GA's Future: The European Perspective
Wherever I travel these days—and lately, that's a lot—the subject of GA's future comes up. Or more accurately, does it even have one? This was raised consistently in my swing through Europe last week. I was asked several times what my opinion of the LSA market was, of the certified segment, of engine and avionics technology. I usually turn this around and toss the ball back to the questioner. I'm not running from one corner of the world to another to spout my opinions—that's what this blog is for—but to seek the views of others.
The short answer is that I see plenty of evidence that there's a future for light aircraft general aviation, just not one that involves a large influx of new pilots or high-volume manufacturing of airframes. If that ever comes back, it won't be for years. There's robust growth in Asia, India and South America, but nothing like the golden age of light airplanes in the mid- to late- 1970s or perhaps even what we saw in the mid-2000s. We're in the midst of a global economic sea change whose dimensions are impossible to gauge at this distance—it's like looking at a football game through a telescope. You can read the numbers on the jerseys, but the big picture eludes.
Still, the innovation goes on. At Diamond, CEO Christian Dries admitted that on one hand, even he has lost the passion for fun flying. He doesn't see strong demand ahead and is as likely to play golf as to go flying. But on the other hand, the guy is a mile-a-minute idea factory and he's showing no signs of letting up. If he's bearish on the future, he's not acting that way. There were all sorts of projects going on at Diamond and I don't get the sense that these are going to let up.
LSA is a constant topic of query and throughout my travels, no one even remotely suggested that as a market segment, it has been successful. Nor did anyone seem to think the next big thing—say Rotax's 912 iS engine intro—is going to change that much. Diamond's Michael Feinig says the company didn't get into LSA for several reasons, not the least of which is lack of volume. He thinks the airframes could be sold profitably for under $100,000, but only in volumes approaching 500 a year. No one is doing that in LSA. No one is going to for quite some time, if ever. Dries fumes about regulatory authorities establishing arbitrary weight limits for LSAs that he thinks makes them so unsafe he's not interested in entering the market. Laudably, he thinks a manufacturer has a responsibility to build safety into an airframe and the Diamond aircraft have the safety record to prove it.
Yet still there are success stories. Tiny little Pipistrel in Slovenia, for example, isn't necessarily that tiny. It's doing multiple dozens of airplanes in three distinct model lines and expanding into the certified world, chancy though that may be. The company has gained a foothold in what might best be called the hyper-efficiency niche. As gasoline prices continue to rise, this idea will resonate strongly with certain buyers. Although it may never yield large numbers, it will make a tidy growth business. Some pilots may continue to complain about fuel prices—mostly in the U.S. where cheap gasoline is thought to be a birthright—while others will just buy these efficient little airplanes and get on with business.
Everyone I spoke to about LSA agrees that there are too many players and too few buyers and that a shakeout is inevitable. I don't see signs of the latter. What I do see is companies doing some things right while, seemingly, doing what they can to not sell airplanes. For instance, my story on the Rotax 912 iS mentioned (mistakenly) that Pipistrel was the launch customer. In fact, it was one of a dozen test-bed companies. A Pipistrel competitor demanded that we remove the reference from the story when what they should have done was to simply invite us to come see their airplanes rather than convince us not to mention the other guy's. This sort of cheap sniping is a standard feature of the LSA landscape. In some ways, it needs to grow up.
This can be a challenge for us in covering many of the LSA companies and even some of the bigger firms. It took some doing to get Rotax to agree to the video interviews and photography we needed to shape our coverage. Some companies either don't return phone calls and e-mails or they work so hard at resisting having their story told that it's almost as if they want to remain obscure. With 100 or more companies plying the LSA segment, none with big promotional budgets, all of them need all the help they can get in getting exposure for their products. We reach out to them in mutual interest, but often don't get responses. To those companies, I'd say this: Taja Boscarol at Pipistrel will eat your lunch. The company bent over backwards to accommodate us and, don't ya know, their story shines. (So did Diamond, by the way. Christian Dries nearly killed us insisting we see everything. We finally collapsed from information overload.)
So where to from here? Overall, based on what I saw on our European tour, I am optimistic. I see innovation. I see forward thinking that presumes a future market. Having said this, I think the little LSA companies are likely to stay little. I don't see the growth mechanism. The Rotax 912 iS may or may not stimulate sales. It's going to be more expensive and even a 20-percent fuel savings may not offset that in buyers' minds. We'll see. Still, I'm glad they built the engine.
You'll be reading a lot about China, India and South America. Based on what I've heard, these will be steady players, but won't ignite explosive growth in light aircraft. China's domestic market, served by its own domestic industries, may be the next big thing.
On the certified side, the demographic bubble is deflating. Pilots 55 and older are reaching the end of their careers and they're not going to be replaced in kind by younger buyers because airplanes are not going to get cheaper, the potential being limited because that demographic lacks buying power. They also have other interests. That means you'll see innovation alright, but it will be more expensive and rarefied. There will be fewer middle-class owners and more wealthy owners at the top of the price pyramid. At the bottom, expect to see more group ownership and club flying arrangements, with not much in between as the U.S. legacy fleet declines.
Europe is already there, really, largely as a result of regulation. In the U.S., the driver will be demographics and income distribution. What's left of the middle class has more important things to worry about than owning an airplane. It's sad that it's going that way, but things evolve and nothing is forever. As a pilot, I wish it weren't so, but as a journalist, I refuse to engage in self-delusion.
So, there's a future all right. It just won't touch as many people as the past has.