Trying to predict the economics of aviation if the House DL Medical Bill took effect

N918KT

N918KT

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I'm not an economist but here is what I predict what would happen to aviation economically if the House Drivers License Medical Bill was passed.

LSA/SP: For LSA, I believe that we would see used and new SLSAs prices falling somewhat because then PPLs can fly bigger planes without having to drop down to LSA. However, I don't think the LSA and the Sport Pilots are toast. I still think SLSAs would be slightly more appealing to people who would want to just fly under sport pilot rules, since the SLSA prices may drop a little bit, but I don't know by how much to be exact. LSA/SP will still be a niche market.

Part 23 Aircraft/PPL: This market will definitely be growing, the used Part 23 airplanes like a 152, 172s and Cherokees will definitely go up in purchase prices. As for brand new Part 23 aircraft, I'm not too sure on effects of the prices for these airplanes. If this bill covers student pilots, we could see a rise in student pilots going for Private Pilot Certificates.

Am I right in these predictions?

What is your take on this on what would happen to aviation economically if this bill was passed?
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Not much, if you can buy a 100k LSA and want one why go slumming with a 20k C150? What percentage of viable owners are being stopped by a medical? Sucks if you are jammed up, but I doubt it is a huge number of people, seems that way because it is easy to find some of them here, but not enough to affect the market.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

I certainly know folks interested in flying but got stopped by the medical thing. I suspect that aviation will have something of a revival, hopefully a boom with the new pilots.
 
I would predict that for a few years after the law goes into effect there will be somewhat fewer used cessnas/pipers/bonanzas on the market. That's because their owners will have one less reason to sell - the anticipation of not passing a medical exam.

And used prices for those planes will benefit some, but not much, from that temporarily reduced supply.

It will just be a temporary effect because those planes will get sold eventually.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

I think this will have a minor impact, but more important could be the streamlining of the part 23 certification process which was recently passed. If they can cut some of the red tape, allowing new ideas, new models, and hopefully cheaper prices, that will make an even larger impact. Prices will always be high, but imagine a sub 200k four seater available again?

I am not sure how much the dropping of class 3 medical would help. How many people is it really stopping? I understand that older pilots are being forced to give up aviation, but how many of the younger people that we need to keep GA vibrant are really stopped from flying by the medical clearance? I would think 99% of people under 50 can pass the medical very easily.
 
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Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

There are a number of VFR-only pilots out there who are happy as such, but I see a lot of gripes with medicals. While it's not a hurdle for young folks like me, I'll admit it's a hassle. Of course, I need it anyway since I like and need to fly IFR. The fewer costs and hassles we can have in GA, the more people will go for it.

As far as market values, I think the main thing it would do short term is see people keeping their planes longer who are no longer worried about their medicals. There might be a price increase, but I don't predict enough of one that I'd go out and invest in eligible planes.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

N918KT said:
I'm not an economist but here is what I predict what would happen to aviation economically if the House Drivers License Medical Bill was passed.

LSA/SP: For LSA, I believe that we would see used and new SLSAs prices falling somewhat because then PPLs can fly bigger planes without having to drop down to LSA. However, I don't think the LSA and the Sport Pilots are toast. I still think SLSAs would be slightly more appealing to people who would want to just fly under sport pilot rules, since the SLSA prices may drop a little bit, but I don't know by how much to be exact. LSA/SP will still be a niche market.

Part 23 Aircraft/PPL: This market will definitely be growing, the used Part 23 airplanes like a 152, 172s and Cherokees will definitely go up in purchase prices. As for brand new Part 23 aircraft, I'm not too sure on effects of the prices for these airplanes. If this bill covers student pilots, we could see a rise in student pilots going for Private Pilot Certificates.

Am I right in these predictions?

What is your take on this on what would happen to aviation economically if this bill was passed?
Click to expand...


Your assement and evaluation is sound as any.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

N918KT said:
Part 23 Aircraft/PPL: This market will definitely be growing, the used Part 23 airplanes like a 152, 172s and Cherokees will definitely go up in purchase prices.
Click to expand...

How many pilots do you think such a law would add to the rolls? I've never seen anyone claim the pilot population is declining due to medical issues (excluding simple aging.)
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Jim Logajan said:
How many pilots do you think such a law would add to the rolls? I've never seen anyone claim the pilot population is declining due to medical issues (excluding simple aging.)
Click to expand...

Your assement is devoid of any reasoning. :mad2:
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Jim Logajan said:
How many pilots do you think such a law would add to the rolls? I've never seen anyone claim the pilot population is declining due to medical issues (excluding simple aging.)
Click to expand...

I definitely think a number of people decide not to pursue it or else bow out of it because of concerns with medicals.

What it really comes down to is the population is declining because of costs and hassles, both of which are high. We should do what we can to lower both.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

NoHeat said:
I would predict that for a few years after the law goes into effect there will be somewhat fewer used cessnas/pipers/bonanzas on the market. That's because their owners will have one less reason to sell - the anticipation of not passing a medical exam.

And used prices for those planes will benefit some, but not much, from that temporarily reduced supply.

It will just be a temporary effect because those planes will get sold eventually.
Click to expand...


This.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Jim Logajan said:
How many pilots do you think such a law would add to the rolls? I've never seen anyone claim the pilot population is declining due to medical issues (excluding simple aging.)
Click to expand...

Geico266 said:
Your assement is devoid of any reasoning. :mad2:
Click to expand...

I asked a question that needs a reasonable estimate if the OP's opinions are to be judged valid. It was the OP that made an assessment, not I. I'm at a loss as to why my question is devoid of reasoning, but the OP's post with many opinions, which lacks any reference to statistics or facts, did not rate the same opinion from you.

So - anyone have a defensible estimate on how much, if any, this law might grow the pilot population enough to actually drive used non-LSA aircraft prices up due to increased demand?

As far as I can tell, his assessment assumes that there are a large number of prospective pilots who have decided that light sport aircraft wont do, but have potentially disqualifying medical conditions preventing them from getting private pilot. I find that hard to believe.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

It might be a large number if you count everyone that has ever been turned away, but I'd guess the vast majority of those folks moved on and bought a boat or dropped dead from their disqualifying ills. Doubt many of those guys would even know it became possible to start flying.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

ClimbnSink said:
It might be a large number if you count everyone that has ever been turned away, but I'd guess the vast majority of those folks moved on and bought a boat or dropped dead from their disqualifying ills. Doubt many of those guys would even know it became possible to start flying.
Click to expand...

It might be a small number, too. Or a number with no foundation in reality - just anecdotes. Consider:

From 2011 to 2012 the number of sport-only pilot licenses increased by 427.
From 2011 to 2012 the number of active private pilot licenses decreased by 6440.

So the original post seems to imply that for every person who gets a sport pilot license there are 14 or more people who insist on flying on nothing less than a private pilot but can't get one due to medical problems, so they opt for no license at all. Seems exceedingly unlikely to happen that way.

Statistics source:
http://www.faa.gov/data_research/aviation_data_statistics/civil_airmen_statistics/2012/
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

I'd be happy if they'd just stop the hernia check like you're a GD fifth grader.

That's so demeaning.

Don't touch my junk!
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

My prediction AMEs will loose money, old guys with dusty out of annuals aircraft will pull them out of the hangar, and find guys like me who will do their annuals. and make money.

then they will find CFIs that will get them current, and make money.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Maybe sone of LSA companies go belly up, but that would not be aviation news.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

It would get me flying again....
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

As far as market values, I think the main thing it would do short term is see people keeping their planes longer who are no longer worried about their medicals. There might be a price increase, but I don't predict enough of one that I'd go out and invest in eligible planes.
Click to expand...

I think Ted hit the nail on the head. We might also see someone buy a plane who might otherwise not have with the medical issue hanging over their head and the very real possibility that because of some medical issue would wind up with having to take a loss on their investment.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Ted DuPuis said:
I definitely think a number of people decide not to pursue it or else bow out of it because of concerns with medicals.

What it really comes down to is the population is declining because of costs and hassles, both of which are high. We should do what we can to lower both.
Click to expand...

What's funny is the curves "ability to pass medical" and "ability to afford GA" are roughly inversely proportional
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

somorris said:
I think Ted hit the nail on the head. We might also see someone buy a plane who might otherwise not have with the medical issue hanging over their head and the very real possibility that because of some medical issue would wind up with having to take a loss on their investment.
Click to expand...

Correct. The part that I find intriguing is the "up to 6,000 lbs" part. While most twin drivers are the IFR sorts and I don't know what the insurance companies would say, the real takeaway is that you could actually get a pretty capable bird. And if you're VFR only and don't need all the fancy avionics, de-ice, etc., that's a big positive for some.

What it might mean is we see fewer planes rotting, which ultimately will be good for everyone.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

The death of fun flying has multiple reasons. The medical is just one barrier among many.
Yeah, eliminating the medical will have a stimulating effect for some individuals.
Whether that stimulus will rise above the background noise and become visible is debatable.
The major barriers of cost (the biggie), litigation risk, TFR's popping up like thunderheads, risk of getting scooped up in the War On Drugs or Terrorism, and endless FAA hoops to jump through will not change appreciably.

Enjoy your ability to fly while it lasts. We are relics living at the end of an era.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

I suspect the impact to the industry as a whole will be negligible. It will certainly decrease the pain factor for a lot of existing pilots (possibly decreasing some AME revenue), but despite an initial bump LSA activity seems to be petering out. I suspect the number of people who would be inclined to fly if they could on a DL medical but wouldn't otherwise is a small percentage. I've got a friend who might keep her 170 rather than going to light sport (she's in this: I can get my special issuance but the cost to maintain it is pretty high).

While I support it (it certainly will make things easier for my wife), it looks like IFR ops will still require a medical so it's not going to help me.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Jim Logajan said:
It might be a small number, too. Or a number with no foundation in reality - just anecdotes. Consider:

From 2011 to 2012 the number of sport-only pilot licenses increased by 427.
From 2011 to 2012 the number of active private pilot licenses decreased by 6440.

So the original post seems to imply that for every person who gets a sport pilot license there are 14 or more people who insist on flying on nothing less than a private pilot but can't get one due to medical problems, so they opt for no license at all. Seems exceedingly unlikely to happen that way.

Statistics source:
http://www.faa.gov/data_research/aviation_data_statistics/civil_airmen_statistics/2012/
Click to expand...

"An active airman is one who holds both an airmen certificate and a valid medical certificate"
So, I am not an active airman and do not show up in the FAA numbers.
How many of those 6440 gave up flying and how many just decided that the medical nonsense was not worth the effort just to have a back seat?
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Most likely this helps reduce the attrition rate for older pilots, but won't do that much to increase the number of new pilots in the short run.

This should have the effect of increasing the quantity demanded for non-LSA airplanes overall, and perhaps decreasing the quantity supplied of used airplanes as owners no longer sell their planes off when they choose to forego special issuance hoops. So, maybe we'll see some upward pressure on the equilibrium sales prices of used non-LSA planes.

In the market for new planes, the prices are already pretty high. There may be more people that might choose to buy new because they no longer fear losing their medical, and if the price of used planes strengthens, their may be those that choose to buy new rather than used because the price differential decreases. But I doubt that will have much impact, due to both the small number of potential purchasers for whom this change makes a difference in their decision to purchase a new plane, and the expected minor price impact on used plances. On the supply side for new planes, this change won't result in any impact in the supply of new airplanes, at least not in the short term. Consequently, with minimal increases in demand for planes, and no short term change in supply, the market for new planes probably won't see much impact.

I would expect the market for LSAs will soften, as it seems to me the biggest driving force for that market is former private pilots going LSA to avoid the medical issues. It's not that much easier to get and LSA license, and LSA planes are pretty expensive relative their performance.

Hopefully, the small plane revitalization act will decrease costs for manufacturers for new planes. If so, between reduced costs, and potentially increased demand (albeit small) from the DL medical, there might be some uptick in profitability for the manufacturers. If production and development costs really do come down, that may bend the supply curve such that equilibrium market prices come down, which would result in more unit sales, and possibly a shift in the demand curve overtime.

Don't ask me to quantify any of the above changes.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Capt. Geoffrey Thorpe said:
"An active airman is one who holds both an airmen certificate and a valid medical certificate"
So, I am not an active airman and do not show up in the FAA numbers.
How many of those 6440 gave up flying and how many just decided that the medical nonsense was not worth the effort just to have a back seat?
Click to expand...

That does raise an interesting point. I have a PP and have been flying under Sport Pilot regs without a medical for at least 4 years. So do I show up as one of the 6440 pilots who the FAA says gave up? I don't have a valid 3rd class medical, but I do have an PP certificate.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

skyking3286 said:
That does raise an interesting point. I have a PP and have been flying under Sport Pilot regs without a medical for at least 4 years. So do I show up as one of the 6440 pilots who the FAA says gave up? I don't have a valid 3rd class medical, but I do have an PP certificate.
Click to expand...
According to the web site, you are not an "active pilot" - just like me. They count the number of sport pilot certificates out there. They count the number of valid medicals out there, they do not count PP certificates without medicals.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

PPC1052 said:
Most likely this helps reduce the attrition rate for older pilots, but won't do that much to increase the number of new pilots in the short run.
Big SNIP
Click to expand...

I wonder if the number of ADD ADHD diagnoses out there might have an impact. Been a lot of those with marginal justification in the last 20-30 years.

We won't know until it happens, but will this be like sport pilot or gliders? in other words, will a prior denial have an impact?
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

This HR will have less than a 1% effect on the economics of flying over the course of 10 years. AvGas and all the other regulations are what's killing GA.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

EdFred said:
This HR will have less than a 1% effect on the economics of flying over the course of 10 years. AvGas and all the other regulations are what's killing GA.
Click to expand...

I agree. If it's not 1%, my guess is it would be sufficiently close to there to be considered true.

My hope is the small plane revitalization act will significantly reduce costs for new products. That's going to be a few years before we see that, with the possible exception of current products on the market that are used in both the certified and experimental arenas. Maybe there will be a reduction in cost for the certified installations. Maybe not. Maybe someone with more knowledge about the technical and legal requirements could weigh in on that.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

The 150 market and other "entry level" PPL airplanes will probably go up in price. I've heard more than a few conversations about the medical being the difference in owning one of these and a sport pilot qualified LSA.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

This should give me an angle to talk my wife in to getting a private license after I become a CFI.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

PPC1052 said:
I agree. If it's not 1%, my guess is it would be sufficiently close to there to be considered true.

My hope is the small plane revitalization act will significantly reduce costs for new products. That's going to be a few years before we see that, with the possible exception of current products on the market that are used in both the certified and experimental arenas. Maybe there will be a reduction in cost for the certified installations. Maybe not. Maybe someone with more knowledge about the technical and legal requirements could weigh in on that.
Click to expand...

Would hope this make a hugh difference. Paying two or three times the price for the exact same part because one has the stamp for FAA approval is just a small symptom of the over regulation. This also extends to items that have no airworthness impact. Why did led's need FAA approval? Why do interior materials, that are nothing more than asthetic, need FAA approval? Why did a piece of copper pipe for my dad's AC unit cost $1200 when any mechinist could have made the same part for $100. These cost factors are what is killing GA in both the after market and new aircraft. Add upp all those $1200 parts in a new plane that should only cost $100, and you could see prices come down significantly.

I read recently that regulations and liability account for about 50% of the cost of a new airplane. So that 450k new Archer should really cost 225k, that 300k 172 should be about 150k. That just proves how heavy the burden is an makers, so no wonder they are using the same basic airframes and tech that was developed 50 years ago. Now I am a realist and know not all those regulations will be gone, but even get that overhead down to 25% per plane, and good things can happen. The revitalization act (and hopefull more like it) is the way to revitalize GA. The medical will play a small role in camparision.

The final kicker is that the over regulation and subsequent roadblocks to innovation are what has greatly slowed both the expansion of GA, and the safety of the product being produced. Regulation is potentially killing people, not pilots failing medical.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

EdFred said:
This HR will have less than a 1% effect on the economics of flying over the course of 10 years. AvGas and all the other regulations are what's killing GA.
Click to expand...

Yeah, but we could use that 1%.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

Getting more engines STC'ed for mogas, would have more impact than almost anything else that government could do for GA.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

PPC1052 said:
I agree. If it's not 1%, my guess is it would be sufficiently close to there to be considered true.

My hope is the small plane revitalization act will significantly reduce costs for new products. That's going to be a few years before we see that, with the possible exception of current products on the market that are used in both the certified and experimental arenas. Maybe there will be a reduction in cost for the certified installations. Maybe not. Maybe someone with more knowledge about the technical and legal requirements could weigh in on that.
Click to expand...

I don't see that happening. If you look at the prices for the traveling machine type SLSAs such as a CTLS or a Sport Cruiser, they're well up into the mid 100's, not far from the price of a DA22. If you were hoping for an IFR equipped 4 seater in the $150,000 range I think you'll be disappointed. I suspect the price for such an aircraft will be well up into the mid-200's, if not higher.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

drotto said:
Getting more engines STC'ed for mogas, would have more impact than almost anything else that government could do for GA.
Click to expand...

There are lots of aircraft with that STC, but not many airports carry mogas. I'd work on the availability issue first. Maybe form a co-op and get a self serve pump put in if no FBO at your airport wants to handle the stuff.
 
Re: Trying to predict the economics of aviation if the House DL Medical Bill took eff

drotto said:
Getting more engines STC'ed for mogas, would have more impact than almost anything else that government could do for GA.
Click to expand...

Actually there are a lot of engines that are approved for it, but the airframe also needs approval.
 
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