[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE FAA'S IMPACT ON SMALL BUSINESSES IN THE GENERAL AVIATION INDUSTRY
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
FEBRUARY 5, 2014
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 113-053
Available via the GPO Website: www.fdsys.gov
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HOUSE COMMITTEE ON SMALL BUSINESS
SAM GRAVES, Missouri, Chairman
STEVE CHABOT, Ohio
STEVE KING, Iowa
MIKE COFFMAN, Colorado
BLAINE LUETKEMER, Missouri
MICK MULVANEY, South Carolina
SCOTT TIPTON, Colorado
JAIME HERRERA BEUTLER, Washington
RICHARD HANNA, New York
TIM HUELSKAMP, Kansas
DAVID SCHWEIKERT, Arizona
KERRY BENTIVOLIO, Michigan
CHRIS COLLINS, New York
TOM RICE, South Carolina
NYDIA VELAZQUEZ, New York, Ranking Member
KURT SCHRADER, Oregon
YVETTE CLARKE, New York
JUDY CHU, California
JANICE HAHN, California
DONALD PAYNE, JR., New Jersey
GRACE MENG, New York
BRAD SCHNEIDER, Illinois
RON BARBER, Arizona
ANN McLANE KUSTER, New Hampshire
PATRICK MURPHY, Florida
Lori Salley, Staff Director
Paul Sass, Deputy Staff Director
Barry Pineles, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Sam Graves.................................................. 1
Hon. Nydia Velazquez............................................. 2
WITNESSES
John Uczekaj, President and CEO, Aspen Avionics, Albuquerque, NM,
testifying on behalf of the General Aviation Manufacturers
Association.................................................... 3
Austin Heffernan, Owner and Manager, Royal Aircraft Services,
Hagerstown, MD, testifying on behalf of the Aircraft Owners and
Pilots Association............................................. 5
Jamail Larkins, President and CEO, Ascension Air, Atlanta, GA,
testifying on behalf of the National Business Aviation
Association.................................................... 7
Kenneth J. Button, University Professor, George Mason University,
School of Public Policy, Director, Center for Transportation,
Policy, Operations and Logistics, Arlington, VA................ 9
APPENDIX
Prepared Statements:
John Uczekaj, President and CEO, Aspen Avionics, Albuquerque,
NM, testifying on behalf of the General Aviation
Manufacturers Association.................................. 26
Austin Heffernan, Owner and Manager, Royal Aircraft Services,
Hagerstown, MD, testifying on behalf of the Aircraft Owners
and Pilots Association..................................... 31
Jamail Larkins, President and CEO, Ascension Air, Atlanta,
GA, testifying on behalf of the National Business Aviation
Association................................................ 38
Kenneth J. Button, University Professor, George Mason
University, School of Public Policy, Director, Center for
Transportation, Policy, Operations and Logistics,
Arlington, VA.............................................. 44
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
THE FAA'S IMPACT ON SMALL BUSINESSES IN THE GENERAL AVIATION INDUSTRY
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WEDNESDAY, FEBRUARY 5, 2014
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 1:00 p.m., in Room
2360, Rayburn House Office Building. Hon. Sam Graves [chairman
of the Committee] presiding.
Present: Representatives Graves, Chabot, Luetkemeyer,
Tipton, Hanna, Schweikert, Collins, Velazquez, Schrader, and
Payne.
Chairman GRAVES. Today we are going to examine the general
aviation industry, and in particular, just how the regulatory
environment for small businesses in general aviation is
inhibiting growth, and in some cases, threatening the solvency
of small operations. General aviation is undoubtedly a small
business issue. The Small Business Administration estimates
that almost 95 percent of all businesses providing air
transport services are small.
The industry consists of about 223,000 aircraft in the U.S.
carrying 166 million passengers to 5,000 public airports. Many
of which have no scheduled commercial service. According to the
National Air Transportation Association more than two-thirds of
these 25 million flight hours per year are for business
purposes.
In addition to the volume of its flights, the industry is a
huge economic driver. If you take into account both operations
and manufacturing, general aviation employs about 1.2 million
people, and contributes approximately 150 billion dollars to
the overall GDP. In 2012 alone general aviation manufacturers
generated 4.8 billion dollars in exports of domestically
manufactured aircraft equipment.
There is no question that the general aviation industry is
a very significant part of the national economy. Despite the
industry's contribution to the economy, general aviation is
facing some economic challenges. In recent years rising fuel
costs, the decline in the number of pilots in the United
States, coupled with the drop off in airline production has
left the industry vulnerable. Given this, it is critical that
the needs of small operators are understood by those who are
regulating the industry. Unfortunately this is not the case.
Many in the industry see the Federal Aviation
Administration as out of touch, and the Agency's inefficient
nature and arbitrary decision making is a real problem for
small operators. Whether it is delays in the aircraft
certification process or it is the inability for the FAA to
implement new technologies to enhance safety, or the
inconsistencies and air-worthiness standards from region to
region, small general aviation businesses are negatively
affected.
We are fortunate enough today to have a group of small
businesses in the general aviation industry. I look forward to
learning first-hand how the FAA's regulatory regime is
affecting their operations.
With that I would definitely like to thank our
distinguished group of panelists for being here and coming in
today. I will now turn to ranking member Velazquez for her
opening statement.
Ms. VELAZQUEZ. Thank you Mr. Chairman. The U.S. economy is
both vibrant and complex resulting in an ecosystem of
businesses, suppliers, and consumers crisscrossing the nation.
For small businessmen and women this may mean traveling at a
moment's notice sometimes to towns not served regularly by
commercial airlines. As a result general aviation and the
flexibility it provides plays a key role in our nation's
economy. In fact, general aviation directly generates more than
20 billion dollars annually, and has an overall economic impact
of nearly 80 billion dollars, employing nearly half a million
workers. This contribution will grow as the economy continues
to recover.
Essential to this sector's success is ensuring the safety
of its pilots, passengers, and those who live near airports.
According to the National Transportation Safety Board there
were 1,071 general aviation accidents in 2012 with 432
fatalities. Conversely, U.S. commercial airline operations were
fatality-free. Pursuing policies that improve safety are
necessary, but they must be data driven and examined so they do
not create excessive burdens for the industry and the workers
that they employ.
With this goal in mind the FAA is undertaking several non-
regulatory efforts to reduce general aviation accident
fatalities by 10 percent. This strategy emphasizes training and
outreach while focusing resources on the highest risk
activities of general aviation. During today's hearing I am
particularly interested in learning whether these airports are
producing meaningful change within the industry.
On the regulatory front several issues before the FAA could
affect safety. This includes a petition by industry groups to
exempt pilots from the third-class medical certificate. While
it appears the safety data is available for the FAA to make a
decision, they have not responded causing frustration to many
of those in this room.
In addition, aircraft certification remains a flashpoint
for the Agency. Not unlike other areas of government, the FAA
has reported that it has a backlog of more than 1,000
certificate applications which are required for repair
stations, flight school, and charter operations. Of that
backlog over 130 have been waiting for more than 3 years. At
least one has been delayed for more than seven years. These
delays prevent new businesses from opening, and existing
enterprises from expanding.
All of these issues have one thing in common, they are
largely dependent on the FAA's budget. For FY 2014 the FAA
received 12.4 billion dollars, 168 million less than the year
before. Sequestration and budget politics have made aviation a
``hot potato'' lurching from crisis to crisis.
In April of last year air traffic controller furloughs led
to flight delays. Then in October 12,000 FAA employees were
furloughed for 16 days. So if you are wondering why the FAA has
not gotten back to you or has a large backlog, I think we all
know the answer. The truth is that budget cuts, sequestration
and shut-downs affect all areas of government, and aviation is
no exception.
However with that said we must try to do what we can to
ensure the general aviation industry remains strong in light of
these current fiscal challenges. It plays an important role in
the U.S. economy particularly for areas that lack other
transportation infrastructure, and is poised to grow stronger
over the next 20 years. Through its presence it not only
creates jobs, but also serves as an economic anchor for many
rural communities. I think the panel of witnesses for traveling
here today, and I look forward to their testimony. I yield
back.
Chairman GRAVES. With that we are going to open it up to
our witnesses. We do have a series of votes that are scheduled
between 1:30 and 1:45, as it turns out, approximately five
votes. I think we can get through our witnesses and then we
will break and come back if that is all right with everybody.
Our first witness is John Uczekaj who is the President and
CEO of Aspen Avionics in Albuquerque, New Mexico. John has over
33 years of experience in the avionics industry, and he started
out as an engineer at Boeing before moving into management
positions at Sperry and Honeywell.
Immediately prior to joining Aspen John was the President
and COO of NORDAM Group, an aviation parts manufacturer and
maintenance company. In January of 2013, John was name
Entrepreneur of the Year by the Living Legends of Aviation. He
holds a bachelor's degree in electrical and computer
engineering from Morgan State University, and an MBA from City
University in Seattle, Washington.
He is testifying on behalf of the General Aviation
Manufactures Association. Thanks for being here, Mr. Uczekaj.
STATEMENTS OF JOHN UCZEKAJ, PRESIDENT AND CEO, ASPEN AVIONICS,
INC.; AUSTIN HEFFERNAN, OWNER AND MANAGER, ROYAL AIRCRAFT
SERVICES; JAMAIL LARKINS, PRESIDENT AND CEO, ASCENSION
AIRCRAFT, INC.; KENNETH J. BUTTON, UNIVERSITY PROFESSOR, SCHOOL
OF PUBLIC POLICY, GEORGE MASON UNIVERSITY, DIRECTOR, CENTER FOR
TRANSPORTATION POLICY OPERATIONS AND LOGISTICS
STATEMENT OF JOHN UCZEKAJ
Mr. UCZEKAJ. Chairman Graves and ranking member Velazquez
and distinguished members of the Committee, I really appreciate
the opportunity to appear before you today to discuss the
impact of the FAA on small business.
My name is John Uczekaj as Congressman Graves says. I am
President and Chief Executive of Aspen Avionics in Albuquerque,
New Mexico. I also serve on the Board of Directors of the
General Aviation Manufactures Association, and I am also Chair
of the Flight Operations Policy Committee. I am really honored
to give this testimony on their behalf as well today. I am also
an instrument rated pilot and owner of an aircraft.
Aspen was founded in 2004 and was founded by two aviation
enthusiasts from Albuquerque with the mission of designing and
manufacturing low-cost avionics for primary flight displays and
multi-function displays for the lower end of the industry.
In 2008 we delivered our first product which was a primary
flight display which was groundbreaking in the general aviation
industry as it brought technologies that up to now had been
really reserved for the higher-end of the aircraft business
jets and air transport aircraft.
Our products bring electronic displays to the cockpit.
Three dimensional terrain awareness is a platform for NextGen,
display of NextGen, and modification of NextGen data, and
really provides a wide range of functionality.
We have 47 employees, and our entrepreneurial spirit is
really the key to our success. We have been able to do quite a
bit in a very short period of time. We have now 6,000 aircraft
installed throughout the world, 27 percent of our business is
done international.
But also the key to our success is really discipline and
managing costs and delivering a return to our investors. Aspen
is run by a group of venture capital investors who demand a
return on their investment, and require us to be able to be
accountable to everything that we do.
So one of the biggest challenges we have in a small
business is response times from the FAA. Each week we get
delays that cause us to lose hundreds or thousands of dollars,
and if you multiply that across the entire business of small
aircraft or small aerospace businesses you can imagine how big
an impact it is.
There are two things that affect us. One is the sequencing
process, and the other is the actual process of certification.
Sequencing process is the FAA's method of determining
priorities. Often times the expectations around when we get
through that process is very inconsistent. We have to plan
buffers and plan in our financials the time it takes for us to
get to the sequencing process.
Once through the sequencing process we then get into the
FAA certification process. In that process there are many
inconsistencies between certification offices throughout the
country. There are inconsistencies between programs. There are
changes in personnel that further exacerbate the problem in
that we have to make changes as we go along.
Aspen, from our standpoint, we raise private capital to
invest in new products. Those uncertainties that we have in the
process create a lot of unnecessary cost that we must absorb,
and it creates a lot of unnecessary time, which in fact has a
big impact on bringing safety technologies for the industry.
With that as Chairman Graves mentioned, in our world we do
retrofit aircraft, and there are 157,000 aircraft that are
facing a January 1, 2020 NextGen milestone. While that may seem
like a long time away, but the reality of the matter is that we
must convince 157,000 individual owners of aircraft to upgrade
their aircraft and convince them that it makes sense to do
that. The installation process alone is a long and arduous
task. When the certification process of new products takes as
long as it does it becomes a real problem for us.
From our standpoint there are a lot of processes to go. The
ODA process and technology of that is a good thing.
Organizational Design Authority is a big process, but it is not
cost effective for small business. We do not have the ability
to do that. From our standpoint we need things like the Small
Airplane Revitalization Act recently signed by President Obama.
That process provided ability to segment markets and allows us
to bring costs down. We really pushed hard for the thoroughness
of that.
The next thing is the Next Generation GA Fund which has
recently been launched by the FAA Reform and Modernization Act
of 2012. That allows funds for people to finance the putting of
equipment on their aircraft, and we think that is a very, very
important part of it.
It is my opinion that the government should be doing
everything to lift general aviation for the reasons that were
discussed both by Congressman Graves and Congressman Velazquez.
It is a very important sector of our economy. I really thank
you for the opportunity to talk about how our business
interacts with regulators in the FAA.
I want to be clear though in closing that we appreciate the
work of the FAA, their dedication and attention. I also believe
their opportunities to improve and reform their efforts to
maximize their benefits and improve safety. I look forward to
discussing this further, and would be happy to answer any
questions you may have. Thank you.
Chairman GRAVES. Thank you. Our next witness is Austin
Heffernan, owner and manager of Royal Aircraft Services in
Hagerstown, Maryland. Founded eight years ago, Royal Aircraft
Services is an FAA certified repair station specializing in
aircraft painting, restoration, structural repair, and general
maintenance activities.
Royal paints military aircraft through subcontracts with
Northrop Grumman, Lockheed Martin, and Sikorsky among others.
His company is also prime aircraft painting contractor for
NASA's Langley Research Center.
Mr. Heffernan is a United States Army veteran with
meritorious service medal, and received his bachelor's degree
from Vanderbilt University in Nashville, Tennessee. He is
testifying on behalf of the Aircraft Owners and Pilots
Association. Welcome, Mr. Heffernan.
STATEMENT OF AUSTIN HEFFERNAN
Mr. HEFFERNAN. Thank you, Chairman Graves and members of
the Committee. Thank you very much for having this hearing
today and inviting me to present testimony.
I am Austin Heffernan, the owner and general manager of
Royal Aircraft Services. I am also a private pilot. Royal
Aircraft Services is a highly regarded FAA certified repair
station in Hagerstown, Maryland. Our staff of 14 employees
provide structural repairs, painting, restoration, and
maintenance for general aviation aircraft based throughout the
Mid-Atlantic region. Today I am also representing the Aircraft
Owners and Pilots Association. I've been an AOP member since
2002.
My testimony today covers the following key points. Number
one, general aviation is a heavily regulated industry. Number
two, general aviation cannot take advantage of the safety and
operational benefits of new technology because regulations have
not kept pace. Number three, FAA policies and internal
structures are increasing the cost of general aviation flying
without delivering added safety.
General aviation directly supports thousands of small
business from flight schools and line operations to repair
shops like Royal Aircraft Services. Thousands more use general
aviation to move people and products, reach new markets, and
support their customers. In fact, an estimated 65 percent of
all general aviation flights are made for business and public
services.
The FAA oversees all aspects of general aviation, and over
time the Agency's regulations have become increasingly complex
and prescriptive. Today we often find that regulations intended
to protect pilots and the public instead limit or slow the
adoption of new safety technologies and practices.
Quite often in my business we are unable to replace
outdated 30-year-old technology in certificated aircraft. Even
when better, less expensive technology is readily available to
the owners of experimental aircraft. The primary reason is that
the certification hurdles are so high that manufacturers cannot
afford to seek the necessary FAA approvals.
When a customer wants the benefits of a state of the art
engine and fuel management system we often have to locate the
unit in an area of the instrument panel that is out of the way
or hard to reach, reducing its effectiveness. We must do this
because we cannot legally replace the outdated, inaccurate,
quote/unquote, primary instruments that were supplied with the
aircraft decades ago.
There are about 200,000 general aviation aircraft flying,
and just over 1,000 new aircraft being produced each year.
These numbers mean that the biggest safety pay-offs will come
from upgrading older aircraft. Making it easier to upgrade
aircraft will have another pay-off as well, creating well-
paying jobs for those who design, manufacture, and install this
equipment.
The FAA's approach to medical certification also negatively
impacts small businesses like ours. We see many more pilots
leaving general aviation then we see new pilots getting
started. The restrictive medical bureaucracy within the FAA is
one of the primary reasons.
Almost two years ago AOPA and the Experimental Aircraft
Association filed a petition with the FAA that would reduce the
hassle and cost of the medical certification process. Despite
almost 16,000 overwhelmingly favorable comments on the
petition, the FAA has not formally responded.
This past December Chairman Graves and fellow AOPA member,
Congressman Todd Rokita, both members of the House General
Aviation Caucus, introduced the General Aviation Pilot
Protection Act. The legislation goes a step beyond the AOPA EAA
petition by allowing even more pilots and more types of
aircraft to make non-commercial VFR flights without the need
for an FAA medical certificate.
Other areas of FAA oversight also impact small business.
The current system requires the FAA to issue air agency
certificates to many types of general aviation businesses
including charter and on demand operations, some flight schools
and training programs, and repair stations.
The FAA has a backlog of more than 1,000 air agency
certificate applications. A fact that is stopping small
businesses like ours from opening or expanding. That is why I
ask Congress to help small business owners like me by, number
one, urging decision makers to consider changing the policies,
guidance, and regulations in ways that will encourage and
advance the use of modern technology in existing aircraft.
Number two, urging decision makers to consider removing the
internal issues that are preventing and delaying issuance of
required FAA approvals.
As a small business owner and pilot, I appreciate Congress'
recent passage of the Small Aircraft Revitalization Act,
directing the FAA to streamline aircraft certification. This
will have a significant impact on deploying new and improved
safety technologies to general aviation aircraft. I look
forward to Congress taking action on the General Aviation Pilot
Protection Act.
Aviation is American. It started here, and we need to
maintain our leadership in this area. We need to find ways to
encourage and grow this amazing industry, and we appreciate
your support.
On behalf of the 14 employees of Royal Aircraft Services,
and the nearly 400,000 members of AOPA, I thank you for your
leadership in addressing the concerns of the general aviation
industry so that it can continue to help small businesses
nationwide grow and thrive.
Thank you again for the opportunity to present here today
before this Committee.
Chairman GRAVES. Thank you. Up next is Jamail Larkins. He
is the President and CEO of Ascension Aircraft in Atlanta,
Georgia. An entrepreneur and pilot since the age of 14, Mr.
Larkins has been responsible for overseeing the rapid growth of
Ascension's private aircraft sales, leasing, financing, and
management services since founding the company in 2004.
He has been named the number one entrepreneur under the age
of 30 by INC Magazine, was featured in Forbes Magazine as a 30
under 30 energy and industry leader, and more recently has been
named the emerging entrepreneur of the year by Black Enterprise
Magazine.
Mr. Larkins studied at Embry-Riddle Aeronautical University
in Daytona Beach, Florida, and is testifying today on behalf of
the National Business Aviation Association. Thanks for being
here, Mr. Larkins.
STATEMENT OF JAMAIL LARKINS
Mr. LARKINS. Chairman Graves, ranking member Velazquez, and
the members of the Committee, good afternoon. My name is Jamail
Larkins and I am a businessman from Atlanta, Georgia. I am
pleased to be here as a member of the National Business
Aviation Association, and my company, Ascension Aircraft has
been an NBA member since 2008.
This is the first time I have ever testified before
Congress, and it is a privilege to be here. In 2008 I founded
Ascension Aircraft, and today I serve as the company CEO.
Although my company is a regional leader in the sale of
fractional-ownership shares of piston aircraft, the business
employs just 19 people including myself.
Over the years I have found that one of the most effective
ways to sell business aircraft is to use business aircraft.
With a business airplane I can seize opportunities as they
arise. The airplane I use for business is a Cirrus SR22, like
the model one I have here before me.
The airplane enables me to meet face to face with potential
clients, and that level of service and accountability helps me
get a leg up on my competition and also build my company. Of
course, many of my clients are also small business owners and
entrepreneurs. They are often located in out of the way places,
and like me, they recognize the benefits an airplane can
provide.
With a business airplane an entrepreneur can travel for
meetings, multiple cities in a single day, return to
headquarters that same evening, and be back in the office the
next day. With an airplane, a business person can transport
tools or products that may be too large to fit into an
airliners overhead bin or too delicate to be checked into the
airliner's cargo hole.
With a business airplane, an entrepreneur can efficiently
manage work sites that are a distance from each other and often
located in towns with little or no airline service. Simply put,
business aviation is a big asset for small businesses. It is
the tool that makes business models work.
If there is anything that I would like you to take away
from my testimony is this two-part premise. On the one hand,
the United States not only has the world's largest, safest,
move averse, and most efficient aviation system, it is also the
best system in the world for allowing small companies like mine
to succeed.
On the other hand, there are a number of ways the FAA could
strengthen its relationship with the small business community
so that the Agency's policies are more workable and effective
for the Agency and for businesses.
When we think about the regulatory climate for business
aviation today we know that, largely for safety reasons,
stringent policy requirements are appropriately placed upon the
industry. That means it is critically important that the Agency
and the industry effectively collaborate. After all, when the
FAA services go unmet or when the Agency implements onerous
policies, business aviation suffers.
Here are two examples to illustrate my point. First, we
know that the FAA policies require that small aviation
businesses, flight training centers, flight schools, and on
demand charter operators be certified by the Agency before they
can open. Unfortunately over the years the certification
backlog has swelled, and today nearly 1,000 businesses are
waiting for an approval which could take up to two to three
years.
Small businesses like these are drivers of job creation, so
we need to find ways for the FAA to streamline its approval
processes for these companies. We want to work with the FAA to
find those ways to do that.
Now, I will point to an example of an instance when an
effective collaboration has had a positive impact. It is on the
operation's side of the industry. As we know, many of the
companies using aircraft are subject to a host of government
requirements for installing equipment like that that are needed
for reduced vertical separation minima of RVSM.
Thanks to government industry collaboration, RVSM
requirements were recently smoothed, even as important safety
standards were protected. We would like to work with the FAA to
find similar areas where authorization procedures can safely be
made more workable for operators today.
Equally important, we want to find areas where our
relationship can be more effective and collaborative when it
comes to future aviation planning. For example, as the FAA and
industry stakeholders come together to debate the next
reauthorization I would like to reiterate general aviation's
communities' long-standing guiding principles for FAA
reauthorization.
First, when it comes to paying for use of the aviation
system, the fuel tax works best for everyone in general
aviation. As a small business owner, I know that we do not need
any other funding mechanisms like user fees. We also do not
need the giant federal bureaucracy required to collect them.
Second, the general aviation community continues to believe
that direct Congressional oversight of the FAA funding system
is necessary. Third, a continued, strong Federal funding
commitment is necessary to maintain the strength of our
national air transportation system.
In conclusion, Mr. Chairman, ranking member Velazquez, I
also appreciate the leadership that you provide, and the
bipartisan support that the committee extends to the small
businesses community. I look forward to answering any questions
you may have. Thank you.
Ms. VELAZQUEZ. Thank you, Mr. Chairman. It's my great
pleasure to introduce to the Committee, Professor Kenneth
Button. He is Professor of Public Policy at George Mason
University where he is the Director of the Center for
Transportation Policy Operations and Logistics. He has
published or has in press some 80 books, and over 400 academic
papers in the field of transportation economics, aviation
policy, and related subjects.
Professor Button is the editor of numerous academic
journals in the fields of aviation, aerospace policy, tourism,
and transportation. Prior to coming to George Mason University
in 1997 he served as a transportation expert for the OECD and
taught at several universities throughout the world. Welcome.
STATEMENT OF KENNETH BUTTON
Mr. BUTTON. Thank you, ranking member Velazquez. Thank you,
Chairman Graves, and the Committee for inviting me to give some
comments at this meeting.
First of all, I want to emphasize the importance of general
aviation for my own work. I did some studies in Virginia, and
as the ranking member noted, it plays an important role in
small communities for stimulating jobs, jobs directly and
indirectly. So it is very, very important.
I want to focus on a slightly different aspect of the
question to the previous speakers. I am interested in the
demand for general aviation services rather than supply. There
was quite an insightful article yesterday in the Wall Street
Journal discussing the shortage and pending shortage, perhaps,
of commercial pilots. Where do commercial pilots come from?
They come from, by and large, general aviation.
There is going to be a projected demand for future pilots,
according to Boeing, of half a million extra pilots worldwide
by the year 2032. In addition, a demand for something like
nearly 600,000 technicians. Many of which also start their
careers through one way or another, general aviation.
Most of this market is in China. China has no real general
aviation market. It trains about 50 general aviation pilots a
year. There is a huge market out there for the gentleman on my
left to penetrate, to make money in the future. They need
equipment. They have about 1,800 general aviation planes. They
need personnel.
To get into that market, not only is there a need for some
trade restrictions to be changed, but also to insure that the
U.S. provides the appropriate hardware and the appropriate
personnel, the pilots go out into that market, the training of
those pilots.
Now, what is the FAA's role in this? Well, my perception is
that most markets work pretty well on their own. Well, there
are some imperfections which do need dealing with through the
intervention of government agencies like the FAA. Security is
an obvious one in aviation, and that is not, I think, on the
table today, but there is also safety.
General aviation is an industry which is not perceived by
the general public to be perhaps quite as safe as driving a car
down the road. Although statistically you are much safer, I
suspect, flying an aircraft then you are driving in a car down
a road on Route 66, particularly this morning.
Now, how can the FAA get involved in actually changing this
perception and altering it? First of all, they need to be
responsive, and they have gradually been responsive to
segmenting the market so that the regulations are appropriate
for particular types of general aviation. It is not a
homogenous sector at all. It ranges at the one end from small
aircraft with sales, sale craft, at the other end we now have a
huge debate about unmanned general aviation which I think will
be very important from small businesses in the future on the
manufacturing side, the operation side, and the usage side.
That is clearly something that is being debated.
We also have a situation where there is taxation which I
will not go into. I have expressed my views on that in the
past. But what the FAA needs to do is to reassure the public.
It is doing, as I said, by segmenting markets, introducing new
legislation or being part of new legislation.
What we do find with the FAA is some of the data is
suspect. They do not collect as much data as they need to. They
have not got the resources to do that, one suspects, as was
pointed out earlier. But without having data and appropriate
ways of analyzing that data, it is very difficult to come to
firm conclusions about how well policies are going to work, and
indeed, which policies should be introduced in the first place.
So I do think there is an issue with the FAA with data
resources. They are improving, but it is still a voluntary
scheme, by and large, by pilots who have to give information
after they have made Flights.
Secondly, about adoption approach issue. It does take time
to get your licenses. It does take time to get certified.
Perhaps dividing the industry up into rather more detailed
segments will facilitate are much more rapid certification
process because at the moment there seems to be very much an
issue of going for a higher standard. It may well be you might
need to move down.
Again, the FAA has been involved in this, but it has taken
a long time to do. I do have some sympathies for an Agency
which is rather stretched for resources. I say that unusually
for the FAA, I did once write an article describing is at a
last bastion of Marxism, so I am not exactly favorably disposed
upon it for some other activities.
But certainly as far as this is concerned, there does seem
to be action. Not as fast as one would like, probably not
always in the direction the manufacturers would like, but
progress is being made, and one would hope that this progress
will continue in the future.
Chairman GRAVES. With that we will start questions. I am
going to go to Mr. Collins first and we will just see what
happens with vote. We will play that by ear. Mr. Collins?
Mr. COLLINS. In full disclosure I am a pilot and so I have
a bias. I'm not IFR, but VRF. Because of some life insurance
issues currently I am not flying as I am not IFR.
But, you know, I have noticed, and I want to talk about the
third-class medical requirement every two years. Most of us are
over 40 so every two years we have to get--and, you know, there
are some fairly arbitrary things on blood pressure and various
cardiovascular testing.
I would like to, I guess, point out, you know, I am a
boater. Boating you do not even need a license of any kind, let
alone a medical certificate. So you are out in a boat and you
have, you know, six or eight people in the boat, and whatever
is going on you are not licensed.
Driver's license, I know in New York they are good for
eight years and you need a vision test which is not much of a
test. I am actually a Formula open-wheel race car licensed
driver. No requirement whatsoever. So I can go around a track
at whatever speed I want and no license.
So here we are, general aviation Class 3 medical every two
years, arbitrary requirements, and it is just, to me,
government intrusion into somebody's personal hobby. That, you
know, we do not have, whether it is golf or tennis or race car
driving.
So I guess I would just like your opinion. I am a co-
sponsor of the bill that would remove the requirement for a
third-class medical for those who are strictly recreational,
limited number of passengers, and speed and altitude, and the
like. Whether you think, you know, such a exemption would, at
all, put the public in jeopardy in any way. I feel like any
time the government steps in it is probably just one more
reason somebody may not take up a sport.
Just your opinion on that, and your answer to the nay
sayers who say, oh my god, everyone's safety is going to be
jeopardized if general aviation pilots are not taking a
medical. Jump in.
Mr. UCZEKAJ. Okay. So I was a pilot myself and over 40
myself. I share your concerns quite a bit. It does seem almost
to the point of being ludicrous when you compare them to the
other safety critical type of things that you would do. I
actually think this is a very important part of the future of
aviation because we have a shrinking population, and for small
businesses like Aspen and others we need pilots to fly and buy
our products. More importantly, we need pilots to move up into
the air transport category the day that it was there.
All of us in aviation view that as one of the biggest
problems facing us in terms of the pilot population. Putting
more requirements in front of people to stop them from flying
is a real problem.
Also, more importantly, many people start flying later in
their life. I started flying just recently, primarily because
there are other requirements in your life, whether that be your
family or otherwise, and at that time in your life when you can
afford to fly is the not difficult time for you to do that.
So I think you would find a widespread, almost 100 percent
support of trying to work the third-class medical for pilots.
Mr. HEFFERNAN. I think the third-class medical requirement
is a definite detractor to business. As pilots age, and most of
our general aviation pilots are getting up there now, this is
just one more hurdle they have to face. It really doesn't seem
to create any additional safety. It seems ludicrous a person
has to have a third-class medical to get in a 2,500 pound
Cessna 172, but they do not have to have any requirements to
get in a 45 foot Zephyr motorhome and take it down the
interstate. It does not make any sense.
We are seeing more and more pilots leave general aviation
as they get older because they have medical problems. It may be
just perceived problems too. Their friend had some problems,
they can envision themselves having that type of problem later
on. When they are in this point of life where they want to look
at the cost of upgrading an engine or overhauling an engine or
upgrading an interior, painting the aircraft. All these
expenses or new avionics, how can you justify putting that much
money into your hobby when an arbitrary decision at a third-
class medical next year may take it all away from you. So why
even do that? Go by a boat, you know?
Mr. COLLINS. You don't need a license.
Mr. HEFFERNAN. Right. Yeah.
Mr. COLLINS. Mr. Larkins?
Mr. LARKINS. Personally it is one of the issues that I do
not have to immediately have to look forward to. But we
actually have had some of our clients that are involved inside
of our fractional program that have had to exit in the last
couple years because of medical issues. So it is one of those
things that I think if we could come up with a solution that
would allow people to continue to fly without having to go
through some of those onerous policies that are currently
implemented would be helpful for the industry long-term.
If you look at some of the other segments out there, ultra
lights, LSA airplanes, people are being able to safely fly
airplanes without having to go through that currently today.
Mr. COLLINS. Thank you. My time is expired, but real quick,
Dr. Button.
Mr. BUTTON. I tend to take a cautious view on this. I think
safety has to do with public perception and not actuarial
calculations. The data actually the FAA has on amounts of
flying is rather Spartan and not particularly accurate, so
making judgments about safety is difficult.
As far as driving a motorhome or airplane is concerned, one
involves two dimensional safety, one involves three dimensional
safety. So I think we will have to be cautious. This is a
perception issue of the public, and people are scared of planes
dropping out of the sky on top of them.
I would be perfectly happy for you to fly in the middle of
the dessert on an aircraft with no one underneath, but I am
worried about flying over open area. With the success of
general aviation building up business around airports,
airfields, that may be serious issue.
Mr. COLLINS. My time is expired. Thank you, all.
Ms. VELAZQUEZ. Thank you, Mr. Chairman. Dr. Button, as
NTSB's data suggests, the majority of general aviation
accidents are due to pilot error and loss of control. Both
regulatory actions such as licensee requirements and non-
regulatory initiatives such as increasing training and raising
awareness can play a part. In your opinion, what is the proper
mix of these regulatory and non-regulatory approaches?
Mr. BUTTON. Thank you. It is clear that safety is a human
factor, as they say in engineering, for many accidents. I think
what is important is actually to ask the question what are the
main causes of accidents. It is not just human failure. There
are different classifications, different types of aircraft, and
so on, and to pinpoint exactly where these issues are.
The Safety Board is very good at doing this. It does a
detailed analysis. One should act on that. But certainly one
does get concerned when we look at situations where drug and
alcohol abuse causing accidents. I, myself was buzzed when I
was a professor in England by an RAF student who had a conflict
with his girlfriend, went and got a pilot's license, took an
aircraft from the local airport, and buzzed the university. He
took down some cables with his undercarriage. So the human
factor is important.
I am not sure you can handle the mental side. He was not an
F-guy, I mean, they go through pretty rigorous training, but
nevertheless the physical side is important. Have a heart
attack in an airplane you are coming down. Have a heart attack
in a Winnebago you drive to the side of the road. These is a
difference.
Ms. VELAZQUEZ. Thank you. In your testimony you point out
that general aviation uses about 16 percent of air traffic
control services, but only contributes about 3 percent of the
cost. Does this mean that the taxpayers and commercial airlines
are subsidizing general aviation activities?
Mr. BUTTON. My personal view is that probably the gap is
not as wide as that because general aviation does not need some
of these whistles and bells that goes with the navigation
system.
Nevertheless, I am a great believer in user charges. I
think it is possible to isolate exactly what is used, not
everything, but exactly for a large part of the cost, and those
costs should be allocated appropriately.
Ms. VELAZQUEZ. Thank you. Mr. Larkins, roughly two-thirds
of air traffic control system carrying costs are financed
through aviation excise taxes of some sort including ticket
taxes, segment fees, international head taxes, and fuel taxes.
If it is determined that additional funds are needed to
continue to operate the air traffic control system and budget
cuts makes it impossible to use additional tax payer's dollar,
how would you suggest the FAA raise these funds?
Mr. LARKINS. Personally I would say that I do not think
anyone on the general aviation side would have an issue with
continuing to pay through the fuel tax. Even if that needed to
be adjusted to be able to pay more. We think that that is
probably the most efficient use of it.
Before I had the opportunity to get my first license here
inside the United States, I actually had the opportunity to get
my student pilot license in Canada. There, there are user fees
that are currently being collected for aviation activities
there.
Personally I can tell you from my own experience, going
through Canada and having to pay for it there is not as
efficient, is not as user friendly as what it is here inside
the United States.
So from my experience, over 2,000 hours of flight time in
all sorts of different aircraft, and throughout a lot of parts
of the world, I would definitely recommend that we continue to
pay for our use of the system through fuel taxes versus any
sort of user fees.
Ms. VELAZQUEZ. Dr. Button, would you care to comment on my
question? How do you suggest----
Mr. BUTTON. I think user fees are important. The point
about user fees are, they not just collected revenue which is
an interest clearly to government a lot of the time, they
actually effect behavior.
At the moment, there are situations where we have--this is
something no one has commented on, the increased number of
hours to qualify for a commercial license gone up from 250 to
1500 hours. It costs money to qualify as a commercial pilot.
Basically to get your license you fly around in circles for two
years, and then you get a license which is not very efficient.
I think user fees may well be a better way of encouraging
people to move in the industry. I think they may well be also
tied, in particular ways, to the type of activity involved in
those 1500 miles. Simply flying in circles does not seem to me
to be a particularly effective way of increasing safety. Take-
offs and landings seem a bit more dangerous to me. I don't
know. So I tie things together.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Chairman GRAVES. I think what we will do is take a quick
recess, and then we will come back and will continue with
questions. We will get through this. I apologize for the
inconvenience of the vote, but it is what it is. We will be in
recess until we are done.
[Recess]
Chairman GRAVES. We can go ahead and get started and then
we will wait on the other members to come back. Again, I
apologize for the vote series which is always an issue in
Congress.
I will start my questions with Dr. Button, which I always
get frustrated when we make generalities to try to make a
point, and, you know, talking about third-class medicals and
heart attacks. When you have a heart attack in a Winnebago you
just pull off to the side of the road, but when you do in a
plane you come down on top. Which I can make the same
generality the other way. You have a heart attack in a
Winnebago, you are going to cross the line, you are going to
kill somebody, but if you have it in a plane you just land it.
It is very frustrating to me when we see that, particularly
when--just to clarify for folks, on third-class medicals, you
know, it is a two-year process. You are basically self-
certifying anyway. Once you take that medical you have two
years for it. You do not even have to mess with it.
So I am very frustrated by that, but my question to you is,
you know, when you were talking about a data-driven process
with the FAA and we need more data to regulate, but then you
turn right back around and said that safety should be a public
perception process rather than data driven. Are you suggesting
the FAA develop policy based on public perception?
Mr. BUTTON. First of all, the comments about the Winnebago
was also a data problem because the data, for example, the FAA
has on flights by general aviation and so on is poor, so
working off the probability of having an accident with someone
having a heart attack in motor vehicles as opposed to an
airplane is a tricky statistical one.
No, I think the problem is that the--there are two things.
First of all, I think policies are made on the basis of
perception a lot of the time. I think that is because people
perceive the benefits they enjoy from things, and there is an
educational process required. That educational process is very
difficult to achieve without adequate data. That was really my
point.
Policy should be data driven, but nevertheless, unless
people are confident in the data they will perceive things, and
if you are a policymaker, my view is that you essentially adopt
policies which people perceive to be good. That is right
through the whole policy agenda as far as I can tell.
Chairman GRAVES. I take a much more objective position on
policy. I think policy ought to be based on that data, and not
based on emotional arguments which drive perception. In the
case of aviation, that can be at its worse. Again, making
generalities, like you make, when it comes to driving a point.
Mr. BUTTON. Well, let me drive the point in a slightly
different way. How many column inches in newspapers are devoted
to a general aviation crash, and how many inches are devoted to
a car crash? There have been studies done on this, and clearly
rare incidents of, I don't like to use the term to be honest,
but it is probably the only one I can think of, spectacular
events tend to attract public attention.
Public attention does drive policy. I am not a politician,
but certainly perception is important in the electoral process,
and it is true in the policy process.
I would like to have an objective-driven system to be blunt
with you, but it is simply not the way it works. It is not the
way the media works, and it is often not the way individual's
minds work either. People are scared of flying still. It is the
safest way of moving around the world, but they are still
scared.
That is a problem. They don't normally know the statistics.
They just hear about serious accidents.
Chairman GRAVES. That is unfortunate too. Just to use your
example of column inches devoted to a car crash as opposed to
the airplane crash, you are right. Because there are so many
car crashes the sheer number and volume of the car accidents
out there, of people getting killed by somebody else crossing
the line.
That is what is always a worry to me. You know, if I am
driving down a two-lane road and I am going 60 miles an hour,
and the person coming at me is going 60 miles an hour, that
means we are closing at 120 miles an hour, and I hope like hell
that he is going to say on his side of the road. I have to
depend on somebody else, whereas in the air, I do not.
It is very frustrating to me when we do use, again this
emotional generalities, and then we talk about whether or not
we should be basing public policy on perception.
My next question is actually for Mr. Heffernan and Mr.
Uczekaj, in fact, if anybody else wants to weigh-in, you are
more than welcome to. We hear a lot of talk about the FAA and
the backlog as a result of sequestration, budget cuts, whatever
the case may be, which are fairly recent, to be quite honest
with you.
My question to you, you all have been in business for a
long time. Was it the same way? Were there backlogs before?
Were you having trouble getting responses out of the FAA or
getting them to move in a timely manner prior to sequestration
then after sequestration?
Mr. HEFFERNAN. My opinion is no. We were not having any
additional problems prior to or after. I think there has been
just a tendency to kind of be stuck in the mud there in terms
of getting things done. I have not seen that the budget cuts
though have really done anything.
Mr. UCZEKAJ. From our perspective there certainly is a
difference. I mean, I have been certifying avionics for well
over 30 years now, and what I have seen evolve over time, and
most recently in the last six to eight months since
sequestration, government shut-downs, and things of that
nature, is that the FAA rank and file do not--their application
of procedures and processes seems to vary a lot more than it
did before. For, I'm sure a plethora of reasons, from job
security to, you know, the perception that they have to be as
safe as possible because of the pressures that are on them.
We see the lack of consistency between applications between
individuals and the FAA has increased since the pressures on
resources and such have occurred. So from our view, at least
from a manufacturer's standpoint, we think it is going in the
wrong direction. We think there are a lot of things that can be
done to improve that.
Most notably is to simplify the process so that an
individual, for whatever reason or whatever motivation, has the
process and procedures supporting them, and they do not feel
like there is any situation where they might be on a limb or
something, and they may take the most conservative position as
well.
Certainly resources at the FAA are a very, very big deal.
There is no question about it. It plays into the sequencing. It
plays into the way they work. It plays into, you know, where
they are. We see change in personnel much more than we ever did
in the past. People are changing roles and therefore, we get
different interpretations.
We feel very strongly that that change has occurred, and we
would like to work with ways to do that. There are many ways to
do that ranging from more delegation to the DER system, that as
an engineering representative which, you know, we have these
people that are 35 year experience people that have been
certifying things for a long time. It seems like delegation is
less and less used.
So these kinds of things, I think, need to be addressed. I
think it is very critical for businesses that are small because
if you really think about it, we have fewer products, and if
one product gets held up the impact on a small business is
disproportionate. A company can fail as a result of one product
being held up.
We encourage everybody to work with the different Small
Aircraft Revitalization Act to make things more simple, use
more delegation so that the pressure on resources that is
current and very real could be alleviated.
Chairman GRAVES. Are you all hearing from the agencies you
have to deal with, whether it is certification or flight
standards, I mean, is anybody getting laid off in the FAA? Are
they being released as a result of budget cuts? Do we have the
same number of people just doing less work or more work? Are we
making work for them? Are they making work for themselves?
Mr. UCZEKAJ. We have not seen any kind of reduction in
workforce. We have seen some people leave the FAA on a natural
nothing out of the usual.
You know, my sense is that there is just not enough
specific procedures and processes for them to be able to follow
and therefore they interpret on their own. We have not seen any
reduction in resources in terms of lay-offs. That is for sure.
Mr. HEFFERNAN. Nor have we.
Chairman GRAVES. That is what I assume. You know, we keep
hearing about not being able to do what they did before, but
they have the same folks.
I have a quick question for Mr. Heffernan about FSDOs, and
in your line of work, which is a little bit different, I was
just curious, have you ever lost business because your local
flight standard's office was seen as too stringent or, you
know, your customers as too stringent, and yet you hear of
other FSDOs because there is so much various between them,
other FSDOs, that are overlooking whatever it is that your
particular FSDO is claiming as a problem? You see where I am
going?
Mr. HEFFERNAN. Yes, sir. I do. We have seen a great
disparity between FSDOs. It is one of the things that really
concerns us right now. We have had customers, one customer
example, has a Cessna 190, very old airplane. He has been
coming to us for annual inspections year after year. This year
we told him, you know, you probably need to pack it up and take
it out to Montana. If we have to do the annual inspection here
on it, the guidelines have gotten so stringent on corrosion
that we are going to be replacing every piece of hardware on
your airplane if we do the annual here. So my advice is, unless
you want to incur that kind of expense take it elsewhere.
We have seen quite a bit of conversation on the D.C.
Pilot's website, some of the other pilot websites about people
saying, you know, from now on they are going to be taking their
airplanes to Pennsylvania or to another state for annual
inspections because there is so much concentration right now on
corrosion. The definition of what is and what is not acceptable
corrosion.
We all know unacceptable corrosion. If you get into an
airplane and there is structural damage, there are rivets
coming loose. Yeah, that is definitely taboo, but how much
surface rust is inappropriate on a screw head or a bolt. You
know, does to really weaken it? How do you know unless you do
undestructive testing or destructive testing on the bolt?
Things that were left up to NIA or to a repair station to,
based on their 40, 50 years of experience doing maintenance on
that make and model airplane, it was up to them to be able to
make a judgment call as to whether they can pass it whether
they can defer it to next year or whatever.
Now that is not an opportunity. It is basically within our
FSDO you replace it or you are in trouble. I just had a
customer with a Grumman. It had a $12,000 dollar annual because
we replaced every piece of hardware on there. A lot of was, I
think pretty subjective, but that is the guidelines we are
operating under.
Chairman GRAVES. Mr. Hanna.
Mr. HANNA. Thank you all for being here. I am a pilot, AOPA
member for many years. I own an airport. I owned an airport,
now I own a mortgage to an airport which incidentally is
marginally better.
My feelings about this business, and I am pretty familiar
with it, is we have watched insurance go up, gas go up. We have
watched licensing certification lessons go up to a point where
if it is true, and I believe all of you have confirmed this, if
we are going to have commercial pilots, we need a health GA
business, right?
Well, I submit to you that GA is really in big trouble
because there is such a thing as critical mass. As a point
where an industry is fundamentally dying rather than growing. I
think that that is where GA has become.
So I say to you, to the extent that the FAA's inability to
go through this process more efficiently, and I have bought
airplanes, I have waited years for certifications, is really
killing the business. That it is not just all of you
collectively and how you suffer day in and day out. You are a
part of an industry that is in big trouble. The hobby that I
love, and I know Sam and other people, members here do, is in
danger of evaporating because you just cannot sustain the
infrastructure we need to sustain if there isn't some amount of
GA.
So to the extent that things like additional gas taxes
which, you know, everybody would prefer that over a user fee,
particularly in this country where I can go into a dozen
airports in a single day and go and come at my leisure. Whereas
in Canada it is much more problematic. I have flown in both
places.
I normally do not make this kind of statement, but I feel
strongly about it, and I feel badly for the circumstances
because it is unique in this country. It is an asset that is
unique in the world to us, and it is a freedom that we have,
that people enjoy. I look forward to my little boy learning to
fly. He already owns an airport that I am going to give him,
you know, in spite of your 12,000 dollar annuals every year.
I guess I would ask you a question about it. We could argue
about user fees. I mean, you are an academic. I am a realist. I
don't mind paying more money, but I do not like user fees
because they simply create as much of an expense as they
pretend to collect money. In this country particularly, the
airport I own, the idea of me having to be there to collect a
fee to send to the FAA would be an utter and complete joke. It
would not happen. I would have to leave a can at the end of the
runway, you know, and some of you would have to drop five bucks
in there.
But do you think there is any truth in what I am saying? Do
you think the whole industry is in trouble because of this?
Cessna, you said there is 1,000 planes being made a year.
Cessna just a few years ago was making 1,500, 1,600, you know,
and you have seen consolidations with Beechcraft, and you have
seen Columbia, and your plane, the Cirrus, right?
It is not in good shape. By the FAA holding up the
opportunity to move things more quickly, and frankly for us to
be so litigious that everything we do has to be--if a third of
the cost of an airplane is bound up in extraneous insurance
costs, you know, that is crazy too. So I will just ask you to
comment on my little talk. Thanks.
Mr. BUTTON. I think the industry is in trouble. It has a
big future though, as I said earlier, if it can think
internationally and start selling its wares overseas, selling
its pilot training skills, which is still does, to some extent
in this country. There is a market.
The law situation I think is much more of a problem, the
litigation and so on is much more of a problem than the FAA
rules. We talk about a few licenses being held up, but the
number of court cases, the way the aircraft are operated and
used, they are influenced. I was talking to some people while
you were doing your democratic duties of voting. There are
serious problems that are deterred from doing things.
I think there is something else that one has to remember. I
told the story earlier to someone. When my father was alive he
used to talk about people and himself when he was young wanting
to be a train driver. My generation in Britain, okay, we do not
have too much general aviation, a lot of people want to become
pilots.
These days the younger generation want to play on
computers, and it is exciting for them to play on computers.
They are used to flying. The younger generation get inside of a
regional jet, a small regional jet, they get bounced around a
few times. They have got their kicks.
So I think there is a cultural change which is taking place
which is often missed by people actually involved in it. I am
outside so I tend to look at it. But I do not think the
industry is dead. I think it has a huge future if it can start
thinking--I think it does think internationally by the way. I
don't want to----
Mr. HANNA. Well, Cessna is building in China right now,
right?
Mr. BUTTON. Exactly. But half the Chinese general aviation
planes which is about 1,800 that are actually built in China do
not work very well. They have very few pilots, very few
training schools. They have huge taxes on imports. That is one
reason Cessna is there.
There is the Anglo-Chinese aviation operation.
Mr. HANNA. When I got my license it cost me 1,000 bucks,
right?
Mr. BUTTON. Yeah.
Mr. HANNA. I took 40 hours.
Mr. BUTTON. Yeah.
Mr. HANNA. I was lousy at it, but I got by. Today it is
5,000 minimum, and does not begin to give you any of the steps
you need to become what Sam is and others here.
Mr. BUTTON. May I pose the question, not acquiring the
license, how much insurance did you need in those days compared
to now?
Mr. HANNA. It is an incredible difference. My point is, and
we apparently agree, that every step of this business has
gotten more expensive, more difficult. Whether kids want to
stare at their computers or not, we have fundamentally taken
away the opportunity for young people to look at it as an
affordable outlet for a pastime or a career.
Mr. BUTTON. I highly agree. But also I think a career is
the important thing mentioned at the end where we have pilots
moving into commercial aviation. They are earning 20,000 a
year. I don't know. It is very low.
There is some imperfection in the commercial aviation
market which is discouraging people from moving into that area.
It may be pay. It may be conditions. That needs to be examined
though.
Mr. HANNA. According to you it is not supply and demand
though? And with all due respect, somehow there is a gap there.
Mr. BUTTON. There is a gap. The market is not working
perfectly. You start hearing stories of airlines now
recruiting, regional airlines recruiting pilots who formerly
they would not have recruited. They got some blemish on the
record, and they simply in the past would have stood back. Now
they recruit them. There is a shortage there.
There is a market failure up the chain. This is what I am
mainly interested in, the use of aviation and training, the
sales overseas. There is something not working well. Certainly
change is required.
I think the trade agreements are important. I think the FAA
needs--and I think it is moving in the right direction, it is
the speed that is the problem, but I think things need to be
done.
It is your perception is because you are inside. I think if
you stand back and look at the global market, the U.S. has got
sort of the best planes in the world, the best training
facilities in the world. There are huge developments in Asia.
There are huge developments in South America. There is a huge
opportunity out there which needs to be dealt with.
I think the main problem is with trade barriers as opposed
to domestic barriers. But having said that, and I said it
earlier, you have to have a strong domestic industry, a strong
domestic sector----
Mr. HANNA. But if the creation is taking place here, and
there are small manufacturers. I bought a few plans from a
wonderful company, Jim Richmond, CubCrafters. You guys know
him. He has been in business all his life. He loves it. I doubt
if the guy is ever going to get rich, but he makes a marvelous,
marvelous product.
It took him five years to get a wing load changed to go
from 1,700 pounds to 2,000 pounds. I know because I waited for
that. It is ridiculous.
So those things are things that we can do on the margin.
And I apologize for my time, Chairman. That we can do on the
margin to change that dynamic and slow down what I think is an
industry approaching critical mass, we should do it every
opportunity. With that I will thank you for your indulgence.
Chairman GRAVES. Mr. Payne. Sorry, I did not see you over
there.
Mr. PAYNE. Thank you, Mr. Chairman. To all the panelists,
thank you for your testimony. Today general aviation provides
approximately 18,000 aviation related and dependent jobs in New
Jersey, and contributes to at least 624 million to household
incomes and an estimated 1.7 billion in annual economic
benefits. So I certainly have an interest in preserving and
protecting small business in this industry.
However, as Dr. Button's testimony mentioned, I believe our
challenge is not only to consider the impact of regulation on
small businesses, but also to consider the general public
interest particularly in the area of safety.
Your testimonies have been helpful today, and I am hopeful
that we can balance support for the important work that you do
with the safety of the people we represent. So I look forward
to working with my colleagues on the Committee on striking a
balance.
With that, I yield back the balance of my time.
Chairman GRAVES. Thanks Mr. Payne. A question for Mr.
Larkins, and anyone else can answer too, but in your testimony
you briefly touched on the sleep apnea issue which, you know,
sent reverberations throughout the aviation community. We have
basically got four segments of aviation out there. The GA
community, we have corporate aviation, we have those folks that
use aviation for their businesses and need to use it, but they
may not necessarily be their business, we have hobbyists, and
then we have the airlines out there too.
My question to you is, when you have something that is just
an out-of-nowhere ruling by the FAA, and we are talking about
resources, talking about finite amount of resources to be able
to use when it comes to regulating aviation, and you go through
the medical process which we have talked about earlier, you
cannot even ask an applicant about their heart attack history,
but yet now they want to know about the circumference of your
neck and how that relates to your body mass, and the size of
your head and whether or not you have sleep apnea which I have
not heard of anybody, and this may go back to a data issue, but
I do not know of anybody that has crashed because they fell
asleep.
But the truth of the matter is, how does that affect you
and your business when it comes to potential clients when you
have these things that just come out of nowhere and people do
not know what to expect?
Mr. LARKINS. It is an important issue and it touches on
what we talked about earlier in the oral testimony that
industry working with the FAA is extremely important. We look
at RVSM certification as one example of that. That when the
industry and the FAA meet together we can come up with the
reasonable solutions that ensure safety, but at the same time
allows the industry to continue to operate.
When there are things that pop up out of nowhere, like the
sleep apnea thing, and there is not enough opportunity for the
industry to communicate on it initially that is when a lot of
issues start to come up.
Without the FAA getting the opportunity to talk to some of
the pilots and the operators inside of the industry then I
think that we see some of these issues of overreactions, in a
lot of ways, that may happen. I am very proud to see some of
the potential legislation that is coming out that will prevent
the FAA from getting the opportunity to implement some of those
things without more interaction and feedback from the industry
right now.
Chairman GRAVES. Anyone else? Uczekaj?
Mr. UCZEKAJ. Clearly things that come out of the blue are
probably the most damaging things to our industry. Whether they
be the sleep apnea or regulation changes that have no basis of
either fact or experience. That creates a very damaging
environment for us to develop and create safety products.
I want to refer back to Mr. Payne's comments about safety.
Aerospace is no different than any other industry that we are
striving to develop products, and striving to put in processes
and procedures for individuals to make flying more safe.
Whether that be a sleep apnea issue or a health issue or a
functional issue.
But when the system itself does not allow for the proper
due process, and once that due process is in a method to
efficiently implement change, this is technically what you get.
You get people and statements made out of the blue, and then we
spend as an industry valuable dollars and time countering that
when we should be spending time on doing the things--creating
better safety products, better safety processes, so that we can
improve both the reality and the perception of aviation.
It is very frustrating as a pilot and as a manufacturer
that so much time and effort was spend on that particular
subject instead of other subjects of more relevance to safety.
Chairman GRAVES. Mr. Heffernan?
Mr. HEFFERNAN. We have spoken here a bit about perception
and perception driving things. I think this is one of the areas
where perception is driving people out of the aviation market,
out of general aviation. As they get older they see these
things cropping up out of the blue, and they see their friends
that lose their medicals for one reason or another, cannot get
them back.
There are people that could probably get their medicals
back, but they have lost the interest or the will to continue
to pursue it. When they see things come out of the blue like
this it reinforces their decision to get out of aviation and
just go buy a boat or whatever.
I think, you know, one of the things that has always
bothered me about the medical is I don't know any pilots that
have gone through all the training and all the sacrifice, and
everything it takes to become a pilot and to be certified, that
want to be unsafe. People want to be safe. I think they will
self-police themselves.
I think the dollars will be much better spent doing
training to help people assess if they are physically qualified
to fly, if there are any warning signs they should be looking
for. That would be a much better approach, spending the dollars
on that aspect rather than trying to legislate some off the
wall, out of the blue condition.
It has always amazed me that you read all the list of drugs
that would prevent you from flying. You look at things that
people take for granted that--we all know people that are
taking these, anti-depressants. You can't fly and take anti-
depressants. Are people really going to tell the truth during
their medical exam that they are actually taking those or are
they going to make the decision to fly and not take them, so we
have a lot of depressed pilots flying around. That is not safe
either.
I just think there is an avenue here for people to police
themselves, and I think education is the way to do it.
Mr. BUTTON. My only observation is looking at the data of
what causes--some of the data on contributory factors. You do
have drugs and alcohol being influential in a number of
crashes. You do have intentional disregard being a factor.
I take the point about self-policing. I think most people
self-police when we drive or whatever we do. Most people are
very, very sensible.
My argument about perception is probably slightly
different. I think people have got to perceive the system to be
working, and at the moment we do not know whether it is working
very well. When you present this sort of data to an individual
where you do have drugs and alcohol involved in accidents, not
a large number, but some accident, intentional disregard. I am
not quite sure if that is, to be blunt, suicidal tendency, I am
not sure. That is something which worries the general public.
Now, I'm not sure, and I sent the questions out about the
Winnebago versus the aircraft, the general aviation aircraft.
I'd like to just know more information which does not seem to
be available from the FAA. They do take decisions, as you
rightly said, sir, and the panelists said, and just something
appears. You just get something coming out from the FAA.
I think that may be a flaw in the FAA in terms of its
public relations or it may be a flaw in its data sources. I
don't know, but it is a problem.
You can't just suddenly have some arbitrary notion that
someone may suddenly fall asleep. I mean, I find that rather
strange.
Chairman GRAVES. You mentioned alcohol and drug abuse in
accidents and being a fair number. Do you have any suggestions
on policing that?
Mr. BUTTON. Well, it could be the alcohol have a sort of
Breathalyzer kit you have in a car. Basically you cannot start
a car unless you breathe into a piece of technology that tells
the technology not subject to alcohol. I am not sure that is
too expensive either, actually.
Drugs I do not know about. I am not sure what drugs are
out. I am not an expert on drugs, but it does not seem to me to
be too expensive, and for everyone's benefit to actually
breathe into a Breathalyzer on a plane and not be able to start
it without being clean.
Chairman GRAVES. Should we do that with cars, trucks,
busses----
Mr. BUTTON. I think we should.
Chairman GRAVES. Busses, boats?
Mr. BUTTON. I certainly do, yes.
Mr. HANNA. Chairman, do you mind if I ask a question? Since
there is no one on the other side, so. I will tell you what my
experience with pilots is, and I know hundreds of them. I owned
an airport. I watched them.
They are a unique group of people, very much focused on
what they do, but if there is any group that I have ever seen
that can adjust what they do individually to their skill level
it is pilots. People who are not IFR current, they are the
first ones to know, but they can still have a current capacity
to do that.
What is see is older people knowing they have, or whatever
their situation is, they do not fly enough. Incidentally,
average pilot flies about 19, 20 hours a year. It is not nearly
enough. We should encourage them to fly more to make it safer,
therefore make it cheaper, not more expensive.
But what I see is people only fly in good weather. They
only fly in the afternoon and in the morning. How about you,
Sam, is that what your experience is?
Chairman GRAVES. I think very much so.
Mr. HANNA. People pretty much self-police. It is pretty
easy to fall under the radar if you want to. You do not need to
get your annual. You do not need to get a bi-annual. You do not
even need insurance, frankly.
I think the more punitive we become, this industry is
becoming the victim of the death of a thousand cuts. Pick an
area of it that is not punitive and yet in this country we are
more free doing it than any place in the world.
I just think we should encourage it and not be so inclined
to tell people that they should not want to kill themselves
because they already know that. Thank you.
Chairman GRAVES. I want to thank all of you for
participating today. I want to, again, apologize for the vote
series, but the testimony has been very good. I think it is
critical to the success of general aviation, to the entire
industry, that the FAA does a much better job of working with
stakeholders so they can better meet the needs of those that it
regulates, and boost the industry rather than dragging it down.
General aviation is a significant contributor to our
economy, and, you know, I think the FAA has to keep up with the
advances in the industry to allow it to continue as a very
dynamic force in our economy.
It is a very important issue to be, obviously, and I think
it is an important issue to every community out there that
depends on aviation, and that is just about every community out
there, and so many businesses that depend on it.
So with that I would ask unanimous consent that members
have five legislative days to submit statements and supportive
material for the record. Without objection that is so ordered,
and with that the hearing is adjourned, and, again, I thank you
all for coming.
[Whereupon, at 3:32 p.m., the Committee was adjourned.]
A P P E N D I X
Statement of
John Uczekaj, President and Chief Executive Officer,
Aspen Avionics, Inc.
On Behalf of the General Aviation Manufacturers Association
Committee on Small Business
U.S. House of Representatives
FAA Impact on Small Businesses
February 5, 2014
Chairman Graves, Ranking Member Velazquez and distinguished
members of the Committee, I appreciate the opportunity to
appear today to discuss the impact of the FAA on small
businesses in the general aviation industry and want to thank
you for your holding this important hearing. As a leader of a
small business, I look forward to highlighting some examples of
the impact specific FAA policies and internal organizational
structures have on small aerospace businesses.
My name is John Uczekaj and I am president and chief
executive officer of Aspen Avionics located in Albuquerque, New
Mexico, I also serve as a board member for the General Aviation
Manufacturers Association (GAMA), with a leadership position
within GAMA as chair of their Flight Operations Policy
Committee and am honored to provide testimony to the Committee
on their behalf as well today. Finally, as an instrument-rated
pilot and aircraft owner, the opportunity to testify before
this Committee is especially significant to me.
In 2004, Aspen was founded by two aviation enthusiasts with
a mission of designing and manufacturing the most advanced
avionics technology and capability for general aviation
cockpits at a price that was affordable to small aircraft
owners. Aspen Avionics' products increase a pilot's situational
awareness in the cockpit, support the implementation of NextGen
technologies, and reduce pilot workload, making it easier and
safer to fly in both visual and instrument conditions.
In 2008, Aspen Avionics began delivering FAA certified,
ground breaking technologies to the lower end of the certified
general aviation industry. These products included simplified
lower cost installation architectures, flat panel displays,
three dimensional terrain awareness, battery backup, and
NextGen capabilities. Prior to the entry of Aspen Avionics into
the market these certified technologies were too expensive for
a large portion of the general aviation fleet and were reserved
for higher end aircraft including business jets and commercial
air transport aircraft. Since that time over 6,000 of our Aspen
systems have been installed into general aviation aircraft
worldwide, which is a testament to our company, our employees
and our product's capabilities.
With just 47 employees, Aspen's entrepreneurial spirit is
key to its success. Also key is the discipline we must have in
managing costs and delivering a return to our investors. The
company is guided by a Board of Directors, whose investment in
Aspen is made with the expectation of a profit in the future.
In order to keep costs low for our customers we operate on
tight margins.
One of the biggest challenges we face as a small business
is response times for FAA approvals. Each week, small aerospace
businesses like Aspen are losing hundreds of thousands of
dollars due to approval delays from the FAA. In recent years,
when a small business begins the process of developing a
certified product it must submit to a sequencing process by FAA
of certification projects. The process in unpredictable and
often results in increased product development times and costs
as companies develop the product and wait for the FAA to apply
resources.
Once through the sequencing process, companies must deal
with a lack of clarity in expectations and inconsistency
between certification offices in different regions and within
individual offices at FAA. This is a major barrier to success
and often survival. Various offices interpret guidelines
differently. More importantly, even within a certification
office, procedures followed on previous programs are
implemented and interpreted differently on later programs. FAA
has proposed changes to the sequencing process but the totality
of the entire process and the threat of costly delay remains a
real concern for our company and many others.
Changes in personnel in the middle of a program further
exacerbate our problem and are compounded by agency personnel
adding or changing tasks at the end of a program with great
impacts. Aspen specifically has been affected during a recent
program where additional work levied late in one program
resulted in unplanned, increased costs and a resulting loss of
13 high paying quality jobs (20% of our overall workforce) in
October 2013. Imagine this outcome, multiplied by hundreds of
small aerospace businesses who experience this on a regular
basis. The money saved by instituting clear procedures,
consistent training, and detailed certification guidelines to
FAA personnel would boost productivity, grow the industry, and
secure jobs.
As a small business Aspen Avionics also has raised private
capital for investment in new products. Our inability to
accurately plan our tasks associated with certification is a
major disadvantage for companies of all sizes, but particularly
for small business like mine. We need to account for these
inefficiencies in our costs projections, thereby lowering our
potential returns and making it very difficult to draw the
interest of financial investors.
To be successful, businesses, and in particular small
businesses, need to clearly understand the tasks and be able to
expect the FAA to respond in a timely fashion. Certification
plans provided early in the process need to be approved and
followed without new requests being levied late in the
programs. This will allow us to plan our tasks, execute them,
and keep costs down, bringing safety critical products to the
market on time and at affordable costs.
Many companies like ours are developing new and innovative
solutions to meet FAA NextGen mandates to equip over 157,000
aircraft facing a January 1, 2020 deadline. These aircraft
operators will have a limited time to schedule and complete
these avionics upgrades. While 2020 may seem like a long time
from now, current delays in the certification process shortens
that time period exponentially. In my opinion, accelerating the
efficiency and response time for approvals is one of the top
issues we must work together to solve. If not addressed soon,
certification delays for NextGen avionics will become
overwhelming and the significant investment in the ATC
infrastructure could be compromised. With Congress, FAA, and
the private sector working together, we can address NextGen
equipage effectively and make the overall program a success.
Urgent and real safety benefits can be delivered if we invest
the resources and develop the approvals and guidelines to speed
up the certification process.
One crucial way to address these issues, particularly for
larger companies, is through the establishment of
Organizational Design Authorities (ODA). The cost, however, of
supporting an ODA for a small business can be prohibitive.
Aspen does employ and contact with some of the most experienced
Designated Engineering Representatives (DER) in the country for
systems, flight test, software, and structures at great
expense. Many of these individuals have over 35 years of
experience. In addition, the senior members of our company have
similar levels of experience in avionics development. We hire
such capable individuals to ensure our products meet and exceed
the requirements of the most stringent regulatory procedures.
We have a vested financial interest to ensure our products are
safe, reliable, robust and perform as promised. Our success
depends on it. The success of our competitors depend upon it.
Likewise, we also understand that the FAA is working under
increased fiscal pressures. With limited resources it is even
more critical that we leverage the expertise of companies like
Aspen to improve safety, drive innovation, and improve
certification efficiency. Delegation to companies like Aspen
that have invested in experienced and industry-respected DER
resources is a viable answer for our businesses and the FAA. We
encourage the FAA to make more consistent use of this very
valuable tool to ensure safety and the viability of innovative
small businesses in aviation.
I also propose we look at ways in which we can work
together to grant some sort of airworthy certification
authority for small businesses to help ``cross the finish
line'' and speed up the certification process. People in small
businesses like ours, and especially those that work in
aerospace, have a passion for the industry and work in this
business because they want to--not because they have to. To
help alleviate the workload, aligning the division of
responsibilities and the authority properly is essential to
ensuring the vitality of aviation small businesses and the
advancement, growth and safety of general aviation.
Such creative thinking and collaboration is exemplified by
the Small Airplane Revitalization Act which was signed into law
by President Obama in late November. On a bipartisan basis,
members of Congress came together and passed legislation which
will improve safety, encourage innovation, and promote growth
in aviation. A legislative focus on small businesses in
aerospace could result in similar benefits.
From an Aspen Avionics perspective, another wonderful
example of this collaboration is the NextGen FA Fund. When
Congress passed the FAA Reform and Modernization Act of 2012,
they included Section 221 to incentivize GA equipage through
use of a public private partnership (PPP), where 100% of
funding for low interest loans are underwritten by private
sector investors. The PPP, called the NextGen GA Fund, is ready
to launch and we are optimistic about its impact on the
industry. Just announced last week, Aspen Avionics is the first
small business to support this important initiative. I only
mention this as an example of the ways we can work on together
to help small businesses in the aerospace industry to continue
to contribute to an important part of the country's economy. It
is my opinion that this is what government should be doing to
lift general aviation as an important economic sector.
Thank you for the opportunity to testify about how my small
business interacts with our regulator, the FAA. I want to be
clear, we appreciate their work, dedication, and attention, but
also believe there are opportunities to improve and reform
their efforts to maximize benefits, improve safety, and allow
small businesses like Aspen Avionics to flourish. I look
forward to discussing this further and would be happy to answer
any questions you may have.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Graves and Members of the Committee:
I am Austin Heffernan, Owner and General Manager, Royal
Aircraft Services.
Royal Aircraft Services is a highly regarded FAA Certified
Repair Station located in Hagerstown Maryland. Our staff of 14
employees handles major structural repairs, aircraft painting,
aircraft restoration and general maintenance for General
Aviation aircraft owners based throughout the Mid-Atlantic
United States.
I'm also representing the Aircraft Owners and Pilots
Association (AOPA) of which I have been a member of since 2002.
AOPA is a not-for-profit individual membership organization
representing nearly 400,000 members. AOPA's mission is to
effectively represent the interests of its members as aircraft
owners and pilots concerning the economy, safety, utility, and
popularity of flight in general aviation (GA) aircraft.
My testimony today will cover the following key points:
1. General aviation is a heavily regulated industry;
2. Rapidly changing technology offers new safety and
operational benefits, but regulations have not kept
pace with technological advancements, preventing
general aviation from receiving these benefits; and
3. FAA policies and internal structures are
increasing the cost of participation in general
aviation without providing commensurate safety
benefits.
General Aviation
As pilots flying in the United States, we are fortunate to
have access to the safest and most efficient air transportation
system in the world. The aviation network of 5,200 public-use
airports, complemented by the more than 13,000 privately owned
landing facilities is a unique national resource. General
aviation is a significant economic engine that contributes
approximately $150 billion to the annual gross domestic product
and approximately 1.2 million jobs in communities nationwide.
Each year, 170 million passengers fly using personal aviation,
the equivalent of one of the nation's major airlines.
General aviation is of special importance to small
businesses and an estimated 65% of all general aviation flights
are conducted for business and public services. Additionally,
the Small Business Administration has estimated that
approximately 94% of the firms that provide cargo and passenger
air transportation services are considered small businesses, as
are 90% of businesses involved in the development and
manufacture of aircraft and parts.
In addition to these businesses, general aviation activity
directly supports thousands of small businesses from flight
schools to repair shops to line operations. Thousands more
small businesses of every type use general aviation to
transport personnel, move products, extend their geographical
reach, meet clients, provide support services, and manage
distant operations.
FAA's Regulatory Oversight
General Aviation is Heavily Regulated
The FAA oversees all aspects of general aviation, including
recreational, private, business, and commercial flying. Pilot
training, medical certification, aircraft certification and
maintenance, operations in the National Airspace System, and
many other aspects of utilizing aircraft and operating aviation
businesses are regulated directly or indirectly by the FAA.
These regulations have evolved over time into a complex and
intertwined legal morass that often limits or slows the
adoption of new safety enhancing technologies and practices.
The FAA routinely finds its hands tied by existing
regulations when it wants to encourage the adoption of newer
technologies and practices that could enhance safety. In many
instances, the regulations have evolved in a way that forces
the FAA to go well beyond its role as regulator and become
directly involved with the operational aspects of the industry.
Impacts on the General Aviation Industry
While the amount of regulation increases, the general
aviation industry shows many indications of decline and
stagnation. Since 1991, the industry has seen a steady decline
in the total number of pilots, with the greatest decrease in
the number of private pilots--a loss of nearly 6,000 per year.
These private pilots are the main market for many of the on-
airport small businesses that make up the general aviation
industry. Businesses providing flight training, aircraft rental
and repair, engine overhauls, fuel, and other products and
services are impacted by this decline.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Regulations Prevent General Aviation from Benefitting from New
Technology
Current regulations, policies, and procedures make it
difficult or impossible for general aviation to adopt and
implement new technology. The following examples are
representative of the types of challenges facing general
aviation operators who want to use new safety technologies.
Technology in Flight Training - Use of Flight Simulation
Pilots and flight training providers have benefited greatly
from advancements in simulation technology. Simulators give
pilots a realistic experience of a wide range of flight
conditions in a way that is far safer, more efficient, and more
cost-effective than attempting to provide equivalent training
while airborne.
While commercial and corporate aviation have had access to
simulation for many years, affordable simulators have become
available to most general aviation training providers only in
the past decade or so. The FAA has been challenged to keep up
with the advances in this area and has struggled to provide
consistent, effective, and flexible oversight.
In January, the FAA issued a new policy in an attempt to
update and standardize its patchwork of existing guidance,
letters of authorization, and advisory circulars. Rather than
promoting the use of this proven technology, the new policy
actually reduces the amount of time a simulator can be used in
some types of flight training until regulatory changes can be
made. Industry has asked the FAA to rescind the new policy
statement, initiate expedited rulemaking to allow a higher
number of simulator hours to be credited, and then reissue its
current guidance and standards.
Aircraft Certification Reform - Technology in New Aircraft
Just last week, the FAA Administrator and his senior staff
met with the leaders of the major general aviation associations
to discuss safety and the need to bring new technology into
general aviation. Today's prescriptive and outdated rules
inhibit innovation and are the major barrier to developing and
producing safer aircraft. AOPA has long advocated streamlining
the aircraft certification process and we are encouraged that a
major FAA-industry effort is underway to reform the aircraft
certification regulations (Part 23) so as to increase safety
while decreasing cost. AOPA is actively engaged in this
process.
In November, these efforts get a boost when the Small
Airplane Revitalization Act was passed by Congress and signed
into law by the President. I'd like to thank Chairman Graves
and Small Business Committee Members Hanna, Heulskamp, and
Collins for cosponsoring this bill.
Existing Aircraft Must Also Benefit from New Technology
While streamlining certification for new aircraft is
important, reform efforts must be expanded to ensure that
owners of existing aircraft can make safety improvements. The
current FAA regulatory structure makes putting new technology
into older aircraft challenging at best and prohibitive at
worst. This issue was at the center of the industry-led portion
of last month's safety discussions with the Administrator.
There are approximately 200,000 GA aircraft flying, and
manufacturers produce just over 1,000 new aircraft each year.
These numbers clearly indicate that the biggest safety payoffs
will come from upgrading older airplanes. Making it easier to
upgrade aircraft will have another payoff as well--creating
well-paying jobs for those who design, manufacture, and install
the new equipment.
The Part 23 Reorganization Aviation Rulemaking Committee
has provided recommendations for changes to other regulations,
such as Parts 21 and 43, and existing policies and procedures
to improve the ability to modify, maintain, and upgrade
existing aircraft. Industry would like the opportunity to work
with the FAA to prioritize these areas and help develop changes
that can enable and encourage the addition of safety
enhancements, equipment upgrades, and new operational equipment
for existing aircraft.
Moving Forward on One Safety Improvement
The FAA has indicated that, after nearly three years of
work, it will soon release a new policy that is intended to
streamline the approval of angle of attack indicators for
existing aircraft. The angle of attack indicator is an
important safety technology that could help reduce the number
of accidents caused by loss of control--the leading cause of GA
accidents. To date, retrofit of this technology has been
hampered by the cost and complexity of the equipment--factors
driven in large part by FAA regulations.
We look forward to reviewing the new policy and we're
hopeful that it will serve as a model for bringing other non-
required safety enhancements into general aviation more quickly
and efficiently.
FAA policies and Internal Structures that are Increasing the Cost of
Participation in the General Aviation Industry
Medical Certification for Private and Recreational
Transportation
The FAA third-class medical certificate is primarily used
by pilots who want to fly recreationally or for private
transportation. The cost and regulatory process associated with
obtaining and renewing the medical certificate, and the fear of
being denied and sent through the bureaucratic hoops and
extensive testing required to get it back, are contributing to
the precipitous decline in number of private pilots.
A petition, presented by AOPA and EAA (Experimental
Aircraft Association), seeks to reduce the cost and hassle of
the FAA medical certification process while maintaining and
potentially increasing safety through education. The petition
would expand the FAA's existing driver's license medical
standard to more aircraft and operations than currently
allowed. That standard, which allows pilots who also hold a
valid driver's license to certify their own fitness to fly,
already exists for pilots flying under Sport Pilot rules and
has been proven safe. The proposal would expand that privilege
to pilots flying certain small piston-powered aircraft under
specific conditions and would add a level of safety by
requiring pilots to take recurring training on how to
effectively determine their fitness to fly.
AOPA and EAA conservatively estimated that giving pilots
the option to use a driver's license standard instead of a
third-class medical for certain operations would save pilots
$241 million over 10 years while saving the government $11
million over the same period. Granting the petition wo9uld keep
pilots flying and therefore supporting the small businesses at
their local airports.
More than 16,000 comments were filed on the petition, and
they were overwhelmingly favorable, but almost two years after
the petition was filed, the FAA has not provided a formal
response.
On December 11, 2013, Chairman Graves and fellow AOPA
member Congressman Todd Rokita, both members of the House
General Aviation Caucus, introduced the General Aviation Pilot
Protection Act. The legislation goes a step beyond the AOPA-EAA
petition. It would allow pilots to use the driver's license
medical standard for noncommercial VFR flights in aircraft
weighing up to 6,000 pounds with no more than six seats.
FAA Unable to Provide Approvals Required by Regulations
The current regulatory system requires the FAA to issue
approvals, in the form of Air Agency Certificates, to many
areas of general aviation operations. In some cases, these
approvals are required before businesses can begin operating.
Air Agency Certificates are required for charter/on demand
operations (Part 135), flight schools (Part 141), training
centers (Part 142), and repair stations (Part 145). In many of
these areas of responsibility and in many parts of the country,
FAA backlogs in issuing these certificates are significantly
hindering the ability of small businesses to operate.
At the October 30, 2013 Aviation Subcommittee hearing on
Certification Reform, the assistant inspector general for
aviation audits for the Department of Transportation reported
that the FAA has a current backlog of 1,029 air agency
certificate applications. Of that backlog, 138 applications
have been awaiting approval for more than three years and one
has been stalled since 2006.
Industry is willing to work with the FAA to find a way to
address these delays and to move forward with granting these
approvals. It is troubling that the FAA implements these
requirements by regulation but cannot provide the resources
when operators are ready to demonstrate compliance.
Conclusion
In conclusion, we believe there are a number of steps the
FAA can take to address the overregulation of general aviation
while maintaining or increasing safety. Additionally, these
changes will increase participation in general aviation,
benefit small businesses, increase employment, and promote
economic growth.
1. Congress should continue to urge decision makers
to consider changing the policies, guidance, and
regulations in ways that will encourage and advance the
use of modern technology in all aspects of aviation,
especially the installation of technology in existing
aircraft.
2. Congress should urge decision makers to focus
attention on resolving the internal issues that are
preventing and delaying issuance of required FAA
approvals, thereby preventing many small businesses
from starting or expanding.
3. We appreciate Congress' recent passage of the
Small Aircraft Revitalization Act directing the FAA to
streamline aircraft certification. This will have a
significant impact on deploying new and improved safety
technologies to general aviation aircraft. We look
forward to Congress taking action on the General
Aviation Pilot Protection Act, which if passed, would
reduce the regulatory burden and cost on general
aviation and encourage people to fly.
Aviation is American. It started here in this country and
we need to maintain our leadership in this area. We need to
find ways to encourage and grow this amazing industry and we
appreciate your support. On behalf of the 14 employees of Royal
Aircraft Services and the nearly 400,000 members of AOPA, thank
you for your leadership in addressing the concerns of the
general aviation industry so that it can continue to help small
businesses nationwide grow and thrive.
Thank you for the opportunity to appear before this
Committee.
STATEMENT OF
JAMAIL LARKINS
ASCENSION AIRCRAFT, INC.
REPRESENTING THE
NATIONAL BUSINESS AVIATION ASSOCIATION
BEFORE
THE COMMITTEE ON SMALL BUSINESS
U.S. HOUSE OF REPRESENTATIVES
REGARDING
THE FEDERAL AVIATION ADMINISTRATION'S
IMPACT ON SMALL BUSINESSES IN THE GENERAL
AVIATION INDUSTRY
FEBRUARY 5, 2014
Chairman Graves, Ranking Member Velazquez and members of
the Committee, my name is Jamail Larkins, and I'm a businessman
from Atlanta, Georgia.
I'm pleased to be here as a proud member of the National
Business Aviation Association. My company, Ascension Aircraft,
has been a member with the association since 2008.
While NBAA often appears before Congressional Committees to
represent its Members, this is the first time I've testified
before Congress. It's a privilege to be here.
Business Aviation: A Big Benefit for Small Businesses
Across the U.S.
In 2008, I founded Ascension Aircraft, and today I serve as
the company's CEO. Although my company is a regional leader in
the sale of fractional-ownership shares of piston aircraft, the
business employs just 19 people, including myself.
Over the years, I have found that one of the most effective
ways to sell business aircraft is to use business aircraft.
With a business airplane, I can quickly seize opportunities as
they arise. The airplane enables me to meet face-to-face with
potential clients, providing a level of service and
accountability that helps me get a leg up on my competition,
and build my company.
Of course, many of my clients are small business owners and
entrepreneurs themselves. They are often located in out-of-the-
way places, and like me, they recognize the many benefits an
airplane can bring to their enterprises.
With a business airplane, an entrepreneur can travel to
multiple cities for meetings in a single day, return to
headquarters that same evening, and be back in the office the
next day. With an airplane, a businessperson can transport
tools or products that may be too large to fit into an
airliner's overhead bin, or too delicate to be checked into an
airliner's cargo hold. With a business airplane, an
entrepreneur can efficiently manage work sites that are distant
from each other, and are often located in small towns with
little or no airline service.
Simply put, for many small business owners and
entrepreneurs--people like me--the use of an airplane is vital
to success. It is the tool that makes the business model work.
Interestingly, you don't often hear about companies like
Ascension Aircraft when people talk about business aviation.
Instead, people tend to focus on large Fortune 500 companies.
But for every Fortune 500 company that relies on business
aviation, there are eight or nine companies like mine--in fact,
the business aviation community is made up mostly of small and
mid-size enterprises.
Every member of this Committee has small businesses like
mine in their state. And the use of an airplane often enables
those companies, and the jobs that come with them, to remain in
communities that can sometimes be harder to reach than the
metropolitan areas.
That's a win not just for the companies using the
airplanes, and their employees--it's a win for the countless
thousands of workers at community airports where business
aircraft fly. It's also a win for the many additional thousands
of employees in the towns surrounding those airports, because
their businesses often exist due to the activity at the local
airfields.
The reason you've asked me here today is not just to talk
about the benefits of business aviation to small enterprises,
but about how the work of the Federal Aviation Administration
affects those of us with small businesses.
If there is anything I'd like you to take from my
testimony, it is this: The United States not only has the
world's largest, safest, most diverse and most efficient
aviation system--it is also the best system in the world for
allowing small companies like mine to optimize business
aviation, so that we can succeed in today's enormously
competitive global economy.
That said, while America's aviation system is an enormous
public benefit--one that should continue to be run by the
government, with oversight from Congress--there are a number of
ways the FAA could strengthen its relationship with the small
business community, so that the policies and procedures
involving the agency are more workable and effective, for the
both the agency and the businesses that rely on an airplane.
In fact, I would offer that because business aviation is
more regulated than other industries, the relationship between
the FAA and the small businesses utilizing aircraft must be a
productive one--not just today, but also when we think about
the aviation system of the future, and how small businesses
like mine will operate in it.
A Highly Regulated Community, A Need For FAA/Industry
Collaboration
When we think about the regulatory regime for business
aviation today, we know that, largely for safety reasons,
stringent policy requirements are appropriately placed upon the
industry.
The services needed to meet those requirements are largely
provided by the FAA, which makes the agency critically
important to the business aviation community. And when those
services go unmet, or when onerous policies are implemented--
sometimes without sufficient industry input--business aviation
suffers, and its benefits to citizens, companies and
communities, is jeopardized. Here are four examples to
illustrate my point.
Example 1: Government Shutdowns Take A Terrible Toll on
Industry
We know that the government shutdown last year led to the
closure of the FAA's U.S. Aircraft Registry. As a result,
aircraft could not be purchased, sold, imported, exported, and
in some cases, flown.
I'm in the business of selling aircraft, so I have a first-
hand understanding of the toll the registry shutdown had on
companies in my line of work. These are mostly small
businesses, often family owned, and comprised of just a few
people. They're located across the country, and when the
government was shuttered, their business was stuck in an
unending layover.
Fortunately, after 17 days, the government shutdown
concluded, and the registry was reopened. But, the effects of
the shutdown were felt by many in the aircraft-transaction
business for weeks following the shutdown. Government and
industry would be well served by working together to ensure
that if a shutdown were to occur again, the registry would
remain open.
Example 2: Aviation-Business Approval Backlog Has Hamstrung
Job Creation
We also know that FAA policies are central to the operation
of small aviation businesses, such as training centers, flight
schools and on-demand charter operators, which require approval
from the FAA before conducting business.
At the same time, as FAA resources are dwindling, the
backlog of businesses attempting to gain certification and
begin soliciting customers has swelled to nearly 1,000. Some
businesses have been told that their wait for approval could
take two to three years.
We know that small businesses like these are the lead
drivers of job creation and economic investment in the U.S.,
which means we need for the FAA to find ways to streamline its
start-up approval processes. That way, the growing number of
general aviation businesses facing these needless delays can be
approved to get underway, creating jobs and investing in local
communities.
Example 3: Some Complicated Operating Requirements Need
Streamlining
On the operations side of the industry, we know that many
companies use aircraft that are subject to a raft of often-
complex government requirements, related not only to equipage
with specific navigation, communication and surveillance
capabilities, but also requirements for specific government
approval for the operator to use that equipment onboard the
aircraft.
Among these requirements are rules for approval of aircraft
operations using equipment allowing for Reduced Vertical
Separation Minima (RVSM). Thanks to government/industry
collaboration, RVSM-authorization requirements were recently
smoothed, even as important safety standards were protected.
There are many other, similar authorizations that could be
streamlined as well, reducing the burden on businesses and
government officials alike.
Example 4: Alarming New Policies for Pilots Are Emerging,
Absent Industry Input
As an additional matter of concern for business aviation,
I'll point to a policy under consideration that members of this
Committee are likely familiar with: the FAA's controversial
plan to begin subjecting pilots with a body mass index (BMI) of
40 or greater to Obstructive Sleep Apnea (OSA) screening prior
to receiving a medical certification.
When this plan was introduced at the end of last year,
NBAA, and its Member Companies--like mine--were alarmed. It
seems that available data to confirm a link between OSA and
flight safety is lacking, and that there is no clear indication
that an additional screening requirement would improve aviation
safety.
Just as troubling, the vast majority of pilots weren't
provided an opportunity to learn of the FAA's plans, or been
given a mechanism for providing feedback on the proposal. As a
businessperson who has been a certificated pilot since my
teenage years, this is a troubling development.
Mr. Chairman, the legislation which you and several of your
Small Business Committee colleagues joined in co-sponsoring--
H.R. 3578--would require the FAA to consult with industry
stakeholders through the established rulemaking process before
issuing any final requirement for pilots to undergo OSA
screening.
It will also require the FAA to conduct a fully
transparent, data-driven justification process for its
proposal, which takes into account the full spectrum of costs,
benefits and other important criteria before any OSA rule or
regulation can take effect.
The Senate has introduced similar legislation. On behalf of
NBAA and its Member Companies, I want to thank you and other
Congressional leaders for supporting these measures.
So, Mr. Chairman and members of this Committee, as I said,
it's clear that the relationship between the FAA and the small
businesses operating in the aviation system which the agency
manages, is a critically important one. And, with the four
examples I just mentioned, there are ways we can enhance that
relationship today. We can make it a more collaborative,
effective relationship.
But equally important, we must ensure that, as we look to
the future of the aviation system, government leaders
understand what small business owners, and other stakeholders
in general aviation, consider fundamental to America's
continued aviation leadership.
An Imperative to Continue Strengthening A World-Leading
Aviation System
When it comes to preserving the nation's leadership in the
aviation arena, we know that much of the debate about how best
to do that will take place in the context of the coming FAA
reauthorization.
While the current authorization does not expire for almost
two years, discussion on the next one has appropriately begun.
And, it's with that in mind that I'll note the industry's long-
standing, united view on some guiding principles for FAA
reauthorization, and the related imperative of continued
aviation system modernization.
First, when it comes to paying for use of
the aviation system, the fuel tax works best for
everyone in general aviation. I know that, in past
reauthorization debates, user fees have been proposed
from some corners as a replacement for the fuel tax. As
a small business owner, I also know that we don't need
user fees--and the giant federal bureaucracy needed to
collect them--when fuel taxes have long been an
efficient, reliable and proven method of collecting
revenue to support aviation-system management and
modernization.
Second, as I mentioned earlier, the general
aviation community continues to believe that direct
Congressional oversight of the FAA funding system is
necessary to ensure the availability of stable,
consistent funding levels for our national aviation
system. Congressional oversight will also ensure that
the specific needs of all aviation industry
stakeholders are taken into account when it comes to
aviation policymaking.
Third, a continued, strong, federal-funding
commitment is necessary to maintain the strength of our
national air transportation system.
I know that there will be a robust debate in the coming
months on this issue, and I very much appreciate this
opportunity to share with this committee my views as a small
business entrepreneur who depends on our national aviation
system to conduct and expand my business.
In conclusion, Mr. Chairman and Ranking Member Velazquez, I
also appreciate the strong leadership you provide, and the bi-
partisan support which this committee extends to the small
business community.
I look forward to responding to any questions you may have.
Thank you.
The FAA's Impact on Small Businesses in the General Aviation Industry
Kenneth J. Button, PhD, AcSS, FCILT, FCIHT
University Professor
School of Public Policy
George Mason University
Evidence to the U.S. House of Representative's Committee on
Small Business
Room 2360 of the Rayburn House Office Building
February 5, 2014
The evidence considers the rationale for the Federal
Aviation Administration intervening in markets for general
aviation, and looks specifically at the public interest issues
regarding safety, and the implications of policies to reduce
accidents on the vitality of small businesses involved in
general aviation. There is a focus on some elements of
administrative costs of pursuing the social interest of
increased safety. The evidence also offers some comments on
recent and proposed legislation impacting on the way that the
FAA handles regulations governing general aviation regulations
and their reform.
Introduction
In the right context air transportation can provide a major
economic stimulus to a region, city, or town. In a strict
economic transportation sense it offers access to a larger
market for local firms and can allow local residents to travel
medium and long distances, albeit often not directly, for
personal and business reasons. At a secondary level local
airports, and the various aviation and non-aviation activities
can provide local employment and generate income for the
community. These benefits are clearly not true for all
locations, there has, for example, to be a threshold of latent
demand if any new airport is to be successful or an existing
one expanded.
These benefits hold at any scale of aggregation, from for
example the gains for the high- and bio-technologies areas of
the National Capital Region from having a major hub airport at
Dulles \1\, to the economic advantages enjoyed by many of the
smaller communities of Virginia that have local airports \2\.
That airports, together with the air transportation associated
with them, can, in an appropriate context, generate
considerable economic gains for local residences and firms is a
pretty consistent finding of academic and other studies.
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\1\ K.J. Button, and S. Lall, `The economic of being an airline hub
city', Research in Transportation Economics, Vol. 5, pp. 75-106, 1999.
\2\ K.J. Button, `The role of small airports in economic
development' Journal of Airport Management, Vol. 4, No. 2, pp. 125-136,
2010.
The roles of general aviation, and the businesses
associated with it, are numerous and vary across airports and
aviation activities. The general economic advantages for a
community of having a general aviation facility are not only
from the direct aviation effects associated with the use of the
airport that range from air taxi and charter services, pilot
training, and crop-spraying through the access business jets
provide to be commercial world, but also from the income that
comes from the maintenance of aircraft, fuel sales, and airport
fees, and non-aviation sales that are often present at
airports, such as parking and catering services. There are also
wider, social benefits, often described as ``public interest
functions'', that are associated with general aviation and with
its role in supporting policing, medical emergency activities,
fire fighting, and accessibility of small communities often
being highlighted \3\. In addition, the general aviation sector
is responsible for large numbers of jobs in the manufacture of
aircraft and associated hard and software.
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\3\ For more comprehensive study of the various roles of general
aviation in economic development, see U.S. Federal Aviation
Administration, General Aviation Airports: A National Asset, FAA,
Washington DC, 2012.
There is, however, an inherent danger in assessing these
economic benefits because confusion may arise between
correlations with causality. While general aviation can confer
local economic benefits in terms of jobs and income, this
causality in some cases may well run from the income levels and
the interests of those living in an area to the development or
enlargement of an aviation facility, rather than from the
airport being the catalyst for local economic development. The
few studies that have sought to separate out these causality
effects, however, support the notion that by-and-large the
general aviation facility is the driver, but these tend to use
aggregate analysis and there may well be cases where causality
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is in the opposite direct.
The challenge, and a major one that is confronted by the
legal duties of the U.S. Federal Aviation Administration, is to
ensure that these benefits from general aviation when they
accrue, and which can be very diverse in their nature, are
obtained without excessive social costs. In particular there
are costs of safety that come into play. The challenge can be
further broken down in administrative efficiency terms by
considering the benefit and costs imposed by the actions of the
FAA in pursuing its duties; i.e. could any safety objective be
obtained at lower ``cost'' to the general aviation sector?
The costs to general aviation of public interest
interventions are diverse, and affect both the supply and
demand side. They may involve direct costs to the manufacturers
of hard or software in terms of standards and testing
requirements, and periodical maintenance, and to airports in
terms of the types of equipment needed to handle various forms
and levels of traffic. These costs are in turn, and often in
rather indirect ways, passed to the users of the hard- and
software of the system. These users, essentially the pilots,
also have to meet a variety of competence and health
requirements, that can take both money and time to acquire, and
often have to provide information on their activities, or at
least are asked to do so. In addition, there are the costs of
administering the system that is partly funded from taxation.
The particular features of general aviation
General aviation covers a wide range of activities. A
standard definition is that it embraces all civil aviation
operations other than scheduled air services and non-scheduled
air transport operations for remuneration or hire. It thus
range from gliders and cowered parachutes to corporate jet
flights involving a professional pilot flying a business
aircraft; about 11% of private flying is by business people on
their way to meetings etc. It constitutes, in terms of aircraft
and their movements, by far the largest component of civil
aviation; there are around 19,000 airports, helipads, and
seaplane bases of varying sizes serving general aviation in the
U.S., and its territories; just over 2,900 handle the
movements. These facilities vary considerably in terms of tower
control, runway features and ground support facilities;
although the FAA classifies them into four broad
categorizations. There is nearly a quarter of a million general
aviation aircraft; of which the bulk is piston or turboprop
aircraft; and the average age of small planes is about 40 years
\4\.
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\4\ General Aviation Manufacturers Association, 2012, General
Aviation Statistical, GAMA, Washington D.C., 2013.
An emerging aspect of general aviation involves the use of
unmanned systems (often termed ``drones''); such aircraft are
without an onboard human pilot being controlled either
autonomously by computers in the vehicle or under the remote
control of a pilot on the ground or in another vehicle. They
take a variety of shapes, sizes, configurations, and
characteristics and are being used in a small but growing
number of civil applications, such as policing and
firefighting, and nonmilitary security work, such as
surveillance of pipelines. At present the use of drones is
severely limited in the U.S., with the FAA developing a road
map to allow their integration into the US airspace
system.\5\We do not discuss the issues of the regulation of
drones here, but their importance for small businesses, as
suppliers of the hardware required, in operating drone
services, and as customers for such services would seem to pose
a variety of future regulatory challenges.
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\5\ U.S. Federal Aviation Administration, Integration of Civil
Unmanned Aircraft Systems (UAS) in the National Airspace System (NAS)
Roadmap, FAA, Washington, D.C. 2013.
A large part of general aviation involves private
activities that are of limited interest to policy makers. They
involve actions of individuals that do not impinge on the
general public or any large part of it, and the transactions
between the individuals and companies involved--airports,
pilots, maintenance companies, fuel providers, aircraft owners,
aircraft manufactuers--take place in fairly simple markets, and
involve standard forms of transactions and contracts. Since
there is ample evidence that such markets, although often not
completely perfect because of such things as market power and
incomplete knowledge on the part of those involved, are the
best way of allocating resources, there is little reason for
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any significant interventions by government.
There is significant governmental intervention, however, in
this market for other reasons. The three areas of public
interest, setting aside generic matters involving such things
as commercial contracts between the various providers of
general aviation services and customers, being largely in the
realms of finance, security, and safety. The first two of these
are hardly touched upon here.
Financing the infrastructure of general
aviation is important in term of its efficient use but
raising money is largely outside of the remit of the
FAA, which is the subject of the hearing \6\. The FAA
has spending responsibilities for many areas of
spending and this does affect small businesses in
general aviation. The evidence here, however, is
general aviation uses approximately 16 percent of air
traffic control services but contributes only 3 percent
of the costs \7\. Raising this money and whether the
ratio of spending to revenue collection is socially
efficient is an on-going debate.
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\6\ It was also the subject of a previous recent hearing, 112th
Congress, 2nd Session.
\7\ US Department of Transportation's Inspector General Office, Use
of the National Air Space System, CR-2008-028, Washington DC, 2008.
Security is largely within the purview of
the Transportation Security Administration rather than
the FAA, although there are inevitable interfaces
between them.\8\
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\8\ Some discussion of the main security issues are found in; U.S.
Government Accountability Office, General Aviation, Security
Assessments at Selected Airports, GAO-11-298, Washington D.C., 2011.
That safety, our main focus is important is of little
doubt, but equally it is unrealistic (if not impossible) to
have 100% safety; it is simply too costly even if a viable
definition of absolute safety could be devised. What public
policy is de facto concerned with is developing what is often
called ALARP; ``as low as reasonably practical'' level of risk
of an accident. This entails balancing the risks of, in our
case, an incident involving general aviation against the social
benefits that general aviation confers. In terms of a pilot and
aircraft owner, if there were no-one else involved then a
private market, possibly involving the activities of insurers,
would suffice to offer the appropriate ALARP level of risk;
safety is the sole concern of the pilot and the aircraft owner
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and any incident has no implications for third parties.
The public interest element comes in when there is
collateral damage with costs inflicted on:
third-parties involved in general aviation,
including pilots and their aircraft and those working
at airfields;
when there are costs of remedial action,
such as involved in search and rescue operations for a
crashed plane, and
when individuals and ``hardware'' on the
ground are affected.
While some of these items, such as property damage from a
crashed aircraft or the medical bills of injured people, can be
directly expressed in monetary terms, there is also clear
evidence that people do value in monetary terms their safety in
broader terms, and place a value on reductions in the risk of
being killed or injured in an accident \9\. They also value a
feeling of safety that can extend beyond fears of direct
personal harm.
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\9\ Jones-Lee, M. and Looms, G. (2003) Valuation of Safety, in D.A.
Hensher and K.J. Button (eds), Handbook of Transport and the
Environment, Elsevier, Oxford, pp. 451-462.
From an economic perspective, the issue is one of whether
the ``private'' costs to the general aviation sector of safety
regulations, and their implementation and enforcement, outweigh
the benefits to third parties of the regulations. This involves
not simply issues of objective measurement but also societal
perceptions; as with security, it is often as much about what
the public thinks the net benefits of general aviation are as
about the actuarial calculations of the costs and be benefits.
This boarder perspective essentially requires some form of
benefit-cost assessment of the sector, and ipso facto of the
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policies of agencies such as the FAA.
The safety situation
The data show that over 90% of fatal aviation accidents in
the U.S. involve general aviation, although the proportion of
fatalities and injuries is far less because of the small
vehicles involved. In terms of trends in the safety record of
U.S. general aviation, Figure 1 shows a substantial decline in
accidents since the 1960s with some flattening out in the
downward trend after the 1990s (Some caution should be taken
when inspecting the table, in that the time intervals prior to
1990 are in five-year periods and in annual periods
thereafter.) As a summary picture, the national Transportation
Safety Board found that fatal accidents fell by 24% between
1999 and 2011, and non-fatal accidents by 29%.
To get a clearer picture of the risk associated with
general aviation activities, accidents need to be set against
the level of activity in the industry. A standard measure of
this activity is flight hours, although other measures such as
the number of flights may also form a legitimate basis for
calculations; most accidents occur during take or landing.
Figure 2 provides the details and again, although retaining the
caveat about nature of the horizontal axis, a general downward
trend is seen in all indicators of accidents, with some
flattening out in recent years. The situation is somewhat
better than in most other countries where general aviation
plays a smaller role in the economy.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
A problem with this analysis, however, is that the data on
fight hours for general aviation is poor, making genuine risk
analysis, a core calculation for public policy making,
difficult; similar data limitations seem to exist helicopter
emergency medical services \10\ While there have been
improvements in data collection, this inevitably comes at a
cost to those engaged in general aviation and, in particular,
in terms of additional documentation requirements. Further, in
terms of data, to gain better insights into causes of
accidents, the FAA has enhanced its collection and maintenance
of data on each certified pilot's recurrent training; the costs
presumably being bourn as part of the certification fee.
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\10\ U.S. Government Accountability Office Aviation Safety;
Enhanced Oversight and Improved Availability of Risk-based Data Could
Further improve Safety, GAO-12-24, Washington, D.C., 2013.
In absolute terms the number of fatal accidents is
relatively small in the U.S. (as a reference point, there were
34,080 road deaths and 2,362,000 injuries in 2012), and, from a
public policy perspective, the vast majority of those involved
were not third parties. A similar picture emerges involving
non-fatal incidents. The issue centers less on actuarial risk
calculations, and more on the public perceptions of the risk of
an individual being impacted by a general aviation aircraft
falling from the skies; but it is this perceived risk that
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forms the basis for providing public policy.
Although accidents can seldom be attributed to any single
cause, or to a particular contributing factor, the overall
pattern of causes and primary contributory factors to general
aviation accidents have tended to remain fairly constant in
recent years. It is clear that pilot error and loss of control
are the main causes of accidents (NTSB data does suggest about
70% of fatal accidents, and 59% of non-fatal are due to pilot
error, with pilots having less than 100 hours in the accident
aircraft being particularly prone to involvement), but the
details of contributing factors vary considerably as seen in
Figure 3. The long-standing problems of pilot errors has been
attributed to a variety of factors, such as inadequate
recurrent training and poor training in cockpit management and
aeronautical decision making.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In addition to the broad trends in accidents there are also
micro-patterns to the incidents that differ according to the
segment of the sector into which they fit \11\. Personal
operations, for example have long dominated the accident
statistics, and in terms of hardware, experimental, amateur-
built aircraft contribute disproportionately (some 22% of
accidents between 2009 and 2013 for only 5% of general
aviation's flight hours), whereas corporate operations, while
accounting for about 14% of flight hours, are only responsible
for about 1% of fatal accidents. The last statistics largely
reflects the more advanced technologies employed by most
aircraft engaged in corporate operations and greater pilot
experience. In terms of time trends, these differences are
important to appreciate; for example between 2008 and 2010,
when the economy was in serious recession, personal flying
hours fell by about 4%, whereas safer, corporate operations
fell by 15% and hence raw accident figures may to some extent
be reflecting changes in the composition of general aviation as
much as changes in safety.
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\11\ U.S. Government Accountability Office, General Aviation
Safety: Additional FAA Efforts could help Identify and Mitigate Safety
Risks, GAO-13-36, Washington D.C., 2012.
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Recent reforms to FAA oversight
The Federal Aviation Administration is essentially
concerned with the public interest aspect of general aviation.
It has the responsibility for administering aircraft and pilot
certification, conducting safety oversight of pilot training
and general aviation operations, and taking enforcement actions
against pilots and others who violate federal aviation
requirements and safety standards. It manifestly is a
regulatory body.
Measuring the net effects of such regulations is, however,
difficult. At one level there is the generic problem in
assessing safety regulation of defining the counterfactual;
just what would the accident situation be without the
regulation. There is then the matter of assessing whether the
actions pursued are the best given that interventions are
justified to enhance social welfare. Finally, there are issues
about whether the administrative costs of enforcing regulations
are minimized; this is generally a contentious issue for those
who have to conform with regulations because the costs of them
are often focused, but the benefits extend across many parties.
In the latter context, and in relations to general aviation
regulation, there have been concerns expressed about the burden
of regulations, including the time and money costs of
conformity and administration. Much of the discussion, however,
has tended to be focused on anecdotal evidence and the
collective views of those in professional and trade
associations, capturing the views of the third parties affected
is less easy \12\.
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\12\ The FAA does have general guidelines for values to be put into
its decisions making (e.g. see GRA, Incorporated Economic Values for
FAA Investment and Regulatory Decisions. A Guide, FAA, Washington DC,
2004) although this does not cover the costs imposed on the regulated
of meeting such things as pilot certification.
The FAA has also itself responded to some of these
concerns, pointing to streamlining certification processes that
have been initiated since 2005 \13\. The challenges highlighted
by the FAA in its responses include the problems posed by
increases in the flow of new ``aviation products'';
technologies, new rulemaking and fleet-wide safety initiative,
and the migration of technologies from large transport
airplanes to general aviation aircraft, but there is an
acceptance that increased efficiency is still possible. A clear
problem is that of public accountability, regulatory agencies
are naturally risk averse because any failure regarding any
individual application can affects others seeking
certifications.
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\13\ US Federal Aviation Administration Aircraft Certification
Service, A Report from the Aircraft Certification Process Review and
Reform Aviation Rulemaking Committee to the Federal Aviation
Administration, Recommendation on the Assessment of the Certification
and Approval Process, Washington DC, 2012.
The Administration has also adopted a multiple faceted
approach, largely based on changing the culture within general
aviation, to improving the safety record of general aviation,
with the stated goal of reducing the accident rate by 10%
between 2009 and 2018 \14\. A number of GAO reports suggest
that progress is being made to improving the record of general
aviation, although not without some criticism regarding the
pace of change, and a number of remaining deficiencies in data
collection \15\. It is also unclear how such a general target
can easily be translated across such a diverse range of
activities and technologies as general aviation, and where the
safety record is so variable.
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\14\ U.S. Federal Aviation Administration, Fact Sheet--General
Aviation, FAA, Washington, January 27, 2014.
\15\ U.S. Government Accountability Office, Aviation Safety:
Certification and Approval Processes Are Generally Viewed as Working
Well, but Better Evaluative Information Needed to Improve Efficiency,
GAO-11-14, Washington, D.C., 2010; and U.S. Government Accountability
Office, Aviation Safety: Status of Recommendations to Improve FAA's
Certification and Approval Processes, GAO-14-142T, Washington D.C.,
2013.
One issue is the difficulty in assessing the effectiveness
of various initiatives because of inadequate informational
bases. While the traditional data offers some general guidance
as to safety tends, and there are efforts being made by the FAA
to improve data, the industry is fragmented geographically, in
terms of the services offered, and the by the types of
suppliers involved making more issue specific statistics
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important to evaluate other than generic reforms.
Added to this, data collection of some types of
information, such as on flight-hours (which have traditionally
involved self-reporting) and on good indicators of a pilot's
experience (which are important in assessing both the wider
costs and the benefits of general aviation) has not been
completed, and is time-consuming for users of the system to
contribute. (This, or a lack of appreciation of the importance
of the information, may explain low response rates to surveys).
The collection also impacts on the FAA budget with, presumably,
costs being passed on through certification fees. The GAO, for
example, has pointed explicitly to this issue.\16\ There is
thus the age-old trade-off between data quality and the
generalized costs of its collection; in this context it is
important to up-date collection methods and what information is
gathered as circumstances change.
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\16\ U.S. Government Accountability Office Aviation Safety FAA
Efforts Have Improved Safety, but Challenges Remain in Key Areas, GAO-
13-442T, Washington, D.C., 2013.
One such area regarding data collection and comparability
that may reduce some burden on users of the general aviation,
is that the FAA and NTSB seem to be improving cooperation \17\.
Combined data banks and data collection should offer provide
some opportunities to reduce surveys and reporting
requirements. There may also be opportunities to combine data
banks with the TSA.
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\17\ U.S. Government Accountability Office Aviation Safety FAA
Efforts Have Improved Safety, but Challenges Remain in Key Areas, GAO-
13-442T, Washington, D.C., 2013.
In terms of policy initiatives to reduce burdens on the
general aviation sector, the Small Airplane Revitalization Act
into law in November 2013 initiating moves on the adoption of
new certification regulations intended to increase safety and
reduce the certification costs of new Part 23 general aviation
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airplanes.
The law requires the FAA to creation of a new category
covering aircraft parts and other products aimed at
streamlining the certification process for light airplanes and
related aviation products. This would allow for the swifter
adoption of new aircraft designs and safety equipment as well
as cut costs. In particular, it aims to reduce certification
costs by half for general aviation aircraft that weigh less
than 12,500 pounds with the FAA implementing recommendations of
the Aviation Rulemaking Committee, composed of aviation
authorities and industry representatives. Basically, these
aircraft will not have to be designed and certified under the
same regulatory requirements as heavier, more complex and
higher performing aircraft.
From the industrial and users perspective, this should cut
production costs and certification costs; in particular, for
practical reasons, components are currently certified at the
level of their highest customer base making them costly for
lower end aircraft. The regulations are also intended to
reflect the lack of need for some equipment in the light
general aviation market, and particularly in the experimental
and light sports segment.
The concerns, and at this point they are concerns, are that
the change is unlikely to make a difference because the
bureaucratic nature of the FAA is unlikely to give up its power
quickly, or to make certification easy, and that the issue of
modifications of used planes, to update them with new safety
equipment, autopilot, etc. is left unaddressed. Given the
number of older aircraft, the impact on users is likely to be
limited in the short run, although the measure should help
manufacturers.
There is also the General Aviation Pilot Protection Act
that has been under consideration, and is aimed at reducing
bureaucracy relating to pilot activities. It would allow pilots
to fly aircraft weighing less than 6,000 pounds, with six seats
or less, flying under visual flight rules below 14,000 feet,
and at speeds less than 250 knots as long as they meet the
medical standards involved in attaining that current state
driver's license, one argument being that a small plane is
similar in size to an SUV and accidents due to ``driver
impairment'' should be treated on a similar basis.
The aim is to reduce the hassle and cost of obtaining the
Class III medical currently required. The evidence that large
numbers of people are deterred from flying because of this
requirement does not, however, seem strong. The more worrying
aspect from a policy perspective is the two years or so that
the FAA has taken to consider the matter.
Conclusions
That general aviation is important in a country as large,
diverse and economically advanced as the U.S. seems difficult
to question. That, by and large, the market has been effective
in ensuring an efficient development of the sector, and
allowing many of its benefits to be enjoyed also seems true.
The challenge is that there is a public interest in general
aviation that extends beyond those involved in the provision of
the infrastructure and operational hardware, and those that
make use of these.
In particular, matters of safety extend beyond individual
flights to accidents involving others either in the air or on
the ground; in effect to third parties. There is also a public
perception, in part brought about by rare, but highly visible
accidents, that general aviation is unsafe. In response to the
safety reality, together with heightened public perceptions,
the sector has been the subject to a variety of regulations.
This has resulted in a variety of additional costs being
introduced into the sector. Any additional costs are an obvious
impediment to the growth of a sector, and need to be monitored
to ensure that at least commensurate public benefits result.
That there is a need for some forms of regulation in the
public interest seems reasonable, but it also needs to be
focused on elements that generate the greatest safety risk
otherwise there is a danger the development of the sector may
be stymied by an over reaction by the public. In particular,
given the number of accidents involving pilot errors of various
types in smaller, older privately operated aircraft it seems
efficient to focus attention on these rather than less
accident-prone corporate operations. In sum, the degree and the
ways that the FAA intervene in general aviation should be
specific to particular issues so as to minimize the costs of
its actions.