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Thursday, December 12, 2013

US Aviation Industry Faces Global Challenges

Lawmakers, industry discuss the 'State of American Aviation' during Congressional hearing.

Woodrow Bellamy III

The United States aviation industry is finally emerging from one of the worst economic recessions in history, and is now facing challenges in remaining globally competitive against emerging markets according to several industry stakeholders who testified Thursday, Dec. 12 during a hearing before the U.S. House aviation subcommittee. 
Lawmakers held the "State of American Aviation" hearing to allow industry stakeholders to voice their opinions on issues that are important to address during the upcoming FAA reauthorization process. The current FAA reauthorization bill expires in 2015, requiring lawmakers to draft a new bill next year. 
"Simply put, American aviation cannot afford the American government to keep doing business the way it did in 2013," said Rick Larsen (D-Wash.), ranking member of the aviation subcommittee. "We simply can’t write a reauthorization bill for 2015 without taking a look at what’s happening elsewhere in the world." 
General Aviation
The hearing also allowed General Aviation Manufacturers Association (GAMA) CEO Pete Bunce the chance to voice the concerns of the 80 member companies that his organization represents. 
Bunce outlined several steps the FAA should take to improve the state of the general aviation industry in the U.S., including partnering with the industry to streamline the certification process for aircraft manufacturers and pursuing collaborative efforts such as the General Aviation Joint Steering Committee (GAJSC), a partnership between the FAA and the GA operator community, to improve safety in the industry. 
Through industry collaboration with the FAA, the GAJSC determined that the installation of Angle of Attack (AoA) indicators could improve safety by increasing situational awareness and giving the pilot more control over aircraft movement during approach and landing phases of flight. The committee is still awaiting a key policy decision from the FAA that will enable the installation of AoA systems in GA aircraft "more broadly," according to Bunce.
GAMA’s CEO also noted the fiscal realities endured by the GA industry over the past five years. 
"Since the 2008 recession, the global general aviation manufacturing industry has experienced a real and substantial decline in airplane sales. The recent peak of 4,276 deliveries in 2007 was followed by a decline to 1,977 airplane deliveries in 2011 for the same set of companies," said Bunce. 
National Business Aviation Association (NBAA) CEO Ed Bolen also attended the hearing, and highlighted three of his organization's "guiding principles" for the FAA and lawmakers to consider when drafting the 2015 reauthorization bill. Specifically, Bolen proposed federal investment in the FAA through a robust general fund contributing to the agency's operating budget, encouraging investment in manufacturing cleaner and quieter aircraft and continued direct congressional oversight over the FAA funding system to provide more stable funding. 
Bolen and Bunce also said it was imperative for lawmakers to avoid another government shutdown. During the 16-day government shutdown in October, GAMA estimates that the closure of the FAA Aircraft Registry office impacted the delivery of 150 newly manufactured aircraft valued at more than $1.9 billion. 
Commercial Aviation
Larsen said that attending the Paris Air Show in June showed him the global competitiveness of the aviation industry and the fact that there are "new entrants in the market everyday. The emergence of new markets, such as Dubai, China and Brazil are causing U.S.-based airframe manufacturers, avionics companies, aircraft engine makers and airlines to target new customers abroad. For example, in 2000, major U.S. airlines earned an average of 25 percent of their system-wide revenue from international services. In 2013, international markets represent nearly 40 percent of system-wide revenue for American carriers. Between 2003 and 2013, international revenues increased by 86 percent, while domestic revenue increased by just 10 percent.
Susan L. Kurland, assistant secretary for aviation and international affairs at the Department of Transportation, said modernizing the air transportation system in the U.S. will be a key factor in providing the infrastructure necessary for the nation's aviation industry to compete globally. Kurland believes the advancement of NextGen is a key factor. 
"FAA’s Next Generation Air Transportation System — or NextGen — is helping us enhance safety and efficiency by transforming our aviation infrastructure. NextGen technologies and procedures guide aircraft on more direct routes, improve communications, save fuel and decrease delays," said Kurland. "NextGen is not only good for the environment, but it also reduces costs to airlines and is good for business, jobs and the manufacturing base."
Larsen also made it clear that other countries are catching up to the U.S. aviation industry, which presents both opportunities and challenges. 
"What happens in Shanghai, Dubai, New Delhi, Moscow, and Bueno Aires matters here in the United States," said Larsen. "The emergence of new international markets is already having an impact on U.S. aviation. U.S. manufacturers are adjusting their strategies to target new customers in emerging international markets."


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