By Rod Douglas 

The great Australian tradition is the Christmas shut down. The whole of Australia starts to wind down about the middle of December and nods once to the hot summer sun, before the migration to the beach begins. Family arises in its importance and it’s the middle of January before Australian business yawns, stretches and thinks about working again.

It’s a time of recovery, reflection and a resetting of the cycle of another year. For many it’s the time when goals are set and the one window of the year when people can actually take the time to decide to make different their lives. This mood of contemplation often extends throughout the first quarter of the year with people still monitoring the global economy and waiting to see if there will be any after-shocks.

So why is this important for the aviation world? I suspect that more often than not this is the time when many people are deciding, at least in principal, just how much of their hard earned cash is going to be committed to aviation. Now it is true that I’m talking about personal cash. Most businesses plan on a financial year cycle, and Australia’s June financial year end creates a nice balance between getting your business sorted midyear and then letting your personal aspirations be dealt with on the sand and under the scorching sun of our glorious summer.

And it’s personal aviation that interests me the most. On one hand we have a remarkable airline industry that is probably the strongest in the world. In a bizarre twist of fate, and while in another ‘as usual’ moment the international airline industry is losing billions of dollars, Qantas and Virgin Blue are in a strong position with good stock market support and relatively small losses being posted. Qantas even has its pretend airline Jetstar propping it up so that it actually is making a small profit.

And the strength in these companies comes from the remarkably resilient duopoly that has existed for the last three generations. The duopoly is so strong that even when one of the incumbents, Ansett, fell over it was replaced by another start up which grew to maturity overnight in the hot house environment of collapse. There is no question that our airline industry is actually stronger as a result of the Ansett collapse, with its assets now spread widely and competition being introduced to the support services which had previously been vertically integrated.

But… not too much competition. Just enough for Australians to feel comfortable that the prices that they are paying for the services of the airlines are fair and to see, particularly with the introduction of the Jetstar no frills operation and the Tiger no service operations, that the airlines have replaced the nationwide bus services that used to serve our wide and great country. Anybody can fly today.

That is anybody can fly today on the airlines.

Private aviation appears to be living on another planet. It simply lacks the available infrastructure and the passionate flow of pilots that are needed for private aviation to thrive. It also lacks the financial products to make aircraft ownership an affordable and simple option for people.

Which is truly bizarre in a country with the conditions and distance that make personal flying such a pleasure. I also just recently realised just how much my attitude had changed. I’ve been a buy on weakness, sell on strength sort of aircraft owner. I’ve always had a budget line that been pretty healthy for my flying addiction and while I’ve never managed to make money out of the aircraft that I’ve bought and sold, I’ve often managed to pay for my addiction through the buy use sell strategy.

So right now, in the midst of the global financial crisis, I would have normally been scouring the Aviation Trader, Trade-a-plane or ASO to find a silly deal on an over spec aircraft that would see me give up the airlines and go back to the absolute freedom of being able to jump into my aircraft anytime and leave on my schedule for the consummate pleasure of flying myself all over the country.

Especially on the strength of the Australian dollar, which over the past six months has moved back into the territory that resembles its run during the strongest of our boom years. It’s dramatically reduced the costs of even the most exotic of aircraft choices, and opened the biggest aviation market in the world to flush Australian buyers. With the Australian dollar having probably a third more buying power than its lows last year and the piston aircraft prices probably down by a third, canny buyers can probably get twice as much aircraft for their money.

Oh the freedom that would give. A high performance single, probably turbo charged, glass cockpit. Yes. No more stupid airport parking fees, no more indignity from the pretend security checks, no more cues, no more bad and stupidly expensive food, no more sardine can type like experiences. No more airlines. Just the freedom of flying. It’s oh so alluring.

And six or seven years ago that’s how it would have been. I would have been on a flight to the States finding the aircraft.

Now I should say that there have been a couple of changes to my circumstances. Firstly, and probably most importantly for my aircraft selection, are the additions to my family. With five kids the selection becomes so much more limited. Suddenly all the fantastic adventures of flight have dried up. Even with four kids we had plenty of choices – Barons, Senecas, 310s, 303s and the venerable, if a little slow, Partanavia, were all available to rent and if it was only day trips without luggage even 210s and Bonanzas would get us there.

Not surprisingly, I realised that it’s been nearly three years since one of our big family flying trips. Talking with the family, it’s something that we’ve really missed. It hasn’t stopped me flying with last year’s log book addition at a little under a 100 hours but the whole family is missing the adventures. So I hit the phones.

Now this was a challenge. Finding a cabin class twin available for hire. And to put it simply they’re not. There would seem to be two categories of these aircraft. The beautifully maintained and private aircraft of a few lucky and wealthy owners and the hard working charter fleets. Very different to the US where the pool of aircraft is dramatically deeper and you could always find someone who wanted to defray their costs with a little extra private hire. Admittedly that was 20 years ago and it may well be that it’s a whole lot harder over there as well.

Of course much of the real challenge has come from the insurance industry with its requirement for significant hours in type and often 90 day currency in type. Some might think that I’m being a little harsh here but do these limitations really add to safety? I know of one provider, located in Victoria, who has a number of Chieftains available for hire. They require a type endorsement, 50 hours in type and 90 day currency in type. I don’t have a Chieftain type endorsement but I do have about 90 hours in type from the early 90s flying in the States. So with a couple of days spent doing the type endorsement and then one flight, a quarter with three take offs and landings, I’m apparently a safer pilot according to the insurance company than I would be flying 100 hours a year in a range of aircraft. The insurance requirements are on top of the need to comply with CASA’s currency requirements. Do they really add safety?

So for this year’s adventure we gave up on taking the family flying. So we decided to take a train trip. Sad really. Still an adventure but hardly supporting aviation in Australia.

I love aviation so I thought I’d give it one more try. Maybe I should buy one I thought? Back to the phones to discover the real cost of operating a cabin class twin. Australian LAMEs have a wonderful way of scaring the crap out of potential aircraft owners, particularly if you’re talking about pre-gap cabin class twin. Now it is true that the costs of aircraft ownership move in direct proportion to the costs of avgas and two donks give you 10 - 20% more speed and close on twice as much cost. Over the last couple of years avgas has pretty much doubled in price and with global warming driving a carbon based emission trading scheme, the only way for the price to go is up. So really honest LAMEs, and the brutal reality of future likely costs of operation, quickly took me out of that market.

Of course, the future is in single engine turbine operations. It a big jump in the level of investment that you’re looking at and there are really only a couple of meaningful choices where the depth of the fleet is sufficient for there to be a range of price point choices. My obvious choice, needing a minimum of seven seats is the PC12, although a Caravan could do the job. And to be honest the dollars involved just took me out of that market.

Now I should say here and now that the real elephant in the room with regard to affordability of aircraft in Australia is actually the finance market. Australia is a small country with a relatively small financial services market place. It’s a very profitable market but that underlies one of the really significant problems for aircraft ownership in Australia.

If you want to sell a lot of capital equipment you need to match the finance to the economic life of the asset. It is the first principal of debt. So what is the economic life of an aircraft? Go wander around any airport in the country and have a look at what’s sitting on the ramp. What’s the average age of the fleet? If aircraft were women they would be suffering in the peak of what Bernard Salt describes as the man drought. Late 30s and with little to no chance of finding a quality single Australian man to marry them.

But really the average age of the GA fleet is extraordinary in that they are old aircraft. They all, in the majority, fly and fly well, as the laws of aerodynamics haven’t changed, but they take a fair bit of maintenance to keep them doing that. They’re far less efficient but they’re reliable old beasts. This means that it is ludicrous to require that an asset that will deliver an effective economic life of 30 – 50 years is funded with a five year loan. Imagine if you had to pay your house off over five years. How many home owners do you think there would be in Australia?

In the US the finance world is a different place. Aircraft are regularly funded using 20 year fixed interest loans which means that you can buy your new Cirrus, Mooney, Cessna or Piper for about the same monthly payment that you’d currently put into buying a modest $100,000 luxury car in this country.

We all know a whole lot more people who have spent $100k on their car than we do people who own private planes. Of course if it was affordable we might start to see a whole lot of the fantastic, and well packaged programs, from the likes of Cirrus who happily put ab initio pilots straight into SR22s, and even their turbos, because they can do so with the support of well designed and high service training offers that make the transition from being earth bound to being warriors of the sky totally integrated. In the States you can buy an aircraft with a personally allocated instructor who will fly with you and teach you while you fly for business and take you through the entire training regime all the way to the completion of a command instrument rating.

This sort of packaging is expected in the provision of high end luxury items. Of course, in Australia, the idea of luxury items tends to stimulate the tall poppy syndrome and, rather than it being a mark of success, it becomes a limitation that many people live by. I have a mate with a TBM 700. He’s a wealthy bloke. He will under no circumstance buy a jet. Reckons that it will spoil his life. I have another mate who has just achieved an amazing goal of buying a Rolls Royce Phantom. He bought it superbly well. A few years old with a few thousand kilometres on it and bought at a third of the price of a new one. He uses it occasionally and usually in association with the Rolls Royce car club. He’s intensely aware of the impact it may have on how people see him. In reading a recent biography of Rupert Murdoch a couple of pages are spent on his concern about how he would be perceived after he ordered a 187ft yacht with a cool $47 million price tag. Murdoch hasn’t lived in Australia for years yet it seems that the Australian upbringing embedded that within him.

Imagine telling your mate at the pub that you have a personal pilot that’s teaching you to fly. I suspect that it’s one of the reasons that these sorts of programs haven’t got off the ground in Australia, although I still have trouble understanding why there has been so little acceptance of syndication and shared ownership of new aircraft. Then again maybe the service culture inside Australian flight schools simply doesn’t stack up with that expected by the very wealthy.

I still struggle with the extent to which the Australian professional instructing culture continues to emerge from the echelons of retired military personnel. Let’s be clear here, I’m not suggesting that they are not excellent instructors, far from it. But their manner and their commitment to customer service can occasionally be extremely flaky. We’ve all seen the sort of boot camp culture that defines the military with its ‘obedience at all costs’ approach to weeding out those who aren’t up to it, but this is hardly the right approach when people are investing tens of thousands of dollars into a discretionary hobby.

I suspect it’s why Australian flight schools have across the board slipped into the lucrative but lazy role of providing mass flight training to the export market. You pay your money, you get whatever you get and by the time you discover the quality of the service it’s all too late. The kids are young, impressionable and do not know what good customer service looks like.

Worst still is the descent of some of the Aero Clubs from member service organisations into self-serving providers of export training at the expense of providing any members services. The loudly proclaimed claim that this is to ensure their survival becomes a mockery when they start using their not-for-profit status to give them a competitive advantage in the training marketplace.

And all of this is a downward spiral for private aviation. When you overlay the greedy and eagle-eyed property developers who are rushing head long to steal the public infrastructure airports which are inevitably on superbly placed land, you can see that it’s going to take a minor miracle for anyone but the most truly committed aviator, or the lay man that is bitten hard by the aviation bug and is willing to drag themselves across the hot coals required, to become a successful private pilot.

My God I’m sounding depressing. Yet I love to fly.

So what else is stopping Australians from flying? Well there is the old alternative use for the money question. While the costs of aviation are spiralling higher there are a few alternatives that have actually got a whole lot cheaper. For the price of a new high performance single the GFC has delivered the capacity to pick up a decent beachside property within three hours of most capital cities. With prices down and finance much harder to get the good buys are abundant and they aren’t producing, or releasing anymore beachside property.

For the adventurous, boats are a great alternative. That said if you are looking for cheaper running costs it needs to be a yacht. There are many bargains to be had in the power boat market with the capital cost of many near new boats down by up to 50%. Of course the running costs are likely to sky rocket with the onset of an ETS.

I was surprised to discover how much the yacht market has changed over the past 15 years. The price of new yachts hasn’t really moved at all in absolute terms and the result is that, in real terms, the costs of owning a yacht has dramatically fallen. Like aircraft, as long as boats are appropriately maintained, their life is mostly unlimited and they come without the requirement for tens of thousands of dollars in flying lessons or the strictures of over regulated airspace or insurance requirement. For a similar price to a near new Cirrus you can quite easily put yourself into a beautiful 40 foot Beneteau. Unusually most people’s mates would be ok with them having a big yacht particularly if they are willing to take them sailing.

Right now I’m tempted to carve up my aviation budget and assign some to a yacht. Strong dollar, soft market and big family mean that adventure is only at the bottom of the hill.

So the real question is what do we need to do to get more Australians flying?

And the answer is both simple and yet dramatically difficult to orchestrate.

Here are the five steps as best as I can predict.

1. Get kids flying. It’s the next generation who are going to provide the impulse for change. Right now the embedded prejudices mean that the old men defending the right to fly are simply running out of energy and that’s good because it’s new energy that will make the difference. Just about every truly committed pilot I know has an ‘I flew as a kid story’. I’ve had one of those as a nine year old and it’s crafted and defined my life in so many ways. We need a powerful ‘Young Eagles’ program that delivers 500,000 aircraft rides to kids over the next decade. Those kids will be the voters of the future and will want to know why they can’t fly.
   
   
2. Get real and meaningful in the lobbying of politicians at every level of government. Flying is seen to be noisy and dangerous in Australia. It’s neither really. It actually delivers value to every Australian. Every Australian receives enormous safety coverage as a result of the emergency services’ use of aviation. That’s rarely talked about. Much of rural Australia stays connected only because of its aviation services. Corporate Australia could dramatically improve its productivity with the judicious use of aviation. Australia’s first line of border surveillance is aviation based and should we ever have to defend our shores the first wave of defense will be aviation based. Where is the coordinated lobbying of both the public and its representatives to protect our aviation assets and then to continue to develop them? This is up to the industry to stop squabbling and start co-operating to ensure the whole food chain is properly fed.
   
   
3. Put the customer service back into aviation. I say ‘back into it’ because I assume there must have been a time when it existed. I know it used to exist in the airlines. I’m pretty sure I’m not old enough to have ever experienced it in general aviation, but I can guarantee you that all the industry would need to do is to find enough money to jump on a plane (unique idea that) fly to the US and figure out how to export the sort of genuine focused customer service that makes flying such a delight over there. It’s all good basic common sense and relies on the concept that if you don’t provide the service then a competitor will come along and take your business away. Every successful Australian industry has leaders who spend their time at the trade shows around the world looking for the best ideas and then successfully adapting them to our great land.
   
   
4. Work as an industry to build a finance capacity that allows aircraft to be funded in line with their economic life. We know there are US based organisations that have worked out the wholesale funding markets that support 20 year fixed chattel mortgages and, undoubtedly, if someone was to aggregate the Australian aviation market then we could dramatically reduce the capital required within the industry. Reduced capital dramatically reduces the cost base in the industry and reduced costs increase usage and so the virtuous cycle of rebuilding the industry will begin. If we were really serious about improving safety in this country then the reduction of the average age of the fleet would be very high on the government’s agenda and a simple change to the depreciation regime, combined with long dated finance, would see this change quickly.
   
   
5. Find a reason to keep flying. It takes real commitment, real time and real money to keep flying. It is one of life’s great freedoms and it needs to be defended and the greatest defense against the creeping malaise is lots of people in lots of airplanes finding lots of reasons to do it. Fly, fly, fly and talk about it. Lobby to have a residential airpark built beside your local airport and then move into it. Volunteer for Angel Flight. Start a Young Eagles program. The more you fly the cheaper it becomes. The more you fly the more inspired and inspiring you’ll be. The measure of the economic prosperity of a country can be easily measured by the number of hours its fleet is flying. Our airlines are keeping their end up. What are we doing to deliver in the private flying world? I’d say right now we are lying down and giving up. Let’s change it.
   
   

Australians should fly. This is the best country in the world for aviation. We should have a strong industry and we should have should have strong support at every level of the community. If we don’t it’s our own fault. Time for you to take action. Ring the airport. Book the plane. Take someone with you. Do it now. Have a great month.

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What’s your view? What will it take for private aviation to reemerge? What else can we do to make it different?  Or tell me your ‘I was a kid’ story that you caught the aviation bug from. If there are enough we’ll weave them into an interesting article. Write me at rod@aviatormag.com.au