Industry On Hold, And Barely Holding On, As The Economy Continues To Drag
By John Ylinen
As we wrap up AirVenture 2012, I look back on my excitement to be coming and then my concern on leaving. I was really hoping to see new and innovative products announced by the manufacturers (Airplane, Avionics, and Powerplants). I was hoping to see considerable improvement in customer demand. I was hoping that the crowds would be stronger than last year.
What I learned was that the American Aviation Industry is on hold. The Chinese are making significant investments in good old American ingenuity (Cirrus SF50, Continental Diesels, Glasair and others). The crowds and camping appeared to be slightly less; exactly how much won’t be known until EAA releases final numbers Sunday. The avionics vendors for TSO equipment were mostly without new announcements. The Experimental A/B avionics were the exception. Especially for ADS-B and GPS receivers and new glass panels.
I guess we should not be surprised given the state of the American general economy, but I think there are some other factors at work here. The FAA has matured a system to regulate personal aviation that mirrors their program for Airlines. The cost of meeting the FAA requirements over and above what the manufacture would prudentially do to bring any product to a marketplace is increasing the cost to the consumer at a percentage higher than any other personal transportation or hobby. Then the numbers of sales has place high levels of fixed cost on a very small number of units of sale. The court results have also added to the amount consumers are paying for products. The perfect storm is that pleasure aviation price for products is orders of magnitude more expense than other forms of transportation and hobbies that Americans can utilize their limited discretionary income for.
The LSA market has not lived up to the dream. LSA airplanes are not significantly cheaper than certified and E A/B. Amateur built are not that much less than certified. When a kit is all said and done they are coming in about 2/3 the price of certified products.
But there is still something about AirVenture that gives me hope. The people are still coming and there is still that desire to band together once a year to have fun, experience aviation as nowhere else. The airshows and pilots are amazing. EAA continues to drive for improvements. This year creating chalets for those of means a place to relax and watch the airshow. It might have been nice to add bleachers and some other forms of facilities for the “lower class” to also feel like EAA felt they were as important.
There were still many inventors and entrepreneurs bringing their ideas to see what the consumer things. There were many repeats from last year still trying to work their way through the FAA maze. Many were struggling to find capital to complete their project and get to market.
The Warbirds were in force. I am concerned with government actions to try and ground private aircraft and force them all to museums. I think it would be a shame for young people to not be able to see and hear these wonderful aircraft. I am amazed that these citizens are willing to use their personal wealth to keep these aircraft flying and operate them for the benefit of all. I view this effort as important as national parks. They must be protected at all cost.
So what is it going to take to bring back aviation? Many smarter than me have discussed this topic at length. Clearly the general economy is going to have to recover and grow at a vigorous rate. The November election is about that single question. Clearly our tax rates are also impacting US business. But that alone will not bring aviation back. The press uses accidents to boost ratings. The lawyers use it to line their pockets and even when pilots are at fault get manufactures to settle rather than go to trial. The economies of scale are too low so each aircraft is a custom build. Large penalties of insurance, tax rates, and FAA oversight have made aviation for more expense than any other activity that a family can pursue.
It is time for a Summit. It is time for the equivalent of the tea party for GA to gather and map out a course of action to grow GA. This will involve legislation proposals, education and communication of the public on the value and possibilities of GA for them and their communities, it will involve changes in insurance both for business that prevent the use of GA for personal travel and for those that need coverage to utilize GA. It will involve manufactures finding capital to do R&D and bring products to market that are new and innovative and what consumers today want; not small refinements to 40 year old airplanes.
Time is not on our side. At most, we have 5 years and maybe fewer before the only GA left is business aviation and the very wealthy.
What can you do now? Send email and letters to EAA and AOPA. Demand that they bring the aviation community together and develop a plan. The AOPA summit would be a good place for this to occur. You also need to make GA an issue when you vote. Not the only issue but you should demand that the candidates provide you their position on GA and consider it when voting.
Let’s hope next AirVenture is bigger with more new products and innovation. No one company can do it. No one person can make the change. But together with clear goals, action items, and fixed responsibilities the industry will get on a path of growth. We need strong leaders to guide the change. I hope that those in AOPA, GAMA, EAA, and NBAA will make this their number one priority.
(ANN Staff images. Top: Cubs at Oshkosh. Second: Lisa Airplanes Akoya. Third: Acting Administrator Michael Huerta. Bottom: EAA president Rod Hightower.)