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Pursuant to a congressional request, GAO reviewed oversight of the air taxi industry, focusing on: (1) the Federal Aviation Administration's (FAA) level of inspection effort for air taxis; and (2) the Office of the Secretary of Transportation's (OST) economic fitness standards as applied to air taxis.

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Matter for Congressional Consideration

Matter Status Comments
Congress may wish to consider whether air taxis' exemption from OST certification and economic fitness review remains appropriate in light of air taxis' poorer safety record. Furthermore, if the Secretary does not perform the recommended study, Congress may wish to mandate that it be done.
Closed - Not Implemented
Congress has not indicated whether it will require DOT to undertake the recommended study.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation 1. To improve oversight of the air taxi industry, the Secretary of Transportation should direct the Administrator, FAA, to perform: (1) a minimum level of required inspections; and (2) periodic, industry-wide special inspections.
Closed - Implemented
Annually, FAA sets minimum air taxi inspection requirements that must be performed. Inspection results are recorded in the Program Tracking and Reporting System (PTRS) database. However, FAA does not plan to conduct periodic industry-wide inspections.
Federal Aviation Administration 2. FAA should revise its inspector handbook to provide guidance and procedures that would allow for special surveillance of any airline in financial distress.
Closed - Implemented
On October 16, 1992, FAA issued Joint Handbook bulletins for Airworthiness (92-19) and Air Transportation (92-15) that provide guidance on surveillance of financially distressed airlines.
Department of Transportation 3. The Secretary of Transportation should study the extent to which air taxi operators' financial distress and poor compliance attitude contribute to safety violations and report the result to the Congress.
Closed - Not Implemented
DOT does not believe the study is feasible because: (1) burdensome financial reporting would have to be imposed on air taxis to determine the relationship of financial distress to safety violations and (2) air taxi operators with poor compliance attitudes may be out-of-business and not available for review.

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