2016 – Edition 3 – April 4
Table of Contents
President’s Report
Symposium 2016
ARSA Works
Legal Briefs
ARSA on the Hill
Regulatory Outlook
Quality Time
Training
Membership
AVMRO News Portal
Upcoming Events
President’s Report
By Gary Hudnall, President
Editor’s Note: ARSA President Gary Hudnall addressed members in remarks delivered at the association’s annual membership meeting and breakfast, held on March 18 during the 2016 Annual Repair Symposium. The following is the text of Mr. Hudnall’s prepared remarks.
Good morning, I am Gary Hudnall, ARSA’s president and the general manager of Jet Center Medford in Medford Oregon. A family business founded in 1967, Jet Center MFR is more than just an aviation enterprise; it is a pillar of the community. We work together with fellow companies, support local charities and are committed not just to the safety of the flying public, but the health of the American economy. This year – my eighth on the board and first as its president – we celebrate a decade of ARSA membership.
I began working for the company in 1981, just a few years before ARSA was born right here in Northern Virginia. I finished at Spartan College and arrived in a little town called Ashland, Oregon with my A&P certificate in hand to work as a line mechanic for a part 135 operation called Southern Oregon Skyways – a two-man shop performing mostly in-house work.
Then: a big change. The company purchased an FBO in Medford and I was asked to become its director of maintenance; I was 19 and a little scared…I needed a waiver from the FAA just to be designated the DOM. More than three decades later, that two-mechanic family business serves customers from throughout the Pacific Northwest out of a 20,000 square foot facility at Medford airport.
Needless to say, I’ve seen a lot of change, but the fundamental challenges we face today are the same as when I arrived in Oregon and ARSA was founded: finding the right balance between government oversight and industry responsibility, learning to work together with the FAA to ensure commonsense application of the rules and remind elected officials that in aviation maintenance good safety is good business. These challenges are the focus of this association every day, and with that focus I’d like to officially call the 2016 annual membership meeting to order.
The first item of business is to introduce the board of directors. I ask each present to stand when I call your name and remain standing through the explanation of all the industry segments represented by your service.
First, ARSA’s Vice President and Coopesa’s Quality & Safety Director Warner Calvo represents the association’s international members.
I’d also like to congratulate Basil Barimo, executive vice president of repair divisions at NORDAM, on assuming the role of ARSA treasurer. Basil will add this new role to his responsibility to ensure that corporate, business and airline maintenance issues are addressed.
In addition to our officers – Warner, Basil and I – the association is represented by an experienced team of board members.
Of course, our last two presidents Jim Perdue of SONICO and Gary Jordan of Jordan Propeller Service are both still proactive members of the board; Jim represents component maintenance, while Gary and I speak for general aviation.
Ian Cheyne of BBA’s Dallas Airmotive represents engine maintenance providers.
Gary Fortner of Fortner Engineering and I represent component maintenance, which makes up the vast majority of ARSA membership.
Chris Erickson from Erickson Aviation represents the rotorcraft industry.
Dave Latimer, from HAECO Americas, represents companies that work on large aircraft.
This group represents the industry’s interests and ensures that ARSA’s strategy supports our collective needs. It is rewarding work, which can be difficult, and I’m thankful to be performing it with such dedicated board members. Thank you all for donating your valuable time to the association. You may be seated.
In reviewing this past year and considering the state of the association, it’s impressive just how much ARSA manages for us. As with every year, though, there is always a single regulatory issue that defines the importance of the association and its work. This year’s defining issue can be expressed in three syllables: MAG…change…five.
As we discussed yesterday, ARSA played a pivotal leading role in “smoothing” implementation of change five to the Maintenance Annex Guidance between the United States and European Union. The change, as it was originally introduced in September 2014, included a major complication regarding the required issuance of Form 8130-3 by production approval holders.
Of course, at the time PAHs in the United States did not have the authority to issue an 8130-3s; they were painted into a regulatory corner and repair stations relying on export business were staring at a complete halt in operations. While the FAA provided a potential remedy in a final rule published last October, PAHs wouldn’t be able to exercise the new privilege until almost four months after the new MAG requirement became effective. The gap would be costly and, frankly, unacceptable for an aviation community unbounded by national borders.
The association led a successful effort to address this gap, first by getting the FAA and EASA to delay the 8130-3 requirement until after the effective date of the new rule and then convincing the FAA to allow early compliance with the new § 21.137(o). We were joined by 12 other aviation interest groups, including Airlines for America, the General Aviation Manufacturers Association (GAMA), the Aerospace Industries Association (AIA) and Helicopter Association International (HAI). You may recall that the “serious” campaign in 2014 – no less important an effort – had seven additional signatories. Efforts like these build relationships through common ground and expand the impact of our efforts. When ARSA leads, others follow.
On the workforce development front, the association has continued to listen to the repeated calls from members about the challenges of finding and retaining technical talent. Last summer, ARSA joined with the Aviation Technician Education Council, which represents part 147-certificated A&P schools, to submit comments to the Standard Occupational Classification or “SOC” system Policy Committee asking it to consider changes to aviation maintenance personnel definitions. The SOC system is used to collect, calculate, and disseminate occupational data on which many statistical analyses rely. Under the current framework nearly all aviation maintenance professionals are lumped together in one group; the draft comments asked that certificated mechanics and repairman and non-certificated maintenance technicians be tracked separately to produce a more accurate picture of the current labor force in order to address the looming industry-wide personnel crisis.
The association’s legislative team has also been studying up on federal-level policies that support technical training and has positioned ARSA, through its membership on the STEM Coalition Leadership Council, as a key advocate for the workforce needs of the aviation technical workforce. We all know too well how important it is to find the right people. Personally, I’m proud of Jet Center MFR’s work with Erickson to support an apprenticeship program at nearby Rogue Community College – while we work to build local talent pipelines in all of our communities, ARSA will help craft effective workforce policy on a national level.
To provide a little bit of local help, ARSA joined with a talent search company called Real Match to launched AeroJobs.org. The site’s search functions were constructed using an aviation-maintenance specific taxonomy, meaning it is a tool that will open doors for employers, aspiring aviation professionals and even – thanks to the expansive reach of its network – skilled workers in other industries who might make valuable contributions in ours.
Of course, we can’t go too long without focusing on the agency that oversees our work here in the United States and on U.S.-registered aircraft around the world: the legislative team’s true focus is reauthorizing the FAA. Both houses of Congress have now introduced bills to set the agency’s funding and policy priorities. While a controversial proposal to privatize air traffic control has grabbed all the headlines, both the Senate and the House bills contain language that would mandate further regulatory incursion into the global business of aviation maintenance: expanded drug and alcohol testing, background investigation requirements and a duplicative focus on risk based inspections.
Now, there’s a long way to go before either of these bills can become law. We’re currently in our first extension of the existing FAA authorization and the second is on the way. Last time we did this, in 2012, lawmakers needed 23 short-term measures before they could agree on a final bill. We’ve only just begun.
Given the state of the FAA debate, this was the perfect time for almost 50 ARSA members to canvass Capitol Hill as part of our annual Legislative Day. These attendees participated in more than 30 meetings with Members of Congress and staff, telling lawmakers – face to face – just how vital aviation maintenance is to the lives and livelihoods of all American citizens. Once again, ARSA members were joined by congressional staffers at a Capitol Hill luncheon and briefing for the release of the 2016 Fleet and Global MRO Market Assessment, performed by CAVOK. Steve Douglas, longtime ARSA friend and former manager of the FAA’s aircraft maintenance division, highlighted the good works and economic importance of nearly 300,000 men and women working in aviation maintenance-related fields across the country.
Individual involvement is still the key to success. The association needs an engaged membership responding to calls for action, hosting congressional facility visits and educating lawmakers about the important role repair stations have within the broader aviation industry. When ARSA asks for help, it’s imperative that members answer the call.
In the coming year, a key part of that call is to ensure we all maximize the value of our memberships by utilizing every benefit and service offered by the association. When we attend training sessions, read newsletters, respond to surveys, purchase model manuals and other publications, recruit new members, contract with association-approved preferred providers and actively participate in events just like this, we not only get the most out of ARSA but also help sustain it.
While we’re discussing commitment to ARSA, I want to take a moment to recognize this year’s symposium sponsors. Every single reception, break and meal this week was financially supported by one of us. In fact, if you have your handout document – itself sponsored by Barfield, Inc. in Miami – flip to pages five and six and take a look at the groups that have committed resources to help make this an effective, useful experience for us all.
Thank you. We can’t do it without you.
Before I close, I want to speak for a minute about the association’s annual member survey. The first invitation email was sent at the beginning of the month to every primary contact at every member organization. Is that you? Do you know who it is? Was the survey received? Has it been completed?
If you don’t know the answer to any of those questions, work with ARSA’s staff to find out and then help us get a completed response from your business. The survey is a vital resource that not only provides a snapshot of the industry – its outlook, the challenges it faces and resources it needs – but also steers the association’s strategy and helps us properly serve you, our members.
Thank you all for making this year’s symposium successful. I expect to see you all here next year, so mark your calendars for March 15-17, 2017. While you’re thinking of dates, there’s another you need to save: October 6, 2016 – just more than six months from now. For the first time, ARSA is issuing an open invitation to all industry members to attend its Strategic Leadership Conference, which will be held this year in Montreal at IATA’s headquarters. An intense, one-day series of roundtable discussions, SLC is the opportunity to come together with industry leaders and craft the future of this international industry. Space is limited, so be prepared to register early.
As ARSA’s President, I pledge to ensure the association continues to push the envelope. I thank the ARSA staff for their hard work on our behalf. It is truly a special organization, one dedicated to the progress of our industry, and I am proud to play such a key role.
With that I open the floor for member comments, questions and discussion….
I hereby adjourn the 2016 annual membership meeting.
Symposium 2016
As the global maintenance community convened for ARSA’s 2016 Legislative Day and Annual Repair Symposium, Washington, D.C. became the capital of the aviation maintenance world. See what happened. For more information about the event itself, click here.
March 21, 2016 @ 9:30 a.m. EDT
Thanks to all participants, speakers and sponsors who made the 2016 Legislative Day and Annual Repair Symposium possible. For those who attended, please be sure to review and download the event resources – including all presentations, attendee listings and references – on the materials page listed in the handout. (Lost the address? Contact ARSA for help.) Whether you made it to the nation’s capital this year or not, save the date for next year’s symposium, held March 15-17, 2017.
March 18, 2016 @ 9:00 a.m. EDT
ARSA Honors Maguire as Her New Career Takes Flight
On March 18, ARSA presented its Leo Weston Award for Excellence in Government Service to Crystal Maguire. Maguire, the association’s long-serving vice president of operations, accepted the honor from Executive Director Sarah MacLeod during ARSA’s 2016 Annual Repair Symposium.
March 17, 2016 @ 9:00 a.m. EDT
Gilligan Praises Aircraft Safety, Highlights Skill and Technology
During her keynote address, FAA Associate Administrator for Aviation Safety Peggy Gilligan focused on technical competency and technological advances that have made the American national airspace system the safest in the world. Gilligan noted that as a result, the U.S. commercial air system has not lost a passenger since February 2009 – 2,590 days of safety. Click here to see the programmatic references from Gilligan’s speech.
March 16, 2016 @ 3:40 p.m. EDT
Senate Panel Approves Bipartisan FAA Bill, ARSA Objects to Maintenance Provisions
On March 16, as ARSA members stormed Capitol Hill for the association’s 2016 Legislative Day, the Commerce, Science & Transportation Committee approved its 18-month, FAA reauthorization bill with bipartisan support. ARSA strongly opposes the bill’s maintenance-related provisions and Legislative Day attendees made the issue a top priority during visits to Senate and House offices.
March 16, 2016 @ 1:10 p.m. EDT
ARSA Releases Annual Economic Report, Highlights Impact of Maintenance
With FAA reauthorization bills taking center stage on Capitol Hill, ARSA’s annual economic market assessment once-again highlights the impact of an often unseen part of the aviation industry: maintenance. The 2016 Global Fleet & MRO Market Assessment prepared by Oliver Wyman was released March 16 at a Capitol Hill briefing. The event, conducted as part of ARSA’s annual Legislative Day, was headlined by House Aviation Subcommittee Member Carlos Curbelo (R-Fla.) and attended by aviation maintenance industry executives and congressional staff.
March 15, 2016 @ 5:00 p.m. EDT
WMATA: All Metrorail service will be suspended Wednesday, March 16, for emergency inspections
Legislative Day and Symposium attendees, particularly those not staying at the Ritz Carlton, Pentagon City but attending events on Wednesday, should account for Metrorail closures in their personal travel plans.
March 15, 2016 @ 12:25 p.m. EDT
Thank you to the 2016 sponsors:
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By Brett Levanto, Vice President of Communications
On March 18, ARSA presented its Leo Weston Award for Excellence in Government Service to Crystal Maguire. Maguire, the association’s long-serving vice president of operations, accepted the honor from Executive Director Sarah MacLeod during ARSA’s 2016 Annual Repair Symposium.
A native of Tulsa, Oklahoma, Maguire first joined Obadal, Filler, MacLoed & Klein, P.L.C. (OFM&K), the firm that manages ARSA, in 2004 immediately after completing her undergraduate studies at her hometown University of Tulsa. For more than 12 years, Maguire has performed every service – administrative support, member management, financial oversight, regulatory and legal compliance assistance, communications development and training presentation – provided by the firm to association members.
Maguire bolstered her professional credentials in 2010 by earning a degree from American University’s Washington College of Law. She has since provided legal and regulatory counsel to the aviation community, advising clients in international aviation safety regulation and government affairs.
“Crystal’s accomplishments and credentials make her deserving of the association’s award,” MacLeod said. “As exemplified by Leo Weston’s commitment to the maintenance industry, her talent and work ethic will serve us all for years to come.”
During the award presentation, the association officially announced Maguire’s planned departure: Effective April 15 she will return to her Oklahoma roots and begin growing her own business as executive director of the Aviation Technician Education Council (ATEC), assuming its management responsibilities from OFM&K.
“The firm has become an effective incubator of aviation talent, having sent a long list of professionals on to continued service of the maintenance industry,” said Christian A. Klein, ARSA’s executive vice president and managing member of OFM&K. “From legal counsel to business counseling, we grow the special kind of talent needed to keep the world in flight. It’s difficult to part ways with a capable, determined and dedicated team member and colleague, but we look forward to watching Crystal continue to grow and working alongside her in pursuit of good government.”
First bestowed on Weston himself in 2005, the award honors an instrumental figure in ARSA’s birth by recognizing individuals who embody his commitment to the industry’s safety and success. This year, it provided the association with a platform to applaud one of its own.
“There was no better way [than through the Weston Award] to recognize Crystal’s faithful service and personal devotion,” said Marshall S. Filler, OFM&K’s third managing member (along with MacLeod and Klein) and ARSA’s managing director and general counsel. “It’s our small way of extending gratitude for her service and looking ahead to decades’ worth of good works to come.”
ARSA Releases Annual Economic Report, Highlights Impact of Maintenance
By ARSA Communications Team
With FAA reauthorization bills taking center stage on Capitol Hill, ARSA’s annual economic market assessment once-again highlights the impact of an often unseen part of the aviation industry: maintenance.
The 2016 Global Fleet & MRO Market Assessment prepared by Oliver Wyman was released March 16 at a Capitol Hill briefing. The event, conducted as part of ARSA’s annual Legislative Day, was headlined by House Aviation Subcommittee Member Carlos Curbelo (R-Fla.) and attended by aviation maintenance industry executives and congressional staff.
Steve Douglas, vice president of CAVOK, a division of Oliver Wyman, provided attendees with a maintenance industry overview and the findings of this year’s report. Douglas, a former manager of the FAA’s Aircraft Maintenance Division, noted that the total worldwide market for commercial aviation maintenance is expected to be nearly $68 billion in 2016. The industry, which currently employs 350,000 people worldwide, will approach $100 billion – four percent annual growth – by 2026.
For its part, the U.S. civil aviation maintenance industry employs more than 270,000 people and generates $43.1 billion in economic activity. In total, more than 3,800 American firms scattered through all 50 states perform maintenance, repair and overhaul services. The vast majority of these, close to 90 percent, are small-medium sized businesses employing 50 or fewer people.
“For policymakers the major takeaway from this report is that, although you may not know it, the aviation maintenance industry is part of your state’s economy,” ARSA Executive Vice President Christian A. Klein said. “There are important issues looming in the House and Senate FAA bills that will affect maintenance businesses and their hundreds of thousands of employees nationwide. Each member of Congress needs to pay attention and be mindful of the consequences.”
The report underscores that America is the global leader in this sector but highlights a variety of potential challenges coming over the next decade. Repair stations will have to manage continually increasing cost scrutiny from air carriers and other operators and find ways to leverage new technologies in materials, production, flight data and maintenance techniques.
“With the new generation aircraft coming into the global market over the next 10 years, MROs worldwide will need to adapt to new technology to maintain profitable margins,” Douglas said before the briefing. “Data sharing will become very important with new-generation aircraft and the self-monitoring of systems and components, resulting in gigabytes of data generated on each flight. Properly leveraged, this data is capable of alerting the operators and the MRO of the health of the aircraft systems.”
The report’s executive summary, as well as a fact sheet illustrating U.S. state-by-state employment figures, can be found in ARSA’s economic data center at arsa.org/news-media/economic-data
ARSA Works
To see all the ways ARSA works as the voice of the aviation maintenance industry, visit our ARSA Works page.
By ARSA Communications, Membership, Legislative and Regulatory Teams
After FAA Associate Administrator for Aviation Safety Peggy Gilligan’s keynote address, ARSA’s Sarah MacLeod and Christian Klein opened the 2016 Annual Repair Symposium with a review of the association’s year.
An annual tradition, the “What We Have Done Lately” presentation provides an overview of ARSA’s legislative, regulatory and communications initiatives, updates on member programs and guidance for getting involved.
To access the presentation slides click here.
To see all of the ways ARSA works on behalf of the aviation maintenance community, visit the ARSA Works page.
To save the day for next year’s symposium, and to learn more about industry events, visit arsa.org/news-media/events.
2016 Member Survey – Final Chance to Capture Snapshot of Aviation Maintenance
By Brett Levanto, Vice President of Communications
The association’s annual survey has been emailed to the primary contact at every member organization. Don’t miss the opportunity to contribute to ARSA’s work on behalf of the industry.
Responses are invaluable to the association as it works with regulators and lawmakers, develops resources and addresses the challenges most impactful to the repair station community. This is your snapshot of aviation maintenance – make it useful.
Visit ARSA’s data and advocacy page to view a series of infographics made using data from last year’s survey combined with the 2015 Global Fleet and MRO Market Assessment.
Want to ensure that your company got the survey? We can help.
The Sights at MRO Americas – ARSA and the AMC
Aviation Week’s 2016 MRO Americas Convention will run from April 5-7 at the Kay Bailey Hutchinson Convention Center in Dallas, Texas. Attendees will be able to engage with ARSA’s Executive Director Sarah MacLeod and witness the industry’s finest skills on display at the Aerospace Maintenance Competition.
Continuing their discussion from ARSA’s 2016 Annual Repair Symposium, MacLeod will once again join Al Givray of Davis Graham & Stubbs and Seabury Group’s Brian Karpiel to explore the nuances of buying or selling a repair station. The session will be an open discussion on the who, what, where, when, how and why of selling an MRO business. It includes a series of “do’s and don’ts,” that are useful for good business management event at organizations where a sale (or purchase) is not on the immediate horizon.
The session will begin at 10:45 on Wednesday, April 6; click here for the full schedule of events at MRO.
Throughout the convention, AMC competitors will participate in a series of hands-on challenges, testing their skill and mettle against competitors from AMT schools, repair stations, airlines and military units. The competition is an opportunity for today’s and tomorrow’s skilled aviation professionals to match their abilities against their peers. It also provides a stage to highlight the knowledge, expertise and integrity that is the foundation of today’s aviation maintenance workforce.
Both the association and its management firm, Obadal, Filler, MacLeod & Klein, P.L.C., have both invested resources in the success of AMC and its participants. Not only as event sponsors, but as a technical resource for the competition’s legal and organizational needs, the experts that support ARSA members every day have invested heavily in the industry’s most valuable resource – its people.
To learn more about AMC, visit: www.aerospacemaintenancecompetition.com.
To make the most of your trip to Dallas, be sure to take in all the sights; circle both ARSA and the AMC on your personal itinerary.
Legal Briefs
This material is provided as a service to association members for educational and informational purposes only. It does not constitute legal or professional advice and is not privileged or confidential
Not Every Audit is the Same
By Ryan Poteet, Regulatory Affairs Manager
We all know that repair stations conduct numerous internal audits each year (a fact backed up by ARSA’s recent audit survey results). It was therefore surprising to hear that the number one finding from EASA’s sampling inspection system (SIS) visits of U.S.-based repair stations is non-compliance with internal product and/or process audits. According to EASA Continuing Airworthiness Organizations Manger Karl Specht, who spoke at this year’s annual symposium, some EASA-certificated U.S.-based repair stations need a refresher on the internal audit requirement for EASA certification.
ARSA has answered the call.
Although the regulatory schemes in the United States and the European Union are similar, they are not identical. The significant differences are listed as Special Conditions in the Maintenance Annex to the Bilateral Aviation Safety Agreement (BASA) between the U.S. and the E.U. The Maintenance Annex Guidance – affectionately known as the MAG – specifies procedures for reciprocal acceptance of each other’s regulatory systems based on compliance with the Special Conditions in the BASA. One of those Special Conditions requires U.S.-based repair stations to include “detailed procedures of an independent quality monitoring system” in its EASA supplement to the Repair Station Manual.[1]
The MAG therefore requires EASA-certificated repair stations to have a Quality Assurance System (also referred to as a Quality Monitoring System) consisting of an independent audit system and procedures for taking corrective action.[2] The audit system must include both procedural audits and product audits and each must be independent.
Procedural audits monitor compliance with applicable technical standards used when performing maintenance functions on aircraft and related components. The focus of these audits is to ensure consistency with established maintenance practices. Existing audit programs typically fail to meet EASA’s requirements because they do not audit every procedure during the year.
On the other hand, product audits require individual articles to be visually inspected and tested, and the supporting maintenance records reviewed, to ensure the work was properly accomplished. Audit programs frequently run afoul of the MAG requirements because not all “primary product lines” as defined in the MAG (i.e., one aircraft, engine, avionic, or mechanical product line where the systems and procedures are very similar throughout that product line) are evaluated. Furthermore, some certificate holders fail to perform enough audits each year because the number of required audits is dependent on the size of the repair station and the number of product lines it maintains.
Finally, the audits must be independent. This means that the personnel responsible for performing or supervising the maintenance function cannot conduct the audit. It is permissible for personnel from other departments to conduct the audit, but this can be problematic for smaller repair stations. The MAG, however, allows repair stations with fewer than ten employees to contract out audit functions to third parties. Importantly, Specht noted that – regardless of the size and complexity of the repair station – audit independence was a recurring issue.
Fortunately, it’s an easy fix. A simple review of the MAG can help determine whether a current internal auditing program passes muster. Just remember: Not all audits are alike.
ARSA is here to help, too. The association’s model EASA supplement contains product and process audit procedures and forms that will ensure compliance with the special conditions. If you don’t want to ferret through the bilateral documents, contact the experts at Obadal, Filler, MacLeod & Klein, P.L.C. for help designing and implementing a customized EASA audit program.
[1]Bilateral Aviation Safety Agreement, U.S.-E.U., Annex 2, app. 2, ¶ 1.1.1(b)(ii), Dec. 6, 2013.
[2] Maintenance Annex Guidance, CHG 5, Section A, Subsection V, ¶ 1.1.1(b)(2) (Sept. 9, 2015); Maintenance Annex Guidance, CHG 5, Section B, Appendix 1, ¶ 14 (Sept. 9, 2015).
ARSA on the Hill
It’s All About You
By ARSA Legislative Team
Before 2016 attendees took the Hill, members of the association’s legislative and communications provided a “cruising altitude” view of Washington politics. Including a review of ARSA’s legislative priorities and the key issues members need their lawmakers to address in the nation’s capital, the presentation is a vital primer on getting involved in the process:
To access the presentation slides click here.
To learn more about what you can do to get involved, visit arsa.org/legislative/get-involved.
Senate FAA Bill and ARSA Objections – Déjà Vu All Over Again
By Daniel B. Fisher, Vice President of Legislative Affairs
On March 16, as ARSA members stormed Capitol Hill for the association’s 2016 Legislative Day, the Commerce, Science & Transportation Committee approved its 18-month, FAA reauthorization bill with bipartisan support.
While the Federal Aviation Administration Reauthorization Act of 2016 (S. 2658) doesn’t include controversial air traffic control privatization language, it does contain the House bill’s micromanagement of repair station oversight. As written, the bill would require the FAA to complete its foreign repair station drug and alcohol testing rulemaking in an extremely expedited manner (despite no safety justification) and mandate businesses conduct extensive pre-employment background checks.
ARSA strongly opposes these provisions and Legislative Day attendees made the issue a top priority during visits to Senate and House offices. The bill now moves to the Senate floor for possible consideration, which is expected in the near future.
Minutes to Midnight – FAA Reauthorization Countdown
By ARSA Legislative Team
On March 30, President Obama signed a short-term measure extending the FAA’s current authorization through July 15. This is the second extension of the current law so far – 23 were needed before enactment of the FAA Modernization and Reform Act in 2012. Though a controversial proposal to privatize the air traffic control system has dominated attention so far, there is plenty on the table for repair stations to focus on.
Help the association put the pressure on Congress to reauthorize the FAA and provide the maintenance industry with the freedom it needs to keep the world in flight.
Visit the association’s issue page for more information on the reauthorization process and keep up-to-date on the latest developments at arsa.org/faa-reauthorization.
Don’t sit back and watch the clock run out. Learn about all the ways you can get involved and help your lawmakers support aviation maintenance at arsa.org/legislative/get-involved.
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Regulatory Outlook
Survey Paints Picture of Audit Burden
By Crystal Maguire, Vice President of Operations
The association recently conducted an industry survey to quantify repair station audit burdens. The survey received a total of 69 repair station respondents, representing a combined 369 facilities certificated under various national aviation authorities.
Of those facilities, 42 percent hold ratings for completed products, 73 percent for components and 39 percent specialized services. All respondents are FAA certificated, 82 percent hold EASA certification, 29 percent hold Civil Aviation Administration of China (CAAC) certification and 20 percent a certificate from the National Civil Aviation Agency of Brazil (ANAC).
On average CAAC proves the most costly certificate to maintain, with respondents reporting auditing fees and expenses of more than $11,000 on average.
Reporting facilities received 6,723 paper and in-person audits in the last year including 797 from the FAA (including 209 from the certificate management office [CMO], which illustrates the continuance of redundant agency reviews), 1,183 from internal sources, 2,698 from customers and 277 for commercial certification (e.g., ISO, NADCAP).
The audits resulted in 561 findings, 79 of which were from the FAA, 173 found internally, 70 from customers and 41 from commercial certifications.
Of those findings, 57 percent were administrative (e.g., typographical errors), 25 percent contradictory (i.e., different opinions on what constitutes compliance), 21 percent duplicative and 10 percent concerned commercial requirements (i.e., contractual or business obligations).
Thank you to the repair stations that participated in the survey. The response data is a valuable tool in the effort to simplify auditing requirements. Stay tuned.
IATA Files Formal Complaint in European ICA Investigation
By Daniel B. Fisher, Vice President of Legislative Affairs
On March 23, the International Air Transport Association (IATA) announced it filed an official complaint in conjunction with the European Commission’s Directorate General for Competition’s (DG-COMP) investigation into alleged abuses of dominant positions by aviation equipment manufacturers.
Last October, the DG-COMP opened a preliminarily investigation into how manufacturers may be limiting the availability of maintenance manuals and possible anti-competitive effects. According to a statement by the EC at the time, it was “closely monitoring competitive conditions as regards maintenance of engines and components of large commercial aircraft.”
Individual companies and aviation industry trade groups (including ARSA) received questionnaires seeking in-depth information on certain practices of specific design approval holders. ARSA’s responses focused on aviation safety rules and how the national aviation authorities’ failure to enforce regulations even-handedly effects competition.
IATA’s complainant status is a promising development as the DG-COMP continues its examination and determines whether it will open a more expansive probe into alleged anti-competitive practices by manufacturers.
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.
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.
Executive Summary – 2016 Global Fleet & MRO Market Assessment
By Oliver Wyman, www.oliverwyman.com
This is Oliver Wyman’s 2016 assessment and 10-year outlook of the commercial airline transport fleet and the associated maintenance, repair, and overhaul (MRO) market. Global airline financial performance is strong, largely attributable to favorable oil prices. While profitability has returned, operators continue to relentlessly scrutinize expenditures; with limited leverage over labor and fuel costs, airlines focus significant attention on maintenance. For an in-depth review of airline profitability, see the 2015-2016 Airline Economic Analysis on www.oliverwyman.com.
New technology will have a profound influence on the MRO industry. Construction of the latest generation aircraft involves the use of carbon fiber composites, hybrid alloys and coatings that impact maintenance frequency and methodologies. Modern aircraft are also self-monitoring, with the capability to report on the condition of hundreds of systems and components, creating gigabytes of data from each flight. Properly harnessed, this data will provides the operator and the MRO information on the health of the aircraft, as well as provide prognostications of impending issues, thus reducing maintenance costs while improving operational performance.
The global commercial air transport fleet stands at over 24,500 aircraft, approximately one-third of which are domiciled in North America. Twenty percent of the global fleet is in Western Europe, and 5% is in Eastern Europe. Asia Pacific, China, and India combined have slightly more than a quarter of the world’s fleet. This composition will change over the next 10 years. North America’s share is expected to decline 7%, as its net growth is constrained by significant re-fleeting efforts of the large operators. The Asian markets are expected to see the highest growth rates, making it the largest world region over this forecast period and thus the center of development for the MRO industry.
By 2026, 61% of the world’s in-service active commercial fleet will have been delivered. The active fleet is forecast to become over 34,400, equating to a compound annual growth rate (CAGR) of 3.4%. It will be comprised of nearly 21,100 new deliveries. With 11,200 aircraft leaving the fleet; 53% of deliveries will be replacement aircraft.
The fleet is comprised of four aircraft classes, each facing a different outlook:
Narrow-bodies are forecast to grow the fastest—from about 13,600 aircraft to over 22,000, a 4.9% average annual growth rate. Thus, their share of the fleet by 2026 s expected to increase from 56% to 64%. The average age of a narrow-body aircraft is forecast to shrink from about 11 years to just under 10 years over that period.
Wide-bodies, the second-largest aircraft class, total over 4,800 aircraft in 2016; it is expected to grow to over 7,200 by 2026, a 4.2% average annual rate of growth. Wide-
bodies will continue to make up a 20% share of the fleet, with the average age decreasing from 12 years to 10 years by 2026.
Regional jets share of the fleet in 2016 is 14%, with just under 3,400 aircraft. This class is expected to decrease an average of 1.7% annually, falling to about 2,800 in 2026, or 8% of the active fleet. The average age of a regional jet is expected to remain around 11 years.
Turboprops are also forecast to decline, dropping from nearly 2,700 to just over 2,300 by 2026, an average annual decline of 1.4%. Its share is expected to decline from 11% to 7%. Turboprops are currently the oldest aircraft class, at an average age of 16.7 years, which is expected to fall to just under 15 years during the forecast period.
Fleet size and makeup changes naturally drive adjustments in MRO demand. Globally, the commercial air transport jet and turboprop MRO markets are expected to be $67.7 BN in 2016, growing to over $98.9 BN by 2026. This represents a healthy average 3.9% annual growth rate. The market segments of airframe, engine, component, and line MRO each have a different growth profile:
Airframe MRO, including modifications, is forecast at $16.0 BN for 2016 and $19.2 BN by 2026. The airframe MRO market is a low-margin, labor-intensive segment and has an average annual growth rate of 1.8%, the slowest of all MRO segments. Airlines and affiliated MROs maintain a solid hold on this market.
Engine MRO is expected to be $25.7 BN in 2016. Growing at 5.3% annually, it is expected to reach $43.0 BN by 2026. Unlike airframe MRO, engine manufacturers (known by the acronym OEMs) have a large, growing share of this market. With more spend going to material rather than labor, engine MROs enjoy higher margins.
Component MRO is forecast to be $13.1 BN in 2016, growing to $18.6 BN by 2026, a 3.5% annual growth rate. Like the engine MRO business, much of the component market is contracted to OEMs or independent repair stations, although the extent varies greatly among component types. Similarly, the labor and material mix, and therefore, margins, vary by component type and age.
Line MRO is pegged at $12.8 BN in 2016 and forecast to grow at 3.6% annually to $18.1 BN by 2026. The operationally sensitive nature of line maintenance makes it less prone to contracting. The work is labor-intensive and with limited ground times on a strict schedule operation, it remains a critical element to an airline’s operational performance.
The business aviation fleet currently consists of more than 30,500 aircraft requiring roughly $10.2 BN in MRO market activity in 2016. Nearly 64% (19,445) of the business aviation fleet is domiciled in North America.
In terms of economic activity, MRO plays a significant role. In the United States, approximately 3,900 firms with more than 184,000 employees operate in the civil MRO market (including airline and affiliated MRO employees). Small and medium-sized enterprises (SME) account for 88% of U.S. firms and nearly 21% of all employees. There are over 136,000 technicians in the U.S. and approximately 37% are certificated.
For more information and details on accessing the 2016-2026 forecast, submit a request to the association via arsa.org/contact.
To see additional reports, data and resources, visit ARSA’s economic data center at arsa.org/news-media/economic-data
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Training
ARSA Online Training – Recordkeeping
By Brett Levanto, Vice President of Communications
Proper maintenance demands proper documentation. Join ARSA’s Executive Director Sarah MacLeod and Managing Director and General Counsel Marshall S. Filler and learn how to “finish the job with proper paperwork.” With sessions targeted at mechanics, repair stations and airlines, pick the class that will give you the tools to manage complex recordkeeping requirements:
Recordkeeping for Mechanics
Description: This session will define the regulatory responsibilities of the operator versus the maintenance provider in creating and maintaining maintenance records, including how obligations can be shifted by contract, but not under aviation safety regulations. It will also cover maintenance recordkeeping regulations; the documents essential to making airworthiness determinations.
On Demand – Available Anytime
Click here to register and get access for 90 days.
Recordkeeping for Repair Stations
Description: This session will delineate the differences between operator maintenance records and those required to be created, maintained and provided by repair stations.
On Demand – Available Anytime
Click here to register and get access for 90 days.
Recordkeeping for Airlines
Description: Air carriers have unique recordkeeping requirements under parts 121 and 135 that do not match the requirements for transferring an aircraft under part 91 or obtaining maintenance records from individual mechanics or repair stations under part 43. This session will differentiate among and between the varying requirements so regulatory and contractual obligations can be clearly delineated.
Date/Time: April 6, 2016 at 11:00 a.m. EDT
Click here to register.
The price per class for ARSA members is $75 ($150 for non-members). Individuals from organizations listed in the member directory must register using the coupon code “ARSAMEMBER” (entered on the checkout page).
Registration for each class includes:
- Attendance for the live, online class session on the scheduled date.
- Access to the on-demand recording available after the live session is complete.
- Digital copies of the presentation and all reference material with links to relevant resources and citations.
- A certificate upon completion of the class (including any test material).
The association’s training program is provided through Obadal, Filler, MacLeod & Klein, PLC, the firm that manages ARSA. To go directly to OFMK’s online training portal, visit potomaclaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.
ARSA Online Training – Public Aircraft [Series]
By Brett Levanto, Vice President of Communications
This three-part series on the regulations and guidance for public aircraft operation will provide in-depth analysis and case-study review of various requirements. Sessions must be purchased together viewed in order, completion of each pre-requisite – either via a live session or on-demand recording – is necessary for access to subsequent classes.
Series Schedule:
Session 1 – The Law and Regulations: April 20, 2016 at 11:00 a.m. EDT
Session 2 – FAA Guidance: May 4, 2016 at 11:00 a.m. EDT
Session 3 – Case Studies: May 18, 2016 at 11:00 a.m. EDT
Instructor: Marshall S. Filler
Click here to register for the series and receive a “bundle” discount.
PLEASE NOTE – Appropriate member discounts for these sessions are applied through price selection on the series page. Use of member-specific coupon codes are not necessary for discounted purchases of this content.
ARSA Online Training – Audit Activism
By Brett Levanto, Vice President of Communications
Audit Activism – Part 1
Description: This session provides instruction in establishing a proactive approach to audits, starting with the differences between regulatory compliance and business requirements. Continuing with creating appropriate interfaces among the certificate holder(s), the government(s) and the customer (since all three must work together) to establish regulatory and business compliance.
Instructor: Sarah MacLeod
Date: April 27, 2016
Time: 11:00 a.m. EDT
Click here to register.
Audit Activism – Part 2
Description: This session provides steps and tips on how to manage an audit process that ensures responses are appropriate, timely and effective.
Instructor: Sarah MacLeod
Date: May 11, 2016
Time: 11:00 a.m. EDT
Click here to register.
Interested in both Audit Activism sessions? Click here to purchase them together and save.
PLEASE NOTE – Appropriate member discounts for these sessions are applied through price selection on the session or series page. Use of member-specific coupon codes are not necessary for discounted purchases of this content.
ARSA Online Training – Make a Difference in Washington
By Brett Levanto, Vice President of Communications
Effectively Engaging Lawmakers
Instructors: Christian A. Klein & Daniel B. Fisher
Description: This session will overview basic strategies for communicating with key lawmakers and their staff to become an effective advocate for aviation interests. Learn how to make the most of your constitutionally-protected right “to petition the government for a redress of grievances.”
On-Demand – Available Anytime
Click here to register and get access for 90 days.
Regulatory Compliance Training
Test your knowledge of 14 CFR 43.1 – Applicability
Membership
Have You Seen These Organizations? 2016 Legislative Day & Annual Repair Symposium Participants, Panelists and Speakers
By ARSA Communications Team
More than 100 different organizations were represented when the aviation maintenance world came to the nation’s capital. Will you join them next year?
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/.
Target Your Message: Advertise Today in ARSA’s Newsletters and Website!
ARSA has a 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 2017 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:
What should a repair station do when it receives a request from a customer to “change” or “swap” a maintenance release for a previously repaired article to include additional information? The customer does not want to send the article back and requests the repair station either add the new information to the existing maintenance release, or swap the tag for a new one that includes the requested information.
The following are examples of such requests:
(a) Add the current engine component maintenance manual (CMM) revision level;
(b) Change the description of the work performed on the article in Block 12 of FAA Form 8130-3 to remove the manufacturer’s manual reference and include an airline manual reference; or,
(c) Change the reference in Block 12 of FAA Form 8130-3 from one engine CMM to a different model engine manual (where the part has the same number in both models).
A:
Generally, customers that desire “more” or “different” information in previously issued maintenance release can do it themselves; and, certainly an installer does not need to ask you, call you, or even return the part to clarify or add information to a maintenance record.
Unfortunately, repair stations are limited by the requirements of 14 CFR § 43.9 which must accurately describe the work performed and/or reference the data on which it relied.
FAA Form 8130-3 is being used to comply with most of the requirements of 14 CFR §§ 43.9 and 145.219, including:
(1) A description of work performed (or reference to data acceptable to the agency).[1]
(2) Date the work was performed. This means the date the work described was approved for return to service after the last maintenance action was completed.
(3) Names of all persons performing maintenance if other than the person approving the work for return to service. This means the names of all the technicians and any other “person” performing a maintenance function that is incorporated into the totality of the work (whether that person is certificated or not). This information is usually in the work order that is kept on file at the repair station.
(4) Signature of person approving the work for return to service. This means that repair station that provided the entire work scope described on the tag.
Consideration of the specific examples presented above:
(a) Adding the Current Manual Revision
The customer (and certainly an installer) can add the manual revision to the maintenance records if it is additional information that augments but does not change the description of work performed by the repair station. By adding the current revision level to the record, the requirements between the two manuals must be the same for the work approved for return to service.
The repair station’s maintenance record (including the FAA Form 8130-3) has to be accurate as to the date the work was approved for return to service. Even if the customer returns the article to you for another work scope, such as an inspection, that doesn’t change the previously referenced data. In other words, if the article was returned and an “inspection” was performed, a new maintenance record would be required since the “new” work was performed on a different date. This prohibits a repair station from “switching” an existing tag with a new one.
(b) Changing a Reference from a Manufacturer’s Manual to an Airline Manual
The customer, and certainly an installer, can “change” or “correct” the manual reference when the work scope in each is the same. For instance, if the repair station’s work order referenced the airline manual as an additional reference, there is no reason for the repair station to correct the “cover sheet” to the § 43.9 record. The customer can use both as it sees fit and could correct the cover sheet (i.e., the FAA Form 8130-3) itself. Importantly, if the repair station did not have the airline manual at the time the work was performed, it could not have referenced that manual on the date the work was approved for return to service. If the customer returns the part for an “inspection,” the original work scope would still have to reference the manual that was used to perform the work.
Repair stations performing work for airlines would be wise to reference the applicable work instructions or engineering orders on the original FAA Form 8130-3. This will ensure all data acceptable to the FAA is recorded from the very beginning. In addition, this will keep compliance issues separate from commercial concerns.
(c) Changing CMM Referenced from one Model to Another
Again, the customer, and certainly an installer, can add or correct information to any record to match its needs after the fact. Repair stations on the other hand must stick with the description of the work it performed on the date provided in the § 43.9 record. For example, if a repair station used a CMM for model “X,” it can’t cite to the CMM for model “Y” even if they are the same because the CMM for model “X” was not referenced at the time the work was performed. Of course, if the CMM is actually the same and another model could be referenced, a “corrected” FAA form 8130-3 may be justified. Alternatively, the repair station could provide a note stating that the manuals are the same.
Conclusion:
All of the above scenarios are merely requesting “additional” information that does not “change” the maintenance record for the customer’s purposes; however, each makes compliance with § 43.9 more difficult. Repair stations can provide additional documents to verify any of the information that it has actual knowledge of after a maintenance record has been issued. There is no prohibition on users obtaining, providing, retaining, or documenting additional information to a maintenance record to ensure the eligibility of an article for installation. Indeed, the need to do so is inherent in the fact that § 43.9 records only certify the work performed and FAA Form 8130-3 states that it does not constitute eligibility for installation.
A customer’s need for a “perfect” FAA Form 8130-3, containing all of the commercial information it would like, is not based upon the regulations, but rather the ignorance of the totality of the rules and the installer’s responsibilities. Above all, do not change required information in a maintenance record that was not available at the time the work was approved for return to service.
[1] In a dual-release situation, FAA Form 8130-3 will have both a description; typically one word in Block 3 or 4, which is often repeated in Block 12 with the manual and revision level or other data acceptable to the agencies.
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.
Upcoming Events
Brazing Symposium – Dallas, Texas – April 4-5
MRO Americas – Dallas, Texas – April 5-7
2016 Aerospace Maintenance Competition – Dallas, Texas – April 5-7
Aviation Technician Education Council Annual Conference – Atlanta, Georgia – April 9-12
Avionics Maintenance Conference – Atlanta, Georgia – April 25-28
Regional Airline Association Convention – Charlotte, North Caroline – May 9-12
EBACE 2016 – Geneva, Switzerland – May 24-26
Global MRO Procurement Expo – London – June 1-2
Recordkeeping for Airlines – April 6
Public Aircraft Part 1: The Law & Regulations – April 20
Audit Activism Part 1 – April 27
Public Aircraft Part 2: FAA Guidance – May 4
Audit Activism Part 2 – May 11
Public Aircraft Part 3: Case Studies – May 18
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/. This material is provided for educational and informational purposes only. It does not constitute legal, consulting, tax or any other type of professional advice. Law, regulations, guidance and government policies change frequently. While ARSA updates this material, we do not guarantee its accuracy. In addition, the application of this material to a particular situation is always dependent on the facts and circumstances involved. The use of this material is therefore at your own risk. All content in the hotline, except where indicated otherwise, is the property of ARSA. This content may not be reproduced, distributed or displayed, nor may derivatives or presentations be created from it in whole or in part, in any manner without the prior written consent of ARSA. ARSA grants its members a non-exclusive license to reproduce the content of the hotline. Employees of member organizations are the only parties authorized to receive a duplicate of the hotline. ARSA reserves all remaining rights and will use any means necessary to protect its intellectual property.
© 2016 Aeronautical Repair Station Association
