Macroeconomics of GA

[denverpilot]

Interesting article.

http://www.generalaviationnews.com/2011/02/02/ga-and-the-middle-class-the-great-divergence/

Thoughts?

 

[RotorAndWing]

Interesting article.

http://www.generalaviationnews.com/2011/02/02/ga-and-the-middle-class-the-great-divergence/

Thoughts?

With the references to Slate and quotes from Krugman it's essentially a class warfare rant.

 

[Jim Logajan]

With the references to Slate and quotes from Krugman it's essentially a class warfare rant.

Seems a good summary.

As best I can make out, the odd implication seems to be that the increasing wealth gap causes the cost of general aviation flying to increase. Or some such logic or perverse correlation.

Kind of like pointing out that the rich are getting richer at the same time high definition TVs are getting cheaper - and concluding the increasing wealth gap is responsible for cheaper high tech gear!

 

[steingar]

Dunno if I agree. GA costs have been rising loads faster than inflation. Could be the folks who were flying in the good ol' days just got priced out.

 

[Ken Ibold]

Not buying it. My view is simply that Americans have become lazy and obsessed with comfort. Aviation is not the place for that kind of attitude, so Americans are going elsewhere in droves.

The rich see status, want to avoid the TSA scam, and, as the article says, can afford to be flown, rather than fly. That may be general aviation, but that's not *flying*.

 

[Ted]

Not buying it. My view is simply that Americans have become lazy and obsessed with comfort. Aviation is not the place for that kind of attitude, so Americans are going elsewhere in droves.

The rich see status, want to avoid the TSA scam, and, as the article says, can afford to be flown, rather than fly. That may be general aviation, but that's not *flying*.

A good summary. You actually have to be intelligent and on the ball to be a pilot, rather than the average idiot who we see going down the road.

You can still fly LSAs, a Chief, or any number of the old aircraft that they made "back in the day" and they are still pretty cheap to operate. But they are also useless as anything other than getting into the air. The aircraft that were capable of real transport were still expensive then, and I wonder how many of those farmers were going out and buying 310s for their ranches like Sky King. Probably not as many as were buzzing around in a Luscombe.

The pilots I know who fly their own nice airplanes as tools have money (obviously), but they don't act like it. GA is a tool they learned how to use, and so when they show up at the airport it's usually in an old truck with jeans on and in need of a shave.

 

[denverpilot]

The pilots I know who fly their own nice airplanes as tools have money (obviously), but they don't act like it. GA is a tool they learned how to use, and so when they show up at the airport it's usually in an old truck with jeans on and in need of a shave.

Holy cow, you've seen me at the airport!

Okay, I don't fit the "using the airplane as a tool" category... and the truck's not that old, but the last one was. It'll be old again, soon enough.

As far as using aviation as a tool goes, no company I've ever worked for would allow me to fly myself to anywhere. Found that one out the hard way back in the mid-90's when a Director asked where my airline ticket reimbursement form was... "Didn't need one", was the answer as I stood in the switch room at the customer site. "Then how did you get there? You didn't drive did you?"

It was a flight to Kansas City from Denver, and I thought he'd have kittens before I got home that Saturday. He'd freaked out every manager in the department by the time I got back, had talked to HR, and had the lawyers change all the company policy documentation the next Monday morning to reflect that no employee would ever fly themselves anywhere.

Oh well, it was a nice flight to KC...

 

[weilke]

My General Aviation is for everyone — or at least for a lot of people of varying wealth and incomes. What inspired me in the 1960s was that firemen, farmers and school teachers in my town were flying. What a wonderful American story. But now?

The reason that firemen, farmers and school teachers were flying in the 60s was that many of them got their license paid for by the goverment and that a Tripacer cost 3 times as much as a Chevy and not 30 times.

 

[flyersfan31]

People demand swank these days. There's a reason Cirrus is successful.

Value? You be the judge. Folks looking to get into aviation today often look at a strutted 172 and ask WTF? Don't you have anything modern?? An Archer? I have to crawl over my pax to get to my seat???? WTF??????

Look at all the leather in SUVs these days. Electric power windows. Heated seats. Luxury sells.

I'm not saying wrong or right. I'm just saying what is.

 

[Everskyward]

If the barrier is only money then the rich would be flying themselves more rather than being flown, which I don't see happening.

 

[Henning]

A good summary. You actually have to be intelligent and on the ball to be a pilot, rather than the average idiot who we see going down the road.

No you don't, you just need to be intelligent and on the ball to survive it the .25% of the time that it goes horribly wrong. On any given day you can meet morons who own and operate planes, and you get to read about them quite frequently in the paper.

 

[bbchien]

Not buying it. My view is simply that Americans have become lazy and obsessed with comfort. Aviation is not the place for that kind of attitude, so Americans are going elsewhere in droves.

Yup, we're like farm raised fish. So fat we have forgotten how to be hungry.

As my father used to say, "What America needs is a good famine".

 

[wsuffa]

Yup, we're like farm raised fish. So fat we have forgotten how to be hungry.

As my father used to say, "What America needs is a good famine".

Americans needs to stop always blaming someone else and take personal responsibility for their situations. A piece of the GA situation is lawsuits (liability insurance on everything from plane to fuel truck), and another part is Federal regulations that are demanded by people who want to be "safe". IMHO, of course.

 

[Chip Sylverne]

I think it would be an interesting exercise to look at the costs of owning and operating a simple single +-100 hours a year in constant dollars since 1970, compared to median income for the same period. I bet it's not that different when you control for the oil spikes.

Anybody save receipts or records?

 

[Anthony]

I think it would be an interesting exercise to look at the costs of owning and operating a simple single +-100 hours a year in constant dollars since 1970, compared to median income for the same period. I bet it's not that different when you control for the oil spikes.

Anybody save receipts or records?

I think that would be a very interesting exercise. I hope someone can pull it off. I wonder if its been done already. Maybe AOPA would know.

 

[denverpilot]

I think it would be an interesting exercise to look at the costs of owning and operating a simple single +-100 hours a year in constant dollars since 1970, compared to median income for the same period. I bet it's not that different when you control for the oil spikes.

Anybody save receipts or records?

I would love to see those numbers. Since I've only been flying since 1991 and an owner/operator for only two years, I definitely don't have the historical data to participate.

On the good news side of that, flying has always been hideously expensive for my age group, so I don't even have any memories of $45/hr wet aircraft like some of my flying buddies do. :wink2:

 

[dmccormack]

I think it would be an interesting exercise to look at the costs of owning and operating a simple single +-100 hours a year in constant dollars since 1970, compared to median income for the same period. I bet it's not that different when you control for the oil spikes.

Anybody save receipts or records?

The seventies were inflationary times, so prices usually outstripped income.

Here are some interesting stats:

• In 1970 the average income per year was $9,350.00 and by 1979 was $17,550.00
• In 1970 a gallon of gas was 36 cents and by 1979 was 86 cents
• In 1970 the average cost of new car was $3,900.00 and by 1979 was $5,770.00

A new C172 $269,500 (from Cessna site)

In 1970 a C172K cost about $15,000 (need a better reference)

An online converter shows that $14,000 in 2006 dollars is $72,742.

Of course the cost of standard avionics has surely increased as capabilities have increased. The number of 172s built is a fraction of what is was in 1970 (759 C172K).

100LL average price is $4.85/gal today.
In 1970 mogas sold for around .35 cents a gallon (I can't find 80 Octane prices from 1970 -- anyone?) But for price to be about right (adjusted for inflation) the price of a gallon of 80 octane in 1970 would be .93 cents to equal today's $4.85.

 

[Everskyward]

The seventies were inflationary times, so prices usually outstripped income.

I looked up some historical prices on this site http://www.aviationexplorer.com/Cessna_172_Aircraft_Facts_Photos.html and came up with some figures.

172L
The 1971 model sold for USD$13,425 in the 172 version and USD$14,995 in the Skyhawk version. 827 172Ls were sold in 1971 and 984 in 1972.

172P
The 172P, or Skyhawk P, was introduced in 1981 to solve the reliability problems of the "N" engine. The Lycoming O-320-D2J was a great improvement.
The price of a new Skyhawk P was USD$33,950, with the Skyhawk P II costing USD$37,810 and the Nav/Pac equipped Skyhawk P II selling for USD$42,460.

So the price of C172 more than doubled in 10 years during the 1970s which many people consider the heyday of GA. $42,460 in 1981 dollars is $97,952.28 in 2008 dollars according to your online converter.

Of course the cost of standard avionics has surely increased as capabilities have increased. The number of 172s built is a fraction of what is was in 1970 (759 C172K).

I think both of these reasons are valid when considering the price of airplanes today. How many people would be happy with the avionics in a 1981 C172 as it came out of the factory? People now want a GPS with moving map as the minimum for a new airplane as well as more engine instrumentation, traffic, weather uplink, etc. These things were not even available, especially for small airplanes, in 1981 at any price. They weren't even that common 10 years ago.

 

[PittsDriver]

...and that a Tripacer cost 3 times as much as a Chevy and not 30 times.

Have you priced a Chevy lately? There's a lot of airplanes you can be flying for 3 times the cost of one. If fact, some of the most fun planes are in that range.

In fact, there are a lot of useful airplanes you can be driving for the price of an Escalade. It might partially be cost as a barrier to entry but I think Ken got it right with his first post.

 

[Doggtyred]

I would love to see those numbers. Since I've only been flying since 1991 and an owner/operator for only two years, I definitely don't have the historical data to participate.

On the good news side of that, flying has always been hideously expensive for my age group, so I don't even have any memories of $45/hr wet aircraft like some of my flying buddies do. :wink2:

That was only 10-12 years ago for a 152...

 

[Anthony]

In 1994 when I learned to fly, I was paying $37/hour for a C-152 block time.

 

[jesse]

People demand swank these days. There's a reason Cirrus is successful.

Value? You be the judge. Folks looking to get into aviation today often look at a strutted 172 and ask WTF? Don't you have anything modern?? An Archer? I have to crawl over my pax to get to my seat???? WTF??????

I highly doubt the average person looks at a strutted 172 and thinks it looks old. Hell, most of them look pretty new with nice paint.

I've never taken a person flying and had them thought the airplane I was flying was old - they're always surprised as hell when I tell them it's over 40 years old.

A decent paint job and a leather interior on a 172 and it looks just as new as any new airplane or car.

 

[denverpilot]

Thinking way back then... yeah, maybe $45/hr wet... but not $35. The amounts some folks have shared from further back are jaw-dropping, but I know they also didn't make as much money, either. None of my friends have ever found it "easy" to pay for flying.

I think the C-150 I have a few flights in was around $37-$40 back then... but I upgraded to the 172 pretty quickly and didn't fly the 150 for my PP-ASEL checkride.

Our 182's interior is dated, but in "okay" shape. The lovely "goldenrod" color so popular in the 1970s makes it look old, but the new panel covers and removal of the old plastic at the avionics shop week before last, makes the panel look a lot more "professional" and well-maintained, compared to the cracking, taped, and crumbling Royalite originals.

Looking forward to going and flying it and seeing how the panel looks and seeing how the good ol' Cessna/ARC 200 Autopilot does... it'll probably do "S-turns about a course" just great now that the Turn Coordinator has been replaced with one that isn't telling it to make a continuous left bank.

Taking out the Cessna/ARC ADF also makes things look more "modern" I'm sure, too. Or just empty over there on the right side... LOL!

Weather sucked this weekend... of course.

 

[Henning]

I highly doubt the average person looks at a strutted 172 and thinks it looks old. Hell, most of them look pretty new with nice paint.

I've never taken a person flying and had them thought the airplane I was flying was old - they're always surprised as hell when I tell them it's over 40 years old.

A decent paint job and a leather interior on a 172 and it looks just as new as any new airplane or car.

Should have seen the PA-12 I used to fly pipeline in, it looked like something Jesus Christ would have learned to fly in....

 

[flyingcheesehead]

So the price of C172 more than doubled in 10 years during the 1970s which many people consider the heyday of GA. $42,460 in 1981 dollars is $97,952.28 in 2008 dollars according to your online converter.

Yet, the price of a new 172 today is probably over $300,000 - It was $297K a couple of years ago, and now they've removed prices from their site.

I think both of these reasons are valid when considering the price of airplanes today. How many people would be happy with the avionics in a 1981 C172 as it came out of the factory? People now want a GPS with moving map as the minimum for a new airplane as well as more engine instrumentation, traffic, weather uplink, etc. These things were not even available, especially for small airplanes, in 1981 at any price. They weren't even that common 10 years ago.

True - But cars have gotten a TON of updated technology over the years, but when cost-adjusted for inflation their prices remain pretty steady. Even in the last 20-30 years, things like power steering, air conditioning, power windows/locks, air bags, anti-lock brakes, nicer stereos, etc. have become pretty much standard equipment - And then there's OnStar and the like, traction control, AWD, power doors and tailgates, and more that's become very common.

But the price of a Honda Civic in 1973 was $2,200 - And that was for a 50 horsepower, 4-speed manual. Remember these?

Corrected to 2010 dollars, that would be $11,179. Today, a Honda Civic starts at $15,605 - So, 40% more than the original. But for that, you get power steering, power brakes, automatic seat belt tensioners, front and side curtain airbags, active head restraints, anti-lock brakes, tire pressure monitoring system, power windows, tilt&telescope steering wheel, intermittent wipers, and a spoiler. AS STANDARD EQUIPMENT.

So, yes today's avionics are much more advanced than the days of yore, but technology has also advanced at a pace that makes such "toys" MUCH cheaper to produce.

 

[Henning]

But the price of a Honda Civic in 1973 was $2,200 - And that was for a 50 horsepower, 4-speed manual. Remember these?

Corrected to 2010 dollars, that would be $11,179. Today, a Honda Civic starts at $15,605 - So, 40% more than the original. But for that, you get power steering, power brakes, automatic seat belt tensioners, front and side curtain airbags, active head restraints, anti-lock brakes, tire pressure monitoring system, power windows, tilt&telescope steering wheel, intermittent wipers, and a spoiler. AS STANDARD EQUIPMENT.

So, yes today's avionics are much more advanced than the days of yore, but technology has also advanced at a pace that makes such "toys" MUCH cheaper to produce.

Hell yes I remember those, looks exactly the same as my 1976 Civic 1200 which got 50mpg with me FLOGGING that *****. Now the hybrid Civic my buddy has gets the same, that's what we call "advancing".

 

[Ted]

I highly doubt the average person looks at a strutted 172 and thinks it looks old. Hell, most of them look pretty new with nice paint.

I've never taken a person flying and had them thought the airplane I was flying was old - they're always surprised as hell when I tell them it's over 40 years old.

A decent paint job and a leather interior on a 172 and it looks just as new as any new airplane or car.

Same. Most people think my Aztec is 10-15 years old (the paint is faded), and think the 310 is only a few years old.

One of my friends has a very nice '65 Beech Travel Air with a gorgeous paint job, nice avionics stack, and flashy wingtip strobes and other good lights on it. People routinely think it's brand new out of the factory.

 

[Everskyward]

But cars have gotten a TON of updated technology over the years, but when cost-adjusted for inflation their prices remain pretty steady.

I don't see how you can possibly compare airplanes to cars. Families which may have owned one car in 1970 now own two or three or more. They come off an assembly line in great quantities. In many cases a car is a necessity. Not so much so with airplanes.

I looked up some of the airplanes in which I learned to fly. It seems that they were 1971 and 1972 Cessna 150Ls. They cost about $12,000 new which according to the inflation calculator would be about $63,000 today. However these airplanes only had one nav, one com, no ILS, no ADF, no DME, no intercom and very little engine instrumentation. Most pilots today wouldn't dream of buying a new airplane equipped like that just like people wouldn't buy a new car like the old Honda Civic. If you add all the "necessary" avionics you would probably be close to $100,000 just like the new LSAs, and a 150 is not that much larger.

 

[flyingcheesehead]

I don't see how you can possibly compare airplanes to cars. Families which may have owned one car in 1970 now own two or three or more. They come off an assembly line in great quantities. In many cases a car is a necessity. Not so much so with airplanes.

But, cars came off assembly lines in the 70's, too... So the comparison between the relationship of today's prices should still be valid. Cars have gotten boatloads of new technology but the prices have only gone up a modest amount. Airplanes have gotten quite a bit of new technology, but the prices have more than tripled AFTER correcting for inflation.

 

[jesse]

But, cars came off assembly lines in the 70's, too... So the comparison between the relationship of today's prices should still be valid. Cars have gotten boatloads of new technology but the prices have only gone up a modest amount. Airplanes have gotten quite a bit of new technology, but the prices have more than tripled AFTER correcting for inflation.

I bet you'd see a very non-linear liability insurance cost that nearly completely makes up for the cost difference.

 

[steingar]

Cars got automation to run down labor costs. Airplanes, not so much. Still hand made. They just don't seem to lend themselves to any sort of automation.

 

[Chip Sylverne]

Tell you what. Just got a call from the shop. Cherk needs a new carb heat muff. $1k from Piper for a $5 piece of tin. That's what's going to kill GA.

 

[weilke]

Tell you what. Just got a call from the shop. Cherk needs a new carb heat muff. $1k from Piper for a $5 piece of tin. That's what's going to kill GA.

Check with aerospace welding and other after-market suppliers. You may be able to get the $5 piece of tin for $500

 

[Everskyward]

I don't know if the price increase is all certification or if people just figure they can charge more if it's going anywhere near an airplane. Over on the thread about being short I found out they make $200 cushions. Then there's catering. A breakfast burrito meal in the restaurant costs about $9. When the same restaurant brings it 100 yards over to our airplane it's $30.

 

[flyingcheesehead]

I bet you'd see a very non-linear liability insurance cost that nearly completely makes up for the cost difference.

I bet you're right.

I don't know if the price increase is all certification or if people just figure they can charge more if it's going anywhere near an airplane. Over on the thread about being short I found out they make $200 cushions. Then there's catering. A breakfast burrito meal in the restaurant costs about $9. When the same restaurant brings it 100 yards over to our airplane it's $30.

They have to cover the cost of getting an AOA badge for the person who brings it to you.

 

[denverpilot]

I bet you'd see a very non-linear liability insurance cost that nearly completely makes up for the cost difference.

I bet you would too, and I bet the insurance underwriters are laughing all the way to the bank. Autos are far and away more deadly than aviation, and the liability cost totals are in the billions. But the pool is bigger. And juries can tell the difference between a bad driver and a good one without even paying attention to the lawyers and expert witnesses.

Just imagine if bicyclists had to buy insurance to ride on public roads, and any failures of a bicycle's design were attributed back to the manufacturer 30 years after the bike was sold...

I believe firmly that the myth being constantly sold to the public that "aviation is safe" has led to "no tolerance" juries. People know you can be killed in a car, and accept the risk. They know you can be killed on a bike, and to a lesser extent accept the risk, and certainly don't name Schwinn as a major defendant in bike vs. dirt mound accidents. But aviation is supposed to be "safe" at all times, no matter what the idiot behind the yoke/stick did.

Odd, isn't it?

 

[Ted]

I bet you'd see a very non-linear liability insurance cost that nearly completely makes up for the cost difference.

Ding ding ding! We have a winner!

I bet you would too, and I bet the insurance underwriters are laughing all the way to the bank. Autos are far and away more deadly than aviation, and the liability cost totals are in the billions. But the pool is bigger. And juries can tell the difference between a bad driver and a good one without even paying attention to the lawyers and expert witnesses.

I'm not so sure the insurance underwriters are laughing all the way to the bank. The costs are high because the risk of a payout is high. If there's no payout, the insurance company comes out ahead. But insurance works on statistics and averages. It's been a bad investment for me up until this point (insurance companies have collectively taken lots of my money). However, I would imagine that the one time I did need it would more than make up for the money I've given them to date.

 

[steingar]

I just got a new roof from insurance and am still behind overall. The company I'm with not so much so (I wasn't with them that long before the roof, my house tried to eat the inspector, Yay Steinholme!) but they'll make it back over time. And I'll be that much more behind over time.

 

[dmccormack]

Hell yes I remember those, looks exactly the same as my 1976 Civic 1200 which got 50mpg with me FLOGGING that ####. Now the hybrid Civic my buddy has gets the same, that's what we call "advancing".

You may have been "flogging" it, but you weren't doing zero to 60 in 3 seconds, or cruising at 80 all day long.

 

[Chip Sylverne]

Check with aerospace welding and other after-market suppliers. You may be able to get the $5 piece of tin for $500

That's not the point. I have access to a square wave TIG, and when in practice can weld two beer cans together. Of course, I'm not an A&P, so I couldn't legally do the repair anyway. Not that I would even consider it. No sir-ee.

But a lot of guys would be stuck taking it in the shorts.
Over and over again.