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September 2014

the hotline 1984


Table of Contents

Sarah Says
Hotline Features
ARSA Works
Legal Briefs
ARSA on the Hill 
Regulatory Outlook 
Quality Time
Training 

Membership
AVMRO News Portal 
Upcoming Events


Sarah Says – Fire and Don’t Forget

By Sarah MacLeod, Executive Director

ARSA works on behalf of the aviation maintenance industry through direct, ongoing contact with the government. The association writes letters and petitions, participates on advisory councils and drafts guidance documents; it is in consistent contact with regulatory officials and congressional leaders to impart knowledge, fix problems, improve resources and otherwise manage the intersection of business and government.

Preparing each letter or message is an immense and intense undertaking, but the biggest challenge is staying on top of the issue. Unlike a satellite being shot into orbit, “fire and forget” is not an option. Through constant attention, ARSA tracks every single matter and stays on target until the industry gets the right answer.

For example, the recently-promulgated TSA security rule was the culmination of a multi-year advocacy effort. Vision 100, which required the TSA to issue foreign and domestic repair station regulation, was signed into law in 2003. Over the next 10 years, the association testified at hearings, submitted comments and lobbied Congress in anticipation of and in response to a ban on foreign repair station certificates. When the final rule was issued earlier this year, the association worked with TSA officials on implementation issues and educated its members on means of compliance. We followed the process all the way by issuing updates to model manuals and writing editorials to ensure company processes and procedures were consistent with the new rule.

The decade-long effort illustrates industry’s perseverance through a tortuous process. The same persistence was and is demonstrated in the handling of other issues including the availability of instructions for continued airworthiness, the drug and alcohol testing rulemaking and limitations on issuance of repairman certificates, just to name a few.

Of course, new problems will always arise that need attention. Indeed, there is a never-ending supply of new regulatory targets. However, new challenges are never an excuse to ignore unfinished work; pulling the trigger is not a license to take your eyes off the target.

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Hotline Features

Hopes for FAA Reauthorization Flying High

By Brett Levanto, Director of Operations

On Sept. 16, policymakers, industry groups, airline representatives and aviation business partners gathered at the National Press Club in Washington, D.C. to explore “the future of flight” at The Hill’s Aviation Policy Summit. The full day of panels and speakers included many ARSA allies and customers as well as industry analysts, business leaders and lawmakers.

The summit embraced a broad range of topics, but certain threads spooled through every discussion. Specifically, the aviation world is looking ahead to the work of renewing the law governing its main American regulatory body – all have a stake in the process. “There are over a hundred industry groups with interest in FAA reauthorization,” said Lee Moak, president of the Air Line Pilots Association.

During his keynote address, Rep. Sam Graves (R-Mo.) noted the 23 extensions required when FAA policy was last set in 2012 and expressed “the last thing we want is another reauthorization like we had last time.” In general, the assembly was hopeful that such measures will not be necessary; the overall tone is positive as the 1-year countdown to the expiration of the current FAA Modernization and Reform Act begins Oct. 1.

“The next FAA reauthorization … should be transformational,” said Rep. Bill Shuster (R-Pa.), chairman of the House Committee on Transportation and Infrastructure. “We need to lay the ground work for the future of U.S. aviation.”

Rep. Bill Shuster (R-Pa.) Discusses FAA Reauthorization at 2014 Aviation Policy Summit

Much of this confidence stems from the summer’s passage of the Water Resources Reform and Development Act (WRRDA), which enjoyed overwhelming support in both chambers after months of legwork, listening sessions with interested parties and careful bipartisan negotiation. “We started very early [on WRRDA],” Shuster said, “reaching out to stakeholders, trying to listen to their concerns and their problems and their ideas.” Many are optimistic the blueprint will prove as effective for airways as it was for ports.

The key substantive issues highlighted by Chairman Shuster – delegation authority, regulatory burden, regulatory interpretation consistency – should sound very familiar to ARSA members. Reauthorization will be a top legislative priority for the association in the next year and should be on your radar from now until the day the president signs the new law.

Weren’t able to make the summit? You can experience it online at: http://thehill.com/217845-aviation-policy-summit-the-future-of-flight.

For more information on ARSA’s legislative program, including how your company can get involved, visit: http://arsa.org/legislative.

It’s a long time until next October. Stay tuned.


FAA Aims to Streamline Certification Processes

By Zach Bruckenstein, Law Clerk

On Sept. 17, the FAA announced new policy intended to streamline the Aircraft Certification Service (AIR) process. The new procedures prioritize U.S. aircraft projects and aim to afford increased predictability and improved response time. Under the now-obsolete project sequencing process, which began in 2005, the agency failed to provide certificate applicants with information concerning project timelines.

This new AIR Project Prioritization Process comes in response to recommendations from the Aircraft Certification Process Review and Reform Aviation rulemaking committee. While the certification process still incorporates existing criteria such as the project’s safety benefit, complexity and company experience to prioritize agency resources, AIR personnel must now communicate with applicants throughout the process. The policy includes strict maximum response times based on a project’s priority.

The agency hopes that these changes enable the industry to retain global competitiveness and improve product to market times. As the FAA implements this new policy, let ARSA know how it affects your business.

Your Word is Your Bond – Bonded Repair Size Limits Draft Policy

By Zach Bruckenstein, Law Clerk

A member has alerted ARSA to a draft policy from the FAA regarding Bonded Repair Size Limits that would require design approval holder (DAH) substantiation on any repairs developed by owners, operators, repair stations, Designated Engineering Representatives (DER) or engineering firms.

ARSA urges anyone affected by such a change to submit comments to the FAA before the Oct. 10, 2014 deadline.

The FAA cites unexpected failures of bonded repairs to noncritical structures as the impetus for the draft policy. The agency, without providing regulatory, engineering, technical or statistical references, “concludes that bonded repair of critical structure is a potential safety threat.” The draft includes further presumptions that there are no available nondestructive inspection (NDI) techniques that assure that viability of a bonded repair. The FAA has deemed that such uncertainty necessitates a limit to the size of bonded repairs for critical structures. Through comments, ARSA members have the opportunity to ensure the agency ensures its policy is grounded in the regulations and to produce documented proof and objective data to corroborate its assumptions.

Under the draft policy, the size limitations of the bonded repairs are based on the inherent constraints of the specific designs and those associated with the substantiating data used to meet relevant regulations under 14 Code of Federal Regulations (CFR) parts 21, 23, 25, 27, 43. The policy will impact the capabilities of owners, operators and repair stations to develop repairs on critical structures by creating reliance on substantiation data only from the DAH for specifying tolerances and size limitations.

The resulting uncertainty imposes unknown cost on industry members without additional benefit to safety. There are additional concerns that dependence only on the DAHfor repair substantiation—many of whom may not have sufficient maintenance experience—will drive the use of new, more costly parts in lieu of properly established repairs.

Examine whether this issue may affect your business. Stay informed, ask questions and submit your comments to the docket. Repair station involvement on these issues – which seem small but can have broad impact on the maintenance community – is essential to ensuring the government appropriately balances its responsibilities with the industry’s.


Washington to [Another] Washington – MacLeod at Airline E&M

By Brett Levanto, Director of Operations

SEATTLE– On Sept. 25, Sarah MacLeod showed the aviation maintenance industry how to safely navigate an increasingly-hazardous regulatory environment.

MacLeod, ARSA’s executive director and managing member at the law firm of Obadal, Filler, MacLeod and Klein, shared her regulatory insight at MRO Network’s Airline E&M: North America. She joined Nick Brohm, director of quality for Virgin America, for a panel discussion titled Regulatory Update: Staying Ahead of the Compliance Challenge.

The purpose of the panel was to update attendees on recent changes in regulatory requirements and assess their impact while providing operating guidance for airlines and repair stations. To accomplish this, MacLeod reviewed recent regulatory actions – a number of important proposed rules and, of course, the new part 145 – and described the association’s work as a roadmap for both compliance and business success.

MacLeod reminded the audience that MRO providers must develop long-term, engaged relationships with regulators. However, effective commercial systems should always be the centerpiece of ensuring compliance, productivity and profit. “Knowing the difference between a regulatory compliance issue and a ‘good business practice’ is essential, more so than a ‘robust’ government-dictated requirement,” she said.

If you couldn’t make it to Seattle, you can get a sampling of the experience by viewing MacLeod’s presentation slides. Need more? Visit ARSA’s training page to view recorded sessions or develop a private session for your staff and be sure to attend the 2015 Annual Repair Symposium.

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ARSA Works

To see all the ways that ARSA is working as the voice of the aviation maintenance industry, visit our ARSA Works page.

“Serious” Petition to FAA

By Brett Levanto, Director of Operations

On Sept. 22 a coalition of aviation trade associations asked the Federal Aviation Administration (FAA) to fix a seven-letter mistake in the Code of Federal Regulations (CFR) that would create serious headaches for the aviation maintenance industry.

The group, which includes the Aeronautical Repair Station Association (ARSA), the Aerospace Industries Association, the Aircraft Electronics AssociationAirlines for America, the Cargo Airline Association, the General Aviation Manufacturers Association and the National Air Carrier Associationpetitioned the FAA to correct the new repair station rule issued on Aug. 12. The amendment to 14 CFR part 145 will become effective Nov. 10, but includes the improper removal of the word “serious” from a paragraph requiring repair stations to report a failure, malfunction or defect of an article to the agency within 96 hours.

Complying with the section was already difficult. By removing the word “serious,” aviation repair stations are effectively required to report everything that comes through the door – if an article did not have a failure, malfunction or defect, it would not need work – an expectation that is unrealistic and inefficient. The change would impose incalculable cost on both the agency and industry and was made without warning; it was not considered in the notice of proposed rulemaking (NPRM) to which industry members submitted comments in 2012.

The FAA incorrectly claims that “serious” was removed to rectify the word’s “inadvertent” insertion during a previous rulemaking.  In fact, the term was deliberately and correctly reinserted as a direct consequence of public comments in 2003, when the agency agreed with industry and acknowledged “it was not the FAA’s intent to require [aviation] repair stations to report all failures, malfunctions and defects.”

“This is why we scrutinize the rules,” said Sarah MacLeod, ARSA’s executive director. “One misplaced or misused word can cause a whole lot of trouble for repair stations, their customers and – in the end – the flying public. It takes work to dissect, apply and chronicle regulations published by the government, but it is one of ARSA’s  jobs for the repair station community. The effort paid off and now the agency has the opportunity to quickly make things right.”

In the petition, the coalition urges the FAA to honor its previous rulemaking activity by replacing “serious.” Since it is in the public interest to implement a correction that was fully vetted during a prior comment period, the agency can use its authority under the Administrative Procedures Act (APA) to implement a direct final rule without delays required for public notice and comment.


Your Snapshot of Aviation Maintenance – Still in Focus?

By Brett Levanto, Director of Operations

In March, ARSA collected responses to its annual member survey. One hundred participants from across the industry shared insight about their current operations, future plans and the value of the association to its members. We’re now halfway to the next survey and it’s time to examine the snapshot you provided; is it still in focus?

To access a summary document containing the results of the survey, click here. Does something really stand out? Have new issues emerged in the past six months that are important to you? Tell us about it.

So far, the data has been invaluable to ARSA staff as we have worked with regulators and lawmakers, developed content on key issues and determine our own direction on the issues most important to the repair station community.  This information should be a tool for you and your company as you work to develop plans and respond to the needs of the market. This is your snapshot of aviation maintenance– make it useful.


Hotline Throwback – 2003: Instructions for Continued Argument

By Brett Levanto, Director of Operations

Repair stations, manufacturers and service providers need clear guidance on the obligations and rights pertaining to Instructions for Continued Airworthiness (ICA).

Since its inception, ARSA has worked to ensure essential information is made available at a fair and reasonable price to operators, maintenance providers and any other person required to comply with instructions from design approval holders (DAH). Notwithstanding the clear language of § 21.50(b), the FAA has been slow to enforce the DAHs’ obligation. On the other hand, the agency has vigilantly enforced the requirement that those performing maintenance do so in accordance with the ICA (see §§ 43.13145.51 and 145.109).

The association has taken numerous steps to combat this “double standard” of enforcement and will continue to encourage, influence, watch and report on the development of uniform ICA policy.

This month, we invite you to travel back to 2003, when the hotline provided “your action guide on instructions for continued airworthiness” by clicking the image below.

Click the image to access the May, 2003 hotline.

Click the image to access the May, 2003 hotline.

For more background on ICA, visit ARSA’s issue page at: http://arsa.org/regulatory/faa/design/ica-efforts/.

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Legal Briefs

So You Want to Petition for Rulemaking

By Laura Vlieg, Law Clerk

As ARSA members know all too well, regulations have a significant effect on business and operations. Industry can of course participate in the rulemaking process by commenting on proposed rules, but how can it initiate change to existing rules or suggest new ones?Congress provides one mechanism in § 553 of the Administrative Procedure Act (APA): “Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.” Title 14 Code of Federal Regulations (CFR) part 11 outlines the process for submitting petitions for rulemaking to the Federal Aviation Administration (FAA).The matter at issue must meet certain criteria; for example, it must affect the public as a whole and it cannot be addressed in an existing or proposed regulation. The submission must also include basic information (see § 11.71):

1. Petitioner name and mailing address (fax number, telephone number and e-mail address are optional)
2. An explanation of the proposed action and its purpose
3. Proposed language for a new or amended rule, or the language to remove from a current rule
4. An explanation of why the proposed action is in the public interest
5. Information and arguments that support the proposed action, including relevant technical and scientific data
6. Any specific facts or circumstances that support or demonstrate the need for the proposed action.

After submission, the FAA processes the petition (see § 11.73); one of several outcomes may occur:
  • If the FAA determines that the petition justifies the action requested, it will initiate the rulemaking process.
  • If there is already an existing rulemaking on either the specific subject matter, or in a closely related subject area, it may consider the petition as a comment to those proceedings.
  • The petition is tasked to the Aviation Rulemaking Advisory Committee (ARAC) for consideration.
  • It will dismiss the petition and place it in a database for examination upon future rulemaking.

The FAA ultimately decides (within the parameters of its congressionally delegated authority) what petitions to address through rulemaking.

ARSA recently joined forces with several other trade groups to petition the FAA to correct an error in the new repair station rule set to take effect on Nov. 10, 2014.

A strong democracy requires participation, but with so many competing interests it can be difficult to participate effectively. ARSA navigates the increasingly complex government system to take action on industry’s collective behalf. It also equips its membership with the knowledge and confidence to act individually. The petition for rulemaking is merely one avenue for ARSA members to be heard.

For more information, check out ARSA’s resources on how to get involved in the regulatory and legislative processes.

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ARSA-NoBS-HalfPage-20140121


ARSA on the Hill

Recycled Air
By Daniel Fisher, Vice President of Legislative Affairs

Aviation stakeholders and lawmakers are once again gearing up for another round of Federal Aviation Administration (FAA) reauthorization lawmaking on Capitol Hill.

The current authorization, the FAA Modernization and Reform Act, expires on Sept. 30, 2015.  The reauthorization process, which should happen every few years, allows lawmakers to set funding levels and policy priorities for the agency.  As Congress crafts new FAA legislation, threats and opportunities abound, and undoubtedly, old ideas will resurface, many that are detrimental to the aviation maintenance industry.

ARSA and its industry partners scored major victories in the FAA Modernization and Reform Act of 2012; however, our success was based on preventing detrimental policies from enactment. While ARSA is already engaging lawmakers on the association’s top legislative priorities, the industry will once again be playing defense to stop recycled, anti-contract maintenance proposals and countering false safety and economic arguments about aviation maintenance companies.

ARSA fully expects efforts to curtail contract maintenance on U.S. air carriers, drug and alcohol testing of foreign repair station employees, and mandatory inspections to resurface.  Once a bad idea is unveiled in Washington it never disappears.  Through education and engagement, ARSA and its members have laid a strong foundation to counteract interests opposed to our industry.  However, those hostile to contract maintenance are well-funded, well-connected, and adept at swaying public perception.

Consequently, the aviation maintenance industry must remain engaged both with lawmakers and the media.  Below are five activities every ARSA member company should do to ensure favorable policy outcomes in the next Congress:

1.  Host candidates and elected officials to visit your facility. The most effective way for policymakers to understand the industry and see the role your repair station plays in the local community is through a company tour.
2.  Attend ARSA’s Legislative Day on March 18, 2015.  Stay tuned for Legislative Day/Symposium registration in the coming weeks.
3.  Learn more about ARSA PAC.  ARSA PAC is a special fund that enables the entire aviation maintenance industry to speak with a common voice in the political process and elect candidates who share its legislative goals.
4.  Vote on November 3. Participation in the democratic process is an important part of active citizenship. ARSA encourages its members to vote – it’s one of your most basic and important democratic rights. You can’t complain about your member of Congress if you don’t vote!
5. Engage the media.  Any opportunity you have to educate the media about contract maintenance’s excellent safety record and contribution to the local economy will help shape policy.

We need your assistance to ensure recycled, bad ideas don’t become terrible laws.  ARSA’s legislative and communications team is standing by to facilitate your engagement with key audiences.

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Regulatory Outlook

Editor’s note: The views and opinions expressed by contributing authors do not necessarily state or reflect those of ARSA and shall not be used for endorsement purposes.

Future UAS Maintenance Needs Could be an Untapped Windfall

By Ryan Aggergaard, Associate at Washington Aviation Group, PC.  Washington 2233 Wisconsin Ave NW, Washington, DC 20007. © 2014 Ryan Aggergaard ALL RIGHTS RESERVED

One of the most prominently discussed aviation matters in recent years is the emergence and introduction of Unmanned Aircraft Systems (UAS), or drones, into the National Airspace System (NAS).  Stories and alerts from a broad cross section of media outlets report almost daily on various concerns raised by the increasing presence of UAS in the NAS.

The wide range of benefits UAS present make them appealing to an equally wide range of interests: public agencies using UAS for the public good, such as border patrol, search and rescue, or the execution of search warrants; delivery services using small UAS for rapid responses to customer order; realtors, artists, and the film industry using UAS to capture previously unavailable images; and hobbyists and other noncommercial users taking advantage of what is simply a fun new technology.

But one element of the new UAS boom that is not frequently discussed is the maintenance and upkeep of these aircraft (if, in fact they can all be considered aircraft, which is a discussion for another day). At a recent conference I had the opportunity to speak with a number of attendees, and a frequent theme was the future possibility of establishing maintenance operations for UAS.  Obviously many details are still in development, as the FAA works to issue regulations specific to drones, but some details can already be identified. Those individuals with the technical capability to provide maintenance services to future UAS operators may stand to benefit as the first entrants into a potentially lucrative market.

One of the first types of UAS to consider is model UAS.  Congress has defined model aircraft as an unmanned aircraft capable of sustained flight in the atmosphere flown within visual line of sight of the operator and flown for hobby or recreational purposes.[1] Notably when these aircraft are operated as follows, Congress has forbidden the FAA from promulgating any rule or regulation: when the UAS flown strictly for hobby or recreational use, operated in accordance with a community-based set of safety guidelines, limited to not more than 55 pounds, operated in a manner that does not interfere with manned aircraft, and the operator gives notice when operating within 5 miles of an airport.[2]

Two factors weigh on whether UAS qualifying as model UAS will be a potential source of maintenance business.  The first is their cost.  These UAS can range from only a few hundred dollars to several thousand.  The low price of many small UAS mean that actual maintenance needs are unlikely; a damaged part, such as a rotor on a quadcopter, can be replaced by the hobbyist, or the entire UAS simply replaced.

However, a second factor weighs toward the possibility of a new market for repair services.  The FAA has explained that, in its interpretation, the prohibition against rules or regulations described above applies only to regulations specifically targeting model aircraft, and only when those aircraft are used in compliance with the statute.  Put another way, any broadly applicable regulation—such as a maintenance regulation applicable to all UAS—could apply to even these small UAS.[3]  Therefore, an expansive rule pertaining to UAS maintenance, or a regulation cabining maintenance of UAS under Part 43, may create a new opportunity to expand maintenance operations.

Large UAS present a clearer opportunity for maintenance.  Although these aircraft are not currently in widespread use, as the FAA issues regulations for the integration of UAS into the NAS, more and more public agencies and wealthy organizations and individuals will have an opportunity to employ UAS.  Thus far, no special provisions or protections have been proposed for these aircraft, and therefore it is reasonable to expect the Federal Aviation Regulations, and Part 43 and 145 in particular, to apply to these aircraft as well.

Given the FAA safety mandate, this makes sense.  Large UAS, if maintained improperly, pose a far greater threat to other aircraft and to persons and property on the ground, than do small UAS fitting the definition of a model aircraft. Of course, any aircraft if improperly maintained or improperly operated can pose a safety threat. When we consider the cost factor we identified above, however, it becomes apparent that maintenance and upkeep of these larger UAS will be preferred to simply replacing the entire aircraft, as may be an option with model aircraft.  If and when the FAA promulgates its regulations for UAS integration, it will be important to identify new requirements with respect to UAS.  Those repair stations able to modify their capabilities to meet the new requirements (if any) for UAS will be ideally situated to take advantage of that emerging market.

Another way for technically qualified individuals to take advantage of this emerging area is as a DAR.  The FAA recently issued FAA Order 8000.372 Unmanned Aircraft Systems (UAS) Designated Airworthiness Representatives (DAR) for UAS Certification at UAS Test Sites.

This Order explains policy and procedures for the selection, appointment, orientation, training, oversight, suspension and termination of designated airworthiness representatives (DAR) affiliated with UAS test sites. The Order explains that UAS DARs will be authorized to issue special airworthiness certificates in the experimental category for research and development, and training, at UAS test sites.

It is important to note that a UAS DAR cannot perform both maintenance and DAR responsibilities with respect to the same aircraft.  DARs that also perform UAS maintenance must be sure to keep their designee and maintenance activities separate. However, the opportunity to act as a UAS DAR at the special test sites may give technically capable persons an opportunity to establish him or herself in the market before others.  Not only is a UAS DAR an opportunity that exists now, but it may also ideally position the individual to continue as a UAS DAR when more widespread opportunities emerge.

Regulation of UAS is an ongoing and rapidly changing field. Maintenance requirements in particular have been largely ignored to this point, as issues over integration into airspace and privacy concerns have dominated most discussions.  But UAS, like all aircraft, do require maintenance.  As use of UAS continues to expand, and as more players enter the arena, those repair facilities positioned to perform maintenance stand to reap the benefits from both public and private operators seeking maintenance services.

—————————————————-
[1] See FAA Modernization and Reform Act of 2012, Pub. L. No. 112-95, § 336(c).
[2] Id. at § 336(a).
[3] See FAA Interpretation of the Special Rule for Model Aircraft, 79 Fed. Reg. 36,172, 36, 173 (Jun. 25, 2014).

 


Final Documents/Your Two Cents

This list includes Federal Register publications, such as final rules, Advisory Circulars, and policy statements, as well as proposed rules and policies of interest to ARSA members. To view the list, click here.

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Quality Time

Editor’s note: The views and opinions expressed by contributing authors do not necessarily state or reflect those of ARSA and shall not be used for endorsement purposes.


Legal Waypoints – Product Recall: How Would You Survive?

By Steven E. Pazar, Attorney at Law, 11 Carriage House Lane, Boxford, Massachusetts 01921. © 2014 Steven E. Pazar ALL RIGHTS RESERVED

“We need to do a product recall.”  Whether you are large or small, the words “product recall”, precedes unexpected and often uncontrollable liability exposure. For the manufacturer this exposure is comprised of the direct cost of the recall plus the loss of company goodwill, loss of use of the product by upset end-users, and perhaps a precipitating traditional bodily injury or property damage claim.  Product recalls are a significant financial risk for all fabricators – witness the recent flurry of automaker recalls.

For a supplier who provided a defective part or component, the results can be more devastating. Typically there is just not enough profit margin in the supply of a part or component to cover the risks of a recall. Unlike a standard warranty claim remedy, the supplier not only has the obligation to repair or replace the defective part or component, but will likely be saddled with the costs of removal and reinstallation plus the other direct and indirect recall costs incurred by the upstream manufacturer and end-user. This exposure could be a terminal financial blow for many part and component suppliers.

Understanding the contractual risk exposure and planning for the possibility of a recall is the best survival strategy. Solid risk management starts upfront with good contract negotiation. This should be followed by the clear documentation of design decisions and approvals. Being able to track material and piece part inventories to end products is essential in mitigating a recall exposure. Lastly, verifying the extent to which your products liability insurance coverage will respond in the event of a recall event could make the difference in ultimate survival.

Consider the flow of the risk and the layering of insurance coverage. In recent years top-tier manufacturers have completed the transition to a procurement system that transfers most, if not all, of the recall risk to suppliers.  This “take it or leave it” approach has forced most suppliers to assume recall risks as part of the cost of doing business. Unfortunately for the supplier there has been little, if any, monetary consideration given in exchange for taking on this broader exposure.

So where does a supplier turn to help mitigate exposure? Apart from the internal tools mentioned above, the use of recall insurance may offer the best risk transfer tool. This coverage attempts to fill the gaps in most commercial general liability and products liability insurance policies. It may even serve as a useful limit on your liability in a well-crafted contract. If a recall occurs you can mitigate the overall exposure for the dollar amount between the deductible and the policy limit. While the recall coverage may not eliminate the financial risk it can make the difference between survival and dissolution.

Steven counsels businesses operating in high-risk industries – including aviation – he provides templates, tools and training that will improve contracting efficiency, close deals faster and control costs.

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Training


Personal Development – Financial Management

ARSA members strive every day to keep the world in flight and each should ensure that their hard work is working for them. The following lesson comes from CNN Money – the first of over 20 on the topic. Continue your education by clicking here.

Lesson 1: Goals for Setting Priorities

1. Narrow your objectives.

You probably won’t be able to achieve every financial goal you’ve ever dreamed of. So identify your goals clearly and why they matter to you, and decide which are most important. By concentrating your efforts, you have a better chance of achieving what matters most.

2. Focus first on the goals that matter.

To accomplish primary goals, you will often need to put desirable but less important ones on the back burner.

3. Be prepared for conflicts.

Even worthy goals often conflict with one another. When faced with such a conflict, you should ask yourself questions like: Will one of the conflicting goals benefit more people than the other? Which goal will cause the greater harm if it is deferred?

4. Put time on your side.

The most important ally you have in reaching your goals is time. Money stashed in interest-earning savings accounts or invested in stocks and bonds grows and compounds. The more time you have, the more chance you have of success. Your age is a big factor – younger people (who have more time to build their nest egg) can invest differently than older ones. Generally, younger people can take greater risks than older people, given their longer investment horizon.

5. Choose carefully.

In drawing up your list of goals, you should look for things that will help you feel financially secure, happy or fulfilled. Some of the items that wind up on such lists include building an emergency fund, getting out of debt and paying kids’ tuitions. Once you have your list together, you need to rank the items in order of importance (if you have trouble doing so, use the CNNMoney.com Prioritizer for help).

6. Include family members.

If you have a spouse or significant other, make sure that person is part of the goal-setting process. Children, too, should have some say in goals that affect them.

7. Start now.

The longer you wait to identify and begin working toward your goals, the more difficulty you’ll have reaching them. And the longer you wait, the longer you postpone the advantage of compounding your money.

8. Sweat the big stuff.

Once you have prioritized your list of goals, keep your spending on course. Whenever you make a large payment for anything, ask yourself: “Is this taking me nearer to my primary goals – or leading me further away from them?” If a big expense doesn’t get you closer to your goals, try to defer or reduce it. If taking a grand cruise steals money from your kids’ college fund, maybe you should settle for a weekend getaway.

9. Don’t sweat the small stuff.

Although this lesson encourages you to focus on big-ticket, long-range plans, most of life is lived in the here-and-now and most of what you spend will continue to be for daily expenses – including many that are simply for fun. That’s OK – so long as your long-range needs are taken into consideration.

10. Be prepared for change.

Your needs and desires will change as you age, so you should probably reexamine your priorities at least every five years.


“Teaching You How to Fish” – ICA Primer

By ARSA Communications Staff

Access to regulatory, business and legislative knowledge is one of the key benefits of ARSA membership. We are standing by for your calls, questions, or clarifications. The association will go a step further, though, and give you the tools to build your own knowledge before the problem even arrives.

Our recorded webinars and training sessions are one way ARSA will “teach you how to fish.” They’re all waiting for you; you can start a session right now.

Featured Session – ICA Primer 1
ARSA General Counsel Marshall Filler provides an overview of the regulatory basis for ICA, including what documents are considered ICA and the obligations of design approval holders to prepare and make them available under 14 CFR § 21.50(b). It also covers the regulations that apply to repair stations and other maintenance providers regarding the use of ICA and their availability. Take an hour and make sure you’re current on this long-standing issue: click here.

This is the first of two sessions covering ICA. To graduate to session two, click here.

Regulatory Compliance Training

Test your knowledge on § 145.161 ratings – Records of management, supervisory and inspection personnel.

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Membership


Member Spotlight: Southwest Airlines

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By Kelsi Oliver, Communications Coordinator

Flash back to March 15, 1967. Imagine champagne, colorful streamers, friends, laughter and general merriment – this was the day founders Rollin King and Herb Kelleher achieved the incorporation of their new company, Air Southwest Co. The business known today as Southwest began with a simple notion: If there is a way to get passengers to their destinations when they want to get there, on time, at the lowest possible fares and “make darn sure they have a good time doing it,” people would fly with King and Kelleher. Southwest is now America’s largest low-fare carrier, serving more customers domestically than any other airline.

So why is an airline a valuable part of ARSA’s membership?

Southwest may not be a repair station, but safety is in their blood. In this sense, ARSA’s regular members could be considered blood brothers with Southwest — different looks and personalities, but bound together by shared genes.  Through its broad membership, the association has built the largest-possible community with a shared interest in the intersection between business and government. From the importance of a one-word change to a rule to longer-term issues like instructions for continued airworthiness, good safety and good business are common across aviation.

Members like Southwest broaden the association’s connection to the entire industry and enhance impact and visibility of regular members. Repair stations can be sure they are working with companies who are aware of the long-term issues they face and their everyday concerns and challenges; they share a side of the table with regulators, sit shoulder-to-shoulder at symposium, and speak with one voice before Congress.

ARSA works with this broad community so that every business – from carrier to component shop – can focus on what they do best: providing safe passage from takeoff to touch down.

Southwest Airlines, an associate member, has been part of the ARSA community since 2005. Learn more about Southwest here.

Are you an ARSA member who would like to be in the “Member Spotlight?” If so, please contact Kelsi Oliver at Kelsi.Oliver@arsa.org.


Have You Seen this Person?

Each month, the hotline spotlights key regulatory, legislative, and business leaders making important contributions to the aviation industry. This month we look at Kevin Hiatt of the International Air Transport Association.

Kevin Hiatt, Senior Vice President, Safety and Flight Operations, IATA

Thiatthe International Air Transportation Association (IATA) has a (relatively) new face. This past February, IATA welcomed Kevin Hiatt as the vice president of safety and flight operations.

With many new safety projects in the works with IATA, 2014 will certainly be a busy year for Hiatt. His responsibilities include IATA’s Six Point Safety Program, an initiative including the Abuja Declaration that aims to bring African safety performance to world-class levels by 2015. He will also play a central role in IATA’s implementation of the Enhanced IATA Operational Safety Audit.

Hiatt has a strong background in both safety and flight operations. Past experiences include time with the Flight Safety Foundation (FSF), serving first as executive vice president and then as president, CEO and COO. At World Airways he served as the vice president for corporate safety and security and was with Delta Airlines for 26 years holding different positions, including Chief Pilot at the Hartsfield-Jackson Atlanta International Airport Pilot Crew Base from 2002 to 2005. This body of work positions Hiatt well to help make this safe industry even more dependable.

At this year’s upcoming ARSA Strategic Leadership Conference hosted by IATA in mid-October, he will share the association’s top priorities for the coming years and how ARSA, industry and IATA can work together to achieve common objectives.

The International Air Transport Association is the trade association for the world’s airlines, representing some 240 airlines or 84 percent of total air traffic. The organization supports many areas of aviation activity and helps formulate industry policy on critical aviation issues.

To learn more about IATA, please visit www.iata.org/.

 


Take Advantage of ARSA’s Members Getting Members Program, Get 10% Off on Membership Dues

The best form of advertising is word of mouth. Use the Members Getting Members Toolkit to recruit an ARSA member and your company will receive a discounted membership rate for your next membership term. Get more information at http://arsa.org/membership/members-getting-members/

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Target Your Message: Advertise Today in ARSA’s Newsletters and Website!
ARSA recently updated its menu of advertising opportunities for arsa.org, the hotline and the ARSA Dispatch. Take advantage of these great opportunities today to showcase your company, a new product or event. For more information go to http://arsa.org/advertise/


Exhibit, Sponsor the 2015 Repair Symposium
As the maintenance industry’s top event devoted exclusively to regulatory compliance, the ARSA Symposium attracts a highly qualified professional audience. Use this opportunity to promote your company while showing support for ARSA. Get more information at http://arsa.org/news-media/events/arsa-symposium/arsa-annual-repair-symposium-sponsorship/

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A Member Asked…

Q: This repair station spends a lot time of and money ensuring that it possesses the latest revisions of maintenance documents needed to support our capabilities. We do not however get support from certain manufacturers—usually those that are not directly controlled by 14 CFR part 21. These accessory manufacturers state they do not have to comply with the requirements in the FAA Memo AIR-100-11-100-002 against inappropriate restrictions on the use and availability of Instructions for Continued Airworthiness (ICA). Most of the problems come from the term design approval holder (DAH) since the original equipment manufacturers (OEMs) do not feel that this term includes them. Do any other members have this issue? Do you know if the stance taken by these OEM entities has been challenged before and is so do you know the outcome?

A: Yes, other members run across “OEMs” that don’t know they are the DAH/PAH responsible for ICA. Equally, members don’t understand the DAH/PAH versus OEM distinction.

The person that is responsible under the regulations for complying with 14 CFR part 21 is the DAH/PAH.

If the “accessory manufacturer” does not hold a design/production approval from the FAA, you need to approach the one that does hold the certificate or approval responsible for ICA (and then you have to figure out whether the document you are seeking is ICA). For example, if the type certificate (TC) holder’s aircraft maintenance manual calls out a component maintenance manual for the appropriate method of performing work—the TC holder (say, Boeing) is responsible for creating and making that ICA available. If the contract between the TC holder and the “OEM” failed to address this regulatory requirement, the TC holder must provide the information required by part 21.

The first question is always “who holds the design approval?” If the accessory manufacturer is selling replacement articles directly to a repair station or air carrier, it must hold a design and production approval or be working under another design or production approval holder’s authority. So, who or what is that “person?”

If it is a Technical Standard Order Authorization (TSOA) holder, it is directly responsible for ICA (as defined by the TSO). Unfortunately, Parts Manufacturer Approval (PMA) holders may not need to provide ICA; nonetheless, they are responsible for evaluating whether separate ICA need be developed and made available. Additionally, if the TC holder’s manual references the PMA holder’s manual, the policy does apply even if it would be enforced through the TC holder relationship.

If your head isn’t spinning enough, let me just conclude by reminding you that parts 43 and 145 refer to the manufacturer—that means the DAH/PAH responsible for providing the maintenance data—not the OEM, which has no meaning under the regulations.

For more information on ICA please visit: http://arsa.org/regulatory/faa/design/ica-efforts/.

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AVMRO News Portal

ARSA strives to provide resources to educate the general public about the work of the association’s member organizations; should you need to provide a quick reference or introductory overview to the global MRO industry, please utilize AVMRO.ARSA.org.


AVMRO Industry Roundup

ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations play globally by providing jobs and economic opportunities and in civic engagement. These are some of this month’s top stories highlighting the industry’s contributions. You can explore these stories through ARSA’s Dispatch news portal.

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Upcoming Events

MRO Europe – Madrid – October 7-9
AOPA – Aircraft Owners and Pilots Association Aviation Summit 2014 – Palm Springs, Cal. – October 9
ARSA Strategic Leadership Conference – Montreal – October 15-16
NBAA 2014 Business Aviation Convention & Exhibition – Orlando, Fla. – October 21-23

Previous issues:

2014: Jan Feb Mar Apr May June July
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2013: Jan Feb Mar Apr May June July
Aug Sept Oct Nov Dec
2012: Jun Jul Aug Sep Oct Nov Dec

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the hotline is the monthly publication of the Aeronautical Repair Station Association (ARSA), the not-for-profit international trade association for certificated repair stations. It is for the exclusive use of ARSA members and federal employees on the ARSA mailing list. For a membership application, please call 703.739.9543 or visit http://arsa.org/membership/join/.

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