Small aerospace companies most at risk from US shutdown

Washington DC
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Small aerospace suppliers are likely to be hardest hit if the US government shutdown that began on 1 October over a budgetary impasse continues for weeks or even months, according to industry officials.

“They will feel the pain,” says Ali Bahrami, vice-president of civil aviation for the Aerospace Industries Association (AIA) and former head of the US Federal Aviation Administration’s (FAA) Transport Airplane Directorate in Seattle, Washington.

Although the FAA has furloughed 15,000 employees, the air traffic control system was not immediately impacted by the shutdown. Moreover, large aerospace manufacturers like Boeing have employees authorised by the FAA to oversee portions of the airworthiness certification process during the shutdown, Bahrami says.

However, the shutdown forced the FAA to furlough all but about 100 of about 1,200 engineers involved in the airworthiness certification process. The remaining staff is being devoted solely to monitoring the safety and airworthiness of the existing fleet. Smaller aerospace companies that specialise in performance or safety-enhancing upgrades and modifications to existing aircraft could face lengthy delays due to a prolonged government shutdown.

At Wichita-based Yingling Aviation, vice-president of repair station operators Bob Gallop says the company is fortunate that it does not have any applications for supplemental type certificate projects that could be delayed because of the shutdown. But the repair station is “concerned and expect we will likely see limitations on modification field approvals, export certificates, special flight permits, etc.”, Gallop says.

It is still possible to complete aircraft modifications without FAA inspectors available, but the process becomes more challenging, Gallop explains. Yingling Aviation would have to hire an FAA designated engineering representative or airworthiness representative, but they are expensive and difficult to schedule even when there isn’t a government shutdown, he says.

The General Aviation Manufacturers Association (GAMA) sounded a similar warning in a statement released on 1 October. “The lifeblood of general aviation manufacturers is their ability to bring new safety-enhancing products to market,” GAMA says. “The government shutdown will interrupt the flow of innovation, as the hundreds of FAA engineers who oversee and certify general aviation products will be sent home.”

Another problem raised by the government shutdown involves flight permits that allow manufacturers and operators to ferry aircraft to repair stations. The FAA is unable to issue the special flight permits during the shutdown. “Hopefully, the FAA will not be shut down for an extended period of time,” Gallop says. “The ensuing back-up could be terrible!”

Indeed, JetBlue is unable to take delivery of an Airbus A321 on the ramp in Hamburg, Germany, because the FAA office in Oklahoma City is closed until the government re-opens.

US aircraft manufacturers of all sizes wasted no time criticising the legislative deadlock over the Fiscal 2014 appropriations bill. Sikorsky, for example, has slowed production of the UH-60 Black Hawk because US government inspectors were furloughed due to the shutdown, says United Technologies chief financial officer Gregory Hayes, speaking to a group of market analysts on 1 October.

Hayes calls the production slow-down a “bump in the road” so far, but a prolonged shutdown could put a dent in Sikorsky’s revenues this year. “We’re not going to know much until we get this Washington mess sorted out, in terms of what the fourth quarter looks like,” Hayes says.

The inspectors were among 800,000 civilian employees furloughed by the US government on 1 October. The shutdown will continue until Congress can pass an appropriations bill or a stopgap measured called a “continuing resolution”. Republicans in the House of Representatives want to delay or repeal a law reforming the US health insurance system. The Democratic-controlled Senate and President Barack Obama will not consider any budget proposals that delay or de-fund the reform initiatives called for under the Afforable Care Act.