Says FAA Needs To Go Back To The Drawing Board

(ANN received a copy of this letter from NBAA Tuesday -- and we thought you would want to know what it said. --ed.)

June 28, 2005

Document Management Facility
US Department of Transportation
400 Seventh Street, SW
Nassif Building
Room PL-401
Washington, DC 20590

Re: Docket Number FAA-2005-20245, Revisions to Cockpit Voice Recorder and Digital Flight Data Recorder Regulations

The National Business Aviation Association (NBAA) represents the interests of over 7,000 Member companies that own or operate aircraft to support their business. NBAA also represents nearly 900 companies that conduct operations under FAR Part 135. NBAA submits these comments in response to the proposed rule that seeks to revise the regulations for cockpit voice recorders and flight data recorders.

It is clear from reading the FAA's proposed rule, the regulatory flexibility analysis and accompanying appendices that the Agency performed a complete review of the impact of this rule on the scheduled airline community. If that was the extent of impact of this Notice of Proposed Rulemaking (NPRM), NBAA would have little to say.

The proposed regulations included in this NPRM indicate that a broad segment of both the Part 91 and Part 135 on-demand communities would have to comply with this proposal; yet there is no evidence to suggest that the Agency evaluated the effect of this rule on those communities. NBAA strongly opposes the issuance of a final rule as it would apply to aircraft operated under Part 91 and 135 on-demand rules without the statutorily mandated initial regulatory evaluation, regulatory flexibility analysis, trade impact assessment and unfunded mandates act determination.

Insufficient Data Sampling from Affected Communities

Section VI.E.3 of the Initial Regulatory Evaluation, Regulatory Flexibility Analysis, Trade Impact Assessment, and Unfunded Mandates Act Determination (the “analysis”) identifies that the FAA sent a survey to seven aviation industry associations to determine the impact of the proposed CVR and FDR systems equipment and labor costs. While the FAA seems to have received information from some CVR vendors about the costs of upgrading these systems, no data was either solicited or received from the general aviation community.

It appears that the FAA did not provide companies that operate or service general aviation aircraft with an opportunity to submit relevant cost data on this proposal. The FAA did not include NBAA in the data survey which would likely have resulted in more data about the cost to the general aviation community. Historically, FAA has used NBAA as a resource for obtaining difficult to identify cost-data for the general aviation industry. It is difficult to understand why the Agency chose to ignore this segment of the aviation community during this rulemaking effort. Clearly, this rule will impose significant costs to businesses and individuals operating affected aircraft.

Regulatory Analysis

The FAA issues rules designed to provide minimum levels of safety. The aviation community must comply with these rules. Congress passes laws creating rules that federal agencies must follow as well. 5 USC 603 requires all federal agencies to conduct an initial regulatory flexibility analysis. The analysis must describe the impact of the proposed rule on small entities. The FAA provided the following analysis for general aviation aircraft: With respect to the economic impact of the proposed rule on small businesses within these owners/operators, nearly all of the private operators listed in Appendix I-2 are corporations.

These entities use their airplanes as an ancillary part of their primary business (e.g., oil, automotive, computer, etc.), primarily to transport executives or employees or to deliver parts. As a result, these operators are distributed across a spectrum of North American Industry Classification System (NCAIS) codes. However, it needs to be noted that the average value of these airplanes is about $20 million and few non-airline small businesses have the resources to maintain such an expensive piece of equipment that primarily serves the companies' executives.

Further, if these corporations were to sell their airplanes due to this rule, commercial passenger airlines and charter air cargo airlines would provide these ancillary transportation services and the proposed rule would have minimal impact on these corporations. Thus, the FAA determined that the proposed rule would not have a significant impact on a substantial number of small non-airline entities.

The FAA would not likely accept an "ignorance of the rules" excuse from a pilot who violated a Federal Aviation Regulation. In this case, general aviation should not accept a rule from the FAA because of its ignorance of the industry. The FAA's regulatory analysis does not contain any mention, notation, or identification of a single general aviation aircraft subject to this rule.

We believe that the "information" contained in the above quoted language bears very little resemblance of the truth and should be stricken. NBAA urges the FAA to reopen the docket on the applicability of the proposed rule to examine –- for the first time -– the impact on Part 91 and Part 135 operations and then to issue a final rule applicable to this section. NBAA's data identifies over 15,000 aircraft that were not analyzed by the FAA that could be affected by this rule. Additionally, NBAA's data indicates that the total cost for the development of the supplemental type certificate (STC) and equipment installation could easily reach $70,000 per aircraft. If each aircraft requires this type of preparation, the total cost of this rule could exceed $1 billion.

Many companies that own aircraft subject to this rule are in fact small businesses that own a single airplane. These aircraft are not only used, as FAA simplistically states, "to transport executives or employees or to deliver parts." If questioned by the FAA, NBAA would have reported that 86% of the passengers on board these aircraft are not company executives. These aircraft are often the reason a company will decide to locate its manufacturing plant in a small town with an airport rather than near a large city. These aircraft often act as life-saving vehicles, transporting critically ill or injured people to specialty burn and trauma centers across the country. These aircraft allow doctors to visit patients without access to health care in rural parts of our country.

These aircraft are a vital but often unseen part of our economy and this regulatory analysis completely discounts their importance or existence. FAA's conclusion that companies can sell their airplanes if the cost of compliance is too high violates the requirements of 5 USC 603. NBAA asks that the FAA truly analyze the impact of this significant rulemaking on the general aviation community as required by 5 USC 603 before conducting additional efforts to finalize this rule.

In summary, NBAA urges the FAA to retract the NPRM as it may apply to Part 91 and Part 135, to initiate its first statutorily mandated study on the real impact on general aviation aircraft operators, to assess that economic impact and issue an appropriate final rule. Please contact us if we can provide additional information.

Sincerely,

Lisa Piccione
Senior Vice President
Government Affairs
cc: A. Steinberg, Esq.
N. Sabatini