Non-OEM / PMA Components and DER Repairs: Best Practices

The Use of PMA and How They Are

Saving

the Airlines Money

Moscow

February 25, 2014

• PMA Legal Basis

• Regulator Updates

• Typical PMA Parts

• Reliability

• Operations Considerations

2

Agenda

Replacement Part Options

3

Bilateral Agreement – Russia/FAA

4

•Interstate Aviation Committee Aviation Registry (AR) and Federal

Aviation Authority of Russia (FAAR)Bilateral Airworthiness

Agreement signed in 1998

•Each agency considers certifications/findings as valid without

further finding The AR will accept FAA Airworthiness Approval Tags on parts only when the

FAA certifies that each part(s) conforms to AR approved design data

Is marked in accordance with approved procedures

Meets all additional requirements of the AR, as notified

Parts must have an 8130-3 tag referencing document for approved design

data

Direction of the PMA Discussion

• All discussion on the legal basis has ended

• All mention of safety issues have ceased

• Commercial aspects dominant – Individual customer specific

– OEM’s very active on restricting use of parts/data

– Lessor/financier education is key

• Smaller PMA supplier absorbed/partnering

• Significant focus on PM aspect of parts

• Revision D of 8110.42 in signature phase

• PMA approvals heading more to a risk based culture – Issue by FAA of the streamlined process policy

5

FAA Direction

• Separation of approval basis? – Production

– Engineering

– Installation

• Focus on supply chain – Who/what/how

– Frozen processes

– Management of sub-tier

– Flow down of requirements

– Lessons Learned

– Selection/de-selection of suppliers

• Less push for ODA – Operator confusion

• Harmonization of Critical Part definition – Aligns with FAA/EASA TIP

6

7

Where Can You Use FAA-PMA Parts?

Types of parts for which FAA-PMAs exist: Gears (CSD/IDG, ATS, APU, etc.)

Shafts (various components / accessories)

Bearings (rod ends, ball, roller, needle, spherical, tapered wheel, etc)

Bushings (bronze, teflon lined, flanged, etc.)

Filters (Oil, air, water, fuel)

Seals (o-rings, gearbox, various components / accessories)

Impellers, Turbine Wheels, etc. (various components / accessories)

Compressor Blades

Turbine Blades

HPT Shrouds

Electrical (switches, lights, sensors, LVDT etc)

Interiors/passenger accomodations

Galley products

Structures

Hardware (nuts, bolts, washers etc)

Landing gear

Avionics

Harnesses and cables

Ball screw actuators

Eligibility

“Crack down” on data sources

No blanket statements allowed

Data sources scrutiny

Questions on similar part experience

Quality of source data

OEMs willing to put PMA in IPC/CMM

8

9

• Piece Part Price

• Reliability

• Leverage

9

How do PMAs save airlines money?

Piece Part Price

• Every PMA company will use the standard verbiage –

40% or better

• Higher usage = bigger savings

• Incentive programs

• Cost avoidance based on historical stocking

• Reliability Improvements

• Options on parts

10

PMA parts are generally as reliable or more reliable than OEM

parts. Why?

1. PMA developers have the benefit of understanding the OEM’s

shortcomings

2. PMA developers often have newer materials, manufacturing

methods and hold tighter tolerances due to the re-engineering

process

3. Generally PMA developers avoid major problem areas that ADs

or major service bulletins have been written against

Reliability

11

12

Leverage

The influence you have

to negotiate yourself a better deal

Lease Holder Opinion

• Will allow - no critical/no-gas path PMA

• What’s in it for me?

• Ask and we can discuss

• Negotiate the use up front/early in the contract

• Financial institute????????

• Make your mind up

– Standardize use of PMA

– Decide what your policy is

13

New Services

• More active bundling of services

– PM of solutions

• PBH offering

– Emphasis on reliability of parts

• PMA supplier cooperation

• Input to maintenance cost drivers

• PMA/OEM packages

• Owner Operator Produced Parts

• New aircraft – what can you do for me?

14

OPERATIONAL Rules

• Deviation to CCLDC granted for PMA parts

– SFAR 88

– 737NG/757 Fuel Pump Parts

• Airworthiness Directive granted

– Landing Gear door hinge fitting AMOC for 737

• Use of TSO

– Cargo net approvals

15

Conclusion

• Every facet of aviation is using PMA

• PMA solutions available across a wide range of products

• PMA parts deliver significant savings via

– Direct part savings

– Reliability improvments

– Leverage in contract negotiations

• PMA parts are safe, reliable and a competitive

business advantage

16

Questions?

17

Slides 13 -16 from Marpa 2012

Appendix

18

19

Lavatory Filter

Page 19

PMA PN: A225400454-204WE : $9.00

OEM PN: A225400454-204 : $22.50

Airbus A330

20

Slow Close Toilet Seat

20

Typical OEM Toilet Seat price:

$500 - $800

PMA “Slow Close” Toilet Seat

price: $280 - $450

21

Customer Fleet Size Wencor PMA Spend

2012 Savings

XYZ 500+ $8.2 M $3.2 M

ABC 500+ $2 M $800 K

DEF 500+ $2 M $800 K

HIJ 294 $290,742 $196 K

OPQ 321 $321,416 $166 K

RST 142 $238,381 $152 K

UVW 198 $221,315 $126 K

GLQ 339 $339,307 $122 K

TST 500+ $346,226 $90 K

MNO 312 $302,137 $155 K

LTO 110 $138,907 $69 K

Representative PMA Savings

Cost Avoidance

22

PMA DeltaP Indicator – Airline X

• PMA Board approved use of PMA DeltaP Indicator in the B737NG APUs in

Feb 2012

• OEM selling price: $8,100 each, with 85 used per year due to poor reliability

Old annual spend: $ 688,500

New Annual spend with more reliable PMA: Less than $100,000

• 40 OEM on order - cancelled

Immediate cost avoidance: $324,000

• 20 OEM in stock sold immediately

$140,000+ generated

Airline D Coffee Makers

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2010 2011 2012

MTBUR

Current Cost Trendline

416 series BE Coffee makers

MTBUR (hours)

23

24

Airline H: GTCP331-200/-250 RFQ

• Current PMAs

– 86 parts with known usage

– $889,253 savings

• WIP (PMAs currently in development)

– 2 parts with known usage

– $9,156 savings

• Development potential

– 29 parts with known usage

– $237,724 savings

Total Annual Savings incorporated into the winning bid = $1,136,133

24

Independence from the OEM

25

Engine Starter Example (Honeywell 3505488)

PMA