Forcasting future trends is difficult in any business, but predicting the direction aviation will move has been particularly inaccurate over the past many decades. Part of the problem is that aviation is fundamentally cyclical, both in the manufacture of airplanes and in their use. Changes in the economy appear to have more to do with aviation activity than any other factor, but that information is of little use since predicting the future of the global economy has also been elusive.
I think it’s safe to say that every prediction of a large change in aviation activity has been wrong. Forecasters have missed in both directions, calling for growth when a bust is about to arrive or failing to see recovery from a downturn.
Probably the biggest miss by the aviation industry forecasters happened in 1945 and into 1946. The military had created thousands of new pilots and exposed many thousands more to aviation as mechanics, gunners, bombardiers and navigators. It seemed logical that those returning servicemen would want their own airplanes. After all, they were already trained, or could learn to fly on the GI Bill. What could prevent the greatest boom in aviation history?
Nobody knows for sure, but the best guess is that 50,000 general aviation airplanes were built in the second half of 1945 and in 1946. To put that number in perspective, you need to know that there are fewer than 200,000 registered general aviation airplanes in the U.S. today. And many of those airplanes on the current registry are derelicts that haven’t turned a propeller in many years.
By the end of 1946 the expected boom was over. The demand failed to show up. Many airplane manufacturers disappeared and the major companies, such as North American and Republic, that had invested in general aviation dropped out to concentrate on the military market. In 1945 and ’46 Cessna built more than 7,000 140s and 120s. By 1951 Cessna built only 551 airplanes in the entire year, and they were the industry leader then as now.
The really big boom in general aviation wasn’t the postwar years, but one that started in the 1970s. During this boom more than 10,000 airplanes per year were manufactured, building to a crescendo in 1979 when just short of 18,000 airplanes were delivered. Nobody in the industry or government predicted the onset of the boom, and it lasted long enough that no expert foretold the looming collapse that came in 1980. By the mid-80s the industry teetered on the brink of oblivion. Cessna, Beech, Learjet, Piper and Mooney were all purchased by large corporations as conditions made it virtually impossible for them to remain independent. Dozens of models went out of production, and manufacturers such as Aero Commander, Bellanca, Grumman American and others went out of the piston airplane building business.
The FAA’s crystal ball in the 1970s was no better than the manufacturers’ outlook. The official FAA forecast for the years 1979 to 1990 predicted unrestrained growth with the general aviation fleet growing from 186,000 airplanes to 310,800 by 1990. That was wrong by more than 110,000 airplanes. The FAA based much of the forecast growth on the introduction of new technology in general aviation that would make airplanes less costly to operate and easier to fly in all weather conditions. That didn’t happen by 1990, and is only now starting to become a reality in 2006.
For the past few years, a new version of the technology-driving-new-airplane-deliveries’ rosy forecast has been in play and it is based on development of new very light jets (VLJ) that are predicted to cost little more than a piston airplane, less than a turboprop, and will be so economical to fly that thousands will be used in a new on-demand air taxi service. The VLJ cost savings are predicted to come from new found fuel efficiencies in small jet engines and economies of scale through mass production. It is the extremely low cost that is forecast to create the air taxi boom. If you believe the most ardent VLJ proponents, it will be possible to charter a VLJ for less than a piston twin, such as a Baron or Navajo, which are the staples of the light end of the air taxi market today.
I have never believed that the VLJs can deliver the promised performance for the price. The initial predictions from Eclipse, for example, fell by the wayside years ago, and the current price is half again as much as the original. No VLJ exists yet, so it’s impossible to know what the actual costs of acquisition and operation will be until they enter production and start flying. But we can be sure it will cost more than forecast, because that’s the way aviation, and the rest of life, for that matter, operates.
The other myth is that VLJs will create an air taxi market where none exists now. That’s wrong at its foundation because there is, and has been for decades, an on-demand air charter industry. The air taxi business waxes and wanes along with the economy, but it is very well established. Every kind of airplane from light singles to Gulfstreams is available for charter, and business has been particularly good over the past several years as the economy has shown strong growth.
But proponents of VLJ air taxi say that jets will attract more customers than propeller airplanes, and that a “charter by the seat” system will cut costs further. Well, the public certainly favors jets over prop airplanes, but I’m not sure that attitude will transfer to a jet that’s smaller than most prop airplanes currently in the charter fleet. Will the typical air traveler really want to squeeze into a VLJ instead of a King Air 90, for example? The speed advantage of the VLJ is not significant over typical charter leg length, and it’s hard for me to believe that a new VLJ can be operated for anything close to the cost of a 10- or 15-year-old turboprop fitted out with new paint and interior.
The charter by the seat concept has been kicked around in years past, but nobody has been able to make it work. The idea is that somebody charters the airplane and others, acting independently, want to fly along from the same airports, or to and from airports along the original route. The rules forbid an air taxi from publishing a schedule because that moves the operation into a more strictly regulated environment, but some people say that random travelers will fill seats without knowing a schedule. I doubt it.
Much of the talk about a VLJ charter boom has come from people outside of or new to aviation. They look at our business and conclude that the people in it are stodgy, narrow minded has-beens who can’t recognize new technology when they see it. Usually I’m happy to have outside money poured into aviation. It’s good to recycle some of the gains from electronics or other high-growth industries into aviation. But this time the growth of a myth – the VLJ air taxi boom – has the potential to do aviation great harm.
The problem is that the FAA has adopted the VLJ boom myth as reality and is now using it to promote a reorganization of the air traffic control system, including the establishment of user fees. The FAA says, “Okay, aviation industry, you say thousands of new VLJs will be crowding the skies in the next few years, so we must get ready. We need a new ATC system to handle all of these airplanes and you, general aviation, are going to pay for it.” The airlines have joined with the FAA in lobbying for user fees with as much as $2 billion of the FAA’s costs transferred directly to general aviation in the form of user fees.
Until recently general aviation industry leaders have held their tongues as the business press and many others have promoted the VLJ boom myth as an established fact. General aviation is in a difficult position because if the established leaders speak out, they are labeled as nothing more than Luddites out to protect the status quo and their stake in it. Also, we all want growth and new technology in general aviation, so it’s not natural to discourage newcomers who are full of enthusiasm and optimism.
But by not knocking down the myth of a VLJ boom, general aviation has given the FAA a club to hit us over the head with. The FAA has accepted the forecast of a VLJ boom because it suits its own desire to move to a new, user paid ATC system. The truth is there will be growth in general aviation, particularly in turbine-powered airplanes, but it will be measured with only hundreds, not thousands, of new airplanes added to the fleet while old airplanes fall out the bottom, creating only a slow net growth that the current system can handle with no drastic overhaul.
New light jets and VLJs will certainly enter the market over the coming years, but they will simply be an alternative, not a revolution. The air taxi business will undoubtedly grow if the economy remains strong, but I can’t imagine a boom that will cripple the ATC system. All of aviation is evolutionary, not revolutionary. We build on what has come before, just as the new VLJs are based on the aerodynamics, structural and powerplant technology of the past several decades. Change is incremental in aviation because truly new, unproven technology is the domain of test pilots.
We can look back at examples of new categories of turbine airplanes that have succeeded for a measure. The Cessna Caravan has been a huge success by any definition and it pioneered a new category of airplane. But the Caravan has been in production for 21 years and fewer than 2,000 have been built. The TBM 700 (now TBM 850), Pilatus PC-12 and Piper Meridian are all successful single-engine turboprops but together account for about 200 new airplanes per year. The Citation CJ has been a success as a light single-pilot jet and about 600 have been built since their introduction in 1993. The idea that thousands of any new jet will be built in just a few years is unbelievable.
General aviation industry leaders have recently recognized the threat of the VLJ air taxi boom myth and have begun to speak out. Cessna chairman Jack Pelton, who is the current leader of the General Aviation Manufacturers Association, has made speeches calling the predicted boom a myth and beseeching the FAA not to jump headlong into a total reorganization based on that prediction. And Cessna is one of the companies building a new light jet, the Mustang. But Pelton knows that the Mustang, which he expects to be a success, is going to be built in the dozens per year, not the hundreds or thousands.
The FAA does need to look ahead and plan for the future, but the coming years will look more like today than a George Jetson world. The system of general aviation fuel taxes, airline ticket taxes and general tax fund contributions that has funded the FAA for decades is working, and can work in the future. The FAA must plan for reality, not a myth, and user fees on general aviation are not required to deal with reality.
Fuel Prices Hurting Though aviation fuel prices declined from their absolute peak reached following the hurricanes in the Gulf of Mexico last year, they, as with all petroleum fuels, have remained stubbornly high. Many have wondered if, or more likely when, fuel costs would start to crimp flying activity.
It’s impossible to know for sure how much fuel costs have hurt because there is no accurate and reliable measure of general aviation flying activity. The best estimates come from tracking fuel sales, and even that is imprecise because there is no comprehensive measure of general aviation fuel sales. But the people from Phillips 66 have noted avgas sales dropping, and Phillips is one of the leaders in aviation fuel sales. Phillips has not measured a decline in jet fuel deliveries, and in many areas of the country jet sales are up, but avgas sales were off at least five percent in the second half of 2005, and the decline is continuing.
When compared to the fixed costs of owning a piston airplane, such as insurance, maintenance, storage and investment expense, fuel costs, particularly for a single, are not the dominant factor. But fuel expenses can be contained by simply flying less. And that’s what is happening.
The people who run the Phillips aviation fuel business told me that avgas prices track almost exactly with the cost of 93 octane unleaded auto fuel. The components of both fuels exist in about the same percentage in each barrel of oil, and the refining processes are similar. Avgas costs more to make because the specification is tighter, there is lead involved, and it is made and transported in relatively small batches. Phillips is the only fuel company that ships some of its avgas in pipelines, but the majority it produces, and avgas from other companies, travels in dedicated trucks and barges. So, we can’t expect avgas prices to move down until premium auto fuel declines, and in recent weeks car gas is headed up, not down.
The people at Phillips forecast very little, if any, growth in avgas sales in the future, but expect jet fuel consumption to go up several percent each year. However, Phillips is committed to producing and delivering avgas indefinitely and to expanding its family of branded FBOs where avgas and jet, plus all other services, will be available.
Garmin Turns On XMIf you have had XM Weather in your airplane displayed on either Garmin or Avidyne equipment for at least six months, you probably will, or already have, had a disruption in service. It has to do with some kind of recognition code that XM needs to deliver the service.
When you establish XM service, the satellite sends down a signal to the specific serial number of your receiver, allowing it to decode the signal. As long as you pay your bill, the receiver should continue to operate without any further action.
But-I’m a little fuzzy on the technical details-the original software in the Garmin XM receiver, and the Heads Up receiver used in other installations such as with an Avidyne display, included the requirement for a refreshed authorization after about six months. What happens is that without this refresh signal, the receivers quit displaying the XM Weather.
It happened first to my EX 500 Avidyne display. I called, XM sent down a refresh signal and everything returned to normal. A few weeks later the same thing happened to my Garmin XM receiver.
Now Garmin has a fix for the problem, which is a software update that your radio shop can install in minutes without removing or changing any hardware. The new software applies to G1000 or GNS 530 or 430 installations with XM receivers. I haven’t heard of a software change yet from Avidyne and Heads Up, but I’m sure it’s coming. When your XM service does drop out it can be very puzzling because there is no warning or prediction of such an event in the operating manual. So, if your XM Weather quits working, call XM customer service first, or go online to their site, before you assume some hardware has failed. And if you have Garmin equipment, get to your radio shop for the new software.
