Friday, September 22, 2017

Deregulation of airline safety rules can still keep skies safe: Bureaucracy, cost can be reduced without harming passengers

By Cass R. Sunstein

The Trump administration has a real opportunity to deliver on its promise to streamline the regulatory state.

That opportunity comes from the proposed elimination of more than 50 regulations imposed on the airline industry — many of them designed to protect safety.

Air safety has been a sensational success story.

In the U.S., commercial accidents have been at very low levels for years. In 2016, more than 40,000 Americans died in motor vehicle accidents.

By contrast, not even one American died in airline crashes from scheduled domestic carriers.

The most recent fatal accident was more than seven years ago, in early 2009.

Market forces are a big reason. A crash is international news, and it’s horrible for business. Airlines have every incentive to ensure safety.

Regulation is also part of the picture.

The top priority of the Federal Aviation Administration is safety — as reflected, for example, in a 2011 regulation designed to reduce the risks associated with pilot fatigue.

If the airline industry feels overburdened by regulation (and it does), it is because the government mandates precautions, in the form of requirements that may not do a lot of good, but that are based on the idea of “better safe than sorry.”

Though it has not made the list public yet, the Aviation Rulemaking Advisory Committee, which advises the FAA, is finalizing its recommendations to eliminate unjustified or outmoded regulations.

One of its big targets is what behavioral economist Richard Thaler calls “sludge” — burdensome reporting and paperwork requirements that impose real costs and do no good.

Fortunately, the White House can use the Paperwork Reduction Act to eliminate duplicative or outmoded requirements that are not increasing safety.

On this count, the Trump administration might well be able to get some quick wins.

Harder questions are raised by regulatory requirements that are admittedly costly, but that might be reducing risks.

One example is the FAA’s highly prescriptive training requirements — directing, for example, that before co-pilots can fly commercial passengers, they must have 1,500 hours of flight time.

Another example is the ground testing that the government has long mandated to ascertain whether airplanes have structural integrity, and whether they can continue to survive a lot of flights (“fatigue tolerance”).

The committee is calling for cutting the 1,500-hour minimum requirement partly to reduce pilot shortages in rural areas.

The panel also recommends a significant increase in flexibility.

Instead of mandating ground tests, the government should allow airlines to use engineering analysis, inspections of older planes and computer simulations.

These recommendations present real tests for the Trump administration, and it will encounter those same challenges whenever agencies seek to eliminate regulatory restrictions.

The first challenge comes from prevailing executive orders, which direct agencies to assess the costs and benefits of their actions, and to proceed only if the benefits justify the costs.

In recent years, many deregulatory decisions have clearly been a good idea, because they have had significant benefits (reducing economic burdens) and essentially no costs.

Some of the FAA advisory committee’s recommendations could save hundreds of millions of dollars. But would they decrease safety?

The answer is not obvious.

For many safety regulations, both costs and benefits are not so hard to calculate; for example, regulators might know that each year, a food-safety rule will prevent a certain number of deaths and illnesses.

For airline safety regulations, the assessment is often a lot harder.

If such rules make any sense at all, they will reduce risks, but it’s really tough to know whether they will actually save lives during a year or even a decade — meaning that it is also tough to know whether repealing them will cause any harm.

The good news is that the advisory panel recommendations can be used to start a process from which public officials can learn a great deal.

If the FAA thinks that the suggested changes are reasonable, a smart next step would be to issue, very soon, an Advance Notice of Proposed Rulemaking, by which it signals its potential interest in repealing specific regulations, and asks members of the public for comments.

If the agency does that, it will get a ton of responses.

Some of them will be interest-group fare — predictable and essentially useless.

But some of them will be filled with facts, offering evidence that (for example) 1,500 hours of flying time is really no better than 750 hours, or that ground tests provide valuable information that computer simulations and visual inspections just can’t provide.

Along with its independent analysis, such comments will give the FAA a pretty good sense of whether to go forward with some or all of the committee’s proposals.

And that’s where the Trump administration has an excellent opportunity.

If it seeks to get rid of regulations that are outmoded or imposing unjustified burdens, a careful, systematic response to those recommendations could well provide a model for deregulatory efforts over the coming years.

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