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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.


U.S. House of Representatives,

Subcommittee on Aviation,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to notice, at 8:34 a.m. in room 2172, Rayburn House Office Building, Hon. John J. Duncan, Jr. (chairman of the subcommittee) presiding.

    Mr. DUNCAN. We'll go ahead and call the hearing to order.

    I was waiting just for a few minutes to see if Mr. Lipinski arrived, but I'm told now that we probably should go ahead. Ordinarily, I give a fairly lengthy opening statement. I will not do so this morning as we have some Members here who are more directly involved in this specific situation than I am.
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    We have called this hearing to look into the closing of Great Lakes Aviation on or about May 16, about three weeks ago. Certainly the FAA has, as its primary responsibility, the requirement to ensure that our aviation system is as safe as it can possibly be, and so they are charged with the responsibility of shutting down any airline or grounding any airline that is operating in an unsafe manner.

    But we have not only this company, of course, affected in a very serious way, but we have many communities and many citizens throughout a very large part of the United States that have been very directly and in some cases adversely affected by this situation, so obviously it is a serious matter. I'm sure it's one that the FAA took very seriously.

    We've called this hearing to look into the process, to learn more about it. I can assure you that at this point I'm not saying anybody was right or wrong. We're just going to ask some questions this morning and hear what the main people involved and concerned have to say about this situation and see if any changes need to be made in the process or in the way that these types of actions are taken.

    We can look into the fact of whether Great Lakes—whether the FAA did give Great Lakes warning or sufficient notice on some of these violations and other questions of that type, and I'm sure that we will get into that as we proceed through the hearing.

    At this time, I will reserve further statements, and I'll have some questions as we proceed through the hearing.

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    I would like at this time to call on the ranking member, Mr. Lipinski.

    I did announce, Mr. Lipinski, that I was willing to wait for you, but they told me to go ahead and so I went ahead.

    Mr. LIPINSKI. I want to know who told you to go ahead, Mr. Chairman.


    Mr. DUNCAN. Your boss sitting right there.

    Mr. LIPINSKI. That's what I figured. Well, I'll forgive you. I don't know if I'll forgive him or not, though.

    Thank you, Mr. Chairman, and thank you for holding——

    Mr. DUNCAN. I didn't mean that boss. I meant Mary sitting back there.


    Mr. LIPINSKI. Well, it makes no difference. She's still going to be the boss, whether I forgive her or not.

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    Thank you, Mr. Chairman, and thank you for holding this hearing.

    As usual, I will keep my opening statement short; however, I do want to address concerns that this hearing may discourage the Federal Aviation Administration from making future decisions to ground airlines.

    This hearing is not about chastising the FAA for its decision to ground Great Lakes Aviation. Not at all. The FAA has an important mission to protect the safety of the traveling public. Congress does not want to interfere with or weaken that mission. In fact, just last year we made sure it was the FAA's sole responsibility to protect the safety of the aviation passengers.

    However, the grounding of Great Lakes Air raises many questions about the process of suspending airline operations. For example, there is confusion about who knew what and when. There is confusion about the seriousness and extent of Great Lakes' safety violations. And there is confusion about what exactly is needed to get the airline running again.

    I have received bits and pieces of information regarding the grounding of Great Lakes Air, and not all of it fits together; therefore, I am anxious to hear the testimony today of all involved parties so that I can fully understand the situation.

    Again, I thank you, Mr. Chairman, for holding this hearing.

    Mr. DUNCAN. Thank you very much, Mr. Lipinski. I did agree to call this hearing after a request by Mr. LaHood and Mr. Lipinski, and was very pleased to do that, and so at this time I'll call on Mr. LaHood, who is the one who made the original request that we conduct this hearing this morning.
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    Mr. LaHood?

    Mr. LAHOOD. Thank you, Mr. Chairman. I want to thank you for holding this hearing. Almost from the first day you and I spoke about this, you were very gracious in your willingness to do this, and almost from the very first time that I spoke to Mr. Lipinski about this he, too, was more than willing to hear me out in the reasons for the request for the hearing, and I'd like to thank both of you. I'd like to thank Great Lakes and the FAA, who are cooperating with the subcommittee by appearing here today and presenting testimony and answering our questions.

    The primary reason for my request for this hearing is safety. American people currently enjoy what I believe is the safest system of air transportation in the world. This is due, in large part, to the interaction between Congress, the FAA, and all the commercial airlines.

    In order to maintain the impressive record for safety that has been established in this country, I believe it is critical that we continue to insist on the highest standard of safety for the airline industry.

    Once enforcement action has been taken, such as the grounding of Great Lakes, I believe it is entirely appropriate for Congress to review the circumstances of grounding, the shut-down, and/or suspension of service to better understand what is involved in this process and whether or not improvements can be made.

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    In this case, I'd like to commend the FAA for acting in a proactive manner to ensure the safety of the flying public. After all, that is what we in Congress ask you to do, and you should be commended for doing it. However, this is not to say that we should not continue to look for ways to improve the enforcement process.

    I, along with other members of the subcommittee, recognize the considerable pressure that can be placed on the employees of the FAA as they perform their job, and I appreciate the tremendous effort that is put forward by many fine employees of the FAA. Their dedication and hard work are a credit to the FAA.

    I might add that suspension of the Great Lakes Aviation is of particular interest to me. First of all, two communities in my District—Decatur, Illinois, and Springfield, Illinois, the State capital—receive air service, although I believe Decatur has been suspended. As a result, many constituents of mine rely on Great Lakes for air transportation, particularly for flights from Springfield, Illinois, the State capital, to Chicago.

    Additionally, I frequently fly on commuter airlines that are similar to Great Lakes, so matters involving their safety are very personal to me, as I know they are to many Members of Congress. As one who flies regularly, I speak as a representative of the flying public when I ask for assurances to all parties that Great Lakes is, indeed, safe.

    It is my hope that this hearing will allow us to examine the process that led to the suspension of operation of Great Lakes, including the method of communication between the airline and the FAA, the time line of such communications, and any steps that were taken to maximize passenger safety while minimizing their inconvenience. I also hope to explore their actual decision to ground Great Lakes and to examine the communication and level of cooperation following the suspension of service.
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    Thank you, Mr. Chairman.

    Mr. DUNCAN. Thank you, Mr. LaHood.

    I'm pleased that you did point out once again that we do have the safest aviation system in the world. It's an amazing statistic that, unfortunately, we have more people killed in four months on our Nation's highways than have been killed in all U.S. aviation accidents combined since the Wright Brothers flew in 1903, and that's, I think, primarily due to the improvements that have come from our competitive, free enterprise, free market system, but also the FAA has played a significant role in that regard, and also the major emphasis in this subcommittee has always been on safety, and that has been primarily due to the work over many years by the ranking member of this committee, Mr. Oberstar. I would like to call on him at this time. It's always an honor to have him at our subcommittee hearings.

    Mr. Oberstar?

    Mr. OBERSTAR. Thank you very much, Mr. Chairman.

    I regret beginning this hearing on a very sad note, personal note for me and I think for all of our members on the committee, that our former chairman of the committee, Bob Jones of Alabama, passed away last night. Bob served in the Congress for 30 years. He was elected in 1946 with my predecessor, John Blatnik. They sat side-by-side on this committee and never had a word of disagreement. They worked together on such monumental legislation as the Tennessee Valley Authority, the Appalachian Regional Development Commission, Federal Economic Development Commission, the Clean Water Act, all the inland waterway rivers and harbors deepening channel improvements, flood control.
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    Bob was known as a builder. In fact, that was his constant campaign theme, ''Bob the Builder.''

    In the year 1962, when redistricting could not be achieved in Alabama and Members had to run State-wide, George Wallace attacked Bob Jones vigorously because he had expressed support for equal rights and civil rights of blacks. Bob Jones prevailed—prevailed because of his integrity and his hard work.

    I remember him telling us, Mr. Chairman, his office—in that same class of John Blatnik and Bob Jones there were also elected John F. Kennedy and Richard Nixon, and Bob Jones' office was between Nixon's and Kennedy's, and he always felt between the two of them in many ways—philosophically, ideologically—and would occasionally take a ride home with Richard Nixon. He said, ''I quit doing it because he'd stay up until 1:00 and 2:00 in the morning.''


    Mr. OBERSTAR. We will all mourn his loss, but his legacy will long live after him.

    Mr. Chairman, colleagues, in the very first section of the FAA charter, the Federal Aviation Administration Act, declaration of policy, section 102, says, ''In the exercise and performance of its powers and duties under the act, the FAA shall consider, as being in the public interest, the assignment and maintenance of safety as the highest priority in air commerce.''
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    The prevention of any deterioration in established safety procedures and the maintenance of safety vigilance, that is FAA's charter.

    Today we hold a hearing, not on a safety initiative, which has been the practice of this committee, or on a safety failure, but on a specific action the FAA took in pursuance of its I would say almost sacred mandate and directive that has withstood the test of time from Congress after Congress. It was a decision by FAA to uphold that safety mandate, to enforce its regulations, to protect the traveling public in their decision to ground Great Lakes Aviation.

    This hearing was called on the question of why the FAA did its job correctly. For the first time since I have been ranking member of the full committee, I have not signed the routing slip requesting scheduling of a hearing. The reason I did so is I do not believe it is in the best interest of aviation or of safety to hold hearings of this nature.

    Oversight of the FAA is essential, and I think oversight by this committee of the FAA's safety, security, and other responsibilities under the act has driven that agency to do a better job, to focus on issues like aging aircraft, on level of safety, flight and duty time for flight attendants and pilots.

    We have often been critical of the FAA for failing to act decisively. We should not be inquiring into their action of acting decisively.

    Last year we passed legislation to eliminate the so-called ''dual mandate,'' to eliminate the public perception that it is the role of this agency to promote civil aviation—a mission that is very much misunderstood, by the way.
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    Whether or not it is necessary to eliminate the dual mandate, we did that to make it very clear that we expect safety to be the FAA's prime and only responsibility to aviation. We do not want any other consideration to inhibit their actions when it comes time to decide whether a carrier is safe or not.

    If it becomes necessary to ground a carrier for safety reasons, we should not have the FAA overly concerned, putting economics ahead of safety. Safety should not be sacrificed on the altar of economics or on the altar of inconvenience. We don't want people in the FAA to be concerned about whether alternate transportation is available. We want them to act in the interest of safety and safety alone. And in this case the FAA did exactly that. They determined that Great Lakes Aviation's operations had serious, systemic safety problems, informed the carrier that it could cease operations voluntarily or wait for the FAA to shut them down.

    Operations ceased. Great Lakes is resuming its operations as the FAA determines the carrier is operating them safely and in accordance with all applicable regulations.

    What signal do we send to the men and women in the safety functions of FAA when we hold a hearing to call the agency up here to defend their decision to keep an unsafe carrier from moving passengers?

    If the FAA has to publicly justify every certification action it takes that inconveniences the public, won't that ultimately result in hesitation, a second-guessing on the part of those safety professionals in the agency? Will that not inhibit the agency from acting decisively to take appropriate certificate action? Is that the outcome we want from this hearing?
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    To the FAA's credit, it acted quickly, decisively, made the decision Great Lakes was unsafe. They made that decision on a Friday night, a time that it would be least inconvenient to travelers. They made that decision knowing that passengers would be at risk if they did not act.

    I understand the concern of my colleagues for the inconvenience of the traveling public, but I want to say that I would rather answer to aggrieved, living travelers than to a grieving family member mourning the loss of a loved one in an air accident.

    A year ago this committee convened on the issue of safety of low-fare, new-entry carriers and berated FAA and the DOT for not acting quickly enough to shut down ValuJet before people died in that horrible tragedy in Florida. And a couple of years earlier, when an ATR 72 aircraft crashed in a suspected wing icing case, the FAA grounded the entire ATR fleet until the problem was addressed.

    The subcommittee, under my chairmanship, did not hold a hearing on why FAA shut down ATR. There were a lot of inconvenienced air travelers then—plenty of them—and we heard from them, but no one questioned whether the FAA did the right thing. They didn't want to be at risk.

    Now, this hearing will proceed, but will proceed as an aberration in the long history of the safety vigilance of our committee, and with this message, at least from me, to the FAA: maintain your vigilance, be faithful to your mission of safety, err on the side of caution rather than convenience.
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    Thank you.

    Mr. DUNCAN. Thank you, Mr. Oberstar.

    I think the next two Members—Mr. Latham has requested to sit with us, but, Mr. Latham, I think I'll go to the members of the subcommittee first and then come back to you at some point.

    Mr. Pease?

    Mr. PEASE. Thank you, Mr. Chairman.

    I wish to associate myself with the remarks of my colleague, Mr. LaHood.

    I'm very much interested in the process by which the decision was made to ground Great Lakes Aviation and the consultation that took place, both prior and immediately thereafter.

    I, too, am primarily almost entirely concerned on the safety issue, but I am concerned, as well, on what can be done to make sure that service is restored as quickly and as safely as possible, particularly I will tell you because of the fact that Great Lakes, through United Express, provides one of only two services in the airport in LaFayette, Indiana, which is in my District, and the only service at Terre Haute, Indiana, which is also in my District and which is one of the two airports in which I get to and from Washington.
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    I'm very much concerned about and applaud the FAA's decision to put safety first, but I'm also concerned about these other issues, and there will be some questions after we've had the chance to hear your presentation.

    Thank you.

    Mr. DUNCAN. Thank you very much, Mr. Pease.

    Mr. Boswell?

    Mr. BOSWELL. Thank you very much.

    Mr. Chairman, I welcome your convening this hearing to review the reasons leading up to the grounding and subsequent recertification of Great Lakes Aviation.

    This is a topic of concern for many of my Iowa constituents who, in many cases, depend on Great Lakes for their air travel. In fact, I have recently flown Great Lakes when returning home to the District, and I can tell you that I had a good ride with what I observed to be a professional operation.

    From a person who flies airplanes and used to fly them a lot, when you sit in the back you're kind of critical of what goes on up front. I'm sure a lot of you can associate with that. I'll explain that in a moment.

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    Many of the communities affected by the grounding of Great Lakes have suffered because of the loss of service. I can tell you in my District many of my communities rely on air service from airlines such as Great Lakes because they are willing to service the rural communities. Many of the employees of Great Lakes have suffered due to the loss of employment due to the airline's grounding, and many of those who provide goods and services to Great Lakes have suffered due to its grounding.

    However, difficult these inconveniences or losses of income are to individuals, again I would agree with Mr. Oberstar: we must never compromise our commitment to safety.

    Yes, people want essential air service to the communities, but they insist on safety.

    In reviewing this matter, I have heard conflicting statements regarding the events leading up to the grounding of Great Lakes on May 16. Some have said there was a severe lack of communication between the FAA and Great Lakes as to what problems were developing with the airline's maintenance program. Others maintain the company may have cut safety corners due to pressing financial problems. And still others have cited the problems leading to the grounding are either technical or minor paperwork oversights.

    These are important conflicting points which need to be explored with the FAA and Great Lakes at this hearing today.

    I've not rushed to judge on this matter, and I urge my colleagues on this committee to join me in refraining from casting blame with any of the parties. While we must consider the actions of FAA to be warranted, it is also reasonable for us to discuss this matter.
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    I do not doubt that the call for grounding an airline due to safety violations is ever done lightly. We have a responsibility to ensure the process was properly carried out and fully warranted.

    With regard to the company, we need to determine whether their perspective on the grounding is valid and how they are proceeding with complying with the consent order for recertification.

    As I said a moment ago, as a person who has had a commercial license for nearly 40 years, I've taught, I've given annual checks, I have spent a lot of time trying to be sure that young pilots knew how to ensure that the machine was airworthy and what was a safety thing and what could be deferred maintenance, but written up so that the next time it went in that it was taken care of. I've spent a lot of time doing that, as many of you have, I'm sure, so I understand the need for giving safety the highest priority.

    Our traveling public expects its Government agency, the FAA, who is charged with maintaining air safety, to fully and effectively carry out their responsibilities, so I would ask we let this hearing proceed so we can learn more about this matter and then determine what additional course of action might be in order.

    So I look forward, Mr. Chairman, to hearing from and questioning our witnesses, and I'm pleased to be here today. I wish there was nothing else going on in this operation today around this capitol so we could all give this our attention, because the safety of people is, as Mr. Oberstar said, very, very important.
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    Thank you.

    Mr. DUNCAN. Thank you very much, Mr. Boswell.

    I believe Mr. Watts was here next.

    Mr. Watts, do you have a statement?

    Mr. WATTS. Thank you, Mr. Chairman.

    I can't add anything to what has already been said, so, for the sake of time, I'd just say thank you to the witnesses for being here. I look forward to your testimony.

    Mr. DUNCAN. All right. Thank you very much.

    Mr. Traficant?

    Mr. TRAFICANT. I want to commend the chairman for convening this hearing and all those who have asked for this hearing.

    Having worked with the chairman before in other duties, I'm sure if there's an answer for this thing or a remedy that Mr. Duncan will find it.

    The FAA tells us that they've found problems with Great Lakes Aviation. They reported 77 violations. Great Lakes Aviation denies these allegations and questions their seriousness. They say there are many communication breakdowns, there are paperwork problems, but they're not that serious.
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    Nevertheless, the sudden shutdown of the carrier left many passengers stranded and many communities without air service. Stranded passengers, communities without air service—absolutely a main reason for having this meeting, Mr. Chairman, and for some action to be taken.

    How to give passengers better notice of an impending shutdown may be one of those issues, since it has come to my attention, reviewing the data here, that the first indication of FAA's intention to shut down Great Lakes came from a press release from a Congressman.

    With that, at many airports Great Lakes is the only airline providing service. Now we have communities without air service, passengers without opportunity to fly with a company that is saying that they have been nit-picked, and with the FAA, under tremendous scrutiny to protect their passengers. It's not an easy process. I hope it can be resolved. I'm looking forward to this process.

    Mr. DUNCAN. Thank you very much, Mr. Traficant.

    I believe Mr. Hutchinson was next.

    Mr. HUTCHINSON. Mr. Chairman, I want to thank you for conducting this hearing. I do believe this is certainly an appropriate oversight responsibility exercised by Congress, and I look forward to the testimony of the witnesses.

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    In the interest of time, I want to yield back the balance of my time to the Chair.

    Mr. DUNCAN. Thank you very much.

    Mr. DeFazio?

    Mr. DEFAZIO. Thank you, Mr. Chairman. Thank you for convening the hearing today.

    I want to associate myself with the remarks of the gentleman from Minnesota, Mr. Oberstar. As one of the principal proponents for more than a decade of removing the dual charge from the FAA of both promoting an industry and regulating an industry in the public health and safety, I've long felt that they were internally conflicted.

    I hope that the result of this hearing today is that, although this may not have been a perfect process in terms of notification and other things, we underscore, underline, and reinforce the FAA in that new single mandate that this committee and the Congress has given them, which is to promote the public's health and safety and not the profitability of airlines.

    So I'm here today to listen very critically, but my initial disposition here is to say that, I don't think the FAA does these things lightly or easily and hasn't done them very many times, and, it's going to take a lot to convince me that the FAA is not doing exactly what we've charged them to do in recent legislation.
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    Thank you, Mr. Chairman.

    Mr. DUNCAN. Thank you very much.

    Dr. Cooksey?

    Mr. COOKSEY. No comments. I will not delay the testimony with my testimony. I'm very anxious to hear what you have to say.

    Mr. DUNCAN. Thank you very much.

    Ms. Johnson?

    Ms. EDDIE BERNICE JOHNSON OF TEXAS. Thank you, Mr. Chairman.

    I don't have any formal remarks. I want to express my appreciation to you and the ranking member for making this opportunity available in hearing about the various aspects of this airline, and I look forward to hearing the witnesses and welcome them.

    Thank you.

    Mr. DUNCAN. Thank you very much.

    Mr. Thune?
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    Mr. THUNE. Thank you, Mr. Chairman. I commend you for holding the hearing, as well, and want to thank you for the opportunity to participate.

    Great Lakes has an important presence in my State of South Dakota, providing air service—sometimes the only air service—to seven communities in our State. There aren't people waiting in line to do that in our State.

    This morning I would like to—and I think it's important that we use this opportunity to get some facts out on the table, because I do believe there has been some significant miscommunication, and this is a matter of important public safety, and I believe that, first and foremost, is why we are here.

    But I also believe, as I have observed this sort of situation play out, that we have lacked clarity with respect to what those facts are.

    Since I was evidently the person who broke this story, I received this notice in my office on Friday afternoon, May 16. Normally, when I get a notification like that from a Federal agency it comes about a day after the other Members of our delegation have already broken the story to the press, so you can imagine that I suspected, by the time I received this, that it had already become a matter of public knowledge. Furthermore, what we attempted to do immediately was to contact the FAA to find out exactly what the nature of this notice was and couldn't reach anybody down there.

    This is, granted, a Friday afternoon, and so we contacted the State DOT individual at his home in Pierre and relayed to him the nature of the notice, the allegations that were made, and he said, ''That's a very serious thing and that's something that you have a responsibility to comment on,'' and so we notified the folks in South Dakota of this, and then came to find out that we were, in fact, the first ones, evidently, who had made that information available.
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    So to me that suggests somewhat of a major breakdown in the communication with the Congress, as well as with the airline.

    Since that time, I have observed some serious problems in internal communications in the FAA, as well. I have a number of questions both for the FAA, as well as for the airline, as to the nature of the communications that have occurred, both prior to this notification, as well as after. I do believe that this is an important hearing in helping us ascertain exactly what the nature of this situation is and what we can do in the interest—when we put this notice out, it was, first and foremost, because of our interest in public safety.

    But I do believe we have a number of questions that are unresolved here, and so I welcome the opportunity to participate.

    Thank you, Mr. Chairman.

    Mr. DUNCAN. Thank you very much.

    We also have with us today a former member of the committee, Mr. Latham, who has asked to sit up here with us.

    Mr. Latham, do you have a statement at this time?

    Mr. LATHAM. Just very briefly.
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    I thank the chairman very much for the opportunity to be here. My interest, obviously, is that Great Lakes is based in my District and services a great deal in the District.

    I underscore and agree with everyone who talks about the role of the FAA as far as safety. There is no question that will continue to be, should be, has always been, and again would hopefully continue to be the number one priority. However, around here we talk an awful lot about process, about doing things correctly, about communications. I think that is the heart of what the problem is and appears to be here.

    If you were just given an award 30 days before you were shut down, you would find that there were some conflicting messages going on here. Obviously, it appears to me that Great Lakes has, from everything I've read and seen, tried for years to be totally cooperative, and to be surprised at the last moment I think certainly questions whether or not the process is working.

    We all want cooperation, and I think the Federal Government has to learn in many aspects that they're working with real people, they affect real people, affect the public, and I think we have to make sure that the process works correctly and that there are communications.

    Again, I thank the chairman very much. It is an honor to be back in the transportation community here again. Thank you.

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    Mr. DUNCAN. All right. Thank you very much, Mr. Latham.

    [The prepared statement of Mr. Costello follows:]

    [Insert here.]

    Mr. DUNCAN. We will proceed now with the witnesses.

    We're always pleased to have Mr. Barry Valentine, who is the acting administrator of the Federal Aviation Administration, with us. He is accompanied by Ms. Margaret Gilligan, who is the deputy associate administrator for regulation and certification; Mr. Thomas Stuckey, who is acting director of flight standards service; and Mr. John V. Coleman, who is director of the Office of Aviation Analysis.

    Thank you for being with us. Mr. Valentine, you may begin your testimony.


    Mr. VALENTINE. Thank you, Mr. Chairman.

    Mr. Chairman and members of the subcommittee, I'm pleased to be here to discuss with you how the FAA determines whether an airline's operations must be suspended in order to ensure the public safety.
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    Given the fact that we are here today due to recent events involving Great Lakes Aviation, or GLA, I will use the FAA's recent experience with that carrier to provide the context for my remarks.

    Before I begin my discussion, Mr. Chairman, I want to assure you and the members of this subcommittee, as well as the public, generally, that the FAA is very mindful of the hardship that results when an air carrier ceases to operate, voluntarily or otherwise. It doesn't happen unless it is necessary to ensure the public safety. The process we undertake to make such a decision is thorough and deliberate. We follow a carefully-organized and stringent inspection protocol, and we work within a strict legal framework. We also rely on the judgment and expertise of our inspectors.

    The earliest signs of trouble with a carrier usually appear during routine surveillance. Generally, inspectors will detect an increase in noncompliance with Federal Aviation Regulations, or FARs, resulting in an increase in the number of enforcement actions against that air carrier.

    For example, during 1996, the number of questionable or unsatisfactory inspections recorded during routine surveillance of GLA more than doubled, increasing from 72 in 1995 to 159 in 1996.

    Likewise, the number of enforcement actions opened against GLA was increasing rapidly, increasing from 6 between 1993 and 1994 to 26 between 1995 and 1996.

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    When routine surveillance uncovers a compliance problem, an inspection team will look at other facets of the company to determine if there is a reason for the trend. In the case of GLA, the team noted that between 1994 and 1996 the airline added 24 aircraft to its fleet. Around the same time, GLA's operations increased from 57,457 flight hours to 80,828 flight hours.

    In addition, GLA was losing money. The company had reported a significant financial loss in 1996 and was continuing to lose money in early 1997.

    Given these facts, the inspection team determined that increased surveillance was necessary. The purpose of increased surveillance is to provide a system-wide look at a carrier's operation to determine the specific areas, if any, in which the carrier may be having difficulty.

    In January 1997, the FAA's certificate management team for GLA requested such a review. The results from this heightened surveillance activity pointed to problems in GLA's maintenance operations. FAA had uncovered similar problems in late 1995 and had worked with the carrier to address its concerns.

    GLA's maintenance manuals were completely rewritten and the company developed an internal auditing system for its maintenance operations.

    Although the FAA had approved GLA's new audit system in mid-1996, recent surveillance showed that the company had not implemented the program.

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    Given these results, the inspection team decided to conduct a special emphasis inspection. A special emphasis inspection is usually the last stage of the inspection team's surveillance before determining whether an air carrier must cease operations.

    At this point in time, it is important to document whether the carrier's problems are isolated or random events or whether the problems are systemic, affecting the air carrier's entire operation.

    For example, a mistake made when recording a repair of an aircraft could be considered an isolated or random violation if this experience happens sporadically. In this case, there is no common element or thread that can be detected throughout the system, and the findings may easily be addressed by correcting the situation on the spot or implementing an action plan or audit system to prevent a repeat event.

    Systemic problems, however, are quite different. They represent a failure or breakdown that can affect an air carrier's operation system-wide.

    The impact of systemic problems is diffused throughout the air carrier's operations. The symptoms may appear as isolated events during routine inspections; however, when an air carrier's entire operation is looked at as a whole, trends appear that point to a larger system failure responsible for numerous individual events.

    In GLA's case, the special emphasis inspection showed that the company's problems were growing. The carrier was found to have an insufficient number of trained mechanics, inaccurate training records were uncovered, and, most significantly, a large number of GLA's aircraft were unairworthy. Based on these surveillance results, it appeared that GLA's problems were not isolated or random problems but that, in fact, the carrier's ability to comply with the FARs was breaking down.
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    After a systemic problem is identified, the inspection team must determine whether the carrier can quickly adjust its operations to comply with the FAR or whether the air carrier's operations must be suspended.

    Recent events at GLA such as growth in operations, system-wide implementation of Part 121 standards, and financial stress experienced by the carrier, in conjunction with the inspection results, suggested that the carrier could not implement an action plan to ensure compliance, and that the public safety was at risk.

    The FAA is well aware that shutting down an air carrier's operation has severe ramifications for the air carrier and, in many cases, for the passengers. However, if the air carrier cannot maintain a sufficient level of compliance with the Federal Aviation Regulations, then the FAA's responsibility is clear: the operations must stop.

    In most cases it is not until a special emphasis inspection is implemented that we have sufficient data available to determine specific systemic problems at hand. It is only after the problem is uncovered and the air carrier's inability to sufficiently comply with the FAR due to the problem is established and documented that the agency has the legal basis to suspend the air carrier's operations.

    If possible, the FAA will work with an air carrier to avoid suspending its operations. In some cases, FAA inspectors work with the air carrier to resolve the FAA's concerns on a real-time basis, and corrective plans may be implemented while the special emphasis inspection is underway.
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    During this time, it is not uncommon for the air carrier to voluntarily remove certain aircraft from its fleet or to restrict its growth. Nevertheless, despite the actions taken by the carrier, there are times when the agency's safety concerns cannot be sufficiently addressed. In those cases, the FAA will not hesitate to suspend the carrier's certificate.

    Before closing, Mr. Chairman, I would like to briefly explain why the agency affords some carriers the opportunity to voluntarily suspend their operation rather than ordering a suspension of the certificate.

    A voluntary shut-down allows both the carrier and the FAA to focus on correcting deficiencies in the carrier's system rather than spending time and money on litigation. More importantly, it allows the FAA to include terms and conditions over and above those required by the FAR in a legally-enforceable document, thereby ensuring that when the operations resume the carrier will be operating at a high level of compliance rather than the legal margin.

    In addition, the consent order is less disruptive to the carrier's business arrangements, such as aircraft lease agreements and airport gate leases.

    These arrangements depend on an effective air carrier certificate. Surrendering the certificate permits the carrier to keep these agreements in effect, significantly increasing the carrier's ability to recover from cessation of operations.

    I want to assure you, Mr. Chairman, and other members of the subcommittee, that we will work hard with GLA and we will be fair. However, the safety of GLA's operations is paramount and we will not authorize additional activity until we are confident that the public safety is assured.
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    That concludes my prepared remarks, Mr. Chairman, and I would be pleased to respond to any questions that you or other members of the subcommittee may have.

    Mr. DUNCAN. Thank you very much, Mr. Valentine.

    We'll go for the first round of questions to Mr. LaHood.

    Mr. LAHOOD. Thank you, Mr. Valentine, for being here and for your very cooperative spirit in helping us to arrange for your appearance and your testimony today.

    I guess if there were two areas I'd like to review, one would be the idea of how the airline was communicated with by your agency, and the second part is to gain a better understanding of the idea of shutting an entire airline down for maintenance problems, which is a little more difficult to understand, I think, from the point of view of trying to figure out if it was the entire maintenance department of GLA that was the problem or if there were just a couple of airplanes that needed to be maintained a little more to the standards of FAA.

    I think it's hard to understand, for the flying public, when they find out that an entire airline was shut down, was it because of the entire maintenance department of that airline or was it because there were two or three airplanes that had not been maintained to the standard that FAA felt?

    The other point I want to make, too, is that there are a lot of new Members on this subcommittee. If you look at the subcommittee here, a lot of these Members do not have the encyclopedic knowledge and the knowledge of maybe some of the more veteran Members here, and I think this is very helpful for Members who have never been involved in knowledge what your responsibilities are.
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    So for some of us—and I would include myself in that—this may be very elementary, but it's because we've not been involved in these aspects of how you carry out your responsibility.

    I wonder if you could just touch on the one area of the communication aspect between your agency and Great Lakes, and then the other idea of, when you shut an airline down, do you have to shut the entire airline down or could it have been that some of these flights could have continued for the fact that every airplane was not poorly maintained?

    Mr. VALENTINE. Thank you, Congressman. I'd be pleased to address those two topics, and this hearing provides—I agree with you—an opportunity to share information with other Members who may be new to the subcommittee or who may not be familiar with many of the nuances associated with airline safety oversight.

    We have historically had five FAA inspectors who have been assigned full time to oversight of Great Lakes Airlines, and over the past several years, as indicated in my testimony, those inspectors have noted an increase in the number of discrepancies, deficiencies that they uncovered during their inspection process. That is, again, as I mentioned in my testimony what resulted in a series of increased oversight steps, that, as you increase them in numbers, not surprisingly often show more problems.

    But during the past number of years, when our inspectors have worked with Great Lakes Aviation, they are literally in constant communication with the maintenance work force and maintenance supervisors of that airline. They work with them to point out the deficiencies, to assure that those deficiencies are corrected, to point out their concerns when they see that those deficiencies are increasing in number.
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    Based on the figures that we have, it would suggest that there was a clear message out there to the airline that, possibly as a result of their rapid growth or other factors, they were doing worse, not better, in the oversight of their program.

    I don't think there's anyone, at least at their maintenance level, who was unaware of the level of our concern and that increase.

    To answer your question about shutdown, there have been times when, I think as I mentioned in my testimony, airlines have removed some aircraft from their fleet or reduced the size of their operations, so there have been instances where not an entire airline has been shut down but has reduced its operations to some degree.

    If a problem had been discovered with one or two airplanes only, then that would fall back into the category that I mentioned which is essentially a lower level of discrepancy that may result in having to address those particular airplanes but not shutting down the entire fleet.

    What we found in this particular case was a serious concern about the airworthiness of an entire fleet of airplanes based, among other things, on the fact that the mechanics who worked on that fleet were not trained to be performing some of the work they were performing; therefore, we have no way of knowing about the airworthiness of that entire fleet of aircraft.

    Mr. LAHOOD. Could you address the idea of how this was communicated to the airlines by your agency, the shutdown?
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    Mr. VALENTINE. Yes. They were notified on a Friday, I believe it was, that we had determined, based on our increased surveillance, that the problems that that airline was having were systemic; that we were concerned about the airworthiness of their entire fleet; and, based on those concerns, that we felt it was necessary for them to cease operations and gave them the opportunity to voluntarily cease operations.

    Mr. LAHOOD. Mr. Chairman, I have some other questions, but I'll come back after you, I guess, allow other Members to ask questions.

    Thank you.

    Mr. DUNCAN. All right.

    Mr. Lipinski?

    Mr. LIPINSKI. Thank you, Mr. Chairman.

    It's my understanding that when ValuJet was grounded, that there was an announcement made at 3:00 or 4:00 in the afternoon that you were going to ground ValuJet at 11:00 p.m. at night. Consequently, many of the passengers could have made other arrangements.

    Was there any possibility of doing this with Great Lakes Air?

    Mr. VALENTINE. I'll ask either Ms. Gilligan or Mr. Stuckey to chime in here with some of the details, but, as I recall, we arranged for that shutdown to take place after the end of—at 5:00, after the end of their last flight of that day.
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    Was that the case? I'll ask Mr. Stuckey, who I think is most familiar with that.

    Mr. STUCKEY. Mr. Congressman, the last day, which was May 16, before the shutdown things were going pretty dynamic. In fact, a decision had not been made probably until about 5:00 or 6:00 p.m. that afternoon. There was one element that we did not have completed, and that was having our regional division manager of Flight Standards——

    Mr. LIPINSKI. Excuse me. Let me interrupt for just a moment. Are we talking about Great Lakes Air or are we talking about ValuJet?

    Mr. STUCKEY. We're talking about Great Lakes Airlines.

    Mr. LIPINSKI. Okay.

    Mr. STUCKEY. On Friday the decision to propose action was finally coordinated at about 5:00 that afternoon, and things were very dynamic that afternoon. One piece that we did not have was our division manager in the region that oversees that FSDO, and our regional attorney had made an appointment to visit that evening to have that same discussion. Those discussions took place around 10:00 central time and, in fact, the airline ceased operations just before midnight eastern time.

    What we attempted to do was to notify Members of Congress, the Department, prior to that as much as we could, but we didn't have the situation where we knew early enough in the day to do anything quicker than what we did.
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    Mr. LIPINSKI. Okay. But can anyone tell me if the information I have is accurate that you notified everyone that ValuJet was going to be shut down at 11:00 that night, and you notified them at 3:00 or 4:00? And if that is the case, why was it possible to do it with ValuJet? Maybe there was some reason for it. Does anyone have an answer to that?

    Mr. VALENTINE. You want to try that? I'm not personally familiar with that.

    Ms. GILLIGAN. Mr. Congressman, actually I believe the data that you have may be a little off, and I'd like to have the opportunity to come back to you directly with the exact times and how that agreement worked.

    There was some agreement to allow ValuJet to move aircraft not in revenue flight to bring them to bases where the shutdown could be effectuated and where ValuJet would be able to either retire those aircraft or begin to do work on them in order to bring them into compliance.

    But there was not continued revenue flight after the point it was determined and a consent agreement was reached.

    Let me get you the exact details on the timing of all of that if we could.

    Mr. LIPINSKI. Thank you.
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    [The information received follows:]

    The ValuJet management team and FAA representatives met on June 17, 1996, at 2:30 p.m. By late afternoon, there was an agreement in principle that ValuJet would enter a consent order and would cease operations. Details of the consent order were worked on through the evening, and the meeting ended at 10 p.m. FAA issued a press release on June 17, announcing that ValuJet would cease operations at 11:59 p.m. We cannot establish exactly when that press release was issued.

    Mr. LIPINSKI. It is mentioned in testimony here that there were a lot of problems for Great Lakes Air with moving from the Part 135 to the Part 121. Were the problems for Great Lakes Air any greater than simply the paperwork problems in moving from 135 to 121?

    Mr. VALENTINE. No, their problems were not paperwork problems in moving from 135 to 121. While we were in the process of conducting inspections, they were also, as were virtually all of the Part 135 scheduled operators in the country, transitioning, as required by law, to a Part 121 operation, and Great Lakes had submitted to us their plan and their program for complying with the conditions set forth under Part 121 and just a few weeks ago had submitted that information to us.

    The issue with the Great Lakes, as I mentioned a few moments ago, was really our concern about the airworthiness of their aircraft and the continued increase in the number of discrepancies that we found, which suggested a large enough and systemic enough problem to warrant a cease of operations until the house could be brought back in order, basically.
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    Mr. LIPINSKI. Do you think you could tell us some of the real problems that you found and some of the specific problems that you found in regards to Great Lakes?

    Mr. VALENTINE. Yes. I'd be happy to. If I may, I would ask Mr. Stuckey to address that subject. Again, he is far more familiar with the details.

    Mr. STUCKEY. Mr. Congressman, prior to the proposed action that we were going to take, there were hundreds of airworthiness concerns that we had. Maybe I can just give you a few examples.

    We inspected a base in Raleigh-Durham and we looked at ten aircraft at that base, and most of those aircraft had airworthiness problems.

    Some of the problems that we found in the system:

    We found an aircraft that had problems with the nose gear parts. In fact, when the aircraft was later tested, it did not pass the test.

    We found one aircraft that had a cracked rib in the wing.

    We found an aircraft that had unsafe propeller control cables.

    We found aircraft that had control cable problems to the engine. There are only two bolts that hold the control cable on. One was missing, and the other one was loose.
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    We found an aircraft that both the left and right engines had worn compressor blades.

    We found conditions out on the flight line at other bases like Denver, where we found parts that were worn and unsafe for further flight.

    Also, some of the problems that we found in one maintenance base, nine out of twelve mechanics were not qualified to perform the work that they were conducting.

    Overall, in the last couple of months we found that the majority of the aircraft that we inspected had some problems. In fact, probably about 20 percent of them, when inspected, could not continue on flying in revenue service, although they had been at the time.

    Mr. LIPINSKI. Thank you very much.

    I see my time is up, Mr. Chairman. I appreciate your generosity, and I'll have a few questions on the next round. Thank you.

    Mr. DUNCAN. Thank you very much, Mr. Lipinski.

    I believe next here with us was Mr. Pease.

    Mr. Pease, do you have any questions at this time?

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    Mr. PEASE. Thank you, Mr. Chairman. I do have a number of questions, but I suspect, given the background on the witnesses that are coming, many of my questions will be addressed by them, so I will, in the interest of efficiency, wait to hear what they have to say and then may have some questions at that time.

    Mr. DUNCAN. Thank you very much.

    Mr. Oberstar?

    Mr. OBERSTAR. Thank you, Mr. Chairman.

    Mr. Valentine, thank you very much for a very good statement, an explanation, I hope an education for Members, for all of those who may be following these hearings, on how the FAA goes about its certificate action decisions.

    We heard earlier about stranded passengers; better, earlier notice of shutdown; comments like, ''Sounds like Great Lakes has been nit-picked.'' The point is, it's all nit-picking in aviation safety. It's looking for those very little early warning signs that are detection notices to the inspecting team about problems that represent patterns of behavior, that represent trends in deterioration of maintenance, that represent trends in deterioration of the aircraft, itself. That is nit-picking. That is being meticulous in looking for the very fine details and specifics of maintenance.

    Often, these decisions are criticized, ''It was just paperwork.'' It's all paperwork. The paper trail is incredibly important. When an airline sells an aircraft to another airline, the whole paper trail associates the sale of that aircraft, boxes and boxes of documents, so that the FAA inspector in the new flight standard district office can go back through the paperwork and check and see whether the work has been completed as required by Federal air regulations. It's all nit-picking. It's all paperwork. It is also all hands-on inspection of the aircraft, of the airframe, and of the engine.
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    Over all the years that I've been involved in aviation safety issues, which is about 16 or 17 now, what I learned to look for are systemic indications of failure, warning signs, significant particularly for small carriers, but also for the Part 121 carriers, although there is not going to be any distinction in those—significant increase or sudden increase over a year or two years in hours of operations, significant increase in number of aircraft, deterioration in the financial condition, losing money, trend of increasing number of unsatisfactory inspections, as represented by the accompanying paperwork. All of those were present in this case, all of those were early warning indicators.

    It seems to me that each step the FAA took along the line was a warning to that carrier to shape up. They knew what they had to do. Safety isn't only the FAA's primary responsibility; safety begins in the corporate board room, the chairman of the corporation. That's where the primary responsible of safety is.

    The one level of safety standard that FAA has adopted means that Part 135 carriers are converting to Part 121 standards. Question: how many other Part 135 carriers are going to have similar compliance problems? That's what this hearing ought to be about, not about what happened in this case.

    How many other carriers are on your radar screen now that may represent problems for the future?

    Mr. VALENTINE. As you know, Mr. Oberstar, we have inspectors out there associated with every one of the carriers in our system, and any time any of them, as in this case, detects a trend or what they believe to be a systemic problem, we heighten the surveillance of that particular carrier and put more people on.
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    The 121 program is new. Everybody came into compliance on schedule a couple of months ago. Now we will look to see the extent to which people comply with the plan that they have put forward to be 121.

    I think it's early at this point to be able to determine whether there will be carriers out there who, upon inspection and review, will not be living up to that standard, and we certainly hope that there won't be any, but we will be vigilant in making sure that we——

    Mr. OBERSTAR. Maintain your vigilance.

    Mr. VALENTINE. Yes.

    Mr. OBERSTAR. Second question is: where is Great Lakes Aviation's maintenance conducted? Do they contract it out?

    Mr. VALENTINE. It's conducted at several facilities throughout the country because they actually cover a fairly wide operating area.

    Mr. OBERSTAR. Are all those facilities owned by Great Lakes or are they contracted out to other providers?

    Mr. VALENTINE. I'll have to ask Mr. Stuckey.

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    Do you know offhand?

    Mr. STUCKEY. They have both. They have contract maintenance and they do maintenance for themselves.

    Mr. OBERSTAR. Do they do maintenance of engines in one location, maintenance of airframe in another location, some parts of airframes in various locations? Or is all maintenance of all aircraft done in the same shop?

    Mr. STUCKEY. Normally not, other than routine line maintenance. There's specialized maintenance procedures. I think Great Lakes uses about 143 different contractors.

    Mr. OBERSTAR. How many?

    Mr. STUCKEY. It's 143, I think, in addition to doing their own maintenance, depending on engine overhauls, prop overhauls, or routine daily inspections. It depends on what type of maintenance they're doing.

    Mr. OBERSTAR. That presents a significant challenge for FAA flight standards district offices in conducting maintenance oversight of that carrier, does it not?

    Mr. STUCKEY. Yes, sir. And, Congressman, as you know, last year we beefed up our surveillance on repair stations that are associated with air carriers, and every one of those repair stations, in addition to their carrier, is going to receive a special inspection this year.
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    Mr. OBERSTAR. Mr. Chairman, the challenge presented to the FAA in overseeing a carrier of this nature—and there are many others like this. There's nothing wrong with contracting maintenance out, because every one of those maintenance providers should be certificated by FAA and FAA should provide surveillance of them, but if there are 153——

    Mr. STUCKEY. It's 143.

    Mr. OBERSTAR.——143 places where maintenance is provided for this carrier, think of the compliance problem and the challenge presented to FAA of overseeing and the problem for the carrier, making sure that every aircraft has gone through every step that it's supposed to take.

    I see my time is up. If there is another round I'll have some other questions.

    Mr. DUNCAN. Thank you very much, Mr. Oberstar.

    Dr. Cooksey?

    Mr. COOKSEY. Mr. Valentine, a loaded question: does the FAA need more funding, more staff to verify that there is compliance with the new part 121 requirements as they've gone from 135 to 121.

    Mr. VALENTINE. It has been recognized that we need a larger inspection force to do our job, and, fortunately, we have been given funding for the purpose of hiring additional safety inspectors, and we are, in fact, this year in the process of hiring several hundred more inspectors and will continue to do so.
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    You asked the eternal question about what is the appropriate level of inspection. Do we need 2,000 inspectors or 5,000 inspectors or 10,000? It all comes back to that very fine balance between the need for resources and a need to be mindful of the budget considerations.

    We believe that we have an adequate staff, and as we continue to add to our inspector force we'll have the staff necessary to provide the level of oversight. If we do not, we'll come to the Congress, as we are obligated to do, and tell the Congress that we need more people and the funds associated with that.

    Mr. COOKSEY. How many individuals do you have as inspectors now that are confirming this compliance with 121 as opposed to 135, approximately?

    Mr. VALENTINE. Approximately a little over 3,000.

    Mr. COOKSEY. I see.

    Mr. VALENTINE. And then there are about 1,000 people who are support staff along with the in-the-field inspectors.

    Mr. COOKSEY. And do you feel comfortable with the level of inspection that you've done? Do you feel like the public safety needs are being met?

    Mr. VALENTINE. We believe that the public safety needs are being met. Again, as I said a moment ago, if we do not believe so, we are literally mandated by law to come to Congress and tell the Congress that we don't believe we are able to meet a particular safety need, and that our choices, if we do not have the resources, obviously are to impose restrictions on levels of operation that obviously affect service and capacity. It's part of this whole balance.
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    Mr. COOKSEY. Had Great Lakes had any accidents at all?

    Mr. VALENTINE. Great Lakes has had one accident. I happened to see some of the testimony you'll be having here shortly, and you'll hear it from the person testifying, but, as I understand, in the years that they've been in operation they've had one fatal accident, and that was the one in Quincy, Illinois, late last year.

    Mr. COOKSEY. One fatality, you mean?

    Mr. VALENTINE. One fatal accident.

    Mr. COOKSEY. I see.

    Mr. VALENTINE. That involved an aircraft that had a collision at the intersection of two runways with another aircraft.

    Mr. COOKSEY. Were they flying Beech 1900s exclusively, or——

    Mr. VALENTINE. No. Great Lakes has a mix of aircraft in its fleet.

    Mr. COOKSEY. I see. Thank you, Mr. Valentine.

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    No other questions, Mr. Chairman.

    Mr. DUNCAN. Thank you very much, Dr. Cooksey.

    Mr. Boswell?

    Mr. BOSWELL. Thank you, Mr. Chairman.

    I followed very closely that Quincy, Dr. Cooksey. Great Lakes was landing and rolling out, and the departing aircraft—one person, kind of like running a red light. They just started their take-off roll. So I think this one fatality or fatal accident was really—if you check into it, you'll find out that Great Lakes was not at fault—not trying to point fault, either.

    Mr. Valentine, I'd like for you to clarify for us, if you could, or paint us the picture, going from Part 135 to Part 121. I guess what I'd like to understand is: were the maintenance personnel under Part 135 that are working on aircraft, whatever model they're working on, qualified and certified one day, and then they institute 121 and those same people were required to move to a higher standard because of that change? Could you clarify that?

    Mr. VALENTINE. In the transition from Part 135 to Part 121, probably the area of the carrier's operations that are in some ways least affected is the maintenance side. Very much of the changes involved in going to 121 address such things as dispatch capability, communications capability throughout their system, some additional training requirements for people.
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    I should mention that——

    Mr. BOSWELL. To save time, then, on the maintenance side of it there's very little play at all? In other words, I wanted to get at people that were certified one day, then the next day, working on the same equipment, were not certified, or they were? I'm just curious.

    Mr. VALENTINE. The people working on aircraft are licensed, certified aircraft and powerplant mechanics, and they are, whether they're working in 135 or on 121.

    Mr. BOSWELL. So the change to 121 did not change that?

    Mr. VALENTINE. Did not change the status of the qualifications of a mechanic.

    Mr. BOSWELL. So they were still qualified the next day to work on that same airplane under 121?

    Mr. VALENTINE. I think that would be the case.

    Mr. STUCKEY. If I could just add to that, the important thing here is that their maintenance inspection programs that they had prior to that had already been approved by the FAA and also was acceptable under 121.
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    The thing that we tried to get them to do to address past problems was to revise their general maintenance manual. That's the manual that tells them how to do maintenance and inspection. They had submitted a new manual and it was acceptable to us in February. They had about a 15-month transition period to get from 135 to 121, so there was probably 121 stuff that they did prior to March 20, but when March 20 rolled over, those that were qualified to work on their aircraft were still qualified.

    Mr. BOSWELL. Okay. I just wanted to clarify that because I wasn't sure. Thank you.

    Thank you, Mr. Chairman. I'll have questions later. I yield back my time.

    Mr. DUNCAN. Thank you very much.

    Mr. Thune?

    Mr. THUNE. Thank you, Mr. Chairman.

    Mr. Valentine, I would say that from day one, when we first got notification, we sided with the FAA's need for safety of the flying public, and I don't think it ever ought to be compromised for the sake of convenience.

    I do, I guess, however, have some questions as to how this notification process works and how you go about educating the public of your actions. Obviously, air service is no ordinary business.
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    I think we in Congress are trying to sort through what are oftentimes some very technical issues, but it seems to me—and I had a conversation yesterday with seven mayors in my State who are confused, I guess, as to what's going on out there. I think Great Lakes Aviation has ten planes on the ground in Huron which they claim are ready to be put back into service. You have indicated, I think, in our conversations with your office, that you have not received the appropriate plan that would allow them to put those back into service. On the other hand, Great Lakes contends that that plan has been submitted.

    I guess it just seems to me that there has got to be a better way of communicating. There's just a tremendous amount of confusion out there, and the people in Huron think that you're putting them on the ground for things like paint chips. And if there are serious mechanical difficulties, obviously that's a very different thing.

    I would go back to the discussion here about changing from FAR 135 to 121, and if, in fact, that is something that—some of these issues are more involved with process and procedure than they actually are with defective and dangerously worn equipment.

    Could you comment a little bit as to how you attempt to notify the public, Members of Congress, the cities that are involved, and the airline, itself? I go back to my initial—as I mentioned earlier, the way in which I think this story was initially broached with the public.

    Mr. VALENTINE. I think one of the important aspects of this process to understand is that up until the time that we make the decision that circumstances are such that it's appropriate to take some action, literally the decision has not been made to take that action. It comes quickly. And once that decision is made, it happens almost immediately.
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    This is a matter literally of assembling information, analyzing that information, and at such point as the analysis of that information shows that action needs to be taken, we then do not hesitate to take that action.

    That's very, very awkward for the carrier. That's very awkward for the public, who is inconvenienced in this process. But I don't know that there is any other way to do this.

    I mean, obviously one would not say, a couple of weeks in advance, ''We're taking a look at this airline and we might shut them down in a couple of weeks,'' because we wouldn't know. We're not in that position to say we might. I mean, I could say that about every carrier the exists.

    The answer is that if we find a problem and we determine it's at sufficient level to take action, we might shut them down. I mean, that's literally what our business is. So there is no real easy or convenient way to provide advanced notice.

    What we do expect, however, is that the management of a carrier, in knowing that the number of deficiencies is increasing, in knowing that we are concerned and have increased our oversight, ought to be aware of the fact that a consequence of that oversight is a shut-down and to be giving that some thought in whatever way.

    In terms of notification, as a matter of courtesy, since obviously shutting down an airline is going to affect service to a district, the ability of residents of that district to get around, inconvenience to those who are already scheduled to fly, we make it a point, as a courtesy, as do agencies of Government for lots of reasons, to let Congressmen know that that's happening so that you won't be surprised when your constituents start calling you and wondering what's going on. You're at least aware that this is happening.
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    Now, we had, in this particular case, met with the CEO of the airline on May 13th to express our serious concerns about where this was all going.

    But, again, the decision isn't made until it's made, and once it's made obviously you don't say, ''Well, we'll wait until next Thursday before we do something, now that we know there's a problem.''

    There is no easy way around that. There really isn't. And, again, in terms of notification of Members, it was a matter of courtesy to let Members know that an agency of Government is taking action that will affect members of their District.

    Mr. THUNE. And I understand some of the unique dynamics of what you're dealing with on that side of it, and I realize my time has expired here, but once that decision then has been made and you enter into this process and the consent order and everything else, in order to resolve some of these issues, if you're going to work through them in a way that actually gets that airline back in service, again, it seems like, unless I'm missing something here, that certainly the communities in my State that are affected by this have very little information as to what happens from here on and what is involved in this consent order and the nature of it, and then, subsequently, how we go about restoring service.

    Realizing, again, that you have to ensure that all of those safety issues are addressed—maintenance and inspections, and so forth—my understanding is—and, again, I share with you what I am hearing from the people that are affected by this in these communities—that some of that information has not been particularly forthcoming. I mean, they're at a loss as to why, you know, they've entered in the consent order, these issues have been addressed—apparently, at least—ready to be back in the air, and service is not being restored.
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    It seems to be at least fueled more by rumor than anything else.

    Mr. VALENTINE. Let me offer two things. One, we would be happy to provide information to you that you could share with people in your community, with municipal officials as to how this process works and what our expectations are.

    The answer to when service will resume rests essentially with the carrier, and the answer is: when they have met the conditions of their consent agreement, when we are assured that all of the conditions of the consent agreement are met, then operations will start up again.

    There are limited operations right now that we have allowed only because we are confident that the aircraft operating through certain maintenance bases are being properly maintained.

    When the conditions of the consent order are met, operations will resume. But the rate at which that will happen rests principally on the carrier, itself.

    Mr. THUNE. Okay. Thank you.

    I thank the Chair. Hopefully we'll get some additional light shed on that subject by the carrier.

    Mr. DUNCAN. Thank you, Mr. Thune.
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    Let me say I want to apologize. I have to go to another hearing at this point and I'm going to ask Mr. LaHood to preside in my absence.

    I will say, just as a general statement, though, Mr. Valentine, I hope that you will work, of course, to make sure that Great Lakes does operate as safely as is humanly possible. At the same time, I recognize that we have to have some balance in this situation, because we could shut down every airline in the country and we would guarantee 100 percent safety in that way, but we can't do that, particularly when we've got such a great increase in the number of passengers traveling by air each year.

    It has been my feeling that we need more airlines flying instead of fewer. Unfortunately, in many over-regulated industries, things end up in the hands of a few giants, and I hope that never happens in aviation, because I think that leads to inefficiencies and decrease of safety because it leads to a bureaucratic, very poorly-run aviation system.

    I hope that we don't force more people onto our already overcrowded and much more dangerous highways. It's much safer to have people in the air than it is to have them on our highways.

    With that having been said, I'll ask—I do think, though, that the FAA does a great job, in general, on most things, but it does not mean that the FAA is absolutely perfect. I should never be—the FAA is not a sacred cow that should never be questioned. I've never felt that, and I doubt that many people at the FAA feel that way, either.

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    Mr. VALENTINE. We don't feel that we're not questioned.

    Mr. DUNCAN. I thank you for being here today, and I'll be back after a while, hopefully, but I'll ask Mr. LaHood to preside at this time.

    Mr. LAHOOD [assuming Chair]. Mr. DeFazio, I believe you are next for questioning.

    Mr. DEFAZIO. Thank you, Mr. Chairman.

    I'd like to return. There was a startling statistic that came out earlier in your testimony that there were 143 separate providers or subcontractors of maintenance services to this airline; is that correct? Was that the number I heard?

    Mr. STUCKEY. Yes, sir. That's the information that we have—that there are 143 outside organizations that it contracts for various services.

    Mr. DEFAZIO. Whose job is it to oversee, coordinate the work of those 143 organizations to make certain that every one of those organizations is complying with Federal aviation regulations; that we're not introducing foreign or counterfeit parts, which we know are a big problem, into the system; that the mechanics are fully certified to do the work, they have the tools to do the work, the work is being conducted properly; and that all of this is assuring airframe integrity? I mean, whose overall responsibility is that?

    Mr. OBERSTAR. Would the gentleman yield?
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    Mr. DEFAZIO. Certainly.

    Mr. OBERSTAR. If I just may sharpen the focus of the question: how many different flight standard district offices are involved in overseeing maintenance provided by 143 maintenance operations?

    Mr. STUCKEY. I don't have an answer to that, but we could get that to you. What I can tell you, in the last four months we've had, in addition to five full-time inspectors assigned to Great Lakes, we've had 106 geographic inspectors supplementing the oversight of them.

    With regard to the repair stations, as you know, last year we made major changes in the way that we oversee repair stations. Heretofore, the repair stations that were certificated had oversight by their local FAA Flight Standards District Office and there was not much of a connection between them and the oversight of the airline.

    Starting last year, we started a program to where it's a dual responsibility within the FAA. It's both the air carrier inspector's responsibility to assure that that repair station conducts maintenance within its capabilities for that air carrier, and within the air carrier's program and, in addition to that, coordinate with the local inspector who provides oversight of the repair station and make sure that any work that's done for that air carrier is done by qualified mechanics within the scope and the capabilities of that repair station.

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    In addition, we have asked the air carrier to go back and do audits on every one of those repair facilities and list those repair facilities and state to us that they have conducted those audit before they use any new repair facilities.

    So I think now we have a much better program to make sure that each of these operators and repair stations conduct operations safely.

    Mr. DEFAZIO. I think your last point is key. The operator chose to farm out, in order to save money, to 143 subcontractors. They chose not to have a large in-house maintenance facility centralized somewhere, which they could oversee easily. It is their responsibility, since they chose this to save money, to make certain, in saving money, that they're not cutting corners or jeopardizing safety.

    I'm a little puzzled to hear a gentleman from the other side talk about planes being—were some of these planes—were your concerns about paint chips?

    Mr. STUCKEY. No sir.

    Mr. DEFAZIO. I heard control cables. I think a control cable is one that has two bolts, one bolt loose and one missing. Sounds to me like it has the potential for a fatal error. What would have happened had that second bolt come undone?

    Mr. STUCKEY. You would not have had control of that particular engine.

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    Mr. DEFAZIO. So you wouldn't have had control of the engine. What would the engine do then? We're talking about twin engine aircraft?

    Mr. STUCKEY. Yes, sir.

    Mr. DEFAZIO. Okay. So we have one engine out of control. What does it mean? Does it idle down? Idle up? What does it do? What happens to the pitch or the prop? What happens?

    Mr. STUCKEY. Without seeing a write-up, I'm not sure exactly what that means. It caught my attention, too, when I was looking through the hundreds of alleged violations, that that was one where it was about to fail, and if we had not caught it out on the line it could have been a very serious safety problem.

    Mr. DEFAZIO. I think that the flying public perhaps would be better served. How visible is it as far as—the airline alleges, if you could, Mr. Chairman, just abide me a moment longer, because I have to run to another obligation. It says, ''The actions of the FAA, which led to our voluntary suspension, came as a complete surprise. We had not received any written correspondence alleging that we were not in compliance with Federal aviation regulations.''

    Is that a correct statement?

    Mr. VALENTINE. May I take that, if I can, Mr. DeFazio?

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    The airline had been cited numerous times for safety violations.

    Mr. DEFAZIO. Were they cited in writing?

    Mr. VALENTINE. Yes, sir. And they have been subject to enforcement action and fines for safety violations, all in writing.

    Mr. DEFAZIO. Is this on your FAA web site so the public could access it? Has this become a transparent process? I know you're making your process more transparent for the public.

    Ms. GILLIGAN. Yes, sir. The enforcement database is not yet on line, although it is one that we're looking at in order to make sure that we have accurate information, and when that's appropriate we will be planning to make that available, as well. It is, of course, available under the Freedom of Information Act. They are public actions taken by the Administration, and so letters proposing civil penalties and final orders of civil penalties are known. And, of course, we publicize any of those civil penalties now that are in excess of $50,000.

    Mr. DEFAZIO. So we had numerous instances, citations, and fines, so I find it hard that ''we have not received any written correspondence,'' that these things were all in writing. I mean, you fine people with written notices. I mean, I'm puzzled by their assertion here, and, unfortunately, I'll probably miss the next panel.

    Mr. VALENTINE. It may be that they didn't receive prior written notice that we're going to be taking action. I'm not sure what is meant by ''not having received notice,'' and I just wanted to qualify that.
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    Mr. DEFAZIO. Okay. But, again, I'd just like to return. I'm hearing—I understand the concern of Members whose communities have been inconvenienced, but I once remember also, in having the regional air transport folks, who are going to be before us shortly, when we were having a bit of a dispute over—where I still don't agree with the FAA—flight duty time for commuter pilots, that the one fellow said to me, ''Well, if you were stuck in Bend, Oregon, and you were under the Part 121 regulations, your pilot wouldn't be able to fly and you'd be stuck there.'' And I said, ''Well, if the pilot is to tired to fly, I don't think I want to fly, and I don't think that the other passengers would really mind we're inconvenienced.''

    That's the case here. I think if the public understood better the seriousness of this—I mean, if we just publicize this one part that's about to fail, one is too many. It's inexcusable. There are supposed to be two bolts and there's one bolt. The one bolt that's there is loose. It has the potential of a catastrophic accident.

    I mean, you're flying in some of these twin engine planes. You get one engine out of control, they don't handle real well. Sometimes they tend to turn over or, they do things that are alarming to passengers.

    So I guess my concern with the FAA here is a communication concern, and it is both in terms of, how the notice got out, that's one thing, but that's fairly minor in terms of communicating more effectively that there are serious safety concerns here so that we don't have this committee launch off on, ''no, it was paint chips,'' and ''Oh, the airline wasn't notified,'' and all this stuff. It wasn't just paint chips. We had the potential of killing people, and killing people to save money, because it's farmed out to 143 people and nobody is in charge except you, and now you're being dragged before us because you've taken a controversial action.
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    I think that you need to get that web site up. If the airlines don't like these kinds of actions, then let's just put every single citation and violation on-line and let all of the web heads in America access it and give them the information, let them make their own decisions about who they want to fly on, and I think that will help a little bit.

    Thank you, Mr. Chairman.

    Mr. LAHOOD. The gentleman from Iowa.

    Mr. LATHAM. Thank you very much, Mr. Chairman.

    You mentioned earlier that there was one fatal incident. Was Great Lakes at fault?

    Mr. VALENTINE. The National Transportation Safety Board has not yet, as I understand it, determined or concluded the probable cause of that accident.

    Mr. LATHAM. Is the gentleman's point here that in fact, they were not at fault. Maybe you haven't had an official determination, but the fact is they have not had any accident that they could be held to blame for, and they have operated in a very safe manner, have they not?

    Mr. VALENTINE. I understand they have been in operation for many years—I believe that testimony here said 16 years—and that was the first and only fatal accident that they've had in 16 years of operation.
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    Mr. LATHAM. And in which there is overwhelming evidence that it was not their fault, right?

    Mr. VALENTINE. That I won't comment on because the Board has not yet come to a conclusion as to the cause of that accident.

    Mr. LATHAM. So any conclusion by the gentleman over here that there was any kind of an unsafe operation I think is drawing—stretching a great deal as far as any kind of conclusion.

    You mentioned earlier, as far as notification of the shut-down, who did you notify?

    Mr. VALENTINE. We met with the airline, the officials of the airline, itself.

    Mr. LATHAM. Who did you notify when you shut them down?

    Mr. VALENTINE. Who specifically?

    Mr. LATHAM. Yes. Why did it have to come from Mr. Thune?

    Mr. VALENTINE. It didn't have to come from Mr. Thune. It was released, I guess, apparently by his staff, prior to our people having an opportunity to hold a meeting with the airline officials.
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    Mr. LATHAM. So you announced it before you ever told the airline?

    Mr. VALENTINE. No. If you'd like, I'll ask Mr. Stuckey to give you the time sequence of events. That probably would be very helpful.

    Mr. LATHAM. I'd really like to have you answer the question.

    Mr. VALENTINE. I'm not familiar with who called whom when, exactly, but I have people who are familiar with that and would be happy to answer that for you.

    Mr. LATHAM. Well, in your statement earlier you did not include the airline in the people you notified. You knew then, apparently, who you notified that day. I mean, you said you notified Members of Congress.

    Mr. VALENTINE. Let me ask Mr. Stuckey to answer that. I'm not sure I quite understand——

    Mr. LATHAM. You made the statement earlier, yourself. I don't know why now you don't know.

    Mr. VALENTINE. What statement are you referring to, sir?

    Mr. LATHAM. Earlier in your testimony, when it was asked about who you notified for the closure of the airline that day, you said you notified Members of Congress so that they would be aware. The only person you failed to mention in that list was the airline, itself.
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    Mr. VALENTINE. Obviously we notified the airline. I mean, that's——

    Mr. LATHAM. When?

    Mr. VALENTINE. That same day. We held meetings, I think you heard earlier in testimony, that night right up until 11:00 that night with the airline.

    Mr. LATHAM. Were they told that day that you were going to shut them down the next day?

    Mr. VALENTINE. Yes, sir.

    Mr. LAHOOD. Mr. Latham, I wonder if we could have Mr. Stuckey give us the time table. I'd be most interested in that. Would you mind if we did that?

    Mr. LATHAM. No.

    Mr. LAHOOD. Please, Mr. Stuckey, because I think there is an awful lot of interest in this, could you proceed with that?

    Mr. STUCKEY. Yes, sir.

    The time table the last day, we were working on the issue for about a couple of days, and then Friday morning it appeared that we were going to have to take some sort of action, and we had all-day meetings, mostly telephonically, with the region over the subject.
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    That afternoon it appeared that we were going to be taking some action, so, as a courtesy to the Members here of Congress, we did put out a short briefing that it looked like we would have to take some action on the airline that day.

    We knew it was Friday afternoon. We knew a lot of people would be stranded. We wanted to give Congress as much notice as possible.

    The decision was made about 5:00 eastern time, as I recall, to actually take the action. About 5:30 eastern time the managers of the Central region departed to go up to Spencer, Iowa. They met with the carrier. The decision was made about 10:00 or 11:00 eastern time that the carrier would shut down.

    We met with them for five hours that evening explaining our concerns and told them that we were prepared to take action if they didn't cease operations.

    About midnight on Friday I was notified that they ceased operations. We followed that up with setting up the communication process, now that we had notified Great Lakes, itself, to notify United Airlines and Midway Airlines, who they are a commuter for. That was done early in the morning.

    At 2:00 in the morning on Saturday, I read a press release to the wire service to make sure that the public would know as soon as possible, and that was followed up the next morning with a formal press release and interviews.

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    So, although things were happening very fast, we tried to keep Congress informed of what we were doing. The decision had not been made, but it looked like that was where we were going to be on a Friday night, and we wanted to do whatever we could to keep Congress informed. And the air carrier was informed during that five-hour meeting.

    And then, subsequent to that and all through the night and all through that weekend, we were working to get the information out.

    Mr. LATHAM. Was there ever any problem with the airline as far as complying with your wishes or any resistance as far as compliance?

    Mr. STUCKEY. Yes, sir, there were some concerns there. There were cases where we found aircraft, in our opinion, that were unairworthy. We pointed it out to the carrier and they operated the aircraft, anyway. And some of those we later found in the system in a condition that we felt was unsafe and even worsened, and at that time the carrier took it out of service.

    The other thing I'd like to point out is, normally, if you look at all the inspections that the FAA would do, only about 4 percent ever lead to some unsatisfactory finding. In the last few months with Great Lakes Airline, that rate is probably two or three times the amount that it is nationally. So it's not an isolated issue. It's throughout their system. We had concerns that they could not maintain aircraft in airworthy condition.

    In fact, after the shutdown, when we asked the carrier to go back through all its aircraft and make them airworthy, present them to the FAA, the first 18 aircraft that they presented in various forms of readiness, including the last three or four that they said, ''Okay, these are ready. We want to put them back on the line. They're airworthy,'' not the first time, not the first aircraft did we find airworthy, and these are aircraft that were operating in the system up until May 16th in revenue service.
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    So yes, we did have concerns about the airworthiness of the aircraft.

    Mr. LATHAM. I appreciate that. My question is about whether there was cooperation or not. My time is up here, but I, you know, have a real concern about the time line here, and as far as you notifying the company. And when there are alternative kinds of charges, basically, or letter of investigations made and you never notified the company. There is a process, I think, that has been circumvented, and I think safety obviously is number one, but also there is a way of getting compliance, and I think that, rather than to work in an adversarial manner, I think it's very important to work in a cooperative manner. That really is my major concern.

    Mr. VALENTINE. Mr. Latham, we couldn't agree more, and that's how we work. I think if you ask Great Lakes, they will tell you that, as well.

    Mr. LATHAM. And then there is a real communications breakdown some place. I mean, maybe you think you are, but if you don't tell somebody that, then it's pretty hard to have a two-way street.

    Thank you, Mr. Chairman.

    Mr. LAHOOD. The gentleman from Illinois, Mr. Poshard.

    Mr. POSHARD. Thank you, Mr. Chairman.

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    Forgive me for being late. I have three subcommittees going on at the same time, and my line of questioning I'm sure has already been engaged by other Members.

    First of all, let me associate myself with all the remarks of Mr. Oberstar. I think it was well stated, and our main objective, of course, is to make sure that the flying public is safe.

    But I don't want you to think that I'm questioning the veracity of what you say here, and I know many of these problems aren't indigenous only to Great Lakes, but I just want to ask this question.

    A couple weeks ago the FAA was before the committee, and at that time we were admonishing the FAA for not moving quickly enough with respect to safety considerations on major airlines.

    Now, today we are lauding your efforts with respect to your moving quickly and efficaciously with respect to safety on a regional airline.

    Is there a different standard here with respect to the procedures that you use and the process that you engage between the major airlines and the regional airlines? Why do we move slowly with consideration to some and move quickly and expeditiously with consideration of others? I just want you to answer that, if there is an answer, in fact, because I think that's part of what is being asked here.

    Great Lakes served two communities in my District—Maquon and Decatur—until they were shut down. I'm not questioning your reasoning for shutting them down. I mean, I would never do that. But I'd just like to know—and I think Mr. Stuckey began to address this question—how they do compare with other regional airlines and, you know, what is it within the structure of the process in which you engage? At what point does an airline reach a critical mass whereby you ground them?
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    I'd just really like you to explain that, if you can.

    Mr. VALENTINE. To answer the first part of your question, the same standard applies to all. We don't have a different standard for large airlines versus commuter airlines. In fact, as we've been talking about earlier, all commuter airlines now must comply with Part 121 regulations, which apply to the large carriers, so they're all subject to the same rule and they're all subject to the same kind of scrutiny, and they're all subject to action appropriate to the circumstances we encounter during our inspection process.

    The rate at which that process takes place will vary, depending upon the circumstances. Whether we find that there are few problems growing slowly or many problems growing rapidly, the action we take would be commensurate with the size, nature, and rate at which we discover problems in the process.

    Obviously, there is a different set of circumstances for almost every carrier. Some are very small, some may do all their maintenance in one location, some may spread out, some may cover a large area that covers several of our Flight Standards Districts, some may operate almost entirely in one Flight Standard District.

    So each situation is quite a bit different, and each one has to be evaluated in accordance with all of those circumstances, but we apply the same standard to all.

    Mr. POSHARD. And how does Great Lakes measure up with other regional airlines in terms of their safety record?
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    Mr. VALENTINE. We, in evaluating all of the airlines, allow them to continue to operate as long as we are confident that they are complying with the standards. Up until we increased our surveillance, we considered them to be compliant until we found otherwise.

    Every carrier that's operating today is operating because at this moment we believe it to be compliant with the regulations.

    So up until we determined otherwise, Great Lakes was compliant, as all of the other carriers are compliant that are operating.

    Mr. POSHARD. Did the action at Quincy, Mr. Valentine, increase your scrutiny of this particular airline?

    Mr. VALENTINE. I don't know whether people in the field altered their practices because of that, but I would doubt it, because the nature of the accident at Quincy wasn't one, at least on initial appearances, that relates to maintenance issues and aircraft airworthiness issues at all. From my understanding of the accident, those are not factors, so that wouldn't really cause anybody to be concerned about that aspect of Great Lakes' operation.

    Mr. POSHARD. Thank you, sir.

    Thank you, Mr. Chairman.
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    Mr. LAHOOD. We're going to go to a second round here.

    Mr. Pease, do you have any questions?

    Mr. PEASE. Thank you, Mr. Chairman.

    My questions focus more on the decision once service is denied at essential air service communities to either assist or—I guess a better term is ''require'' the airline to come into compliance or, alternatively, to find somebody else to serve those communities. Can you comment on that process?

    Mr. VALENTINE. I would ask Mr. Coleman if he would address that.

    Mr. JOHN COLEMAN. Right. Our focus, of course, has been on those communities where Great Lakes was providing the only air service. They had some 27 cities on their system where they were the only air carrier.

    We've discussed with Great Lakes almost on a daily basis what its obligations are. It does have a remaining obligation to provide essential air service at all of those communities. It understands its legal obligations, and they've assured us that they are planning to restore service at all of its essential air service communities as soon as it can. They've given us a time line.

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    Their ability to meet those target dates, of course, will depend squarely on how they're able to work things out with the FAA and to get those services restored.

    In the meantime, we have done a couple of other things. We did call—we contacted virtually the entire commuter airline industry to ascertain what carriers might be interested or willing to provide substitute or replacement service for Great Lakes, either in the short term or on a more permanent basis. That response, frankly, was not very positive for a variety of reasons.

    Clearly, there is a lot of inconvenience associated with the hiatus in air service, and we're doing everything that we can to try to get that hiatus filled in. We have target dates and we'll continue to work very closely with Great Lakes and the FAA to try to meet some kind of a schedule.

    Mr. PEASE. If I understand you correctly, the priority will be given to those essential air service communities first?

    Mr. JOHN COLEMAN. Yes.

    Mr. PEASE. Okay. Well, if the problem here with, in our case, United Express at LaFayette and Terre Haute, is because you've determined that there is this problem in the maintenance of the entire fleet in terms of a systemic problem, how is it that you're going to restore service to some communities before the entire operation is remedied?

    Mr. JOHN COLEMAN. Well, there has to be—this whole thing has to come back into play on a rational basis. The carrier's ability to go into any individual community earlier than it might go back into others isn't something that can be looked at in isolation. It may be more difficult for them to get into some communities as quickly as we would like them to.
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    And, of course, you know, in the long term we want the carrier to survive. It has a lot of judgments to make, itself, as to which communities it believes it should give priority to in terms of reinstituting their air service. Their inclinations, of course, are going to be to go into the densest markets as quickly as they can.

    And the bright spot here has been that the carriers reported to us that in those communities where it has reestablished its service their traffic has virtually instantly come back to them. The longer it takes to get back into communities, of course, the less in play that will be.

    Mr. PEASE. Of course, and I understand that, but I guess I still am concerned that if the decision to ground was based on a determination that the entire maintenance operation was not sufficient, then how is it that you're now putting planes back into the air?

    Mr. JOHN COLEMAN. Understand, there are two levels of the organization here. The essential air service program is administered from the immediate office of the Secretary, which is where I am. I'm not an FAA official. All of the decisions having to do with the ability of Great Lakes to put individual airlines back into the air is entirely between Great Lakes and the FAA, so that's an issue that my staff is not involved in and, of course, has no control over and would not attempt to influence in any way.

    What we're trying to do is to work with both the airline and the FAA toward that kind of a schedule that most productively serves the interest of the flying public that we're concerned with, and that is those communities that have lost all of their air service.
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    Mr. PEASE. Mr. Chairman, if I could, I appreciate what you're saying, and I don't mean this to be in an adversarial fashion. I just don't understand the logic here yet. If the entire system has a problem in its maintenance, which you use as the reason for shutting it down, then one would conclude that there ought not to be any planes in the air, but there are. I'm glad there are in some places if they're safe, particularly in my District, but I don't understand the logic between the decision to shut down because the whole maintenance operation isn't working and, at the same time, say, ''Well, we really didn't mean it, because some of it is working.''

    Mr. VALENTINE. We really did mean it because we weren't certain any of it was working. We are allowing a very limited operation to take place now because that part of their operation is working.

    Mr. PEASE. But it uses the same mechanics, I assume, that you've determined are not good enough to use for——

    Mr. VALENTINE. No.

    Mr. PEASE. Then you didn't——

    Mr. VALENTINE. We are allowing this operation, because these aircraft are being maintained at a maintenance base or bases that we are satisfied are compliant.

    Mr. PEASE. Then I guess I misunderstood your earlier testimony that said the entire system wasn't functioning correctly and that's why you shut it down.
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    Mr. VALENTINE. We had no way of knowing that the entire system was not functioning adequately, and it was not. And one of the difficulties in this situation is you don't know. For example, when you have unqualified mechanics working on an airplane, you have no way of being assured that an airplane is airworthy. It may be, but just because the mechanic might have done a good job despite the fact that he or she was not qualified, but you have no way of ascertaining that.

    Because of our concern about systemic problems throughout the airline's entire operation, it was appropriate for them to discontinue their entire operation until such time as we could be assured that they were compliant.

    We worked with them, and I'm proud to say that our people have been working very closely with Great Lakes to try to restore service, and we determined that a limited number of aircraft that we were satisfied were airworthy could operate to a limited number of locations, because they would be maintained by facilities that we were assured were compliant and had proper people who were trained and qualified to do the work.

    Mr. PEASE. Okay.

    Mr. VALENTINE. And, within the context of our consent order, that was one of the features that we provided in there, that said that at our discretion we could authorize limited operations of the airline.

    Mr. PEASE. Okay. I appreciate that. And then your decision, I guess, is—your priority is determined on essential air service communities first and other communities after that; is that correct?
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    Mr. VALENTINE. If I can add, it was basically determined by them. They told us which communities they wished to restore service to and which aircraft they wished to operate and in what fashion.

    Mr. JOHN COLEMAN. As airplanes are permitted to come back on-line, it is the airline that makes the decision as to what markets it wants to deploy those airplanes in. We're working as closely with them as we can to try to make sure that the essential air service communities are not treated as an ugly stepchild in that process.

    I don't know that we want to absolutely dictate that Community X will come up on June 10th and Community Y will come up on June 11th, but as long as there is some reasonable time schedule there, then we'll be satisfied, but we're working very closely with them toward making sure that happens.

    Mr. PEASE. Thank you very much.

    Thank you, Mr. Chairman.

    Mr. LAHOOD. Mr. Lipinski?

    Mr. LIPINSKI. Thank you, Mr. Chairman.

    I'd like to go back just one more time so I understand it to the notification, you know, who was notified, when they were notified, when the final decision was made to shut down the airline, and I'll briefly give you what my understanding is.
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    My understanding is that you notified some Members of Congress, those people who you thought should be notified and those who you thought would be interested. You gave them a notification that Great Lakes Air may be grounded today.

    You met with the Great Lakes Air people. It took several hours. You did ground them.

    Now, one of the Members of Congress who you notified earlier in the day sent out a press release saying that Great Lakes Air was going to be grounded.

    Now, is that the sequence of events, and is that how one Member of Congress managed to make the announcement, because he was concerned about his constituents, before anybody else really knew it?

    Mr. VALENTINE. That's essentially the sequence of events, as I understand them. Yes, sir.

    Mr. LIPINSKI. Mr. Stuckey, do you agree with that?

    Mr. STUCKEY. Yes, sir. We were prepared to issue emergency order suspension, and the carrier agreed to shut down that evening.

    Mr. VALENTINE. They agreed voluntarily to shut down. Had they not, we would have taken an action that would have shut them down.
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    Mr. LIPINSKI. Okay. There has been some question about that, and that's the way I heard what was solicited from you. I just wanted to make sure I understood it.

    I was looking over here at the consent decree between the FAA and Great Lakes Air, and there are over 20 pages of violations, and I would guesstimate that there are probably 25 violations per page. So it would seem to me that you put together a very extensive case against Great Lakes Air.

    I just wanted to bring that to everyone's attention, because it seems like there have been some questions here indicating that maybe there wasn't a necessity to shut Great Lakes Air down.

    I'd like to move away, though, from Great Lakes Air and to a more general area here.

    What are geographical inspectors? You mentioned you had so many permanent inspectors on Great Lakes Air and 106 geographical inspectors. What are geographical inspectors?

    Mr. VALENTINE. People who are assigned to a specific geographic region of the country. That's all that means.

    Mr. LIPINSKI. That's simple. Okay. The full-time people that were on there, what is their definition? What's the difference between a geographical inspector and a full-time inspector?
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    Mr. VALENTINE. We're divided nationwide into, I believe—correct me if I'm wrong, Tom—about 125 or so Flight Standards District Offices, and those offices are responsible for carriers who are based, who have their headquarters within the geographic boundaries of that Flight Standard District, and they are responsible for overseeing all operations based out of that district, if you will.

    With Great Lakes Airlines we had, as I understand it, five people who were assigned from the district in which that airline is based full time to oversee activities at Great Lakes Airlines.

    And if we have to, for example, increase surveillance, depending upon the staffing arrangements in that district, we may have to bring people in, and often do, from other areas of other districts to assist in the process.

    Mr. LIPINSKI. Thank you. Now, Great Lakes Air had 143 different locations that they were having maintenance work done at; is that correct?

    Mr. STUCKEY. Our information is that they had 143 separate contractors that did maintenance for them, and that could be for a variety of repairs and maintenance.

    Mr. LIPINSKI. Over how long a period of time did they have these 143 maintenance contractors?

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    Mr. STUCKEY. I don't know. We could get you that information.

    Mr. LIPINSKI. I'd like to get that information.

    [The information received follows:]

    The majority of the 143 contractors listed on Great Lakes Aviation's (GLA) Operations Specifications were actually vendors supplying new, overhauled, and/or repaired products and parts to the Airline, not performing maintenance on the GLA fleet of aircraft. Since then, FAA has clarified the definition of ''substantial maintenance'' for airlines to better determine which contractors must be listed on the Operations Specifications, and Great Lakes now lists only 13 ''substantial maintenance'' contractors on its Specifications. These 13 contractors have been used by GLA for at least the last 4 years.

    Mr. LIPINSKI. And if they had 143, it doesn't mean that these 143 necessarily were at different locations, correct? I mean, 10 could have been at one location, 20 could have been at another?

    Mr. STUCKEY. Yes, sir, and it's no indication of what percentage of the maintenance they do, either. I mean, the carrier could, in fact, do most of its own maintenance.

    Mr. LIPINSKI. Do you have any idea in this case how much of the maintenance Great Lakes Air did itself?

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    Mr. STUCKEY. No, sir.

    Mr. LIPINSKI. Could you get me that information and get the members of the committee that information?

    Mr. STUCKEY. Yes, sir.

    [The information received follows:]

    Great Lakes Aviation performs most of its own maintenance, with the exception of overhauls and major repairs to engines and propellers. Overhauls and major repairs are done by FAA-approved facilities in accordance with GLA's FAA-approved maintenance program.

    Mr. LIPINSKI. Mr. Chairman, I want to say an area that I really believe that this committee should get into is the area of these maintenance contractors. I have said on other occasions and I say again that I think some of the problems we have and some potential for problems, great problems, are with these contract maintenance. I've seen it in ValuJet. I believe that I've seen it once again in this particular situation.

    I think that we need a hearing to focus in on the contract maintenance that goes on in this country.

    We did have members of this subcommittee staff tour several maintenance facilities back, I believe it was late last year or mid last year, and we did talk to them. We've gotten no formal report as of yet, although there will be one. But I would really like to see a hearing held just on this contract maintenance, because that's an area I think we should really focus in on, and I think that's an area where, by our focusing in on it, we'll be able to improve the safety even greater than it is today.
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    Thank you, Mr. Chairman.

    Mr. LAHOOD. Thank you for those comments. We will make sure that Mr. Duncan is aware of that, and we can hopefully arrange a hearing.

    Dr. Cooksey, do you have any questions on the second round?

    Mr. COOKSEY. No. Thank you, Mr. Chairman.

    Mr. LAHOOD. Mr. Thune?

    Mr. THUNE. Thank you, Mr. Chairman.

    Just maybe one follow-up question, and that is directed perhaps at Mr. Coleman.

    What is the DOT doing for the communities at which Great Lakes was the only airline and are therefore now without air service? There are, I think, 38 of them around the country.

    Mr. JOHN COLEMAN. As I mentioned a minute ago, we have talked to other commuter airlines about their willingness or interest in either substituting for Great Lakes in the short term or replacing them in the longer term, but the response that we got to that inquiry was not very enthusiastic.
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    In the meantime, frankly, I think that the most productive course for everybody, for all the communities involved here, is for us to work as closely as we can with Great Lakes, which we do virtually daily, and with the FAA to try to work toward a realistic time table of targets for them to resume their air service.

    In the long term I think that's probably the most productive course.

    Mr. THUNE. Do you see the—in last year's reauthorization there was the overflight tax that was approved. Do you see, given some of the controversy around that, is the DOT going to have the money that is necessary for essential air service, permanent funding source?

    Mr. JOHN COLEMAN. I'm sorry. I didn't hear the full question.

    Mr. THUNE. Well, I guess the question is, longer term, one of the concerns that I hear frequently is that essential air service, of course, has always been somewhat subject to annual appropriations. Now we have this permanent funding source, and whether or not your view is that that's going to be sufficient to retain essential air service in the communities, many of the communities particularly in rural areas around the country.

    Mr. JOHN COLEMAN. Yes, sir. I think it will be.

    Mr. THUNE. I thank the Chair.

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    Mr. LAHOOD. Mr. Oberstar?

    Mr. OBERSTAR. Thank you, Mr. Chairman.

    It is apparent that there is some misunderstanding by members of the committee about just what took place, who was notified when, and I would like to have you, Mr. Valentine, submit in writing for the committee the chronology of discussions between FAA and Great Lakes leading up to the day on which the decision was reached, and then on that day to outline for us—because I think your attempts to explain verbally have not been clear enough and made clear enough to Members.

    [The information received follows:]

    [Insert here.]

    Mr. OBERSTAR. But this is clear: it was a day-long meeting with Great Lakes Aviation. They were given the option to cease operations voluntarily or have their certificate pulled. They chose to cease operations voluntarily.

    There is no way in my mind that this airline did not know they were in trouble. There is no way that they were not notified in the course of a day-long series of meetings about the future of their operations and the conduct of their maintenance. That should be clear.

    I also want you to spell out for us in writing where their maintenance is conducted geographically, city-by-city, and which flight standard district offices are charged with responsibility of oversight, because I think that will show a web of complexity of oversight for the FAA in reviewing the operations of this carrier, and I think it will be characteristic of other carriers.
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    [The information received follows:]

    [Insert here.]

    Mr. OBERSTAR. I also ask unanimous consent, Mr. Chairman, that the consent order, FAA docket 96CE010020, be included in the committee hearing record.

    Mr. LAHOOD. Without objection.

    [The information received follows:]

    [Insert here.]

    Mr. OBERSTAR. Members should understand every carrier enters operation with approval by FAA of a maintenance manual that is then that carrier's bible, and all of its actions are judged by its compliance with or deviation from its maintenance manual.

    This consent decree also directs Great Lakes to ''remove procedures from general maintenance manual which require non-certificated mechanics to sign for maintenance performed.'' That is an extraordinary condition. How the FAA could have approved—this is a question, but I am not asking you to answer it. How could FAA approve a general maintenance manual that includes provisions that require non-certificated mechanics to sign for maintenance performed? That should never be in a maintenance manual. It shouldn't have been in it in the first place. I'm glad you're directing them to remove it.
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    Lest anyone think these are just little paperwork problems, a random review—we're talking about Embraer aircraft and Beechcraft aircraft—a random review of the various dockets over a period of several weeks, beginning in April: seat 3A had a hole in the wall above the oxygen mask door; right-hand engine inlet was cracked on the inside of the inlet and below the ice door hinges; loose screws on right-hand wing root fairing; right-hand prop lead hanging out of spinner; loose screws on the spire ramp; left-hand prop had one de-ice boot coming loose from the blade; oil leak in right main gear wheel well; six-inch-long crack in the cabin door, lower left inboard side; hydraulic leak on the right side of fuselage at hydraulic servicing port; three-quarter-inch-long crack found in the weld on the outboard edge of the left air inlet heated duct; right wing boot loose in the vicinity inboard of the fence; right propeller one prop de-ice boot separated from the blade, approximately two-and-a-half inches in length—and on and on and on.

    These are not insignificant little problems. These are problems that were notified on ramp inspections by FAA inspectors of problems that should have been corrected by the carrier, itself. They did not correct them. They failed to do this work, and the FAA ultimately had to show them that they were not in compliance and give them the option to shut down and fix their problem.

    As far as I can determine from comparing this action with other actions, and especially the ATR case, the relationship between FAA and the carrier was frequent, was direct, was specific, was focused on problems of the kind that I just cited. They are fully documented. I think this document should be spread upon the public records so the public knows that this was not an arbitrary action undertaken by the FAA.
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    I think that also, in comparison to last year, when this committee was questioning FAA for not acting preemptively on ValuJet when a whole series of problems was cited, when the FAA was berated for trying too hard to work with that carrier to fix their problems, and now the FAA's judgment is being questioned as to whether you did exactly what we were telling you to do last year, but this hearing should not be interpreted by Flight Standard District office inspectors as a go-slow, take-it-easy, be-careful, someone's-watching-you kind of oversight by this committee.

    I hope that you and your staff will take this as an encouragement to work ever more vigorously. The only thing I would say you need to do is cover your tracks with a paper trail. It appears that folks want a little more documentation ahead of time, so do that.

    But you cannot tell the carrier that in two days or three days and the traveling public, ''We want you to know in two days or three days we're going to shut this carrier down.'' You work with them right up until the time that it's obvious they cannot come into compliance, and then you take that ultimate action.

    Taking a certificate action, pulling a certificate is not a decision lightly carried out by the FAA. It is taken very seriously. You know what its economic consequences are, you know what its consequences are for the traveling public, but you also know the consequences of not doing it.

    Let me repeat: I would rather be talking to aggrieved travelers who missed schedules, who didn't get to their destinations, than trying to explain to surviving family members why we didn't do the right action in time to save the lives of their loved ones.
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    Thank you, Mr. Chairman.

    Mr. LAHOOD. I'm not going to belabor the point about the time table and how people were notified. I appreciate the fact the Mr. Oberstar has asked for that in writing. I think that's a good idea to really clear the air.

    I do want to ask a question about something that's known as the ''Diamond Award.'' Can you explain that, Mr. Valentine, particularly for Members who are not familiar with it, and what it involves and how it is awarded?

    Mr. VALENTINE. Yeah. I'd be happy to, Mr. Chairman, because it's part of one of the programs that I think we are most proud of.

    The FAA, as part of its mission, conducts regularly throughout the country, in all of its Flight Standards Districts and offices, seminars, safety seminars for pilots, for mechanics, for people involved in all facets of aviation. They're very well attended, and it is one of the best ways that we have to have in place kind of a continuing education program for the aviation community.

    One of those programs involves seminars held for aircraft mechanics. Airlines have the opportunity, if they so desire, to have their people—all those people, quite often on their own, have the opportunity, if they so desire, to attend the seminars, participate in these programs.

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    When people do attend them or if they attend a certain number of them, we like to recognize that. We think the people who make the effort to do that should receive recognition for so doing.

    In the case of the Diamond Award, it is awarded to individuals and to an airline where a certain number of individuals—in this case, on the maintenance staff of that airline—participate in these kinds of programs, and Great Lakes is to be commended for having its people attend these programs, and they were so recognized.

    Mr. LAHOOD. So the Diamond Award is actually an attendance award?

    Mr. VALENTINE. Well, participation——

    Mr. LAHOOD. It is not an award—it is certainly not an award for having good maintenance; it's an attendance award. If X number of people show up, they get the Diamond Award. I'm simplifying. Excuse me for simplifying what you said, but——

    Mr. VALENTINE. It's more than just attendance, because these programs are training programs, so that person has, in fact, received additional training, so we are recognizing them for receiving additional training.

    I think, to clarify what you're asking, no, it's not an award for some particular maintenance activity they engaged in at the airline; it's an award recognizing that their people engaged in activities to enhance their maintenance education.
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    Mr. LAHOOD. Could we assume that if an airline received the Diamond Award that their maintenance program was probably pretty good, because the people who attended the seminar were educated or informed about proper maintenance, and if an airline was awarded this award that, in all likelihood, they must have pretty good maintenance people, at least the ones that attended the seminar?

    Mr. VALENTINE. I'd say that speaks toward the desire in those who attended the seminar to improve their education, enhance their knowledge. Beyond that, I don't know whether you could make a nexus between that attendance and the performance of the airline, itself.

    But again, as I said, I will commend Great Lakes for having its people participate in that program. That kind of thing is a step in the right direction.

    Mr. LAHOOD. I'll tell you what I'm getting at, Mr. Valentine, and that is the question between an airline receiving the Diamond Award and being shut down. And as recently as, I think, a year before—and perhaps a number of things took place—this airline did receive the Diamond Award, and then we find out that they're shut down for maintenance reasons.

    I think common sense would dictate that it's very difficult for ordinary citizens to understand how an airline could be given the Diamond Award, which is considered a prestigious award by your organization, and then be faulted for having poor maintenance.

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    Mr. VALENTINE. I can understand why the public would be confused about that, sir. I would point out that, even if an airline was grounded and their mechanics were participating in this program, they would get the reward. The reward is a reflection of the level of participation, not a direct reflection on the performance otherwise of other aspects of the carrier. Even a grounded carrier would receive the award.

    Mr. LAHOOD. My thinking on this is that I wonder if the agency really ought to evaluate the Diamond Award and what it means and what standards are established to award the Diamond Award and what perceptions there are about it. I just really wonder if it's the right message to be sending to airlines who receive the award, to employees who receive the award, and then what, in reality, is what happened here.

    That's up to you to decide that, obviously. We're not going to decide it. I just think it may be an antiquated thing that the FAA does and does not really fall under the responsibility that was assigned to you by Congress and that you've accepted, which is airline safety. I don't really know how that fits into all of this. I really don't.

    Mr. VALENTINE. If fits perfectly into what we consider people who have better knowledge and better training to be safer people, whether they're pilots or mechanics or aircraft builders or anyone else. It is, I think, one of the best programs we have and one that I hope we continue forever.

    Mr. LAHOOD. Are there other Members who would like to—I know Mr. Ehlers from Michigan has arrived.

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    Mr. Ehlers, do you have anything that you'd like to say to this panel we're about ready to conclude, or any questions?

    Mr. EHLERS. Thank you, Mr. Chairman. I appreciate the opportunity. At this time I have no questions. Thank you.

    Mr. LAHOOD. Does the gentleman from Iowa have any further questions?

    Mr. BOSWELL. No. I don't know what has happened in the last 30 minutes. I'd just call the Chair's attention that we have Water Resources across the hall from Transportation, we have a full Agricultural Committee going on, and a lot of things that interfere.

    Mr. LAHOOD. Would you like us to adjourn our hearing here?

    Mr. BOSWELL. Well——'

    Mr. LAHOOD. No, you're not suggesting that.

    Mr. BOSWELL. If you want me to make a motion, I could make it, if that's what you like.

    Mr. LAHOOD. I would prefer that you not. We have one more panel.
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    Mr. BOSWELL. I'm just letting off a little steam here, because there are important things going on. This is extremely important, and so is the discussion across the hall on the TVA very important.

    Thank you.

    Mr. LAHOOD. Thank you.

    Thank you all very much.

    I want to just again reiterate the idea that I think this has been very helpful, particularly for the newer members of this committee who need to be informed and posted and know how you folks operate so that you don't have Members running all over the country criticizing the FAA. This has been very enlightening, I believe, to Members who have never served on this panel, to Members who really don't know what your mission is and how these things happen.

    I think it has been very fruitful, and again I want to thank Mr. Duncan and Mr. Lipinski for their encouragement to allow this hearing to go on, and certainly I want to thank all four of you for being here. I think this has been very enlightening. Thank you very much.

    Mr. VALENTINE. Thank you, Mr. Chairman.

    Mr. LAHOOD. We will now go to the second panel.
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    Mr. Voss and Mr. Coleman, welcome to this hearing. Thank you so much for being here. We would like to allow you to make whatever statement that you would like to make, either orally or have it submitted for the record, and you may proceed, Mr. Voss.


    Mr. VOSS. On behalf of the company, Great Lakes Aviation, we'd like to extend our appreciation of the ability to give you some background on the company and our concerns relative to this event and this issue.

    I've got a brief statement I'll read, and we have provided for the record a rather extensive document that gives you some additional background.

    Great Lakes Aviation was founded on April 15, 1977, by myself and a partner from northwest Iowa who left the company in 1987. He happens to be a pilot today for American Airlines out of—continues to live in northwest Iowa but flies out of Chicago.

    In hindsight, we continue to be friends, and there are times when we have questioned who envies who, because it was a difficult decision for him to leave the company at the time, and we were growing, and he chose a piloting career.

    Certainly for me, on a personal basis, the company historically at least, up to this event, has been rewarding, and I feel that the company's dedication to the service it provides is ongoing and continues.
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    My partner and I had both learned to fly in Spirit Lake, Iowa, in 1974, and in April 1977 were awarded a contract to manage the Spirit Lake Municipal Airport. Subsequently, we developed a flight school, an FAR Part 135 air charter service, and began to establish an aircraft maintenance operation.

    The name of the company initially was Spirit Lake Airways, but, due to the fact that we transitioned to an airport just south of the Iowa Great Lakes region called Spencer, we renamed the company Great Lakes Aviation in 1979. We actually moved the balance of the headquarters of the company in 1980.

    On a personal note, after the initial summer of managing this airport as a seasonal resort region that we were developing a business in, I left in the fall of 1977, moved to Colorado, attended a school known as Colorado Aerotech, as an aviation maintenance program. There I learned in the process through the courses to become a licensed, certified airframe and powerplant mechanic, and came back from that schooling as a part of the development of the business.

    Over the early years of the company, I held the roles of director of maintenance and my background primarily was maintenance.

    Also during that period in Colorado I began a relationship—I was employed by a subsidiary of Beech Aircraft Corporation, and during the period in which I was attending school there had developed relationships that over the last 20 years have constantly resurfaced in the development of the company.
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    As those of you that are familiar with the company would know, we have an extensive fleet of Beech products. We have over 45 of Beech-manufactured aircraft.

    The company's initial focus was that of developing an on-demand air charter and air ambulance business, and in 1981, October 1981, we expanded into the scheduled air service business.

    Compared to most commuters or regional airlines, we grew relatively slowly from 1981 through 1987, with all of the funding in this partnership being generated by retained earnings. The traditional approach in the industry was outside investors, but we were building on a solid business base in the charter, fuel, and maintenance business.

    In April 1988, the company made its first major expansion in that we acquired a number of essential air service routes and slots into Chicago O'Hare. We initiated service into O'Hare in 1985, but expanded it substantially in 1988.

    For over 20 years the company has worked with FAA to develop systems and operating procedures that to date now have provided over 4.5 million passengers with safe transportation.

    Having been presented the opportunity in the past, and especially during Senate testimony I gave over a year ago, the company has encouraged and supports the transition to FAR Part 121. Having experienced an onslaught of media concern relative to what could have been perceived as double standards, the logic certainly made a tremendous amount of sense, and the significant structural changes to the operation not only helped assure the public safety; we have actually seen a productive improvement in operations efficiency due to some of the systems that are relatively expensive to set up and develop, but once in motion have proven to be financially wise, also.
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    Until November 1996, the Quincy accident, Great Lakes had not experienced an accident where either injury or a fatality had occurred. And, as has been mentioned previously, the accident unfortunately involved a collision that, under the circumstances, given our review, we were quite confident in the procedures that were being used, and I think, under the circumstances, we simply dealt with, as was mentioned, another aircraft that essentially ran a red light.

    Great Lakes and its over 1,400 employees, as of the pre-shutdown, maintained a professional and productive working relationship with the FAA. The support for the airline provided by the local FAA office over the course of the years has been extremely positive, particularly during periods of growth. Principal inspectors, supervisors, and the office manager have offered assistance when we needed it as we needed it.

    During the majority of 1996 and the first quarter of 1997, Great Lakes and the local FAA office worked closely in the development of operating policies and procedures required for the completion to the mandated transition to Part 121.

    During the transition, every facet of the operation was examined thoroughly. Numerous procedural and system changes were agreed upon and incorporated into Great Lakes Aviation's general maintenance manual and general manual system, as a whole.

    Principal inspectors from the Des Moines flight standards office were instrumental in the successful transition process.

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    Great Lakes has dealt with the FAA in an open and honest manner. The manner in which the voluntary disclosure process was adopted by Great Lakes recognizes our ability to identify shortcomings on an internal basis and respond with timely and meaningful changes to our systems. We believe our openness with the FAA was reciprocal, and thus promoted communications with them on methods to further refine operations.

    The actions of FAA on May 16, which led to our voluntary suspension of operations, did come as a complete surprise in that we had not received any written correspondence alleging that we were not in compliance with Federal aviation regulations.

    As is illustrated by a graph that we have provided, prior to the consent order there is a time table that demonstrates that subsequent to the certification we did receive what's called a ''RESIP'' inspection, or regional inspection, approximately 30 days after that. We received what we considered excellent reviews on both the outbrief of the 121 transition and the RESIP inspection.

    The time table sets forth a chain reaction of events that began in late April and into early May that set off the chain reaction of events that ultimately led to our voluntary decision to cease operations on the evening of the 16th of May.

    Since the 16th of May, we have been meeting and working with FAA diligently to satisfy all directives contained within the consent order. As a prerequisite to returning aircraft to service, the FAA has added inspectors at our Spencer, Iowa, maintenance facility performing oversight of the return to service inspections.

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    Great Lakes Aviation is analyzing all of its routes to determine when service can be expeditiously restored. At the FAA's request, a subsequent request following the consent order, we did provide a business plan that provides a sequence of events and creates a series of goals that is primarily being made available to provide FAA with some planning capability for the surveillance activity.

    We want to make it abundantly clear that Great Lakes Aviation will not operate any of its routes until our management team, I, the FAA, and the traveling public are totally confident that our pilots, mechanics, and aircraft are operating at the highest level of safety.

    Mr. LAHOOD. Mr. Coleman, did you have any statement?

    Mr. WALTER COLEMAN. I have a short statement, and I'd like to file my statement for the record.

    Mr. Chairman, members of the Aviation Subcommittee, the Regional Airline Association appreciates the opportunity to appear before you today.

    RAA has 75 member airlines, including Great Lakes Aviation. Our member airlines carry approximately 95 percent of all the regional airline passengers in the U.S.

    All together, there are 109 regional airlines in the U.S. operating approximately 2,100 aircraft. In 1996, U.S. regional airlines boarded nearly 62 million passengers. This is an increase of 8 percent over 1995. Passenger enplanements on regional airlines have more than doubled in the past ten years.
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    On March 20th of this year, 33 regional commuter airlines completed the transition from operating under FAR Part 135 and now operate under Part 121. This recertification under a single rule, which applies to airlines operating 10-to 30-seat aircraft in scheduled service, was strongly supported by this Aviation Subcommittee. It was also strongly supported by the RAA. The Board of Directors of the Regional Airline Association adopted a position in support of a single rule one year before the rule was proposed.

    RAA members recognize the importance of enhancing safety by adopting the regulatory requirements applicable to larger air carriers. All 27 RAA member airlines who are affected by this requirement completed the transition to FAR Part 121. Great Lakes Aviation is one of the largest regional carriers to make the transition.

    There is little doubt that the transition from Part 135 ops to Part 121 was costly for all affected airlines. There is initial capital expense to acquire new equipment, change existing manuals, computer software to satisfy new regulatory requirements, and procedural changes.

    Operating under Part 121 also has a recurring cost with additional personnel required and equipment to maintain, among other new requirements.

    While there are higher operating costs under Part 121 for the former Part 135 airlines, the RAA member airlines are committed to providing safe and reliable air transportation for all of the communities served by regional carriers.

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    The Federal Aviation Administration and the airlines share the responsibility for ensuring compliance with the regulatory requirements. This shared task has created the outstanding national air transportation system we have today, and this shared responsibility will continue to be the basis for industry improvements.

    Thank you.

    Mr. LAHOOD. Thank you.

    Mr. Lipinski, do you want to begin?

    Mr. LIPINSKI. Thank you, Mr. Chairman.

    Mr. Voss, Mr. Coleman, thank you for being here today.

    Mr. Voss, in your statement—your prepared statement and also your oral statement—you state, ''The actions of the FAA on May 16, 1997, which led to our voluntary suspension of operations came as a complete surprise in that we had not received any written correspondence alleging that we were not in compliance with the Federal Aviation regulations.''

    Did they tell you anything verbally at all prior to May 16?

    Mr. VOSS. There were no conversations that were prompted by FAA that would have led us to believe that the seriousness of their concerns would indicate something that would suggest that there may be a shutdown in the near future.
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    On the evening of May 12 we did experience an event where, in Denver, Colorado, we had maintenance personnel on our staff who had been informed that an inspector had made a statement to employees, pilots, that in particular to an issue on an airplane, a statement that referred to the fact that there was an airworthiness directive that had not been complied with.

    That, in this industry, and as a licensed mechanic, is kind of the silver bullet of critical safety issues, if there is an airworthiness directive that's not complied.

    At that time we had made a request to speak with the inspector, because it did not, from a logic point of view, track to our systems that assures that any airworthiness directives that are required to be complied with were not, or that those inspection processes had not been performed.

    We were instructed that the—our personnel were instructed that we should call our manager of the Des Moines office and obtain that information, which concerned us severely that evening, because if there was a particular issue we would have expected that we would have been informed what it was.

    Under the circumstances, I did place a call that evening to the manager, and he had not been informed of any problem, and I suggested that we meet immediately, and on the morning of the 13th we flew down and, during a short period of time, we did finally reach the inspector, and he indicated that there must have been a misunderstanding because there was no airworthiness directive that he was aware of.
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    At that point it highlighted the fact that there was a communications issue for us. We spent approximately two to three hours discussing the status of the company and a number of recently-accelerated ramp inspections that can be pointed out on this time line that you'll find placed in the document here.

    At that point in time, those ramp inspections which had occurred, the documentation that would normally follow findings had not been provided.

    During the course of those discussions, we were made aware that they were doing a review of those, and that at some point in the future we should expect to see letters of investigation regarding those findings.

    In particular, in the case of the consent order, the attachment that was referred to in the rear, up until we had been provided the consent order we had not received anything in writing from the FAA regarding those allegations, and effectively the statement that we had not received anything in writing on the evening of May 16 is a true statement, because those allegations were subsequently provided. We actually began to see them on Monday afternoon and Tuesday, which would have been the 19th and 20th.

    Mr. LIPINSKI. Well, in the consent decree there are incidents that go back starting actually in—it says here December 12, 1995; November 5, 1995. Does the FAA—when these things come up, does the FAA bring them to your attention, at least orally?

    Mr. VOSS. Normally they do, and certainly if there's any safety issue that's an immediate concern we address it immediately. Historically, the working relationship was excellent. If there was a concern over a safety issue, the airplanes would be immediately grounded and ferried as required.
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    There are, in the course of events in an inspection process on aircraft, every single aircraft is not inspected 100 percent every night, for example. As a routine part of doing business, you structure inspection intervals that are designed to find problems that are developing within the aircraft on a time line that gives you a margin that assures that safety is never compromised. The system, itself, was structurally designed to try to achieve that.

    During ramp inspections, the ability to find a particular discrepancy on an airplane can, in many cases, directly correlate to when the last time an inspection had been scheduled to occur regarding that section of an airplane.

    So you have, on a routine basis, a structural system that achieves the—most importantly, achieves a margin of safety. There is probably no such thing as a complete——

    Mr. LIPINSKI. Let me interrupt you here for a moment, though. What I'm trying to establish is that when the FAA makes these investigations and they find discrepancies, they don't send you any written notice of that. And apparently they don't tell you verbally in any way, either.

    Let me just give you here: ''On April 29, 1997, FAA inspectors conducted a ramp inspection of GLA's aircraft in Chicago, Illinois, on civil aircraft N267UE, an Embrayer model EMB120.''

    Now, were you made aware of that inspection or were you aware of that inspection?
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    Mr. VOSS. It is my understanding that during the normal course of conversations with the FAA, if there is a safety discrepancy that's found, at that point in time it is brought to our attention, without looking more specifically at that, and then we——

    Mr. LIPINSKI. It is not brought to your attention?

    Mr. VOSS. If there is certainly a safety concern, it is brought——

    Mr. LIPINSKI. Let me finish reading this, then. ''GLA employee Jason Edwards was observed conducting maintenance on the aircraft's left propeller. Edwards removed the left propeller spinner, reconnected a deicer boot electrical lead, and reinstalled the spinner. Edwards failed to record the required maintenance and the N267UE was returned to revenue service without the appropriate approval for return to service. Based on the foregoing facts and circumstances, GLA is alleged to have violated the following Federal Aviation regulations,'' and then it mentions all the regulations.

    Were you made aware of that at the time it occurred or the next day?

    Mr. VOSS. I do not believe that we were made aware that the paperwork had not been completed at that particular time. The observation that the maintenance had obviously occurred, and the paperwork process, itself, apparently there was a breakdown in the process.
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    If that would have been noted at that particular inspection point by that person from the FAA, it would have been anticipated that he would have brought it to our attention.

    In this particular case, as I understand it, I do not believe that it was brought to our attention at that point in time. This was a subsequent paperwork inspection that had occurred that verified that, while the maintenance had occurred and had been performed, that apparently the paperwork documentation was not there to support it.

    Mr. LIPINSKI. All right.

    Mr. Chairman, I'm way over my time, so I'll resume this on the next round. Thank you.

    Mr. LAHOOD. Mr. Pease?

    Mr. PEASE. Thank you, Mr. Chairman.

    I don't know who this should be directed to, either—I just need a response. How is a determination made about which essential air service communities qualify for subsidized service and which of the EAS communities do not?

    Mr. VOSS. The subsidy program or the subsidy portion of the program is triggered based on a carrier's experience with revenue versus expense. If losses are being generated, the procedural process is that a 90-day notice of intent to terminate service is filed, which triggers a sequence of events that, at the point that the 90-day notice expires, subsidy can begin to be provided.
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    Mr. PEASE. So DOT makes a—who makes a determination if it's going to be subsidized? That's my question. And how is it made?

    Mr. VOSS. It's based—the need for subsidy is made basically by the carrier as to whether or not it's generating a profit or a loss from the route. The communities that are technically eligible, that eligibility traces back to the Deregulation Act of 1978, and certain communities fall within the parameters of a protection that includes a subsidy if necessary to maintain the service.

    Mr. PEASE. Okay. So there was a determination made 20 years ago that those communities would be EAS communities. If a carrier provides service, loses money, is it automatically entitled to a subsidy, or is there some sort of a review about whether you're efficient or not efficient?

    Mr. VOSS. Certainly there is a review on efficiencies, and a carrier with our size, over $100 million in revenue, the traceability of our cost structure is relatively easy to identify.

    The actual eligibility—there are a number of components as to whether or not a community falls within certain requirements for eligibility. There are distance requirements, there are issues of subsidy——

    Mr. PEASE. I guess I needed that by way of background for my next question, which is: as you're determining now which communities you're going to serve first, as you attempt, I assume, despite the financial difficulties of the company, to come back into full service, does the determination of whether a community is subsidized or not have any play in your decision as to what you're going to go to first?
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    Mr. VOSS. Right now our motivation for sequencing of return to service is being driven primarily by, number one, the ability to properly support and maintain the aircraft, from a safety perspective and, number two, the markets that the company has provided service. There are certain essential air service markets, for example, that have been boarding, on average, less than 40 or 50 people a month.

    So, given the capacity that we have available to provide those services, we are providing it where the greatest demand exists on a first-come, first-served basis after the ability to support the schedule structure from a safety and maintenance point of view.

    Mr. PEASE. Okay. I guess, getting very specific, then, as you work to make those decisions, do you communicate with the communities involved and give them some idea of what your expectation is? The reason I ask that is that I assume those that are further down the list are most likely eventually to have their service declined, because ridership isn't going to wait forever, that they're going to lose service entirely at some point.

    I speak specifically of at least one airport in my District.

    Mr. VOSS. Certainly Charlie Goodwin at Terre Haute, we try to communicate as often as we can. As you may have been aware, it served 74 cities and 21 States, with Sonora being in Mexico. But that is a significant challenge. I think we did just recently restore service to LaFayette, which would indicate to you in the near term Terre Haute would be brought on board shortly.

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    The other front in the sequence of events is the Chicago-O'Hare hub for us is where the greatest demand is for those seats, and that hub, as a network, is our first priority, versus the balance of the system.

    Mr. PEASE. I appreciate that. I am concerned about LaFayette, but they have other service. Terre Haute doesn't. My guess is that the longer that you wait to go back there, the less likely you'll ever succeed there.

    Mr. VOSS. And certainly we are moving as aggressively as possible. It seems as if our aggressiveness has come to haunt us a bit. But, to the extent that the aircraft are brought up and we have an agreement that this aircraft is ready to go on-line, our original business plan, as we had presented it to FAA last week, would have seen the return to service a little quicker than we were currently experiencing.

    I don't have the exact time line on Terre Haute, for example, but I think it is in the very near future.

    Mr. PEASE. I don't want to be—I can ask you these more parochial questions privately, but I am concerned about when an EAS community loses service, there is a determination made apparently that it's just not financially feasible. What happens to your slot, for instance, at O'Hare from the service that was provided to that community?

    Mr. VOSS. The understanding that we have with DOT and FAA at this point is all of the slots that are being used to provide all the service at O'Hare have been effectively frozen. There is no jeopardy due to ''use it or lose it'' provisions.
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    Mr. PEASE. Okay.

    Mr. VOSS. Those slots are effectively still there, they're still available, and as we reinstate the service we'll begin utilizing those slots on a going-forward basis.

    Mr. PEASE. Thank you very much.

    Mr. LAHOOD. Mr. Oberstar?

    Mr. OBERSTAR. Thank you, Mr. Chairman.

    It is good to have you, Mr. Coleman and Mr. Voss, here.

    I would just like to say that the principal determination of a carrier's fitness is attitude of compliance in the corporate office. I would grade Great Lakes Aviation's as having a spirit of compliance. I think that's an important thing to point out here. Were it otherwise, I think matters would have been quite different at FAA.

    But the record shows—and in preparation for this hearing I went back through the consent order and through the long period of oversight that is conducted on Great Lakes Aviation, that they find a problem and your maintenance personnel fix it, find a problem, tell your folks about it, and they fix it. The problem is that your maintenance operations were not finding the problems first and fixing them first.
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    By entering into the consent order, you've agreed to revise your maintenance manual, to toughen your maintenance procedures, to address the systemic problem areas that FAA has identified.

    In the ordinary conduct of FAA oversight, there are daily conversations between the FAA inspectors and your line mechanics—not yours, those of any carrier—line mechanics, the principal inspection officer of the carrier, and, if necessary, with the vice president for maintenance where there are system-wide shortcomings that need to be addressed. I think all of those avenues of communication were followed in this case, and I appreciate the spirit of compliance that you have demonstrated.

    I also appreciate, Mr. Coleman, the vigor with which the Regional Airline Association has embraced one level of safety, moving up from Part 135 standards to Part 121 standards, and the total compliant spirit of your association and its individual members. That's important for the traveling public. You're flying 61 million passengers in regional service. That's as many as all major airlines carried at the dawn of the jet age in this country in 1960.

    You're going to—you're an increasingly critical part of our hub and spoke aviation system, and there's no doubt that regional carriers are going to grow into major carriers in the future, and I hope provide even more competition, so I appreciate very much that spirit within your association and again I commend you for your leadership in that regard.

    Mr. WALTER COLEMAN. Thank you.

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    Mr. OBERSTAR. I just want to say the hearings of our committee do not go unnoticed within the ranks of the FAA. The Flight Standard District office personnel read our hearings. They read them last year on ValuJet. They read the critique that we make of FAA. They look at those hearings very carefully to see how they can do their job better and what ways we have found shortcomings and how they can improve their operations.

    Therefore, I do not want this hearing to be understood by the career safety personnel of FAA as a critique of their conduct.

    If three days before this certificate action a Great Lakes aircraft had gone down and lives had been lost, the total nature of this hearing would have been different. It's a grim thought, but remember it happened in the case of ValuJet. It's unfortunate that people were displaced. It's unfortunate that people missed dates. It's unfortunate that people missed very important engagements and events and graduations.

    I was on my way that weekend to Milwaukee to my daughter's graduation and my granddaughter's baptism. I would have been terribly upset myself if a carrier that I was flying had been shut down, but I would have been grateful that the action had been taken. I think that's the message that the traveling public has to understand. These actions are taken not lightly by the FAA. The consent order would never have been entered into by Great Lakes Aviation if they hadn't come to an understanding that there was a need to improve operations. I think the result of this will be that Great Lakes will be a better carrier, offer better service, and the traveling public in the end will know that its travel is safer.

    I hope that will be the message of this hearing, not the question of who was notified when. That is a matter that could have well been done in a briefing rather than in a public hearing.
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    But the hearing will serve a purpose of informing members of the committee about this process, and I would like to pursue this further. I'd like to have a complete briefing by FAA's certification and safety office for all members of the committee and walk them through every step of the operation—something that will take a lot longer than a hearing period—so that Members can understand exactly how maintenance oversight is conducted by the FAA, and I will discuss this matter with Mr. Lipinski and Mr. Duncan at the appropriate time and we'll—I think we can pursue this matter further.

    For the moment, thank you very much, Mr. Voss and Mr. Coleman. I appreciate your participation here today.

    Mr. LAHOOD. Mr. Thune?

    Mr. THUNE. Thank you, Mr. Chairman.

    I think it is instructive to see what we can do in terms of improving this process for the future, too, and particularly with respect to how the FAA handles such matters, and so I think there's a lot of value in that.

    The one thing I guess I would like to focus on now in discussing with the airline is the question that I had asked previously about those communities that are currently not being served, many of which are in my State, as to what would be the recommendation in terms of the FAA and the DOT to see if those communities are, in fact, served.

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    The answer from Mr. Coleman was that it was in everybody's best interest, I think, if I repeat this accurately, that we work as best we can now with Great Lakes to restore service to most of those communities.

    And so, having said that and having that basic premise that that's the way we want to approach this issue, I think it's important now to figure out how we go about doing that.

    Mr. Voss, your company has entered into a consent order drafted by the FAA on May 30, and I think this document lays out in pretty explicit terms requirements of the FAA for Great Lakes to meet prior to bringing its aircraft back into service, including specific dates at which FAA expects Great Lakes to accomplish certain tasks such as development of maintenance manuals and placement of supervising personnel.

    In light of the action FAA has taken in suspending the company's airline service temporarily, the size of the company, and the region you serve, do you believe that the requirements outlined are realistic in terms of time line?

    Mr. VOSS. Well, certainly the spirit of the consent order and the desire on the part of the company to maintain its long history of a proper compliance attitude was something that motivated the decision to proceed. Having 1,400 employees in 74 cities, to see air service shut down overnight was certainly providing a tremendous amount of pressure to a process and loss of $400,000 a day in revenue generation.

    Under the circumstances, we felt that the agreement as we reached it and when we reached it was something that we could live within to accomplish the rebuilding of confidence on the part of the FAA, and most certainly other communities and the company, itself.
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    As it relates to the planning events that are involved in the restarting of the service, as I mentioned earlier, the first and most important concern of the company is that we have a complete understanding, as each aircraft leaves the maintenance facility, that that aircraft has completed the inspection process both to our satisfaction and to FAA's.

    It is probably the single metering event that is occurring in the system right now, the speed with which inspectors are being made available to the company, and what is actually occurring is the inspections are being performed by our staff and our mechanics with FAA observing the procedures that we used to perform those inspections, and at this point in time we have a maintenance facility in Spencer, Iowa, that's capable of holding five aircraft with 53 of them on the ground. It does not move at light speed by any means.

    We do have a large staff of 187 maintenance personnel that have—a large number of which have been brought from other maintenance bases into Spencer to help maintain a 24-hour project line, as we call it, and they're—again, the timing and the metering is somewhat subject to availability of staff.

    I mentioned earlier also that we are using the reinstatement of service being based primarily on the number of inconvenienced passengers that can be supported from a network wherein we do have aircraft that are out in the system overnight. They can be brought back in for routine inspections that occur over a course of days and weeks.

    Mr. THUNE. Do you think that the—a lot of the requirements in the consent order stipulate June 15 and July 1 as deadlines, and those dates are right around the corner.
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    Mr. VOSS. We certainly feel comfortable with that. With a staff of 1,400 employees, we assaulted each issue aggressively, and we have provided the procedures changes, a large amount of it, even before the consent order was even agreed to. We'd had verbal conversations that indicated they would be looking for procedural changes in certain areas, and we were providing those changes before we even reached an agreement.

    At this point, we do not consider the time line to be strained, or we do not see ourselves failing to meet time lines inside that consent order.

    Mr. THUNE. I guess the only thing I would say is—and you are obviously—we have many communities in our State that eagerly await your return, and my understanding is we're hopeful that we can get Huron and Sioux Falls up and going in the not-too-distant future, as early as this week, but our understanding now is that may be pushed back a little bit.

    But the thing I need, probably more than anything else, is to be able to deliver the people in my State and those communities straight answers as to what's going on, and that's why I have attempted to probe and to find out from the FAA and from the airline, as well, what the status is of the various paperwork that has to be complied with in order to meet the requirements that FAA has imposed.

    I guess I would just simply ask you—and I think I probably have in the past—to the best of your knowledge, the information that you are required to furnish to the FAA in order to get, in this particular case, Huron and Sioux Falls up and running. Has that been presented?
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    Mr. VOSS. Yes, it has, and in the case of Huron, which is the heavy maintenance base for the Embraer Brasilia project line, we've had ten of those aircraft at that facility. We've been performing maintenance on those aircraft and inspections. Unfortunately, to date we have not had any FAA inspectors made available at that base.

    We do understand that the course of events and the supply of FAA inspectors will increase as we progress through the procedural issues associated with some manual revisions, but at this point that base has not been provided with FAA inspectors, and that's influencing the speed with which Huron's service gets reinstated and the Sioux Falls service gets reinstated.

    Mr. THUNE. I hope that is an issue that we can address.

    I thank you, Mr. Voss, and I thank the Chair.

    Mr. LAHOOD. The gentleman from Iowa, Mr. Boswell?

    Mr. BOSWELL. Thank you, Mr. Chairman.

    Having visited with you before, Mr. Voss, and sharing some of our concerns, I ascertain that you very much personally and your team wants to comply and get back in action and do the services that you're out there to do. That's why you started this.

    I think I heard somewhere that you're going to reduce the size of your fleet. Is that correct?
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    Mr. VOSS. The unfortunate outcome of this kind of revenue loss is accelerating the elimination of points from within our system at an increasing rate.

    Prior to this event, we did—and over the course of the winter we had recognized that we had a number of routes that were losing money. Between the 1st of October and the 6th of April, for example, we had discontinued 17 cities.

    Subsequent to the shutdown of service on the 16th, when we reviewed the performance of the route system and route structure, we did announce the permanent termination of an additional eight cities, and, unfortunately, on Friday of last week we have now also announced that the Raleigh-Durham operation in its entirety will be permanently shut down. There were 13 cities and 10 aircraft involved in that operation.

    We do anticipate a fleet reduction from 53 aircraft to approximately—the current business plan, as it has been reviewed through this most recent weekend, has now downsized the company to 34 aircraft.

    Again, a good portion of this activity was already underway, but this particular event is accelerating a restructuring of routes within the company.

    Mr. BOSWELL. I'm assuming you're doing it, but reassure us that you, through your public relations operation, are doing—that the traveling public that flies with you, that you're complying and doing those safety things to——

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    Mr. VOSS. Most certainly. As was previously mentioned in my written statement, the company has had a long history of excellent relationship with the FAA. Safety has always been paramount, and, while there were certain—I guess you could describe them as ''leverages'' in this process, the decision was ours to voluntarily suspend the service. It was done so to again demonstrate our desire to make certain that, if there is a lack of confidence in our product, that we will do what we feel is necessary to demonstrate that it is not at issue and that we can provide a safe aircraft for the traveling public.

    Mr. BOSWELL. Do you feel that your communication with the FAA is working? Are you talking to each other? Are you comfortable? Are you having communication to where you know exactly where you're at? And, from your viewpoint, are we where we need to be?

    Mr. VOSS. Certainly the two to three weeks that led up to May 16th we began to see a change in how that communication was occurring. Incidents such as I had mentioned earlier where an inspector will make a comment to a crew member and then not make himself available for clarification was unusual, highly unusual. And the fact that any serious safety discrepancy had not been provided to us in writing prior to such a significant, traumatic decision being made is confusing for us.

    We certainly recognize the issues that they presented as being serious. The normal course of an inspection process of an aircraft can be—100 percent of a Beech 1900 D model, for example, would occur over the course of 6 to 7 months, and at any given moment in time during ramp inspections, if you inspect certain areas, the inspection process, itself, would create windows where, if deficiencies were beginning to occur, they would not be on a routinely-based part of an accelerated inspection.
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    So, under the circumstances, finding a substantial amount of what would be routine items in an inspection program accelerated the process, and the increase in the surveillance activity and the fact that we were not getting a lot of the verbal feedback that we would normally experience was frustrating.

    Normally, if there is an issue and it's brought to our attention we immediately correct it, but in this particular case there has been a—it has been a challenge to make certain that we're on the same page.

    Mr. BOSWELL. I see my time is up, Mr. Chairman.

    Mr. LAHOOD. The gentleman from Iowa, Mr. Latham.

    Mr. LATHAM. Thank you very much, Mr. Chairman.

    Again, I thank the committee for giving me the opportunity to sit in.

    Mr. Voss, I first of all want to congratulate you on really, when we think about someone who has an idea and really wants to succeed and have an entrepreneurial attitude that really develops, creates jobs and opportunities, I think it's extraordinarily unfortunate what has been happening here.

    What has been your number one priority since you started the company?

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    Mr. VOSS. Well, certainly from an operational perspective, as a pilot and as a mechanic, safety is something that you never compromise. As a pilot, when you are flying the aircraft, and you do have something that—a system that fails, it becomes an immediate concern and you routinely address it.

    Experience over time gives you the ability to make safety assessments, and you live within a rule structure and guidelines that provide margins of safety, sequence of events that prevent lives from being jeopardized.

    Under the circumstances, that certainly has been our priority. Our goal, from a company perspective, has been to stay focused on small community air service. We've been dedicated to it for now nearly 20 years, and on a going-forward basis in an incredibly tough industry, it is still our objective to try to fill that niche and that need that exists for a product like this.

    Unfortunately, the economies of a lot of these smaller communities, and especially in the case of the essential air service program, with the budget cuts that were occurring over the previous three years, we appeared to be seeing an increase in the EAS here in October, but that has had a dramatic influence on our ability to sustain the blood flow or the cash flow necessary to continue to develop a growing operation.

    As I mentioned, it certainly was not our desire to begin to shrink the company, but, under the circumstances, all the laws of economics are now telling us that we can no longer support on an ongoing basis a substantial portion of that system that previously existed.

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    Mr. LATHAM. So, I guess, getting back to your first statement, safety has always been your first priority and, in fact, your safety record has been virtually, as far as any fault or anything, has been unblemished through your entire 16 years that you've been in operation. I mean, the one incident I think any observer would say obviously was not—you would not be at fault, although there has not been an official determination made there.

    I am looking at your statement, and it would appear, by several of the letters of investigation docket numbers here of which you were not notified of apparently many of these. But it would almost appear that there was a concerted effort at one point to build a case, and you were not notified, apparently, of these letters of investigation. Is that, in fact, the case?

    Mr. VOSS. Well, the unusual thing that occurred in this particular situation is normally, when there is a discrepancy found, it would be verbally brought to our attention and we'd immediately correct it. In the normal course of ramp inspections, of which many hundreds and thousands, of that matter, occur in our operation on an annual basis, those types of activities are relatively routine.

    In this particular case, any serious safety issue, traditionally we would receive a letter of investigation and be given the opportunity to provide a written explanation as to why that item might have been in that particular condition.

    There are issues that are inside the consent order relative to the ability to read certain paperwork, decals on the airplane, and in some cases it becomes a case of researching the maintenance manuals, themselves, to determine whether or not that was the proper configuration.
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    In some cases, the LOIs—and traditionally the majority of letters of investigation are administratively processed or cleared and they do not involve a civil penalty action on to the next step, which is a hearing, and in this particular case there was a large number of discrepancies that did not reach us in the form of a written letter of investigation prior to the consent order, itself.

    Mr. LATHAM. I would just make a judgment, that it would appear almost that someone had made a determination and then afterwards tried to justify the determination, by building a case after the fact. I guess that would be something that would be up for debate, obviously. But it would certainly appear that way by the time line here.

    I don't know how you're supposed to respond or how something can be held against you if you're not notified officially of what's going on by the letters.

    Again, we all want you to get back in the air as quickly as possible, but in a safe way, obviously, and I just wish you the best of luck and anything we can do to help you.

    Mr. VOSS. Thank you.

    Mr. LATHAM. Thank you.

    Mr. LAHOOD. Mr. Voss, how were you notified that your airline was being shut down? Who notified you? And when did you find out?
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    Mr. VOSS. Well, the initial report, as has been mentioned to you, is that the suggestion that a suspension was being considered came to us in the form of a press release.

    We had had, as I mentioned earlier, as a byproduct of what we felt was a need to improve communications so that there were no surprises, earlier in the week on the 12th of May, prompted by this breakdown of communications with the geographic inspector, met and discussed the status of the accelerated ramp inspections that had been to occur. But during that conversation the suggestion of a suspension was not indicated. There was concern over a large number of discrepancies that we were working on and being repaired at that particular time, but, by the same token, there was not an indication that the seriousness of those would lead to a discussion of suspension.

    That press release I believe arrived about a half hour to 45 minutes prior to a request that had been made in the afternoon of Friday that we convene a meeting to discuss the status of the discrepancies and issues that related to the accelerated ramp inspections.

    That meeting commenced at, I think, about 7:00 or 7:30 on Friday evening, and actually I think the decision as to what we were going to do was probably completed by 8:30 or 9:00 that evening. Under the circumstances, from our point of view, we describe it as a surprise because of the nature of how we went from having had an excellent out-briefing from the 121 procedure or the transitional procedure—we actually completed the proving runs, the final step in the phase of that, two weeks prior to the certification date.

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    The out-briefing of the RESIP inspection would have not indicated that there was something that was going to be perceived as a serious enough event that would create the trauma that this did.

    Mr. LAHOOD. Let me see if I understand this. You woke up Friday morning and went to work with the idea that your airline was in business, right? And when you went home that night, you went home with the idea that your airline was shut down. Like a death in the family, somebody called you and said, ''Hey, somebody just died.'' I mean, is that—am I over-characterizing it? I get the impression from you that you went to work on that day thinking that your planes were flying and that people were boarding your planes, everything was fine; and by that evening you went home and had to tell your family, ''Oh, by the way, we're out of business.''

    In reality, is that what happened?

    Mr. VOSS. In an encapsulized format, you could probably describe it as that. Certainly, during the course of living inside this industry, you go through various cycles of efforts to determine the status of your operation, and in our particular case on that Friday, as you mentioned, I arrived at work. I would have never suspected that we would have seen the chain reaction of events that led to what occurred.

    Mr. LAHOOD. I mean, you had no notion that when you got up that morning and were driving to work you were thinking in your head, ''Hey, if we don't correct some of these things and get this thing organized with the FAA, I may be out of business,'' right?

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    Mr. VOSS. That's true.

    Mr. LAHOOD. And how did you actually hear about it? Were you sitting in your office and somebody faxed you a release from Mr. Thune's office, or what? I mean, how—did somebody come in and say, ''Oh, Mr. Voss, by the way, FAA's shutting us down''? I really want to know exactly. Did somebody call you or did somebody walk in your office and hand you his release, or how did it exactly happen?

    Mr. VOSS. In this particular case, because the company's operational headquarters is in Spencer, Iowa, and our executive offices were in the Twin Cities of Minneapolis/St. Paul/Bloomington, I was in Spencer that morning, but I was attending meetings in the afternoon in Minneapolis.

    I was informed that the FAA wanted to meet with us at approximately 2:00 or 3:00 in the afternoon. I was not given an indication other than the fact that, from our point of view, as we had expressed on Tuesday the 13th, we had a desire to find a way to improve communications because we did not feel that events like what had occurred in Denver on the evening of Monday, where an allegation was being made and we subsequently investigated and we couldn't find it.

    Under the circumstances, my anticipation of that evening's meeting was that we would accelerate discussions to address the concerns that were being generated as quickly as possible.

    But in the afternoon, when it was brought to my attention that they did want to have a meeting, there had not been any statements that would have indicated that they were going to request a suspension.
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    Mr. LAHOOD. Do you think that this is a problem within your organization or a problem between the FAA and your organization or a combination of both? I mean, I'm dumbfounded about the fact that you are totally surprised and shocked when you find out your airline is being shut down, and I'm trying to figure out how that can happen.

    In part I think it reflects on the FAA's ability to communicate, but in part I wonder if it reflects on your maintenance people or your vice presidents or director or whomever handles this of telling you, ''Mr. Voss, we've had some maintenance problems here, and it's likely that the FAA may shut us down.''

    I don't know how this kind of thing can really—I'm trying to figure out in my own mind, and I don't want to simplify these things, but are you sort of wondering if maybe there was a disconnect between your maintenance people and you, or what?

    Mr. VOSS. Certainly that has been a definite concern. Under the circumstances, in routine communications we expect that when allegations become so serious that it would appear to jeopardize what the future of the company or what its activity may look like into the future, it would be brought to my attention.

    In this particular case, and having personally attended both out-briefings of the 121 and the RESIP inspection, and having had a working relationship for a number of years with our FAA on a personal basis, the seriousness of this moved at a speed in which did just simply catch us off guard. Between the 13th and the 16th, there were a lot of decisions that were being made and we were not actively involved in any discussions during that period. The allegations were not being made available to us where we would have responded.
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    I would have expected the ability to have at least had the opportunity to respond to a verbal allegation.

    Under the circumstances, it is frustrating. I do look back to my people and anticipate that certainly in the future anything that is—any signal that we would receive from this system that would trigger a concern as serious as this, we would expect it far more in advance.

    We've been putting forth a great deal of effort in our communications since the shutdown to try to improve communication, both within the company and in the working relationship with the FAA, and our objective, having experienced this, will certainly be to never see it happen again.

    Mr. LAHOOD. Were you surprised by a number of the things that were in this consent decree in the sense that you really didn't know that these things were a problem? And were your maintenance people surprised by them?

    Mr. VOSS. The items in attachment A of the consent order that were listed were, as I mentioned earlier, not items that we had been presented with in a written format. There's a large portion of those items that we had not heard about, neither verbally nor in writing.

    Again, while——

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    Mr. LAHOOD. Are you saying that the maintenance people had never heard of some of these things that are in this consent order?

    Mr. VOSS. If you analyze attachment A, you would quickly recognize that things like loose screws and items—I certainly don't want to diminish the seriousness of any discrepancy, in particular, but——

    Mr. LAHOOD. I don't either, but I want to know if you knew about them or if your maintenance people did, because the FAA claims that they should have known about them because their people told them about them.

    Mr. VOSS. It depends on——

    Mr. LAHOOD. You heard that. You heard the testimony.

    Mr. VOSS. It depends on the items, themselves. For example, in order to perform inspection routines you normally would routinely open up inspection panels and have interior access that is not normally afforded an external inspection.

    Issues on pre-flight inspections and service checks, every single area of the airplane is not inspected in a complete, detailed format. Those inspection processes and procedures proceed over a period of time.

    Under the circumstances, in the case of items like this or like were brought to our attention in attachment A, a substantial portion of those would have been routinely found in routine inspections, but those timing intervals that take place between the last time it was inspected and the next time it is inspected, the system is designed to create a margin of safety that does not allow a loose screw to potentially create a safety problem.
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    Under the circumstances, those types of issues are somewhat routine. I mean, if a maintenance inspector, such as the case of the Denver ramp inspections, had found loose screws and brought it to our attention, we immediately perform the repair or the correction, the corrective activity.

    Mr. LAHOOD. Mr. Voss, do you think you have been treated fairly by the FAA in this matter?

    [No response.]

    Mr. LAHOOD. You don't have to answer that. Let me ask you another question. How do you feel about the idea of really getting your airline back to where it was? I mean, in reality, is that ever going to happen? And the reason I ask that is I look at what's happened to ValuJet, and they were shut down for a significant amount of time and they're not back to where they were or where they want to be, and I wonder if it's possible for airlines like yours—obviously, you are a more regional airline, and I wonder if you feel like you really have a shot at getting back on your feet again and being a viable airline the way that you were a month or so ago.

    Mr. VOSS. Certainly the loss of what is now $8 million in revenue over the last three weeks is a tremendous setback. While we had a long history of generating profits for many years, the setbacks of the immediate damage from the HR accident and all of the safety concerns—the required spool-up of 121, the EAS subsidy cuts—created a vacuum that drained the resources of the company.
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    While we were making a lot of deliberate decisions to modify route structures and seek other revenue alternatives, we were in the processes of shrinking long before this particular event.

    On a going-forward basis, as I mentioned earlier, we've already deliberately made the business decision to reduce inventory of aircraft from 53 to 34.

    No, there will be no way to return to the previous network as we once knew it, and on balance the challenge that is before us in rebuilding the current structure is certainly a delicate program.

    But within the company there was a very profitable core, and for both operational control reasons and for profit reasons that is our primary objective—to get back to that money-making core. And anything that was marginally contributing to the company's existence is essentially going to cease to exist.

    Mr. LAHOOD. Mr. Coleman, do you have any observations about any of the matters we've been talking about here?

    Mr. WALTER COLEMAN. I'd like to respond to your last question.

    Mr. LAHOOD. Sure.

    Mr. WALTER COLEMAN. I think very different from the ValuJet accident, which was, of course, a tragedy that had a lot of attention and people reflected on that carrier, this one was not triggered by an accident. There was no injury or fatality. To many people I think it will appear as an administrative matter.
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    Great Lakes has a splendid reputation in the areas that it serves, and I think people will wait for that carrier to start serving their city and get back on that airline because of the valuable service it provides.

    And so I think, to the extent that Mr. Voss can bring that carrier back into those markets, that people will be ready to fly on that carrier because of the reputation it maintains.

    Actually, the regional airlines, and one of the reasons I'm here today is that we have a tendency—when there is an incident affecting our carriers, they're all sort of looked at together collectively. It doesn't really matter what kind of aircraft or which airline it is, it's something that has happened to the commuter industry, as it is frequently characterized.

    So it is important for us and it is important for the way Mr. Voss is presenting his carrier that he's being responsive to the FAA, which he is and has expressed, as has FAA, that we've maintained the reputation of the carriers.

    It's a little bit surprising to us, I must admit, that this carrier, having gone through the recertification process just two months ago, which took a tremendous amount of FAA resources, a tremendous amount of scrutiny to ensure they were qualified to fly under 121, that that wouldn't have indicated either to Great Lakes or to the FAA that there were some concerns, and so soon after that to have this shutdown is a bit of a puzzle.

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    Mr. LAHOOD. Mr. Lipinski?

    Mr. LIPINSKI. Thank you, Mr. Chairman.

    I hate to belabor this situation about you being so surprised that the airline was being shut down, but I, like Congressman LaHood, have a very difficult time comprehending this.

    Could you tell me what was your understanding of when the FAA found a deficiency which your airline—what was your understanding of how that notification was made—your airline was made aware of it?

    Mr. VOSS. Well, traditionally anything that affected immediate—was recognized as an immediate safety issue would be addressed immediately. If a ramp inspection occurred and you found a safety issue, it would be——

    Mr. LIPINSKI. The FAA inspector is there. He observes a deficiency in one of your aircraft. He obviously or should, I assume, tell one of your maintenance employees.

    Do you agree with me thus far that's how it goes?

    Mr. VOSS. Unfortunately, it's more complex because the ramp inspections can occur. We do not have maintenance personnel at all 74 cities, for example, so the availability of maintenance at those locations and who the communication occurs with is not——
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    Mr. LIPINSKI. Well, tell me, if an FAA inspector finds some discrepancy and you don't have any maintenance personnel there, what do you think the FAA does?

    Mr. VOSS. Routinely, they would contact the pilot, and if it was a safety issue they would inform him, and then our pilot would contact our maintenance control and they would review the issue and proceed to make a series of decisions.

    Mr. LIPINSKI. Now, is there any paperwork kept on that within your company?

    Mr. VOSS. Well, we—every communication—we run events between both pilots and maintenance personnel. There's both verbal communication and there's written communication. If there are discrepancies found, those discrepancies are immediately written up. The pilot has the authority to create a discrepancy if he sees something that he feels is not proper, given his experience level.

    Mr. LIPINSKI. Run me through. The pilot sees that there are a couple of bolts loose on one of the seats and he writes that up. We won't even bring the FAA in yet. But he then gives that to your maintenance personnel?

    Mr. VOSS. The discrepancies are certain items within the body of the airplane that have the ability to be deferred or MEL'ed—there's an item called a ''minimum equipment list'' which recognizes that certain equipment can cease to be functional and not affect safety of flight. So there are procedural issues where those determinations are made. They are what they call ''cosmetic items,'' like, you know, a loose bolt in a seat or a torn seat cover.
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    Mr. LIPINSKI. Okay. Well, let's try to go at it another way. Do you have a chief maintenance person?

    Mr. VOSS. Certainly. We have 187 personnel and, I think, over 20 supervisors, and each one of them covers a certain——

    Mr. LIPINSKI. Okay. And you have a chief of maintenance or vice president of maintenance?

    Mr. VOSS. Certainly. Vice president of maintenance.

    Mr. LIPINSKI. Does he get a report on all of these discrepancies that are either found by the FAA or by your own personnel?

    Mr. VOSS. He does not necessarily review every single one, but we have an automated system where discrepancies are classified and reports are being generated by computers that point to highlighted areas where there are repetitive concerns, and then his responsibility is to review those and see if there is a systematic problem either with the design of the airplane or with our own inspection system.

    His role is to review those procedures and the staff and the performance of the staff and the performance of the aircraft, itself, in terms of its engineering.

    Mr. LIPINSKI. Did he at any time bring any concerns to you about discrepancies that your own personnel were finding or the FAA was finding?
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    Mr. VOSS. Certainly, when the accelerated ramp inspections were occurring, we——

    Mr. LIPINSKI. And how long did that start before you were shut down?

    Mr. VOSS. I think the 29th of April, the 30th of April is when we, in Denver, Colorado, had seen an unusual surge of activity in terms of quantity of personnel doing review of the aircraft as they transitioned through the Denver hub.

    Over the course of—I think it was the 29th and the 30th, and then subsequently a ramped-up program on the 12th and the 13th of May. He was aware of that and did bring that to our attention.

    As a normal course of anticipated future events, we, along with the rest of the industry, expected that, when you live inside an environment that is functionally different than the old Part 135, there are areas within procedures manuals within operational changes that can create confusion. If you've got a series of habits you've been doing over 16 years and you proceed now to make a structural procedure change, there can be confusion as to, ''Well, this is the way we used to do it. This is how we do it now. Why did we do that?''

    On an ongoing basis, there is a constant revision process and critiquing process that should occur, and in this particular case we anticipated accelerated ramp inspections, knowing fully well that it's not only in FAA or our best interest, but, you know, it's in the interest of a process that needs to constantly be refined and honed.
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    Mr. LIPINSKI. Mr. Voss, let me just ask you one more question. In light of the fact that you do have one location where you keep all the deficiencies that your personnel or the FAA may have discovered, have you had an opportunity or did you, prior to signing the consent decree, go over all these deficiencies that the FAA presented to you in the consent decree and check those, either at that time or since, with your own maintenance records? And do you have any documentation that concurs—of your own records that concurs with the FAA's deficiencies that they have on there?

    Mr. VOSS. Certainly immediately after we receive any sort of either letter of investigation or, as in this particular case, an attachment with a consent order, we do a review for quality of content.

    Under the circumstances, the nature of the consent order, itself, is such that if you found a discrepancy in a letter of investigation routinely we communicate with FAA and say, ''Here's what happened. Here's what we're going to do to prevent it from happening again.''

    In this particular case, while we certainly reviewed it, there is not, as a byproduct of the consent order, itself, a written exchange where we're going to respond in writing as to what our point of view was on those discrepancies.

    Mr. LIPINSKI. I'm not talking about that. I'm talking about—you know, they're listing all these discrepancies going back to 1995. Is there anything in your own records, your own company's records, that match up with these discrepancies? I mean, they're saying that on November 9, 1995, there was—on five occasions this mechanic worked on something he wasn't trained. Do you have that in your records, too?
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    Mr. VOSS. The company——

    Mr. LIPINSKI. Independently from what was in the consent decree?

    Mr. VOSS. The company, on a routine basis, will have a disagreement over particular issues or discrepancies. As in the case of qualifications of a mechanic, for example, there can be additional documentation to support that those mechanics had been trained, had been qualified, that may not necessarily have been reachable at the time of a certain series of inspections.

    What would normally occur, under a letter of investigation we're given the opportunity to research the records to make certain that the FAA has access to all data that would affect whether or not the allegation is considered true or false and to what degree does corrective action need to be taken to prevent occurrences in the future.

    Mr. LIPINSKI. Let me just ask one last time to try to get to this. On page 17 of the consent decree, about two-thirds of the way down the page, it says on May 12, 1997, through May 13, 1997, FAA airworthiness inspectors conducted ramp inspections on GLA's aircraft at Denver Airport.

    Prior to the time you saw the consent decree and signed it, is there anything that I could go to in your own company records, independently of the consent decree, that would talk about this ramp inspection on May 12th to 13th, 1997, in Denver?
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    Mr. VOSS. If there was any item that was brought to our attention, you would find a record where we had written it up and corrected the discrepancy for those that were brought to our attention.

    Mr. LIPINSKI. Okay. So you're saying that we could go back and get the independent records from your maintenance department and present those and we could also—and then we could have the FAA, in what they say that they found, and if they gave it to you, you're saying that you would have to have a record of it?

    Mr. VOSS. If we were notified that they had found a deficiency on the 12th of May and brought it to our attention, you would have within our records what our response would be, because there would have been a discrepancy written in a maintenance log and a subsequent event to clear it.

    Mr. LAHOOD. I'm about ready to conclude this hearing, but I would allow Members to ask a question or two further if anyone has a burning question they'd like to ask.

    Mr. Thune?

    Mr. THUNE. Maybe just one question, Mr. Chairman.

    Mr. Voss, the FAA has contended that you used unqualified mechanics and flew planes that were not airworthy, even after being told they were not airworthy. Is that an accurate characterization?
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    Mr. VOSS. Given what we've received from information, we understand that that allegation has been made. There existed within our Part 121 certification procedure a program called ''maintenance watch carry forward,'' which is an authority that is afforded all airlines to make a determination on a particular discrepancy as to whether or not it affects safety of flight and as to what point in time a correction should be made to that.

    It exists within the authority of the company under that procedure, the ability of the company to make a judgment as to whether or not an item would be substantive enough to cause a grounding or require an immediate repair.

    Under the circumstances, as it has been explained to me, we have had occasions where we had disagreements regarding the usage of maintenance watch carry-forward, and procedurally it did foster a debate. But, given the authority that was within our operation, a determination was made that the aircraft would be flown. At that point in time, if there was a safety of flight issue, routinely we would, in theory, concur with it. If there was a debate over a particular discrepancy, it is very unusual for us to arbitrarily—and the history of the company, we do not, with the safety first and foremost approach to doing business, fly airplanes in anything that creates an unsafe condition.

    In this particular case, as I understand it, there was an honest, open debate as to whether or not maintenance watch carry-over should have been used relative to these particular discrepancies.

    We did, as a part of the consent order, agree to remove that authority from the company's operations into the foreseeable future. That is significant—has a potential to be a significant financial penalty, along with—and certainly we don't have an interest in compromising safety from a financial point of view, but from a customer service and a public service point of view, you have issues where, if there are loose screws, do you cancel flying and inconvenience 19 passengers.
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    And so you must, on a daily basis, make routine safety judgments to make a determination as to whether or not that transportation to be provided will be done safely.

    There can be, just as we have 187 different maintenance personnel, we have 187 different opinions as to what those items are that create a serious problem that would justify the grounding and parking of the aircraft.

    Mr. THUNE. Just one other question if I might, Mr. Chairman. Thank you.

    I would like to maybe direct this to Mr. Coleman. The FAA has indicated that they brought 32 enforcement actions against Great Lakes in the last three or four years. How does that compare with other regional airlines? And maybe Mr. Voss could answer how many of those enforcement cases resulted in fines and how many of them were dismissed. What's the past history?

    Mr. WALTER COLEMAN. We don't keep track. Our members do tell us if they have a difference with the FAA and ask for some guidance with whether other people are experiencing it, but we don't keep track of enforcement actions. That may have been something that Ms. Gilligan was referring to when they talked about what they may be providing ultimately.

    But I would suspect that number doesn't seem—although it sounds high, sometimes some relatively minor events will figure an enforcement action, and they can cover a wide area, including security issues, not just aircraft airworthiness.

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    And so I'm not sure how significant it would be to compare them, but I'm not sure that's a startling figure.


    Mr. LAHOOD. Thank you.

    Mr. Boswell, you may proceed.

    Mr. BOSWELL. Thank you, sir. Thank you, Mr. Chairman.

    Mr. Chairman and Mr. Voss, I think that we've had a good discussion here today. I perceive—and I think that I've been studying folks like yourself for a long time—that you really want and intend to have a safe operation. Your service is needed. Mr. Coleman has made some statements I think that have been beneficial to us.

    I think we have to continue to charge the FAA to do their oversight. There's no question about that. But can you tell us when do you think, in your opinion, you'll have everything complied with and you'll be back into full service, even with your reduced fleet?

    Mr. VOSS. The business plan, as we had presented it a little over a week ago, or about a week ago, provided FAA with a chain of events and established the goals that we had, would have achieved 100 percent of the business plan system, which is effectively 34 aircraft, by July 1.

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    From the company's point of view, the maintenance personnel staffing and the speed with which the inspections and the reinspections of the aircraft have been occurring would indicate to us that we have that capability.

    There are limitations that are entering the equation that are relative to, for example, the Huron maintenance base, in support of the inspection activity that's been going on. Our maintenance personnel have been performing inspections, but until the FAA has observed them or observed the aircraft they're not releasing the aircraft.

    In the case of Huron, for example, there have been no inspectors made available.

    We have been working towards coordinating that availability, and we had anticipated it to be earlier this week, for example, and there have been delays that have occurred over the last few days.

    At this point, as we sit here and speak, we do not have any inspectors in the Huron Brasilia maintenance base.

    We work as efficiently as possible, but certainly there are processes and we have seen outside the consent order requests that are being made of us that we work through and we communicate with the FAA and we try to resolve as we proceed through that process.

    Our goal was to have the United Express system restored by the 1st of July. At this point we are getting indications that we're probably going to have to revise that schedule. Having been in town here for two days, I, unfortunately, haven't been involved in the communications directly.
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    But our initial goal and our expectations, given the staff—you don't go from 1,400 total employees, a staff of nearly 400 pilots and 187 mechanics supporting 53 airplanes, down to 10 or 12 airplanes on an overnight basis and not be able to perform a lot of inspection activity.

    We certainly have the staff and the trained and qualified staff in place to move in what I believe is a diligent and professional fashion in getting it restored, but the timing of that restoration is not necessarily under our control. There are certainly restrictions that are subject to the availability of FAA personnel at this point.

    Mr. BOSWELL. Well, they may come and find a discrepancy, even after you fulfill that gate sheet, and they, in the process, find something they don't agree with or that you might need some more time, so the inspection, once you're ready for them, is quite important to get you back in the air.

    Thank you, Mr. Chairman.

    Mr. LAHOOD. Thank you.

    Mr. Latham?

    Mr. LATHAM. Just very briefly, I want to thank Mr. Voss. I'm sure it has been difficult, with everything going on back at home, to be able to have to take the time to come out here and to have this hearing.
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    I just want to thank the committee very much for having this hearing. It has helped me a great deal. Hopefully we can get the FAA to do the inspections very promptly, to get people on-site, and get the work done so that we can get back in the air.

    Again, I just wanted to express my appreciation for having the hearing and allowing me to sit in. Thank you.

    Mr. LAHOOD. You're welcome.

    As the prerogative of the Chair would dictate, I'm just going to make one statement, and that is I think there is a huge disconnect in communication in this particular instance between the FAA and this regional airline. I really do, based on what I've heard here today.

    And I wonder a little bit about the communications within your own organization, too, Mr. Voss. I really do.

    But I think if there had been better communications, perhaps we wouldn't even be holding this hearing today. I hope that that can be improved, and that's something that I'm going to communicate directly to the FAA.

    With all due respect to everything that has been said here about safety, there's not a Member of the House of Representatives or the Senate or anybody who doesn't care about safety. We all care about safety. But there ought to be a way to do these things in a manner that is communicated from one person to another person and one organization to another so you don't have to shut an airline down.
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    I think, obviously, something has been lacking here, and I guess we'll all be left to our own judgment about that.

    I wish you well. I think all of us wish you well, and we hope that you will be back in business again to the extent that you can be and doing well and serving the public.

    For the time that you have devoted to this, we are very, very grateful, and I know you had to take time away from other important matters to do it.

    Mr. Coleman, thank you. Mr. Voss, thank you. We appreciate it very much.

    The subcommittee is adjourned.

    [Whereupon, at 12:26 p.m., the subcommittee was adjourned, to reconvene at the call of the Chair.]

    [Insert here.]



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JUNE 5, 1997

Printed for the use of the
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Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
JOHN L. MICA, Florida
SUE W. KELLY, New York
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RAY LaHOOD, Illinois
FRANK RIGGS, California
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
ROY BLUNT, Missouri
JOSEPH R. PITTS, Pennsylvania
JOHN R. THUNE, South Dakota
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
J.C. WATTS, Jr., Oklahoma

NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
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ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ROBERT E. (BUD) CRAMER, Jr., Alabama
ELEANOR HOLMES NORTON, District of Columbia
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi
BILL PASCRELL, Jr., New Jersey
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JAY W. JOHNSON, Wisconsin
JAMES P. McGOVERN, Massachusetts
TIM HOLDEN, Pennsylvania

Subcommittee on Aviation

JOHN J. DUNCAN, Jr., Tennessee, Chairman

ROY BLUNT, Missouri Vice Chairman
RAY LaHOOD, Illinois
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
JOSEPH R. PITTS, Pennsylvania
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
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J.C. WATTS, Jr., Oklahoma
BUD SHUSTER, Pennsylvania
(Ex Officio)

NICK J. RAHALL II, West Virginia
ROBERT E. (BUD) CRAMER, Jr., Alabama
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
(Ex Officio)



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    Coleman, Walter S., President, Regional Airline Association

    Valentine, Barry L., Acting Administrator, Federal Aviation Administration, U.S. Department of Transportation, accompanied by Margaret Gilligan, Deputy Associate Administrator for Regulation and Certification, Thomas Stuckey, Acting Director of the Flight Standards Service, and John V. Coleman, Director, Office of Aviation Analysis, U.S. Department of Transportation

    Voss, Douglas G., Chairman, President and CEO, Great Lakes Aviation, Ltd


    Costello, Hon. Jerry F., of Illinois


    Coleman, Walter S

    Valentine, Barry L

    Voss, Douglas G

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Valentine, Barry L., Acting Administrator, Federal Aviation Administration, U.S. Department of Transportation:

Chronology of discussions between FAA and great Lakes Aviation leading to suspension of operations

Great Lakes Aviation Maintenance Facilities/Locations at time of shutdown, chart
Oberstar, Hon. James L., a representative in Congress from Minnesota, FAA Docket 96CE010020, Alleged Violations of 49 U.S.C. 40101, et seq. and Title 14, C.F.R., Parts 43, 119, 135, and 121 by Great Lakes Aviation, Ltd

Voss, Douglas G., Chairman, President and CEO, Great Lakes Aviation, LTD:

Air Agency Certificate GLBR031A, issued to Great Lakes Aviation, Ltd. by the Federal Aviation Administration, December 23, 1981

Repair Station Operations Specifications, issued by the Federal Aviation Administration, May 2, 1996

Operational statistics since the commencement of scheduled service, October 12, 1981, chart

Prepared statement before the Committee on Commerce, Science and Transportation, April 25, 1996


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