by Greg Reigel
“Copyright 2017. All Rights Reserved”
Published In Midwest Flyer December 2017/January 2018 issue
Are you one of the estimated 778 unfortunate aircraft owners affected by the latest Lycoming airworthiness directive (“AD”)? If you are, I am hopeful this article will help you navigate your current situation.
The Airworthiness Directive
On August 4, 2017, Lycoming issued a “Mandatory Service Bulletin” (“MSB”) requiring inspection, and potentially replacement, of connecting rod bushings in certain Lycoming engines that had been overhauled or repaired using replacement parts. The MSB identified the potentially affected engines and replacement parts, and it also included instructions for completing the inspection, as well as the installation of replacement connecting rod small end bushings. It also indicated that the inspection and/or replacement be performed within the next 10 hours of engine operation.
As we know, although a manufacturer may state that its service bulletin is “mandatory,” for most operators flying their aircraft strictly under Part 91, service bulletins are not, in fact, mandatory. So, when it was issued, the MSB wasn’t mandatory for most Part 91 operators.
Unfortunately, the FAA received five (5) reports of uncontained engine failures and in-flight shut downs due to failed connecting rods on certain Lycoming engine models identified in the MSB. Based upon its evaluation of the information available to it, the FAA determined that an unsafe condition existed or could develop in products of the same type design. As a result, on August 10, 2017, the FAA issued the airworthiness directive (“AD”) with respect to the Lycoming engines requiring compliance with the MSB in order to prevent uncontained engine failure, total engine power loss, in-flight shut downs, and possible loss of the aircraft.
And, as we also know, an airworthiness directive is mandatory, regardless of the particular regulations under which you are operating. So, if your aircraft’s Lycoming engine is one of those specified in the MSB/AD, you have no choice but to comply with the AD if you want your aircraft to be airworthy.
Cost of Compliance
According to the AD, the FAA anticipates that initial compliance with the AD (the inspection of the connecting rod small bushings) will cost engine owners approximately $1,425 in parts and labor. If connecting rod replacement is required, the FAA estimates the additional parts and labor costs will range from $2,170.00 for a four-cylinder engine, up to $6,850.00 for an eight-cylinder engine. Of course, these are just estimates and they do not take into consideration any warranty coverage or variations in the costs of parts or labor.
Fortunately, this AD isn’t as extensive, or expensive, as the 2006 Lycoming crankshaft airworthiness directive. That airworthiness directive required replacement of the crankshaft in approximately 3,774 engines to the tune of about $16,000 per engine. So, what are your options if this AD applies to your engine?
One option is to pursue a warranty claim with Lycoming. Lycoming has several types of warranties: New and Rebuilt Engine Warranty; New Non-Certified Warranty; Overhauled Engine Warranty; and Replacement Parts Warranty. You will need to determine which warranty applies to your engine and then file a claim with Lycoming. Lycoming will then determine whether you have coverage and, if so, to what extent. Although I haven’t reviewed Lycoming’s various warranty programs, the coverage typically includes parts only. And it certainly does not cover loss of use or other losses an engine owner may suffer as a result of the AD.
If you don’t have warranty coverage, or if you are unsatisfied with the warranty coverage applicable to your engine, you could also consider suing Lycoming to try and recover the costs of complying with the AD and any other losses you suffer as a result of the AD. However, given the anticipated cost of compliance, unless you have other significant losses as a direct result of the AD, the cost of litigation would likely exceed your losses with no guaranty of recovery. (Although given the number of affected engines, I wouldn’t be surprised if some owners attempted a class action lawsuit against Lycoming).
Also keep in mind that a manufacturer’s warranty typically includes language making the warranty your sole remedy and excluding your ability to pursue other claims for recovery against the manufacturer. So, I would anticipate that Lycoming would raise this and other legal defenses in responding to any lawsuits. But litigation is certainly an option, although not necessarily a practical or preferred option.
As you may recall, the Lycoming crankshaft airworthiness directive resulted in numerous lawsuits brought by engine owners against Lycoming. Of course, the cost of compliance for that airworthiness directive was significantly higher than the current AD, which certainly made the economic analysis for litigation more attractive in that situation. Some lawsuits were brought by engine owners in their individual capacities, and others sought class action status on behalf of all affected engine owners. Lycoming also sued its crankshaft manufacturer, although it ultimately lost the case.
The bottom line for most engine owners affected by this AD is that they will need to comply in order for their aircraft to remain airworthy. How or whether they are able to recover their costs of compliance will initially depend upon how Lycoming handles the warranty issues. If Lycoming doesn’t treat its customers fairly, I would anticipate at least some litigation. However, whether such litigation will be successful is hard to say at this point in time.
EDITOR’S NOTE: Greg Reigel is an attorney with Shackelford, Melton, McKinley & Norton, LLP, and represents clients throughout the country in aviation and business law matters. For assistance, call 214-780-1482, email email@example.com, or Twitter @ReigelLaw.