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Audit questions FAA’s oversight of domestic airline code share agreements
20 February 2013

The U.S. Department of Transportation’s Office of Inspector General found that the FAA does not have specific procedures to actively ensure an equivalent level of safety between U.S. mainline air carriers and their code share partners. 

This conclusion was draw following an audit on FAA’s oversight of code share programs, initiated in August 2010. The audit was carried out because the number of code share agreements—in which a mainline air carrier contracts with a smaller regional carrier to provide flights to its hub airports—has grown rapidly in recent years, raising questions about both the oversight and consumer awareness of these agreements.

The Inspector General found that the Office of the Secretary’s (OST) and FAA are not required to review most domestic code share agreements. While OST is required to assess the potential economic impacts of certain agreements, the number of agreements that fall under the criteria for review is limited. It was also found that some confusion still exists for consumers about which airline is operating their flight because carriers, travel agencies, and advertisers all disclose this information differently. Finally, as a safety regulator, FAA is not required to review any domestic code share agreements and does not voluntarily do so. FAA also does not have specific procedures to actively ensure an equivalent level of safety between mainline air carriers and their code share partners. Instead, the Agency relies on its oversight of individual carriers to ensure the safe operation of passenger flights.

Five recommendations were made to enhance OST and FAA monitoring of domestic code share relationships and to increase code share transparency for consumers. Two of these pertained to safety:
– Publish best practices guidance for safety-sharing practices among Part 121 air carriers and their code-share partners.
The FAA replied that it saw value in many of the safety best practices adopted by certain airlines, such as the Aviation Safety Action Program (ASAP) and Flight Operations Quality Assurance (FOQA). The FAA does not consider publishing best practices guidance for safety-sharing between codeshare partners to be the most effective way to further improve safety. Each air carrier must address the safety risks it identifies in its own operation, which may not be the same as those identified in another air carrier’s operation. Instead, the FAA intends to require each Part 121 air
carrier to implement a safety management system (SMS).

– Review code-share agreement performance metrics, such as financial incentives for on-time performance, to ensure they do not have unanticipated or adverse impacts on safety.
The FAA replied that it conducts risk-based surveillance based on diverse and extensive information sources to evaluate an air carrier’s ability to balance resources and operational requirements. The FAA considers its surveillance of business process risks to be sufficiently comprehensive to address the aspects
that would be touched by the recommended action.

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