CHAPTER 1 : INTRODUCTION
1. 1 Introduction
Parts Manufacturer Endorsement (PMA) is a mixed design and development approval for modification and substitute parts. It allows licensed sources that are not the initial type qualification holder to create and manufacture replacing parts for commercial plane. The FAA (National Aviation Supervision) approves materials, procedures, appliances and other areas by other means just like a Technical Standards Order (TSO) or together with a type certificate. The idea is very straight-forward: TheFAAsays that so long as you don't infringe after somebody else's patent, you can make a component or system of parts that someone can set up on their airplane instead of the initial item. The FAA, specifically the ACO (Aeroplanes Certification Office) of the FAA, is responsible for approving any part design related to commercial plane. An OEM (OE Producer) is subject to the same regulations to be eligible and validate parts as a PMA holder is. An OEM will not approve its own parts. Order8110. 42prescribes the agreement types of procedures for FAA workers and guides people in the authorization process. Of course, for safety's sake, the FAA desires detailed evidence that the PMA part is really as good or much better than the one made by the original equipment company, but that is clearly a hurdle that greater than a thousand PMA manufacturers have jumped many, many times. The rewards because of their efforts are the gains received from building what they feel are better products, less costly products or both. Today, airlines on every continent have an increasing demand for the PMA parts. The usage of high-quality PMA parts has given airlines the cost cost savings that are translated into operational economy. Airlines are actually working straight with PMA suppliers to develop replacement parts as a hedge against what they view as the monopoly charges electric power of OEMs.
1. 2 Problem definition
Being first to the market is much less important as providing the customers what they want. Although being the major player on the market, OEMs such as Boeing and Airbus have to take into concerns of how the customer seems about the cost-cutting value that the PMA part offers. The OEM might have paved the road in the industry, but PMAs are taking advantage of the situations that arise from it. At a time of weak earnings progress, the global airline industry has continued to get more impressive cost containment
strategies. Maintenance, which ranks second behind gasoline as the most significant cost collection item for airlines, has huge potential for cost savings. Much of these cost savings can be realised by using DER repairs - i. e. fixes approved by FAA Designated Engineering Associates - and parts produced under PMA by reputable sources other than the original OEM. (Andrew Farrant, October 2010).
The battle between the original parts and the aftermarket parts have been a heated one, not only in the aviation industry but also from other businesses as well. We can see almost atlanta divorce attorneys motor vehicle workshops that aftermarket products are being sold widely to cater for the demand of the customers. Original manufacturers would like their customer to buy and use their products, whereas aftermarket products manufacturers offers a cheaper substitute that could work as good as the original part. The OEM says there's a lot wrong in using aftermarket products, because if the OEM didn't make it, there's no guarantee that it will perform as well as the original; a situation that may jeopardize lives and indirectly destroy the reputation of the aircraft contractor. A straightforward situation could describe all this. If in the event of an aircrash, the general public only hears that a particular model plane crashed, not the actual fact an aftermarket part may have brought on it.
In the other hand, the PMA producer says there's nothing wrong with their parts, especially since the FAA has to certify them as being add up to or better than the OEM's product before they can be sold to anyone. That is to demonstrate that only a certified part can be utilized on an plane, thus keeping the typical of airworthiness. Usage of such parts does not at all impact the airworthiness of the airplane. Such parts are identical in design specifications and part quantity compared to that of original maker. Such parts are not bogus parts. They meet the drawing and materials requirements and are manufactured under agreement. Often, PMA parts are cheaper than the OEM parts as PMA holder doesn't have to make any investment on research and development. The PMA parts are identified by OEM's part amount with either a prefix or suffix to identify it from OEM part number and also to have traceability. It really is almost indistinguishable, but with less price tag. Just how that the OEM addresses this issue is to state that once PMA parts has been used in combination with their aeroplanes, the warrantee for that particular plane, if still valid, is not accepted nowadays. That is a big blow for the PMA industry, creating a minority say in the problem. But like the rest in a free market, the victor is chosen by the clients, and for the present time they're separated, with some swearing by PMA parts and more swearing at them.
In this challenge, both OEM and PMA have their own power. The OEM is armed with guaranteed compatibility and the PMA steps frontward with compatibility, as well as lower prices and better availability. It is hard to see which part is winning the parts struggle. It all comes to which part and what sorts of customers are being analyzed.
1. 3 Objective of research
The objective of the research is to look for the acceptance of PMA consumption within the aviation industry in Malaysia. There is always two sides on the gold coin. Some may say that PMA is very the ideal solution especially in this dire economical state that the aviation industry is facing, while others may choose the assured OEM parts. Matching to Jason Dickstein, chief executive of the Modification and Parts Replacing Connection (MARPA), the attitude toward PMA parts was completely different in the 1990s than it is today. He says that as some greater companies known that PMA parts is actually a viable threat with their business, people became more hesitant to accept them. Efforts to attempt to disadvantage PMA parts ensued in the Aviation Rulemaking Advisory Committee (ARAC).
"I think that there has been some anti-PMA sentiment in the past, " says Dickstein. "People who didn't understand PMAs were averse to PMAs because they displayed an mysterious quality. During the last decade or so, MARPA, the PMA parts manufacturers themselves, and even some of the government companies have done a good job cooperatively of better educating the public, particularly the open public within the industry, in what a PMA part is.
In reaction to OEM concerns, the FAA put its Aviation Safety (AVS) Repair, Alteration, and Fabrication (RAF) Team to work. Its activity was to "provide suggestions to close any gaps existing in both current and in-process laws, policy, and direction essential to ensure an acceptable level of safeness commensurate with the criticality of affected parts. "
"What they concluded was that the particular FAA is doing is safe, that PMA parts are safe, and lots of the OEM concerns are competitive, rather than safety-driven, " says Dickstein.
1. 4 Research scope
This research will be targeted mainly on both biggest airline providers in Malaysia, that happen to be Malaysia Airlines System and Air Asia. The range of the study will only be focused in the maintenance and financial field.
* Maintenance - the practicallity of PMA parts to be the substitude for OEM parts (the way they perform, do they can fit easily, the availability of parts etc)
* Financial - the pros and cons in conditions of monetary value, both in short and long term aspects (how much difference does indeed PMA parts offers in conditions of savings, from what extend does PMA parts affect the warranty of any aircraft etc)
This research will only cover the perceptions and opinions of folks who are involved with the aviation industry, especially on PMA issues. The outcome from this research may help both airlines in deciding whether to move for or against PMA parts. There are a few big names working with the PMA manufacturers. Titles such as English Airways, Delta Airlines, Pratt & Whitney are now enjoying the huge benefits that the PMA parts offers, both to them and also to their customers. Airline providers in Malaysia must have their stand on the PMA issue to become on par with the top names.
CHAPTER 2 : Books REVIEW
2. 1 Introduction
PMA parts have been produced for 50 years, you start with the demand for replacement parts for World Battle II-vintage aircraft. In those days, companies apart from the original manufacturers were allowed to design and make free parts for aeroplanes under a PMA to help a big number of armed forces aircraft sold to civilian operators to take flight again. However, even after 50 years of consumption throughout the industry, arguments between your airlines, the OEMs and the PMAs are still highly debated. This is due to the "questionable quality" and "safety concerns" used by Original Equipment Manufacturers (OEM) to concern PMAs, whom they take as a large competitor in the market.
2. 2 Certification
According to the FAA, PMA means the look and production acceptance for modification and replacement unit parts. It allows a supplier apart from the OEM to create and sell these parts for set up on type certificated products. With no PMA, plane parts would be designed and created solely by the OEM, granting them a monopoly in the replacing parts market.
The FAA requires that companies or people that produce parts for sale for installation into type certificated aircraft may only sell approved parts. These "approved" aeroplanes parts, apart from hardware, are parts that are approved by TSO, PMA, a sort certificate, or a creation certificate. To receive a TSO or PMA endorsement for a component, the manufacturer of the part must show the FAA that the part will operate just like the original part, as supposed in an aeroplanes environment and will be manufactured in line with the FAA specifications. The FAA regulations states that it's the duty of the person installing the parts on an aircraft to guarantee the parts meet up with the appropriate airworthiness standards. The Technological Standard Order (TSO) is one of the procedures that the FAA uses to determine standards for aircraft parts. TSOs have been proven for most types of airplane parts such as getting gear parts, engine parts and many avionics accessories. TSOs are split into different categories and the evaluation necessary to cover a wide range of environmental conditions such as temperature, temps, altitude, vibration, etc must be established.
If a TSO is designed for a component, a manufacturer will test the part in an FAA-approved laboratory to meet up with the requirements according to the TSO. When the part successfully passes all the tests, then the company will be awarded a letter from the FAA proclaiming that the part is approved per the TSO. This TSO approval notice means the part can be utilized for installation in any aircraft via an STC (Supplemental Type License) or TC (Type License) as long as the operating environment of the part in the aeroplanes is within the TSO standards.
If there are no TSO categories founded for the part that the maker wants to produce and sell, the maker can still have the approval from FAA by tests the part in the genuine aircraft type where it is designed to be used. To do this, the part must be conformed to the look drawings by the FAA-designated inspector to ensure it complies with the type design. Then it will be installed and examined in accordance with a FAA-approved test plan. Upon completion of the testing, submittal of the appropriate documentation, and verification of the FAA-approved processing system for the part, the FAA will issue a letter identifying the part as qualified to receive assembly under PMA for the specific aircraft enter which it was examined. The PMA part will then be installed in the specific aeroplanes via STC or TC. If the part manufacturer would like to make use of the part in another airplane type, additional documents and tests may be needed. Regardless, a PMA part can only just be installed within an aircraft types where it includes specifically been approved.
Airliner who produce parts for their own use, do not require a PMA for the manufactured parts being that they are not being sold to another party. The parts, however, still must be approved and made according to the FAA criteria and installed by using a STC or other FAA-approved unit installation procedure. The restrictions states a PMA part must be add up to or better than the OEM equal. John Wicht, a project supervisor at Wisconsin-based Rapco, Inc pointed out that the FAA Aircraft Qualifications Office won't acknowledge on 'equivalent to' parts, regarding to his engagement in many PMAs. He also said that "If you can't definitively show that your part will exceed the performance of the OEM part, they're just not interested in talking to you. "
2. 3 Security issues
The FAA or EASA haven't any statistical facts for safety concerns with PMA parts. It really is as if they are simply turning a blind eye on the problem, which is obviously not a good media for the OEM. To them, anything can do so long as all the required procedures are being used accordingly. To accomplish certification, PMA manufacturers must prove to the FAA that a part that they manufacture is the same in every respect to a design in a type-certificated product or, through test an computation, that the part is equivalent to, or better than, the main one it seeks to replace. "You must prove that the product quality confidence system is adequate before you get development approval, similar to the OEM products are proven, " says Jason Dickstein, president of the Changes and Substitution Parts Association (MARPA).
As people get started to see the particular regulatory structure bordering PMA parts before it is being approved, those people begin to simply accept PMA parts. Many airline carriers are now starting up programs to recognize and purchase PMA parts because they believe the PMA parts are safe which, because they stand for competition, PMA parts would bring prices down. Uk Airways had been on the contrary of the PMA parts until associates from Heico International Inc. , a maker of hydraulic cylinders, sat down with those to explain the great things about PMA parts. Following the presentation, English Airways had switched around 180 diplomas and commence purchasing PMA parts.
Air carriers are now being more acceptance towards PMA at the purchasing and quality assurance levels because they have conducted investigations prior to the actual usage of it. Air carriers possessed to investigate the utilization of PMA to determine whether or not they represent a good monetary value. What the carriers found out was that not only were they a good economical value, but they're also safe. A PMA may be obtained for substitution parts for TSO articles that are approved as part of something type design, so long as installation eligibility to that product can be shown. Approval of a component that would bring about a significant design change to the TSO article can't be done under a PMA and would require a new TSO authorization. Even critical components can be 'PMA'ed, given that it is compliance with the specific FAA advice. When there is a PMA on a crucial part, chances are that the critical part has gone through a whole lot of FAA scrutiny that the OEM part
didn't go through. This means that a PMA part has been more thoroughly examined.
The FAA has to see all the lab tests being completed to the most critical components. These won't be delegated to a DER (chosen engineering representatives). The FAA has to perform its analysis of all the data and make the average person regulatory compliance findings themselves. The draft for FAA Order 8120. 2F also states that once a PMA part has handed through the PMA holder's quality system, the holder must set up a procedure to survey any failure, breakdown, or defect of the part to the FAA.
2. 4 Cost savings
By using the PMA parts, airlines all over the world can also save big money. The economic essential for airlines to reduce maintenance costs means the personal savings offered by PMA parts, in comparison with OEM catalogue prices are a big advantage. DER vehicle repairs and PMA parts programmes that specifically concentrate on gas way components can cause savings of more than US$500, 000 per shop visit, or over 50 percent of the normal OEM catalogue
pricing. These alternate parts and repair programmes not only symbolize a great chance for savings, I believe they represent the only form of competition available in this specialised market. [ Andrew Farrant, 2010 ]
As mentioned earlier, British Airwaysis evidently showing an extremely high interest on using PMA parts. They are actually looking to make massive savings through the considerable use of PMA parts rather than sourcing them from the OEM. Speaking at "THE FANTASTIC PMA Argument" event at the Royal Aeronautical Culture in London, Ameet Bhalla, British Airway's technical supervisor, airframe systems, explained that the strategy comes after on from a deal authorized with Heico, the world's largest independent designer, manufacturer and distributor of FAA and EASA approved alternative parts for plane engines and aircraft components. This will see that Heico will be taking care of BA's choice parts program while at the same time helping the flight maximise cost savings through using different aeroplanes parts.
"Through this deal with Heico, we will positively seek PMA opportunities in the years ahead. We won't be the cash machine for OEMs, " said Bhalla. "Contrary to popular belief, PMA parts have been used for quite some time within BA. There has been an acceptance process since 1997 and hundreds of PMA parts are actually in use. In 2006 only, 28 new PMA parts were approved, " he added. "They are not bogus parts but approved by the same regulatory government bodies that approve OEM aircraft parts. BA reviews all relevant PMA parts and approves each one on the case-by-case basis. Once installed, the parts are watched for any defect trends and we note failure modes of PMA parts to check on that they are similar, if not similar, as their OEM comparative, " he says. Bhalla also said that BA are actually looking on to discovering the potential of 95% of Heico's inventory that are non-critical items. "There's been no overall financial cutting down target arranged but we have said that people will openly entertain the PMA theory and would consider adding non-critical PMA parts on any of our plane, " he says.
James Bennett, Heico Western sales director, informed Airfare International: "Historically BA, without anti-PMA, could not be said to be advocates either. They may be well known to be extremely conventional as an airline but the move byLufthansa, which isa stakeholder in Heico, was observed in the industry as an extremely successful proceed to keep carefully the OEMs in check. "
"BA must certainly be looking around saving between 30-40% off OEM list prices and will be concentrating on high-cost items. Heico will head that PMA management process and review together with BA where further PMA applications can be used. We will be the fulcrum for BA to explore PMA. "
2. 5 Availability
PMA manufacturers are also pleased with their inventories, to be able to supply immediate availability on a variety of parts that the OEMs have trouble keeping in stock. Although customers' most typical issues are with engine motor OEMs, shortages are available with everything from fasteners to landing products struts.
During the summer of 2003, owners of MDHI's helicopters observed a dramatic decline in the option of OEM parts. It wasn't long later on that everyone understood the company is at the grips of severe cashflow problems, leading to furious suppliers refusing to deliver new components to the manufacturer floor until spectacular bad debts were paid. Because of this, sales of MDHI's light single-engine MD500s and twin-engine Explorers plummeted and there are rumours that MDHI was months away from bankruptcy. Meanwhile, MDHI aircraft surrounding the world were on the ground with timed-out parts plus some very angry operators.
Aerometals, a California-based supplier of PMA parts, which have been offering PMA parts for MDHI (then Hughes Helicopters) since 1983, was perfectly positioned to use advantage of the situation with the OEM and sell tons of products to MDHI's restless customers. And although the fitness of MDHI has greatly better since its acquisition by Patriarch Companions investment group in 2005, customers still call on Aerometals for a multitude of components. Aerometals tend to have 95 percent of the product line designed for same-day delivery, whereas the OEM competitor has many items back again ordered for half a year or more. Aerometals has experienced a huge surge in sales simply because they have the items in stock and the OEM doesn't.
Even a few of the healthy helicopter manufacturers have had trouble filling orders. Since the terrorist disorders of September 11, companies likeAgustaWestland, Bell andEurocopterhave seen requests for new aeroplanes come in at an archive pace. The increase in purchases at the helicopter manufacturers still have their assembly lines operating at maximum capacity. A fresh Bell orEurocopterproduct will have to wait around two to three years before it could be sent. The ripple aftereffect of those sales has stressed the engine unit manufacturers and other OEM subcontractors in the chain as well, going out of the door open for PMA manufacturers to step in with parts ready for immediate shipment to plane already in-service.
2. 6 Wider acceptance
Acceptance comes with maturity. And where there is acceptance, market potential could develop from it. This assertion briefly concludes the PMA parts in aviation world today. Each year, more businesses discover the advantage of buying PMA parts. Because of this, the aerospace industry has observed a continuous go up in the utilization of PMA parts on a worldwide range. But their popularity by the airlines has escalated only recently. "PMA parts acceptance among airlines was really low just five years ago, " says Hal Chrisman, a principal at the Ann Arbor, Mich. -established management consulting firm, AeroStrategy. North American airlines have long used PMA parts, but their involvement in their cost-cutting value has increased noticeably since 9/11 and the ensuing economic downturn. PMA parts "supply the irresistible cost benefit of 30 percent to 50 percent, " says Kirti Timmanagoudar, research analysis at the consulting & research company, Frost & Sullivan, San Jose, California. Similarly important to industry potential is the appearing interest coming from European countries and Asia. Europe's growing use of PMA parts "is being supported by a better industry structure and by major third-party MRO providers that are encouraging airlines to change to PMA parts, " regarding to a Frost & Sullivan survey of Western european maintenance trends. The increased use of PMA parts in Europe is at tandem with the continent's growing variety of low-cost providers (practically 50 of the greater than 80 carriers, corresponding to Frost & Sullivan) and the development to outsource maintenance, which has brought the swift increase in amounts of third-party MROs. Ironically, not surprisingly growing demand for PMA parts (made in the United States and approved for popularity far away through bilateral contracts), Europe has nearly no parts manufacturers other than the OEMs.
This escalating interest in PMA parts led to a two-day conference of flight maintenance representatives in Seattle in later January 2006, the purpose of which was to raised understand PMA parts and theFAAparts acceptance process for the airlines. They want to, first, learn how each of the attending airlines cope with PMA parts and, second, find ways to expedite, as well as perhaps standardize, the use of PMA parts. "Before, the airlines obviously didn't speak much to each other [about PMA parts handling], " according to Gloria Nations, leader of the Adjustment and Replacement unit Parts Association (MARPA) and attendee of the Seattle conference. Spearheaded by Alaska Airlines, the appointment included presentations by invited relationship, administration and industry officers. Airlines like United, Delta, Air Canada, Japan Airlines and, lately, English Airways have struck proper partnership handles Heico, reputedly the world's major independent designer, supplier and distributor of FAA- and EASA-approved substitute parts for airplane and jet motors. American Airlines has a jv with the business to manage its substitute parts, while Lufthansa Technik actively encourages the development and creation of PMA parts through its 20 percent stake in Heico.
Carl Pedersen, leader and CEO of Cimber Air Support, a separate advocate of PMA, told delegates that PMA will become more relevant than ever before as providers are pressured to minimize cost without jeopardizing security. "Yet, whenever the use of PMA parts is set up for talk, " said Pedersen, "the individual who tables the problem is often looked after as 'the bad guy of the movie' which, to my head, indicates that the main topic of PMA is not totally understood. "
EASA is only going to grant acceptance to a PMA part today whether it's not really a critical component, it has been manufactured under license or if any minor changes or more major supplemental type qualifications meet specific EASA acceptance.
But now, Pedersen said, EASA has programs in place for a Western european PMA equivalent to the FAA under the banner associated with an "EPA" part, that a sensitive for review has been commissioned but not yet finalized. "It could be argued that design and making procedures are already set up under EASA's Part 21, " said Pedersen, "but creating an established European equal will put Western operators and MROs on a straight footing using their U. S. counterparts, eliminating the unfair trade limits we have today". To this end, he said the issue of PMA might yet be contained in the imminent EU/U. S. Bilateral Air Basic safety Agreement which, apparently, presently is embroiled in the politics of fees and charges.
Yves Morier, EASA's brain of product safety, verified EASA is talking about with its FAA counterparts how better to cooperate on PMA rulemaking. "Currently, there is no statistical information for safety concerns with PMA, " said Morier. "But the overall experience may well not be sufficient to bring definitive conclusions. "
Chris Carter, who manages the FAA's Official certification Procedures Branch, had a distinct view. "PMA is here to remain, " he said. "It's deeply embedded inside our system, and there's an ever-growing demand, especially given that Pratt & Whitney is going into the market, " he said. Additionally, in terms of PMA product quality, he verified the FAA has no "better than" or "safer than" conditions. The only pub required is the complete safeguard of professional rules. Any latent risk in PMA has more to do with the financial standing of the PMA manufacturer than the PMA part itself, and, in his view, some PMA manufacturers are attaining the scale and stableness of many OEMs.
Looking ahead, he advised the delegates that the FAA will constantly improve its processes and work very strongly with MARPA (Adjustment and Replacement Parts Association) on forthcoming insurance policy and new changes. "We're also widening delegation as the industry matures its capacities and responsibilities, " he said. Indeed, the U. S. has signed its first PMA bilateral contract with Australia, which now has its PMA approval techniques, he said.
The greatest aiding fact that PMA is currently being accepted is the defence from the FAA privately of PMA. In an attempt to counter anti-PMA protection concerns, the FAA released Special Airworthiness Information Bulletin (SAIB) NE-08-40 on Aug. 8, 2008. There have been a few wording in a few OEM manuals that drove the FAA to issue the bulletin as a final statement within an ongoing debate about the validity of PMA parts. Regarding to Jason Dickstein, leader of the Changes and Parts Replacement unit Connection (MARPA), the SAIB was influenced by the FAA's dismay at the fact that some OEMs were utilizing protection documents for competitive purposes. A MARPA release from Aug. 10, 2008, expresses that some manufacturers have made commercial statements designed to demoralize the public's self-assurance in PMA parts. OEM decisions cannot override the term of the FAA. "If the FAA approved a PMA part to be used, the OEM is at no position to tell you that the FAA's acceptance is invalid, " says Dickstein.
MARPA says that the FAA needs the industry to take care of its authorization of PMA parts with the esteem to the FAA decision. "We could an exceptionally risk-averse industry, " says Dickstein. "Many industries is going with a fresh product as long as they don't really see anything wrong with it. Our industry won't go with a product unless we see everything is right with it. "
2. 7 Different views
As a person, the air travel industry consists of numerous subcategories. All of them have another type of way on the PMA issue and whether they best fit into their operation or not.
2. 7. 1 The Airlines
It is in a very competitive business environment that airlines are working, with income so small, every money has to be treated as if it was worthwhile a million. That is why all airlines are very interested at the low cost that PMA parts do offer. Most of the engine parts that must be replaced on a regular basis, must be changed occasionally and the cost of sustaining such activity are straight proportional to the usage of the engine motor. This means that a lot more the engine has been used, the greater maintenance that it has to go through and the additional money needs to turn out from the pocket of the airline. Maximising the consumption of the airline's resources, in cases like this the airplane itself, is very important in keeping the airline in business. Acquiring the less expensive part such as the PMA parts to cater to the demand of the ever increasing cost in maintenance is a very good move. The airlines are trying to control the amount of money that comes out using their pocket to be able to operate successfully. They can not control the price tag on fuel, therefore the next most sensible thing that they can control is the price of maintenance activity. But what scares them is the OEMs requesting the billion money question: "Are you willing to risk lives, rules suits and ruining your good name because you decided to buy cheap parts?"
In response to not knowing which part to maintain, whether heading to the people who say PMA parts are safe and inexpensive or the OEMs who say PMA parts are unsafe because they're inexpensive, some airlines conducted evaluations. Samples of an OEM part and its PMA equal are run in managed tests hand and hand to judge their performance. Many airlines that perform their own checks end up selecting certain PMA parts, while keeping some OEM components.
The buzz surrounding the airline industry is the fact that British Airways does not use PMA parts in any way, but according to Michael Barnes, who will serve as BA's design guarantee supervisor, the UK's greatest airline does use PMAs, although in a restricted amount, aboard its 230-plus aircraft. "Our management team is behind the PMA process, " said Barnes. "We've an internal authorization process we've had jogging for 20-25 years. " He added that BA is looking for more, longer-term PMA associations.
David Linebaugh, an engineer with Delta Airlines, and the only real full-time engineer specifically given to PMA parts with Delta Airlines defined his airline's reliance on PMA parts. "We have to really know what you have and feel great that you did this part right, " Linebaugh said to the PMA reps present at the twelve-monthly gathering. "We must do what's in the best interest of Delta Airlines. " Actually, matching to Linebaugh, Delta approves 95 percent of the PMA parts they look at, generally because if indeed they find a deficit in a component's design, they send it back again to the PMA manufacturer and ask for some modifications. Taking into consideration the size of Delta's fleet - more than 500 aeroplanes at any given time - the PMA supplier is just as thinking about producing a top quality, cost-effective part for the best carrier as Delta is within buying it. Linebaugh also said that more than 90 percent of the PMA "packages" they acquire only need administrative review from Delta, instead of a complete in-house complex review. He attributes that number to the specific and meticolous efforts of the PMA companies to build a quality product and provide strong, verifiable technological data to aid the airworthiness of the component.
Ameet Bhalla, technological manager, airframe systems at British Airways Executive, says that those who are privately of the OEM should understand that approvals for PMA parts and OEM parts are created by a similar people. "PMA are EASA- and FAA-approved parts, " said Bhalla. "They're not bogus parts. " He stressed that although BA is undoubtedly "anti-PMA, " it actually has been using PMA parts since 1997 and created its own parts authorization process in Feb 2006. BA possessed approved about 28 different parts since then, but they are looking to widen the usage of the PMAs. Through its relationship with Heico, Bhalla said BA will positively seek PMA opportunities and potential within the 95 percent of Heico's inventory that comprises non-critical items. "We won't be a cash machine for the OEMs, " he said.
Aegean Airlines' CEO, Antonis Simigdalas, who attended the conference as leader of the Western Regions Airline Association (Period), said the PMA issue is a clear demonstration of the way the air transportation industry is responding to issues that matter safety, suggesting that the anti-PMA lobby was "overdoing it a little. " In his thoughts and opinions, compromise on both attributes could increase operating protection and possibly improve safe practices.
2. 7. 2 The lessors
Phil Seymour, controlling director of the International Bureau of Aviation, pointed out that it is hard to differentiate the parts, whether it's an OEM or PMA, upon returning an aeroplanes from lease. This is because they seldom contain the "FAA PMA" suffix showing which part is which. This may only be determined by the documents and tags associated with each part during the maintenance activity itself. He also observed that the value of an used aircraft is usually evaluated on what has been done to it throughout its functional life, for example a recently available D check might add $2 million or $3 million to its value. But imagine if the previous operator have been using PMA parts during the D check somewhat than OEM parts? There has to be differences in the grade of both parts and this variations, although small in amount may eventually lead to bigger cost gap.
"Appraisers have a tendency to look at the expense of added items somewhat than their value, " said Seymour. "But how do we compare the beliefs of two recently overhauled CFM56-3C motors, where one has only OEM parts and the other has been fitted with P&W life-limited PMA parts? We can't add the standard $1. 5 million to the engine unit fixed with PMAs, because the price of the PMA parts may only be $1 million. So, how much do we add this case?"
Despite such conundrums, some lessors are gradually taking the PMA. There have been recent lease agreements where the lessors are giving the choice to the customer to utilize PMA parts, with the condition that they must be addressed before hand.
John Sharpe, CEO of Engine motor Lease Finance Corp. , said investors prefer property with long lives, strong value retention and extensive re-marketability. So, their best concern in conditions of risk is: if one flight installed PMA parts over a lessor's aircraft, and then that aircraft was offered to another airline which used only OEM parts, the deal could never be done. "It's a simple equation, " he discussed. "Only if 50 percent of my customer base desires PMA parts in their motors, then that reduces my market by 50 percent, immediately reducing the value of the property. "
Sharpe experienced that OEMs are to blame for this value differential because the success of PMA puts their strategy of selling equipment with an eternity spares package in danger. Indeed, by protecting their aftermarket with these guaranteed cost strategies, OEMs have tripled their market share within the last 10 years. As a result, OEMs are extremely concerned about expansion in the PMA market. "They're those triggering problems downstream for everybody else, " said Sharpe, "particularly for unbiased MROs, non-OEM parts suppliers and leasing companies. So PMA is either going to be the fatality knell of a dying pet animal or a complete game changer. "
Another air travel delegate, who preferred not to be determined, voiced his airline's frustration at being "stuck in a corner" because most of its airplane are leased from lessors that don't that allow PMAs. "Our engine unit suppliers clearly state that no PMAs can be utilized, " he said, "but we certainly will take a look at using low priced consumables. "
Thanos Pascalis, technical director of Aegean Airlines, thought lessors should follow the exemplory case of "informed" airlines and discuss PMA's impact on component values. On top of that, PMA designers should support their products with appropriate paperwork, like the OEMs do. In addition, airlines should put pressure on lessors through their buying electric power and, where possible, limit the amount of lessors per fleet to 1 or two companies. "Placing say 20 leases with one lessor might allow some arm twisting, " he said.
2. 7. 3 The Cargo Carriers
Major cargo providers have another type of take on this matter. Operating in just a small variety of fleet, they are not enjoying the same market of size benefits like folks carriers (airlines usually have bigger variety of fleets). However, in terms of gains margins they are leading. Jointly, these issues make the financial consideration of PMA parts just a little less pressing than in the airline's corporate and business office. On their behalf, in terms of the aeroplanes upkeep, OEM's higher price will not convey any issue. The option of parts, however, is really important as it pertains to moving cargo. Smaller fleets often means less spare plane to press into service. Mechanics have to get broken equipment back into the air as fast as possible, making availability of the needed part the main element issue, not the price. When the OEM has it, fine. If not, they'll find the PMA on the line.
2. 7. 4 The Military
If there's one PMA customer with a profound interest in saving money on parts, it is the Department of Defense. In fact, even the history demonstrates that the army is the main one who started out this whole PMA sensation. Many people credit the Air Pressure with making the PMA industry as successful as it is.
Back in the 1970s, administration insiders leaked reports of $6, 000 hammers and $2, 000 toilet seating to the press, sparking public outrage. Taxpayers demanded better accountability in military services spending and an instantaneous stop to paying high charges for seemingly simple items wish contractor made it specifically for the federal government. Today, mid-air Force is a world leader in the use of PMA parts, but all US armed service aircraft rely closely on them. That's a substantial quantity, considering 29 percent of everything flying above the 50 areas is one of the Department of Protection. On top of that, issues of paying unnecessary charges for parts have been greatly reduced.
2. 7. 5 The Commercial And Business Operators
Commercial air operators come in many sizes, with each one taking a look at the PMA world from a marginally different perspective. With the ever before growing level of popularity of fractional possession programs, the people who buy time with them are more than happy to relinquish the whole OEM vs. PMA parts concern to the program professionals. And a formidable problem it is, too.
New Jersey-based NetJets is the largest fractional operation in the industry, flying 700 airplane more than 370, 000 miles per year. All of that flying means repeated appointments to the shop to displace timed-out components and fix all the unexpected problems associated with aircraft that are, by organizational design, retained very busy. With those many repair cycles, a fractional procedure has to limit downtime in order to maximize earnings. PMA manufacturers boast immediate turnaround on requests, which fractional operators love to listen to. It doesn't hurt if the purchase price is good, either, because even though plane availability is vital, competition continues to be out there. Commercial accountants, while worried about having an airplane on the tarmac when the boss needs one, aren't happy to spend additional money than they have to to the service.
As as it happens, whether or not PMA parts are used is sometimes out of the hands of the fractional managers. Most contract their maintenance out to various shops selected because of their skill, rates, turnaround history and strategic location. Contracts between your fractionals and their repair depots can dictate which, if any, OEM parts can be changed with PMA items, but it still doesn't end there. There's just a little subject of resale value. Fractional plan aeroplanes come and go out of the fleet frequently, as older planes are dumped and only new ones, or at least ones that contain a reasonable timeframe left in it before they too become liabilities.
For the most part, audience are fine with knowing the airplane they're looking to buy is completely OEM-equipped, but some people - the types the OEMs want everyone to think like - get nervous if they see a PMA component in the log publication. That can give the fractional operator at least some incentive to use OEM parts. Some fractionals play both ends against the middle, opting to utilize PMA parts while an airplane is in this program, then switching back again to OEM parts as the time to sell off that plane approaches. Days gone by existence of the PMA part it's still memorialized in the maintenance logs, but a potential buyer with anti-PMA sentiments will need solace in knowing that the aircraft is all OEM again.
As for the expensive business jets that are wholly had and controlled by one company, holding the cost of their maintenance to the very least while simultaneously making the most of availability is extremely important. The OEMs' position is the fact that utilizing their parts might not be the cheapest, nonetheless they say they are the most reliable, and will fetch a much better price when enough time comes to trade the planes in. But up in the accounting office, the perception is an FAA-approved part that's available today for less price trumps the OEM offering practically every time. Commercial pilots, who are interested in basic safety and keeping the company's aviation department from going belly-up (for the reason that order), are for anything that will carry down prices, plus keep carefully the executives flying. The price tag on PMA parts, and their availability to a one or two-plane operation, performs into those priorities.
2. 7. 6 The GA community
For the overall Aviation community whether a weekend aviation enthusiast out for a day of sightseeing or a tiny flight school trying to turn a profit, PMA is known as to be their best friend. For these people, money is vital and when it involves replacing a part, an OEM warranty is no problem. The difference in price between a PMA element and an OEM offering can practically make the difference. .
Pratt & Whitney was once a vocal opposition of PMA parts, mailing letters contacting the PMA industry problematic to the FAA. Within five years Pratt & Whitney commenced offering its PMA parts on CFM 56-3 machines. Not only does it have PMA parts on CFM 56 engines today, it also has a program to develop more. "Pratt & Whitney made a decision not to even develop an engine motor for the 787, " says Jason Dickstein, president of the Changes and Alternative Parts Relationship (MARPA). "Instead, they had taken the resources that may have ended up into growing an engine unit for the 787 plus they put those resources into growing PMA parts for CFM machines. Instead of putting all the investment into creating a fresh engine, why not simply generate income off the existing engine motor and get PMA parts for the prevailing engine? I believe it was an extremely smart business move for Pratt & Whitney. In addition, it represented a major shift in coverage from them having been anti-PMA to them having all of a sudden turn into a PMA company themselves. " If there is to be a "game changer" in the market, it probably is usually to be Pratt & Whitney. It intends to get PMA documentation to produce up to 48 critical parts for the CFM56-3 engine motor by spring and coil 2008. The to begin these, high pressure turbine shrouds, received the FAA's PMA approval earlier this season.
Rick Deurloo, director of sales for Pratt & Whitney's Global Material Solutions, affirmed that 19 of the 48 parts will demand supplemental type certificates (STC) because of design changes that P&W executed. "We're not new to the PMA market, " Deurloo insisted. "As an OEM, we've seen PMA market penetration on the JT8D, JT9D and today the PW4000, so PMA exists, and we live with it. We made the decision to build up parts for the CFM56-3 primarily on customer demand. We consider they will complement our existing aftermarket and allow for future growth, " he said.
Deurloo reported that lessors' reactions to P&W's move have been "more natural than expected" because they still have concerns over property marketability and residual beliefs. However, in his view, demand will be the sign of future marketability. Handling risk issues, he said P&W is well aware that safety and reliability are fundamental factors, which is why it is jogging its CFM56-3 life-limited-parts (LLP) program as an OEM program. "Though it usually takes them half a year or even more, lessors should come on-board eventually, " Deurloo predicted. "But the airlines will have to drive it by insisting lease contracts give them more versatility. "
2. 8 Better understandings
"Whenever we first started retailing parts in the middle- 1990s the circumstance was a lot like a guy having a trench layer open: 'Psssst! Wanna buy some PMA parts?', " joked Rex Kamphefner, co-owner and standard director of Aerometals, a California-based company of PMA parts forMD Helicopters. "There is a tendency to mistake PMA with the shady area of the market. "
Other PMA parts manufacturers, like Larry Shiembob, leader and CEO of Arizona-based EXTEX agree, and accuse the OEMs of implying to prospective customers that after-market parts are incompatible, substandard and possibly dangerous. "Among the big things you listen to from the OEM is the fact if you install a PMA part you will not have a guarantee, " said Shiembob, whose company builds parts for turbine motors. ". . . in reality, unless it's a fresh engine, you don't have a warranty in any case. If his part fails he must warrant that product equally as a PMA provider must warrant their product. So, that's a great scare technique: 'If you put in a PMA part your warrantee will be void. ' That's untrue and that is probably outlawed. "
John Wicht is a project director at Wisconsin-based Rapco, Inc. , manufacturers of PMA engine, auxiliary power device and brake parts. He actually agrees with the OEM's judgment of PMA parts, at least to a certain extent. "Many of the OEMs prefer to say that PMA parts are not equivalent to the OEM design, " said Wicht. "That is true. That's an accurate assertion, they're not. In virtually all cases they're more advanced than the OEMs. "
Wicht helps his lay claim by describing that PMA manufacturers have the good thing about monitoring the performance of the OEMs' components, then focusing a greater amount of attention on enhancing that part than the original builders are able to provide.
In addition to creating a part that fits or surpasses the specification of its OEM counterpart, PMA manufacturers must show a potential customer that the worthiness of the after-market component - whether through its preliminary purchase price, durability or better operating efficiency - is more appealing than the OEMs' offering.
"Our parts are frequently 40 percent cheaper than the OEM; and who doesn't like this?" Kamphefner mentioned. "Our customers won't lower us a break on quality, however. Because the parts are less expensive and available today, our customer still insists on perfect quality and they please contact Aerometals and raise a ruckus if they have the part didn't show the service life they expect. "
One factor that obviously stifles such potential is user misunderstanding of PMA parts, as was noticeable in the airlines recognized need to hold the Seattle appointment, and despite the PMA industry's 50-year-old history. Clarification in the Part 21 rules covering PMA parts would help get rid of the misunderstanding, and FAA's Aviation Rulemaking Advisory Committee (ARAC) Part 21 made recommendations that were contained in a notice of proposed rulemaking (NPRM), released in January 1999. One key suggestion would assure that all parts manufacturers, PMA and OEM, have set up production quality guarantee systems and self-audit of all activities. Practically all PMA parts makers have established these methods, even although NPRM never became a guideline. Such a rule, which is still expected, would no doubt clarify airline perspective of PMA parts. A revision to Order 8110. 42, which describes the manufacturing technique required to produce PMA parts, also would bring clarification. Order 8110. 42. B, Change 1, currently being worked on, would, among other activities, require a parts maker must, first, assure a part's quality; second, trail its use; and lastly, make any correction which may be uncovered from the traffic monitoring.
Through better understanding, clearer written rules and broadening international acceptance, the PMA parts industry may soon realize its full economic potential.
CHAPTER 3 : METHODOLOGY
3. 1 Overview
This research will be conducted in order to determine whether PMA usage is appropriate by the folks involved in the aviation industry. The advantages and drawbacks as well as the dependability of PMA parts were also part of the objectives. To be able to answer these research goals, I opted to obtain the view of the employees of two different departments in line with this topic ; Finance Department and Anatomist Department. Specifically, a complete of 40 respondents from either two engaged departments will be arbitrarily selected to make up the sample. Specific participants will answer a survey questionnaire structure in Likert format. Data obtained from this research instrument will be computed for interpretation. Along with main data, I am going to also make use of secondary resources in the form of printed articles and literatures to support the review results.
3. 2 Research Design
The descriptive method of research is going to be used because of this study. To establish the descriptive type of research, Creswell (1994) stated that the descriptive method of research is to gather information about today's existing condition. The emphasis is on explaining somewhat than on judging or interpreting. The purpose of descriptive research is to validate designed hypotheses that make reference to today's situation in order to clarify it. The descriptive way is quick and functional in conditions of the financial aspect. Moreover, this method allows a flexible methodology, thus, when important new issues and questions arise during the duration of the study, further research may be conducted.
Descriptive research on the other palm is a kind of research that is mainly concerned with describing the nature or condition and the amount at length of the present situation. This method is used to describe the type of a predicament, as it is present during the study also to explore the cause/s of particular a sensation. The purpose of descriptive research is to obtain an accurate profile of folks, occurrences or situations. With this research type, it is vital that the researcher already has an obvious view or picture of the phenomena being investigated prior to the data collection treatment is completed. The researcher used this kind of research to acquire first side data from the respondents so as to formulate rational and sensible conclusions and suggestions for the analysis. I opted to utilize this research method considering the objective to obtain first palm data from the respondents. The descriptive method is useful for me due to its flexibility; this method may use either qualitative or quantitative data or both, offering me better options in selecting the tool for data-gathering.
The research is using Money and Engineering Departments employees as respondents from Malaysia Airlines System and/or AirAsia in order to gather relevant data; the descriptive method is then appropriate as this may allow the id of the similarities and distinctions of the respondents' answers. For this research, two types of data were collected. These included the principal and supplementary data types. The principal data were produced form the answers the individuals gave through the review process. The extra data on the other hands, were obtained from published documents and literatures that were relevant to PMA parts. With the use of the review questionnaire and published literatures, I am accomplishing this study dealing with the combined quantitative and qualitative way of research. Through employing this blended approach, I will be able to obtain the benefits of both quantitative and qualitative techniques and triumph over their limitations.
Quantitative data collection methods are centred on the quantification of connections between variables. Dimension, numerical data and reports are the primary chemical of quantitative devices. With these devices, an explicit information of data collection and research of procedures are essential. The quantitative way is more on the detailed description of any phenomenon. It fundamentally gives a generalization of the collected data with tentative synthesized interpretations.
Contrary to the quantitative method, qualitative approach produces verbal information somewhat than numerical values. Instead of using statistical evaluation, the qualitative procedure utilizes content or all natural analysis; to make clear and comprehend the study findings, inductive and not deductive reasoning is used. The main point of the quantitative research method is that measurement is valid, reliable and can be generalized using its clear anticipation of cause and result. Being particularistic and deductive in character, quantitative method is dependent on the formulation of a research hypothesis and confirming them empirically by using a specific data collection. The scientific hypothesis of a quantitative method retains no value. This means that the researcher's personal thoughts, subjective personal preferences and biases aren't applicable to this type of research method.
3. 3 Participants
In order to look for the suitability of PMA in the aviation industry here in Malaysia, a complete of 40 respondents will be asked to get involved. The participants experienced for test selection must be personnel or employees of these respective team. This qualification means that the participants understand the nature of the questionnaire, making the study items possible for them to perform. The respondents will be selected randomly. Simple arbitrary sampling was done for the sample selection. This sampling method is conducted where each person in a population comes with an equal chance to become area of the sample. As all associates of the population have an equal chance of becoming a research participant, this is reported to be the most effective sampling technique.
3. 4 Instruments
The survey questionnaire will be used as the main data-gathering instrument for this research. The questionnaire will be split into two main portions: a account and the review proper. The account includes socio-demographic characteristics of the respondents such as age, gender, civil position, the amount of years they had served the business as well as their assigned job position. The study proper explored the perceptions of employees on the usage of PMA parts, particularly on issues that relate with the respondents team. The questionnaire proper section also includes questions that identify the advantages and drawbacks of using PMA parts in the department. The questions will be set up using the Likert format. Within this review type, five choices are provided for each and every question or declaration. The choices stand for the amount of arrangement each respondent is wearing the given question. The size below will be utilized to interpret the full total responses of all respondents for each and every survey question by processing the weighted mean:
Range Interpretation
5 Strongly Agree
4 Moderately Agree
3 Agree
2 Moderately Disagree
1 Highly Disagree
The Likert review was the chosen questionnaire type as this will enable the respondents to answer the study easily. Furthermore, this research device will give me the possibility to carry out the quantitative way effectively with the use of reports for data interpretation. In order to test the validity of the questionnaire used for the study, I will be tests the questionnaire to 3 respondents. These respondents as well as their answers will never be part of the actual analysis process and will be only used for trials purposes. After the questions have been answered, I will ask the respondents for any recommendations or any necessary corrections to ensure further improvement and validity of the instrument. I will then revise the survey questionnaire based on the recommendation of the respondents.
3. 5 Data Handling And Analysis
After gathering all the completed questionnaires from the respondents, total responses for every item will be obtained and tabulated. In order to use the Likert-scale for interpretation, the computation of the weighted mean will be carried out to stand for each question. Weighted imply is the average wherein every amount to be averages has a equivalent weight. These weights signify the significance of every quantity to the common. To compute for the weighted mean, each value must be multiplied by its weight. Products should then be put into have the total value. The full total weight should also be computed by adding all the weights. The total value is then divided by the full total weight.
