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Thread: Aviatinon Spending and the Economy

  1. #1

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    Aviatinon Spending and the Economy

    Hows the economy and how's it affect aviation? Spending varies with the economy. EAA gen aviation is discretionary, the decisions to buy a new Garmin panel or new paint job or a new rating or add a T-6 or acro plane is of course based on wants more than need. My Bonanza still flyies pretty much the same, even with long overdue paint and an inst panel that I can actually read. But I'd like to have new, at least the paint. Pilots are more likely to transfer want into action if they or optimistic about income, jobs, even taxes, and we are in a positive trend now, not counting possible negative govt privatization. Even corp and airline spending is related to anticipated growth and needs. A corp may upgrade its jet to the latest and even companies and countries do. Boeing just got a huge Saudi order, think $15 billion over Airbus. And EAA attendance was up this year.

    So is the economy and the forecast that good? Recall where we were in the recession 10 years ago, Stocks down maybe 40%, home foreclosures, business defaults and unemployment 10%, 30% for some groups. Now unemployment is 4.7%, stock market to 23,000 and lots of hiring especially for those with computer or other skills. Help wanted signs at many restaurants , hotels etc. Is this normal in history. Yes and even more so. Ken Fisher in USA Today charts largest recoveries. Current one only rates #7, up 21% so far. Biggest of all time was 2nd Clinton in 1996. And it is likely the circumstances more than the man,.2nd Clinton was only 10%, #9 rank. Roosevelt coming out of depression then war was #2 and 3., JFK #4. Another analysts has a measure of optimism at an all time high, maybe looking forward to some tax reform. Apple makes so much they can barely place it!
    One caution note, hiring and especially higher wages dont hit all segments. I saw a talk by Bill Gates, and Buffet re competition from lower wage labor abroad, and Gates said that automation would have as big an impact, we are seeing it on car assembly lines. On a postive note, good effects spread, a worked gets recalled or hired and buys a new car or goes on vacation, the car dealer may hire more or the hotel or airline. and on to the next. By the way, Fisher may be a pilot not sure.
    Last edited by Bill Greenwood; 11-14-2017 at 08:44 PM.

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    These things are always local; one looks at what their own position is and pays attention to those around them. Even if one is in a good financial situation, if they see their friends getting laid off the tendency is to reduce expenditures.

    For example, my financial position is pretty solid, regardless of the larger trends of the economy, and so I spend accordingly - but because my income isn't large, I scrimp and save.

    The larger problem with aviation spending has little to do with this, though. The truth of the matter is demographics is screwing things up. There are far fewer GA pilots than 30 years ago. With that, economy of scale goes out the window. Prices for all things aviation goes up, as fewer items sold have to make up for the fixed costs of manufacturing and distribution.

    However, it comes down to what one wants to do. If aviation is a high priority for a person, they will find a way to pay for it. I took a second job for the sole reason to pay for my pilot training and the cost of the airplane.
    The opinions and statements of this poster are largely based on facts and portray a possible version of the actual events.

  3. #3

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    All (Pvt, Com, ATP) Pilots

    1993 to 2003: 6% decline
    2003 to 2013: 14% decline
    1993 to 2013: 19% decline
    Private Pilots
    1993 to 2003: 15% decline
    2003 to 2013: 25% decline
    1993 to 2013: 36% decline
    Source: GAMA 2013 Databook
    Private Pilots Represent the Market for Owner Flown Aircraft
    US population that are pilots (2013):
    All pilots: 0.14%
    Private pilots: 0.06%
    Driver’s License: 67.1%

    This survey gleaned from a website that had completed a study on this subject. In comparing this to similar studies the writing is on the wall


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    This is interesting data, but not really on topic, the economy has gone up and down over that time, not just one way.. This data shows less pilots, over a long time, but doesn't give economic or other causes. Some of the economic recovery has been since 2013.And type of planes and prices have changed over the years. There may be a lot less Cessna 172s sold now, but there are a lot more Citations. And pilots flying and spending on these Pilatus and Citation, etc spend a lot more money than more basic aviation in the past, and they are not going to be flying these types of planes with just a private pilot license.
    I think a couple of things have led to the decline in new pilots. First of all airports are much less lilkely to be located whate most people live. It used to be, when I started in the 70s that many big ariports were right in town. such as Austin Mueller, and Denver Stapleton, and the often had both gen av and flight schools right there. Then came the TCA and it really killed student pilot at that location inside the TCA. That and bigger airline planes have made an airport now often something that is way out of town, like Denver INt or Bush in Houston of to some extent Austin Bergstrrom. and these big airports are all or mostly airline use now, maybe a few corp planes. Great small gen av airports like Houston Andrau and Chicago Meigs are often houses now. And I think the average person thinks of an airplane as a Jet that you just ride on, rather than something you learn to fly. As a boy, I and others had horses in our back yard, in town, not so likely now and I bet there are less riders.
    Last edited by Bill Greenwood; 11-15-2017 at 11:30 AM.

  5. #5
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    I learned to fly at age 39-40 in the late 1970's. The local FBO had half a dozen rentals 150. 152, 172, etc. and you had to schedule ahead of time if you wanted one. I think they have probably one or two 172's now and I doubt scheduling is a problem. Regarding the overall economy we seem to be doing OK in our area however I noticed the price of gas just went way up again which is a more or less fixed cost that anyone who travels to work and cuts into the loose change anyone might have for other uses (flying for example). One thing which might be slightly off topic but still adds into the picture is the move in some states towards legalizing some drugs yet many businesses require mandatory drug testing. Every business I've been involved with has drug testing. Not a problem for me but there are some who whine about not being able to get a good job because they can't pass the pre employment drug test or lose the job because they can't leave the stuff alone.
    If God had intended man to fly He would have given us more money!

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    The only drug that I know that is legal here is pot and it has been for a few years as in over half states. There are a number of dispensaries about town, and statewide, and it brings in a LOT of taxes. One doesn't notice any real change, its just like when someone opened a cigar bar once, if you didnt go in it didnt affect you. I asked our largest employer and they don't do drug testing unless there was an accident. You are not supposed to use in public or I guess while working, people probably do it at night like youd have a glass of wine. It just doesn't seem to cause any problem, but like many places the police weren't really looking for pot even before it was legal. Good thing is we don't seem to have an heroin problem. They do enforce DUIs, and we have a lot of bars. My big drug is ADVIL, like a lot of those of us who have ski raced, glad its legal, the old struts get a bit stiff!
    Last edited by Bill Greenwood; 11-15-2017 at 01:00 PM.

  7. #7
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    Quote Originally Posted by Bill Greenwood View Post
    The only drug that I know that is legal here is pot and it has been for a few years as in over half states. There are a number of dispensaries about town, and statewide, and it brings in a LOT of taxes. One doesn't notice any real change, its just like when someone opened a cigar bar once, if you didnt go in it didnt affect you. I asked our largest employer and they don't do drug testing unless there was an accident. You are not supposed to use in public or I guess while working, people probably do it at night like youd have a glass of wine. It just doesn't seem to cause any problem, but like many places the police weren't really looking for pot even before it was legal. Good thing is we don't seem to have an heroin problem. They do enforce DUIs, and we have a lot of bars. My big drug is ADVIL, like a lot of those of us who have ski raced, glad its legal, the old struts get a bit stiff!
    As a resident of the other state that approved recreational pot at the same time as Colorado, I can back Bill up on this: It didn't result in much visible change. Those who would drive stoned before pot was legal still drive stoned, and, since public use is still illegal, you don't see folks using it very often. The biggest change is the billboards advertising pot shops....that's kind of a shocker, considering how long use was a sub-rosa sort of thing. Also a shocker to drive down some streets and see 3-4 pot shops for every McDonalds.

    I remember, years ago, a reporter for Flying magazine asking the FAA how long should a pilot wait to fly, after imbibing pot.

    The answer: "Until you get out of the penitentiary."

    Ron "Did you ever look at your hand?" Wanttaja

  8. #8
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    But it still gets down to almost any business with moving equipment does pre employment and drug testing. Example: I hold a commercial license (CDL) along with a school bus endorsement in addition to my pilots license. I was random drug tested maybe 2-3 times each year (walk in the door to go to work and they hand you a bottle/fill 'er up). If I failed the test it was no job.....period. They don't want a pothead (or drunk) hauling a bunch of kids around any more than they want me hauling freight or flying under the influence. Also I seem to remember I had to attest to the fact I hadn't used illegal drugs when I applied or my last pilots renewal and (no matter what the states say) pot is still a schedule one drug.
    If God had intended man to fly He would have given us more money!

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    Bill, the number of pilots is directly related to how much is spent on aviation, and on prices.

    Right now most common used GA aircraft are seriously over priced, to be honest, and the only reason the price point has remained high is an artificially low supply in the market. Pilots are letting their planes rot in hangars rather than have to "give them up for a song." I know of five aircraft off the top of my head that haven't been started, let alone flown, for over ten years. Why those pilots throw money down a hole in hangar rent rather than cut their losses and dump it is beyond me. I guess they're waiting for the estate lawyer to make that decision for them.

    The most common excuse for the lack of GA pilots taking to the sky is AVGAS pricing, but that can't really be it. Let's look at the number of pilots versus gas prices:

    https://www.eia.gov/dnav/pet/hist/Le...TG_NUS_DPG&f=M

    Average AVGAS per gallon didn't hit over two bucks a gallon until March of 2005, but the decline was well underway before then.

    Indeed, in January of 1983, the average price for 100LL was $1.30 a gallon - the price of 100LL in January of 2002? $1.12.

    Factoring inflation, the price of AVGAS didn't overtake it's normal pricing until 2008.

    So what changed? The cohort of pilots aged out, and there wasn't any young guys to replace them. Heck, look around your airport and in your EAA chapter. How many people hanging around under the age of 50? Not many.
    The opinions and statements of this poster are largely based on facts and portray a possible version of the actual events.

  10. #10

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    I have been out of aviation strictly because of the economy. For the last 5-7 years my industry (gas and oil) has been in the dumper, at many points I was glad to survive the layoffs. Buying an airplane came WAY down the list of providing for my family and paying bills. The industry is turning and a certain amount of stability has returned. My family survived and I feel confident enough that I have a kit on order. I am a 30 year employee ( first a a contract employee and recently being hired on) of the same company and have been down this road too many times watching the cycle of good and bad. I have probably oversimplified what you are all discussing, but I am not that smart..... Lol
    Rick

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