Purpose of Document The intent of this document is to provide a detailed handover of all analysis and materials relating to regulatory gap studies on Airworthiness.

General Aviation Implementation Support (GAIS)
Booz & Company Beijing, 25 September 2009 General Aviation Implementation Support (GAIS) Airworthiness Module (Revised) 1st Revision: October, 2010 Final Revision: October, 2011 This document is confidential and is intended solely for the use and information of the client to whom it is addressed.

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

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

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

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

Module 3: Airworthiness China (CAAC) Observations
Summary of observations and recommendations for Module 3: Airworthiness (1/2) Module 3: Airworthiness Key Areas U.S. (FAA) Observations China (CAAC) Observations Recommendations Airworthiness regulations In the US, FAA has stipulated regulatory requirements for different GA segments, e.g.: Requirements for experimental amateur-built aircraft and light sport aircraft FAA also works closely with industry association to provide necessary guidance and information for: Amateur build aircraft The FAA and Industry Guide to Product Certification (CPI Guide) guide is jointly prepared by FAA, AIA and GAMA Plane Sense - introduces aircraft owners and operators, or prospective aircraft owners and operators, to basic information about the requirements involved in acquiring, owning, operating, and maintaining a private aircraft The VTC process leverages the work from primary airworthiness country to reduce the applicants’ burden - it requires on-site visits to the original aircraft manufacturer China lacks simple but concise guidance materials in the following areas: CAAC and industry guide to product design and production certification Summary of requirements involved in acquiring, owning, operating, and maintaining a private aircraft China does not have clear regulatory requirements for self-built aircraft despite reporting of test flying activities and accidents Work with GA industry stakeholders to review and streamline VTC requirements Work with manufacturers and suppliers to produce CAAC-Industry guidance material on aircraft design and production certification Produce a guidance that summarizes requirements involved in acquiring, owning, operating, and maintaining a private aircraft (similar to Plane Sense) Draft advisory circular related to airworthiness requirements for experimental amateur-built aircraft Issue LSA related regulations and rules for inclusion in the aircraft airworthiness requirements Booz & Company

Module 3: Airworthiness China (CAAC) Observations
Summary of observations and recommendations for Module 3: Airworthiness (2/2) Module 3: Airworthiness Key Areas U.S. (FAA) Observations China (CAAC) Observations Recommendations Aircraft registration and certification process In the US, it generally takes less than 1 month to register and obtain aircraft certificate for registration and airworthiness Some of the requirements are either duplicative or inconsistent across different regulations (e.g. CCAR 285) Work with GA industry to simplify and shorten aircraft registration and certification process Booz & Company

Executive summary Airworthiness regulations Type and production certifications Aircraft registration and certification Appendix Booz & Company

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

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

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

Categories of FAA Special Airworthiness Certificate
1 Airworthiness Regulations In the US, FAA has stipulated regulatory requirements for experimental amateur-built aircraft and LSA Categories of FAA Special Airworthiness Certificate Category Purpose(s) Title 14 CFR Section Primary Aircraft flown for pleasure and personal use 21.24 21.184 Restricted Aircraft with a "restricted" category type certificate, including: Agricultural Forest and wildlife conservation Aerial surveying Patrolling (pipelines, power lines) Weather control Aerial advertising Other operations specified by the Administrator 21.25 21.185 Multiple Multiple airworthiness certificates 21.187 Limited Aircraft with a "limited" category type certificate (conversion of military aircraft for civilian use) 21.189 Light-Sport Operate a light-sport aircraft, other than a gyroplane, kit-built, or transitioning ultralight like vehicle 21.190 Provisional Aircraft with a "provisional" category type certificate for special operations and operating limitations part 21 subpart C part 21 subpart I section Category Purpose(s) Title 14 CFR Section Experi-mental Research and development Showing compliance with regulations Crew training Exhibition Air racing Market surveys Operating amateur-built aircraft Operating kit-built aircraft Operating light-sport aircraft Unmanned Aircraft Systems (UAS) 21.191 21.193 21.195 Special Flight Permit Special-purpose flight of an aircraft that is capable of safe flight (though may not currently meet applicable airworthiness requirements), for the purposes of : Flying aircraft to a point for repairs, alterations, maintenance, or storage. Delivering new aircraft to the base of a purchaser or to a storage point. Conducting production flight tests. Evacuating an aircraft from impending danger. Conducting customer demonstration flights in new production aircraft that have passed or completed production flight tests. Excess weight operations. 21.197 Source: FAA Booz & Company

Experimental Certificates (FAR21.191)
Airworthiness Regulations FAA issues experimental certificates for amateur-built aircraft and LSA to fly Experimental Certificates (FAR21.191) Purpose Explanation Research and development To conduct aircraft operations as a matter of research or to determine if an idea warrants further development. Typical uses for this certificate include new equipment installations, operating techniques, or new uses for aircraft Showing compliance with regulations To show compliance to the airworthiness regulations when an applicant has revised the type certificate design data or has applied for a supplemental type certificate or field approval Crew training For training the applicant’s flight crews in experimental aircraft for subsequent operation of aircraft being flight tested in type certificate programs or for production flight testing Exhibition To exhibit an aircraft’s flight capabilities, performance, or unusual characteristics for air shows, motion pictures, television, and similar productions, and for the maintenance of exhibition flight proficiency Air racing To operate an aircraft in air races, practice for air races, and to fly to and from racing events Market surveys To conduct market surveys, sales demonstrations, and customer crew training for U.S. manufacturers of aircraft or engines Operating amateur-built aircraft To operate an amateur-built aircraft in which the major portion has been fabricated and assembled by persons for their own recreation or education Primary category kit To operate a primary category aircraft that was assembled by a person from a kit manufactured by the holder of a production certificate for that kit, without the supervision and quality control of the production certificate holder Operating light-sport aircraft Operating a light-sport aircraft that: Has not been issued a U.S. or foreign airworthiness certificate and does not meet the provisions of 14 CFR section An experimental certificate will not be issued under this paragraph for these aircraft after January 31, 2008; Has been assembled: From an aircraft kit for which the applicant can provide the information required by 14 CFR section (e); and In accordance with manufacturer's assembly instructions that meet applicable consensus standard; or Has been previously issued a special airworthiness certificate in the light-sport category under 14 CFR section Source: FAA Booz & Company

1 Airworthiness Regulations These experimental certificates provide much more relaxed certification requirements Comparison between Type Certified and Experimental Aircraft Type Certificated Aircraft Experimental Amateur-built Aircraft Basic Requirements An airplane produced in accordance with 14 CFR Part 23 must meet a number of requirements intended to ensure airworthiness in areas such as performance, stability, controllability, and safety mechanisms An experimental amateur-built aircraft is an aircraft that has not met any minimum performance standards required by 14 CFR Part 23 Marking Requirement No particular marking required if comply with type certificated aircraft category Need to properly mark the aircraft as “Experimental Aircraft” Must display a visible placard stating “Passenger Warning: This aircraft is amateur-built and does not comply with Federal safety regulations for standard aircraft.” Type of Airworthiness Certificate Mostly Standard Airworthiness Certificate (Standard) Some require Special Airworthiness Certificate (Special) Special Airworthiness Certificate Operating Limitations No specific operating limitations for Standard Comply with Order for Special Must comply with Order Source: AC 20-27F, Order F, FAA Aviation News Booz & Company

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Executive summary Airworthiness regulations Type and production certification Aircraft registration and certification Appendix Booz & Company

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

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

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

CAAC’s overall airworthiness regulations align closely with the FAA
Comparison of the Airworthiness Regulations Category FAA CAAC Differences Airworthiness management 14 CFR Part 21 - Certification Procedures for Products and Parts CCAR-21-R2 & R3 民用航空产品和零部件合格审定规定 Nil Airworthiness standards for aircraft 14 CFR Part 23 - Airworthiness Standards: Normal, Utility, Acrobatic, and Commuter Category Airplanes 14 CFR Part 25 - Airworthiness Standards: Transport Category Airplanes 14 CFR Part 27 - Airworthiness Standards: Normal Category Rotorcraft 14 CFR Part 29 - Airworthiness Standards: Transport Category Rotorcraft 14 CFR Part 31 - Airworthiness Standards: Manned Free Balloons CCAR-23-R3 正常类、实用类、特技类和通勤类飞机适航规定 CCAR-25-R2 & R3 运输类飞机适航标准 CCAR-27-R1 正常类旋翼航空器适航规定 CCAR-29-R1 运输类旋翼航空器适航规定 CCAR-31 民航总局第181号令载人自由气球适航规定 Airworthiness for engines and propellers 14 CFR Part 33 - Airworthiness Standards: Aircraft Engines 14 CFR Part Airworthiness Standards: Propellers CCAR-33-R1 中国民用航空总局关于修订《航空发动机适航标准》的决定 CCAR-35AA 螺旋桨适航标准 Other airborne equipment CCAR-37AA 民用航空材料、零部件和机载设备技术标准规定 CCAR-37AA Emission requirements 14 CFR Part 34 - Fuel Venting and Exhaust Emission Requirements for Turbine Engine Powered Airplanes 14 CFR Part 36 - Noise Standards: Aircraft Type and Airworthiness Certification CCAR-34 涡轮发动机飞机燃油排泄和排气排出物规定 CCAR-36 & R1 航空器型号和适航合格审定噪声规定 Airworthiness directives 14 CFR Part 39 - Airworthiness Directives CCAR-39AA 民用航空器适航指令规定 Registration 14 CFR Part 47 - Aircraft Registration CCAR-45-R1 民用航空器国籍登记规定 Source: Booz & Company analysis Booz & Company

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

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

Executive summary Airworthiness regulations Type and production certification Aircraft registration and certification Appendix Booz & Company

Type Certification FAA issues type certification when the design of civil aircraft, engine, or propeller complies with applicable regulations Major Design Approvals (Type Certification) Design Approvals Regulation and Policies Issuer Original Design Approval An original FAA design approval is a five-phase process in which an applicant applies for, and the FAA may issue, a type certificate or design approval of a product or a major design change to a product 14 CFR Part 21 subpart B (sections through 21.53) Predecessor Regulations to 14 CFR Aeronautical Bulletins Civil Air Regulations (CARs) Regulations of the Administrator Advisory Circular 21-23 Orders Aircraft Certification Offices (ACOs) Certificate Management Offices (CMOs) Field Approval A field approval is one of the means used by the FAA to approve technical data used to accomplish a major repair or major alteration 14 CFR Part 1, 43 Advisory Circular , , , 43-10 Orders FSIMS (Flight Standards Information Management System), Volume 4, Chapter 9, Section 1 Administrator, through Aviation Safety Inspector (airworthiness) Parts Manufacture Approval (design) The PMA certifies that a replacement or modification part complies with the airworthiness standards of eligible products (aircraft, engine or propeller) 14 CFR Part 21, Part 43, Part 45 Subpart B Advisory Circular 43-18 Orders Manufacturing Inspection District Offices (MIDOs) If the applicant is applying for a PMA based on an STC or identicality by a licensing agreement If the design approval basis is identically without a license agreement or test and computation Original Type Certification Replacement / Alternation Source: FAA Booz & Company

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

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

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

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

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

Major Production Approvals Regulations and Policies
Production certificate approves the manufacturing of duplicate products under an FAA-approved type design Major Production Approvals Production Approvals Regulations and Policies Issuer Production Certificate An approval (document) to manufacture duplicate products under an FAA-approved type design (i.e., type certificate or supplemental type certificate) 14 CFR Part 21, subpart F, Part 21 subpart G, Part 45 Advisory Circulars 21-1, 21-6 Orders , , , , Manufacturing Inspection District Offices (MIDOs) Approved Production Inspection System (APIS) An approved production inspection system is an FAA-approved inspection process applicable to products manufactured more than 6 months after the date of issue of the type certificate, supplemental type certificate, or licensing agreement The approved production inspection system is used most frequently by low-volume manufacturers Parts Manufacturer Approval PMA production approval allows you to produce and sell FAA approved aircraft parts that are eligible for installation on FAA type certificated aircraft 14 CFR Part 21, Part 43, Part 45 Subpart B Advisory Circular 43-18 Orders Aircraft Certification Offices (ACOs) Technical standard order authorization A TSO is a minimum performance standard for specified materials, parts, and appliances used on civil aircraft 14 CFR Part 21, sections 21.3, and subpart O Advisory Circulars , 20-41 Orders , , Local FAA office Booz & Company

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

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

Executive summary Airworthiness regulations Type and production certifications Aircraft registration and certification Appendix Booz & Company

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

Airworthiness Certification
After an aircraft is registered, the owner then informs the manufacturer to apply for airworthiness certification Airworthiness Certification Process Aircraft Registration Identify Type of Airworthiness Certificate Needed Submit Application to Local FAA Office FAA Decision Standard Airworthiness Certificate Special Airworthiness Certificate Normal Utility Acrobatic Commuter Transport Manned free balloons Special classes Primary Restricted Agricultural Forest and wildlife conservation Aerial surveying Patrolling (pipelines, power lines) Weather control Aerial advertising Other operations specified by the Administrator Multiple Limited Light-Sport Experimental Special flight permit Provisional Local FAA Field Offices Aircraft Certification Offices (ACO) Flight Standards District Offices (FSDO) Manufacturing Inspection District Offices (MIDO) - FAA Aviation Safety Inspectors Manufacturing Inspection Office (MIO) Booz & Company

Depending on the classification aircraft owners need to get different airworthiness certifications Major Airworthiness Certification Approvals Airworthiness Certification Regulations and Policies Issuer Standard Airworthiness Certification Regulations Airworthiness Directives Listing 14 CFR Part 21 Section 21.17, Part 21, subpart H, Part 23, Part 25, Part 27, Part 29, Part 31, Part 39,Part 43, Appendix D, Part 45 subpart C, Part 47, Part 91 Orders Advisory Circulars 21-12, 45-2 FAA Aviation Safety Inspectors Representatives of the Administrator (i.e. Designees) Special Airworthiness Certification 14 CFR Part 21, Part 21 subpart H, Part 45 Section , Part 91 subpart D, Part 375 Orders , Advisory Circulars 20-27, , 21-4, 21-12, , 45-2, 90-89 Export Airworthiness Approval 14 CFR Subpart L Orders , F Advisory Circulars 21-2 Booz & Company

Aircraft Registration and Airworthiness Certification
There are three major regulatory requirements in China for applicant to comply with towards successful certification Three Major Regulatory Requirements for Aircraft Registration CCAR 45 PRC Aircraft Nationality Registration 中华人民共和国民用航空器国籍登记规定 CCAR 49 PRC Aircraft Ownership Registration 中华人民共和国民用航空器权利登记条例 CCAR 285 Non-Commercial GA Registration Administration 非经营性通用航空登记管理规定 This regulation has listed requirements for aircraft owners or operators when registering their aircraft Forms and materials required are included in this document This regulation in principle is similar to FAR 47, however, it also includes identification and registration marking related issues Whether an aircraft is owned, operated, or leased, the owner, operator or leaser needs to compile with this regulation in order to register an aircraft Forms and materials required are included in this document The FAA has included this part of the regulation in the Aircraft Registration Application - there is no separate regulation regarding this in FAR This rule is applied to anyone who wish to use GA aircraft for non-commercial purpose The applicant must obtain aircraft registration certificate and airworthiness certificate beforehand Forms and materials required are included in this document FAA does not have equivalent of this rule Source: CAAC Booz & Company

Aircraft Registration
In each aircraft registration step, the applicant is required to submit relevant documents CAAC PRACTICE Typical Aircraft Registration Process Individual Purchase Documents Required for Registration Individual Purchase Acquire Credentials Purchasing purpose ID document Police record Feasibility study Pilot license Intent Contract with base airport Submit Aircraft Logo Marking Plan Apply for Aircraft ID Number Aircraft nationality registration application ID document Purchase/lease approval document Purchase/lease contract Apply for Aircraft Registration Re-apply if documents are not comply with requirement Submit Application ID document Purchase/lease approval document Purchase/lease contract Logo and registration marking application Airworthiness Contact Office Process the Application Aircraft nationality registration application Proof of aircraft ownership ID document Evidence of the aircraft not registered elsewhere Other documents required Aircraft Certification Obtained Booz & Company

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

This is similar for airworthiness certification
CAAC PRACTICE Airworthiness Certification Process Imported Aircraft Documents Required for Airworthiness Certification Imported Aircraft Applicant Registration with Local CAAC Office 30 days before aircraft delivery, the applicant need to hand in the aircraft delivery plan and technical terms in the contract Aircraft delivered must comply with CAAC Type Design and is qualified for safe operation Submit Airworthiness Application Airworthiness Certification application Difference description of aircraft structures compare to TC or VTC Other documents required Apply for Temp Certificate (Special Permit) for Testing Flight Certification Issuance Special permit application Suggested limitations Manufacturer’s “Manufacturer Accordance” (if any) Aircraft technical evaluation Local Airworthiness Certification Office Process the Application 对于尚未取得有效适航证或目前可能不符合有关适航要求，但在一定限制条件下能安全飞行的航空器可申请特许飞行证申请特许飞行证的航空器应满足CCAR-45的要求,尚未取得国籍登记的航空器应当首先申请临时登记标志并获得临时登记证书民用航空器的所有人或占有人可以申请该航空器的特许飞行证 Issuance of Airworthiness Certificate Special Permit Booz & Company

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

Summary We have identified the following issues in aircraft registration processes that can be improved Issues Identified from CAAC Regulation and Requirements 1 Some of the documents required are duplicative and should be simplified if possible E.g. Some of the clauses under Aircraft Purchase Application and Non-Commercial GA Registration Administration are the same Duplication Adverse Impact on Buyers To prospective private aircraft owners, these requirements can slow down the application process significantly Most of these buyers only want to experience flying, however, the complex administrative packages and processes have become a burden and stopped willingness to buy 2 There are requirements in several regulatory document stating “other documents required” which are not clear to the applicant in terms of what exactly is needed to complete the certification process Ambiguity Minor contradiction exists for Ultralight Aircraft For example, in CCAR 91, it is not required for this category aircraft to go through aircraft certification process - however, it is treated the same as all other categories in CCAR 285 Some of the economic regulations does not agree with each other For example, in CCAR 45 and 49, nowhere it said that the owner of the aircraft needs to be a pilot in order to register its aircraft, however, CCAR 285 requires it 3 Inconsistency Source: FAA, CAAC, industry interview, Booz & Company analysis Booz & Company

Summary 1 For example some of the requirements related to aircraft registration are duplicative Documents Required for Aircraft Registration Aircraft Purchase Credential Proofs Administrative Requirement Non-Commercial GA Registration Administration CCAR 285 Aircraft Nationality Registration CCAR 45-R1 Purchasing purpose ID document Police record Feasibility study Intention to use the aircraft, funding capability, declaration of compliance with law Pilot license or intention to hire a pilot Intent contract with airport Signed application ID document Living address Personal CV and police record Activity purpose and source of funding and insurance documents (copy) Aircraft registration certificate, airworthiness certificate and radio license Pilot license or intention to hire a pilot Intent contract with airport Aircraft management company contract, activity scale and length of time and other necessary proceedings Chapter 2 Nationality Registration Rule 10 …the applicant must provide the following document to the CAAC 1) Applicant’s identity approval document 2) … 3) … 4) Other documents that may required by the CAAC The wordings highlighted are duplicative and should be eliminated Source: FAA, CAAC, industry interview, Booz & Company analysis Booz & Company

Summary 2 Documents submission requirements for aircraft certification process are ambiguous Examples of Ambiguity in the Aircraft Certification Requirement Aircraft Nationality Registration CCAR 45-R1 Non-Commercial GA Registration Administration CCAR 285 Chapter 2 Nationality Registration Rule 10 …the applicant must provide the following document to the CAAC Chapter 2 Registration Administration Rule 8 The applicant must meet the following requirement to register 1) Applicant’s identity approval document 2) … 3) … 4) Other documents that may required by the CAAC 1) …has aircraft registration and airworthiness certification… 2) … 3) … 4) Other documents that are required by Law and Administrative Rules This is not very clear in informing exactly what is required from the applicant Many of these “other documents” are for administrative purpose which can slow down the certification process significantly Source: FAA, CAAC, industry interview, Booz & Company analysis Booz & Company

Summary 3 CCAR 285 requirements also create inconsistency with other aircraft registration regulations… Examples of Incompliance in Economic Regulations Aircraft Nationality Registration CCAR 45-R1 Non-Commercial GA Registration Administration CCAR 285 Aircraft Nationality Registration CCAR 45-R1 Chapter 2 Nationality Registration Rule 10 …the applicant must provide the following document to the CAAC in order to register Chapter 2 Registration Administration Rule 11 For individuals applicants, the following document needs to be provided (3 copies of each) Chapter 2 Nationality Registration Rule 10 …the applicant must provide the following document to the CAAC 1) Applicant’s identity approval document 2) … 3) … 4) Other documents that may required by the CAAC 1) Applicant’s identity approval document 2) Purchasing/leasing contract 3) Proof of aircraft not registered elsewhere 4) Other documents required 1) … … 8) …require pilot certificate… 9) …airport usage proposal… Nowhere it said in CCAR 45 that “pilot certificate” and “airport usage proposal” are needed One might argue that the above are included in “Other documents required” in CCAR 45 - however, as rigorous as regulations can be, the requirements should be listed clearly in the first place Source: FAA, CAAC, industry interview, Booz & Company analysis Booz & Company

… and general operating rules
Summary 3 … and general operating rules ULTRALIGHT AIRCRAFT Examples of Minor Contradictions in the Aircraft Certification Requirement General Operating and Flight Rules CCAR 91 Non-Commercial GA Registration Administration CCAR 285 Aircraft Nationality Registration CCAR 45-R1 Chapter O Ultralight Aircraft Rule Certification and Registration Chapter 1 General Rule 3 This registration applies to all non-commercial activities conducted by either an organization or an individual Chapter 2 Nationality Registration Rule 10 …the applicant must provide the following document to the CAAC a) …does not require aircraft registration or airworthiness certification… b) …does not require pilot certificate or flying experience… c) …does not require any identity marking… 1) Applicant’s identity approval document 2) … 3) … 4) Other documents that may required by the CAAC Ultralight aircraft as stated in CCAR 91 does not require any form of formal documentation to register or obtain any type of certificate, however, pilots who fly these type of aircraft still needs to register and comply with CCAR 285 and provide numerous documents (e.g. police documents, airport usage, source of funding etc) which appears to be unworthy for flying such type of aircraft CAAC needs to check the possibility of exclude “ultralight” from CCAR 285 or further simplify the process Source: FAA, CAAC, industry interview, Booz & Company analysis Booz & Company

Hand Book for Potential Aircraft Owners
Summary In summary, the GA industry lacks a structured guidance materials for prospective aircraft owners and operators FAA EXAMPLE FAA Plane Sense Cover Published by FAA Flight Standards Service Hand Book for Potential Aircraft Owners Plane Sense introduces aircraft owners and operators, or prospective aircraft owners and operators, to basic information about the requirements involved in acquiring, owning, operating, and maintaining a private aircraft This handbook highlights regulations and regulatory guidance material, as well as providing advice regarding where to locate answers to possible questions Though this hand book cannot cover every issue faced by aircraft owners and operators, it is intended to be a useful guide and will help potential aircraft buyers to locate the resources to assist the process Booz & Company

Regulation and forms for aircraft registration
Executive summary Airworthiness regulations Type and production certifications Aircraft registration and certification Appendix Regulation and forms for aircraft registration Issues related to import and export Booz & Company

Regulations related to Airworthiness (FAA)
General Aviation Related Airworthiness Regulations (FAA) Type 14 CFR Subchapter C Part Certification Procedures 21/ Certification Procedures For Products and Parts Airworthiness Standards 23/ Normal, Utility, Acrobatic, and Commuter Category Airplanes 27/ Normal Category Rotorcraft 31/ Manned Free Balloons 33/ Aircraft Engines 35/ Propellers Noise Standards 36/ Aircraft Type and Airworthiness Certification Airworthiness Directives 39/ Airworthiness Directives Aircraft Registration 47/ Aircraft Registration Others 34/ Fuel Venting And Exhaust Emission Requirements for Turbine Engine Powered Airplanes 43/ Maintenance, Preventive Maintenance, Rebuilding, and Alteration 45/ Identification and Registration Marking 49/ Recording of Aircraft Titles and Security Documents The 14 CFR Subchapter C - Aircraft (Part ) includes all regulations related to “Aircraft“ - all of these parts are airworthiness related Source: FAA Booz & Company

Overview There is no major gap in aircraft certification related regulation between the FAA and the CAAC General Aviation Related Airworthiness Regulations (CAAC) Type CCAR Part # Compatibility to the US Part # (FAR) Certification Procedures CCAR 21-R3 21/ Certification Procedures For Products and Parts Airworthiness Standards CCAR 23-R3 23/ Normal, Utility, Acrobatic, and Commuter Category Airplanes CCAR 27-R1 27/ Normal Category Rotorcraft CCAR 31 31/ Manned Free Balloons CCAR 33 33/ Aircraft Engines CCAR 35AA 35/ Propellers CCAR 53 53/ 民用航空化学产品适航规定 CCAR 55 55/ 民用航空油料适航规定 Noise Standards CCAR 36-R1 36/ Aircraft Type and Airworthiness Certification Airworthiness Directives CCAR 39AA 39/ Airworthiness Directives Aircraft Registration CCAR 45-R1 Aircraft Nationality Registration (民用航空器国籍登记规定) CCAR 49 49/ 中华人民共和国民用航空器权利登记条例实施办法 47/ Aircraft Registration Others CCAR 34 34/ Fuel Venting and Exhaust Emission Requirements for Turbine Engine Powered Airplanes CCAR 43 43/ Maintenance, Preventive Maintenance, Rebuilding, and Alteration 45/ Identification and Registration Marking CCAR 285 285/ 非经营性通用航空登记管理规定 CCAR currently doesn’t have compare to the FAR CCAR has but FAR hasn’t Source: FAA Booz & Company

FAA requires the submission of a series of Aircraft Registration Forms
Title 8050-1 Aircraft Registration Application Affidavit of Ownership A Affidavit of Ownership for Light-Sport Aircraft Aircraft Security Agreement 8050-2 Bill of Sale 8050-4 Certificate of Repossession 8050-5 Dealer's Application AFS Information in Recording of Aircraft Ownership and Security Documents AFS E Information to Aid in the Cancellation for Export of United States Registered Aircraft AFS I Information to Aid in the Registration of Imported Aircraft AFS Information to Aid in the Registration of U.S. Civil Aircraft International Registry Entry Form Light-Sport Aircraft Manufacturer‘s Affidavit AFS List of Title Search Companies Aircraft Owner Change of Address Notification Form HEIR-AT-LAW Declaration of International Operations Form Limited Liability Company Registration Information Sheet All applications must be mailed to FAA Aircraft Registration Branch in Oklahoma City The application is centrally processed and approved for days Booz & Company

Aircraft Certification Forms
Airworthiness Certification FAA requires the submission of a series of Airworthiness Certification Forms for processing Aircraft Certification Forms Type Form Title Standard 8130-6 Application for U.S. Airworthiness Certificate 8130-9 Statement of Conformity Special Application for U.S. Airworthiness Eligibility Statement, Amateur-Built Aircraft Light-Sport Aircraft Statement of Compliance Export 8130-1 Application for Export Certificate of Airworthiness 8130-3 Authorized Release Certificate 8130-4 Export Certificate of Airworthiness Applications can be dealt with relevant local FAA field offices Booz & Company

Aircraft certification and registration processes are managed by various FAA offices
FAA Aircraft Certification Local Offices Aircraft Registration Branch Aircraft Certification Offices (ACO) Flight Standards District Offices (FSDO) Manufacturing Inspection District Offices (MIDO) Manufacturing Inspection Office (MIO) Roles Receive and process the aircraft registration application located in Oklahoma City Answer aircraft registration enquires Provide registration related information FAA Safety Engineers Design approvals and certificate management U.S. production approvals Engineering and analyses questions Investigating and reporting aircraft accidents, incidents, and service difficulties Designated Engineering Representatives (DER) oversight Airmen certification (licensing), to include pilots, mechanics, I.A.s, repairmen, dispatchers, and parachute riggers Aircraft permits and other certification issues Air carrier certification and operations Accident investigations Enforcement and investigation issues FAA Aviation Safety Inspectors Manufacturing and production certification Airworthiness certification Manufacturing facilities approval holder issues Manufacturing Designated Airworthiness Representatives (DAR-F) oversight Oversight of Manufacturing Inspection District Offices (MIDO) Management of geographically located production facilities and designees Source: FAA Booz & Company

Regulation and forms for aircraft registration
Executive summary Airworthiness regulations Type and production certifications Aircraft registration and certification Appendix Regulation and forms for aircraft registration Issues related to import and export Booz & Company

Import Documents Required Export (Deregistration)
Aircraft Registration Both import and export aircraft registration cases are handled with high priority Both Import and Export Cases are treated with High Priority Import Documents Required Export (Deregistration) A statement by the official having jurisdiction over the National Aircraft Registry of the foreign country of export indicating that registration has ended or that the aircraft was never registered Evidence of ownership, such as a Bill of Sale, signed in ink, from the foreign seller to the U. S. applicant/owner A completed Aircraft Registration Application, AC Form A check or money order made payable to the Federal Aviation Administration in the amount of $5 (U.S. funds) A complete description of the aircraft, including manufacturer name, model designation, serial number and registration number The reason for cancellation (export to foreign country) The name of the country to which the aircraft is being exported The signature and appropriate title of requester A release, or consent to export for all outstanding security instruments and unexpired leases with a term of six months or more that were executed on or before February 28, 2006 The resolution of outstanding interests in the aircraft executed on or after March 1, 2006 Booz & Company

Import Airworthiness Approval Export Airworthiness Approval
Airworthiness Certification FAA can issue airworthiness approvals for import and export only if the country of manufacture has bilateral agreement with the US Import Airworthiness Approval Export Airworthiness Approval Import an aircraft, aircraft engine, or propeller The owner of the aircraft needs an export airworthiness approval (or equivalent certifying statement) from the Civil Aviation Authority (CAA) of the country of manufacture This export airworthiness approval from the country of manufacture certifies that: the product conforms to its U.S. type certificate is in a condition for safe operation and has been subjected to a final operational check by the manufacturer Import accompany materials, parts or appliances The owner of the aircraft needs an export airworthiness approval from the Civil Aviation Authority (CAA) of the country of manufacture for materials, parts and appliances The export airworthiness approval certifies that the applicable requirements have been met and the materials, parts and appliances are eligible for installation on a product for which the U.S. has issued a design approval Prior to issuance of an export airworthiness approval, a determination is made that these items conform to their FAA-approved design, are in a condition for safe operation, and meet all special requirements established by the importing country's Civil Aviation Authority The exporting manufacturer or individuals must follow the Export Airworthiness Approval Procedures and guidance for special requirements for importing countries (these can be found in Advisory Circular 21-2 Booz & Company

Purpose of Document The intent of this document is to provide a detailed handover of all analysis and materials relating to regulatory gap studies on Airworthiness.

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Purpose of Document The intent of this document is to provide a detailed handover of all analysis and materials relating to regulatory gap studies on Airworthiness.

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Presentation on theme: "Purpose of Document The intent of this document is to provide a detailed handover of all analysis and materials relating to regulatory gap studies on Airworthiness."— Presentation transcript:

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