Questions and Answers on Contract Maintenance

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 14%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	Questions and Answers on Contract Maintenance
	PubZone1 Q: What is contract maintenance? A: In simple terms, contact maintenance is the process allowed by FAR 121.363 where airlines hire third-party experts to perform maintenance tasks. The type of maintenance involved ranges from minor servicing to major overhaul of components, engines and airframes. The entities performing the work are called repair stations and are subject to stringent federal regulations. Furthermore, all U.S. airlines are required to monitor maintenance work at the vendor work site. Also, all third-party mechanics are required to meet the same professional standards as those employed by the airlines. Finally, all maintenance work is subject to FAA audits and airline quality assurance programs, regardless of whether that work is performed by the carrier or a contract maintenance vendor. Q: Is maintenance a major contributor to airline accidents? A: Not at all. The number of maintenance-related accidents* has decreased since 1980. In fact, only about 5 percent of all Part 121 accidents (based on NTSB definitions and statistics) over the last 10 years were attributable to maintenance. Q: How is contract maintenance performed? A: The majority of contracted maintenance is done in the United States by original equipment manufacturers, such as Pratt & Whitney, Honeywell and GE, as well as other FAA-certified facilities that have a core competency performing heavy maintenance checks or specialized repairs. Maintenance performed outside the United States is performed by premier MRO organizations, including Lufthansa Technik and TACA Aeroman. Q: Why do airlines use contract maintenance? A: Airlines operate in a highly-competitive, global environment. Their ability to obtain high-quality, affordable maintenance services whenever and wherever needed is essential to their competing effectively. Like a lot of other industries (e.g., truckers, railroads and ships), it simply more efficient for highly-specialized technical services to be provided by companies that can devote all their time and attention to this type of work. This tried-and-true practice has contributed to reducing accidents. Airlines contract their heavy maintenance to repair facilities in same way. Contracting also helps airlines manage maintenance demands through peak and non-peak periods and allows carriers to focus on routine maintenance and other core competencies, which are more central to their business. Q: Are all airlines moving to contract maintenance? A: U.S. airlines have safely contracted maintenance for more than 30 years and all airlines employ some form of contract maintenance. While some rely heavily on contract maintenance, others opt to perform much of their work internally. Although airlines are continually reassessing maintenance needs, we expect that the industry, on average, to stabilize in the 40 percent to 60 percent range for the amount of maintenance contracted. Q: How much airline maintenance goes to contractors? A: Although the amount varies by airline, Department of Transportation (DOT) Form 41 reports reflect that roughly 40 percent of the total amount spent on maintenance goes to contractors. It is important to note that on a per unit basis, engines and components have much higher repair costs than the airframe itself, and most of that work is done by contractors. In a 2005 survey of A4A member airlines, data revealed that of roughly 5,000 heavy airframe checks that year, 70 percent were performed internally by the airline and 30 percent went to contractors. Approximately, one-third of those contracted checks (450 total) were performed at foreign repair stations. Q: So are maintenance practices making airline travel less safe? A: Absolutely not. While some critics have charged that airline maintenance practices undermine safety, independent government figures simply don’t support that conclusion. As one example of the safety of their products, the U.S. military aviation activities subcontract to many of the same facilities as commercial transport operators. Regardless of how you slice the data, air travel is safer today than ever and we stand behind our stellar safety record. Q: Is contract maintenance costing U.S. jobs? A: No, to the contrary, it’s creating more jobs than it is costing in two ways: First, in 2009, U.S. repair stations employed more than 199,900 people at 4,000 facilities across the country. These repair stations perform work not only for U.S. airlines, but for many foreign airlines as well. Secondly, when U.S. airlines leverage contract maintenance to reduce their costs, they can become better competitors and grow. Q: Does that mean airline critics are miscasting the debate over maintenance? A: Yes. Unfortunately, the debate over contract maintenance has ebbed and flowed for years and has more to do with politics than with safety. As with other industries that have had to evolve to compete globally, so must the airlines. Eliminating jobs, and in some cases moving them offshore (or abroad), attracts the attention of lawmakers and regulators. What is important, however, is that making smart business decisions, while meeting the airlines’ safety goals, makes the industry healthier and ultimately benefits the public. *NTSB defines an accident as "an occurrence associated with the operation of an aircraft which takes place between the time any person boards the aircraft with the intention of flight and all such persons have disembarked, and in which any person suffers death or serious injury, or in which the aircraft receives substantial damage." PubZone2	Safety is the number one priority for our airlines.