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Vol. 137, No. 24 — November 19, 2003 Registration AERONAUTICS ACT Regulations Amending the Canadian AviationRegulations (Part VII) P.C. 2003-1783 6 November, 2003 Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to section 4.9 (see footnote a) of the Aeronautics Act, hereby makes the annexed Regulations Amending the Canadian Aviation Regulations (Part VII). REGULATIONS AMENDING THE CANADIAN AVIATION REGULATIONS (PART VII) AMENDMENT 1. The reference "[705.81 to 705.88 reserved]" after section 705.80 of the Canadian Aviation Regulations (see footnote 1) is replaced by the following: Cargo and Baggage Compartment Fire Protection 705.81 After June 1, 2004, no person shall operate a transport category aeroplane in respect of which an initial type certificate was issued after January 1, 1958 unless each cargo or baggage compartment of the aeroplane meets the requirements set out in section 725.81 of Standard 725 — Airline Operations — Aeroplanes of the Commercial Air Service Standards. [705.82 to 705.88 reserved] COMING INTO FORCE 2. These Regulations come into force on December 1, 2003. REGULATORY IMPACT (This statement is not part of the Regulations.) Description General The Regulations Amending the Canadian Aviation Regulations (Part VII) introduce new regulatory requirements into the Canadian Aviation Regulations (CARs) with new section 705.81 (Cargo and Baggage Compartment Fire Protection). Also being added is a new Commercial Air Services Standard 725.81 (Cargo and Baggage Compartment Fire Protection) which describes how air operators are to comply with section 705.81. The regulatory requirements incorporate new fire protection requirements for Class D cargo and baggage compartments and an upgrade of cargo and baggage compartment liners for Class C and Class D cargo and baggage compartments. This amendment harmonizes Canadian regulatory requirements with the United States' Code of Federal Regulations, Title 14, Chapter 1, Part 121, section 121.314 (Cargo and baggage compartments) which came into effect on February 17, 1998. The Regulations Amending the Canadian Aviation Regulations (Part VII) were pre-published in the Canada Gazette, Part I, on October 5, 2002. No comments were received. The effective date by which the required changes to the affected cargo and baggage compartments must be completed has been revised to be June 1, 2004. Originally, a three-year period after promulgation of these requirements was planned to allow the industry ample time to complete the necessary modifications at minimum cost. In anticipation of the promulgation of these Canadian amendments and in light of the presence of the U.S. requirements, the Canadian industry has achieved close to 100 percent compliance with the necessary changes. Since nearly 100 percent compliance has already been achieved an extended period is no longer necessary. The date of June 1, 2004 is not expected to present compliance problems for the industry. In acknowledgement of the industry's voluntary compliance with these requirements and of the federal government's overall goal of regulating "smarter" by using objective-based regulation, the requirements for air operators to submit a compliance plan and quarterly information reports have been removed from these amendments. With very few air operators who have not completed the necessary modifications, the reporting requirements would have added an administrative burden for the majority of air operators which, although minor, is not now considered necessary. Canadian air operators operating aeroplanes under Subpart 705 (Airline Operations) will be subjected to these requirements. The aeroplanes affected will be transport category aeroplanes with an initial type certificate issued after January 1, 1958. Subpart 705 applies to Canadian air operators operating aeroplanes and helicopters in air transport service or in aerial work involving sightseeing operations. The aeroplanes are, for the most part, aeroplanes with a maximum certificated take-off weight (MCTOW) of more than 8 618 kg (19,000 lb) or those for which a Canadian type certificate has been issued authorizing the transport of 20 or more passengers. The helicopters have seating configurations, excluding pilot seats, of 20 or more. These regulatory requirements do not, however, apply to helicopters. The term "air transport service" means a commercial air service that is operated for the purpose of transporting persons, personal belongings, baggage, goods or cargo in an aircraft between two points. The term "aerial work" means a commercial air service other than an air transport service or a flight training service. Transport category aeroplanes are aeroplanes type certificated pursuant to Chapter 525 (Transport Category Aeroplanes) of the Airworthiness Manual or an equivalent foreign airworthiness standard. Chapter 525 of the Airworthiness Manual sets out detailed airworthiness standards for transport category aeroplanes. Aeroplanes on the Canadian Civil Aircraft Register are type certificated into categories based upon the intended use or operating limitations of the aeroplane. The term "initial type certificate" refers to the earliest type certificate which was issued for a particular aeroplane type. An aeroplane type is a classification of aeroplanes having similar design characteristics. The design characteristics of an aeroplane are dependent upon the type design of that aeroplane. The type design of an aeroplane includes the drawings, specifications, dimensions, materials and manufacturing process which must meet specific airworthiness requirements for each component part of the aeroplane. These characteristics of the type design apply to all aeroplanes produced in accordance with the type certificate. These aeroplanes are jointly referred to as an "aeroplane type". The issuance of an aeroplane type certificate confirms that the type design, manufactured product and maintenance program meet minimum safety standards. The date January 1, 1958 was chosen so that the majority of turbine powered transport category aeroplanes would be included. Compliance is not being required for aeroplanes type certificated before January 1, 1958 because their advanced age and small numbers would make compliance impractical from an economic standpoint. This decision is consistent with the similar exclusions made for these aeroplanes from other historic requirements pertaining to equipment upgrades for flammability of seat cushions and floor proximity escape path marking. It is also consistent with the approach taken by the Federal Aviation Administration (FAA) with respect to the regulation of these aeroplanes. Air operators will be required to modify the Class C and Class D cargo and baggage compartments of affected aeroplanes to the higher standard of new section 705.81. These modifications will contribute to a significant increase in public safety. Aeroplanes with Class C and/or Class D cargo and baggage compartments will be prohibited from operating after June 1, 2004 unless their cargo and baggage compartments meet the requirements of new section 705.81 and its corresponding Commercial Air Services Standard 725.81. Specific Section 705.81 (Cargo and Baggage Compartment Fire Protection) (1) New Fire Protection Requirements for Class D Cargo and Baggage Compartments Accident experience and full-scale tests and analyses conducted by the United States FAA have demonstrated that the past method of fire protection used in Class D cargo and baggage compartments was inadequate in controlling certain types of fires including fires involving aerosol cans. Aerosol cans now contain highly flammable propellants as a result of environmental legislation and have been shown to burst within a few minutes upon exposure to fire in burning luggage. Available information indicates that a large percentage of checked luggage contains at least one aerosol can. Canadian regulations set limits on the quantity of aerosol cans that passengers may transport, however, the transport of aerosol cans is not prohibited (see footnote 2) . The potential consequences of a bursting aerosol can in the non-inert atmosphere of a Class D cargo and baggage compartment include explosion of the propellant with enough force to rupture the cargo and baggage compartment liners. This would, as a result, compromise the fire suppression capability of the cargo and baggage compartment and potentially jeopardize the structural integrity of the aeroplane. Tests have shown that there is no ignition and hence, no explosion of the propellants contained in aerosol cans in the inert atmosphere of a Class C cargo and baggage compartment. The atmospheres of Class C cargo and baggage compartments are made inert by the use of suppressing agent when fire or smoke is detected. Class C and Class D cargo and baggage compartments are located in areas that are not readily accessible to crew members in flight. Paragraph 525.857(d) of the Airworthiness Manual Chapter 525 (Airworthiness Standards Transport Category Aeroplanes), effective January 1, 1987, contains the most recent standards applicable to Class D cargo and baggage compartments in the Canadian fleet. Prior to 1987, the standards Canada applied to Class D cargo and baggage compartments of transport category aeroplanes were those of the United States' Code of Federal Regulations, Title 14, Chapter 1, Part 25 (Airworthiness Standards, Transport Category Airplanes). Aeroplanes on the Canadian Civil Aircraft Register are type certificated to meet the standards in place at the time of application for type certification. A new amendment to Part V Airworthiness Subpart 11 Approval of the Type Design of an Aeronautical Product and Subpart 13 Approval of Modification and Repair Designs introduced procedures to require applicants for approval of proposed design changes to aeronautical products to incorporate in the redesigned products the most current design standards, to the greatest extent practicable. Since there has already been extensive industry compliance with respect to the modifications of cargo compartments few requests for revisions of type certificates to accommodate these modifications are expected to be affected by the new approval procedures. The requirements of this amendment are contained in columns 2 and 3 of Table 1.0. Class D cargo and baggage compartments on passenger-carrying aeroplanes that meet the standards in effect on or before January 1, 1987 will have to meet the standards in column 2 no later than June 1, 2004 . Class D cargo and baggage compartments on cargo-carrying aeroplanes that meet the standards in effect on or before January 1, 1987 will have to meet the standards in column 2 or 3 no later than June 1, 2004 . Column 1 contains the most recent standards of the Airworthiness Manual applicable to Class D cargo and baggage compartment fire protection. As of June 1, 1998, Class D cargo and baggage compartments have been eliminated as an option for future aeroplane type certification under Chapter 525 of the Airworthiness Manual. Table 1.0
* These requirements pertain to section 525.858 of the Airworthiness Manual (Cargo Compartment Fire Detection Systems) and apply if certification with cargo compartment fire detection provisions is requested. Air operators operating aeroplanes with Class D cargo and baggage compartments have not normally made this request as Class D compartments were not required to have fire detection systems prior to the introduction of new section 705.81 and new Commercial Air Services Standard 725.81. (2) Upgrade of Cargo and Baggage Compartment Liners in Class C and Class D Cargo and Baggage Compartments Accident experience and full scale tests and analyses conducted by the United States FAA show that fires can rapidly burn through certain types of liners, and thus compromise the integrity of the fire control mechanisms in Class C and Class D cargo and baggage compartments. Once fire penetrates the liner air may enter the cargo and baggage compartment or suppression agent may escape the cargo and baggage compartment, thus, fire may spread to other parts of the aeroplane. This new requirement applies to: • Each Class C and each Class D cargo and baggage compartment, as referred to in Chapter 525, section 525.857 (Cargo Compartment Classification) of the Airworthiness Manual in effect on January 1, 1987 that has a volume greater than 5.66m3 (200 ft3); and • Each Class C and each Class D cargo and baggage compartment type certificated before 1987 with a volume greater than 5.66m3 (200 ft3) meeting the requirements of the United States' Code of Federal Regulations, Title 14, Chapter 1, Part 25 (Airworthiness Standards, Transport Category Airplanes) in force at the time of application for type certification. The content of Chapter 525, section 525.857 (Cargo Compartment Classification) of the Airworthiness Manual, relating to Class C and Class D cargo and baggage compartments in effect on January 1, 1987, is detailed in Table 2.0 below. Table 2.0
Under section 705.81, affected air operators will be required to replace the ceiling and sidewalls of the cargo and baggage compartments with upgraded liner panels. These liner panels are to be constructed of materials that meet the flame penetration resistance test requirements set out in Chapter 525, Appendix F, Part III of the Airworthiness Manual. These requirements will involve testing sidewall and ceiling liner panels, including joints, fasteners and all other design features to ensure all materials meet the above flame penetration resistance test requirements. Cargo and baggage compartment liners comprised of glass fiber reinforced resin or aluminum may be retained in lieu of meeting the new requirements provided the liner installation was approved by the Minister of Transport prior to the date on which this Regulation is registered. Alternatives The intent of these regulatory requirements is to ensure that the same level of protection from the results of in-flight fires is provided to passengers on Canadian-operated commercial transport aeroplanes as on those operated by their U.S. counterparts and expected to be required of European operators in future. As an alternative to these regulatory requirements, the status quo in combination with voluntary compliance was considered in developing the amendment. Although extensive voluntary compliance has taken place, the industry agreed to participate on condition that regulatory requirements harmonizing with the U.S. rule would be introduced in Canada. Without such Canadian regulatory requirements, air operators choosing not to comply would face lower costs (and have a competitive advantage) compared to those who do comply. No alternative to this regulatory action is available to ensure that the intent of this amendment is satisfied. Benefits and Costs Although this analysis was initially undertaken in 1999 and the industry has, with few exceptions, completed the necessary conversions to comply with the requirements of this amendment, the analysis has been left unrevised. It is likely the alterations to cargo compartments would not have been initiated at this time without the prospect of regulatory change as embodied in this amendment. Therefore, the resource use and resulting benefits discussed in the following analysis are viewed as a result of the new regulatory regime with respect to cargo compartments in the affected aeroplanes. Section 705.81 (Cargo and Baggage Compartment Fire Protection) (1) New Fire Protection Requirements For Class D Cargo and Baggage Compartments (a) Affected Aeroplanes In mid-1999, there were 45 Canadian air operators operating a total of 590 aeroplanes in commercial air service under Subpart 705 (Airline Operations). Information provided by the Air Transport Association of Canada (ATAC), the Transport Canada National Aviation Company Information System (NACIS), the Transport Canada Canadian Civil Aircraft Register and the Type Certificate Data Sheets applicable to aeroplanes registered in Canada, indicated that 225 aeroplanes operating under Subpart 705 would potentially be affected by this regulatory requirement. These included: • 207 aeroplanes operated by air operators who were members of ATAC; and • 18 aeroplanes operated by air operators who were not members of ATAC. The 207 aeroplanes operated by ATAC members were primarily older aeroplane types operated by twelve air operators. These aeroplane types included the Boeing 727, the Boeing 737, the Fokker F-28, the McDonnell Douglas DC-9, the McDonnell Douglas DC-10, the British Aerospace BAE 146, and the Lockheed L-1011. Two newer aeroplane types operated by ATAC members identified as affected were the Airbus A319 and the Airbus A320. At the time this analysis was undertaken, information available through the Transport Canada NACIS and the Transport Canada Canadian Civil Aircraft Register indicated that air operators who were not members of ATAC were operating 52 aeroplanes under Subpart 705. Type Certificate Data Sheets indicated that 34 of these aeroplanes would be excluded from the amendment as they were type certificated prior to January 1, 1958. The remaining 18 aeroplanes were considered in the analysis. This involved 8 air operators operating the following aircraft types: the Hawker Siddley HS 748, the Airbus A300, the Shorts 330, the DeHavilland DHC-8, and the DeHavilland DHC-7. Some of these aeroplane types were also operated by ATAC members but were not identified by ATAC as being affected by the new requirement. Cargo and baggage compartments are aeroplane specific rather than aeroplane type and model specific. Aeroplane models are variants of aeroplane types. Thus, the 18 aeroplanes described above were included in the analysis. (b) Cost Estimates (i) General These cost estimates apply to the 225 aeroplanes described above. These cost estimates exclude the portion of the fleet which had voluntarily complied in 1999 when this analysis was prepared. These cost estimates consider the cost of the fire detection and suppression systems including the installation costs and certification costs of the systems; and the increase in the annual operating costs including an increase in fuel consumption, inspection and maintenance costs, weight constrained departure costs and flight diversion costs. It has been assumed that Class D cargo and baggage compartments in all-cargo aeroplanes would be converted to Class E cargo compartments which do not require the installation of active suppression systems. In instances where Canadian data was not readily available, the costs presented by the FAA in The Federal Register, Vol. 63, No. 31 (Tuesday, February 17, 1998) pertaining to 14 CFR Parts 25 and 121 (Revised Standards for Cargo or Baggage Compartments in Transport Category Airplanes; Final Rule) were used and converted into Canadian dollars. This approach is considered practicable as Canada and the U.S. share, for the most part, common costs and markets in the aviation sector. The exchange rate of $1.5142 in effect in September 1999 was used in the analysis. Where available data permitted, labour costs were estimated to range between $60 to $90 per hour. Dependent upon the availability of Canadian resources, it was possible some labour would be conducted in the U.S. The $90 per hour cost represents the estimated cost of labour conducted in the U.S. The $60 per hour cost represents the lowest estimated cost of labour conducted in Canada. These labour costs were averaged to $75 per hour. A more detailed explanation of the estimated costs is provided below. (ii) Specific (A) Fire Detection and Suppression System Costs Equipment and installation costs are estimated to range from $20,000 to $153,000 per aeroplane in 1999 dollars, depending on the aeroplane model. These costs also include the certification costs of the fire detection and suppression system and the one-time costs incurred in the manufacturing process directly related to the manufacture of the fire detection and suppression systems. Cost estimates assume that compartments will be fitted with a system of optical smoke detectors (configured to give indication of a fire within one minute) and a halon suppression system (see footnote 3) . The analysis further assumes a quantity of halon that will provide an initial "knockdown" discharge, and subsequent capability to maintain a 3 percent halon concentration for one hour. This is consistent with the standards currently in effect for Class C cargo and baggage compartments. (I) Installation Costs As indicated above, installation costs comprise part of the $20,000 to $153,000 per aeroplane fire detection and suppression system cost. Time to convert these aeroplanes could be substantial, especially for aeroplanes with three Class D compartments, however, conversions could be accomplished during a C-check. A C-check is a scheduled maintenance check that occurs about once a year, typically over a period of four to five days. Conversions conducted concurrently with a C-check could reduce labour hours by as much as 30 percent because many areas of the aeroplane are easily accessible. The fire detection and suppression system cost estimates above are not adjusted to account for this potential 30 percent saving. It is assumed most air operators will likely perform conversions during C-checks, thus, this analysis attributes no foregone revenues due to downtime. (II) Certification Costs As indicated above, certification costs comprise part of the $20,000 to $153,000 per aeroplane fire detection and suppression system cost. A type design approval of the detection and suppression system was required for all aeroplane models affected by the regulatory requirement. Type design approval was in the form of a supplemental type certificate (STC) issued to an applicant. An STC records the approval of a change to the type design of an aeroplane and its component parts. Certain aeroplane models required a separate type certification program for each different variant. In other cases, all variants were sufficiently similar that type design approval could be granted for all variants following only one type certification program. This analysis assumed the minimum number of type certification programs theoretically necessary to accomplish the conversions. With the industry-wide voluntary compliance the new requirements for changed airworthiness designs of aeronautical products are not expected to affect this initiative. Because of voluntary compliance which has already taken place, the necessary type design approvals have been obtained and will not be affected by the new procedures for changes to airworthiness designs of aeronautical products which came into effect June 2003. (B) Annual Operating Costs (I) Increased Fuel Consumption Depending on the aeroplane model and its configuration, installing fire suppression and detection systems will add between 3.18 kg and 136.36 kg (between 7 and 300 lb) to the empty weight of an aeroplane. This weight, in turn, will affect fuel consumption. Incremental fuel consumption costs for each aeroplane model are based on the weight of additional equipment and suppression agent required, statistical estimates of the change in fuel consumption as a function of the incremental weight by aeroplane type and estimates of annual flight hours by aeroplane model. Annual per aeroplane incremental fuel consumption estimates are calculated as ranging between $86 to $8,404 depending on the aeroplane model. (II) Inspection and Maintenance Costs Inspection and maintenance of fire detection and suppression systems will include a leak check, a visual inspection of the system, a sensor test and a hydrostatic check of the fire bottles. The first three checks could be accomplished at each C-check, i.e., about once per year. A hydrostatic check will involve removing and replacing the fire bottle once every five years. The fire bottle will be returned to the halon provider where it is recharged and checked for leaks. Six work-hours at an hourly rate of $75 will be required to conduct a leak check of the system of each compartment. A visual inspection of the system will require 1.5 hours per compartment at $75 per hour. Checking the sensors will require about one hour per compartment. It will take two Aircraft Maintenance Engineers (AMEs) one hour at an hourly rate of $75 to remove and replace a fire bottle. (This labour cost is pro-rated over a five-year period as the fire bottle is removed and replaced once every five years, thus the labour cost for one year is calculated at $15.00 per AME). The estimated cost typically charged by fire-bottle vendors to perform a hydrostatic test and recharge the bottle irrespective of the size of the bottle, ranges from $900 to $1,500. This estimated cost includes the cost of shipping. It has been estimated that annual unit and inspection costs per aeroplane model will take about 9 to 26 hours. Annual unit maintenance and inspection costs, therefore, are estimated to range from $850 to $2,850 per aeroplane depending on the aeroplane model. (III) Weight Constrained Departure Costs Under certain combinations of conditions, some departures might be weight-constrained. In these cases, the additional weight of the fire detection and suppression systems will require an air operator to off-load passengers or cargo. The cost of unaccommodated off-load estimated at approximately $0.45 per 0.454 kg (1 lb) is a weighted average of passenger and cargo revenue derived from Canadian passenger and cargo traffic volumes. Estimates of annual unit off-load penalties range from $45 to $1,200 per aeroplane depending on the aeroplane model. (IV) Flight Diversion Costs It is anticipated that air operators will also incur costs associated with flight diversions caused by false fire warnings. Estimated costs include incremental aeroplane operating costs incurred during the diversions and passenger costs. The frequency of false alarms is estimated to be approximately 44 per million departures. Annual diversion costs per aeroplane are estimated to range from $90 to $4,240 depending on the aeroplane model. In any given year most aeroplanes will not experience a diversion. The diversion costs presented in this Regulatory Impact Analysis Statement (RIAS) represent the average cost of a diversion weighted by the annual probability of a diversion. Total Estimated Costs Total estimated costs are based on the mid points of the ranges of costs for the fleet as presented above. Present value estimates of the annual operating costs are calculated at a 10 percent discount rate over 10 years. The 10-year period represents the expected average life of the installation. The estimated cost for all aeroplanes identified as affected by air operators who are members of ATAC is approximately $30.3 million. The total estimated cost for the aeroplanes operated by air operators who were not members of ATAC is approximately $2.64 million. This difference in cost is attributable to ATAC members operating 92 percent of the aeroplanes identified as requiring conversion. Total costs for the Canadian fleet are estimated as $32.94 million. (c) Benefits Estimates (i) General The potential benefits to Canadians of the new fire protection requirements for Class D cargo and baggage compartments will depend on the degree to which the addition of detection and suppression systems will enable an air operator to avert a catastrophic accident in which lives are lost and/or serious damage is done to the aeroplane as a result of fire in a Class D cargo and baggage compartment. Measuring this benefit is problematic as it will depend upon the fire protection capabilities of Class C, D and E cargo and baggage compartments and the probability that a fire will occur. Fire protection capabilities of Class C, D and E cargo and baggage compartments specifically affected by this amendment have been previously outlined in Tables 1.0 and 2.0. The benefits of the new fire protection requirements for Class D cargo and baggage compartments (section 705.81 and Commercial Air Services Standard 725.81(b)) will be impinged upon by the benefits of the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments (section 705.81 and Commercial Air Services Standard 725.81(c)) and the existing benefits of Class C cargo and baggage compartments. The expected future rate of fires occurring in cargo and baggage compartments has been estimated using worldwide historical accident and incident data. These estimates, however, are largely based on accidents and incidents occurring, for the most part, prior to the use of flammable propellants in aerosol cans. As described previously, under the Description section of this RIAS, the current use of highly flammable propellants in consumer aerosol cans presents an additional hazard. During the 20-year period between 1977 and 1996, there were 19 fires reported worldwide as having occurred in Class C and Class D cargo and baggage compartments involving transport category aeroplanes while used in commercial air service (see footnote 4) . During this period air operators worldwide (excluding domestic operations within the former Soviet Union, the Russian Federation and the Commonwealth of Independent States) accumulated approximately 224.5 million departures in transport category aeroplanes having Class C or Class D cargo and baggage compartments. The worldwide event rate for fires occurring in Class C and Class D cargo and baggage compartments is, therefore, estimated at approximately 0.085 per million departures. Of the 19 fires occurring in Class C and Class D cargo and baggage compartments between 1977 and 1996, the fires occurring in Class C cargo and baggage compartments resulted in no casualties. Casualties occurred in three fires in Class D cargo and baggage compartments. While these three fires did not involve Canadian air operators, a Canadian air operator experienced a potentially catastrophic fire in a Class D cargo and baggage compartment during 1995 in which the plastic cap of an aerosol can melted. The most recent of the three fires incurring casualties took place in 1996 when a McDonnell Douglas DC-9 operated by Valujet was destroyed and 110 lives were lost. The other two Class D cargo and baggage compartment fires which resulted in casualties are a 1983 fire in a Boeing 737 operated by Gulf Air in which there were 112 casualties and a 1980 fire in a Lockheed L-1011 operated by Saudi Arabian Airlines which resulted in 301 casualties. The worldwide event rate for fires in Class D cargo and baggage compartments incurring casualties is estimated at 0.0134 per million departures. The current use of highly flammable propellants in consumer aerosol cans presents an additional hazard. (ii) Specific This analysis estimates the potential benefits of the new Canadian regulatory requirement by considering the potential benefit of fatalities averted if Canadian air operators avoid one catastrophic accident caused by a fire occurring in a Class D cargo and baggage compartment over a 10-year period. A 10-year period represents the expected average life of the installation. The expected reduction in the proportion of occupants fatally injured in an accident resulting from a fire occurring in a Class D cargo and baggage compartment is estimated as the ratio of fatalities to total occupants. Of the 1,411 individuals involved in the three accidents that incurred fatalities, 523 individuals were fatally injured, representing approximately 37 percent of occupants. The new regulatory requirements will provide the potential to reduce the risk of loss of life by up to 37 percent by reducing the possibility of serious fires in Class D cargo and baggage compartments. Estimated benefits are presented as an average for the fleet by using the Airbus A320 as a representative sample aeroplane. The Airbus A320 seat capacity of 150-186 seats most closely represents the overall average seat capacity of all affected aeroplane models. Applying the average 1998 applicable load factor (70.9%) to the average passenger capacity of the A320 (168) makes it possible to estimate total occupants at 119. Using the 37 percent risk reduction estimate explained above, 37 percent of the 119 lives (44 lives) will potentially be saved if one A320 avoids a catastrophic accident as a result of the implementation of this amendment. Potential benefits are calculated by multiplying the estimated value of a fatality averted by the number of lives potentially saved. Potential benefits over a 10-year period are estimated by calculating the present value of the estimated benefits at a 10 percent discount rate. Potential benefits if a fire is prevented in the first year of the 10-year period are approximately $66.1 million. If the fire does not occur until the 10th year the potential benefits will be $28 million. Further benefits will be realized by this amendment by the potential avoidance of aeroplane hull loss. Benefit-Cost Comparison and Summary In the above analysis, total estimated costs and benefits are presented as an average for the fleet over the expected lifetime of the installation. Costs are estimated at $33 million for the fleet. Potential benefits if a fire is prevented in the first year of the 10-year period are estimated at $66.1 million. Potential benefits if the fire does not occur until the 10th year are estimated at $28 million. Quantifiable data used in the analysis indicates positive benefit-cost implications for the first eight years of the installation. While potential aversion of hull loss has not been quantified, the aversion of hull loss will augment benefits. The additional hazard presented by the use of highly flammable propellants in consumer aerosol cans is non-quantifiable. In aggregate, the potential benefits of this amendment will justify the potential cost. (2) Upgrade of Cargo and Baggage Compartment Liners in Class C and Class D Cargo and Baggage Compartments (a) Affected Aeroplanes The Class C and Class D cargo and baggage compartments of Boeing 727, 737, 747, 757, 767, Lockheed L-1011 and Saab SF-340 aeroplanes will be affected by the amendment. Certain Boeing 727 and 737 aeroplanes have cargo and baggage compartment doors with nonrigid fiberglass blanket construction which do not meet the new requirement. Similarly, certain portions of the cargo and baggage compartment liners in Boeing 747 aeroplanes are of nonrigid fiberglass construction. Although the rest of the cargo and baggage compartment liner material used in Boeing 727, 737 and 747 aeroplanes will be satisfactory, the portions that are of nonrigid fiberglass construction will have to be replaced. Certain Boeing 757, 767, Lockheed L-1011 and Saab SF-340 aeroplanes have cargo and baggage compartment liners made of materials which do not comply with the new requirement. All liner panels in certain aeroplanes of these models will have to be replaced with cargo and baggage compartment liner panels that meet the new requirement. Table 3.0 below, sets out the fleet complement as of May 1999 and the assumptions made for the purpose of this analysis. These assumptions were made on the basis that Boeing began to voluntarily install liners meeting the similar United States' Code of Federal Regulations, Title 14, Chapter 1, Part 25, entitled Airworthiness Standards, Transport Category Airplanes on their Boeing 747, 757 and 767 aeroplanes during the latter portion of 1986. Therefore, the only aeroplanes of these models assumed not to be in compliance with the new liner requirement were those delivered before the voluntary installations began. It was anticipated that Boeing 737 aeroplanes manufactured after March 20, 1989 would be equipped with compliant materials as U.S. Amendment 121-202 (Fire Protection Requirements for Cargo or Baggage Compartments) setting requirements for the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments became effective on that date (see footnote 5) . Aeroplanes imported from the U.S. after March 20, 1991, were assumed compliant as the two-year compliance period given to U.S. air operators under Amendment 121-202 to upgrade the subject liners expired on this date. Canada is harmonizing with the United States' Code of Federal Regulations, Title 14, Chapter 1, Part 121, section 121.314 (Cargo and Baggage Compartments) by means of this amendment. Table 3.0
(b) Cost Estimates (i) General The estimated costs are compiled below for aeroplanes assumed, when this analysis was compiled, not to be in compliance with the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments. These cost estimates consider material costs, labour costs and annual operating costs. The annual operating costs consider weight penalties and fuel costs. This analysis attributes no foregone revenues due to downtime as existing liners are routinely removed more frequently than every two years for inspection of structure surrounding the cargo or baggage compartments. In instances where Canadian data was not readily available, the costs presented by the FAA in The Federal Register, Vol. 52, No. 214 (5 November 1987) pertaining to 14 CFR Parts 121 and 135 (Fire Protection Requirements for Cargo or Baggage Compartments; Notice of Proposed Rulemaking) were used and converted into Canadian dollars. This approach is considered practicable as Canada and the U.S. share, for the most part, common costs and markets in the aviation sector. The exchange rate of $1.5142 in effect in September 1999 is used in the analysis. A more detailed explanation of the estimated costs is provided below. (ii) Specific (A) Material Costs Unit costs for converting most aeroplane models that will be affected by the rule are based upon estimates of complete kits provided by airframe manufacturers. Engineering and certification costs incurred by the airframe manufacturers are reflected in the cost of these kits. Unit costs are presented in Table 4.0. (B) Labour Costs Labour cost estimates are based upon installation of a prefabricated kit. In lieu of purchasing prefabricated kits, air operators may elect to fabricate their own replacement panels from sheets of compliant liner materials. In such cases, they will incur lower material costs and higher labour costs, but the total conversion cost will be equal to or less than the cost of using a kit. As only two cargo doors are affected on Boeing 727 and 737 aeroplanes, it is assumed that air operators of these aeroplanes will use the latter approach. Labour costs for the installation are estimated to range between $60 to $90 per hour. Dependent upon the availability of Canadian resources, it is possible that some work will be conducted in the U.S. The $90 per hour cost represents the estimated cost of labour conducted in the U.S. The $60 per hour cost represents the lowest estimated cost of labour conducted in Canada. These labour costs are averaged to $75 per hour. These costs are presented in Table 4.0. (C) Annual Operating Costs (I) Weight Penalties The Boeing 727 and 737 aeroplanes will not incur any weight penalties because the new cargo door panels will weigh approximately the same as the fiberglass blankets they will replace. The other models affected by the amendment will be, however, expected to incur slight weight penalties in complying with the new requirement. Although rigid fiberglass will not weigh more than fiberglass blankets, it is expected that operators of Boeing 747 aeroplanes will retain the fiberglass blankets that are currently used as the compartment liners in some areas and simply install rigid fiberglass directly over the blankets. Rigid fiberglass will weigh slightly more than the non-compliant material that it will replace in Boeing 767, Lockheed L-1011 and Saab SF-340 aeroplanes. Weight penalties for Boeing 747, 757, 767 and Lockheed L-1011 aeroplanes are presented in Table 4.0. (II) Fuel Costs Each additional 0.454 kg (1 lb) of weight added to a turbofan-powered transport category jet aeroplane will result in an average additional fuel consumption of about 57 L (12.5 gal) per year per aeroplane. At the jet fuel price of $0.87/L, each additional 0.454 kg (1 lb) of weight will cost $49.59 annually. These costs are presented in Table 4.0. Table 4.0 Cost Estimates for Aeroplanes Subject to the Upgrade of Cargo and Baggage Compartment Liners in Class C and Class D Cargo and Baggage Compartments (Section 705.81 and Commercial Air Services Standard 725.81(2))
* The two SAAB SF-340 aeroplanes affected are not included in the analysis due to difficulty in separating the material costs from the labour costs. ** The material costs used in Table 4.0 are based on 1986 U.S. dollars converted into Canadian dollars at the exchange rate of $1.5142 in effect in September 1999. These costs may be a low estimate. Total Estimated Costs The present value estimate of the annual operating costs is calculated using a 10 percent discount rate over a 10-year period. The 10-year period represents the expected average life of the installation. Total costs are estimated by adding the one time approximate $1.95 million material and labour cost estimate to the approximate $2.38 million present value estimate of the annual operating costs. The sum of these cost estimates is approximately $4.33 million. This is the estimated cost for the Canadian fleet assumed affected over a 10-year period. (c) Benefits Estimates (i) General The potential benefits to Canadians will depend on the degree to which the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments enables an air operator to avert a catastrophic accident in which lives are lost and/or serious damage is done to the aeroplane. Measuring this benefit is problematic as the benefit will impinge on the improved benefits of the new fire protection requirements for Class D cargo and baggage compartments discussed previously, the fire resistance capability of Class C and Class D cargo and baggage compartments specifically addressed by this amendment outlined in Tables 1.0 and 2.0, and the probability that a fire will occur. The expected future rate of fires occurring in cargo and baggage compartments has been estimated using worldwide historical accident and incident data. This estimate, however, is largely based upon accidents and incidents occurring, for the most part, prior to the use of flammable propellants in aerosol cans. The current use of highly flammable propellants in consumer aerosol cans presents an additional hazard. During the 20-year period between 1977 and 1996, there were 19 fires reported as having occurred worldwide in Class C and Class D cargo and baggage compartments involving transport category aeroplanes while used in commercial air service (see footnote 6) . During this period air operators worldwide (excluding domestic operations within the former Soviet Union, the Russian Federation and the Commonwealth of Independent States) accumulated approximately 224.5 million departures in transport category aeroplanes having Class C or Class D cargo and baggage compartments. The worldwide event rate for fires occurring in Class C and Class D cargo and baggage compartments is, therefore, approximately 0.085 per million departures. Of the 19 fires occurring in Class C and Class D cargo and baggage compartments between 1977 and 1996, the fires occurring in Class C cargo and baggage compartments resulted in no casualties. Casualties occurred in three fires that occurred in Class D cargo and baggage compartments. While these three fires did not involve Canadian air operators, a Canadian air operator experienced a potentially catastrophic fire in a Class D cargo and baggage compartment during 1995 in which the plastic cap of an aerosol can melted. The potential consequences of a bursting aerosol can in the non-inert atmosphere of a Class D cargo and baggage compartment include explosion of the propellant with enough force to rupture the cargo and baggage compartment liners. Class C cargo and baggage compartments will not experience an ignition or explosion of an aerosol can as the atmospheres in Class C cargo and baggage compartments are made inert by the use of suppressing agent when fire or smoke is detected. However, a fire could still start within a Class C cargo and baggage compartment as other combustible materials are carried in these compartments. Class C and Class D cargo and baggage compartments are located in areas that are not readily accessible to crew members in flight. Accident experience and full scale tests and analyses conducted by the FAA show that fires can rapidly burn through certain types of cargo and baggage compartment liners, compromising the integrity of the fire control mechanisms in Class C and Class D cargo and baggage compartments. Once fire penetrates the liner, air may enter the cargo and baggage compartment, or the suppression agent may escape the cargo and baggage compartment, thus, fire may spread to other parts of the aeroplane. (ii) Specific Potential benefits of the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments are estimated in this analysis by considering the benefit of Canadian air operators averting one aeroplane hull loss over a 10-year period. A 10-year period represents the expected average life of the installation. The Boeing 737 and Boeing 767 aeroplane types are used as representatives of the fleet to illustrate potential benefits. These aeroplane types represent the majority of the fleet assumed affected. These aeroplane types will not incur either the lowest or the highest conversion costs, as shown in Table 4.0. Utilizing price guidelines contained in the 1999-2000 edition of Lloyd's Aviation's Aircraft Types and Price Guidelines, in conjunction with data specific to the Canadian fleet, the average value of a Boeing 737 operating in Canada, at the time of the analysis, was estimated at approximately $6.90 million. One-time equipment and labour costs of this amendment per Boeing 737 were estimated at $875.00. Subtracting these costs and calculating the present value of the used aeroplane at a 10 percent discount rate over 10 years results in a benefit estimated to range from $6.90 million if a hull loss is prevented in the initial year to $2.92 million if a hull loss is prevented in the 10th year. Lives will also be saved which will add to the net benefit. Again, utilizing price guidelines contained in the 1999-2000 edition of Lloyd's Aviation's Aircraft Types and Price Guidelines, in conjunction with data specific to the Canadian fleet, the average hull value of a Boeing 767-200 assumed affected by this amendment, at the time of the analysis, was estimated at approximately $28.35 million. Costs of this amendment per Boeing 767-200 are estimated at $57,400. This $57,400 cost estimate includes the equipment and labour cost estimates for the conversion of one B767 aeroplane and the increased annual operating cost estimate. Subtracting these costs and calculating the present value of the used aeroplane at a 10 percent discount rate over 10 years results in a benefit estimated to range from $28.3 million if a hull loss is prevented in the initial year to approximately $12 million if a hull loss is prevented in the 10th year. As well as the estimated savings from the prevention of hull loss, lives will also be saved — a significant addition to the net benefit from this initiative. Benefit-Cost Comparison and Summary This analysis of the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments estimates potential costs for the fleet at $4.33 million over the expected life of the installation. The quantified benefits for the Boeing 737 are estimated to range from $6.90 million if a hull loss is prevented in the initial year to $2.92 million if a hull loss is prevented in the 10th year. The quantified benefits for the Boeing 767 are estimated to range from $28.3 million if a hull loss is prevented in the initial year to approximately $12 million if a hull loss is prevented in the 10th year. While the potential aversion of fatalities has not been quantified, the aversion of fatalities will augment benefits. The additional hazard presented by the use of highly flammable propellants in consumer aerosol cans is non-quantifiable. The potential benefits of this amendment will justify the potential costs. Overall Summary of Benefit-Cost Analysis In aggregate, the benefit-cost implications of section 705.81 (Cargo and Baggage Compartment Fire Protection) are positive. These regulatory requirements will correct a potentially unsafe condition, increase consumer confidence in the aviation industry, and maintain equivalent levels of safety between the Canadian and the American fleets. Throughout the development of the CARs, Transport Canada applies risk management concepts. Where there are risk implications the analysis of these amendments has led to the conclusion that the imputed risk is acceptable in light of the expected benefits. Consultation The Regulations Amending the Canadian Aviation Regulations (Part VII) were pre-published in the Canada Gazette, Part I, on October 5, 2002. No comments were received. The effective date by which the required changes to the affected cargo compartments must be completed has been revised to be June 1, 2004. Originally, a three-year period after promulgation of these requirements was planned to allow the industry ample time to complete the necessary modifications at minimum cost. In anticipation of the promulgation of these Canadian amendments and in light of the presence of the U.S. requirements, the Canadian industry has achieved close to 100 percent compliance with the necessary changes. Since nearly 100 percent compliance has already been achieved an extended period is no longer necessary. The date of June 1, 2004 is not expected to present compliance problems for the industry. In acknowledgement of the industry's voluntary compliance with these requirements and of the federal government's overall goal of regulating "smarter" by using objective-based regulation, the requirements for air operators to submit a compliance plan and quarterly information reports have been removed from these amendments. With very few air operators who have not completed the necessary modifications, the reporting requirements would have added an administrative burden for the majority of air operators which, although minor, is not now considered necessary. The need for these regulatory requirements was discussed at a joint special Technical Committee meeting of the Aircraft Certification, Maintenance and Manufacturing, General Operating and Flight Rules, and the Commercial Air Service Operations Technical Committees of the Canadian Aviation Regulation Advisory Council (CARAC) in September 1997. During the meeting it was agreed that regulatory requirements pertaining to the modification of Class C and Class D cargo and baggage compartments of aeroplanes operating under Subpart 705 (Airline Operations) were needed and would be consulted by mail. Active members of the Technical Committees consulted include the Aerospace Industries Association of Canada, Air Alliance, Air BC, the Aircraft Electronics Association, Air Canada Pilots Association, Air Canada, the Canadian Union of Public Employees, Bell Helicopter Textron Canada, Bombardier Aerospace, Bombardier/de Havilland Inc., Canada 3000 Airlines-Pilots Association, Canadian Airlines International Ltd., Field Aviation East Ltd., Flight Safety Canada, Innotech Aviation, l' Association professionnelle des T.E.A. du Québec, l'Association québécoise des transporteurs aériens Inc., l'Association des Gens de l'Air du Québec, l'Association des PNT d'Air Transat, NAV Canada, Pratt & Whitney Canada Inc., the Aerospace Group, the Air Transport Association of Canada, the Aircraft Operations Group Association, the Alberta Aviation Council, the Canadian Airline Pilots Association, the Canadian Association of Aviation Distributors and Maintenance Organizations, the Canadian Auto Workers, the Canadian Business Aircraft Association, the Canadian Aviation Maintenance Council, the Canadian Federation of Aircraft Maintenance Engineers, the Canadian Labour Congress, the Canadian Marconi Company, the Canadian Owners and Pilots Association, the International Aircraft Owners and Pilots Association, the Central Aircraft Maintenance Engineers Association, the Department of Justice, the Department of National Defence, the Government of Manitoba Air Services, the International Association of Machinists and Aerospace Workers, the Northwestern Ontario Air Carriers Association, the Pacific Aircraft Maintenance Engineers Association, Teamsters Canada, the Transportation Development Centre, the Transportation Safety Board of Canada, and Voyageur Airways. All respondents to the consultation by mail supported or did not object to the proposed regulatory requirements. Of the nine responses received, some requested either more or less time for implementation. The three-year compliance period consulted in the proposed section 705.81, on July 27, 1998, has been amended to require compliance of affected air operators by June 1, 2004. The amendment to the compliance period is not expected to cause additional hardship to air operators as air operators have been in agreement with the intent of the amendment since 1997. ATAC, whose members represent the majority of air operators affected by the amendment, is in agreement. Air operators have been made aware of this amendment by Commercial and Business Aviation Advisory Circular No. 0172, entitled Cargo and Baggage Compartment Fire Protection, dated May 9, 2000. One response submitted resulted in an amendment being made to proposed section 705.82 (Compliance Plan). The Notice of Proposed Amendment (NPA), consulted on July 27, 1998, required affected air operators to provide copies of contractual agreements for the required equipment and installations to the Minister of Transport as part of their compliance plan. Proposed section 705.82 was removed following prepublication as discussed above. One respondent submitted that the upgrade of cargo and baggage compartment liners in Class C and Class D cargo and baggage compartments should also apply to compartments having a volume smaller than 200 ft3. Compartments below 200 ft3 are considered to provide an acceptable level of safety under current standards on the basis that the fire hazards in such compartments are lower due to the reduced quantity of oxygen and smaller amount of combustible materials present to sustain combustion. Thus, the amendment was not changed as a result of this comment. One respondent suggested that liner installations approved prior to the promulgation of the new regulatory requirements should be allowed to comply with the aircraft's basis of certification. This suggestion is contrary to the objective of the new regulatory requirements, that of requiring liners which will prevent fires from burning through cargo compartment liners. The amendment was presented at the Civil Aviation Regulatory Committee (CARC) , which is composed of senior managers in the Civil Aviation Directorate of the Department of Transport, in April 1999. The members of CARC approved this amendment. Compliance and Enforcement Aeroplanes not in compliance after June 1, 2004 will be prohibited from operating. These regulatory requirements will be enforced through the suspension or cancellation of a Canadian Aviation Document pursuant to sections 6.6 to 7.1 of the Aeronautics Act or through judicial action introduced by way of summary conviction as per section 7.3 of the Aeronautics Act. Contact
Chief
S.C. 1992, c. 4, s. 7 SOR/96-433 The transport of dangerous goods to, from and within Canada is regulated by the Transportation of Dangerous Goods Regulations (TDGR), a set of Regulations administered by Transport Canada. Subsections 2.9(1) and (2) of those Regulations indicate that in addition to specified requirements of the TDGR the ICAO Technical Instructions (2001/2002) must be met when transporting dangerous goods by air. The Technical Instructions provide a listing of all possible dangerous goods, in which "Aerosols" is included, and prescribes the type of packaging, quantity limitations and how they should be identified, documented and handled. Part 8 of the ICAO Technical Instructions permit limited quantities of aerosols to be transported on an aircraft in passenger or crew baggage. Currently, the most effective and most commonly used suppression agent is a halogenated hydrocarbon known as halon. Canada is a signatory to the Montreal Protocol, a 1987 international agreement to phase out production of ozone depleting substances, including halon. Halon continues to be used as a fire suppressant for on-aircraft fires due to the current lack of a suitable and safe alternative. That situation will be unchanged by this requirement. The international community continues to research alternatives to halon for the extinguishment of on-aircraft fires. United States of America, Department of Transportation, Federal Aviation Administration, "14 CFR Parts 25 and 121, Revised Standards for Cargo or Baggage Compartments in Transport Category Airplanes; Final Rule", Federal Register (Tuesday, February 17, 1998) Vol. 63, No. 31, p. 8047. Amendment 121-202 was published by the FAA in 54 FR 7384, February 17, 1989. United States of America, Department of Transportation, Federal Aviation Administration, "14 CFR Parts 25 and 121, Revised Standards for Cargo or Baggage Compartments in Transport Category Airplanes; Final Rule", Federal Register (Tuesday, February 17, 1998) Vol. 63, No. 31, p. 8047. 5 United States of America, Department of Transportation, Federal Aviation Administration, "14 CFR Parts 25 and 121, Revised Standards for Cargo or Baggage Compartments in Transport Category Airplanes; Final Rule", Federal Register (le mardi 17 février 1998) Vol. 63, No. 31, p. 8047. |
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