FAA predicts growth in commercial, GA activity
While the FAA drastically reduced its estimate about the number of very light jets (VLJs) to take to the air in the next decade, comments and speeches at the agency’s 31st annual forecast conference in Washington early last month indicate there will be changes in the way the aviation industry pays for operating the nation’s airspace system.
For general aviation, it could come in the form of new user fees, higher fuel taxes or both. “I cannot tell you what the final plan will look like,” said Transportation Secretary Norman Mineta.
The Bush Administration is working on “modernizing” the Airport and Airway Trust Fund, which currently is funding about 80 percent of the FAA’s approximately $14 billion annual budget. The current taxes and fees paid into the trust fund expire on September 30 next year.
“Currently, as all of you know, our primary revenue source is tied to the price of [an airline] ticket,” Mineta told delegates at the FAA forecast conference. “But there is general consensus that our growing aviation system needs a more stable and predictable revenue stream. And we know that there needs to be a more direct relationship between revenues collected and services provided.”
The airlines and the Bush Administration have claimed that the influx of VLJs is going to clog the ATC system, adding 20,000 flights per day to an already overburdened system. The airlines are calling for user fees to help pay to upgrade and modernize ATC, citing a recent study by NASA and the Joint Planning and Development Office that predicts 8,700 VLJs will be flying by 2016.
The FAA’s own aerospace forecast for 2006 to 2017 expects that 100 of these jets will join the fleet next year, increasing to 400 to 500 VLJ deliveries per year through 2017, and it estimates that only 4,950 VLJs will be in service by 2017.
“The relatively inexpensive twin-engine microjets [priced between $1 million and $2 million] are believed by many to have the potential to redefine the business jet segment by expanding business jet flying and offering performance that could support a true on-demand air-taxi business service,” the FAA said.
Last year, the manufacturers of general aviation aircraft shipped 2,615 aircraft, an increase of 10 percent over 2004. All aircraft shared in the recovery–jet aircraft were up 15.1 percent; piston aircraft up 9.5 percent and turboprops up 5.3 percent. Billings totaled $7.8 billion, up 14.7 percent from the year before.
Interestingly, general aviation activity at FAA air traffic facilities was mixed last year, according to the agency. Operations at combined FAA and contract towers declined 2.5 percent, with reductions in both itinerant and local operations. GA instrument activity at combined towers also declined last year, falling 3.4 percent. The number of GA aircraft handled at FAA en route centers remained flat, up just 0.2 percent.
The airlines argue that they are paying 90 percent of the FAA’s costs while using airspace only 70 percent of time.
Business Aviation Growth Expected
Statistics from the FAA’s enhanced traffic management system (ETMS) database do not yet show an expected turnaround in business flying. For FY2005 the number of GA jet flights was 2.6 percent higher than in FY2004, although growth in the first half of the year was much higher than in the second half.
The FAA ETMS data also show that general aviation flying by fractional aircraft has continued to outpace the industry, with flights up 2.7 percent for the January through September period. The industry is counting on growth in fractional ownership companies and corporate flying to expand the market for jet aircraft, the forecast said.
Based on the latest FAA assumptions about fleet attrition and aircraft use, along with General Aviation Manufacturers Association aircraft shipment statistics, the active general aviation fleet is estimated to have increased 1 percent last year, to 214,591 aircraft. GA flight hours are estimated to have increased 3.8 percent to 28.3 million.
Despite a slowdown in the demand for business jets over the past several years, the current forecast assumes that business use of general aviation aircraft will expand at a much more rapid pace than that for personal/sport use.
The business/corporate side of GA should continue to benefit from a growing market for new microjets, according to the FAA forecast. In addition, corporate safety/security concerns for corporate staff, combined with increased processing times at some U.S. airports, have made fractional, corporate and on-demand charter flights practical alternatives to travel on commercial flights.
The active general aviation fleet is projected to increase at an average annual rate of 1.4 percent over the 12-year forecast period, from an estimated 214,591 last year to 252,775 aircraft in 2017. The more expensive and sophisticated turbine-powered fleet (including rotorcraft) is projected to grow at an average of 4 percent a year during the 12-year period, with the turbine fleet doubling in size.
The number of general aviation hours flown is projected to increase by 3.2 percent yearly during the 12-year forecast period. Much of the increase reflects increased flying by business and corporate aircraft.
Hours flown by turbine-powered general aviation aircraft are forecast to increase 6.4 percent yearly over the forecast period, compared with 1.8 percent for piston-powered aircraft.
For commercial aviation, the 2006 forecast anticipates small gains. But in the longer run the industry is expected to grow significantly. System capacity–the overall yardstick for how busy aviation is both domestically and internationally–will increase just 0.9 percent this year, as legacy carriers cut back on flights. Capacity in international markets will increase by 5.9 percent.
Domestically, capacity is expected to shrink 0.7 percent, triggered by fleet cutbacks at legacy carriers. This creates a ripple effect in regional carrier capacity, which gets passengers from the legacy carriers. Regional carrier capacity had grown by as much as 20 percent per year since 2003, but this year the growth will be about 4.5 percent.
The size of domestic aircraft will decline this year by 1.4 seats as legacy carriers continue to replace their widebody and larger aircraft with smaller, narrowbody airplanes. Additionally, demand for 70- to 90-seat aircraft will continue to increase, which furthers the decline in the overall number of seats per aircraft.
Since 2000 the industry has been battered by 9/11 and high fuel prices. But the FAA continues to be optimistic.
An important yardstick remains the number of passengers who traveled on the airlines. Last year, that number was a record 739 million, up from 690 million the previous year. U.S. commercial aviation remains on track to carry one billion passengers by 2015, the FAA said.