Figures released by the General Aviation Manufacturers Association (GAMA) show that worldwide aircraft shipment and billing figures are down for the first half of 2016.
Airplane shipments declined 4.5% to 970, while billings fell 11% from $10.4 billion to $9.3 billion.
Rotorcraft shipments also dropped 16.1%, from 467 during the same period a year ago to 392 in 2016. Billings for rotorcraft fell 32.5%, from $2.1 billion to $1.4 billion.
“In a challenging global climate, every segment of the fixed-wing and rotorcraft market showed declines for the first half of 2016,” GAMA President and CEO Pete Bunce said. “As we saw at AirVenture 2016, general aviation manufacturers are working hard to regain momentum by delivering innovative new products and technologies that enhance safety and provide substantial improvement in capability.
“Unfortunately, the U.S. Congress has not done its part to support aircraft manufacturers or maintenance, repair and overhaul companies through its collective failure to include reforms of the outdated and overly prescriptive certification processes in the recently passed FAA extension,” he noted. “As U.S. Senator Jerry Moran (R-Kansas) noted, excluding certification reform was ‘a sorely missed opportunity for Congress, where meaningful bipartisan accomplishments so often remain elusive.’ Additionally, U.S. Representative Peter DeFazio (D-Oregon), the Ranking Member of the House Transportation and Infrastructure Committee, said that overhauling the FAA’s certification processes ‘would have created jobs.’
“As these members of Congress and others recognize, general aviation manufacturers and MRO companies, along with their employees, deserve better. We hope to see greater commitment by policymakers around the globe to give manufacturers the regulatory environment they need to succeed and allow our industry to continue to move forward,” Bunce concluded.
In the latest figures from GAMA, piston airplane deliveries were down 4.5%, from 464 to 443. Turboprop shipments declined 4.9%, from 247 to 235.
Additionally, 292 business jet airplanes were shipped in the first half of 2016, a 4.3% dip from the 305 shipped during the same period last year.
Piston rotorcraft fell 10.1%, from 129 to 116, and turbine shipments were down 18.3%, from 338 in 2015 to 276 in the first six months of this year.
Well said gentlemen, most GAPs get it….otherwise, BE RICH or get off the planet! Better Wake up America, what’s next on the DEATH list…..we’re headed in the wrong direction because of one simple concept….GREED! At some point, the prolatarian class won’t make anything in this great county of ours, so NO ONE will have the jobs and buying power to purchase anything, or the freedom to enjoy it!
…Continued last – part 2 of 2:
The ‘Experimental’ ‘Industry’ has been equally infected …as for the all of those available ‘Kits’ out there today. Realistically, even a modest, two place, fixed gear/prop with a basic IFR panel (that by reg, one actually can’t utilize for it’s designed purposes) 140+ kt airplane most often sports (pun intended) a finished price of close to 100K …many others almost twice that! But don’t forget …ya still have to build (and maintain) it yourself!
The aircraft industry now looks at things differently; The ‘GA’ (BUSINESS) aircraft industry makes over $20 billion a year in revenue by selling 2,000 executive aircraft at an average price of $10 million each …in order to make $20 billion in sales selling (little)airplanes, even at $100,000 apiece, they would have to sell 200,000 small airplanes a year. That’s never going to happen …there simply are not 200,000 people who are interested in buying their own airplane each and every year …or have the extra $100,000 lying around to do so. So the numbers are woefully against the ‘rest of us’ …that is the reality.
We must all come to grips with the fact that ‘General Aviation’ is now solely ‘Business Aviation’ NOT the little guys flying around for personal or ‘recreational’ purposes in Cessnas & Cherokees. That is not what ‘General Aviation’ is anymore. The ‘Aircraft Industry’ sure knows this …and that’s why they made the (rational?) choice that it is not worth it.
Repeat: General Aviation is now ‘Business Aviation’ …Long Live The King!
And while I’m not so naive (or young and foolish) or unappreciative to not understand that is was (is?) the engine of capitalism that made “GENERAL” Aviation attainable to most of the masses in the first place, and ‘Business Aviation’ was indeed a (if not “The”) very large and essential part of ‘General Aviation’ which fueled that engine …unfortunately, it has become (painfully) obvious to me (and I suspect more than just a “vocal minority” of our “community”) that the US Aviation ‘Industry’, along with its publications and all of our ‘alphabet ‘Associations’, and dare I postulate, even the EAA, all who’ve been a welcomed part of my life during my almost 40 year love affair with Aviation, have morphed into what indeed it seems ‘Corporate America’ has equally mutated into …’Business’ entities whose SOLE purpose appears to be the pursuit of profit …SOLELY for its own sake, and the unlimited enrichment of their upper echelons.
…But I digress.
Well, so that’s the problem. And guess what? Now at least knowing what the problem is just maybe we can start looking for solutions. But the solution is not to just root for ‘Business Aviation’ …and bankroll their lobbying fights in rotten DC. And yes …as has just become overwhelmingly apparent with our last election fiasco, WDCorruption is a very real truth. Unfortunately, it is exactly that kind of lobbying of (our) ‘Special Interest’ groups that is/has been the problem.
And the little guy (privately) flying around in piston airplanes is all but extinct already. That’s why we hear the message all the time that what is good for ‘Business Aviation’ is good for the little guy . This has been a mantra at ‘Flying’ (magazine) publications for quite some time …even as the little guy aviator continues to wither away …while Bizav continues to grow and prosper.
I’m afraid these greedy times we’re a livin’ and the EXPONENTIALLY accelerating rate of expense, will only serve to hasten the time when the final nails are driven. We’re rapidly destroying ‘General (Recreational) Aviation’ in this country …making it solely a ‘Rich Mans Sport’.
And as to the reasons for its demise? Surely, if you’re (intellectually) honest with yourselves, (and you know who you are) you understand the point of this (lowly 2-cents-worth) comment. If not, then …no offense …uplifting, hopeful enthusiasm notwithstanding, but with none of the cold, clear logical pragmatism so necessary for one to be a successful ‘PIC’ …you’re ‘rowing down that famous long river in Egypt’ …or are of that myopic ‘mindset’ of those who have caused and /or are still actively involved in the death of General Aviation …are in fact one of the many active and willing participants in it …and, unfortunately, part of the problem …certainly NOT the solution.
We (as in ALL of us) have just witnessed the greatest transfer of wealth in the history of mankind in this country (no …this IS NOT “Class Warfare” talk here …just an honest, objective assessment of the data & facts) …and our beloved and nearly extinct ‘General Aviation’ has just simply been one of its many and most obvious casualties.
“Why” …the rapidly decreasing pilot population? …the rapidly downward spiral of total logged hours? …a Pilot shortage?? …sluggish sales factors?? …continuing decline in attendance at Oshkosh?
And now …a (continuing) trend towards decreasing BIZAV sales!! (Oh My!)
…very, very sad indeed.
Part 1 of 2:
…Sorry Mr. Beck, But Larry and Nick are spot-on. And …Cessna could indeed manufacture, and sell a new 172 for $125 -150K …and realize a ‘reasonable’ profit per unit., NOT a “loss of $125K”
“There’s no way to sugarcoat the fact that these numbers are not what we had wanted to see,” GAMA President and CEO Pete Bunce said. “Unfortunately, they reflect the instability of the used aircraft market coupled with complicating global economic and geopolitical factors.”
…and there’s just no way to “sugarcoat” my response to that/this hogwash;
So …the elite Business (Aviation) club is experiencing a bit of drop in membership (revenues) these days??
By forgetting its core roots and the re-inventing of itself into a ‘profit-solely-for-its-own-sake’ ‘business’ model, perhaps the ‘General-Aviation’ INDUSTRY is now finally beginning to feel the effects of its shortsightedness, in painting itself into the very limited little corner it’s only now beginning to realize it’s in?!?
It is mind-bogglingly appalling the manner in which this ‘Industry’, in its present incarnation, shamefully continues to perpetuate the illusion that it hasn’t (deliberately) mutated into something totally unrecognizable from how it was born and existed, for the better part of the last 100 years …now destined, by design and careful maintenance, to cater solely to an extremely small, ‘elite’, and most affluent segment of our society …a perfectly constructed, self-perpetuating, insulating ‘bubble’, what was once a great, vibrant, perpetually growth potentiated and mostly unique to the USA phenomena …’General Aviation’.
Is it deliberate ‘spin’, outright propaganda, or just plain ‘denial’?
Most of Europe and all of present day Asia have no (and really never had any) such thing as ‘General Aviation’ …solely because of the PROHIBITABLY EXPENSIVE costs. Their citizens have long been coming here to pursue that dream we’ve all taken for granted! (but even that may change …read: practically grind to a halt, now that the new draconian EASA Flight Crew licensing regs have kicked in) Active participation in our wonderful world of ‘Flight’ here in the USA has always been on the (relatively) expensive side, but up until recently remained the best (and only) place on the planet to do so.
But! …let’s take a hard look at what ‘we’ (US General Aviation) have allowed to happen:
… In 1979/80, the peak of GA aircraft production, almost 20,000 piston airplanes rolled off the assembly lines with a US population of about 200 million. The average price of an airplane was 2-3 times that of a new car.
…In 2013, with a population of just over 300 million people, about 500 pistons were produced/delivered each year …and the average prices are 2-3 times the (median) price of a (equally over-inflated) house!
First of all ‘General Aviation’ is doing just fine …never better in fact. That is if when you say “General Aviation” …you mean the 98 percent of GA which consist of ‘executive’ aircraft. Ninety eight (98) percent of the GA industry’s annual revenue now comes from Turbine aircraft (Bizjets and Turboprops)
According to GAMA Statistics; In 1978 there were over 14,000 piston singles produced and just over 2,600 twins, for a total dollar value of just over $1 billion in 1979 dollars …which is about $3.6 billion in today’s dollars.
Total ‘Turbine’ GA aircraft produced were 779 with a total value of $772 million in 1978 dollars …which is about $2.8 billion in today’s money.
So the ‘little guy‘ was THE major source of revenue for the GA industry as late as 1978 …not the business bigwigs . That says a lot about where we where and where we have come to. Of course back then the head of the company made maybe 10-12 times as much as the Joe on the shop floor …what is it today?
Let’s look at those numbers a little more closely; The average cost of that executive airplane (the turbine variety) was just under $1 million …about 3.5 million in today’s dollars. Today the average sticker price is $10+ million.
The average cost of a piston plane in 1978 was $58,000 (INCLUDING light to medium twins and all the high end singles) which is about $200,000 in today’s money If we could separate the twins from the singles we would find the average piston single price would be closer to $90,000 …in today’s dollars.
Now what really bears notice is the fact that those 30 some years ago, there were far less than 1,000 big spenders who could spend the equivalent of $3.5 million in today’s money for a Bizjet or Turboprop …but there were 17,000+ little guys who could afford to buy a piston single or even a light twin …over 2,600 twins. Who has gained and who has lost?
Well the ‘GA’ Industry is doing nicely. It has increased sales from $3 billion a year in today’s dollars to well over $20 billion.
The big spenders also don’t seem to be doing too badly. There’s now over 2,000 of them buying a new executive airplane every year (almost three times as many) …and paying more than three times as much on average for the airplane …a nearly tenfold increase in spending power by the big spenders.
Let’s just repeat that …A NEARLY TENFOLD INCREASE IN SPENDING POWER.
At the same time (light) piston airplanes, which made up more than 60 percent of ‘General Aviation’ …60 percent! …even as late as 1978, today make up just TWO lousy percent (2%) of sales by dollar. Want to buy a new airplane Joe? …can you write a check for $500,000?
What it all adds up to is that the rich have gotten much richer …while the middle class dream of airplane ownership is toast. It’s not surprising that most if not all of our Industry publications are funded almost entirely by big spending ‘Business Aviation’ …and continues to deliberately confuse things by lumping us ‘little’ aviators on life support in with the rest of ‘GA’.
Please!! …it is time for some “honesty!
Please forgive me, as I really don’t wish to sound sarcastic, but it’s just mind -boggling to a (simple minded?) guy like myself how casually, and with such cavalier so many ‘representatives’ of the Aviation Industry quote prices for production, the average ‘Light Sport’, or any other 2-4 place ‘Light Airplane’. What a perfectly reasonable price ($150-200K) to pay for a (new) ‘Light Sport’ airplane …or the $400+K for a “moderately tricked out Cessna 172″ …or the 1.2 mil!!?? for a SENECA, version 5 recently reviewed in AOPA Pilot, (another 45+ year old, basically unchanged airframe design) …I mean, what’s wrong with that …isn’t that just about right …why ain’t everybody buyin’ em?!?
How can such a sums for such airplanes ever be (reasonably) justified?? And we wonder why new pilot certification is half what it was just two decades ago?? Why (aircraft) rental rates have gotten beyond the reach of most would be Sunday Flyers?
What could possibly be causing this decline in our beloved activity?!? (‘Private/Recreational Aviation’)
In most all the ‘other’ industries that are a factor in every other facet of our lives (save for our uniquely corrupt Health-Care ‘Industry’) …one that bears mention is the financial industry. Every product we buy has over 30 percent of its price built in for finance overhead that it took to bring that product to market, on average …in some cases it is much higher …interest charges, brokerage fees , etc. Yet even with all that financial overhead, a lot of consumer products still deliver more for your inflation adjusted buck than they did 15 to 20 years ago. That is a fact. Cars bought today are far better value for the dollar, same with the lawn tractor, the big screen TV, the washing machine, etc.
And before you start ‘raving’ about the unique and ”excessive regulatory” environment that aircraft manufacturers have to endure …they were ALL operating under those basically unchanged set of rules way back in the 70-80’s as well …so what exactly changed??
The only thing today that costs five times as much as it did 30 years ago is a new airplane. Talk all you want about the cost of hangars, fuel, insurance, maintenance etc. …those things are a fact of life everywhere, but it is new and AFFORDABLE products that drive an industry. And unfortunately, the personal ‘Recreational Airplane’ industry is finished because the average price of a new 4 place piston airplane is half a million+ dollars …which less than 1.5% of the population could ever afford/justify.
That is strictly an ‘Industry’ issue. If the automotive industry wanted to build an airplane for $50,000, do you think they couldn’t? …sure they could And they would sell who knows how many thousands at that price.
Cessna, like Piper, Beechcfraft and others in the 50’s, 60’s & 70’s who once not only supported, but actually CREATED’ a market for ‘General Aviation’, by providing aircraft, not only for the affluent, but airplanes that the ‘Average-Joe’ could actually afford, now give us the $400,000+ venerable C172 and the $500,000+ Cherokee. Basic, single engine, 4 place, fixed gear, fixed prop, simple low HP ‘Light Airplanes’ …whose basic airframes have been around for over half a century and whose R & D, tooling and most all other initial development costs have long since been paid for many times over, decades ago. Essentially, (very) old airframe designs with a few tweaks, and upgraded to some modern avionics (which also SHOULD cost substantially less than their steam gauge, analog counterparts)
These manufacturers decided, long ago, that Corporate (Turbine) aircraft is “where the monies at” (and an extremely lucrative amount of money at that) And the LSA (‘Industry’) which was supposed to be GA’s “savior” has, it seems, quickly succumbed to the disease …behold the Cub Crafters Carbon Cub An even simpler TWO place, basic, fixed gear, fixed prop, low HP ‘LIGHT SPORT’ airplane with a basic avionics package for the bargain price of 200K!
This is what has been/is still primarily responsible for the demise of ‘General Aviation’ …as those of us who numbered among what was generally perceived to make up its largest segment during the 60’s, 70’s and into the early 90’s have been so fortunate to have been a part of.
….continued next;
Well said BMD….otherwise, BE RICH or get off the planet! Better Wake up America, what’s next on the DEATH list…..we’re headed in the wrong direction because of one simple concept….GREED! At some point, the prolatarian class won’t make anything in this great county of ours, so NO ONE will have the jobs and buying power to purchase anything, or the freedom to enjoy it!
OK; time to get serious! Are there ANY “capitalist’ in the room?
A Cessna sales rep at Airventure 2016 informed me the base price of a new 172 Skyhawk is $369K and that did not include the wheelpants or sales tax. Hmmm… no wonder new aircraft sales are in a death spiral.
I also would hate to guess how much it would cost to insure it for the full purchase price.
Also……. the plane does NOT come with an autopilot nor synthetic. Vision…..those are extra additional $.
Any Company will eliminate a product (at some point) — like this — where sales and profits aren’t there.
Well lets look at what a 172 cost in 1960, about 8 or 9 grand. How much was the average car then about
2 to 3 grand? so the average car cost now about 18 to 20 grand. Compare that to the 172 at to days cost
and it is about just under 4hundred grand. Well some thing is running up the cost. I am guessing 1/3rd is
government’s fist in scales of the regulation’s, 1/3rd is lawyers chasing every plane accident. The rest is my guess the plane manufactures trying to protect them selves against all possibly that could put them out of business. We all know that prices rise with time but some thing seams really out of whack, but is something is not fixed the whole thing is going to fail. That is general aviation.
It’s easy to blame others for this decline in shipments / billings. If GAMA is ONLY a statistical reporting Association, why do the manufacturers need them? That means there’s a lack of proactivity on their part. Quit reporting dismal numbers … start DOING something GAMA.
I am aware that GAMA took part in the FAR Part 23 rewrite over 7+ years BUT if they didn’t then work very hard to finish the job and only trusts the FAA to do it for them … what’s the point of all the nice words? The FAR Part 23 NPRM doesn’t look much like the ARC final report … WHY? Because they trusted the FAA to do it’s part and we all know what THAT means. The Administrator can give all the nice speeches he wants about “performance based standards” but we all know they move at the speed of frozen molasses and are more worried about protecting their bureaucracy than making far sighted changes to anything related to aviation. They need to focus on commercial aviation safety and operations and let business aviation and general aviation mostly manage itself. Sport Pilot proved that it is possible.
By comparison, AOPA and EAA had direct help from Sen Inhofe and Rep Graves, et al, to get the third class medical relief finally passed. Maybe it’s time for GAMA to find an ombudsman or two in Congress to take their goals on to do the same for the larger aircraft shipment issue by writing laws that FORCE the FAA to act proactively, in like manner. Don’t report on it … find some folks to help you, Pete.
Besides that sort of help … maybe GAMA ought to be telling the constituent companies that their products are … “To Darn Expensive.” Corrected for inflation, my ~$21,000 1975 C172 should not cost $400K. THAT is the problem. The manufacturers got GARA in 1994 and what did THAT do for the cost of an entry level Cessna Skyhawk? Why can’t a very cheap entry level airplane be built to replace SOME of the aging legacy aircraft that the FAA is so worried about? The Sporty’s “training” rehabbed C172 is a good example. I fly to enjoy flying … not to sit behind a panel full of computers that I can’t use, don’t need and can’t remember all the functions of flight to flight. I can do that with my laptop. The same thing goes for the high end machines. Companies make more money on them so they’re basically ignoring the low end of the market where pilot starts come from but as units sold go down, prices have to go up. That’s counterproductive.
Which came first … airplanes that are too expensive and pilot training that is both too expensive and/or onerous or shipment numbers that keep falling and active pilot counts that likewise keep falling.
The third class medical relief is a one-time gift horse, GAMA. Find a way to use the apparent FAA willingness to be flexible on installed equipment to bring the cost down and … THEY will come.
There is no reason a LSA airplane — reasonably equipped — should cost more than $100K. There is no reason a brand new C172, likewise equipped, should cost over $250K. Achieve THOSE numbers and your shipment stats improvements will follow.
At Airventure 2016, I looked at a light sport airplane that was very nice. I’m not interested in such light weight airplanes but they ARE the parakeet in the coal mine. The vendor didn’t even flinch when he said, $250K !! Are they serious?
Where is the Primary Aircraft Category in the FAR Part 23 re-write final report in the FAA NPRM? Likewise, I see an opportunity to improve the low end of the spectrum … raise the MGTOW of an LSA from 1320 pounds (600kg) to a nice round 2,000 pounds. A great low end airplane which has crashworthiness margins (and doesn’t require BRS’) with range and performance could be built if it weren’t against the ridiculous 1320 pound weight limit. There’d be pure driver’s license medical relief (not what we got), FAR Part 23 vs ASTM relief and if the price could be held down, they’d sell well if you could get a decent (heavier) LSA for a decent price.
In conclusion, all one has to do is attend Airventure to see that there IS interest in flying. People ARE spending money to rehab old legacy airplanes because they can’t afford OR justify a new one. Get the low end GA market vibrant again and the entire spectrum will grow. Fail to do that and all you’ll be reporting on — ultimately — is the sale of virtual reality drones carrying cameras.
Nice write-up Larry, but more “subjective” than objective?
Yes, there IS “interest” in flying – BUT, the limited and LOW demand, IS the problem , and frankly, many, like yourself, continuously state “cost” as the culprit! The REAILITY, is, like it or not, believe it or not, a changed society that we have today, for more immediate and obtainable alternative recreational activities, that incidently, are considerably less expensive as well?
I assume you’ve head the terms; cost/benefit or profit & loss statement?
The “satirical” cure?
1. Reduce all av-fuel cost to under $1.00 NOTE: Must prove annual income of LESS than $5,000!
2. Get an LSA pilot license – ONLY $995*
3. ” a Private Pilot License – ONLY $2,495*
4. Fee tie-downs (sorry – no T-Hangars yet) at ALL municipal or county “owned” GA airports!
5. Once a month FREE “pan-cake breakfasts” NOTE: ONLY available at government GA airports
6. Government Grants for LSA or Private Pilots license! NOTE: depending WHO’s in office?
7. Lifetime passes to Disney Land and World for ALL pilots not “medically”qualified!
7. Cessna will GIVE away FREE, a NEW loaded Skyhawk/172 to ANYONE over the age of 115 who still hold’s a 3rd class medical and has had a bi-annual flight review in the past year!
*a monthly “lottery” will be held in WASHINGTON (DC)- where else – to determine the winners?
Not sure I get your point Rod. I believe Larry pretty well nailed it. Except I disagree with him on one point – a new base Skyhawk ought to be about $125K, – not $250K! And a complete new glass panel OUGHT to be about the cost of 3 or 4 new high quality desktop computers – not $50K.
THAT would stir the “interest” you’re looking for.
Hi Nick; In simple terms; the (my) point is that a higher DEMAND would result in lower pricing possibly. I’m sure Cessna “could” sell a new 172 for $125K, BUT at a loss of $125K — doesn’t make for good business cent$, wouldn’t you agree?
Let’s not lose the focus as we spar….. Bottom line is that bureaucracy and litigation are the culprits. Third class Med reform and Dynons in 172s proves the FAA can change. But won’t ever do it on its own. GM or Ford could build that $125k 172, and mass produce it for probably a third of that. But no one can do it with the strangulation of regulation and litigation. That’s my point, and I think that’s Larry’s too.
My last nickel! ?
Hi Nick: Yes, I agree with you – but “economies of scale” which MIGHT bring down cost IF the DEMAND warranted, isn’t going to save “recreational GA”. I also agree further that regulation and ligation are “out of control”; BUT, in business, one has the choice to stay in that business OR opt out, given the potential (legal?)consequences. The REALITY, Nick, it’s simply about $$$ ! And that’s my 2 cents worth.