Aviation shipments up slightly as fiscal cliff is set to kick in
December 28, 2012, 11:37 am
A recent report by the General Aviation Manufacturers Association showed that global shipments of general aircraft increased during the first nine months of 2012, even with economic uncertainty.
The report indicated that shipments were up more than 4 percent to 1,393 aircraft, when compared with the first nine months of 2011.
"Purchase decisions continue to be delayed due to fiscal uncertainty in our North American and European markets," said Pete Bunce, GAMA chief executive. "Now that the U.S. election is behind us, we hope that legislators quickly act on the nation's budget crisis so that individuals and businesses can begin to chart their own long-range fiscal paths."
Wichita general aviation manufacturers, which include Bombardier Learjet, Cessna Aircraft and Hawker Beechcraft, delivered 487 planes, down from the 563 delivered during the first nine months of last year. During the third quarter, the three companies delivered 164 airplanes, down 20 percent from the third quarter of last year. Usually shipments from these Wichita companies account for 50 percent of all aviation shipments, but during the third quarter, and the first nine months of the year, they only delivered just under 35 percent of shipments.
Pilots might feel uncertain about the aviation industry's future, as the budget talks in Washington will undoubtedly have an influence on the Federal Aviation Administration's implementation of the Next Generation Air Transportation System, the largest aviation investment in history.
The Federal Aviation Administration is forecasted to lose nearly $1 billion of its $15.8 billion budget, unless a governmental decision provides some relief on the automatic spending cuts set to kick in at the beginning of 2013, according to the Aircraft Owners and Pilots Association. If the crisis is not averted, the AOPA said that a loss to that extent will cause the FAA to close more than 200 control towers and be forced to let go 1,200 controllers and 600 other staff members. In addition, the AOPA says the loss of funding will further delay implementing the NextGen program, which would be detrimental not only to aviation in America, but the U.S. economy as a whole.
The NextGen system looks to streamline the way in which flights are handled, reducing overall traffic. According to a study by the Aerospace Industries Association earlier this year, if the government were to cut the NextGen budget by $1 billion, the cost to the U.S. economy would amount to $80 billion a year by 2035 and 700,000 jobs would be lost by 2021.
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