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Ten Questions For NATA

Coping with growth amid challenges members face- says NATA head

Challenging times never seem far away for those businesses in the business of aviation- even during good times. As noted a year ago by Jim Coyne- most in the aviation-services sector enjoy good times – going back a few years and looking ahead to the near future.
    As the long-time president of the National Air Transportation Association (NATA)- Coyne’s in a position to know the general health of the nation’s general aviation businesses: the FBO sector- maintenance shops- charter providers- and flight instruction businesses.
    It was that last segment - flight instruction - that continued to suffer- struggling to survive in an environment in which post-9-11 security rules all but eliminated a large part of their students – student aviators from outside the U.S. A year later- the plight of the flight school remains little changed. But all other segments of NATA’s focus area seem boisterous and healthy- growing in tangent with the expanding sales of new planes coming out of humming factories.
    Nonetheless- NATA members face significant challenges in the latter half of the decade. Some of those challenges cut across all segments of general aviation – proposals to rewrite how the FAA is funded- for example. Other challenges impact the average pilot or aircraft owner less than the businesses upon which they depend – FBOs- maintenance shops and charter operators. In fact- the attention needed just to address the FBO segment helped spur NATA to split off a focused FBO meeting from its annual convention and trade show late last month.
    Regardless of how NATA organizes its member services- serving its members remains at the foremost in the mission of Coyne and his staff- a mission at which they clearly excel.
    Coyne has served as NATA’s president for almost 13 years following stints at another association- as a Member of Congress and as a special assistant to the late President Ronald W. Reagan. A successful business man prior to his appointment to head NATA in April 1994- Coyne’s accumulated knowledge of politics- business- government regulations and general aviation consistently informs his work.
    An active pilot for more than three decades- Coyne employs his flying skills in the service of the association by flying his own aircraft for much of the travel demanded by his position of representing a highly diverse community of aviation business.
    With the convention and FBO meetings on the horizon and a full bill of fare on Capitol Hill- Coyne was gracious enough to spend time with us for a World Aircraft Sales Magazine ‘Ten Questions Interview’.

WAS: A year ago you gave us a baseline look at your membership’s business lines and you were “pretty bullish”. Would you use the same phrase today- or would it be overstating or understating in 2007?

Coyne: Last year I think was the best year a vast majority of our members ever had. This year looks like it’s continuing the trend. But there are some problems this year we didn’t have last year. However- business continues at a high level. There are some definite concerns we all have and we’re working.

WAS: You also acknowledged that there were “clouds on the horizon”. Among them you noted the adverse impact of regulations on flight training as one cloud in particular. Has the environment improved at all for this business?

Coyne: Well- only marginally – the domestic side is strong- but the situation continues to be a problem for foreign students. We have a lot of law-abiding people who want to come here to learn to fly where we have the best training in the world. But these people continue to have to jump through a lot of hoops and suffer a lot of delays in getting approved to come here for flight instruction.
    Domestically- of course- flight training is still a healthy business. But a lot of that training is for the airline segment as opposed to business aviation. And the business aviation side has a tremendous demand for pilots.

WAS: You said the FAA’s reauthorization proposal “demonstrates a remarkable misunderstanding of the aviation industry”- and noted your disappointment in its content. Were you as surprised as you sounded that the FAA proposal goes as far as it does – proposing user fees- higher taxes and a shift in agency oversight?

Coyne: I thought they would look at the political tea leaves after the November election and come up with a more politically palatable proposal. With so many strong advocates urging them not to do this- I was surprised. I don’t know if they weren’t paying attention or whether they’re giving in to political pressure- or what they’re thinking.
    I think they drank all the Kool Aid the airlines fed them. And if you look at the FAA today- they don’t know how general aviation operates- they don’t know how ATC operates – they just aren’t as knowledgeable about general aviation as the FAA people of 20 years ago.
    But I thought it was a proposal that was dead on arrival; that doesn’t mean it isn’t a problem. It gives credibility to the airlines’ arguments - arguments that we disagree with. I hope we can move toward a more realistic proposal for the agency.

WAS: Moving closer to home- and at the time of writing- NATA’s annual meeting is approaching and this year you’ve structured two distinct events tailored to different segments of your membership: the first FBO Leadership Conference (March 19-22); and the long-running Aviation Industry Expo- of which NATA is a primary sponsor. Can you enlighten us on how this came about and why?

Coyne: What we decided to do reflects the reality of business aviation. The FBO folks have a whole set of issues with airports- acquisitions- consolidations- infrastructure development and the like – different issues than what the charter operators deal with today.
    We’re old enough to remember 30 years ago when the local FBO did it all – charter- service- maintenance- flight instruction. But over the years- the segments have become more specialized. The FBOs today typically don’t have charter operations and they deal with other issues. So we thought we’d better serve the two sectors with individual events in which we can tailor more activities.

WAS: With NATA’s presence and participation at the Aviation Industry Expo continuing- will this change affect what your non-FBO members can expect to take away from the Expo?

Coyne: I think the charter members previously didn’t get a lot from the Expo- because the Expo is geared more to maintenance- airports and businesses at airports. Virtually everybody coming will find things valuable to them. We’re thinking this makes a lot of sense for improving what we can present to both sectors.

WAS: A year later- there seems to be almost no noise on the status of the Washington ADIZ- as if the FAA reauthorization debate sucked all the oxygen out of every other issue. Do you see any realistic prospect for change on an issue you- controllers- pilots and media all agree is an ineffective hassle?

Coyne: I think you’re right – reauthorization is the 800-pound gorilla and it’s dominating the work we do. But- our staff has worked very hard on a lot of these second-tier issues- of which access to National Airport (DCA)- training- the ADIZ are a part. But right now- everything seems focused on the bigger issue.
    We’re spending a lot of time on the other issues. Charter security rules are coming out – there’s a lot going on over at the FAA. I think more congressional interest on general aviation security is coming. It’s going to be coming out of the aviation subcommittees and the intelligence committees. The security issue is going to be a challenge for our industry to show that general aviation is not a security threat. It could affect general aviation all around the country and- if we’re not careful- make using general aviation even more difficult.

WAS: Other security issues remain an ever present issue for general aviation- business and charter operators. Are proposed changes to the 12.5 program a step forward or a step back- as some voices hint at?

Coyne: I think that general aviation is not a threat. I don’t see a need: Vigilance at airports; the economic interest of owners to protect their assets; the interest in corporate operators to secure their interests; and the general aviation airplane is just too much trouble and has too little potential to be attractive. Just because the terrorists used airliners doesn’t mean that terrorists are going to start using Cessnas. I’m troubled by the continued hysteria over this.
    Look at the cries after the Cory Liddle accident – fortunately- Mayor Bloomberg- a pilot- brought some sanity to the debate. I was pleased he did the right thing and went on television to put the record straight.
    But we still have our work cut out. Terrorists have used virtually every transportation mode around to launch attacks – cars- trucks- railroad trains- boats and - of course - airliners. We seem to put more than 80 percent of our security efforts into aviation alone – and even there we don’t seem to focus on the real threats. And general aviation is not a threat.

WAS: How do you see the prospect for the new VLJ-based on-demand air-taxi model influencing business.

Coyne: I think it’s great – but risky. The benefits of general aviation are so great that it attracts a lot of entrepreneurs who want to create something new and make a fortune at it. Of course- aviation attracts a lot of risk takers and a lot of them get burned.
    Remember United Airlines’ Avolar (a fractional-ownership program)? They threw several million into the pot and they lost it all in a few months. 
    I’m happy to see this new idea develop – but I guarantee you- they’re not all going to make money. I think- fundamentally- there is a market for small-jet charter though. When you look at charter today- almost all of it is flown by aircraft of six seats or larger. But most often- there are only two or three on board. So if it’s priced right and fits the clients’ needs- it could do well. No one likes paying for a lot of empty seats in an airplane bigger than what they really need.
    However- there are clearly challenges involved- and the biggest is that most models I’ve seen call for aircraft utilization of more than 1-000 hours a year. That amount of use takes a good airplane- good management and marketing and excellent maintenance. For that level of utilization to be viable is going to take a lot of talent and work.
    And in the end- I don’t think the models will work. I’m hopeful some winners will come out of this though.

WAS: Operational control of charters is another issue that required a lot of attention in the past year- but in the end- is the FAA’s direction here a step forward for charter users and providers?

Coyne: I think it was something the FAA found itself in a position where it had to do something.
    In a couple of cases- there were FSDOs that were allowing certificate holders to rent out their certificates to other parties and the FAA didn’t have adequate oversight over those third parties. Rather than admitting their problem- they were embarrassed and blamed the charter businesses.
    The first proposal was really unrealistic. After our 10 meetings around the country- they came out with something that we hope the charter business and users can deal with. My disappointment is that this will generate a lot of business for lawyers reviewing the paperwork requirements.
    It’s going to make it a little easier for everybody to understand what has to be done. It’s going to be an education challenge for a lot if businesses- but it could’ve been a lot worse. I don’t think the battle is entirely over yet- however.

WAS: When you get time away from Washington- how does what comes from inside the Beltway play with your members? Do they view issues like user fees- security and operational control as as important as we seem to see them from inside the Beltway?

Coyne: We’ve got almost 2-000 members and it’s impossible to put them all in the same category – different levels of knowledge- experience and participation. But under the old 20/80 rule of thumb- about 20 percent of our members are very involved. They work closely with us- volunteer their time and are in general very involved.
    But 80 percent expect us to do all the heavy lifting for them because they’ve got so much at home to keep them busy – mowing the grass- keeping the fuel tanks filled- servicing their customers. But I wouldn’t enjoy this job as much without those in the 20 percent category. It’s great to go out and see those people and share their enthusiasm and feel their energy.

To learn more about the activities of the National Air Transportation Association- visit www.nata.aero


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