ASA Praises FAA as 3000 Employees Return to Work, Despite Shutdown

The FAA is bringing almost three thousand more inspectors to work during the partial government shutdown.

Numerous organizations have raised concerns about the aviation safety effects of the funding lapse; ASA joined with several other trade associations to send a joint letter to Congress and the White house expressing our concerns.

The Department of Transportation had previously published a shutdown plan that called for the FAA to retain 27,138 unpaid workers and to furlough 17,791 (FAA has a total of 44,929 employees).  Only 216 of those employees were from the Office of Aviation Safety.  The new plan increases this number of personnel to 3113 – so the FAA will recall an additional 2897 employees to work within the Office of Aviation Safety.

The returning staff are expected to be back at work by Friday, January 18th.  This should include many of the Flight Standards Service inspector staff.  Some designated airworthiness representatives holding flight standards privileges (DAR-Ts) have expressed concerns over renewal of their privileges.  This ought to return personnel who can renew those privileges.  But it is uncertain whether appropriate aircraft certification personnel will return and be able to renew DAR-F privileges.

These employees will work without pay until the lapse in funding has ended (but their back-pay has been guaranteed by a bi-partisan bill in Congress, pending the President’s signature on the back-pay bill). Although ASA empathizes with the staff whose pay will be delayed (possibly for a long time), ASA is also proud of the dedication being shown by those who return to their jobs to protect safety.

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Government-Sourced Parts: Why Do We Care?

We are periodically asked about parts that have been sourced from “government” aircraft.  The concern is raised because standard industry documentation frequently recommend certifications about government sourcing (or lack thereof).  This can cause confusion, sometimes, about what represents a government source and what does not.

The root cause for this disclosure is a recognition that most aircraft are maintained to common civil standards in accordance with ICAO standards, but that the ICAO civil aircraft maintenance standards do not apply to public use aircraft.  E.g. Maintaining Public AircraftFAA Advisory Circular 91.91 § 1.3 (Oct. 19, 2016) (explaining that the FAA has no statutory authority to regulate public aircraft, and the government operator therefore remains responsible for ensuring adequacy of maintenance).

Consequently, used aircraft parts that have been removed from public aircraft might not have been maintained according to the standards that are commonly used for civil aviation maintenance.

 

What is a Public Aircraft?

 

U.S. law defines a public aircraft as an aircraft used exclusively for United States Government purposes, or state government purposes.  The definition includes any aircraft exclusively leased by the government of a state or U.S. territory for at least 90 continuous days and an aircraft owned or operated by the armed forces or chartered to provide transportation or other commercial air service to the armed forces.  49 U.S.C. § 40102(a)(41).  The reason that the aircraft parts community cares about public aircraft is because public aircraft do not need to be maintained to the same standards as civil aircraft.

 

What Has the FAA Recommended About Parts from Public Aircraft?

 

Because parts from public aircraft may not have been maintained to normal civil standards, the FAA has expressed concerns over them.  It is not illegal to use them, but the FAA wants their nature disclosed, so that an installer can ensure airworthiness at the time of installation (or an overhauler can ensure airworthiness at the time of overhaul).

The FAA has recommended that where a part was obtained from a non-certificated aircraft, including a public aircraft, then that fact should be so-identified by some type of documentation. Eligibility, Quality, and Identification of Aeronautical Replacement Parts, FAA Advisory Circular 20-62E, chg 1, § 10(c)(1) (Sept. 14, 2018).

 

Industry Standards for Parts from Public Use Aircraft

 

The FAA’s recommendation in AC 20-62E has been implemented through certain industry standards – most notably ASA-100.  ASA-100 recommends that the seller provide a statement disclosing whether the aircraft parts were “previously installed in a public aircraft, such as a government use aircraft or a military aircraft.”  Aviation Suppliers Association Quality System Standard, ASA-100 § 10(b)(2) (rev. 4.0).

In similar language, ATA Specification 106 recommends that used aircraft parts obtained from non-certificated aircraft be disclosed , unless the part is already accompanied by an 8130-3 that was completed as an approval for return to service.  The guidance provides examples of the sort of sources that should be disclosed, including “public use, non-U.S., and military surplus aircraft.

 

Mitigating Factor

 

A mitigating factor in all of this is that today, many public aircraft in the United States are operated and maintained as if they civil aircraft.  Through the 1980s, the United States has begun to recognize that they were not receiving adequate value on aircraft and aircraft parts that were sold at auction.  One reason was the significant expense associated with verifying airworthiness on such aircraft before they could be used for civil purposes. To remedy this, the U.S> government started maintaining its aircraft consistent with FAA (civil aviation) standards.

This eliminates the differences that caused the industry to be cautious about such public-aircraft-sourced parts.  It makes the affected public-use aircraft parts technically equivalent to comparable parts used in civil aviation.

Despite this, under current federal standards, a federal agency that sells or transfers aircraft parts to a non-federal party must provide the buyer with the following statement:

Warning to purchasers/recipients. The aircraft parts you are purchasing or receiving in an exchange may not be in compliance with applicable Federal Aviation Administration (FAA) requirements. You are solely responsible for bringing the aircraft into compliance with 14 CFR Chapter I, or other applicable standards, by obtaining all necessary FAA inspections or modifications..”

41 C.F.R. § 102-33.360(a)(2).

In addition, the purchaser must sign the a lengthy warning and disclaimer statement at the time of sale – this statement is supposed to be retained by the government seller.  Id.  These steps are meant to ensure that the U.S. government has adequately warned the buyer of the potential for non-compliance.

 

“Government Aircraft”

 

People in the industry often use the term “government aircraft.”  They come by this term honestly – the Office of Management and Budget publication OMB Circular No. A-126 (Improving the Management and Use of Government Aircraft) (May 22, 1992) uses the term “Government Aircraft” to mean the federal government’s public aircraft.  OMB Circular No. A-126. at 5(a).

The term “public aircraft,” alone, is well-understood.  But the use of the shorthand term “government aircraft” as a proxy for the concept of public aircraft has led a number of people to ask me whether the term “government aircraft” applies to airlines that are government owned. This is an obvious point of confusion.

Typically, in order for the air carrier to hold itself out to the public and offer carriage, it must be certificated under the home nation’s civil aviation rules.  This means that the air carrier’s aircraft are not (typically) flown as public aircraft. Thus, the mere fact that the air carrier is owned by the government does not imply an airworthiness question requiring a specific disclosure.

Obviously there are potential exceptions, such as where an airline wet-leases an aircraft (on an exclusive basis) to the government (this may be a public operation).

 

 

Renewing Delegated Privileges During the Shutdown

Delegated privileges for DARs, DERs and DMIRs need to be periodically renewed. Normally, the renewal period is annual (every twelve months).  This affects many people in the aircraft parts community, including the DARs who issue 8130-3 tags for aircraft parts.

Under current guidance, a designee that is not renewed by their expiration date will be automatically placed in expired status.  When a designee is placed in expired status, he or she is not permitted to exercise the delegated functions.

A designee in expired status has a 90 day window.   During that 90 day period, the managing office is expected to determine a follow-on action, that is, either reappointment or termination.  In the event no FAA action is taken, then the action defaults to termination.

This could be a real problem for those designees whose expiration arises during the current lapse in funding (aka the shutdown), because there is likely nobody in the local office who can renew their delegated privileges.

To remedy this, we have asked the FAA senior management to issue a memo that tolls the expiration date of DAR, DER and DMIR delegated privileges.  This would have the effect of freezing the privileges as they existed on December 21, and if they were scheduled to expire between that date and the resumption of funding, then the privileges  would continue in place through the tenth business day after funding resumes (to permit a window of time to process the backlog).

This is a proposal only – and it is likely that the FAA will be unable to issue this proposed memo during the shutdown.

After the 2013 shutdown, FAA issued extensions and deviations once the government was reopened – we expect that this is the approach that will be used again in 2019.  Although the precise nature of the extensions and deviations that will be issued after the shutdown cannot be predicted, we hope that ASA’s draft memo tolling the expiration date of expiring delegations will be used as a template to endorse DAR work performed during the shutdown.

Government Shutdown Advice: DARs May Continue Functioning

We continue to get inquiries about designee functions during the government shutdown.

Generally, DARs should go back to their authorizing documents and ensure that they do not have any restrictions that would forbid exercise of authority during the shutdown. As long as there is no limitation/prohibition, and as long as the DAR has general authority to issue 8130-3 tags, it should be acceptable for the DAR to continue issuing 8130-3 tags during the government shutdown in the same manner that the DAR did before the shutdown.

For a complete discussion of this issue, please see our article: DAR Privileges, During the Shutdown

Networking With the Chinese Air Carrier and MRO Community

With all of the rhetoric between US President Trump and Chinese President Xi, it is easy to forget that China is still “open for business.”  China still poses fascinating long-term business opportunities for the aviation community.

Shanghai, during the 2016 Aviation Parts Management Forum

Shanghai, during the 2016 Aviation Parts Management Forum

I have found that one of the best conferences for meeting Chinese air carriers and MROs is the Aviation Parts Management Forum. They have a history of getting all of the large MROs and air carriers, and a significant representation of the smaller ones as well.  If you want to sell aerospace articles or services into the Chinese market, I can think of no better conference at which to meet your Chinese customers.

The 2019 Forum will be held on March 28-29 in Xiamen, China.  A year ago, CNN’s Travel Section called Xiamen “China’s new capital of cool.”

The forum sponsor (Oppland) will soon be publishing their agenda for the 2019 Aviation Parts Management Forum, but for now a preliminary agenda is available on the website.

To get in touch with the organizers directly, send an email to Echo Sun at echos@opplandcorp.com, or call her at +86 1356 463 7605.

ASA in Japan

The ASA Team meets with the Skymark Team. Ryan Aggergaard, Sachie Tomita, Shinichi Kitamura, Jason Dickstein, Shimpei Nakahara and Shichi Nonome

ASA partnered with the Tokyo Metropolitan Industrial Technology Research institute (TIRI) to lead a workshop on aircraft parts in Tokyo this week.  Airline attendees included representatives from All Nippon Airways, (ANA), Japan Airlines (JAL) and Skymark Airlines.

Skymark's Shinichi Kitamura and ASA's Jason Dickstein reconnect over 8130-3 tags in Tokyo.

Skymark’s Shinichi Kitamura and ASA’s Jason Dickstein reconnect over 8130-3 tags in Tokyo.

We were pleased to reconnect with Shinich Kitamura.  Many ASA members have met Kitamura-san at past ASA Annual Conferences, when he used to attend on behalf of ANA.  He is now with Skymark, but is looking forward to retirement, quire soon.  Skymark is a low-cost carrier based out of Haneda airport and operating 737-800s.

The focus of the workshop was discussing aircraft parts documentation standards from the perspective of Japan’s international agreements (like the Bilateral Aviation Safety Agreement with the United States and the Working Arrangement with EASA) as well as the recommendations and common practices of the industry.  We also reviewed documentation recommendations from AC 00-56B.

We hope that this sort of support continues to bolster the important commercial relations between the US and Japan

Brexit is Coming – How Will It Affect Aircraft Parts?

Brexit – the withdrawal of the United Kingdom from the European Union – will occur at 11 pm on Friday, March 29, 2019 (known as the withdrawal date).  In the past few weeks, we’ve met with representatives from the UK CAA, EASA and the FAA.  We’ve had a chance to talk about post-Brexit expectations.  It is clear that there are still a lot of unknowns.

One of the most significant unknowns revolves around the uncertainty in the future of UK-EU relations.  The UK CAA feels that there are generally two possible options.

The Two Options for Brexit

Option one is a Brexit that is reflected by an agreement between the United Kingdom and the EU. The EU and the UK negotiators have a draft of such an agreement, but early statements suggest that it may face some difficulty being ratified by the UK Parliament.

If there is a broad agreement between the two parties before the withdrawal date, then there is a reasonable chance that EU will permit UK CAA to participate in EASA.  EASA already has several non-EU participants that participate in EASA – like Norway and Switzerland – and the EU could permit the United Kingdom to join EASA as a non-EU member state.  In such a case, UK could continue to issue certificates recognized by EASA and certificate holders could continue to issue the EASA Form 1.  This option could make things simple, but as each day passes without a ratified high-level UK-EU agreement, the likelihood of this happening diminishes.

In addition, UK CAA has suggested that EASA may be unable to negotiate with UK CAA at any level under after the withdrawal date (because UK remains a part of the EU until then); so even if the plan is for UK CAA to participate in EASA, there may be a gap between the withdrawal date and UK CAA’s subsequent participation in EASA.

Option two arises if there is no deal between the United Kingdom and the European Union.  In such a case, UK CAA believes that EASA will not be permitted to negotiate with UK CAA on a formal basis. UK CAA would have to rebuild its own independent regulatory framework; it is already hiring additional qualified staff to be prepared to do this.

Under option two, and even under some versions of option one, there may be no aviation safety agreement between UK and EU.  If there is no agreement, then the European Commission published a Notice to Stakeholders detailing the consequences of the UK’s withdrawal from the European Union’s aviation safety rules.  The Notice to Stakeholders paints a bleak picture of the near future between the UK CAA and EASA.

European Union Treatment of Parts Produced or Maintain in the UK

The European Notice to Stakeholders explains that when the UK leaves the European Union (EU), then from an EU perspective, this action will (1) invalidate all certificates issued by the UK CAA, and (2) invalidate all certificates issued by the UK CAA certificate holders.  Certificates will be invalid as of the withdrawal date, which is currently set for 11pm (UK time) on March 29, 2019.

The Notice explains that “[t]he products, parts and appliances concerned will no longer be considered as certified in accordance with Article 5 of the Basic Regulation.”  Article 5 of the Basic Regulation provides the legal foundation for the issue of an EASA Form 1 for a part or appliance.

This means that UK production approvals will become invalid, as far as the EU is concerned.  But this does not just apply to parts made after March 29.  It also applies to parts made before the withdrawal date.

Under European regulations, acceptable parts are required to bear appropriate documentation (such as EASA Form 1).  EASA Forms 1 issued before the withdrawal date under UK CAA authority become invalid as of the withdrawal date.  This means that parts in your inventory today – parts that are perfectly acceptable for installation on European-registered aircraft, today – will no longer be acceptable, after withdrawal, under EASA documentation rules because the UK CAA certificates will become invalid after the withdrawal.

After March 29, one may not install a part that is documented solely under a UK CAA EASA Form 1 into an EU-registered aircraft.  It would appear likely that this also would apply to aircraft registered in non-EU nations (like Norway) that have agreed to follow EASA regulations.  This would include:

  • New parts with UK CAA EASA Form 1
  • Maintained parts released to service on a UK CAA EASA Form 1

In a practical sense, if you have an EASA Form 1 for a new part, and it was issued in the UK, then the EU will no longer recognize it as a valid document after Brexit.  This means that parts in your inventory that bear EASA Form 1 may have to be segregated and identified as “UK” and “EU,” in order to ensure that if they are still in inventory after Brexit, then they can be directed to customers who are legally able to use those parts.

How does a distributor tell if its EASA Form 1 certificates are affected?  Check block 1 of the form.  This is the block with the name of the regulatory authority.  If it says “UK CAA” in block one, then the EU will no longer recognize it as a valid tag after the withdrawal date (unless there is an agreement that changes the circumstances).  As an example, here is a link to a form issued under the legal authority granted by France’s DGAC; and here is a link to an overhaul tag issued under the legal authority granted by the UK CAA.

Some people might wonder about dual-certificated parts from the UK.  About 200 repair station in the UK have FAA Part 145 certifications, and they historically have been released to service, following maintenance, on a UK CAA EASA Form 1 that also indicates compliance with FAA Part 145 regulations.  The EU has a bilateral agreement with the United States … does this permit acceptance of the work because it was performed under US FAA standards (too)?  The answer is “no.”  The EU only accepts maintenance from the United States’ system when it also approved under the EASA 145 standards.  Because UK’s EASA 145 certificates (and all other certificates issued by the repair stations) will become invalid upon withdrawal, a dual US-UK approval will not be acceptable for introduction into the EASA system.

Possible UK Solutions

EASA has a solution.  But it may be a costly and unwieldy solution.

EASA has proposed to issue EASA certificates to businesses in the UK as “third-country.”  In fact, it started accepting applications on October 2.  “Third country” treatment means that the UK certificate holders get treated like any-old foreigners.  They need to pay as if they were foreign applicants.  They need to pay for all of the EASA-time spent in approval and oversight.

By way of comparison, the EU has a working arrangement agreement with Uzbekistan.  It is currently scheduled to have no agreement with the UK.  So the Uzbekistan CAA is scheduled to have a closer relationship with EASA than the UK CAA will have.  This doesn’t mean that the years of trust between EASA and UK CAA disappear.  In the interim between now and March 29 (while UK CAA is still a member of EASA), EASA will be relying on UK CAA to support audits of UK aviation businesses that apply for EASA certificates as third country applicants.

EASA issues a number of foreign certificates, but the two most important for aircraft parts distribution are likely to be production organization approvals and maintenance organization approvals.  Both are potentially available to UK businesses.  An EASA third-country production organization approval would permit a UK manufacturer to produce parts and issue an acceptable EASA Form 1 even after the withdrawal date.  An EASA maintenance organization approval would permit a UK repair station to maintain articles and issue an acceptable EASA Form 1 even after the withdrawal date.

The timing of third-country certificates appears to be uncertain.  It would make the most sense for EASA to issue the certificate on or before March 29 in order to allow seamless operations in support of aviation safety.  The earlier that   EASA is able to issue the certificate before March 29. the better for industry planning (including safety contingency planning).  But it is also possible that the European Union will not permit EASA to issue third-country certificates to businesses in the UK until after the withdrawal date (a lergal justification advanced for this delay is that UK is not a third country until the withdrawal date).

When a distributor looks at an EASA Form 1 certificate issued by a UK-based entity, if block 1 of the form says “EASA” then this is an indication that the relevant certificate was issued by EASA and not by the UK CAA.  If it says “EASA” in block one of the Form 1, then the EU should recognize it as a valid (“third country”) tag after the withdrawal date.

What happens to parts that were maintained or produced in the UK before withdrawal date, by a company that obtains a replacement EASA third country certification?  This would appear to establish a continuity of EASA approval; but the actual legal treatment of the certification is currently unknown.  It is equally possible that EASA could invalidate EVERYTHING with UK CAA in block one (for ease of determination) or it could decide to accept parts from UK certificate holders who subsequently obtain comparable EASA foreign approvals (causing potential complication in cases where there was a hiatus between the withdrawal date and the date on which the EASA foreign approval was issued).

US Acceptance of UK Maintenance and Production

The United States and the United Kingdom have pledged to work things out.  It is likely that there will be some difficulties at first (there always are), but both authorities seem optimistic about their desire to find a way to support safety and keep aviation flying.  They are actively negotiating a new bilateral agreement, with the understanding that they will be ready to use it if the UK CAA is unable to rely on EASA as their agent (and if the EU permits UK CAA to participate in EASA, then some of the following details will likely change).

An important element of the US-UK negotiations is the plan concerning UK-based repair stations.  As previously mentioned, there are about 200 repair stations in the UK that bear FAA credentials as well.  The plan appears to be

  1. Identify the repair stations whose FAA credentials will expire in the first six months after the withdrawal date;
  2. Renew the FAA credentials of those soon-expiring repair stations early, before the withdrawal date, so they can be renewed before March 29 under the EASA provisions;
  3. This early renewal of expiring repair station certificates in the UK allows the FAA to have a cushion of time to work-out the operating procedures with UK CAA without any emergencies forcing rash decisions;
  4. After the withdrawal date, FAA repair stations in the UK will be permitted to issue dual release 8130-3 tags under FAA and UK CAA authority.

Yes, you read that last bit correctly.  Repair stations in the UK would be permitted to issue 8130-3 tags as approval for return to service documents.  This unusual move is permitted, because FAA removed the geographic limitations on 8130-3 tags about a decade ago.  The UK repair stations in question hold FAA Part 145 certificates and are permitted to approve for return to service in accordance with 14 C.F.R. 43.9.  UK CAA is in favor of this solution because the 8130-3 tag is well-recognized internationally.

Other than these details, it is likely that much of the UK-US bilateral will resemble the US-EASA bilateral in order to minimize the differences and mitigate the change management issues associated with Brexit.

Conclusion

It is possible that the EU and the UK will enter into an agreement that permits UK CAA to remain a part of EASA.  It is also possible that Brexit could be reversed.  But, absent some other agreement, the EU will no longer accept UK-based EASA Form 1 for new parts, even if the Form was issued while the UK was still part of the EU, after the withdrawal date.

Distributors need to be prepared by:

  1. Assessing their inventory for susceptibility to Brexit issues based on UK CAA production and/or maintenance, and potentially segregating inventory in a way that eases identification;
    • Segregation could be physical or virtual, e.g. inventory could be managed through software;
    • Remember that we might not know who is willing to accept EASA Form 1 from the UK CAA until very close to the withdrawal date;
  2. Communicating with customers to understand their post-Brexit expectations;
  3. Establishing procedures for proper handling of UK CAA-tagged articles to ensure that they do not go to customers who cannot accept such articles;
  4. Training their personnel on how Brexit impacts the business and the customers;
  5. Communicating with UK-based partners to assess how they plan to deal with the changes.  For example, will your UK-based repair stations apply for EASA 145 under the third-country provisions?  Will your UK-based manufacturers apply for EASA POA under the third-country provisions?

Bear in mind that we’ve dealt here only with the airworthiness acceptance issues in this article.  Commercial relationships will be further complicated by myriad other issues, ranging from import tariffs to continued operations of aircraft.

This is a developing issue.  ASA will be taking steps to keep members informed, and ASA hopes to host discussions about the impact of Brexit in the near future.

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