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UPDATE 1-FAA must ramp up staffing to oversee airplane certification after 737 MAX -panel

David Shepardson

737 MAX -panel@ (Recasts with report findings)

WASHINGTON, Oct 11 (Reuters) - The U.S. Federal Aviation Administration had insufficient personnel to oversee the certification of new Boeing airplanes and should make significant reforms in how it approves new airplanes, an international aviation panel said Friday.

The panel also faulted assumptions made by the airplane manufacturer in designing the 737 MAX.

Reuters reported on a draft copy of the Joint Authorities Technical Review (JATR) findings and recommendations earlier on Friday that called for sweeping changes in how the FAA evaluates and certifies new airplanes.

The report also said the FAA did not closely evaluate a key safety system known as MCAS involved in two fatal crashes of the MAX in five months that killed 346 people and prompted the plane's grounding in March.

FAA Administrator Steve Dickson said Friday the agency would respond to all recommendations in the "unvarnished" review.

At issue is the long-standing practice of the FAA delegating certification tasks to Boeing and other manufacturers. Many critics say the FAA should take a bigger role.

The report said the FAA had just 45 people in an office overseeing Boeing's Organization Designation Authority (ODA) and its 1,500 employees.

In the 737 MAX, the FAA initially delegated 40% of the certification tasks and boosted that figure as the five-year review progressed, including the review of MCAS. The panel said, "FAA involvement in the certification of MCAS would likely have resulted in design changes that would have improved safety."

Boeing is revising the 737 MAX software to require the MCAS system to receive input from both AOA sensors, and has added additional safeguards. If the AOA sensors differ by 5.5 degrees or more then MCAS cannot operate, FAA Deputy Administrator Dan Elwell said last month.

The FAA has just 24 engineers "to review and find compliance for retained items as well as conduct on-site and desk audits of the Boeing ODA. The report said the office is overseeing Boeing's 737, 747, 767, 777, and 787 programs.

The review added there are only two technical FAA staff assigned per Boeing program and some are "new engineers with limited airworthiness experience."

The review also found "signs of undue pressure" on Boeing employees performing tasks for the FAA, "which may be attributed to conflicting priorities and an environment that does not support FAA requirements."

Those Boeing employees should be able to directly talk to FAA technical staff "without fear of reprisal," the review added.

Boeing did not respond to criticism in the report but said it is "committed to working with the FAA in reviewing the recommendations and helping to continuously improve the process and approach used to validate and certify airplanes." A U.S. Senate panel last month approved legislation to increase aviation safety budgets by $31.8 million and require the FAA to finalize its rule-making on safety management systems for aircraft manufacturers.

The aviation panel report also said the FAA must ensure manufacturers "provide a full list of all aircraft proposed changes (no matter how trivial)."

The JATR, which was commissioned in April by the FAA, is headed by Christopher Hart, former chairman of the National Transportation Safety Board (NTSB). It includes air safety regulators from the United States, Canada, China, Indonesia, European Union, Brazil, Australia, Singapore, United Arab Emirates and Japan, and the five-month review included FAA officials who were not part of the 737 MAX certification.

Deputy FAA Administrator Dan Elwell told Congress in March the agency would need an additional 10,000 employees that would cost $1.8 billion if it were to assume all responsibilities for aircraft certification.

(Reporting by David Shepardson; Editing by Richard Chang and Nick Zieminski)