NAFA Administrator posted an article2021 Trends, Trials, Triumphs - BizAv Trade Associations Working for You see more
NAFA member and Marketing Director of The National Aircraft Finance Association (NAFA), Tracey Cheek, shares the latest trends in general and business aviation.
The National Aircraft Finance Association (NAFA) recently hosted a webinar with industry leaders: Ed Bolen, President and CEO of the National Business Aviation Association (NBAA); Pete Bunce, President and CEO of the General Aviation Manufacturers Association (GAMA); Tim Obitts, President and CEO of the National Air Transportation Association (NATA); and Mark Baker, President of Aircraft Owners and Pilots Association (AOPA); moderated by Business Aviation Advisor Publisher Gil Wolin to discuss the changing state of the aviation industry.
What are some trends – both positive and negative – that business aircraft owners and users can expect to see?
- General and business aviation use increased dramatically since April, as have first-time jet card buyers and charterers. Initially, 90% of these flights were personal, while only 10% were for business. However, as the year progressed, while the percentage of flight activity for business increased, travel remains challenged because there isn’t a lot of business to be done. According to NBAA, larger international jet traffic is slow. Fortunately, these flight departments have not shut down or sold off their fleet. They are still using their aircraft for intracompany flying between and among remote facilities, while preparing to gear up to resume travel to other cities when it’s safer to do so.
- Health and safety continue to be drivers for increased charter. Ed Bolen cited a recent McKinsey study indicating that travelers flying commercially encountered more than 780 “touchpoints” with others, while those flying business aircraft had fewer than two dozen. For that reason alone most of these new business aviation flyers already say they have no intention of returning to commercial travel. This bodes well for current owners. If your aircraft is available for charter, these new entrants will book more charter hours, helping to maintain or even increase your aircraft’s asset value. History indicates that many of those new charter users will eventually buy their own aircraft, thus bolstering the resale market.
- Baker indicated that flight schools are reporting a dramatic increase in students, from both new flyers and those inactive pilots seeking a refresher. AOPA’s Flying Club initiative, launched in 2016, has to date created 161 clubs, serving more than 2,400 pilots nationwide.
- As the pandemic continues, an interesting new phenomenon has emerged: people are leaving cities for remote suburbs. While they’ve learned to work remotely, they still need mobility. Bunce indicated that the network of GA airports makes that possible, as people are using small aircraft to commute from larger city airports to their new homes.
What are your trade associations doing to support you, and business aviation in general?
- Illegal charter continues to be an issue in the industry. Many owners still do not understand that as soon as money changes hands, that flight can be construed as a commercial flight. NATA has been on the forefront of this issue, along with the FAA, the Department of Homeland Security, and Customs and Border Patrol, educating those who use and operate business aircraft. According to Obitts, it mostly is an issue of dealing with the “clueless and careless.” AOPA is working to inform owners about how to properly share aircraft via safe and legal “dry” (aircraft only) leases.
- After many years of no increases, insurance rate hikes for both new and renewal policies are significant. Insurance underwriters also are discriminating against older pilots, charging higher rates and even denying them coverage. Neither AOPA nor the NTSB has found any correlation between age and fatalities or significant accidents. AOPA is leading industry efforts to fight this age bias by educating insurance providers on the facts, encouraging them to look at individual qualifications, and discussing options like training and level of experience.
In some instances, owners are placing planes in aircraft management companies, while in others, operators are pooling insurance companies to share risk. In all instances, parties are working to understand the real discriminators and to find alternative ways to mitigate risk to the underwriters. Despite these efforts, NATA suggests premiums will likely continue to rise over the next couple of years.
- Safe and efficient business and general aircraft travel depend on access to all airports, especially those with FAA-tower control. NBAA and AOPA work tirelessly to ensure those government-funded towers remain open and functioning, reminding authorities that they fall under the same essential regulatory requirements as interstate highways.
- The one real positive outcome to the pandemic is an increased awareness of, and improvement in, sanitization. NATA created its Safety First Clean Initiative, creating standards for cleaning both aircraft and ground facilities, covering aircraft from landing to departure. FBOs are educating travelers with billboards outlining steps they’ve taken to keep the aircraft and their passenger lounges and maintenance hangars clean. The industry is discovering new uses for ultraviolet and ionizing sanitation procedures, and examining how HEPA filters work to filter cabin air. AOPA’s website, regularly accessed by thousands, is updated daily with a list of restrictions by state. Because of these efforts, all airports remain open today, and these new standards for cleanliness will last long after the pandemic is over.
- The industry continues to invest in the future, ensuring that owners will have the flight and support personnel needed to continue flying safely and securely. Science Technology Engineering & Math (STEM) continues to be an important part of these efforts. AOPA’s donor-supported program has created 400 classes and introduced more than 8,000 children to aviation as a career, 25% of whom are girls and 40% come from diverse backgrounds. GAMA has initiated a Washington, DC program to help introduce inner city students to aviation, as well. NBAA recently conducted a Safety Week, focused on training, technology, and personal fitness.
- To counter ongoing negative public perceptions of business aviation, your trade associations are assertively promoting the usefulness of the industry, advances in sustainable aviation fuel, use of composite technology, and the adoption of GPS. New efforts will celebrate advances in electric, hybrid, and even hydrogen propulsion, as well as aviation technology, such as drones, supersonic travel, Advanced Air Mobility, and particularly Urban Air Mobility – vertical takeoff and landing (VTOL) aircraft.
- Charitable use of aircraft is increasing. In support of pandemic and disaster relief efforts, many companies are donating their aircraft and crews, moving people and supplies to areas that need it most. Bunce stated that aviation manufacturers too are responding generously, diverting their plant capabilities to making much-needed medical and safety equipment to support health care requirements.
This past year has wrought unforeseen changes, for both new and existing users of business and general aviation. We are more aware of the way we travel and conduct business. We now have an increased awareness of the value of time: the cost of time lost or wasted, and how we can travel more safely and efficiently.
That bodes well for both segments in 2021, and beyond. BAA
This article originally appeared in Business Aviation Advisor November/December 2020.
Tracey Cheek posted an articleIndustry Leaders Praise Passage of More Relief Funding see more
Industry groups welcomed U.S. congressional approval this week of additional funding for the Paycheck Protection Program (PPP), saying it provides the opportunity for much-needed relief for small aviation businesses. The nearly $500 billion measure—which included more than $300 billion to replenish the depleted PPP fund with $60 billion set aside for small lenders—passed the House yesterday, following Senate passage on Tuesday.
“We are very pleased to see Congress respond to the continuing, highly challenging needs of many small businesses and their employees,” said NBAA president and CEO Ed Bolen.
Noting the majority of Helicopter Association International’s membership comprises small businesses, HAI president and CEO James Viola added, “Like most small businesses around the world, they are suffering from the effects of the economic disruption caused by the Covid-19 pandemic.”
The business and general aviation community have been working to ensure Congress understands the harm the Covid-19 pandemic is having on the industry and continues to seek further assistance as Congress considers future measures.
This is particularly true as smaller carriers are still struggling to obtain resources for that and funding that was specifically set aside for aviation. “We are hearing stories of difficulties with the PPP and the Air Carrier Worker Support Program,” NATA president and CEO Timothy Obitts said, adding the organization is continuing to educate and push for access to all available relief programs.
“As Congress considers additional legislation related to the Covid-19 pandemic, NATA has already begun discussions with key policymakers regarding the need for additional support for our industry,” said Jonathon Freye, NATA vice president of government and public affairs.
Alluding to a possible fifth economic stimulus package, HAI pointed to “much-needed additional funding,” and said it would continue to impress upon Congress the importance of keeping the industry viable.
This article was originally published by AINonline on April 24, 2020.
Tracey Cheek posted an articleIndustry Leaders Voice Growing Concerns about Shutdown see more
Business aviation leaders are expressing growing concern about the increasing ramifications of the prolonged partial U.S. government shutdown. “It is clear that the shutdown’s impact is being felt,” NBAA said in an update to its members today, pointing the cessation of activities such as the issuance of new pilot certificates and letters of authorization.
In addition, training centers are concerned about the possibility for expiration of authorizations for evaluators and flight training devices, and certification of aircraft and equipment is affected. Further, the association has been concerned that Customs and Border Protection is not processing requests for new overflight exemptions.
The FAA has indicated plans for a number of safety inspectors to return to work, but details about which functions will resume remain unclear, the association said, adding the primary focus is anticipated to be on safety surveillance.
“Since the partial government shutdown began on December 21, our nation’s aviation system has functioned safely and efficiently thanks to the hard work of dedicated FAA professionals,” said NBAA president and CEO Ed Bolen. “That said, general aviation is a highly regulated industry, so it’s no surprise that some service disruptions are becoming visible.”
NATA agreed, saying the aviation industry is one of the hardest hit because of safety and security requirements. “The shutdown has halted work on new aircraft certification, interactions between FAA and other nations, some aircraft registrations, commercial drone flight authorizations, aircraft mechanic licenses, introduction of new air traffic technology and airport construction approvals.”
The effect has been “very real” for controllers and other workers missing paychecks, NATA said.
The association further pointed to specific disruptions, such as a member company that has had two aircraft stranded in Canada, awaiting FAA approval to return. Others have had issues with ferry permits and/or special flight permits, both domestic and international-bound flights and NetJets has not been able to add new aircraft into its operations, NATA added. Training companies, including FlightSafety International, have reported multiple delays and cancellations.
GAMA president and CEO Pete Bunce, meanwhile, warned during a recent rally that even though the aircraft registry is open, the FAA and DOT have taken a narrow view of what is authorized registry activities, hampering its full use. If the shutdown was to continue in the next few weeks, the costs could run into the billions, he added.
The associations were among the more than 30 organizations signing a letter last week to leaders on Capitol Hill, outlining some of the many ramifications and urging them to work to end the shutdown.
Another signatory of that letter, NATCA, meanwhile, has taken a multipronged effort to put pressure on the government to end the shutdown, through a rally, leaflet campaign, and lawsuit. The organization, however, did welcome passage and signing into law of the Government Employee Fair Treatment Act of 2019, which guarantees back pay to federal employees affected by the shutdown. But NATCA president Paul Rinaldi added, “There is no reason to keep employees home and furloughed now that they are guaranteed their pay. Our elected leaders need to be responsible stewards of American taxpayer dollars and end this shutdown immediately.”
He added that the shutdown is “eroding the layers of redundancy and support necessary” for the National Airspace System.
This article was originally published on AINonline on January 17, 2019.