Observations on H.R. 3774, 'The Aging Aircraft Safety Act of 1989'

Published by the Government Accountability Office on 1990-05-23.

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

                        United     States General Accounting   Office

For Release             Observations       on H.R. 3774,   "The         Aging
on Delivery             Aircraft     Safety   Act of 1989"
Expected    at
1O:OO a.m. EDT
May 23, 1990

                        Statement    for the Record    of
                        Kenneth    Y. Mead
                        Director,    Transportation    Issues
                        Resources,     Community,   and Economic
                        Development     Division

                        Before    the
                        Subcommittee      on Aviation
                        Committee     on Public    Works
                        and Transportation
                        House of Representatives


                   ~clcD~7-7     /I Ii--\ \+?iL                                     GAO FOHII 160 ‘S/fJV
 Mr. Chairman and Members of the Subcommittee:

          We appreciate    the opportunity     to testify    on H.R. 3774, "The
 Agi ng Aircraft      Safety Act of 1989."       The purpose of the bill      is to
 reduce the safety risk of older aircraft              and thus raise the
 public's     confidence     in the overall    safety of the U.S. air transport
  fleet.     Our observations      today are based on a significant       body of
-work that we have underway in the areas of aging aircraft,                aircraft
 maintenance,       and FAA (Federal Aviation       Administration)   over5ight     of
 that maintenance.         We testified    before your Subcommittee in October
  of last year that FAA needed an overall            plan for coordinating
  activities     in the aging aircraft      area.1     The Department of
 Transportation       recently    informed us that FAA is developing       such a
  plan and we will be interested          in reviewing the specifics      of that

        Among other actions,      H.R. 3774 would require that, within 1
 year of reaching a predetermined         age based on usage or the passage
 of time, each aircraft       in the U.S. fleet be removed from service so
 that (1) FAA can review the aircraft's          maintenance documentation   to
 determine whether the aircraft         is safe to continue service,    (2) FAA
 can conduct a direct,      on-site   inspection   of the aircraft,  and (3)
 the aircraft      operator can demonstrate to FAA that maintenance has
 been adequate and timely enough to ensure the highest degree of
 safety.      If these three actions are accomplished successfully,        FAA
 would allow the aircraft       to continue to be used for air
 transportation      for a period of time which is not specified      in the
 bill.    Thus, the bill    is designed to provide a high degree of
 assurance that older aircraft        remain airworthy.

        While we agree that this assurance needs to exist,    we believe
 that   several practical  obstacles will handicap successful

 lAsins Aircraft:   FAA Needs Comnrehensive Plan to Coordinate
 Government and Industrv Actions (GAO/RCED-90-75, Dec. 22, 1989).
implementation  of the legislation.         For example, our work suggests
that, because of the following       scenarios,   implementing the bill
would either be economically      frustrating    or have other
unintentional  effects on FAA's inspection        programs:

          Enormous pressure would be placed on FAA's inspector                  work
          force over a relatively       short time period.         TO inspect
          within    1 year the 1,400 aircraft       that now qualify        based on
          age, our work shows that FAA may have to dedicate almost
          three quarters of its airworthiness            inspectors.      This
          would severely constrain        FAA’s  ability     to effectively
          oversee its routine airline         maintenance activities         that are
          unrelated    to aging aircraft.

      -- In addition,    we foresee a virtual     inundation    of the
         aircraft   repair and maintenance industry        with demand for
         services.     Our preliminary   analysis    of this industry   shows
         that during the near term the industrial          capacity will not
         exist to accommodate the added demand on repair facilities
         that this bill    would create.

        These concerns notwithstanding,           we believe    that, with some
modifications,      the bill's     goal of lowering the safety risk of older
aircraft      can be achieved with the resources available               and without
unduly affecting       flight    schedules,    airfares,     or other necessary
routine     fleet maintenance.        In our statement,       we propose and
discuss three alternatives          to the bill,      including    integrating     the
bill's    requirements      into other recent regulations          for additional
maintenance of the aging fleet,            targeting     a sample of the fleet for
inspection,      and inspecting     a random sample of the fleet.              We also
suggest that FAA will need to work closely with industry                     in
developing mechanisms that will enable FAA to stretch                    its resources
over a broader area and target them as necessary at high-risk


        Many in the aviation       community, including     FAA and alLline
representatives,        do not agree with the proposals outlined          in H.R.
3774. In their opinion,          this proposal implies that current airline
maintenance practices         under Part 121 of the Federal Air
Regulations,       coupled with existing     FAA inspection     oversight   and
enforcement policy,         are not enough to assure the American public
that each aircraft        that has exceeded its economic design life is
safe enough to continue flying.            While no one would say that
airline    maintenance and federal       inspection   oversight     are
inadequate,      the facts discussed below tend to undermine the
confidence that can be placed in this system for assuring aircraft

      -- A few air tragedies,        some involving     older aircraft,     in
         recent years have been attributed           to inadequate maintenance
         and inspection     oversight.       For example, as brought out in
         this Subcommittee's        hearings in September 1989, the
         National    Transportation      Safety Board attributed        the 1988
         Aloha Airlines     incident     primarily   to the airline's      failure
         to detect fuselage skin and structure             defects on a 19-year-
         old aircraft,     FAA's failure      to require certain      inspections
         proposed by the plane's manufacturer,             and lack of action by
         FAA or the manufacturer         to correct structural       problems that
         were discovered early in the aircraft's             production.

      --   It is becoming more widely known that the nation's           aging
           air transport      fleet is an increasingly    larger portion     of
           the whole.       Over 1,400 of the nation's    4,100-plane    fleet
           have exceeded their economic design lives in terms of
           years-in-service        and over 450 in terms of flight    cycles
            (take-offs    and landings).     In fact, very few turbo-jet
           aircraft    have ever been retired,      and most will probably
         see many more years of service.   (See appendix         I for
         additional information on the aging fleet.)

      -- Little   is known about the status of the older aircraft          in
         the fleet because FAA does not keep records of individual
         aircraft   by owner/operator,     age, structural    problems, or
         compliance with specific      air safety regulations.       This
         means that (1) unless an aircraft       has recently     undergone a
         comprehensive maintenance overhaul and (2) FAA inspectors
         were either present during the overhaul or reviewed its
         documentation,    FAA cannot attest to the air safety status
         of a specific   aircraft   at any given time.      This is one of
         the circumstances     that H.R. 3774 is trying     to correct.


         Our work in the areas of aircraft    maintenance and FAA's
oversight     of this activity shows that a more structured         approach
may be needed to assure the integrity       of the aging fleet.        For
example, we believe that each of the following           factors could
mitigate     against the kind of high quality    aircraft     maintenance that
the public expects:

      -- Maintenance of even the same model aircraft       is airline
         specific  and can vary significantly    across airlines.
         Moreover, aircraft   often move frequently    among airlines     or
         from one lease arrangement to another and, therefore,         are
         subject to a variety    of maintenance practices,     some of
         lower quality   than others.

      -- A significant     segment of our fleet is always being
         operated and maintained out of the country where FAA has no
         official    cognizance or jurisdiction.
      -- Finally,    FAA, the agency charged with overseeing          airline
         maintenance,    has had difficulty      maintaining   a sufficient
         inspector    work force, training     its inspectors    to handle          new
         problems such as corrosion,        and adequately ensuring
         compliance with its regulations         for maintaining

These factors     are discussed      in more detail     below.

Closer Scrutinv Would Identifv          Variations
in Maintenance Qualitv

        Aircraft    manufacturers       and FAA have long known that not all
aircraft      maintenance is equal and that some maintenance can fall
below the standard called for in the regulations.                   FAA was
concerned with the aging fleet long before the Aloha incident.-                     In
May 1981, FAA issued Advisory Circular                91-56, which provided
guidance to ensure the safe operation                of older aircraft    and kicked
off manufacturers'         aging-fleet      surveys.    Based on these surveys of
older aircraft,        manufacturers       have learned that maintenance varies
significantly       from operator to operator and that corrosion              is a
more serious problem than fatigue.                In describing   their findings      to
us, Boeing officials          said that not all operators'        maintenance
programs are equivalent.             Moreover, the National Transportation
Safety Board has documented poor maintenance practices--notably                     in
its investigation         of the Aloha 737 and two other similar           aircraft
belonging to Aloha.           Because other cases of improper airline
maintenance or inadequate FAA oversight                of its maintenance
regulations      have occurred,        a closer look at our aging fleet could
identify      and-correct     these problems, thus providing          maximum
assurance of the fleet's            safety.

       Complicating the variation-in-maintenance   issue is the
widespread practice    for banks, trust companies, and equipment
leasing companies to buy new and used aircraft     and lease them back
to various U.S. and foreign operators.             Under lease arrangements,
some aircraft     move frequently    among operators and therefore               are
subject many different      maintenance programs.          As of March 1, 1990,
51 percent of the 4,125-aircraft          U.S. fleet was leased.             (See
appendix II.)      However, a leasing company does not always plan to
own a plane over its whole lifetime.            Two such aircraft          and their
various operators      are shown in appendixes III and IV.               Over a
period of 9 years, 11 different          operators were responsible             for the
maintenance of one of these planes.            These operators,        while not
operating    their aircraft    unsafely,    may not have as much economic
incentive    to perform the kind of high quality            and costly
maintenance that would extend the aircraft's             life as might aircraft
operators who own their planes.           And the actual owners--the
lessors-- of the aircraft      are often financial       institutions         that are
not in close contact with the aircraft            and its maintenance.
Therefore,     the quality  and level of maintenance performed on -
aircraft   that move frequently      among operators,        lessors,      and other
owners could be lower than that for operator-owned                 aircraft.

Foreian    Owned, Operated, and/or        Maintained
Aircraft    Pose Special Problem

      Especially    relevant   to the merits of H.R. 3774 are the
approximately     139 U.S. registered     aircraft,   or about 4 percent of
the fleet,    that are flown over foreign routes--with           some U.S.
points of arrival      and departure-- and maintained by foreign
operators.      These aircraft    are required to be operated and
maintained    under federal aviation      regulations    enforceable   by FAA:
but because the aircraft       are out of the country       most of the time,
FAA does not.have a great deal of access to them. When the lease
arrangement or ownership of one of these aircraft             changes and it
begins operation     in the U.S., a requirement       exists for the aircraft
to be inspected to ensure compliance with FAA regulations.
However, a special problem is presented at this point because no
data base exists that FAA can turn to for the maintenance status--
including     compliance with air safety regulations,      aircraft   age,
ownership, and schedule of planned mandatory repairs--of            a specific
aircraft    that is identified    by tail   or serial  number. This is
further    support for establishing      an air safety inspection    process
for older aircraft      during which the current operator can
demonstrate that the aircraft       has been properly    maintained
throughout     its life and continues to be airworthy.

FAA's Shortaae of Qualified          Personnel    Makes
Adecruate Insoection Difficult

        FAA has had longstanding       problems in recruiting           and retaining
aircraft    safety inspectors.      Although the agency's goal is to have
3,100 inspectors     on board by the end of 1991, as of April 1, 1990,
FAA had only 2,128.      Only about 930 are assigned to oversee the
maintenance programs of the major airlines,                 and only about half of
this number have a specialty         in structural        airworthiness.
Furthermore,     FAA's current inspector         staffing     did not allow for (1)
the recent emphasis to perform more direct                inspection     of aircraft
instead of relying     on reviews of maintenance documentation,                  (2)
growth in the size of the commercial fleet,                 or (3) an emerging need
for oversight     of an expanding domestic and foreign repair station
industry.     Also, developing courses for special airworthiness
hazards, such as corrosion,        has been stalled          at the FAA Academy for
lack of personnel.2      Finally,     we reported recently           that FAA's
oversight    of its airworthiness       directive      program is inadequate to
determine whether airlines        are complying with the directives3                 and

2Aviation    Trainins:    FAA Aviation Safetv Insoectors Are Not
Receivina    Needed Training   (GAO/RCED-89-168, Sept. 14, 1989).
3Aviation    Safetv:     Manaaement Imorovement Needed in FAA's
Airworthiness     Directive   Proaram (GAO/RCED-90-94, Feb. 16, 1990).

                                          7                           i
    that its inspection     management system needs attention         from FAA


            If passed, H.R. 3774 should have a positive             impact on one of
    FAA's major goals --ensuring          the safety of air travel.         And, no
.   doubt, requiring       inspection     of each aircraft's     airworthiness
    before it exceeds its economic design life would add substantially
    to the safety of the aged fleet.             However, there would, of course,
    be costs associated         with this additional      assurance.     Record checks
    and aircraft     inspections      are time-consuming     tasks, and airline
    officials    have told us that every day an aircraft              is out of
    service costs an airline          $25,000 to $30,000.       Such out-of-service
    opportunity     costs will cause financial         strain to all airlines
    affected    and could be catastrophic         to small airlines      that cannot
    afford to ground their aircraft           for extended periods.         Thus,
     inspecting    aging aircraft      will pose a familiar      dilemma to FAA:
    balancing    air safety against the economic impact of such safety on
    the aviation      industry.

           In addition,     taking actions to maximize safety could create
    more workload than can be accomplished with existing          resources.
    The two kinds of resources that will be in short supply are FAA
    inspectors    and repair facilities      that can inspect and work on
    large transport      aircraft.    We have some options,   however, for the
    Subcommittee's      consideration   that we believe would accomplish the
    bill's   goals but would be less resource intensive.

    4Aviation   Safetv: FAA's Insoection  Manaaement Svstem Lacks
    Oversiaht   (GAO/RCED-90-36, Nov. 13, 1989).
         Section 2 of H.R. 3774 would require FAA not only to review
the maintenance paperwork of all aircraft          exceeding their economic
design life,      but also to perform a direct     structural   inspection       of
that portion      of the fleet.    FAA estimates that this airworthiness
audit would take a team of six inspectors          a minimum of 2 weeks to
thoroughly      review paperwork and inspect the aircraft's        structural
 integrity.      Given that about 1,400 of the over 4,100 aircraft            in
the U.S. fleet have currently         exceeded 20 years in service,       the
 immediate task of inspecting       these aircraft    within the l-year
period specified       in the bill  is very time-consuming     and labor-
 intensive.      Moreover, every year more and more of the fleet will
exceed its economic design life and qualify           for inspection.

         Assuming that an age criterion          is used rather than the number
of flights      or flight    hours, we estimate the immediate impact that
this task would have on FAA inspector               workload is as follows:
Teams of 6 inspectors          (including    inspectors    with structural
expertise)      working 2 weeks each on 1,400 aircraft             would require
about 350 staff-years,           or 350 people working for 1 full year.            FAA
currently     has a total     of a little      over 2,100 inspectors,
approximately       930 of whom are assigned to oversee maintenance
programs of Part 121 scheduled air carriers.                  Of the 930, about
493 are airworthiness          inspectors.      This means that almost three
quarters     (350 out of 493) of FAA's qualified             inspector    work force
would be required to accomplish the bill's                objectives.      With this
many inspectors        focused on a single task, FAA may be hard-pressed
to effectively        accomplish its other safety compliance tasks.               These
tasks include overseeing airline             maintenance on a daily basis:
approving changes to airline            maintenance programs, modifications          to
aircraft,      and changes to fleet composition:           evaluating     airline
maintenance training         programs; and performing          enroute,   ramp, and
facility     inspections.
                                           9                            i
Inadeouate ReDair Station        CaDaCitV to
Accommodate ReDair Work

      In addition    to the added pressure that the bill     would put on
the inspector     work force, H.R. 3774 would create severe scheduling
problems for the repair station      industry.   This is because proper
inspection    of an aircraft  should be done while the aircraft      is
completely    enclosed inside a permanent structure,      out of the
weather and wind.      The number of such structures    that can be used
for this purpose, however, is limited.

        On the basis of our observations        and discussions       with
officials     U.S repair stations --both independent and airline              owned--
we have identified         about 50 repair stations       in the U.S. that can
physically      accommodate large transport      aircraft      and that have the.
capability      to maintain these aircraft.        While some of these          -
stations     are owned by major U.S. airlines         and have several large
hangars that can completely          accommodate a dozen or more aircraft,
others are smaller independent facilities             that can enclose only a
few aircraft        at one time.    To provide a rough estimate of the
industry's       ability   to respond to the bill's       requirements,     we asked
a sample of both airline          and independent repair stations          what
portion     of their capacity was projected        to be used in 1990.
Overall,     the five airlines      and four independent repair stations
that we surveyed reported operating           at or near 100 percent of
capacity.        One independent repair station       even turned away more
aircraft     than it worked on in 1989. Moreover, these repair station
officials      told us that because of skilled         labor and space
shortages,       the industry    cannot expand in the near term to meet any
significant        increase in demand.

       Therefore,    to respond to H.R. 3774's requirements    for
inspecting     older aircraft,  the airline  industry  would have to
displace    or postpone a large amount of scheduled repair and
maintenance.       This could mean grounding some aircraft,    raising
airline      costs,    and eventually    affecting    airfares    and reducing
flight      service.


      Recognizing the practical      obstacles to full   implementation of
H.R. 3774, we have identified      three options that lessen the impact
on inspector    and repair station    resources by either reducing the
number of aircraft     to be inspected or extending the time period
for accomplishing    this task.    Below we describe the three options:
however, others or combinations       of these also could be developed.

          -- The 100 percent inspection           requirement    of the bill     could be
             retained,    but the inspections         could be performed in
             conjunction     with airlines'       schedules for accomplishing
             repair work specified          in a number of new air safety            -
             regulations     recently     issued by FAA. These proposed
             regulations     address problems associated with aging
             aircraft,     and FAA has given the airlines           4 years to comply.
             Combining the new regulations            with the proposed
             inspections     would spread out over 4 years the initial               wave
             of 450 to 1,400 aircraft          that have currently       surpassed
             their economic design lives.             (And over the 4-year period,
             more aircraft      will be added to the first          1,400.)     This
             alternative     has the advantage of having a less severe
             impact on both FAA's inspection             resources and the repair
             industry    than the H.R. 3774 approach.            This option would
             tend to promote air commerce (lessen the cost impact on
             operators)     more than H.R. 3774 because it would spread the
             inspections     out over a longer time period.             The safety risk
             for the fleet due to inspecting             some aircraft     toward the
             end of the 4-year period could be lessened by scheduling
             the oldest aircraft        first.

-- A random sample of each airline's             fleet could be taken with
   the objective     of evaluating      the remainder of the airline's
   fleet based on the inspection           results     of the sample.
   Additional     samples could be taken depending on the results
   of the evaluation.        This sampling approach, coupled with
   testing    of representative      aircraft      bodies to determine the
   time period over which the inspection               would be valid,      is
   an alternative     that FAA says would accommodate their
   resources.      While it, too, would be more practical               than the
   100 percent inspection        options and would take fewer
   aircraft    out of service,     results      of inspecting      a sample
   could not be projected        across an entire fleet without
   taking a fairly      large sample.        Moreover,      this option would
   not raise assurance of safety on a plane by plane basis as
   much as the 100 percent inspection              options,     and its
    implementation    would be complicated by the movement of-
   aircraft    in and out of an airline's           fleet.

-- A "targeted"      sample of aircraft        could be selected from the
   U.S. fleet reflecting         the quality     of airline      maintenance
   programs.      Sampling criteria        could be based, for example,
   on the results      of manufacturers'        aging-fleet      surveys, FAA's
   ongoing inspection        team visits     to airlines,      the amounts of
   civil   penalties    that FAA assessed airlines           for violations,
   and other indications         of maintenance program quality.
   Depending on the results         of inspecting        the sample, other
   samples could continue to be taken and maintenance programs
   and practices      could be altered or the status guo retained
   as appropriate.        This option would not ensure as high a
   degree of safety on a plane by plane basis, but it is more
   practical    than the 100 percent inspection             option in terms
   of resource use.        It also is sensitive          to airlines'    need to
   keep their aircraft         in service.      Moreover, this option is
   in line with a recommendation we made in our management
   reVieW    of the Department of Transportation              in which we said
                                   12                          .
          that FAA should use safety data to target              its   inspector
          resources at high-risk  conditions.5

       Regardless of which of these or other options the Subcommittee
may wish to consider and eventually          implement, FAA will need to
make many decisions       about how it will use its inspector            resources.
While aircraft      inspection   and structural      expertise    exists in the
private     sector that can supplement FAA staff,           taking advantage of
it will require advance planning and coordination.                  For example,
FAA is exploring       the concept of a Wself-audittl         capability    that
would exist within an airline        that already has a qualified             quality
assurance organization.        While this is an emerging issue and FAA
has only within the last year begun to explore its application                      to
aircraft     maintenance and inspection      activities,       it is highly
relevant     in the context of H.R. 3774 because of the impact that
bill    could have on FAA inspector      resources.

      Aircraft     operators also will need to plan ahead.    It will be
imperative     for each operator to forecast  how this legislation    will
apply to his fleet and make early plans for scheduling        the
inspections     within the repair industry's  capacity to provide the

      In short, achieving the bill's     goals will not be easy.     It
will require some sacrifices      and much coordination   on the parts of
many members of the aviation      community.   To better ensure that this
happens and regardless     of which approach the Committee chooses to
implement the legislation,     the Committee may wish to consider
adding to Section 2 (6) of the bill      the requirements   that FAA

      -- track    maintenance     status   and other    information     using      a tail

5See Denartment of Transoortation:    Enhancina Policv and Proaram
Effectiveness  Throuah ImDrOVed Manaaement (GAO/RCED-87-3, Apr. 13,
                                   13                  .
         or serial number-based       system and thus provide      a basis   for
         choosing which aircraft       to inspect first  and

      -- establish   a plan for working with operators    and
         manufacturers    for the purposes of augmenting FAA staff
         resources and scheduling     aircraft through the inspection

       In summary, we agree that if an older aircraft           is to remain in
commercial service,     a hard look must be taken at its maintenance
record and at the plane's structural       integrity.       FAA, however, will
not be able to do this alone: it will need the resources and
support of the manufacturers      and major air carriers.         Moreover,
achieving the bill's     goals in a single year could exceed the repair
industry's   capacity to effectively    provide such services.            Instead,
focusing first    on the oldest or most used aircraft         in an orderly,
scheduled fashion would minimize disruption           of the air travel
industry.    At the same time, this will have a positive             impact on
reducing the risk of an air tragedy due to structural              fatigue    or

   Mr. Chairman, this concludes our statement.   We would be pleased
to answer questions that you or other Subcommittee Members may

Appendix    I                                                                      Appendix   I

                Profile      of Aqing   Commercial   Jet   Transport      Fleet

                    Figure     1.1:   Age Distribution  of U.S.        Fleet
                                      (As of March 1990)

                                                                Under 5

                                                                56 10

                                                                lOto 15

           Source     :   Aviation    Data Service

                                             15                                .
Appendix     I                                                           Appendix   I

           Figure    1.2:    Average   Age of U.S. Manufactured   Aircraft
                                     in the U.S. Fleet
                                    (As of March 1990)

            Source   :   Aviation      Data Service

Appendix   I                                                          Appendix   I

                     Figure   1.3:     Aircraft  20 Years Or Older:
                              U.S.     vs Rest of the World
                                     (As of March 1990)

           Source:      Aviation     Data Service

Appendix           I                                                                      Appendix   I

                   Table     1.1:   U.S. Manufactured Aircraft        That      Exceed
                                       Design Life in Cycles
                                         (As of March 1990)
                                         Design life             Number      exceeding
Aircraft           Type                    cycles         design      life      in cycles
                                                           USA               Rest of World
Boeing             707/720                 20,000            15                  117

                   727                     60,000                8                   6
                   737                     75,000                2                   0

                   747                     20,000                1                 18

Douglas            DC-8                    25,000            35                    17

                   DC-9                    40,000           407                  212

                   DC-10                   42,000               0                     0
                                                          ----e                 -----
           Total                                             468                   370
                                                          =====                 =====

               Source:        Aviation     Data Service

Appendix     II                                                                 Appendix   II

              Information     on Leased   Aircraft   in the U.S.     Fleet
           Figure    11.1:   Leased and Owned Aircraft     in U.S.     Fleet
                                  (As of March 1990)


           Source:     Aviation   Data Service

                                          19                            ‘

Appendix    II                                                           Appendix          II

                     Table      11.1: Leased Aircraft    By Aircraft
                                    Type in The U.S. Fleet
                                      (As of March 1990)
      Aircraft       Type                Owned      Leased     Total    Leased
      Boeing         707/720               23         20         43        46.5    %
                     727                  666        531       1197        44.4
                     737-100/200          177        236        413        57.1
                     737-3/4/500          120        252        372        67.7
                     747                   93         89        182        48.9
                     757                   67         89        156        57.1
                     767                   47         64        111        57.7
      Douglas        DC-8                 118                   200        41.0
                     DC-9                 280        2::        521        46.3
                     DC-10                117         68        185        36.8
                     MD-80                159        248        407        60.9
      Lockheed       L-1011                 52         54       106        50.9
      All   Others                           96        136        232       58.6       -
                                       ------      ------     ------    -------
            Total                        2015        2110       4125        51.2   %
                                       ======      ======     ======
       Source:       Aviation      Data Service

Appendix      III                                                                          Appendix   III

                             History      of Select        Leased   Aircraft
                    Table        111.1:   Leasing History   of a Late              Model
                                 Boeing   737 (Serial   Number 22453)
                                          (As of March 1990)
                                                                         Country of
      Operator                               Timeframe                   Operation
      Air     Belgium                        3/81     to    3/81         Belgium
      Bahamasair                             3/81     to    4/81         Bahamas
      Air     Belgium                        4/81     to    4/81         Belgium
      Eagle         Air                      4/81     to    4/81         Iceland
      Britannia                              4/81     to 11/81           United     Kingdom
      Eagle         Air                     11/81     to 11/81           Iceland
      Air     Belgium                       11/81     to lo/82           Belgium
      Orion         Airways                 lo/82     to lo/82           United      Kingdom
      Air Belgium                           lo/82     to  3/83           Belgium
      Wien Air Alaska                       lo/83     to 4/84            United States
      Orion Airways                           4/84    to 11/84           United Kingdom
      IFLC                                  11/84     to 12/84           United      States
      America             West              12/84     to     4/88        United      States
      Amberair                               4/88     to lo/88            United     Kingdom
      Paramount             Airways         10/88     to 11/88            United     Kingdom
      Dragonair                             11/88     to     4/89         Hong Kong
      Paramount             Airways          4/89     to lo/89            United     Kingdom
      Dragonair                             lo/89     to present          Hong Kong

            Source:          Aviation     Data Service

Appendix    III                                                              Appendix   III

                  Table    111.2:    Leasinq History   of A Late     Model
                           Boeing    727 (Serial   Number 21349)
                                     (As of March 1990)
                                                            country   of
      Operator                         Timeframe            Operation
      Singapore       Airlines        10/77    to   6/80    Singapore
      Dan-Air       London             6/80    to 11/81     United    Kingdom
      LACSA                           11/81    to   4/82    Costa    Rica
      Dan-Air       London             4/82    to lo/82     United     Kingdom
      LACSA                           lo/82    to 4/83      Costa Rica
      Dan-Air       London              4/83   to lo/83     United Kingdom
      LACSA                           lo/83    to 4/84      Costa    Rica
      Dan-Air  London                  4/84    to   l/85    United     Kingdom
      Sun Country Airline              l/85    to   4/85    United     States
      Dan-Air  London                  4/85    to 12/85     United      Kingdom
      Sun Country Airline             12/85    to 4/86      United      States
      Dan-Air       London              4/86   to   l/87    United      Kingdom
      Sun Country Airline               l/87   to 4/87      United      States
      Dan-Air  London                   4/87   to 12/87     United      Kingdom
      Sun Country          Airline     12/87   to   4/88    United      States
      Dan-Air       London              4/88   to 12/88     United      Kingdom
      Sun Country          Airline     12/88   to   4/89    United      States
      Dan-Air       London              4/89   to 12/89     United      Kingdom
      Sun Country          Airline     12/89   to present   United      States

           Source:        Aviation   Data Service


Appendix           IV                                                                               Appendix      IV
                    Information            on U.S.     Aircraft      Operating           Overseas
           Table        IV.l:     U.S.     Registered     Aircraft Operated                 Overseas     by
                                         Aircraft     Type and Location
                                                (As of March 1990)
Aircraft           Type               Number                      Location
Airbus             A~300                    2                     Venezuela
Boeing             707/720                  9                     Netherlands,    Uruguay,              Guyana,
                                                                  Peru, United Kingdom,                 Antigua,
                                                                  Dominican    Republic
                   727                     27                     Columbia,   Peru, Venezuela,
                                                                  Brazil,   Costa Rica, Mexico,
                   737                     20                     Zaire,     El Salvador,            Greece,
                                                                  Australia,     Norway,            West          -
                                                                  Germany, Guatemala
                   747                     33                     Uk , New Zealand,    Philippines,
                                                                  Netherlands,    Lebanon, France,
                                                                  Japan, Switzerland,       Singapore,
                   757                                            West Germany
                   767                                            El Salvador,             Columbia
Douglas            DC78                                           Liberia,  Costa Rica, Zambia
                                                                  Dominican Republic,   Surinam
                   DC-9                     3                     Mexico,         Guatemala
                   DC710                   15                     Mexico, France,    Zambia,
                                                                  Nigeria,  Finland,   Malaysia,
                   MD780                   13                     Argentina,             Mexico,    Netherlands
Lockheed           L~l011                   6                     Egypt     r    Ivory     Coast,     Bahrain,
Others                                     2                      South         Africa
              Total                      139

              Source:           Aviation        Data   Service
Appendix           IV                                                                          Appendix   IV

               Table         IV.2:   U.S.      Registered Aircraft              That Have Been
                                 Operated      Overseas by Aircraft               Type
                                              (As of March 1990)
                                                              Number              Percent
                                                              operated            operated
Aircraft           type              Fleet      size          overseas            overseas
Airbus             A300                         67                          2       2.9    %
                   A310                         19                          0       v
                   A320                             6                       0       7
Boeing             707/720                      43                       37        86.0
                   727                      1,197                      142         11.9
                   737                         785                      91         11.6
                   747                         182                      21         11.5
                   757                         156                       2           1.3
                   767                         111                       2          1.8

Douglas            DC78                        200                     134         67.0
                   DC?9                        521                     146         28.0
                   MDr80                       407                        8          2.0
                   DC710                       185                       36        19.5
Lockheed           LrlOll                      106                          7       6.6

All   others                                   140                      26         18.6
           Total                            4.125                      EL          15.9

              Source:         Aviation       Data       Service