On August 2 MARPA joined a petition signed by 12 other industry groups seeking the extension of FAA Notice 8900.380. This effort was spearheaded by the Aviation Suppliers Association (“ASA”), the trade association that represents aircraft parts distributors. The policy serves to formalize a repair station’s ability to receive, inspect, and approve for return to service new articles that are not accompanied by an 8130-3 tag. Yesterday, the FAA responded to the petition by agreeing to reissue the policy for another year.
The FAA-EASA Maintenance Annex Guidance revision 6 (“MAG 6”) made the 8130-3 tag a requirement for new parts received into a dual-certificated repair station, even though the 8130-3 tag is not required by the regulations. Not only was this requirement contrary to the actual regulations, it also had the effect of making it difficult for distributors to sell many new parts received from a PAH, and for repair stations to receive new parts released from a PAH, because many PAH’s do not issue 8130-3 tags for new parts (something that is also not required under the regulations).
Notice 8900.380 provided a temporary solution to this issue by ensuring industry knew that repair stations could receive and inspect new parts within their ratings without an 8130-3 tag. This was particularly important for low-dollar value parts for which obtaining a tag from a designee was economically infeasible. This solution is expected to be permanently memorialized in MAG 7, but with only weeks before the expiration of the Notice no draft of MAG 7 has yet appeared on the horizon, and so a different solution was required. Notice 8900.380 was scheduled to expire on August 26 before a permanent solution to this tag problem was reached.
In order to support industry the FAA responded to the petition initiated by ASA and signed by MARPA by reissuing the policy in the form of Notice 8900.429. This notice continues the policy established by Notice 8900.380 for another year, until August 9, 2018. Hopefully this will give the FAA, EASA, and industry time to develop a permanent solution to the 8130-3 problem created by MAG 6 and memorialize that solution in MAG 7.
MARPA is thankful to ASA for leading this effort, as it allows our members–and the PMA community generally–to continue operating our business in the ways we deem most effective, whether we choose to issue 8130-3 tags with our parts or not. Implementing the optional procedures to issue 8130-3 tags described in 14 C.F.R. § 21.137(o) comes with inherent costs, and so it is valuable to not have that requirement forced onto PMA manufacturers by a de facto requirement arising from MAG 6.
You can read the full Notice 8900.429 here.
MARPA is happy to announce that it has extended its partnership with the U.S. Department of Commerce International Trade Administration through the Market Development Cooperator Program (“MDCP”) for another year. The extension of our partnership means MARPA can continue to draw upon the expertise and wide network of contacts the ITA can bring to bear, and in exchange will continue to report export data to ITA, honoring the commitment MARPA made at the beginning of the MDCP relationship. Although there will be no additional direct funds from ITA as a result of the extension, the support and resources ITA staff will continue to offer will be invaluable to MARPA’s continued PMA promotional efforts going forward.
As readers of this blog know, MARPA was awarded an MDCP award of $300,000 in late 2014 for a program to promote the export of PMA parts to certain international markets of emphasis. These markets included Europe, the Middle East, and the Asia Pacific region. In exchange for this award, MARPA agreed to put up $900,000 in cash and in-kind contributions in support of its new initiatives as well as collect export data from participating companies and report it to ITA to validate the MDCP program. (The obligation to report data is an import condition of receiving the MDCP funds and helps ITA justify this program to Congress to promote U.S. exports.) The vast majority of MARPA’s contribution was of the “in-kind” sort, primarily arising from the labors of MARPA staff in organizing conferences and participating in trade shows to promote PMA.
MARPA’s MDCP award has already borne fruit. The matching award has allowed MARPA to establish a second conference: the MARPA EMEA Conference. The conference was held in three different locations in the past three years: Istanbul, Madrid, and Dublin, and has resulted in new customer contacts for attendees, and generated new business for a number of U.S. companies. The conference has been such a success that even though the MDCP funds have been depleted, MARPA has determined that the conference will be held again in 2018, when we return to Dublin to build on our success generating new customers and engaging the leasing community. MARPA’s long-term goal is to make the MARPA EMEA Conference an annual event that people attend every year, much like the MARPA Annual Conference in the U.S. (Orlando, FL, October 25-26, 2017).
The MDCP award also allowed MARPA to participate in several trade shows around the world that we would otherwise not have had the resources to reach. These have included events in Europe, the UAE, Japan, Singapore, China, and South and Central America. MARPA is working internally to determine the value proposition of our continued participation in these events. If our members believe there are events MARPA should be at to promote PMA, we would love to hear from you.
As we continue our cooperative efforts with ITA, MARPA will continue to need your help. We need our members to provide us with export data that we can report to ITA as part of our MDCP obligation. ITA keeps all this information confidential and are well versed in protecting sensitive information and trade secrets. However, MARPA is happy to report trade information anonymously if you prefer. But we need your help to provide us with export data so that we can honor our commitment to ITA. Your export data will also help MARPA better craft its conference agendas to offer the best and most helpful programming possible. Our goal is to help our members export more PMA parts to the world.
We look forward to continuing our relationship with ITA, and we look forward to seeing all of you at future MARPA events!
Questions or suggestions about the conferences? Contact Senior Program Manager Katt Brigham at firstname.lastname@example.org.
Export data to report or questions about reporting? Email VP of Government and Industry Affairs Ryan Aggergaard at email@example.com.
Mark your calendars! After a successful third annual MARPA EMEA Conference, MARPA has decided to return to Dublin, Republic of Ireland to continue building upon the success we have made in engaging the leasing community and expanding the use of PMA across Europe and the Middle East. MARPA has chosen to return to Ireland and hold its fourth annual MARPA EMEA Conference April 30 – May 1, 2018 at the Hilton Dublin Kilmainham hotel.
MARPA knows our members are busy and that there are many conferences fighting for your time and attendance. We are therefore continuing with our pattern of running a very efficient two-day conference with a great networking reception on Monday, April 30, and a full and informative general session on Tuesday, May 1, with plenty of opportunities to network throughout the day.
Locating the MARPA EMEA Conference in Dublin allows for easy travel from the United States and Europe, and the efficient two-day event also allows members traveling from the U.S. to tie in visits to existing customers and potential customers across Europe after the event concludes. (Attendees have also taken advantage of event in the past to enjoy a little time off with their families afterward.)
MARPA looks forward to continuing our discussions with the aircraft leasing companies that call Ireland home, and working with our air carrier friends and friends in government to continue the promotion and global acceptance of PMA. The MARPA EMEA Conference reliably produces an excellent ratio of customers to suppliers and provides ample opportunities to both expand current business and develop new business with customers you might not see anywhere else.
Visit the MARPA EMEA Conference page to learn more, and check back often as we add speakers to the agenda.
Are there speakers or topics you would like to see addressed? Email your recommendations to MARPA Senior Program Manager Katt Brigham at firstname.lastname@example.org so that we can provide you the most valuable conference agenda we can.
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
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.
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!
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:
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.
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.
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 email@example.com. There are a limited number of subsidies available, so apply ASAP!
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).
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.
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.”
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.