Can you give us a hint?
John
First, let's look at the statistics. Check out this useful document - specifically the tables and graphs on pages 22 to 24:
http://www.gama.aero/files/documents/GA_Statistical_Databook_and_Industry_Outlook_0.pdf
Sales didn't just gradually decline over the years - they plummeted right after 1978. In 1978 manufacturers shipped 14,398 single engine airplanes. In 5 years that dropped to 1,811. (Table 1.8, single-engine column.) Unprecedented. From '78 to '81, prices for single engine land airplanes rose only an average of 13%/year (from SEL columns of tables 1.8 and 1.9.) (There was a 40% rise from '81 to '82 - when sales had fallen so far that amortization of fixed costs started to dominate per unit costs.) The GAMA report doesn't contain data for SEL prior to '78 in table 1.9, but the average price for all GA planes from '75 to '78 rose only 12%/year (computed from table 1.7.)
So 12% rises per year pre-drop and 13% rises per year post-drop.
Ergo:
The dramatic decline in single engine land airplane sales was not due to any dramatic rise in prices.
The only thing the statistics show is that fixed costs (and fixed liabilities, like insurance premiums which are tied to the number of planes
already sold - i.e. existing fleet size) began to dominate
after the sales plunge began. Liability insurance overhead wasn't a cause, it was an effect.
So maybe the decline was due to fewer private pilots? Well take a look here:
http://www.aopa.org/newsroom/statistics/pilots.html
The number of private pilots peaked in 1980, with the most number of students in 1979. The numbers peaked slightly after the decline in sales had begun.
Was it all caused by the sharp rise in oil in 1979? If so, why would it not have recovered when costs dropped? And why would GA sales be affected in 1979 when they weren't in 1973? All forms of transportation would have been similarly affected by increases in fuel costs.
(http://en.wikipedia.org/wiki/1973_oil_crisis)
The reason suggested by James Fallows (and Vern Rayburn formerly of Eclipse Aviation) in his book "Free Flight" (Chapter 3, "The GA Mafia") appears to be this:
http://en.wikipedia.org/wiki/Airline_Deregulation_Act
So prior to airline deregulation in 1978, using private airplanes was a competitive alternative to travel by airlines. Thanks to government dictating routes, flight schedules, and fares for airlines. After deregulation, the hub-and-spoke model the airlines adopted caused fares to drop 30% to 40% (
http://www.cato.org/pubs/regulation/regv21n2/airline2-98.pdf ,
http://libraryonline.erau.edu/online-full-text/books-online/Dereg.pdf )
So once upon a time single engine airplanes were a competitive mode of transportation, which is why they sold so well for so long. When the government's direct meddling in air transport economics was reduced, SEL airplanes couldn't compete.
So if this theory is correct, the way to return SEL GA to its glory days would be for the U.S. government to dictate high airline fares like they used to.