With business aviation’s most economically challenging years in the past, NBAA president Ed Bolen sees promise in recent incremental growth. However, he notes that the industry is likely several years away from getting back to the high levels seen in 2007 and the first three quarters of 2008.When the recession hit the United States in 2008, the business aviation industry was among the sectors affected most by the sluggish economy. However, recent data from the General Aviation Manufacturers Association (GAMA) reveals some good news.
“There seems to be a little higher degree of confidence and a little bit more stability versus 2012,” says Ed Bolen, president and CEO of the Washington, DC-based National Business Aviation Association (NBAA), which represents more than 9,000 companies that rely on general aviation aircraft to help operate their business.
Longer & Harder Recovery
Among the factors that Bolen counts as having helped his industry slowly rebound from the economic downturn is a much stronger U.S. stock market, an improving domestic housing market, a marginally improving U.S. labor market and less concern about a total implosion in Europe.
“On a more macro level, there seems to be some improvement in the U.S. aircraft inventory, some stabilization of U.S. airplane pricing, as well as some new products in the marketplace,” he says.
Bolen remains cautiously optimistic about his industry’s recovery from the economic crisis. “This recovery has been longer and harder than we had seen in the past,” he says. “We hit the high water mark in 2007 and the first three quarters of 2008. I think the expectations are —according to some market metrics — that we are probably still several years away from getting back to those highs.”
What’s important to Bolen is that the industry is well off those lows. The year 2009 was enormously difficult, and 2010 was tough; but, he says the aviation industry has had incremental growth, which seems to be continuing.
“A recovery is certainly underway, albeit not as robust as many people would have hoped or predicted when we were at the bottom of the trough,” he says. “We expect continued improvement in 2014 and that is based on a continuing U.S. recovery, projections for growth in the transportation industry’s economic cycle in 2014, as well as continued opportunities in the global marketplace.”
Overseas, Bolen believes that the improved economic stability in Europe and continued growth in emerging markets is leading to some growth opportunities abroad. One particular emerging market that the aviation industry has been eyeing is the continent of Africa.
“Africa has proven to be an interesting continent with more commerce starting to develop there,” says Bolen. “That presents us with a new and different growth opportunity in the international business aviation market,” he explains.
Significant Policy Achievements & Challenges
A critical role of NBAA is to act as an advocate for its members and represent business aviation before policymakers at the state, federal and local levels. The association also keeps its members abreast about issues of importance to the business aviation community.
In March 2013, NBAA made sure that the industry’s voice was heard when sequestration budget cuts were mandated by the federal government. In response to these proposed cuts, the Federal Aviation Administration (FAA) had planned to begin closing 149 contract air traffic control towers and scale back on aviation services nationwide. NBAA representatives repeatedly met with FAA officials to express concerns about how the tower closures could affect the thousands of U.S. businesses that rely on air transportation.
The association worked with other aviation organizations to find temporary solutions to keep some towers open throughout the course of the summer and keep air traffic controllers on their jobs. While Congress ultimately passed the “Reducing Flight Delays Act of 2013” in May to end air traffic controller furloughs and reallocate up to $253 million in available funds, Bolen notes that the sequester still remains in effect until a long-term solution is found. “We will need to continue to work closely with the aviation community and with policymakers and laborers, to find ways — despite tight budgets — to make certain that this country continues to lead the world in all aspects of aviation,” Bolen says.
Another notable policy achievement by NBAA in 2013 includes helping to create a stay on Internal Revenue Service (IRS) federal excise tax (FET) audits of aircraft management companies. This delay will give the NBAA, along with the National Air Transportation Association (NATA), more time to work with the IRS and Treasury Department officials on developing clear and precise guidance as to how FET will be applied to aircraft management companies.
The NBAA, along with 49 other organizations, also successfully petitioned the federal administration to ensure adequate funding for U.S. Custom and Border Protection (CBP) staffing at U.S. ports of entry. Understaffing these ports could increase wait times and discourage other businesses from visiting the U.S. In a letter, these groups also recommend that CBP continue “to focus on ways that it can utilize its current staff more effectively, through expanding trusted-traveler programs, aggressively implementing its Trade Transformation Agenda and evaluating additional methods for increasing efficiency at the ports.”
In 2014, a central, continuing initiative for the NBAA will be to build on the grassroots support the association already gets from its members in its work to advance the industry’s policy priorities. “In the literally thousands of professional associations in Washington, all of them have a president and a government affairs staff,” says Bolen. “But what really separates effective industry associations from others is the ability to mobilize membership.” At NBAA, Bolen says that the organization differentiates itself by ensuring that its membership is educated on all issues affecting their business through electronic newsletters, a robust website, emails and weekly news roundups.
“We also try to not just inform our members, but facilitate their ability to communicate with their elected officials,” Bolen says. “Probably our signature advancement in that area is our Contact Congress software, which allows members to go to our website, enter their zip code and immediately have the email addresses to their senators and congressmen.”
In addition to encouraging its members to become more involved in advocacy actions, Bolen says NBAA plans to continue to promote to policymakers and opinion leaders the importance of business aviation to the nation’s economy and transportation system.
In February 2014, NBAA will celebrate the fifth anniversary of a joint advocacy campaign with GAMA, called “No Plane, No Gain,” which highlights the reality that business aviation generates jobs, gives a lifeline to communities with little or no airline service, spurs economic development and helps U.S. businesses stay efficient and competitive in the global marketplace. The educational campaign is promoted through a dedicated website (www.noplanenogain.org), paid advertising, social media, news media interviews, online education offerings, YouTube placements and podcasts. Since No Plane No Gain was launched, 49 governors have issued proclamations on how essential business aviation is in their respective states.
The awareness campaign has leveraged Google advertising to help address misperceptions about the business aviation industry. When someone types in a negative search term about the industry, positive ads will pop up in the search results. These ads have been viewed three million times on more than 6,000 websites, according to NBAA. Additionally, in the past year, the campaign’s Twitter followers have grown from 3,408 to more than 6,000, while its Facebook page “likes” have increased 335% from last October, to more than 4,700. The website itself has seen a 450% increase in visitors referred by social media alone.
Bolen says the goal of the campaign is simple — to continue to educate people on the importance of business aviation to the country. “When people hear the words, ‘business aviation,’ we want them to understand and appreciate the benefits of this industry, its ties and significance to our nation’s job base, as well as our export goals and our economic development efforts.”
Daniel Casciato is a professional business writer and regular Monitor contributor.
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