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  1. Beijing, 25 September2009 Booz & Company General Aviation Implementation Support (GAIS) Airworthiness Module (Revised) 1st Revision: October, 2010 Final Revision: October, 2011 This document is confidential and is intended solely for the use and information of the client to whom it is addressed.

  2. Purpose of Document • The intent of this document is to provide a detailed handover of all analysis and materials relating to regulatory gap studies on Airworthiness Module as part of deliverables for General Aviation Implementation Support (GAIS) project funded by the US Trade Development Administration (USTDA) • The study focuses on drawing general aviation (GA) regulatory experience and insights from the U.S. because: • The U.S. has the most established and successful GA industry with a mature regulatory system that increases GA capacity and efficiency while maintaining safety • ACP is an U.S. organization with its members consisting of FAA and key GA aircraft and equipment manufacturers with global presence. ACP member firms are best able to share GA regulatory, management, technological and operational experiences from the U.S. • Analysis has been conducted and completed by Booz & Company with active contribution from Civil Aviation Administration of China (CAAC), Development Research Center of the State Council (DRC), Aviation Industry Corporation of China (AVIC), ACP members and other key stakeholders • For further information please contact: • Mr. Paul Fiduccia (PFiduccia@aol.com) • Mr. Frank Yu (dongfang.yu@ge.com) • Mr. Kevin Wu (kevinwu@textron.com) • Dr. Edward Tse (edward.tse@booz.com) • Mr. Yang Guang (guang.yang@booz.com) • Mr. Timothy Wong (timothy.wong@booz.com)

  3. This is one of the seven sets of deliverables developed for ACP GAIS project ACP General Aviation Implementation Support (GAIS) List of Deliverables Executive Summary 1 2 3 4 5 6 Safety Module General Aviation Airport Module Airworthiness Module Flight Standards Module Operators Module GA Associations Module Main Module GA Safety Regulation GA Airport Regulations Airworthiness Regulations Flight Standards Regulations Regulatory Constraints for Operators Roles of GA Associations Safety Oversight Organizational Structure GA Airport Planning & Design Type and Production Certifications Mechanics GA Aircraft Ownership Case Studies Sub - Module Safety Performance Measurement GA Airport Funding Aircraft Registration and Certification Pilots GA Operating Cost Safety culture and promotion

  4. In China, GA refers to all civil aircrafts activities other than public aircraft transportation activities NON EXHAUSTIVE Three Main Categories of General Aviation Flight Activities* Definition of General Aviation General Aviation China: General Aviation refers to all civil aircrafts activities other than public aircraft transportation activities. Including flight operations associated with industrial, agricultural, forestry, fishery and construction, and other purpose operations such as medical and sanitation, emergency rescue, Meteorological sounding, ocean monitoring, scientific experiments, education and training, culture and sports etc. Public Service Economic Construction Consumer Aviation Agriculture Aerial Photography Training and Sports Forestry Mine Exploration Tourism FAA: General aviation (GA) refers to all flights other than military and scheduled airline flights, both private and commercial. Meteorology Petroleum Services Business Travel Disaster Relief Others2 Private Use ICAO: General aviation comprises all aircraft that are not operated by commercial aviation or by the military. Others1 Non scheduled commercial operations3 (*) CAAC categorization (1) Others include aircraft seeding, pest control, farming and emergency rescue (2) Others include remote sensing, power line services and industrial associated applications (3) Non scheduled commercial operations include air taxi and air charter operations Source: Committee of General Aviation Specialist of China Aviation Industrial Base (CAIB), CAAC and Booz Allen analysis

  5. Airworthiness Module aims to identify opportunities to simplify airworthiness management of general aviation aircraft in China • The main objective of Airworthiness Module is to conduct regulatory gap analysis to identify opportunities to simplify airworthiness management of general aviation (GA) aircraft in China • The scope of Airworthiness Module is as follows: • Review FAA’s regulations in ensuring initial airworthiness of general aviation aircraft • Review corresponding CAAC’s regulations • Identify regulatory gaps • Recommend steps to improve airworthiness management of GA aircraft

  6. Summary of observations and recommendations for Module 3: Airworthiness (1/2) Module 3: Airworthiness

  7. Summary of observations and recommendations for Module 3: Airworthiness (2/2) Module 3: Airworthiness

  8. Executive summaryAirworthiness regulationsType and production certificationsAircraft registration and certification Appendix

  9. GA stakeholders have highlighted several regulatory and administrative shortcomings related to GA airworthiness Key Takeaways from Interviews and Questionnaire Lack of regulatory guidance • For experimental amateur-built aircraft, it is difficult to get type certification due to lack of necessary regulations and procedures • Most of the potential buyers of aircraft do not understand what exactly needs to be done and where to start • CAAC and the regional bureaus sometimes do not have conformed understanding - some options are approved by regional bureaus, but ruled out by CAAC • There are lack of standards and useful reference or guidance materials provided by CAAC Lack of understanding of regulatory requirements • The overall certification process from design, production to registration and airworthiness certification are lengthy • There are unnecessary administrative procedures and processesthat require: • Large amount (and at time repetitive) of paperwork • Frequent visits to different CAAC offices • Aircraft purchase processes are taken too long and some of the processes are repetitive Onerous approval process Source: Booz & Company analysis

  10. We have identified differences in three areas which have impacted the effectiveness of current airworthiness regulatory system Key Areas Key Differences Impact 1 • CAAC needs to review and incorporate provisions of Light Sport Aircraft (as stipulated in AC-21-AA-2009-25) in CCAR Part 21 • CAAC does not have clear airworthiness regulatory requirements for amateur built experiment (kit built) aircraft • Current production and test flying of experimental amateur built aircraft cause safety concerns and restrict the growth of amateur built aircraft Airworthiness regulations • The VTC process is complicated and lengthy - it requires on-site visits to the original aircraft manufacturer • China lacks simple but concise guidance materials in the following areas: • CAAC and industry guide to product design and production certification • Guidance for experimental amateur-built aircraft certification • Resource consuming for applicants • Confusion in interpretation of regulations • Inconsistency in regulatory compliance 2 VTC and industry guidelines 3 • Aircraft registration process is complex and restrictive for applicants • China lacks a guidance that summarizes requirements involved in acquiring, owning, operating, and maintaining a private aircraft • Resource (time and cost) consuming for applicants as well as CAAC • Inconsistency in regulatory compliance Aircraft registration and certification Source: Booz & Company analysis

  11. 广东男子7万自制飞机视频走红网络 2008-6-30 来源:中国台州网 ….两年前,40岁的陈昭荣正式开始在村里造直升机。从组装开始,他就不停在门前的空地上摆弄,拉去别人家里请人焊接等等。6个月前,他组装好直升机,“样子跟任何的一架直升机都不一样,是我自己做的,发动机是买来的一个二手发动机。”造飞机的全部花费,陈昭荣估计是六七万元… 1 Airworthiness Regulations China does not have clear regulatory requirements for self-built aircraft despite reporting of test flying activities and accidents 重庆小伙自制飞机飞上300多米天空 2008年10月26日 来源:新华网/华龙网 10月25日,彭聪驾驶自制飞机成功起飞    当日,重庆市江津区电信局员工彭聪在江津长江水面上驾驶自己制造的飞机成功起飞,并飞上了320米高空。制造这架飞机,彭聪用时5年,耗资10多万元,经过无数次试验才最终成功 CAAC needs to stipule clearly airworthiness requirements and guidance for experimental amateur-built segments 北京市一工人自制小飞机坠毁 驾驶员受伤 浙江64岁老汉驾自制飞机坠落被调查 2007年04月11日来源:京华时报 2008-04-15来源:天津北方网 30歲的李賢鋒已住院兩天,他是為了自己的“飛天夢”而受傷。 4月8日上午,完全沒有駕駛經驗的李賢鋒駕駛一架小飛機衝向天空。兩分鐘後,飛機從50米的高度墜毀。那是李賢鋒手工制造的飛機,他說用了幾年的時間。自己制造一架飛機並飛起來———以維修保齡球器具為職業的李賢鋒,為這樣的夢想“癡狂 上周,浙江一位64岁的飞行爱好者在驾驶自己组装的超轻型飞机时失去控制,飞机损毁严重,所幸人员无恙…去年底,他从杭州买来零件,自己组装了一架“小蜜蜂3C”超轻型飞机,迫不及待地进行试飞时,结果险象环生 China permit ultralight under Part 103; Aircraft that are above ultralight weight limited could be permitted under experimental amateur-built-experimental Source: Media reporting, Booz & Company analysis

  12. 1 Airworthiness Regulations In the US, FAA has stipulated regulatory requirements for experimental amateur-built aircraft and LSA Categories of FAA Special Airworthiness Certificate Source: FAA

  13. 1 Airworthiness Regulations FAA issues experimental certificates for amateur-built aircraft and LSA to fly Experimental Certificates (FAR21.191) Source: FAA

  14. 1 Airworthiness Regulations These experimental certificates provide much more relaxed certification requirements Comparison between Type Certified and Experimental Aircraft Source: AC 20-27F, Order 8130.2F, FAA Aviation News

  15. 1 Airworthiness Regulations FAA also works closely with industry association to provide necessary guidance and information for amateur build aircraft Process of Certifying and Operating an Amateur-built Aircraft - FAA Example Want to build an aircraft Contact the nearest FAA office for guidance & info Design and construct the aircraft • FAA encourages amateur aircraft builders to ask for help in design and constructing the aircraft in the following ways through Experimental Aircraft Association (EAA) for guidance, other person with expertise or commercial help recommended by the FAA • FAA also provides detailed Advisory Circulars, Orders and publications for amateur builders to learn and digest Register the aircraft Identify and mark the aircraft Apply for airworthiness certificate Flight test and maintain the aircraft Source: AC 20-27F, Order 8130.2F, FAA Aviation News, China news search

  16. 1 Airworthiness Regulations China has recently issued an advisory circular on LSA airworthiness but specific requirements on airmen and operations CAAC Advisory Circular on Light Sport Aircraft (LSA) AC-21-AA-2009-25 Comments • The Advisory Circular concerning airworthiness requirements of Light Sport Aircraft (LSA) category was recently released in May 2009 • It provides an official category of GA segment in China • Subsequently, the development of relative regulations, procedures and forms requirements regarding LSA needs to be carried out as soon as possible • CAAC also needs to review the need for special provisions for airmen and operational requirements specific to LSA as practiced in the U.S. (please refer to Flight Standards Module) This AC include type certification, production certification and airworthiness certification for LSA

  17. VTC and industry guidelines 2 A validation of type certificate (VTC) needs to be obtained for products (aircraft, aircraft engine and propeller) imported to China Comments VTC Applicability • According to the Chinese authority law and regulation requirement and Validation Procedure for Import Civil Aviation Products and Parts (AP2101), the Chinese VTC for an import aircraft is a prerequisite to issuance of a Chinese Certificate of Airworthiness • An engine or propeller also should get a Chinese VTC, unless the engine or propeller is validated as part of the aircraft • The detailed procedures for issuance of Chinese Validation Type Certificate are prescribed in CAAC AP2101 • Any import aircraft or aircraft engines or propellers needs to apply for VTC before the Chinese authority to issue a airworthiness certificate • Adopting supplement modifications or improvements to the existing VTC model needs to re-apply for VSTC (S for supplement) before they can come in to China • The process for VSTC are similar to VTC - however project complexity might be reduced

  18. VTC and industry guidelines 2 The VTC process is complicated and lengthy - it requires on-site visits to the original aircraft manufacturer Validation Type Certificate (VTC) Process and Requirements • Application form AAC-021 for manufacturer to fill in and pass to FAA then to CAAC • Recommendation letter and general product description from FAA to CAAC • Description of design features and basic specification of product include three-view drawing • A copy of the FAA type certificate and type certificate data sheet • A copy of all FAA special conditions, equivalent safety items and exemptions from the airworthiness, fuel venting and exhaust emission, or noise requirements • A compliance checklist with certification basis Document Submission • CAAC-AAD issues Notification of Acceptance • Examination fee • CAAC establish examination team Acceptance of Application Initial Familiarization Meeting • Establish type validation basis and perform on-site engineering review • Review manufacturer’s quality assurance system • Sign final validation meeting minutes • The documents to be provided to CAAC-ADD project team needs to include over 10 sets of document Certification Comments • CAAC only validate the FAA type certification from export country, which require less work for both CAAC and the applicant • Feedback from interviewees: “Current VTC process is too time consuming and costly” - this will lead to fewer GA airplanes available in China Noise Requirements Fuel Venting and Exhaust Emission Requirements Source: FAA, CAAC and industry interviews, Booz & Company analysis

  19. VTC and industry guidelines 2 Regulations and guidance on experimental amateur built airworthiness certification is lacking GA Manufacturer Interview Quotes “My project will never materialize if I go through the proper process” Key Takeaways • General aviation aircraft manufacturer/ entrepreneurs are not clear of CAAC’s approval process for GA aircraft production (e.g. balloons, sports aircraft etc.) • There are no clear standards/ guidelines to ensure an efficient certification review and approval process • Part of these are because China currently does not have a strong aircraft design capability or demand - however, we think that the application procedures should be simplified in order to encourage more individuals or companies to participate in aircraft design and production “I will design and build my aircraft first and deal with certification and registration matters later” “The VTC application process is lengthy and costly” Source: Industry interviews

  20. 3 Aircraft registration and certification In the US, it generally takes less than 1 month to register and obtain aircraft certificate for registration and airworthiness FAA Aircraft Certification Process Aircraft Registration 12-16 Days Check Eligibility of Registration Submit Aircraft Registration Package FAA Issue Aircraft Registration Certification Identify Type of Airworthiness Certificate Needed Submit Application to Local FAA Office FAA Decision Airworthiness Certification 7-14 Days • The registration requirements are very clear and easy to follow • All process and forms required are easy to find on FAA website • FAA also has “Information Aid” document to answer general problems occur during certification process • There are also local office contract details for applicant who might have individual enquiries Source: FAA

  21. Start 3 Aircraft registration and certification However, in China, there process normally takes 2-6 month to complete ILLUSTRATIVE Aircraft Certification Process in China 手续完成 总计2-6个月 Successful Certification 适航审定 大约1-2个月 飞机登记 大约半个月 • 特许飞行证 • 标准/特殊适航证 • 无线电台执照 初期申请 大约需要1-2个月 • 航空器国籍登记 • 航空器所有权登记 • 非经营性通航活动登记 • 民航局允许购机许可 • 交付购机申请 • 等待海关报批 • After the aircraft registration, the pilot/owner of the aircraft can apply for airspace and filing flight plan • The whole process is time consuming and complex • Many private aircraft buyers postpone their purchasing decision because of this • During the down time, the owner of the aircraft still have to incur depreciation cost 想买进口的私人飞机 Source: CAAC, industry interview

  22. 3 Aircraft registration and certification Compare to the FAA, the CAAC has more complex and restrictive administrative requirements for aircraft registration… Typical Aircraft Registration Process FAA Typical Aircraft Registration Process CAAC No Documents Required • Only need to comply with the law, no need to filing any documents Documents Required • Purchasing purpose • ID document • Police record • Feasibility study • Pilot license • Intent Contract with base airport Eligibility of Registration Acquire Credentials Submit Aircraft Logo Marking Plan Apply for Aircraft ID Number Submit Aircraft Registration Application All included in one package Apply for Aircraft Registration • Registration application • Evidence of ownership • Applicant ID document • Evidence of the aircraft not registered elsewhere • Other documents required Key forms included • Evidence of ownership • Identity number • Registration marking May need to redo if a form is not filled in properly Submit Application Airworthiness Contact Office Process the Application Aircraft Registration Branch Process the Application Aircraft Certification Obtained • Applicant to fill in “Non-Commercial GA Registration Administration” Aircraft Registered Aircraft Registered Source: FAA, CAAC, industry interview, Booz & Company analysis

  23. 3 Aircraft registration and certification … as well as airworthiness certification (normally completed by the manufacture after registration) Typical Airworthiness Certification Process FAA (Local-made Aircraft) Typical Airworthiness Certification Process CAAC (Imported Aircraft) Contact FAA Local Office for Direct Guidance on Airworthiness Certification Applicant Registration with Local CAAC Office • Not directly comparable FAA Safety Inspectors Assists the Applicant in Conducting Aircraft Inspection Submit Airworthiness Application • Application content required here is somewhat similar to the FAA - however in different forms Submit Airworthiness Application Apply for Temp Certificate for Testing Flight One form required • Aircraft Designation • Certification Type • Owner’s Certification • Inspection Agency Verification • FAA Representative Certification • Production Flight Testing All included in one package Certification Issuance Local Airworthiness Certification Office Process the Application Local Manufacturing Inspection District Office Process the Application CAAC has different sequence in this process compare to the FAA Issuance of Airworthiness Certificate Issuance of Airworthiness Certificate Source: FAA, CAAC, industry interview, Booz & Company analysis

  24. 3 Aircraft registration and certification Some of the requirements are either duplicative or inconsistent across different regulations Issues Identified from CAAC Regulation and Requirements • Some of the documents required are duplicative and should be simplified if possible • E.g. Some of the clauses under Aircraft Purchase Application and Non-Commercial GA Registration Administration are the same Duplication Adverse Impact on Buyers • To prospective private aircraft owners, these requirements can slow down the application process significantly • Most of these buyers only want to experience flying, however, the complex administrative packages and processes have become a burden and stopped willingness to buy • There are requirements in several regulatory document stating “other documents required” which are not clear to the applicant in terms of what exactly is needed to complete the certification process Ambiguity • Minor contradiction exists for Ultralight Aircraft • For example, in CCAR 91, it is not required for this category aircraft to go through aircraft certification process - however, it is treated the same as all other categories in CCAR 285 • Some of the economic regulations does not agree with each other • For example, in CCAR 45 and 49, nowhere it said that the owner of the aircraft needs to be a pilot in order to register its aircraft, however, CCAR 285 requires it Inconsistency Source: FAA, CAAC, industry interview, Booz & Company analysis

  25. We recommend six initiatives that will improve the effectiveness and efficiency of the current GA regulatory system Key Areas Key Recommendations Expected Benefits 1 • Draft advisory circular related to airworthiness requirements for experimental amateur-built aircraft • Improve safety • More appropriate requirements for recreational GA segments • New technology development 1.1 Airworthiness regulations • Issue LSA related regulations and rules for inclusion in the aircraft airworthiness requirements 1.2 2 • Work with GA industry stakeholders to review and streamline VTC requirements • Shortened approval duration and reduce cost VTC and industry guidelines 2.1 • Work with manufacturers and suppliers to produce CAAC-Industry guidance material on aircraft design and production certification • More aircraft available for China GA growth • Reduced cost to CAAC 2.2 3 • Work with GA industry to simplify and shorten aircraft registration and certification process • Improved efficiency • Reduced cost to GA operators • Reduced workload to CAAC 3.1 Aircraft registration and certification 3.2 • Produce a guidance that summarizes requirements involved in acquiring, owning, operating, and maintaining a private aircraft (similar to Plane Sense) • One stop information for all related regulatory requirements and forms Source: Booz & Company analysis

  26. 1.1 We have also drawn up high level descriptions of necessary tasks for each of the recommended initiatives (1/6) Initiative (1.1) Initiative Key Objectives • Draft advisory circular related to airworthiness requirements for experimental amateur-built aircraft • Clarify and define approval requirements and process for experimental amateur built aircraft • Provide guidelines on design (TC), production requirements and process • Define registration and airworthiness certification requirements for these type of aircraft Task 1: Product Definition Task 2: Airworthiness Approval Task 3: Registration and Certification • Work with FAA specialists and industry experts on definition for experimental amateur-built aircraft • Clarify and define approval requirements and process - this should aim to encourage amateur built aircraft • Document processes and procedures • Issue public consultation • Use the FAA AC 20-27 and Order 8130.2 Section 7 Experimental Amateur Built Airworthiness Certification as a guidance as how to conduct approval and this also maybe used as applicant reference • CAAC needs to be reasonable in getting the information required from the amateur builders - as most case there is only one aircraft involved - hence, production certificate is only required if there are duplications of aircraft • Consult industry experts and past amateur builders on simplifying the process Stakeholders to be Consulted Expected Benefits Next Steps/Follow-up • FAA • Industry associations and experts • Past and existing experimental amateur aircraft builders • Improve safety • More appropriate requirements for recreational GA segments • Increase use of experimental aircraft for new technology development • Set up steering committees/work groups for each task • Draft detailed scope and work plan

  27. 1.2 We have also drawn up high level descriptions of necessary tasks for each of the recommended initiatives (2/6) Initiative (1.2) Initiative Key Objectives • Issue LSA related regulations and rules for inclusion in the aircraft airworthiness requirements • Set up full regulations, rules, administrative procedures and advisory circulars for LSA category Task: LSA • Recent issuance of Light Sports Aircraft advisory circular has made great impact on the GA industry - the subsequent procedures and forms required needs to be carried out as soon as possible • Consult stakeholders on relevant procedures required - again, this should aim to simplify the administrative processes • Consult stakeholders on related importation procedures and processes • China can take the lead in setting the electric LSA plane requirement and regulation standard Stakeholders to be Consulted Expected Benefits Next Steps/Follow-up • FAA • Industry associations and experts • Past and existing experimental amateur aircraft builders • Improve safety • More appropriate requirements for recreational GA segments • Increase use of experimental aircraft for new technology development • Set up steering committees/work groups for each task • Draft detailed scope and work plan

  28. 2.1 We have also drawn up high level descriptions of necessary tasks for each of the recommended initiatives (3/6) Initiative (2.1) Initiative Key Objectives • Work with GA industry stakeholders to review and streamline VTC requirements • Simplify current VTC processes and reduce cost for manufacturers Task: Review and Streamline VTC Requirements • Baseline current VTC requirements • Consult stakeholders on current issues - suggest discussions scope limited to GA aircraft only • Decide jointly with stakeholders on where to reduce paper work and costs • Work with FAA to develop a agreement on VTC and SVTC exemptions - for example, minor modifications to products are exempt for VTC procedures for certain category of GA aircrafts • Document processes and procedures • Issue public consultation Stakeholders to be Consulted Expected Benefits Next Steps/Follow-up • FAA specialists • CASC and CATIC • ACP and other non-Chinese manufacturers • Shortened approval duration and reduce cost • More aircraft available for China GA growth • Reduced cost to CAAC • Set up steering committees/work groups for each task • Draft detailed scope and work plan

  29. 2.2 We have also drawn up high level descriptions of necessary tasks for each of the recommended initiatives (4/6) Initiative (2.2) Initiative Key Objectives • Work with manufacturers and suppliers to produce CAAC-Industry guidance material on aircraft design and production certification • Provide direct guidance on aircraft design certification • Provide direct guidance on aircraft production certification Task 1: Aircraft Design Certification Task 2: Aircraft Production Certification • Baseline current aircraft type certification process and procedures • Get industry input in how to make the process more efficient and collaborative • Document findings and procedures • Publish CAAC-Industry guide on design certification • Detailed examples can follow FAA CPI • Baseline current aircraft production certification process and procedures • Get industry input in how to make the process more efficient and collaborative • Document findings and procedures • Publish CAAC-Industry guide on production certification Stakeholders to be Consulted Expected Benefits Next Steps/Follow-up • AVIC • FAA • GAMA • ACP • Shortened approval duration and reduce cost • More aircraft available for China GA growth • Reduced cost to CAAC • Set up steering committees/work groups for each task • Draft detailed scope and work plan

  30. 3.1 We have also drawn up high level descriptions of necessary tasks for each of the recommended initiatives (5/6) Initiative (3.1) Initiative Key Objectives • Work with GA industry to simplify and shorten aircraft registration and certification process • This is aim to help individual purchase and importation of GA aircraft in China through simplifying aircraft registration and certification process Task 1: Aircraft Registration Task 2: Airworthiness Certification • Baseline current aircraft registration certification process and procedures • Review especially on individual aircraft purchase documentation required - simplify or delete the “购机申请“ (aircraft purchasing credentials) • Compare with the FAA aircraft registration process and compile all necessary documents into one package rather than let the applicant going back and forth to acquire different piece of paper • Modify existing requirements according to above findings • Baseline current aircraft airworthiness certification process and procedures • Compare with the FAA airworthiness certification process and study the possibility of involving safety inspectors at the right beginning of the certification process • Simply paper work and documentations processes for airworthiness certification and compile all necessary documents into one package • Modify existing requirements according to above findings • Also, study possibilities of simplify or delete CCAR 285 as it appears redundant and unnecessary Stakeholders to be Consulted Expected Benefits Next Steps/Follow-up • AVIC • FAA • GAMA • ACP • Improved efficiency • Reduced cost to GA operators • Reduced workload to CAAC • Set up steering committees/work groups for each task • Draft detailed scope and work plan

  31. 3.2 We have also drawn up high level descriptions of necessary tasks for each of the recommended initiatives (6/6) Initiative (3.2) Initiative Key Objectives • Produce a guidance that summarizes requirements involved in acquiring, owning, operating, and maintaining a private aircraft (similar to Plane Sense) • Develop a easy-understanding industry guidance to ease aircraft owning process for individuals Task: Provide Guidance for Individuals • CAAC can ask industry associations to draft this guidance from an individual point of view - develop the guidance from the process of acquiring, owning, operating and maintaining a private aircraft • Use the FAA Plane Sense as a reference in each step • CAAC to review the draft guidance and make recommendations • Circulate for consultation and feedbacks Stakeholders to be Consulted Expected Benefits Next Steps/Follow-up • Industry associations • GA enthusiasts / individual aircraft buyers • One stop information for all related regulatory requirements and forms • Set up steering committees/work groups for each task • Draft detailed scope and work plan

  32. Executive summaryAirworthiness regulationsType and production certificationAircraft registration and certification Appendix

  33. ICAO requires its member states to ensure airworthiness of aircraft throughout their life cycle ICAO Annex 8 Part II Recommended Procedures for Certification and Continuing Airworthiness Original Airworthiness Recurrent Airworthiness Type Certification Production Certificate of Airworthiness ContinuedAirworthiness of Aircraft • It defines the design of an aircraft type and to certify that thisdesign meets the appropriate airworthiness requirements under the anticipated operation conditions • Aircraft manufacturer normally submit a request for Type Certificate before serial production • It requires proof of compliance with the appropriate airworthiness requirements (such as documentary evidence, inspections and ground and flight tests) • This ensures that each aircraft,including parts manufactured by sub-contractors, conforms tothe approved design • Proof of production control and traceability of production records are critical considering factors • A Certificate of Airworthiness shall be issued on the basis of satisfactory evidence that the aircraft complies with the design aspects of the appropriate airworthiness requirements and fit to fly • It shall be renewed orshall remain valid provided continuing airworthiness of the aircraft is demonstrated through a system of inspection • This is ensured through proper maintenance of aircraft • Maintenance can include any one or combination of overhaul, inspection, replacement, defect rectification and the embodiment of a modification or repair Source: ICAO Annex 8 to the Convention on International Civil Aviation - Airworthiness of aircraft, Booz & Company analysis

  34. United States Code and Federal Aviation Regulation do not define “airworthy” but FAA Order 8130.2F states two conditions that must be met FAA ORDER 8130.2F CHG 3 Airworthiness Certification of Aircraft and Related Products Definition of “Airworthy” “The aircraft must conform to its TC” Paragraph 9.b. of 8130.2F: “The aircraft must be in a condition for safe operation” “AIRWORTHY" + = • Paragraph 9.a. of 8130.2F • Conformity to type design is considered attained when theaircraft configuration and the components installed are consistent with the drawings, specifications,and other data that are part of the Type Certification (TC) • This includes any supplementaltype certificate (STC) andfield approved alterations incorporated into the aircraft • Paragraph 9.b. of 8130.2F • It refers to the condition of the aircraft with relation to wear and deterioration • For example, skin corrosion, window delamination/crazing, fluid leaks, and tire wear • If one or both of these conditions are not met, the aircraft would beconsidered unairworthy • Aircraft that have not been issued a TC must meet therequirements of paragraph 9b above Note: 1) The term “airworthy” is not defined in Title 49, United States Code (49 U.S.C.), or in 14 CFR 2) FAA ORDER 8130.2F CHG 3 Airworthiness Certification of Aircraft and Related Products - It establishes procedures for accomplishing original and recurrent airworthiness certification of aircraft and related products. The procedures contained in this order apply to Federal Aviation Administration (FAA) manufacturing aviation safety inspectors (ASI), to FAA airworthiness ASIs, and to private persons or organizations delegated authority to issue airworthiness certificates and related approvals Source: FAA Order 8130.2F, Booz & Company analysis

  35. Three primary Federal Aviation Regulations govern the airworthiness of an aircraft in the U.S. Three Primary Regulations Governing the Airworthiness of An Aircraft in the U.S. 14 CFR Part 21 Certification Procedures for Products and Parts 14 CFR Part 43 Maintenance, Preventive Maintenance, Rebuilding, and Alterations 14 CFR Part 91 General Operating and Flight Rules • It prescribes rules governing the maintenance, preventive maintenance, rebuilding, and alteration of aircraft having U.S. airworthiness certificates • It also applies to airframe, aircraft engines, propellers, appliances, and component parts of such aircraft • It does not apply to any aircraft with experimental certificate • It is an operational regulation that is focused towardthe owner, operator, and/or pilot of the aircraft • Clause 91.7(a) states “no person may operate a civil aircraftunless it is in an airworthy condition.” • Subpart E — Maintenance, Preventive Maintenance,and Alterations describes in general the rules regarding maintenance, preventive maintenance and alteration • This regulation identifies the requirements of and the proceduresfor obtaining type certificates, supplementaltype certificates, production certificates, airworthinesscertificates, and import and export approvals Other interlinked regulations • Airworthiness standards for airplane, rotorcraft and manned balloons (Parts 23, 25, 27, 29 and 31) • Airworthiness standards for aircraft engines and propellers (Parts 33, 35) • Airworthiness Directives (Parts 39) • Emission requirements (Parts 34, 36) • FAA Orders 8110.4 Type certification and 8120.2 Production Approvals • Operating requirements (Parts 91, 121, 125, 135) • Repair station • Certification of pilots, airmen (Parts 61, 65) • Certification of commercial operators (Parts 119) • Operating requirements (Parts 91, 121, 125, 135) • Repair station (Part 145) • FAA Orders 8900.1 Flight Standards Information Management System (FSIMS) Source: Federal Aviation Regulations, Booz & Company analysis

  36. CAAC’s overall airworthiness regulations align closely with the FAA Comparison of the Airworthiness Regulations Source: Booz & Company analysis

  37. In addition the States Council also promulgated regulations for the administration of the airworthiness of civil aircraft • The States Council promulgated Regulations of the Peoples Republic of China for the Administration of the airworthiness of Civil Aircraft in May 1987 • The regulations stipulate that airworthiness requirements shall be followed by: • All units and individuals engaged in the designing, manufacturing, use and maintenance of civil aircraft • All units or individuals that export civil aircraft to the People's Republic of China • All units or individuals that perform outside the People's Republic of China maintenance services to aircraft registered in the People's Republic of China • It also states that the Civil Aviation Administration of China shall be responsible for the administration of the airworthiness of civil aircraft

  38. However, there appear to be a regulatory difference between the State Council one and CCAR 21 Regulations of the Airworthiness of Civil Aircraft of the People’s Republic of China Civil Aviation Products and Parts Certification Requirements (CCAR 21) 第六条  任何单位或者个人设计民用航空器,应当持航空工业部对该设计项目的审核批准文件,向民航局申请型号合格证。民航局接受型号合格证申请后,应当按照规定进行型号合格审定;审定合格的,颁发型号合格证 • Details of “Design” procedures are not clear as how to file for application to the “Ministry of Aviation Industry” (航空工业部) - at least this is not found in CCAR 21 related regulation procedures and advisory circulars 第七条   任何单位或者个人生产民用航空器,应当具有必要的生产能力,并应当持本条例第六条规定的型号合格证,经航空工业部同意后,向民航局申请生产许可证。民航局接受生产许可证申请后,应当按照规定进行生产许可审定;审定合格的,颁发生产许可证,并按照规定颁发适航证。 任何单位或者个人未按照前款规定取得生产许可证的,均不得生产民用航空器。但本条例第八条规定的除外 • CCAR-21 (民用航空产品和零部件合格审定规定) does not require the approval from other states agency prior to the application of production approval • Details of “Production” filing procedures are not clearly mentioned We recommend that “Regulations of the Airworthiness of Civil Aircraft of the People’s Republic of China (1987)” be reviewed and the role of “Ministry of Aviation Industry” to be clearly defined

  39. Executive summaryAirworthiness regulationsType and production certificationAircraft registration and certificationAppendix

  40. Type Certification FAA issues type certification when the design of civil aircraft, engine, or propeller complies with applicable regulations Major Design Approvals (Type Certification) Original Type Certification Replacement / Alternation Source: FAA

  41. Type Certification FAA issues Orders that prescribe the responsibilities and procedures the FAA must follow to certify new aircraft, enginesand propellers 14 CFR Part 21 Certification Procedures for Products And Parts Summary of Requirements on Product Certification Orders 8110.4CType Certification • Order 8110.4, Type Certification, is primarily written for internal use by the FAA, its designees, and delegated organizations • The order provides procedures and policy for the type certification of products • It describes the process for U.S. applicants to obtain a U.S. TC for their product under 14 CFR § 21.21 • It focuses on the design approval process conducted by Aircraft Certification Offices (ACO) • It also addresses other aspects of safety, such as airworthiness (airworthiness certificates), manufacturing (production approval), maintenance, and operations (continued airworthiness) as they relate to design approval (type certification) • Order 8110.52 Type Validation and Post-Type Validation Procedures applies to U.S. applicants who seek foreign TCs and when non U.S. applicants seek U.S. TCs • Before manufacturing a product, an applicant must have a design approval (that is, TC, STC, amended TC, amended STC) and a PC or other FAA production approval • Similarly, before manufacturing a component or spare part (for sale) the applicant must have a PMA or a TSO authorization Note: TC = Type certification; STC = Supplemental type certificate (i.e. a type certificate for a change to an aircraft, engine, propeller, or appliance); Amended TC = an approval for a change to a TC, made by the TC holder; Amended STC = an approval for a change to a STC Source: FAA, Booz & Company analysis

  42. Type Certification The CPI Guide provides clear guidance on processes to reduce the certification cycle time while ensuring regulatory compliance The FAA and Industry Guide to Product Certification (CPI Guide) Comments Jointly prepared by: • The FAA and Industry Guide to Product Certification (CPI Guide) guide is jointly prepared by FAA, AIA and GAMA • It aims to improve certification process, referred to as Certification Process Improvement to reduce cycle time of reduce the cycle time to certify products, while ensuring regulatory compliance • This guide describes how to plan, manage, and document an effective, efficient product certification process and working relationship between the Federal Aviation Administration (FAA) and an Applicant • It is a compilation and enhancement of the best business and certification practices and is compatible with FAA Orders 8110.4, “Type Certification” and 8100.5, “Aircraft Certification Service - Mission, Responsibilities, Relationships, and Programs” Source: FAA

  43. Type Certification These Orders and Industry Guide define clearly processes and roles and responsibilities of FAA and applicants during the five phases CPI’s Product Certification Process Roadmap (for US Manufactured Product) Conceptual Design Phase Requirements Definition Phase Compliance Planning Phase Implementation Phase Post Certification Phase • This Phase is initiated when the Applicant begins design concept for a product that may lead to a viable certification project. • The intent is to ensure early, value added, joint involvement with an expectation to surface critical areas and the related regulatory issues, and begin formulating a preliminary Project Specific Certification Plan (PSCP) • Efforts in this Phase clarify the product definition and the associated risks, and conclude with a mutual commitment to move forward with product certification • Specific regulatory requirements and methods of compliance or critical issues are formulated • A more formal PSCP is developed • During this Phase a PSCP is completed • The plan is a tool to which the responsible parties commit and use to manage the product certification project • During this Phase the Applicant and FAA work closely in managing, refining, and achieving their agreed PSCP to ensure that all agreed upon product specific certification requirements are met • During this Phase close-out activities provide the foundation for continued airworthiness activities and certificate management for the remainder of the product’s life cycle Source: The FAA and Industry Guide to Product Certification (CPI)

  44. Type Certification For foreign manufactured products FAA only issues design approval to an applicant in a country with U.S. bilateral agreement Original Design Approval (for Foreign Manufactured Product) • The FAA will only issue product design approvals to an applicant in a country with which the United States has concluded a bilateral agreement for the export and import airworthiness certification of such products • Additionally, the FAA does not normally issue a type design approval for a product manufactured outside the United States (in other words, the State of Design is a country other than the United States), unless the product is intended for use under the U.S. Registry or for operation by a U.S. operator under lease or charter • Foreign applicants for U.S. design approval must provide the FAA with evidence that the product will be imported into the United States, or will be installed in a U.S. registered or U.S. manufactured product This is in principle similar to CCAR 21 Paragraph 21.319 Source: FAA

  45. Type Certification For parts import, FAA and CAAC have reached an agreement for FAA certified PMA to be used in China Comments Procedures of Replacement or Modification of FAA Certified PMA Product to China Registered Aircraft AC-20-01 • This has helped greatly in simplifying the approval process for FAA-certified parts • However, due to lack of aircraft technical knowledge and certification capability, the application of this AC is limited - as it is difficult for the CAAC to evaluate whether the PMA parts are indeed qualify for “safe operation” • The CAAC may need to invest resources to put together detailed guidance and procedures on PMA and related certification process and regulations • In March 2003, the CAAC and the FAA have signed agreement on certification exemptions for FAA-certified parts under Parts Manufacturer Approval • However, for major replacement and modifications, the applicant is still required to apply the MDA and VSTC • Also, for parts that’s sensitive to ETOPS, FAA PMA are not allowed to use

  46. Production Production certificate approves the manufacturing of duplicate products under an FAA-approved type design Major Production Approvals

  47. Production It takes three-step process to get a production certificate Production Certificate Process Submit Application FAA Evaluate quality control or production inspection system Issue Production Approval • For a production certificate, submit Form 8110-12 (PDF) , Application for Type Certificate, Production Certificate, or Supplemental Type Certificate, to your local Manufacturing Inspection District Office (MIDO) • For an APIS, a formal application is not required. However, Form 8110-12, Application for Type Certificate, Production Certificate, or Supplement Type Certificate, may be used • Determine that proposed manufacturing facilities located outside the United States place no undue burden on the FAA in administering the applicable Regulations • Conduct a quality system audit to determine compliance with the applicable requirements of 14 CFR part 21. This audit evaluates the applicant's organization, production facility, quality control or inspection system, and approved quality control and design data for compliance with applicable requirements • Notify the applicant in writing of any corrective actions required • Conduct any additional audits, corrective actions, or meetings with the applicant if needed to support the application process • If the applicant's quality control or inspection system, organization, and facilities are in compliance with 14 CFR part 21, subpart F or subpart G, the FAA will issue: An approval letter for an approved production inspection system • A Production Certificate, FAA Form 8120-4, and a Production Limitation Record, FAA Form 8120-3. The Production Limitation Record identifies which products or parts are authorized for production Source: FAA, Booz & Company analysis

  48. Type Certification and Production In China CCAR 21 and associated administrative procedures regulate the type certification and production process CCAR 21 Certification Procedures for Products and Parts • Similar to the FAA, this is the major regulation issued by the CAAC to regulate aircraft type certification and production process in China • Other administrative procedures and advisory circulars on this include • AP-21-03R3 型号合格审定程序 • AP-21-04R3 生产许可审定和监督程序 • AC-20-01 关于在中国注册的航空器上使用经FAA批准的PMA产品实施更换或改装的管理办法 • AC-21-AA-2007-14 航空器内、外部标记和标牌 • AC-21-02 机载系统和设备合格审定中的软件审查方法 • AC-21-05 初级类航空器适航标准—甚轻型飞机 • AC-21-06 初级类航空器适航标准—超轻型飞机 • AC-21-07 初级类航空器适航标准—滑翔机与动力滑翔机 • AC-21-09 飞艇适航标准 Source: CAAC

  49. Executive summaryAirworthiness regulationsType and production certificationsAircraft registration and certificationAppendix

  50. Aircraft Registration An aircraft owner must register his/her aircraft upon purchase Aircraft Registration Process An Eligible Plane for Registration 14 CFR Part 47 Documents Required Registration • An aircraft is eligible for U.S. Registration if it is not registered in another country and it is owned by: • a U.S. citizen as defined in 14 CFR Part 47.2. • a Resident Alien (foreign individual lawfully admitted for permanent U.S. residence • a U.S. governmental unit or subdivision • a non-citizen corporation lawfully organized and doing business under the laws of the U.S. or one of the States as long as the aircraft is based and primarily used in the U.S. (60% of all flight hours must be from flights starting and ending within the U.S.) • It generally takes Aircraft Registration Branch of the FAA 12 - 16 working days to process the registration upon receiving the application package • Different types of registration include: • Individual • Co-owners • Partnership • Corporation • Government Aircraft Registration Application* Evidence of Ownership** US$ 5 Registration Fee *) This form (AC Form 8050-1) must be original and can be obtained from the “Aircraft Registration Branch” **) Need to fill in AC Form 8050-2 - Bill of Sale Source: FAA