At the 2005 AOPA Convention, barely six months after the first light-sport aircraft (LSA) airworthiness certificates were issued, AOPA President Phil Boyer observed, “This has got to be one of the most interesting things you can do: help bring a whole new segment of aviation to market.”
Boyer made this observation at the Expo’s opening session to a standing-room-only crowd of 1,200 attendees. I happened to be the lucky focus of his comments as he introduced my presentation. At the keynote ceremony, I spoke about LSA, Cirrus’ Alan Klapmeier then addressed technically advanced aircraft (TAA) and Eclipse’s Vern Rayburn finished by discussing very light jets (VLJs).
Afterwards, in answering a reporter’s question during a press conference, I mentioned that the potential economic impact of LSA was much less than that of TAA or VLJs. Both Klapmeier and Rayburn quickly countered, “No, that’s wrong! LSA represent a huge economic impact.”
They were right, but so was I. What I meant was that the total billings of LSA sales would total much less than TAA and VLJ sales. Klapmeier and Rayburn meant that the value of a new fleet of trainers and new energy for recreational flying could trigger a growth phase for aviation in general.
I was pleased by the viewpoint of these two leaders and by Boyer’s comments. LSA have become the new entry point in aviation and could have an important role in helping aviation prosper by reversing a slow decline.
Just The Facts
The LSA industry is completing its third year of deliveries following the first approvals. In that time, the industry can be proud of its accomplishments.
How fares the LSA industry? Are we meeting the lofty expectations of Messrs. Boyer, Klapmeier and Rayburn?
The new rule gave birth to the sport pilot certificate and to LSA, the new, factory-built aircraft that sport pilots and other pilots may fly.
Abbreviated SP/LSA, the new rule affected many other parts of the FARs, the familiar Parts 61 and 91 among them. It also established a new way of certifying aircraft. So far, many expert observers feel that the program is succeeding. We have a number of benchmarks to use in explaining this position.
In the 32 months from the first approvals (on April 15, 2005) through December 31, 2007, 1,395 LSA were delivered, including 1,118 fixed-wing, three-axis airplanes and 277 alternative aircraft (i.e., weight-shift trikes, powered parachutes and motorgliders). Two-thirds of these came from overseas factories, primarily in Eastern Europe.
In 2007 alone, once the industry’s distribution structure began to answer demand, deliveries totaled 565 airplanes, up 98% from 2006. Deliveries of all LSA types equaled 720 units, up 120% from 2006.
The FAA refers to the ticket as a sport pilot “certificate” rather than a “license.” The agency made many term changes with the introduction of the comprehensive new rule. Names aside, one fact has been proven beyond a doubt: The sport pilot certificate is far more popular than the recreational pilot license. Three years of sport pilot certificate issuances beat 20 years of recreational pilot licenses nine times over (2,078 versus 242).
Despite the progress, big LSA growth remains in the future. LSA presently amount to less than 1% of the U.S. piston airplane fleet. And sport pilot certificate holders are less than 1% of the number of private pilots.
Some experts look to the European model to predict the future. Not only is the euro currency soaring, but so is its sport aircraft community. In the 27 European Union countries, GA aircraft number about 50,000 units. They’re overwhelmed by 180,000 to 200,000 sport aircraft, including European “ultralights” and nonmotor-powered aircraft. If those trends start finding their way to the U.S. aviation landscape, you could surmise that LSA have an extremely bright future in America.
Rush Of New Brands
The pace of new approvals for LSA—which successfully met ASTM standards developed by the industry, the FAA and others—has been phenomenal.
From April 2005 through December 2007, 73 new models won airworthiness certificates. Of these, 20 new models arrived on the scene in 2007 alone, and the pace of two or three new models arriving monthly shows no sign of abating.
The many LSA models, coming as they do in every shape, size and control system, address the desires of those who want something different or specialized. But the old 80/20 rule, which states that 80% of sales are made by 20% of sellers, still applies.
At the end of 2007, 53 companies supplied 73 certificated models. However, just 22 of those companies have made 95% of all the sales to date. Putting even a finer point on it, 953 airplanes, or 85% of all fixed-wing, three-axis designs, have been delivered by the top 12 companies, though it would be unwise to dismiss newcomers yet to arrive on the scene.
One company, Flight Design, has consistently led the category with more than 20% of the market. Little yellow taildraggers are also doing well, with three companies supplying such aircraft for another 20% of the market. And, intriguingly, about 70% of all LSA sales are for high-wing aircraft, even though many attractive low-wing models are available.
For all their successes, how will the top brands fare when Cessna and Cirrus arrive on the scene? No one knows, but most of the leading LSA producers are pleased with, not frightened by, the market entry of these storied brands. One brave company CEO smiled and said, “We’re moving forward fast. I hope Cessna can keep up!”
Are LSA Safe?
LSA have earned a good record in the short time of measurement. At the January 2008 meeting of ASTM committee members, Larry Werth, the FAA’s LSA Program Manager, stated that the agency has identified four LSA accidents claiming the lives of eight persons in the 32 months of LSA activity.
While some producers may need to improve elements of their certification documentation, LSA, in their many flavors and varieties, have largely proven to be reliable. Presently, the NTSB and other agencies are watching, but they may not be the biggest concern.
As many aviators know, the FAA may think it regulates aviation, but insurance companies may have the final say. Companies like Avemco are looking hard at LSA. Avemco President Jim Lauerman spoke with me at January’s Sebring LSA Expo to explain that the loss record hasn’t been good for his company. After he visited with several industry leaders, however, Lauerman said he could see that the infrastructure, specifically the transition training of pilots, was being handled professionally by the larger suppliers. He also noted that, among other steps, such care should help reduce the LSA loss ratio. He indicated that Avemco remains keen on insuring LSA.
For the most part, U.S. GA industry participants appear to be embracing the new segment, even while acceptance from FBOs and individual pilots may still be growing. But with the potential for a universal (ASTM) standard used around the world for certifying LSA, it would appear the long-term viability of the new segment is all but assured.
Domestically, only the acid test of time will show if SP/LSA can wedge its way deeper into the U.S. aviation community. Endearing factors like low purchase cost, low fuel usage, quiet operation and snazzy shapes and equipment should give the new segment a strong tailwind.
In addition to serving as Chairman of the Board of LAMA, Dan Johnson runs two companies. Learn more about him at his website, www.bydanjohnson.com.