Optimistic signs for 2009

December 31, 2008

Cirrus SR22Think how your 401k balance here in early 2009 might be different if at this point last year you knew what you know now. But as investor billionaire Warren Buffett once said, “In the business world, the rearview mirror is always clearer than the windshield.”

So, what might the rearview mirror say about 2009? “It was a challenging year”? No doubt it will be, but as in every case where there is a challenge, some will find an opportunity. For those with cash or good credit, 2009 may well be the year they become an aircraft owner or that they upgrade to a newer or higher performance airplane. There are certainly buys to be had in the market right now and probably for a while longer as the aircraft market is flooded with inventory. At the same time, insurance premiums are also softening, meaning lower costs for owners. Finance charges, again for those with good credit, are on the decline.

Avgas prices are falling—down to about $4.45 a gallon at the end of 2008 from the summer’s high of as much as $8 a gallon in some markets. Fuel surcharges, the 2008 phenomena once routinely tacked onto everything from airline tickets and aircraft rental rates to package delivery charges, are fading away as oil prices plummet. One flight training company, ATP, recently announced it was going to rebate some fuel surcharges to its students and said it would lower costs to incoming students because of declining fuel costs.

So, perhaps 2009 will turn out to be a “fly more” kind of year. Imagine if all pilots committed to spending more flight time staying proficient while also taking advantage of educational materials, such as the AOPA Air Safety Foundation’s cadre of online courses, to improve their skills. Undoubtedly the GA safety record would improve, and we might see even lower costs as a result.

A fly-more campaign might also reverse what is projected to be a continuing decline in hours flown. A recent report suggests that business flight activity was down 25 percent in November 2008 compared to a year earlier with declines forecast to continue in the new year.

Meanwhile, Gulfstream Aerospace has pledged to move forward with its expansion plans in Savannah, Ga. One analyst predicted the company will weather the short-term turndown well and will be positioned to capture market share at the next upturn.

While Gulfstream manufactures globe-girdling business jets, piston aircraft manufacturer Cirrus Design’s new CEO in late December reported that it was continuing to receive orders and that its customers were able to get financing. The company nonetheless, like most every other aircraft manufacturer, has reduced staff and production rates in an attempt to weather the turmoil.

With the introduction of its Cirrus Perspective panel in 2008, Cirrus started a trend that will undoubtedly continue in 2009—the infusion of synthetic and enhanced vision into GA cockpits. Several manufacturers followed suit in 2008 and more will do so in 2009, perhaps another boon to safety in the future.

Diamond Aircraft is expected to start a trend of its own in 2009 with the first deliveries of the Diamond D-Jet set for mid-year—the first of the single-engine jets to come to market. Up-market a ways, Honda Aircraft is scheduled to fly its first production prototype HondaJet twinjet in the summer of 2009.

Sooner than that, though, we should see the first customer deliveries of the Embraer Phenom 100, which received Brazilian and FAA certification in December 2008.

Less certain is the future of Eclipse Aviation, a pioneer in the very light jet market that declared bankruptcy in December. An auction is planned for Jan. 14 at which the future of the company may be determined.

Not all of the development is at the upper end of the market. The first weeks of 2009 may well see the first flight of Terrafugia Transition, the first new “roadable airplane” to fly in decades. The Transition is not really a flying car, but more of an airplane that is street-legal. Also in the light sport aircraft market, the attention-getting amphibious Icon Aircraft A5 will make an even bigger splash in 2009 as more prototypes fly. Together, perhaps they will light a spark under the LSA movement that has struggled to find new markets. Meanwhile, first deliveries of the Cessna SkyCatcher LSA, designed to appeal to more traditional buyers and flight schools, are planned for the second half of 2009.

The environment and the future of fuels will undoubtedly be an issue in 2009. Concerns about the impact of aviation exhaust will demand attention. Perhaps this year we will begin to see viable alternatives to leaded avgas emerge. Some of the new fuels may require higher compression engines be refit with electronic engine controls to manage detonation. One way or another, expect such systems—full authority digital engine controls (FADEC), to become more commonplace in GA—both for turbine and piston engines. They reduce pilot workload and fuel consumption while potentially increasing engine life. While turbine fuel is not as endangered as avgas, the airlines in particular are looking at biofuels as a way of reducing their environmental impact and perhaps lowering costs. In late December, Air New Zealand conducted a flight with one engine on one of its Boeing 747-400s running on a biofuel. The fuel was a 50:50 mixture of Jet A and a biofuel made from the weed jatropha.

So, while based on the recent performance of 2008, it might be easy to write off 2009 as a year of doom and gloom, there are plenty of bright spots for the months ahead. One of the best things each of us can do to bolster GA is to share the experience of flight with the many who have expressed an interest but not yet taken their first steps. For that we have created the Let’s Go Flying! Web site, where pilot prospects can learn more about this wonder that inspires us all. And to further fuel your passion, don’t forget to follow along with our 2009 Let’s Go Flying sweepstakes project. Come early 2010 we may well be delivering the pristine 2005 Cirrus SR22 to your ramp, at which point no one will care about your credit score.