Several speakers at the FAA’s 10th annual general aviation forecast conference, held in Wichita April 15 and 16, disputed the agency’s numerical prophecies. Helicopter Association International president Roy Resavage asserted the FAA was underestimating the number of in-service civil helicopters by 50 percent, skewing that part of the forecast. Further, AOPA president Phil Boyer contended that the agency severely deflated the number of student starts in the next decade, distorting all of the following assumptions made on those numbers.
The “growing role of general aviation in intercity transportation” panel discussed the obvious by saying as a country we are not investing sufficiently in capacity issues, such as runways and infrastructure.
“The market for turbine aircraft” panel yielded a big-picture view of business aviation. Bob Blouin, NBAA senior v-p of operations, said 25 percent of NBAA’s members are flying more than they did before September 11, 25 percent are flying less and 50 percent are flying about as much. “Aggregately, we’re slightly up,” he said, “but we still have restrictions, such as not being able to fly into DCA. We continue to struggle with those issues and we’re working on them, but if you think everything is back to normal, think again.”
Jim Wojciehowski, Honeywell’s v-p of commercial aerospace, said last year’s business jet deliveries stood at 769 aircraft worth $11.7 billion, a year-over-year increase of 3.8-percent in units and 1 percent in billings. He said the fractional industry grew at a double-digit rate last year and charter demand was up 25 percent. Wojciehowski said the OEM backlog is currently estimated at 2,000 aircraft, but new aircraft order intake continues to be weak due to prevailing circumstances. “However, there are clear signals that the economy is recovering.”
The Honeywell forecast is based on telephone interviews of nearly 1,000 business aviation operators flying 2,049 aircraft in North and South America, Europe, Asia, Africa and the Middle East. Those interviews were conducted last spring, asking respondents about their five-year plans. The results generally indicated an increase in demand for both used and new business jets, but there had been no update since September 11, leaving the results in doubt to say the least.
Don Spruston, director general of the International Business Aviation Council (IBAC), ranked countries according to the number of registered business aircraft. The U.S. leads the world with 14,837, while Canada falls into second place with 706 aircraft. Then Brazil (680), Mexico (571), France (445), Germany (416) and the UK (293). IBAC predicts 600 business jet purchases worldwide this year, 620 next year, and 640 annually in 2004 and 2005.
Spruston cited a number of pressures acting on business aviation growth, including the health of the world economy; continued globalization of industries; industry focus on productivity; continued access to airports and airspace; changes in the airline route structure; the effect of actual and perceived security measures; and fractional ownership.
During the “next-generation ATC system” panel, Radio Technical Commission for Aeronautics president David Watrous, outlined the three requirements for future system growth: necessity of accurate and timely information; utilization of available technology to collect and disseminate information; and continuation of the relationship between industry and government. He suggested the role of government in the system is both historic and essential, and ATC privatization was not in the industry’s best interest.
Steve Brown, FAA acting associate administrator for air traffic services, discussed the status of the operational evolution plan (OEP), noting that before September 11 the administration focused on implementation of the OEP and paid only slight attention to security issues. “That immediately reversed and we concentrated almost exclusively on the needs of the Transportation Security Administration [TSA],” he explained. “Today, seven months later, our efforts in those two areas are about equal.” OEP is the program to increase system capacity, including en route capacity, weather reporting automation and airport capacity.
During the “general aviation security” panel, Brown put the security issue in perspective: “The TSA is the largest federal administration formed since World War II.” He explained that in the aftermath of September 11, the government was forced to go into overdrive with very little preexisting structure.
Brown said he recognizes not all decisions were good or even make sense in retrospect. “But things will get more organized and make more sense as time goes on,” he said. “Within TSA, NSA and Homeland Security I’ve met a lot of pilots, aircraft owners and ex-military pilots. The knowledge of our industry is there. TSA’s area of focus was commercial aviation and airports, but it will also be dealing with general aviation issues. It will get better.”
During the “major issues affecting general aviation” panel, GAMA president Ed Bolen said general aviation is in the best position of all to police itself. “When you look at GA airports, you see a close-knit group of people working together. There are rarely loners and outsiders. Everyone at the local airport knows everyone else and strangers stand out,” he said.
NBAA president Jack Olcott cited security concerns as the most profound change: “Big decisions are being made by those with little knowledge of general aviation. Some issues of major importance to our industry will be new requirements for access to airports and airspace.” Olcott worries that the FAA’s traditional role has been greatly diminished and replaced by that of TSA.
“Our challenge is to convince the TSA that GA is secure. NBAA is working with other GA associations toward that end. We are preparing for the next period of heightened security,” he said. “They have yet to focus on GA, but that time is coming and we want to be prepared with an effective plan of our own making.”
Olcott suggested a security letter of authorization (SLOA) because it was a system that the FAA was already using in a different capacity. “SLOAs could provide an excellent tool to ensure the security of flight departments,” he explained. “Business aviation has always had a security culture. Our aircraft are stored in high-security hangars. TSA needs to recognize we already have some of the best security personnel overseeing business aviation operations.”
NATA president Jim Coyne put the issue of security into focus by pointing out the industry would not be able to meet any forecast numbers if the elements of the industry aren’t allowed to make a profit. “Our members face a higher degree of uncertainty about their future than ever before. Not because they doubt their ability, but because they’re nervous about what the government will do to us,” he said. “There are members of Congress that fear general aviation, and we’re nervous our government will continue to overreact.
“In the past seven months our foreign student-training programs have been severely hit. Our FBOs, typically small businesses, are being told they have to fence everything in,” Coyne said. “Every employee of every aviation company may face background checks, costing as much as $300 each. Everyone may be required to install security doors and other systems that go beyond their financial ability.”
HAI’s Resavage said for his industry the greatest challenge appears to be insurance, despite this segment having the lowest accident rate in five years. “The aviation insurance industry claims to have lost money in 10 of the last 13 years, and that September 11 broke the bank for the entire insurance industry,” he said. “An already hardening market turned into solid granite. Our large fleet operators have seen premium increases varying from 30- to 50 to percent and our smaller operators have seen rates soar as high as 80- to 100 percent.”
He also took issue with the FAA’s estimate of the helicopter community: “We are about 50 percent larger than the FAA estimates. The agency has gone on record saying there are 7,150 civilian-operated helicopters, but we believe that number is closer to 11,100.”
And AOPA’s Boyer was none too happy with the FAA’s numbers, either. He disputed the FAA’s forecast decline in student pilot starts. AOPA contends student pilots will increase some 16 to 20 percent in the next five years. Boyer said the FAA’s projections are based on “bad assumptions and internal system errors.”
Boyer said, “Student pilots are the key to the general aviation industry. Everything is driven by the number of students. That number is the leading indicator for everything from hours flown to new and used aircraft sales.” He showed graphs depicting a nearly identical correlation between new student starts and such things as avgas consumption, new and used aircraft sales and total hours flown.
The FAA’s forecast recognized the number of new student pilots is the key to the future of GA, but it said new student starts are down and are declining. It lists them as the fewest since 1955 and predicted no recovery until 2010, but Boyer said historically the FAA has been wrong in predicting student pilot starts and showed graphs demonstrating a significant disparity between FAA forecast and actual statistics. “So far this year so far student starts are up 2.5 percent,” he said. Boyer made a plea for the FAA to revise its student-tracking system.