Remarks
by
Jack
J. Pelton
Chairman,
President and CEO
Cessna
Aircraft Company
to
the Aero Club of
June
21, 2010
“Cooperation
is key to the future of aviation”
Good
afternoon.
Thank you
for inviting me to join you today.
It’s been a
little more than four years since I last spoke to this group. That was February
of 2006, and I discussed the myths and realities around FAA funding. At that
time, the stage was just starting to be set for a comprehensive bill to reauthorize
the FAA. Since then we’ve had so many extensions of the old law that most
people, including insiders, have lost count. I’m told we’ve had 13 extensions
to date. But it looks like we’re very close to making it happen – we need the
House and Senate to work through their differences so we can send a compromise
bill to the President.
This
reauthorization bill is absolutely essential to preserving aviation’s critical
role From the perspective of general aviation and Cessna Aircraft Company, my
trip here in 2006 is a world away from where we are in 2010. The general
aviation manufacturers have gone from making record deliveries and building
record backlogs to taking on an economic storm that gathered strength in late
2008 when the automakers made their memorable appearance before the congressional
committee here in
We’ve seen
cancellations of orders for new airplanes swell, some flight departments simply
shut down and at one time the pre-owned market for business jets was 18 percent,
which meant that nearly 1 in 5 of the business jets flying today was up for sale.
Worldwide GA shipment and billings figures in 2009 reflected a reversal of a five-year
period of double-digit revenue growth.
The Cessna I
represent today is half the size we were in 2008 – in terms of revenue and
employees. Our deliveries in 2009 were a fraction of what we had planned – 289 Citation
business jets compared to our original plan of 535. This year, we’re scheduled
to deliver 225 Citations. Market conditions have stopped freefalling – new
orders are starting to come in again, cancellations have slowed, flight hours
are going in the right direction and the pre-owned business jet inventory is
down from 18 percent but still far from the traditional 12 percent level. This
will not be a fast ascent. It will be a slow recovery.
During the
next few minutes, I want to share the most important lesson we must take away
from the past 20 months…and examine how that lesson can be applied to three
areas that will significantly impact aviation’s growth across all sectors. That
important lesson learned over the past 20 months is this: to have a healthy aviation
industry, we must work together. The negative rhetoric around business aviation
has died down… thanks to a focused effort among all of general aviation’s stakeholders.
Industry associations and companies like Cessna have pulled together for a
truly grassroots and grasstops campaign to share the positive contributions of
GA.
·
The 1.2 million jobs across the country
·
The $320 billion contributed annually to the
·
The significant trade surplus we provide
·
The fact that GA supplies a lifeline to communities
of all sizes by offering air transportation through 5,000
Our combined
efforts to inform decision-makers of the impact of general aviation have paid
off. General aviation caucuses have been formed in both the House and Senate,
ensuring GA’s essential role in every state and most Congressional districts is
considered by
lawmakers. Rather
than hearing negative comments about the use of business aviation, we’re hearing
acknowledgement of the value of business aviation. In recent months, numerous
states, cities and counties have declared “GA appreciation months” to recognize
our industry’s significance to the local and national economy. This cooperation
we’ve experienced in GA must span all areas of aviation.
The Future
of Aviation Advisory Committee is an excellent start. By creating this 19-member
panel, Transportation Secretary LaHood is supporting the needs of aviation
across the country. He’s gathered a cross-section of the aviation community –
airlines, transportation unions, manufacturing, academia, finance, consumer groups,
and I am please to be a representative of general aviation.
Last month,
at our first meeting, we framed the five areas of focus:
·
Ensuring aviation safety
·
Ensuring a world-class aviation workforce
·
Balancing the industry’s competitiveness and
viability
·
Securing stable funding for aviation systems
·
Addressing environmental challenges and solutions
Five
subcommittees will focus on those areas. I’m chairing the funding subcommittee,
but I’m looking forward to bringing the voice of general aviation to the entire
panel. GA must be a part of these discussions because we are the foundation for
all of
aviation.
General aviation provides a pipeline of pilots and other trained aviation personnel
who are the lifeblood of the air transportation system.
This leads
me to the three key issues I see most impacting our industry: the pilot population,
environmental concerns and the Next Generation Air Transportation System.
FAA
forecasts that the number of student pilots nationwide will drop to a 10-year low
of about 69,000 next year. That’s about a 30 percent decrease in a decade. This
is a problem for all of us in aviation…and all of us should be part of the solution.
Fewer pilots equate to less business for all of us, and it threatens the
strong, sustainable aviation system our nation counts on.
General
aviation is the pipeline for flight instructors and regional and commercial pilots.
A smaller pool of qualified pilots could prevent airlines from expanding to new
routes, and it could also mean lower training requirements. Gone are the days
when the military was producing all the pilots the airlines could absorb, or
when a broader GI Bill funded expansive flight training for veterans returning
to civilian life. Gone are the days when flying captured the excitement of
young people. Times are much different now.
Our industry
competes with the tools of immediate gratification – the internet, video games,
texting and tweeting… all those technologies that have made learning to fly less
exciting and less appealing. Because of this uphill battle, we must make
learning to fly, and flying, more accessible, and that means more affordable.
The new light
sport aircraft category is one way to do this. In the past six months, our new
Cessna Skycatcher light sport aircraft has entered service. At a price of about
$115,000, we are seeing many individuals buying a Skycatcher and flight schools
are offering rental of a Skycatcher as low as $98 an hour. It’s not the total
solution, but it’s a start.
We must also
make being a pilot an attractive career choice by offering salaries and benefits
that encourage the next generation to incur the cost it takes to get the necessary
training. Congress should give serious consideration to permitting flight training
under the Post 9/11 GI Bill. Additionally, we must aggressively fight
legislation like that recently passed in California that puts a financial
burden designed for larger classroom-type institutions on the primarily small
business-owned flight training industry. This type of legislation could end the
careers of many flight instructors and force flight schools out of business,
and this legislation could easily spread to other states. That would certainly
put a stake in the heart not only of general aviation, but all of aviation. This
is not what we need for aviation right now; we need legislation that fosters
and stimulates our industry. Avoiding legislation that cripples our operators
is also what we are fighting on the environmental front.
Aviation has
established an outstanding track record in reducing its environmental impact as
we grow to meet rising demand for transportation around the world. The market
demands efficiency. And because of our aggressive pursuit of greater fuel
efficiency,
carbon dioxide emissions from all of aviation represent only about 2 percent of
total CO2 emissions arising from the burning of fossil fuels. General aviation
is a fraction of this number. Still, we recognize there is much more we must
do.
The
philosophy of the Lindbergh Foundation has it right – we must pursue policies and
practices that balance progress and technology with environmental sensitivity. Funding
is a vital element to finding the best solutions – finding an alternative to leaded
fuel is an example: there’s still much work to be done to find a fuel that works
for the legacy fleet as well as new aircraft. Right now that funding is tied up
in the stalled reauthorization bill. Reauthorization holds the key to moving
forward in a number of areas.
This brings
me to my third and final key issue: NextGen.
We’ve seen a
flurry of activity in this area lately – the ADS-B Out mandate, recent FAA
contracts to develop and demonstrate potential NextGen processes. Still, funding
and implementation must accelerate.
Cessna is a
member of the team headed by Boeing that recently won one of three FAA
contracts to help reinvent the National Airspace System. Our involvement will help
ensure continued access to airspace for our customers and everyone in general aviation.
The jury is still out on the real benefits of the ADS-B Out mandate, and we
don’t yet know about incentives for operators to equip their aircraft.
ADS-B Out is
just one step in modernization; we really need to see and understand what the
full roadmap looks like for our future air transportation system. What we do
know is that the migration to a new satellite-based system must weigh cost
versus benefit for all sizes of aircraft. The win with the ADS-B Out mandate,
though, is an implementation plan that gives the FAA and industry a decade to
work together to find low-cost, effective solutions. It’s encouraging to see
this type of cooperation and I hope it will continue as we look
to deploy
other components of the NextGen program. That is the only way to truly ensure
the safety, efficiency, and economic and environmental benefits we are all counting
on from NextGen.
These three
areas – new pilot starts, environmental issues and air transportation system
modernization – illustrate that to have a healthy aviation industry, we must work
together.
I’m often
asked – will the business aviation market come back to where it was? The short
answer is: Yes, in time.
Business
aviation typically lags by about eight quarters after corporate profits return.
The consensus among industry forecasts is that we’ll start to see modest growth
in the next few years. My optimism is anchored in the concept that despite the
challenges in the world’s
economy, the
business case for general aviation remains.
Let’s not
forget GA provides humanitarian and disaster relief. We’ve had fresh reminders
of the critical need of helicopters and fixed-wing aircraft during the Haiti earthquake
earlier this year and more recently the oil spill in the Gulf – where, for example,
GA aircraft are making daily flights to gather digital images and data to assist
with the cleanup efforts.
Next month,
Cessna is coordinating its sixth Citation Special Olympics Airlift, transporting
hundreds of athletes to compete in the Special Olympics USA National Games
thanks to the generosity of Citation owners across the country. The demand for
air transportation will continue to grow. The key to protecting the growth of
our industry is cooperation.
Thank you very much.
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