Who Pays For Repairs?

The slang expression for a problem identified with an aircraft is “squawk,” which my American Heritage Dictionary defines as “a loud screech,” but also as a “complaint.” Either or both will suit for many aircraft issues. The word used in polite society for airplane squawks, however, is “discrepancy,” a word that figures prominently in Federal Aviation Authority regulations. Unfortunately, the FAA never explained the term, so I turned to my ancient copy of Black’s Law Dictionary, which defines “discrepancy” as “a difference between two things which ought to be identical…a variance.”

For an aircraft, this raises the question: variance from what? An obvious candidate is the type design, the FAA-approved blueprint, but that will account for only some of the discrepancies identified in shop visits. To this we could add variances from applicable FAA regulations and the aircraft’s maintenance manual, which provides limits and tolerances for installed equipment and portions of the aircraft, like the leading edges. But this will still not account for many “discrepancies” that show up on lists provided by jet service centers.

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Consider a few examples of discrepancies identified in recent pre-buy inspections (edited slightly so as to more closely approximate English): “several pen marks in the cabin, one on a seat and the rest on upper sidewall panels,” “latch loose on left-hand galley drawer #2,” and “veneer on forward lavatory partition ash tray is disbanding” (disbonding?). No type certificate problems here. Many “discrepancies,” in other words, don’t have anything to do with the aircraft’s airworthiness and are characterized by service centers as “notes of condition,” “action optional,” “information only,” and the like. Part of the reason service centers call out pen marks and scratches on wood veneer is to try to avoid getting blamed for causing the blemishes. In sum, a “discrepancy” is really an issue the service center wants to draw attention to, not necessarily something that needs immediate attention or rectification.

Airworthy discrepancies, however, do require rectification, so a service center performing an inspection that discovers such discrepancies can’t return the aircraft to its owner without qualification unless they are cured. This doesn’t mean that the service center will actually identifyon a discrepancy list which discrepancies it considers “airworthy”; some do, some don’t. A good discrepancy list, however, not only identifies the discrepancy but also indicates what it varies from, such as “not in compliance with Section x of the aircraft maintenance manual,” and may even indicate required actions and an estimated cost. 

Discrepancy Armageddon is a typical occurrence during a pre-purchase evaluation. In a wholesale transaction, discrepancies can be the buyer’s problem since the aircraft is generally sold “as-is” with minimal due diligence. In a retail transaction, on the other hand, the jet buyer will hire a service center to perform a pre-purchase evaluation of the aircraft and its records. As it proceeds with the work, the facility generates discrepancies, which it memorializes on one or more lists that it updates throughout the process. 

The question is then: Who is supposed to pay to fix these things? A retail seller is likely obligated to deliver an airworthy aircraft, but the answer is complicated. First, as noted earlier, many discrepancies are merely notes of condition. Unless the buyer has negotiated one fabulous purchase agreement, the seller will not be on the hook for a scratch on wood veneer or a stain on a seat. On the other hand, even though not obligated, sellers sometimes take care of discrepancies like that just because they want to deliver an aircraft they’re proud of, especially if the discrepancies are easy or inexpensive to address.

“Airworthy” discrepancies, though, can be difficult and costly to fix: windshields needing replacement, brakes that are worn to the bone, leading edges that are out of limits, extensive surface corrosion requiring the aircraft to be stripped, treated, and repainted…the list is endless. And don’t think such things go unnoticed in a good pre-buy. The business of a service center is fixing airplanes, so when a jet comes in for a pre-buy, it’s basically an invitation to keep the shop busy for a month or two—rather like inviting your dry cleaner over to tell you what needs cleaning in your closet.

Fearing overzealous maintenance technicians and costly squawks, some sellers try to put a cap in the purchase agreement on their financial exposure for fixing things: if the discrepancies they’re on the hook for exceed a certain dollar amount, the buyer must either accept responsibility for the overage or terminate the deal. This can be a self-defeating strategy, of course, since the seller will likely have to fix those items for any retail buyer, but sellers often think they can address discrepancies cheaper themselves or at their favorite shop rather than at a service center perceived as holding the aircraft hostage in a pre-buy.

Any good aircraft purchase agreement will require the seller to repair equipment and systems that are not properly operational. This, of course, begs the question of what’s proper—the same old issue, a discrepancy from what? The best standard is a variance from the manufacturer’s stated limits and tolerances—if there are any. Lacking stated limits, common sense can often substitute. If you need a crowbar to pry open a drawer in the galley, it probably needs fixing.

Suppose the parties can’t agree? The pre-buy service center is often made the arbiter of disputes, for lack of anyone better. But talk about a loud screech? Service center personnel, not famous for Solomonic wisdom, are loath to perform this role; it basically requires them to side with one client against another, and their work package includes neither the time nor the compensation for adjudicating disputes between buyer and seller. The idea often makes the most sense if the pre-buy is at the airframe manufacturer’s facility, where it is easier to obtain authoritative advice.

That advice may also be needed when a disagreement arises not about whether to fix something but about howto fix it. When there are multiple options for correcting a squawk, the seller typically deploys two time-tested standards: what’s cheapest and what’s fastest. The buyer may be sympathetic with the latter, but not the former. There’s often a right and a wrong way to do a repair, and you can guess which the cheapest usually is. Accordingly, the buyer is best served by a purchase agreement that rules out repairs resulting in non-standard inspections, FAA Form 337s (for major repairs and alterations), engineering dispositions, and the like.