PMA End User Considerations

1. PMA End User Considerations International PMA Summit London - November 3, 2011

2. The Landscape Source: Aerostrategy Analysis, 2011 ASA Annual conference

3. The BASA 2.8.2 Procedures for EASA Acceptance of FAA PMA • Direct Acceptance by EASA of PMA Design Approvals: EASA shall directly accept PMA approvals, without further showing, for modification and/or replacement parts for installationon products certified or validated by EASA in the following cases: • The PMA part is not a “critical component” or • The PMA part conforms to design data obtained under a licensing agreement from the TC or STC holder according to14 CFR §21.303; or • The PMA holder is the holder of an EASA STC which incorporates the PMA part Source: Technical Implementation Procedures For Airworthiness And Environmental Certification between the FAA and EASA

4. FAA Validation Process • Identicality (with a License Agreement) • Is the OEM, but not Type Certificate Data Sheet (TCDS) holder • Manufacture to the OEM shows proof of an agreement with OEM authorizing use of OEM technical data. • Must prove installation eligibility to TCDS end applications • Submits directly to the FAA-MIDO for approval You ARE already using these PMA parts !!! • Identicality (without a License Agreement) • Has technical data to prove design is “exactly” the same as OEM design. • Could be a supplier to OEM • Must prove installation eligibility to TCDS end applications • Submits to FAA-ACO and FAA-MIDO for approval You MAY already be using these PMA parts !!!

5. FAA Validation Process Test & Computation • Uses reverse engineering process to duplicate OEM part in all aspects • OEM parts are procured and thoroughly analyzed to determine all dimensions, tolerances, materials, surface treatments, etc • A “design data” package is submitted to FAA-ACO/ODA demonstrating proposed PMA part is same in form, fit and function to OEM design. Package may include additional manufacturing process, fabrication processes, assembly techniques, and endurance and test requirements if necessary to establish airworthiness of the part in accordance with applicable regulations • Part marking per 14 CFR Part 45.15 (marked to distinguish from OEM part) “FAA-PMA” Supplier Cage Code or Trademark Part Number Installation eligibility (marked on part or package) • Must prove installation eligibility to TCDS end applications (airframe or engine) • If required, provides Instructions for Continued Airworthiness (IFCA’s) • Compliance with all applicable airworthiness regulations

6. The Safety Story • Source: ADs issued from 2000 to 2011, MARPA 2011

7. Reliability PMA parts are generally as reliable or more reliable than OEM parts. Why? PMA developers have the benefit of understanding the OEM’s short comings PMA developers often have newer materials, manufacturing methods and hold tighter tolerances due to the re-engineering process PMA companies focussed on this market, not moving their engineers to the “next big platform” Generally PMA developers avoid major problem areas that AD’s or major service bulletins have been written against

8. Reliability Example Scarring in the Aluminum body, caused by the return spring, lead to the valve sticking in the open position Customer asked Wencor to change the material of existing Valve Body P/N 746528-5 from Aluminum to Stainless Steel 8

9. Reliability Example Customer successfully conducted an in-service evaluation of the new stainless steel valve body P/N 746528-5WE 9

10. The Argument Against PMA • The Leassor • Aircraft residual value • Ability to move aircraft across geographical boundaries (where regulatory rules are different on PMA) • Ability to obtain financing: lack of understanding of PMA by banks • The User • Concerns over loss of warranty • Restrictive business practices by OEM • Don’t want to be the first user • Lack of product coverage

11. The Argument for PMA Source: FAA Draft Memo - Policy Statement, PS-AIR-21.50-01: Inappropriate DAH Restrictions on the Use and Availability of ICA While not exhaustive, the FAA does not find the following DAH practices acceptable under the provisions of 14 CFR §21.50(b) and related ICA airworthiness requirements: • Requiring the use (installation) of only DAH-produced or authorized replacement parts, articles, appliances, or materials. • Requiring that alterations or repairs must be provided or otherwise authorized by the DAH. • Requiring the use of only repair stations or other persons authorized by the DAH to implement the ICA. • Establishing, or attempting to establish, any restriction on the right of the owner/operator to disclose or provide the ICA to persons authorized by the FAA to implement the ICA.

12. The Argument for PMA Airline NOT accepting PMA Airline Demand For PMA Overcomes Market Concerns Belief That PMA Devalues The AC/Engine Upon Lease Return

13. The Argument for PMA Engine Starter Example (Honeywell 3505488) Potential Savings $18,880

14. A Few Considerations • Since 1955 there have been over 300,000 PMAs issued according to Jack Buster of Aviation Data Research • 55% Licensing (165,000) • 25% Test and Computation (75,000) • 20% Identicality (60,000) • Note: many of these PMAs are OEM parts that are assemblies - not just individual part numbers.

15. What’s the Difference? PMA Part OEM Part

16. How Do You Tell?

17. Conclusions BASA in place allows widespread acceptance of PMA in Europe Safety aspect is proven, no longer a discussion Reliability levels are similar or better than OEM product Non-PMA accepting airlines are now moving towards minority Refusal to accept PMAs is restricting leassors potential market place FAA reacting to limit unfair practices by OEM PMA coverage is increasing, with demonstrated savings OEMs are largest producers of PMAs

18. Questions?