For those that are seeking encouragement that the “great recession” has ended, stop now because you will not find it here. I see continued challenging economic times for the aviation sector of our economy. Despite this, I do see the economic future getting brighter, especially in the stock market.
A sector that will affect the recovery is growing government and its penchant for justifying its existence by over legislating the free market. Government growth has been phenomenal and I am not pointing a finger at the present administration. This started some time ago. Do you know the average government worker makes some $71,000 per year … while the average worker in private industry makes $51,000 a year? The average pay of a service mechanic is about $20 an hour, which without overtime, comes to less than $50K a year.
Most likely there is nothing we can do about this other than attempting to ensure we get our bucks worth from the services performed on our behalf.
We are growing into a services economy and not competing with the things that made this country great. Look at Ireland. Their working population has been steadily gravitating toward the public service model, with less workers in private industry. I just read their ATC workers are initiating work stoppages on a daily basis for higher wages. One hears this all the time in Europe. The hell with safety!
Most see new airplane sales by the OEMs as picking up gradually as seen by the diminishment of their adjusted backlogs. Used aircraft sales inventories have been lessening also but these need to decline significantly before new sales regain momentum. Airline purchases of new aircraft are dependent on revenue per passenger mile or yield per seat mile. It is difficult for airlines to make money. They are their own worst enemy, competing against one another. They sure do not know how to make customers happy. These new baggage charges and other previously no-charge “frills” are upsetting many travelers.
According to some, growth and hiring at MROs, small and big, will continue to be slow, dictated by flying hours, ultimately dictated by the consumer who drives our economy. And with the jobless rate remaining at 10 percent (real-out-of-work is 17 percent) most experts do not see the consumer gaining confidence any time soon. Where we may see some help is from the stimulus funds, provided some are directed at those aviation-related businesses that could use some help.
Finally, the global market with its requirements for harmony will add more costs to doing business but should offer new growth opportunities for aviation, as aviation is primarily a global business. We need to maintain our technological leadership but not at the cost of jobs.
Thanks for reading this. I look forward to hearing back from you.