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Volume 25, Number 19a
May 7, 2018
 
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Aircraft Loan Rates On The Rise
 
Paul Bertorelli
 
 

A decade of low interest rates on aircraft loans continues to stimulate aircraft sales, but worries about inflation are pushing rates up, says Airfleet Capital, a leading aircraft lender. While no spikes are expected short term, the market is definitely headed higher, says Airfleet’s Jim Blessing.

In this podcast recorded last month at Sun ‘n Fun, Blessing told us the continuing bull market is driving modest demand for owner-flown aircraft, but there’s underlying pressure on low interest rates. “So far, they haven’t had a tremendous impact on the aircraft lending segment, but they have had on other segments, homes and automobiles. I suspect they will have an impact on aircraft this year. We’re expecting to see continued advances in rates,” Blessing says.

Average rates on aircraft loans have risen only slightly above historic lows of about 4 percent two years ago. Blessing says current averages are between 4.5 and 5.5 percent. “We haven’t had buyers see 7 percent interest rates in 10 years. What are they gonna do when they see that?” Blessing adds.

Until then, buyers are finding both airplanes to buy and the money to finance them. “There seems to be a positive attitude on the small business side. Our customers are entrepreneurs with owner-flown aircraft. They seem to have found a way to get their businesses more productive [using airplanes],” he says.

American Airlines Dropping Two Regional Carriers
 
Kate O'Connor
 
 

American Airlines won’t be renewing its contracts with regional carriers ExpressJet and Trans State when they expire in 2019, according to Bloomberg News. The report cites a memo to reservations agents that goes on to state the move is being made to streamline passenger experience and that ExpressJet and Trans State flights will be shifted to other airlines. American Airlines also ended its contract with Air Wisconsin Airlines in February.

In addition to the 12 CRJ700s it flies for American, ExpressJet has a partnership with United Airlines. The company flew for Delta as well until Delta ended that contract in August 2017. ExpressJet is owned by SkyWest Inc., which also operates SkyWest Airlines. SkyWest Airlines has a separate partnership with American and will reportedly be taking over the routes flown by ExpressJet. St. Louis-based Trans State flies for United as well. It has been reported that its American routes will be flown by Envoy Airlines once the contract expires.

Is the Vashon Ranger The New 150?
 
Paul Bertorelli
 

You can say a lot of things about light sport airplanes, but one of them isn’t that the sky has been darkened with 1320-pound wonders. Sales remain modest at best and a company selling 30 or 40 a year has a smash hit.

Now comes new startup Vashon to reset that equation with a heretofore untested idea: a cutting-edge airplane with a large cabin, an efficient production system meant to drive the price down and a dual appeal as a sort of flying RV and would-be replacement for the Cessna 150. In addition to lifting its own weight, the Vashon Ranger has to levitate those expectations in a market where light sports haven’t made a meaningful dent in the trainer fleet.

What are its chances? Challenged, I’d say, not least of all because I haven’t encountered anyone who claims to understand the overall anemic piston market. Consider this: 2017 was, relatively, a good year for trainer sales. Yet, says GAMA, between Cessna, Piper, Diamond, Cirrus and Tecnam, the market absorbed 334 aircraft that might be considered trainers and even that number depends on assuming all of the Skyhawks, Archers and DA40s went into the flight school segment. So I’d guess the more reasonable number is 225.

We’re led to believe that the chronic pilot shortage and the burning urge of 1.4 billion to Chinese to slip the surly bonds will unleash a torrent of demand any day now and, well, I first heard that in 2005 and I’ve been a bemused bystander since. As explained in this video, Vashon’s belief is that demand is suppressed by high prices and it wants to drive those prices down by building volume. For now, the Ranger is at $115,000, fully equipped. The company doesn’t know if it can make money at that price, nor does it yet know if it can go lower or will be forced to escalate, as so many companies have had to do.

Big volume is planned. But what’s big volume? Is it 100 airframes a year? Or 300? The company is cagey about this, but I’d say if they can approach the lower number and be profitable, the Ranger will be a player. If they reach 300—basically what Cirrus is selling—I’ll be the idiot I always suspected I was. In context, $115,000 is not the lowest-price LSA out there by any means. But with sophisticated two-display avionics including an autopilot, it’s a good value against something like the Flight Design CTLS north of $150,000.

On the other hand, the normal rules of supply and demand don’t seem to apply to airplanes. The best-selling LSAs are the most expensive ones, including the aforementioned CTLS and CubCrafters’ Carbon Cub. And while these airplanes are upper tier for light sports, they’re still half the price (or less) of Part 23 trainers such as the Archer and Skyhawk. Yet they aren’t well represented in the training fleet because schools have a bias against them related to durability, tight cabins, squirrelly handling and lack of payload—but mostly durability and support. That’s not to say light sports aren’t used in training, just not to extent their lower price suggests.

With robust landing gear, a huge cabin and handling like an RV-8, the Ranger addresses these shortcomings. What it does not address is payload. With a 438-pound useful load, it gives up a solid 100 pounds to an airplane like the CTLS. LSAs that push the weight envelope aren’t unusual—the American Legend Super and the Carbon Cub are even heavier. With the Ranger, will buyers and flight schools be willing to work around this limitation considering the price, the sophisticated panel and cabin size? People who insist yes or no either know a lot more than me or a lot less. I just don’t know. I thought Diamond’s DA42 would be a dud.

The reason for the Ranger’s high empty weight is at least partially because Vashon picked the Continental O-200-D. That’s why the Super Legend and CarbonCub are so heavy, too. They bypass the Rotax 912/914 series in favor of traditional aircraft engines that are at least 50 pounds heavier, if not a little more. This choice is an axe with two blades. Do you pick up more buyers for using an archaic legacy engine than you lose for having 50 pounds less useful load? See above. I can’t say. In CubCrafters’ and Legend’s case, they’ve tarted up the basic four-cylinder with either electronic ignition or fuel injection, or both.

That’s my beef with the O-200. In addition to being heavy, the number of carb icing accidents in Cessna 150s is legion. The Ranger is a cutting-edge design that’s even equipped with an integration module. It needs an engine to match, in my view. It’s 2018—no piston airplane should have an engine sans fuel injection and electronic ignition. Vashon says it’s looking at other engine options. Price may be an issue, too. The Rotax 912 iS is more expensive than the O-200-D.

And we interrupt this blog for my standard screech about the LSA weight limit. It needs to be raised. Period. A driving reason it's 1320 pounds is to align with the 600 kg European ultralight limit, but Europe and the rest of the world are shot through with inconsistencies and I can see no reason why the U.S. should cling to 1320 pounds in a universe of 225-pound students and instructors. If the Ranger had a 1500-pound limit—which it easily could—it would be far more appealing.

Among many unknowns is another: market timing. It’s always possible that in a strong world and U.S. economy, demand really is on the verge of a spike and it's further possible that schools may become fed up with Part 23 trainers that cost close to a half-million bucks, or at least enough of them to constitute a viable market. The $115,000 price point—if Vashon holds it—will be an interesting test. It’s far from the $40,000 airplane of light sport fever dreams, but given Vashon’s investment in automated production, it may be as good as it gets. The question is this: Is it good enough?

Epic Optix Shows Low-Cost HUD
 
AVweb Staff
 
 

At Sun 'n Fun 2018, Epic Optix showed off a new low-cost HUD for light aircraft. In this follow-up coverage, AVweb learns how the new device works. It's designed to attach to the aircraft glareshield without need for formal approvals.

You're the PIC: You're Authorized
 
Rick Durden
 
 

As a student pilot I badly embarrassed myself by making about six go-arounds while trying to land at an airport in a gusting crosswind. My instructor had told me to land there, so I had then told myself that I had to land there—there was no alternative. I also had internalized that go-arounds were a mark of a poor pilot—one who couldn’t get his stuff collected and so had to announce to everyone at the airport that he was an incompetent rube.

I did land, not gracefully, and taxied to the FBO to get my logbook signed. Inside, as I walked to the counter, I could feel the eyes of every single one of the pilots in there who were drinking coffee and watching airplanes through the big windows. I knew that they had been commenting on the quality of the pilots, and that I had been the subject of less than flattering comments. I felt lower than the gum stuck to the bottom of my sneakers.

Logbook signed, I wanted to get out of the door as fast as possible, to get away from people who had, I was certain, judged me unfit to join the ranks of aviators. However, before I could get to the door, one of the coffee-drinkers asked me, “Were you the one who made all those go-arounds?”

My voice came out three octaves high, “Yeeesss.” I wanted to disappear.

The old man, he must have been at least 40, approached me, stuck out his hand and said, “Smartest thing I’ve seen anyone do here today. Never be hesitant to go around if things aren’t right.”

I shook his hand, stammered out, “Thank you,” and left.

Outside, the day was brighter. The airplane glowed in its yellow paint accented by the black lightning flash. My feet had become light. Birds were singing. I realized that I might even learn to fly.

That event had a powerful influence on me. I’d known what to do and had done it, but felt foolish for having done so. In years to come I would spend a lot of time with pilots who asked whether it was OK if they did this or that—knowing in their aeronautical hearts that what they thought was right was probably authorized, but it ran counter to what it seemed like everyone else did.

As an attorney working on aircraft accident lawsuits and regularly reading as many as 100 accident reports a month, I saw too many situations where a smart pilot didn’t exercise his authority as pilot in command because he was hesitant to do something unconventional or inconsistent with what others were doing—and wrecked an airplane. Or worse. I watched a friend succumb to peer pressure to fly his just-restored Cessna Airmaster on a gusty day. That airplane is a handful on the ground on a good day. For some reason, pilots in the pattern were landing in a quartering tailwind. My friend followed the crowd and lost control on rollout, putting the airplane into a fence—necessitating major repairs. Some years later I looked at a Cirrus crash that killed four because the pilot tried to land in a strong, 90-degree crosswind on the paved runway at the airport, lost it and flipped the airplane. There was a grass runway directly into the wind, but he’d been told by someone not to land on grass …

So this is to give every pilot permission to do smart things in airplanes even though the smart thing might conflict with old wives’ tales and what “everyone knows.”

You’re the pilot in command—you’re authorized.

You’re authorized to make a go-around if you do not like the way a landing is shaping up. If the lineup isn't right, if you're too high or even too low, or the airspeed isn't in the parameters you set for it, go around. It's perfectly OK to make a go-around at a controlled field. You are the pilot in command. When you get the airplane collected, tell the controller what is going on and what you want to do next. Your taxes pay the controller. He or she will work you in for landing once again. Want to know the truth? The controllers will be very glad you made a go-around because crunched airplanes on runways really increase their workload.

Refuse the Clearance

You’re authorized to refuse a clearance that a controller gives you if you don't feel safe complying with it. If you are going IFR from Detroit to Cleveland and get routed over the lake, it's OK to refuse that routing and get one that stays over the shoreline. You’re authorized. The controller will work it out. It's perfectly OK to not have a burning desire to fly a single-engine airplane over a large body of water. Wanting to stay over land may be a pretty good indication of mental health and good judgment.

You’re authorized to follow the procedures for your airplane in the POH (or Owner’s Manual) even though the old guys have some other, "better" way. If the POH does not call for a power reduction after takeoff, there is no reason to make one. In fact, the power reduction that the old airport hands insist on probably came about from some completely different type of engine that some of them once operated—or once heard about—and they have decided to apply the procedure to every engine regardless of its make, power output or operating needs. If the engine is rated for maximum continuous operation at 100 percent power, there is no reason to make a power reduction after takeoff even though the new engine monitor says that the engine is developing 90 percent power. In fact, that’s great. You need power to climb and the engine is designed to run at 100-percent power all day long. The POH may call that a “maximum performance” climb—but, in reality, is there any other kind? Do you want to do “sort of high performance” climb? Plus, if the engine quits, do you want to be at 2000 feet AGL with a lot of options because you used all the performance available or at 1200 feet because someone told you to pull the power back in the climb?

You’re authorized to read John Deakin's AVweb columns on engine management and learn what is going on inside your engine so that you can make informed decisions on how to operate it.

You’re authorized to lean the mixture any time you are in level flight, at any altitude. There is absolutely no reason to run the mixture full rich when you are in level flight unless you have an airplane with a pressure carburetor set up as they are on the Twin Bonanza. If you want to get book fuel burns (or even beat them) you have to lean the mixture in cruise. The POH will get you started in doing so. If in doubt, run 100 degrees rich of peak and you'll never hurt the engine. If you are at 65% power or less you cannot hurt the engine by leaning it. It is not developing enough power or heat to damage itself. If you lean it too much, it will simply run rough and then quit until you slide the mixture control back in a notch or two. In general, the worst place for running the engine is about 50-75 degrees rich of peak. Run either richer or leaner and you'll have a happy engine, clean spark plugs and predictable fuel burns. As John Deakin pointed out in his columns, there’s no such thing as “too lean,” there’s only the "wrong lean"—and that’s 50 degrees rich of peak at high power settings because that’s where you are at the highest risk of detonation.

You’re authorized to declare an emergency when something goes wrong or if there is something going on that doesn't make sense. There is no paperwork associated with declaring an emergency when you’re flying under Part 91. By declaring, you are telling the world that you are smart enough to be a pilot in command and that you understand how to call in the troops that are available to you to solve a problem. One of the worst things you can do is think you have diagnosed a problem, decide it's not a serious problem, and then—as the fire breaks out—realize your diagnosis was wrong and you should have declared. You may be about to touch down on landing, but the fire trucks are in the shop and the CFR crew is out cutting the grass. You're screwed. If things aren't right, declare, get the trucks rolling and take command of all of the assistance available.

You’re authorized to work a weight and balance before you load the airplane. How long has it been? What will that airplane carry with full tanks? Where can you put it? Are you sure? Know what happens in your airplane if the CG is one inch forward of the forward limit? Can you physically flare the airplane to land? How about what happens when the CG is only one inch aft of the aft limit? And it's turbulent on climb out, causing you to stall the airplane? When will it become neutrally stable in pitch? At what point will it display negative stability? If you stall it, is it possible to recover from the stall, or the incipient spin? How well do you like surprises?

You’re authorized to tell that overbearing, impatient jerk of a passenger that the weather is just plain too bad to make the flight and that it may be tomorrow or the next day before you can go. Remember, if you push it, your funeral will probably be on a sunny day.

Recurrent Training

You’re authorized to take a flight review every six months or annually. Professional pilots do so. You know that the one variable that seems to be determinative as to whether a pilot will have an accident is how long ago the recurrent training was. So, it's OK to have a standing appointment with your favorite instructor every six months to get a good review and an instrument proficiency check. It's cheap insurance.

If you see or do something during a flight that doesn't meet your expectations for a sufficient level of safety or if you think you inadvertently violated a FAR, you’re authorized to file an ASRS (NASA) report. The FAA will not find out. You may provide yourself with a little bit of protection should the FAA decide you did violate a regulation. (Keep in mind you only have 10 days after the event in which to send in the NASA form.) You may also call attention to a safety matter that needs to be resolved. Pilots filing NASA reports have caused changes to be made.

You’re authorized to expect that the airplane you rent at an FBO has all of the squawks fixed. After all, it's probably worth substantially more than any car you rent at Hertz or Avis and you wouldn't tolerate squawks on a rental car, would you? It's OK not to tolerate an FBO that tells you not to write up squawks. You’re also authorized to complain about poor service at an FBO. By the same token, it's OK to compliment good service and good FBO employees publicly and to management.

You’re authorized to sit quietly in an airplane before you start up. The cockpit or some spot away from your passengers and distractions can provide you with the time to clear your mind of earthly distractions, visualize the flight to come, shift mental gears to movement in the third dimension and program your internal computer for what you are about to do. After all, humans have only been flying for about 235 years and that isn't time for tens of thousands of years of evolution to have caught up ... we have to think about each flight we make because it isn't yet a natural part of us.

You’re authorized to get involved in local politics to help protect your airport. It's probably also a good idea.

You’re authorized to go ahead and get that rating you have been thinking about. Pick up an instrument ticket. Go ahead and exert yourself a bit and get your commercial or ATP. Who cares if you ever "use it?” The skills you pick up will add tremendously to the enjoyment you get from flying. You will also have a deeply satisfying feeling of accomplishment. Look around. Notice who is telling you not to get the rating, that it's not worth it. It's the hangers-on with the ancient private ratings, who nearly roll airplanes into balls of aluminum when landing in mild crosswinds. It's easier for them to accept their own lack of ambition or desire to be better pilots by holding others back. Do they represent the level at which you want to remain? Remember—it’s not necessary to put a lid on a lobster tank. Any one of them trying to get out will be pulled down by the rest.

You’re authorized to go to a safety meeting and ask questions. You’re authorized to challenge the wisdom of those who make pronouncements about flight, including columnists. You’re authorized to demand answers.

Fly the Airplane

You’re authorized to fly the airplane and not the microphone. When you are in the pattern, making your position report is not nearly as important as making sure the airplane is where you want it to be, on speed, configured as it should be, with the checklist complete. Then, and only then, should you consider talking on the radio. That may mean you do not make a radio call at some spot you ordinarily would. It's OK. I've read too many incident reports where pilots got so interested in reporting on downwind that they interrupted the landing checklist and proceeded to omit to extend the landing gear.

You’re authorized to fly more than above 2000 feet above the ground. Sure, most of your training took place down there and your dual cross countries weren't much higher. But, if the weather is decent, climb higher. You won't have to worry about towers, and you may reduce the chance of blundering into a TFR or other restricted airspace. Your normally aspirated airplane is most efficient between 6000 and 8000 feet MSL. Plus, you may find smoother air and your passengers will appreciate it.

You’re authorized to show respect for your passengers. Remember how nervous you were about flying when you started? That's where they are now emotionally, and they probably don't even have the drive and desire for flight that you did. So, your concern for them and willingness to provide a smooth, enjoyable ride that keeps their best interests in mind may make the difference between whether they become aviation supporters or vote to close your airport.

You’re authorized to insist that the people in the airplane with you wear the shoulder harnesses.

You’re authorized to run your pre-landing checklist more than once. You’re also authorized to point at the landing gear position indicator on base or final and ask your passenger to confirm that it says what you think it does. It may just prevent that certain embarrassment of a gear-up landing.

You’re authorized to slow the airplane down on final and fly it at the speed recommended in the POH and to use all of the flaps. Excess speed on final has caused far more accidents than too little speed. You’re authorized to admit that that airplane feels better when you are going faster, and then to go out and practice until you are comfortable approaching at the published speed of about 1.3 Vso. It's not OK to go faster—it's asking for trouble on those landings where it really matters.

You’re authorized to wait until you are on short final to push the prop control forward. It's not OK to do it on downwind when you are still going fast and therefore make enough noise to aggravate every homeowner around the airport.

You’re authorized to remember that a lot of people on the ground don't particularly like airplane noise and to show respect for others by flying higher, turning the prop slower and otherwise flying quietly.

You’re authorized to expect an instructor with whom you fly to sit down with you before a lesson or flight review and go over the goals and what will be covered on a lesson. You’re also authorized to expect that the instructor will be willing to work with you and cover specific types of things you want to review. You’re authorized to demand that an instructor tailor training to the type of flying you do, and it's OK for the instructor to demand that you work to the best of your abilities when you take recurrent training.

You’re authorized to use a basic, two-seat trainer for knock-around and proficiency flying. It doesn't make you any less macho and it may allow you to afford to fly more. After all, that's what's really important, isn't it?

Do a Pre-buy

You’re authorized to be suspicious when you buy an airplane and to inspect it extremely carefully. You’re also authorized to refuse to buy an airplane that is not as represented, or doesn't have all of the paperwork to prove compliance with all ADs or otherwise prove that it is airworthy.

You’re authorized to volunteer for the various aviation activities in your area. It's also OK for you to organize some of them. Aviation has enriched your life; it's time to give something back. You’re authorized to look at the website of the Air Care Alliance and find a Public Benefit Flying organization and use your skills to help people.

You’re authorized that when an old friend shows signs that it is time for him to stop flying for you to talk with him and see if you can reach him. It's also OK that if your talk doesn't work, that you take the necessary actions to have him stop before he hurts himself or others. It may be one of the hardest things you ever do in aviation, and it may cost you a friend, but it may also be the most important thing you do.

You’re authorized to sit quietly in the airplane after shutdown and go through the flight in your mind; to think about what you did right and what you could have done better and what you learned from that flight. It's OK to be thankful that you were able to make one more flight.

After the flight, as you are securing the airplane, you’re authorized to thank the airplane for taking you aloft.

Now, you have permission. you’re authorized to go out and learn.

Rick Durden is an aviation attorney who is a CFII, holds an ATP with type ratings in the Douglas DC-3 and Cessna Citation and is the author of The Thinking Pilot’s Flight Manual or, How to Survive Flying Little Airplanes and Have a Ball Doing It, Vols. 1 & 2.

Question of the Week
 

Each week, we poll the savviest aviators on the World Wide Web (that's you) on a topic of interest to the flying community.

Visit AVweb.com to participate in our current poll.

Click here to view the results of past polls.

Lycoming 'When can an engine give you 200 extra flying hours?'
Brainteasers Quiz #243: Put The Civil In Civil Aviation
 

The seemingly infinite possibilities of flight are easily achieved by expanding the frontiers of our self-induced limitations -- whatever that means -- so be bold, and mighty forces will come to your aid in acing this quiz. (Yes, that's a cheeky allusion to Almost Famous, likely to spark hangar discussions among incensed Goethe scholars.)

Click here to take the quiz.

Meet the AVweb Team
 

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Tom Bliss

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Contributors
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Kevin Lane-Cummings
Paul Berge
Larry Anglisano

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Karen Lund

Executive Vice President, Editorial Director
Timothy Cole

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