The perfect storm

At this year’s AOPA Aviation Summit, EAA and AOPA jointly announced they will pursue driver’s license medical privileges for pilots wishing to operate GA airplanes with less than 180 horsepower with only two persons on board in day VFR. Combined with ongoing events in the LSA industry, it seems a “perfect storm” is brewing.

The storm includes: Three years of sluggish sales; the threat of even more reduced sales following the EAA/AOPA announcement; and the FAA’s intensified auditing of companies and the agency’s virtual shutdown of Criquet’s Storch.

At the end of August, the FAA sent notices to field offices nationwide with instructions not to issue any new SLSA airworthiness certificates for the Criquet Storch, effectively halting business of Criquet Aviation USA and its importer/assembler, U-Fly-It. FAA did not ground the three Storch aircraft already flying in the USA, but referred to “possible safety of flight issues” which could stop all flying of the American Storches.

The FAA has also conducted what officials call “prototype audits” of CubCrafters and Tecnam, including Tecnam’s U.S. and Italian operations. In the future FAA officials say they plan to visit many more operations, in and outside the USA.

Meanwhile, many LSA sellers expect sales to slow further as some pilots elect to keep their medicals until the EAA/AOPA drivers license medical proposal makes it way through the rulemaking process. Any new regulation is at least a year or two away and perhaps as many as five years — and it may never be approved, despite a mighty push by two large membership organizations combining their clout. Indeed, five previous tries failed.

Even with the threat of this perfect storm, good news always seems to bubble to the surface. Companies organized specifically to build SLSA may be less challenged by the perfect storm. I think of ICON Aircraft and its solid fundraising — the start-up company recently raised $25 million, even in this difficult economy. I also think of Terrafugia and its niche LSA, known by many as “the flying car.” Some current manufacturers are well equipped to meet all standards and regulations. They are also battle-hardened companies likely to survive the present economic downturn. In fact, just yesterday I heard from a trusted friend that a successful team is reorganizing to introduce a new SLSA (more on that when I’m at liberty).

Conversely, a company organized to sell 51% kits or ultralights may not have the structure needed to meet SLSA demands. The business models are distinctly different.

More good news: LSAs have much more to offer than simply being aircraft that do not require a medical to fly. Buyers can examine more than 120 diverse choices of flying machines with excellent performance and handling, high-tech instrument panels, modern safety gear, large cabins, high useful loads, low operation costs, low noise, and more. In fuel efficiency alone — plus mogas options — LSA can still compete handily.

A 1971 Cessna 172 that could perhaps be flown with a driver’s license medical may cost less but it’s, well… old, and probably worn. Supplies of those older GA aircraft won’t last forever; don’t forget the two-decade period when single-engine models were barely produced. A new 172 costs more than twice the most expensive SLSA.

So while I’m concerned, I’m not truly worried. My prediction is the LSA industry will survive its perfect storm.

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