The business and corporate side of general aviation should continue to benefit from a growing market for new microjets over the next 14 fiscal years, and the FAA expects business use of GA aircraft to expand at a more rapid pace than that for personal and sport use.
In addition, safety and security concerns for corporate staff, combined with the hassle factor at some U.S. airports, have made fractional, corporate and on-demand charter flights practical alternatives to travel on commercial flights.
That will increase the active general aviation fleet at an average annual rate of 1.4 percent over the forecast period, growing from an estimated 226,422 in 2006 to 274,914 aircraft in 2020. The more expensive and sophisticated turbine-powered fleet (including rotorcraft) is projected to grow at an average of 3.6 percent a year over the 14-year forecast period, with the jet fleet increasing at 6 percent a year.
However, the report, “FAA Aerospace Forecast Fiscal Years 2007-2020,” did include some disclaimers about those predictions. The main assumption in developing this year’s forecasts, released at the 32nd annual FAA Aviation Forecast Conference in Washington last month, continues to be that there will not be a successful terrorist threat against either U.S. or world aviation. In the case of commercial aviation, the forecasts do not assume further major contractions of the industry through bankruptcy, consolidation or liquidation.
The forecast for general aviation is clouded further by a lack of accurate recent data. The FAA relies on the General Aviation and Air Taxi Activity and Avionics Survey for estimates of fleet size, hours flown and type of flight as a baseline. Beginning with the calendar year 2004 survey, methodology was improved to include 100-percent samples for turboprops and jets, all rotorcraft, all aircraft in Alaska and all aircraft operating on-demand under Part 135.
The changes resulted in the sample size nearly doubling. At the same time, the number of aircraft and hours flown in many categories changed dramatically. Because the survey is on a calendar-year basis, the 2005 statistics are the latest available.
The FAA conceded that the GA forecasts rely heavily on the discussions with industry experts that occurred at the October 2006 FAA/Transportation Research Board (TRB) Workshop on General Aviation. The agency said FAA analysts have updated the assumptions to reflect more recent data and developing trends, as well as further discussions with industry experts.
The FAA also presents the forecasts and assumptions to industry staff and aviation associations, who are asked to comment on the reasonableness of the assumptions and forecasts. Their comments and/or suggestions were incorporated into the forecasts as appropriate.
System Modernization Needed To Support Traffic
At last month’s conference, both Transportation Secretary Mary Peters and FAA Administrator Marion Blakey used the forum to push the Bush Administration’s plan to finance the FAA and ATC modernization.
The FAA aerospace forecast predicts 768 million passengers to be flying this fiscal year, more than one billion passengers by 2015 and 1.2 billion by 2020. To demonstrate how this will tax the ATC system, the forecast expects 62.5 million takeoffs and landings at the nation’s towered airports this fiscal year. By 2020, that number is expected to reach 81.1 million operations, growing by an average of 1.4 million per year during the forecast period. In addition, general aviation flying hours are expected to increase by 59 percent by 2020.
Peters cautioned that already growing delays will worsen without significant changes to the nation’s ATC system. Delays last year reached an all-time high and now cost the nation’s economy more than $10 billion annually.
“The freedom that flying has brought to our lives is being challenged by delays in our current aviation system,” she told the approximately 700 delegates. “Replacing our dated air traffic control architecture with a 21st century satellite-based system will return freedom, convenience and reliability to the skies.”
The Bush Administration has introduced the Next Generation Air Transportation System Financing Reform Act of 2007, which would replace the decades-old system of collecting ticket taxes with what the White House touts as a cost-based, stable and reliable funding program that relies on a combination of user fees, taxes and a federal government contribution to modernize the ATC system.
“As part of a wide-ranging transformation of the entire airspace system, our reform proposal will ensure that we can fund a move away from ground-based technologies into more dynamic satellite-based operations,” added Blakey. “Our goal is to ensure that everyone pays their fair share for these upgrades by fixing revenues to the costs that users impose on the air traffic system, whether commercial, business or general aviation.”
At the October 2006 TRB/ FAA workshop, industry experts suggested the market for new microjets could add 500 aircraft a year to the active fleet by 2010. “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. “This year’s forecast assumes that microjets will begin to enter the active fleet in 2007 (350 aircraft) and grow by 400 to 500 aircraft a year after that, reaching 6,300 aircraft by 2020.”
With the exception of heli- copters, the number of piston- powered aircraft is projected to increase from 170,967 last year to 181,750 in 2020, an average annual increase of 0.4 percent. But piston-powered helicopters are projected to increase rapidly, by as much as 5.7 percent per year. The FAA assumed that microjets and the new light sport aircraft could erode the replacement market for traditional piston aircraft at the high and low ends of the market.
The number of GA hours flown is projected to increase by 3.4 percent yearly over the 14-year forecast period. Much of that reflects increased flying by business and corporate aircraft as well as steady, if relatively small, annual increases in the use of piston aircraft.
VLJs Coming Soon
Hours flown by turbine aircraft–including helicopters–are expected to increase 6.1 percent a year over the period, compared with 1.3 percent for piston-powered aircraft. Jet aircraft are forecast to account for most of the increase, with hours flown expanding at an average annual rate of 9.4 percent over the 14 years.
The FAA attributes the large increases in jet hours to the introduction of VLJs, as well as increases in the fractional ownership fleet and its activity levels. Fractional aircraft fly about 1,200 hours annually compared to roughly 350 hours for all business jets in all applications.
Because VLJs are expected to function much differently from traditional jets, the FAA made separate assumptions for the two different types. Assumptions are made for the entire VLJ fleet and also for the distribution of that fleet among air-taxi use, private use and fractional use.
VLJ air taxis are expected to average about 1,500 hours per year, fractionals 1,200 and private use 350. According to the FAA, this results in an expected annual use rate for all VLJs in 2020 of 1,067 hours. Traditional (non-VLJ) jets are expected to average approximately 407 hours per year by 2020, since VLJs are expected to have a greater share of their use in on-demand air taxi service than the traditional jets.
The 2007 forecast for commercial aviation calls for a return to growth and, over time, the industry is expected to grow significantly. System capacity–the overall yardstick for how busy aviation is domestically and internationally–will increase 2.8 percent this year, following last year’s decline of 0.2 percent.
In domestic markets, capacity is expected to increase 2.1 percent, as network carrier capacity stabilizes and low-cost carriers continue to grow. Regional carrier capacity, which depends in large part on feed from the legacy carriers, is forecast to increase 2.9 percent. Revenue passenger miles will increase 2.8 percent while enplanements are expected to increase by 3.6 percent.
The FAA continues to be optimistic about the future. Since 2000, the industry has been battered with 9/11, the spread of the severe acute respiratory syndrome and concerns about pandemics, the bankruptcy of four network carriers and high fuel prices.
“Terrorist and pandemic concerns notwithstanding, this year’s forecast is driven, at least in the short term, by the improving financial health of the commercial aviation industry, which in turn is tied to the price of jet fuel and the health of the U.S. economy,” the FAA forecasters said.
Oil prices peaked at more than $77 a barrel in early August last year and then fell below $56 a barrel by mid-November. However, prices then gradually rose to more than $63 a barrel by mid-December.
“Most economic projections now assume that oil prices will remain in the $55- to $65-per-barrel range over the next several years, with $50 a barrel being touted as the new floor for future oil prices,” the FAA concluded.