Trying to predict the economics of aviation if the House DL Medical Bill took effect

[QuiQuog]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

There's a lot of speculation about how many pilots who fear not passing their medical and decide to go sport affecting the increase to private pilot if this bill passes, but there's one question that I haven't seen anyone ask yet, and I'd like to hear if someone had any input on it. How many student pilots are forced to stop their training each year due to a failed medical? Are there numbers on the books anywhere that can be found? This number would seem to give a good estimate of how much GA would increase through a DL medical. It doesn't address PP with no medical flying under SP rules, but I'm not sure you can get a solid number on that, short of requiring them to register as sport pilots. As it is, they are flying under the radar. No pun intended.

 

[JeffDG]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

There are lots of aircraft with that STC, but not many airports carry mogas. I'd work on the availability issue first. Maybe form a co-op and get a self serve pump put in if no FBO at your airport wants to handle the stuff.

That's a chicken-egg problem

FBOs won't provide the fuel if there is insufficient demand for it. People won't pursue the STCs if they can't get the fuel.

 

[Ted]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

There's a lot of speculation about how many pilots who fear not passing their medical and decide to go sport affecting the increase to private pilot if this bill passes, but there's one question that I haven't seen anyone ask yet, and I'd like to hear if someone had any input on it. How many student pilots are forced to stop their training each year due to a failed medical? Are there numbers on the books anywhere that can be found? This number would seem to give a good estimate of how much GA would increase through a DL medical. It doesn't address PP with no medical flying under SP rules, but I'm not sure you can get a solid number on that, short of requiring them to register as sport pilots. As it is, they are flying under the radar. No pun intended.

That's a good question. I think these days with so many people of piloting age having a ridiculous ADHD diagnosis that was false, the numbers are higher than they should be.

 

[PW_Plack]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

The combination of the Part 23 rewrite and eliminating the third-class medical requirement under 6K pounds would be much more significant than either one alone. For one thing, all the European-made LSAs which currently have their MTOW downgraded in the US to be sold as LSAs would quickly be freed to have data plates with bigger useful loads matching their EU versions, and some might get more power and speed when entering Part 23.

As far as airplanes rotting, it could go either way. There might be fewer parked by old pilots who've lost medicals, but that's only one reason old pilots stop flying. If they don't need a medical but have self-grounded for medical issues they'll never resolve, (or had the keys taken by the kids,) there might not be much difference. Without the need for a medical, they could stay in denial years longer with their pride and joy tied down in the summer sun.

There seem to be a few lingering misconceptions regarding LSA. Any LSA can be flown by Sport Pilots, including those equipped for night and IFR. So, one plane could serve both SP and Private Pilots even now, and some trainers have been equipped this way.

I'm not sure AMEs will lose money, unless aviation medicals are the only thing they do. My AME also has a general practice, and every time he fills a spot on his schedule with an aeromedical exam, even for a third-class, he loses money compared to what he'd make on an annual physical for a non-pilot. It's got to be an especially bad deal if there's an SI or other paperwork.

It would be nice to see better availability of mogas, but many full-service airports operate under local laws which make it difficult to add another set of tanks/pumps. I think we're just going to have to wait for a tipping point there, the time when avgas is required by such a minority of aircraft that airports stop selling it for economic motives. When that happens, the local fuel taxes which fund airports will be added to mogas sold at airports, and the prices will be jacked up for the convenience of being able to buy it on the ramp side of the fence. It might still save some money, but maybe not as much as we think.

I'd expect to see the biggest cost benefit come in avionics. Because a fair-sized chunk of this marker is in upgrades, it could happen very abruptly. If Dynon did what you need at a far lower price than Garmin, would you like the option to buy Dynon? If you're planning a panel upgrade to a Part 23 aircraft right now, has it crossed your mind to wait and see how this plays out? I'll bet there would be lots of upgrade customers who would wait another year if it meant saving the cost of a new car when more options become available.

 

[Dean]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

To the original OP's question, the market will not change because the change in the medical will never pass.

 

[RotorAndWing]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Would hope this make a hugh difference. Paying two or three times the price for the exact same part because one has the stamp for FAA approval is just a small symptom of the over regulation. This also extends to items that have no airworthness impact. Why did led's need FAA approval? Why do interior materials, that are nothing more than asthetic, need FAA approval? Why did a piece of copper pipe for my dad's AC unit cost $1200 when any mechinist could have made the same part for $100. These cost factors are what is killing GA in both the after market and new aircraft. Add upp all those $1200 parts in a new plane that should only cost $100, and you could see prices come down significantly.

I read recently that regulations and liability account for about 50% of the cost of a new airplane. So that 450k new Archer should really cost 225k, that 300k 172 should be about 150k. That just proves how heavy the burden is an makers, so no wonder they are using the same basic airframes and tech that was developed 50 years ago. Now I am a realist and know not all those regulations will be gone, but even get that overhead down to 25% per plane, and good things can happen. The revitalization act (and hopefull more like it) is the way to revitalize GA. The medical will play a small role in camparision.

The final kicker is that the over regulation and subsequent roadblocks to innovation are what has greatly slowed both the expansion of GA, and the safety of the product being produced. Regulation is potentially killing people, not pilots failing medical.

One of the main reasons those new airplanes sell for what they do is Product Liability insurance factored into each model. And not just the manufacturer but also the companies that produce the accessories as well.

If you truly want to reduce flying cost start with Tort Reform, get the trial lawyers under control. Out of control lawyers suing everything that moves or is remotely connected with aviation have done more damage.

 

[Ted]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

One of the main reasons those new airplanes sell for what they do is Product Liability insurance factored into each model. And not just the manufacturer but also the companies that produce the accessories as well.

If you truly want to reduce flying cost start with Tort Reform, get the trial lawyers under control. Out of control lawyers suing everything that moves or is remotely connected with aviation have done more damage.

 

[drotto]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

One of the main reasons those new airplanes sell for what they do is Product Liability insurance factored into each model. And not just the manufacturer but also the companies that produce the accessories as well.

If you truly want to reduce flying cost start with Tort Reform, get the trial lawyers under control. Out of control lawyers suing everything that moves or is remotely connected with aviation have done more damage.

My wife is a doctor, I could not agree more. How we live in a society where the FAA declairing an accident clearly pilot error results in the maker of the plane getting sued is beyond me. It is clear how we strengthen aviation.

1. tort reform
2. regualtion reform
3. re-evaluate licensing standards(medical, not proficiency in flying)
4. allowing cheaper alternative fuels (ie mogas for approved engines)

We all know the answers, wish that was the easy part.

 

[Henning]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

I think this will have a minor impact, but more important could be the streamlining of the part 23 certification process which was recently passed. If they can cut some of the red tape, allowing new ideas, new models, and hopefully cheaper prices, that will make an even larger impact. Prices will always be high, but imagine a sub 200k four seater available again?

I am not sure how much the dropping of class 3 medical would help. How many people is it really stopping? I understand that older pilots are being forced to give up aviation, but how many of the younger people that we need to keep GA vibrant are really stopped from flying by the medical clearance? I would think 99% of people under 50 can pass the medical very easily.

Thing is, how many people under 50 can afford to buy even a that sub $200k new plane? I think hand in hand the Part 23 rewrite and DL medical if they both come through will have a positive impact on GA, how much is what is in question, but every bit will help.

 

[Ted]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Anything that's a step in the right direction is good, and we need to push for more.

 

[drotto]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Thing is, how many people under 50 can afford to buy even a that sub $200k new plane? I think hand in hand the Part 23 rewrite and DL medical if they both come through will have a positive impact on GA, how much is what is in question, but every bit will help.

Planes have always been expensive, 200k would at least bring the numbers more in line with the historic cost curve. At 200k for a new plane it may loosen up and make older planes cheaper. No that 35 year old may not be able to get a new plane, but that 50 year old that would have bought the used plane may get a new plane instead with lower prices. This in theory could expand the fleet size in general increasing the number of used planes available as more older people buy new, leaving the older for others to purchase.

 

[Henning]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Planes have always been expensive, 200k would at least bring the numbers more in line with the historic cost curve. At 200k for a new plane it may loosen up and make older planes cheaper. No that 35 year old may not be able to get a new plane, but that 50 year old that would have bought the used plane may get a new plane instead with lower prices. This in theory could expand the fleet size in general increasing the number of used planes available as more older people buy new, leaving the older for others to purchase.

Yep, the 50 yo will buy the new plane and in a few years it will be on the market as a used plane, the greatest of the benefits will take a few years to come to fruition.

 

[FormerHangie]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

That's a chicken-egg problem

FBOs won't provide the fuel if there is insufficient demand for it. People won't pursue the STCs if they can't get the fuel.

Unless the FBO is running a sizeable training fleet that could potentially use mogas, he has no motivation to sell mogas unless he thinks he can attract transients who would stop at his operation rather than someone else's. Since the mogas burning fleet probably does most of their flying locally, that's not likely. Between Petersen and EAA, the STC is out there for most of the likely candidates.

It would be nice to see better availability of mogas, but many full-service airports operate under local laws which make it difficult to add another set of tanks/pumps. I think we're just going to have to wait for a tipping point there, the time when avgas is required by such a minority of aircraft that airports stop selling it for economic motives. When that happens, the local fuel taxes which fund airports will be added to mogas sold at airports, and the prices will be jacked up for the convenience of being able to buy it on the ramp side of the fence. It might still save some money, but maybe not as much as we think.

No, don't sit passively by and wait for someone else to solve the problem. If you fly an airplane that could use mogas, push the issue. If there are enough of you at your airport, form a cooperative and get your own self serve pump put in. There's no point in waiting for someone who doesn't have your best interest in mind to provide a solution.

 

[Henning]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

The gas price issue will not be greatly affected if an FBO sells Mogas, 100LL is not that bloody much more expensive at the rack than Premium Unleaded. When Shell starts producing the 100UL, the will likely also be selling it as a premium fuel in the automotive market as a competitive marketing advantage at their gas stations. It's the FBOs that add the price on the fuel. When we were buying at the rack for 75¢ a gallon 7miles from the airport, they were charging $1.70 some at LGB and Corona, cheapest fuel in the basin was $1.27. I'm not sure what rack price is on 100LL now, but I doubt it's over $3.50.

 

[e.pie]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

One of the main reasons those new airplanes sell for what they do is Product Liability insurance factored into each model. And not just the manufacturer but also the companies that produce the accessories as well.

If you truly want to reduce flying cost start with Tort Reform, get the trial lawyers under control. Out of control lawyers suing everything that moves or is remotely connected with aviation have done more damage.

Exactly this.

Look at how much cheaper experimentals are compared to certifieds, and in most cases are better, more modern, faster, and use less fuel.

Like the case of lycoming losing that case a few years ago where the guy flew VFR in to IMC and crashed. They hadn't seen the engine since it rolled off the assembly line sometime in the 70's, yet they had to pay the family of the guy who died $89mil.

$89mil is a lot of money, even if you spread it over every engine lycoming has sold since then. And that's just one example of many.

 

[Henning]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Exactly this.

Look at how much cheaper experimentals are compared to certifieds, and in most cases are better, more modern, faster, and use less fuel.

Like the case of lycoming losing that case a few years ago where the guy flew VFR in to IMC and crashed. They hadn't seen the engine since it rolled off the assembly line sometime in the 70's, yet they had to pay the family of the guy who died $89mil.

$89mil is a lot of money, even if you spread it over every engine lycoming has sold since then. And that's just one example of many.

Why do you think product liability is any less for experimental aircraft products? Where does the difference lie? Do you believe Lycoming has any less liability on one of their engines because it hangs on an RV rather than a 172?

 

[Ted]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Exactly this.

Look at how much cheaper experimentals are compared to certifieds, and in most cases are better, more modern, faster, and use less fuel.

Like the case of lycoming losing that case a few years ago where the guy flew VFR in to IMC and crashed. They hadn't seen the engine since it rolled off the assembly line sometime in the 70's, yet they had to pay the family of the guy who died $89mil.

$89mil is a lot of money, even if you spread it over every engine lycoming has sold since then. And that's just one example of many.

By the way, Lycoming doesn't make that many engines. 2,000/yr is the rough number. Do the math...

 

[Neil Rubin]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

yet they had to pay the family of the guy who died $89mil.

Not true.

A jury rendered a verdict of $89 million, but there is a long way between a huge jury verdict and money actually getting paid. The jury verdict is subject to post-trial motions before the trial court judge, and then it is subject to appeal. Damages awards that are out of line with the actual evidence--particularly where they involve large punitive damages components--are knocked down by courts all the time.

In this particular case, the parties reached a settlement after the trial and before the hearing on Lycoming's motion to modify the damages verdict. You can check this for yourself by searching for the case docket at http://fjdefile.phila.gov/efsfjd/zk_fjd_public_qry_00.zp_disclaimer. The case number is 010704008. The court never entered a judgment against Lycoming--for $89 million or for any other amount. The details of the settlement were filed with the court under seal, so we have no way of knowing exactly how much Lycoming paid, but I'm sure it was just a tiny fraction of the jury's $89 million number.

The huge headline-grabbing jury verdicts you hear about from time to time are rarely ever paid. The story that the parties settled for an undisclosed amount, or that the verdict was reversed on appeal just isn't as newsworthy as the story of the original verdict.

As far as I can tell from the NTSB report, Lycoming probably shouldn't have had to pay anything in this case. There is a problem with how the courts handle manufacturer liability suits in airplane crashes. But that problem is not as big as the $89 million number would suggest.

 

[denverpilot]

What it really comes down to is the population is declining ...

You should have stopped there. The WWII guys are dead, or soon will be. The Boomer/Korea/VN guys are retiring. There's not nearly enough people to make up the difference. Same thing with the economy. Boomer spending is slowing. And will continue lower. They almost outnumber the following two generations of adult age, combined.

 

[RotorAndWing]

Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Not true.

A jury rendered a verdict of $89 million, but there is a long way between a huge jury verdict and money actually getting paid. The jury verdict is subject to post-trial motions before the trial court judge, and then it is subject to appeal. Damages awards that are out of line with the actual evidence--particularly where they involve large punitive damages components--are knocked down by courts all the time.

In this particular case, the parties reached a settlement after the trial and before the hearing on Lycoming's motion to modify the damages verdict. You can check this for yourself by searching for the case docket at http://fjdefile.phila.gov/efsfjd/zk_fjd_public_qry_00.zp_disclaimer. The case number is 010704008. The court never entered a judgment against Lycoming--for $89 million or for any other amount. The details of the settlement were filed with the court under seal, so we have no way of knowing exactly how much Lycoming paid, but I'm sure it was just a tiny fraction of the jury's $89 million number.

The huge headline-grabbing jury verdicts you hear about from time to time are rarely ever paid. The story that the parties settled for an undisclosed amount, or that the verdict was reversed on appeal just isn't as newsworthy as the story of the original verdict.

As far as I can tell from the NTSB report, Lycoming probably shouldn't have had to pay anything in this case. There is a problem with how the courts handle manufacturer liability suits in airplane crashes. But that problem is not as big as the $89 million number would suggest.

How much do you think Lycoming spent in attorney fees defending themselves?

In these frivolous lawsuits the only winners are the attorneys for both sides, they WILL get paid, and that's the whole point, right?