Teething EASA confronts budget woes

Farnborough Air Show » 2006
November 27, 2006, 5:29 AM

The almost three-year-old European Aviation Safety Agency (EASA) wants to keep on a fast growth curve, despite its acknowledged teething problems. The main problem–funding–is being addressed through a major increase in certification fees. Over the next two years, the agency is preparing to extend its responsibilities to cover aircraft operations, flight crew licensing and eventually activities such as airports.

“We are still very young. Expectations from the industry are very high, maybe too high,” executive director Patrick Goudou said earlier this month during a July 7 visit organized by the French association of aerospace journalists (AJPAE) to EASA’s headquarters in Cologne, Germany. In the short period of time since its inception in September 2003, the agency has recruited more than 250 people and started creating an “EASA culture.” Part of this culture involves turning technical experts into managers, Goudou asserted. Most of them come from existing national aviation authorities (NAAs).

Last year, EASA fell short of recouping the €45 million ($56 million) cost of its certification work. European law calls for this activity to be financially self-sufficient, which is supposed to be covered by certification fees paid by manufacturers. The fees have been levied since June 1, 2005, but they have proved to be far too low.

“Setting up a certification fee scheme is very difficult,” explained Goudou. “We simply did not have enough information to work out the fees properly. When I say ‘we,’ I mean the agency and the industry.”

As a result, the European Commission last year approved a subsidy to cover 53 percent of the certification costs. This year the percentage will be roughly 35 percent. To have the certification activity break even eventually, most fees have increased significantly this spring. For example, the holder of a type certificate for a fixed-wing aircraft has had to cope with a fourfold increase. For an airframe weighing over 50 metric tons, the fee is now €480,000 ($600,000) a year to ensure continued airworthiness.

At the same time, some fees were left unchanged or even decreased. A spokesman explained that the agency has launched a process to completely revise the fees and charges regulation, adding that it is likely to result in further increases.

Meanwhile, the aerospace industry is lobbying to change the law that calls for it to pay for certification costs. If this campaign is successful, the European Commission will have to come up with another way to fund EASA. While the UK has always charged industry for aircraft certification, most other European states have absorbed these costs directly.

Some in the industry have voiced concerns about the way the 26-member EASA management board works. In addition to one representative per member state in the European Union, one person has a seat on behalf of the European Commission.

The board’s main job is to approve work programs and budgets. In May, Goudou said he wanted the board to be supported by a group of six to eight special advisors. They would be experts in the fields of safety, law and finance and would be appointed irrespective of their nationalities.

Soft Approach to Certification

In the agency’s structure, the certification division is by far the largest, with 200 people. There is a major difference between the certification specifications (CS) it releases and the joint airworthiness requirements (JARs) that the Joint Aviation Authorities (JAA) used to issue. The CSs are “soft laws” because they directly apply in every member state but only describe the acceptable means of compliance with a safety requirement rather than providing hard, detailed rules.

In other words, manufacturers can offer equivalent means of compliance. It is possible for them to convince the EASA that new equipment, for instance, meets a CS. Obtaining an exemption to a JAR was virtually impossible to achieve since these were firm technical requirements. “The new system is more compatible with innovation,” Alain Leroy, head of the EASA product certification department, emphasized. He made no secret that his division’s benchmark is its counterpart at the U.S. Federal Aviation Administration (FAA).

The agency’s other activities are funded by European Union taxpayers, such as rulemaking, standardization and safety analysis.

“So far, funding has been sufficient for these activities,” Goudou clarified. The agency’s total budget is €66.5 million ($83 million) this year. Out of this amount, €26 million ($32 million) is used to pay for subcontracted activities, such as some certification work by the NAAs. Next year, the total budget will increase to €71 million ($89 million).

The 2007 work program for the rulemaking directorate is to be approved this month. The safety standard consultation committee, which involves airframers and pilot unions–among others–helps with setting these annual priorities, Yves Morier, head of the product safety department, explained. Another advisory group is that of the NAAs. The rulemaking directorate employs 25 persons.

Standardization is the task that is supposed to ensure uniform implementation of the European law. For example, some of the 10 member states that entered the European Union in 2004 have not yet reached their western counterparts’ standards. “One of our roles is to inspect them and report to the European Commission,” Goudou explained. EASA works with these countries to help them improve. Goudou insisted the ultimate sanction possible, the infringement procedure, has never been used.

Safety analysis involves gathering incident and accident data. They notably are collected from accident probe organizations such as the UK’s Air Accidents Investigation Branch (AAIB). “We study their recommendations and look at what we can do with them,” Goudou said.

This fall, EASA will issue its first annual report on air safety in Europe. “It will only be a prototype,” Goudou emphasized, again trying to avoid excessively high expectations in the industry.

In spite of the agency’s teething problems, EASA executives are adamant the scope of the agency should be extended swiftly, as planned. Technically, next January EASA will take over operations (OPS) and flight crew licensing (FCL). The JAA still performs rulemaking and standardization for both of them and it will take until early 2008 for the relevant European law to be passed confirming this transition. “For OPS and FCL, we will add a total 30 persons,” Goudou said.

Airport safety is expected to fall into the EASA’s remit in 2008. Then, air traffic management (again, rulemaking and standardization) in 2009 or 2010. To be mulled by the commission and the European Parliament is whether to add third-country operator oversight, the equivalent of the FAA’s Part 129 regulation. Discussions also are going on to decide whether EASA will be involved when aviation is included in the carbon dioxide European trading scheme.

The agency occupies four floors in a 28-story building. Up until now, local authorities have paid the rent (as an incentive to have the EASA headquartered in Cologne) but, starting next year, the agency will have to pay for it. Moreover, the agency will soon require more space, a spokesman said. By year-end, workforce will reach 300.

Can the EASA hire enough people to handle its growing responsibilities? “We have no margin in our workforce but there is no red alert,” Goudou answered. EASA executives carefully and continuously look at the human resources available in the industry. “We will soon start hiring young graduates,” the executive director added.

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