2020 – Edition 4 – May 5

Table of Contents

Note: The order of material varies in hotline emails, but is always presented the same on this landing page. Readers scrolling through content on or printing this page will find it organized consistent with the table of contents.

Taking Lead
Anti-Viral Measures
ARSA Works
Legal Brief
ARSA on the Hill
Training
Membership
Resources
Industry Calendar

Taking Lead

Working Together Moves Mountains

By Christian A. Klein, Executive Vice President

As the aviation industry confronts the biggest economic disruption in memory, the value of relationships among and between ARSA, its members, allies and government entities has been sharply defined.

By facilitating industry collaboration, the association together with its members and allies quickly formulated the maintenance industry relief request to Congress. Relationships among ARSA, its members and key congressional offices ensured repair stations access to billions of dollars in grants and loans in the CARES Act. Since its enactment, the association has been in daily communications with members providing guidance, identifying problems, smoothing out kinks and preparing for the next congressional relief actions.

ARSA’s working relationship with regulators has facilitated remote engagement with the FAA and has kept members up to date on the international aviation agencies crisis-related deviations and exemptions and continuity plan. In the weeks ahead, the longstanding relationships will become more critical as additional exemptions from regulatory requirements are sought and provided. These measures are also essential for continued operations in future international crisis management.

While this situation is highly unusual viewed from yesterday’s standards, ARSA’s activism is not nor will it be in the future. The crisis merely highlighted the association’s constant and steady work with all parties, be they opponents, members, allies, legislators or regulators. ARSA led and will continue the fight to make maintenance workforce a top priority and will lead and continue coalition efforts against the anti-repair station bill in the current Congress.

On the regulatory front, participating prominently on FAA and EASA rulemaking and advisory committees dealing with civil aviation compliance issues, leading the push for reciprocal acceptance of repair station approvals and ensuring FAA’s bilateral and technical agreements allow full recognition of maintenance actions developed independently of the “OEM” will continue. And, of course, ARSA has and will relentlessly pursue appropriate access to maintenance data for its members and their customers.

In good times and bad ARSA is a tireless champion for its members because together, we will navigate current and future headwinds.

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Anti-Viral Measures

More PPP Money From Congress, New Relief Guidance from Administration

Another round of coronavirus relief legislation is on the way to the president’s desk after clearing the House on April 23 and the Senate on April 21. The Paycheck Protection Program and Health Care Enhancement Act (H.R. 266) provides $321 billion in additional funding for the Paycheck Protection Program (PPP) created by the CARES Act, as well $60 billion for small business economic disaster loans, $75 billion for hospitals and $25 billion for coronavirus testing.

H.R. 266 is the fourth coronavirus bill passed since the pandemic crisis began in early March and brings the total relief spending approved by Congress to $2.7 trillion.

At the urging of ARSA and its members, Congress has made significant resources available to help repair stations weather the storm. The CARES Act included $25 billion for loans to airlines, repair stations and ticket agents and $3 billion for “Payroll Support Program” grants for airline contractors. The PPP, which was replenished by H.R. 266, provides small businesses and companies with fewer than 500 employees access to forgivable loans of up to $10 million to cover payroll and other expenses.

On April 21, the Treasury Department issued additional guidance confirming that repair stations located at airports are eligible to apply for “Payroll Support Program” grants.  However, the Treasury Department has said nothing about the eligibility of off-airport maintenance subcontractors (to read ARSA’s April 2 letter to Treasury Secretary Steven Mnuchin, click here). The deadline to apply is April 27.

On April 23 the Treasury Department also updated its PPP guidance, produced in coordination with the Small Business Administration.

While the vast majority of ARSA members can benefit from the various programs Congress has created since mid-March, certain businesses (particularly mid-size companies with off-airport repair stations) have found it difficult to access relief. As such, the association is working to include additional support for the maintenance industry in the next round of coronavirus legislation. To get involved in those efforts, please contact ARSA Executive Vice President Christian A. Klein at christian.klein@arsa.org.

Treasury Confirms Repair Station Eligibility for $3 Billion Grant Program

On April 20, the U.S. Treasury Department issued guidance confirming that repair stations are eligible for grants from the Air Carrier Worker Support (ACWS) program created by the Coronavirus Aid, Relief and Economic Security (CARES) Act (H.R. 748).

In addition to the Paycheck Protection Program for small businesses and companies with fewer than 500 employees and a special $25 billion loan fund for air carriers and repair stations, the CARES Act authorized $32 billion in direct financial assistance to airlines ($25 billion), cargo carriers ($4 billion) and airline contractors ($3 billion). The deadline to apply for money out of the program is April 27.

Although it was always ARSA’s position that maintenance providers were intended to be included in the ACWS program, the legislative language is ambiguous. ARSA sent a letter to Treasury Secretary Steven Mnuchin on April 2 urging the law be interpreted to include repair stations – both those serving air carriers at airports and those acting as subcontractors off-airport. Several members of Congress also contacted the Treasury Department about the issue.

The guidance – which is organized in Q&A format – is clear about the eligibility of on-airport repair stations:

“Are Part-145 certified repair station operators and ticket agents that are eligible for loans under Division A, Title IV, Subtitle A of the CARES Act also eligible to apply for the Payroll Support Program as contractors?”

The answer is:

“Yes, if they meet the eligibility requirements for the Payroll Support Program.” The guidance then goes on to restate the requirements, including being a contractor for a part 121 air carrier and being on the property of an airport.

The clarification is good news for on-airport repair stations serving air carriers either as direct contractors or subcontractors because they can now tap into the $3 billion grant pool. However, the Treasury Department did not answer the second question ARSA raised in its letter to Mnuchin: whether, like contractors, subcontractors must be “on-airport”. The guidance simply restates what is in the CARES Act: “A subcontractor that performs such functions is also eligible”. ARSA’s position is because the law does not explicitly state that subcontractors must be on-airport, location should not be a factor in determining eligibility.

As the association continues its efforts to clarify the CARES Act and ramp up for the next round of coronavirus relief legislation, please share suggestions about other things Congress can do to help companies weather the pandemic. Send suggestions and thoughts to ARSA Executive Vice President Christian Klein at christian.klein@arsa.org.

More information about the ACWS program and other Treasury coronavirus responses initiatives is at home.treasury.gov/policy-issues/cares/preserving-jobs-for-american-industry.

FAA Guidance on Remote Connectivity

On March 31, the FAA’s Aircraft Certification Service issued its policy on use of remote technology (as promised, albeit a year late). Although the policy claims it does not add burdens, its general consideration adds the elements of “complexity, novelty, and safety criticality of the product, article or system.” Therefore, it will be up to “applicants” to ensure requests to use the technology cover the ultimate requirement to …”enabl[e]…proper performance of duties” in spite or despite the general elements that are supposed to be considered.

On April 22, the Flight Standards Service issued its own guidance – in the form of a memorandum to AFS employees – regarding remote connectivity applications. Under the subject “Use of Video and Communication Technology (VCT),” the memo made clear that use of such tools is allowed under the aviation safety rules:

“Current FS Orders and [FAA] regulations do not prohibit FS or industry use of VCT in fulfilling the requirements, and no specific guidance is necessary to enable its use. When evaluating an applicant, certificate holder’s or designee’s procedures to use VCT, or when evaluating your own use of VCT, aviation safety inspectors (ASIs) should apply critical thinking and interdependence to foster consistent decisions for proper use of VCT.”

The AFX memo is not prescriptive regarding “proper use,” but instead provides a series of questions and considerations for both government and industry to consider when applying remote connectivity resources for both live and recorded/asynchronous uses. Though presented differently, these guidelines reflect the baseline standards proposed by ARSA and its industry partners in 2018, focusing on task accomplishment in situations where necessary “coverage and content” is sufficient to complete the relevant activity using remote tools.

To read the AFX memo, click here.

To read the AIR policy statement, click here.

The bottom line is that the agency can allow the use of any technology that achieves the purpose of the regulation and will be part of an application or showing of compliance. The AFS and AIR policies are steps on the path the industry should be pursuing (and where it needs the government to go).

Assessing Pandemic Impacts on Maintenance Markets

On March 11, the ARSA released its 2020 Global Fleet & MRO Market Assessment. The report, which was prepared for the association by aviation management consulting firm Oliver Wyman assessed the then-current state of the global aviation maintenance market and projected continued industry growth through 2030.

Though the 2020 report contemplates the impact of the novel coronavirus on the aviation industry, its analysis was performed well before the scope of the crisis became apparent (which as of this update it still might not have). The report as written provides useful context for assessing potential impact areas on the aviation community. ARSA is working with its partners at Oliver Wyman to produce new resources to appropriately capture the “new normal” in the industry for 2020 and beyond:

Interactive Dashboard

The dashboard is amended weekly based on new developments and insights and compares the original MRO forecast, released in February 2020, to an adjusted forecast baseline.:

[Dashboard] COVID-19 IMPACT ON COMMERCIAL AVIATION MAINTENANCE
To supplement the 2020-2030 Global Fleet & MRO Market Forecast Update, our COVID-19 impact interactive dashboard provides users with the ability to explore the near-term impact of COVID-19 on the MRO demand in a deeper fashion. Both dashboard views include a summary table that quantifies the updated MRO forecast and the corresponding impact. Click here to see the dashboard.

April 28 Webinar

During the live session, Oliver Wyman’s experts discussed how recent fleet groundings, aircraft retirements, production rate shifts, and other announcements related to COVID-19 will impact the global commercial airline fleet and its associated aftermarket. The session was recorded and can be viewed on demand.

[Webinar] IMPACT OF COVID-19: FLEET & MRO FORECAST
Topics Include: (1) Future demand and traffic. (2) Fleet and production implications. (3) MRO and aftermarket shifts. Click here to register and access the recording.

To see all of ARSA’s analytical tools for understanding the industry, visit the Data & Advocacy page.

To review previous market assessments, including the 2020 report released on March 11, visit arsa.org/market-assessment.

FAA Exemptions, Deviations and Other Virus Related Information

Note: ARSA has been posting guidance, exemptions and other resources to arsa.org/faa-strategy as they become available. Review below to see new content.

The FAA’s Flight Standards organization has issued several deviation and information memoranda and bulletins to assist in continued operations of air carrier, schools, pilots and repair stations.

While most of these documents are available on the agency’s Flight Standards Information Management System (FSIMS; Order 8900.1), ARSA will post any that it finds or is provided to assist the aviation community in continuing compliance with aviation safety requirements.

Anyone needing more information can contact AFS directly at 9-AVS-FS-Requests@faa.gov.

Added April 30: SFAR 118 – Relief for Certain Persons and Operations during the Coronavirus Disease 2019 (COVID-19) Outbreak

Added April 25: COVID 19 Virus IA Refresher Course Provider Letter

Added April 2: Central FSIMS Page: COVID-19 Relief For Certificate Holders: Policy Deviations, Exemptions, and Rule Changes

Added April 1: [Final Rule] Enforcement Policy for Expired Airman Medical Certificates

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ARSA Works

What ARSA Has Done Lately – First Quarter 2020

Each quarter the board of directors receives reports on the association’s activities. Step into a board member’s shoes by reviewing the operations, legislative and regulatory reports highlighting advocacy on behalf of aviation safety between January and March 2020:

Regulatory Advocacy

• Reported on FAA implementation Airman Certification Testing Service.
• Reported on and provided subsequent analysis of DOT final rule regarding “administrative rulemaking, guidance and enforcement procedures.”
• Encouraged industry to support petition to delete the last sentence of § 109(d).
• Reported on FAA assurance to industry that “Brexit” would have no immediate impact on transatlantic aviation business.
• Analyzed report by U.S. Government Accountability Office on available government data describing aviation technical workforce and FAA efforts to support technician career development (mandated by ARSA proposed language in 2018 FAA Reauthorization Act).
• Delivered industry-supported letter – signed by 12 other U.S. and Canadian aviation associations – to Transport Canada Civil Aviation and FAA raising two issues in U.S.-Canada MIP.

Pandemic Response

• Developed position that aeronautical repair stations are businesses that provide essential services and published resources for companies needing to lobby state governments on the matter.
• Sought out and reported on DOT and FAA guidance regarding drug & alcohol testing requirements during national emergency.
• Revived FAA attention in use of remote connectivity technology and tools to cope with impacts of U.S. government telework mandates on inspectors.
• Reported on ICAO briefing regarding state-level pandemic response actions and centralization of related information.
• Interfaced with FAA, both Flight Standards and Aircraft Certification, on exemptions, deviations and other virus-related information for certificate holders.

 Legislative and Lobbying

• Obtained COVID19 pandemic relief for repair stations in CARES Act.
  • Bill includes $25 billion loan fund for repair stations and airlines, $3 billion grant program for airline contractors and $10 million max paycheck protection loans for companies with 500 or fewer employees.
  • Engaged with Treasury Department and Congress on CARES Act implementation.
  • Developed analytical materials to help members access CARES Act funds.
  • Coordinated with members to identify opportunities to improve CARES Act and develop Phase IV relief bill recommendations.
• Continued to lead coalition to secure $10 million in FY 2021 appropriations for aviation maintenance and pilot workforce development grant programs created by Sec. 625 of 2018 FAA reauthorization law and encourage FAA to initiate the program.
• Coordinated March 9 coalition letter to House and Senate appropriators.
• Submitted testimony to in conjunction with House Aviation Subcommittee hearing on aviation workforce.
• Supported efforts to obtain congressional signatories on letters to appropriations leaders from Sens. Jim Inhofe (R-Okla.) and Maria Cantwell (D-Wash.) and Reps. Dan Lipinski (D-Ill.) and Sam Graves (R-Mo.).
• Continued to lead coalition to prevent enactment of Safe Aircraft Maintenance Standards Act (H.R. 5119).
  • Conducted March 9 briefing for allied company and association communications professionals.
  • Coordinated and led 22 briefing for embassy aviation attaches at Netherlands Embassy.
  • Coordinated more than a dozen coalition lobbying meetings (Jan. 14 and 15).

Communications and Surveys

ARSA in the News – Selected Industry Coverage

Congress Introduces Legislation for a National Aviation Center
February 27, 2020
AOPA Pilot
Bipartisan legislation introduced in the Senate on February 27 would help ensure the aviation and aerospace industries in the United States remain competitive and are prepared to address the workforce challenges facing the entire industry.

Aviation Regulators Move Toward Cooperation Even As Virus Drives Countries Apart
March 17, 2020
AviationWeek
Last year it was Brexit, this year it is a far more damaging virus that is driving nations apart. Yet, aviation regulators are still trying to collaborate to ease burdens on international aviation, as discussed at the Aeronautical Repair Station Association’s recent annual symposium.

Relief Bill is Good News for America’s 250K Aviation Maintenance Workers
March 30, 2020
AviationPros
On March 27, Congress officially responded to the aviation maintenance industry’s pleas for economic assistance in the face of pandemic-related air travel disruptions.

Grounded flights could result in less work for Duluth aircraft maintenance base
March 30, 2020
Duluth News Tribune
A March 17 letter from the Aeronautical Repair Station Association to the Trump administration and to congressional leaders said: “Our industry has long been suffering from a severe and well-documented technician shortage and maintaining a highly trained workforce is critical to ensuring the long-term stability of the entire U.S. aviation sector.”

ARSA-placed Industry Editorials

Surveys

• Quick questions re: ARSA Conference Opening Salvo (Feb. – 14 responses); Coronavirus impacts (March – 14 responses)
• Conducted 2020 member survey (89 responses – last response on March 2). High level of satisfaction and alignment of ARSA priorities with member needs. Provides snapshot of industry prior to COVID19 disruptions. Association team determining how to use results, contact Brett Levanto for information.

Events, Meetings and Training

Events

Executed successful 2020 ARSA Annual Conference (E2E meeting, Legislative Day, Symposium).

Meetings

• 8: Sarah met with FAA Deputy Administrator for Aviation Safety Ali Bahrami to discuss ARSA priorities.
• 9: Sarah, Brett and Christian met with Aircraft Owners & Pilots Association Director of Regulatory Affairs Chris Cooper.
• 16: Brett participated in a Choose Aerospace Steering Committee meeting.
• 21: Sarah participated in a meeting with the Aerospace Industries Association, General Aviation Manufacturers Association and Airlines for America to develop a consensus position on certification reform.
• 27 to 30: Sarah and Marshall participated in the Helicopter Association International’s Heli-Expo, including presenting training classes.
• 11: Sarah met with FAA Chief Counsel Arjun Garg.
• 14: Brett participated in a Choose Aerospace branding initiative meeting.
• 20: Christian participated in the Q1 meeting of the Transportation Security Administration’s Aviation Security Advisory Committee.
• 20 to 21: Sarah participated in a meeting of the FAA’s Flight Standards Transparency, Performance, Accountability, Efficiency Aviation Rulemaking Committee.
• 27: Christian presented on ARSA’s workforce activities and the new Sec. 625 grant program at the National Association of State Aviation Officials.
• March 2: Christian, Sarah, Marshall and Brett met with EASA Washington, D.C. representative Thomas Mickler.
• March 2: Christian and Brett briefed Travel Weekly reporter Robert Silk on ARSA’s workforce activities.
• March 3: Christian and Brett conducted briefing webinars for E2E and Legislative Day attendees.
• March 3: Christian and Brett meet with GAO Director of Physical Infrastructure Heather Krause and Analyst Justin Reed to discuss aviation workforce analysis and planning for ARSA Conference discussions.
• March 19: Christian and Brett held an introductory conference call with FAA workforce point person Kate Lang.
• March 24: Sarah participated in a conference call on FAA’s operational status during the COVID19 pandemic.

Training

Training discounted 50 percent during pandemic.

ARSA-led Petition Would Provide FAA Path to Reciprocal Acceptance

On April 17, 14 aviation trade associations joined ARSA in delivering a petition for rulemaking to the FAA to amend 14 CFR part 43. The requested amendment would provide the FAA flexibility to accept foreign maintenance organization certificates – without issuing its own certification under part 145 – by authorizing such acceptance in the United States’ bilateral aviation safety agreements.

Under the proposed language, the FAA would have the discretion to enter into a reciprocal acceptance agreement with a bilateral partner. The rule would not independently establish such acceptance or require the agency to do so.

“The proposed changes to §§ 43.3 and 43.7 would enable the FAA to significantly streamline the approval and compliance assurance processes for all affected parties,” the petition said. “The FAA would, of course, retain the right to negotiate the specific terms of any such arrangement with each bilateral partner, thereby assuring the FAA’s ability to exercise its State of Registry prerogatives as it does today.”

The group cited ongoing coordination among and between the world’s leading aviation regulators. Based on progress made by the “Maintenance Management Team,” which includes representatives of the FAA, EASA, Transport Canada and ANAC Brazil working with industry organizations, the petition explained the United States should have the same discretion as its international partners to determine equivalent levels of safety.

For additional support, the industry cited a 2011 study commissioned by ARSA underscoring the financial benefits of global regulatory coordination. That study, performed by the consulting group AeroStrategy, found it costs repair stations significantly more to become certificated by foreign aviation authorities when a maintenance organization’s home country does not have a BASA.

“Industry’s costs to obtain and retain foreign AMO certificates would be eliminated completely if the domestic authority’s certificate and oversight is the only expenditure required to perform work for a foreign customer. Adoption of the proposal would also allow agency resources to be directed at continued operational safety elements rather than expenditures to perform certification and oversight operations that are duplicative to the bilateral partner’s efforts,” the petition said.

To read the complete petition, click here.

Stay tuned for updates – and calls for comments and support – as the petition is docketed in the Federal Register.

In addition to ARSA, the petition was also supported by:

Aerospace Industries Association
Aircraft Electronics Association
Aircraft Owners and Pilots Association
Airlines for America
Aviation Suppliers Association
Aviation Technician Education Council
Cargo Airline Association
General Aviation Manufacturers Association
Helicopter Association International
Modification and Replacement Parts Association
National Air Carrier Association
National Air Transportation Association
National Business Aviation Association
Regional Airline Association

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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Legal Brief

Apply, Don’t Run Out of Cash – Tapping into Federal Relief

By Al Givray, Partner, Davis Graham & Stubbs LLP

Al Givray, Partner, Davis Graham & Stubbs LLP

The following analysis was prepared for ARSA by Al Givray, law partner at the law firm of Davis Graham & Stubbs in Denver, Colorado, and general counsel to The NORDAM Group LLC in Tulsa, Oklahoma. He can be reached by email at al.givray@dgslaw.com. You can learn more about Mr. Givray’s experience at: www.dgslaw.com/what-we-do/industries/aviation and www.nordam.com/who-we-are/leadership.

To keep tabs on all of ARSA’s work related to the current pandemic, visit arsa.org/anti-viral-measures.

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.

The rollout of the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) has been rocky (some would call it a disaster). The initial pool of cash allocated by Congress was quickly exhausted – in some cases disbursed to, and subsequently returned by, companies amid bad publicity – and then replenished, requiring many applicants to “re-enter” the line for relief.

For aviation businesses too large for the PPP (500 or more employees or larger than the applicable SBA small business size standard) or otherwise not eligible (e.g., affiliation rules), there is aid money available from the U.S. Treasury Department and Federal Reserve. There are restrictions and equity winds to navigate and some deadlines have passed (don’t despair); but financial resources for many outside the SBA universe are and will be accessible.

Title IV Overview

Big picture, funds made available under Title IV of the CARES Act will end up in two baskets: Treasury-direct grants/loans and Fed-administered loans.

The initial deadline for seeking Title IV grant money from the Air Carrier Worker Support program ($3 billion total available for air carrier contractors) was April 3. The secondary deadline was April 27. If you didn’t apply, you still should; though consideration will be at the discretion of the Treasury Department and money may not be available if all appropriated funds have already been disbursed. If you provide any “on airport” services to a Part 121 passenger air carrier, you should consider applying since the process is not hard, and the time taken may pay off! There is also the chance that more grant monies will be allocated to the program during the coming months by legislators.

Given the deadlines and limitations for a grant, a Title IV loan may be your best option.

The Four Loan Buckets of Title IV

The CARES Act creates four buckets of loan monies in Title IV:

Bucket 1: $25 billion for passenger air carriers and Part 145 repair stations

Bucket 2: $4 billion for cargo air carriers

Bucket 3: $17 billion for businesses critical to maintaining national security

Bucket 4: $454 billion:

• For US businesses of any size with a majority of employees in the United States;
• If you haven’t gotten loan relief from another part of the CARES Act; and
• If you wish to access one of the programs of the Federal Reserve Bank.

Bucket 4 is Fed-administered, while Buckets 1 to 3 are Treasury-administered.

Rules (i.e., strings) will vary from bucket to bucket and include things most businesses are not used to seeing when borrowing money.

Treasury-Direct Loans

If you are a business other than an air carrier, there are two Title IV loans for which you may qualify: 

• Loans out of the $25 billion bucket aimed at repair station businesses and certain other contractors, and
• Loans out of the $17 billion bucket aimed at businesses critical to maintaining national security.

Not surprisingly, there are many similarities between the two loans, but there are nuanced differences too.  One key example: The applicant pool in the $17 billion bucket may be smaller than the pool in the $25 billion bucket, so you may have a better shot at getting the loan money you need out of the $17 billion bucket.

The Fed’s Main Street Lending Program

The Fed’s Main Street Lending Program gives companies with up to 15,000 workers or 2019 revenues of $5 billion or less reasons to borrow money from a $600 billion bucket. If the company is backed by venture capital or private equity, these monies can be accessible where SBA loans are not.

The Fed has a lot of discretion about how to administer this program and there could be a lot more money available – up to $ 4 trillion – if the Fed should decide that the $600 billion announced so far is not adequate to ease the liquidity needs of the U.S. economy. Rules have been announced, though, on collateralization, taxpayer protection (code for having to give warrants and options on company equity), and solvency, and the Fed has already come under fire for not doing enough, or with needed speed, to deploy sufficient liquidity that will spare the U.S. economy from dire consequences. 

The Fed made a major announcement on April 30 (“Fed Expands Scope and Eligibility for Main Street Lending Program”). Plenty of details here, but unfortunately a slew of complications as well calling for expert analysis, which in the minds of many still constrain cash from flowing into the economy where needed.

From even a casual read through of these fresh details, it is hard to rebut the argument that the Fed is more preoccupied with avoiding credit losses than with pushing liquidity out fast to those who need it most. Why? Well, just take a look at the menu printed in the Fed’s April 30 announcement outlining what are now three Main Street Loans:

So, the Main Street $600 billion bucket contemplates a company taking out a “new” loan, a “priority” loan or an “expanded” loan. There are some undoubtedly positive features to these loans, but many attributes call for interpretation by financial and legal advisors against the company’s loan arrangements with existing lenders.

Some immediate take-aways (you can read the fine print here: new loan / priority loan / expanded loan):

1—The 95 percent Fed-buy feature expires Sept. 30; that’s just five months and loan transactions are not known for warp speed.

2—You may only participate in one of the Main Street facilities, but you may take out more than one loan once you’re in a given facility, as long as you don’t exceed the borrowing ceiling for that facility. Also, if you receive a loan through the SBA’s PPP, you can still be an eligible borrower under one of the Main Street facilities if you meet the eligibility requirements.

3—You’re not eligible, though, for a Main Street loan if you have received money out of the Treasury-direct buckets of CARES Act Section 4003(b)(1)-(3) (described above).

4—Don’t be lulled by the deferred payment features of the Main Street loans – you will be paying some “ouch” fees for sure.

5—Be prepared to comply with restrictions on the compensation you can pay your top executives, on repurchasing the equity in your company, and on paying out dividends and other distributions to owners (same as for Treasury-direct loans covered by CARES Act Section 4003(c)(3)(A)(ii)), but the good news is that the restrictions on dividends and other distributions will not apply to tax distributions typically made by an S Corp or LLC.

6—You can’t use Main Street loan money to repay existing debt (these restrictions vary across the three Main Street facilities).

7—You must make reasonable efforts to maintain the payroll and employees during the term of the Main Street loan.

And of course, both you and your lender must qualify. Your qualifications are the size and money numbers above and employing a majority of your workers in the United States. Lenders will qualify by being one of the many “U.S. federally-insured depository institutions (including banks, savings associations, and credit unions), U.S. branches or agencies of foreign banks, U.S. bank holding companies, U.S. savings and loan holding companies, U.S. intermediate holding companies of foreign banking organizations, or any U.S. subsidiary of any of the foregoing.”

You would think it’s a good thing that the qualified lender keeps only 5 percent of the credit risk, with the Fed picking up 95 percent through its special purpose vehicle structure with an investment from the U.S. Treasury. Unfortunately, that’s proving not to be true, as banks are applying their own credit underwriting rules to even the 5 percent and seem to be taking risks only with their best customers while forsaking others who were good before the pandemic broke out.

This has led to cries that the Fed should just buy 100 percent of all Main Street Loans, do so on a first-come-first-served-basis, and increase the size of the Main Street Loan bucket from the present $600 billion up to a $4 trillion size (which would coincide with past leveraging), the idea being that sparing the economy is worth the additional credit losses that may result in going from the present 95 percent-buy structure to clean 100 percent across all Main Street facilities.

Even with the new guidance released on April 30, the analysis of what money to seek, from whom, and how to streamline your liquidity-seeking energies will take a lot of time.  Even so, the process will be worth every hour spent for many companies struggling to survive in this period of massive economic disruption. You can’t be one of them without making a timely application, especially if the Fed yields and decides to buy 100 percent of Main Street loans.  In that situation, you’ll want to be at the front of the line.

Accessing the $

Here’s a four-step strategy to seeking cash under Title IV:

1. Decide on which monies and how much (if any) to draw on.
2. Cast a wide net to tap Title IV programs from both the Treasury and the Fed.
3. Engage an in-house/outside team leader to navigate the maze and to frame decisions for immediate action.
4. Submit an application for a Treasury-direct grant and/or loan monies now! click here

To decide whether to apply—

1. Study the Title IV loan applications released by Treasury so far. There are actually two: one for Air Carriers and Certain Eligible Businesses (including repair stations) (click here) and one for Businesses Critical to Maintaining National Security (click here).
2. Make up your own mind about how much money you’ll want/need.
3. Analyze the strings attached.
4. Organize the information you’ll need to populate online applications.

Start with the following questions:

Q1: Will existing loan agreements and lenders permit more debt?

Q2: What collateral can or will you be able to pledge?

Q3: Will debt bring on insolvency?

Will assets exceed liabilities?
Will debts be paid as they become due?

If the answers point to “yes, I need the extra liquidity for sure,” now how much—

Q4: How much leverage exists before busting current loan covenants?

Q5: Is any part of the debt publicly traded, and how much is the rating likely to go down?

Q6: What if the details of the new borrowing become public?

If the answer is still “yes, I need the liquidity,” evaluate the “strings attached” for each loan possibility, and then make a go/no-decision right away.

What to gather in preparation?

1. Data on why your business is not able to borrow any more money than you have already borrowed
2. Employment levels on March 24, 2020
3. Total compensation packages greater than $425,000 in 2019
4. Unencumbered collateral (that could be pledged for a CARES Act loan)
5. Ability to pass two standard solvency tests: assets>liabilities and ability to meet obligations as they become due
6. Why you should get a loan (i.e., critical to maintaining national security or because (thanks to ARSA’s lobbying!) repair stations are specifically eligible under the law)
7. What money or economic benefit have you received or do you expect to receive under any other part of the CARES Act (Title IV grants and SBA loans included, if you’ve applied or are planning to apply)
8. U.S. operations, U.S. employees, and changes in employment levels since January 2020
9. Audited financial statements with footnotes intact and particulars about intercompany debt, parental guarantees, restrictions on taking on more debt, and liens on collateral
10. Details on direct and indirect losses suffered and to be expected by reason of COVID‑19.
11. Details on how the loan proceeds will be used to meet financial needs
12. Detailed operating plan for of 2020 and 2021
13. What warrant, equity interest, or senior debt you’re willing to offer in exchange for the loan

It may be daunting but it’s not insurmountable.  And as Aristotle would tell us, a good start is half the job.

If you would like counsel regarding economic relief, contact Givray directly via al.givray@dgslaw.com.

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ARSA on the Hill

More for Phase IV

By Christian A. Klein, Executive Vice President

With the aviation industry reeling from pandemic-related air travel disruptions, ARSA is focusing on the next round of relief legislation (“Phase IV” or “CARES 2.0”).

With significant efforts from the association, its members and allies, Congress made considerable resources available to help aviation weather the storm. The CARES Act included $25 billion for loans to airlines, repair stations and ticket agents and $3 billion for “Payroll Support Program” grants for airline contractors (including on-airport repair stations). Also, because the vast majority of repair stations are small companies, many ARSA members can benefit from the Paycheck Protection Program, which was replenished in late April. It provides small businesses and companies with fewer than 500 employees access to forgivable loans of up to $10 million for payroll and other expenses. (To catch up on the legislative effort to provide economic relief, visit arsa.org/covid19-relief.)

Unfortunately, some maintenance companies (particularly mid-size businesses with off-airport repair stations) have found it difficult to access the resources provided by Congress. Thus, ARSA is working to include additional support for the maintenance industry in the next round of coronavirus legislation.

Priorities are:

Small Business Size Standards

Companies qualify for PPP loans under the CARES Act by meeting standards set by the Small Business Administration (SBA). The agency establishes small business size standards based on annual revenues and/or the number employees for each North American Industrial Classification System (NAICS) code category. Thus, companies with more than 500 employees can be eligible depending upon the NAICS’ annual revenue number.

The threshold for NAICS code 488190 (“Other Support Activities for Air Transportation”), is $35 million in annual revenue. Based on a conservative ARSA estimate of $100,000 in revenue per repair station employee, companies with more than 350 employees are likely to not be considered small businesses by SBA. (Some ARSA members have told us a $35 million company might have as few as 100 employees.) However, companies in many industries (including other sectors of aviation) are considered small businesses if they have fewer than 1,500 employees, allowing bigger companies to tap into the PPP.

ARSA is asking Congress to mandate SBA to issue a direct final rule raising the size standard for code 488190 to put repair stations on par with other industries and allow more members to qualify for the PPP.

SBA Affiliation Rules

Combined with the size standards, the SBA’s affiliation rules also make it difficult for some aviation maintenance companies to access PPP relief; in particular, those partially or wholly-owned by private equity companies or operated as a family of small companies under a common ownership umbrella.

Title 13 CFR § 121.103(a)(6) states that, ”[i]n determining the concern’s size, SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates, regardless of whether the affiliates are organized for profit.” Title 13 CFR § 121.103(a)(1) states that, “[c]oncerns and entities are affiliates of each other when one controls or has the power to control the other, or a third party or parties controls or has the power to control both. It does not matter whether control is exercised, so long as the power to control exists.”

Put more simply, if Company A is owned wholly or partially by an individual or business with other commercial interests, the employees and receipts of those other business interests are imputed to Company A in determining its eligibility as a small business.  Thus, many repair stations that would otherwise qualify for PPP relief are excluded based on unrelated ownership structures.

Recognizing that the affiliation rules would prevent small and medium-size businesses in certain industries from accessing PPP relief, Congress included language in the CARES Act exempting them from the affiliation rules. Sec. 1102 of the law waived the affiliation rules for companies with up to 500 employees per location if the company was assigned a NAICS code beginning with 72 (i.e., the accommodation and food service sectors), for franchises assigned an SBA franchise identified code and for business that receive financial assistance from SBA-licensed small business investment companies.  However, despite being similarly situated and in desperate need of assistance, none of these exemptions apply to the aviation industry. Thus, some repair stations are precluding from accessing PPP relief.

ARSA is asking Congress to exempt businesses with the NAICS codes most applicable to aviation maintenance – 336411 (“Aircraft Manufacturing), 336412 (Aircraft Engine and Parts Manufacturing), 336413 (“Other Aircraft Parts and Auxiliary Equipment Manufacturing”) and 488190 (“Other Support Activities for Air Transportation”) – from the SBA’s affiliation rules for PPP purposes.

Off-Airport Repair Station Access to Airline Contractor Grants

The CARES Act included a $3 billion grant program for airline contractors. Unfortunately, the legislative language is ambiguous about which companies qualify. The Treasury Department issued guidance on April 21 confirming that repair stations with airline contracts that are located at airports are eligible to apply for “Payroll Support Program” grants. However, despite ARSA’s urging, Treasury has said nothing about the eligibility of off-airport maintenance subcontractors. ARSA is requesting Congress to define “contractor” as that term is used in 14 CFR part 120 so “off-airport” maintenance providers will have the ability to access grants.

Tax Credits for Investment, Training and Maintenance

Well-crafted tax policy can stimulate economic activity and recovery. A great example is the depreciation bonus created in response to the 2001 economic downturn and 9/11 attacks, a temporary tax law change that encouraged considerable business investment. ARSA believes that similar policies can help the aviation industry and U.S. economy recover more quickly from the pandemic. In particular, ARSA is urging Congress to create temporary refundable tax credits (i.e., tax credits that allow you to get money back from the government even if you do not owe taxes) for capital investment in facilities, worker training and aircraft maintenance.

Topping Up the Buckets

The pandemic’s economic effects will continue well past its health impact, particularly for the aviation sector. Experts from Oliver Wyman CAVOK project that global MRO spend in 2020 will be half of earlier projections. Even as other industries and sectors begin recovery, the maintenance industry will need support to maintain the capacity necessary to service the U.S. fleet. ARSA is therefore requesting that the Phase IV bill replenish the ACWS program and PPP to provide relief to companies that will need continued sustainment.

So, What’s Going to Happen When?

It is clear the next round of relief legislation is going to be much more difficult. With the stock market supposedly stabilizing and the end to lock-down orders the daily “breaking news,” there’s less pressure on lawmakers to “help.” Conservatives are balking at the cost; Congress added almost $3 trillion (more than 10 percent) to the national debt (which now stands at $24.7 trillion) in less than two months.

Budget concerns aside, the differences between Republicans and Democrats on how any additional money should be spent is stark. Democrats want to provide relief to state governments that are facing massive increases in spending and reduced revenues due to the lack of economic activity. Senate Majority Leader Mitch McConnell does not want to borrow money “from future generations to fix age-old problems that states have that they created themselves wholly unrelated to [coronavirus].”

“There probably will be another state and local funding bill, but we need to make sure that we achieve something that will go beyond simply sending out money,” McConnell said.  Rather than rushing blindly into another big relief package, he wants to assess the effectiveness of what Congress has already done.  McConnell also wants to make sure that the Phase IV bill contains language to protect health care workers, businesses and employees from coronavirus-related lawsuits.

Problems with the CARES Act programs are sure to be a central focus of the Phase IV debate. For example, the PPP has suffered from a lack of coordination among and between the federal government and the banks saddled with moving the money out the door. Media reports that large companies with strong balance sheets – including the Los Angeles Lakers – have been able to tap into the PPP have led to the threat of criminal charges, making lawmakers less willing to provide mid-size companies access to those resources.

In addition to legitimate differences of opinion, this is an election year and politics is front and center. Not only is the White House at stake, but Democrats are increasingly optimistic about winning seats they need to take back the Senate (three if Biden wins the election because his vice president would cast the tie-breaking vote and four if Trump wins reelection).

Both sides are playing to their bases. Republicans say Democrats are using the relief debate to channel money to big cities in majority-Democratic states and pursue policy objectives unrelated to the virus response (e.g., the pro-labor strings attached to CARES Act loans and grants). Some conservatives claim that the risks of COVID-19 are overblown and that the response has been “hyped” and “politically hoaxed” to achieve liberal policy ends and “bludgeon” President Trump”.

Republicans are also worried that the longer Americans are told to shelter in place, the worse the economy will get. Given that presidential elections are often considered referenda on the economy, Republicans want the shutdown orders lifted so that the economic rebound can start sooner, avoiding a “coronavirus cliff” and giving the GOP a boost going into the 2020 elections.

At the same time, Democrats are characterizing the Trump administration’s response as incompetent and Senate Majority Leader McConnell as Trump’s enabler, callously out of touch with the needs of working (and, now, unemployed) Americans. Some of it is personal: McConnell is considered one of the most vulnerable GOP senators up for reelection and Senate Democrats – led by Minority Leader Chuck Schumer (D-N.Y.) – have helped his opponent (a female former Marine Corps fighter pilot) raise more than $12 million for her campaign in the first three months of 2020.

Politics aside, there is also the question of how the legislative process will work in the coronavirus era. Although senators are scheduled to return to the nation’s capital the week of May 4, Democratic leaders will not reconvene the House of Representatives because the infection curve in the Washington, D.C. area has not flattened and the city is on a lockdown order through May 15.

Doctor Brian Monohan, the House physician, has said it could take “years” for Congress to return to normal with a full roster of staffers working together in an office at one time. While much of the business of developing legislation can be done remotely, lawmakers need to be in the nation’s capital to vote. A bipartisan group of lawmakers are discussing potential rule changes to allow remote voting, but some Republicans oppose the idea and it is unlikely to happen anytime soon.

Will You Answer the Call?

The problems aside, the aviation maintenance industry has access to billions of dollars in CARES Act loans and grants because ARSA, its members and allies engaged aggressively in the legislative process.  Given the political challenges, it is going to take more work to be successful in Phase IV.

When the grassroots alerts are issued in the days ahead and answer the call!

With more of your help, your company, your industry and your colleagues will survive this period of unprecedented economic disruption. To get involved in ARSA’s legislative program TODAY, contact me at christian.klein@arsa.org.

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Training

ARSA Discounts Online Training During COVID-19 Response

The ARSA team continues to be heartened by the growing list of businesses and service providers offering additional benefits to the public as the world responds to the spread of COVID-19. Since some of the association’s members have indicated that personnel development and training will be paramount during the period of upcoming business uncertainty, the team has issued a 50 percent discount on all price levels for ARSA online training sessions.

This discount is valid for every individual session purchase and will apply automatically at checkout.  Multiple sessions can be purchased at once and the entire “cart” amount will be discounted, but “bundles” of similar classes (denoted on individual class pages as “special offers”) will not be additionally discounted; this 50 percent reduction exceeds the savings of any bundle, so please independently select each course in which you are interested and then follow the appropriate steps to check out.

Click here to go directly to the training platform (operated by ARSA’s management firm) and begin reviewing available sessions.

For more information about ARSA’s training program, review the menus below. If you have questions or would like to learn more about ways to integrate ARSA training into your own program, contact Vice President of Operations Brett Levanto.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’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.

What training do you need? Contact ARSA to let the association know and help get it developed.

The Mechanic’s Bible – 3 Sessions on Part 43

Bundle pricing is available for three of ARSA’s training sessions focusing on 14 CFR part 43. Each 0n-demand recording is available for 90 days of unlimited viewing. Purchase together and save.

Click here to go straight to the bundle purchase.

Part 43 – The Mechanic’s Bible

This session provides an overview of 14 CFR part 43, Maintenance, Preventive Maintenance, Rebuilding and Alteration. It places the work performed on U.S. civil aircraft in the context of the “aviation safety regulatory chain,” explains general definitions and requirements and reviews the standards that impact these activities.

Instructor: Sarah MacLeod

Click here to register and get access for 90 days.

What is “Acceptable to the Administrator”? – The Performance Rules of § 43.13

This session provides an overview of the regulations that use the language “acceptable to” the Federal Aviation Administration and how to determine what makes something acceptable to the agency.

Instructor: Sarah MacLeod

Click here to register and get access for 90 days.

Overhauling Overhaul – Part 43’s Most Misunderstood Word

In June 2015, the FAA issued another legal interpretation on the term “overhaul” – stimulating a flurry of member questions about the term’s applicability to the everyday work of maintenance providers. This course provides the regulatory context, an overview of the term, a review of its interpretations and tools for applying it in a business context.

Instructor: Sarah MacLeod

Click here to register and get access for 90 days.

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.

Regulatory Compliance Training

Test your knowledge of 14 CFR § 1.1 – Definitions and Abbreviations [definitions comparing “approved by” with “acceptable to”].

Click here to download the training sheet.

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Membership

ARSA Remembers – Joe Sirico

Joseph Sirico

It is with great sadness that ARSA informs its membership of the recent passing of Joe Sirico, long-time quality fellow and regulatory compliance stalwart at Pratt & Whitney. (Company sources advise that his death was not related to the current pandemic.) 

Sirico arrived at Pratt & Whitney after graduating from the University of Connecticut, where he also attended law school, to begin a career that spanned parts of six decades. Although he had recently retired – his LinkedIn bio proclaimed he was no longer seeking work – those who regularly attended ARSA’s Annual Conference know that he was always an active participant, a tireless advocate of “good government” principles and an important ally in educating both government and industry representatives about their regulatory obligations and roles. He frequently traveled to Pratt & Whitney’s facilities all over the world and was as well-known to and respected by international regulatory authorities as he was to the FAA.

“Many people didn’t know that Joe was also an attorney and he used that knowledge, along with his technical skills, to carry out his day-to-day responsibilities,” said ARSA Managing Director and General Counsel Marshall S. Filler. “ARSA could always rely on Joe to help out when needed. He was a kind and gentle soul and the industry is stronger for his significant contributions to aviation safety.”

For more information about services and remembrances, and for Joe’s full obituary, click here.

Do You Know a “40 Under 40” AMT?

ARSA’s commitment to building the aviation maintenance workforce of the future means celebrating the excellence of the men and women who already keep the world safely in flight. The association encourages its members to celebrate outstanding personnel through Aircraft Maintenance Technology Magazine’s 2020 “40 under 40” Awards, which recognizes young aviation professionals on whom the flying world will depend for decades.

Criteria for selection include job commitment, industry involvement and contribution, professional achievement and innovation. Anyone working in any aviation maintenance field who will be 39 years old or younger on June 30, 2020 is eligible for nomination. Winners will be featured in the magazine’s August/September issue and celebrated on AviationPros.com.

Click here to learn more and nominate someone today. The deadline for submissions is June 30, 2020.

Anyone submitting a nomination is encouraged to contact ARSA’s Vice President of Operations Brett Levanto, so the association can join AMT Magazine in celebrating the best of this community’s young talent. Through its experience with the awards program in 2015, ARSA saw first-hand the vital importance of celebrating the maintenance industry’s most valuable resource: its people.

“What we need is to do every single day what AMT Magazine is doing … show off what’s great about aviation,” Levanto said in 2019. “Whether it’s impressive people (hello NextGen honorees!), interesting challenges, advanced technology, worldwide travel opportunities, or the allure of really, really important work, there is so much in which we can take pride.”

Past NextGen awards…

10/15/21 - What We Can Learn

"As long as you have a willingness to learn and a good work ethic, you can do anything."

Click the edition image below to read about the impact of that perspective on aviation career growth, then flip through the stories of the 2021 40 Under 40 honorees.

Click the cover image to jump into the edition.

8/22/19 - The Good Example Movement

ARSA's Vice President of Operations (and 2015 NextGen Honoree) explains how it's become a favorite activity of his to celebrate the young aviation professionals recognized by AMT Magazine each year.

Click the cover image to access the full edition.

 

 

9/20/18 - Making Good (and Honoring the 2018 NextGen Honorees)

September 20, 2018

Making Good

This year's AMT Magazine annual class of Next Gen Award winners includes young professionals from five ARSA member companies.

Click here to view the August/September 2018 issue of AMT Magazine.

11/21/17 - Don't Hold For Applause: Celebrating ARSA's (and Others') 2017 NextGen Honorees

AMT Magazine November/December 2017 - Editorial: Don't Hold for Applause

Click to Access the November 2017 Editorial "Don't Hold for Applause" by ARSA VP of Communications Brett Levanto

11/26/16 - Eight ARSA Winners Among AMT Magazine's “NextGen” Honorees

November 29, 2016

On Nov. 28, AMT Magazine announced its 2016 class of NextGen Award winners. For the second year, the publication honored up-and-coming talent by recognizing maintenance engineers, technicians and support staff under 40 years old.

The list includes eight winners from seven different ARSA member organizations:

• Kevin Easley, Maintenance Supervisor, AAR Aircraft Services
• Hilary Kerkstra, Turbine Engine Technician, Pratt & Whitney Engine Services
• Carolyn Rena Kincaid, Manager of Training and Records Dept., AAR Aircraft Services
• Joshua Krotec, Senior Vice President, First Aviation Services
• Tony Oggs, Field Service Lead Technician, StandardAero
• Josh Riehle, Director of Quality, HAECO Cabin Solutions
• John Wing, Program Manager, PEMCO World Air Services
• Xiang Yao, Lead Aviation Maintenance Technician, FedEx

“Taking pride in this group is easy,” said Brett Levanto, ARSA’s vice president of communications and 2015 NextGen honoree. “Every person – yes, even those whose employers aren’t ARSA members – represents the best in the aviation maintenance community. From diverse backgrounds, with different experiences and performing a wide range of needed tasks, each one keeps the world safely in flight. We can’t fly without them and we wouldn’t want to.”

Finding and retaining world class talent – like the names listed in AMT’s awards – has become a pressing challenge for repair stations and a key policy focus for the association. While celebrating the best and brightest is a great way to attract attention, ARSA also provides tools for building the aviation workforce of the future:

(1) Aerojobs.org. The web-based recruitment tool specifically targets individuals with the skills needed to maintain aircraft (regardless of what industry they’re in now).

(2) AVMRO.arsa.org. The industry’s information portal introduces the world of maintenance, repair and overhaul. The site has information useful to everyone from job seekers to the media to elected officials to nervous fliers.

(3) Propaganda. “You Can’t Fly Without Us,” a seven-minute documentary on the maintenance industry produced for public television. ARSA provides license for use of the film as an informational or recruitment tool. (Visit arsa.org/documentary to see how you can use the video.)

(4) Training. In addition to a growing library of on-demand recordings, live sessions are hosted weekly on regulatory compliance, government affairs, legal and business development topics. Everything you need to get better at your job and get ready for the next one. (Visit arsa.org/training for course information and to register.)

“While celebrating [the NextGen honorees’] hard work, let’s consider how to help them move ahead,” Levanto said, encouraging broader industry action. “Nurture their careers while attracting new applicants to work and learn alongside them.”

To see all of the winners, visit: www.aviationpros.com/article/12278511/2016-amt-next-gen-40-under-40-award-winners.

Are you from one of the organization's represented on the list of winners? Click here to contact ARSA to share how you're celebrating your young talent.

11/24/15 - Singing for the Unsung: The Inaugural Class of NextGen Honorees

AMT Magazine November/December 2015 - Editorial: Singing for the Unsung

Click to Access the November 2015 Editorial "Singing for the Unsung" by ARSA VP of Communications Brett Levanto and VP of Operations Crystal Maguire (NextGen Honorees)

Quick Question – ARSA Activism

The inclusion of repair stations in the U.S. Congress’ pandemic relief efforts demonstrates ARSA’s impact on Capitol Hill. As the the association’s legislative activism has become more and more effective over the past several years (see the 2018 FAA reauthorization process for a key example), regulatory knowledge and advocacy remains a core value to the industry.

Help ARSA’s team understand the evolving value of its work by responding to this month’s “quick question.”

If the embedded survey does not appear/load, open the survey independently by visiting: https://www.surveymonkey.com/r/qq-ARSAAdvocacy

Note: The survey below is in an embedded window and you may need to scroll down within the window to see/click the “Submit” button.

Click here to see what questions have been asked and answered…and keep a lookout for more.

For more information about this or any other question, contact Brett Levanto (brett.levanto@arsa.org).

Welcome Back – Renewing Members

ARSA’s members give the association life – its work on behalf of the maintenance community depends on the commitment of these organizations. Here’s to the companies that renewed in April:

Renewing Members (Member Category, Member Since)

Accurate Accessories, R01, 2002
ACSS Repair & Overhaul, R02, 2002
AEE-EMF, Inc. d.b.a. Aircraft Electrical Electronics, R01, 2009
AERO Component Repair, LLC, R01, 2011
Aero-Craft Hydraulics, Inc., R03, 1988
Aerospace Quality Research & Development 145, LLC, R01, 2006
Aery Aviation, LLC, Assoc, 2019
AerSale, Inc.-Aero Mechanical Industries, R04, 2011
AgustaWestland Philadelphia Corp., R05, 2012
Aircraft Electric Motors, Inc., R04, 1984
AMETEK B&S Aircraft Parts & Accessories, R03, 1985
Aviation Avionics & Instruments, Inc., R03, 2012
Barfield, Inc., R05, 1995
E.B. Airfoils, LLC., R03, 2001
Ford Instruments & Accessories, LLC, R01, 2012
Rotortech Services Inc., R02, 2019
SkyWest Airlines, Assoc, 2010
Star Aviation, Inc., R01, 2012
The Giles Group, Affil, 2013
WGI, Inc. dba Westfield Gage Company Overhaul and Repair, R03, 2018

A Member Asked…

Q: What is the functional difference between FAA approval and FAA acceptance? There are a number of rules that require FAA approval as well as describe some kind of FAA “acceptance.”

A: Thank you for asking this question. It gives us the opportunity to point to the plain language of the regulation – normally, the verbiage in the rules is either “approved by” or “acceptable to.”

Approved by means a certificate holder or applicant must receive approval from the agency before proceeding.

Acceptable to means the certificate holder has provided information that comports with the regulation and is therefore “acceptable to” the agency. The agency need not acknowledge acceptance nor does the certificate holder require acceptance to proceed. Notice 8900.444 (now in the Flight Standards Information Management System (Order 8900.1, Vol. 3, Chapter 1, Section 1, paragraph 3-1 B) explains the term (as opposed to “accepted by”) using the following: “If an item is required to be acceptable to the FAA, the FAA’s active review and acceptance prior to use is not normally required.”

Now comes the hammer; IF the certificate holder has produced or provides a manual required by the regulations with procedures that are “acceptable to” the agency and in those procedures the certificate holder “requires” the agency to provide acceptance before proceeding, the CERTIFICATE HOLDER has turned “acceptable to” into “accepted by.”

Of course, the certificate holder can always change its procedures to echo the plain language of the regulation. Certificate holders must “show” compliance and if the FAA wants to establish a non-compliance it must establish by the preponderance of the evidence that a violation has occurred. In other words, the FAA would have to prove that the procedure (or whatever) was unacceptable to the agency because it did not meet the plain language of the regulation.

Member questions should be submitted through the inquiry system run through ARSA’s new online member portal. Members can use their portal access to submit inquiries by logging in through arsa.member365.com/sharingnetwork.

Make ARSA’s Voice Your Own: Advertise

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 arsa.org/advertise.

Stand Up for ARSA by Sponsoring

In order to provide world-class resources for its members, the association depends on the commitment of the aviation community. By sponsoring events and activities, supporters can help ARSA’s work on behalf of repair stations to endure.

Need a place to start? For information about opportunities, contact Vice President of Operations Brett Levanto (brett.levanto@arsa.org).

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Resources

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.

Anti-Viral Measures

For the use of its members and the larger aviation community, ARSA is maintaining this page as a resource for pandemic-related updates on policy initiatives and business needs. It is the association’s central point of communication on the topic

H.R. 5119 – Contract Maintenance Under Attack

Help combat a bill introduced in the U.S. Congress that would disrupt the global aviation industry.

The U.S.-EU MAG

Keep up to date on ARSA’s analysis and resources related to the Maintenance Annex Guidance issued under the bilateral agreement between the United States and the European Union.

Industry News 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.

Industry Calendar

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 arsa.org/membership/join. For information about previous editions, submit a request through arsa.org/contact. 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.

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