The Crash of Air Philippines 541

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AAR never ascertained whether Air Philippines was aware of what Boeing’s schedule of maintenance requirements were.

AAR had it checked by a company that makes appraisals, and they were warned that this was going to be a plane that would have problems with maintenance in the future, yet they purchased it because the returns were great.

So there was a cost-benefit analysis conducted in which the financial returns even though it was acknowledged that it was with a start-up airline in a foreign country the returns were higher than normal and, therefore, the financial return warranted the lease.

[Southwest] wrote that off, but Air Philippines takes it because it’s a cheaper acquisition for them. They take that [plane] and AAR knows it has increased maintenance as it goes on, but they never did the review of maintenance facilities and programs of Air Philippines. They didn’t check to see if the maintenance manuals were coordinated or any of those things. The pre-lease inspection said, ”You’re going to have ever-increasing maintenance costs, use caution.”

Chicago Lawyer: Can airplanes be brought up to speed after so many miles?

Nolan: There are metal fatigue issues that we commonly deal with. Aging and metal fatigue is a common problem in the commercial aircraft industry, and it’s exacerbated in the situation of aged aircraft.

Metal fatigue issues are especially important when you’ve leased an airplane in an ocean environment like the Philippines, where you have accretion of salt as a corrosive factor, so taking an old airplane like this, not performing maintenance, with old parts, and then exposing it to a salt-water environment is especially difficult.

Chicago Lawyer: You’ve talked about the lack of training and maintenance how does the ground warning issue relate to the crash?

Nolan: When the plane was inspected and leased by AAR and brought to Philippines, the airplane was not equipped with an up-to-date ground proximity warning system, an enhanced ground proximity warning system, which was then available and widely sold to airlines for safety reasons.

Instead, the plane was sold with the original old, outdated ground proximity warning system, which gave much lesser warning to the pilot of impending disaster.

The plane flew into a mountain. It was coming in, there was another plane on the runway, so it had to do a missed approach.

It was circling the airport in inclement weather and flew into a mountain, and that’s precisely why the enhanced ground proximity warning system would have prevented the crash. It would have given a 24-second warning to the crew, at a minimum. They almost avoided the crash they clipped trees but the old system only gave them a few seconds’ warning.

Had this plane been equipped for a few cents more per passenger with an enhanced ground proximity warning system, the plane crash would never have taken place.

Yet AAR elected even though the FAA had set a schedule for incorporating the enhanced ground proximity warning system into the American fleet to place it over in the Philippines when, in fact, the outdated system was not suited for the mountainous regions of Philippines.

We took the deposition of the designer of both systems and he noted that the old system was not designed for that terrain. The enhanced system was available and being employed by other operators.

Chicago Lawyer: What was the spoliation issue?

Nolan: We, through discovery, found that the insurers had hired an insurance adjusting company in Singapore called Air Claims. After we instituted our product liability lawsuit, Air Claims went to the scene of the crash and buried the wreckage in concrete. This was paid for by the insurers. Illinois law recognizes spoliation, so we had a motion for sanctions pending at the time the case settled.

AAR and Fleet, the successor company, now part of Bank of America, both of the defendants knew or had to know that maintenance was not being performed as required on this airplane, and so, certain key elements the component parts of the aircraft, the distance measuring equipment and the altimeter were buried by the insurance company and that prevented us from ever looking at it, even though maintenance records show these parts had been in the shop just days before the occurrence, so that was very critical.

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