According to the classification adopted in USA, general purpose aviation includes all aviation technical equipment used neither in the field of commercial aviation nor within the structures of Department of Defense (the term of "commercial aviation" in USA is probably construed only as regular flight aviation and not as anything allowing earning money). Business aviation constitutes one of the essential elements of general purpose aviation (further referred to as GPA). Business aircrafts represent the planes used by companies or individuals for the needs of own enterprise.
It is common practice to distinguish two categories of business carriage in USA : - Business Carriage - application of the aircrafts for the flights related to the business in which entrepreneurs and owners of airplanes are involved (most often mono piston-engined airplanes are used for such transportation when the owner of the aircraft can perform the role of a pilot. As an example of business carriage one could mention the use of GPA aircrafts by trading agents and paramedics). - Corporate Carriage - means the use of aircrafts by corporations (companies) for transportation of the employees and company's property (for the corporate case mainly air jet or project/turbo-prop airplanes are used. As a rule these aircrafts are aviated by professional pilots being the employees of the company; technical personnel is often on the company staff too).
Recent years were marked with growth of GPA popularity that led to its high evolving all over the world. Due to that fact GPA plays considerable role in the economy of the Western countries at present. For instance, in USA the companies representing business aviation are distinguished by one of the highest levels of paid off dividends on the shares among the private companies. Annual investments of GPA to the national economy reach 51 billion US Dollars. Every year the state receives only as taxes payment over 1.2 billion US Dollars from the companies exploiting the aircrafts of business aviation. Though to be precise one must confess that the above amount incorporates the taxes on the airway tickets purchased for the flights of regular aviation companies.
Such an evolution of GPA is caused by many reasons. The main advantage of business aviation compared to the regular one consists in the opportunity the former renders in unlimited choice of taking off time and of flight route allowing eluding of extra changes and consequently avoiding extra time losses. Time is the main value of business aviation.
Flights performed by GPA aircrafts require less time and increase the productive efficiency during the flight itself as the business aircraft is usually well equipped with communication means representing a kind of airborne office. As a rule, the saloon of a business aviation airplane is fitted with such office equipment as computer, facsimile, telephone and other devices needed for work. Besides, the absence of alien passengers that could become undesired witnesses of the company staff negotiations can be attributed to the major advantages of a business aircraft. Another essential virtue of business aviation is the ability of GPA aircrafts to use minor airfields sometimes with poor surface as well as the airports of less inhabited localities, where no regular flights are destined or accomplished with increased time intervals in consequence of commercial unprofitableness.
For example in USA GPA airplanes have the possibility of using approximately 5,400 airfields. Just for comparison the aircrafts of regular aviation can use only 580 airfields.
Further to that, about 75 % of all passengers of regular aviation fly through 29 major centers of aviation transportation of the country. In the meanwhile, the share of GPA in these centers does not exceed 9 %. Even though we take into account that in 1998 the activity of GPA in main airports (towered) increased by 2.5 % (according to Federal Aviation Agency - FAA).
The possibility to use a smaller, less crowded airport located closer to the final point of destination stands for another advantage of GPA. In fact, the major part of those exploiting aircrafts of business aviation prefer making use of minor airports instead of bigger ones even though located in the capitol regions. This gives the reason why among the general flow of aircrafts in big airports the GPA share is usually trifling. The prices are higher there and there are much inconvenience related to bigger people crowds and higher over-organization. Such a big center as is New York could save as a demonstrative example. In the major city airports - Newark, LaGuardia and Kennedy - the GPA part constitutes only 5 % of the overall flow.
The main flow of business aviation passes through minor local airports : Teterboro or Morristown in New Jersey and Westchester or Islip in New York. These airports are small and normally there are no regular flights coming through or their number is low. In addition to that, regular aviation lines serve only 1 % of the country regions accessible for the GPA. For many regions GPA represents the only means of aviation transport and the sole possibility of rapid movement. The aspect of safety is of no less importance. Traditionally the business aviation demonstrates better results on the safety. According to the statistics, in 1998 GPA reached the lowest mark of accident and breakdown rate since 1938. Thus for every 100,000 flight hours there is mere 0.091 of flight accidents. In 1999 there was not a single flight accident that resulted in people casualties. Business aviation is one of the most safe and secure means of transportation including the carriage by the aircrafts of regular aviation.
As the NBAA experts emphasize, all the advantages of business aviation lead to the main outcome - increasing of productive efficiency of the personnel in the course of the flight. This is secured by the following factors :
- Time saving - means the major value of business aviation. The possibility of a flight between minor local airfields without necessity of a change.
- Increasing of working productivity during the flight - the presence of office equipment onboard the aircraft and absence of stranger witnesses impeding confidential talks. The least factor is of higher importance as the aircraft is often used as the place for holding negotiations.
- Decreasing of spare time of company employees spent outside home and without family - a very important factor for the Western countries. A flexible schedule, easy reaching of the destination point allow to resolve the questioned set forth for an employee or manager of the company on a business trip within a single working day.
- Informational protection - minimizing the chance of information leakage, absence of alien witnesses and undesired communication.
- Maximum personal safety - business jet aircraft usually aviated by two experienced pilots possesses a higher level of safety compared to the airplanes of regular aviation.
- Entire freedom in the flight planning - the opportunity to rapidly change the flight plan if required, amend the time of stay in one place without running the risk of penalty payment and dependence upon the flights. The possibility to avoid night flights.
- Company image.
Let us dwell upon some of the points mentioned.
According to the poll carried out by the company Louis Harris ET Associates Inc. the passengers of business aviation aircrafts spend the time during the flight more effectively than at the office. It is reasoned by the lack of annoying factors pertaining to a normal office and on the other hand by mobilizing ambience onboard the plane.
As the same investigation shows, business negotiations onboard the business aircraft take place 8 times more often than on a plane of regular flight aviation. Talks with the customers occur almost 7 times more often.
Further to that, onboard a commercial plane a desire to read the literature not related to the professional activities is conceived three times more often than in the course of a flight on a business aviation aircraft. These figures indirectly demonstrate the advantage of making use of business aviation as by minor entrepreneurs as well as by bigger companies.
The analysis of the same company Louis Harris ET Associates Inc. Carried out in 1997 showed that for 60 % of the managers the main stimulus to use business aviation was represented by the rapidness and possibility to apply flexible schedule to accomplish the flights. Such characteristic of GPA as the ability to reach remote regions with lesser airfields makes over 25 % of the companies turn to the services of business aviation. According to the data rendered by GAMA - General Aviation Manufacturers Association of USA - over 7,000 American companies use the services of GPA aircrafts of longer flight range for the access to remote regions and countries.
Besides, business aviation is used for expansion of the international market. At the present moment about 70 % of the members of NBAA - National Business Aviation Association of USA use the aircrafts for the flights abroad. Among them about 60 % fly to Canada and 40 % fly to the countries of Caribbean Basin and to Central America. Other routes include : Europe - 27 %, South America - 17 %, countries of Pacific Ocean Region - 10 %, Asia - 10 %, Middle East - 7 %, Africa - 6 %.
It is interesting to mention that out of overall volume of carriage by the aircrafts of business aviation only 14 % refers to the top management of the companies. The rest 86 % is distributed as follows : - 14 % of the carriage covers the senior managerial staff; - 49 % deals with transportation of the middle management level; - 19 % refers to the carriage of ordinary employees of the companies (specialists).
USA IS THE WORLD LEADER IN BUSINESS AVIATION
Considerable interest for investigation of GPA is traditionally represented by USA as the country with the highest level of GPA development. What is the reason ? According to the evolution of business aviation USA also occupies the leading position in the world. To coordinate the activities in the market of business aviation in USA National Business Aviation Association was founded (NBAA) combining the owners and exploiters of business aviation aircrafts.
Today there are over 8,300 exploiters of business aviation. Out of them almost 6,000 are the members of NBAA. The joint fleet of airplanes and helicopters of NBAA members exceeds 8,000 crafts. As a bright mark of the growing interest toward business aviation we could mention almost a double increase of Association members from 1991 - by fair 90 %.
Analyzing the composition of Association members one could jump to conclusions on the particular sectors of economy where business aviation stirs up the major interest. The main part meaning almost one third of the owners is constituted by the manufacturers. Another one third refers to the enterprises of servicing sector : banks, insurance companies and realty traders. This kind of distribution is quite understandable. Big manufacturers with their production incorporated into the economic structure of the whole state and often stretches out beyond its boundaries, badly need rapid movements, which makes reasonable the application of business aircrafts. The same refers to the second group of business aviation exploiters. Banks, insurance companies and realty traders usually accumulate huge monetary funds and at the same time their activity sphere spreads far beyond the limits of a single country region and the state on the whole.
It is worth mentioning that the majority of companies performing charter carriage or operating in the mode of air taxis represent minor and most often family business enterprises possessing in their fleet one or few inexpensive piston-engined aircrafts. There are over 3,500 companies of this kind in USA today. A big aviation company (AC) coordinates the activities of minor owners of the aircrafts (with the cost less than a couple of hundred thousand US Dollars).
Out of total number of Association members as in January 1999 there were 1,646 corporate owners, while the business-members counted 1,353 companies. Associated members, i.e. the companies involved into the sphere of flights servicing, including vendors and manufacturers count for 2,864 companies meaning about 48 %. 210 of them reside outside USA. This part represents approximately 36 % of the aircraft fleet of NBAA
Certain percentage refers to the so-called Affiliate Members of the Association. They consist of the companies owing or using the technical equipment registered beyond the territory of USA.
As a rule though, the companies do not confine within application of only business aviation. Every year in USA the owners of administrative airplanes spend more than 11 billion US Dollars on the services of regular aviation companies.
The fleet of GPA comprises piston-engined aircrafts and helicopters - as the most available and consequently most popular and also it includes the project/turbo-prop and jet airplanes meant for 4-19 passengers with the flight range up to 12 thousand km.
At the present moment over 190,000 GPA aircrafts are being used in USA out of which almost 100,000 crafts are used for the individual purposes. 42,000 airplanes are used for business and corporate transportation. But it is worth remembering that a certain number of the aircrafts registered for personal purposes exploitation are also used for the business flights. Say, in 1997 the overall annual amount of flight hours of GPA aircrafts for business flights almost reached 5.9 million constituting approximately 2/3 of the total volume of flight hours of GPA airplanes registered for the individual purpose use (more than 9 million flight hours). Business flights represent the most popular kind of GPA use (inclusive of air taxis and learning to fly). According to GAMA almost 70 % of the flight hours of GPA pertains to just business and commercial flights. Total amount of flight hours of GPA aircrafts in USA in 1998 reached 27 million meaning almost twice as much of the flight hours accomplished by regular flight aviation for the same period of time. Further to that, in 1998 GPA aircrafts carried approximately 145 million passengers. Two thirds of the overall flight hours are secured by mono piston-engined crafts that dominate in the total GPA fleet. Jet and project/turbo-prop airplanes cover less than 20 % of total flight hours while multi-engine piston type aircrafts gathered only 2.4 million flight hours meaning less than 9 % of the overall amount. Flight hours collected by helicopters reached the amount of 1.7 million standing for less than 6 %.
Total amount of flight hours of GPA aircrafts in USA in 1998 reached 27 million meaning almost twice as much of the flight hours accomplished by regular flight aviation for the same period of time. Further to that, in 1998 GPA aircrafts carried approximately 145 million passengers. * (la Rptition des donnes exposes dans le fragment prcdent)
Two thirds of the overall flight hours are secured by mono piston-engined crafts that dominate in the total GPA fleet. Jet and project/turbo-prop airplanes cover less than 20 % of total flight hours while multi-engine piston type aircrafts gathered only 2.4 million flight hours meaning less than 9 % of the overall amount. Flight hours collected by helicopters reached the amount of 1.7 million standing for less than 6 %. * (la Rptition des donnes exposes dans le fragment prcdent)
Overall flight hours amount of GPA was progressing insignificantly and it is expected that the same trend will maintain in the future (according to FAA).
As a rule, the companies holding business aircrafts in their property create special interior aviation divisions dealing with the aspects of aviation technical equipment exploitation. From 1993 to 1999 the number of such divisions within USA companies increased by more than 20 % - from 6,747 to 8,625.
On the average rate there is 1.33 of an aircraft (helicopter) for every single company-member of the Association. Though the majority of owners possess in their fleet a sole aircraft (helicopter). Among the owners of jet business aircrafts 1 craft belongs to 85 % of the companies while the staff of aviation divisions of such companies consists on the average of 3.1 people! In majority of cases jet aircrafts are being piloted by the crews of two persons specifically trained for exploitation of the company's airplane. Average number of the personnel of aviation division of the companies using more than 2 crafts constitutes 6.8 people!
On the whole in the world in 1998 there were 18,850 jet and project/turbo-prop business aircrafts for 11,826 exploiting companies. Almost 70 % of the companies (8,513) and approximately identical percentage of the aircrafts (13,019 - 69 %) were deployed in North America. Europe was a runner-up in this list - 1,160 companies, meaning less than 10 % and 2,002 aircrafts constituting 10.6 % of the overall fleet of jet and project/turbo-prop airplanes. South America occupies the third place - 1,036 companies (8.7 %) and 1,612 aircrafts (8.5 %). The remaining 9.4 % of the companies and 11.8 % of aircrafts split between Africa, Asia, Central America and Oceania (Australia and Pacific Ocean Islands).
The world fleet of jet aircrafts in 1999 comprised 9,661 planes. In the course of recent 20 years the growth of jet aircrafts number was not constant. Though regardless of recession periods occurred in the past the fleet of jet aircrafts increased in comparison for example with 1979 almost three times. Within the same period of time the number of project/turbo-prop airplanes doubled and by the beginning of 1999 reached 9,189 crafts. In this category of the planes there also was a temporary recession detected that ceased in 1996. But the major growth of project/turbo-prop airplanes fell on 70-ies - 80-ies. During the 90-ies this fleet increased insignificantly.
In USA the fleet of jet and project/turbo-prop aircrafts of business aviation changed as follows :
|Year||Number of Crafts||Number of Aviation Divisions|
The distribution of jet and project/turbo-prop airplanes according to the globe regions is not even. It can be reasoned by different level of economic development of the states and integration level of the separate country economy to the economy of entire region or the whole world as well as by the status of transportation systems inside the region. In USA, Europe and Asia the number of jet and project/turbo-prop aircrafts is divided almost equally. In Africa, South America and Oceania there are twice as much project/turbo-prop aircrafts flying compared to the jet planes. At the same time almost 60 % of Central America fleet consists of jet aircrafts. These are basically the crafts with take-off payload up to 13,619.5 kg.
As for USA, there is the following ratio of aircrafts types there.
The central part of the country is least developed in this regard. Jet and project/turbo-prop aviation is widely represented in the South and in the West. It might be probably justified by poor development in comparison with other states of land transportation system and by remoteness from the centers of economic and political life of USA traditionally concentrated closer to the North and to the East of the country. In particular, there are 1,144 aircrafts in Texas. In other 9 most aviation advanced states of the country the fleet of aircrafts is distributed as follows :
California - 850, Florida - 823, Ohio - 593, Michigan - 424, North Carolina - 423, Illinois - 417, Delaware - 375, Virginia - 366 and Georgia - 359.
Approximately 80 aircrafts registered in USA are deployed in Alaska, Hawaii (10) and Rode Island (13). The latter two represent the states with the lowest number of jet and project/turbo-prop business aircrafts.
Out of the total fleet of jet and project/turbo-prop aircrafts the major part is comprised of medium size planes. For instance in USA medium size aircrafts constitute 44 % (5,467) of the entire fleet. Moreover, they represent rather obsolete models. The age of more than 8,800 medium size aircrafts of the world fleet exceeds 19 years!
The second popular class of business aviation is represented by light jet aircrafts. Nowadays there are approximately 4,700 crafts of the kind under exploitation with average age of 16 years. There are over 1,400 light jet aircrafts flying in USA meaning almost 11 % of total fleet of American business aviation.
If we turn to statistics rendered by NBAA, we would see that its fleet splits according to the following pattern
- Light and medium size jet aircrafts with the maximum take-off payload up to 29,999 pounds (13,619.5 kg) - 2,781 airplanes (35 %). The most represented makes of the aircrafts in this category are : Cessna Citation and Learjet. Other members of the category are Westwind and Astra of the company Israel Aircraft Industries, Hawker and Beechjet of Raytheon Aircraft Company.
- Heavy jet aircrafts with maximum take-off payload starting from 30,000 pounds (13,620 kg) - 1,300 airplanes, meaning about 16 %. Most popular crafts within this category are Gulfstream planes of various series. The share of this company in the market of USA reaches almost 40 %. Other popular aircraft types of the class are Falcon (Dassault, France), Challenger and Global Express manufactured by the company Bombardier (Canada). Some companies use as a business aircraft modified regular flight planes of Boeing and of some other manufacturers.
- Project/turbo-prop aircrafts with take-off payload from 12,500 pounds (5,675 kg) - 391 planes, constituting approximately 5 % of entire fleet of business aircrafts.
- Project/turbo-prop aircrafts with take-off payload from 12,500 pounds (5,675 kg) - 1,700 planes, meaning almost 16 % of total fleet of business aircrafts. Overwhelming majority of project/turbo-prop airplanes used by the members if NBAA is represented by Beech King Air, manufactured by Raytheon company. Manufacturers of light multi-engine project/turbo-prop airplanes enlist such companies as Cessna, Fairchild, Piaggio and Piper. Among the heavy aircrafts the most popularity was gained by Canadian Bombardier and German Fairchild Dornier.
- Helicopters with take-off payload starting from 12,500 pounds (5,675 kg) - 8 crafts (0.1 %).
- Helicopters with take-off payload up to 12,500 pounds (5,675 kg) - 616 crafts, meaning less than 8 % of total fleet of business aviation of USA. Most popular helicopters are those manufactured by the company Bell Helicopter Textron, located in Texas, Sikorsky Aircraft and helicopters of joint French-German venture Eurocopter.
- Piston-engined aircrafts - 1,609 planes, slightly exceeding 20 %. Out of the total number almost 40 % refers to mono engine aircrafts. Almost all of them are manufactured in USA by the companies Beech, Cessna or Piper. According to NBAA statistics, during 1998 annual average amount of flight hours of jet aircrafts reached 420 - 430. Just for a comparison, in 1997 annual average number of flight hours constituted 432. At the same time piston-engined aircrafts reached on the average 260 flight hours. Average amount of flight hours for project/turbo-prop airplanes was 406. The same value for helicopters amounted 339. In the meanwhile, a single aviation division in use in 1998 corresponded to 2.4 crafts.
In 1993 a respected auditors company Arthur Andersen carried out the investigation called "The Business Aviation Performance Study". That analysis showed fascinating results :
- the companies that purchased an aircraft within a period from 1986 to 1990 on the average increased their sales by 7 % during the year following the year of aircraft purchase in comparison with those abstained from airplane purchasing;
- on the average, the revenues on a single share of every company that purchased a new jet aircraft during the year following the year of purchase were 30 % higher comparing the same average value of the companies that did not buy an aircraft;
- 92 % of the companies from the Fortune-500 list featuring 500 major USA companies showing highest revenues in the period from 1982 to 1992 represented the exploiters of business aircrafts. In 1998 344 companies out of 500 were using their own planes. In the Fortune-100 list featuring top 100 companies of the country, 88 establishments own the aircrafts of business aviation;
- 80 % of the companies that entered in 1993 the list of Business Week "Productivity Pacesetters" represent the exploiters of business aircrafts.
Gross profit of the companies using the aircrafts of business aviation reached 4.5 trillion US Dollars while this value at the others did not exceed 1 trillion. Overall number of employees in the exploiting companies constituted 19 million people all over the globe while the personnel of other companies counted only 3.6 million. Average annual wages of the exploiting companies' employees make approximately 5 trillion US Dollars.
The joint capital of exploiting companies exceeded 9.7 trillion US Dollars. At the same time the joint capital of the companies abstaining from the services of business aviation amounted 3.1 trillion.
Net profit of all exploiters of business aviation aircrafts in 1997 achieved 278 billion US Dollars while the others managed to reach only 46 billion. Overall value of the shares of exploiters reached 1.8 trillion US Dollars compared to the total value of the others of 300 billion. SEPARATE OWNERSHIP
The aircrafts of business aviation are usually owned by a sole proprietor. But higher cost of the technical equipment imposes certain restrictions on the potential buyers considerably narrowing their group. At the same time the advantages of business aviation do not afford declining its application. Such a situation forced the manufacturers and exploiters to search for new forms of ownership and exploitation of the technical equipment. One of these forms was represented by a "separate ownership" that gained high popularity in the West. The essence of this possession form consists in the fact that the companies and individuals do not purchase the whole aircraft, but only its part - a share according to which they receive the amount of flight hours with crew. This system permits the companies lacking experience of aviation technical equipment exploitation to avoid lots of mistakes natural to the beginners in exploiting sector. It also allows doing without creation of special aviation divisions within the company. On top of that, there emerges an opportunity in addition to already existing aircraft to use once required another craft without full payment of a new plane. This appears expedient in the situations when a single aircraft can meet the company requirements to 80-90 %. In such a case a purchase of the second aircraft for the full price is irrational. As a rule, the majority of companies yet possessing aircrafts of business aviation when entering the shared ownership of a new plane keep their aviation divisions and use the shared ownership as an extra to add to existing fleet for the use according to the actual necessities. On the other hand there are companies that join shared ownership to get the opportunity of aircrafts' use without creation of their own aviation division. It is expected that a considerable number of current shared owners in due course of time would cancel their shared ownership and would establish their own aviation divisions within their companies. But overall number of shared owners would grow due to the newcomers entering this scheme. In this regard we can consider the system of separate or shared ownership as an addition to traditional forms of possession and as some kind of transition period for the beginning exploiters.
Yet the pure essence of concept of separate ownership when a single aircraft belongs to several companies is not devoid of few serious disadvantages. First of all it comes to a necessity to accord the flight schedule, a need in few crews, difficulties related to the servicing etc. It is possible to elude these drawbacks through creation of specific companies that possess a fleet of aircrafts and carry out their exploitation in favor of the interests of the companies owning the crafts.
Executive Jet Aviation (NetJets) became one of the pioneers in the line of these companies, commencing its program of separate ownership in 1986. Later on it was joined by Business Jet Solutions (FlexJet), Raytheon Travel Air and others. Nowadays the program of "separate ownership" is one of the most rapidly growing not only in the aviation of USA, but of the whole world.
The following figures prove the growth rates.
In 1986 within the margin of separate ownership program there were only 4 aircraft proprietors. By 1993 their number increased to 89. From 1997 to 1999 the number of companies exploiting aviation technical equipment conforming to the program of separate ownership grew by 50 % - from 743 to 1,567.
In the beginning of September 1999 in USA there were 329 jet business aircrafts used according to the program of separate ownership by the companies Netjets, Flexjets, TravelAir, Flight Options and Starshares. Overall these aircrafts represent 1,569 shareholders.
The dynamics of aircraft fleet's growth exploited by the program of separate ownership can be traced through the following figures :
The chart shows that in less than 6 years the fleet grew 13-fold or in other words, it was increasing by almost 60 % every year. At the same time total fleet of jet and project/turbo-prop airplanes increased within identical period only 1.3 times. This testifies that the main part of the aircrafts purchased on the grounds of separate ownership program does not fall on brand new, but to the aircrafts with partially depleted resource thus justifying lower cost. At the present moment about 15 % of all new jet business aircrafts are supplied within the margin of shared ownership programs.
At present out of 344 biggest companies of USA owning the aircrafts of business aviation and featured in the Fortune-500 list, 46 have the share holding. Out of the next 500 companies another 26 own the planes according to this program. As on the 1st of September 1999, in USA the fleet of jet and project/turbo-prop aircrafts counted 12,938 crafts in 8,625 aviation departments, 5 of which exploited the technical equipment purchased within the margin of share holding. As a rule one aviation department corresponds to one company (with exception of the above mentioned 5 departments exploiting the crafts of several owners). Hence it is clear that the number of companies exploiting the aircrafts of business aviation increased 1.3 times within recent 6 years. The fleet of business aircrafts showed approximately same values of increase fold. One could come to a conclusion that the growth of volume of transportation by aircrafts of business aviation is not secured by stirring up of already existing exploiters, but exclusively on account of new companies involvement into the sphere of business aviation application.
The number of private pilots in a country represents one of the most essential parameters of GPA development. This is a so-called second wave factor meaning that if a person has some skill, he or she aspires to make use of it even though it does not bring up direct economic benefits. In other words the principle is true : if there is someone to aviate, there will be something to aviate. Besides, over 50 % of the pilots of domestic aviation lines started their careers just in the GPA (according to GAMA). Usually the pilots walk the following path : first they receive a PPL certificate and fly as private pilots. Then they start working as instructors and after that switch to performing of charter flights. Finally they join one of the airway companies in charge of a pilot. It is historical prevalence that the ratio between pilots and number of aircrafts almost does not change in course of time. In USA this proportion approximately equals to 3:1.
This is why successful work on increasing the total number of pilots directly affects the growth of aircrafts' sales.
In view of the said above one could comprehend the anxiety of USA officials related to a constant drop of the cadets' number in the State Pilot Schools within recent years. In 1994 the lowest number of aspirants to learn flying was marked from the period of World War II end. A long period of decreasing of Pilot Schools' cadets was stopped in 1996 when a national program "Become A Pilot" was launched. This program is supported by 160 members of GPA manufacturing association and has the annual budget of about 2 million US Dollars. From the commencement of the program in 1996 the number of cadets of Pilot Schools increased by about 12 %. And in 1998 there was 22 % increase in PPL (Private Pilot License) issuing compared to the previous year.
Today in USA there are over 60,000 people complete the course at Pilot Schools every year.
By the end of 1998 more than 120,000 people had the Commercial Pilot Licenses (CPL) and over 135,000 people had Airline Transport Pilot Certificates (ATPL). Overwhelming majority of business aviation pilots has highest flying categories. But the growth of cadets' number in Pilot Schools is not only reasoned by the Government support of training programs. The basic reason lies in the increase of transportation volume performed by the aircrafts of GPA and of business aviation in particular. According to the estimations of GAMA experts, during the next 5 years three most big USA companies with share holding expect considerable increase in the demand for qualified pilots to service the aircrafts of business aviation. According to the programs of shared ownership it is planned to hire up to 500 pilots every year.
Though the GPA aircrafts in USA carry every year more passengers than by regular flight aviation along any separate route, this aviation segment covers less than 5 % of the fuel consumed in the national civil aviation. Regarding individual sorts of the fuel, one might mention that entire consumption of Avgas gasoline falls exclusively on the GPA. But Avgas gasoline represents only 1.5 % of all aviation fuel consumed in the country.
Yet jet engine fuel dominates in the sector of civil aviation. GPA annually consumes about 3 %. Aviation carriers of USA consume about 72 % of jet engine fuel in the segment of all non-military aviation. International carriers consume the rest 25 %.
If we turn to precise figures, we will see the following picture. GPA of USA annually consumes approximately 930 million gallons (3,406 million liters). Out of which :
- jet aircrafts - over 450 million gallons (1,700 million liters), or about 50 %;
- project/turbo-prop aircrafts - over 135 million gallons (510 million liters) - 15 %;
- piston-engined aircrafts - over 260 million gallons (985 million liters) - about 30 %;
- helicopters and others - approximately 72 million gallons (270 million liters) - about 8 %.
SALES OF BUSINESS AIRCRAFTS
As it has been already stated the GPA aircrafts have the long service life. It is reasoned by a number of particulars pertaining to GPA. As a rule, the aircrafts of business aviation during entire lifetime have one or two owners; they are being used in a spare mode and enjoy good maintenance. Along with general stir up in the market of carriage, this not only caused the activity in the after market to stay at the higher level but to constantly grow as well. The sales of second hand business aircrafts in 1998 increased by almost 20 %. Out of 1,289 project/turbo-prop airplanes sold in 1998 in the whole world only 145 were brand new. In 1998 world sales of jet aircrafts of business aviation reached the mark of 387 crafts.
Average age of world fleet of business aircrafts according to their types
|Craft Type||Number of Aircrafts||Average age (years)|
|Medium Size Jet||2,881||17.19|
|Medium Size Project/Turbo-prop||8,820||18.85|
The world supplies of project/turbo-prop and jet business aircrafts reached its peak in the first half of 1980-ies, but their sales significantly dropped by the beginning of 90-ies. In 1990-ies the sales slightly increased. After 1981 when the record making number of jet aircrafts was sold - 500 planes - their average annual sales stabilized within the range of 200-250 aircrafts and stayed at the same level during next decade. But in 1998 the supplies of jet aviation technical equipment increased by almost 50 % reaching the number of 387 aircrafts.
As for project/turbo-prop airplanes, starting from 1981 when over 800 crafts were sold their supplies keep decreasing. In 1996 only 100 aircrafts were sold though this value raised to 145 aircrafts sold by 1998.
Cessna and Raytheon represent the major manufacturers in the class of jet and turbojet aircrafts, holding the share of 60 % in the overall number of manufactured in 1998 jet and project/turbo-prop aircrafts attributed to the business class.
MANUFACTURING OF AIRCRAFTS OF GPA
The growth of popularity in carriage by means of the aircrafts of business aviation could not help affecting the production of GPA technical equipment. During the last four years its manufacturing progress stays at a rather high level. In 1996 this sector of economy overcame the threshold of 3 billion. In 1997 total turnover reached the amount of 4 billion US Dollars and in 1998 this value approached the point of 6 billion, constituting 5.9 billion US Dollars a year. Total volume of the aviation technical equipment supplied in 1998 reached the number of 2,220 crafts, giving 41.5 % increase compared to the year 1997. That year was the first one when the number of the crafts sold exceeded 2,000. Obviously, the production growth is not distributed evenly according to the classes of the crafts. The biggest upsurge was detected in production of piston-engined aircrafts. Most probably it is explained by the reason of its lower cost, bigger ease, cheap maintenance and consequently by higher availability. In 1998 overall number of piston-engined aircrafts reached 1,534 planes. It meant 55.7 % increase compared to the previous year. The biggest boom fell on mono engine crafts supplies of which rose by 58.7 % - from 905 crafts in 1987 to 1,436 in 1998. Less significant growth was witnessed in the production of the crafts with two and more engines - 22.5 % - from 80 planes in 1997 to 98 crafts in 1998.
It is also fascinating that according to the rates of production growth jet aviation left behind the project/turbo-prop one. Supplies of jet aircrafts increased by 17.5 % - to 686 planes, while the supplies of project/turbo-prop crafts grew only by 14.8 % - from 236 to 271 planes. The sales of technical equipment fitted with turbo-fan engines increased by 19.3 % - from 348 in 1997 to 415 crafts in 1998.
Exportation of the technical equipment increased by 19.2 % - to 535 crafts. Nowadays almost one third of the technical equipment manufactured by GPA is being exported. Overall earnings from exportation in 1998 reached 1.6 billion US Dollars, marking 27.9 % increase in comparison with 1997. Certainly the state of GPA production is highly affected by the general condition of national economy as well as the world economy state. The crisis in Asia did not affect much the sales of aircrafts of GPA since that region is not yet representing a vast GPA market. It is expected in future that the market in Asia would occupy important position in the world sales. Though in the very nearest future there is no considerable expansion of that market expected. The market of Latin America has always been very favorable to GPA. Yet the growth of sales in the upcoming years will be insignificant in this region.
Introduction to the market of modern technical equipment also played its role. During last 4 years there appeared more new models than within entire previous decade.
For instance, Cessna company initiated the supplies of new jet aircraft Citation Excel and a little bit later started to supply the third model belonging to the line of piston-engined aircrafts of the company - Cessna 206 Stationair (1998).
In the second quarter of 1998 the company Learjet began supplying its first in many years new airplane Learjet Model 45. At the end of the same year Boeing company started to supply Boeing Business Jet aircraft. Production growth of GPA leads to increasing of the number of the people involved into working in this sector. In 1998 the number of laborers occupied in the field of GPA production in USA (members of GAMA) increased compared to 1997 by 11.5 % and constitutes today the figure exceeding 150,000 people. It is worth mentioning that aviation stands for high technology production and requires workers of high qualification skills.
Within the period from 1980 to 1994 there was a flow-out of companies from the GPA market. It was caused by decreasing of activity in the market and by the drop of carriage volume accomplished by GPA. Today the situation has changed. The companies not only stopped quitting the market, but on the contrary there is an enhanced interest showed toward the GPA sector from the companies that previously were not involved into this field. On top of all that the market of GPA inspires keen interest from the manufacturers of commercial aviation aircrafts. For instance, Boeing company enters the market of business aviation with its aircraft model Boeing Business Jet. Airbus and Fairchild companies as well work on creation of business airplanes on the basis of the crafts of line aviation. At the present moment at least 10 American manufacturers of GPA operate on certification of new types of their aircrafts.
Activity growth in the sphere of GPA production inevitably leads to the expansion of scientific, researching, designing and planning works.
This means an increase in demand for highly professional and skilled specialists that consequently would raise the demand for the graduates from aviation higher education institutions and retrieving them the former prestige in the opinion of the youth.
For instance, during last two years Canadian company Pratt ET Whitney Canada annually spends on research and designing work-outs over 400 million dollars. This amount constitutes more than 20 % of the sales revenues. Just for a comparison we would like to note down that in other industry fields the expenditures on scientific and research works do not exceed 3 - 4 %.