Good morning and welcome.

        I am Robert Francis, Vice Chairman of the National Transportation Safety Board and Chairman of the Board of Inquiry for this Public Forum.  We have convened this meeting today to discuss the oversight practices associated with aviation maintenance work conducted at contract repair facilities.  These facilities, also called repair stations or third-party repair stations, are certified under Title 14 Code of Federal Regulations Part 145.

        Competitive market pressures in the airline business have resulted in more air carriers, both large and small, who outsource maintenance to Part 145 repair stations.  This practice decreases air carrier equipment and facility overhead and, as a result of competitive bidding, decreases maintenance labor costs.  These industry trends have resulted in a variety of organizations and facilities that perform aircraft maintenance and, in turn, have greatly complicated the oversight of aircraft maintenance for both the air carriers and the Federal Aviation Administration (FAA).

        There are about 2,500 certified aviation repair stations in the United States that perform maintenance on a contractual basis to scheduled and nonscheduled air carriers and cargo operators.   The size and function of these repair stations vary widely.  Some small, specialized operations may employ only a few people working on specific maintenance jobs.  Large, complex operations can employ several thousand people working at maintenance bases with multiple service bays.  Aviation maintenance work performed by contract repair stations increased 30 percent between 1990 and 1996.  They currently perform about half of the industry's work to inspect, maintain, repair, and renovate the U.S. fleet of airline and cargo aircraft; these businesses account for a $3 billion-a-year industry.

        The Federal Aviation Regulations clearly specify that the responsibility for airworthiness lies with the air carrier.  "A certificate holder may make arrangements with another person for performance of any maintenance, preventative maintenance, or alterations.  However, this does not relieve the certificate holder of the responsibility. . . ."  As such, the aircraft operator has primary responsibility for any work performed by maintenance repair stations.

        Decentralization of aircraft maintenance activity has presented the FAA with new challenges relative to its oversight of maintenance operations.  In the past, the FAA allocated most of its resources for air carrier maintenance inspection to the internal maintenance operations of the largest airlines.  However, as air carriers have moved toward more outsourcing, the FAA's workload require-ments have shifted and expanded.  We expect to hear some of the problems and successes that FAA has had implementing its new inspection program, Air Transportation Oversight System (ATOS).
 Even though there are many facets to the aviation maintenance business, today's Public Forum will focus primarily on issues of maintenance oversight.  We will address air carriers' maintenance operating procedures for quality control and oversight of outsourced maintenance services; repair stations internal procedures for accomplishing maintenance work according to each carrier's maintenance program; and FAA inspection and oversight of contract maintenance work, including procedures for inspections, reporting, deficiency tracking, and general oversight of repair operations.

        The National Transportation Safety Board is an independent Federal agency that was created by Congress to oversee and promote transportation safety.  The Safety Board accomplishes this through the investigation of accidents and through safety studies, and ultimately through the formulation of safety improvement recommendations.  We have convened this Public Forum as part of our responsibility to foster transportation safety.  Oversight of Aviation Maintenance Repair Stations is also the subject of a safety study that is currently underway at the Safety Board.

        At this point, I would like to introduce the other members of the Board of Inquiry.  They are Dr. Vern Ellingstad, Director of the Office of Research and Engineering; Mr. Jack Drake, Chief of the Aviation Engineering Division in the Office of Aviation Safety; and Mr. Jim Rosenberg, Acting Chief of the Safety Studies Division in the Office of Research and Engineering, who is also the Forum's Hearing Officer.  The Board of Inquiry will be assisted by a Technical Panel comprising Mr. Frank McGill from the Office of Aviation Safety, and Ms. Deborah Bruce from the Office of Research and Engineering.  Also here to assist are Ms. Denise Daniels and Ms. Maria Sturniolo from my staff, and Mr. Paul Schlamm from our Public Affairs Division.

        I would like to emphasize that the Safety Board's Public Forum is a fact-gathering exercise.  There will be no attempt to analyze the facts or announce any conclusions at the close of this meeting.  The transcripts of the Public Forum and any exhibits subsequently entered into the record, will become part of the public record in the Safety Board's Washington, D.C., office.  The Safety Board does not provide copies of the transcript.  Anyone desiring to purchase the transcript can do so through the court reporter.  We will publish a proceedings to this Forum and have provided a box at the door for anyone who would like to fill out a proceedings request form or write the request on the back of your business card.

        The Safety Board's rules provide for the designation of parties to a Public Forum.  Pursuant to these rules, those organizations whose participation and special knowledge will contribute to the development of pertinent information are designated parties.  I will ask that the spokesperson at the various party tables give his or her name, title, and affiliation to the Hearing Officer.

        The following organizations have been designated parties in this Public Forum:

        Air Transport Association (ATA)
        Regional Airline Association (RAA)
        Aeronautical Repair Station Association (ARSA)
        Flight Safety Foundation (FSF)
        Federal Aviation Administration (FAA)

        Last week, the Board of Inquiry held a pre-forum conference at Safety Board headquarters in Washington, D.C.  It was attended by Safety Board staff and a representative from each of the parties to the Public Forum.  During that conference, the areas of inquiry were delineated and the scope of the issues to be explored were defined.  Copies of the list of panel participants are available at the press table.  The panel participants speaking at this Public Forum have been selected because of their ability to provide the best information available on the issues we are considering.  Pursuant to the Safety Board's procedural rules, the panel participants will be questioned first by the Technical Panel, next by the spokesperson for each party, and then by the Board of Inquiry.  If necessary to clarify previous comments, I may allow a second round of questions.

        As Chairman of the Board of Inquiry, I will be responsible for the conduct of the Public Forum.  Thank you.

         We will now proceed with the Public Forum.