The most recent aircraft shipment data released by the General Aviation Manufacturers Association (GAMA) showed a mixed performance, with 1,558 total shipments of airplanes manufactured worldwide during the first nine months of 2015, down 6.5% from 1,665 total shipments during the same period in 2014. However, total billings in the same period increased to $15.7 billion, up 1.5%.

Ex-Im Bank Reauthorization

In a news release issued with its Q3/2015 aircraft shipment data, Pete Bunce, GAMA president and CEO, indicated that the inability of the U.S. Export-Import Bank to create new financing guarantees since July 1 had significantly affected the agricultural aircraft sector in the turboprop market.

The Export-Import Bank reauthorization has been a key priority for GAMA this year, and on October 27, the U.S. House of Representatives voted in favor of the legislation, which will now head to the U.S. Senate. The Ex-Im Bank has facilitated deals between U.S. general aviation manufacturers and international clients since 2012 by providing more than $1.9 billion in financing guarantees to manufacturers.

Bunce says that passing the reauthorization is a critical step toward ensuring a level playing field for U.S. general aviation manufacturers in the global marketplace. “We are very encouraged by the strong bipartisan support in the U.S. House of Representatives this month that complements U.S. Senate support in late summer to renew the Ex-Im Bank,” Bunce said in a recent news release. “We are hopeful that the Surface Transportation bill to which Ex-Im re-authorization is attached will be conferenced quickly and sent to the president’s desk for his signature.”

From a fiscally conservative perspective, Bunce says opposition to the reauthorization is simply illogical. “If you did away or do away with Ex-Im banking, we would have a big hole in the federal budget because the Ex-Im Bank brings a return to the government based on the fees they charge for their services,” he explains.

On a brighter note, Bunce says the state of leasing and finance, which is vital to the health of the industry, has recovered from the Great Recession. “Leasing is critically important to the whole health of the industry,” he says. “Right after 2008 there were many banking regulations that were put in place, both nationally and internationally, that had an impact on swinging the pendulum the other way on capabilities for lending and finance. That pendulum now has gradually swung back toward more equilibrium, and that has allowed more flexibility with financing.”

Bunce says that while leasing is obviously important on the commercial side, it is also seen in general and business aviation as well. “It’s a great capability to get more aircraft in the system than if each was individually purchased and owned,” he says.

Streamlining Certification Processes

The hottest topic on GAMA’s agenda right now is its effort to streamline certification processes with civil aviation authorities such as the Federal Aviation Administration, Transport Canada or the National Civil Aviation Agency of Brazil. Bunce says certification processes are currently long and cumbersome. “We want improvements in relying on each other’s safety competencies, by use of bilateral agreements,” he explains. “The more we streamline the process, the more product development that we have. We are allowed to put more safety-enhancing technology into aircraft, which ultimately makes it safer for operators and safer for the whole airspace system wherever that aircraft may be operating.”

Other issues on GAMA’s list include implementation of the Small Airplane Revitalization Act, acceptance of supplemental certificates on both sides of the Atlantic and reform geared toward improving the efficiency of rotorcraft certification.

Next Generation Air Transportation System (NextGen), which proposes a shift in U.S. air traffic control from ground- to satellite-based, is another matter GAMA is monitoring. “We’ve got issues across the board, whether it’s to continue to make NextGen a reality or to improve general aviation’s ability to grow and develop in countries, especially the BRIC countries [Brazil, Russia, India and China],” Bunce says. “Those parts of the world are engines for the regional economies and the global economy, so we want to be able to see that grow.”

A Global Industry

According to Bunce, half of the general aviation market is outside of the U.S., while the other half of aviation products are produced and consumed within the U.S. “We anticipate the U.S. will continue to be a very robust market,” Bunce says. Business aviation’s unique ability to help companies meet their customers wherever they are and visit several geographic locations in a day will continue to attract interest throughout the world, Bunce says. “In a global economy, the business jet is the way that businesspeople conduct their affairs.”

Bunce uses the Pacific islands as an example: “When you go to the Philippines, where you’ve got huge land masses that are made up of thousands of islands and you need to connect those, ferry boats are slow; business aviation is fast.

“With the growth of commercial aviation worldwide, we also hope that the infrastructure on the commercial side that’s created also spurs business aviation development,” he adds. “We’re very bullish on international markets. The one thing that dampens that, obviously, is all the conflict we see around the world. We’re somewhat at the mercy of all of the instability that we see. Whether it’s Russia, or what’s happening in the Middle East, all of that has an impact on the growth of the global market.”

Bunce says the international market has shifted since the Great Recession when the accelerated economic development of the BRIC countries was the talk of the industry. “The landscape has changed some with what has happened recently in China with its market, and obviously in Brazil with the Russian sanctions,” he says.

Thanks to technology, the whole world is developing rapidly. Bunce indicates that other international markets are on the rise, such as South America, the United Arab Emirates, Saudi Arabia, Morocco and other regions of Africa. “Because aviation is a global industry, we want markets to develop everywhere,” he says.

Beyond the Horizon

Looking ahead to the next five years, Bunce says the best asset to the future growth of the aviation industry would be stability — both in the U.S. and internationally. “If we have stability, it allows companies to formulate expansion plans, and that obviously has a major impact on the fortunes of business and general aviation,” he explains before admitting that hoping for economic and political stability around the world is akin to wishing for world peace. “But that is the one thing that will raise the fortunes for our industry.”

Going forward, Bunce says research and development are also essential to continued growth. “Despite the economic downturn, each one of our member companies has had major new development programs and new products, and that keeps taking place,” he says. “So it is very important for us, on the U.S. side of the house, to provide incentives that allow innovation to continue to happen.”

Bunce says research and development tax credits are important to that effort. “Having governments recognize that when you have manufacturing and you can stimulate research and development — especially with the rapid pace of technology — that is a good thing. For us, new product development is a critical element. It’s been good to see that, despite the depths of the recession, our companies continued their innovation and research on new product design.”