Editorial: Cherry Picking
By Ed Downs
Did the title of this editorial get your attention? We hope so, as the real issue discussed in this article, the “State of General Aviation,” would probably have sent you into an immediate “ho-hum” status, deciding to skip the read. But hang in there! “Cherry Picking” will come into play as we take a look at what 2016 may have to offer the GA world, and you may even pull out some usable information.
It is customary for In Flight USA to take a look at our industry in the early part of each year to see how we think things are going. This writer decided to take the task seriously and looked for statistics that would give readers a real view as to what is going on in the world we love so much. But statistics are a funny thing. As one political statistician said, “tell me what you want to prove, and I will pull stats together to prove your point.” This philosophy is exactly what I ran into while dutifully looking for dull facts to present. Regrettably, dull statistics are plentiful, perhaps too much so. But on the fortunate side of the scale, there are four sources that can help one sort through dozens of reports and forecasts.
Of course the FAA leads the pack, producing an Annual Aviation Activity Forecast, which seeks to look 20 years into the future and predict how aviation will fare. The Aircraft Owners and Pilots Association (AOPA) is a great source of data for GA-related stats, and the National Business Aircraft Association (NBAA) does a great job for those of us who have a G-4 in the hangar. The General Aviation Manufacturers Association (GAMA) represents those who build our wondrous machines, doing a great job representing the manufacturing industry. But reviewing stats and figures on these websites reminded this writer of an article written several years ago dealing with the high cost of S-LSAs.
In an attempt to deal with memories of new airplanes that sold for well under $10,000, I attempted to compare the “dollar of today” with the “dollar of yesterday” in order to even the playing fields. I discovered that there are at least five algorithms that statisticians use to determine comparative values of products over the years. Each formula came up with wildly different dollar equivalents. So, this writer just picked the algorithm that allowed me to make my point, a trick known as “cherry picking.” You see, there is a reason for the article’s title!
We will hear a lot of cherry picking in 2016 as politicians seek to prove their claims. One side is going to reference specific examples and statistics to prove that our economy is strong and growing stronger. The other side will dig up stats and economic reports that show the economy is terrible and getting worse. Both sides are correct given the facts they have cherry picked. It will be up to voters to sift through the hyperbole and come to a middle ground set of views based primarily upon personal experience and gut feeling, tempered with common sense.
How does this apply to the state of GA today? For the person who just happens to be in a growing sector of the economy, making a terrific income, having just purchased a new point seven million dollar Cirrus that is professionally cared for by a contract maintenance firm and hangared in a fully heated business center, GA is doing great. For the person who is working three jobs to support a family and trying to learn to fly in a tired, 50-year-old Cessna 150 that has never seen the inside of a hangar and has travelled 50 miles just to find a CFI, GA is in bad shape.
To paraphrase a famed TV show about the paranormal, “both truths are out there.” Allow this writer to draw upon information gleaned from a review of our industry through research, and temper it with personal experience and common sense. This writer continues as an active CFI and, through a national weekend ground school provider (Aviation Seminars), teaches classes in all ratings, for all categories of aircraft, including Flight Instructor Refresher Clinics (FIRCs). Activities also include national tutoring for folks having difficulty with flight training, resulting in this writer working with up to 400+ students and CFIs every year. No, this is not “moon lighting.” In Flight USA fully supports the need for our writers and contributors to be current in aviation activities.
So, what’s going on in the GA world? FAA predictions are not good. GA will never recover to the heydays of the 1960s through the mid 1980s timeframe. The mid ‘80s saw litigious law and corporate pirates plunder the GA industry, and production of most single engine planes was shut down. Flight schools went out of business, and services dwindled. While the Aviation Revitalization Act of 1998 did help, the planes that came back online cost up to three times more than in previous years.
Business was looking up until the tragic events of 9/11, when fears that strong government regulations that would limit flight hit the industry. By 2007, we were on the way up again, with Light Sport Aircraft and Very Light Jets promising excitement at both ends of the cost spectrum. But the economic failure of 2008 ended what appeared to be a promising recovery. It has been a very slow climb since 2008, with many businesses basically “hanging in.” Corporate mergers have limited competition, and the primary emphasis has been on the production of high-end machines used in corporate transportation.
It is interesting to note that long range FAA predictions (I do not think I would use these predictions for investing purposes) show only a slow point four percent per year increase in GA activity, but the LSA world is expected to grow at four point three percent per year, 10 times faster than the contemporary market. Hopefully, this points to a relatively healthy sector of recreational GA flying, which can lead to pilots moving up to bigger and more capable airplanes.
This writer notes that dropping arbitrary and unneeded medical standards for the LSA world has played a key factor in promoting the use of Sport Pilot privileges. It will be interesting to see how the proposed Pilots Bill of Rights 2 law, which substantially reduces FAA medical bureaucracy for private pilots, will affect activity. This law has not been factored into predictions and may have a very positive influence. Stay tuned to AOPA for updates on these new medical issues.
GAMA points out that delivery of all aircraft went down in 2015, but revenues were up. Simply stated, the industry is selling more corporate-level planes at higher prices, the cost of which is often offset by tax benefits. One report touted the good news that Gulfstream was continuing development of a new super jet but laying off 1,100 workers. Is that good news or bad news? It all depends upon which fact is cherry picked.
According to the NBAA, there is true good news for young professional pilots who are trying to get an airline job. The airline pilot shortage is real and getting even more critical. The regional carriers that used to treat new hires as indentured slaves are now paying semi-livable wages, meaning young pilots may not starve before they can get a job with a major airline. This need for new pilots is not bad news for flight schools if they are smart enough to cash in on it.
So, how does one apply the preceding discussion? It depends on your reading perspective. If you are a venture capitalist, look elsewhere. The fast buck world of venture investment is looking for big immediate returns, not a long-term commitment. If planning to enter GA as a pro, be ready for the long haul and learn how to promote your services. The GA industry is famous for its inability to get its message out to potential customers… and no… a website alone does not get the job done. Remember, the web did not exist when GA was at its best. But persistence will pay off.
This writer entered aviation in 1955 and continues to make a living in a field for which the passion has never subsided. How many readers can make that claim about their work life? Far be it for this writer to discourage youth from entering a path that can lead them to worldwide adventure, but be prepared to work hard and never stop learning. When it comes to my career in aviation, I admit that, “were it not for aviation, I would have had to go to work for a living… what a terrible fate!”
For you folks who own a plane, hang on to it. New aircraft costs continue to skyrocket, and used plane values continue to go up, probably at a rate much higher than your IRA. Technological upgrades can turn a very average Skylane into a super plane that challenges aircraft costing five times the total investment. Just browse the pages of this issue and take a look at the services our advertisers offer; the variety is incredible.
For now, the pressure is off rising fuel costs and, hopefully, a low-lead option to current AVGAS will result in the use of automotive technology, which will lower fuel costs even more. The market could not be better for those thinking about buying a plane, especially a used plane. While prices are high, value is great. There are some great values being advertised in this issue of In Flight USA; hunt them down and take action. Purchase options have never been better.
Those who are thinking about learning to fly may have a search on their hands. The trick is to find a flight school that can offer a well-structured course with a consistent staff of CFIs. Such schools are sometimes hard to locate. Website, www.aopa.org, has a training link that can help with your search and give you valuable information as to what to look for in a training school. And do not forget to look into a Sport Pilot certificate as a starter. You may find that this certificate will serve you well as a recreational flyer, with all the experience gained through Sport Pilot flying applicable to more advanced certificates. The cost of a Sport Pilot certificate, by the way, is about half that of a Private Pilot certificate, definitely in the good news category.
And finally, for those businesses trying to sell planes, services, and flying lessons, step up and act like a business that actually wants to make a buck. Sorry if that came across as being a bit blunt, but this writer helps more than 100 students per year find services because they do not know where to look for them. Many businesses think that customers will show up simply because “you built it, and they will come.” That might work in a movie scenario but not in real life. This writer communicates with hundreds of aviation businesses every month, and a startlingly high percentage of them simply do not promote their businesses, with community involvement, participation in national organizations, or good old-fashioned marketing. The funny thing is, those who do work at selling, sell. Go figure!
Yes, the future GA is not bright and cheery, unless the industry pulls together and creates a new day. Those of us who work in GA must not blame our customers for a lack of business but need to look inward and power up by reaching into new markets. It would be unfair to write an article about the challenges our industry faces without asking the industry to participate in solutions. It should not be up to our customers to fix GA. That is our job.
The experts are very cautious about GA, predicting slow growth. They have cherry picked the facts that make them look like experts. The real future of GA is in the hands of those who participate in the industry, as both users and producers of services and products. Frankly, this writer thinks it would be great sport to prove the “experts” wrong and show them what the tradition of aviation in America can really do.
