Cheap Gas Equals More Flying


When it comes to the buying of gasoline, I may be the quintessential American in one sense and the atypical American in another. Regardless of what it costs, I’m going to buy it and do what I plan to do. I’m the last guy to care if one station has a price a nickel less than the one across the street. I rode motorcycles for 12,000 miles last year and the 15-cent savings on a fill up isn’t worth the risk of a left turn across busy lanes. On the other hand, cheaper gas doesn’t make me drive, ride or fly more because fuel price just isn’t a factor for me.

But what about other people? I drove into the airport the other day and the posted price on the self-serve pump was $3.98. As I observed a year ago,that’s what the price was then, too, down from $5.40 the previous year. So basically, at least at our airport, fuel prices have been 26 percent lower for more than a year.

Nationally, AirNav had the 100LL average price at $5.37 a year ago; today it’s at $4.86 for the latest reporting period, a rather less impressive 9 percent reduction. For comparison, GasBuddy reported the average U.S. price for regular gasoline in mid-2014 as $3.67. For the latest reporting period, the price is $1.99, a decline of 46 percent. I’m not going to launch into whining about why avgas is so expensive compared to car gas because you already know that its price point isn’t strongly indexed to the crude oil market nor does the retail price have much to do with the constituents used to make it. It’s market-will-bear-pricing and that’s just the way it is.

But the larger point question is has a 10 to 25 percent decrease in the cost of avgas increased flying activity? Has it for you? Did you fly more last year because of cheaper gas or do you plan to fly more in 2016? We’re publishing a Question of the Week to probe that and I encourage you to comment below. My guess is, however, that the answer to both will be no. Although there’s strong correlation to lower car gas prices changing behavior—people drive and travel more, consumer spending rises and buyers swing back toward purchases of gas-guzzling SUVs and trucks—the data on general aviation flying is murky at best.

The best global indication is not asking people if they’re flying more, but seeing if they’re buying more avgas. The U.S. Energy Information Agency tracks this as does the American Petroleum Institute. But the data is, to put it generously, difficult to parse. According to EIA data,avgas consumption trends have been steadily downward since 1984, with the exception of a strong spike in demand between 2009 and 2012—yes, into the teeth of the recession. This data makes no sense to me, but the spike was significant—from about 493,000 gallons a day in 2009 to 733,000 in 2012. After that, it dropped off sharply.

Looking at more recent data, September 2015 saw demand for about 462,000 gallons a day, according to EIA data charted by Ycharts. That was down from 487,2000 gallons for the same period between the year before. Month by month, there’s variability in demand; some months are up, some are down. The peak in 2015 occurred in July and was higher than the July peak in 2014 by almost 2 percent, which is similar to trends on the automotive gasoline side.

For the nine months that data is available, five months showed higher consumption, four showed less. That’s not a lot different than the same period between 2013 and 2014, before the price drops became evident. During that period, five months showed declines, four increases and one was a wash. If there’s a trend buried in there, I sure don’t see it. Perhaps someone could enlighten me. The source data for all this has always been somewhat suspect because the totals don’t always add up to what refinery sources have told us they actually produce. But the trends ought to be consistent, in my view.

I’ve always maintained that the price of avgas is actually just a small factor in larger forces that shape GA activity and that it might take much larger price decreases to stimulate demand, if that’s even possible. It could very well be that a combination of things—say, the Third Class medical revision, fuel prices, more younger pilots buying airplanes, GDP above 3 percent—could conspire to spike up GA activity a little.

Or not. Something to contemplate for 2016.

Rotax Revisited

Reader Gus Funnell wrote to say that my theory about Rotax developing the 915 iS in last week’s blog is all wrong. He says Rotax has in mind the gyrocopter market, which is huge in Europe and all but non-existent in the U.S. Rotax’s Marc Becker said as much in this video shot at AirVenture last July.

That’s probably more right than thinking Icon had much influence, although several people in the industry told me they believe that Rotax is big on Icon’s success. And why wouldn’t they be? If Icon succeeds, that’s many hundreds more engines out there in the market. We’ll see what 2016 brings.