Establishment and remit of EASA

BACKGROUND

27. The European Aviation Safety Agency (EASA) was set up in 2003 as an independent EU body under European law. It is based in Cologne and employs 300 professional staff from all Member States. It was established to succeed the Joint Aviation Authorities (JAA), a voluntary body representing the civil aviation authorities of a number of European states, with the objective of co-ordinating safety regulation across Europe. EASA's budget and work programme is adopted by its Management Board, which is made up of representatives from the 25 EU Member States and the European Commission. EASA states that its mission is "to promote the highest common standards of safety and environmental protection in civil aviation."[39] Box 3 lists its current tasks. Box 3:  Current tasks of EASA

Drafting safety legislation and providing technical advice to the European Commission and to the Member States; Inspections, training and standardisation programmes to ensure uniform implementation of European aviation safety legislation in all Member States; Safety and environmental type-certification of aircraft, engines and parts; Approval and oversight of aircraft design organisations world-wide and of production and maintenance organisations outside the EU; and Data collection, analysis and research to improve aviation safety.

European Aviation Safety Agency website, http://www.easa.eu.int

28. While national authorities continue to carry out the majority of operational tasks—such as certification of individual aircraft or licensing of pilots—EASA has responsibility for developing common safety and environmental rules at the European level. It is tasked with monitoring the implementation of standards through inspections in Member States and providing technical expertise, training and research. EASA is also responsible for the certification of specific models of aircraft, engines or parts approved for operation in the EU. Work is underway to extend the scope of EASA's regulatory activity. By 2008, EASA expects to assume responsibility for the regulation of pilot licensing, air operations and third country aircraft, as well as the safety regulation of airport operations and air traffic control services.[40]

CONTINUING ROLE OF THE CAA

29. The CAA acts as a "competent authority" in relation to the UK in those areas where EASA has taken over competencies from it, and is charged with implementation of European rules in the UK.[41] Since EASA assumed its current set of responsibilities in September 2003, it has needed to use the CAA and other national authorities to carry out many certification responsibilities on its behalf while it has been building up its own staff. These activities are currently carried out on a contract basis, whereby EASA pays the CAA for its services and charges the industry directly, in line with Commission regulations on EASA fees and charges. The Department for Transport told us that these contractual arrangements are intended to be transitional, but that the final extent and timing of internalisation of all the activities in EASA is subject to detailed discussion between EASA and Member States.[42]

PRINCIPLE OF EASA

30. We heard support for the principle of the creation of a body for co-ordinating safety regulation across Europe from a number of witnesses. Dr Mark Thatcher from the London School of Economics told us that, although there had been very few European regulators, there had been a general move towards networks of national regulators co-ordinated more or less formally by the European Commission. He believed that these networks allowed regulators to learn from each other and encouraged the development of Europe-wide firms and increasing efficiency.[43] Dr Graham Braithwaite of Cranfield University felt that the launch of EASA provided "opportunities for establishing and maintaining high and harmonised standards for civil aviation safety across the European Union".[44] Captain Mervyn Granshaw of the British Air Line Pilots Association argued that the establishment of EASA could help remove the inefficiencies associated with having to establish, conform to and test against, different safety regulations in each individual European country.[45] Sir Roy McNulty agreed that the establishment of EASA was a positive step in principle.[46]

31. Prospect commented, however, that the transfer of competencies to EASA could lead to a shift towards the lowest common denominator and therefore the dilution of the CAA's high standards of aviation safety, unless the remit of EASA was to support the high standards established by the CAA in the UK.[47] EASA made clear to us that it believed that the CAA was one of the most efficient and competent aviation safety authorities in the world, and it said that it had been its aim from the outset to co-operate with the CAA and draw upon its experience and expertise.[48]

32. We are emphatically opposed to any diminution in safety standards in the UK in the name of harmonisation. We are favourably disposed to the principle of European co-operation to create joint safety standards and enforcement only if it genuinely assists all European Union countries in matching the highest aviation safety standards.

Current effectiveness of EASA

OPERATIONAL PROBLEMS FACED BY EASA

33. Despite supporting the principle of EASA, Sir Roy McNulty told us that it was not yet "fit for purpose".[49] He said that the CAA was disappointed with the way things had started, and argued that the establishment of EASA—whereby it acquired significant responsibilities in September 2003 despite having only a handful of staff—had not been well handled. He explained that EASA had brought into the certification and approval system a range of additional bureaucratic steps which meant that the improvement of safety regulations across Europe had been slowed as compared to the system operated under the Joint Aviation Authorities, and that operations which had been completed by the CAA in days sometimes took EASA months, thereby imposing significant problems on industry. Sir Roy suggested that EASA's staffing, management and planning difficulties had been exacerbated by its significant budgetary problems. He told us that EASA's budget for 2006 included a "big income shortfall" and that EASA was proceeding with a budget due to run out of money "in three or four months' time" (i.e. May 2006).[50]

34. Sir Roy told us that the transfer of responsibilities from national aviation authorities to EASA had not, as yet, created any safety issues and was unlikely to do so in the short term, but he warned that if EASA were allowed to continue along its current course, safety problems would ensue somewhere, "some way down the road".[51] He argued that:

"If you have slowed down your rule-making, if you are causing companies problems in getting modest, technical changes processed, if you have not put in place the standardisation and audit of all the regulatory regimes within the European Union, you are asking for trouble some day."[52]

35. Other witnesses supported the evidence we received from Sir Roy. Captain Mervyn Granshaw of the British Air Line Pilots Association said that EASA was badly led and argued that it lacked the "conscience" of the CAA—a sense of responsibility and accountability—and that it was content to simply follow the narrow definitions of its duties.[53] John Eagles of the Association of Licensed Aircraft Engineers (ALAE) argued that EASA's inadequacies were compounded by the fact that the top four levels of its management were made up of managers with no background in aviation.[54] The ALAE argued that EASA's lack of enforcement powers made it impotent in the face of "serious safety issues" in Cyprus, and therefore had implications for safety in the UK given that all authorisations and licenses must be recognised across EASA member states.[55] The Minister told us that the Government shared the CAA's concerns about EASA and the fact that there had been a number of problems in governance and funding.[56]

36. It is with dismay that we have learnt of the chaotic state of the European Aviation Safety Agency (EASA), which at this time is not able to fulfil its declared purpose. EASA is an accident waiting to happen—if its problems are left unchecked, we believe it has the potential to put aviation safety in the UK and the rest of Europe at risk at some point in the future.

POTENTIAL IMPACT ON SAFETY IN THE UK

37. Dr Graham Braithwaite argued that the transition of competencies from the CAA to EASA provided a significant challenge to the integrity of aviation safety within the UK. He claimed that recruitment, training and development of working relationships all had the potential to distract EASA from its key tasks, and that the UK therefore needed to be vigilant during the transition period to ensure that the "hard-won mantle of safety" was not lost.[57] Dr Braithwaite argued that, given the problems faced by EASA, it was important that the CAA did not scale down its operations in anticipation of EASA, but only did so when EASA had full capability in place.[58]

38. The Minister assured us that the Government would not commit the UK to any further transfers of power to EASA until it was fit for purpose.[59] The United Kingdom cannot and must not transfer any further powers from the CAA to EASA until the Government is assured that the serious problems of governance, management and resources at EASA have been resolved. We welcome the Minister's assurances on this.

SAFETY RESEARCH

39. Prospect told us that the CAA was reducing its safety research budget in anticipation of this function being transferred to EASA, but that EASA had not yet announced any research budget or strategy. Prospect was unhappy with this situation, arguing that the ability to undertake research into emerging aviation technologies as well as investigating innovative approaches to safety management systems was an essential capability of the CAA's Safety Regulation Group.[60]

40. The CAA confirmed that it had been reducing its safety research expenditure in recent years and that further reductions were planned, with expenditure projected to fall from £1.7 million in 2002/03 to £0.8 million in 2010/11.[61] Although the CAA was very disappointed that EASA had not yet undertaken research in the areas for which it is now responsible, Sir Roy McNulty suggested that the CAA had little choice but to scale down its research function because failure to do so would have led to complaints from those within the industry that ultimately paid for the research.[62] This argument was implicitly supported by British Airways, which told us that, since research was the responsibility of the Secretary of State under the Civil Aviation Act, the CAA should be "obliged to secure consent before undertaking such extra-statutory work from whoever will pay for the work."[63]

41. The Department for Transport told us that the CAA invested in safety research in order to increase the effectiveness of the Safety Regulation Group's regulations and regulatory processes in delivering safety improvements, including the provision of 'best practice' advice to UK industry. The Department argued that research resources were therefore best committed to areas in which the CAA had competence and could deliver the outcome of the research.[64] The Director of the Aviation Directorate within the Department, David McMillan, said that he was unaware of the issue surrounding the running down of the CAA's safety research until it was raised as part of our inquiry, and that the Department had not given any instructions to the CAA to resume the research it had curtailed because the Government considered safety research to be a matter for the Safety Regulation Group to decide in consultation with its stakeholders.[65]

42. The Department explained that EASA was beginning to develop a "European Safety Strategy Initiative" which would, in due course, lead to the funding and co-ordination of research projects.[66] The Department said that, through its representative on the EASA Management Board, the Government would monitor closely the development of EASA's research activities.[67] Mr McMillan also told us that a transition working group led by the UK member of the EASA Management Board had been set up to ensure that no other operations were wound up by national aviation authorities until EASA had the capability to take over the necessary responsibilities.[68]

43. We understand that the CAA's decision to reduce its safety research expenditure prior to EASA establishing a fully operational research group was made in keeping with its duty to keep its costs in check. However, we are concerned that the operational difficulties within EASA mean that a knowledge gap is developing which has the potential to undermine safety innovation in the aviation industry. We recommend that the Government make representations to the European Commission to ensure that action is taken to remedy this gap. The CAA must resume the research it has so far curtailed. Going forward, there should be no further closure of CAA departments and functions before the Government is absolutely satisfied that the comparable departments and functions at EASA are fully operational.

RESOLVING THE OPERATIONAL PROBLEMS FACED BY EASA

44. Sir Roy told us that the CAA had been in dialogue with the Department for Transport, the European Commission and EASA regarding the operational problems faced by EASA. He explained that the CAA was monitoring the implications and effects in the UK and that, if safety were compromised in any way by the actions of EASA, the CAA would take immediate action to resolve the issue by itself. He did not believe the problems faced by EASA were insoluble, but remarked that solving them would require proper management, governance and planning. Sir Roy explained that the CAA alone had little influence over EASA and that it was instead through representation on the EASA Management Board that the UK had the best opportunity to encourage improvement. Among the EU Member States, there were perhaps five to ten countries sharing the UK's reservations about the competence of EASA. Although many Member States, particularly the Accession States, did not have the size of aviation industry or the regulatory experience of the UK, there was an "emerging coalition of view" that there were some serious problems which needed to be addressed.[69]

45. The Minister told us that the UK was taking a leading role in pushing a number of practical changes to improve the situation, focusing in particular on EASA's governance and manpower.[70] The Department explained that the UK member of the EASA Management Board was asked in February 2005 to convene a small group of high-level technical experts to review the manpower planning strategy of EASA, and that the Management Board subsequently accepted the recommendations of the group, published in June 2005. The Department also informed us of UK-sponsored initiatives in relation to the effectiveness of EASA's Management Board meetings, the management and financial procedures of EASA and its distribution of airworthiness directives. It noted, however, that not all of the recommendations of these initiatives were accepted by EASA, while others were not implemented fully.[71]

46. The Department also provided us with details of a meeting on 9 February 2006 between the Chairman of the CAA, the Director of Aviation in the Department, the UK member of EASA's Management Board, the Director of Aviation in the Transport and Energy Directorate of the European Commission and the Commission member of EASA's Management Board, to discuss the UK's concerns about EASA. At this meeting, the UK delegation outlined a number of areas in which it considered improvements were needed, and the Commission confirmed that it took EASA's difficulties very seriously and recognised the urgency required in addressing them. The Department said that there was agreement between the UK and the Commission, and that the key to improvement lay in strengthening partnerships between EASA and the national aviation authorities and in ensuring that EASA was able to draw on as wide a range of specialist assistance and support as possible. The Department explained that the UK delegation presented some initial ideas on how to strengthen co-operation and partnerships between EASA and national aviation authorities, and that the Commission had welcomed the proposals and undertaken to study them further.[72]

47. The CAA told us that, although it was difficult to predict how long it would take to resolve all of the issues with EASA, experience with other organisations in difficulty suggested that it should be possible to make EASA fully functional within about two years from the start of a comprehensive turnaround programme such as the one proposed by the UK delegation.[73] More recently, the CAA provided us with an update of developments at EASA. It noted a number of improvements in both the internal structure of EASA and the quality of service it provided. The CAA concluded that the "despair" it had felt about the state of EASA in January, had been replaced by cautious optimism:

"There is now more strategic thinking, and more flexibility, at the top of the Agency, and anecdotal evidence, from UK industry and also from ex-CAA staff working in Cologne, confirms that the Agency is beginning to stabilise […] The Agency has advanced in terms of recognising that there are problems, and by setting in motion remedial action—but as yet it is all very much work in progress which now needs to be effectively managed to a successful conclusion, and the pace of improvement needs to quicken further."[74]

48. We welcome the representations made by the UK to EASA's Management Board and to the European Commission about the Agency's present ineffectiveness, and we are encouraged to note that the CAA has observed some improvement in the situation over the year. It is clear that there is much still to be done, however. We recommend that the Government continue to make the strongest possible representations in order to ensure that urgent and decisive action is taken to make EASA fit for purpose within no more than two years.

Transfer of responsibilities to EASA

49. Some witnesses argued that the confusion surrounding the transfer of competencies to EASA had resulted in a number of inefficiencies. The Society of British Aerospace Companies (SBAC) told us for instance that an apparent lack of clarity about the division of responsibility between EASA and the CAA had led to the process of certification becoming more time consuming since operations were taken over by EASA.[75] The CAA accepted that the removal of the flexibility enjoyed by the CAA prior to the establishment of the contractual arrangements with EASA had led to a "limited duplication of effort".[76] It acknowledged in its Corporate Plan 2005/06 that it had been "particularly difficult" to forecast staff numbers for the period covered by the plan because the full implications of EASA were not known.[77]

50. The Airport Operators Association (AOA) was concerned about what it saw as an inadequate level of transparency in connection with the transfer of responsibilities from the CAA to EASA. The AOA questioned whether the reduction in the CAA's role, resourcing or costs had so far been commensurate with the functions already transferred to EASA. It called for the CAA to demonstrate to those it regulated that there had been no drift towards double regulation and double costs.[78] The CAA responded that such a demonstration was not readily available, but could be provided to anyone who asked for it. Michael Bell, Director of the Safety Regulation Group, explained that the CAA's website detailed the "existing standard" and that this would have to be compared to the standard that was in existence pre-EASA.[79]

51. The CAA said that it aimed to have regular meetings with the industry and the Department for Transport to brief them on progress in the transfer of tasks. It pointed out that the Joint Review Team initiative and the consultation on the Safety Regulation Group's fees and charges had covered in detail the impact of EASA on costs, and that the joint industry/CAA Safety Regulation Finance Advisory Committee was briefed fully on the steps taken to reduce the CAA's costs as work was transferred to EASA. It argued, however, that the CAA and the Department could only brief industry on progress based on what was known. It said that industry had justifiably found it difficult to understand a transition in which much of the work to implement functions taken over by EASA from national aviation authorities had been sub-contracted back to those authorities because of EASA's lack of resources.[80]

52. We understand that the ability of the CAA and the Government to relate information to industry regarding the transfer of responsibilities to EASA has been hampered by the delays and uncertainties experienced by EASA itself. We acknowledge that the Safety Regulation Financial Advisory Committee has provided one means of keeping industry informed of progress. We are concerned that many organisations remain uncertain about what is happening and how the transfer is being handled. We therefore recommend that the CAA make this information more readily available via its website, with a clear description of powers already transferred and those that will follow, along with details of the impact on the CAA's costs and charges. It also needs to explain clearly what functions have been contracted back to the CAA from EASA, and what the implications of this are for the industry.

Impact on CAA staff

53. We heard concerns from various witnesses that uncertainties over the timing and scope of the transfer of responsibilities from the CAA to EASA were affecting CAA staff. The Society of British Aerospace Companies argued that, as a result of the apparent "mismatch" between the speed at which the CAA was reducing its activities and the torpor with which EASA was expanding its activities, CAA employees with considerable expertise were not being recruited by EASA, and were therefore being lost from the field.[81] Dr Graham Braithwaite told us that uncertainty was inevitably demotivating the CAA's workforce, and that a loss of talent had followed as more secure jobs became available elsewhere. He suggested that to remedy the situation the CAA needed to form a clearer view of its future and the speed and scope of its transfer of responsibilities to EASA.[82]

54. The CAA told us that its primary aim in relation to staff affected by EASA's establishment had been to encourage and assist them in obtaining jobs with EASA. It said that, thereafter, its priority had been to ensure that it had the right balance of staff to undertake its remaining regulatory work, while at the same time seeking to minimise the risk of redundancies as a consequence of the transfer of powers to EASA. It admitted, however, that it had achieved only limited success in encouraging staff transfers to EASA: of those who had left their posts in the CAA due to a reduction in scope, 28% had taken up roles with EASA, 33% had been redeployed to roles elsewhere in the CAA, 29% had retired and 10% had resigned. It cited a number of reasons for the apparent reluctance of its staff to transfer to EASA, including the location of EASA's headquarters in Cologne and the lack of employment opportunities for partners moving there, concerns about the effectiveness of EASA's recruitment process and the generally poor reputation of EASA.[83]

55. The CAA told us that it had been difficult to maintain morale in areas where it had been forced to encourage employees to pursue alternative jobs outside the area in which they were currently employed. It had sought to improve morale through "sensitive change management, open and frequent communication and a supportive approach."[84] An external assessment of the Safety Regulation Group carried out in August 2005, as part of its Investors in People assessment, found that employees who had experienced the most direct impact from the transfer of work to EASA felt they had been "appropriately informed and assisted", and believed the handling had been "sensitive and pro-active."[85]

56. EASA recruits staff from all Member States and told us that, in the area of certification, it had recruited the majority of its experts from countries with a comparatively large aviation industry, such as the UK. It admitted that initial recruitment campaigns within the CAA on behalf of EASA had met with a poor response, but said the situation had improved more recently. At the time of writing, it employed 30 UK nationals out of a total of 200 agents, most of whom had previously worked for the CAA. It made clear that it was dedicated to recruiting more CAA staff and explained that a working group co-chaired by the UK representative on its Management Board was helping to monitor the transfer of personnel.[86] The Minister agreed that there were some signs of progress on the recruitment of CAA staff by EASA and said that the Government was working closely with EASA to make relocation to Cologne more attractive to CAA staff. Efforts were also under way to resolve the problems arising from the formal nature of qualifications required by EASA, as this had previously precluded the recruitment of some highly-skilled operators from the UK.[87]

57. We are concerned by indications of low morale among CAA staff as a result of uncertainties over the transfer of responsibilities from the CAA to EASA, and by the associated loss of experienced staff from the aviation regulation industry. We acknowledge that the CAA's ability to manage the situation is compromised by the problems within EASA itself and we commend it for its sensitive and pro-active handling of the situation. We recommend that the CAA work with the Department for Transport to draw up a detailed assessment of the speed and scope of the transfer of responsibilities to EASA as soon as circumstances within EASA allow, and that it should ensure that staff are kept fully informed about this process. We are encouraged to hear that the situation has improved in recent months, with more UK staff being recruited by EASA.

40   European Aviation Safety Agency website, http://www.easa.eu.int Back

41   Ev 189, para 28 Back

42   Ev 189, para 29 Back

43   Qq 496, 499 Back

44   Ev 151, para 2.1; see also Q 437 Back

45   Q 163 Back

46   Q 102 Back

47   Ev 68, para 20 Back

48   Ev 278, introduction Back

49   Q 88 Back

50   Qq 72, 89, 91, 93 Back

51   Q 106 Back

52   ibid. Back

53   Q 161, 163; see also Qq 205, 341 Back

54   Q 164 Back

55   Letter to the Committee from Association of Licensed Aircraft Engineers, 10 October 2006 Back

56   Q 595 Back

57   Ev 151, para 2.2 Back

58   Q 435 Back

59   Qq 612-613 Back

60   Ev 68, para 17 Back

61   Ev 39, note 5 Back

62   Q 127 & Qq 131-132, 136 Back

63   Ev 101, para 30 Back

64   Ev 207, note (ii) Back

65   Qq 637-639; Ev207, note (ii) Back

66   Ev207, note (ii) Back

67   ibid. Back

68   Q 626 Back

69   Qq 92, 106, 140, 142 Back

70   Qq 600, 607 Back

71   Ev 207, note (i), paras 1-17 Back

72   Ev 207, note (i), paras 18-21 Back

73   Ev 39, question 37 Back

74   Letter from Sir Roy McNulty to Committee, 11 October 2006 Back

75   Ev 136, para 15 Back

76   Ev 39, question 35 Back

77   Civil Aviation Authority, Corporate Plan 2005/06, p39 Back

78   Ev 89 Back

79   Qq 119-120 Back

80   Ev 39, Q 36; The CAA appointed a Joint Review Team in 2004, comprising representatives from different parts of the industry, the CAA and Government, to consider the distribution of the Safety Regulation Group costs.  Back

81   Ev 136, para 11 Back

82   Ev 151, para 2.3; Qq 440, 442 Back

83   Ev 39, Qq 38, 41 Back

84   Ev 39, Q 40 Back

85   ibid. Back

86   Ev 278, para 3 Back

87   Q 604 Back