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Emery Airlines Halts Operation

Aired August 13, 2001 - 12:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: Noon was the deadline for Emery World Airlines. That's the deadline it had been given to park its planes or else. Emery is one of the nation's major cargo airlines. It's come under fire recently about the way that it maintains its planes and federal investigators are looking into two recent crashes that may have been maintenance related. Emery has regional hubs in eight cities across the country, from Dayton to Dallas, Los Angeles to Orlando.

With the very latest from Washington, let's check in with our Patty Davis -- Patty, hello.

PATTY DAVIS, CNN CORRESPONDENT: Hi, Daryn.

Well, the company that owns Emery World Airlines says that it has suspended operations as part of a temporary and interim agreement with the Federal Aviation Administration and this is a drastic step that this company would take. It said it only did so because the FAA would have done it on its own had it not gone and suspended operations. The last time the FAA did step in in a situation was ValuJet in 1996.

Now, the FAA says that Emery has been under heightened surveillance since January of 2000 for its maintenance practices. Sources tell CNN the most recent inspection in May and June showed that maintenance wasn't getting any better so the FAA was moving ahead, along with this step, as of 12:00 noon today, as you said, would have gone ahead and shut that airline down.

Now, aviation sources tell CNN that the FAA found aircraft flying out of compliance with federal regulations, inadequate record keeping, inadequate repairs, unapproved installation of parts. The company, CNF, which owns Emery Worldwide, says that it is shocked by all of this, totally taken by surprise by the FAA moving ahead with this. It is totally unwarranted. The company says it stands by its maintenance practices, which, by the way, it does most on its own. It's the heavy maintenance that it does subcontract out.

Now, Emery has also said in a statement that it expects it will have to furlough up to 800 airline pilots, crew members and other personnel because of this interim agreement with the FAA. But it certainly does hope that it will be able to iron out this problem and be back in the air soon.

As far as customers are concerned, since this carrier, this cargo carrier mostly handles heavy freight, it will be business customers, if anybody, impacted. But Emery says that, in fact, it has contracted out with other carriers to take care of its freight and will be operating on a normal schedule this evening -- Daryn.

KAGAN: Hard to believe, but the company insisting that if, indeed, you did send your stuff through Emery that it's still going to get there on the same schedule had this not happened.

DAVIS: Yes, it absolutely says that.

KAGAN: All right, Patty Davis in Washington, thank you -- Leon.

LEON HARRIS, CNN ANCHOR: Well, it's almost unheard of for the FAA to ground an airline or threaten to do so. For more on today's action, let's turn now to an expert. Aviation specialist Michael Goldfarb is a former FAA chief of staff. He joins us this afternoon here from our Washington bureau. Good to see you again. How are you?

MICHAEL GOLDFARB, FORMER FAA CHIEF OF STAFF: Fine, Leon. How are you?

HARRIS: I'm OK. This is very interesting to see the FAA step in at this particular time. What do you think was the critical mass that built up to make it do this?

GOLDFARB: Well, I think the series of violations -- you know, when we talk about maintaining planes, we have to put in perspective that Emery flies very old aircraft. So they have a special obligation to make sure that those 28 DC8s, I believe they have, and some DC10s, are really properly maintained. For the FAA, Leon, to take this kind of action, there's a loss of total confidence in the systems Emery has in place to ensure the safety of their aircraft.

HARRIS: Now, what I find interesting here is that Emery said that they knew that they had been under some heightened scrutiny by the FAA for some...

GOLDFARB: Yes.

HARRIS: ... a long time.

GOLDFARB: But see, that even makes the situation worse because normally when airlines are under increased scrutiny by the agency, they step up to the plate and put in place the extra precautions.

HARRIS: Yes.

GOLDFARB: We're not seeing that here now and also the parent company saying they're totally surprised by it and stand behind good maintenance, this doesn't spell a good going forward position for the airline in terms of convincing the FAA that those planes should take off again.

HARRIS: Now, it sounds as though there may be a third party dragged into this, as well, another company that's actually doing the maintenance for Emery? GOLDFARB: Yes. And Leon, you remember during the ValuJet crash that they had contracted out their heavy maintenance which is, in fact, when planes come in for major overhauls, to a third party. But those third party providers have the same obligation as if Emery did it in-house and Emery has the responsibility of providing that oversight. If the federal regulators aren't convinced of that, they're going to ground them.

HARRIS: Is there some sort of a time limit that the FAA would impose now for Emery to either get everything or get their maintenance program up to snuff by a certain period or is it just an indefinite now?

GOLDFARB: Well, it can be as indefinite as the government chooses to make it and in this case with the number of citations, the concerns of the pilots, the two crashes, the NTSB looking at those as well, one, we want a better attitude from Emery, quite frankly, to want to comply, and two -- not to have a fight over whether or not they are in compliance -- and two, the FAA is going to have to look very carefully at the primary and the secondary maintenance of all those planes.

HARRIS: That was quite a move today.

Matthew Goldfarb, thanks much for coming in. Good to see you again.

GOLDFARB: Good to see you.

HARRIS: Take care.