As we discussed at the MARPA Annual Conference, Part 21 has been amended in some ways that will impact the PMA community.
The amendments can be found in the October 1 Federal Register. There are three main amendments that drive change in a PMA company’s production quality system:
MARPA has drafted compliance guidance that explains what the change are, and provides checklists to aid in compliance with each of the changes that significantly affect the PMA community.
The MARPA compliance guidance will be mailed to MARPA members with the next MARPA Supplement. if you are a MARPA member and do not receive the MARPA Compliance Guide with the November 25 MARPA Supplement, then please contact the Association.
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.
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!
One of our members recently reported that his company has been offering cabin interior PMA parts to several Chinese airlines, only to be told that they are already using CAAC PMAs for many of these cabin parts. CAAC PMAs are Parts Manufacturer Approvals issued by the Civil Aviation Authority of China. CAAC PMAs are acceptable for installation on Chinese-registered and Hong Kong-registered aircraft but they do not appear to be currently acceptable for installation on any other aircraft.
Our member asked whether there is a master list of CAAC PMA parts that MARPA members could review. This would help MARPA members know which parts have not been PMAed in China which in turn will help to reveal which FAA-PMA parts might be most valuable and useful to Chinese air carriers.
As far as we know, the master list of CAAC PMAs is only maintained as an advisory circular. Because it is an advisory circular, it is not maintained in real time, but rather it is updated annually. This link is to the 2015 revision of the CAAC PMA Catalog.
Hong Kong has a separate aviation authority. Hong Kong’s Civil Aviation Department also issues its own PMAs. Hong Kong has issued PMA authority to Taikoo (Xiamen) Aircraft Engineering Co. Ltd. There is a Schedule of Implementation Procedures between China and Hong Kong under which each accepts the PMAs of the other.
ACCEPTANCE OF CHINESE PMAs
Remember, the current US-China bilateral permits entry of US PMAs into China, but it is currently a one way only: it does not permit installation of Chinese PMAs onto US-registered aircraft. Without an explicit acceptance of CAAC PMAs through a US document (such as the US-Chinese bilateral agreement), CAAC PMAs are not currently eligible for installation on US registered aircraft as replacement or modification parts (under 14 C.F.R. 21.9).
FAA PMA FOR CHINESE MANUFACTURERS
There is a mechanism for Chinese companies to obtain US PMA. Chinese companies wishing to set up final production sites in the US could apply for US PMA and could use that as a mechanism to create FAA-PMA parts that are accepted all over the world. For many Chinese companies, the most efficient and effective way to accomplish this would be to partner with an existing FAA-PMA holder in the United States that has experience navigating the FAA regulatory system.
I just got off the phone with senior leadership at the FAA and all I can say is “WOW.”
The FAA is talking very seriously about a new model of certification for the aerospace industry focusing on approval of design processes and risk-based oversight in order to better leverage the FAA’s resources to ensure safety of the growing aerospace marketplace.
I shouldn’t be surprised. The models are there, and they’ve worked. We’ve sat on Federal Advisory Committees that have made these recommendations to the FAA. The industry has been talking about this for years. But sometimes when you talk about projects for too long, you start to lose hope that they will ever come to fruition.
But this idea has the support of the FAA’s senior management and that is what will make the difference.
The new model of certification will likely rely on paradigms like:
Under this new paradigm, a company that specializes in PMAs for landing gear (for example) would have a library of compliance methods – test and procedures that are designed to show compliance to the regulations (including ways to demonstrate true identicality with an existing compliant design). By following the compliance methods from the library, the company would be able to demonstrate compliance for future landing gear parts. This would allow the company to more readily develop compliant designs that can be readily PMAed based on the methods that are already known to be sound.
This would involve a major restructuring of how the FAA oversees design approval. Moving to a TSOA-like self certification should permit small businesses to react very nimbly to market forces and it allows the FAA to more readily focus its resources on real safety issues based on risk assessment. This paradigm could be supported by FAA Centers of Excellence that would be able top provide support to the design approval community on technical issues.
This paradigm could also impose more responsibility on the design approval applicant. It would likely be reflected in design systems that would be subject to FAA surveillance. This would replace the current model in which designs are reviewed. It would be analogous to the modern approval to production quality systems, in which the FAA approves system rather than approving each individual part and product that comes out of the system.
For PMA companies, this could help companies bring part to market faster, when those parts fall within the compliance library, because it would limit the FAA’s involvement in projects where compliance can clearly be shown based on known and accepted methods.
We are currently working with the FAA on a presentation (“challenge session“) about this new paradigm; we hope to add this to the program for the 2015 MARPA Conference.
MARPA and the Korean Trade Promotion Agency (KOTRA) delivered a PMA workshop in Seoul this week. Hosted at KOTRA Headquarters in Seoul, the workshop provided an opportunity to begin educating the Korean aerospace community about the value of FAA-PMA parts. It also afforded the PMA community an opportunity to begin strengthening business relationships with the Korean aerospace industry.
MARPA’s President, Jason Dickstein, spent the first day of the workshop laying the goudnwork for understaing the PMA process.
The room was packed with about 60 participants from all sectors of the Korean aeroaspace community. MARPA discussed issues like the parts approval process, the safety, reliability and economic advantages afforded by FAA-PMA, and strategies for partnering with US PMA companies in order to increase trade and increase the profis of both companies.
Three of our members attended the workshop. Representatives from Heico, Jet Parts Engineering, and the Wencor Group joined us at the workshop and had an opportunity to network with potential suppliers from Korea’s manufacturing community as well as potential customers from MROs and airlines.
We were honored to be joined by Ha Girl Chung, the Deputy Director of Aircraft Certification for Korea’s Ministry of Land, Infastructure and Transportation. Mr. Chung was a key negotiator in the recently updated technical implementation procedures for the US-Korean bilateral aviation safety agreement. He reviewed the elements of Korean law that permit the acceptance of US PMA parts in Korea, and he also explained Korea’s own ability to issue PMA for parts made in Korea.
Privately, Mr. Chung told MARPA that Korea would like to begin issuing domestic PMA. This was foreshadowed by last years update to the US-Korean technical implementation procedures, which left a specific reservation (a place holder) for US acceptance of Korean PMA parts.
Asiana and Korean Air Lines were both well-represented at the event. Hoon Yong Kim, from Korean Air, delivered a presentation about his air carrier’s PMA policy. He explained that his carrier does not currently use critical PMA parts, but that they would like to expand their current use of non-critical PMA (critical PMAs are less than 1% of all PMAs). Mr.Kim said that they are particularly targeting interiors parts, right now, but they would like to increase both the quantity and the scope of the PMAs that they use.
What specific qualities does Korean Air seek? Mr. Kim explained that parts partners need to hold FAA PMA (other nations’ systems are currently not on his radar) and they should be prepared to support Korean Air in cooperative analysis. He described one situation where a supplier helped Korean Air perform a root cause analysis. Despite the fact that the root cause was unrelated to the supplier, the supplier provided continued engineering support. During subsequent conversations, Mr. Kim confirmed that he is looking for companies that have established systems like MARPA’s Continued Operational Support (COS) program.
All three of the MARPA members who were on hand had an opportunity to meet and speak with the attendees. Steve Johnson from Jet Parts Engineering added some insightful questions to the workshop. Joe DePaoli of Heico explained that his company and his peers from other PMA companies were interested in opportunities to work with Korean manufacturing companies with specialized technologies, and also with Korean manufacturing companies that are already making certain types of parts and who could use those skills to manufacture parts that could be approved under FAA-PMA.
Mark Powell of the Wencor Group delivered the anchor presentation at the end of the workshop, and he summarized the process that helped to ensure that PMA parts met the highest standards.
KOTRA and MARPA have begun a partnership to promote US-Korean aerospace trade with a focus around PMA parts. MARPA members should expect – and should look forward to – future oppotunities to increase their trade with Korean businesses.
We will be discussing issues that affect Korean-US business relationships and strategies for increased Korean-US trade. MARPA members will be networking with existing and potential Korean business partners.
We should be able to secure complimentary registration for any MARPA member who wants to attend. If you have personnel in the Republic of Korea or elsewhere in northern Asia, then you should certainly have them on site for this meeting.
If you have personnel that you would like to register for the workshop, please let MARPA know ASAP as time is running short.
Yes, China accepts FAA-PMA parts.
The United States and China signed a Bilateral Airworthiness Agreement (BAA) in 1991. That agreement recognized that each authority (FAA and CAAC) had a system for production and airworthiness approval of civil aeronautical products, and that each system was sufficiently equivalent to the other to permit the authorities to accept certain approval decisions of the other.
The BAA is implemented through a Schedule of Implementation Procedures. This schedule explains how international aerospace transactions will work. It is meant to facilitate certain transactions and relationships.
The schedule covers, inter alia, Chinese acceptance of FAA Export Certificates of Airworthiness appliances, parts, and materials for which the FAA is the exporting authority. The schedule explains that China will accept US export certificates of airworthiness for parts and materials when the FAA certifies that each article:
(a) Conforms to approved design data;
(b) Is properly marked; and
(c) Meets the special requirements of the importing country.
This is typically done through the issue of an FAA 8130-3 tag.
The special import requirements of China must be formally presented to the United States, and then the United States publishes those special import requirements in Advisory Circular (AC) 21-2. The Chinese special import requirements apply to airframes, engines, propellers, and TSOA articles, but the only special import requirement that applies to FAA-PMA parts is that the part must be accompanied by an 8130-3 tag. Since the 8130-3 tag is the medium for communicating the compliance, the 8130-3 for a FAA-PMA part can be safely annotated as meeting the special import requirements of China.
The Chinese have clarified in several places that they really mean it when they say that they are accepting PMA parts.
In order to ensure that there is no confusion, appendix D of the Schedule of Implementation Procedures specifies that the term ‘part’ means replacement and modification parts manufactured under any FAA production approval. The appendix goes on to say that this includes replacement and modification parts manufactured by an FAA-PMA holder!
Some additional provisions are listed in the Schedule of Implementation Procedures , but none of them actually impose any additional obligations on someone who exports a PMA part to China, so long as that part already complies with US regulatory standards.
China has also published their own advisory circular on the acceptance of FAA-PMA parts. The advisory circular clarifies that FAA-PMA parts are acceptable for use on Chinese aircraft and reiterates that the parts should marked according to the requirements of FAA Part 45.
The purpose of this trade mission is to introduce air carriers and MROs in Southeast Asia and China to the concept of PMA, and to the significant advantages that they can recognize by doing business with PMA manufacturers from the United States. We hope that this will help increase PMA sales into these regions.
The mission will begin for MARPA at MRO Asia in Singapore, November 3 through 5. We are planning to set up a few pre-scheduled meetings as well as allowing members to interact with the MRO attendees. After MRO, we will fly to Hong Kong to meet with air carriers on Friday. We plan to transfer to Guangzhou over the weekend in order to meet with Gameco and China Southern on Monday. Then we will spend Tuesday-Wednesday in Shanghai and Thursday-Friday in Beijing meeting with air carrier and MRO sales targets.
If you aren’t yet selling into Asia, then this is a wonderful way to start meeting potential customers. If you already have business in Singapore, China and Hong Kong, then you won’t want to miss this exceptional opportunity to renew acquaintances and build more business.
MARPA has been planning this 2015 trade mission since late 2014, and we’ve enjoyed incredible support from our US government contacts. This trade mission is undertaken in partnership with the US Department of Commerce, and we are being assisted by the International Trade Administration and the Commercial Foreign Service officers in the embassies and consulate offices. This is a valuable membership benefit that is available to help MARPA members increase their export business so make sure you take advantage of it!
If you are interested in participating or want more information, then please contact the Association. We’d love to hear from you.
We hope to soon be able to offer a specific itinerary and price for the mission. Once this is announced, we will take firm commitments from members on a first-come-first-served basis until the program is full.
Wondering if you can sell PMA parts into China? Tomorrow we will start addressing the legal standards for PMA acceptance in China!
The MARPA Air Carrier Committee, led by Michael Rennick, Delta Air Lines Component Engineering Manager, is hard at work supporting PMA users and MARPA members. In June, members of the MARPA Air Carrier Committee, including Air Wisconsin, American Airlines, Republic Airways, US Airways, Air Canada, and Delta Air Lines, submitted to the FAA a letter seeking clarification on the issue of PMA parts that are alternates to post modification Airworthiness Directive (AD) related parts.
This clarification is necessary because confusion has sometimes arisen between operators and local regulators over the need for an Alternative Method of Compliance (AMoC) for post-modification AD-related PMA parts. It is the position of the MARPA Air Carrier Committee that if the PMA is an alternate to an OEM part contained in a post-AD configuration, no such AMoC is required.
When a PMA is issued for a replacement part for a post-modification AD-related OEM part, it is uncommon for the PMA applicant to request an AMoC to the AD, or for the FAA to note the AD on the PMA approval. This makes some sense because a post-AD PMA part is inherently an alternative method of compliance without being described as one. However, an issue arises because many ADs call out only the modified OEM part as a means of compliance. Because ADs are technically regulations under Part 39, alternate approvals such as PMAs might not satisfy the regulatory requirement and so an AMoC may be required.
It would be beneficial to both operators and PMA manufacturers to see this change.
The OEM part is the source of the condition giving rise to the AD. The post-modification part must resolve the condition in order to satisfy the AD. During the PMA approval process for the same part, the AD is also taken into consideration.. In order to receive PMA approval, the subject PMA part must resolve the condition resulting in the AD, just as the post-modification OEM part does. There should be no need to call out an AMoC for the PMA part related to the AD; the underlying condition that necessitated the AD has changed because the approved PMA part has replaced the post-AD OEM part. The PMA should be a valid terminating action for the AD.
There are limited circumstances in which this reasoning may not apply, but these limited circumstances are not the subject upon which the Air Carrier Committee seeks clarification. For instance an AMoC may be necessary in a scenario in which an AD applies to a higher level component or assembly. In this scenario the PMA replacement for the OEM part may not address the AD for the higher assembly because it is a replacement at the piece-part level, and thus an AMoC may be necessary for the higher assembly.
Generally, however, an AMoC should be inherent in an approved PMA part and therefore unnecessary as a separate approval. This is the policy clarification that the Air Carrier Committee seeks in the form of a formal FAA communication. If an approved PMA part is a replacement for a post-AD OEM part, the FAA’s policy should clearly state that the approved PMA is a terminating action for the AD and that no additional approval or discrete AMoC is required. In the alternative, an AMoC could automatically issue for each post-AD PMA to show compliance.
MARPA greatly appreciates the Air Carrier Committee’s work on this project. MARPA will be working with the FAA and the Committee to determine whether future ADs will list an approved PMA as a valid terminating action, or whether an automatic AMoC should automatically issue with a PMA to show compliance to the AD, or some other solution is desired. We will keep our members apprised of these developments.
If you are a MARPA member air carrier and want to get involved with the Air Carrier Committee, please email Katt Brigham at firstname.lastname@example.org. If you are not yet a MARPA member but would like to get involved, visit our membership application page. MARPA membership is free for air carriers!
Edited to clarify that ADs are regulations and identify possible solutions to the issue raised in the Air Carrier Committee’s letter.