Aviation Reality in a Post-Peak World
By Scott Spangler on December 1st, 2008
Aviation has weathered a number of economic storms in its history, most notably the Great Depression and the collapse of the GA boom that followed World War II. How the industry met and survived past challenges unfortunately will not predict aviation’s future today because one important factor has changed. Instead of climbing the bell curve of available natural and consumer resources, the global economy is, I believe, at the curve’s peak. What’s ahead is all downhill, and how long the resources will last depends on how wisely we humans consume what’s left.
Many debate our arrival at the peak, especially when it comes to oil. Given the growing global consumption and the dearth of easily tapped new resources, we’re certainly on the plateau. And when it comes to the consumer resources–specifically pilots–we’ve been going downhill for some time now, despite decades of industry-wide efforts to find new ones.
Let’s face facts: aviation is shrinking. Not only are there fewer pilots than there were two or three decades ago, there are fewer airlines and manufacturers. Given the recent merger of Delta and Northwest, the distillation of the military-commercial manufacturers, and the tide of bankruptcy now washing up on GA’s beach, it’s time to look forward with a clear eye rather than backwards with a longing sigh.
Aviation isn’t alone is this reality. Getting in line for a bailout, the automobile industry is right there with us, and it, too, is contracting. Like aviation, it clung to the past rather than planned for the future. Avoiding change is human nature, especially when the future isn’t as comfortable as what it was. But change is unrelenting, and avoiding it only makes the transition more painful, and we’re starting to pay the price for it now.
And it will get worse. The number of airlines and airframe manufacturers will continue to shrink until it reaches the equilibrium of demand and supply. It will, I think, finish its transition of one-size fits all to three distinct markets, commercial transportation, personal transportation, and recreation. The number of new pilots learning to fly each year will be counted in the hundreds, not thousands.
When the transition is complete, few pilots will move up the ladder. Instead, pilots will train specifically for their intended segment, with the airline that hires them, or the company (or tax breaks) that subsidizes their personal travel, paying the training tuition. Recreational aviators will pay their own way, if they find flying worth the sacrifice of their discretionary income and time.
Airframe manufacturers are in a situation similar to the housing market. The number of pilots able to adopt and care for a new or nearly-new airplane is shrinking. To aid their survival, perhaps the airframers should take a lesson from homebuilders and add “remodeling” to their list of services. There are a lot of perfectly good airframes flying today that could benefit from new, fuel efficient powerplants and the avionics that open up modern airspace. As the DC-3 proves, if properly cared for, airplanes don’t wear out and they can continue to lead cost-effective lives with upgrades that give them new capabilities.
Without a doubt, financially troubled companies and those poorly led or resistant to change will not survive. Specifically which of today’s companies will prosper in the post-peak world is anybody’s guess. But they will share common traits. They will acknowledge–and embody–the post-peak reality and devise long-term, sustainable plans that focus on efficient production, maintenance, operation, and training. — Scott Spangler
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December 5th, 2008 at 10:37 am
So…aviation will be different in the 21st century, and so will the opportunities. Smart aviation entrepreneurs will recognize those opportunities and provide excellent products, services and information to fill those needs.
But what will those opportunities be? What will 21st century aviation entrepreneurs do? Anybody have an idea?
December 10th, 2008 at 8:06 am
[…] you might expect, I’ve received a fair number of comments to my recent post, Aviation Reality in a Post-Peak World. All of them came to me as email, using the link that is my byline at the end of my posts. Either […]
December 14th, 2008 at 2:46 pm
Air transport is contracting from the low cost highs that we saw over the last decade but look back further to the 50s and 60s. Air transport was slow, comparatively dangerous and far, far more expensive than it is now. There will always be those who are prepared to pay a high price to fly and those who will fight to build the craft to carry them.
This is a high stakes business and change is about to turn from rush to flood I think… and in forms that we have not seen before.