Cost of flying down 17% in one year -- so where is everyone?

Jay Honeck

Jay Honeck

Touchdown! Greaser!
Joined
Jun 6, 2008
Messages
11,571
Location
Ingleside, TX
Display Name
Display name:
Jay Honeck
AOPA is reporting that -- with fuel half of last year's cost -- the overall cost of flying has dropped 17% in the last 12 months. Yet, despite this, GA flying remains at historic low levels.

This is unprecedented, methinks. I know when we fly now, the burden on our budget is much lower than it was last year -- yet we're still not seeing very many others in the pattern. Where did everybody go?

Combined with the big drop in aircraft values (you can buy a great plane for a song nowadays, comparatively speaking), this reduction in costs SHOULD be kicking GA back into high gear -- yet it's not happening, at least not yet.

Why? Anyone got any theories on when it will come back?
 
When will it come back? Possibly when people feel their job isn't in jeopardy.

Many people are saving in case their job is lost- they can pay for things like car payments, mortgages, utilities, ect with the saving.

Another possibility is when the credit card is paid down. Lots of people bought too much on credit.

Just my opinion and I have no facts to back it up.

I note that my wet rental prices are the same as last year- no 17% decline there!
 
I hate to be the Grime messenger but long before the economy turned sour, GA was is in a downward spiral. Our exisiting Pilot Population is dwindling and the amount of "new starts" is down. Aircraft ownership regardless of your situation (Club, outright, share owner) is and continues to be very expensive. The time and expense to reach your PPL is around $9K +/-. Who the hell knows what "user fees" are lurking around the corner? Oh, and throw in the lousey economy and it's a bleak trend for GA.

Do I see a rebound? Sadly no.....
 
Cap'n Jack said:
When will it come back? Possibly when people feel their job isn't in jeopardy.

Many people are saving in case their job is lost- they can pay for things like car payments, mortgages, utilities, ect with the saving.

Another possibility is when the credit card is paid down. Lots of people bought too much on credit.

Just my opinion and I have no facts to back it up.
Click to expand...

I think you're right. People look at their liquidity, the decrease in value of their retirement portfolio and their house, and then paying $100+ an hour to go flying just doesn't seem all that prudent.

I note that my wet rental prices are the same as last year- no 17% decline there!
Click to expand...
Funny how that works, isn't it?


Trapper John
 
CT Arrow said:
I hate to be the Grime messenger but long before the economy turned sour, GA was is in a downward spiral. Our exisiting Pilot Population is dwindling and the amount of "new starts" is down. Aircraft ownership regardless of your situation (Club, outright, share owner) is and continues to be very expensive. The time and expense to reach your PPL is around $9K +/-. Who the hell knows what "user fees" are lurking around the corner? Oh, and throw in the lousey economy and it's a bleak trend for GA.

Do I see a rebound? Sadly no.....
Click to expand...

Very well said. Add in the TSA's continuing quest to add more regulations to GA is another part of the equation. Once they clamp down on "commercial Airports" the next target will be Federal GA airports, then private airfields.

User fees are coming, not a matter of "if" but "when".
 
Those who really want to fly, will. The high cost only weeds out those for whom it is not a passion or priority. There is no reason for them to return. There is just too much competition for the attention of people these days. It's not cool anymore.
 
Rotor&Wing said:
Very well said. Add in the TSA's continuing quest to add more regulations to GA is another part of the equation. Once they clamp down on "commercial Airports" the next target will be Federal GA airports, then private airfields.

User fees are coming, not a matter of "if" but "when".
Click to expand...

Reading AOPA I'm very much smelling that it's not going to be "$9B in User Fees to replace the avgas tax," it'll be "$9B in new user fees." "What avgas tax? Oh. Good news, everyone! No increase there."
 
It has been very important to "some people" that we (the collective "we," not just the "aviating we") feel insecure and uncertain about our individual and collective futures.

"Never waste a good crisis," has been an oft-repeated phrase, and that has been used to set the tone, with compelling effect.

Draw your own conclusions.
 
The comments about user fees and the TSA also resonates with me. I'd love to buy a plane at the current prices. I don't feel it's prudent to invest in something likely to be worth its weight in empty beer cans in a few years because the few that will be able to afford flying will have enough money to buy a new plane.
 
Rotor&Wing said:
Very well said. Add in the TSA's continuing quest to add more regulations to GA is another part of the equation. Once they clamp down on "commercial Airports" the next target will be Federal GA airports, then private airfields.

User fees are coming, not a matter of "if" but "when".
Click to expand...

For years people came from overseas to the U.S. to fly and train GA, because it was less expensive and the bureaucracy and regulations less onerous. It won't be long before we're looking to go overseas to fly, ourselves.
 
I don't think the thought of user fees and the TSA is the reason that people are not flying today. I think it's a function of the bad economy and that people either don't have or can't justify spending their discretionary income on an expensive pastime. Even people who have secure jobs have seen their investments and house values decline. Sure these are just paper losses unless you sell, but there is psychology involved too.
 
Post 9-11, I opted to stay with my cherokee 140 instead of investing in something like a comanche or homebuilt. With the ever increasing TSA bull**** it's not likely I'll ever move up to something bigger/faster.

My own flying is down significantly because of taking care of my elderly parents. The economy has zippo to do with it.
 
Trapper John said:
I think you're right. People look at their liquidity and paying $100+ an hour to go flying just doesn't seem all that prudent.
Trapper John
Click to expand...

especially when flying is defined as boring holes in the sky to go around the pattern, instead of getting Productive use out of the vehicle (and, no, practice is not productive)
 
I can tell you that my rental prices aren't down 17% and if they were I'd be flying a lot more.
 
I don't understand the logic of "people are flying less because of what the gubmint is _gonna_ do to us all!"

I'd assume the most obvious reason first, namely that people are flying less because while costs may be down 17% from a year ago, discretionary income is down far more than that, and those "year ago" figures represented the "top" after a long and steady climb of the past few decades.

It's also possible that there are some cultural factors at work. Maybe the effect of all our WWII fliers has finally worn out, as we no longer have those Dads and Granddads to inspire the children and grandchildren. Just speculating, of course...

I'd also speculate that the modern form of news delivery provides a much more efficient mechanism for wide distribution of news of small plane crashes, encouraging an exaggerated perception of risks.
-harry
 
mantakos said:
I don't understand the logic of "people are flying less because of what the gubmint is _gonna_ do to us all!"
<SNIP>
-harry
Click to expand...

If I knew the gubmint wasn't going to add user's fees and the TSA to every airport, I'd probably buy a plane and fly more. Instead I rent and fly about the same.

Does this help?
 
I think that the 17% decrease only really affects owners that fly or rent out their own planes. That reduction is not passed on to those of us that cannot afford our own planes. So, therefore, there is no change.

In my situation, having took a financial gamble on getting into flying professionally and not having it work out, I am still paying for that and have to work in anotehr career field whilst allowing all of my flying skills to go down the drain because I cannot afford to fly.

The one thing I worked really hard for I cannot do. I am 37 years old. I can't afford to do another career change like this. Do to the economy and some personal setbacks employment wise, my credit is now trashed also.

Aviation really has only hurt me. Don't get me wrong though, I am nto sorry I got all my ratings. It is jstu a shame I have no use for them and the money has gone to waste and I will be paying on it for the next 20 odd years.

Maybe some day I will be able to try again to be a CFI or higher on the food chain.

To all that can fly and reap the benefit of the so called decrease, enjoy it while you can. The bottom will fall out again.

David
 
jesse said:
I can tell you that my rental prices aren't down 17% and if they were I'd be flying a lot more.
Click to expand...

Sounds like you need to clip that article out of AOPA Pilot and present it to your FBO.

They may think they're pocketing a profit that's rightfully theirs -- but if they are priced so high that no one is flying, they're cutting off their nose to spite their face...
 
Why is anyone surprised by this? If AOPA and others don't understand that, then a subscription to the Wall Street Journal is needed more than an extra hour of Hobbs time. This is like asking, "If during the Depression, a loaf of bread was a dime, how come so many people were starving and didn't have bread?" with the answer being "Because no one had a dime to buy it." The raw cost of flying might be down, but the risk in absorbing that cost into your monthly budget is way higher.

I just went through my own job loss here recently. I was let go in April. I had a different job in the works since ~February. Thankfully, they came through shortly after my layoff, but I'm in chemistry with a Ph.D., 2 yr. postdoc, and 2 yr. industrial experience and all the companies that were hiring and had things posted out there that I applied to in early April haven't gotten back to me yet. Not even a "we received your application" response.

It's bad out there. Real bad and it's not over either and that's scaring a lot of people away from more than flying. I have friends reconsidering homes, cars, vacations, more kids, even pets. Yeah, it might be real cheap to buy a house now, but try to write that check for the down payment and closing costs when people at your work just got laid off and they say, "This is all we anticipate...for now" in the meeting after it. That'll keep you out of the skies real quick! :D There was a story of a woman in NYC who "can't afford luxuries like the Subway" so she bikes 1.5 hr to Brooklyn from Manhattan to buy groceries at a farmer's market that has samples out for people to try and that's how she eats lunch each day. It's bad out there.

I'm not an economist, but from what I've read, seen, and followed, I think we've started the roundout portion of the economy. We'll stay level and bleed off that speed until we touchdown. Then, just like a touch and go, we're gonna roll for a bit. Moving forward, but not getting any altitude. When will we be configured for t/o again and actually take back off? I'm not sure, but most seem to think 2010 will begin the slow recovery. At that point though, it won't matter how good things are. Those that have enough $$$ to fly will have it all eaten up by the taxes that'll go up to pay for 2008/2009 :D
 
bigtuna said:
I just went through my own job loss here recently. I was let go in April. I had a different job in the works since ~February. Thankfully, they came through shortly after my layoff, but I'm in chemistry with a Ph.D., 2 yr. postdoc, and 2 yr. industrial experience and all the companies that were hiring and had things posted out there that I applied to in early April haven't gotten back to me yet. Not even a "we received your application" response.

It's bad out there.
Click to expand...

Indeed it is! My wife who worked for small start-up's for the past 18 years was cut loose after the last Company exhausted their funding. The days of discovery are gone! She had numerous interviews at Big Pharma throughout CT and MA. all to no avail.

She finally gave up on Industry and pursued Academie. Now working for Yale University. The only positive out of this is she is moving forward w/ her PhD.
 
17%. Is that much?

If I received a 17% raise at work, the impact to my finances would be immediately felt. That could be a lot.

But a 17% discount on what is a 100% discretionary and mostly recreational activity for a lot of pilots? I guess I'm not shocked things are not rebounding.
 
Club rates haven't dropped, even though 100LL has gone down. Hangar rents went up. Why is my flying reduced? Lost my medical last year, got it back a week and a half ago. Weather stank this winter, so I didn't really want to go flying with my CFII. I've been up twice in the past week. :D I plan on flying more this spring and summer. Buying a plane isn't in the cards unless we hit the lottery. My wife likes the cost structure of the club much better than ownership.
 
CT Arrow said:
Indeed it is! My wife who worked for small start-up's for the past 18 years was cut loose after the last Company exhausted their funding. The days of discovery are gone! She had numerous interviews at Big Pharma throughout CT and MA. all to no avail.

She finally gave up on Industry and pursued Academie. Now working for Yale University. The only positive out of this is she is moving forward w/ her PhD.
Click to expand...

Yep, things suck everywhere. Travel is way down, taking our business with it. It's been especially bad, coming as it has after a record-breaking year like '08. (The talking heads who keep saying the recession started in late '07 are just blowing smoke -- the economy didn't collapse until last fall of '08.) All in all, business travel is down 40% year over year.

But there are still plenty of people in our market -- gubmint employees in this college town -- who are fully employed, with little or no danger of losing their jobs. Yet, few of the hangar doors are open, even on a sunny VFR Sunday like today and even with fuel half of what it cost a year ago.

It's just sad to see...
 
Jay Honeck said:
The talking heads who keep saying the recession started in late '07 are just blowing smoke -- the economy didn't collapse until last fall of '08.)
Click to expand...
Agree, at least, that is where the most of us started to feel it. The things that caused it though started much earlier. I am marginally effected by the economy--not enough to strike fear in my heart when it comes to aviation or home buying.
 
Jay Honeck said:
. (The talking heads who keep saying the recession started in late '07 are just blowing smoke -- the economy didn't collapse until last fall of '08.)
It's just sad to see...
Click to expand...

We track airplane trades pretty close. Based on our data, the economists are right insofar as GA values are concerned. The highest price point (for the airplanes tracked and relative to book prices adjusted for condition, time, equipment and cosmetics) was an airplane delivered on the Friday of Labor Day weekend 2007.
 
Jay Honeck said:
Yep, things suck everywhere. Travel is way down, taking our business with it. It's been especially bad, coming as it has after a record-breaking year like '08. (The talking heads who keep saying the recession started in late '07 are just blowing smoke -- the economy didn't collapse until last fall of '08.) All in all, business travel is down 40% year over year.

But there are still plenty of people in our market -- gubmint employees in this college town -- who are fully employed, with little or no danger of losing their jobs. Yet, few of the hangar doors are open, even on a sunny VFR Sunday like today and even with fuel half of what it cost a year ago.

It's just sad to see...
Click to expand...

My local wine shop started to notice the bleeding in March of 2008. One year later they closed.

Things don't just collapse overnight. The warning signs had started long before that. How long has the housing market been in the doldrums - what was the high point - 2006?
 
bigtuna said:
Why is anyone surprised by this? If AOPA and others don't understand that, then a subscription to the Wall Street Journal is needed more than an extra hour of Hobbs time. This is like asking, "If during the Depression, a loaf of bread was a dime, how come so many people were starving and didn't have bread?" with the answer being "Because no one had a dime to buy it." The raw cost of flying might be down, but the risk in absorbing that cost into your monthly budget is way higher.

<SNIP>
Click to expand...

CT Arrow said:
Indeed it is! My wife who worked for small start-up's for the past 18 years was cut loose after the last Company exhausted their funding. The days of discovery are gone! She had numerous interviews at Big Pharma throughout CT and MA. all to no avail.

She finally gave up on Industry and pursued Academie. Now working for Yale University. The only positive out of this is she is moving forward w/ her PhD.
Click to expand...

The days of Big Pharma aren't gone- it's just moved overseas. The biggest customers for lab equipment aren't in the USA any more- they are in China and India. All the chemists downsized in the USA? The work is still being done in those two countries at 1/3 the price.

In my work- I see the orders drop off in the USA and pick up in China & India. They purchase stuff for a contract for Merck, Aventis, etc.
 
We, the USA, buy $1 out of every $3 of goods exported by all the countries of the world... In other words, one country sucks up one-third of the entire worlds exports... Buying vastly more than we produce is unsustainable - it is like having a $200 a day crack habit while living on welfare.. The rest of the world is now refusing to let us continue stealing to support our habit...

It is an insoluble problem given the mindset of the average American - entitlement, etc...
To solve it will require a dictator... A man who can (and will) cancel NAFTA, tell the World Court to take a hike, impose import duties on goods that should be produced here, revoke union contracts, take control of all EPA/DNR actions across the country, restart factories by direct order, and tell the courts to sit down and shut up when the Nimby's come around whining...

Of course, that will take an armed revolution to implement... Perhaps someone in the next generation will take up the challenge... This generation will only sit in front of the brain sucking TV and whine as they slide into poverty...

Meanwhile, I am going flying until the oil hits $200...

denny-o
 
Dr. O said:
We, the USA, buy $1 out of every $3 of goods exported by all the countries of the world... In other words, one country sucks up one-third of the entire worlds exports... Buying vastly more than we produce is unsustainable - it is like having a $200 a day crack habit while living on welfare.. The rest of the world is now refusing to let us continue stealing to support our habit...

It is an insoluble problem given the mindset of the average American - entitlement, etc...
To solve it will require a dictator... A man who can (and will) cancel NAFTA, tell the World Court to take a hike, impose import duties on goods that should be produced here, revoke union contracts, take control of all EPA/DNR actions across the country, restart factories by direct order, and tell the courts to sit down and shut up when the Nimby's come around whining...

Of course, that will take an armed revolution to implement... Perhaps someone in the next generation will take up the challenge... This generation will only sit in front of the brain sucking TV and whine as they slide into poverty...

Meanwhile, I am going flying until the oil hits $200...

denny-o
Click to expand...

and oh, how I'd love to live in a country which did all that.
 
used airplane prices are certainly down Jay. and if i could find a bank that would loan me a little money, i would've bought one several months ago.

And I've never met an FBO yet that understood Econ 101: Law of Diminishing Returns.
 
tonycondon said:
used airplane prices are certainly down Jay. and if i could find a bank that would loan me a little money, i would've bought one several months ago.

And I've never met an FBO yet that understood Econ 101: Law of Diminishing Returns.
Click to expand...

It *is* odd, no? All FBOs appear to be doing the same thing right now -- RAISING prices in the face of declining demand. This, of course, makes no sense in the real world, where the rest of us are furiously CUTTING prices in order to compete...
 
The cost of flying may be down 17 percent, but my income is down about 60 percent from two years ago.

About the only thing up is my past-due bills (both incoming and outgoing). I've sent more clients to collections this year than in all the years since I started the business. Even the company my brother works for is more than 90 days past due on payment for a one-day assignment I did for them -- and they're going to collections, too, if something doesn't arrive in the mail this week.

-Rich
 
Jay Honeck said:
It *is* odd, no? All FBOs appear to be doing the same thing right now -- RAISING prices in the face of declining demand. This, of course, makes no sense in the real world, where the rest of us are furiously CUTTING prices in order to compete...
Click to expand...

most airplane rentals are supported by either a money making maintenance shop or a strong business selling fuel. There's a reason that any FBO that expands beyond about 3 airports stops renting airplanes. there just isnt enough money to be made to be worth it.
 
RJM62 said:
The cost of flying may be down 17 percent, but my income is down about 60 percent from two years ago.

About the only thing up is my past-due bills (both incoming and outgoing). I've sent more clients to collections this year than in all the years since I started the business. Even the company my brother works for is more than 90 days past due on payment for a one-day assignment I did for them -- and they're going to collections, too, if something doesn't arrive in the mail this week.
Click to expand...

Ouch. Suing your brother's company will be...ugly.

What makes all of this so awful is that it came on SO suddenly. We were setting and breaking sales records each month, every month last year, right up until the election.

From that moment on, business travel essentially stopped. We've been in the dumpster ever since -- and so has every lodging establishment in the country. It's just spooky how things can go from perfectly normal -- great, even -- to absolutely terrible, like a light-switch...
 
tonycondon said:
most airplane rentals are supported by either a money making maintenance shop or a strong business selling fuel. There's a reason that any FBO that expands beyond about 3 airports stops renting airplanes. there just isnt enough money to be made to be worth it.
Click to expand...

Another great example of short-term thinking that will ultimately doom general aviation. The FBOs that think they're "saving money" by not renting aircraft to customers are only hastening their own demise.
 
My perception is that it happened more slowly. Things were headed downhill even in the spring and summer of 2008 with the high fuel prices. Remember how much people complained about them?
 
My apologies - I replied to a thread I thought was in the Spin Zone, and it wasn't. Apparently it may need to be moved there..
 
Everskyward said:
My perception is that it happened more slowly. Things were headed downhill even in the spring and summer of 2008 with the high fuel prices. Remember how much people complained about them?
Click to expand...

and the housing market going to hell in a handbasket since... 2006?

Yeah, that was SUDDEN. Like a light switch.
 
I personally discovered that my flying money is actually my future mortgage payment. I'm making that silly choice to get house this year and pick up flying again when I make more money.

Turns out So Cal housing is only affordable to normal people (i.e. those living within our means) once every 8 - 10 years. I can't wait 8 more years.
 
You must log in or register to reply here.
Back
Top