Source: http://arsa.org/news-media/newsletters/2017-edition-4/
Timestamp: 2019-04-21 18:03:18+00:00

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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.
U.S. companies are deriving substantial revenues from international customers. Close to one third (31 percent) of revenues for the average U.S.-headquartered respondent came from customers outside North America. The average U.S. company earned 15 percent of its revenues from European customers, seven percent from Asia-Pacific, five percent from Latin America, and three percent from Africa and the Middle East.
Bilaterals are big business. The average U.S. respondent reported earning 30 percent of its revenue from work done under a bilateral aviation safety agreement. The United States has BASAs covering maintenance with the European Union and Canada, among others.
Air carriers are most important customers, but other segments are significant. The average U.S.-headquartered survey respondent earned 50 percent of its revenues from air carriers, 22 percent from business aviation, 17 percent from general aviation, eight percent from military, and three percent of other government (non-military) customers.
Profitability is steady or increasing. Close to half (46 percent) of all survey respondents said their unit margin/profitability had increased in the past two years, 33 percent said it had stayed the same and 20 percent said it had decreased.
ARSA members are optimistic about the future. Fifty-nine percent of all respondents said they expect revenues and markets to grow in the coming year and 33 percent expect revenues and markets to stay the same. Only eight percent expected revenues and markets to contract.
Well-paying jobs. The average reported hourly wage for entry-level technicians at U.S. companies was $16.40 per hour ($32,800 per year). The average wage for all technicians at U.S. companies was $24.39 per hour ($48,780 per year).
Close to half of technicians have their own certificates. On average, 45 percent of technicians at companies responding to the survey hold a certificate from a civil aviation authority.
ARSA members are hiring … More than half (55 percent) of all survey respondents plan to add positions and/or hire new employees in the coming year and 43 percent said they do not plan to change the size of their workforce, which would require hiring to cover attrition. Only one percent expected to lay-off workers.
… But are having trouble finding workers. Eighty-two percent of respondents reported having difficulty finding qualified workers to fill technical positions over the past two years, with close to one-third (31 percent) reporting a lot of difficulty.
Unfilled positions could cost ARSA members close to $200 million in 2017. More than half of all respondents (53 percent) reported having unfilled positions at their companies. The average number of reported vacancies at companies with open positions was five; the median was two. Projecting the number of reported vacancies across our entire membership (based upon the average number of vacancies in each membership category), ARSA estimates that its members have 1,045 open positions. With survey respondents reporting average annual revenues of $177,000 per employee, ARSA estimates that, should the positions go unfilled, ARSA members will lose $185 million in revenue in 2017.
Regulatory burdens, worker shortage, access to repair manuals are top concerns. Survey participants were asked to select the most pressing risks to their companies’ profitability, revenue or workforce forecast over the next five years. Tied for the top risk (selected by 52 percent respondents) were “regulatory costs and burdens” and “difficulty finding and retaining technical talent.” Rounding out the top five industry challenges were availability of maintenance information (48 percent), inconsistencies between national regulatory systems (39 percent) and restrictions on international trade/markets (25 percent).
ARSA members are highly satisfied. Survey participants were asked to rate their level of satisfaction with their ARSA membership on scale of one to five (1 = not at all satisfied and 5 = very satisfied), the average score was 4.36.
Respondents reported total 2016 gross annual revenues of $1.791 billion. Eighty percent of respondents said their companies were privately-owned, 14 percent said they were publicly-traded, and four percent were owned by a government entity. Eighty-eight percent of respondents were headquartered in the United States. Respondents reported operating facilities in 29 of the 50 U.S. states. The best represented states were Florida (17 percent of respondents reported having facilities), California (17 percent), Texas (16 percent), Georgia (10 percent) and Ohio (10 percent).
ARSA is very grateful for the members who took the time to complete the survey. By doing so, you provided important data to support our regulatory and legislative advocacy for repair stations and to help us focus our energy on the issues of greatest concern to the industry.
If you have questions about the survey or the results, click here to contact ARSA.
80 respondents (versus 95 in 2016).
High level of member satisfaction (4.36 average score w/ 5 = very satisfied).
Top member concerns are regulatory costs burdens and difficulty finding/retaining technical talent (52 percent), and availability of maintenance information (47 percent).
82 percent of respondents have had difficulty finding qualified technical workers in past two years.
Industry is growing (55 percent of respondents plan to add positions and hire new workers in coming year).
Members are generally optimistic (59 percent say revenues and markets will grow in 2017).
Will incorporate data into communications, advocacy, member development, etc.
Could Protectionist Measures Impact $1 Billion In MRO Services?
Regulatory Reform is on the Fast Track…Will the Momentum Hold?
Conducted successful Legislative Day & Annual Repair Symposium (March 15-17). Very positive feedback from attendees. Next year will be on March 14-16.
Marshall S. Filler representing ARSA on EASA’s Engineering and Maintenance Stakeholder Technical Committee (E&M STeB) (Next meeting scheduled for May 9, 2017 at EASA headquarters).
Christian A. Klein is seeking appointment on TSA Aviation Security Advisory Committee (ASAC). Appointment is pending due to administration change.
Sarah MacLeod is representing ARSA on FAA’s Aviation Rulemaking Advisory Committee (ARAC).
Sarah MacLeod hosted ARSA/FAA Compliance Philosophy discussion with FAA (Jan. 13).
Sarah MacLeod and Ryan Poteet participated in FAA Dynamic Regulatory System town hall webinar (Jan. 26).
Marshall S. Filler participated in FAA APAC Industry Day planning meetings (Jan 24, Feb. 2, Feb. 9).
Marshall S. Filler and Ryan Poteet participated in AIR Transformation meetings (Feb 7, Feb. 22, March 1, March 31).
Christian A. Klein and Brett Levanto met with staff from Aviation Week to discuss potential collaboration (Feb. 24).
Hosted Thomas Mickler/EASA at ARSA HQ to discuss ongoing cooperation and Symposium (Feb. 27).
Sarah MacLeod and Christian A. Klein represented ARSA at 2017 US Chamber of Commerce Aviation Summit (March 2).
Christian A. Klein and Brett Levanto represented ARSA at International Air Transportation Association Washington Reception (March 2).
Marshall S. Filler and Ryan Poteet participated in meeting with Tim Shaver (FAA) re: Singapore MAG (March 8).
Marshall S. Filler and Ryan Poteet participated in General Aviation Manufacturers Association (GAMA) meeting to discuss improving of surveillance activities for AMOs and industry.
Sarah MacLeod participated in A4A EMMC meeting (March 8).
Brett Levanto participated in Small Business Administration Office of Advocacy regulatory roundtable (March 24).
Christian A. Klein and Brett Levanto met with Sean Broderick/AirlineAftermarket (March 27).
Planning is underway for 2017 SLC on Oct. 18 and 19 in Washington, D.C. Theme is “engaging for effect”. Focus will be on new administration and building executive branch relationships for member companies, ARSA, and the industry.
Released “Part 145 – Soup to Nuts” intensive training.
Library of on-demand sessions now has 52 courses available.
While building new live schedule, team is developing training tracks for topic-specific certification and curriculum for potential “Certified Regulatory Expert” program.
Launched PartnerShip shipping program in conjunction with symposium.
Joined Remanufacturing Industries Council and working to design content for June 21 conference.
ARSA led a group of 16 industry representatives in drafting and submitting a legal interpretation request to confirm that the drug and alcohol testing requirements do not apply to individuals performing receiving functions.
ARSA led a group of nine industry representatives to request the FAA address the international issues created by the regulatory definition of “commercial parts.” The request is part of a seventeen-month effort by the association to mitigate problems related to aircraft parts documentation under the U.S.-EU Bilateral Aviation Safety Agreement (BASA).
ARSA collaborated with industry representatives and members to shape the agenda at the FAA’s Asia-Pacific Conference.
ARSA staff has been participating in the Aircraft Certification Service Transformation by leading bi-weekly meetings of the International Working Group and participating in the Accountability Framework Working Group. The working groups will continue to meet until a joint government-industry comprehensive strategic plan is developed.
ARSA has been coordinating with GAMA to address repair station surveillance during the ICAO Airworthiness Panel at the Maintenance Management Team meeting in September 2017.
ARSA continues to work on having a review of part 145 internal and external guidance assigned to the Aviation Rulemaking Advisory Committee (ARAC).
Launched aggressive campaign to (re)introduce ARSA to members of House and Senate aviation subcommittees and committee staff. Focusing on repair station economic and employment impact, structure of industry, importance of small business, international trade impact/BASA benefits, laying FAA reauthorization tripwires, and industry technical workforce needs.
Conducted and released results of study identifying states with most EASA approval holders to support lobbying in favor of BASAs.
Christian A. Klein submitted testimony to House Aviation Subcommittee for March 8 hearing on “State of the Aviation Industry in the 21st Century” and delivered to all House aviation subcommittee member offices.
Delivered new Oliver Wyman industry economic data to congressional offices.
Christian A. Klein conducted more than 20 individual meetings with subcommittee and member congressional offices in the first quarter. Focus first is on House aviation subcommittee Rs in order of seniority, House Ds is reverse order of seniority, Senate Rs and Ds in order of seniority.
Meetings with offices of Reps. LoBiondo (subcommittee chair), Duncan, Graves, Webster, Davis, Farenthold, Hunter, Young, Denham, Gibbs, Roskam, Hill, Rooney, Sessions, Sen. Inhofe, House aviation subcommittee (majority staff), House Small Business Committee (majority and minority staffs), Senate aviation subcommittee (majority and minority staffs).
Christian A. Klein attended meet and greet for new House Transportation & Infrastructure Committee members hosted by T&I Chairman Bill Shuster on Jan. 30.
Christian A. Klein and Brett Levanto participated in familiarization meeting with Beyond the Runway Coalition (airport infrastructure) (Feb. 9).
Christian A. Klein and Brett Levanto participated in Perkins Coalition kickoff meeting with House Education & Workforce Committee staff (Feb. 15).
Christian A. Klein presented at House Small Business Committee Democrats roundtable on industry policy priorities (Feb. 28).
(2) Complete a separate questionnaire for every recommendation, be sure to provide specific rationale.
(3) When you click the “DONE” button, the survey will automatically reload for another submission. Continue submitting recommendations as many times as needed.
On April 18, ARSA pressed the FAA to acknowledge a Feb. 3 request to resolve international regulatory issues associated with commercial parts and commercial off-the-shelf parts (COTS). These parts must be accompanied by an FAA Form 8130-3 or EASA Form 1 when used in work subject to the Maintenance Annex Guidance (MAG) despite there being no such requirement under 14 CFR.
The original letter, spearheaded by ARSA and signed by both industry interest groups and private businesses, is part of a now-19-month effort to mitigate problems related to aircraft parts documentation under the U.S.-EU Bilateral Aviation Safety Agreement (BASA). The commercial parts issue has become the most-recent example of American and European regulators failing to acknowledge the equivalency of each other’s system and as a result imposing paperwork requirements with no attendant safety benefit.
Failure to harmonize international aviation safety rules undermines the purpose of entering into bilateral aviation safety agreements. System differences must be negotiated to avoid untenable situations – like those being experienced with commercial parts – by certificate holders on both sides of the Atlantic.
Stay tuned as the association continues to press the issue. For more updates regarding the U.S.-EU MAG, visit arsa.org/mag.
Editor’s note: 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 FAA has a variety of Voluntary Disclosure Reporting Programs (VDRP). Each is slightly dissimilar covering different certificate holders and activities. Nevertheless, all are based on the principle that the carrot is stronger than the stick. In the FAA’s own words, aviation “safety is well served by incentives for [regulated entities] to identify and correct their own instances of noncompliance and to invest more resources in efforts to preclude their recurrence.” Advisory Circular 00-68B, Aircraft Certification Service Voluntary Disclosure Reporting Program, sec. 7 (Oct. 1, 2016). The FAA realizes that self-disclosure will foster safer operating practices and that information sharing will help regulated entities develop comprehensive internal evaluation programs. This in turn allows the agency to focus on more at-risk behaviors and certificate holders.
Given that airworthiness starts with the design and production, it’s not surprising that the Aircraft Certification Service (AIR) created a VDRP.
Organization Designation Authorization (ODA) Holders.
Failures to timely report failures, malfunctions, and defects as required by 14 C.F.R.
Failures by an ODA holder to report unsafe conditions as required by 14 C.F.R.
The FAA was promptly notified of the potential noncompliance.
The actions causing the potential noncompliance were inadvertent (i.e., not a purposeful choice).
The potential noncompliance does not indicate the certificate or approval holder lacks the qualifications necessary to hold its certificate or approval.
The submitter took immediate action to cease the conduct that resulted in the potential noncompliance.
The submitter has developed, or is in the process of developing, a corrective action plan (CAP).
The informal disclosure process is a streamlined way to report potential noncompliance and for investigating personnel to process the disclosure. Because of the streamlined nature of the informal process, only certain types of potential noncompliance are eligible for disclosure. These include quality escapes due to cosmetic flaws and non-systemic, low risk instances of potential violations.
To be able to take advantage this less burdensome process, the RE must execute an Informal Disclosure Agreement with the responsible office prior to making an informal disclosure. The agreement will outline the types of potential noncompliance activity that can be disclosed, the timeframe for making the disclosure (e.g., daily, weekly, quarterly), and the information that must be reported.
Should an RE disclose a potential noncompliance that is not eligible for disclosure under the agreed-upon informal agreement, the FAA will give the RE an opportunity to disclose under the terms of the formal VDRP process.
The formal VDRP is a six-stage process. So long as the basic eligibility requirements are satisfied (see above), the formal VDRP allows disclosure of potential systemic noncompliance, a potential noncompliance that poses more than a remote risk to safety, and quality escapes affecting the fit, form, or function of the article being designed or produced.
The RE must notify the office responsible for oversight, in writing (hard copy or email), within 24 hours of discovering the apparent discrepancy. Acceptance of notifications after the 24-hour deadline is entirely discretionary. Therefore, it is important to report potential noncompliance as soon as it is known. Should you exceed the reporting deadline, section 11.1.3 of Advisory Circular 00-68 outlines instances when discretion to accept untimely notifications can be applied.
Among other things, the initial notification must provide a brief description of the potential noncompliance and certify that it ceased after discovery. In addition, the submission must explain the immediate action taken to terminate the conduct causing the potential noncompliance and that evaluation of and/or implementation of a corrective action program is ongoing. Importantly, a written report must be submitted to the FAA within ten working days.
The FAA will review the initial notification and determine whether the potential noncompliance is eligible for disclosure under the formal VDRP process. If acceptable, a tracking number will be assigned and a written acknowledgment sent. In the event that the disclosure is ineligible under the formal VDRP, the FAA will follow Order 2150.3 to determine whether enforcement action is necessary.
It’s important to note that voluntarily reporting potential noncompliance and taking corrective action are viewed as mitigating factors when the FAA determines the appropriate course of action. See Order 2150.3, ch. 7, section 4(l)-(m). If the disclosure is rejected, it’s likely because the potential noncompliance is significant, puts safety at risk, or is a recurring problem. That means that the potential noncompliance is much more likely to be discovered during an FAA audit or reported to the FAA by another party. Therefore, being proactive and disclosing the potential violation can be the best option.
Within ten working days a written report detailing the actions taken since the anomaly was discovered, the CAP, and how the CAP will be implemented must be provided. Since some issues are more complex, additional time may be necessary to fully evaluate what caused the potential violation. In that instance, an overview of the CAP must be submitted within ten working days, and then a detailed description of the CAP within thirty calendar days.
The CAP must outline the planned short-term and long-term corrective actions, the responsibilities for implementing the corrective actions, a timeline for implementation, and self-audit procedures that ensure the CAP’s effectiveness. See Advisory Circular 00-68, section 11.3.6 for questions you should ask yourself when developing and comprehensive CAP.
The FAA will review the written report and the CAP and work with the submitter to ensure the cause(s) of the potential noncompliance is/was resolved. If the CAP is accepted, the FAA will notify the company that the disclosure is closed with no enforcement action taken unless there is a failure to implement the CAP. Failure to agree on a CAP will result in administrative or legal enforcement action. See Order 2150.3, ch. 5.
All the corrective actions outlined in the CAP must be completed and the FAA notified of that fact. A self-audit is to be accomplished that ensures the CAP was effective. If the CAP needs to be changed, changes must be submitted to the FAA for approval. Follow through is key because if the FAA determines that the CAP wasn’t followed, or something wasn’t documented in the CAP, the FAA will initiate legal enforcement action. Once the CAP is fully implemented, the FAA will verify its completion and notify the submitter of its satisfaction.
There’s a lot happening on Capitol Hill this spring. The air is abuzz, not just with D.C.’s notorious spring pollen, but also with talk of fixing, repealing or replacing Obamacare, tax reform, and national security issues. FAA reauthorization is also high on the agenda. The reauthorization debate poses some important opportunities – but also significant risks – for repair stations.
Authorization for the FAA is set to expire on Sept. 30. The goal for the current Congress is to enact a new, multi-year budget blueprint for the agency to provide more long-term certainty about FAA resources and priorities.
The starting point for reauthorization is the FAA bill reported by the House Transportation & Infrastructure Committee during the last Congress. The legislation is generally positive. It contains provisions aimed at greater consistency in FAA regulatory interpretation, making greater use of organization delegation authorization (ODA), improving the certification process, and promoting international acceptance of FAA certifications and approvals.
The process is well underway. The House and Senate aviation subcommittees have started holding hearings, engaging stakeholders, and drafting proposals. There’s talk that FAA legislation may start moving as soon as late May or early June. There are some difficult issues lawmakers need to resolve (e.g., whether or not to privatize air traffic control), but with the clock ticking towards the Sept. 30 deadline there’s a strong incentive for Congress to move quickly.
Our primary objective has been to raise the industry’s visibility and make sure lawmakers and staff are aware of the aviation maintenance industry’s contributions to the economy, airline efficiency, and aviation safety. At our meetings, we’ve told the story of growing, high-tech, small business-dominated industry that employs more than 200,000 people, contributes more than $40 billion to the U.S. economy, is serving international customers at facilities around the country, and has a positive balance of trade. We’ve also discussed the industry’s skilled worker shortage and found policymakers interested in doing something to address it as part of reauthorization. However, in our conversations we’ve also picked up rumblings about a potential new ban on foreign – and even potentially domestic – repair stations.
The problem isn’t our industry or even the FAA; it’s the law. Recent FAA authorization laws have directed the agency to undertake rulemakings to extend drug and alcohol testing to foreign repair stations and require pre-employment background investigations for all repair station employees performing safety-sensitive functions on air carrier aircraft. The FAA hasn’t made significant progress in either area primarily because drug and alcohol testing should be handled by ICAO (it’s currently a Recommended Practice rather than a required Standard). Additionally, TSA rules already require criminal background checks for those with unescorted access to designated security areas as well as previous employment checks for those responsible for implementing repair station security measures. The absence of FAA rulemaking action has led some to suggest that Congress should impose a new ban on foreign – and potentially domestic – repair station certificates until the FAA completes its rulemakings.
If you think this sounds familiar, you’re right. In 2003, Congress enacted VISION 100, which included a provision requiring the Transportation Security Administration (TSA) to issue repair station security rules by August 2004 and to audit for compliance with the regulations within 18 months. The agency failed to meet its deadline. In 2007, lawmakers approved the Implementing Recommendations of the 9/11 Commission Act. The legislation again mandated TSA to finalize repair station security rules but also demanded the regulations be completed by August 3, 2008. If not, the FAA would be prohibited from issuing new foreign repair station certificates. When TSA missed the deadline, in large part because the agency was focusing on other, real threats to transportation security, the ban took effect.
ARSA had long argued that the repair station security rules were a problem in search of a solution. The rules were not based on demonstrated risk, but on a desire by some in Congress to cast repair stations in a negative light and drive up costs to make our members less competitive. The ban put ARSA in a difficult position of having to urge Congress to put pressure on TSA to issue rules that we thought were unnecessary to begin with. After the ban had been in place for almost five years, TSA finally issued the rules in 2013 and the ban was lifted. However, in the meantime it caused chaos for companies seeking to open repair stations outside the United States and raised the specter of retaliation against U.S. facilities with foreign certificates and approvals.
In our meetings with policymakers about the current FAA reauthorization we’re sending a simple message: Don’t punish industry because the FAA hasn’t moved as quickly as Congress directed.
To be fair to the FAA, crafting D&A rules for foreign repair stations is no easy task. ARSA was able to convince Congress to modify the legislation mandating the D&A rules so that testing programs would be consistent with the laws of the country in which the repair station is located. (That’s why dealing with this controversial subject through ICAO makes the most sense.) Those modifications to the legislation were important because requiring D&A testing would have presented enormous practical challenges (e.g., flying samples to be tested at U.S. labs). Also, because some countries’ laws prohibit or limit random drug testing, a one-size-fits-all D&A testing requirement would have effectively forced repair stations in those countries to hand in their certificates. Some of the challenges and issues the FAA is considering in the D&A rulemaking were laid out in the agency’s advanced notice of proposed rulemaking on the subject issued in 2014. Since issuing the ANPRM, the FAA has not taken any further action.
ARSA recognizes that Congress wants the FAA to issue the rules; however, the association is telling lawmakers it would be an enormous mistake to punish industry because the FAA hasn’t yet done so. We’ve made the point that much of the growth in the aviation sector in the coming years will be overseas. Many U.S. companies operate foreign repair stations and plan to open more to serve customers in areas (particularly Asia) where the aviation sector is growing. Banning new certifications would hamstring the ability of U.S. companies to tap into those markets and provide aftermarket support for U.S. aircraft sold overseas.
A ban on new foreign certificates would also have practical consequences for U.S. airlines. Because U.S.-registered aircraft and related components need to be maintained by a facility or person approved by the FAA, fewer foreign repair stations makes it harder for U.S. carriers to operate internationally.
Then there’s the risk of retaliation against U.S. industry. The U.S. maintenance sector has a positive balance of trade (i.e., more work comes into the United States from foreign customers than U.S. air carriers send overseas). For example, more than 1,400 U.S. facilities are approved by the European Aviation Safety Agency to work on European-registered aircraft and related components. Banning new foreign repair stations could lead the European Union, China, and others to restrict new certifications and approvals in the United States.
But the risk isn’t just to foreign repair stations and U.S. facilities serving international customers; at least one congressional staffer has hinted a ban could even extend to new domestic certifications as well. That would be a disaster for our growing, thriving industry and the hundreds of thousands of Americans working in it.
There’s a saying that those who don’t learn the lessons of history are doomed to repeat them. In the past, the aviation maintenance industry hasn’t stepped up as aggressively as it should when Congress has threated repair stations. The risks in the current reauthorization only underscore the importance of ARSA’s advocacy and your engagement. Ultimately, whether we win or lose will be a function of our members’ willingness to get involved and support the association’s work.
There are many things you can do to help: contacting Congress, hosting a lawmaker at your facility, and getting more involved in ARSA’s political program. If you want to be part of our advocacy on your behalf, shoot me an email at christian.klein@arsa.org and let’s talk about all the ways to get more engaged.
In late April, the tax policy debate in the nation’s capital took another small step forward as the Trump administration unveiled the president’s reform objectives. While short on details, the proposal provides some guidance on where President Trump wants the debate to end up.
Based on briefings by administration officials and an outline released by the White House, the president wants to lower taxes and simplify the code for individuals by reducing the current seven tax brackets to three: 10, 25 and 35 percent, doubling the standard deduction so that a married couple won’t pay any taxes on their first $24,000 of income and providing additional tax benefits for families with child and dependent-care expenses.
For individuals, the president’s proposal would also repeal the estate and alternative minimum taxes, as well as the 3.8 percent Obamacare tax on passive income. The top tax rate on capital gains and dividends would be reduced to 20 percent. However, the administration is also proposing to eliminate all deductions other than those for mortgage interest, charitable donations and 401k contributions.
“[W]e are working with the House and Senate on all the details. And this is – everybody has an agreement we are going to move this as fast as we can. And when we have an agreement we will release the details and go through it with all of you,” Treasury Secretary Steve Mnuchin said.
Unlike other recent Republican tax proposals, the president’s plan isn’t deficit neutral. The Committee for a Responsible Federal Budget estimated it would add between $3 trillion and $7 trillion to the national debt over the next ten years. Budget neutrality is an important issue because Republicans hope to use the budget reconciliation process to move tax legislation through Congress. That allows a lower vote threshold in the Senate (reconciliation legislation is privileged and not subject to the filibuster), but to qualify, the bill can’t have negative budget impact beyond a ten-year window.
What Does It Mean for ARSA?
The U.S. aviation maintenance industry is dominated by small to medium-sized businesses overburdened by a complex and inefficient tax code. The Trump administration’s reform goals apparently share ARSA’s priority for both corporate and pass-through entities. Without all the details, the proposal is a bit of a mixed bag with regards to business incentives and capital investment and leaves unanswered international questions.
If you have questions or what to share input with the association as the debate progresses, contact Christian A. Klein (christian.klein@arsa.org).
The directive is an attempt to close loop holes in the H-1B visa program, which is meant to bring highly-skilled workers into the U.S. According to the White House, companies frequently abuse the program and bring in low skilled labor to replace American workers. The executive order directs federal agencies to strictly enforce the Immigration and Nationality Act and the requirements of the H-1B visa program.
According to a February 2017 report by the Government Accountability Office, the U.S. awards government contracts to foreign-owned companies at an increasing rate; however, foreign governments have not been so generous to American-owned companies. For example, in 2010, the last year for which data is available, the U.S. government awarded $837 billion to foreign corporations, while American-owned companies only received $381 from the United States’ five largest trading partners. To offset this imbalance, the executive order sets out procurement preference policies and directs federal agencies to require contactors to use goods, products, and materials produced in the United States.
This executive order will have limited effect on the aviation maintenance industry because it is directed at the government’s procurement practices. It does not apply to non-government entities and it will not affect any of the FAA’s certification or oversight activities. Even if your company does business with the U.S. government, aviation components and materials are governed by the military specifications and often FAA’s design and production rules. The executive order does nothing to change that.
While there may be a lot of fuss in the media about the Buy American Hire American presidential missive, it is directed more at infrastructure projects that the aviation industry.
On April 6, ARSA’s Managing Director and General Counsel Marshall S. Filler and Regulatory Affairs Director Ryan Poteet attended the second joint government-industry meeting, hosted by MITRE, to discuss the progress of the Aircraft Certification Service (AIR) Transformation.
The meeting brought together the initiative’s working groups – each tasked with evaluating and plotting steps to achieve certain transformation process objectives – to report back on their efforts so far. The key takeaway from these briefings was the complexity and interdependence of each aspect of the aviation regulatory system; overhauling AIR cannot be accomplished in a vacuum and the groups’ goal is to make the transition seamless.
Training needs were key to the deficiencies noted during the meeting. The process will fail if an independently-conceived, utopian framework for AIR is fumbled in execution through lack of information. The agency’s goal, through its industry partners, is to prevent poor follow through and currently aims to have a draft comprehensive strategic plan by September. Implementation will follow shortly thereafter.
Stay tuned to ARSA as the association and its industry allies help the FAA through the details.
On April 7, the FAA hosted the 4th Annual Global Leadership Meeting at Gallaudet University. The conference consisted of two panels: regional directors providing observations on recent trends and industry representatives sharing insights into the struggles facing certificate holders.
Discussions included Brexit and the proliferation of open skies legislation as well as cyber security, the pace of technological innovation and lagging regulatory systems. While none of these issues would be solved in a single meeting, one thing was clear: Maintaining open lines of communication and engaging regulators is key future growth and success.
Lex den Herder, International Operator’s Committee Member, National Business Aviation Association (NBAA) and Vice President, Government and Industry Affairs, Universal Weather and Aviation Inc.
There is no website or publicly-available resource for the conference, for more information contact ARSA.
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.
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.
Additive Manufacturing – Does it Fit into the Regulations?
Additive manufacturing, or 3-D printing, continues to gain popularity as a method for producing aircraft parts. Stratasys, a 3-D printing company, recently revealed they are producing more than 1,000 parts for the Airbus A350 using a resin-based additive manufacturing technique. While it seems like an exciting new technique in aviation, it has been around for decades (I wrote an article about its potential in aviation manufacturing almost ten years ago).
While many are thrilled at the potential to 3-D print aircraft parts, there are concerns over compliance challenges posed by this fabrication method. The industry seems to have sound and reasonable solutions rooted in the existing aviation rules.
The best way to think of additive manufacturing is it’s “just another production technology.” This seems frightening – many people want to reinvent the regulatory wheel – but the FAA’s regulatory system is quite robust and can handle the challenges posed by this “new” production tool.
For example, the FAA has identified materials as a challenge facing widespread production. FAA-approved designs require specific materials that meet exacting standards. With additive manufacturing, a key issue is uniformity from supplier companies – these otherwise non-aviation businesses may not be using the sort of quality assurance that is expected in the aviation industry.
But 3-D printing companies have developed production standards and have linked them to testing standards (e.g. ASTM, UL, Mil Spec, 14 CFR). These have made products used in additive manufacturing more consistent and provide a foundation upon which to build robust production quality systems.
The quality system rules (14 CFR § 21.137) require a manufacturer to adopt written procedures for supplier control. Standard supplier control mechanisms like auditing, independent testing and data management can be applied to ensure raw materials meet expected standards (e.g., physical properties like constituent content and grain size, which lead to mechanical properties like tensile, flexural and compressive strengths as well as thermal properties). If you can’t control the supplier, then you can’t meet the regulatory requirements for a production approval – and this applies whether you are cutting bar stock or using additive manufacturing.
Software is another challenge. There is control software for the 3-D printers, and that is supplemented by software procedures for the specific unit being fabricated. Units are typically designed in a computer-aided environment using a number of software tools.
Software has long been an integral part of the design and production process and is used for other types of manufacturing equipment like a CNC lathe (which must be programmed with the coordinates for its operations). As with any software, rigorous testing is necessary to validate it, and the FAA and industry have developed guidance in this area as well.
The advantages of additive manufacturing make it worth your time to figure out how the regulations can support the practice. Some traditional mechanisms for production involve removing material (for example, punching holes) that produces wasteful scrap. In 3-D printing, the unit is built with little or no wasted material. Similarly, the system can be programmed to handle unusual geometries or create hollow parts.
The FAA’s manufacturing regulations provide a good set of compliance guidance, but what if you want to produce under a repair station’s authority? This is permitted by 14 CFR § 21.9(a)), which allows repair stations to fabricate articles in support of repairs and alterations. In such a case, an important regulatory standard is found in 14 CFR § 43.13, which requires that the methods used must be acceptable to the administrator and must return the product to its original (or properly altered) condition.
Additive manufacturing is too new a technology to be featured in Advisory Circular 43.13-1, “Acceptable Methods Techniques and Practices” but a repair station will still need to identify a mechanism for demonstrating compliance to 14 CFR § 43.13. Using the manufacturing rule found in 14 CFR § 21.137 as a baseline for establishing a production quality assurance system is a sound approach that is consistent with the FAA’s recommendations in Advisory Circular 43.18, “Fabrication of Aircraft Parts by Maintenance Personnel.” The FAA has also published National Policy N 8900.391, entitled Additive Manufacturing in Maintenance, Preventive Maintenance and Alteration of Aircraft, Aircraft Engines, Propellers and Appliances.
Like any other manufacturing technology, you have to think about how additive manufacturing fits into the regulatory scheme before you use it to produce aircraft parts. But if you examine the existing regulations and guidance, it is quite possible to develop a robust quality system that adequately reflects regulatory needs for quality assurance.
Additive manufacturing isn’t yet ready to produce every aircraft part needed by a repair station on an on-demand basis, but it can replace a useful manufacturing technology for creating parts where the user is willing to develop control methods using traditional quality assurance requirements.
Jason Dickstein is a Washington, DC-based aviation attorney who represents manufacturers, air carriers, repair stations and aircraft parts distributors. He advises aviation companies on legal issues surrounding maintenance, manufacturing, quality assurance and the movement of aircraft and their parts. He served as associate counsel for ARSA in the 1990s, and still works cooperatively with ARSA staff on issues affecting the industry.
Join Executive Director Sarah MacLeod for a three-session training series covering part 145. Make sure you know what the regulation governing repair stations really says about your business.
Real world implications of aviation safety requirements.
Housing, facility and equipment requirements in aviation safety regulations.
Maintenance personnel requirements in aviation safety regulations.
Test your knowledge of 14 CFR § 43.13(b)-(c) – Performance rules (general).
Click here to download the training sheet.
On April 24, Vice President of Communications Brett Levanto stopped in Orlando for a discussion with Aviation Week’s Commercial Aviation Forecast Advisory Board. At the meeting, held at the Orange County Convention Center during the run-up to MRO Americas, Levanto briefed board members on the legislative, regulatory and operational issues that must be faced by the repair station community.
(2) Legislative efforts to curb the powers of the executive branch (i.e., regulators).
(3) The fresh debate on reauthorizing the FAA.
(4) Efforts to mandate drug & alcohol testing requirements at “foreign” repair stations.
(5) The role of ARAC in regulatory reform.
(6) Aligning bilateral agreements in pursuit of true – and elusive – reciprocal acceptance.
(7) Safety and compliance-focused initiatives from global regulators.
(9) The regulatory impacts of new technologies.
(10) The aviation workforce crisis.
Levanto also explored the exhibition floor as static displays were finished. In every corner of the space, the association’s members and allies were well represented. If walking the floor at MRO is a proxy for traveling the maintenance world, then ARSA is always among friends…these organizations carry the flag on behalf of all members as the association works for them.
To get the MRO Americas experience from anywhere, follow @AvWeekEvents and @MRONetwork on twitter and search the hashtag #MROAM.
The 2017 Aerospace Maintenance Competition is once again co-located (and well located, on the main exhibition floor) with MRO Americas. For more information and to access the live stream, visit: www.aerospacecompetition.com.
ARSA members and allies can be found on every corner of the MRO Americas exhibition floor.
You’ve already seen the report from ARSA’s survey team (haven’t read it yet? Jump to the top of the hotline and catch up.). Before jumping into that deeper analysis, the association saw immediate trends related to workforce and employment data. In this series of infographics, survey response data is presented alongside information from the 2017 Global Fleet & MRO Market Assessment provided by Oliver Wyman.
Click the images below to view and download. When the full image appears right-click and select “save image as” to create a copy. You may also access the online, interactive version of the image by clicking the appropriate link.
For years, the maintenance community has faced recruitment headwinds. According to ARSA’s recently-completed member survey, the vast majority of respondents have difficulty finding technical talent – one of the two biggest perceived risks for the industry this year. It is challenging to attract qualified applicants, so it’s important to consider what happens once they’re actually in the door.
Answer this quick question for ARSA: How long does it take for you to turn new hires into productive technicians? Use the embedded survey below to submit your answer (in months) by either moving the sliders or typing your answers directly into the text boxes, then clicking the “done” button.
You do not have to provide an answer to both questions to submit a response. If you have questions or want to provide additional information, contact Brett Levanto (brett.levanto@arsa.org).
Take advantage of these great opportunities today to showcase your company, a new product or event. For more information go to arsa.org/advertise.
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, including sponsorship of the Strategic Leadership Conference in October (click here for info), contact Vice President of Communications Brett Levanto (brett.levanto@arsa.org).
Q: My company has part 145 repair station certificates in Europe. Last summer, President Obama signed a bill funding the FAA through September 2017. That law contained provisions mandating the FAA require drug and alcohol testing for foreign repair stations within one year. It’s almost been a year; do I need to start a drug and alcohol program?
On July 15, 2016, the President Obama signed into law the FAA Extension, Safety, and Security Act of 2016 to fund the FAA through September 2017. The extension bill included a number of policy riders aimed at the aviation maintenance industry, including the foreign D&A testing requirement.
Importantly, these policy riders were directed at the FAA and not industry. Congress directed the FAA to issue a notice of proposed rulemaking within 90 days of the enactment of the extension and to issue a final rule within one year. Since the extension passed, the FAA has not taken any steps towards issuing a foreign D&A testing rule. Until a final rule is issued, no action is required by the industry.
You may recall, however, that this is not the first-time Congress has attempted to micromanage the FAA. Back in 2012 Congress passed its most-recent full reauthorization of the FAA, which included a similar foreign D&A testing requirement. The FAA was faced with a multiplicity of logistical issues so it issued an Advanced Notice of Proposed Rulemaking (ANPRM) in May 2014. Since the ANPRM, the FAA has not moved forward with a proposed rule.
The FAA’s continued failure to promulgate a foreign D&A testing rule has frustrated Congress and is the reason the testing requirement and a deadline for action was included in the last extension bill. As Congress begins to debate the next FAA appropriations bill, the foreign D&A issue highlights the need for industry’s voice to be heard. Micromanaging the agency and imposing arbitrary regulatory requirements without any attendant benefit to aviation safety must be avoided. We have the safest aviation system in the world for a reason. When the focus of legislation turns from aviation safety to what sounds good on the nightly news, the result is more red tape, increased costs of running a business and fewer jobs.
Stay tuned as ARSA covers the reauthorization debate. Click here to learn more about hot to get involved and let your voice be heard.
Have a question for ARSA? Click here to let us hear it.

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