A just-released report by the U.S. Department of Transportation (DOT) Office of Inspector General (OIG) points to the importance of the regional airline industry in safely transporting passengers, economic changes buffeting the industry, and difficulties encountered by the FAA in monitoring, overseeing, and responding to these economic changes. The OIG prepared the report, FAA Oversight Is Not Keeping Pace With Changes Occurring in the Regional Airline Industry, in response to a request by the ranking members of the House Transportation and Infrastructure Committee’s Subcommittee on Aviation. It’s worth a read.

Relying on data from the DOT Bureau of Transportation Statistics and the Regional Airline Association, the report indicates that Part 121 regional air carriers operate over 40 percent of the Nation’s commercial flights and transport over 157 million passengers a year (approximately 20 percent of all airline passengers). Yet, as is well-known, the industry has experienced numerous economic challenges, including “shrunk, merged, or changed mainline partners, … airline consolidations, strict domestic code-sharing partnerships, and changes in pilot licensure requirements.” Despite these changes, the report acknowledges that the regional air carrier industry has not suffered a major accident since 2009 (the February 12, 2009, Colgan Air crash in Buffalo, New York).

In general, the OIG determined that the FAA’s risk-assessment tools and decision aids are ineffective and result in agency inspectors overlooking key risk indicators at regional carriers. The OIG characterized the main risk-assessment tool, the Certificate Holder Assessment Tool, as subjective and lacking metrics to properly assess risks such as key personnel turnover, financial distress, or rapid expansion. It also concluded that the decision aids are poorly designed and confusing. Overall, the FAA inspectors lack a clear understanding of the risk indicators and how to use the available risk-assessment tools.  As an example, the report describes FAA inspectors’ failure to recognize numerous indicators of financial distress at one particular carrier prior to the carrier’s bankruptcy filing. These indicators included a decline in stock prices, a decrease in scheduled flights due to pilot shortages, an increase in pilot attrition rates, and a lawsuit filed by one of its mainline partners for failure to perform contractually scheduled flights.

The OIG report includes 10 recommendations to the Federal Aviation Administrator to enhance the FAA’s oversight of regional carriers. The agency concurred with each of them. The report also credits the agency with implementing a new risk-based oversight system but indicates that a substantial amount of work remains to ensure its inspectors have the tolls, knowledge, and guidance necessary to identify risks and “adjust surveillance” at regional carriers.