Fueling the GA Economy

The Million Air fixed base operator at San Bernardino, CA

Whether you’re operating a plane, train, or automobile, your fuel price undoubtedly varies somewhat from place to place. But in aviation, the difference can be staggering. At one airport, avgas might be in the $5 range, while a stone’s throw away it’s $8.

Mac McClellan recently opined that this has more to do with the retailer’s operating costs than anything else.

Consider at one extreme the airport that offers only self service fuel. The airport, if it is staffed at all, almost certainly has only one person there and only for at most eight hours a day. The operating costs that must be added to set the retail fuel price at an airport like that are small.

At the other end is a full service FBO that is fully staffed by several people for probably 16 or more hours a day. That FBO has a comfortable waiting room, pilot briefing services, food vending or more options, regularly cleaned restrooms, quickly available ground transportation and on and on. Since the only significant income left for FBOs is from fuel sales it’s easy to see how the cost of all of the staff and services must be added into the final retail price of fuel.

Neither type of fuel/FBO operation is intrinsically good or bad. It drives me crazy when I hear pilots blasting the fuel price at a big full service FBO without for a moment considering who pays the cost of the many services included in the fuel price. If you don’t want to pay for the FBO services, land at one of the thousands of airports that don’t offer those services.

Mac’s article interested me because on any given day I’m as likely to be flying a Cub or RV-6 as I am a Gulfstream or King Air. I regularly visit full-service FBOs and unattended rural airports in wide variety of airplanes, and to me his thesis just doesn’t ring true.

While I understand how more services result in higher prices, it doesn’t fully explain why the fuel price is three dollars per gallon higher in some airports than it is at another field just a few miles away. A company that provides more services should also have more sources of revenue. Isn’t that the whole reason they’re providing those services in the first place? McClellan’s big-city operator has higher ramp fees and service charges in order to help cover the cost of providing clean restrooms and waiting rooms.

In fact, I’d argue that the big FBO’s prices should actually be lower not higher. These retailers tend to see turbine airplanes which buy large quantities of fuel. The G-IV, for example, frequently takes on thousands of gallons in a single purchase. The cost of labor on a per-gallon basis is quite low when compared to airplanes that only take a few gallons at a time. While the Gulfstream take Jet-A rather than avgas, it’s all profit for the fixed base operator. Turbine aircraft pay for lav cleaning, potable water service, catering, deicing, dish washing, dry cleaning, and many other things. The hangar fees for both transient and based tenants are also sources of revenue — consistent ones at that.

Mac sees those as justification for higher fuel prices. I see the aircraft owner or operator paying the full cost of providing those services, and then some.

My point is that FBOs with many services also have many sources of revenue beyond fuel, and since large chain FBOs can leverage their buying power the same way any billion-dollar corporation does, you’d expect their prices to be lower, not higher. By McClellan’s logic, a WalMart Superstore should be sporting the highest prices in town since they provide far more products and services than a simple grocery store.

If the fuel price variations aren’t due to service level, then what’s behind it? Perhaps part of the problem is that airports with only one service provider have a monopoly on the market and can charge whatever they want, knowing pilots have no choice but to pay it. It’s like a remote desert town with only one gas station. The price is going to be high — and you will fork over the dough because there is simply no alternative.

The aforementioned WalMart Superstore has to compete with Target, Sam’s Club, countless grocery stores, and many other businesses. Sadly, airports don’t work that way, and as a result we all pay the price.

Even with two FBOs, some markets are saturated enough that the fixed base operator doesn’t really face competition in the normal sense. John Wayne Airport is like that. There are two places you can find fuel, service, and parking at SNA: Atlantic Aviation and Signature Flight Support. Neither one of them could possibly handle all the business traffic in and out of the airport alone, so is there really much of a sense of competition between them? Perhaps for the highest margin customer: frequent visitors with large thirsty airplanes like a Global Express or Gulfstream, or high volume operators like JetSuite or NetJets. But for the other 80% of general aviation? No.

I don’t begrudge retailers profiting from their significant investment. Running an FBO requires major capital infusions and serves a small market even in the best of times. But I still don’t see how it justifies a 60% difference in the price of fuel. Inordinately high fuel prices damage the entire aviation ecosystem by discouraging light general aviation customers, decreasing GA’s utility, and driving prices upward for those who remain.

Look around. We’re turning into Europe — and where GA is concerned, that’s not a good thing.

User Fees for All

Highway at night

I’ve been flying sixteen years now, and the specter of user fees has haunted the general aviation community the entire time. Longer, in fact.

The history of these proposals has been summarized by AOPA if you care to know the full background, but one thing not many of us remember is that these taxes were first proposed to Congress nearly two decades ago by… who was it again? Oh, that’s right: the industry itself. Yes, it was the airlines who first urged the adoption of user fees “as a mechanism to fund the FAA in a balanced federal budget.”

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The Spirit of 1903

Before they flew the powered aircraft, the Wrights researched and practiced using unpowered gliders of their own design.

While waiting for a (delayed, of course) flight at LAX recently, I passed the time perusing a new tablet-based aviation magazine called “Airscape”. If there was ever a perfect subject for a multimedia publication on the iPad, it’s got to be flying.

Airscape’s first issue was chock-a-block with gorgeous photos and engaging articles (including one by a Sam Weigel, a writer whose blog I’ve followed and commented on for years; incidentally, Sam’s stuff recently started appearing in Flying magazine). The Airscape feature which most interested me, however, was excerpted from Wilbur and Orville Wright’s account of the days leading up to their historic first flight in 1903. We all know the story, of course, but it’s different when you’re getting it from the horse’s mouth. It’s the little things that grabbed me, like their unwavering practicality, the way they always referred to their aircraft as a “machine”, or the perfunctory writing style which impeccably complemented the sepia-toned, Instagram-esque photos of their experiments.

So there I perched, stuffed into that miserable little chair amidst a stifling, overcrowded, and purely unromantic environment which can only describe in terms of Dante’s Inferno. And I realized that if the Wrights were around today, they wouldn’t recognize this brand of “aviation” at all. In fact, they’d probably hate what it’s become: a grind, a pain, something to simply be endured. Likewise, the joy and wonder of flying’s early years would be completely foreign to a typical 21st century American. “Enjoy flying? You’ve got to be kidding…”

If I had just one wish for aviation, it’d be to put the spirit of 1903 back into it — that sense of excitement and accessibility. We need the industry to be healthier, more vibrant, prosperous, and the key to doing that is getting more people involved. A lot more! The question of why there aren’t more people involved right now is one that gets asked frequently. The blame has been foisted on medical certification hassles, high dropout rates among student pilots, poor service from CFIs, the proliferation of cheap, high-fidelity simulators, the foreboding security surrounding airports, and dozens of other reasons.

My experience leads me to believe that the root cause is financial. It’s also what pilots have told me when I’ve asked them why they left GA or never went after the dream even though they obviously had interest. It’s all about the cost. Make flying cheaper and it will grow. Look at places where flying is pricier – Europe, Asia, just about anywhere else in the world, come to think of it – and you’ll find a smaller aviation community. Even here in the U.S., as the expense of taking flight has risen, the pilot population has fallen in both real numbers and, more dramatically, as a percentage of the overall populace. It’s all about money.

Even among those who realize it’s about dollars and cents, they often focus on how to make flying more affordable. That’s the wrong question. We need to think about what’s making it so bloody expensive. This isn’t limited to aviation, by the way. What’s making healthcare, business, and life in general more costly? It’s the legal perils, insurance expense and limitations, and regulatory compliance. Take a look at the exponential growth in the size of the Federal Register and you’ll see the root of our problem:

The researchers, economists John Dawson of Appalachian State University and John Seater of North Carolina State, constructed an index of federal regulations by tracking the growth in the number of pages in the Code of Federal Regulations since 1949. The number of pages, they note, has increased six-fold from 19,335 in 1949 to 134,261 in 2005.

As of 2011, the number of pages had risen to 169,301.

There’s an inverse relationship between regulation and the economy’s ability to innovate, grow, and prosper. General aviation didn’t cease manufacturing in the 80’s because people suddenly lost interest in flying. It was the legal burden that killed it, and only relief in the form of the General Aviation Revitalization Act allowed production to restart. On the flip side, check out the homebuilt industry today. A relatively lower level of regulation has led to phenomenal growth.

Over-regulation is an anchor we’re all dragging and unless something changes it will eventually sink our collective boat. I could fill page after page with examples from my own life.

  • You can’t even go to the airport without violating one law or another. At SNA, I once received a speeding ticket from a sheriff’s deputy for going 7 mph in a 5 mph zone. Even other deputies couldn’t believe it.
  • The EPA came after me and my family for Superfund clean-up costs on a landfill near Pomona because a company my father was once a part-owner of deposited muddy water (runoff from washing their trucks) – completely legally, mind you – more than 40 years ago. I never had any ownership in the company whatsoever.
  • A good friend had her classic aircraft impounded during a restoration at Chino Airport because the airplane had original instrumentation installed and the dials contained minute levels of radium. Read the whole story on AVweb, it’s quite ridiculous.
  • Every day I deal with TSA “security theater” nonsense. Need I go into the details on this?

If I was king for a day, I’d tackle the problem with three actions:

  1. Rewrite the FAA’s mission statement to, first and foremost, emphasize the promotion and growth of aviation.
  2. Institute major product liability reform.
  3. Roll back Title 14 rules on non-commercial GA so that it operates with the freedom of the Experimental-Amateur-Built category.

I’ll freely admit this would have a somewhat detrimental effect on general aviation safety, but it would be well worth the trade off if we could avoid regressing to a time that the Wright brothers would also recognize: a time when men looked skyward at the birds and wished they could soar, but knew it would never be possible.

This entry is part of an ongoing collaborative writing project entitled “Blogging in Formation”.

The Future is Already Here


Ask a dozen American pilots what the future holds for general aviation and I’d bet ten of them will opine that from where they stand, it doesn’t look good.

Can you blame them? Active pilots, hours flown, aircraft sales, and literally every other statistic the industry tracks has been trending downward for a long time. Between the inexorable rise in regulation and the flagging fortunes of our collective economy, there’s little reason to expect it will get better any time soon. I mean, who even has money to fly anymore?

The number of new private pilots has been dropping for years.

The number of new private pilots has been dropping for years.

Yes, the future looks bleak. And it is — especially if you’re viewing it through the prism of the late 70’s/early 80’s heyday. On the other hand, I’ve come to look at that period as an aberration. Much like last decade’s housing bubble, it was a unique and frankly unsustainable set of circumstances which were driven by demographic and economic factors we’re unlikely to see again. This isn’t necessarily a bad thing. Bubbles are destructive, whereas stability is a positive factor for just about any industry.

For many years, trying to figure out what GA would look like in the decades to come was an exercise in futility. It was predicted that the General Aviation Revitalization Act would fix the industry’s woes. It didn’t. Manufacturers resumed producing aircraft, but in limited numbers, and even then it was mostly the old designs at ever higher price points.

The recreational pilot certificate, we were told, would bring pilots back into the fold. It didn’t. I’m not sure I even know anyone who knows anyone who ever had one of those certificates.

More recently, the Light Sport rules were going to revolutionize aviation and swell the ranks of active pilots. It didn’t. What it did do was give us an admittedly wide variety of aircraft designs which are heavily — and arbitrarily — limited in their speed, size, and capability.

Year after year of looking through a glass darkly, trying to divine the future can be discouraging. But that doesn’t mean GA is doomed to extinction. It’s simply changing, and to see where the road leads, we must follow the apocryphal advice given to Woodward and Bernstein 40 years ago: follow the money.

As nice as it would be if the various FAA and industry initiatives could fix our problems, they cannot save aviation by themselves because GA responds not to missives from government or industry groups, but rather to the same factors that drive the economy as a whole.

On the certificated side, that means new airframes will continue to be prohibitively expensive due to liability expense, low volumes, and certification costs. Used aircraft, by contrast, will present a comparatively good value. This is already starting to create a sizable industry for rebuilding and retrofitting older airframes. The most extreme example of this is the warbird world, where folks have gone so far as to dig through three hundred feet of ice to recover an aircraft and then spend years and millions of dollars getting it back into airworthy status.

I’m not suggesting that’s in the cards for your average four-place GA aircraft, but it’s worth remembering that our airplanes are infinitely reparable. The only reason a damaged or worn-out airplane isn’t rebuilt is because — wait for it! — it’s not economically worthwhile. But it will be in the future as this cottage industry grows and begins to offer a substantial challenge to the ever-rising cost of factory-new airplanes.

At the last AOPA Summit in Palm Springs, Cessna — arguably the leader in GA manufacturing — didn’t even make an appearance, yet there were plenty of modified and refurbished aircraft on display. From winglets on an SR22 to turbine powerplants on a cabin-class C-340, it was eye-opening to see how vendors have responded to market forces. This is the future.

The O&N Cessna 340 turbine conversion

The O&N Cessna 340 turbine conversion

Well, half of it, anyway.

The other half lies not in certificated aircraft, but with Experimental-Amateur Built airplanes. Again, it’s all about the economics. You get much better value for your money without any of the limitations (assuming non-commercial operation) of the LSAs. This is already happening. Look at the RV series: more than 8,300 are flying, and another 10-15,000 are probably under construction at this very moment.

If the trend continues, the Van’s line alone will be producing more flying aircraft each year than all the other GA manufacturers combined. Think about that: general aviation, saved by an army of Davids.

The kits are getting faster and easier to build, there’s a large resale market, and the range of modifications and upgrades is too long to list. You can get a 200 mph fully aerobatic cross-country cruiser for $35,000. Already built, no less. Agile handling, sporty looking, yet extremely conventional in construction and material. So conventional, in fact, that it’s really a misnomer to refer to them as “experimental” at all.

The RV series may be what most people think of when they hear “home-built”, but there are designs out there from dozens of designers ranging from powered parachutes to composite turboprops and jets.

The Epic LT.  It's a composite, 6-seat, 300 knot turboprop.  Oh, and it's a homebuilt aircraft!

The Epic LT. It’s a composite, 6-seat, 300 knot turboprop. Oh, and it’s a homebuilt aircraft!

I should note that there is a wildcard in this scenario: the FAA. My crystal ball presupposes that the FAA won’t drop in on this party and regulate the Experimental-Amateur Built category out of existence. With a stroke of their proverbial pen, the FAA could change the rules and crush the one area of general aviation which is truly thriving. But barring that, it seems clear to me the future is Experimental and rebuilt/refurbished certificated aircraft.

Of course, aircraft are not much use unless there are people around to fly them, and that brings us to the next part of the equation: the pilot population. The bad news is that I just don’t see it reaching the level of the early 80’s. For one thing, the vast multitude of military-trained World War II, Korea, and Vietnam-era pilots which once populated the nation’s GA airports are mostly gone. For another, flying is never going to be inexpensive. And perhaps most significantly, our society as a whole has become far less tolerant of risk than it was 40 years ago.

You know, general aviation’s safety record may not improve despite new technology and additional training requirements. I for one value the freedom we have to fly when and where we want and think it’s far more important than incremental improvements in safety which require sacrificing that freedom. If we’re to continue being the land of the free and the home of the brave, there will be a price to pay. The beauty of our system is that we get to choose what risk level we’re comfortable with rather than having a faceless government agency do it for us. The day safety becomes the most important thing is the day we all stop flying permanently, because it’ll always be safer to stay on the ground than take a risk by venturing into the wild blue.

In that vein, it might be more appropriate — especially in light of today’s 4th of July holiday — to call the Experimental category the “Freedom” category. It represents the finest of American innovation and independence. If I had one hope for GA, even above keeping airports open and fighting off user fees, it would be that the Experimental category would remain unfettered by the government. In my opinion, everything flows from that. In fact, go back far enough in time and you’ll see that the entire aviation industry started as an experiment. The closer we remain to that ethos, the more vitality we’ll preserve for the future.

A hundred years ago, everything was experimental -- and aviation was a vibrant and growing industry.  Coincidence?

A hundred years ago, everything was experimental — and aviation was a vibrant and growing industry. Coincidence?

Another challenge for growth of the pilot population is competition. Can’t afford to fly a real aircraft? There are plenty of advanced RC models and high-fidelity computer simulators to help scratch that itch at relatively minimal cost. Even full-size aircraft may largely be operated by remote in the future as functions like cropdusting, police surveillance, fire fighting, cargo transport, and military flights are converted to UAVs operated by ground-based pilots. On the other hand, I can also see this creating a thirst for “real” flying among these system operators, so it might not be a bad thing for general aviation.

At the end of the day though, the fortunes of pilots and the aircraft they fly are inexorably linked. Should the E-AB market segment keep supplying us with low cost, high performance aircraft, I’m confident the pilots will be there to fly them. But if we allow the Feds to stamp out homebuilders or limit the versatility of their creations, sooner or later there just won’t be much worth saving.

This entry is part of an ongoing collaborative writing project entitled “Blogging in Formation”.

Aviation Scholarships

No scratched up windows to get in the way of viewing the sunset's amazing colors.

As I’ve noted on many occasions — as if it even has to be said! — flying is expensive. Ruinously expensive.

And it’ll only get worse in the future — just ask anyone who started in the 60’s 70’s, or 80’s. They’ll regale you with stories about flying for a few paltry dollars per hour. Of course, they’ll also tell you that it seemed like an enormous amount of cash at the time. I’ve no doubt that the current generation of aviators will be spinning identical yarns to equally wide-eyed and disbelieving pilots in the decades to come.

It’s certainly possible for an individual today to chop thousands of dollars off the cost of a rating or certificate through the shrewd use of a few simple tips (see my list). But even with the best planning and decision-making, flying will never be free.

Or will it?

I’ve noticed an increasing number of aviation scholarships popping up in e-mails, newsletters, and web sites. You’d think that the prospect of flying for free would generate a stampede of applications for these generous programs. They’re worth thousands (sometimes tens of thousands) of dollars each! But it ain’t necessarily so. In fact, I’ve known more than one of these scholarships to go unclaimed for lack of applicants.

So, in an effort to help get more of my fellow pilots on the road to the airport, I’d like to highlight a series of grants and scholarships that have come across my desk in recent weeks. Keep in mind that this list is by no means exhaustive. There are countless opportunities if you’re willing to dig deep enough, so ensure you’re following the newsletters and other publications put out by AOPA, EAA, IAC, local flight schools, regional pilot and airport associations, and anyone else you can think of.

1. The Vicki Cruse Memorial Scholarship

This one is offered by CP Aviation in Santa Paula, California in memory of Vicki Cruse, who was a top-level Unlimited aerobatic competitor and member of the U.S. National Aerobatic Team, National-level judge, president of the International Aerobatic Club, and Reno Air Race competitor.

CP is providing an emergency maneuvering training scholarship valued at $3,100. This scholarship aims to promote aviation safety through unusual attitude and aerobatic training. The scholarship includes three modules of the EMT course which includes stall/spin awareness, in-flight emergencies, and basic aerobatics.

This year’s scholarship includes transportation and lodging of up to $2,000 due to a donation made in memory of Danny Franscioni. I knew Dan; he was a talented pilot, tough competitor, and generous friend. His family also makes some fantastic wines. The Franscioni donation brings the value of the scholarship to $5,100.

All applications received by July 15 will be considered for this year’s award. Visit the IAC website for more information, or contact Judy Phelps at judy@cpaviation.com.

2. Greg Koontz Aerobatic Instructor Scholarship

Greg Koontz Aerobatics at Sky Country Lodge, Ashville, Alabama, will provide a full scholarship to promote aerobatic instruction. The scholarship consists of an eight-flight training program. All required ground school is included as well as four nights stay at Sky Country Lodge with its all-inclusive accommodations. The recipient would only be responsible for travel to and from the school.

The program is not an initial aerobatic course. For that reason the scholarship is targeted at those certificated flight instructors who have some tangible experience in aerobatics and have demonstrated by their activities that they are interested in becoming involved in aerobatic instruction.

To be eligible, one must have a current instructor certificate, be age 25 or younger, and have a demonstrated need for the financial support provided by this program.

3. The Douglas Youst Memorial Aerobatic Scholarship

The purpose of this scholarship is to promote aviation safety through aerobatics training. The recipient will receive a cash payment of $2,000, in the form of a check made payable to the aerobatic school where the recipient will be training. Training must be conducted at a facility approved by the Chapter 78 Scholarship committee and training must be completed within a 12 month period from receiving the grant. A list of approved facilities can be provided to the successful applicant.

The successful scholarship applicant must be well-rounded, involved in school and community activities as well as in aviation. The applicant’s academic record should demonstrate that they could successfully complete the educational portion of aerobatic training. Flight instructor comment reports or letters of recommendation must indicate that the successful applicant has the basic flying skills and potential to benefit from this type of training.

Qualifications: Applicants are preferred to be a certified flight instructor (CFI) or be receiving flight instruction with the intention of becoming a CFI. However, this is not a mandatory requirement. The applicant can be attending College or other post-secondary school or have recently completed College. The successful applicant will have demonstrated that he or she has the basic flying skills and potential to benefit from and to pass on lessons learned from this type of training. 

4. Amelia Earhart Memorial Scholarships

The Ninety-Nines offer an annual series of scholarships for women. These range from initial pilot training all the way up to turbojet type ratings. The only hard-and-fast requirement is that the applicant be a member of the organization, something that’s quick and easy to do.

5. NBAA Scholarships

NBAA’s scholarship program offers nearly $100,000 annually in cash awards as tuition reimbursement for enrolled students, and nearly the same amount in monetary and training awards for working professionals in business aviation, including pilots, maintenance professionals, schedulers, dispatchers, flight attendants and flight technicians.

6. AOPA Flight Training Scholarships

The Aircraft Owners’s and Pilots Association administers this program. ASA, Jeppesen, and the Richard J. Santori Memorial Scholarship each award $5,000 to a student pilot pursuing an FAA sport, recreational, or private pilot certificate. The recipients are chosen based on merit, including previous accomplishments, ability to set goals, and demonstrated commitment to flight training.

7. EAA Flight Training Scholarships

The Experimental Aircraft Association offers dozens of scholarship programs, and while many of them are aimed at young people, there are also grants for professional pilots (I recommend the Clay Lacy Professional Pilot Scholarship, which provides up to $12,500 of support per year per award) and other adults.

The San Carlos Flight Center offers a fantastic scholarship program for those living in the Bay Area

The San Carlos Flight Center offers a fantastic scholarship program for those living in the Bay Area

8. The Upwind Scholarship

The San Carlos Flight Center in Northern California offers this regional program to allow high school students to earn their pilot certificates over the summer.

9. The Aero Club of New England

An east coast version of the previously mentioned Upwind Scholarship, ACONE offers nine scholarships totaling more than $25,000 annually for pilot training. These are regional awards limited to those who live in the New England area.

10. Southern California Aviation Association

I’ve saved what I consider to be one of the best scholarship programs for last. SCAA is not a name I was familiar with until recently. The organization started off in San Diego County and has recently expanded to include the greater SoCal area. SCAA is growing rapidly and I’ve been impressed by the size and scope of their offerings, which include Citation CJ type-ratings at both Simuflite and ProFlight. They’ve also provided a series of general flight training awards and offer scholarships for aviation mechanics.

As I said at the top, this is not a complete list. There are hundreds of scholarships, grants, and awards available for pilot training. Imagine what you could dig up if you really put your (proverbial) back into it!

If you’re a member of the “flying poor” (or aspire to join that august club), you might have more time than money. Searching out and applying for these scholarships can make all the difference in the world for both you and an aviation community that needs fresh faces if it has any hope of thriving in the future. And if you’re a veteran who’s already got his or her ratings, or simply doesn’t need the money, they’re equally valuable because we want to ensure the next generation of pilots is as large, well-trained, and successful as we have been.