The Rise and Fall of General Aviation — An Economists View with Focus on Single Engine Aircraft and the Impact of Airline Deregulation 2000-01-1677

The catastrophic decline of general aviation in the early1980’s – exemplified by the rapid fall in sales of single engine piston powered models – is old news. But as the industry, emboldened by legislative relief in product liability, now embarks on revitalization it is worth revisiting its history to see if there are any lessons for today. To an economist that history (starting post WWII) would include the impact of the evolving national economy on the industry and the contribution of “products” competing for the composite intercity travel and leisure markets in terms of price and changing tastes. Economists prefer statistical evidence to draw conclusions, and that has been gathered for addressing the specific competition with the airline industry as well as the market ceiling for general aviation airplanes. Quantitative, but non-statistical, evaluation of alternative ways of “flying” for recreation was also done. The results are not encouraging. Although the industry has in retrospect acknowledged an earlier type of market saturation, the statistical evidence is that the industry was headed for saturation even before airline deregulation, and the post-deregulation correlation between airline travel growth and the decline in general aviation travel is strong. It also appears that the nation’ surge to fly for fun is not diminished but is being satisfied by a number of activities other than just piloting light airplanes, for example skydiving, hang gliding, and ultralight flying. The industry’s case that airline deregulation has complicated and congested the airways is a convincing one, but that situation only serves to exacerbate its problems and is not easily resolved. Despite the fact that the industry’s current goals are modest compared the golden years any expectation that these aggregate obstacles will be easily disposed of would seem unwarranted.