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Looking at the Big Picture

“If you want to make a small fortune in aviation, start with a big one.” Today, this would seem truer than ever. However, some indicators such as UBS, and Forecast International suggest that we have bottomed out and things are starting to get better.


September 29, 2009
By Rob Seaman

Topics

“If you want to make a small fortune in aviation, start with a big one.” Today, this would seem truer than ever. However, some indicators such as UBS, and Forecast International suggest that we have bottomed out and things are starting to get better.

Aircraft prices seem to be stabilizing and inventories have settled. FBOs report growth. But there is a long way to go and depending upon whose report you read, we are looking at between three and 10 years before levels to back to being good.

The consumer media seem determined to show aviation in a bad light. The guy or gal in the street believes what they see and hear on TV, radio and newspaper print. That in turn leads elected officials – always thinking of voters in order to get re-elected – to come down against us too.

In the U.S., airports are part of the economic recovery plan. Not so here. The Obama government earmarked $1.1 billion in stimulus spending for airports. Aviation is getting a share of the pie! But wait – enter the CBS and its story that says about one third of that $1.1 billion has gone to “little used” airports that cater to recreational flyers, corporate jets and remote communities. To them, that is a bad thing. Frankly it hits the mark and has put the money where it is needed to support the transportation infrastructure. Many here in Canada wish our government was so misguided.

The other implication made by the CBS is that by spending the money this way, big airports go without things like “critical taxiway warning lights” and that there are “significant safety issues” at the big airports that would have been better recipients of the money.

While this holds some truth, the fact is that big airports in the U.S. did get money. At LAX for example, $15 million was given for a new fire hall. As for the “little used” airports, most received small amounts – like the flying club in upstate New York who got $400,000.00 to repave its runways. That really is not a big bag of money, but for the airport in question, it makes a huge difference to its ability to operate safely and efficiently. Not only that, these smaller fields are the lifeline for their respective communities and as we know, smaller airports feed into the larger system.

It also means that local suppliers did the actual work which is otherwise unavailable stimulus to that regional economy. CBS was not happy, inferring that the funds were to create new jobs – not help current ones. It totally missed the point about work being work – and the more there is, the more jobs come out of it – direct and indirect. Retaining jobs is just as important as creating them.

What CBS did do was take yet another shot across the bow of private aviation as elitist and for the privileged. Once again it missed the big picture that includes aviation and incidental jobs for today, training/jobs for tomorrow and transportation in regions where no other efficient means may exist. Sound at all familiar to you folks up north?

This is not just a U.S. argument. It can be made here in Canada. Our government has given money to airports but it was not big bucks in the scheme of things. And just FYI, the government continues to collect its rent and taxes on crown lands, airports and aviation operations at the same rates it did prior to the downturn. So even though use and traffic may have diminished, Ottawa still want their full whack without a market correction to the reality of the day. Does that make sense?

Just to ice the cake, while communities here struggle to keep their airports alive, the folks in Ottawa have announced tens of millions of dollars in funding to yet again – improve rail service on the Montreal/Toronto corridor. Sorry, but have we not done this numerous times before? This is proof once again that rail, roads, bridges and sidewalks seem to fit their definition of infrastructure – not air transport. Does someone there have an issue with flying? 

Clearly our government is out of step and out of touch with issues here, and for all appearances, uncaring about it. When the next election comes, please bring to office some folks who understand our industry and its impact on all of Canada.

Your comments and feedback are always welcome.  Send your e-mail to Rob Seaman c/o dmccarthy@annexweb.com