Paris Air Show

AIA: U.S. risks retaliation over foreign mx rule

 - June 17, 2009, 10:22 AM

U.S. politicians are poised to provoke Europe to take retaliatory action if they press through a proposal in the U.S. Congress to require the Federal Aviation Administration to inspect foreign repair stations twice a year, according to the head of the U.S. Aerospace Industries Association. “We have great concern about that aspect of the FAA reauthorization bill,” said AIA president and CEO Marion Blakey.
“We have protested it very strongly because we believe…that it is unnecessary, that there are strong safeguards in the system to oversee repair stations, both foreign and domestic.”

If enacted, she told AIN, the legislation will provoke the European Aviation Safety Agency to begin similar requirements in the U.S., and they will begin attempting to oversee U.S. repair stations. It essentially violates the bilateral safety agreements that have been working very, very well for quite a long time, AIA contends.

“In violating those agreements, you have the risk not only that they will essentially begin similar oversight requirements [in the U.S.], which are very, very costly,” Blakey said. “In Europe they have user fees, and they would charge for those kinds of inspections and that would be very onerous for the industry.”

It also will provoke less use of U.S. repair stations as a result, and that hurts U.S. economic interests and undercuts jobs at domestic repair stations. “This is a formula for a real economic deterioration for aviation should this occur,” Blakey warned.

With a European Union-wide bilateral aviation safety agreement about to go into effect, if Congress keeps the foreign inspection station requirement, that is likely to be put on hold. “And it has a lot of important contributions to make to both safety and efficiency that all of us want to see go forward,” she said. “So it is not jeopardizing just the status quo, it is jeopardizing our future. We do not believe that the stance the Europeans say they will take is a hollow threat; we believe that it is very real.”

While maintaining that aerospace has been a very bright spot among industries, Blakey acknowledged that, “We have been affected by the downturn like everyone else. It’s time for the industry and its customers to take stock of where we stand.
“I think from that vantage point, what we are seeing–and I think this holds up through the first quarter–is that our sales figures, our overall revenue and our profitability continue to be positive relative to last year and the overall trend,”
she explained.

This is true for the commercial aircraft side as well as the military, but the business jet and the civil aviation side have taken the hardest hit, she said. While much of that is attributable to deferrals and cancellations of orders, Blakey suggested that some of it is caused by recent rhetoric against corporate jets, “which we feel very strongly is ignoring the fact that these are workhorses for the business community.”

Blakey, a former FAA Administrator and former chairman of the National Transportation Safety Board, noted that business jets are a tremendous source of jobs, and she said AIA will be emphasizing that. When you step back and look at the bigger picture, she said, it is hard to know how that is going to look when it comes to orders.

“The backlog continues to be very strong for commercial aviation, but the question for new orders is hard to read,” she said, admitting that orders have been virtually flat, with cancellations essentially wiping out new orders.

Nevertheless, she said overall numbers for the first quarter in sales and revenues are still positive. “I think the industry is working hard to manage so that costs do not begin to outstrip the broad economic market or outstrip what the market is going to bear right now,” she added.

According to Blakey, AIA, which is celebrating its 90th anniversary this year, has a lot of different responsibilities here at the Paris Air Show, citing dialogues between the U.S. delegation and the leaders of the European aerospace industry: the Aerospace and Defence Industries of Europe.

“I think it’s going to be a very dynamic dialogue when they will be looking at the economic conditions–taking stock of that–and how it affects our industry,” she said. “It also looks at how there can be greater efficiencies and effectiveness in the way we are handling acquisitions on the military side.”

She also expects further discussions about environmental considerations and export controls, as well as joint efforts to increase the ethical guidelines that the industry imposes on itself.