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ValuJet shut down indefinitely FAA cites airline's 'serious deficiencies' in operations; 'Multiple shortcomings' found; Outside contracts hinder ability to assign and direct repairs


WASHINGTON -- The Federal Aviation Administration shut down ValuJet indefinitely last night, saying an intense evaluation begun after one of the airline's planes crashed in the Everglades on May 11 had turned up "serious deficiencies" in its operations.

David R. Hinson, the FAA's administrator, said at a brief news conference that ValuJet had failed to establish the "airworthiness" of some of its aircraft and that "multiple shortcomings" had been found in its supervision of maintenance contractors.

ValuJet, a young and rapidly growing airline based in Atlanta, differs from most other carriers by contracting out nearly all maintenance work to outside companies. The airline "has not demonstrated that it has an effective maintenance control system" to oversee this outside work, Hinson said.

In a written statement, Hinson said that this "would impede ValuJet's ability to assign and direct repairs." That statement seems to suggest that ValuJet bears prime responsibility for the crash, which occurred after a maintenance company, Sabretech, delivered to the airline mismarked, dangerous devices that Sabretech had removed from ValuJet planes being renovated. A ValuJet employee in Miami then put the devices, called oxygen generators, into the ill-fated plane's cargo hold, where they apparently caused a fire shortly after the jetliner, a DC-9, had departed for Atlanta. ValuJet has been blaming Sabretech.

The grounding was to take effect at midnight, Eastern daylight time. ValuJet made no immediate statement about what people who have already paid for its flights should do.

A ValuJet spokesman, James V. O'Donnell, said after the announcement that the company was still formulating a response. But he also said: "There's no question that ValuJet will return, and in fact the airline has already begun work on its return-to-service plan."

In order to resume operations, ValuJet must resolve, to the FAA's satisfaction, all the shortcomings cited yesterday. O'Donnell said did not know how long that would take.

The grounding was a sharp turnaround for government regulators. Immediately after the crash, which killed all 110 people aboard, Transportation Secretary Federico F. Pena went on television to assure the public that the airline was safe, although it had been under special scrutiny for months.

Asked why yesterday's action was not taken sooner, Hinson said that the FAA had been concerned about ValuJet long before the crash, because of a series of less dramatic incidents, and had begun a stepped-up inspection last October. But at the completion of that inspection, he said, "the airline was deemed to be safe."

"That decision was based upon the evidence that existed at that time," he said. But in an even more intensive 30-day inspection, ++ begun after the crash, "we have turned up a number of issues that caused us to take the action today," he said.

Possible role in crash

Investigators say that they have found evidence that poor coordination between ValuJet and Sabretech may have played a role in the crash.

The National Transportation Safety Board is still weeks away from formally establishing the cause, but investigators say old oxygen generators from two or three other ValuJet planes were improperly put in the DC-9's forward cargo hold, where they apparently activated and set fire to aircraft tires that were also in the hold. The co-pilot of the plane reported dense smoke in the cockpit just before the crash.

Hinson said yesterday evening that ValuJet had agreed to the shutdown, but as a practical matter the airline had little choice; if it had resisted, the FAA could simply have grounded it anyway.

Since shortly after the crash, the airline had grounded half its fleet of 51 planes to allow for enhanced scrutiny by federal inspectors, and had cut its schedule in half. That decision probably saved it money, because the planes, formerly flying about two-thirds full, have been only about half full lately, even with only half as many flights.

ValuJet will fly again

O'Donnell said that while the airline, with its "critter" painted on the fuselage, a cartoon-like airplane smiling and bending its wings, would certainly fly again, "at this moment we cannot tell you exactly when or with how many planes."

The FAA sometimes shuts down airlines, especially small ones, for shortcomings, but does not usually do so in response to crashes.

John Pincavage, an airline industry analyst at Dillon Read, said he believed that ValuJet would survive the FAA shutdown. Other airlines such as Kiwi and Nations Air, both much smaller carriers, have survived similar disruptions in service, he said. He estimated that ValuJet has cash reserves of more than $200 million. He said that many travelers will probably believe that ValuJet is the safest airline flying when it returns to service, and will start buying its low-fare tickets again.

"I think the odds favor the company coming back," Pincavage said.

The airline faces other problems. The FBI in Miami has begun investigating whether any laws were broken in the crash.

Even if there are no criminal charges, the FAA could require the airline to make major changes, some of which could raise its costs and change its basic operating philosophy, which has been to buy a grab-bag of used planes as cheaply as possible, and contract out much of the maintenance and other work that is usually done internally by an airline.

Since the crash, the FAA and the company have been discussing a variety of steps that could improve safety, including reducing the number of kinds of airplanes that ValuJet flies and the number of contractors it uses.

ValuJet is not the only airline to assemble a second-hand fleet; Northwest Airlines did the same, with the same airplane, the DC-9, but unlike Northwest, ValuJet did not modify its cockpits to make them all alike, so that pilots could move effortlessly from one to another.

Differences in the planes, in fact, may be found to be a cause of the accident in an indirect way. The DC-9 delivers oxygen to the passengers' emergency masks from centralized oxygen bottles, but the MD-80 uses oxygen generators, which are small chemical reactors.

Sabretech had removed the oxygen generators from ValuJet MD-80s it was renovating, because their shelf life had expired, and sent them back to ValuJet in cardboard boxes. If Sabretech or ValuJet had been more familiar with the parts in question, Sabretech workers might not have sent them back across Miami International Airport to ValuJet, and a ValuJet ramp employee might not have put them on the plane, apparently dooming it.

ValuJet had been using six contractors for major maintenance. It has since dropped Sabretech and has been discussing reducing its major contractors to two. It has been negotiating with Air Canada to be one of those, but has not reached any agreements.

McDonnell Douglas hurt?

One potential victim of the shutdown is the McDonnell Douglas Corp., whose commercial airline operations already had been facing difficulties. ValuJet placed a large order with McDonnell Douglas in October for 50 of its new MD-95 commercial jetliners, which seat 100 passengers and which have had difficulty winning enough orders to justify full-scale production.

ValuJet had agreed to purchase the 50 jets for about $1 billion, and it acquired an option to purchase 50 more. At the time, the order had been seen as a coup for McDonnell Douglas, which had developed the plane as a replacement for its old DC-9.

Pub Date: 6/18/96

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