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MARPA Extends its Partnership with ITA

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 katt@washingtonaviation.com.

Export data to report or questions about reporting? Email VP of Government and Industry Affairs Ryan Aggergaard at ryan@washingtonaviation.com.

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MARPA to Return to Dublin in 2018!

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 katt@washingtonaviation.com so that we can provide you the most valuable conference agenda we can.

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).

US Government Seeks to Remedy Unfair Competition Affecting Aerospace Trade

I had a great conversation today with the International Trade Administration (ITA).  They are concerned about non-US companies misusing intellectual property (“IP”) claims to in ways that give them an unfair commercial advantage.  I pointed out some situations where IP rights are claimed, but do not really apply, and this is used as justification for a foreign company failure to comply with regulations, causing commercial disadvantage to US companies who do comply with the regulations.

Our next step is to try to entice them to meet with some members to hear their concerns.  We focused in our initial discussion on IP because tat was the focus of the people who were present, but they felt that some of the issues amounted to technical barriers to trade and suggested that they might want to have a technical barriers to trade specialist hear about these issues, too.

I offered to assemble a few affected parties from US aerospace companies who could tell them “the whole story.”  That is where YOU come in.

   Are any of you interested in attending a meeting (not sure if it will be in-person or telephonic) where you would have an opportunity to discuss the details of IP situations with ITA representatives? 

Remember that ITA’s focus is not going to be on general unfair competition – just unfair competition that affects international trade and puts the US at a disadvantage – so we need to be focused on those issues.

Remember also that this meeting is still in the early planning stages – they have not committed to it yet and if it happens then I want to make sure that we have some strong issues to share with the ITA.

If you feel that your aerospace business is being affected by unfair competition from non-US competitors (especially as a consequence of intellectual property claims), please let us know as we work with ITA to set up the next meeting.

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.

 

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.

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!