As NBAA returns to Orlando for its annual gathering, there seem to be reasons for optimism but not outright giddiness. There is no doubt that the economy is the number-one topic for delegates at the 62nd Annual Meeting and Convention.
“I think over the last couple of months there has been an emerging consensus that things have stopped getting worse,” NBAA president and CEO Ed Bolen said recently. “There have been some in the industry who have suggested they are seeing those green shoots the Fed chairman has talked about; there are others who may not be seeing quite as much evidence of recovery.”
Among the positive signs are slightly improved used aircraft inventories, slightly improved flight activity, indications that sales are once again on par or even exceeding cancellations, which has been reflected in stronger than expected participation at the European Business Aviation Convention and Exhibition (EBACE) and the EAA AirVenture shows.
In addition, the fallout from the Troubled Assets Relief Program (TARP) bailout and the recriminations against business aviation have largely subsided in the months following the public relations disaster that was fueled when the CEOs from the Big Three automakers flew to Washington last November in separate company airplanes to request money from Congress.
“The fact that they did not explain their use of business aviation on that specific mission led to a belief that perhaps all business aviation missions are unnecessary,” Bolen said. “And it was in response to the [automobile executives’ actions] that the terms of their financial assistance from the government required them to divest their aircraft operations.”
Bolen views the TARP proposal as a turning point in a lingering congressional view that business aviation was unnecessary, because of a provision that would have required companies accepting TARP money to be treated like the automobile manufacturers. “In other words, if they’re going to accept federal assistance, then they are going to have to get rid of their aircraft,” he explained.
That proposal did not go anywhere because by the time it reached the House floor there was enough support expressed for business aviation by members of Congress that the provision was eliminated from the final bill. There continued to be lingering statements against business aviation, which was probably the nadir of congressional attacks.
Over the last several months, said Bolen, the House of Representatives has created the General Aviation Caucus, which now has nearly 70 members. And the House also has passed a resolution that effectively says general aviation is good for
At a Senate hearing in May many senators expressed support for the business aviation community. “They have recognized that it’s an industry that generates good jobs, an industry that serves as a lifeline to communities with little or no airline service; that it allows small and midsize businesses to be productive and efficient; and that it plays a big role in our humanitarian efforts,” said Bolen.
Asked about the effect of carbon emissions and attendant cap-and-trade schemes on business aviation, Bolen acknowledged that the fact that the European Union has moved forward on such a broad and far-reaching cap-and-trade scheme and the fact that the U.S. House of Representatives has moved forward a major environmental bill certainly suggests that environmental regulations and laws is a movement that is expanding. “And I think almost every industry expects that environmental laws and regulations will impact them in some very real way,” he said, “and I don’t think business aviation is an exception.”
According to Bolen, the aviation community in the U.S.–which includes general aviation and the airlines–has advocated that there be an international approach to environmental aspects. In other words, this should be an International Civil Aviation Organization (ICAO) issue rather than a patchwork of regional regulations.
The aviation industry also would like to see the “tremendous” gains and progress it has made in the environmental area over the past several decades be reflected in discussions, and any revenues from environmental laws or regulations be reinvested in the aviation system, he said.
“So I think what we are looking at is a kind of growing environmental sense, a recognition that there will be impacts on our community and that we are trying to work together to make sure anything we do is very thoughtful and fair,” he explained. “I think that is bringing the community together in ways we haven’t seen for quite some time.”
With regard to the European regulations for its emissions trading scheme (ETS), Bolen stressed that is “clearly, in our opinion, not fair.” It defies common sense that a flight across the U.S. and across open waters would be subject to a European tax, he said. The hope is that ultimately ICAO will be able to prevent a patchwork of states or regions developing their own environmental laws or regulations, he added. NBAA also believes the ETS is punitive toward aviation compared to other industries.
Finally, Bolen opined that the industry is making important progress with the Large Aircraft Security Program (LASP). Since LASP was proposed in October by the Transportation Security Administration, NBAA says it has helped facilitate 7,000 comments to the docket, five public meetings on the issue and participation
in congressional roundtables and hearings. “We believe it will be significantly modified from what was proposed,” he said. “We hope the final rule will ultimately be workable, reasonable and effective. It has been a very significant issue for the community.”