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Archive for April 2nd, 2008

FAA takes risks with shoddy oversight, experts say

posted by admin in cnn, news

WASHINGTON (CNN) — The Federal Aviation Administration is putting the public at risk with lax oversight and a too-cozy relationship with the airlines, a top lawmaker and aviation experts said Tuesday.

The FAA has shown a dangerous lack of enforcement compliance with inspection requirements, resulting in thousands of people flying on potentially unsafe aircraft, said Rep. James Oberstar, the chairman of the House Committee on Transportation and Infrastructure.

This is the most serious lapse in aviation safety at the FAA that I’ve seen in 23 years, the Minnesota Democrat said in an interview with CNN, a position he restated at a news conference Tuesday.

The result of inspection failures and enforcement failure has meant that aircraft have flown unsafe, un-airworthy and at risk of lives, he said.

Oberstar scheduled hearings to begin Thursday, after a congressional investigation uncovered that discount airline Southwest Airlines kept dozens of aircraft in the air without mandatory inspections — and, in some cases, with defects the inspections were designed to detect.

CNN was first to report on the investigation in early March after obtaining documents submitted to the congressional investigators by two FAA inspectors who said FAA managers knew that the Southwest planes were flying illegally and did nothing about it.

The day after CNN’s report, the FAA began actions to seek a $10.2 million civil penalty against Southwest for allegedly operating 46 Boeing 737s without conducting mandatory checks for fuselage cracking.

Allowing an airline to fly passengers on aircraft with a known unsafe condition in my opinion is criminal, one inspector wrote.

FAA spokeswoman Laura Brown said the agency would talk in great detail about all this at the hearing.

We have found consistently high rates of compliance with our audits and inspections, she said, adding that the agency intends to add additional measures to provide inspectors the opportunity to report concerns up the chain of command.

The FAA also has scheduled a news conference for Wednesday, when the results of new inspections are expected to be announced.

The inspectors wrote that Southwest, which carried more passengers in the United States last year than any other airline, flew at least 70 planes beyond a mandatory inspection on the rudder unit, part of the steering mechanism, some of them as much as 30 months beyond the mandatory rudder inspection.

The airline also flew at least 47 planes beyond a mandatory inspection of the fuselage, or skin, of the planes for possible cracks, the inspectors said. When the inspections were carried out, six of the planes were found to have possibly dangerous cracks, they said.

In that group, Southwest flew at least 1,457 fights, according to the documents. Those flights carried an estimated 200,000 paying passengers, Congressional investigators said.

The FAA inspectors wrote that the airline knew it was in violation of safety rules by continuing to fly the uninspected 737s. At least one of the FAA inspectors wrote that he had been complaining about increasing problems like these for years at the Southwest regional FAA office, which oversees Southwest Airlines.

The two inspectors are to appear before Oberstar’s committee Thursday.

In the wake of the congressional inquiry, the FAA ordered its inspectors to ensure that airlines were complying with 10 airworthiness directives — orders to check or correct a known unsafe condition — and to expand the review to include more directives thereafter.

Oberstar said that this week’s hearings, though focusing on Southwest, were also important to show a larger trend: that the FAA is far too close to the airlines it regulates.

It reflects an attitude of complacency at the highest levels of FAA management, a pendulum swing away from vigorous enforcement of regulatory compliance toward a carrier-friendly, cozy relationship with the airlines, he said. This can lead to accidents and to fatalities.
found here.

France: Insider trading at Airbus firm

posted by admin in cnn, news

PARIS, France (CNN) — The French markets regulator said Tuesday it has found evidence of insider trading at EADS, the parent company of Airbus.

In a report following an 18-month investigation, regulator AMF also alleged EADS had misled financial markets by failing to meet standards on the publication of information.

While AMF’s announcement did not mention Airbus specifically, its investigation was triggered when top management and shareholders carried out suspicious share trades in the time before EADS revealed severe delays to the production of the Airbus A380 superjumbo jet in June 2006.

Word of those delays caused shares in EADS to drop by a quarter at the time.

EADS had reported in March 2006 that certain executives and major shareholders had sold shares during a pre-approved window, but AMF decided to investigate whether anyone who sold those shares knew the bad news about the delays was coming.

Aviation analyst Howard Wheeldon, of brokerage firm BGC Partners in London, said the French investigation initially involved 21 people.

What they actually knew or didn’t know in terms of the delay, (whether) there would be a delay announcement forthcoming — it’s very difficult, it’s very complicated, Wheeldon told CNN. But I do seem to get the impression that the French regulatory authorities have got a long way down the line.

French reports about the investigation have previously pointed to former EADS Director Noel Forgeard, who was fired soon after the delay announcement in June 2006.

Forgeard made a profit of some $3 million when he sold his stock in March 2006, and his three children also sold stock options. Forgeard has said the timing of the stock sale and news of the delays were an unfortunate coincidence.

Christian Streiff was hired in July of 2006 to clean up the problems at Airbus, but he resigned in October of that year after the company announced another lengthy delay in A380 production.

The A380 finally completed its first passenger flight last October after two years of delays and cost overruns.
found here.

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