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Friday, August 1, 2003

PMA Parts: Changes Coming in Europe

Roy Allen, Contributing Editor

Aviation Maintenance talked to MROs, users, distributors, and regulators about forthcoming changes in the regulations covering non-OEM parts use in Europe.

The use of PMA (parts manufacturer approval) parts for aircraft is a familiar practice in the U.S. and the subject of a sizeable industry. This has not been the case in Europe, although some easing of the regulations in recent times has opened the door to variations on the theme. Until fairly recently it was not possible to use PMA parts on aircraft manufactured in Europe. MRO companies were then allowed to use PMA parts on U.S.-built aircraft providing the parts were FAA-approved, non critical, nor airworthiness-sensitive.

The U.K. Civil Aviation Authority took a further step forward in October 2002 with the issuance of Airworthiness Notice Number 17, Issue 6, which states in essence that PMA parts may be used on any aircraft in non-critical and critical applications subject to safeguarding conditions and permission from the design holder to make the part. This CAA Notice is matched by the JAA’s requirements set out in TGL 11, which approves use on any aircraft in Europe subject to like clearance by the national regulatory authority. Permission to manufacture parts is covered by the rules of JAR-21G, which vests design and manufacturing authority in MROs and other companies by the original equipment manufacturer (OEM).

So as Europe smiles increasingly warmly on the use of PMA parts, this coming September 28 will see changes in the regulatory structure that should further the acceptance of PMA-type parts and lead, hopefully, to a developing market amongst European countries. More about this later.

Maintenance and overhaul organizations in Europe, and airlines, are able to make PMA-type parts now so long as they hold the appropriate authority, and Marshall Aerospace of Cambridge is typical of the larger MROs in the U.K., which embrace this work as part of the company’s everyday program of maintenance, overhaul, and structural modification.

The company’s autonomous division, Marshall Aerospares, has some 40,000 line items in stock and turns over some $64 million worth of parts annually, 80 percent of which are rotables and 20 percent spares. Some 20,000 line items are issued a year. The company has JAR-21G manufacturing authority and has made seating, air ducts, and general structural parts together with aircraft ailerons and flaps, working to approval to manufacture certificates issued by the OEMs. In a recent contract the company produced non-OEM parts for Delta Air Lines.

The Marshall Aerospace organization handles a substantial volume of MRO work annually for major international airlines, corporate carriers, and in particular the Royal Air Force, for which it performs overhaul and conversion work under contract to the Ministry of Defence on AWAC Sentrys, C-130s, etc. Marshall Aerospace is a somewhat unique company amongst U.K. MROs in that it grew out of an automotive business founded at the turn of the century. Turning to aviation in 1929, the company is adjoined by its own aerodrome, the hard standings of which are now routinely occupied by 747s, TriStars, MD-11s, and 777s belonging to U.K. and foreign airlines.

Nigel Heath is general manager of Marshall Aerospares and explained that when established in 1998, it was felt that there was a market for the spares business. This has been confirmed by the rapid expansion of the business and Aerospares is now a profit center in its own right.

Right now, Heath said, principal aircraft and engine parts generally come from the manufacturers, which means the OEMs, but the company does not have to buy from these sources, as alternatives can offer a price and supply advantage and are often taken because of the competitive nature of the business. The three main sources available are the distributors, which can deliver OEM, and indeed PMA, parts because of their large spares holdings; the airlines, whose stocks could be surplus to requirements, or the OEMs themselves, who may often sell parts at reduced prices when they have exhausted their requirement for stock holdings. So long as provenance is verified and proper documentation is in hand, the buyer should have unquestionable authority to meet his needs.

A change in the regulations covering the production of PMA parts in Europe would certainly be welcome, said Heath, and Marshall would be "very interested. But I would not take them into the year’s sales figures for the reason I believe a developing industry in the U.K. and Europe will take time to grow and be accepted."

In this Heath was underlining the fact that the bulk of MROs and operators will still use OEM-made parts for some time yet for a variety of reasons, not the least of which is that the PMA parts market is still small and unfamiliar and a European industry manufacturing such parts is virtually non-existent. "In the end it will be down to the customer," said Heath.

Garret Copeland, general manager engineering services for British Airways, echoed the prevailing attitude to PMA: "Our philosophy is to use OEM parts, but BA’s approach to the matter is to look for the best, and we would certainly buy PMA parts if the market is there and the regulations allow. PMA parts can often perform better then OEM parts for one thing, by virtue of their improvements and useful modifications made, and the price can be better; if there is no competition there can sometimes be unrestrained price growth."

Having said that, Garrett Copeland offered caution with respect to PMA parts, particularly to potential entrants to the European PMA manufacturing market. "Operators have to consider very carefully the airworthiness rules today and there are of course warranty issues. Barriers to entry to this market will be different and they could also be formidable."

As a big operator, concerned very largely with big airline aircraft (300 in the fleet) British Airways holds a stock of no more than 250,000 spares, which it regards as perfectly adequate for its needs. As the manufacturers/distributors quickly meet the airline’s needs as required, it makes no sense for BA to hold an over-large stock. BA and its regional subsidiary British Airways CitiExpress operate few old aircraft and the older types, ATPs and BAe 146s for example, are being steadily replaced. There is thus little need for BA to make parts, although the airline holds JAR-21G authority to do so. On occasion BA has made fasteners, engine blades and vanes, floor boards, cabin fittings, etc., but does not see itself as a manufacturer.

As a parts distributor with long experience of the aviation market, former Fokker subsidiary Avio-Diepen, of Alphen aan den Rijn, Netherlands, is familiar with the difficulties with PMA parts in Europe. "Customers still tend to equate PMA parts with sub-standard parts and feel there is a stigma attached to them, which is quite wrong because PMA parts are often better than OEM spares," said company president Vincent van Campen. "Any rule change could be good for dispelling this image."

German airline Lufthansa would agree, for the operator is so keen for the development of alternative parts sources that it has invested a 20 percent stake in U.S. turbine engine components manufacturer Heico Aerospace of Hollywood, Florida, from which it sources parts as required for its aircraft engines.

In this regard Lufthansa will doubtless be cheered by the forecast in a new industry study, which predicts that non-OEM parts will account for one-fifth of the commercial aero engine spares market by 2015. The study, conducted by consultants AT Kearney in conjunction with the University of Stuttgart, suggests that the PMA parts market will grow by 10 percent a year until a market share of 21 percent is achieved by 2015.

Commercial benefits aside, one reason why Lufthansa has turned to the U.S. for a PMA parts source is that it would not find one easily in Europe, as this industry is as yet virtually non-existent. Marshall and British Airways both know PMA parts sources but make the point that regulatory constraints have so far inhibited the development of this business in Europe and it could be some time before it is established. One industry man goes as far as saying: "I have not heard of any manufacturer of non-OEM parts in Europe to date."

Unlike the U.S., consequently, there is seemingly no parts manufacturers association, or trade body, representing makers’ interests, certainly not in the U.K.. The nearest thing to such a body would seem to be AECMA (Association Europeene des Constructeurs de Material Aerospatial or European Association of Aerospace Industries) the long-established, France-based organisation representing the European aerospace industry to trade associations, institutions, and international organizations.

Dr. Marvin Curtis, spokesman for AECMA in the U.K., noted that after September 28, with the formal constitution of the JAA’s European Aviation Safety Agency or EASA, JAR-21 will be replaced by IR-21, or implementing rule 21. The PMA parts story will be taken a stage further by that agency, ("and in Europe we’ll call PMA parts something else!" added Curtis).

Introducing a little confusion into the story, Europe already has an EASA, in the form of the European Aviation Suppliers Association, based in Nottingham, U.K. and which is a flourishing trade body currently representing the interests of some 70 European companies supplying parts to airlines and aviation MROs. Formed in 1995, the association was created to give suppliers a voice within the industry and to offer views on airworthiness and quality matters affecting the business. EASA is now a recognised body offering audits to ISO and BSI quality process standards and holds well-attended conferences and seminars. EASA members will of course supply parts of any nature that customers specify and that meet the regulations.

Roger Kidd, quality assurance manager for EASA ("We had the initials first!") points out that regulations at present allow anyone to form a company and supply parts and services within the industry, in many cases with little or no experience or standards, and the association is concerned that this unsatisfactory situation should be allowed to continue in an industry that has the most rigorous safety and reliability standards. Representations to the U.K. CAA and JAA are believed to be gradually bearing fruit in this matter.

The European Aviation Safety Agency is scheduled to be formally inaugurated on September 28 and will be a new body with the function of coordinating and regulating aviation safety matters in Europe. It will operate as a separate branch of the Joint Aviation Authorities, which is headquartered in Hoofddorp, Netherlands.

Changes that will be made in the aircraft and engine parts regulations in Europe will be made by EASA, for, in the words of Gert Litterscheidt, the JAA’s director of maintenance, this is "EASA-driven." The intention is to have everything in place and mandatory by September 28 and there is a European law in place for this. "Providing they get through the legal review of the European Commission without delay, September 28 will see changes implemented. The principal intention with regard to PMA parts is to achieve a proper balance between the American scenario and the European scenario," Litterscheidt said. "Changes made will be in full agreement with the FAA, and these will be documented through IR-21. What it will mean is that there is a full harmonisation of the rules."

Little more can be said on the European PMA parts issue at this time as the secretariat for EASA is not yet in place, but evidence points to the fact that, for the first time, PMA parts in Europe will soon be given full authority under the new regulatory regime and in due course receive full acceptance in the industry as a consequence. The next event, it would seem, is the development of a new industry, and it will be interesting to see how quickly such an industry might develop.

PMA Parts Regulations in Europe

From September 28, 2003 a new JAA body, the European Aviation Safety Agency, will assume responsibility for the regulations covering the manufacture of aircraft and engine parts and which are expected to be fully harmonised with those of the U.S. FAA. The new rules, applicable to signatory-countries in the European Union, should allow the unrestricted manufacture and sale of PMA-type parts to operators, MROs, and others, providing design and manufacturing requirements are met.

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