Much has been and is being said regarding the proposed merger of Jet Blue and Spirit. Recent reports suggest that the Department of Justice will make its position known shortly.
One aspect of the merger that has received little attention is the role of the FAA. While all manner of assertions have been made regarding the effect of a merger on the consumer and competition, the traveling public/consumer should have a high confidence level that safety of the operations after a merger will not be adversely affected. Despite all of the issues swirling around them, the FAA is the “platinum” standard in aviation safety and oversight. That standard carries over to their role in an airline merger. It would be a travesty if any of the issues involving FAA, or the airline industry in general, in any way impacted the position that DOJ or DOT take on this matter.
Both Jet Blue and Spirit hold operating certificates issued by the FAA under 49 CFR Part 121. When a merger occurs, those certificates will, at some point, be combined under a single operating certificate. However, before the FAA does that, the “new airlines” must demonstrate to the FAA that it will, as each airline currently does, maintain and continue operations at the highest level of safety.
The Federal Aviation Regulations set the standard, but they are minimum standards. The fact is that no US airline views meeting the minimum standard as an acceptable way of doing business. They all, including Jet Blue and Spirit, exceed any minimum standard. It’s this fact, along with all elements of the industry working together, that accounts for the extraordinary level of safety the US airline industry has attained. So what does the FAA examine as part of an airline merger? They include, among other areas:
- substantive changes in certain areas of management
- labor issues
- personnel turnovers
- changes/differences in fleet type
- changes in outside vendors e.g., MRO’s, service providers, etc.
- operational control systems
- approved/accepted manuals and programs, including training, maintenance, safety quality control etc.
In many instances, the airline(s) and the FAA sit down together numerous times and go over what the “new” or merged airline will look like as it relates to these factors. What is being sought through this review is consistency to ensure that there are common procedures, standards and practices in place for the operations going forward.
Another aspect of the merger process is that the FAA will have had two separate Flight Standard District Offices (FSDO’s) involved, one overseeing each operating certificate of the two airlines. Once the certificates are combined, there will be a single FSDO holding, and responsible for, the new operating certificate. This ensures that FAA maintenance/operation/safety inspectors are also trained in the procedures/processes of the “new” airline.
Following the completion of the merger, the FAA typically will conduct a broad based “deep” dive into the operation of the new airline, called a Certificate Holders Evaluation Program or CHEP inspection. Its goal is to evaluate how effectively the merger and transition has been accomplished.
Putting aside any antitrust considerations, the traveling public should take significant comfort in the fact that the unprecedented levels of safety achieved by the US airline industry, will not only be maintained, but due to the high level of scrutiny brought to bear by the FAA given its role in a merger, will very likely be increased.