WASHINGTON, D.C., March 18, 2010 – Legislation pending on Capitol Hill threatens the United States’ $2.4 billion positive balance of trade in the aviation maintenance services market, a leading aviation industry group told the International Trade Commission (ITC) today.
Testifying at an ITC hearing on export activities by small and medium-size companies, Christian A. Klein, executive vice president of the Aeronautical Repair Station Association (ARSA), warned that Federal Aviation Administration (FAA) reauthorization legislation passed by the House of Representatives and being debated by the Senate would lead to the collapse of international agreements that allow U.S. aviation companies to serve foreign customers.
Citing the results of a recent economic study by AeroStrategy, Klein told commissioners that the small business-dominated U.S. aviation maintenance industry employs 274,000 people, contributes $39 billion to the U.S. economy, and has a $2.4 billion positive balance of trade. However, ill-conceived provisions in the FAA bills imposing new oversight, drug and alcohol testing mandates, and limitations on foreign repair stations licensed by the FAA would lead to retaliation by trading partners.
Klein pointed in particular to the likely collapse of the recently-concluded bilateral aviation safety agreement (BASA) between the United States and the European Union (EU). European officials have said they will withdraw from the BASA if the FAA bill passed by the House becomes law. “If the U.S. BASA with Europe collapses, the annual cost for the average U.S. repair station to maintain approval from the European Aviation Safety Agency would rise from $960 to $37,500, an increase of approximately 3900 percent,” Klein said.
Klein also stated that the House and Senate FAA bills ignore a long-standing agreement between the United States and Canada. “The bills will prevent Canadian approved maintenance organizations (AMOs) from performing maintenance on U.S. air carrier aircraft and dramatically impact cross-border relationships with our largest trading partner,” Klein said. “Many Canadian AMOs are actually subsidiaries of U.S. companies, meaning the economic repercussions of the legislation will be felt on both sides of the border.”
Klein warned commissioners that there is more at stake in the FAA debate than the economic health of the U.S. aviation maintenance industry. “If the FAA legislation passed by the House becomes law, it will become more difficult (and, in some cases impossible) for foreign repair stations to serve U.S. air carriers. This will increase costs for U.S. airlines operating overseas and put them at a disadvantage against foreign competitors. Ultimately, this will have consequences for the entire U.S. aerospace industry and our whole economy,” Klein said.
The full text of Christian Klein’s statement to the ITC is available here.
The full AeroStrategy economic study is available here.
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ARSA is an Alexandria, Virginia-based trade association the represents aviation maintenance and manufacturing companies. The association has a distinguished 25-year record of advocating for repair stations and providing regulatory compliance assistance to the industry.
