For years MARPA has talked about opportunities that exist for PMA manufacturers willing to look for non-traditional customers. One of the most under-appreciated possibilities, and one that MARPA President Jason Dickstein has emphasized, is to act as a supplier to OEMs. OEMs are very often massive companies with a need for quality, reliable suppliers, and many MARPA members are ideally positioned to take advantage of OEM purchasing needs with high quality approved parts on the shelf and ready to ship.
The U.S. Department of Commerce is presenting a program on becoming a supplier to Embraer. Because many PMA companies are already manufacturing parts for Embraer aircraft, this may be an excellent opportunity to broaden your customer base for your Embraer parts.
The program will begin with a presentation made by Embraer representatives on how to initiate a relationship with Embraer. This presentation will be made by webinar on October 28, 2016. Participation in this introductory webinar is a mandatory part of the program, so if this is something your company may even be remotely interested in, you should plan to register and participate.
Interested companies will then be asked to fill out an online questionnaire from which Embraer engineers will evaluate companies and select suppliers for a second round of webinar discussions with Embraer’s engineering department. Embraer may then invite select companies for a further in-depth interview.
There is no cost to participate in this program, and it presents an opportunity to potentially expand parts sales. MARPA has often said that OEMs should be thought of as no different than air carriers from a customer perspective: they need parts, and we manufacture and sell great parts. This could be an excellent opportunity for MARPA members to diversify their customer base.
If this opportunity sounds like something your company may be interested in, you can register for the mandatory introductory webinar at the following link: http://2016.export.gov/california/losangelesdowntown/events/embraer/eg_us_ca_102435.asp.
As part of its ongoing drive to increase the export of U.S.-made PMA parts and increase global knowledge and understanding of PMA, MARPA has in the past few years traveled to Japan to speak with potential customers, government contacts, and manufacturing partners. MARPA is happy to announce that it will continue these efforts this year at the Japan International Aerospace Exhibition 2016, in Tokyo, Japan, October 12-15.
We have worked closely with long-time MARPA member and MARPA supporter Akira “Jay” Kato of JK Tech Consulting to make valuable contacts in Japan and discuss PMA at a very high level with Japanese customers and government officials. These efforts include both explaining and educating air carriers and their purchasing groups about PMA, as well as, importantly, promoting the use of PMA by discussing the safety, value, and reliability PMA provides.
These efforts are one prong of MARPA’s ongoing MDCP efforts supported by the U.S. International Trade Administration.
MARPA hopes to continue to make valuable contacts in the Japanese aviation community, and particularly to make additional inroads on behalf of the PMA industry with customers in Japan.
While MARPA always enthusiastically promotes the benefits of PMA where ever it goes, we would like to be able to provide a more targeted benefit to our members. We would therefore like to offer to our members the opportunity to display your marketing literature in the MARPA booth at the Japan International Aerospace Exhibition. This will allow us to direct visitors at the MARPA booth to those members who can best serve their needs or might be an ideal partner for future business.
If you would like to have your literature displayed in the MARPA booth this October in Tokyo, please contact Senior MARPA Program Manager Katt Brigham at firstname.lastname@example.org no later than September 30.
As our members know, MARPA has been working over the past two years with the U.S. Department of Commerce’s International Trade Administration (ITA) under its Market Development Cooperator Program (MDCP). Under the MDCP the ITA provided MARPA a $300,000 matching grant to help MARPA promote PMA around the world with the ultimate goal of increasing exports of U.S.-made PMA parts, with the additional benefit of potentially adding U.S. jobs.
One of the conditions of MARPA’s receipt of the MDCP grant is that we are required to report back to ITA on the increase in exports our members are seeing. These reports allow the ITA to demonstrate the results of the program to Congress and keep open the funding to support increasing U.S. exports in various industries around the world.
This requirement is why we need our members’ help. We need to hear from you to know if MARPA’s efforts are working, and if the PMA industry is seeing an increase in export sales. MARPA therefore needs your help in gathering data on new exports of PMA parts.
MARPA is always sensitive to its members’ business needs, so we want to assure you that any information provided to us will be kept confidential, and the only information that is shared with ITA will be the country of export and the value of the export, and no other sensitive business information or data.
We are asking that our members fill out the export survey found by following this link. MARPA needs to know the following information: for any exports that are traceable to a MARPA effort under the MDCP–the MARPA Europe Conference, the domestic MARPA Annual Conference, MARPA’s presence and promotion at trade shows around the world–to what country was the export (or contract for future sales), and what was the value of the export or future export?
That’s it! Just country and dollar value. We don’t need to know your customer’s name, the specific parts or product type involved, or any other detail. Even your company’s name will be kept anonymous unless you expressly tell us to release it to ITA.
If you wish to provide MARPA additional information so that we can better focus our efforts, of course we welcome it. But we only need for the sake of our MDCP requirements a report on export country and dollar value.
Please help MARPA fulfill its obligations to ITA under the MDCP. The ITA was generous in supporting MARPA with this grant so that we can increase our efforts to expand the global PMA market. MARPA needs to make good on its requirement to report back on our efforts and help ITA keep this valuable program going!
If you have questions about MARPA’s reporting obligations under the MDCP or wish to report export data directly rather than by using the survey form, feel free to email VP of Government and Industry Affairs Ryan Aggergaard directly at email@example.com. MARPA sincerely thanks our members in advance for their help!
MARPA had the opportunity this week to attend the 2016 FAA-EASA International Aviation Safety Conference that was held in Washington, DC. The conference provides an opportunity for the regulatory agencies and industry to get together to discuss emerging issues in aviation safety and strengthen the cooperation between both the regulators themselves as well as the regulators and industry.
One notable panel discussed performance-based regulations (PBR) and their development, implementation and oversight as a part of the ongoing safety management adoption. The goal of PBR is essentially to retain the high level requirements and clearly establish what those high-level regulations are trying to achieve, while clearing out more detailed prescriptive regulations. Those detailed regulations would then be replaced by industry consensus standards.
In theory, this should clear the way for innovation by focusing more on ensuring a satisfactory outcome (that complies with the regulations) is the result, rather than focusing on prescriptive compliance-based rules. (How this exactly squares with a safety management system focused on systems and processes rather than the outcome per se is a conversation for another day.) Performance-based regulations can free the hands of regulated parties and avoid the trap of innovation stagnation in which companies are forced to design or produce in only limited ways in order to comply with the regulations.
Although moving to a PBR approach may be a laudable goal, the next panel demonstrated how challenging it may be for regulators to break free of deeply ingrained compliance-based approaches to oversight. Relevant to PMA manufacturers, the “fast-moving technologies” panel spent a significant amount of time discussing certification of projects using additive manufacturing techniques.
In theory, a PBR approach would be ideal for approving parts manufactured using emerging technology like additive manufacturing (AM). If a part can be produced using AM techniques (like 3D printing) that meets all the design requirements (dimensions, material composition, durability, etc) of a part that is traditionally machined, an outcome-focused approach like PBR claims to be should have no problem approving that part. Conversely, if a 3D printed part cannot be made to conform to the approved design, our quality assurance systems reject the part and we go back to the drawing board.
However, it became clear during that panel that we can expect to see more of the same compliance based review of processes in seeking to obtain approval of parts manufactured using emerging technologies like AM. Of course to borrow from Captain Renault I was shocked, SHOCKED to find that the OEM panelist expressed skepticism that “sub-tier” suppliers or those in the aftermarket were capable of producing approved parts using these methods. But of greater concern was his statement that the regulators might also question that ability.
Part of this concern on the part of the regulators arises from the fact that the regulators themselves do not fully understand technologies like AM yet. The FAA is currently working with industry to determine what controls will need to be in place and what the oversight requirements will be with respect to AM. It will therefore be very important for any PMA manufacturer seeking to use new techniques to manufacture parts to engage the FAA early in the process and demonstrate to the FAA its competence with the technique. This may involve educating the FAA in some cases (and refuting the implications of some larger OEMs that only they know the “special sauce” of new technology).
This much was supported by FAA AIR-1 Dorenda Baker, when she explained that the key to getting approval when relying on new technology is ensuring an understanding on both sides. The FAA needs to be brought into the process very early on. When the FAA is brought in at the last minute, problems and confusion can arise, because what might seem clear to the applicant, who has been working with the technology for months or even years, can seem confusing to the regulator seeing it in action for the first time. Ms. Baker explained that we don’t want questions being asked for the first time, or engineers trying to understand new processes, at the time of certification. We, as applicants relying on new manufacturing techniques, need to engage the FAA early and often.
Of course this is somewhat inconsistent with a performance-based approach. As we mentioned above, if the goal of PBR is to ensure an outcome that satisfies high-level regulations, it should be less important how we get to the result than that we obtain a satisfactory result. A need on behalf of the regulator to understand fully the processes by which we obtain the result is more consistent with systems oversight (their stated goal) but doesn’t square perfectly with a PBR approach.
Nonetheless, it thus becomes clear that the PMA industry will have to fight this battle of fast moving technology on two fronts: First, we will have to (again) battle against an OEM-driven (mis)perception that only OEMs are capable of understanding and safely applying emerging technologies like additive manufacturing. Second, we will have to work very closely with the regulators to continuously demonstrate our competence and expertise in applying these technologies, and in effectively implementing systems that consistently produce the desired outcome.
There is a lot happening right now; from fundamental shifts in the role regulators play to the way we design and manufacture parts. By frequently engaging with the regulators we are able demonstrate our competence and abilities (simultaneously refuting any implications by competitors to the contrary) and keep the regulators closely engaged so that the certification process moves smoothly and we are able to nimbly adapt to changes as they happen.
MARPA will continue to keep you updated as old regulations change and new regulations emerge.
As readers of this blog and attendees at MARPA events know the FAA, specifically the Engine and Propeller Directorate, has been releasing a significant number of PMA-related advisory circulars of late. Currently open for comment is AC 33.15-3 Parts Manufacturer Approval (PMA) Metallic Part Material Compliance Using Comparative Test and Analysis Method for Turbine Engines or Auxiliary Power Units. This is a highly complex draft advisory circular that has the potential to affect many MARPA members and the PMA industry as a whole.
MARPA plans on submitting comments on this advisory circular, but we need the assistance and expertise of the MARPA community to make sure we identify all the possible issues that may have an adverse effect on the PMA industry.
I know that some of our members have already looked at this and have begun to identify issues. For those who have not yet had the opportunity, please take the time to review the draft language and identify any issues and possible solutions you see. Please provide any comments you identify to MARPA so that we can include them in our comments that we will submit to the FAA.
The AC is fairly lengthy document, so it may take some time to get through. Because of this complexity, we would like to have all of your comments in well in advance of the July 20, 2016 comment due date. MARPA therefore requests that any comments you identify are provided to us as quickly as possible, and in any case no later than July 8. This should give us ample time to compile all of your comments into a single comment submission on behalf of the members. It will also give us time to circulate our comments back to both the MARPA Technical Committee and MARPA Board for review.
This is a complex and weighty document, so if you plan on reviewing and submitting comments to MARPA or submitting comments on behalf of your company, we encourage you not to wait until the last minute to review the draft AC.
Please email your comments to VP of Government and Industry Affairs Ryan Aggergaard at firstname.lastname@example.org.
Several draft FAA Advisory Circulars are currently open for comment of which MARPA members should take note.
Today the FAA’s Engine and Propeller Directorate released draft AC 33.15-3 Parts Manufacturer Approval (PMA) Metallic Part Material Compliance Using Comparative Test and Analysis Method for Turbine Engines or Auxiliary Power Units. This AC is intended to provide guidance to assist PMA applicants in developing tests to demonstrate the equivalence of materials with that of the type design materials.
We will provide a more detailed analysis of this draft AC in the coming days, but want to encourage each of our members to review it and submit comments to the FAA addressing any potential problems you identify–or offering praise if you feel it is a useful document. MARPA will be offering its own comments, so if you do not wish to file on your own, please feel free to provide us with your thoughts and we will incorporate them into the association’s comments. These comments are due to the FAA by July 20.
Two other draft ACs are also open for comment and bear review. The first is AC 39-xx Alternative Methods of Compliance. This AC is intended to provide guidance to those applicants seeking approval of an AMOC. This guidance formerly appeared in FAA Order 8110.103A but has since been removed to a stand-alone AC. Comments are due May 30.
The other is AC 23.10 FAA Accepted Means of Compliance Process for 14 CFR Part 23. This AC provides guidance on how to submit applicant proposed means of compliance to the FAA for acceptance by the Administrator in accordance with proposed § 23.10 (which is one section of the current Part 23 proposed rule revision). Comments are due May 13.
Each of these proposed Advisory Circulars should be reviewed for potential effects on the PMA industry. MARPA will be undertaking its own reviews, but we encourage each of our members to do the same, and file such comments as they believe helpful. All draft materials and FAA contact information can be found at https://www.faa.gov/aircraft/draft_docs/ac/.
If you would like us to incorporate your comments, you should email them to VP of Government and Industry Affairs Ryan Aggergaard at email@example.com
The FAA has released a Draft Policy Statement related to Order 8110.42D that is directly applicable to the PMA community. PS-AIR-21-1601 – FAA Order 8110.42D, Parts Manufacturer Approval Procedures – Use of Parts Manufacturer Approvals (PMA) for Minor Modifications to Products establishes FAA policy for “the gray area when a modification to a product does not rise to the level of a major change . . . and the producer of the modification article wishes to sell it in accordance with 14 CFR 21.9.”
The Draft Policy explains that historically there was not a consistent policy for issuing PMAs when the PMA made a modification that did not rise to the level of a major change under the regulations. Confusion existed as to whether a STC was appropriate for a modification article that did not constitute a major change to type design.
The Draft Policy clarifies the FAA’s position that:
PMA is a suitable method to approve an article, and provide for that article’s installation, in cases where the installation would not constitute introduction of a major change in a product’s type design.
The policy goes on to explain that the applicant must be able to identify the change resulting from installation of the article and justify it as not being a major change to the product and have the project ACO’s agreement.
On balance this looks like a positive policy for the PMA industry, clarifying modification PMAs that do not constitute a major change to a product’s type design can be approved through the PMA process and not require a STC. However we would still like to hear from our members to determine if there are any unintended consequences of this policy or ways in which the policy can be made more clear.
Comments on this policy statement are due May 1, 2016, so please email Ryan Aggergaard at firstname.lastname@example.org if you have any concerns about this policy or potential effects on the PMA industry.
Everyone in the PMA industry knows about the challenges that arises when selling PMA parts to customers operating leased aircraft. These challenges very often arise from restrictive clauses in lease agreements that prevent the use of PMA on the asset. This can cause particular headaches when the customer is a low cost carrier (LCC) whose business model should make them the ideal PMA customer, but whose largely (or exclusively) leased fleet means that restrictive clauses (either perceived or actual) restrict use of PMA.
The good news is that lessors’ position with respect to use of PMA appears to be loosening as lessees demand the right to use PMA, lessors become more familiar with PMA, and the industry continues its shift toward ever greater PMA acceptance.
The first, and most important, step in greater PMA acceptance on leased aircraft is demand by the operators. We have already heard at least two air carriers–Delta Air Lines and Copa Airlines–state unequivocally that they will not sign leases with “no PMA” clauses in them. But at MRO Asia Pacific last week, we heard multiple parties–both LCCs and lessors–state that the use of PMA on leased aircraft was a common occurrence; the lessee (the air carrier) just has to ASK.
Lessors typically enter a lease negotiation with a set of boilerplate terms. Those terms, however, are subject to change to suit the lessee’s business model and to satisfy the needs of both parties. Ananta Widjaja from Sriwijaya Air pointed out that a lessor will never give a lessee anything outside of the boilerplate unless the carrier asks for it. This point was echoed by a number of lessors over the course of the conference, who recognize that use of PMA is a reality in virtually every air carrier’s operation.
This is an important point for PMA manufacturers to take to their customers. Remind air carriers that most lessors will permit PMA to be used on leased aircraft (with a few exceptions); the carrier just has to demand the right. As lessors continue to grow more familiar with PMA, and recognize that use of PMA does not in any way devalue their asset, they grow more willing to waive the “no PMA” clauses in their lease agreements. This is beneficial for the lessee and lessor, as the lessee can continue to realize the savings and reliability improvements provided by PMA, and the lessor opens up more potential customers by allowing the use of PMA.
A number of the LCCs at MRO Asia Pacific pointed out that they especially use PMA during the middle of the lease. The lessor community explained that the most important part of any lease is the return conditions, because these are the terms that dictate the condition of the aircraft for the next lessee. Lessees take advantage of this fact by using PMA throughout the term of the lease (as allowed by the lease terms) but if necessary return the aircraft to an “OEM-only” condition (such as exists, which we in the PMA community know is a fiction) during C-check prior to the return of the aircraft.
Lessors are becoming more accepting of PMA for a couple reasons. The first, which we’ve touched on, is demand by their customers. Lessors need to have their aircraft leased in order to realize a return on investment, so it makes sense to permit the customer to use PMA if that is what it takes to get the lease signed.
Second, lessors have begun to realize that it is simply not possible for many carriers to operate without any PMA. PMAs, especially on interiors and air frames, are a reality for a significant number of carriers. Some carriers simply cannot operate without the use of PMA to control costs and reliability. Air carriers, LCCs in particular, want to control costs and improve reliability to the greatest extent possible, and this drives use of PMA. (As an aside, if anyone manufactures a PMA lavatory mirror for the lav setup on the A320 family, Tigerair out of Singapore would love to hear from you.)
Lessors recognize this. Lessors have even started to realize that this is the case with respect to engines. And though most lessors remain squeamish about PMA in the gas path or life-limited PMA, the simple fact is there are very very few PMA that meet this description.
Finally, lessors are becoming more flexible in allowing PMA because it is impractical not to. When leasing older aircraft, lessors recognize that it is simply not possible to get “OEM” spares. They also recognize the significant lead times for OEM parts, when PMA parts are available off the shelf. This makes a big difference in turn time when delivering a leased aircraft to the next customer. Finally, lessors are beginning to understand that many new aircraft are, in fact, built new using PMA parts! It simply makes no logical (or legal) sense to demand no PMA be used when the aircraft are delivered new with PMA throughout.
There are still many hurdles for PMA in leased aircraft. Lessors remain nervous about PMAs in engine gas paths, LLP and rotable PMAs, and PMA in high-value components. The fear is that PMA could devalue these articles and reduce the resale or part-out value. This means that we as a community must continue to educate the leasing community and the valuation community to allay those concerns, by explaining that PMA meets the exact same standards as TC/PC parts, and must meet or exceed the performance of the OEM part.
Lessors are also concerned about the practices of many OEM repair shops to threaten to void the warrant of an engine if it includes PMA, or pull off PMA parts during maintenance and replace them with OEM parts (and bill for it), thus depleting maintenance reserves required under the lease. These protectionist tactics are something we will continue to fight.
Ultimately, lessors are becoming more and more accepting of PMA in leased aircraft. Air carriers must remember that everything is negotiable, and that if PMA plays and important part of their maintenance and cost saving strategy, they need to demand use of PMA be allowed by the aircraft lease. PMA manufacturers should make it a point to remind their customers that lessors will allow (or at least negotiate) the use of PMA. But they won’t allow anything if the carrier doesn’t ask.
MARPA is in Singapore this week for MRO Asia-Pacific promoting all things PMA. The first day of the MRO conference agenda dedicated substantial discussion (as they usually do) to market forecast and trends. Some of these trends could be an opportunity for PMA manufacturers, but others could mean significant challenges down the road if companies are unable to adapt.
The opening session presented a discussion of trends in supply chain logistics. One of the largest takeaways was the change in inventory management practices, especially in the Asia Pacific region, from a just-in-case model, to a just-in-time (JIT) model. This follows the trend in many other industries, including manufacturing and retail, which enable businesses to reduce costs by carrying less inventory.
PMA manufacturers are in an excellent position to benefit those customers shifting to a JIT model because PMA parts can help customers defray the costs associated with warehousing and inventory management, which is outside of the customers’ core competency. This applies to both operators and MRO facilities. This is because PMAers have the parts on the shelf ready to go, eliminating the need for users to maintain parts inventories themselves to ensure availability.
But the shift to a JIT model also presents certain challenges in Asia Pacific, particularly for AOG situations or other scenarios demanding quick turn times. In certain markets with well-established MRO markets, like Japan and Singapore, getting parts to the customer is often a fairly straight-forward exercise and can be done overnight from the United States. However, in less-developed markets and countries in the region, import and customs requirements can pose significant barriers, meaning delays of several days in clearing the shipment and getting the part to the customer. Those companies able to most efficiently navigate those challenges will be at a competitive advantage.
Another trend in Asia Pacific is the MRO spend focused on the narrow body fleet–namely the 737 and A320 families. The narrow bodies currently account for approximately 70% of the MRO spend in the region (and are the two largest fleets by type). This trend should continue over the next decade for two reasons: (1) a significant number of these aircraft have been delivered over the last decade (and continue to be delivered); and (2) the commonalities that exist between the current gen aircraft and the Max and neo versions of the aircraft.
Finally, an emerging trend that should be of great concern to PMA manufacturers is the shift by component and airframe OEMs toward power-by-the-hour agreements. The PMA industry has already seen the problems that are caused when OEMs use PbH agreements as engine OEMs have taken significant steps to lock up the engine spares market. Although the percentage of PbH agreements in component and airframe is still small, it is growing. PMA manufacturers need to get out in front of this trend and remind their customers that they are a) not obliged to sign such agreements and b) demonstrate the value of PMA in terms of cost, reliability, and customer service offered by PMA. It can also benefit smaller PMA companies to form partnerships with other manufacturers of complimentary product lines to offer greater benefits to customers.
MARPA will work to stay on top of these trends. We welcome any information or questions our members have that can help MARPA continue to craft its strategy.
Last week, MARPA participated at the Tokyo Aerospace Symposium 2015 in Japan. The event drew operators, part manufacturers, equipment and tooling manufacturers, and technology companies, among others, to the Tokyo Big Site convention center to discuss current and emerging manufacturing and regulatory issues, as well as display exhibitor capabilities on the trade floor.
Jason Dickstein and Ryan Aggergaard from MARPA, joined by Akira “Jay” Kato, advisor to the Tokyo Metropolitan Government Aviation Industry Participation Support Project and President of JK Tech Consulting Inc., gave a panel presentation discussing PMA and MRO business trends and discussed ways manufacturers can partner with U.S. PMA companies to develop synergistic relationships that can benefit both U.S. and Japanese companies. Many of the manufacturing companies in attendance expressed an interest in seeking out U.S.-based manufacturing partners to develop a supplier or other type of business relationship, and some stated that they had already developed supplier relationships with U.S. PMA manufacturers.
The Tokyo Aerospace Symposium drew nearly 9,000 registered attendees over the course of the three-day event, with most of those attendees participating on multiple days. The MARPA booth saw significant traffic, and we took the opportunity to speak to as many attendees as possible, explain who we are and what we do, as well as the benefits of U.S. FAA-PMA, and discuss the businesses of our members. Several attendees asked for more information about the particulars of our members’ businesses in hopes of developing relationships.
MARPA hopes that our members will be able to participate with us–or provide us with promotional materials–in future years in Japan, because there is strong interest from the Japanese manufacturing community in developing U.S. relationships. As we explained in our panel presentation, the opportunities provided by partnering with high-quality manufacturers that are able to offer product lines that complement your current offerings can greatly expand your business opportunities, because customers often prefer suppliers that can meet as many of their needs as possible all in one place.
MARPA also took advantage of its presence in Japan to meet with a number of air carriers to promote the values and benefits of PMA. We were happy to find these operators are already familiar with PMA and use PMA in their fleets. However, as with all carriers, there is still significant room for growth. MARPA took the opportunity to explain how PMA parts provide great value and savings by solving reliability issues, quality issues, and sourcing issues, as well as offering the obvious benefit of reduced cost off the shelf.
The positive reception toward our discussion of PMA leads MARPA to believe there is still a lot of opportunity for sales expansion in the Japanese market.
There will be several representatives from Japanese carriers and suppliers at the MARPA Annual Conference in Las Vegas next week (October 28-29). The conference will be a great opportunity to network with existing and future customers as well as discuss potential relationships with Japanese suppliers. We look forward to seeing new business connections made!