Outsourcing Continuing Airworthiness Management Activities: Benefit and Risks

Outsourcing Continuing Airworthiness Management activities is a benefit or a risk? Does EASA need to change the CAMO rules?

Abstract

Under current legislation, Commission Regulation (EU) No. 1321/2014, both air carriers and commercial air transport operators have to develop their own Continuing Airworthiness Management Organisation which has the purpose of managing the tasks and activities associated with the continuing airworthiness of the fleet. Moreover, if the operator is deciding to outsource continuing airworthiness management tasks and activities, it will be limited and subject to the European Competent Authority approval from where the air carrier or the commercial air transport operator was registered. To put it in another way, the operator will be limited when outsourcing continuing airworthiness management tasks or activities.

This dissertation aims to investigate and evaluate the risks and benefits of outsourcing an airline or commercial air transport operator’s continuing airworthiness management activities and tasks. Based on this, an outsourcing decision model is developed which has the scope to help the operators on deciding whether it is beneficial to manage the continuing airworthiness tasks and activities in house or to outsource a part of them. In addition, this dissertation will analyse the regulations governing the continuing airworthiness to see if the European Aviation Safety Agency has to create a more flexible environment for airlines and commercial air transport operators for managing the continuing airworthiness. Consequently, the Notice of Proposed Amendment 2010-09 developed by the European Aviation Safety Agency will be analysed. The NPA 2010-09 proposes that air carriers or commercial air transport operators are offered the choice to outsource all continuing airworthiness tasks and activities to an approved stand-alone Continuing Airworthiness Management Organisation and in this instance the operator is not required anymore to develop its own CAMO.

By choosing the structured interview as a research method, the researcher is looking to explore concepts, ideas and interpretations from the perspectives of the respondents that are experienced within the field of study and are knowledgeable about this topic. The purpose of interviewing industry experts is to gather primary information which is to offer a better understanding and an industry overview of the topic being analysed in this dissertation.

List of tables and figures

Figure 3.1: Continuing Airworthiness Process

Figure 3.2: EASA Initial and Continuing Airworthiness Regulation Structure

Figure 3.3: Part M in Relation to Maintenance of Aircraft

Figure 4.1: Traditional Airline Business Model

Figure 4.2: Virtual Airline Business Model

Figure 4.3: Aviation Business Model

Figure 4.4: Important information needed by the subcontractor to carry out maintenance planning

Figure 4.5: communication between CAMO, contracted Part 145 and subcontracted party

Figure 4.6: Possible choices for a CAT/licensed air carrier to ensure continuation of the aircraft airworthiness

Figure 4.7: Forces driving the change of the legislation governing continuing airworthiness

Figure 4.8:  Rational and systematic approach to outsource CAM tasks and activities

List of abbreviations

AD = Airworthiness Directive

AMC = Applicable Means of Compliance

AOC = Air Operator Certificate

ARC = Airworthiness Review Certificate

C of A = Certificate of Airworthiness

CACE = Continuing Airworthiness Control Exposition

CAM = Continuing Airworthiness Management

CAME = Continuing Airworthiness Management Exposition

CAMO = Continuing Airworthiness Management Organisation

CAT = Commercial Air Transport

CDL = Configuration Deviation List

EASA = European Aviation Safety Agency

EU = European Union

GM = Guidance Material

ICAO = International Civil Aviation Organisation

MEL = Minimum Equipment List

MP = Maintenance Programme

NAA = National Aviation Authority

NPA = Notice of Proposed Amendment

PICAO = Provisional International Civil Aviation Organisation

SARP = Standard and Recommended Practice

SB = Service Bulletin

TC = Type Certificate

TDO = Type Design Organisation

Table of Contents

Introduction

Chapter 1

1.1 Hypothesis

1.2 Research question

1.3 Aims and objectives

1.4 Background

1.5 Challenges

1.6 Methodology

1.7 Sources / Bibliography

Chapter 2

2.1 Difference between qualitative and quantitative research

2.2 Research methods

2.3 Analysis of the interviews

2.4 Primary research limitations and challenges

Chapter 3

3.1 From airworthiness to continuing airworthiness concept

3.2 Continuing airworthiness under ICAO

3.3 Overview of continuing airworthiness under EASA

3.4 Responsibilities of an operator and overview of Part M Sub-part G

Chapter 4

4.1 Outsourcing in aviation

4.2 Outsourcing an airline’s CAMO activities

4.3 Changing CAMO rules – NPA 2010-09

4.4 Decision model to outsource CAM tasks and activities

Conclusions and recommendations

Appendices

List of references

Introduction

Continuing airworthiness is an important aspect of the commercial aviation industry because this concept is enhancing safety by ensuring that operated aircraft for commercial reasons have to be always in an airworthy condition. In the European Union (EU) any licenced air carrier or commercial air transport (CAT) operator registered in one of EU’s member countries has to comply with the European Aviation Safety Agency (EASA) regulations. Under Commission Regulation (EU) 1321/2014 a licenced air carrier or CAT operator has to develop an internal Continuing Airworthiness Management Organisation (CAMO) department which has to manage the continuing airworthiness management (CAM) tasks and activities that keeps the aircraft airworthy. The air carriers or CAT operators can outsource those CAM tasks and activities however, it is limited. EASA took the initiative to develop the Notice of Proposed Amendment (NPA) 2010-09 which proposes that airlines shall have the option to outsource all CAM tasks and activities. This NPA is still active and under discussions.

The core questions investigated in this dissertation are: is the outsourcing the CAM tasks and activities a benefit or a risk for airlines and CAT operators? Does EASA need to change Part M to make the continuing airworthiness legislation more flexible for commercial aviation? Therefore, the objectives of this dissertation are to determine if the outsourcing of CAM tasks is a benefit or a risk and to investigate if EASA has to change CAMO rules. Another objective is to develop an outsourcing decision model which will potentially help the air carriers and CAT operators.

The first chapter includes information about the hypothesis of this dissertation, its aim and objectives, research questions, background and potential challenges. In addition, the first chapter includes a brief description of how primary and secondary research will be gathered. In the second chapter it is discussed in detail the research methodology and method selected to gather information for primary research. Also, this chapter contains information on how the primary research was conducted and how the information was analysed. The third chapter is part of the literature review and is describing the continuing airworthiness concept. Also, third chapter provides an overview of how the continuing airworthiness is regulated under EASA. Moreover, the main focus of the third chapter is to identify the responsibilities of the operator and provide an overview of the Annex I Sub-part G of Commission Regulation (EU) 1321/2014. In the final chapter the author is discussing what CAM activities and tasks can be outsourced by a licensed air carrier or commercial air transport operator. In addition, this chapter outlines the idea behind the NPA 2010-09 and its purpose. Furthermore, at the beginning of the chapter the outsourcing in aviation is briefly discussed and at the end of it, the outsourcing decision model based on an economic model is developed and explained.

Chapter 1

1.1 Hypothesis

Continuing airworthiness is one of the most important key contributors to enhancing safety in commercial aviation. Continuing airworthiness[i] comprises from key maintenance tasks and activities which ensure that the aircraft will continue to operate in safe conditions during its operating life. Under the European Aviation Safety Agency (EASA), any European Union (EU) licensed air carrier[ii] or commercial air transport (CAT) operator[iii] must have their own Continuing Airworthiness Management Organisation (CAMO), as per Commission Regulation (EU) No. 1321/2014[iv] Annex I. The purpose and objectives of a CAMO department is to keep the aircraft airworthy during its operating life. Some of the in-house CAMO activities of a licensed air carrier or CAT operator can be outsourced to an independent approved CAMO company. Although the CAMO activities that can be outsourced are limited, some airlines have different views about outsourcing and this might depend on what kind of business model the airline is operating.

Recently, there have been initiatives made by EASA to change the regulatory framework governing CAMO through the Notice of Proposed Amendment (NPA) 2010-09[v] which is questioning if it is possible that licensed air carriers or CAT operators can outsource all CAMO’s activities. However, no consensus has been reached over NPA 2010-09 which is still being debated. Being able to outsource CAMO activities and tasks may help start-up and established airlines to avoid the financial burden through outsourcing the CAMO department and pay more attention to their core business and competencies. Moreover, independent approved CAMO companies will not only be fully contracted by leasing companies but also by licensed air carriers and CAT operators that wish to outsource all CAMO tasks and activities. Therefore, the option of being able to outsource all CAMO activities and tasks will create a flexible solution for licensed air carriers and CAT operators and this may allow them to focus more on their core business and competencies to maximise profit.

1.2 Research question

Is outsourcing Continuing Airworthiness Management activities and tasks a benefit or a risk?

• This particular question will provide an insight into whether or not the decision of outsourcing the CAM activities brings a huge benefit to CAT operators and air carriers.
• In order to assess the benefits and risks of outsourcing CAM activities an outsourcing decision model will be developed.

Does EASA’s legislative framework governing CAMO need to be changed?

• In case the NPA 2010-09 will supersede the current rules governing continuing airworthiness, CAT operators and air carriers will focus more on their core business and the financial burden involved in developing their own CAMO department will not be required anymore. Also, the independent approved CAMOs will get more business by being fully contracted by CAT operators and air carriers.

1.3 Aims and objectives

1.3.1 Aim of this dissertation

The primary aim of this dissertation is to investigate and evaluate the benefits and risks of outsourcing CAMO activities and, based on this, to create an outsourcing decision model regarding continuing airworthiness activities. The secondary aim is to assess the opinions of different areas of the commercial aviation industry to see if EASA has to change the continuing airworthiness rules to create a flexible environment from which the aviation industry in the EU can benefit as a whole.

1.3.2 Objectives of this dissertation

The first objective is to determine what are the benefits and risks of outsourcing continuing airworthiness activities. This will require a good understanding of EASA regulatory framework needed in particular, the Annex I of Commission Regulation (EU) 1321/2014 including any relevant Guidance Materials and Acceptable Means of Compliance. Also, industry opinions will be used to understand better the risk and benefits of outsourcing CAMO activities.

The second objective is to find out what will be the impact of outsourcing all CAMO activities in case EASA will supersede current continuing airworthiness rules and to what extent the aviation industry will benefit from this.

The third objective is to develop a continuing airworthiness outsourcing decision model for CAT operators and air carriers.

1.4 Background

During a recent work experience I had the opportunity to take an internship with the CAM department of an aero-club. All CAMO activities were done in-house and nothing was outsourced to any independent organisation. When new services such as supplemental type certificates and CPCP programs had to be developed it was taking a long time and a lot of resources to do it especially that the aero-club owned an impressive fleet of gliders, aerobatic aircrafts and lightweight aircrafts. Sometimes not having the expertise in house means that time and resources are required to develop specific services. In addition, recently I had the opportunity to work in an independent CAMO which was dealing mainly with large airplanes in transition from one operator to another. However, most of the work generated for this independent CAMO was coming from aircraft leasing companies. Also, studying extensively in the Aviation Technology degree about EASA’s regulatory framework, I have started to focus on the continuing airworthiness legislation. Thus, being exposed to both independent and in-house CAMO gave me the idea of choosing this topic as a main research subject for this dissertation.

1.5 Challenges

• Primary research might be a challenge as specific contacts in the aviation industry are required;
• Obtaining the necessary resources for the literature review as there are no books written specifically on this subject;
• Researching and understanding the EASA’s regulatory framework;
•  Developing a conceptual outsourcing model for continuing airworthiness activities will hugely depend on primary and secondary research;

More information on challenges encountered during this research can be found in chapter 2.4 Primary research challenges and limitations.

1.6 Methodology

1.6.1 Primary research

Primary research will comprise of interviews/ questionnaires which will be addressed to airlines (both legacy and low cost carriers), independent CAMO companies and Competent Authorities. Primary research may also be under the form of analysing both qualitative and quantitative information made available. More details on primary research methods and methodology can be found in second chapter.

1.6.2 Secondary research

Secondary researchwill comprise of EASA regulations governing continuing airworthiness such as Annex I to Commission Regulation (EU) No. 1324/2014, NPA No. 2010-09 and International Civil Aviation Organisation (ICAO) Annex 6 [vi] Part I and Annex 8 [vii]. In addition, library resources, journal articles, internet resources and any relevant conference proceedings. Using secondary research materials, a critical literature review will be used to evaluate in greater detail why and why not to outsource CAMO activities.

Three options are identified in relation to outsourcing CAMO activities and those are: keeping CAMO activities in house, outsourcing partially CAMO activities (as reflected by the current Commission Regulation (EU) No. 1324/2014) or fully outsourcing the CAMO activities (if NPA 2010-09 will be adopted by European Commission to supersede current legislation). The options can be used in conjunction with a SWOT/Risk analysis to develop a conceptual outsourcing model for continuing airworthiness activities.

1.7 Sources / Bibliography

• European Aviation Safety Agency regulations: Annex I to Commission Regulation (EU) No. 1324/2014, NPA 2010-09
• ICAO Annex 6 Part I and Annex 8
• Irish Aviation Authority and European Aviation Safety Agency websites
• Dublin Institute of Technology library and E-resources provided through DIT
• Google Scholar, books, journals, conference proceedings
• Other internet resources especially websites with a major focus on aviation industry i.e.:  Flight Global, Royal Aeronautical Society etc.
• A full list of references it is provided at the end of this dissertation.

Chapter 2

2.1 Difference between qualitative and quantitative research

The qualitative research examines and takes into consideration experiences, attitudes and behaviour (Dawson, 2002, p. 14). The data or information gathered in a qualitative research is mainly qualitative in character (Saldana, 2011, p. 3) and uses research methods such as interviews or focus groups for primary research (Dawson, 2002, p. 14). Through a qualitative research, the researcher is aiming to gain a better understanding of the selected topic to be investigated by collecting data from other individuals’ experiences (Blair, 2016, p. 56). This type of research will require few people to take part in the research, however the contact with them will last longer (Dawson, 2002, p. 14).

Comparatively, the quantitative research will always generate statistics by using large-scale survey research and through research tools like structured interviews and questionnaires. To gather data for a quantitative research more people are involved and the contact with those people might be shorter when comparing with the qualitative research (Dawson, 2002, p. 15). In a quantitative research, the researcher will measure the relationship, which is the basis of predictions, between a dependent or outcome variable and an independent variable (Blair, 2016, p. 52).  Furthermore, it is acknowledged that the researcher can achieve a combination of both qualitative and quantitative research. This is known as triangulation and some researchers claim that is a good approach for a thesis as the strengths and weaknesses of both qualitative and quantitative research are somehow balancing each other (Dawson, 2002, p. 20).

Providing that the researched topic is narrowed and focused on a specific area of study, the qualitative research was selected to be the main methodology framework of this dissertation. Moreover, the researcher chose the qualitative research because it is important to understand interviewees’ knowledge and their experiences. On the contrary, if the researcher was to select a quantitative research this could have been a constraint to find out qualitative answers for the core questions (Savin-Baden and Major, 2013, pp. 5-7). To find out the answers for the core questions, the researcher has to approach specific individuals who are working in the field of the studied topic and have experience within the field of study. Furthermore, by employing a qualitative research, the researcher will make the decision of what to be included or excluded in the research, what are the research questions and who are the participants. Consequently the qualitative research is a flexible research methodology framework where the boundaries can only be created by the researcher (Savin-Baden and Major, 2013, pp. 11-2). In addition, the main advantage of employing a qualitative research is that the research methods can be defined in the early planning stage. Therefore, the researcher becomes more focused and will know precisely what will be the most appropriate way to gather information for the research  (Dawson, 2002, p. 33).

2.2 Research methods

The research methods are tools used by researchers to collect primary information. The major research methods are focus groups, questionnaires, participant’s observation and interviews. The focus groups method involves a moderator and a number of individuals discussing a particular topic. The moderator’s role is to ask questions, mediate the group conversation and make sure that this is not deviated from the topic under discussion (Dawson, 2002, pp. 27-38). On the other hand, questionnaires are associated with quantitative research through which a scholar is looking to gather measurable data which is presented in a numerical format (Blair, 2016, p. 52). Different from focus groups and questionnaires as research methods, the participant observation method is the research tool through which the scholar wants to notice and have a deeper understanding on what is happening in a specific culture without interacting with it (Dawson, 2002, pp. 27-38). In contrast, the interview research method is one of the most common tools used to gather primary research information when the scholar is undertaking a qualitative research. Dawson identifies three different types of interview research methods: unstructured, semi-structured and structured interviews (Dawson, 2002). Because the researcher approached the qualitative research for this dissertation, the research tool used to collect data for primary research is the interview method (more details in subchapter 2.2.1).

2.2.1 Interview as a research method

Interview is one of the main methods used to gather information and data in a qualitative research. Interview is defined by Savin-Baden as being a conversation between two persons where the interviewer asks questions and the interviewee answers them. The purpose of the interviewer is to obtain in-depth information shared by the interviewee from it is own experience and perspective (Savin-Baden and Major, 2013, pp. 358-68).

The main advantage of the interview is that the researcher can adapt it while interviewing individuals. Through an interview concepts, ideas and interpretations can be explored whereas by carrying a questionnaire similar information cannot be gathered. Moreover, by carrying interviews, the feelings and motives of the person interviewed can be investigated. This is where a questionnaire will fail to record such information because through interviews ideas and concepts can be clarified or further developed. The down side of the interview method is that it is time-consuming and only a small number of people can be interviewed while compared to a higher number of respondents when selecting the questionnaire as a research method. In addition, the interview can be influenced by personal feelings and opinions and there is always the threat of biasing. As the information obtained is qualitative in nature it might be a challenge to analyse it. Similarly to a questionnaire, it is really important when the researcher is formulating the questions which are to be addressed to the interview participants (Bell and Waters, 2014, p. 178).

There are three common types of interviews: unstructured, semi-structured and structured interviews. By choosing the unstructured or in depth interview the researcher will look to achieve a better understanding of the researched topic through the perspective offered by the interviewed participant. The interviewee is allowed to talk freely and the interviewer has to keep the directional influence at minimum by asking as fewer questions as possible. The advantage of this type of interview is that it is easy to manage. However, as the interviewer has a lower interaction in the conversation it may become difficult to remain quiet. The interviewer has to stay focused and make sure that the participant is not changing the subject of the topic. In addition, unstructured interviews produce a huge amount of data which may be difficult to analyse (Dawson, 2002, pp. 27-8). On the other hand, a semi-structured interview requires the researcher to follow a set of questions, but during the interview additional questions may arise from the conversation. In general the main questions asked during the interview tend to follow an order. To allow the interview’s participant to express its opinions freely the questions are usually open-ended (Savin-Baden and Major, 2013, p. 359). The structured interview is discussed in detail in the next subchapter (2.2.2 Structured interviews) as the researcher chose this approach to collect information for primary research.

2.2.2 Structured interviews

A structured interview requires the researcher to follow a particular set of questions that are to be asked in each interview. Although most of the questions asked are closed type questions, sometimes the researcher has a tendency to formulate the questions as open-ended. The structured interview is the research tool selected for this dissertation as it is considered to be the most suitable qualitative research method. Through a structured interview, the researcher is trying to minimise the variation in questions. Moreover, one advantage of the structured interviews is that the interviewer avoids to upset the conversation and opinions exposed by the interviewee. Also, by asking all participants similar questions, common information is collected and this is making easier for the researcher to analyse and compare the information provided by each participant. This particular research method can be used only if the researcher has a good understanding of the topic. Usually this is achieved by carrying a literature review of the topic and based on this the questions are structured for the interview. One disadvantage of the structured interview is that the questions prepared by the researcher may limit and restrict the investigation of issues that were not identified by the researcher when the questionnaire was developed (Savin-Baden and Major, 2013, pp. 358-9).

2.2.3 Ethics when conducting interviews

The researcher has to make sure that there is no legal boundary breached while carrying out the primary research. For this reason a good approach was followed as per Bell and Waters (2014) which points out that it is really important to let the participants know what the research is about and why they were chosen to be interviewed. Equally important is to let the participants know about the interview process and for what the information acquired during the interview is going to be used for. Therefore, each participant received a document before they confirmed their availability for the interview. The document entitled “Dissertation interview” contains details about the researched topic, objectives of the research, general ground rules to be agreed and questions asked during the interview (for more details on ‘Dissertation Interview’ document see Appendix IX). All participants have been given equal opportunity to enquire if there is any information or statement in the ‘Dissertation Interview’ document needed to be clarified. This was to make sure that the participants fully understood what the research is about and what will be the questions that the researcher will focus on during the interview. Also, this approach was followed to eliminate any uncertainty caused by participants withdrawing from the interview stage based on misleading or ambiguous interview process and/or questions.

To ensure that the participants know about their rights and identify the interviewee responsibilities, some ground rules have been implemented in the interview process document. The ground rules had to be agreed between respondents and researcher in order to protect any party’s position. All participants had the opportunity to remain anonymous. Also, they were asked if they wanted to be dissociated with the company/corporation they worked for. As part of analyzing the interviews, the researcher decided to protect the respondents’ identity (for more details see “Interview duration, place and ground rules” section from Dissertation Interview document attached in Appendix IX).

2.2.4 The interview protocol and process

The participants were approached through email to see if they wished to take part in the research and consequently interviewed. After they confirmed and accepted to be interviewed, the dissertation questionnaire was sent to them. This was to ensure that the respondents will fully understand the researched topic and also know what questions are going to be asked during the interview. Each participant had the right to request clarification in case there was an identified ambiguous process step or question.

To ensure the participation at the interview the location, date and time of the interview was decided upon the preference of respondents. At the start of the interview, each respondent was asked if the interview can be recorded and if they need any other clarification about the interview process or questions asked. In addition, each interviewee was asked if they would like to remain anonymous or not associated with their company they work for. This was to protect them in case the information gathered thorough the interview contained sensitive information about them or the company/corporation they work for. At the end of the interview the participants were asked if they would like to receive a transcript of the interview. This was to reflect a transparent analysis of what exactly they said and stated during the interview.

2.3 Analysis of the interviews

The analysis of the interviews is based on evaluation and examination made on each interview transcript which are attached in Appendix X. By analysing the first question it was found out that it is not a huge cost incurred on airlines setting their own CAMO but is important to mention that managing the CAM tasks and activities is only a labour intensive job and it hugely depends on the pay rates. This is one of the criteria which will influence an operator to outsource certain CAM tasks and activities and this is where the operator cannot compete with independent CAMOs offer, as they can perform the tasks cheaper. Furthermore, the outsourcing will hugely depend on airline’s fleet size, complexity of operations [flying short, medium or long haul routes], how many aircraft types are operated and to what extent the airline is unionized (in this case outsourcing being the last option). One of the airlines interviewed was outsourcing one of their aircraft type CAM tasks to a well-known technical services provider and the benefit of this was the knowledge pool that the subcontractor has. The CAMO manager stated that the subcontractor helps the airline to keep the aircraft in-service and without a third party input developing the in-service experience might be a challenge.

When the interview participants were asked what are the risks associated with outsourcing CAM tasks and activities, the following potential risks have been highlighted:

• Lack of oversight when the airline is not having control over the subcontracted CAM tasks and personnel performing them.
• Lack of performance as the third party is not performing as the airline would like them to perform. The underperformance might be because the contracted third party cannot take the influx of information for each managed aircraft.
• Improper service level agreements where one of the parties can take the advantage.
• Operator or contracted party missing significant information such as mandatory AD embodiment. This is caused by a lack of communication between the operator and contracted party and both entities working on different IT systems which are incompatible. Moreover, if the contracted party is performing work for other airlines or managing different aircraft types this can result in a ‘cross contamination’ of vital information.

All potential risks mentioned above can be prevented by having strong contracts in place and a sufficient level of oversight. A good oversight will comprise from implementing audit processes to assess the performance of the contracted party and to make sure that the contracted work [CAM tasks/activities] are carried out. In addition, the operator’s audit programme shall ensure that the contracted party has proper procedures and resources to manage the contracted CAM tasks/activities. To ensure a good communication between both parties, proper meetings have to be arranged and a good reporting system should be developed. To ensure a ‘good visibility’ for the aircraft managed by a contracted third party and to eliminate the likelihood of ‘cross contamination’ to occur, both parties shall either work on the same IT system/platform or the contracted party has to be fully trained to work as per the operator’s requirements and standards. A very important key point to mention is that the operator has to do his due diligence before contracting any organisation to manage CAM tasks/activities. This is mainly to ensure that the third party provider is a viable company, with a long term commitment and that will not go out of business causing the airline (or aircraft managed) to be grounded.

The fourth question asked, revealed that there is not a high risk between outsourcing CAM tasks/activities to either an approved stand-alone CAMO or a non-approved technical services provider organisation. In both cases it is a must that the operator’s CAMO has to review the contracted work performed by the third party to make sure the operator’s standards are followed and that the contractual agreements are followed. The required level of oversight is usually greater when CAM tasks/activities are outsourced to a non-approved organisation (not CAMO approved). Also, the work performed by a non-approved organisation has to be reviewed and certified by an operator’s CAMO while CAM tasks/activities carried out by an approved CAMO are certified. Additionally, the independent CAMOs are seen as a better choice as they reached a European standard by being approved by a particular NAA. A CAMO already went through the NAA’s audits while a non-approved technical services provider is not regulated. However, there are situations where non-approved organisations are as good as a CAMO and possibly more specialized than a CAMO, having that knowledge pool and in-service experience for certain aircraft types. Consequently, either a poor CAMO provider or a poor non-approved technical services provider will not last long on the market. Ultimately, the outsourcing decision stands with the operator who has to do their due diligence. It is a very common approach that the airlines will look to outsource CAM tasks and activities to reputable organizations disregarding that they are approved or not. Moreover, those reputable organisations are unlikely to go out of business as they have a massive financial back-up and a strong position in the market.

From the fifth and sixth questions it is concluded that the proposed amendment NPA 2010-09 will potentially eliminate the higher risks associated with sub-contracting a non-approved organisation. As the airlines will have the choice of outsourcing all CAM tasks and activities to an approved stand-alone CAMO, certain non-approved organisations providing technical services may look into getting a CAMO approval. This will not only raise the industry standard but will potentially bring them more customers. One of the respondents is stating that “if the non-approved organisation becomes approved by changing their processes to good processes it is an improvement and this will make a difference”. On the other hand there is a demand from the EU aviation industry that EASA has to offer the choice for airlines to outsource all of their CAM tasks and activities. This demand is mainly driven by airlines where the outsourcing is their business model, airlines that have a small fleet (including operations) and airlines which are looking to establish on the market (including start-up airlines). Another advantage is that multiple airlines making part of the same parent company will be able to use a centralized CAMO through which all airlines will share certain CAM services and build up the in-service experience. One potential issue with providing this option to airlines is how the airlines and CAMOs will control the accountability. Another challenge will be to ensure, manage and maintain a good relationship between both parties which will be vital for aircraft continuing airworthiness.

Regarding the development of the outsourcing decision model one interviewee advised that this should be based on an economic model. Before the outsourcing decision will take place the operator has to ask itself why there is a need to take into consideration the outsourcing option. As previously stated, the decision will be based on the airline business model, fleet size etc. Also, the operator has to take into account the competent authority’s acceptability for a third party to be contracted to manage operator’s CAM tasks. After this, the operator has to clarify what CAM tasks and activities have to be outsourced and this has to be supported by arguments which will contribute to outsourcing decision.

2.4 Primary research limitations and challenges

As mentioned previously in subchapter 2.2.2 one limitation of using the structured interview as a primary research method is that that the questions prepared by the researcher may restrict the investigation of issues that were not identified in the secondary research and when the questionnaire was developed. For instance, from one interview carried with one respondent, it was highlighted that there is the need to develop legislation to control and standardize those technical services companies and lessors managing engines. At the moment when an engine comes off the wing independent technical services providers can do all CAMO type functions but their work is not certified. The airline is generally re-analysing all information prepared by those independent companies in order to certify the status of the engines. Therefore, there is a scope for EASA to develop regulations to cover those organisations looking to obtain a dedicated CAMO approval for components, engines and APUs. This area is not well developed and regulated at the moment, and the engines, APUs and other aircraft components are more valuable than the airframe itself.

One challenge was that only five out of nine participants expressed their interest to be interviewed. The researcher targeted participants from airlines’ CAMO department, independent CAMOs and competent authorities in order to gather information with the scope to achieve a full industry overview for the researched topic. However, there were no participants interviewed which were involved or worked for a competent authority. Moreover, it was desirable to interview participants employed in all airline business models but only employees from a legacy and a regional airline took part in the interview. Under those circumstances, a full industry overview cannot be provided, as the primary research information cannot be analysed from different perspectives (from each airline business model and competent authority’s point of view). Another challenge encountered by choosing to research this topic is that there are no previous studies, dissertations or other academic papers to discuss about the Continuing Airworthiness Management Organisation concept and gaps within the EU legislation governing this concept.

Chapter 3

3.1 From airworthiness to continuing airworthiness concept

The author Fillip de Florio (2016) defines the airworthiness concept as being “the possession of the necessary requirements of an aircraft to fly in safe conditions, within allowable limits”. In this simplified definition three important key elements can be identified: possession of necessary requirements, flying in safe conditions, and allowable limits. The possession of the necessary requirements refers to the standards and regulations which are followed to build, design and test an aircraft, its parts and components. In addition, the safe conditions makes reference to those conditions free of causing any harm, injury, illness to aircraft passengers or damage to a property or environment. Furthermore, the allowable limits means that the aircraft is flying within its approved flight envelope for which it is designed to operate into. Therefore, each aircraft type has specific structural load factors and speed ranges that cannot be exceeded and is designed to fly in specific types of operations. (Florio, 2016).

In contrast with the airworthiness concept, continuing airworthiness is regarded to be a set of processes which maintain or restore an airplane, its systems or parts of a system to a standardised airworthiness process established by a type design organisation. Sometimes from a safety perspective, it is identified that the original standards are not stringent enough when the operator may encounter issues such as systems malfunctions and faults while the aircraft is in service. For this reason, service life expectation of the aircraft may be reduced or extended if adequate corrective actions are taken. Therefore, the continuing airworthiness process carried out continuously during the aircraft life cycle may adjust the aircraft service life values and design standards. Equally important, is the revision of civil aviation regulations, standards and recommended practices based on findings while the aircraft is in service (Enders, Dodd, and Fickeisen, 1999).

The continuing airworthiness process comprises from three key steps: generating a database, analysing data and decision process. The generation of database is done through gathering data from operators based on service experience. After that, data is analysed and often compared to the original certification process and results. The final step is the decision making process carried out by either an accident investigation authority or a national aviation authority and certification authorities. Furthermore, the manufacturers and operators of the aircraft, parts and components will be part of the decision making process (see Fig. 3.1) In all steps difficulties may be encountered because the acquisition of human and computer resources information may be insufficient to form a consistent database which makes it difficult to generate a database and analyse it (Enders, Dodd, and Fickeisen, 1999).

Figure 3.1: Continuing Airworthiness Process

Source: (Enders, Dodd, and Fickeisen, 1999)

3.2 Continuing airworthiness under ICAO

On December 1944, 52 States signed the Convention on International Civil Aviation – known as the Chicago Convention – to establish the Provisional International Civil Aviation Organisation (PICAO). In April 1947, PICAO turned into a fully operational organisation named as the ICAO which also became a United Nations agency (ICAO, 2017b). Nowadays ICAO works with its member states, and various aviation industry groups to develop Standards and Recommended Practices (SARPs) and policies. By doing this, ICAO aims to improve safety and efficiency of the civil aviation sector at an international level. Equally important, the policies and SARPs makes commercial aviation aspire to an environmentally responsible and a more economic sustainable aviation sector. SARPs and policies are adopted by ICAO’s contracted states into air law that must be respected by the commercial aviation businesses operating in that particular country. Therefore, the ICAO SARPs and policies are more or less the global norms to harmonize the international commercial aviation (ICAO, 2017a).

The ICAO standards are highly important for civil aviation, especially for air carriers operating on international flights. Under Article 29 of the ICAO Convention it is established that each aircraft registered under an ICAO member country[viii] has a certificate of registration and a certificate of airworthiness[ix]. In addition to that, Article 31 requires that the certificate of airworthiness shall be valid during aircraft operations and should only be released by the State of Registry. Moreover, Article 33 obliges all ICAO member states to acknowledge any valid certificate of airworthiness released by an ICAO recognised State of Registry[x] provided that the established minimum standards are met (ICAO, 2006).

In accordance with standards provided in ICAO Annex 6 – Part I and following the State of Registry’s procedures, an operator has to maintain the operated aircrafts in an airworthy condition and also provide that the emergency equipment is serviceable for intended operations. Correspondingly, the airplanes shall be maintained and released to service only by approved maintenance organisations recognised by the State of Registry. Equally important, each operated airplane shall have a valid certificate of airworthiness while in service. Additionally, a group of persons shall be employed by the operator to ensure that the maintenance is performed in accordance with a maintenance control manual [xi]. Furthermore, the maintenance carried out on the airplane has to be executed in accordance with an approved maintenance programme [xii] (ICAO, 2010).

ICAO defines the concept of continuing airworthiness in the Airworthiness Manual as being a set of processes required to show compliance with airworthiness requirements established in the aircraft type certificate (TC) [xiii] or any other specifications stipulated by the State of Registry. In addition, the aircraft, its parts and components shall be in a state of safe operation at any point in time during the operating life. In particular, based on the ICAO Airworthiness Manual the operator has to accomplish the following minimum standard tasks in order to keep the aircraft airworthy (ICAO, 2013):

• The operator shall develop a maintenance programme for the aircraft operated. The maintenance programme has to comprise from specification, methods, procedures and maintenance tasks that are established by the aircraft manufacturer and tailored to specific operations carried by the operator.
• The operator has to report back to the type design organisation (TDO) [xiv] any defects, faults or malfunctions and important information or issues encountered during operations or when carrying out maintenance on the aircraft. The reporting procedure shall follow the requirements established by the State of Registry and State of the Operator [xv].
• When required by the TDO or it is necessary to ensure the structural integrity of the aircraft, the operator has to meet the airworthiness requirements taking into consideration the fatigue life limits, inspections or any special test to ensure the continuing airworthiness of the aircraft and its structural integrity.
• The operator has to implement a supplemental structural inspection programme (SSIP) and any other SSIP requirements if mandatory. In addition, the operator has to consider the TDO’s recommended SSIP. The SSIP may also include corrosion protection and control programme, Service Bulletin (SB) review and mandatory modification programme, repairs review for damage tolerance.

Regarding the exchange and use of the continuing airworthiness information the operator has to keep informed the State of Design and aircraft’s TDO in respect with any service difficulty experienced when operating the aircraft. Provided that the important information is shared by the operator, the State of Design or TDO can issue appropriate recommendations which shall have the objective of solving the problems of the aircraft in service (ICAO, 2013).

3.3 Overview of continuing airworthiness under EASA

The EASA, also known as the Agency, is an independent EU agency which became operational in 2002 through the adoption of Basic Regulation (EC) No. 1592/2002 [xvi] by the European Parliament and the Council of EU. Mainly, the Commission Regulation’s rules governing commercial aviation are mirroring the ICAO’s SARPs and recommended practices. However, the implementing regulations are binding rules which are more detailed and rigorous than ICAO SARPs. EASA’s purpose is to help the European Commission in drafting the necessary regulatory framework and assist in the development of implementing rules which governs the air safety and environmental protection. Moreover, by developing the necessary expertise to deal with civil aviation matters, EASA is assisting the EU member states and aviation industry to adopt the regulations. In the light of assisting the EU states to implement the rules, EASA can develop applicable means of compliance (AMC) and guidance materials (GM). More importantly, EASA has the authority to verify if the regulations are well implemented and respected by each member state. Also, EASA can carry out certification tasks and impose financial penalties on holders of certificates and approvals issued under the  Agency and withdraw them in case of breaching the regulations (European Parliament and Council of the European Union, 2008).

Fig. 3.2: EASA Initial and Continuing Airworthiness Regulation Structure

Source: (European Aviation Safety Agency, 2017c)

Under the Basic Regulation through which EASA was established, Initial Airworthiness and Continuing Airworthiness regulations have been developed (see Fig.3.2). The implementing rules on continuing airworthiness are adopted by European Commission Regulation (EU) No. 1321/2014. This regulation is setting up common technical requirements and administrative procedures with the scope to keep the aircraft and its components airworthy. The regulation applies to aircrafts registered in an EU member state and aircrafts registered in third countries that are used by an operator of which an EU member state is assigned to supervise the operations (European Union, 2014).

The implementing regulation on continuing airworthiness consists of five different annexes. The first annex is Annex I or Part M and contains requirements on how to manage the continuing airworthiness of the aircraft and components. Moreover, Part M contains requirements on organisations and personnel involved in managing the continuing airworthiness of aircraft and components. Additionally, the requirements for continuing airworthiness for aircraft possessing a permit to fly can be found in this annex. The second annex, the Annex II or Part 145, incorporates requirements for approval of maintenance organisations engaged in maintenance of aircrafts used for commercial air transport and aircraft components intended for fitment. Furthermore, Part 145 includes requirements on qualifications of personnel which performs and/or controls the aircraft maintenance and non-destructive testing carried out on aircraft components and/or structures and releases them to service. Requirements for certifying the engineers carrying out maintenance on airplanes, helicopters and components are established in Annex III or Part 66. Within the Part 66 different type of licence categories are distinguished and correspondingly a level of technical and practical knowledge is affixed to each licence category. Nonetheless, Part 66 covers the renewal of such licences, as well as the possibility of licence extension to multiple categories and also the prerequisite of individual type rating is included in this annex. On the other hand, Annex IV or Part 147 establishes binding rules for organisations involved in the training of engineers carrying out non-destructive tests or maintenance on aircraft and components. Through Part 147 the approved training organisations can be entitled to conduct recognized basic and type training courses, to carry out examinations and issue training certificates. (European Union, 2014). The last annex, Annex V or Part T, contains amendments to AMC[xvii] and GM[xviii] of Annex I, II and III. All of the amended AMC and GM are focusing on the safety issues related with the implementation of continuing airworthiness programme by competent authorities[xix]. Also, Annex V is making reference to risk mitigation associated with the performance of maintenance and the necessity of developing corrective actions. Moreover, Part T covers AMC and GM for regulatory coordination issues to assure that the continuing airworthiness Implementing Regulation is applied efficiently by all entities involved in commercial aviation (European Aviation Safety Agency, 2016b).

3.4 Responsibilities of an operator and overview of Part M Sub-part G

The Annex I is dealing with the management of aircraft maintenance which is cross referenced with the continuing airworthiness. In particular the Annex I of Commission Regulation (EU) No. 1321 from 2014 lays out regulations on how to manage the maintenance with special consideration to the work orders and contracts for maintenance performed by an approved Part 145 organisation (Total Training Support Ltd, 2014).

3.4.1 CAMO responsibilities

Figure 3.3: Part M in Relation to Maintenance of Aircraft

Source: (Total Training Support Ltd, 2014)

As per M.A. 201, an EU registered licensed air carrier or a Commercial Air Transport (CAT) operator has to apply for CAMO approval as per Part M Subpart G. The CAMO will be responsible for managing the continuing airworthiness of the aircraft. To receive a CAMO approval the operator has to comply with all requirements outlined in Part M Subpart G (European Commission, 2015b). The main objective of a CAMO is to be the interface between the CAT/air carrier operator and the internal approved or contracted approved maintenance organisation (See Fig. 3.3).

The CAMO is responsible for sending the work orders to be accomplished by an approved Part 145 maintenance organisation. In essence, any person or organisation performing maintenance will be responsible for the tasks and activities carried out (European Union, 2014). However, the operator is accountable and responsible to demonstrate that the aircraft operated are airworthy. Equally important is that the operator will make sure that the emergency equipment of the aircraft operated is installed and serviceable. Nonetheless, the operator has to ensure that the Air Operator Certificate (AOC) of the aircraft remains valid and the maintenance carried out on the aircraft is in accordance with a maintenance programme (European Commission, 2015a). Furthermore, if the operator identifies any condition of the aircraft or any component that might put in danger the flight safety, the competent authority assigned by the state of registry and the holder of the type or supplemental type design shall be informed within 72 hours (European Union, 2014).

3.4.2 Application for CAMO approval

In order to obtain a CAMO approval the representative of the air carrier has to submit an EASA Form 2 [xx] or an equivalent application to the competent authority that is also issuing the AOC for the air carrier (European Union, 2014). Moreover, as part of the CAMO approval process the operator has to develop a continuing airworthiness management exposition (CAME) (European Commission, 2015b).

To demonstrate that the organisation [xxi] is compliant with the CAME and Annex I at any point in time, the accountable manager [xxii] has to confirm by signing a written statement included in CAME. The accountable manager has to nominate a person or multiple individuals that will ensure that the CAMO is all the time compliant with Part M Sub-part G. In addition, in the case of a licensed air carrier the accountable manager has to nominate a post-holder [xxiii] that will supervise and manage the continuing airworthiness activities. In order to clarify the chain of responsibilities within the organisation, a corporate structural chart including the names and titles of nominated post-holders has to be included in CAME. Similarly, if the CAMO has the privilege to issue or extend the Airworthiness Review Certificates (ARC) [xxiv], names of the personnel authorised to issue/extend such certificates must be listed in the CAME. Likewise, the CAME should also contain a list with the airworthiness staff [xxv] and if applicable a list with the staff authorised to issue permits to fly [xxvi]. CAME will also contain detailed information about the operator’s scope of work and procedures in place through which the operator will show compliance with Annex I and how the CAME can be amended for future improvements. Furthermore, the CAME has to contain a brief about the location of the facilities of the operator in question. Also, a list with the approved maintenance programme (or programmes if there is more than one type of aircraft operated) or an approved generic maintenance programme shall be incorporated in the CAME (European Commission, 2015b). An example of a CAME layout is attached to Appendix I.

3.4.3 CAMO facilities and personnel requirements

The organisation has to provide adequate office accommodation for employees whether they carry out activities related to continuing airworthiness management, quality staff, technical records and planning. Having sufficient office space will ultimately contribute to good standards. Additionally, the CAMO has to accommodate an adequate technical library and a room for document consultation (European Aviation Safety Agency, 2015).

Regarding the personnel requirements, the CAMO staff has to be appropriately qualified for the expected work carried out in the department. The nominated post holder supervising and managing the airworthiness tasks and the personnel overseeing the compliance of organisation with Part M Sub part G have to demonstrate that they have the appropriate background, knowledge and experience relevant to aircraft continuing airworthiness (for more details on personnel qualifications see Appendix II). Moreover, qualification of all CAMO’s personnel has to be recorded.

Regarding the personnel approved to perform and issue airworthiness reviews for aircrafts, they must acquire at least 5 years of experience in continuing airworthiness, have an aeronautical degree or an appropriate Part 66 license, a formal aeronautical maintenance training and have to be named on a position with the appropriate responsibility. The organisation is responsible to maintain a record of all airworthiness review staff and to ensure training continuation in the field of continuing airworthiness management. However, the approval to conduct airworthiness reviews is optional. More details regarding the CAMO privilege to conduct airworthiness reviews and issue airworthiness review certificates are attached to Appendix III (European Commission, 2015b).

3.4.4 Quality system and classification of findings

For the purpose of CAMO showing continuous compliance with Part M Subpart G of Annex I, a quality system has to be implemented and a quality manager shall be designated. The responsibilities of the quality manager is to monitor the compliance of CAMO with part M and to see if the established continuing airworthiness management procedures are adequate. The quality system shall have a direct feedback system with the accountable manager. This is to insure that the corrective actions are applied where necessary. Therefore, the core objectives of the quality system is to ensure that CAMO manages the continuing airworthiness adequately and at the same time it shows continuous compliance with Annex I requirements. A fundamental component of the quality system is the independent audit process. This is an objective process and comprises from a regular sample check carried out to see if the CAMO is managing the continuing airworthiness as per the mandatory regulations and recommended standards. Additionally, the independent audit will consists of a product sample check intended to complement the requirements for airworthiness review to ensure the aircraft will continue to be airworthy and safe to operate (European Aviation Safety Agency, 2015).

Aside from the direct feedback system is the occurrence reporting mechanism through which all employees can report any difficulties encountered with CAMO’s approved procedures. Establishing such an internal mechanism to report issues will lead to the improvement of CAMO procedures. This in turn will reflect that a best practice is applied within the organisation (European Aviation Safety Agency, 2015). In the case of a licensed air carrier the quality system required under Part M Subpart G shall be an integral function of the operator’s quality system. Moreover, where the airline is approved under another Part, the quality system can be linked together with the other Part (European Commission, 2015b).

The organisation has to establish levels of findings in accordance with Part M Subpart G, Section M.A.716 and two levels can be identified. The level 1 finding indicates that the organisation is not showing compliance with Part M and there is a serious issue where the safety standards are reduced resulting in an unsafe operation of the aircraft. The level 2 finding is when there is a non-compliance with Part M and is possible that safety standards and flight safety can be lowered but not as significant as a level 1 finding. If the competent authority is carrying out an audit on the organisation and a non-compliance with Part M, the CAMO’s holder has to implement a corrective action plan and within a timeframe given by the competent authority the issue has to be rectified (European Union, 2014).

3.4.5 Documentation, record retention and continuation of approval

In respect with the approved documentation, the CAMO must ensure that data used to perform continuing airworthiness tasks is up to date. The operator has to make the maintenance data available to any contracted parties (European Commission, 2015b). Regarding storage of the records, the CAMO has to keep a detailed record comprised from all work that was performed. A list with all required documents that have to be stored in the record system by a CAMO can be found in Appendix IV. When a CAMO has the privilege to issue, renew or make recommendations for an ARC, a copy of each ARC shall be retained and stored in the record system. This similarly applies when permits to fly are issued by a CAMO. The ARC and permits to fly records have to be kept for two years after the aircraft was withdrawn permanently from service. Also, the records have to be stored in such a way that they are unlikely to be damaged, altered or robbed. In case the records are kept electronically the CAMO must ensure that a second backup copy is kept in another location and that all documents will be kept in a good condition at any point in time (European Union, 2014).

When a competent authority approves the CAMO there will be no renewal date. In other words, the approval is never expiring. However, in the circumstances that the CAMO will not comply with the Part M provisions the competent authority has the entitlement to revoke the approval. In this case, the organisation has to return the approval title back to the competent authority. Similarly, if any corrective actions proposed by the competent authority is not implemented to rectify the findings, the CAMO approval can be suspended or revoked (European Union, 2014).

3.4.6 Continuing airworthiness management tasks and CAMO privileges

As per M.A. 708 and M.A 301 from Annex I, a CAMO shall ensure that for each aircraft managed the following tasks are carried out (European Commission, 2015b):

• The pre-flight inspections are accomplished before aircraft departure.
• Any defects and damages that have the potential to affect the safe operation of the aircraft are rectified. Moreover, a Minimum Equipment List (MEL) and a Configuration Deviation List (CDL) have to be developed for each aircraft type operated.
• CAMO must establish and control a maintenance programme for the aircraft managed. If the maintenance programme is based on MSG-3 logic a reliability programme must be established. The competent authority has to approve both the maintenance and reliability programme. The CAMO has to analyse the effectiveness of the maintenance programme and consequently revise it if necessary. Based on monitoring the frequency of aircraft any defect, damage or malfunctions of parts and components the maintenance programme has to be revised where required.
• CAMO must insure that the maintenance is performed in accordance with the approved maintenance programme and an approved Part 145 organisation is accomplishing it. Also whenever is required, the operator has to bring the aircraft to an approved Part 145 organisation. Additionally, CAMO has to verify and confirm that the scheduled maintenance, replacement of life limited parts and inspection of components are properly performed. The CAMO is in charge to determine what maintenance is required, when and where the maintenance has to be performed and who can perform it to ensure the aircraft will continue to stay airworthy (European Aviation Safety Agency, 2016b).
• The CAMO must ensure that any applicable Airworthiness Directive (AD), operational directives made by the Agency which impacts the continuing airworthiness, EASA’s continuing airworthiness requirements and rectifications mandated by the competent authority in response to a safety problem finding are carried out.
• The CAMO shall ensure that modifications and repairs are carried out in accordance with approved data authorised by EASA or a Part 21 design organisation. Also, approval of any modification and repair has to be properly managed and documented.
• Maintain and administer the continuing airworthiness records and operator’s technical log.
• Insure that the mass and balance statements are accurate when comparing with the current status of the aircraft.
• CAMO has to establish an embodiment policy for non-mandatory modifications and/or inspections. Some examples of non-mandatory information are the service bulletins or any authorised information made by an approved design organisation and which is tailored to a specific aircraft.
• The operator’s CAMO has to make sure that maintenance check flights are carried out when necessary.

On top of the tasks that CAMO has to carry out, The CAMO personnel should have an acceptable level of understanding the design status [xxvii] of the aircraft operated and what maintenance is necessary to be carried out. To support a good performance of CAMO’s quality system, the aircraft type design and maintenance to be carried out should be well documented  (European Aviation Safety Agency, 2016b).

An airline’s CAMO is approved under Subpart G, Section A of Annex I and has the privilege to manage the continuing airworthiness only for the aircraft listed on its approval certificate and which is also mentioned on the AOC. Moreover, the CAMO can outsource some continuing airworthiness tasks and in this case the CAMO has to make sure that the contracted organisation is working under the airline’s quality system and that the subcontracted arrangement is listed on the approval certificate. Another privilege is that the CAMO can extend an ARC issued by the competent authority or another approved CAMO. In addition, when the CAMO is registered in a EU member state it may hold the privilege of issuing and extending an ARC if the competent authority approves it in the basis of the CAMO being compliant with Part M, Subpart G, Section M.A.901 (see more details in Appendix V). Furthermore, the CAMO is entitled to issue a recommendation for airworthiness review to the competent authority of where the aircraft was registered. In addition, if a CAMO was approved to issue a permit to fly for a particular airplane, it is considered to be an entitlement of the CAMO. However, the CAMO has to satisfy the competent authority’s approved flight conditions (European Commission, 2015b).

Chapter 4

4.1 Outsourcing in aviation

Outsourcing in general has become a restructuring tool for companies looking to improve their business performance and expand their business (Mol, 2007). Usually through outsourcing the functions of a business will result in reducing operational cost and capital investment. At the same time, outsourcing decisions will help managers to leverage capabilities and resources of a company with the aim to  focus on the core values of the business (Al‐kaabi, Potter, and Naim, 2007). Furthermore, the outsourcing option is also fuelled by attractive marketing offerings which promise lower prices due to cheap labour (Rosenberg, 2004). Usually this is one of the main reasons why airlines are outsourcing their maintenance. The objectives are to cut the maintenance cost which occasionally will result in significant reduction in operational costs when compared with maintenance carried out in-house (Baum Hedlund Aristei&Goldman, 2016).

In the aviation industry, airlines are outsourcing those parts of the business that are labour intensive, such as aircraft maintenance, or are identified as being a non-core activity of the business (Rosenberg, 2004). McFadden and Worrells (McFadden and Worrells, 2012) considers that outsourcing a company may increase its overall profit, however this is not risk free as the contracted organisation may underperform. For example the worst scenario for an airplane maintained by a contracted Part 145 is when the aircraft is grounded and not able to fly as its airworthy condition was not maintained. Ultimately, the airline is the one responsible to properly select external suppliers if not there is always the option to perform everything in-house.

A big factor that dictates how much an airline is going to outsource is to analyse what is the airline business model. Doganis (2006) identifies three distinctive business models operated by airlines: the traditional, virtual and an aviation business model. Under a traditional business model, an airline is performing most of the functions and services in house with the aim to limit the outsourcing. An airline with a traditional model is characterized by the fact that all departments are developed in-house with the consideration that all airline’s functions are vital to manage the airline (See Fig. 4.1).  After 1990s another two airline business models, virtual and pure business, have evolved. The virtual airline concept requires that an airline should focus only on its core competences and outsource those non-core functions and activities (See Fig. 4.2).

Fig. 4.1: Traditional Airline Business Model

Fig. 4.2: Virtual Airline Business Model

Source: (Doganis, 2006)

Fig. 4.3: Aviation Business Model

Source: (Doganis, 2006)

The result expected from adopting a virtual business model is to reduce unnecessary costs created by non-core activities. This business model is suitable for start-up, small airlines and low cost carriers because they can take the advantage of obtaining good deals from third party suppliers and at the same time focus only on the core activities. The alternative between the traditional and virtual business model is the aviation business model (see Fig. 4.3). An aviation business model is proposing that airlines can develop the functions as a separate business entity to operate the airline and also to offer their services to other airlines. Thus some airline functions can bring profit on its own from other airlines (Doganis, 2006).

Another criterion by which an airline decides to carry everything in house or to outsource is based on the managed fleet size. A study made by Al-kaabi et al. (2007) indicates that only airlines managing a larger fleet will have a lower level of outsourcing, around 30% to 40%. The main reason is that larger airlines have the capital to invest whereas airlines with a small fleet may not have this advantage. This is typical for start-up airlines and low cost carriers (McFadden and Worrells, 2012).

Outsourcing functions of an airline company has advantages, however it is not risk free. Selecting suppliers that will underperform might result in long turnaround times, late deliveries or even loss of aircraft reliability. Moreover, safety and quality might be on the edge if certain functions are performed under operator’s standards (McFadden and Worrells, 2012, pp. 66-7). Also, by outsourcing certain airline functions the operator will heavily rely on supplier’s performance (Al‐kaabi, Potter, and Naim, 2007). Furthermore, when outsourcing it must be taken into consideration how secure it is to share certain information with the third party suppliers. Sometimes the information shared with the contracted organisations may encourage them to become a competitor or take the advantage of passing the information to other rivals on the market (Heikkilä and Cordon, 2002). Another risk when deciding to outsource is when one of the parties might take the advantage of a loosely written contract. For example, a contract between an airline and a maintenance provider may not contain information as to what extent a non-routine maintenance task can be carried out as part of a scheduled maintenance task. Therefore, inadequate contract terms might result in a late delivery of aircraft and occasionally hidden costs incurred (Sedatole, Vrettos, and Widener, 2012). Furthermore, one of the parties may be trapped in a long term contract with no opportunity to clarify the contract (Heikkilä and Cordon, 2002, p. 186). An additional risk of outsourcing is when the business functions are contracted out but previously were performed in house. This will lower employees’ morale because some of their colleagues are to be dismissed because of business restructuring. Moreover, these actions may result in union strikes and grievances which will lower down the company’s operations and share prices (Belcourt, 2006, pp. 274-5). Therefore, by selecting a reputable supplier and keeping a good relationship with him outsourcing risks may be eliminated. Moreover, implementing certain contractual agreements between an airline and a third party might lower the risks regarding the breach of confidentiality and disputes (Belcourt, 2006).

4.2 Outsourcing an airline’s CAMO activities

4.2.1 Requirements of subcontracting continuing airworthiness tasks

Already discussed in subchapter 3.4.6, one of the CAMO’s privilege is the ability to subcontract a qualified organisation or person to manage certain continuing airworthiness tasks. A key point is that any subcontracted organisation has to be listed on CAMO’s approval certificate and that all subcontracted activities are performed under CAMO’s quality system (European Commission, 2015b). Important to realize is that the CAMO is still responsible for the management of continuing airworthiness tasks regardless of any contractual agreement between CAMO and subcontracted party. Under those circumstances, the CAMO must establish measures of active control with the purpose of monitoring the subcontracted party compliance with the relevant requirements of Part M (European Aviation Safety Agency, 2016b). As part of implementing active control measures for subcontracted tasks, the CAMO has to employ a person/group of persons that have adequate knowledge about Part M Subpart G to supervise the subcontracted party (European Aviation Safety Agency, 2016a). The procedures of maintaining an active control over the subcontracted person/organisation must be stipulated in the contract between both parties. In addition, those control measures and procedures have to be in accordance with CAMO’s practices and policies stipulated in the CAME. Therefore, in the case of subcontracting tasks to a person or to an organisation, the continuing airworthiness management system is considered to be extended to the subcontracted parties.

The subcontracted person/organisation cannot further subcontract any continuing airworthiness management task. EASA advises that there should be only one subcontracted organisation per aircraft type performing the agreed subcontracted continuing airworthiness tasks. The latter conditions will not apply to subcontracted organisations that are managing specific continuing airworthiness tasks for engines and/or auxiliary power units. Ultimately, the contract between CAMO and a subcontracted party has to be approved by the competent authority. The competent authority has the privilege to oversee the subcontracted CAMO activities through the CAMO approval. Additionally, any change in the contract between CAMO and subcontracted organisation must be acknowledged to the competent authority and consequently approved by it (European Aviation Safety Agency, 2016b).

With respect to outsourcing the continuing airworthiness tasks mentioned in subchapter 4.2.2, the CAMO’s quality system has to monitor if the subcontracted work is carried in compliance with the contract and with the Part M subpart G. Therefore, the contract between CAMO and subcontracted party shall include certain conditions which allow CAMO to carry out quality control and audits on the subcontracted organisation. The primary objectives of quality audits is to examine the compliance with the contract and the Subpart G of Annex I. Also, quality audits will provide a measure to see how effective the subcontracted tasks are carried out. Where necessary, the audits carried out by CAMO’s quality department can be reviewed by the competent authority (European Aviation Safety Agency, 2016a).

4.2.2 What a CAMO can outsource and typical subcontracting arrangements

To retain the ultimate responsibility the CAMO department has to limit the subcontracted tasks. Therefore as an acceptable means of compliance the CAMO can only outsource the following tasks as per AMC M.A.711(a)(3) of Annex I (European Aviation Safety Agency, 2016b):

• Airworthiness Directives (ADs) analysis and planning;
• SBs analysis;
• Planning of maintenance;
• Maintenance programme development and amendments;
• Engine health monitoring and reliability monitoring;
• Any other activities which do not limit the CAMO responsibilities, as agreed by the competent authority.

Choosing to subcontract Airworthiness Directives

The AD planning and follow-up may be subcontracted to an organisation, however the AD embodiment can only be performed by an approved Part 145 organisation. The CAMO responsibility is to make sure that the embodiment of any mandatory AD is done within the timeframe specified in the AD, and that notification of compliance is provided. Also, by having clear policies and procedures on AD embodiment CAMO will show compliance with EASA’s AMC. When outsourcing the analysis and planning of ADs, the CAMO has to establish procedures on what information has to be shared with the subcontracted party. To illustrate this, the subcontracted party may need access to ADs publications, to continuing airworthiness records and the aircraft/engines flight hours and cycles. On the other hand, the CAMO shall implement procedures on what kind of information the subcontractor has to provide. For example, the CAMO may need the AD planning list and detailed engineering order (European Aviation Safety Agency, 2016a).

Subcontracting analysis of Service Bulletins 

When subcontracting the analysis of SBs, the CAMO has to implement relevant procedures and policies that will make clear what should be accomplished by the subcontracted party. For instance, the subcontracted organisation can review and make recommendations on what SBs should be carried out or not. Nonetheless, the expected work to be carried out by the subcontracted party has to be included and detailed in the contract arranged between both parties (European Aviation Safety Agency, 2016a).

Subcontract the maintenance planning

The CAMO can subcontract an organisation to define and plan the maintenance checks and inspections. The inspections and maintenance checks have to be planned and defined in accordance with the approved maintenance programme. CAMO has to implement procedures on how the control is achieved when maintenance planning is outsourced. The procedures will refer to how the cooperation between CAMO and subcontracted organisation is to be achieved and how the feedback is to be provided by the subcontracted party. In addition, the degree of which the CAMO will get involved in checking and assessing the maintenance planning has to be determined and described in the CAME. In the case of base maintenance checks the CAMO has to assess and agree with each individual work specification performed by the subcontracted party. With regard to routine line maintenance checks, the subcontracted party can control it every day providing that there is appropriate liaison with the CAMO. Typical maintenance checks to be controlled by a subcontracted party are: incorporation of ADs, scheduling component removal, planning work packages to be carried out etc. Also, the CAMO has to implement a control procedure to ensure that every maintenance check and inspection is timely compliant (European Aviation Safety Agency, 2016a).

CAMO has to establish a ‘fast track’ which ensures that vital maintenance data is communicated to the subcontractor in a timely manner. The Figure 4.4 below outlines specific maintenance data that is regarded to be important and has to be shared with the subcontractor.

Fig. 4.4: Important information needed by the subcontractor to carry out maintenance planning

Subcontracting the preparation of maintenance programme draft and its amendments

The CAMO can subcontract the drafting of maintenance programme including its following amendments. On the other hand, the ultimate responsibility of the CAMO is to make sure that the drafted maintenance programme meets its requirements and the prerequisite in order to be approved by the competent authority. Relevant procedures shall be implemented in the contract to reflect CAMO’s responsibilities with regard to the subcontracting of maintenance programme development. In addition, the contract has to lay down conditions through which it is shown that the necessary data needed to substantiate the initial approval or any other amendment of the maintenance programme is furnished to CAMO for acceptance and consequently provided to the competent authority if requested (European Aviation Safety Agency, 2016a).

Subcontracting the maintenance programme effectiveness and reliability monitoring

To monitor the effectiveness of the maintenance programme, the CAMO needs to implement a monitoring system that is taking into account the actual operational experience and maintenance carried out. The subcontracted party can gather the necessary data to monitor the effectiveness, however the required actions are taken by the CAMO. In the case of a reliability programme being used, information can be gathered by the subcontracted organisation to establish the effectiveness of the maintenance programme providing that relevant procedures are in place. Additionally, details with regard to meetings to discuss the reliability programme between CAMO’s personnel and subcontracted party have to be specified. The subcontracted party will be limited to work with primary data when CAMO is providing such data with the purpose to assess the reliability programme. The type of reliability data given by CAMO to the subcontractor has to be accepted by the competent authority (European Aviation Safety Agency, 2016a).

Where CAMO may allow the subcontracted organisation to propose variations to the scheduled maintenance, which is part of the maintenance programme, relevant procedures should be in place. The procedures will refer to CAMO’s acceptance for proposed variations of the scheduled maintenance. In the event that the proposed variations are found to be outside the limits established in the maintenance programme, the CAMO needs to obtain approval from competent authority to amend the maintenance programme (European Aviation Safety Agency, 2016a).

Subcontracting engine health monitoring

CAMO can outsource the on-wing engine health monitoring to an external organisation. The contracted organisation has to receive all relevant information in order to perform the engine health monitoring process. This is to be specified in the contract between CAMO and subcontracted party. Moreover, in the contract has to be established what feedback information has to be provided by the subcontracted party to the CAMO. The feedback information may include engine limitation, technical advice etc. (European Aviation Safety Agency, 2016a).

Other activities that can be subcontracted

Forecast of component control/removal and control of service life limited parts

The CAMO can outsource the planning of service life limited parts and components removal or control. Within the contract between the CAMO and subcontracted organisation, it should be established how frequently the flight cycles, flight hours, landings or calendar control data have to be received by the subcontracted organisation. Furthermore, there should be a good communication between CAMO, subcontracted organisation and the maintenance organisation performing the scheduled maintenance tasks. The ultimate responsibility to ensure that any required maintenance is accomplished within a specified timeframe sits with CAMO (European Aviation Safety Agency, 2016a).

Defect control

The CAMO can outsource the technical log and its deferred defects to be managed by an external organisation. In the contract it must be specified that the external organisation can control the technical log and this should also be defined in a CAMO procedure. In addition, the procedures shall include to what extent the subcontracted party is taking actions on particular defects such as aircraft on ground situations, damage beyond type design limits and repetitive defects. To decide if the defects can be differed or not, the subcontracted party has to follow the operator’s MEL or CDL. In addition, before deferring any defects the subcontracted party has to carry out an assessment to identify any potential hazards that may result from operating the aircraft with that particular defect. Ultimately, it is important that the subcontracted party will follow up with the CAMO to receive approval for deferring the defect  (European Aviation Safety Agency, 2016a).

If any defects are found out during a maintenance visit, the CAMO must be informed about it to determine if the defect can be deferred or not. In this condition, proper communication must be ensured between the CAMO, maintenance organisation and subcontracted party. Furthermore, any defect should be deferred as per operator’s MEL or CDL and can only be accomplished by an approved maintenance facility. Also in such case, the defect that will be deferred has to be approved by the captain in charge with the operation of the airplane. Moreover, the maintenance facility will use the relevant technical log procedures to defer the defect (European Aviation Safety Agency, 2016a).

Managing the continuing airworthiness records

The continuing airworthiness records can be managed by a subcontracted organisation in the name of CAMO which retains the ownership of the documents. Under agreed procedures, the subcontracted organisation must provide an up to date AD compliance status list and the current status of the service-life limited components. Furthermore, when the CAMO requests to see the original records, there should be unrestricted access provided by the subcontracted organisation. Similarly, the subcontracted party shall provide unlimited access to records stored in electronic format on online platforms. The subcontracted organisation has to meet Part M provisions for record-keeping when they are contracted to manage the CAMO continuing airworthiness records. In addition, if the competent authority requires access to continuing airworthiness records the contracted party has to grant them access to the records  (European Aviation Safety Agency, 2016a){European Aviation Safety Agency, 2016, Annex I to ED Decision 2016/011/R. Acceptable Means of Compliance (AMC) and Guidance Material (GM) to Annex I (Part-M) to Commission Regulation (EU) No 1321/2014}.

Check flight procedures

Usually check flights are carried out under CAMO control. However, when check flights are required by a contracted maintenance organisation or any subcontracted organisation the check flights are to be agreed by CAMO (European Aviation Safety Agency, 2016a){European Aviation Safety Agency, 2016, Annex I to ED Decision 2016/011/R. Acceptable Means of Compliance (AMC) and Guidance Material (GM) to Annex I (Part-M) to Commission Regulation (EU) No 1321/2014}.

4.2.3 Communication between CAMO and subcontracted party

Fig. 4.5: communication between CAMO, contracted Part 145 and subcontracted party

The airline’s CAMO is ultimately responsible for the continuing airworthiness of the aircraft. When the maintenance is contracted out and also certain CAMO’s tasks are subcontracted to another organisation, there should be an effective communication established between all parties. Any contracts negotiated between parties have to contain certain meetings. The purpose of the meetings is to ensure that each party is committed to ensure the continuation of aircraft airworthiness. More importantly is that all meetings have to be documented and the type of meeting shall be detailed within the contract between parties. Some key meetings are highlighted in Figure 4.5 (European Aviation Safety Agency, 2016a).

The purpose of the contract review meeting is to reach a common consensus on what are the responsibilities and obligations of both parties. Usually when a contract is established, the technical personnel from both parties will get involved in the process of drafting the contract. Another typical meeting between CAMO and contracted/subcontracted organisation is the work scope planning meeting. In this meeting, both parties will reach an understanding on what tasks have to be performed. Different from the work scope planning meeting is the technical meeting. During a technical meeting both parties will review and discuss technical matters such as ADs/SBs embodiment, modifications, defects to be deferred or major airworthiness issues found during a maintenance visit. Therefore, the purpose of a technical meeting is to agree upon what has to be done and consequently the contracted/subcontracted party will look for CAMO approval to carry out the proposed solution (European Aviation Safety Agency, 2016a).

Other important meetings between CAMO and contracted/subcontracted party are the quality and reliability meetings. In a quality meeting the CAMO’s quality department will highlight findings and corrective actions that are needed to be taken by the subcontracted organisation. The findings and corrective actions are based on the quality surveillance carried out by CAMO’s quality department or by the monitoring activity performed by the competent authority. On the other hand, through a reliability programme meeting, it will be established the level of involvement of both CAMO and subcontracted party in the implementation and management of a reliability programme. Moreover, arrangements to allow the attendance of the competent authority in reliability meetings have to be established (European Aviation Safety Agency, 2016a).

4.3 Changing CAMO rules – NPA 2010-09

As discussed in previous subchapters, a CAT operator and a licensed air carrier are required to obtain approval for its own CAMO department in order to manage the continuing airworthiness of the aircraft. Through the Notice of Proposed Amendment (NPA) 2010-09 the EASA Rulemaking Directorate is proposing three choices for CAT and licensed air carrier operators to ensure that the aircraft airworthiness is continued (See Fig. 4.6 on the next page). The first two options of carrying out the CAM tasks and activities in house or subcontracting some of them to an external organisation are already included in the current legislation, more exactly in the Annex I of Commission Regulation (EU) No. 1321 from 2014. However, the third choice proposes that a CAT operator or licensed air carrier can fully contract CAM activities and tasks to an approved contracted CAMO registered in an EU member state. For the latter option proposed, the operator has to implement adequate measures to control the contracted CAMO (European Aviation Safety Agency, 2010). To assess the potential change of the continuing airworthiness legislation and to develop an opinion, a working group (M.014) was established by EASA in 2006. One of the aims of the working group was to reach a common understanding on the NPA 2010-09 (Hall, 2012a).

Fig 4.6: Possible choices for a CAT/licensed air carrier to ensure continuation of the aircraft airworthiness Adapted as per (Hall, 2012a)

4.3.1 Factors driving the change of continuing airworthiness regulation

The change in the legislation governing continuing airworthiness in the EU is influenced by various forces that were taken into consideration by the working group responsible for reviewing the NPA 2010-09 (see Fig 4.7 on the following page). First of all, the increase in the number of new approved independent CAMOs which are able to offer full CAM services to operators is a driving force to change Part M. Secondly, many Original Equipment Manufacturers, (OEMs), and approved maintenance facilities may offer premium or “Total Care” packages to operators acquiring their product. Those packages will often contain a level of support which includes the option of performing CAM tasks for the operator. As of current rules, an OEM cannot fully manage an operator’s CAM tasks and activities. Another reason for changing the continuing airworthiness regulation is that some operators would like to benefit more by not only outsourcing certain CAM tasks but outsourcing all of them to an approved ‘stand-alone’ CAMO which already has the expertise. This situation will mostly apply for new operators trying to establish themselves in the market, and small operators that are struggling with building up the necessary expertise. Furthermore, some small operators which already have a Part M Subpart G approval and are acquiring new aircraft types on their fleet will find it difficult to extend the Part M Subpart G approval (scope of approval) due to a lack of resources. This particular problem arises when the operator is acquiring, through leasing agreements, a new aircraft type for a short period of time. Therefore, the new proposed option for operators might help them to manage efficiently the CAM tasks for the added fleet by outsourcing to an independent CAMO. Alongside all the driving forces mentioned above which influence the change of current continuing airworthiness, the working group took into consideration those operators’ CAMO that form a different legal entity than the operator itself. This is especially applied when multiple airlines are part of a parent company. Consequently, if the proposed continuing airworthiness regulation is accepted there is no need for airlines that are part of the same company to hold individual Part M Subpart G approvals  (Arnaud, 2010b).

Fig. 4.7: Forces driving the change of the legislation governing continuing airworthiness

4.3.2 Advantages identified by EASA when the operator has the option to outsource all CAM tasks and activities

Outsourcing all CAM activities and tasks to an approved CAMO will help small operators to maintain their operations and avoid a huge financial burden caused by developing an in-house CAMO with the purpose of managing the continuing airworthiness of the aircraft. This has proven to be non-feasible and difficult for small operators to develop a CAMO department to manage CAM tasks and activities for a small fleet. Under the current regulations most of the small operators are already subcontracting CAM tasks under their own quality system to unapproved organisations. Likewise the operators undertaking new aircraft types on their fleet or acquiring aircrafts through short-term dry lease are inclined to subcontract CAM tasks to unapproved organisations. Therefore the Agency believes that the proposed option of allowing the operators to contract an approved CAMO to manage the CAM tasks will be more suitable when compared with current practices (European Aviation Safety Agency, 2010).

Another advantage of allowing airlines to outsource CAM activities to approved CAMOs will be reflected in the increase in number of CAMO approval applications. EASA is expecting that most of the non-approved organisations subcontracted by airlines will apply for CAMO approval in order to be able to provide complete contracting services. Consequently, EASA and competent authorities are able to monitor more effectively the quality of the work performed by approved CAMOs (Arnaud, 2010b). In addition, the contracted approved CAMO will be accountable for the work performed which is not applicable under current legislation. In spite of the contracted CAMO being accountable for work performed, the operator still holds the ultimate responsibility to ensure the aircraft are kept in an airworthy condition while in operation (European Aviation Safety Agency, 2010).

The option of outsourcing all CAM tasks and activities will clear up any ambiguities where CAMO may form a distinct legal body from the operator or same parent company. In such case, when multiple airlines are part of the same parent company it is not required to develop a CAMO for each airline. It will be sufficient that each airline will have a contract with the CAMO performing the CAM tasks and activities. Furthermore, outsourcing all CAM tasks and activities will let the aircraft manufacturers provide full CAM services to their clients (European Aviation Safety Agency, 2010).

4.3.3 Disadvantages identified by EASA when the operator has the option to outsource all CAM tasks and activities

The agency admits that allowing a CAT/air carrier operator to outsource all CAM activities and tasks could result in the operator neglecting its responsibility of ensuring the aircraft will continue to remain in an airworthy state. In other words, the operator will rely on contracted CAMO to ensure the continuing airworthiness of the airplanes. Also, the operator may fail to offer in time and up to date information to the contracted CAMO. Another key point is the selection of CAMO based on the economic offer. The operator may end up contracting a CAMO which may be far from operator’s base and offers its services at a much lower price. This may result in a failure to manage the continuing airworthiness of the aircraft when contracting to a stand-alone CAMO that is away from the operator’s base. Moreover, the contracted CAMO may fail to deliver all or certain CAM tasks and activities due to inadequate expertise, and may have inadequate facilities to accommodate its personnel (European Aviation Safety Agency, 2010). Another problem may arise if the contracted CAMO is serving more than one operator. In such case it must be ensured that the CAMO has sufficient resources to manage CAM tasks for all operators and is not giving priorities to a specific one. Therefore, the CAMO has to plan its resources and analyse if can work for more than one operator (Haglund and Brunnberg, 2012).

4.3.4 Measures to eliminate any non-compliance when contracting all CAM tasks

In order to prevent any non-compliance with the proposed regulation, which will let the operator outsource all CAM activities, certain requirements have to be accomplished. One important aspect is that the operator has to demonstrate that the contracted CAMO is actively controlled[1] and monitored for the work carried out. This in turn will ensure that the CAM tasks and activities are performed in accordance with Part M requirements. EASA considers that the following control measures have to be implemented by the operator in order to oversee and monitor the contracted CAMO:

• A risk analysis assessment (RAA) must be developed to determine how critical it is to outsource CAM tasks, the RAA will be based on a Safety Management System concept;
• A confirmation of the level of control required by each outsourced CAM task/activity
• Operator shall develop a plan which will demonstrate that the contracted CAMO has adequate resources to carry out all CAM tasks. Through this plan the operator has to ensure that the contracted CAMO has enough employees with adequate knowledge and competencies. Moreover, the operator shall ensure that CAMO has adequate procedures to manage CAM tasks and that there is a suitable airworthiness data exchange between contracted CAMO and operator.
• The operator has to demonstrate that the contracted CAMO has a minimum amount of technical expertise such as an accountable manager and a designated post holders that are able to perform continuing airworthiness control.
• The operator has to show that there is a well-established communication channel between operator and contracted CAMO, especially in the case of a contracted CAMO being far from operator’s base;
• The operator has to establish a contract with the independent CAMO which is clearly defining the responsibilities of each party;
• The Operator has to develop a Continuing Airworthiness Control Exposition through which will be shown that the contracted CAMO has adequate procedures and resources in place (European Aviation Safety Agency, 2010).

A good example to illustrate this outsourcing scenario is when an operator takes the decision to move away from the traditional concept of performing the aircraft maintenance in house and to outsource it to an independent approved Part 145 organisation. Based on the implementation of adequate control measures over the contracted maintenance organisation, the operator will not endanger the safe operation of the aircraft and its airworthiness. A similar situation can be found if the operator is outsourcing all CAM tasks to a standalone CAMO. Therefore, if the operator demonstrates that the contracted organizations are monitored and controlled properly, the safety and airworthiness of the aircraft are not put under any threats (European Aviation Safety Agency, 2010).

4.3.5 Changes brought by NPA 2010-09 to Part M

One of the biggest changes brought by NPA 2010-09 is that a CAT operator does not need to meet up to Part M Subpart G regulation if is deciding to fully outsource CAM tasks to a stand-alone approved CAMO. In this case the operator has limited continuing airworthiness responsibility as he only needs to monitor and control the work performed by contracted CAMO. However, to show compliance with ICAO Annex 6, Part I, Chapter 8.2 the operator will still be responsible to insure the continuing airworthiness of the aircraft. On the other hand, the contracted CAMO will be responsible to make sure that CAM tasks are properly performed (Arnaud, 2010b). As part of NPA 2010-09, EASA proposes a new Subpart – Subpart J – to Annex I. If the operator does not want to apply for Part M Subpart G approval it must show compliance with Part M Subpart J in order to maintain a valid AOC. The Subpart J will contain all necessary provisions for a CAT operator to be approved to fully outsource its CAM tasks and activities. Moreover, when the operator is showing compliance with Subpart J it means that there is an appropriate level of monitoring and control over the contracted CAMO. The operator has to carry out a RAA on each outsourced CAM task with the purpose to show compliance with Part M Subpart J. The RAA will describe and demonstrate the operator’s level of control over the contracted CAMO (European Aviation Safety Agency, 2010).

When the operator decides to fully contract CAM tasks it cannot be approved to issue or review ARCs because an independent CAMO was contracted. Moreover, the contracted CAMO does not need to hold the privilege to make recommendation, extend or issue an ARC. In this case the main contracted CAMO which is performing the operator’s CAM tasks shall contract another CAMO which holds the privilege to issue, extend or recommend an ARC. It is important to point out that in some cases there could be three different competent authorities involved in reviewing and monitoring how the continuing airworthiness is managed. These authorities can be the competent authority from where the aircraft was registered (Member State of Registry), the competent authority where the operator obtained the AOC (Member State of the operator) and the competent authority that approved the contracted CAMO.  Therefore, EASA decided to limit the CAT operators to contract all CAM tasks only to those CAMOs that are approved by a competent authority of an EU member state (European Aviation Safety Agency, 2010).

Initially the Agency considered to introduce a new approval certificate which demonstrates that the operator is compliant with Subpart J. However, EASA decided that the operator’s AOC will contain an attachment which will state that the operator is showing compliance with Subpart J. The attached document will detail the scope of outsourced activities as per Subpart J of Annex I. Nonetheless, since outsourcing all CAM activities is still a concept EASA did not provide clear instructions on how the attachment will look (European Aviation Safety Agency, 2010).

For the operator to comply with Part M Subpart J, EASA proposed to introduce new provisions in Annex I as following:

• Defining the operator’s responsibilities in relation to the control and monitoring of the outsourced CAM tasks/activities.
• With reference to contractual arrangements, minimum requirements have to be developed to cover the responsibilities of both the operator and contracted CAMO. Also, requirements for contractual arrangements for CAM will be established.
• Establish in certain circumstances which CAM tasks can be outsourced and which ones have to remain under operator’s control.
• New GM will be developed to help the operator establish a CAM contract. Moreover, the purpose of GM will be to help the operator to understand the requirements settled down in the new Subpart J of Annex I.
• Requirements for the operator to establish a Continuing Airworthiness Control Exposition (CACE) will be established. The main objective of CACE is to provide details about operator’s structure and procedures which have to meet the requirements of Subpart J of Annex I. Furthermore, through CACE the operator will show compliance with ICAO Annex 6, Part I, Chapter 8.2.
• A new form will be established by the Agency through which the operator can apply to get approval under Part M Subpart J. This means that the operator’s control system over the contracted CAMO is in accordance with Subpart J. Moreover, as part of the approval process the competent authority will approve the CACE and also has to agree with the operator what relevant chapters have to be included in it (European Aviation Safety Agency, 2010).

4.3.6 Industry opinion with regard to the outsourcing of CAM activities and tasks

By outsourcing all CAM tasks to a stand-alone approved CAMO, the operator does not have to invest on building up the expertise to manage CAM tasks. Moreover, when the operator is acquiring new type of aircraft within the fleet, a stand-alone CAMO can be contracted to manage CAM tasks for the new aircraft. Consequently the operator does not need to extend the scope of approval. Contrary to Jorge Leite, David Inns – a consultant at Baines Simmons – claims that the airlines are already taking full advantage of current legislation. David claims that at the moment airlines are “extremely outsourcing” their CAM tasks. In addition, David thinks that when an airline is “extremely outsourcing” CAM tasks it becomes unclear who is responsible for what. Therefore, David Inns says that is crucial to make a difference between management of CAM tasks and control. To ensure that the aircraft will remain in an airworthy state, the operator has to implement adequate control measures for CAM tasks whether those are performed in house or outsourced to a third party CAMO (Gubisch, 2012).

The trend of in-sourcing CAM activities stands with airlines that are looking to expand their fleet and also they want to be more independent and have a closer control when CAM tasks are carried in house. For these reasons EasyJet decided in February 2010 to perform all CAM activities in house. Previously EasyJet was outsourcing most of the CAM tasks to SR Technics which also was their MRO partner. Swaran Sidhu, EasyJet’s head of fleet technical management was stating that bringing back all outsourced CAM tasks generated cost savings for projects carried out by Easy Jet’s engineering department. Moreover, he was able to see a greater improvement for technical operations and a better process control. Additionally, building up its own expertise the airline was making better decisions when certain maintenance tasks had to be outsourced. To in-source everything it took almost one year and the most challenging part was to recruit employees that were required to have adequate knowledge and experience to work in a CAMO department. To establish a strong culture within the company and to prevent the loss of intelligence the employees had to be contracted on a permanent basis (Gubisch, 2013b). When EasyJet started the operations the CAM activities were outsourced to a specialized MRO. Through outsourcing EasyJet had the ability to predict cost base and also they were having access to a tailored support packaged offered by the contracted MRO. However, Swaran concludes that when an airline plans to expand its fleet it becomes harder to control the outsourced CAM activities and also difficult to maintain a cost base. Therefore, this was the main reason why EasyJet decided to in-source everything back in-house (Gubisch, 2013a).

On the other side, the low cost airline Wizz Air extended its fleet management contract agreement with Lufthansa Technik even if the airline is looking forward to expand its aircraft fleet and to become more established (Corporate Communications of Lufthansa Technik AG, 2016). Wizz Air did not contract Lufthansa only because it is offering a complete fleet management package but also because Lufthansa Technik has “a pool of knowledge” gathered from managing other air carriers. Lufthansa Technik’s VP of engineering department, Robert Nyenhuis, also emphasizes that “due to many customers, [Lufthansa Technik] is a relatively large [MRO] and provides great depth of engineering experience”. Usually small airlines that are not capable of performing all CAM tasks in house will look out to outsource some of them to be managed by a third party. Primarily this issue is generated by not having enough financial resources to employ the necessary staff to carry out all CAM tasks in house. Furthermore, when an airline is not having a well-established technical competence, the contracted CAMO or a subcontracted engineering consultant may represent the airline in a dispute with the Original Equipment Manufacturer (OEM) (Gubisch, 2013a).

EASA’s proposed NPA 2010-09 is well-supported by most of the stand-alone CAM providers such as Lufthansa Technik. Also EASA itself wants to improve the CAMO regulation as under the current legislation some operators extensively subcontracted CAM tasks which resulted in situations where the operators were not having an adequate control on outsourced CAM tasks (Gubisch, 2013a). Despite the industry support and EASA’s strive to change the continuing airworthiness regulation, some national aviation authorities (NAAs) and airlines are not in favour of this and also misinterpret the proposed amendment (Hall, 2012b). For example the German’s NAA, Luftfahrt Bundesamt, prefers the current legislation as it is and is specifying clearly that the aircraft operator has to remain fully responsible to ensure fleet’s continuing airworthiness. Furthermore, Jorge Leite the VP of Quality and Safety of TAP airline declares that EASA’s proposed amendment is not offering a clear view on shared responsibility between airlines and contracted organisations. Also, he claims that people are perceiving outsourcing as a “discharge of responsibilities” and he recommends that a medium or large airline should invest in carrying all CAM tasks in house which in turn will improve the business image. On the contrary, Leite says that small air carriers could take advantage of an eventual legislative change, however, he thinks that an airline capable of managing all CAM activities in house will result in more efficient operations and better customer perception (Gubisch, 2013a).

4.4 Decision model to outsource CAM tasks and activities

Through outsourcing non-core activities, airlines are capable of increasing their efficiency and abilities to provide good services by focusing more on their core competencies. Ultimately, the airline should generate realistic profits and notice an increase in customer satisfaction. Although this may be true, in practice it is not always clear what are the advantages of outsourcing certain airline’s business functions. In some cases the outsourcing advantages are not materialized due to unsuccessful outsourcing of activities. Generally, ineffective outsourcing develops from implementation of improper strategies and outsourcing methods. This may lead to an airline losing its core competencies and exposure to unpredictable risks (Hsu and Liou, 2013). Therefore, to identify a suitable third party provider it is important to follow a rational and systematic decision process. This is to ensure that risks associated with outsourcing are eliminated and that the outsourcing decision making is a success.

Franceschini et al. (Franceschini et al., 2003) is proposing a general outsourcing decision model which comprises from four main steps: internal benchmarking and analysis, external benchmarking and analysis, contract negotiation and outsourcing management (See Appendix VII for general outsourcing decision model). Moreover, the McIvor et al. (1997) developed a strategic model to formulate a ‘make and buy’ decision (See Appendix VIII for the make or buy decision model developed by McIvor et al. (1997)). By combining the general outsourcing decision model along with make and buy decision model a rational and systematic outsourcing decision model can be adapted for airlines willing to contract out CAM activities and tasks (See Fig. 4.8 on the following page).

Fig. 4.8:Rational and systematic approach to outsource CAM tasks and activities.

Adapted from McIvor et al. (1997) and Franceschini et al. (2003)

Similar with the make and buy strategic decision model developed by McIvor et al. (1997), the adapted outsourcing decision model to contract out CAM activities and tasks have four main levels (See fig 4.8):

1. First level: is to identify how critical are certain CAM tasks and activities for an airline. Each CAM task and activity has a different impact level on airline’s performance. Consequently, certain CAM activities such as updating engine health monitoring and reliability monitoring or AD status list may result in more costs or it will impact the safety if they are mismanaged by the contracted/subcontracted organisation. For CAM activities or tasks that are not too critical, the airlines can outsource them based on the fact that any associated risks are under operator’s control.
2. Second level: the operator has to ask himself if it is justifiable to outsource CAM tasks and activities. This decision will be highly influenced by airline’s fleet size and how many aircraft types are operated. For example, an airline having a small fleet operating a few different aircraft types might not justify the necessity of performing all CAM tasks and activities in house.
3. Third level: the operator has to analyse if it is capable to carry out all CAM tasks and activities in house. This will be highly influenced by airline’s capital which will decide if is worth investing in a full CAMO or not. Moreover, performing all CAM tasks and activities in house will require skillful personnel with appropriate experience and qualifications.
4. Fourth level: the operator has to decide the CAMO configuration based on the three distinctive airline business models identified by Doganis (2006). Therefore three distinctive options can be determined:

• Following a traditional airline business model: the airline is embracing the “make decision” to keep the CAMO staff and resources to an optimal level with the scope to fully manage only its CAM tasks and activities.
• Following a virtual airline business model: the operator will always look to outsource most of the CAM tasks and activities to an external organisation. Because at the moment EASA regulations governing continuing airworthiness is limiting CAT and licensed operators to outsource CAM tasks, the decision of what CAM tasks and activities to manage in house and what to outsource will fall under a combination of “make and buy” decision.
• Following an airline business model: the operator will make sure that all CAM activities and tasks will be carried in house and the extra capacity is used to create a business opportunity with the scope to boost airline’s profit. This is accomplished by creating an over-capacity of personnel and resources which will not only manage airline’s CAMO but will also provide technical services to other airlines.

Conclusions and recommendations

Through the literature review it is observed that the concept of continuing airworthiness is very important to ensure the airworthiness integrity of an aircraft operated by an air carrier or CAT operator. The air carriers and CAT operators registered in an EU member country will have to comply with EASA regulations especially with Commission Regulation (EU) No. 1321/2014 which requires them to develop their own CAMO. Setting up an internal CAMO does not incur a huge cost for operators, however, as managing CAM tasks and activities is a labour intensive job running the CAMO will depend on pay rates. If the operator takes the decision to outsource certain tasks and activities this will be limited by EASA regulation to only outsource certain tasks and activities. The outsourcing limitation is not very clear in the legislation and this is also confirmed by an interview respondent which also states that the contracts between the operator and a technical services provider will come down to a Competent Authority approval. There are airlines in the EU market that outsource nearly all CAM tasks and activities.

Outsourcing CAM tasks and activities of an air carrier or CAT operator is both a benefit and a risk. Usually airlines that are looking to establish in the market and new start-up airlines will see the outsourcing as a benefit. Moreover, there are airlines looking to outsource CAM tasks and activities of particular operated aircraft types only because they do not have the in-service experience and are looking to contract out technical services providers that have the knowledge pool for those aircraft types. By interviewing two respondents working in CAMO department from two different airlines it is clear that outsourcing CAM tasks and activities will depend on various operator’s characteristics such as: fleet size, aircraft types being operated and flight profiles and routes operated. The risks associated with outsourcing CAM tasks and activities can be mitigated by having a good oversight on the organisation performing them. A good oversight and control is ensured by proper audit programmes, good communication between parties (this includes the sharing of information and establishing meetings) and a good reporting system. More importantly, is that the operator must carry out due diligence on the technical services provider. This is to make sure that the party being contracted is financially backed-up and has proper procedures in place to meet the operator’s requirements.

EASA has to amend Commission Regulation (EU) No. 1321/2014 by offering the choice to airlines to outsource all CAM tasks and activities as proposed in NPA 2010-09. This will be a great benefit for new start-up airlines and for those airlines looking to develop a centralized CAMO. In addition, the industry standard will raise as non-approved organisations will look into getting CAMO approval to provide full CAM services. Because the CAMO approvals are granted by NAAs, the increasing number of CAMO applicants will possibly make the Competent Authorities to be more stringent and rigid to give the approvals. This issue can be further investigated in future academic studies because this was one of the limitations of this dissertation – there was no Competent Authority interviewed.

The decision model for outsourcing CAM tasks and activities is developed by firstly analysing the criticality of CAM tasks, justify the need of outsourcing CAM tasks and considering the capability of CAMO department. Furthermore, the model is taking into consideration the airline business model embraced by the operator. The outsourcing decision model can be improved by including airline’s characteristics such as fleet size, how many aircraft types are operated and what are the flight profiles and routes operated etc. Attached to the outsourcing model a SWOT analysis could be developed in order to identify internal strengths and weaknesses and external opportunities and threats when an operator decides to outsource CAM tasks and activities. Moreover, the outsourcing decision model could be improved by using a scientific approach such as Multiple Criteria Decision-Making model described by Hsu and Liou (2013).

A further research is recommended to be carried out in order to see if there is a scope for EASA to develop regulations to cover those organisations looking to obtain a dedicated CAMO approval for components, engines and APUs. This area is not well developed and regulated at the moment, and the engines, APUs and other aircraft components are more valuable than the airframe itself.

The decision of EASA NPA 2010-09, EU Regulation No. 1321/2014 is eagerly awaited.

Appendices

Appendix I

AMC2 M.A.704 continuing airworthiness management exposition

(European Aviation Safety Agency, 2016a)

EXPOSITION LAYOUT FOR A CAMO HOLDING A MAINTENANCE ORGANISATION APPROVAL

1. Where a CAMO is also approved to another Part, the exposition or manual required by the other Part may form the basis of the continuing airworthiness management exposition in a combined document.

2. Example for a combined CAMO and Part-145 organisation:

Part-145 Exposition (see equivalent paragraphs in AMC 145.A.70(a))

Part 0: General organisation

Part 1: Management

Part 2: Maintenance procedures

Part L2: Additional line maintenance procedures

Part 3: Quality system and/or organisational review (as applicable)

This chapter should cover the functions specified in M.A.712 ‘Quality system’ and 145.A.65 ‘Safety and quality system’.

Part 4: Contracts

This chapter should include:

• the contracts of the CAMO with the owners/operators as per Appendix I to Part-M;
• the CAMO procedures for the management of maintenance and liaison with maintenance organisations.

Part 5: Appendices (sample of documents)

Part 6: Continuing airworthiness management procedures

Part 7: FAA supplement (if applicable)

Part 8: TCCA supplement (if applicable)

Part 9: Airworthiness review procedures (if applicable)

3. Example for a combined CAMO and M.A. Subpart F organisation:

Part 0 General organisation
Part 1 General
Part 2 Description
Part 3 General procedures
Part 4 Working procedures: this part should contain, among other things, procedures for quality system or organisation review, as applicable.
Part 5 Appendices
Part 6 Continuing airworthiness management procedures
Part 7 Airworthiness review procedures (if applicable)

Appendix II

AMC M.A.706 Personnel requirements

(European Aviation Safety Agency, 2015)

1. The person or group of persons should represent the continuing airworthiness management structure of the organisation and be responsible for all continuing airworthiness functions. Dependent on the size of the operation and the organisational set-up, the continuing airworthiness functions may be divided under individual managers or combined in nearly any number of ways. However, if a quality system is in place it should be independent from the other functions.

2. The actual number of persons to be employed and their necessary qualifications is dependent upon the tasks to be performed and thus dependent on the size and complexity of the organisation (general aviation aircraft, corporate aircraft, number of aircraft and the aircraft types, complexity of the aircraft and their age and for commercial air transport, route network, line or charter, ETOPS) and the amount and complexity of maintenance contracting. Consequently, the number of persons needed, and their qualifications may differ greatly from one organisation to another and a simple formula covering the whole range of possibilities is not feasible.

3. To enable the competent authority to accept the number of persons and their qualifications, an organisation should make an analysis of the tasks to be performed, the way in which it intends to divide and/or combine these tasks, indicate how it intends to assign responsibilities and establish the number of man/hours and the qualifications needed to perform the tasks. With significant changes in the aspects relevant to the number and qualifications of persons needed, this analysis should be updated.

4. Nominated person or group of persons should have:

4.1. practical experience and expertise in the application of aviation safety standards and safe operating practices;

4.2. a comprehensive knowledge of:

(a) relevant parts of operational requirements and procedures;

(b) the AOC holder’s operations specifications when applicable;

(c) the need for, and content of, the relevant parts of the AOC holder’s operations manual when applicable;

4.3. knowledge of quality systems;

4.4. five years relevant work experience of which at least two years should be from the aeronautical industry in an appropriate position;

4.5. a relevant engineering degree or an aircraft maintenance technician qualification with additional education acceptable to the competent authority. ‘relevant engineering degree’ means an engineering degree from aeronautical, mechanical, electrical, electronic, avionic or other studies relevant to the maintenance and continuing airworthiness of aircraft/aircraft components;

The above recommendation may be replaced by 5 years of experience additional to those already recommended by paragraph 4.4 above. These 5 years should cover an appropriate combination of experience in tasks related to aircraft maintenance and/or continuing airworthiness management and/or surveillance of such tasks;

4.6. thorough knowledge with the organisation’s continuing airworthiness management exposition;

4.7. knowledge of a relevant sample of the type(s) of aircraft gained through a formalised training course. These courses should be at least at a level equivalent to Part-66 Appendix III Level 1 General Familiarisation and could be imparted by a Part-147 organisation, by the manufacturer, or by any other organisation accepted by the competent authority.

‘Relevant sample’ means that these courses should cover typical systems embodied in those aircraft being within the scope of approval.

For all balloons and any other aircraft of 2 730 kg MTOM and below the formalised training courses may be replaced by demonstration of knowledge. This knowledge may be demonstrated by documented evidence or by an assessment performed by the competent authority. This assessment should be recorded.

4.8. knowledge of maintenance methods.

4.9. knowledge of applicable regulations.

AMC M.A.706(a) Personnel requirements

Accountable manager is normally intended to mean the chief executive officer of the CAMO, who by virtue of position has overall (including in particular financial) responsibility for running the organisation. The accountable manager may be the accountable manager for more than one organisation and is not required to be knowledgeable on technical matters. When the accountable manager is not the chief executive officer, the competent authority will need to be assured that such an accountable manager has direct access to the chief executive officer and has a sufficiency of continuing airworthiness funding allocation.

AMC M.A.706(e) Personnel requirements

1. The competent authority of the operator should only accept that the nominated post holder be employed by the organisation approved under Part-145 when it is manifest that he/she is the only available competent person in a position to exercise this function, within a practical working distance from the operator’s offices.

2. This paragraph only applies to contracted maintenance and therefore does not affect situations where the organisation approved under Part-145 and the operator are the same organisation.

AMC M.A.706(f) Personnel requirements

Additional training in fuel tank safety as well as associated inspection standards and maintenance procedures should be required of CAMO technical personnel, especially the staff involved with the management of CDCCL, Service Bulletin assessment, work planning and maintenance programme management. EASA guidance is provided for training to CAMO personnel in Appendix XII to AMC M.A.706(f) and M.B.102(c).

AMC M.A.706(i) Personnel requirements

The approval by the competent authority of the exposition, containing in M.A.704(a)3 the list of M.A.706(i) personnel, constitutes their formal acceptance by the competent authority and also their formal authorisation by the organisation.

Airworthiness review staff are automatically recognised as persons with authority to extend an airworthiness review certificate in accordance with M.A.711(a)4 and M.A.901(f).

Appendix III

M.A.707 Airworthiness review staff (European Commission, 2015b)

(a) To be approved to carry out airworthiness reviews and, if applicable, to issue permits to fly, an approved continuing airworthiness management organisation shall have appropriate airworthiness review staff to issue airworthiness review certificates or recommendations referred to in Section A of Subpart I and, if applicable, to issue a permit to fly in accordance with point M.A.711(c):

1. For aircraft used by licenced air carriers in accordance with Regulation (EC) No 1008/2008, and aircraft above 2730 kg MTOM, except balloons, these staff shall have acquired:

(a) at least 5 years’ experience in continuing airworthiness, and;

(b) an appropriate license in compliance with Annex III (Part-66) or an aeronautical degree or a national equivalent, and;
(c) formal aeronautical maintenance training, and;
(d) a position within the approved organisation with appropriate responsibilities.
(e) Notwithstanding points (a) to (d), the requirement laid down in point M.A.707(a)1(b) may be replaced by 5 years of experience in continuing airworthiness additional to those already required by point M.A.707(a)1(a).

2. For aircraft not used by licenced air carriers in accordance with Regulation (EC) No 1008/2008 of 2730 kg MTOM and below, and balloons, these staff shall have acquired:

(a) at least 3 years’ experience in continuing airworthiness, and;
(b) an appropriate license in compliance with Annex III (Part-66) or an aeronautical degree or a national equivalent, and;
(c) appropriate aeronautical maintenance training, and;
(d) a position within the approved organisation with appropriate responsibilities;
(e) Notwithstanding points (a) to (d), the requirement laid down in point M.A.707(a)2(b) may be replaced by 4 years of experience in continuing airworthiness additional to those already required by point M.A.707(a)2(a).

(b) Airworthiness review staff nominated by the approved continuing airworthiness organisation can only be issued an authorisation by the approved continuing airworthiness organisation when formally accepted by the competent authority after satisfactory completion of an airworthiness review under the supervision of the competent authority or under the supervision of the organisation’s airworthiness review staff in accordance with a procedure approved by the competent authority.

(c) The organisation shall ensure that aircraft airworthiness review staff can demonstrate appropriate recent continuing airworthiness management experience.

(d) Airworthiness review staff shall be identified by listing each person in the continuing airworthiness management exposition together with their airworthiness review authorisation reference.

(e) The organisation shall maintain a record of all airworthiness review staff, which shall include details of any appropriate qualification held together with a summary of relevant continuing airworthiness management experience and training and a copy of the authorisation. This record shall be retained until two years after the airworthiness review staff have left the organisation.

Appendix IV

M.A.305 Aircraft continuing airworthiness record system

(European Commission, 2015b)

(a) At the completion of any maintenance, the certificate of release to service required by point M.A.801 or point 145.A.50 shall be entered in the aircraft continuing airworthiness records. Each entry shall be made as soon as practicable but in no case more than 30 days after the day of the maintenance action.

(b) The aircraft continuing airworthiness records shall consist of:

1. an aircraft logbook, engine logbook(s) or engine module log cards, propeller logbook(s) and log cards for any service life limited component as appropriate, and,

2. when required in point M.A.306, the operator’s technical log.

(c) The aircraft type and registration mark, the date, together with total flight time and/or flight cycles and/or landings, as appropriate, shall be entered in the aircraft logbooks.

(d) The aircraft continuing airworthiness records shall contain the current:

1. status of airworthiness directives and measures mandated by the competent authority in immediate reaction to a safety problem;

2. status of modifications and repairs;

3. status of compliance with maintenance programme;

4. status of service life limited components;

5. mass and balance report;

6. list of deferred maintenance.

(e) In addition to the authorised release document, EASA Form 1 or equivalent, the following information relevant to any component installed (engine, propeller, engine module or service life-limited component) shall be entered in the appropriate engine or propeller logbook, engine module or service life limited component log card:
1. identification of the component; and

2. the type, serial number and registration, as appropriate, of the aircraft, engine, propeller, engine module or service life-limited component to which the particular component has been fitted, along with the reference to the installation and removal of the component; and

3. the date together with the component’s accumulated total flight time and/or flight cycles and/or landings and/or calendar time, as appropriate; and

4. the current point (d) information applicable to the component.

(f) The person responsible for the management of continuing airworthiness tasks pursuant to Section A, Subpart B of this Annex (Part-M), shall control the records as detailed in this point and present the records to the competent authority upon request.

(g) All entries made in the aircraft continuing airworthiness records shall be clear and accurate. When it is necessary to correct an entry, the correction shall be made in a manner that clearly shows the original entry.

(h) An owner or operator shall ensure that a system has been established to keep the following records for the periods specified:

1. all detailed maintenance records in respect of the aircraft and any service life-limited component fitted thereto, until such time as the information contained therein is superseded by new information equivalent in scope and detail but not less than 36 months after the aircraft or component has been released to service; and

2. the total time in service (hours, calendar time, cycles and landings) of the aircraft and all service life-limited components, at least 12 months after the aircraft or component has been permanently withdrawn from service; and

3. the time in service (hours, calendar time, cycles and landings) as appropriate, since last scheduled maintenance of the component subjected to a service life limit, at least until the component scheduled maintenance has been superseded by another scheduled maintenance of equivalent work scope and detail; and

4. the current status of compliance with maintenance programme such that compliance with the approved aircraft maintenance programme can be established, at least until the aircraft or component scheduled maintenance has been superseded by other scheduled maintenance of equivalent work scope and detail; and

5. the current status of airworthiness directives applicable to the aircraft and components, at least 12 months after the aircraft or component has been permanently withdrawn from service; and

6. details of current modifications and repairs to the aircraft, engine(s), propeller(s) and any other component vital to flight safety, at least 12 months after they have been permanently withdrawn from service.

Appendix V

M.A.901 Aircraft airworthiness review (European Commission, 2015b)

To ensure the validity of the aircraft airworthiness certificate an airworthiness review of the aircraft and its continuing airworthiness records shall be carried out periodically.

(a) An airworthiness review certificate is issued in accordance with Appendix III (EASA Form 15a, 15b or 15c) on completion of a satisfactory airworthiness review. The airworthiness review certificate is valid one year;

(b) An aircraft in a controlled environment is an aircraft (i) continuously managed during the previous 12 months by a unique continuing airworthiness management organisation approved in accordance with Section A, Subpart G, of this Annex (Part-M), and (ii) which has been maintained for the previous 12 months by maintenance organisations approved in accordance with Section A, Subpart F of this Annex (Part-M), or with Annex II (Part-145). This includes maintenance tasks referred to in point M.A.803(b) carried out and released to service in accordance with point M.A.801(b)2 or point M.A.801(b)3;

(c) For all aircraft used by licenced air carriers in accordance with Regulation (EC) No 1008/2008, and aircraft above 2730 kg MTOM, except balloons, that are in a controlled environment, the organisation referred to in (b) managing the continuing airworthiness of the aircraft may, if appropriately approved, and subject to compliance with point (k):

1. issue an airworthiness review certificate in accordance with point M.A.710, and;

2. for the airworthiness review certificates it has issued, when the aircraft has remained within a controlled environment, extend twice the validity of the airworthiness review certificate for a period of 1 year each time;

(d) For all aircraft used by licenced air carriers in accordance with Regulation (EC) No 1008/2008 and aircraft above 2730 kg MTOM, except balloons, that

(i) are not in a controlled environment, or

(ii) which continuing airworthiness is managed by a continuing airworthiness management organisation that does not hold the privilege to carry out airworthiness reviews, the airworthiness review certificate shall be issued by the competent authority upon satisfactory assessment based on a recommendation made by a continuing airworthiness management organisation appropriately approved in accordance with Section A, Subpart G of this Annex (Part-M) sent together with the application from the owner or operator. This recommendation shall be based on an airworthiness review carried out in accordance with point M.A.710;

(e) For aircraft not used by licenced air carriers in accordance with Regulation (EC) No 1008/2008 of 2730 kg MTOM and below, and balloons, any continuing airworthiness management organisation approved in accordance with Section A, Subpart G of this Annex (Part-M) and appointed by the owner or operator may, if appropriately approved and subject to point (k):

1. issue the airworthiness review certificate in accordance with point M.A.710, and;

2. for airworthiness review certificates it has issued, when the aircraft has remained within a controlled environment under its management, extend twice the validity of the airworthiness review certificate for a period of 1 year each time;

(f) By derogation from points M.A.901(c)2 and M.A.901(e)2, for aircraft that are in a controlled environment, the organisation referred to in (b) managing the continuing airworthiness of the aircraft, subject to compliance with point (k), may extend twice for a period of one year each time the validity of an airworthiness review certificate that has been issued by the competent authority or by another continuing airworthiness management organisation approved in accordance with Section A, Subpart G of this Annex (Part-M);

(h) Whenever circumstances reveal the existence of a potential safety threat, the competent authority shall carry out the airworthiness review and issue the airworthiness review certificate itself;

(i) In addition to point (h), the competent authority may also carry out the airworthiness review and issue the airworthiness review certificate itself in the following cases:

1. when the aircraft is managed by a continuing airworthiness management organisation approved in accordance with Section A, Subpart G of this Annex (Part-M) located in a third country;

2. for all balloons and any other aircraft of 2730 kg MTOM and below, if it is requested by the owner;

(j) When the competent authority carries out the airworthiness review and/or issues the airworthiness review certificate itself, the owner or operator shall provide the competent authority with:

1. the documentation required by the competent authority; and

2. suitable accommodation at the appropriate location for its personnel; and

3. when necessary, the support of personnel appropriately qualified in accordance with Annex III (Part-66) or equivalent personnel requirements laid down in point 145.A.30(j)(1) and (2) of Annex II (Part-145);

(k) An airworthiness review certificate cannot be issued nor extended if there is evidence or reason to believe that the aircraft is not airworthy;

Appendix VI

Appendix IX to AMC M.A.602 and AMC M.A.702 — EASA Form 2 (European Aviation Safety Agency, 2015)

Appendix VII

General outsourcing decision model

Appendix VIII

Appendix IX

Dissertation Interview

Outsourcing Continuing Airworthiness Management activities is a benefit or a risk?

Does EASA need to change the CAMO rules?

Student Name: Andrei Jatariu

Student Email:  andrei.jatariu@mydit.ie

Phone no.: 0894854603

Dissertation hypothesis:

Continuing airworthiness comprises from key maintenance activities which ensure that the aircraft will continue to operate in safe conditions during its operating life. Under the European Aviation Safety Agency (EASA), any EU licensed air carrier or commercial air transport (CAT) operator must have their own Continuing Airworthiness Management Organisation (CAMO), as per Commission Regulation (EU) No. 1321/2014 – Annex I. The purpose of a CAMO department is to keep the aircraft airworthy during its operating life. Some of the in-house CAMO activities of a licensed air carrier or CAT operator can be outsourced to an independent CAMO company. Although the CAMO activities that can be outsourced are limited, some airlines have different views about it and this might depend on what kind of business model the airline is operating.

Recently, there have been initiatives made by EASA to change the regulatory framework governing CAMO through the Notice of Proposed Amendment (NPA) 2010-09 which is questioning if it is possible that licenced air carriers or CAT operators can outsource all CAMO’s activities. However no consensus has been reached over NPA 2010-09. Being able to Outsource CAMO activities and tasks may help startup and established airlines to avoid the financial burden through outsourcing CAMO department and pay more attention to their core business and competencies. Moreover, independent approved CAMO companies will not only be fully contracted by leasing companies but also by licenced air carriers and CAT operators that wish to outsource all CAMO tasks and activities. Therefore, the option of being able to outsource all CAMO activities and tasks will create a flexible solution for licenced air carriers and CAT operators and this may allow them to focus more on their core business and competencies to maximise profit.

Dissertation objectives:

The first objective is to determine what are the benefits and risks of outsourcing continuing airworthiness activities. This will require a good understanding of EASA regulatory framework needed in particular, the Annex I of Commission Regulation (EU) 1321/2014 including any relevant Guidance Materials and Acceptable Means of Compliance. Also, industry opinions will be used to understand better the risk and benefits of outsourcing CAMO activities.

The second objective is to find out what will be the impact of outsourcing all CAMO activities in case EASA will supersede current continuing airworthiness rules and to what extent the aviation industry will benefit from this.

The third objective is to develop a continuing airworthiness outsourcing decision model for CAT operators and air carriers.

Scope of the interview:

The scope of the interview is to obtain information from industry professionals that ultimately will contribute to a practical analysis which may offer an answer to the hypothesis made above.  Particular focus will be on outsourcing CAMO activities to see if there is a benefit or a risk for licenced air carriers or CAT operators.  In addition, the data obtained from the interview process will clarify if EASA has to change CAMO rules to make a less stringent regulatory framework that may be helpful for airlines and CAT operators.

Interview duration, place and ground rules:

• Duration of the interview should be agreed by both the interviewer and interviewee (generally in around of 45 min – 1hrs).
• Place where the interview shall take place should be agreed by both interviewer and interviewee; generally at a place convenient to the individual being interviewed.
• For the purpose of carrying out an efficient interview and to obtain qualitative data the interview will be recorded, this shall be agreed with the interviewee.
• In the premises of the interviewee, the interviewer will adhere to any instructions offered.
• The data analysed from the interview would be used for primary research; in the case the individual interviewed would like to remain anonymous this has to be agreed before the interview will take place.

Interview Questions:

1. For airlines it is more costly to carry out all CAM tasks in house or by outsourcing certain CAM tasks will help them to avoid financial burden?

2. What are the risks associated with outsourcing a CAT operator’s CAM tasks and activities?

3. How the risks associated with CAM tasks being outsourced can be minimised and consequently prevented?

4. By changing the current practices EASA expects more non-approved organisation to seek CAMO approval in order to be able to provide full CAM services. Is there a higher risk to outsource CAM activities to non-approved organisations rather than outsourcing to approved CAMOs?

5. The current legislation allows airlines to outsource CAM activities to non-approved organisations. Do the current practices pose a threat in the way that airlines may be out of control over the subcontractor managing the CAM tasks? Will the proposed amendment potentially eliminate this issue?

6. Do airlines need an option to outsource all CAM activities and tasks? EASA have to make the rules more flexible?

7. One of the objectives of this dissertation is to build up an outsourcing decision model for airlines willing to subcontract certain CAM tasks. Do you have any advices on what is important to take into consideration to develop the outsourcing decision model?

8. Extra questions that airlines have been asked:

a) Do you outsource any CAM tasks to approved or non-approved organisations?

– Why was it decided to contract out certain CAM tasks? What CAM tasks are contracted? How do you “actively control” the outsourced CAM tasks and what are the main challenges when CAM tasks are outsourced to a third party?

– Would you consider outsourcing certain CAM tasks? Why not? (if negative answer on the main question)

b) EASA is proposing through the NPA 2010-09 that airlines can outsource all CAM tasks and activities to a stand-alone approved CAMO. If the proposed amendment will be adopted, will you take into consideration to outsource all CAM activities to an approved CAMO?

Appendix X

Transcripts

Question 1

1. For airlines it is more costly to carry out all CAM tasks in house or by outsourcing certain CAM tasks will help them to avoid financial burden?

[1^st respondent]

Either way the airline has to have its own people to monitor in-house the subcontracted work [performed by a third party organisation]. The costs involved in develop and internal CAMO is not massive. It is only a labour intensive job and hugely depends on the pay rates, will depend on how competitive the contract is [to outsource CAM tasks to another organisation], and also the economies of scale will dictate if it is beneficial to outsource or not.

Certain CAM tasks are cheaper to be outsourced and the airline cannot compete. In some cases the subcontracted work might be done in-house cheaper. However, certain circumstances the experience pool might be lost if the airline wants the benefit from saving the money. The knowledge pool of a subcontracted party brings a huge benefit for the airline helping it to keep the aircraft in service. In service experience is a challenge to get it and this is why is beneficial to subcontract certain CAM tasks.

[2^nd respondent]

This will depend on the operator and its business structure. For example it is difficult for unionised legacy airlines to outsource parts of the business as unions are protecting employees’ jobs. On the other hand, for companies that are not highly unionised and do not have legacy issues there might be scope for them to outsource parts of the business especially if the costs of setting up an internal CAMO to carry out all tasks and activities in house.

There is also the financial perspective where a company is deciding to outsource certain CAMO activities. It is assumed that any subcontracted approved CAMO will meet the regulatory requirements but which one is going to work towards improving the airline’s dispatch reliability and potentially reduce the maintenance costs?  Is the third party CAMO looking to improve the reliability of the aircrafts?

[3^rd respondent]

Depending on the size, scale and complexity of the operation in terms of aircraft types operated, it may be difficult to source and retain suitable qualified personnel for specialist activities, for example Powerplant management, Reliability  Engineer, Maintenance Programme development.

[4^th respondent]

It will hugely depend on the labour rate. For example Lufthansa which has a high labour rate financially is making more sense to outsource CAMO activities to a place that has a lower labour rate. However, the likes of legacy airlines [culturally] they will never do that.

If the airline operates into an environment which has a low labour rate is worthwhile to in source and perform everything in house. However, a small airline is not able to perform all CAM tasks and activities by itself.

[5^th respondent]

It will not be cost beneficial for airlines to outsource CAM tasks and activities. An independent CAMO may charge more to perform the CAM tasks. Also the CAMO might not be able to take the influx of information for each aircraft. On the other hand the airlines have to keep the records and to monitor in service aircrafts.

Another problem is with CAMOs serving multiple operators and each operator has a different system to work with. Is the CAMO able to manage all work for each client?

It could be beneficial if an airline is outsourcing CAM tasks and maintenance to an approved MRO provider which offers both the maintenance side and technical services.

Question 2

2. What are the risks associated with outsourcing a CAT operator’s CAM tasks and activities?
[1^st respondent]

Lack of oversight, you are not in control of it. If they are a small organisation subcontracted and for them the contract is not economically viable they could close down and that may result in the airline to be grounded. Will the subcontracted organisation give priority for your airline? What level of skills have they got to support your subcontracted tasks and possible other subcontracted work coming from other clients?

The risks are: lack of performance from the support [offered by subcontracted organisation], improper service level agreements and the lack of oversight.

[2^nd respondent]

The risks are that the third party is not performing as the airline needed them to perform. They may miss something significant such as a mandatory AD. What are the implications for them if airline’s CAMO is in an AOG situation because of third party not doing a proper job?

[3^rd respondent]

Based on the fact that the tasks or activities are subcontracted to another CAMO, the risks are that the airline itself is not having control over who is actually performing the task. When the airline is carrying the CAM tasks and activities by itself it has the control over the individuals performing them.

[4^th respondent]

While certain tasks may be out sourced, the overall responsibility remains with the operator., the potential for errors exists.

[5^th respondent]

Could be messy if the airline and contracted CAMO to work on different IT systems. Communication might be a big issue, if is a big risk that either the airline or the contracted CAMO may not receive important information in time. CAMO underperforming because is not able to take in the influx of information coming from airline.

[Also the CAMO might not be able to take the influx of information for each aircraft. On the other hand the airlines have to keep the records and to monitor in service aircrafts.]

Another problem is with CAMOs serving multiple operators and each operator has a different system to work with. Is the CAMO able to manage all work for each client? Is there a cross contamination caused by serving multiple aircraft types? i.e. mixing ADs between different aircraft types.

Question 3

3. How the risks associated with CAM tasks being outsourced can be minimised and consequently prevented?
[1^st respondent]

Good oversight minimise the risks above, good audit processes in place and requiring that the subcontractor is very close to the airline’s operations. Also, ensure that the airline is doing their due diligence to make sure the subcontractor is a viable company and will not close down. Have a good service level agreement in place.

[2^nd respondent]

Risks can be minimised and prevented by having very strong contracts in place and having a sufficient level of oversight.

[3^rd respondent]

When outsourcing CAM tasks/activities the risks are to be minimised by proper audit programs. The airline has to make sure that what is paying to be done is actually done. The airline has to implement proper procedures to not only audit itself but also to audit subcontracted organisations to see if they have proper procedures to manage the CAM tasks. Another risk is that a contracted CAMO could go out of business, the airline doesn’t know where the aircraft records are or the system used by the CAMO is not compatible with the airline’s system. It is not only the people behind this but also the systems that have to go hand in hand.

[4^th respondent]

Risks can be mitigated by using comprehensive interface procedures where the areas of responsibility is clearly communicated.

[5^th respondent]

Good communication lines, contracted CAMO being fully integrated in the airline’s systems. There has to be a good reporting system between contracted CAMO and the airline. The CAMO needs to have a full visibility of the aircraft and this is why certain airlines will keep critical tasks such as reliability programmes to be managed in house. There will be involved a lot of training for contracted CAMO’s personnel to work as per clients standards.

Question 4

4. By changing the current practices EASA expects more non-approved organisation to seek CAMO approval in order to be able to provide full CAM services. Is there a higher risk to outsource CAM activities to non-approved organisations rather than outsourcing to approved CAMOs?
[1^st respondent]

The airline should always do a review of any potential subcontracted/contracted organisation. Companies that are CAMO approved they show that they have a certain standard, they are approved by a NAA. There could be a risk that the level of service could drop across different companies [that are approved and those that are not]. Ultimately the customers are doing their independent audits, it is a huge decision made by airlines when outsourcing CAM tasks/activities. Negotiation of contracts will take weeks and they usually include penalties in them.

The potential of signing up for a substandard organisation is low but it is there, it is a risk. You are more confident in contracting organisation having EASA approval as they have been audited, they reached a standard and they have processes in place. However, there are non-approved organisations as good as approved CAMOs. Consequently, either a poor CAMO provider or a poor non-approved technical services provider will not last too long on the market.

[2^nd respondent]

It is not a huge risk outsourcing CAM tasks to non-approved organisations rather that approved CAMO as either way the oversight is under the airline’s CAMO. The airline has to be satisfied in both situations that there is a sufficient in house monitoring.

The Stobart Air is not doing any CAM outsourcing. However, from time to time if for example a new aircraft is brought in the fleet the airline may contract a third party to review records of the aircraft.

[3^rd respondent]

There is more work involved when outsourcing CAM tasks to a non-approved organisation. It is potential risk if the airline decides to outsource CAM tasks to non-experienced/unknown technical services organisations that are in the business because of their low labour rates. Also, the use of the English language can be a barrier if the airline is outsourcing CAM tasks to companies based in other countries.

[4^th respondent]

I believe all CAMO work should be carried out by approved Organisations, the regulations are flawed allowing this relief.

[5^th respondent]

The problem of subcontracting a non-approved organisation to perform certain CAM tasks is that the airline has to review and certify their work. Usually the airlines will outsource their CAM tasks to those companies that have a standard and also a good reputation. Non- approved technical services providers would be hardly taken into consideration unless it is known as a reputable company. If the airline has to choose between a reputable technical services provider and a new CAMO approved on the market it is highly probable that the organisation with better reputation will be selected even if is not approved as a CAMO. MRO non-approved as a CAMO but offer technical services could have a massive financial back-up whereas new approved CAMOs on the market could go busted overnight.

When the organisation is CAMO approved and an airline is contracting it, there is more control and also it is known that the organisation has a certain standard, is NAA approved.

Even EASA is proposing that airlines can outsource all CAM tasks is down to each individual airline to choose this and also to the NAA to approve such contracts between airlines and CAMOs.

Question 5

5. The current legislation allows airlines to outsource CAM activities to non-approved organisations. Do the current practices pose a threat in the way that airlines may be out of control over the subcontractor managing the CAM tasks? Will the proposed amendment potentially eliminate this issue?
[1^st respondent]

Yes because certain organisations providing technical services are looking to become CAMO approved because it will raise their standard.

If an airline is not appropriately resourced in house and they want to subcontract the tasks to an organisation to do their work, or the outsourcing is their business model it is better to give them the choice of contracting out all CAM activities and tasks to an approved CAMO. CAMO has been audited by a competent authority to get approval. The proposed choice will potentially bring up the standards.

There is a demand from the industry to facilitate a choice for airlines, especially for small and [new start-up airlines]. An issue is how the airlines and contracted CAMOs will control the accountability. Another potential challenge is how the relationship between independent CAMO and the airline is going to be managed.

[2^nd respondent]

The proposed amendment can eliminate the issue of airlines subcontracting non-approved organisations as not only those non-approved organisations are looking to get CAMO approval but also airlines will look to contract their CAM tasks to an approved organisation which has a particular standard.

However the airline still has to have a level of oversight over the subcontracted/contracted work, if will be up to the airline what it wants to do. The legislation needs to address the gaps that potentially solve problems, issues and ambiguities.

[3^rd respondent]

If the airline is subcontracting out CAM tasks to organisations that do not understand the airline business and are just data gatherers there is a risk. It would be hoped that everybody providing technical services they have a certain level of competences. Moreover, as part of the airline’s decision made to subcontract certain CAM tasks it has to be established that the subcontracted/contracted organisation has some level of technical competence and that this technical competence meets all airline’s requirements.

If the non-approved organisation becomes approved by changing their processes to good processes it is an improvement. If the non-approved organisation will be granted a CAMO approval without improving its processes will make no difference.

[4^th respondent]

Responsibility remains with the operator, it is up to them to ensure they are meeting the requirements.

[5^th respondent]

There is not a huge risk outsourcing CAM tasks to non-approved organisations because their work still has to come back to be reviewed by airline’s CAMO. The airline’s CAMO is the one who is certifying the work performed by a non-approved organisation. An airline would be foolish to go to an organisation that is not approved and know that they cannot perform the tasks given. This is why airlines will always choose organisations that are able to perform the outsourced work and usually this is confirmed by the industry.

Question 6

6. Do airlines need an option to outsource all CAM activities and tasks? EASA have to make the rules more flexible?

[1^st respondent]

It is not in the view of the airline to outsource all CAM tasks and activities. Losing operational control, not controlling the airline’s destiny and relying on other people [is not a future strategy for the airline].

Potentially if a new aircraft type will be acquired, subcontracting CAM tasks will be done with a well-known technical services provider. Contracting an independent CAMO without having the support structure in place is not an option.

Having a centralized CAMO might be an option for airlines being part of the same group. All airlines may share certain services with each other, especially when airlines have similar aircraft types. From an airline point of view the downturn of having a centralised CAMO is that the control of performance might be lost and you also lose some of your own people.

[2^nd respondent]

The airline has no plans of outsourcing any CAM tasks or activities. The airline already has a full CAMO in place, there is a good level of in-house expertise, and the price of performing all CAM tasks and activities is not excessive. Financially the airline will not be better if it is supposed to outsource certain CAM tasks. It is in the airline interest to have control over the work performed and the outsourcing is not an option as having everything insourced works better for the airline.

[3^rd respondent]

At the moment the airlines have to retain the responsibilities as a CAMO regardless, even if they do subcontract out certain CAM tasks/activities, the airlines still retains the responsibility. Airlines do need to have the option to outsource some of their CAM activities and tasks. In particular small airlines, because for example they might not have the experience to manage the engines in house. Also if it is a small fleet is not worthwhile to manage your engines by yourself [as an airline].

Even the airlines such as Aer Lingus they still subcontract some CAM activities to organisations such as Lufthansa, thus airlines need the option of subcontracting. Also the airlines should have the option to outsource all CAM activities, however they still have to be responsible for aircraft airworthiness.

[4^th respondent]

Did not want to answer the question.

[5^th respondent]

It is easier for new air carriers to outsource CAM tasks rather than performing everything in house. For having a full CAMO in house may take more time to get approval from the NAA as it needs to carry audits on the airline. It will be harder for airlines to control the outsourced work. There should be a common system to make it easier for airline to monitor the contracted CAMO. It will be very risky to airlines to solely rely on a CAMO to perform all CAM tasks and activities.

It might be cheaper for airlines to carry the CAM tasks in house rather than to outsource them. The airline is not relaying on anybody else to carry out the CAM tasks. The contracted CAMO has to work as close as possible with the airline’s IT system, trained on the airline’s system. Another problem for contracted CAMOs is in a reporting case where do they go to report problems? A structure has to be in place to clearly outline who is responsible for what. Another problem is the communication between an airline and an external CAMO and the risk of not receiving important information in time.

Question 7

7. One of the objectives of this dissertation is to build up an outsourcing decision model for airlines willing to subcontract certain CAM tasks. Do you have any advices on what is important to take into consideration to develop the outsourcing decision model?

[1^st respondent]

The reliability and the performance of the aircraft is crucial. An AD status, SBs status or reliability programme it doesn’t really matter where is done.

The majority of CAM tasks can be outsourced if they will not impact the day to day operation. But, when you have reliability issues or supporting in service aircraft that is where it could fall down. As an airline you need to have reaction to this. An independent CAMO might not cover an airline in service aircraft 24/7. The operational support is one of the critical element to keep the aircraft in service.

Aircraft technical experience as the aircraft is ageing: having a subcontractor with a knowledge pool they would really help the airline to solve/troubleshoot any issues due to the aircraft aging [this will minimise the time for the aircraft being in an AOG situation].

Other factors to be taken into consideration: compliance and the authorities and the quality of contracted work?

If deciding to deliver huge projects such as aircraft retrofitting/upgrading with new seats, WiFi etc., it is beneficial to have your own expertise in house rather than contracting a third party to manage the projects. For some projects (i.e. upgrading airplanes), the airline still needs to have its own expertise in house because the subcontracted party cannot deliver such projects. The engineering department has both a CAMO function and a commercial function for the airline.

[2^nd respondent]

The operator has to ask itself why it needs to consider the outsourcing. Is it because is hard to employ the expertise, is it because the airline does not want to spend a lot of money on fully develop its own CAMO? Is it possible to get it cheaper elsewhere? (There are other questions to be asked). Then the airline has to analyse the answers and see if is better to outsource or not. What exactly is the airline looking for the contracted CAMO to achieve? It will become difficult when the airline is bringing a third party in play between airline and NAA?

[3^rd respondent]

The airline has to look if it is a need for its own CAMO to perform all CAM tasks and activities in house. For example the airline has to make some decision:

• There is a need of an engine expert?
• Do the airline needs a system’s expert?
• How many aircraft types are within the airline fleet? Is the airline changing the aircraft engines, adding new aircraft type in the fleet? What is the aircraft size?
• What are the options for outsourcing? i.e. engines on power-by-the-hour contracts which will require a lower input from airline’s CAMO side.

Can the airline take the advantage of the economies of scale? i.e. Ryanair having same aircraft type, same engine type and based on this carrying all the CAM tasks and activities in house.

The respondent advises that the outsourcing model has to be an economic model.

[4^th respondent]

• use of and access to same Maintenance Software system,
• CAMO manpower levels.
• CAMO Experience .
• Number of Aircraft Types being out sourced.

[5^th respondent]

How the information is going to be shared between the airline and contracted CAMO? There will be a common system to share the information? Meetings between the airline and contracted party is very important. It has to be clear what are the responsibilities of each party, to be clearly identified what the CAMO has to deliver.

If EASA will relax the legislation there will be more non-approved organisations looking to obtain CAMO approval. However, the problem will be with the NAAs becoming more stringent as more independent CAMOs have to be managed by them.

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[1] ‘Active control’ requires the operator to be actively involved in the accomplishment of tasks or activities contracted to a CAMO or subcontracted to an organisation. This is to ensure that subcontracted or contracted CAM tasks a properly carried out (Arnaud, 2010a).

---

[i] Continuing Airworthiness is the managing of maintenance tasks and activities that are accomplished by a Part 145 approved organization. For a better understanding subchapter 2.4 gives a detailed overview about continuing airworthiness.

[ii] Licensed air carrier is defined in Regulation (EC) No. 1008/2008 as being an air carrier holding a valid operating licence authorised by a competent licensing authority. In this dissertation the licensed air carriers are simply referred as air carriers, airlines or operators.

[iii] The term commercial air transport operator is defined in second article of Commission Regulation (EU) No. 965/2012 as being an aircraft operation to transport passengers, cargo or mail for remuneration or other valuable consideration.

[iv] Commission Regulation (EU) No 1321/2014 of 26 November 2014 on the continuing airworthiness of aircraft and aeronautical products, parts and appliances, and on the approval of organisations and personnel involved in these tasks (OJ L 362, 17.12.2014, p. 1), as last amended.

[v] NPA 2010-09 has the purpose to amend the rules superseding the contracting of continuing airworthiness management activities that are included in Annex I of the Commission Regulation (EU) No. 1321/2014.

[vi] ICAO Annex 6 – Operation of Aircraft – is the International Civil Aviation Organisation Standards and Recommended Practices which is laying down information on how the aircraft shall be operated

[vii] ICAO Annex 8 – Airworthiness of Aircraft  – is the International Civil Aviation Organisation Standards and Recommended Practices which is laying down information about airworthiness of the aircraft

[viii] An ICAO member country is also known as an ICAO contracted state or member state.

[ix] A certificate of airworthiness (C of A) is issued by a corresponding National Aviation Authority (NAA) of an EU member state. This C of A is confirming that the aircraft complies with requirements laid out as per TC (European Commission, 2003).

[x] The “State of Registry” refer to the state where the aircraft is registered.

[xi] The maintenance control manual acts as a guidance manual for the maintenance and operational personnel. An MCM is approved by the State of Registry.

[xii] Maintenance Programme (MP) is a document developed by the operator and approved by the State of Registry. A MP consists of particular information about scheduled maintenance tasks and how frequently are carried out. In addition, the MP contains procedures tailored to type of operations carried by an aircraft for example the reliability programme.

[xiii] TC is a document issued by a Contracting State which defines the aircraft type design and certifies that the approved aircraft type meets the airworthiness requirements standard established by the State. Additionally, some ICAO’s Contracting States may issue TCs only for engines and propellers.

[xiv] TDO is the organisation which is designing the aircraft and could also manufacture it.

[xv] State of the Operator is the country where the operator’s place of business is located or could be the operator’s headquarter and is regarded to be a permanent residence.

[xvi] Commission Regulation (EC) No. 1592/2002 is repealed by (EC) No. 216/2008. The (EC) No. 216/2008 is on common rules in the field of civil aviation and establishing a European Aviation Safety Agency

[xvii] AMC are non-legislative standards that are developed by EASA to explain how the regulated entities have to comply with the Basic Regulation and its Implementing Rules. The regulated entities are not obliged to comply with AMCs however they might use other means to comply with the regulation. In general, showing compliance with EASA’s AMCs it also show compliance with the law (European Aviation Safety Agency, 2017a).

[xviii] The GM is generally accompanying the AMC to provide more information on how the regulated entities can show conformity with Basic and Implementing Regulation.

[xix] EASA is defining the competent authority as being a ministry, a national aviation authority or any aviation body appointed by an EU Member State. The Member State can appoint multiple competent authorities covering different areas of commercial aviation. There should be no ambiguity of each competent authorities’ role within the Member State (European Aviation Safety Agency, 2015)

[xx] A typical EASA Form 2 is attached to the Appendix VI.

[xxi] In Subchapters 2.4 to 2.6 the word organisation may simply refer to the operator’s organisation. The operator is the CAT operator or the licensed air carrier.

[xxii] The accountable manager has the corporate authority to ensure that the organisation is financing and carrying out the continuing airworthiness management activities in accordance with Annex I of Commission Regulation (EU) No. 1321/2014 and in case of air carriers the operations are carried out at a standard accepted by the National Aviation Authority granting the AOC.

[xxiii] A nominated post-holder in an airline is a person which will be responsible with the management and supervision of continuing airworthiness activities (European Commission, 2015b).

[xxiv] An Airworthiness Review Certificate (ARC) is a certificate attached to the aircraft’s Certificate of Airworthiness (C of A). The ARC is renewed each year and is satisfying that the aircraft is airworthy to fly. The airworthiness review is a documented review of the aircraft records (European Commission, 2015b).

[xxv] Airworthiness staff is issuing ARC by carrying a documented review on aircraft records.

[xxvi] Permit to fly is issued when an aircraft has the CofA invalid and applicable airworthiness requirements are not met but the aircraft is capable to operate safely under certain conditions. A permit to fly is usually issued by a competent authority of the state of registry. However, sometimes a design organisation or a CAMO holding such privileges can issue a permit to fly (European Aviation Safety Agency, 2017b).

[xxvii] Design status of an aircraft comprises from aircraft type specification, options required by the customer when buying the aircraft, airworthiness directives, airworthiness limitations contained in the aircraft instructions for continuing airworthiness, modifications, major repairs, operational equipment etc. (European Aviation Safety Agency, 2016b).