Future Challenges for PMASeptember 30th, 2009

Rick StineSVP Technical Operation

HEICO Aerospace

Agenda

PMA Past – A Look Back

PMA Present – Setting the Stage

PMA Future – New Challenges

ConclusionAcceptance

Commercial/Competitive

Technical

Closing Comments

PMA Past – A Look Back

• Most PMA and DER development was on simpler less complex products

• Rotating part alternatives just starting to emerge in the marketplace

• Leasing companies not addressing alternative materials

• OEM mostly on the sideline with sporadic inputs

• PMA acceptance and legitimacy was always a topic of discussion at every conference

PMA was just becoming a mainstream activity

The The AmericasAmericas

19971997

Asia & Asia & AustraliaAustralia

19971997

Europe, Europe, Middle East Middle East and Africaand Africa

19971997

76%76% 20%20% 4%4%

The The AmericasAmericas

20082008

Europe, Europe, Middle East Middle East and Africa and Africa

20082008

Asia & Asia & AustraliaAustralia

20082008

PMA Past – A Look Back

Agenda

PMA Past – A Look Back

PMA Present – Setting the Stage

PMA Future – New Challenges

ConclusionAcceptance

Commercial/Competitive

Technical

Closing Comments

PMA Present – Setting the Stage

• 19 of the worlds largest airlines fly HEICO parts

• Many Lease companies are now open to discussions regarding PMA

• Airlines are starting to expect more from their PMA providers then just a good price

• 4 or 5 major airlines are now driving the direction of PMA development

• The Legitimacy debate of PMA is finally over!

PMA Present – A Wide Range of Product is Now Available

Cockpit/Avionics•INUs, IRUs•Display Units•DGAs•Instruments•Autopilots•Radomes•Nose Cowl •Battery Packs•Cockpit Paper

Landing Gear•Wheels and Brakes•Landing Gear

Wing•Flight Controls•Actuation Systems•Guides

Components•Electro-Mechanical•Hydraulic Pumps•ACMs, CSD/IDG•Batteries•APUs

Fuselage/Interiors•In Flight Entertainment•Lavatories•Seat Parts•Tray Tables•Galleys•Overhead Bins

Engines•CFM56•CF6•CF34•PW2000•PW4000•V2500•JT8D•JT8D•LM2500/500/600

Engines•Combustion Chambers•Blades & Vanes•Fan Exit Guide Vanes•Shrouds (single crystal & equiax)•Thrust Reversers•Acoustic Panels•Pneumatic/Bleed/Anti Ice Valves•Heat Shields•Insulation Blankets

Engines•Fuel Pumps•Nozzles•Gears•Shafts•Bearings•Starters•Rings•Spacers•Expendables

PMA Present – PMA Usage and Effect on Safety

• ICA Restrictions• False & Misleading Statements

- Advertisements - Technical Presentations

• Customer Notifications- AOW’s (All Operators Wire), Service Letters, Warnings- Threats of Reduced Tech Support- Threats of Warranty Denial

• CFMI TRUEngineTM Designation

PMA Present – OEM Strategies

OEM (TC/PC Holder)• TC/PC holders removing repairs from ICAs• TC/PC holders putting restrictive statements about non TC/PC holder

parts and repairs in ICAs• OEM Stating ICAs are not valid with non TC/PC holder FAA

approved partsFAA• Such ICA statements are not acceptable to the FAA• FAA Rules permits/requires use of OEM ICA for assessment as part

of the application and approval process; and in performing maintenance

• FAA will not accept OEM ICAs that include restrictions that conflict with regulations

PMA Present – OEM Strategies – ICA Restrictions

Many times claims have no factual basis

PMA Present – OEM Strategies – False & Misleading Statements

• MARPA & ATA sent letter to CFMI 6/24/08Key Points of letter:- Making statements about the integrity and airworthiness of FAA

approved non-CFM alternative parts- Undermining public confidence in FAA Approval process While FAA observes:- “such misleading and inflammatory statements do a grave

disservice to the U.S. Aviation industry and the FAA”- TCH not always reporting known service difficulties in a timely

fashion- TCH not always objectively investigating service events nor

accurately presenting facts when aftermarket parts are involvedNote:- Advertisement in question and cited technical presentations have

not appeared in marketplace recently- Perhaps resulting from specific FAA RAFT study and/or the

MARPA/ATA letter

PMA Present – OEM Strategies – False & Misleading Statements

Both EASA and the FAA have made bold moves in support of PMA

*Aircraft Technology: Issue 96, Oct-Nov 2008

EASA Decision ED/2007/003/C

FAA SAIB NE-08-40

FAA RAF Study

PMA Present – Market Reactions

SAIB Overriding theme

• FAA approved TC/PC holder, PMA & STC parts are interchangeable

• Unless stated otherwise, the life limit for a TC/PC disk is unchanged and remains in effect when PMA blades are installed in that disk

• Applicants are required to assess the ICA and show that the products ICA are still valid with their part installed

• TC/PC, PMA and STC holders are responsible for the COS support for their parts and products which they have designed and produced

PMA Present – Market Reactions – SAIB

Economic issues• TC/PC Holders Fighting for share of the same market they criticize

and lobby for regulation and policy changes in their favor• TC/PC Holders have acquired independent companies that hold

PMA’s. Once a TC/PC Holder acquires the aftermarket Company, the parts they previously complained about suddenly become acceptable

Safety & Compliance• Population of PMA parts….has increased substantially …yet the

occurrence of service difficulties and AD’s have not….• When responding to TC/PC requests for complete certification

testing for certain aftermarket parts…, FAA experience does not support this change and there is no substantive part failure event, or safety data to warrant such a change

• FAA Concludes “No Difference” in airworthiness of parts from Alternate means

PMA Present – Market Reactions – RAFT Study

Agenda

PMA Past – A Look Back

PMA Present – Setting the Stage

PMA Future – New Challenges

ConclusionAcceptance

Commercial/Competitive

Technical

Closing Comments

PMA Future

• Airlines, under the pressure of economic conditions will be moreopen but will continue to want more from their alternative partssupplier

• Leasing companies will need to decide on level of commitment to alternative parts

• OEM will raise the bar on competitive strategies

• New Policies, Orders, and Advisory Circulars will assist alternative parts suppliers in developing, managing, and supporting their product line

• MARPA and other trade organizations will continue to work with the FAA on additional guidance material and safety initiatives

Support Systems

Financial Strength Engineering

Critical Mass

Customers want a Supplier that has all the pieces

PMA Future – Airline’s PMA Supplier Requirements

There is no known restriction of the use of PMA throughout the world

The availability of different types of PMAcontinues to expand every year

As cost pressures increase so willthe airlines willingness to review alternatives

PMA will be a mainstream activity for every major airline

PMA Future – Acceptance

With future savings up to 1M per event leases that do not allowPMA will become unattractive

In 2010 we will continue to see OEMexpansion into PMA

More airlines will embrace PMA as the product line diversifies

PMA companies will need to providethe services and support offered by themajor OEMs in order to survive

PMA Future – Who Make’s the First Move

• ICA Restrictions- Continue to push for the restricted use of ICA- Continue to remove technical information

• Use of Legal System- GTA to access data- Patent strategy

• Customer Notifications- Continue to issue AOW’s (All Operators Wire), Service

Letters, Warnings- New Warnings of Reduced Tech Support based on product

configuration- Statements of Warranty Denial

PMA Future – OEM Strategies

PMA Future – OEM Strategies

OEM drawing a line in the sand with these statements

8110.42C Organization Designation Authorization (ODA) Overview

• Authorizes qualified organizations to act on behalf of the FAA through a comprehensive and systematic approach

• Creates approval efficiencies as more functions can be delegated by the FAA

• Functions include:1. Issuing PMA Supplement by Test & Computation2. Issuing PMA Supplement by STC/Licensing3. Issuing Airworthiness Approvals (as done now)

PMA Future – Policies, Orders, and AC’s

New Advisory Circulars will have the following:

• guidance for PMA of turbine engine and auxiliary power unit parts under test and computation (T&C) method

• Supports the regulatory requirements and the design approval processes defined by PMA Order 8110.42C

• Details T&C under both comparative and general test and analysis

• Outlines reverse engineering considerations• Includes Part Categorization, Select design templates

and COS guidance (which is the MARPA document)

PMA Future – Policies, Orders, and AC’s

New Advisory Circulars include:

• 33.83-1 Comparative Method to Show Equivalent Vibratory Stresses and High Cycle Fatigue Capability for Parts Manufacturer Approval of Turbine Engine and Auxiliary Power Unit Parts– This AC describes a comparative test and analysis method that may

be used for turbine engine or auxiliary power unit (APU) blades or vanes when produced under PMA. PMA applicants may use this comparative modal and high-cycle fatigue (HCF) method to show the vibratory stresses and HCF capability of their proposed blades or vanes are equivalent to those of the type design parts. This method supports showing that the engine or APU still complies with part 33 of Title 14 of the Code of Federal Regulations (14 CFR part 33) or Technical Standard Order (TSO) C77. (Issued 9-8-09)

PMA Future – Policies, Orders, and AC’s

New Advisory Circulars include:

• 33-8 Guidance for Parts Manufacturer Approval of Turbine Engine and Auxiliary Power Unit Parts under Test and Computation– This AC provides guidance for developing substantiation data to

support the design approval of critical and complex turbine engine and APU parts produced under PMA. This guidance is for the comparative test and analysis method used to show compliance to the airworthiness requirements under test and computation, per §21.303 of Title 14 of the Code of Federal Regulations(14 CFR). This method supports showing the engine or APU still complies with 14CFR part 33 and Technical Standard Order (TSO) C77.

– Additionally, this AC provides information on developing a COS plan and part numbering for turbine engine parts. (Issued 8-19-09)

PMA Future – Policies, Orders, and AC’s

New Advisory Circulars include:

• 33.87-2 Comparative Endurance Test Method to Show Durability for Parts Manufacturer Approval of Turbine Engine and Auxiliary Power Unit Parts– Comparative Endurance Test Method to Show Durability for Parts

Manufacturer Approval of Turbine Engine and Auxiliary Power UnitParts (Issued 6-25-09)

• Future Advisory material will include:– Materials– Sample Size and Statistics

PMA Future – Policies, Orders, and AC’s

MARPA must continue to support the technical and safety considerations of the FAA when drafting these types of

materials

ICAO Standardization Annex 6:

• From January 1 2009, States shall require, as part of their safety program, that a maintenance organization implement a safety management system (SMS) acceptable to the State that, as a minimum:

– Identifies safety hazards

– Ensures that remedial action necessary to maintain an acceptablelevel of safety is implemented

– Provides for continuous monitoring and regular assessment of thesafety level achieved

– Aims to make continuous improvement to the overall level of safety

• Currently, there are no FAA authorized procedures to accept or approve SMS’s (guidance material includes Order 1110.152 -SMS, AC120-92, Order 8000.369 & VS8000.367)

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PMA Future – SMS integration

FAA – SMS Framework

• Safety Policy – sets the organizational infrastructure, safety performance goals, and commitment

• Safety Promotion – Communicates, trains, and encourages collaboration for managing safety with employees and customers

• Safety Risk Management – People, Process, and tools that manage safety and look for and mitigate hazards

• Safety Assurance – Oversees, Analyzes, and corrects the performance of the SMS to Assure safety goals are achieved

• Advanced Notice of Proposed Rulemaking– Initial solicitation for information comment from public– No proposed rulemaking language– Request for Comments has been issued (due October 21st)

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PMA Future – SMS integration

SMS:• Must develop a single SMS standard• Formal, holistic, top-down, business like approach to

managing safety risk• Includes integrated and systematic procedures, practices

and policies• Combines quality control and quality management

techniques with risk management to improve safety• SMS is both backwards (forensic) and forward (prognostic)

looking• COS to be part of your SMS

– Closed loop system includes prevention, part performance (monitoring), risk assessment and corrective action

– COS is a backwards (evaluation, research) and forward (prediction, FMEA) looking

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PMA Future – SMS integration

Agenda

PMA Past – A Look Back

PMA Present – Setting the Stage

PMA Future – New Challenges

ConclusionAcceptance

Commercial/Competitive

Technical

Closing Comments

Future Challenges – Closing Comments

• PMA’s use and breadth is growing and are accepted in all jurisdictions around the world

• OEM’s will continue to face and fight growing aftermarket competition while making claims concerning alternative product

• OEM’s will use legal means to continue to restrict the use of ICA data and limit competition through the use of Patents

• Airlines need to drive leasing companies to accept PMA’s to produce savings

• FAA guidance material will provide increased technical assistance to PMA applicants as well as official FAA policy clarifying COS responsibilities