Is the bottom going to fall out of the used GA market?

ClimbnSink said:
Totally justifies a 10 million dollar runway.
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Thanks to Mari for the link... Decorah Municipal results in 13 people having jobs and $813,800 added to the local economy per year. That 10 million dollar runway pays for itself in a bit over 12 years, and keeps paying dividends afterwards.

Unfortunately, that impact is mainly earned by the local businesses and government without any knowledge that the airport resulted in that impact. Thus, trying to build and run an airport as a private business is unlikely to be financially feasible, and since the government is profiting by increased tax revenues, the government has the money to pay for the airport (plus some when it's paid for).

In addition, the fact that Decorah has an airport resulted in increased revenues for people, businesses, and government in southeastern Wisconsin as well, where I buy most of my fuel and maintenance. If Decorah and every other small town I visited closed their airport, I wouldn't have any need for an airplane, thus Milwaukee would be affected as well.

The air transportation infrastructure we have is a huge boon to the economy, and it is an inherent governmental function because it benefits everyone.
 
Ken Ibold said:
The same could be said of the majority of paved roads in the U.S. As much as I value private enterprise and loathe federal overreach, there are some functions that are inherently governmental, and I would put transportation infrastructure in that category.
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The local politicians here are selling the roads to private companies who will make more lanes as toll roads and pay for maintenance on the rest of the road, along with putting it into the deal that the municipality may NOT build any roads nearby capable of handling significant traffic besides the highway with the toll roads...

And CDOT is going ahead with it completely. Apparently because wherever our tax dollars are going, it isn't to CDOT.

So whatever "inherently governmental" means, apparently the government here has decided it's a better deal to have cushy jobs managing relationships with private for-profit business that'll do those "inherently governmental" things like roads, because the government spent the money elsewhere and needs an escape plan.

I for see this as foreshadowing of a fully user-fee based aviation infrastructure for all but the airlines before I'm dead.

If they can't even pay for road maintenance out of the roughly 50% they take of most folk's income after all taxes and fees are accounted for, there's zero hope for airports.

Short term and at airline hubs, plenty of loan money being thrown around still. But it won't last forever. States are slowly going bankrupt and cow-towing to the Feds who get free loans compared to what municipal bonds cost local governments.
 
timwinters said:
And if people in urban areas want food, let them grow it themselves. Too crowded to grow enough? Well, hard cheese, starve your ass off.
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ClimbnSink said:
Or they could use their money to buy food and flyover land farmers can use money made from selling food to build their own airports. Does anyone really believe the economic value of little airports shtick?
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My point being, there's a helluva lot more gov't money spent subsidizing urban food than is spent subsidizing rural airports.
 
denverpilot said:
Short term and at airline hubs, plenty of loan money being thrown around still. But it won't last forever. States are slowly going bankrupt and cow-towing to the Feds who get free loans compared to what municipal bonds cost local governments.
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What loans are you referring to? Most airport infrastructure is paid for by the Airport Improvement Program, which makes grants that come from fuel taxes and ticket taxes. That money is not paid back if the airport fulfills the grant obligations that come with it. The federal share of the cost for a runway, taxiway or other airside improvement is paid at 80% to 100% federal money (YOUR gas tax money). The remainder comes from airport operating funds, bonds, state funds, or some other combination.

People complain about their tax dollars being wasted all the time. All of the money raised by avgas tax and ticket taxes goes back into airports. All of the proceeds from airport operations is required to go back into that airport (or airport authority or whatever if it owns more than one airport). The point is that aviation taxes are dedicated to aviation expenditures. Not a lot of government programs are so direct.
 
Ken Ibold said:
What loans are you referring to? Most airport infrastructure is paid for by the Airport Improvement Program, which makes grants that come from fuel taxes and ticket taxes. That money is not paid back if the airport fulfills the grant obligations that come with it. The federal share of the cost for a runway, taxiway or other airside improvement is paid at 80% to 100% federal money (YOUR gas tax money). The remainder comes from airport operating funds, bonds, state funds, or some other combination.



People complain about their tax dollars being wasted all the time. All of the money raised by avgas tax and ticket taxes goes back into airports. All of the proceeds from airport operations is required to go back into that airport (or airport authority or whatever if it owns more than one airport). The point is that aviation taxes are dedicated to aviation expenditures. Not a lot of government programs are so direct.
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Bigger picture. FedGov is technically bankrupt with tens of trillions of debt.

Unless you're saying the entire Aviation infrastructure and all Fed workers involved in it is fully paid off and in the black with no debt, it applies.

Grants paid from money we don't have, or are paying interest on, is truly awful fiscal policy.
 
timwinters said:
My point being, there's a helluva lot more gov't money spent subsidizing urban food than is spent subsidizing rural airports.
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Should the poor just starve to death? That was popular under Stalin and North Korea starved millions also. Rural airports grew the best when the G.I. Bill was introduced after WW2. Veterans not only went to college , they also learned to fly at small airports. State money funds a lot of the upkeep to small airports today, paving, mowers, etc. today a new single engine aircraft is beyond the reach of those left working. The good paying blue collar jobs have gone overseas......for good. Price a new bonanza lately? Today the cessnas and piper products are growing old and soon won't be worth repairing. The middle class that used to buy new aircraft are broke or working two lousy jobs in order to eat. They've been replaced by serfs in places like china who make 40 bucks a month and live in a barracks.
 
I wonder how much of the airport economic impact is Keynesian broken window effect. We pay a guy to plow the runway so the runway creates jobs.
 
Uh-oh. Word came that Gary is out there selling 09Romeo for $60k. He joins the august company of EdFred and Kent (did you guys see the discussion of Kent's DA-40 being overpriced?). I don't want to say anything bad about 09R, it's a great airplane. But in the end it's still a Sundowner... for $60k. So much for the bottom falling out.

My definition of a bottom falling out would be finding a flyable C-150 for $10k with 1200 SMOH. As long as that's not happening, the bottom is in place and holding tight.
 
zaitcev said:
Uh-oh. Word came that Gary is out there selling 09Romeo for $60k. He joins the august company of EdFred and Kent (did you guys see the discussion of Kent's DA-40 being overpriced?). I don't want to say anything bad about 09R, it's a great airplane. But in the end it's still a Sundowner... for $60k. So much for the bottom falling out.

My definition of a bottom falling out would be finding a flyable C-150 for $10k with 1200 SMOH. As long as that's not happening, the bottom is in place and holding tight.
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EdFred's plane is in the ballpark, I really don't know enough about DA-40s to comment; not to insult anyone, but I would certainly not pay $60 for a Sundowner, that's just me though.
 
zaitcev said:
Uh-oh. Word came that Gary is out there selling 09Romeo for $60k. He joins the august company of EdFred and Kent (did you guys see the discussion of Kent's DA-40 being overpriced?). I don't want to say anything bad about 09R, it's a great airplane. But in the end it's still a Sundowner... for $60k. So much for the bottom falling out.
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I've never sold a DA40. :dunno: Bought one a few years ago, though. (Mooney. It's a Mooney. Goes faster, metal, great for tall people.)

Ed's plane sounds like it's sold.

And I think that there seems to be a certain range - Say, $10,000 per seat - that tends to be the bottom of the certified used market for airplanes that won't eat your lunch in ongoing costs.
 
zaitcev said:
Uh-oh. Word came that Gary is out there selling 09Romeo for $60k. He joins the august company of EdFred and Kent (did you guys see the discussion of Kent's DA-40 being overpriced?). I don't want to say anything bad about 09R, it's a great airplane. But in the end it's still a Sundowner... for $60k. So much for the bottom falling out.

My definition of a bottom falling out would be finding a flyable C-150 for $10k with 1200 SMOH. As long as that's not happening, the bottom is in place and holding tight.
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I can get you a flying c150 for that price... With less hours. Ugly though. But it flys.
 
FastEddieB said:
Well, to be accurate, he's attempting to sell 09Romeo for $60k.

Hope he gets it, but the it's only the final sale price that will inform about the used GA market.
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considering there are decent deb's in that price range, good luck
 
Tummler said:
There seems to be numerous factors working against GA: skyrocketing operating costs; decreasing numbers of licensed pilots; closing airports; and the ever present threat of banning LL gas. At what point does the used plane market collapse?
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I hope so, especially if the DL medical gets pushed through. Then I'll buy my airplane. Although I think that if it does go through it will rekindle interest and take care of most of the things you listed.
 
Ken Ibold said:
Most airport infrastructure is paid for by the Airport Improvement Program, which makes grants that come from fuel taxes and ticket taxes.
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Just ran across the following statistics:

"There are over 19,000 airports, heliports, seaplane bases, and other landing facilities in the United States and its territories. Of these, 3,330 are included in the FAA’s National Plan of Integrated Airport Systems (NPIAS), are open to the public, and are eligible for Federal funding via the Airport Improvement Program (AIP)." (http://www.faa.gov/airports/planning_capacity/ga_study/media/2012assetreport.pdf)

That means over 82% of airports are privately owned and used - and so operations in and out of them cannot help but subsidize (in some small way) the 18% that are public use airports.
 
Jim Logajan said:
Just ran across the following statistics:

"There are over 19,000 airports, heliports, seaplane bases, and other landing facilities in the United States and its territories. Of these, 3,330 are included in the FAA’s National Plan of Integrated Airport Systems (NPIAS), are open to the public, and are eligible for Federal funding via the Airport Improvement Program (AIP)." (http://www.faa.gov/airports/planning_capacity/ga_study/media/2012assetreport.pdf)

That means over 82% of airports are privately owned and used - and so operations in and out of them cannot help but subsidize (in some small way) the 18% that are public use airports.
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Not really. Just because an airport isn't in NPIAS doesn't mean it isn't public.

Of operational airports in the US:

* 8540 are private use, 4863 are public use.
* 9092 are privately owned, 4107 are publicly owned, 204 are owned by the military.
* Annual GA operations at privately owned airports account for only 10% of total GA operations. GA Operations at publicly owned airports account for 89.5% of total GA operations. (About 0.5% of GA operations actually happen at mil bases - Flying clubs, fly-ins, etc.)
 
John Baker said:
It's not all that complex. Break it into simple to understand terms. You own an aircraft repair shop. All of your personal expenses come to $5,000.00 per month, house, kid in college, cars, groceries, etc. Your shop expenses come to $5,000.00 per month, hanger rent, tools, utilities, etc. That means you have to have a gross income of around $15,000.00 per month.

That equates to servicing a minimum of fifteen planes per month, assuming you average about a thousand dollars per plane in labor charges. This hypothetical shop has no employees, just the owner.

So at first your doing fine, then fewer planes come in for servicing, you are averaging only ten planes per month. That means you have to raise your prices on labor to $1,500.00 per airplane. As the number of customers keeps dwindling, the higher you must raise your prices on each airplane you service. When it reaches the point that nobody comes to your shop, then you fold.

The same holds true on all of the aviation industry, the fewer the customers, the higher the prices have to be.

When I owned an airplane, I spent around five thousand dollars a year in the aviation industry, that is now gone. The remaining participants will have to either find someone to replace me, or they will have to start paying a little more to be a member of the community.

It will eventually reach the point when there are not enough participants to support the industry, then it will be over. The only bright star in GA at this point is the LSA and experimental market, the certificated fleet is going by by.

It does you no good to buy a great used airplane if it costs more than its worth for an annual, or fuel is thirty dollars a gallon because they do not sell enough of it.

-John
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Hmmm, you don't have $30k for a nice used "certificated" airplane, so you'll plunk down $300k for a new "certificated" LSA? Howzzat work?
 
zaitcev said:
On the other hand, somebody is buing all those Carbon Cubs for $230k. Retirees still have the money.
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Most are not retirees, but still working, earning 6+ figures a year.
 
flyingcheesehead said:
You're assuming that regulation is the sole reason we're not building as many planes. Big assumption.

EU aviation is highly regulated, but they don't have the litigious society we do, so the liability costs are way lower. Tort reform would make a major difference for us.

Or are you predicting the second coming of GA after the part 23 rewrite?
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I suspect two things are driving innovation in design of GA aircraft in Europe:
a) great tradition of gliding
b) high fuel prices
 
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