FAA to Pressure CNF’s Emery Into Grounding Fleet

WASHINGTON —  The Federal Aviation Administration, concerned about numerous maintenance discrepancies and two maintenance-caused crashes, plans to force the grounding of all of Emery Worldwide Airlines’ cargo planes, federal sources said Sunday.

The FAA on Saturday gave the company until noon today to decide whether to voluntarily ground its fleet. Otherwise, the FAA told Emery, it would remove the company’s certificate to operate the planes, the sources said.

Although Emery, a subsidiary of CNF Inc. of Palo Alto, is one of the nation’s major cargo airlines, other sources stressed that customers probably would not be affected by the shutdown. The company, which is one part of a much larger transportation and logistics management company, is arranging with other airfreight carriers to handle the needs of its customers, the sources said.

A FAA shutdown of a major carrier is extremely rare. Occasionally, the agency will crack down on smaller regional air carriers, but the last shutdown of a major airline was ValuJet in June 1996. That shutdown was for maintenance practices and involved a voluntary shutdown instead of having the FAA take the action.

FAA officials said privately that the agency had conducted four major inspections of the airline over the last year and a half, pointing out numerous discrepancies, including improper repairs, unapproved parts installation, operation of un-airworthy aircraft, failure to follow procedures in company manuals and inadequate record keeping. Despite the heightened attention, the problems continued, they said, and the company still failed to properly oversee its maintenance contractors.

FAA spokeswoman Laura Brown confirmed that FAA officials had met with Emery officials, but declined to say what was discussed.

“Emery has been and remains under heightened oversight,” she said.

Nancy Colvert, a CNF spokeswoman, would not discuss details.

“We’re meeting with the FAA now, and we don’t have anything to say yet,” she said.

The latest round of complaints about Emery’s maintenance came from its own pilots, who were upset that the mechanical irregularities they reported were not getting fixed, sources said.

However, much of the attention on Emery came from crashes that appeared to be related to maintenance.

The National Transportation Safety Board was scheduled to conduct a hearing Tuesday on Emery’s maintenance practices after a Feb. 16, 2000, crash near Sacramento that killed the three crewmen. An Emery four-engine DC-8 freighter taking off for Dayton, Ohio, crashed into an auto storage yard. The safety board is looking at possible improper maintenance of the elevator, which is plates at the rear of the horizontal tail section that control up and down movements.

Another Emery DC-8 crash-landed at Nashville on April 26 after mechanics apparently installed the wrong part in the forward landing gear.

NTSB member John Goglia said Sunday that he is seriously considering postponing the hearing. “I want to take a serious look at whether it would be prudent to hold the hearing since the [Emery] senior management team will be dealing with other issues and will not be available to testify at this time,” Goglia said.

CNF reported net income of $135.1 million last year and revenue of $5.7 billion, including $2.4 billion from Emery. Emery has airfreight and ocean-shipping components, and the airfreight component is not broken out separately in CNF financial statements.

According to a database maintained by Airclaims Ltd. of London, Emery has a fleet of 53 aircraft, 12 of which are in storage. Airclaims lists Emery’s active fleet as 31 DC-8s, seven DC-10s, two Boeing 727s and one MD-11.

On June 14, CNF announced plans to reduce the fleet to 38 aircraft and lay off about 900 workers, about 11% of the work force. Emery lost $25.2 million in the second quarter, and CNF said the airline would have a third-quarter loss of $8 million to $10 million.

Cargo Facts, a Seattle-based trade newsletter, reported July 20 that CNF was considering offers to sell Emery.

The airline received an economic blow in May when the U.S. Postal Service said it would terminate Emery’s contract to haul express mail Aug. 26.