ALEXANDRIA, VA - The downturn in the global economy has taken a toll on repair stations, a recent Aeronautical Repair Station Association (ARSA) member survey has determined. The majority of ARSA members have seen revenues fall over the last year and have cut jobs as a result. The outlook for next year is mixed.
Slightly fewer than half of ARSA members expect to see revenues increase and only six percent are planning more layoffs. But only 21 percent expect to add positions next year, suggesting that recovery in the industry is likely to be sluggish.
The online survey was conducted on Nov. 12 and 13 in preparation for a meeting this morning between aviation industry trade associations and the Republican leadership of the House Transportation & Infrastructure Committee to discuss aviation industry economic conditions. Based upon 144 responses from ARSA repair station and corporate members, ARSA estimates the margin of error at just over six percent, making it the most reliable survey of maintenance industry economic conditions the association has ever conducted.
Ninety-four percent of the survey respondents were headquartered in the United States. While respondents represented a wide range of business sizes, consistent with the makeup of the repair station industry, the vast majority were small companies. Seventy-four percent of respondents had less than $10.5 million in revenues in 2008 and 72 percent had fewer than 50 employees. Based on an extremely conservative estimate, the survey respondents collectively had more than $1 billion in annual revenues in 2008 and more than 15,000 employees. The overwhelming majority (92 percent) were non-union companies.
By far, the most important markets for the respondents were commercial air carrier and business aircraft. Reflecting the international nature of the repair station industry, 68 percent of the U.S.-based companies reported that in addition to their FAA part 145 certificate they had a European Aviation Safety Agency (EASA) approval allowing them to work on European-registered aircraft and products installed thereon.
The survey’s key findings were as follows:
* Business conditions have deteriorated for ARSA members over the past year. Sixty-two percent of respondents reported that their 2009 revenues fell below 2008 levels and only 21 percent reported increased revenues this year.
* The economic downturn has taken a toll on industry employment. More than half of respondents (53 percent) reported laying off workers in the past year because of poor business conditions. On average, companies reporting layoffs had eliminated nine percent of their workforces.
* ARSA members are guardedly optimistic about the future. Forty-six percent of survey respondents believe their companies’ revenues will increase in 2010 and only 14 percent are anticipating a decrease.
* The industry employment outlook is relatively stable. Only six percent of respondents planned to eliminate positions in the coming year and 63 percent said they expected to hold their workforce at current levels.
* Despite poor business conditions, ARSA members are continuing to invest in their companies. Fifty-one percent of respondents have made substantial capital investments in 2009 and 47 percent plan to do so next year. Capital investment in the coming year might be improved by extension of the economic stimulus bill’s depreciation bonus and increased Sec. 179 expensing levels.
As one of the United States' leading exports, aviation maintenance contributes $39.1 billion annually to the U.S. economy and maintains a $2.4 billion positive balance of trade.
ARSA is seeking broad participation in the survey; any repair station regardless of location is welcome to respond.
The latest ARSA survey is a follow up to one conducted in fall 2011.