La970306
General Counsel
AOPA Legislative Action
before the
SENATE COMMERCE, SCIENCE AND TRANSPORTATION COMMITTEE
SUBCOMMITTEE ON CONSUMER AFFAIRS,
FOREIGN COMMERCE AND TOURISM
The Honorable John Ashcroft, Chairman
concerning
The General Aviation Revitalization Act of 1994
March 6, 1997
Mr. Chairman, my name is John Yodice, and I am General Counsel for AOPA Legislative Action.
AOPA Legislative Action enjoys the financial support of 340,000 dues paying members. Together with our affiliated organization, the Aircraft Owners and Pilots Association, we promote the interests of those who contribute to our economy by taking advantage of general aviation aircraft to fulfill their business and personal transportation needs. There are more than 650,000 general aviation pilots nationwide.
In the decade leading up to its passage in 1994, we were pleased to take a leading role in support of the General Aviation Revitalization Act. The Act, sponsored in the Senate by Senator Nancy Kassebaum, enacted a statute of repose that applies to the manufacturers of general aviation aircraft or parts for aircraft with nineteen or fewer seats. Manufacturers are no longer liable for civil claims beginning 18 years after the aircraft is manufactured or the part is installed.
Exceptions include cases of deliberate fraud or concealment of defect, accidents involving medical air evacuation flights, or cases brought on behalf of persons on the ground injured by an air crash.
AOPA is a consumer organization which represents the interests of the likely victims of accidents involving general aviation aircraft. Thus, we had a clear interest in maintaining an adequate and equitable compensation system.
Nevertheless, in survey after survey, product liability reform was unquestionably the number one concern of our members. Before Congress passed the Revitalization Act, AOPA members overwhelmingly believed that unreasonable product liability exposure has diminished the availability of affordable general aviation aircraft and parts and had aided in the downfall of the U.S. general aviation manufacturing industry.
The concern of our members was so great that ninety-three percent of AOPA members surveyed were willing to give up their theoretical right to sue an aircraft manufacturer for production or design defects in older aircraft to help reduce the industry's product liability burden. This staggering majority of our members also supported passage of a reasonable statute of repose for general aviation aircraft, which Congress obliged in 1994.
The result was a breath of new life for the general aviation industry and its customers.
Before passage of the Act, confidence among our members in the future of general aviation was remarkably low. As you can see from the chart attached to my testimony, a clear majority called themselves "pessimistic" over the future of general aviation. In 1992, the number of new pilot licenses issued by the FAA dropped to a 22-year low. From this group comes our future commercial and military pilots, so the concern extended beyond general aviation.
In the years leading up to the Act's adoption, optimism began to increase, which I attribute in part to AOPA's continuing work on this legislation as our number one priority. After enactment in August 1994, a majority of our members for the first time said they were optimistic over the future of general aviation, and that optimism continues to grow.
AOPA Member Survey: "Are you optimistic or pessimistic over the future of general aviation…?"
Their optimism is rooted in real progress. Since 1994, shipments of general aviation aircraft have increased steadily in all categories. Production of single-engine piston aircraft, the type most of our members use, is up, but so are multi-engine piston, turbine, and turbojets. The export sector has also experienced a healthy rebound. The Act has produced new factories and new jobs nationwide in record time.
Here's an example. In January, AOPA had the privilege of taking delivery of Cessna Aircraft's first 172 Skyhawk produced by its brand new plant in Independence, Kansas. We gave this aircraft, the "New 172," to the lucky winner of our sweepstakes. Cessna Aircraft was one of the aviation companies on the forefront of the development of flight, and it had produced the popular 172 for decades. In the years leading up to 1994, though, you'd have been hard-pressed to find a 172 that was less than 20 or 30 years old. The burden of defending against lawsuits, even those without merit, had made Cessna's production line draw to a near standstill. Now, less than three years after the passage of the General Aviation Revitalization Act, Cessna has a new plant and the firm is back in the business of producing the 172, as well as its higher-performance sister, the 182.
The statute of repose has aided the manufacturing industry by substantially increasing the difficulty of filing nuisance lawsuits against the major airframe manufacturers. They are the obvious "deep pockets" in most cases. Yet the law also preserved the balanced approach we as consumers insisted upon to ensure a remedy in cases where a defective part or component is actually to blame for an accident. Here's how.
As you may know, the average age of the general aviation fleet is around 28 years old. But there really is no such thing as a 28-year-old aircraft. The airframe might be that old, or even older. But the aircraft as a whole is actually a collection of newer parts regularly replaced throughout the useful life of the airframe. Unlike an automobile, which tends to wear out entirely after ten or so years beyond the point of cost-effective repair, older aircraft are really an "old" collection of "new" components attached to an original airframe with an indefinite useful life.
The Revitalization Act ensures that consumers have a redress for defective components by providing that the statute of repose clock begins to run anew on each individual part whenever it is replaced or installed. The airframe manufacturer of an older aircraft is protected by the statute of repose, and so is the manufacturer of those very few parts or components which happen to last 18 years or longer. But our members continue to have a remedy in cases where a more recently installed part proves defective.
Product liability was a major reason for the lack of parts for the aging general aviation fleet. I'm aware of one case before 1994 where a Piper Saratoga - a typical six seat aircraft - sat idle on the ramp for nine months because it was not possible to secure a simple replacement actuator for the landing gear.
Furthermore, product liability concerns once stymied research and development. General aviation manufacturers, and their civil and military customers, were relying on ancient technology. In 1988, one manufacturer scrapped its development of an electronic ignition system for piston aircraft engines, which have been used in automobiles for 30 years. The sole reason the company ended the program was the liability risk. Today, that system is entering the market. Research and development, both private and in partnership with government, will lead to further leaps in the revitalization of the general aviation sector of the economy.
Never before in history has a consumer group been so willing to help an industry by delicately balancing their right to sue a manufacturer with relief for the industry to produce new products and support present products. The consensus forged between the manufacturers of airframes, engines and parts and their customers was essential to the success of the General Aviation Revitalization Act. We are proud to have been a part of it, and now we look forward to the future of general aviation.
Of course, none of this would have been possible without the leadership and foresight of the many members of Congress who joined the general aviation industry in its struggle to pass this historic legislation. I'd like to take this opportunity to extend my thanks today.
Mr. Chairman, that concludes my comments. I would be happy to answer any questions.
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