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Aviation today- private and corporate- non-commercial and commercial- on-demand or scheduled…if it flies or involves flying- it faces issues in a mix not seen in more than a half century – at least- not until after September 2001.

Dave Higdon   |   1st June 2010
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Dave Higdon Dave Higdon

Dave Higdon writes about aviation from his base in Wichita Kansas. During three decades in...
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10 Questions For Jim Coyne (NATA)
Changing times in aviation- with NATA members in the thick of it all.

Aviation today- private and corporate- non-commercial and commercial- on-demand or scheduled…if it flies or involves flying- it faces issues in a mix not seen in more than a half century – at least- not until after September 2001.

Since then it seems that the issues all warrant upper-case spelling almost all of the time- given how often these words headline stories of aviation’s ongoing challenges. These include:

• Security (costs and permutations);
• Fuel (recurring- unpredictable cost challenge);
• Economic Turmoil (lack of business- lack of access to airports or airspace- and lately- a lack of capital to hire and grow);
• Regulations. If it hasn’t been security concerns and the intrusiveness of a new TSA- it’s been a political fight over the future of the FAA (where if it wasn’t FAA funding in general it was FAA’s NextGen- WAAS and the ADS-B transition); or again the TSA- which rang alarm bells with its dubiously labeled “Large Aircraft Security Program”.

Then we’ve had the financial drain of the largest run-up in petroleum costs in history… or- just as the fuel-cost crunch subsided- a second financial body-blow as crisis of costs morphed into crisis of collapsing revenues – courtesy of the worst economic implosion to befall the country since the Great Depression.

It is throughout this near decade-long cycle of unrelenting change and challenge that members of the National Air Transportation Association (NATA) worked- as their association labored to deliver help at every level possible. For veteran NATA president Jim Coyne- much of his second decade at the helm involved meeting more than the typical issues-as-usual challenges. And it is in this turbulent environment that we prevailed on veteran NATA president Jim Coyne with ten timely questions about the association- its membership and the state of their world.

Coyne and his NATA staff have worked tirelessly to help its members – FBOs- charter operators- shops and service centers – in their efforts to sustain and grow their businesses while coping with security regulations affecting them in many instances. Today- it is true that aviation businesses continue to strain against a never-never land of convergences- but they do so with some signs of a return to better times on the horizon.

Those signs from across the aviation sphere indicate a tentative recovery is underway- with a number of indicators swinging beyond mere stability and back toward actual growth and expansion.

WAS: During the past three years people in aviation have heard a great deal about the struggles of aviation businesses that make and sell aircraft- new and pre-owned. In the same vein- FBOs- charter operators- aircraft management- maintenance and flight-training have felt their own pain from this recession- too often without a spotlight on their struggles. Can you give us a snapshot of how the FBO community has held up- and the impact of this downturn on those businesses?

Coyne: In the simplest sense we’re linked to how the economy goes. We’re very sensitive to changes in the utilization rates. Since the recession started utilization rates have declined- particularly as we’ve seen political leaders make statements to disparage the use of airplanes in business. The timing of this really began in later 2008- shortly after the [bank] bankruptcies - and in the 16 months after there was a pretty steady decline in use which hit the maintenance- upkeep and fuel sales that underpin the industry.

There’s a big regional difference in impact- as well. In the New York City area our markets were affected by the whole government/Wall Street agenda. Detroit- another high-use area- was severely impacted by the auto-industry problems. In the middle part of the country- the agricultural parts of the country - the oil patch - the aviation businesses have done fairly well because those industries have held up. But the West Coast suffered greatly - so it’s hard to say specifically how any one area has held up.

Since January 1- though- we’ve seen steady recovery but we’ve got no area totally back to normal. We’re about 15 percent off a few years ago. But that’s better than the 50 percent drop we took at the start of the recession.

They say a recession is over when you have two consecutive quarters of (economic) growth. We think this quarter will be positive; last quarter was positive. As long as we don’t take a double dip or get hit by a ripple from Europe- we’re hopeful that business growth is coming back - especially in the political cycle- when in an election year you get a different rhetoric out of leaders. Hopefully there’ll be no more of the disparaging kind we had in the past.

Our number one goal is to do what we can to help the users of aircraft fly more. We believe flying more is good for the companies we represent- good for the people who use the planes- and good for the country and its economy.

WAS: Recent charter market analyses seem to indicate gains in their indicators –expanding demand; increased bookings; growth in rates: Can you give us a charter-market status report from the perspective of NATA members? Is the market back at the right end of the Bull? And how badly did the downturn impact the size of the charter community?

Coyne: The charter segment is much like the other segments and very dependent on the growth of the economy. It moves with corporate profits. We are seeing some good signs for corporate profits in the first quarter – they exceeded people’s expectations. So we’re confident we’re going to see more growth. The supplemental lift segment (when the charter companies back up the fractional operators) has taken a hit.

Historically- the fractional jets have been among the biggest customers of the charter business. That wasn’t the case last year at all. But we’re seeing recovery there- as well. I don’t expect it will be strong enough to have a very big impact on charters just yet. For personal and recreational use of aircraft- we saw a big drop off in 2008 as well – but that has recovered pretty well since January 1. The stabilization of high net-worth individuals’ situations has helped.

We think charter was down about 25 to 30 percent from peak to trough. We’ve seen charter start to come back since January 1. But the charter industry has a way to adjust to meet demand- moving airplanes on and off their (135) certificates. So there’s a mechanism by which the industry right-sizes its fleet.

We now see more aircraft going back on charter certificates. We saw a jump in international charters after the Icelandic volcano eruption shut down transatlantic airline routes for a while. Because the charters could fly south to the Azores and then north into Europe- the industry picked up millions in business.

Nobody expects circumstances like that and you can’t plan on it. But it’s had an impact. That’s the nature of charter – you never know exactly what’s going to happen. Charter is the first line of defense for emergencies worldwide.

WAS: One of the areas we’ve seen NATA repeatedly address is consistency in regulatory interpretation and enforcement from region-to-region- between regions and their superiors. Are the FAA and the aviation community any closer to resolving this issue now than five or ten years ago? If not- what do you see as the major barriers to a solution?

Coyne: One of the most frustrating things for us was the lack of someone at the top of the FAA – which continues with the issue of FAA reauthorization. When the top brass of any organization feel like they can keep getting more- they don’t run a tight ship.

Having said that- I do think things are improving. We got an FAA administrator last year and he is a pilot and is getting into some of these issues. Congress is avoiding its responsibility in funding- as we’ve seen in the lack of a reauthorization bill.

One of the good things Congress has done was to go to the GAO (Government Accountability Office) and ask for a study on the FAA’s inconsistency in regulation – on the FAA’s behalf- by the way. We’re expecting a report on how inconvenient inconsistency is- but also how expensive and how dangerous it is. It’s a real safety issue. The administrator understands how this impacts operators and seems interested in working to stop it.

WAS: We hear anecdotally that the charter community has adapted to dealing with TSA regulation… Thanks to time and experience- you’d expect the businesses to find it easier to deal with the agency. Looking from the opposite direction- has the TSA become any more adept and insightful in dealing with general aviation- and is the lack of a TSA administrator a hindrance to progress between TSA and the NATA community?

Coyne: First let me say the problems of the government understanding the unique needs of the charter community are a historic problem- especially in Congress. The only model they know is the airlines. Congress doesn’t perceive the unique roll of the charter community- but it’s a problem throughout government.

The bad news is that the first view TSA had of the charter industry was through this lens of everything looking like the airline industry. But now it (TSA) has a leader who comes from the GA industry- and he brings the kind of knowledge and understanding needed – and it’s having an impact.

We now have a go-to person at TSA. That came into play recently after the Times Square bombing attempt. The TSA changed the rules for its No-Fly List and required a response to changes in the list within two hours of the update posting – and the change can happen any time of the day or night. Now an airline might have people on duty 24 hours a day- but a charter operator would not have a reason and wouldn’t be in a position to respond per the rule.

Before- we wouldn’t have had an ear over at TSA- but now we have someone who understands and listens to our industry- and it looks like we’re going to get some relief.

The fact that we don’t have an approved TSA administrator there; it’s frustrating but it hasn’t been a handicap for us – we work around it. It is another example of why Congress has become so ineffective at getting its job done. We need a permanent person (at TSA) because an acting administrator can too easily defer decisions while waiting on the permanent replacement.

WAS: State regulations- it seems- also add more to the NATA workload. Most recently the high-visibility item has been California and its new requirements for vocational training and educational institutions that would- in your view- burden flight-training providers. In other states the issue often seems to center on use taxes or the treatment of aircraft as business assets. Are state regulatory and legal concerns becoming more frequent and complicated in today’s depressed-revenue environment?

Coyne: I have three answers: absolutely; absolutely; absolutely. State regulations have become an absolute nightmare. We have rolling bankruptcies going on in state-after-state after years of easy revenue growth – a lot due to real estate speculation – and now we have a lot of states in a terrible- terrible fiscal crisis.

Like a lot of people- states in crisis react in unpredictable ways and start reaching out for whatever they can grasp. And it’s not just aviation they’re tapping – it’s businesses in general and as a result some states are in danger of running business out in response. We know of one operator who moved his airplane from California to Oregon – and now when he needs to fly he charters an airplane to go to Oregon to fly his own airplane…all that rather than deal with California’s tax issues.

We’re seeing problems in state-after-state- and rather than fix the fundamental problems of stopping the overspending- they look for new places to tap revenue. We had one municipality want to raise the property tax in its jurisdiction by 4-400 percent! We went before them and told them simply that every airplane in that jurisdiction would leave if that tax increase went into effect.

We at NATA are going to more and more places- and spending more and more time putting out more and more of these fires. And state legislatures keep looking for more revenue rather than fixing the problems.

WAS: The Coast Guard recently lost funding to continue operating Loran C as a viable area-nav system- and the system was turned off – despite concerns about the need for a back-up system for GPS and WAAS. Only a few weeks later we learned one of two WAAS satellites was drifting out of orbit and out of use. Until another WAAS satellite goes on-station and on-line- we find this system operating with a single failure point capable of bringing down the system – capability needed for WAAS and ADS-B to function.

What- in NATA’s view- should be the solution to back-up the GPS network and mitigate the potential problems of a GPS disruption?

Coyne: It was such a sudden surprise to hear the decision to pull the plug on Loran; we were chagrinned to say the least. We don’t know what the catalyst was- but it looks like all the federal agencies are doing everything they can to preserve their payrolls – letting technology go rather than letting go people. It strikes me as a very short-sighted budget decision; one that short-changes the community the system supported.

The support (for shutting down Loran) was a somewhat unprofessional analysis of the cost/benefit – a faulty analysis. It didn’t really address the benefits and advantages- only the costs. It strikes me that it’s going to be a hard decision to reverse. We’ve communicated with them- as have other parts of the aviation community. We’ve not gotten any encouragement from the responses.

It seems to me that we have to have some sort of reliable system established (to back up GPS) because it seems the height of stupidity to be dependent on this one technology for the needs of our system… And this gets me going on NextGen. I’m beginning to question whether the FAA is capable of finishing this- and whether Congress is going to exercise its oversight and its funding for it. A lot of people have gotten jobs and a lot of contracts have been let. A lot of work is going on- but we don’t know how it’s supposed to improve the system.

It’s a lot like going out and hiring a crew to build a house before you hire an architect or decide what kind of house you want to build.

What our members are afraid of is that they’re going to spend hundreds of thousands of dollars to upgrade and not see any benefits. I hope to be convinced that’s not going to be the same outcome as RVSM. Our industry invested millions in equipping for RVSM and we don’t really see any benefit from it.

Equipping (for NextGen) is going to be very- very costly and I’m less and less convinced that the FAA is going to be able to use this in a way that provides us with any real advantages. I think NextGen is going to be as controller-centric as this system- and that’s not going to gain us anything.

WAS: The aviation community is waiting rather anxiously for two regulatory proposals from two different agencies: the FAA and the TSA. Regarding the latter- let me first ask about NATA’s expectations for a revised Large Aircraft Security Program Proposal. Does it seem probable that the revised NPRM will be more realistic and in line with how general aviation operates?

Coyne: I think obviously- the fact that the agency has no administrator to deal with is a factor and my expectation is it’s going to take several more months to get done. With TSA we were able to put into the response everything we wanted them to hear and we got a lot of “Thanks” from the TSA staff for helping them with the information they needed to understand our business.

We hope to get something by the end of the year – but not before we see a TSA administrator. And we expect this proposal to be a lot better than the first one. I’m cautiously optimistic. They have to keep the flexibility of our industry and recognize that what works for the airlines doesn’t work for us.

WAS: Second part- on the NPRM expected imminently from the FAA on meeting access requirements for the fully operational NextGen system: is the NATA operating community already adapting with ADS-B functionality? Is the cost of equipping a significant issue – or is the cost of adapting looking more like the cost of normal business – like replacing a transponder – for your members?

Coyne: We’ve got a very- very diverse group of members. I talked to one of our members recently who spoke about how much it was going to cost to upgrade his CJ. He’s not happy and not sure of the benefits. On the other hand- we have members in Alaska who’ve been using ADS-B for years. They love it and enjoy a lot of benefits from it.

A lot is going to depend on what it’s going to cost – and nobody really knows that yet. A lot also depends on the benefits – and that can depend on where you operate. Operating out of a high-traffic airport like Teterboro- there may not be a lot of benefit. Operating out of the UP of Michigan- it may be very useful.

It’s hard for us to say right now what the response is going to be. We’ve got a lot of questions to get answered – and there’s a lot of selling that needs to be done if the FAA expects people to get on board.

WAS: The current administration is approaching the 18-month mark and we’ve heard some talk of the agencies involved in aviation seeming to work more closely with their client communities than anytime in the past decade. Does NATA see any difference in dealing with today’s FAA – for the first time in a decade administered by an aviator?

Coyne: Every administrator has pluses and minuses. But let me tell you- Randy (Babbitt- FAA administrator) is very articulate. He knows airplanes- he knows the business- he knows aviation. He brings a lot of strengths to the job.

Having said that- I’m not sure he has the kind of authority that he needs to get his issues attended to. I know he’s highly respected by the White House; his union constituency is strong- in the FAA and out. But there’s more to think about than the labor constituencies.

The agency has to balance the entire set of constituencies and not think only in terms of union priorities – which have an unusually strong pull on Congress right now- as well. But this industry can only succeed if it’s profitable – all its segments have to be profitable. We can’t afford an FAA that makes its decision on the basis of what’s good for its workforces at the expense of the shareholders and company owners. If we can’t return aviation to a level of profitability that sustains us- we’re going to have trouble surviving economically. We can’t get into a situation where- for the TSA or the FAA- a company has to hire a consultant just to fill out a form because it’s so complicated.

At the operational level- in manufacturing- in the pilot community- we need to rebuild this industry. He’s come to our meetings and listened and commented and participated. We’d like to see him succeed.

WAS: With work issues seeming more plentiful and involved than ever- how do you find time to enjoy a little R&R – and what’s your favorite getaway- from-it-all method?

Coyne: My favorite form of relaxation for the past 30-odd years has been flying by myself – hopefully VFR – and going to any of my 50 favorite locations – from Maine to Colorado to Texas to the Keys. My son just got his pilot’s license and we’re enjoying flying together to some of these places. My favorite flight was picking up my son and putting him in the left seat of my 50-yearold Baron and letting him fly us to lunch. And someday I’ll do the same with a grandson.

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