Small Is Beautiful

In years of severe recession, consumers and businesses put off any purchases that they can, and hardly any purchase would seem more readily postponable than a private plane costing from $5,000 (for a used Piper Cub) to $1.6 million (for a new Learjet). But 1975 turned out to be the "general aviation" industry's best year ever. In the twelve months ended last September, sales of private planes jumped 12%, to just over $1 billion.

The private-plane boom has helped keep the unemployment rate in Kansas, where Cessna (1975 sales: $491 million) is the biggest private employer, to 4.5%. In Wichita, the home of Beech and Gates Learjet as well as Cessna, the rate is lower still; in fact, Learjet, unable to find enough qualified Wichitans to run its production lines, will open a factory in Tucson this year. Says Cessna Chairman Russell Meyer: "We have kept pinching ourselves--at first it was hard to believe."

Costs Outweighed. Not too hard to explain, however. Three-quarters of all flying time logged by small aircraft is accounted for by business travelers, and corporations buy the lion's share of the most popular planes in each of the industry's principal categories: the Cessna 172 Skyhawk single-engine (1976 price: $20,750), the Piper Seneca twin-engine ($75,100) and the Cessna Citation jet ($845,000). Though the operating costs of small planes are high, many corporations justify the craft as necessities. High fuel and labor costs have compelled airlines to cut back on both flights and routes. Only 425 domestic airports are now served by the commercial carriers, v. 660 a decade ago.

"To travel from New York to Keokuk is getting harder," observes Cessna's Meyer. Keokuk, however, is precisely the kind of place where many executives need to go, as corporations decentralize operations. J. Lynn Helms, president of Piper, based in Lock Haven, Pa., tells of executives of an Ohio company who had to visit a plant in Mississippi several times a week. Their door-to-door travel time was reduced from eleven hours to 3 1/2 hours after the company began flying them direct in its own Piper.

Industry officials believe they also have gained sales at the expense of auto travel. The national 55-m.p.h. highway speed limit, they say, is just too slow for many salesmen. Even some of the smallest, least-expensive craft can cruise at 110 m.p.h.--while getting better than 20 miles to a gallon of fuel.

Noncorporate markets for private planes are also growing. More of the ultra-affluent are buying planes, following the example of Actors Cliff Robertson and Gene Hackman, Country Singer Merle Haggard and Attorney F. Lee Bailey. Learjets and other craft that can fly as high as 45,000 ft. or more are popular for aerial photography and mapping. Small planes are being used to seed crops, salt icy highways, conduct geological surveys, and patrol the nation's coasts. Nearly 30% of the industry's sales are to foreign customers--not surprisingly, since 90% of the world's small planes are made in the U.S. Sales to Africa, Asia and the Middle East have been especially vigorous.

Industry executives, noting a significant increase in the number of student pilots last year, fully expect the performance to continue. Their projections call for 15,000 small planes to be sold in 1976, compared with 14,200 last year, and for dollar sales to rise about 20% to $1.2 billion.

There is only one storm cloud: Brazil, long an important market for small U.S. aircraft, has imposed heavy tariffs designed to restrict their importation and encourage its own fledgling domestic general-aviation industry.

This file is automatically generated by a robot program, so viewer discretion is required.