While shipments down, GA officials confident industry ready for rebound
In announcing another year of declining aircraft shipments in 2011, general aviation manufacturing officials Feb. 22 made it clear that the industry’s stagnant performance won’t turn around without supportive policies from the federal government. Pete Bunce, president and CEO of the General Aviation Manufacturers Association, said a robust GA industry—which already registers a positive trade balance—can help President Barack Obama achieve his goal of doubling U.S. exports in five years, but the fragile industry needs onerous regulations, the threat of user fees, and penalizing tax policies removed from discussion in Washington.
Bunce made his comments at the National Press Club at GAMA’s annual industry briefing that details the previous year’s GA shipments and billings. GAMA Chairwoman Caroline Daniels, chairwoman and CEO of Aircraft Technical Publishers, provided the detailed delivery report, noting that while all segments were down in 2011, the declines were all in single digits. The performance is a continuing reflection of the economic downturn of 2008, she said. While 2011 had previously been predicted to be a year of recovery, the resurgence did not occur. However, the small declines in deliveries compared to 2010 shows the industry is showing signs that it is ready for a sustained recovery.
GAMA members shipped 860 piston-powered airplanes in 2011, a 1.5 percent decline compared to the 873 delivered in 2010. Turboprop deliveries declined 2.4 percent to 324. Business jet deliveries were off 6.3 percent to 681. Daniels noted that not all the news in the business jet segment was negative. While light jet deliveries are down some 70 percent since 2008 and medium jets are down 47 percent, deliveries of large jets climbed 4 percent. She said that financing for light and medium jets is difficult to find while large jets are more frequently self-financed by the buyers.
The delivery figures do not include fourth quarter shipments for 2010 or 2011 from Hawker Beechcraft, which has elected to wait until March 31 to announce its fourth quarter 2011 deliveries as part of its filings with the Securities and Exchange Commission. While Hawker Beechcraft is not publicly traded, its president, Bill Boisture, said the company does have some publicly funded debt and therefore must follow certain SEC regulations.
In noting the tenth anniversary of GAMA accepting members from outside the United States, Daniels said U.S. manufacturers generated $4.3 billion in new aircraft export revenue, with exports representing more than 50 percent of U.S. billings; overall, GAMA member billings grew by 0.4 percent to $19.1 billion, compared to 2010. In a sign that the U.S. economy is faring better than some other regions, North American share of deliveries was up across all categories, while it was down across all categories in Europe, Latin America, and the Middle East/Africa region. In the Asia/Pacific region, shares of jets and piston products increased 2 percent each.
Bunce said continuation of favorable bonus depreciation policies is important to spurring GA growth and that it was especially important that business aviation not be singled out for less favorable treatment than other industries, something that Obama has recommended in the past. Also important is facilitating the certification of new aircraft models, given that it is unlikely the FAA is going to get additional resources for that task. The agency must work with the industry to come up with creative solutions that don’t increase the already expensive certification process. Bunce predicted that the much-talked-about $100 fee per turbine flight proposed in Obama’s 2013 budget is not likely to be taken seriously by Congress this year, but it is something to be watched.
Finally, in a separate interview with AOPA Live, Bunce urged NASA to focus more resources on aeronautics, helping manufacturers to reduce costs and improve efficiencies.
