Aviation Industry NAICS and SIC Codes

We frequently get calls from companies that need help identifying the right NAICS code that applies to their business.  We have taken some typical business activities performed by ASA members and captured their NAICS and SIC codes in the table below.

Typically, a NAICS code is assigned based on the primary business activity of the enterprise.  Sometimes, identifying the primary business activity of an enterprise can be difficult if it engages in multiple business activities.  Ideally, the primary business activity is identified by the relative share of capital investment, but in practice, other variables, such as revenue, value of shipments, or employment, are used as proxies to identify the primary business activity.  The Census Bureau generally uses revenue to determine an establishment’s primary business activity.

We have also included the 1987 SIC codes.  Even though the NAICS codes replaced the SIC codes in 1997, some agencies and programs still rely on (or ask for) SIC codes.

Aircraft and Aircraft Parts Business Classification Codes

Business Activity NAICS (2012) SIC (1987)
Aircraft Parts Distribution 423860 5088
Aircraft Sales 441228 5088
Commercial Aircraft Leasing 532411 7359
Repair Station 488190 4581
Aircraft Upholstery Repair 811420 4581
Aircraft Rebuilding 336411 3721
Aircraft Engine Rebuilding 336412 3724
Aircraft Storage at Airports 488119 4581
Engineering Research and Development on Aircraft Parts
on a Contract or Fee Basis (e.g. DER Services)
541712 8731

Aircraft Disassembly

Increasingly, we are seeing members of the ASA community that are disassembling aircraft for parts.  The precise NAICS and SIC for disassembly may vary depending on the business’ primary business activity.  In many cases, it appears that NAICS 488190 (Other Support Activities for Air Transportation) is the best NAICS for aircraft disassembly when the purpose is to recover parts, and NAICS 423930 (Recyclable Material Merchant Wholesalers) is the best NAICS for aircraft disassembly when the purpose is to recover the scrap metal or other materials (this NAICS includes breaking up vehicles for scrap); but NAICS 488119 (Other Airport Operations) may also be appropriate in some cases (especially for a business that focuses on parking of aircraft).

A business that sorts and recycles aircraft materials may also be considered a non-hazardous waste treatment facility under NAICS 562219.

If you need to identify a SIC code for aircraft disassemblers who disassemble on a contract basis to reclaim parts, then it is likely to fall within the scope of SIC 4581, which encompassed both MRO activities and airport operations.  Aircraft recyclers that break up aircraft and sort the materials (without reclaiming parts) would fall within SIC 5093 – but this SIC specifically stated that dismantling for parts was considered to be a distribution activity.  So aircraft disassemblers who disassemble aircraft in order to sell the used parts for their own account would likely fall into SIC 5088 (distribution).

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No, Aircraft Disassembly is Not a Maintenance Activity Under the FAA Regulations

Many ASA members have entered the exciting world of aircraft disassembly.  A member recently reported that he has encountered some customers who believe that aircraft disassembly can only be performed by a repair station under FAA regulations. This belief is untrue.

Part 43 of the FAA’s regulations requires that alteration, rebuilding, maintenance, and preventative maintenance be performed only by parties authorized to do so under the regulations. 14 C.F.R. § 43.3(a). Other functions that are not specifically regulated by the FAA remain unregulated functions.

Aircraft Disassembly is Not Regulated Under Part 43 nor Part 145

It should be obvious that disassembly of an aircraft does not constitute alteration or rebuilding. But could it be a maintenance or preventative maintenance task?

Maintenance is defined in the regulations to be “inspection, overhaul, repair, preservation, and the replacement of parts….” 14 C.F.R. § 1.1 (definition of “maintenance”). This definition also specifically excludes preventive maintenance, which is defined separately.

Aircraft disassembly is different from inspection, overhaul, repair, preservation, and the replacement of parts, so aircraft disassembly is not a species of maintenance under U.S. law.

Preventative maintenance is defined in the regulations to mean “simple or minor preservation operations and the replacement of small standard parts not involving complex assembly operations.” 14 C.F.R. § 1.1 (definition of “preventative maintenance”). This definition is further refined in Appendix A to Part 43. That appendix limits the scope of preventive maintenance only to certain listed functions (this is explicitly described as a limitation so it cannot expand the definition of preventative maintenance). It clarifies that the removal, installation and repair of landing gear tires is a preventative maintenance function (but this only applies in the context of simple or minor preservation operations, and disassembly alone is not a preservation operation). So removal, alone, without any effort to preserve, is not a preventative maintenance function.

Aircraft disassembly is neither a preservation operations nor the replacement of small standard parts, so aircraft disassembly is not a species of preventative maintenance under U.S. law.

Whereas aircraft disassembly is neither alteration, rebuilding, maintenance, nor preventative maintenance, it is not regulated under Part 43, and therefore is not one of the functions reserved to only certain certificate holders,

Thus, it is clear that the FAA Part 43 regulations (and by extension the Part 145 regulations) do not apply to disassembly of aircraft.

The unregulated nature of disassembly is one of the reasons that the Aircraft Fleet Recycling Association AFRA) stepped in and offered their Best Management Practices (BMP) for disassembly of aircraft in order to encourage practices designed to preserve airworthiness as well as to guard the environment.  The AFRA BMP provides guidance, and the AFRA auditing program supports compliance to the standard.

This does not mean that repair stations are prevented from disassembling aircraft for their parts. Because this is an unregulated function, repair stations may also perform the disassembly function if they wish.

No Obligation Imposed by Advisory Circular

Some have taken text in FAA’s AC 20-62 out of context and suggested that it might impose restrictions on removal of parts. The text in question (take alone and out of context) states: “Parts with removal records showing traceability to a U.S. certificated aircraft, signed by an appropriately certificated person.” But look at this text in its full context and you see a different picture:

8. INFORMATION RELEVANT TO USED PARTS. The following information may be useful when assessing maintenance records and part status.

d. Seller’s Designation. The seller may be able to provide documentation that shows traceability to an FAA-approved manufacturing procedure for one of the following:

(1) Parts produced by an FAA-PAH by TC, PC, PMA, TSOA.

(2) Parts produced by a foreign manufacturer (in accordance with part 21 subpart N).

(3) Standard parts produced by a named manufacturer.

(4) Parts distributed with direct ship authority.

(5) Parts produced, for the work being accomplished, by a repair station to accomplish a repair or alteration on a specific TC’d product.

(6) Parts produced by an owner or operator for installation on the owner’s or operator’s aircraft (i.e., by a certificated air carrier).

(7) Parts with removal records showing traceability to a U.S. certificated aircraft, signed by an appropriately certificated person.”

Eligibility, Quality, and Identification of Aeronautical Replacement Parts, FAA AC 20-62E, para 8(d) (December 23, 2010).

In its full context, it is obvious that this text is just one of a list of types of parts that are considered acceptable. Most parts removed from aircraft that are intended for reuse will fit into category one (TC, PC, PMA, TSOA), and therefore the analysis will never get to category seven. That category exists for articles that do not fit within one of the first six categories.  Note also that this text harkens back to the time when it was assumed that any part removed from an aircraft was a good part – modern practice recognizes that mistakes are made at installation and therefore modern disassembly procedure scrutinizes each part and its records to properly identify it without making unsubstantiated assumptions.

Further, the FAA does not have any removal record, and has no regulations reflecting removal records. For this reason, no certificate is necessary in order to sign a removal record.

 

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