Annual Report of the Aircraft Owners and Pilots Association

Joining forces for the good of all

Reflect back with me for a moment on my first year as AOPA president. The Gulf war started a tumultuous 1991 by showing off the latest technology and demonstrating aviation's military role. In addition, the war sent airline revenues spiraling downward as passengers stayed home. Student starts, a measure of the vitality of general aviation, came to a virtual halt. The economy followed a similar course and perhaps was the final straw that broke Piper Aircraft's back, sending it into bankruptcy. Another of the Big Three, Cessna Aircraft was put up for sale. The Piper Malibu, one of the industry's most promising new designs, fell under suspicion following a series of accidents. Deliveries of general aviation aircraft sunk to a record low; billings also were down. Meanwhile, general aviation's accident rate continued to improve.

At year-end, the two top aviation positions in the nation were vacant. Secretary of Transportation Samuel K. Skinner was promoted to White House chief of staff and Federal Aviation Administrator James B. Busey moved up to deputy secretary of transportation. A newcomer to aviation, Andrew H. Card, Jr., was recently sworn in as DOT secretary. At press time, retired U.S. Air Force, General Thomas C. Richards had been nominated as FAA administrator and was expected to be confirmed.

I'm pleased to report that through all this turmoil, your association maintained its position of strong leadership while forging new alliances with other aviation organizations, to face the challenges of the 1990s. Like all smart organizations adapting to this fast-changing decade, we've trimmed expenses and learned when and where to use office automation to best serve you — our members, customers, and shareholders.

The economic slowdown that began in 1991 affected AOPA in many ways. Besides the potential for decreasing membership and lowering revenue, it brought about new challenges at the state and local levels. Early in 1991, the Government and Technical Affairs Division staff knew states would be facing decreasing federal subsidies. To head off any proposals that would directly increase the cost of flying to the membership, the staff began a challenging campaign on tax and spending legislation issues. AOPA's regional representatives and the office of congressional and state legislative affairs met the challenges head-on and successfully defeated a number of critical tax proposals.

Another major issue of the year was the auxiliary flight service station (XFSS) initiative. With the help of influential members of Congress, AOPA secured passage of legislation barring the FAA from closing any existing FSSs until nine months after it issued its list of proposed XFSSs. I'm pleased that your association has been able to extract 46 sites from the FAA, and we haven't given up on this issue yet. For a Complete rundown of all the issues handled in 1991 by the legislative affairs staff, both at the federal and state levels, see "Legislative Report: Capitol Dispatch" and "States' Rites" (February Pilot).

An important job in 1991 was working with the FAA in its efforts to revamp the airman medical form. The FAA originally was proposing to extensively increase the amount of medical information required to be reported by the pilot. AOPA fought hard and convinced the agency to change its thinking. The FAA also was proposing that the medical include proctology, pelvic, and breast examinations. These and other proposals would have drastically increased the paperwork factor and driven the cost of a simple third-class medical to hundreds of dollars. AOPA fought those proposals and won again. The staff also was active in encouraging the FAA to approve medications that previously would have disqualified the user from receiving a medical certificate. AOPA staff members can speak authoritatively on such medical subjects because of the participation of the Medical Advisory Board. The voluntary board of specialists advising AOPA was enlarged in 1991 to include a cardiologist, psychiatrist/pharmacologist, and aviation medicine specialist.

On another front in 1991, AOPA continued to strongly advocate that military bases targeted for closure be converted to civil aviation facilities. Staff members frequently provided comments to the National Base Closures and Realignment Commission on the potential benefits of converting these bases and continued to work closely with local officials concerned with the transitions. Efforts along those same lines continue this year.

Also preparing for 1992, when airport security will be an important issue, the GTA staff in 1991 participated in the Airport Security Advisory Committee. The committee recommends to the FAA and DOT ways to reduce the negative impacts of airport security on operations while maintaining required levels of security.

AOPA's work with the National Base Closures and Realignment Commission and the Airport Security Advisory Committee represents just a couple of the dozens of committees, advisory boards, and advocacy councils that AOPA staff members and regional representatives serve on. We have an impact on these committees because the FAA now undertakes "regulation by negotiation." Rather than rule by fiat, a more cooperative public debate between users and regulators smoothes the regulatory process and builds acceptance before a bill or regulation is ever introduced or announced. This approach has been effective on many issues, particularly on airspace matters. Instead of just stamping out cookie-cutter terminal control areas, the FAA now seeks input from the local airspace users. AOPA is the organizer of many of the local user groups that participate in the airspace reviews.

AOPA participates on some 55 working groups and 15 subcommittees addressing subjects from future air navigation systems to aircraft certification.

Hardly a day goes by that somewhere an AOPA staffer or regional representative isn't testifying or meeting with some other organization to advance the causes of general aviation. Such participation is a tremendous commitment of personnel and resources. Other organizations attend these sessions on an erratic basis, but AOPA is there consistently. I believe it imperative that AOPA be represented in all areas where our members have an interest.

Despite the recession, membership in AOPA remained above the 300,000 level at 301,000, against 1990's record 302,000 members, and renewals remained strong. AOPA attracted nearly 41,000 new members to the fold in 1991, despite the marginal growth in the new-student pilot population.

Without a doubt, 1991 financially was one of our best years ever — this despite a recession and a decreasing pilot population. Our revenues in 1991 grew by 8.7 percent to $24.7 million, and we ended the year with a net surplus of $986,000.

We managed these impressive financial gains by carefully controlling costs while increasing income from advertising and AOPA Partner Services. The timing was right, so we negotiated with the Resolution Trust Corporation and bought out, at a discount, the mortgage on our headquarters building in Frederick. That alone will save the association almost $1 million in interest payments. These steps allowed us to spend an equivalent of $78.07 per member on services while maintaining the annual dues at just $39.

Of course, none of this would be possible without the dedicated and professional staff here at AOPA. There is no replacement for good old human ingenuity, and let me assure you, there is no shortage of that at AOPA. It is through the employees' individual efficiencies that AOPA is able to generate more and more income and offer each of you more and more benefits and better representation without increasing your dues.

That ingenuity shows up in a number of ways. One is in the AOPA Partner Services we offer. These services, which include the AOPA credit cards, rental car contracts, telephone discounts, and others, return a profit to the association.

Member dues contribute about 43 percent of the AOPA budget. Without the Partner Services, advertising, and other income programs, AOPA would not be able to offer many of the benefits you have come to expect. When announcements of Partner Services show up in your mailbox, remember that each has been carefully screened by the AOPA staff. No member dues are used for the mailings or for any Partner Service programs; the costs are borne entirely by the product or service. If you choose to use the services, you will be receiving a good value and helping AOPA provide additional benefits without raising member dues.

AOPA's marketing staff continually scouts ways to bring you new and valuable Partner Services. One of the most important of the services is the AOPA credit card program in association with MBNA America. Seventy-five thousand AOPA members use these cards, and every purchase they make earns income for the association. Because of the popularity of the cards, AOPA was able to negotiate an exclusive new benefit for 1991 — $5,000 of flight insurance. The accidental death and dismemberment insurance covers you whether flying as pilot, passenger, or crewmember. Just use your card at least once every other month for any purchase, and you're covered. Another valuable benefit is the MasterPurchase extended warranty program for those with an AOPA Gold Card. The benefit protects purchases against mishap or misfortune for the first 90 days and doubles the manufacturer's warranty for up to an additional year. The extended warranty can be particularly valuable when purchasing expensive avionics.

In another Partner Services enhancement, AOPA revised its auto rental discount program in 1991 to include the big three: Avis, Hertz, and Budget. This provides a wider range of prices and availability to members who choose to rent cars through the program.

The AOPA Legal Services Plan is yet another Partner Service. The plan covers attorney fees in full for the initial stages of an FAA enforcement action and covers 80 percent of fees in the appeal stage. In 1991, AOPA upgraded the plan to include a free half-hour consultation with an attorney on any aviation matter, not restricted to enforcement actions. More than 30,000 pilots have taken advantage of the plan, and with the basic fee for private pilots only $22, this new benefit makes participation even more desirable.

Another improved benefit is a $300 increase in basic coverage under the Flight Plus insurance plan included with membership. The plan now provides $1,000 in coverage for the first four years of membership and then increases $100 for every year of continuous membership. Members may opt to purchase up to $100,000 of insurance.

Also in 1991, U.S. Sprint began offering substantial long-distance telephone discounts to AOPA members. Another new Partner Service is a guaranteed rate annuity "shopping service" provided by Independent Advantage, an organization that specializes in selecting high-quality annuity products from top-rated, financially sound insurance companies.

In an effort to directly reduce costs to members, AOPA introduced a new 15-percent discount on NOS charts. The discount has proven popular; chart sales have increased dramatically.

Meanwhile, AOPA's Oklahoma City staff continues to provide quality title search and escrow services to assist aircraft buyers.

All of the services offered by AOPA are outlined in a new "Member Services Guidebook" that was mailed with the December issue of AOPA Pilot and are listed on the "Guide to AOPA Optional Benefits Programs" page in the magazine.

Though AOPA is the leader in general aviation matters before the federal government, no longer can we afford to go it alone. We have been and will continue to build coalitions with other organizations — even the FAA — to advance the needs of general aviation. Our world is increasingly interactive, interrelated, and in need of new flexibility, not old demands. Without diminishing AOPA's role as the defender of the fair rights of those who fly, I and the entire staff have reached out to other aviation groups and interests to seek new solutions to old problems.

We're not just listening to other organizations and the FAA, we're listening to you. More than ever, we're doing telephone and mail surveys and using other methods to gain the input of the members before we make the policy decisions that end up before the FAA. As a result of member concerns about product liability, we in 1991 began planning a new strategy to attack this cancer that is destroying the aircraft manufacturing industry.

You'll see us implementing that strategy in 1992.

Because members so enthusiastically embraced loran navigation and now GPS satellite navigation, AOPA is urging the FAA to forge ahead with the development of loran approaches and satellite navigation procedures; even air traffic communications via satellite is under consideration.

We have reached a turning point. In cooperation with others, we can reach new heights never before achievable. With all of aviation working together, we can pick up the struggling aviation industry and leapfrog it over outdated certification regulations. Together, we can work with the military to free under-used special-use airspace. We can make the U.S. Customs Service understand the international operational needs of general aviation. We can convince the FAA of our concerns about the airport security issue. Together with state and local pilot organizations, we can preserve local airports. AOPA cannot fight local battles alone. Local airport support groups are needed. Then AOPA can contribute its government, congressional, and public relations resources and technical expertise.

Stay with us throughout the 1990s as we forge new alliances to maintain this great American resource of general aviation.

Sincerely,

Phil Boyer
President

AOPA Pilot enjoyed a record year in 1991. Advertising revenues grew despite a terrible year for the magazine industry as a whole and the continuing soft market in general aviation.

New features help members hold the line on operating costs. Pilot has begun to focus more editorial coverage on used aircraft, which dominate the sales market. More emphasis also has been placed on flying techniques, weather avoidance, and accident analysis. Other features detail exciting places to fly and highlight the latest "black boxes" that can add utility and safety to flying.

A new element is "Turbine Pilot," a special section bound into regular Pilot issues four times a year. "Turbine Pilot" goes to members with advanced ratings and certificates — those who are most likely to be interested in reading about turbine aircraft and operations. However, any member who wishes to receive "Turbine Pilot" can request it.

The Publications Division staff is working on the 1993 edition of AOPA's Aviation USA. The 1992 edition was sent beginning in January to members who requested it on their renewal forms. The 900-page 1992 book is packed with airport and flight operation information.

Last October, colorful New Orleans served as the kickoff for AOPA Expo '91, the new name for the AOPA convention. Registrants from 15 different countries attended the event. The attendees visited exhibits at the New Orleans Convention Center and looked over aircraft at Lakefront Airport. Nine other aviation groups held meetings in conjunction with the event. AOPA Expo '92 is scheduled for October 11 through 13 in Las Vegas.

AOPA members often take advantage of one of the association's most important assets: the knowledgeable staff. Help with myriad aviation problems is only a toll-free telephone call away. Aviation specialists in the Member Services Division answer hundreds of calls a day from AOPA members. Sometimes it's to change an address, another time it might be a medical question or a concern about an airport. All in all, the division handled more than 214,000 member contacts in 1991, 31 percent more than in 1990, without increasing staff size, an excellent example of the increasing productivity of AOPA's staff. The ever greater number of calls demanded an increase in the number of toll-free lines to 12.

None of AOPA's divisions works in a vacuum. Each coordinates its efforts with others in the building. For example, throughout 1991, AOPA's Member Services Division worked closely with the Government and Technical Affairs Division and the legal department on many issues. Most notable was an effort to override what proved to be unnecessary or overburdening airworthiness directives. The FAA proposed expensive recurring wing spar inspections of certain models of Beech Bonanzas, but careful analysis by AOPA showed only a one-time inspection was necessary; the FAA agreed and modified the AD. As a result, the aircraft owners will save $500 per aircraft for every 500 hours of operation. Likewise, an AD affecting Aero Commander spars proved overreaching. AOPA was influential in convincing the FAA to rescind the longstanding AD on certain Hartzell propellers.

AOPA's biggest effort along these lines in 1991 was on the Piper Malibu. Early in the year, the FAA issued severe flight restrictions for the entire fleet. AOPA worked with user groups to convince the agency to modify the AD, permitting the aircraft to fly in IFR but not in areas of icing or turbulence. Putting technology to work once again, the association regularly faxed bulletins to the Malibu owners detailing the ongoing dialogue with the FAA. Since then, a special certification review team and the National Transportation Safety Board have determined the aircraft is safe.

One of the keys to AOPA's successes on all fronts is its ability to communicate not only with the membership, but also with the public at large. In order to assure fair treatment of general aviation by the media, AOPA's Communications Division works daily with journalists from around the country. In 1991, the division distributed more than 100 press releases.

AOPA's most visible means of educating the media about general aviation is our ongoing "Learn to Fly, America!" project in which an AOPA flight instructor takes television reporters and video crews up for a first flight lesson. The effort has resulted in 143 broadcasts, reaching more than 61 million viewers. In 1992, we will be expanding on the "Learn to Fly, America!" theme with other targeted outreach programs.

Reaching out to members, the staff also began placing monthly columns in 12 regional aviation publications to inform members of AOPA's work in that region. By publishing AOPA's news releases as well, the regional publications play an important part in keeping members informed.

Believing that the way to reach future pilots is through the schools, AOPA in 1991 launched two new initiatives. Following the format of AOPA's other successful "Fly-A..." programs, the association last year kicked off the "Fly- A-Teacher" program at a press conference announcing the APPLE (America's Pilots Participating in Local Education) project. Also at the event, Acting FAA Administrator Barry Harris and AOPA President Phil Boyer signed a formal Aviation Education Partnership agreement to coordinate the educational efforts of both organizations.

One of the biggest issues facing general aviation in 1991 was the future availability of avgas. AOPA's congressional affairs and technical analysis offices were instrumental in securing a favorable interpretation of the Clean Air Act ban on lead-fuel-burning engines. An unfavorable ruling could have halted the production of aircraft engines that require leaded fuel. But AOPA didn't stop with that victory. Instead, recognizing the need for the industry to address the environmental issues facing us today, AOPA brought industry and government experts together at a workshop in July to study realistic alternatives. The association also successfully secured congressional and federal support for research into alternative fuels for the future.