Although the downturn in the economy has dampened the near-term prospects for the general aviation industry, demand for business aviation will expand over the long term, according to the most recent forecast from the FAA, which anticipates a growing U.S. and world economy.
In its annual aviation forecast, the agency predicts a return to growth for air travel in the long term, underscoring the need for vital aviation infrastructure and environmental improvements contained in the FAA’s comprehensive Next Generation Air Transportation System (NextGen) plan.
“The question now is how long the recession will continue,” the FAA said in its 16-year forecast for 2009-2025, released March 31. “While history may be a guide, every recession has its own character. On average, the recessions since the end of World War II [have] averaged 10 months in duration.”
Nan Shellabarger, FAA director of aviation policy and plans, told the 34th Annual FAA Aviation Forecast Conference in Washington, D.C., that “the assumption is the recession will end this year” and general aviation will resume “modest long-run growth.”
In last year’s outlook, the FAA restated earlier predictions that U.S. airlines would board one billion passengers a year by 2016. The forecast now estimates that figure won’t be reached until 2021.
U.S. aircraft operations are predicted to decline this year by 5.7 percent from 2008 levels. Beginning next year, the agency expects operations to grow at an average annual rate of 1.5 percent for the remainder of the forecast period.
Speakers throughout the forecast conference noted that the current slowdown will provide a little more breathing room to get NextGen off the ground. Environmentally friendly NextGen technologies and procedures will boost capacity and safety while reducing fuel burn, carbon emissions and noise.
“Now is the perfect time to invest for when the system comes back,” said Hank Krakowski, COO of the FAA’s Air Traffic Organization. He explained that NextGen will also help the general aviation pilot and the business jet pilot to derive maximum benefit from the system.
“A vibrant, efficient and green aviation system will play a key role in our nation’s economic recovery,” Transportation Secretary Ray LaHood told the conference attendees. “The Obama Administration is committed to essential safety and efficiency advancements that will meet our continued air travel demands.”
General Aviation Sector
Total operations at FAA and contract tower airports fell 4.3 percent and were at their lowest levels since 1985 as increases in air carrier operations were offset by declines in other user categories. Although the number of flights fell, the combination of fleet mix–with more regional and business jets in the nation’s skies and with carriers consolidating their operations at large hubs–resulted in increased workload due to the continued growth in the complexity of the airspace.
According to the FAA forecast, the market for general aviation products and services showed mixed results in 2008. Worldwide shipments declined for the first time since 2002 (down 6.7 percent), but billings were up 14.4 percent compared with 2007. Piston aircraft shipments fell 20.7 percent while turbine aircraft shipments increased by 16.7 percent. Despite the higher shipments and billings, GA activity fell 5.6 percent in 2008.
Based on the latest FAA assumptions about fleet attrition, aircraft use and General Aviation Manufacturers Association shipment statistics, the active GA fleet is estimated to have increased 1 percent in 2008, to 234,015 aircraft. The active GA fleet is projected to increase at an average annual rate of 1 percent over the forecast period, to 275,230 aircraft by 2025. (See chart below.) The more expensive and sophisticated turbine-powered fleet (including rotorcraft) is projected to grow at an average of 3.1 percent a year over the forecast period, with the turbine jet fleet increasing 4.8 percent a year.
Despite the increase in the active general aviation fleet, flight hours in the sector are estimated to have decreased by 0.2 percent in 2008 to 27.8 million.
In the most recent forecast, the FAA revised downward its prediction for in-service very light jets (VLJs). As recently as 2007, industry experts suggested the market for new VLJs could add 500 aircraft a year to the active fleet by 2010. Last year the FAA was predicting that the number of VLJs would reach 8,145 aircraft by 2025. In the latest forecast it has revised that figure downward by 40 percent, to 4,875.
“The relatively inexpensive twin-engine VLJs (priced between $1 million and $2 million) were 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 forecast report said. “However, events since that time have dampened expectations for a rapid penetration of VLJs into the market, most notably the bankruptcy of Eclipse and the demise of DayJet.”
Last year VLJ deliveries fell short of the FAA’s original assumption–262 versus 400. However, despite the “challenging economy,” the new forecast assumes that about 200 VLJs will enter the active fleet in the U.S. over the next two years and then increase to a rate of 270 to 300 aircraft a year for the balance of the forecast period.
The current forecast assumes that business use of general aviation aircraft will expand at a more rapid pace than for personal/sport use. In addition, corporate safety/security concerns, combined with increasing flight delays at some U.S. airports, have made fractional, corporate and on-demand charter flights practical alternatives to travel on commercial flights.