Light-plane industry revved up and awaiting takeoff
Wichita, Kan. — The message from pilot to control tower -- that is to say, from manufacturers of light aircraft to the Reagan administration -- is that mixed signals from washington are delaying an otherwise clear takeoff for the industry.
The 37 members of America's General Aviation Manufacturers Association, producing 95 percent of all noncommercial aircraft sold in the world today, hope that President Reagan will succeed in curbing the recession and high interest rates that stalled their sales last year. Industry leaders are encouraged by the administration's promises to relax credit restrictions and to speed depreciation schedules, two steps that should give businessmen extra incentives to buy new aircraft.
But aircraft manufacturers remain concerned about other signals coming from Washington. In particular, Mr. Reagan's proposed aviation user tax is seen as contradictory. Depreciation allowances offered to new purchasers, it is argued, would be offset quickly by the proposed jet fuel tax for corporate operators. This tax would rise from 20 cents a gallon in 1982 to 65 cents a gallon in 1986.
Another curb on sales, according to the industry, is congressional and Department of Transportation reluctance to spend money on improving the nation's transportation system -- despite having $3.7 billion available in the federal airport-airway trust fund. As well, the industry criticizes Washington for failing to help expand export sales into newly developing markets overseas.
With or without Washington's help, US firms expect to hit the $3 billion mark this year in sales of noncommercial general aircraft -- up from $2.5 billion last year. As in 1980, 30 percent of this production is aimed at overseas markets. To spur sales despite the economic downdrafts, manufacturers are offering incentives such as 12 percent financing packages or even free jet fuel for a year.
Aircraft manufacturers are not willing to sit back and wait out recessionary times. They are convinced that there is great growth potential in the domestic and overseas markets for everything from single-engine two-seaters at $20,000 each to business is jets priced at more than $3 million. The industry estimates that the current general aviation fleet of 200,000 will grow to 300,000 by 1990 -- with possibly a far larger growth rate for the 80,000-aircraft fleet overseas.
Airline deregulation adds to industry optimism. General aviation traffic in the United States last year carried 120 million intercity passengers among 12, 000 airports. Commercial airlines carried 275 million passengers but provided service to only 320 airports. The contrasting figures suggest a continuing need for private aircraft to serve businessmen by travelling routes increasingly neglected by deregulated commercial carriers.
Even during the recent slump in sales of small aircraft, businessmen have continued to buy, with executive- jet sales soaring.
Facing tough competition from other fanjet manufacturers such as Canadair, Dassault-Brequet, Gates Learjet, Gulfstream American, and Rockwell Internationa, the Cessna Aircraft Company's business-jet plant here in Wichita is an example of where the industry is headed.
Production foreman Doyle Mathews is working hard to switch his executive jet production line from a 10-hour to an 8-hour cycle to catch up on an 18-month backlog of orders.
But the hoped-for speedup is a tough target. Even if Mr. Mathews can lure enough skilled aircraft workers away from neighboring firms such as Beech, Boeing, and Learjet, he will still face delays due to parts and equipment shortages. In one area of this 7,900-worker plant, Cessna has installed a constantly humming line of eight digitally controlled automatic machining centers costing $200,000 each. Yet delivery of new equipment such as this can take up to 18 months.