GA Says Goodbye and Good Riddance to ’83

Locally the sales scene was just as bad, if not worse than that being experienced in the US and Europe. For financial year 82/83, GADA reports that Rex Aviation sold 29 Cessna aircraft, Ansett General Aviation sold 21 Pipers and Hawker Pacific sold 7 Beechcrafts. The agricultural market became almost non-existent whilst the only bright spots in the helicopter market were from Aerospatiale (Rex) and Robinson (Heliflite) while once-dominant Bell endured the year without recording one sale. Flying training has dropped off as the per-hour cost of hiring aircraft has steadily risen. Not many aspiring amateur pilots can afford to nowadays pay upwards of seventy to eighty dollars an hour to learn to fly and successive government fuel tax hikes have also taken their toll.

What caused the fall of ’83 in the GA industry?

Certainly, the primary cause has been the recession, which certainly has been the worst internationally since the Second World War. The basic economic recession has, as far as Australia is concerned, been exacerbated by several other unique factors. Firstly, we had the drought. The drought had plagued most of Australia from 1980 through to mid-1983 and even today the after effects linger on in many marginal communities. With the easing of the drought, most local GA dealers expect a pick up of interest from early 1984. The second reason revolves around our currency value in relation to the American dollar. In 1980 the exchange rate was roughly 1. 14, this having eroded to a low of around . 86 following devaluation in March this year. You don’t have to be an economist to see that relying upon imported US-built aircraft paid for in US dollars in a situation where your native currency deteriorates in relative value by as much as a third in three years is bad news. The cost of a 172 today is more than anyone could have imagined back in the boom days of 1978.

Our dollar is firming though and when parity is reached it is generally considered that the exchange rate corner will have been turned. Only then will a stronger Australian dollar plus readily available credit at lower interest rates make the purchase of new 1984/85GA aircraft viable. Aircraft will have to be replaced though, particularly in the upper levels of the market and in the flying training field where in time a new generation of light trainers will emerge to break the cost spiral that is slowly destroying this vital sector of aviation.

What of the future?

Stateside, the FAA (Federal Aviation Administration) saw growth emerging in 1984 and continuing for a number of years at healthy rates. Market projections at best these days are fraught with unknowns though the FAA has based much of its research on the ‘need to replace’ basis which would see the entire US GA fleet increase from a 1982 figure of 220,000 to around 350,000in 1993. The FAA also foresees a market in the US alone in that period for 3,000 new corporate jets and 5,000 new turboprops bringing the 1993 fleets to 4,800 and 9,500 respectively. After the financial flogging GA has experienced over the past three years and with ’83 as a veritable coup de grace it can only be hoped that the FAA know something that we don’t.

The companies themselves are hanging their medium-term hopes on a number of new aircraft types. Piper has well and truly led the way with their excellent Mojave twin and Malibu pressurised single while an even more macho development of the much respected Aerostar, the 700P, will make the aircraft a true rival for many smaller turboprops where the requirement exists for a fast, relatively inexpensive six-seater. Piper also is looking very strong with an entire family of Cheyenne turboprops including the Garrett powered Cheyenne IV which boasts cruise speeds nudging that of the slower pure jets and at substantially lower costs. Local Piper agents, Ansett General Aviation, report interest in both the Malibu and Mojave in addition to the Cheyenne IV yet agree that interest probably won’t be converted to signatures till the dollar situation improves.

Cessna is pinning high hopes on the Citation III and to a lesser extent the newly released Citation S/11. So crucial to Cessna is the Citation Ill that it is estimated that it will produce around $350m of the $800m turnover Cessna expects to make in 1984. The Ill is selling well and a healthy order backlog exists that is also shared to a larger extent by its smaller brothers. Cessna feels that Conquest I and II will definitely make a comeback by the end of ’84. On the utility side the new Caravan I will find its niche while the commuter market will find good use for the Caravan II as profitability returns to this market as the overall economic situation improves through next year. Local Cessna dealers, Rex Aviation, certainly feel that the new aircraft sales market will improve as soon as the value returns to our dollar and our economy begins to positively emerge from the depths of the recession.

Beechcraft has always enjoyed successful trading with the King Air family of turboprops and by and large will continue to stick with this aircraft type over the next few years. A recent massive order from the USAF for the lease of no less than40 Super King Airs (the same USAF order also signed for80 Lear35s) has rejuvenated the line and certainly helps to alleviate some poor publicity the type has often unjustifiably attracted in recent times. This brings military and government King Air sales to 244 aircraft operated in the colours of 30 nations. Beech is also busily test-flying a 213rd-sized development model of their King Air successor, the Model 300, which features canard wings, winglets and propulsion via twin turboprop pusher propellers. The Model 300 is a product of the legendary design talents of Burt Rutan in association with Beech and will certainly be a revolutionary aircraft by present King Air design standards. Beech are also hoping that the commuter market begins to reflect the resurgence of the US economy in general so that they can commence a more economic production run of the 1900 Airliner.

Overall, It appears that the entire Western World is heading into recovery, and interest rates are falling despite the usual large number of potential world trouble spots Western governments are stable and most currencies have firmed to some extent against the Greenback in recent months. Australia mirrors all these positives including an anticipated strong 1984 for the rural sector, a strengthening in the minerals exploration area and an overall reduction in domestic interest rates allowing a continuing increase in consumer spending. Spending not only on shoes and furniture but also on flying training, on light aircraft and at the other end of the spectrum on corporate aircraft from Falcons to Lears, from Conquests to Cheyennes. Whichever way you look at it GA dealers and manufacturers alike can well and truly say goodbye and good riddance to 1983