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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.

Help MARPA Help the Commerce Department

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 ryan@washingtonaviation.com.  MARPA sincerely thanks our members in advance for their help!

Challenges Apparent in Reconciling Performance Based Regulations and Emerging Technologies

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.

MARPA Needs Your Comments on the FAA Materials AC

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 ryan@washingtonaviation.com.

 

GECAS Says it has No Safety or Technical Issues with PMA

GECAS’ Gilberto Peralta turned some heads at CCMA yesterday when he said that he sees no safety or technical issues with PMAs.  He explained that his only objections to PMAs are commercial.

Peralta is the GECAS General Manager for Latin America and the Caribbean.  ALTA representatives confirmed that GECAS is the most significant leasing company in South America.  Peralta was part of the CCMA panel discussing the technical and commercial aspects of PMA parts.

He explained that GECAS’ standard lease agreement excludes PMAs, and therefore he expects that the lease terms will control the use of PMAs.  He explained that the reason for this term is because of a fear that air carriers will not accept a leased aircraft with installed PMAs. Several operators in the audience suggested that their only impediment to accepting PMAs is the anti-PMA lease terms.  David Linebaugh of Delta, who was also part of the same panel, suggested that this is a chicken-and-the-egg situation, in which operators and lessors blame one another for erecting walls against PMA when they really all just need to get out of the way of progress.

The audience asked Peralta whether GECAS would accept use of PMAs during the term of the lease if those PMA parts were removed and replaced in pars manufacture under a production certificate (“OEM” parts).  Peralta explained “I don’t know what you do with the the aircraft during the lease term,” and expressed that his concern was only with the condition of the aircraft at the time of return.  He added that he would expect the lessee to take responsibility for such PMA part failures.  Mike Garcia of HEICO, who was also part of the panel, explained that HEICO offers a generous warranty to support its parts (so operator liability should not be an issue); but he also noted that HEICO has never experienced an airworthiness directive or service bulletin on any of its articles.

FAA Deputy Associate Administrator John Hickey was also on hand as part of the same panel.  He noted that the FAA has issued a very small number of airworthiness directives against PMA parts,  but that the FAA issues “two hundred, three hundred, even four hundred ADs per year” against PC holders products and articles.  He noted that the PMA community has an excellent safety record, and that the FAA has rigorous design approval and production approval processes intended to ensure that FAA approved designs – and the parts created under them – remain compliant with the FAA’s regulatory safety standards.

FAA Draft Policy Statement on Modification Articles Open for Comment

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 ryan@washingtonaviation.com if you have any concerns about this policy or potential effects on the PMA industry.

Small Business Standards for Aerospace R&D, Adjusted

The Small Business Administration has adjusted the size standards for small businesses that perform research and development in the aerospace field (including businesses that are required to deliver manufactured product as part of a research and development contract).

Research and Development in the Physical, Engineering, and Life Sciences is currently categorized under NAICS 541712.  This NAICS code has three sub-industries or “exceptions.” The SBA feels that the small business standard for these companies should be consistent with that of peer companies that manufacture parts.  SBA is therefore modifying the titles of the three exceptions, and the size thresholds associated with them.

NAICS code NAICS industry title Current size standard (number of employees) New size standard (number of employees)
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) 500 1000
except Aircraft Engine and Engine Parts 1000 1500
except Other Aircraft Parts and Auxiliary Equipment 1000 1250
except Guided Missiles and Space Vehicles, Their Propulsion Units and Propulsion Parts 1000 1250

This rule change becomes effective on February 26, 2016. Full details of this change are available in the Federal Register.

US Names Denied Aviation Parties from Gambia and UK

The U.S. Bureau of Industry and Security has issued an order denying the export privileges of:

  • Ribway Airlines Company Limited (from The Gambia),
  • Af-Aviation Limited (from Wolverhampton, UK),
  • Andy Farmer (from Wolverhampton, UK),
  • John Edward Meadows (from East Sussex, UK), and
  • Jeffrey John James Ashfield (from East Sussex, UK).

This is a temporary denial order that is only valid for 180 days, unless extended.  Although published in today’s Federal register, the order is actually dated January 19, 2016. The Order prohibits the denied parties from engaging in export transactions, and it includes a prohibition against third parties exporting from the U.S. to any of these denied parties.

Absent a license that authorizes sales to these denied parties, sales of US-origin FAA-PMA parts to such denied parties may violate the temporary denial order.

MARPA members with a history of doing business with any of these parties should ensure that their future transactions remain consistent with U.S. law.  While the Order remains effective, those who are approached by any of these denied parties should exercise caution in their dealings.

Compliance with the New Part 21 Rules

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:

  • Change in the compliance statement;
  • Change in supplier management; and
  • Capability for PMA holders to issue 8130-3 tags  (without using designees).

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.

Are Leases Getting Looser?

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.

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