Agencies Ignored ‘Warning Signs’ in OKing Airline, Congressman Says
Galaxy Airlines, operator of a chartered plane that crashed in Reno last January, killing 70 people, received regulatory approval from two federal agencies despite “abundant warning signs” that its owner “had serious financial and technical problems,” the chairman of a House subcommittee said Tuesday.
“From the beginning, Galaxy Airlines was a recipe for disaster,” declared Rep. James L. Oberstar (D-Minn.) as he opened hearings by the House public works and transportation subcommittee on investigations and oversight into how and why the Florida-based firm gained operating authority.
Galaxy’s four-engine Lockheed Electra turboprop, which was returning to Minnesota on Jan. 21 from a gambling excursion, crashed and burned about two minutes after takeoff from Reno Cannon International Airport.
Only one person aboard the plane survived. The National Transportation Safety Board is still investigating the cause of a severe vibration reported by the pilot shortly before the crash.
Oberstar said the Civil Aeronautics Board and the Federal Aviation Administration granted approval for Galaxy’s operations in 1983 without thoroughly investigating reports that the firm’s owner, Phillip Sheridan, “had financial problems” and “a number of unpaid bills” from other aviation firms in which he was part owner.
Saw No Direct Link
At Tuesday’s hearing, two Department of Transportation officials testified that no direct link has been established between the crash and the company’s financial condition or maintenance practices. A third department official told the panel that “there is ample evidence of carriers who are not financially stable cutting corners in maintenance areas.”
Patricia T. Szrom, the Civil Aeronautics Board division chief who handled Galaxy’s certification, said Sheridan told the agency that he had contracts with casinos and a $300,000 line of credit with a bank.
“We felt he had financial resources. . . . He looked good on paper,” said Szrom, who now holds a similar position in the Department of Transportation, which absorbed the CAB’s functions this year.
Jeffrey Shane, the department’s deputy assistant secretary for policy and international affairs, joined Szrom in asserting that no connection has been found between the crash and Sheridan’s financial situation. In defending the approval of regulatory authority for Galaxy, Shane testified that “to say the decision is wrong is armchair quarterbacking.”
Questions Raised
Joseph Hamilton, who was chief of the CAB’s investigations division and now is a Department of Transportation official, told the subcommittee that he had raised questions about Sheridan’s financial condition in 1983 because of his concern that “there is a direct relationship” between any air carrier’s financial stability and the safety of its operations.
Oberstar also said that government records uncovered by the subcommittee staff show that the FAA had criticized “major deficiencies” in Galaxy’s maintenance manual. William T. Brennan, acting deputy director of the FAA’s flight operations office, responded that the manual “went back and forth several times” before it was approved by the agency.
Brennan said the FAA is alert to signs of financial troubles of air carriers. “When we hear of problems, we step up surveillance,” he said.
