This rocks on so many levels!
First, it keeps PPL's - for the most part - in the aircraft they already own and are familiar with. A lot of misfortune has been dealt by guys going from larger planes to (sometimes) twitchy LSA's, which require a suprising amount of transition training.
Second, it will keep the price of LSA eligible aircraft down, at least hopefully. In a few years I'll be in the market for a Champ, and I'd like not to compete with a glut of Private Pilots looking for a light fix to their addiction.
Third, it fits with the type of flying the Average Joe out there is doing - daytime VFR either solo or with one passenger - so it's not unduly burdensome. Now they can fly to their destination and carry baggage, too!
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The FAAST team needs to get hot on the medical education seminars! It's a great way for them to put two birds in the same egg basket - encourage WINGS participation while educating more than just PPL's looking to transition to Recreational Pilot rules.