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Standard Parts Do Not Need PMA (but it can be an option)

A consultant recently told me that his client is planning to produce parts under NASM22529.  He asked for advice about the process for showing compliance to get a PMA.

NASM22529 is an AIA/ NAS standard.  It replaced a milspec of the same number that was retired in 1996.  As an AIA (NAS) specification, it is recognized as the sort of industry specification that supports ‘standard parts’ under the FAA’s interpretation of the term.

Standards parts can be manufactured and sold without a PMA.  The regulatory authority for this can be found at 14 C.F.R. § 21.9(a)(3).  Therefore a PMA is not necessary in order to produce standard parts intended to be consumed in civil aviation.

While it is not necessary to seek FAA approval to manufacture a standard part,it is nonetheless possible to get a PMA for a standard part, and in some cases (like fasteners) it can also be possible to obtain a TSOA for a standard part.

There are a number of reasons why someone might seek to obtain FAA approval for a standard part.  This sort of FAA approval can be valuable for marketing purposes.

If you seek FAA approval for a part, then the design of the part must be shown to meet the appropriate FAA standards, and the production quality assurance system must be developed to meet FAA requirements.

The same consultant also asked whether AS9100 certification satisfies all or most of the PMA requirements?  The AS9100 series of specifications were specifically designed to support compliance to aviation regulatory standards, but compliance with AS9100 should not be confused with compliance to FAA regulations.  The answer to this question can depend on the implementation of the AS9100 system.

AS9100 will typically satisfy requirements under 14 C.F.R. § 21.137, as well as certain other requirements, but it may does not satisfy all FAA approval requirements (A well-developed AS9100 system can be developed to provide management assurance of compliance with all of the relevant FAA requirements but it can also be developed to omit some of them).

The design side of the manufacturing process is a process that is particularly susceptible to a finding that the AS9100 system is not adequate, alone, to ensure compliance to FAA regulations.

Looking to learn more about PMAs?  You may want to consider attending the MARPA Conference in Orlando on October 25-26, 2017.  The FAA has confirmed that they will be teaching a “PMA 101” workshop as part of the Conference.  You can find out more at http://pmaparts.org/annualconference/about.shtml

Manufacturing Receiving Inspection is Not the Sort of “Inspection” that requires Drug and Alcohol Testing Under DOT Standards

Are manufacturers required to drug test their receiving inspectors?  A recent FAA legal interpretation explains that receiving inspectors typically are not subject to the DOT drug and alcohol testing rules.

The FAA has issued a legal interpretation that confirms that receiving inspectors who are receiving articles for stock are not performing maintenance activities, and therefore they are not among the personnel who are required to be subject to DOT-regulated drug and alcohol testing.

This effort was spearheaded by our industry colleagues at ARSA, but the final request for interpretation was jointly filed by 15 organizations (including MARPA).

The root of the issue is that the Part 120 requirements require air carriers to ensure that their maintenance subcontractors are tested under the drug and alcohol rules. This requirement is applied to those who perform aircraft maintenance duties – but those who do not perform such duties are not subject to the testing requirement.  Inspection is described as a species of maintenance in the FAA’s definitions.

So what about manufacturers who produce in support of an air carrier’s maintenance efforts?  Are their receiving inspectors performing maintenance when they inspect incoming articles?

The FAA explained:

14 CFR part 43 applies to the performance of maintenance and preventative maintenance. Sections 43.9 and 43.11 establish recordkeeping requirements for tasks associated with maintenance and preventative maintenance. These recordkeeping requirements have never been applied to tasks associated with receiving articles for stock. Individuals who perform receiving tasks ensure that there is no visible damage to the packaging or the enclosed items, and that the articles were obtained from an approved or acceptable source. Persons performing these tasks compare part numbers, serial numbers, quantity, etc. with the purchase order and confirm that the items match the purchase order and that they are not damaged. These tasks are not maintenance or preventative maintenance activities. Therefore, employees receiving items for stock are not safety sensitive employees under part 120 and should not be included in the pool of employees subject to drug and alcohol testing.

 

2017 MARPA EMEA Conference a Success

This month marked the third annual MARPA EMEA PMA Parts Conference. After successful events in Istanbul (2015) and Madrid (2016), MARPA hosted this year’s conference in Dublin, Republic of Ireland, with the twin objectives of engaging the aircraft leasing community, and making attendance convenient for both MARPA’s manufacturing members and air carrier members.  Building on the success of the previous two years, MARPA was able to bring together more than a dozen different customers and potential customers to meet and network with PMA manufacturers and hear from government representatives and members of industry about the opportunities and benefits of PMA.

One of the primary reasons for selecting Dublin as the site of the 2017 MARPA EMEA Conference was to work to engage the leasing community in discussions about the acceptability and use of PMA on leased aircraft. The use of PMA on leased aircraft is one of the most important issues that members mention to MARPA, and restrictive clauses in lease agreements often create challenges for member operators in implementing and achieving their maintenance program goals, whether driven by cost, efficiency, or reliability.  As leased aircraft continue to expand as percentage of the global fleet, it will become more and more important to work with lessors to ensure PMA remains an option for operators of leased aircraft.

MARPA worked closely with representatives from the International Trade Administration and the U.S. Embassy in Ireland to secure a meeting with members of the leasing community. This initial meeting was hosted by the Charge d’affaires Reece Smyth and was attended by representatives of the ITA, FAA, representatives from each of MARPA’s conference sponsors, and representatives of several leasing companies.  This was a very productive luncheon in which the lessors were able to explain their positions and concerns, and government regulators and MARPA members were able to address and discuss those concerns, as well as describe how and why PMA are beneficial not just to operators, but to the lessors themselves.  (Due the sensitive nature of these discussions, and potential competitive issues, the lessors have asked us to refrain from broadly naming them at this time.)  The challenges of PMA and leased aircraft were not solved by this luncheon, but it was an important step in continuing the conversation and addressing lessor concerns. MARPA hopes that this was just the first of many productive conversations that we will have with the aircraft leasing community.

The MARPA EMEA Conference also provided an opportunity to meet and network with a number of air carriers and MROs, some of whom can’t be seen (or previously haven’t been seen) at the MARPA Annual Conference in the U.S. Attendees included operators such as Aer Lingus, Emirates, Swiftair, and the Dubai Royal Air Wing, among others, as well as MROs like Luthansa Technik and Dublin Aerospace.  The combination of receptions, lunch, and breaks, provided several hours of time to meet with the attendees and begin to develop or further build customer relationships, and for the operators to get new and useful information from manufacturers.

And, as always at a MARPA event, there was a robust agenda featuring presentations from all sides of the industry.  These presentations included the keynote address by Aer Lingus Chief Technical Officer Fergus Wilson, as well as presentations from Stobart Air and Delta Air Lines, in which each discussed the role PMA plays in their operations, how they use PMA now and what they see in the future, and anecdotes about the successful use of PMA in their maintenance programs. Charge d’affaires Reece Smyth also offered remarks on the efforts by the U.S. and Ireland to encourage small businesses, stimulate trade and job creation, and the excellent trade and diplomatic relationship between the U.S. and Ireland.

Manufacturers also offered their insight into the industry, described hows and whys of some of their successes, and made predictions about the direction of PMA.  Finally, speakers from the FAA made presentations about the status of initiatives that could affect the PMA industry, both domestically and internationally, and recapped for attendees the regulatory basis for PMA.

MARPA hopes to build on the success of the past three EMEA Conferences going forward and continue to deliver quality content and networking opportunities to our members domestically and internationally. MARPA also looks forward to seeing everyone in Orlando for the 2017 MARPA Annual Conference for more great speakers, workshops, and business development opportunities.  Register today!

Finding Suppliers in Taiwan

Are you looking to expand your global supply base?  The Taiwan Trade Center is raising awareness about the Taipei Aerospace & Defense Technology Exhibition (TADTE), which will be held in Taipei on August 17 – 19.  In order to entice potential business partners to the show, the Taiwan Trade Center is offering generous subsidies to MARPA members interested in attending the exhibition.  Here is their offer:

For qualified buyers, we offer the following incentives:

  1. For companies with annual sales exceeding US$30 million that are related to the industries profiled in the show, TAITRA will offer 1 R/T economy-class ticket scheduled stay during two full show-day periods between August 17 and August 19, 2017, 1 room with a maximum allowance of NT$15,000 (tax included) to be used toward lodging (up to 4 nights being in August 16 to August19, 2017) and airport pickup to-from the accommodating hotel. Attending procurement meetings is requested.

  2. For companies with annual sales exceeding US$5 million that are related to the industries profiled in the show, TAITRA will offer 1 R?T economy-class ticket scheduled stay during two full show-day periods between August 17 and August 19, 2017. Attending procurement meetings is requested.

  3. For companies with annual sales exceeding US$0.3 million that are related to the industries profiled in the show, TAITRA will offer 1 room with a maximum allowance of NT$ 15,000 (tax included) to be used toward lodging (up to 4 nights being in August 16 to August 19, 2017) and airport pickup to-from the accommodating hotel.

In order to accept this offer from the Taiwan Trade Center, MARPA members must complete the 2017 TADTE Registration Form. The completed form should be emailed to Unice Wu from the Taiwan Trade Center – New York at unicewu@taitra.org.tw. There are a limited number of subsidies available, so apply ASAP!

 

Taiwan Details:

Despite the ‘One-China-Policy,’ Taiwan has its own Civil Aviation Authority which is separate from the CAA of China. Taiwan has processes for issuing TSOA and PMA. Under a bilateral agreement, the US accepts new TSO appliances from Taiwan that meet the performance standards of an FAA TSO under an FAA letter of TSO design approval. They also accept replacement parts for those TSOA articles. The U.S. currently does not accept PMA parts from Taiwan.

EASA has a working arrangement with the Taiwan CAA for the validation of EASA certificates. This appears to be a one-way arrangement; EASA does not appear to have a process for validating Taiwan CAA approvals.

In defense contracts, Taiwan is treated by the United States as a major non-NATO ally (22 C.F.R. § 120.32).

MARPA Attends 2017 Aviation Summit

On March 2, MARPA had the opportunity to attend the U.S. Chamber of Commerce 2017 Aviation Summit in Washington, DC.  The event featured addresses and panels by the presidents and CEOs of aerospace industry leading operators, manufacturers, and service providers. Although the focus was primarily on operational issues affecting air carriers like Open Skies, airport infrastructure, and air traffic control, there were a couple of points raised by speakers that are relevant to MARPA members and the PMA industry.

During the manufacturing panel, HEICO Corporation Co-President and past MARPA Annual Conference keynote speaker Eric Mendelson, discussed the importance of choice and competition without which it becomes difficult for carriers to operate cost effectively. He used the decrease in suppliers relied upon by Boeing for successive new aircraft to illustrate the challenges facing both operators and aftermarket parts manufacturers, as competition becomes more and more restricted. He noted that the original 777 had three engine options, and approximately 17 component suppliers provided 75% of components. For the 787, those numbers fell to two engine options, and about four component suppliers for 75% of components. In the case of the new 777 there will be only one engine option and fewer still component suppliers.

This on-going reduction in suppliers means that operators face fewer and fewer choices both at the initial purchase stage and in terms of maintenance over the life of the product. This also means that those suppliers have a great deal of leverage in locking operators into long-term service agreements, which threaten PMA manufacturers.

In order to fight this phenomenon, it is vitally important that our customers be educated through their organizations as to the value of ensuring PMA is viable replacement part option, to ensure that they aren’t locking themselves into unfavorable maintenance agreements that needlessly restrict their replacement part options and drive up their costs. This will become even more important if fuel prices begin to rise, causing operators to look more aggressively for areas to realize cost savings.

Another interesting point was made later in the day, by Dennis Muilenburg, Chairman, President, and CEO of Boeing. He noted the importance of the Ex-Im Bank to financing export of US-manufactured goods, and stated that there is approximately $30 billion in deals merely awaiting the Ex-Im Bank’s board to reach a quorum. This requires one more confirmed nominee (currently, only 2 of the 5 seats are filled, and a quorum is required to approve deals over $10 million).

Although MARPA’s members aren’t generally making deals that require that level of financing from Ex-Im, having Ex-Im move out of limbo would be valuable for MARPA’s members. We’ve talked previously at conferences about the various ways the Ex-Im Bank can support MARPA’s members in exporting goods to credit-worthy customers abroad who may otherwise lack the cash flow to complete a large purchase. If Boeing’s willingness to throw its weight behind Ex-Im results in securing the stability of the bank for the future, the benefits would ripple out to the rest of the industry.  This is something we will be keeping an eye on.

If you have questions about how Ex-Im can be leveraged help your PMA business, don’t hesitate to let MARPA know.

 

Don’t Panic: Why the Election Results Should Not Undermine Aviation Business

I have been watching the election results here in China (I am in China for an MRO & Aftermarket Conference in Shanghai). Before the election results began to roll-in, I flipped through the Chinese language channels and passed a news station that had a graphic of Donald Trump with a collection of speech bubbles. Every speech bubble was filled with the word “China” in English. I could not understand the newscasters, who spoke in Chinese, but it was clear that they were expressing concern over what a Trump victory could mean for China. This sentiment, in different forms, has been expressed to me by colleagues from both Asia and Europe, who wonder what President Trump could mean for international business.

This is a legitimate concern. CNN reported that trade was one of the three most important ‘exit poll’ issues that people think Donald Trump will be able to address as President (along with immigration and terrorism). As a candidate, President-elect Trump has expressed his desire to “tear-up” a number of international agreements, including NAFTA and the (as-yet unimplemented) Trans-Pacific Partnership.

But for our industry – for aviation – the level of concern should be a little different. International transactions involving aircraft and their parts are generally governed by the Agreement on Trade in Civil Aircraft (ATCA). No one is talking about eliminating this agreement.  Part of the reason that this agreement is likely to be safety from the new Administration’s ‘red pen’ is because the US has always enjoyed a favorable aerospace trade balance.

ATCA expresses that aircraft and their parts will cross international borders free of tariffs.  They will also pass free of technical barriers to trade (that is, technical regulations and standards will be non-discriminatory, will remain focused on safety, and will not create unnecessary obstacles to aviation trade).

So the agreements like NAFTA and TPP that permit free trade in goods are unnecessary to most of the aviation industry because so many aircraft parts are already insulated from the limits that NAFTA and TPP would proscribe for other goods.

There are parts that fall outside of the scope of the ATCA. You can see a discussion of these parts here.  Some of these parts may still be subject to tariffs; and tariffs on these parts could have been lowered or eliminated by agreements like NAFTA and TPP.  Repudiation of such agreements could lead to continuation or implementation of tariffs on these parts.  But most aircraft parts remain within the tariff-protected category of ATCA.

Probably the biggest concern is not a legal issue, nor an issue of how the new Administration will pursue trade agreements with the US trading partners; rather the most significant issue will be the psychological fall-out of unrelated trade issues.  If the US imposes restrictions on the import of unrelated Chinese goods, then this could adversely affect the desire of Chinese buyers to purchase aircraft parts from America.  While this may not be a limit directly related to the regulatory policies of the new Administration, it reflects a real-world concern; but we can address this real world concern with real-world remedies.

The best way to address these concerns is to reach out to your trading partners – let them each know that you remain committed to the relationship – and let them know that you are going to work to ensure that your government remains open to your business relationships.  Let them know that the new Administration will likely have significant affects on US policy; but it is less likely to affect aviation.  In fact, the FAA Administrator serves a five-year term in order to better insulate the FAA Administrator from political concerns that might interfere with the FAA’s safety focus.  Unlike the Assistant Administrators, who are political appointees, the FAA official in charge of safety regulations (and the bilateral agreements which affect trade) is a member of the Senior Executive Service.  She is not subject to summary dismissal by the President.  Because of this, the  Trump Administration will be unlikely to immediately affect the FAA’s senior leadership that impact the way that the FAA handles international aircraft parts transactions.  So ‘business as usual’ is a very real possibility.

MARPA will do its part, as well. We will continue to work with the US Commerce Department on policies that advance the interests of the community of FAA-approved aircraft parts producers.  We will also continue to work with the FAA leadership on the technical and safety issues that can affect trade in civil aircraft parts.  And we will continue to let our trading partners know that PMA parts are safe, FAA-approved components that can be trusted to keep aviation safe.

In the immortal words of Douglas Adams, “Don’t panic.”

New Required Language for Exports

A new regulation has changed the destination control statement (“DCS”) that is required on all exports of PMA aircraft parts.

PMA aircraft parts are typically exported under the jurisdiction of the Commerce Department’s Bureau of Industry and Security (BIS).  If you export aircraft parts, then the BIS regulations require a DCS.  These regulations have been changed to harmonize the DCS to the same language as the ITAR DCS.

Te DCS is placed on each export control document that accompanies an export shipment. The export control documents that are required to show this statement include the invoice, the bill of lading, the air waybill, and any other export control document that accompanies the shipment from its point of origin in the United States to the ultimate consignee or end-user abroad.

This is sometimes known as the ‘non-diversion statement’ because the current version includes language stating that “diversion contrary to U.S. law is prohibited.” The purpose of the DCS was to alert parties outside the United States that the item is subject to the US export regulations.

The rules have always held that compliance with the comparable ITAR requirement was an acceptable means of compliance where the shipment included both ITAR and EAR-controlled articles. The comparable ITAR requirement requires slightly different language. Many people nonetheless found the different language in each regulation to be confusing.

The Commerce Department has changed their DCS language to harmonize it with the ITAR-required-language. This is meant to make compliance easier. Starting on the implementation date of the rule (November 15, 2016), exporters of articles subject to BIS jurisdiction (those with ECCNs) should use the following destination control statement on all exports:

“These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations”

In addition, the DCS should show the Export Commodity Classification Number (ECCN) for any 9×515 or ‘600 series’ (nx6nn) items being exported.

There are exceptions to this DCS requirement for EAR 99 exports and also for exports under license exceptions BAG (baggage) and GFT (gift parcels and humanitarian donations), but typically these do not apply to exports of PMA aircraft parts.

Become a Supplier to Embraer

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.

MARPA Returning to Japan

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.

2015-10-15 MARPA Staff and Tokyo Govt Rep and Jay Kato

From left to right: MARPA volunteer staff Judy Dickstein and Harvey Dickstein, MARPA VP of Government and Industry Affairs Ryan Aggergaard, Tokyo Metropolitan Government Supervisor for Aviation Industry Participation Support Project in Tokyo Chikako Nagase, and Tokyo Metropolitan Government Aviation Industry Participation Support Project Adviser (President, JK Tech Consulting, Inc.) Jay Kato at the MARPA booth at the 2015 Tokyo Aerospace Symposium.

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 katt@washingtonaviation.com no later than September 30.

DRAFT Materials Advisory Circular – Extension of the Comment Period

Many of our members have been communicating with us about their concerns over the proposed Materials AC. We had previously asked the PMA community to send us their comments and concerns so we could assemble them into a single missive to deliver to the FAA.

We’ve heard from a number of you that the large volume of material and the highly technical nature of the proposed AC has made it slow going to put together your comments.  With this in mind, MARPA asked the FAA last week for a extension of time to file comments on this draft.

We received the answer today, granting that extension.

Dear Mr. Ryan Aggergaard,

This e-mail is in response to your request to grant a 90 day extension to comment on the FAA public draft Advisory Circular 33.15-3, titled “Parts Manufacturer Approval (PMA) Metallic Part Material Compliance Using Comparative Test and Analysis Method for Turbine Engines or Auxiliary Power Units”.

The FAA will consider comments after the comment period has closed if it is possible to do so without incurring expense or delay.

We have determined there will be no incurring expense or delay, and will grant the MARPA members and the MARPA Technical Committee an extension from July 20, 2016, to October 18, 2016.

Please feel free to contact us if you have any questions or concerns.

Sincerely,

Judith Watson

Please do not wait until October to review this AC and develop your comments.  The earlier you can provide your comments and concerns to the FAA (and to MARPA), the better able we will be to address them in a positive and productive way with the FAA.