the root cause(s). The decision to implement a compliance versus an enforcement
action is more appropriately based upon factors such as whether the conduct was reckless,
intentional, or indicates an inability or unwillingness of the air carrier to comply with the
regulations. These parameters best predict the likelihood of future non-compliance. We do
recognize that clarification of this aspect of the compliance and enforcement policy is
necessary in light of the draft report findings, and intend to update that guidance by October
31, 2020.

We appreciate this opportunity to respond to the OIG draft report. Please contact H. Clayton
Foushee at (202) 267-9000 if you have any questions or require additional information about
these comments.




Appendix. Agency Comments                                                                        27
             Our Mission
 OIG conducts audits and investigations on
behalf of the American public to improve the
performance and integrity of DOT’s programs
   to ensure a safe, efficient, and effective
       national transportation system.