ContentsMay 2009 www.nata.aero

2 National Air Transportation Association

3 Air Services Council4 The General Aviation Fleet

Global Fixed-Wing Market TrendsBusiness JetsVery Light JetsTurbopropsPiston-Engine AircraftRotorcraftGlobal Turbine Rotorcraft MarketExperimental AircraftLight Sport Aircraft

10 Fixed Base Operators11 Special Aviation Service

Organizations11 Fuel14 On-Demand Charter

Regional Air Cargo CharterAeromedical Services

16 Fractional Ownership CompaniesLong-Range Impact of Fractional Ownership Plans

19 Pilots and Flight TrainingGeneral Aviation Industry Compensation

23 Airports26 Maintenance and Repair Stations27 Air Tour Operators27 Agricultural Aviation28 Corporate Aviation28 Firefighting29 Law Enforcement30 Aircraft Brokers, Dealers

and Distributors30 Safety

Writers:

Paul Seidenman and

David J. Spanovich

35 Government Agencies that Regulate General Aviation

Animal Plant and Health Inspection Service (APHIS)United States Citizenship and Immigration ServicesDepartment of Homeland SecurityDepartment of Transportation (DOT)Federal Aviation Administration (FAA)Environmental Protection Agency (EPA)Internal Revenue Service (IRS)National Transportation Safety Board (NTSB)Occupational Safety and Health Administration (OSHA)Small Business Administration (SBA)Transportation Security Administration (TSA)United States Customs and Border Protection (CBP)

37 Other Sources of InformationNATA Associate Members NATA Compliance Services NATA Publications

1

The term “general aviation”

refers to all aspects of the aviation

industry except scheduled passen-

ger and cargo airline operations and military

flying. General aviation includes businesses

engaged in on-demand passenger or cargo

charter flying; corporate flight departments;

owner-flown aircraft; flight schools; compa-

nies offering aircraft fuel, storage,

maintenance and parts; and aircraft sales, bro-

kerage and rental firms. Some companies

classified as general aviation businesses also

serve the scheduled airline industry by provid-

ing line service, fueling, cabin cleaning,

catering and baggage handling. The support of

military aviation—through fueling contracts

and other ground-handling activities—is anoth-

er vital service provided by some general

aviation companies.

According to the latest available data fur-

nished by the General Aviation Manufacturers

Association (GAMA), the general aviation industry

contributes an estimated $150 billion annually to

the U.S. economy, accounting for 1.2 million jobs.

General aviation aircraft fly to approximately

4,000 airports in the U.S. with paved runways.

(The number of similar airports served by com-

mercial airlines is under 600). The GAMA data also

shows that general aviation aircraft fly approxi-

mately 166 million passengers some 27 million

flight hours each year. Approximately 67 percent

of those flights are for business purposes.

2009 General AviationBusinesses & Services General Aviation Businesses and Services has been pro-

duced by the National Air Transportation Association (NATA)

for its members, the media, government, and the general

public to illustrate general aviation’s importance to the U.S.

transportation system and economy.

Founded in 1940 and based in Alexandria,

Virginia, the National Air Transportation

Association (NATA) is the public policy group that

represents the interests of the general aviation

business community before Congress and federal,

state and local government agencies.

NATA’s nearly 2,000 members provide a

broad range of services to general aviation, the air-

lines and the military. These member companies

directly serve the traveling public by providing

fuel, on-demand passenger and cargo air charter,

aircraft rental, tie-down and storage, and flight

training. Other services include aircraft mainte-

nance, parts sales, airline baggage and cargo

handling; and line support as well as individual

business aircraft or fractional ownership fleet

management. Still other member companies sell

or market new and used general aviation aircraft.

While large firms, such as international FBO

chains, are among its members, NATA has always

been the advocate for smaller, single-location oper-

ators that depend exclusively on general aviation

for their livelihood. In fact, these smaller compa-

nies account for the majority of NATA’s

membership.

As a representative of the general aviation

business industry, NATA interfaces with Congress,

as well as major federal government agencies

whose policy-making authority directly impacts

aviation. These include the Federal

Aviation Administration (FAA),

the Department of

Homeland Security

(DHS), the

Transportation

Security Administration

(TSA), the

Environmental

Protection Agency

(EPA), the Internal

Revenue Service (IRS),

the Department of

Transportation (DOT),

the Occupational Safety

and Health Administration

(OSHA), U.S. Customs and

Border Protection (CBP), and National

Transportation Safety Board (NTSB).

In addition to giving the association’s con-

stituents a voice in Washington, D.C., NATA

membership offers a number of ancillary benefits

including its annual FBO Leadership Conference

and Air Charter Summit and its highly regarded

Safety 1st Professional Line Service Training (PLST)

program. Considered the industry standard line

service training program, PLST has instructed

thousands of employees, at more than 900 FBOs,

in safe aircraft ground handling procedures over

the past nine years. In 2008, NATA updated PLST

and transitioned it from a video to an on-line

course, making it available to trainees at any loca-

tion with Internet access.

At a time of increased security awareness,

NATA Compliance Services provides drug testing,

background screening, and fingerprinting for

employees of aviation-related businesses in accor-

dance with all current FAA and TSA regulations.

With an increased focus on aviation's role in

mitigating climate change, NATA established its

Environmental Committee to develop programs to

aid the industry on issues of global warming and

the support of a more sustainable environment.

Along with this, NATA has added an

Environmental Compliance Seminar, specifically

for FBO and general aviation airport representa-

tives.

General aviation continues to face formidable

challenges, including ongoing threats to airport

access. Conflicts between local communities and

small general aviation airports over noise continue

to generate proposals to close and redevelop some

facilities for non-aviation use. To counter these

actions, NATA allocates considerable resources to

educating local and state legislative bodies on the

vital role aviation businesses fill. An NATA-pro-

duced video is available to advise NATA members

how to work with community leaders to promote

the value of airports and prevent closures. In con-

junction with the video, a Community Relations

Toolkit published by the association provides a

comprehensive manual for those individuals and

communities seeking guidance in working with

community leaders to protect and expand general

aviation airports.

2

National Air Transportation Association

With the economy of the U.S. and much of the

world in turmoil, government financial aid to the

banking and manufacturing sectors has led to a

public perception of business aircraft as a luxury

indulgence of top corporate executives. NATA is

working hard to change that perception and pres-

ent general aviation as a vital business tool and

major part of the U.S. economy.

NATA is also resisting legislative and rule-mak-

ing attempts that would effectively limit the use of

general aviation aircraft. For example, a proposal

by the TSA, known as the Large Aircraft Security

Program (LASP), would implement burdensome

and costly security mandates on anyone operating

a general aviation aircraft with a maximum take-off

weight (MTOW) in excess of 12,500 pounds—even

if the aircraft is owner-flown.

At the same time, NATA continues to work

with Congress to help secure long-term funding

for FAA reauthorization, the Airport Improvement

Program (AIP), and research and development in

such areas as the Next Generation Air

Transportation System (NextGen). However,

NATA opposes any legislation that would impose

unreasonable user fees on the general aviation

community.

Among NATA's other concerns is what

appears to be a lack of standardization regarding

the interpretation of FAA regulations among the

agency's Flight Standards District Offices (FSDO).

In addition, the association is working to establish

a national standard of badge issuance for workers

with access to high security parts of airports.

Criteria for the issuance of badges often differs

from one airport authority to another.

Education and training are a focus of the

National Air Transportation Foundation (NATF), a

stand-alone organization within NATA. The pri-

mary mission of NATF is to enhance safety and

aviation business services through education and

training of employees. NATF is also working with

colleges, universities and technical schools to

develop courses and training materials specific to

the needs of the general aviation community. This

includes student scholarships and grants for teach-

ers to acquire aviation-related training materials in

order to ensure continued availability of qualified

people who will choose general aviation as a

career.

The Airline Services Council (ASC) was

formed in 2002 as an organization within NATA to

represent those companies whose main business

is providing ground services to scheduled airlines.

Those services include fueling, baggage, cargo and

aircraft handling, cleaning, catering, deicing, main-

tenance and security. Although the ASC caters to

the unique concerns of airline service firms,

NATA’s traditional membership has always includ-

ed companies that serve commercial air carriers,

but mostly for into-plane fueling and baggage han-

dling, as a secondary, rather than primary line of

business.

The ASC provides its member companies with

a single voice within the public policy arena con-

cerning issues that affect their viability and

3

Airline Services Council

profitability, and serves as a catalyst for industry

discussion and education. In that regard, the ASC

works to ensure that this critical and growing seg-

ment of the commercial aviation industry is fully

recognized by government and other entities, and

that airline services providers have the opportuni-

ty to comment on any proposed legislation or

regulations.

Currently, the ASC represents 20 domestic

and international firms—ranging in size from sin-

gle-location to multi-national companies—that

employ a combined workforce in excess of 90,000

at 450 airports worldwide and generate more than

$2.5 billion in annual sales.

To reduce costs at a time of global recession,

more established airlines, as well as start-up carri-

ers, will outsource aircraft service functions to

independent companies that can provide ground

handling packages on an a la carte or turnkey basis.

However, in tandem with this trend, airline servic-

es companies are being impacted by air carrier

bankruptcies and consolidations and their own

challenges, including fluid staffing levels, uneven

training, and security or environmental regulations,

which may be burdensome or of limited value.

Given the current uncertainties of the interna-

tional economy and today's security concerns, the

ASC's goals include the improvement of communi-

cations and information distributed to ASC

members and the development of staff contacts at

federal agencies, including the DOT, DHS and TSA.

The ASC is also working proactively with

these agencies to identify risks and opportunities

concerning any proposed regulatory changes. For

example, the ASC is in discussions with the TSA

on the implementation of new mandates to screen

all cargo to be carried on commercial airliners. In

2008, the ASC worked with the TSA to develop an

employee screening pilot program. The organiza-

tion is also working with the agency to develop a

secure web board or other notification procedures

allowing airline services companies direct access

to any security protocol that affects their opera-

tions at commercial airports.

On the legislative side, the ASC continues to

monitor the status of the latest war risk insurance

programs affecting its member companies and to

mitigate the impact of proposed environmental

legislation on the airline services industry.

Based on the FAA’s latest available forecast

data, released in February 2009, the total U.S. gen-

eral aviation fleet, including fixed-wing aircraft

and rotorcraft (helicopters), is projected to grow

from an estimated 234,015 aircraft as of the end of

2008 to 275,230 by 2025.

This growth trend follows four years of

decline that began in 2000 when the total fleet

was 217,533 aircraft, dropping to a low point of

209,606 in 2003. By 2004, the downturn was

reversed and the fleet expanded that year to

219,319 units. The FAA is forecasting a slight

increase in the fleet to 236,235 for 2009, despite

the economy, and projects an average annual

growth rate of 0.1 percent through 2025, factoring

4

The General Aviation Fleet

in new aircraft deliveries and the retirement of old-

er units.

By far, the total (fixed-wing and helicopter)

piston-driven fleet will continue to be the most

popular for general aviation operators, increasing

from an estimated 168,790 in 2008 to 170,475 by

2025—a one percent annual growth rate. A more

substantial 3.2 percent growth rate is predicted for

the turbine fleet, including jets and turboprop air-

craft, which stood at 28,145 in 2008. The total

turbine fleet, the FAA forecasts, is projected to

grow to 48,280 by 2025.

For the 2008-2025 period, the FAA estimates

that the two greatest areas of average annual

growth will be in the fixed-wing jet and the rela-

tively new sport plane category. For jets and sport

planes, the respective forecasted growth rates are

4.8 percent and 5.0 percent. The 2008 turbojet

fleet stood at 11,400 and is estimated to reach

25,165 by 2025. The sport plane fleet in 2008 stood

at 6,965, with a 15,865 estimated total in 2025.

The growth of the general aviation fleet will

also mean increasing numbers of flight hours.

According to the latest FAA forecast, total flight

hours are projected to go from an estimated

27,784,000 in 2008, to 37,846,000 by 2025, for an

average annual growth rate of 1.8 percent. Here,

too, the single-engine, fixed-wing piston fleet

dominates, accounting for 13,530,000 hours flown

in 2008, but projected to reach 14,643,000 hours

in 2025, for a 0.5 percent annual growth rate.

The sport plane group, on the other hand, is

expected to experience a 7.1 percent average

annual flight hours growth rate--the highest for the

2008-2025 period. For that time frame, sport

plane hours estimated at 305,000 hours in 2008,

are projected to come in at 971,000 by 2025. This

group is edging out jets, the second highest in

hours of the fixed-wing group, which had

4,043,000 hours in 2008, and are expected to

reach 9,569,000, for a 5.2 percent annual growth

rate in 2025. Turboprops will experience a 1.3

percent average annual growth rate between 2008

and 2025, going from 2,594,000 to 3,219,000.

Behind the jets, the piston helicopter group will

have an average annual growth rate of 3.9 percent,

reaching 1,355, 000 hours in 2025, up from the

703,000 hours in 2008. However, the turbine heli-

copter, at 2,484,000 flight hours in 2008, will

continue to account for more rotorcraft flight hours,

which the FAA estimates will hit 3,815,000 by 2025,

for an average annual growth rate of 2.6 percent.

Each type of general aviation aircraft--piston,

turboprop, jet, and rotorcraft--is designed to satisfy

one or more broadly defined mission categories—

personal, business, and corporate/utility. Personal

flying simply means that the aircraft is used for

non-business purposes, while business flying

refers to the use of the airplane—piloted by the

owner. Corporate and utility flying, while done for

business purposes, involves the use of a profes-

sional pilot who is compensated for the work.

According to a study of the general aviation

market, released in 2006 by consulting firm

MergeGlobal, of the 17.8 million hours flown by all

types of general aviation piston aircraft in 2005, 47

percent was for personal use and 40 percent was

for business-related transportation. Only 13 per-

cent of the total piston flight hours were devoted to

corporate transportation and general utility work.

For rotorcraft and turbine-powered fixed-wing

aircraft, however, the MergeGlobal study deter-

5

mined that usage was almost strictly business. Of

the 3.9 million hours flown by turboprops in

2005, corporate and utility use accounted for 73

percent, while 16 percent was devoted to business

travel. Just 11 percent was devoted to personal fly-

ing. On the jet side, corporate and utility missions

accounted for 81 percent of the 2.5 million hours

flown by those airplanes that year, with personal

use just 8 percent and business flying 11 percent.

Rotorcraft had the lowest percentage of per-

sonal use at just 4 percent of the 2.3 million hours

flown in 2005, with an equal percentage for busi-

ness flying. But, 92 percent of the flight hours

were for corporate or utility flying.

Global Fixed-Wing Market Trends For2008

In spite of the current global economic down-

turn, which began in December 2007, the

manufacturers of general aviation aircraft world-

wide enjoyed a record year for billings throughout

2008. As a result of huge orders booked prior to

the recession, the manufacturers, according to

GAMA data, billed out $24.8 billion, a 13 percent

increase over 2007's $21.9 billion, making 2008

the industry's fourth straight record year.

Of the global market, the U.S. share was

$13.35 billion, an 11.8 percent increase over the

$11.94 billion in 2007. Also in 2008, the U.S. gen-

eral aviation aircraft manufacturing industry

shipped 1,161 units on the export market, up 1.7

percent over the 1,142 shipped the previous year.

From a dollar standpoint, this translated into $5.86

billion in sales of exported aircraft--a 27.8 percent

increase over 2007's $4.59 billion. The total U.S.

share of the 2008 export market was 37.7 percent

in terms of shipments and 43.9 percent of the

billings.

However, as the recession took hold, actual

aircraft shipments worldwide declined by 7.6 per-

cent to 3,969 in 2008, compared to the 4,272 in

2007. That decline was accounted for by a fall-off

in piston aircraft sales.

The U.S., which is the world's largest produc-

er of general aviation aircraft, reflected the global

market trends, based on GAMA statistics. In 2008,

the U.S. accounted for 3,079 shipments, a 6.5 per-

cent decline from the 3,279 reported that year to

3,079 in 2008. That, too, was largely due to the

weakening piston aircraft market, which saw a

decline of 21.4 percent in 2008, as the recession

continued. That year, U.S. manufacturers shipped

1,791, down from the 2,174 in 2007. Worldwide,

the piston group accounted for 2,119 shipments in

2008, a 26.2 percent decline from the 2,675

shipped in 2007.

Other categories, however, remained strong.

Business jet shipments were up 15.6 percent in

2008, with 1,315 deliveries, versus the 1,138 in

2007. Turboprops also did well at 535, a 16.6 per-

cent increase over 2007's 459.

U.S.-built business jets and turboprops, on the

other hand, followed the increased global demand

for turbine-powered aircraft. For 2008, the busi-

ness jet group accounted for 955 aircraft, a 17.2

percent increase over the 815 shipped in 2007.

For turboprops, the U.S. shipped 333 aircraft in

2008, up 14.8 percent over the prior year's 290.

High oil prices and resulting increases in jet fuel

retail costs are among the chief reasons why the

industry is seeing a renewed interest in turbo-

props.

Business JetsThe world business jet fleet totaled 16,097

as of March 31, 2009, an increase of 6.1 percent

from the 15,174 in service by the same time in

2008, according to statistics from Utica, New

York-based JETNET. At the end of 2008, the FAA

put the U.S. business jet fleet at 11,400, but

expects that to more than double to 25,165 by

2025, for a 4.8 percent average annual growth

rate.

Flight hours for U.S. business jets were esti-

mated by the FAA to total about 4,043,000 in

2008, reaching 9,596,000 in 2025, for an average

annual growth rate of 5.2 percent.

According to the FAA Aerospace Forecast Fiscal

Years 2009–2025, despite a 16 percent increase in

business jet shipments in 2008, events related to the

global economy, especially during the last quarter of

2008 have dampened market prospects in this sec-

tor for at least the next few years. This is because

the market for business jets is largely dependent

upon the growth in the economy and corporate

profits, which have declined in the current environ-

ment.

Brian Foley Associates, a Sparta, New Jersey-

based consulting firm, is projecting that business

jet deliveries in 2009 will drop by about one-third

compared to 2008, with North America account-

ing for approximately 50 percent of total

6

shipments The company anticipates that a growth

trend could emerge in this segment by mid-year

2010, although at a slower pace than what the

industry has experienced in the recent past.

In its 10-year proprietary forecast, Brian Foley

Associates estimates negative to flat growth in

each of the three (small, medium, and large) cabin

segments. However, in general, the larger the cab-

in, the larger the compound annual growth rate.

Very Light JetsA newly-emerging category within general avi-

ation aircraft is known as the very light jet (VLJ).

Sometimes referred to as micro-jets or personal

jets, they are generally recognized as those

designed for single-pilot operation and a certified

MTOW of under 10,000 pounds.

As of March 31, 2009, JETNET statistics show

that 430 VLJs have been delivered. That is more

than double the number shipped by the same peri-

od in 2008, when deliveries totaled 204. The

Adam 700, Citation Mustang, Diamond D-JET,

Eclipse EA500, Embraer Phoenom 100 and 300

models and the PiperJet are the seven VLJ types on

which JETNET's research is currently based.

Because of their relatively inexpensive $1-2

million pricing, it was estimated that VLJs would

account for 500 new aircraft shipments per year

by 2010. As recently as 2007, industry experts sug-

gested the market for new VLJs could add 500

aircraft a year to the active fleet by 2010.

However, the bankruptcy of a major VLJ builder--

Eclipse Aviation—and the failure of DayJet, a large,

start-up air taxi service that had placed major

orders for VLJs, has throttled back the once opti-

mistic projections. For example, according to the

FAA, only 262 VLJs were delivered in 2008, instead

of the 400 predicted originally.

Still, the current FAA forecast assumes that

about 200 VLJs will enter the active fleet in the

U.S. over the next 2 years and then increase to a

rate of 270 to 300 aircraft a year through 2025.

That would put the total projected VLJ fleet at

4,875 by that year, when annual utilization is esti-

mated to average 432 hours per aircraft, taking

into account air taxi/shared use and private opera-

tor utilization.

Newtown, Connecticut-based Forecast

International, however, projects that between 375

and 400 VLJs could enter the market annually

through 2018. VLJ production rates are expected

to be impacted by the currently weak demand for

business jets and the difficulties of some manufac-

turers. However, deliveries should increase as the

market recovers and new models enter service. As

a result, it is estimated that VLJ deliveries could

reach 3,232 aircraft in the 2009-2018 period, pri-

marily to the owner-flown market and small

businesses. More specifically, the company pre-

dicts that VLJ buyers will be dominated by the

owner/operator who wants to upgrade from a pis-

ton or turboprop, as well as those who might be

considering a light business jet.

Forecast International also expects fractional

ownership plans to account for some VLJ sales,

primarily among more regional as opposed to the

large national firms. Conversely, sales to the once

promising air taxi market segment are likely to be

sluggish, although the company predicts that sig-

nificant long-term potential is there.

As product lines have expanded, Forecast

International sees VLJs falling into two sub-mar-

kets. The first comprises operators looking for an

alternative aircraft to more traditional light busi-

ness jets. Given their size and performance, the

Citation Mustang, the Embraer Phenom 100, the

HondaJet, and the S-33, are considered especially

well suited to this role. The second sub-market will

cater more to the owner-flown and air taxi servic-

es, rather than corporate flight departments and

most on-demand charter firms. For this segment,

the twin engine Eclipse 500 and the single-engine

D-JET, Vision SF50, and PiperJet are considered

promising.

TurbopropsWhile jets continue to dominate business air-

craft production, the high cost of fuel is causing a

number of general aviation aircraft operators to

look again at turboprops.

As of March 31, 2009, JETNET put the global

turboprop business aircraft fleet at 12,261, up

from the 11,817 from the same time in 2008, for a

3.7 percent increase. In its latest forecast, the FAA

puts the U.S. share at 9,600 in 2008, rising to

12,245 in 2025, for a 1.4 percent annual growth

rate. The FAA estimates that in 2008, general avia-

tion turboprop aircraft in the U.S. flew 2,594,000

flight hours, and is projecting an increase to

3,219,000 by 2025, for an annual growth rate of

1.3 percent.

7

Looking at a 10-year period from 2009-2018,

Forecast International is projecting deliveries of

4,628 turboprop general aviation aircraft, with

545 delivered by year-end 2009--exclusive of turbo-

prop regional airliners. The company estimates

that North America will account for about 50 per-

cent of the twin-engine models, but as much as

two-thirds of the single-engine aircraft. For the

global market, the projection is that 65 percent

will be captured by single-engine models, with the

twin-engine group accounting for the remaining

35 percent.

For the near term, 2009-2013, Forecast

International predicts that turboprop deliveries

will fall due to prevailing economic conditions,

but expects an upturn after that as production

cycles increase. As budgets will continue to be

constrained, more customers are expected to con-

sider turboprops as a viable alternative to jet

aircraft, given their higher fuel efficiency, lower

operating costs, and spacious cabin sizes. Forecast

International also cites a trend among light turbo-

props to enter the utility segment of the general

aviation market, which was traditionally the realm

of piston-powered aircraft. Among the reasons

given for this is the growing scarcity and increas-

ing price of avgas in many markets.

Piston-Engine AircraftGeneral aviation is virtually synonymous

with single- and twin-piston engine aircraft in

the public's eye. Since these airplanes are main-

ly owner-flown, their operation is considered an

indication of the direction in which the economy

is headed.

That, in fact, is being substantiated by data pub-

lished by the FAA in March 2009, which showed a

year over year decline in both single- and multi-

engine fixed-wing, U.S.-registered, piston aircraft

from 147,569 and 19,337 respectively in 2007 to

146,590 and 19,130 in 2008, the first full year of the

current recession. The FAA is further predicting a

decline in the annual growth rate of piston singles

of 0.6 percent in the 2008-2010 time frame and a

0.9 percent decline for the multi-engine models dur-

ing the same period. (These figures do not include

experimental or light sport aircraft, for which the

FAA maintains separate data).

Flight hours also showed some reduction. In

2008, single-engine piston aircraft in the U.S. flew

approximately 13,530,000 hours, down from the

13,571,000 in 2007. The multi-engine group

accounted for 2,591,000 hours in 2008, nearly

100,000 hours below the 2007 level of 2,686,000.

The FAA estimates that between 2008 and 2010,

the single-engine models will have a negative 1.4

percent annual average growth rate in flight hours,

while the twins will see a decline of 2.2 percent

for the same period.

Of the piston-driven aircraft, the single-

engine, fixed-wing fleet is expected to continue to

be the most popular, increasing from 146,590 in

2008 to 148,545 by 2025, for a 0.1 percent annual

growth rate. During this period, the number of

multi-engine, fixed-wing piston aircraft is expect-

ed to show a one percent decline from the 2008

estimated 19,130 to 16,005. Taken together, the

total fixed-wing piston fleet will have virtually zero

growth by 2025, when it is expected to reach

164,550, compared with 165,720 in 2008.

In terms of flight hours, the average annual

growth rate for the single-engine pistons is estimat-

ed to be 0.5 percent between 2008 and 2025,

although the twin pistons are projected to have a

negative 1.5 percent rate for the same period.

RotorcraftThe turbine-powered helicopter will contin-

ue to be the dominant player in the rotary wing

world, based on the latest FAA forecast. In 2008,

the turbine-powered rotorcraft fleet was 7,145,

and is expected to increase to 10,870 by 2025,

for a 2.5 percent annual growth rate. But piston-

driven helicopters are also expected to grow

during the 2008-2025 forecast period, from

3,070 to 5,925, for a 3.9 percent annual average

growth rate.

Although it represents the larger of the two

markets, the more immediate outlook for turbine-

powered helicopters is being heavily impacted by

the current global economy.

According to Honeywell's Eleventh Turbine-

Powered Civil Helicopter Purchase Outlook,

issued in February 2009, deliveries for the 2009-

2013 period are predicted to be flat to slightly

higher than they were for the 2004-2008 time

frame. This is due to a lack of available financing, a

spike in the inventory of current production used

models, and a weakness in new orders. For the

survey period, deliveries of new turbine-driven

helicopters worldwide should range between

3,500 and 4,500, of which 37 percent will be

8

accounted for by North America--the largest

regional share of the market. Of that number, 62

percent will be for light singles, as some operators

opt to trade down to less expensive models.

From 2009-2013, purchase expectations for

medium twin-engine models fell by 43 percent, 49

percent for intermediate twins, and 28 percent for

aircraft in the long cabin, light single-engine catego-

ry. Purchase expectations, however, rose by 29

percent for short cabin single-engine models, and 23

percent for light twins. Heavy twin-engine helicop-

ters are projected to account for only one to five

percent of the total share.

Although the market is changing, corporate,

emergency medical services (EMS), law enforce-

ment and utility missions combined are still

expected to account for more than 80 percent of

all global new civil rotorcraft sales during the five-

year forecast period--the same percentage cited in

Honeywell's 2008 survey. In North America, law

enforcement applications were the most frequent-

ly mentioned use category, accounting for 27.5

percent of all purchase planning. Corporate usage

came in at 24 percent, and EMS at 21 percent.

Worldwide, the corporate category represents

the largest segment, at about 40 percent of project-

ed new turbine helicopter sales for 2009. In that

group, close to 70 percent of all demand in Latin

America is for corporate use, followed by Asia at

over 50 percent, Europe at over 40 percent and

Africa/Middle East at 31 percent.

In second place behind the corporate catego-

ry, EMS applications will comprise about 14.7

percent of total worldwide demand, with law

enforcement at 14 percent.

Television news, tourism, firefighting and

training continue to report projected require-

ments for new helicopters over the next five

years, with tourism and sightseeing at 6.4

percent of global purchases, according to the

Honeywell survey.

Experimental Aircraft Within general aviation, experimental air-

craft are typically those built or restored by

aviation enthusiasts, often for use at air shows

and exhibitions.

Prior to 1994, the FAA general aviation aircraft

survey counted only those experimental aircraft

built without an FAA production certificate, but

starting that year it was expanded to include those

holding the agency’s “Experimental Airworthiness

Certificate.” This included amateur-built aircraft

and those used for research and development,

exhibition, racing and crew training, as well as

market survey or proof of concept purposes.

According to the most recent FAA data, exper-

imental aircraft have accounted for an average of 9

to 10 percent of the general aviation fleet since

1999. For 2008, the FAA estimated the size of the

U.S. experimental fleet at 24,100, or 10.3 percent

of the 234,015 in the total U.S. general aviation

fleet for that year. That number is expected to

reach 34,625 by 2025, for a 2.2 percent annual

growth rate. In that year, the total general aviation

fleet is estimated to reach 275,230 aircraft.

As a proportion of total general aviation flight

hours in 2008, experimental aircraft accounted for

1,316,000, or about 4.7 percent of the 27,784,000

estimated flight hours for that year. By 2025, the

FAA projects that some 2,017,000 flight hours will

be attributable to experimental aircraft, or 5.3 per-

cent of the 37,846,000 total general aviation flight

9

The fixed base operator (FBO) is the primary

provider of services to general aviation aircraft

operators. Long before there were scheduled pas-

senger airlines, there were FBOs. The first ones

were reportedly operating as early as 1914.

According to Aviation Resource Group

International (ARGI), a Denver-based worldwide

FBO marketing and consulting firm, any business

calling itself an FBO must operate under a lease

with an airport-owning authority and it must dis-

pense aviation fuel--Jet A and/or Avgas. In

addition, an FBO must perform at least one of four

other basic services: line service, which may

include tie-down and hangar services; technical

services, such as airframe and engine mainte-

nance; aircraft rentals, charters, aircraft

management and/or aircraft sales; and flight

instruction.

At some airports, FBOs have fueling contracts

with commercial passenger and cargo carriers or

with government entities, such as an Air National

Guard unit. At certain locations, FBOs also per-

form line maintenance, cabin cleaning, and

baggage handling for airline customers.

An ARGI survey completed in April 2009 put

the number of U.S. businesses meeting the mini-

mum criteria for an FBO at 3,138 (down from

3,346 in ARGI's 2006 survey). The survey includ-

ed those located at the more than 3,300 airports

with at least one paved runway that is 3,000 feet

or more in length. For those FBOs with over

$5,000,000 in annual revenue, the payroll per

facility ranged between $980,000 and $1,240,000,

with an average of 14 employees per location

(down from 18 in the 2006 survey). ARGI puts the

total employment for this group of companies at

31,200 (down 6,800 personnel from 2006 survey).

Fuel and maintenance are considered the top

two services provided by U.S. FBOs. In fact, the

2009 survey reveals that FBOs pump approximate-

ly 98 percent of the fuel consumed by general

aviation aircraft. The remaining amount is pumped

by corporate flight departments that operate their

own fuel farms or municipal airport authorities

that are direct sellers of aviation fuels. This per-

centage has increased by 3 percent from the 95

percent reported during the 2006 survey due to

the direct reduction in corporate self-fueling flight

departments and the corresponding cessation of

self fueling.

Based upon its own client profiles of FBOs

averaging over $5,000,000 in annual revenues,

ARGI reports that Jet A fuel accounts for 85 per-

cent of the fuel sold, with Avgas accounting for 15

hours estimated for that year, for a 2.5 percent

annual growth rate.

Light Sport AircraftSince 2005, the Light Sport Aircraft certifica-

tion and pilot's license has offered what is

considered to be a more affordable entree to avia-

tion, especially for the novice pilot. Light sport

aircraft can be no more than 1,320 pounds MTOW

(1,420 pounds for a seaplane), have no more than

two seats, and be powered by a single reciprocat-

ing engine, and flown under daylight conditions,

and for recreational (non-business) purposes only.

According to FAA data, 2,623 sport pilot certifi-

cates were issued as of December 31, 2008. The

agency projects that by 2025 the total number of

sport pilot certificates will reach approximately

20,600.

The FAA also predicts a growing number of

light sport aircraft and flight hours, as the antici-

pated popularity of this new entry level pilot

certificate increases. In 2008, the number of light

sport aircraft was 6,965, but that is expected to

reach 15,865 by 2025, for a 5.0 percent annual

growth rate. That, says the FAA, assumes the addi-

tion of 930 aircraft per year through 2013, and 300

annually through 2025. The fleet includes pur-

pose-built light sport models, as well as aircraft

converted from ultra-light trainers. Flight hours by

2025 in light sport aircraft are expected to reach

971,000, a 7.1 percent annual growth rate from the

305,000 hours in 2008.

10

Fixed Base Operators

11

percent. For those averaging under $5,000,000,

the ratio of avgas and jet fuel sold is about 50/50,

although at some very small FBOs, Jet A fuel sales

could be as low as 15 percent.

ARGI classifies FBOs as falling into one of

three groups — single location, regional chain or

national chain. It defines a chain as an FBO com-

pany with three or more operations. To be

considered a national chain in the U.S., an FBO

must have facilities in at least two distinct regions

of the country. A regional chain’s activities are

concentrated in one specific geographical area,

such as the Midwest, East Coast or Southwest.

Due to ongoing industry consolidation over

the past decade and a half, there are now four

national and six regional chains in the U.S. In 1990,

there were 10 national and 12 regional chains. The

consolidation of the FBO industry continues.

Special aviation service organization (SASO) is

a term that was developed by Aviation Resource

Group International (ARGI), in the early 1990s to

effectively classify non-FBO activities that support

the delivery of services to the general aviation

industry.

More specifically, an SASO is a non-FBO that

operates under a non-FBO lease and under restric-

tive provisions with the airport lessor, which

precludes it from performing full FBO services.

Services that are specifically excluded are the sale

of aviation fuel and aircraft and passenger ground

handling.

Examples of SASOs are companies that pro-

vide aircraft technical services; avionics repair and

installation; reciprocating engine repair and over-

haul; turbine engine hot section and overhaul;

aircraft component and accessory overhaul; stand-

alone flight schools; specialized vendors of pilots

supplies; aircraft detailing and cleaning services;

and aircraft in-flight catering services.

An ARGI survey completed in April 2009 put

the number of U.S. businesses meeting the mini-

mum criteria for a SASO at 667. Since no previous

census of the number of SASOs has been conduct-

ed, 2009 represents the baseline for the annual

ARGI SASO census.

Special Aviation Service Organizations (SASO)

Although the economy and the high fuel

spikes of 2008 impacted fuel sales to general avia-

tion aircraft operators, the most recent FAA

forecast predicts a modest long-term growth trend

for jet fuel, although it does predict negative long-

term growth for avgas consumption. However,

between 2008 and 2025, gains in jet fuel use are

expected to offset the losses in avgas pumped,

resulting in an average annual growth rate of 3.1

percent in the total amount of fuel pumped into all

segments of the U.S. general aviation fleet.

The FAA forecast estimates that in 2008, a

total of 1,898,500,000 gallons was consumed by

the entire U.S. general aviation fleet, including

fixed- and rotary-wing aircraft. That number

includes 348,900,000 gallons of avgas, and

1,549,700,000 jet fuel gallons. As the economy

continued to weaken, avgas gallons showed a

decline from the 350,900,000 pumped in 2007,

although jet fuel managed a small gain above that

year's 1,543,500,000.

By 2025, the forecast predicts that the amount

of avgas pumped that year will be 345,800,000 gal-

lons, while jet fuel will account for 2,868,000,000.

In fact, the forecast indicates that jet fuel pumped

into general aviation aircraft will exceed two bil-

lion gallons for the first time in 2014, with an

estimated 2,646,000,000 dispensed that year.

Fuel consumption rates, of course, will vary

by aircraft type, with the steepest drop--1.9 per-

cent--coming from the multi-engine, fixed-wing

piston-engine category, and the highest growth

rate--6.6 percent--predicted for the popular light

sport category. Business jets will account for sec-

ond place with a 4.1 percent average annual

growth rate, between 2008 and 2025.

Fuel

Continued on page 14

12

CALENDAR FIXED-WING FIXED-WING FIXED-WING FIXED-WINGYEAR PISTON SINGLE-ENGINE PISTON MULTI-ENGINE TURBO PROP TURBO JET

Historical

2000 200.8 108.4 176.3 736.72001 180.4 76.4 149.1 726.72002 177.9 74.2 152.3 745.52003 181.8 66.7 154.5 729.02004 167.5 80.1 167.0 1,004.92005 218.4 111.9 196.1 1,181.32006 208.2 104.8 190.1 1,303.92007 203.2 110.9 233.9 1,234.32008E 203.6 107.6 228.0 1,248.1

Forecast

2009 201.0 105.5 229.7 1,353.02010 199.9 103.9 229.7 1,435.52011 198.2 100.9 234.0 1,509.62012 194.6 96.9 238.2 1,581.32013 191.7 93.4 239.1 1,658.92014 189.6 90.1 242.4 1,735.82015 188.8 87.5 245.4 1,807.92016 188.9 85.6 245.4 1,877.22017 189.9 84.6 248.3 1,945.32018 191.0 82.9 252.1 2,011.22019 192.1 81.2 253.6 2,076.22020 193.2 79.4 256.7 2,143.82021 193.9 77.0 259.1 2,212.82022 195.5 75.8 260.0 2,283.12023 198.0 76.3 263.5 2,352.32024 200.8 76.8 266.7 2,421.92025 204.4 77.7 269.1 2,490.0

Avg. Annual Growth

2008-25 0.0% -1.9% 1.0% 4.1%

General Aviation Fuel Consumption (Millions of Gallons) Part One

13

CALENDAR ROTOR CRAFT ROTOR CRAFT EXPERIMENTAL SPORT TOTAL AVGAS TOTAL TOTALYEAR PISTON TURBINE OTHER CONSUMED JET FUEL FUEL

Historical

2000 8.4 59.0 15.2 NA 332.8 972.0 1,304.82001 7.2 42.6 15.3 NA 279.2 918.4 1,197.62002 6.9 40.5 17.8 NA 276.7 938.3 1,215.02003 6.8 48.8 17.1 NA 272.4 932.3 1,204.72004 7.9 59.0 17.5 NA 272.9 1,230.9 1,503.82005 13.3 71.7 17.7 0.0 361.3 1,449.2 1,810.42006 16.7 74.8 21.6 0.3 351.6 1,568.8 1,920.42007 12.8 75.2 22.6 1.4 350.9 1,543.5 1,894.42008E 12.8 73.5 23.3 1.6 348.9 1,549.7 1,898.5

Forecast

2009 13.2 73.8 23.8 1.9 345.4 1,656.5 2,001.82010 14.2 76.3 24.4 2.1 344.5 1,741.6 2,086.12011 15.2 79.0 25.2 2.4 341.8 1,822.5 2,164.32012 15.9 81.4 25.9 2.6 336.0 1,900.9 2,236.92013 16.8 83.8 26.7 2.9 331.5 1,981.8 2,313.32014 17.6 86.3 27.5 3.1 327.8 2,064.6 2,392.42015 18.2 88.7 28.1 3.2 325.9 2,142.0 2,467.92016 18.9 91.0 28.9 3.4 325.6 2,213.6 2,539.32017 19.5 92.8 29.6 3.6 327.2 2,286.4 2,613.62018 20.0 94.8 30.2 3.7 327.8 2,358.2 2,686.02019 20.6 96.6 30.9 3.8 328.5 2,426.4 2,754.92020 21.2 98.7 31.6 4.0 329.3 2,499.2 2,828.42021 21.8 100.8 32.3 4.1 329.0 2,572.7 2,901.72022 22.2 102.5 32.8 4.2 330.5 2,645.5 2,976.12023 22.8 104.6 33.5 4.4 335.0 2,720.5 3,055.52024 23.4 106.8 34.1 4.6 339.7 2,795.3 3,135.02025 24.1 108.9 34.8 4.8 345.8 2,868.0 3,213.8

Avg. Annual Growth

2008-25 3.8% 2.3% 2.4% 6.6% -0.1% 3.7% 3.1%

General Aviation Fuel Consumption (Millions of Gallons) Part Two

Source: FAA APO 2008 Estimates.

Note: Detail may not add to total because of independent rounding.

14

One of the most important contributions of

general aviation is providing on-demand, or as

needed, transportation for freight and passen-

gers—especially to airports that have no scheduled

commercial air carrier service.

In the U.S., most operators using general avia-

tion aircraft in a for-hire passenger and/or cargo

service are certificated under FAR Part 135. Under

FAR Part 135, on-demand charter passenger opera-

tions are limited to no more than 30 passengers and

a 7,500-pound payload. According to the FAA, as of

March 28, 2009, a total of 2,228 operators held

active Part 135 certificates exclusively, while another

19 had authority under both Part 135 and Part 121,

which applies to larger capacity and heavier aircraft.

Although air tour operations and aeromedical

services are also operated under FAR Part 135,

most activity is carried out by companies provid-

ing charter services for business and leisure

travelers and shippers of high-priority cargo. The

FAA classifies these companies as “air taxis.”

Most aircraft used for air taxi or charter servic-

es are turbine powered. The most recent FAA Part

135 list includes 11,195 aircraft, but according to

industry authority Air Charter Guide of

Cambridge, Massachusetts, a total of 5,110 fixed-

wing aircraft were used in on-demand charter as

their primary mission. The fleet comprised 1,557

single- and twin-engine aircraft, 905 turboprops,

410 turboprop airliners and 2,239 jets--including

22 very lights jets, and six airliner VIP-configured

jets. Along with the fixed-wing fleet, 630 helicop-

ters were flown in charter services—other than

aeromedical missions or air tours.

A large number of aircraft are deployed in

charter service on a part-time basis when not fly-

ing their primary mission, such as executive

transport. Air Charter Guide reports that approxi-

mately 6,000 aircraft in the U.S. are currently

flying charter at least some of the time. Of that,

about 85 percent—5,100—are made available for

charter under a management contract between

the owner and an aircraft management firm when

the owner is not using the aircraft. Of the aircraft

under management contracts, 40 percent are in

charter service under charter management con-

tracts in which the aircraft’s owner—instead of the

management company—furnishes the pilots. The

remaining 15 percent of the 6,000 aircraft fleet are

chartered to the end-user directly by the owner.

About 75 percent of the charter trips flown

are for business-related travel, with 15 percent for

leisure trips and 10 percent for small package and

aeromedical transport.

Due to the worldwide economic downturn,

on-demand charter slowed down considerably in

2008 and during the beginning of 2009. However,

according to Air Charter Guide, as of the second

quarter of 2009, charter operators began to report

more charter travel and a more cost-sensitive air-

craft type selection.

Regional Air Cargo Charter The growth of the large, integrated global

freight carriers, such as FedEx, UPS and DHL, have

brought about a segment of the on- demand charter

market in which the aircraft are used primarily as

Rotorcraft will also show a significant increase

in fuel consumption, with a 3.8 percent average

annual growth rate for piston-driven models, and a

2.3 percent growth rate for turbine engine-

equipped types.

On a big picture basis, the FAA statistics indi-

cated that in 2008, the 1,550,000,000 gallons of

fuel consumed by general aviation jets was about

7.4 percent of the total of 20,889,000,000 gallons

of jet fuel pumped, with the remainder--

19,339,000,000 gallons--accounted for by U.S.

domestic and international air carriers. By 2025, it

is projected that the air carrier portion will

account for 25,482,000,000, while the general avi-

ation jet fuel share will be 2,868,000,000, or

approximately 11.3 percent of the total jet fuel gal-

lons used that year.

With avgas all but gone from the air carrier

community, general aviation will account for near-

ly all product consumed. In 2008, air carriers

accounted for 2,000,000 of the 351,000,000 gal-

lons sold, for just under .6 percent of the total. By

2025, the air carriers are projected to remain at

2,000,000 gallons out of a total of 348,000,000 for

that year, putting their share at 0.575 percent.

On-Demand Charter

Continued from page 11

15

cargo haulers, feeding hubs and other large trans-

shipment points for these shipping companies.

According to the Regional Air Cargo Carriers

Association (RACCA), there are currently 50 com-

panies in the U.S. flying over 1,050 small aircraft as

dedicated freighters, mostly in short-haul regional

cargo service and mainly for the large air freight

carriers, as well as the U.S. Postal Service and

Federal Reserve. Fleet sizes range from as few as 3

aircraft to as many as 200. Most of those compa-

nies operate under FAR Part 135, which restricts

payload to 7,500 pounds unless an exemption is

granted to an individual operator. At this time,

four of those carriers hold FAR Part 121 authority,

allowing for heavier payloads.

Over the past few years, there has been a

major trend among regional air cargo operators to

replace older, twin-piston aircraft, such as the

Cessna 402 and Piper Navajo, with more recently

built, but mostly out of production, former twin-

turbine passenger airliners. According to data

supplied by the RACCA, there are currently 75

Beech 99s, 45 Beech 1900Cs, 25 EMB 110

Bandeirantes and 75 Fairchild Metroliners now in

dedicated regional cargo service. In addition,

FedEx verified that it owns 252 single-engine tur-

boprop Cessna Caravans and a combined 39 ATR

42/72 twin turboprops, all of which are leased to

seven independent operators that fly those air-

planes exclusively on behalf of the big freight

company.

A further evolution in the cargo fleet is taking

place due to the dwindling supply of quality, pre-

owned Bandeirantes and Beech 99 and 1900Cs. As

a result, more regional cargo operators are acquir-

ing such larger, former passenger turboprops as

the Saab 340, the Embraer EMB 120 Brasilia and

the ATR 42/72 family. According to the RACCA,

these three families now represent the major

growth sector in regional air cargo equipment,

with 40 ATR 42/72s, 7 Saab 340s, and 12 Brasilias

in dedicated U.S. freight service.

As a result of the depressed economy, RACCA

reports that the regional air cargo business in the

U.S. experienced a flat growth rate in revenue and

flight hours. The impact of the economy on retail

sales has resulted in fewer shipments generated by

Internet-based purchasing. The industry has also

been hurt by the growth of electronic bank check

clearance. That, however, has been somewhat off-

set by the ongoing trend toward lean inventories

with just-in-time deliveries and storage facility con-

solidation.

Aeromedical Services According to the Association of Air Medical

Services (AAMS), approximately 250 organizations

in the U.S. are currently engaged in the transport

of seriously ill or injured people to hospitals for

emergency care. When appropriately used, air

medical transport saves lives by bringing more

medical capabilities to the patient than are normal-

ly provided by ground emergency medical

services, along with faster transit times to the

appropriate specialty care location.

Air medical service providers usually operate

from an average of 1 to 2 bases, and operate a fleet

of 3 to 5 aircraft, although there are providers with

as few as 1 to as many as 30 aircraft. The helicop-

ter is the dominant fleet type, with approximately

750 aircraft in dedicated air medical service, trans-

porting over 400,000 patients per year. The AAMS

estimates that, separately, on-demand charter

operators fly an additional 100,000-110,000

patients per year on fixed-wing aircraft.

The helicopters deployed in air medical trans-

portation are a combination of newly-built and

those which have been purchased on the used

market and reconfigured for air ambulance serv-

ice. Employment by these organizations ranges

from fewer than 10 to as many as 100 individuals.

Roughly 60% of air medical flights are inter-

facility, that is, between a referring and a receiving

hospital. Some 30% of the flights respond to the

scene of an accident or injury, and the remaining

10% are classified as other, such as organ procure-

ment.

For those who do not need the use of an air-

plane full time, fractional plans offer all of the

benefits of private aviation, including on-demand

transportation, consistently high service levels and

an excellent safety record. The typical candidates

for fractional plan participation are businesses that

do not have their own flight departments, private

individuals, and corporate flight departments that

need additional lift but cannot justify the cost of

acquiring another aircraft. Historically, fractional

fleets are predominately light- to medium-size jets.

16

Fractional Ownership Companies

Bombardier Aerospace (Flexjet)

Make/Model #Aircraft Average #Share- #AircraftAge holders In Use

CHALLENGER 300 35 3.5 272 26.72CHALLENGER 604 8 5.1 55 5.63CHALLENGER 605 3 2.0 22 2.13LEARJET 40 7 4.3 59 5.09LEARJET 40XR 12 2.9 138 11.25LEARJET 45 11 7.8 38 3.19LEARJET 45XR 9 2.2 71 6.03LEARJET 60 9 7.8 41 3.44LEARJET 60XR 8 2.0 68 5.69Total 102 4.2 764 69.16Total Unique Shareholders 638

Source: JETNET

CitationShares

Make/Model #Aircraft Average #Share- #AircraftAge holders In Use

CITATION BRAVO 19 7.3 91 6.63CITATION CJ1 1 9.0 0 0.00CITATION CJ3 19 3.2 204 15.59CITATION EXCEL 10 6.6 73 4.66CITATION SOVEREIGN 11 3.5 125 9.31CITATION XLS 14 4.1 119 9.13Total 74 5.0 612 45.31Total Unique Shareholders 529

Source: JETNET

Continued on page 18

17

Flight Options, LLC

Make/Model #Aircraft Average #Share- #AircraftAge holders In Use

BEECHJET 400A 35 9.7 290 23.44CITATION X 9 9.8 80 5.97EMBRAER LEGACY 600 5 3.8 53 3.66HAWKER 400XP 18 3.7 166 14.31HAWKER 800XP 17 8.1 169 12.63HAWKER 800XPI 2 3.5 28 1.63HAWKER 850XP 2 2.0 22 1.47Total 88 7.5 808 63.09Total Unique Shareholders 653

Source: JETNET

Netjets (Executive Jet Sales Inc)

Make/Model #Aircraft Average #Share- #AircraftAge holders In Use

BOEING BBJ 3 9.7 0 0.00CITATION ENCORE 16 6.0 147 13.50CITATION ENCORE+ 10 2.0 85 6.50CITATION EXCEL 53 7.2 368 35.19CITATION SOVEREIGN 34 2.8 312 30.22CITATION ULTRA 49 11.8 80 6.31CITATION X 68 8.4 354 41.63CITATION XLS 43 3.4 308 30.59FALCON 2000 32 8.2 244 25.78FALCON 2000EX EASy 4 4.0 33 3.81GULFSTREAM G-200 35 4.2 300 29.81GULFSTREAM G-400 2 5.0 10 1.03GULFSTREAM G-450 14 2.7 99 10.91GUL7FSTREAM G-550 7 2.9 39 5.25GULFSTREAM G-IVSP 31 11.1 183 17.75GULFSTREAM G-V 7 8.4 53 6.20HAWKER 400XP 21 3.8 151 13.88HAWKER 800XP 33 8.5 184 22.03HAWKER 800XPI 5 3.6 34 4.06HAWKER 900XP 6 1.3 43 4.88KING AIR C90B 1 8.0 0 0.00Total 474 6.8 3027 309.33Total Unique Shareholders 2357

Source: JETNET

18

In 2008, 109 or 8.3 percent of the 1,315 total

new business jet deliveries that year went to the

fractional ownership plans. Of those 109, 72 per-

cent went to the combined Netjets and Netjets

Europe, the largest of the fractional plans, accord-

ing to an analysis by Lewisville,

Texas-headquartered Chase & Associates, based

on JETNET and GAMA data.

As the term fractional implies, participants are

brought together to buy into a specific airplane,

with each holding a fractional share entitling them

to usage of that aircraft on a predetermined hourly

basis, normally over a 12-month period. Usually,

the fractional unit available for purchase is one-

half, one-quarter, one-eighth, or one-sixteenth.

The higher the fraction or portion of the aircraft

purchased, the greater the number of hours that

the shareholder can fly over the term of the con-

tract, which is normally five years. At the

conclusion of the period, the owner can either

extend his contract or sell his shares back to the

fractional plan provider.

Fractional plan participants can hold shares in

more than one airplane at any given time. Those

whose holdings are limited to a single aircraft are

referred to as unique shareholders. The day-to-day

operational management of an aircraft involved in a

fractional plan is carried out by the plan’s operator,

who is responsible for the acquisition and manage-

ment of the aircraft on behalf of the shareholders.

This operator also provides flight crews and is

responsible for maintenance and scheduling.

All of this is paid for by the owners through

management fees and other ancillary charges,

such as hourly usage fees, which are separate from

the cost of the shares. Since the cost of the frac-

tional shares is directly tied to the procurement

cost of the aircraft, shares in a mid-size jet will cost

more than those for a light jet or twin turboprop.

The concept of aircraft fractional ownership

was introduced in 1986 by NetJets when just three

shares in a single aircraft were sold. According to

JETNET, as of March 31, 2009, a total of 5,049

shares in 931 aircraft had been sold in fractional

plans worldwide.

JETNET recognizes four major fractional com-

panies—NetJets, Bombardier Aerospace Flexjet,

Flight Options LLC, and CitationShares Sales, Inc.

— along with 21 minor firms. As of March 31,

2009, NetJets, including its NetJets Europe and

NetJets Middle East operations, was the largest,

with 474 aircraft and 2,357 shareholders. With 74

aircraft and 529 shareholders, CitationShares Sales

was the smallest of the majors. Together, the four

major players encompassed 738 aircraft and 4,177

shareholders, while the 21 minor providers had a

total of 193 aircraft and 872 shareholders.

Long-Range Impact of FractionalOwnership Plans

The currently depressed global economy has

not spared the once booming fractional owner-

ship plans. According to information provided by

Honeywell, the fractional providers took delivery

of 115 new jets in 2008, a four percent decrease

from the number added in 2007. Also in 2008, net

sales of fractional shares declined by 13 percent

compared to 2007, which was considered a strong

growth year.

Honeywell adds that as of the end of the first

quarter of 2009, just nine new jets came into the

fractional fleets, versus 28 added in the same peri-

od of 2008. Also, net share additions are off by

approximately 27 percent.

Given the impact of the economy, Honeywell

predicts that 2009 will be a slow growth year for

fractional expansion, with new aircraft additions

running at less than 50 percent of more recent

rates. The result of this is that the portion of the

backlog of business jet orders will most likely be

less than the 10-15 percent share the fractionals

commanded over a five-year period prior to 2009.

Nonetheless, Honeywell maintains that while

the recession has delayed and reduced the near-

term rate of fractional fleet expansion, the

slowdown has been based more on rescheduling

of deliveries than actual cancellations. In fact, the

OEM is optimistic that the rate of new aircraft

additions to the fractional plans will reach the

more typical level of 80-100 aircraft annually as the

economy improves.

Part of the increased deliveries will be driven

by replacements of older aircraft that will be

retired from the fleet, as well as the needs of an

expanding number of shareholders. Along with

this, the expansion of jet card programs that per-

mit prepayment of flight hour blocks will cause

more aircraft to be added since fractional operators

often provide lift for jet card customers.

Continued from page 16

19

In the U.S., flight training is carried out under

FAR Part 61 regulations or under a structured FAA-

certified FAR Part 141 or 142 program.

FAR Part 61 training is often provided by indi-

vidual, for-hire flight instructors, as well as some

flight schools. The curriculum is flexible and can be

tailored to a student’s specific needs, such as the

amount of time he or she can devote to training. In

addition, because the lesson content and sequence

can be periodically changed to accommodate the

student’s progress, Part 61 training is considered

ideal for the part-time student.

In contrast, the operation of a certificated Part

141/142 training program mandates that the flight

school use a detailed FAA-approved course outline

and students must meet specific performance stan-

dards. In order to maintain certification, the FAA

periodically audits Part 141/142 schools. The struc-

tured Part 141/142 programs tend to cater more to

the full-time flight student who is training for a

career as a professional pilot. Students enrolled in a

Part 142 program have the advantage of using simu-

lators or other complex training equipment

typically offered by large, multi-location companies

that serve the business and commercial aircraft

pilot.

A major advantage of the more structured cur-

riculum is that fewer training hours are needed for

specific ratings. As examples, the Part 141 or 142

program specifies a minimum of 35 hours of train-

ing for the private certificate, while under Part 61

pilots must train for 40 hours. For the commercial

certificate, the requirement under Part 141/142 is

190 hours compared to the 250 hours mandated

under a Part 61 program.

As of March 1, 2009, the FAA listed a total of

600 active flight schools under Part 141 and 207

active Part 142 training centers. For 2008, the FAA

reported that there were 93,202 certified flight

instructors. Since there is no certified course syl-

labus under Part 61, the FAA has no data on the

number of individual people or schools that train

under that rule.

The number of active U.S. pilots has fluctuated

over the past two decades. The FAA, which defines

an active pilot as a person with some type of pilot

certificate and a valid medical certificate, reported

that in 1983 the total number of U.S. pilots reached

718,004. By year-end 2006, according to the latest

FAA estimate, the number of pilots dropped below

600,000 for the first time in decades, hitting

597,109. That trend bottomed out in 2007, with

590,349 active pilots. However, the FAA estimates

that by the end of 2008, the number increased to

613,746, the highest of the past four years. That

number includes 146,838 airline transport pilots.

The FAA data for the forecast period of 2009-

2025 predicts that the pilot population will

continue in a growth mode in 2009 with 619,970,

about the same amount as it was in 2001, before

being impacted by a recession caused by the com-

bined dot com collapse and 9/11 terrorist attacks.

By 2025, the FAA projects a total of 665,550 pilots,

for an average annual growth rate of 0.5 percent

between 2008 and 2025. That will include 155,650

airline transport pilots.

Pilots and Flight Training

20

The number of student pilots is also expected

to grow, but at a marginal average annual rate of just

.04 percent between 2008 and 2025. The FAA's

estimated number of student pilots was 80,989 at

the end of 2008, but that number will shrink to

72,050 by year-end 2010, before some recovery

takes place in 2011. In that year, the student group

is expected to reach 72,800. By 2025, the FAA fore-

casts a student pilot population of 86,600.

The number of pilots holding the Airline

Transport Pilot (ATP) certificate, which is the

most advanced pilot rating, is also expected to

expand modestly, with an estimated average annu-

al growth rate of .03 percent between 2008 and

2025. At year-end 2008, the ATP group stood at

146,838. It is expected to reach 155,650 by 2025.

Instrument-rated pilots, who are those quali-

fied by the FAA to fly in weather conditions

requiring the aid of certain aircraft instruments,

had been in decline since 2003 when there were

315,413, dropping to 309,333 in 2006. However,

that group began trending upward by 2007, with

an FAA estimate of 325,247 at the end of 2008.

The FAA expects that by 2025, there will be

356,300 instrument-rated pilots, representing an

average annual growth rate of 0.5 percent

between 2008 and 2025.

For the rotorcraft pilot group, growth nearly

doubled between 2000, when there were 7,775,

to an estimated 2008 total of 14,647. The current

forecast calls for a 1.2 percent average annual

growth rate between 2008 and 2025, when pro-

jections call for 17,830.

For most student pilots, the private pilot rat-

ing is the first step toward achieving the more

advanced ratings that are the prerequisite for a

career as a professional pilot. Possibly due to the

cost and time involved in pursuing flight instruc-

tion, the FAA predicts in its latest forecast that the

growth in the number of pilots holding a private

license will remain essentially flat between 2008

and 2025. The estimated number of pilots with the

private license in 2008 was 222,596. By 2025, that

number is estimated to be 223,400.

In some cases, students have taken advantage

of two newly established ratings to get a foothold

in flying, avoiding some of the costs and time

involved in getting the private license. The first is

the recreational pilot certificate, which was estab-

lished by the FAA in 1989. It requires just 30 hours

of instruction, as opposed to the minimum of 40

hours for the private certificate. But it is highly

restrictive. Pilots with this type of certificate must

fly under daytime, clear weather conditions and

remain within 50 miles of their home base and

within airspace that requires no radio communica-

tion. The recreational pilot cannot carry more

than a single passenger and may only fly an aircraft

with four or fewer seats, powered by no more

than a 180- hp engine. There have been few takers

for this certificate, with an estimated 252 holders

in 2008 and about the same--as little as 250--for its

entire 2009-2025 forecast period.

In 2004, the FAA created another rating below

the level of the private license in response to those

whose interest was in flying the emerging class of

certified light sport air-craft (LSA) or older aircraft

that meet the same LSA certification limitations.

Known as the sport pilot certificate, its major

advantage is that it is the only rating that will

accept a valid driver’s license in lieu of an FAA

medical certificate as proof of fitness to fly. In addi-

tion, it requires a minimum of just 20 hours of

flight instruction. The sport certificate holder can-

not fly above 10,000 feet mean sea level (MSL) or

fly under conditions other than daytime, clear

weather flight conditions.

Given the fact that fewer hours are required

for training and the FAA medical certificate is

waived, the FAA estimates that the sport pilot

group could have a 12.9 percent average annual

growth rate between 2008 and 2025, the highest

of all the pilot certificate types. Since the first

licenses in this category were issued in 2005,

when there were 134 by year end, an estimated

2,623 had been issued in 2008. The FAA projects

that by 2025, as many as 20,600 sport pilot certifi-

cates will be in effect.

General Aviation IndustryCompensation

General aviation is a significant contributor to

the U.S. economy, especially when factoring in

salaries and benefits. In order to get a perspective

on this, NATA commissioned Association

Research, Inc. of Rockville, Maryland, to conduct a

wide-ranging survey of the general aviation indus-

try, focusing on all aspects of wages, salaries and

benefits. The 2008 NATA Compensation Survey,

published in May 2008 and available for purchase,

was based on responses from 296 companies—sub-

mitted online and via fax. Included were a total of

20Continued page 23

2121

AS OF STUDENTS RECREATIONAL SPORT PRIVATE COMMERCIAL AIRLINE DEC. 31 PILOT TRANSPORT

Historical

2000 93,064 340 NA 251,561 121,858 141,5962001 94,420 316 NA 243,823 120,502 144,7022002 85,991 317 NA 245,230 125,920 144,7082003 87,296 310 NA 241,045 123,990 143,5042004 87,910 291 NA 235,994 122,592 142,1602005 87,213 278 134 228,619 120,614 141,9922006 84,866 239 939 219,233 117,610 141,9352007 84,339 239 2,031 211,096 115,127 143,9532008E* 80,989 252 2,623 222,596 124,746 146,838

Forecast

2009 76,300 250 6,500 226,650 125,400 147,6502010 72,050 250 8,500 224,400 124,450 148,4002011 72,800 250 10,200 218,050 125,050 149,1002012 73,550 250 11,000 212,500 123,100 149,7002013 74,300 250 11,550 210,250 120,000 150,3002014 75,250 250 12,150 209,850 117,300 150,8502015 76,200 250 12,800 210,250 119,050 151,3502016 77,200 250 13,450 211,100 120,800 151,8002017 78,200 250 14,150 212,200 122,550 152,2502018 79,200 250 14,900 213,450 124,450 152,7002019 80,200 250 15,650 214,750 126,350 153,1502020 81,250 250 16,450 216,100 128,350 153,6002021 82,300 250 17,200 217,500 130,400 154,0502022 83,350 250 18,000 218,950 132,450 154,4502023 84,400 250 18,850 220,400 134,500 154,8502024 85,500 250 19,700 221,900 136,600 155,2502025 86,600 250 20,600 223,400 138,700 155,650

Avg. Annual Growth

2008-25 0.4% -0.0% 12.9% 0.0% 0.6% 0.3%

Active Pilots by Type of Certificate Part One

22

AS OF ROTORCRAFT GLIDER TOTAL TOTAL LESS INSTRUMENT RATED DEC. 31 ONLY ONLY PILOTS AT Pilots PILOTS 1

Historical

2000 7,775 9,387 625,581 483,985 311,9442001 7,727 8,473 619,963 475,261 315,2762002 7,770 21,826 2/ 609,936 465,228 317,3892003 7,916 20,950 625,011 481,507 315,4132004 8,586 21,100 618,633 476,473 313,5452005 9,518 21,369 609,737 467,745 311,5002006 10,690 21,597 597,109 455,174 309,3332007 12,290 21,274 590,349 446,396 309,8652008E* 14,647 21,055 613,746 466,908 325,247

Forecast

2009 15,390 21,830 619,970 472,320 323,5002010 15,680 21,980 615,710 467,310 321,8002011 15,810 22,080 613,340 464,240 320,1002012 15,870 22,120 608,090 458,390 321,8002013 15,890 22,150 604,690 454,390 323,5002014 15,900 22,170 603,720 452,870 325,2002015 15,910 22,190 608,000 456,650 326,9002016 15,940 22,220 612,760 460,960 328,6002017 16,050 22,240 617,890 465,640 331,1002018 16,200 22,260 623,410 470,710 333,6002019 16,390 22,290 629,030 475,880 336,2002020 16,600 22,310 634,910 481,310 338,8002021 16,820 22,350 640,870 486,820 342,2002022 17,060 22,390 646,900 492,450 345,7002023 17,310 22,440 653,000 498,150 349,2002024 17,570 22,480 659,250 504,000 352,7002025 17,830 22,520 665,550 509,900 356,300

Avg. Annual Growth

2008-25 1.2% 0.4% 0.5% 0.5% 0.5%

Active Pilots by Type of Certificate Part Two(*SOURCE — FAA U.S. Civil Airmen Statistics)

*E. Estimate1 Instrument-rated pilots should not be added to other categories in deriving total.2 In March 2001, the FAA Registry changed the definition of this pilot category. It added approximately 13,000 to this pilot category.

Note: An active pilot is a person with a pilot certificate and a valid medical certificate.

23

13,024 employees, of which 11,073 (85 percent)

held full time positions. The survey respondents

represented all seven FAA regions, as well as com-

munities of all sizes—classified as large, moderate,

or small. Here are a few examples of the survey

highlights:

For all companies responding, payroll aver-

aged 19.8 percent of gross sales, with as much as

24.8 percent for companies earning $1 million or

less, and 17.1 percent for the those with annual

sales in excess of $10 million.

For full-time, hourly employees, the top aver-

age wage—$26.27 per hour—was paid to

inspectors, with computer programmers in sec-

ond place at $25.46 per hour. A&P mechanics

came in third at an average hourly wage of $24.05.

At the lower end of the pay scale were line service

technicians, with under three years of service,

whose compensation averaged $11.77 per hour.

On the management side, the average annual

salary for a general aviation company president in

2007, according to the survey, was $109,929—

based on responses from 109 company presidents.

The average was predicated on a low of $40,160 at

companies with sales of $1,000,000 or less, to an

average of $149,674 at 35 companies with over

$10 million in sales.

Chief Flight Instructor was the lowest paid man-

ager position with an average salary of $3,631 per

month. This was followed very closely by the

Customer Service Manager ($3,701). Flight

Operations Manager and General Manager were the

highest paid with average monthly salaries of $7,679

and $7,126 respectively.

With on-demand charter a growing part of

general aviation, and flight schools a significant

segment, the survey also looked at pilot and flight

instructor pay.

Pilot compensation data was figured on the

basis of pay per flight-hour as well as a monthly

salary. Among the data generated, average pay per

flight-hour ranged from $23.36 for a turboprop

copilot to $41.51 for the Captain of a medium-size

jet. Flight instructors on single-engine aircraft

earned $21.50, with multi-engine instructors at

$24.35.

Benefits included health insurance plans, with

over half of the companies surveyed, 63.5 percent

favoring health maintenance organizations

(HMOs). Nearly 50.6 percent of respondents had a

Section 125 Flexible Spending Account, and 64

percent had a 401(K) Plan—to which 59.3 percent

of the companies surveyed matched at least some

of the employee contribution. Other benefits not-

ed in the survey included group life, long-term

disability, accidental death and dismemberment,

dental, vision and loss of license insurance.

A major advantage of a general aviation air-

craft is its ability to fly to thousands of smaller

airports across the country. In contrast, scheduled

air carriers fly only to those places where the eco-

nomics of operation justify service.

The latest statistical information published in

September 2008 by the U.S. Department of

Transportation's Research and Innovative

Technology Administration (RITA), Bureau of

Transportation Statistics, shows a general decline

in what it calls certificated airports since the

immediate post-deregulation period of the U.S. air-

line industry. RITA defines a certificated airport as

one that serves commercial air carriers using air-

craft with at least nine seats.

To illustrate, in 1980, just two years after air-

line deregulation, commercial carriers were

serving 730 U.S.-certificated airports. In 2007, the

latest year for the RITA data, the number of certifi-

cated airports had fallen to 565, roughly a 23

percent decline. For that year, the entire U.S. air-

port group was 20,341, up from 15,161 in 1980.

(More recent FAA data, however, shows that as of

year-end 2008, the U.S. total was slightly less at

19,930).

Airports with FAA-operated or contracted

control towers have handled a declining number

of operations since the all-time high of 40 million

in 1999. According to FAA data, in 2007, the latest

full year for which information was available, gen-

eral aviation operations at those airports totaled an

estimated 33,135,000, about the same as the prior

year's 33,131,000 but below the 34,161,000 for

2005.

Airports

Continued from page 20

24

United States Total 19,930

U.S. Civil and Joint Use Airports, Heliports, Stolportsand Seaplane Bases by Type of Ownership —

As of December 31, 2008(Source — FAA)

U.S. Public Use Facilities:U.S. Total 5,202

Part 139* 560

*(Part 139 airports are certificated

for air carrier service.)

Military Usage OnlyTotal 277

Civil Private Usage Landing Facilities:Total 14,451

Airports 8,476

Heliports 5,423

Seaplane Bases 296

Gliderports 31

Stolports 79

Balloonports 13

Ultralight Flightparks 133

2008 Airport Name GA GA GA GA Ops as Total Ops Ranking Code Operations Operations Operations % of including

Itinerant Local Total Total Ops Comrcl. & Military

1 VNY Van Nuys - CA 239,824 108,602 348,426 97.00% 359,299

2 DVT Phoenix Deer Valley - AZ 121,627 214,203 335,830 98.10% 342,163

3 RVS Richard Lloyd Jones - OK 128,885 184,121 313,006 98.30% 318,270

4 DAB Daytona Beach - FL 216,057 88,936 304,993 96.50% 315,963

5 FFZ Falcon Field - AZ 125,809 164,315 290,124 98.10% 295,810

6 TMB Kendall-Tamiami 129,122 154,229 283,351 98.80% 286,799Executive Airport - FL

7 LGB Long Beach - CA 124,999 155,141 280,140 86.90% 322,394

8 APA Centennial Airport - CO 121,161 134,711 255,872 85.30% 300,131

9 PRC Ernes A. Love Field - AZ 77,967 174,208 252,175 98.20% 256,788

10 HIO Portland-Hillsboro Airpor - OR 72,843 168,229 241,072 97.00% 248,400

11 SEE Gillespie Field - CA 95,931 130,280 226,211 99.70% 226,793

12 CHD Chandler Municipal Airport - AZ 69,469 147,580 217,049 98.60% 220,023

13 MYF Montgomery Field Airport - CA 115,050 95,965 211,015 98.50% 214,136

14 BFI Boeing Field King County 121,695 88,358 210,053 74.60% 281,658Airport - WA

15 IWA Williams Gateway Airport - AZ 66,771 131,462 198,233 93.10% 212,850

16 SNA John Wayne-Orange County - CA 106,404 84,669 191,073 64.80% 294,915

17 SFB Sanford-Orlando - FL 89,054 101,202 190,256 93.10% 204,367

TOP 50 U.S. General Aviation Airports for 2008

2008 Airport Name GA GA GA GA Ops as Total Ops Ranking Code Operations Operations Operations % of including

Itinerant Local Total Total Ops Comrcl. & Military

18 DWH David Wayne Hooks 78,629 99,096 177,725 97.20% 182,803Mem. Airport - TX

19 SDL Scottsdale Airport - AZ 100,200 66,972 167,172 93.80% 178,259

20 EVB New Smyrna Beach 77,135 87,460 164,595 99.60% 165,242Municipal - FL

21 CRQ McClellan-Palomar Airport - CA 105,597 57,288 162,885 92.50% 175,998

22 PDK Dekalb-Peachtree Airport - GA 113,142 45,158 158,300 90.30% 175,208

23 HWO North Perry Airport - FL 55,018 102,625 157,643 99.90% 157,826

24 VRB Vero Beach Municipal 86,021 71,496 157,517 97.30% 161,878Airport - FL

25 PAO Palo Alto Airport - CA 63,613 92,650 156,263 98.60% 158,477

26 RYN Ryan Field Airport - AZ 56,088 99,094 155,182 97.90% 158,448

27 GYR Phoenix Goodyear Airport - AZ 72,136 82,665 154,801 94.80% 163,311

28 FXE Fort Lauderdale ExecutiveAirport - FL 126,171 25,586 151,757 91.70% 165,516

29 SSF Stinson Municipal Airport - TX 47,552 102,043 149,595 95.70% 156,275

30 GFK Grand Forks Int'l - ND 11,553 137,744 149,297 66.20% 225,474

31 OMN Ormond Beach Municipal 67,709 80,063 147,772 100.00% 147,787Airport - FL

32 FRG Republic Airport - NY 82,383 64,639 147,022 92.10% 159,588

33 LVK Livermore Municipal 62,992 82,724 145,716 99.10% 147,099Airport - CA

34 MRI Merril Field Airport - AK 56,315 88,858 145,173 90.20% 160,884

35 BED Laurence G Hanscom 82,670 62,426 145,096 83.80% 173,095Field Airport - MA

36 PTK Oakland County Int'l Airport - MI 72,027 70,893 142,920 92.60% 154,408

37 CMA Camarillo Airport - CA 72,487 70,280 142,767 97.20% 146,929

38 TIX Space Coast Regional 60,037 82,669 142,706 99.60% 143,259Airport - FL

39 ISM Kissimmee Gateway 78,664 63,431 142,095 97.60% 145,651Airport - FL

40 TOA Zamperini Field - CA 70,687 69,370 140,057 99.50% 140,738

41 VGT North Las Vegas Airport - NV 56,929 82,626 139,555 92.30% 151,178

42 ISP Long Island Mac Arthur Airport - NY 61,135 78,268 139,403 83.50% 167,020

43 BJC Rockymountain Metro- 63,022 74,224 137,246 96.30% 142,590politcan Airport - CO

44 FPR St. Lucie County Int'l Airport - FL 75,127 61,879 137,006 99.10% 138,183

45 HWD Hayward Executive 57,258 78,848 136,106 98.40% 138,384Airport - CA

46 PUB Pueblo Memorial Airport - CO 51,874 82,548 134,422 92.20% 145,827

47 RHV Reid-Hillview Airport - CA 48,440 82,696 131,136 99.80% 131,452

48 PAE Snohomish County 62,575 65,389 127,964 95.90% 133,436Airport (Paine Field) - WA

49 MLB Melbourne International 76,101 51,355 127,456 94.90% 134,301Airport - FL

50 GEU Glendale Municipal - AZ 43,978 82,023 126,001 98.70% 127,725

TOP 50 U.S. General Aviation Airports for 2008

25General Aviation operations as defined by the FAA, based on traffic operations counted in Air Traffic Activity Data System (ATADS). Source: FAA

Aircraft are maintained by FAA-approved facil-

ities certified under FAR Part 145. As of March 1,

2009, there were 4,871 repair stations in the U.S.

That number is applicable to all aircraft, as the

agency does not categorize repair facilities in

terms of service to general aviation, scheduled air

carriers, or military aircraft.

FBOs are usually among the first sources of

maintenance, repair and overhaul (MRO) turned to

by the general aviation aircraft operator. According

to the annual FBO census of the Aviation Resource

Group International (ARGI), of the 3,138 FBOs in

the U.S. as of April 2009, approximately 58 percent

(down from 65 percent in its 2006 survey) provided

at least some level of aircraft maintenance. Of that

group, 31 percent (down from 35 percent in the

2006 survey) offered maintenance beyond the line

level. ARGI also estimated that as of April 2009

some 17 percent (up from 12 percent in the 2006

survey) of those FBOs with annual revenue in

excess of $5,000,000 offered maintenance services.

In July 2008, AeroStrategy, a well known Ann

Arbor, Michigan-based international aviation con-

sulting firm, released a forecast of the business

aviation segment of the MRO market, which con-

centrated on turbine-powered fixed-wing aircraft

and helicopters.

According to

AeroStrategy, $7 billion

was spent on mainte-

nance involving

fixed-wing general

aviation turbine air-

craft in 2007. That

year, North America

had the largest share

at 74 percent, and

accounted for 71

percent of the

27,100 turbine-driv-

en, world-wide general

aviation fleet. This is expect-

ed to increase 6.2 percent

annually to $9.5 billion by

2012, with North America still

projected to account for the

majority of activity.

AeroStrategy divided the

maintenance market into

four segments for analysis--

component, engine, airframe, and modification

work. Of that, MRO activity involving compo-

nents, such as avionics and landing gear,

accounted for the largest share--$2.1 billion in

2007, with engine work at $1.8 billion and air-

frame and modification work, such as an interior

refurbishment, at $1.6 and $1.5 billion respective-

ly. Of the four segments, engines are projected to

account for most of the growth, with 30 percent--

another $750 million--by 2012. Modification work

will be in second place, increasing by 11 percent

or $660 million by 2012.

AeroStrategy's forecast indicates that corpo-

rate flight departments will account for 45 percent

of maintenance expenditures for the fixed-wing

turbine fleet, followed by on-demand charter and

cargo at 28 percent. Fractional plans will account

for eight percent, with government operators at

five percent.

For turbine-powered helicopters, the

AeroStrategy forecast puts the worldwide commer-

cial fleet at 23,000 in 2007, accounting for $5.3

billion in MRO activity that year. Of that, $1.6 billion,

or 23 percent of the work was performed in North

America. The global total is projected to reach $6.8

billion in 2016—for a 2.8 percent annual growth

rate—when the fleet is expected to reach 31,700.

For helicopters, the component, airframe,

engine and modification shares of the sales in

2007 were 40 percent, 30 percent, 22 percent and

eight percent, respectively. Through 2016, engine

and airframe work is projected to increase by

three percent annually, while components and

modifications will grow by 2.8 and 2.2 percent

respectively.

Continuing a trend of recent years, the original

equipment manufacturers (OEMs) will assume a

dominant share--about 35 percent--of the mainte-

nance and repair market. According to AeroStrategy,

the engine OEMs now control 45 to 50 percent of

the overhaul market for their products, with another

35 to 40 percent going to OEM-licensed service cen-

ters. The remaining 10 to 15 percent is held by

independent, niche operators specializing in older,

so-called sunset engines.

Independent maintenance facilities, accord-

ing to the AeroStrategy study, will continue to be a

factor in the overall maintenance market, but focus

mostly on mature, out of production aircraft and

systems.

Maintenance/Repair Stations

26

In certain scenic parts of the United States,

sightseeing flights are an important part of the

local tourist industry. The United States Air Tour

Association (USATA), a Washington, DC-based lob-

bying group for the industry, reports that the U.S.

air tour industry comprises approximately 275

operators flying close to 1,000 aircraft and employ-

ing about 3,000 people. Estimates are that the air

tour industry contributes about $625 million annu-

ally to the U.S. economy.

The USATA itself represents only commercial

FAR Part 135 and 121 air tour operators that provide

air tour services as their full-time business and oper-

ate mostly in Alaska and Hawaii and over the Grand

Canyon. However, the association defines a com-

mercial air tour operator as a company that flies

sightseeing trips on at least a part-time basis. The

part-time operator devotes 10 to 15 percent of his

flight hours, on average, to the air tour business,

with the remainder involved with some other activi-

ty such as flight training. For the combined full- and

part-time tour operators, the air tour fleet in the U.S.

averages 3.5 aircraft per company or individual, rep-

resenting an investment of $481.25 million in

aircraft and related equipment.

The total number of flight hours devoted to

sightseeing tours is in excess of 428,500 annual-

ly, accounting for over 285,700 actual flights,

each with an average duration of about 90 min-

utes. The typical sightseeing flight averages

about seven passengers. A total of two million

passengers are served annually on an industry-

wide basis, equally divided between foreign and

domestic passengers. The growth in the number

of international passengers has mostly offset the

drop off by Americans who are curtailing travel

due to the current recession.

In the United States, the air tour business is

concentrated mainly in Alaska, particularly around

Denali National Park, the Grand Canyon, and at

two locations in Hawaii--Haleakala National Park on

Maui and Hawaii Volcanoes National Park on the

Island of Hawaii. While the Grand Canyon and

Alaska operations include a 50-50 mix of fixed-

wing aircraft and helicopters, air tours in Hawaii

are almost exclusively performed by helicopter.

The USATA counts nine full-time operators in

Hawaii, five in Alaska and 10 for the Grand Canyon.

With ongoing pressures to reduce the impact

of noise over national parks and other wilderness

areas, the industry is continuing to move toward

the acquisition of quieter aircraft. New national

standards have also resulted in continued safety

enhancements.

Air Tour Operators

Since the early 1920s, general aviation air-

craft have played an important role in the

agriculture industry in the U.S., as well as

throughout the world. Aircraft used for agricul-

tural purposes, initially known as crop dusters

because they “dusted” farmers’ fields with dry

chemical insecticides, now dispense mostly liq-

uid products but also dry granular products and

seeds. In fact, according to data supplied by the

Washington, D.C.-based National Agricultural

Aviation Association (NAAA), aerial application

now accounts for 25 percent of the various prod-

ucts applied commercially for crop production

and protection in the U.S.

Originally, the aircraft used for aerial applica-

tion were war-surplus pistons, such as the

open-cockpit Stearman biplane. By the 1950s,

purpose-built aircraft were introduced. Today, the

newest and biggest planes dispense as much as

800 gallons of product and are powered by turbo-

prop engines. GPS technology is now used to help

pilots maintain pinpoint accuracy when applying

these materials

In order to be in business, aerial applicators

must hold an FAA Part 137 certificate. Pilots must

have a commercial pilot's license, as well as a letter

of competency to work as an agricultural pilot.

According to a 2007 estimate, the NAAA's

most recent, there were approximately 1,625 busi-

nesses operating in the U.S. agricultural aviation

industry, delivering airborne application of fertiliz-

ers and pesticides on crops. The estimate put the

average fleet size per operator at 2.2 aircraft,

employing approximately 2.7 pilots per operation.

Agricultural Aviation

27

In 2007, the total number of aircraft used in

U.S. agricultural applications stood at 4,162,

according to FAA statistics cited by the NAAA. In

the fixed-wing category, which was the largest,

there were 2,436 piston aircraft—of which 2,398

were single-engine—and 1,046 turbine aircraft.

The U.S. agricultural rotorcraft fleet included 236

piston and 349 turbine models. In nearly all cases,

these aircraft are flown as single-pilot operations.

The NAAA estimates that most of the agricultural

fleet is based at privately owned airstrips, although

many are based at public-use airports.

The NAAA also points out that many of these

businesses work in other specialized areas, includ-

ing fire fighting, cloud seeding, motion pictures,

documentary production, and animal tracking, as

well as in the support of the timber industry and

the control of pests that threaten public health.

Despite the hazardous nature of the business,

accidents and fatalities in the aerial application cat-

egory are very low, according to NAAA, which

based its data on NTSB accident reports for the

years 2003-2007. For that period, there were an

estimated 6.80 accidents per 100,000 flight hours,

with a fatality rate of 0.73.

The agricultural aviation business is undergo-

ing changes, which include an ongoing trend over

the last several decades toward larger aircraft and a

gradual phase out of piston-driven models in favor

of turbine aircraft. A major incentive for this,

according to the NAAA, is that these more capable

aircraft can replace several older models, thus cut-

ting ground and aircrew costs. The switch to

larger aircraft has also led to considerable industry

consolidation and a decrease in the number of

small or part-time operators.

Corporate aviation involves the operation of

an aircraft by a company for business purposes

and flown by a professionally trained in-house or

contract pilot. That pilot is paid solely to operate

the aircraft, and holds no other job within the

company. In the U.S., corporate aviation is carried

out under FAR Part 91 regulations, which pertain

to private, not-for-hire flying.

Although the global economy has caused

some businesses to eliminate or scale back their

corporate flight departments, a positive growth

trend in business aircraft ownership is still evi-

dent, based on JETNET statistics. According to

JETNET, there were 17,202 companies worldwide

operating 29,041 aircraft as of the end of the 2009

first quarter. That represents a 4.8 percent

increase over the similar period in 2008. Of the

worldwide group, the U.S. continued to represent

the lion's share, with 10,993 firms flying 17,648 air-

craft.

Helicopters and fixed-wing aircraft are the

backbone of the aerial wildland forest firefighting

fleet used by the U.S. Forest Service and the U.S.

Bureau of Land Management in their fire suppres-

sion efforts. According to the American Helicopter

Services and Aerial Firefighting Association, a

Washington-based industry trade group, at the

start of 2009 there were five companies operating

fixed-wing tankers and 25 to 30 firms with light,

medium and heavy helicopters. While most of

these companies are based in the far western U.S.,

a large number of their helicopters are deployed

nationwide.

Helicopters release water or retardant onto

the fires from either internal or external tanks or

large buckets attached to a sling and activated from

the cockpit. In contrast, fixed-wing aircraft, or air

tankers, have been modified with special internal

tanks used to drop large volumes of water or retar-

dant on fires. They tend to be large, turbine- or

piston-powered former military aircraft. The

majority of the airtanker fleet comprises two

Corporate Aviation

Firefighting

28

types, the four-engine turboprop P-3 and the twin-

piston P-2V, both originally designed for military

flying. Some operators are also using the twin-pis-

ton CL215 and twin turboprop CL415, both

purpose-built to scoop water from rivers and lakes

for fire extinguishing.

In 2009, a DC10 and a 747, both formerly

used in commercial air carrier service and modi-

fied for air tanker operations, may be evaluated

as firefighting aircraft by the U.S. Forest Service,

which is the primary employer in the U.S. of air

tanker companies. In fact, some of those firms

are exploring the use of other former passenger

and cargo aircraft, especially as the current fleet

ages.

Although the air tanker operators generally

continue to use pre-owned aircraft, helicopter

operators have been modernizing their fleets with

new equipment. When not combating fires, these

helicopters are often contracted out for other

functions, such as logging, construction, animal

control and pesticide spraying.

The use of aircraft as a law enforcement tool

in the U.S. goes back to 1948, when the New York

Police Department started to operate helicopters

on a part-time basis. But according to the

Frederick, Maryland-based Airborne Law

Enforcement Association (ALEA), it wasn’t until

1966, when the Los Angeles County Sheriff’s

Department established Sky Knight under a feder-

al grant, that modern airborne law enforcement

programs began.

Today, a growing number of agencies are

turning to aircraft for homeland security mis-

sions, such as harbor patrol, critical facilities

checks, and for disaster first response. In fact,

the ALEA estimates that more than 350 law

enforcement agencies in the U.S. currently use

aircraft, up from approximately 300 in 2007.

Federal and state police agencies continue to be

the largest users of aircraft in police work. In

municipal law enforcement, the two largest

fleets are operated by the Los Angeles County

Sheriff’s Dept. and the Los Angeles Police Dept.

Each department has a fleet of approximately 20

aircraft, both fixed and rotary wing.

ALEA also estimates that the U.S. airborne law

enforcement fleet now numbers about 1,100 air-

craft, an increase of 100 over the past two years.

The current fleet includes what ALEA calls a signif-

icant number of surplus military aircraft obtained

by the police agencies under a Department of

Defense program.

The fleet is made up predominately of light

rotorcraft (under 6,000 pounds MTOW), with heli-

copters outnumbering the fixed-wing portion at a

ratio of two to one. While light turbine-powered

helicopters are preferred, ALEA reports that many

agencies are now looking at the economic benefits

offered by small, piston-driven models. In fact, the

Robinson R44 is now emerging as both a good

starter aircraft and an alternative to older, military

surplus equipment.

The airborne law enforcement field is one of

the fastest growing missions in police operations.

Advancements over the past 20 years in thermal

and visual imagery technology, video downlink,

moving maps, interoperable communications

capabilities and high-powered search lights have

greatly enhanced the power of aircraft in the law

enforcement role.

In addition, the successful military use of

unmanned aerial systems has prompted their

deployment by federal law enforcement organiza-

tions. As a result, ALEA believes that state and

local law enforcement agencies will adopt this

technology at some point.

(Statistical information from the U.S.

Department of Justice, supplied by ALEA.)

Law Enforcement

29

30

The general aviation safety record of the past

20 years has shown an overall improvement based

on the numbers of accidents and fatalities per

100,000 flight hours, according to data compiled

by the NTSB.

For purposes of comparison, in 1989 there

were 2,242 accidents, resulting in 769 fatalities,

for a rate of 7.97 accidents and 1.52 fatalities per

100,000 flight hours. Total general aviation flight

hours that year were 27,920,000.

In 2008, there were 1,559 accidents and 495

fatalities for a rate of 7.11 accidents and 1.25

fatalities per 100,000 flight hours. Both the acci-

dent and fatality rates increased slightly over

2007, 6.92 and 1.20 respectively per 100,000

flight hours. This can be attributed to a decrease

in hours flown (21,931,000 in 2008 versus

23,819,000 in 2007), the result of higher fuel

prices that peaked in 2008.

The safety record of on-demand charter car-

riers operating under 14 CFR 135 authority also

has improved over the same 20-year period. In

1989, there were 110 accidents for this group. Of

these, 25 were fatal, accounting for 83 deaths,

including 81 on the aircraft. In that year, the

total flight hours attributed to the charter group

were 3,020,000, for 3.64 accidents and 0.83

fatalities per 100,000 hours. By 2008 the acci-

dent total had dipped to 56, of which 19 were

fatal, for a total of 66 deaths, of which all

occurred onboard the aircraft. For that year,

flight hours were 3,673,000, for 1.52 accidents

and 0.52 deaths per 100,000 hours.

It should be noted that due to economic con-

ditions and higher fuel prices throughout 2008,

the number of flight hours for charter operations

was down from the 4,033,000 reported in 2007. In

2007, there were 62 accidents, of which 14 were

fatal, resulting in 43 total fatalities. Per 100,000

hours, that came to 1.54 accidents and 0.35 fatali-

ties, making the per 100,000-hour rate of total

accidents and fatalities slightly below the 2008 lev-

els.

The accident and fatality rate for corporate/

executive and business aviation also showed long-

term improvements, according to data compiled

by Robert E. Breiling Associates.

Breiling defines corporate/executive aviation

as the use of an owned or leased aircraft by a cor-

poration or business for business related

personnel or cargo transportation. The aircraft

are flown by professional pilots receiving a direct

salary or compensation for their jobs. In 1997, the

data indicates that per 100,000 flight hours there

were 0.230 accidents, of which 0.080 were fatal.

By 2007, the rate had dropped to 0.103 and 0.034,

respectively, for the same number of flight hours.

In contrast, Breiling defines business avia-

tion as the use of aircraft by pilots not receiving

direct salary or compensation for flying but in

Safety

General aviation aircraft are marketed primari-

ly through dealers and brokers. While dealers

purchase aircraft for resale, brokers simply bring a

buyer and seller together and generally do not take

possession of the airplane in the process. Often,

both dealers and brokers will specialize in certain

aircraft types, such as light jets, turboprops or

twin pistons. Since they deal in used aircraft, bro-

kers and dealers usually present the most

affordable opportunity for aircraft ownership,

especially for first-time buyers.

The sale of new aircraft is handled by inde-

pendent distributors; although in the U.S., all new

jet sales are factory direct. Outside the U.S., distrib-

utors play an active role in the new jet market.

Brokers and dealers represent the largest seg-

ment of the general aviation aircraft marketing

sector. According to JETNET, as of March 31,

2009, there was a worldwide total of 2,232 dealers

and brokers, of which 1,497 were located in the

United States. The remaining 735 were headquar-

tered outside the U.S.

JETNET also put the grand total of distributors

of fixed-wing aircraft and helicopters at 483. That

number, valid as of March 31, 2009, includes 204

based in the United States and 279 located outside

the U.S.

Aircraft Brokers, Dealers and Distributors

Continued page 33

31

Accidents, Fatalities, and Rates, 1989 through 2008,U.S. General Aviation Source — NTSB

Accidents Fatalities Accidents per 100,000 Flight Hours

Year All Fatal Total Aboard Flight Hours All Fatal

1989 2,242 432 769 766 27,920,000 7.97 1.521990 2,242 444 770 765 28,510,000 7.85 1.551991 2,197 439 800 786 27,678,000 7.91 1.571992 2,111 451 867 865 24,780,000 8.51 1.821993 2,064 401 744 740 22,796,000 9.03 1.741994 2,021 404 730 723 22,235,000 9.08 1.811995 2,056 413 735 728 24,906,000 8.21 1.631996 1,908 361 636 619 24,881,000 7.65 1.451997 1,844 350 631 625 25,591,000 7.19 1.361998 1,905 365 625 619 25,518,000 7.44 1.411999 1,905 340 621 615 29,246,000 6.50 1.162000 1,837 345 596 585 27,838,000 6.57 1.212001 1,727 325 562 558 25,431,000 6.78 1.272002 1,715 345 581 575 25,545,000 6.69 1.332003 1,740 352 633 630 25,998,000 6.68 1.342004 1,617 314 559 559 24,888,000 6.49 1.262005 1,670 321 563 558 23,168,000 7.20 1.382006 1,520 307 705 546 23,963,000 6.33 1.282007 1,650 288 496 491 23,819,000 6.92 1.202008 1,559 275 495 486 21,931,000 7.11 1.25

Notes • 2008 data are preliminary.

• Flight hours are estimated by the Federal Aviation Administration. Miles flown and departure informa-

tion for general aviation operations is not available.

• Suicide, sabotage and stolen/unauthorized aircraft cases, included in "Accidents" and "Fatalities" but

excluded from accident rates in this table are: 1989 (17, 8); 1990 (4, 1); 1991 (8, 5); 1992 (2, 1); 1993 (5,

4); 1994 (3, 2); 1995 (10, 6); 1996 (4, 0); 1997 (5, 2); 1998 (6, 4); 1999 (3, 1); 2000 (7, 7); 2001 (3, 1);

2002 (7, 6); 2003 (4, 3); 2004 (3, 0); 2005 (2, 1); 2006 (2, 1); 2007 (1, 1); 2008 (0, 0)

• The 705 total fatalities in 2006 includes the 154 persons killed aboard a foreign-registered Boeing 737

aircraft operated by Gol Airlines when it collided with an Embraer Legacy 600 business jet over the

Brazilian Amazon jungle.

• 49 CFR Part 830.1 pertains to accidents that involve civil aircraft and certain public aircraft of the

United States “wherever they occur.” For the year 2007, the total number of accidents includes 20 U.S.-

registered (N-numbered) aircraft accidents that occurred outside the United States, its territories, or its

possessions.

32

Accidents Fatalities Accidents per 100,000 Flight Hours

Year All Fatal Total Aboard Flight Hours All Fatal

1989 110 25 83 81 3,020,000 3.64 0.831990 107 29 51 49 2,249,000 4.76 1.291991 88 28 78 74 2,241,000 3.93 1.251992 76 24 68 65 2,844,000 2.67 0.841993 69 19 42 42 2,324,000 2.97 0.821994 85 26 63 62 2,465,000 3.45 1.051995 75 24 52 52 2,486,000 3.02 0.971996 90 29 63 63 3,220,000 2.80 0.901997 82 15 39 39 3,098,000 2.65 0.481998 77 17 45 41 3,802,000 2.03 0.451999 74 12 38 38 3,204,000 2.31 0.372000 80 22 71 68 3,930,000 2.04 0.562001 72 18 60 59 2,997,000 2.40 0.602002 60 18 35 35 2,911,000 2.06 0.622003 73 18 42 40 2,927,000 2.49 0.612004 66 23 64 63 3,238,000 2.04 0.712005 65 11 18 16 3,815,000 1.70 0.292006 52 10 16 16 3,742,000 1.39 0.272007 62 14 43 43 4,033,000 1.54 0.352008 56 19 66 66 3,673,000 1.52 0.52

Notes • 2008 data are preliminary.

• Flight hours are estimated by the Federal Aviation Administration (FAA). Miles flown and departure information for on-

demand Part 135 operations is not available.

• In 2002, the FAA changed their estimate of air taxi activity. The revision was retroactively applied to the years 1992 to

2002. In 2003, the FAA again revised flight activity estimates for 1999 to 2002.

• U.S. air carriers operating under 14 CFR Part 135 were previously referred to as Scheduled and Nonscheduled Services.

Current tables now refer to these same air carriers as Commuter Operations and On-Demand Operations, respectively,

in order to be consistent with definitions in 14 CFR 119.3 and terminology used in 14CFR 135.1. On-Demand Part 135

operations encompass charters, air taxis, air tours, or medical services (when a patient is on board).

Accidents, Fatalities, and Rates, 1989 through2008, for U.S. Air Carriers Operating Under 14

CFR 135 On-Demand Charter OperationsSOURCE: NTSB

33

conjunction with their occupation or a business.

The Breiling data for this group shows that in

1997 the accident rate per 100,000 hours was

1.41 with 0.39 fatalities. By 2007, this had

dropped to 0.72 with 0.16 fatalities.

According to NTSB statistics, the helicopter

accident rate on a year-over-year comparison since

2004 shows a generally fluctuating trend. In 2004,

the total number of accidents was 180, but drop-

ping to 140 in 2008.

The NTSB statistics indicate that helicopters

powered by reciprocating (piston) engines account-

ed for the majority of accidents, with a high of 104

in 2005 but reaching a multi-year low of 79 in 2008.

Multi-engine, turbine models had the lowest acci-

dent rate, with a high of 17 in 2005 and a low of 10

in 2007 for the five-year period. For 2008, the multi-

engine turbine group had 11 accidents.

The fatal injury rate for the reciprocating

engine models was 22 for 2006, its highest since

the 17 fatalities of 2004. In 2008, this group of hel-

icopters accounted for 11 fatal injuries. The

multi-engine turbines, however, had the highest

number of fatal injuries in 2008 for the five-year

period, largely due to a number of accidents in the

EMS community. That year, there were 20, up

from just four in 2007. Until then, this group had

been experiencing a declining number of fatalities

since 2004 when the number was 15.

The highest number of fatal injuries occurred in

single-engine turbine operations, which saw a spike

in 2008 to 37, up from the 23 in 2007. Since the 36

fatal injuries with this group in 2004, the fatalities

had been declining, dropping to 14 in 2006.

Continued from page 30

Aircraft Accident Rates per 100,000 Flight Hours forCorporate/Executive and Business Aviation — 1995-2007

(Source Robert E. Breiling Associates, Inc.)

Date Corporate/ Executive Corporate/ Executive Business Business

Total Fatal Total Fatal

1997 0.230 0.080 1.41 0.391998 0.091 0.000 1.14 0.301999 0.230 0.130 1.40 0.402000 0.125 0.060 1.28 0.372001 0.108 0.031 1.06 0.232002 0.116 0.029 1.08 0.382003 0.028 0.014 0.95 0.282004 0.093 0.013 0.91 0.232005 0.075 0.013 0.73 0.142006 0.141 0.011 0.76 0.272007 0.103 0.034 0.72 0.16

34

Comparative U.S. Civil Helicopter Safety TrendsFive-Year Comparative Statistics Through 4th Quarter

January 1 – December 31, 2008-2004Civil helicopters- estimated hours flown1: 2008 2007 2006 2005 2004

Total helicopter hours flown (in millions) 3.813 3.629* 3.446* 3.116* 2.534(*FAA Flight Hours Revised in February 2006)

Number of civil helicopter accidents2: 2008 2007 2006 2005 2004

Total number of civil helicopter accidents 140 178 162 193 180Total number of fatal helicopter accidents 29 22 25 26 33Total number of fatalities 75 43 43 44 68Total number of serious injuries 28 35 34 44 38Total number of minor injuries 40 55 64 74 68

Accident rate per 100,000 flying hours: 2008 2007 2006 2005 2004

Accident rate 3.67 4.9 4.7 6.19 7.1Fatal accident rate 0.76 0.61 0.73 0.83 1.3Fatal injuries rate 1.97 1.18 1.25 1.41 2.68Serious injuries rate 0.73 0.96 0.99 1.41 1.5Minor injuries rate 1.05 1.52 1.86 2.37 2.68

Safety Statistics By Helicopter Type: 2008 2007 2006 2005 2004

Estimated Total Flight Hours1 (in millions):Single-Engine Turbine: 2.153 1.961 1.894 1.829 1.515Multi-Engine Turbine: 0.538 0.654 0.632 0.61 0.505Reciprocating: 1.122 0.836 0.755 0.617 0.514Total Number of Accidents2:

Single-Engine Turbine: 50 72 63 72 78Multi-Engine Turbine: 11 10 14 17 11Reciprocating: 79 98 85 104 91Total Number of Fatal Accidents2:

Single-Engine Turbine: 11 13 8 15 18Multi-Engine Turbine: 3 1 4 4 3Reciprocating: 15 8 13 6 12Total Number of Fatalities2:

Single Engine Turbine 37 23 14 26 36Multi-Engine Turbine 20 4 7 7 15Reciprocating 11 16 22 9 17Accident Rate per 100,000 Hours Flown:

Single Engine Turbine 2.32 3.67 3.33 3.94 5.15Multi-Engine Turbine 2.04 1.53 2.22 2.79 2.18Reciprocating 7.04 11.72 11.26 16.86 17.7Fatal Accident Rate per 100,000 Hours Flown:

Single Engine Turbine 0.51 0.66 0.42 0.82 1.19Multi-Engine Turbine 0.56 0.15 0.63 0.66 0.59Reciprocating 1.34 0.96 1.72 0.97 2.33Fatalities Rate per 100,000 Hours Flown:

Single Engine Turbine 1.72 1.17 0.74 1.42 2.38Multi-Engine Turbine 3.72 0.61 1.11 1.15 2.97Reciprocating 0.98 1.91 2.91 1.46 3.31

1 FAA Aerospace Forecasts Fiscal Years 2008-20252 NTSB Preliminary Accident Reports (Includes a 2 helicopter collision that counted as 1 accident; NTSB posting through 1/09/09)

35

A number of U.S. government agencies affect

the day-to-day operation of aviation businesses.

Those that make a substantial impact are detailed

here.

Animal Plant and Health InspectionService (APHIS)

This agency, now a part of the Department of

Homeland Security, is charged with preventing for-

eign agricultural pests and diseases from entering

the United States. Inspections and fees are

required when passengers bring plants or pets into

the country. For more information, see the APHIS

Web site, www.aphis.usda.gov.

United States Citizenship andImmigration Services (USCIS)

Formerly known as the Immigration and

Naturalization Service, this agency is now part of

the Department of Homeland Security. Its regula-

tions continue to apply to non-citizens or

non-residents of the United States. More

information is available at

http://uscis.gov/graphics/index.htm.

Department of Homeland Security(DHS)

The newest of the cabinet-level federal agen-

cies, the Department of Homeland Security was

established by the Homeland Security Act of 2002

in the wake of the 9/11 terrorist attacks on the

United States. Aviation is particularly affected by

Border and Transportation Security, one of four

directorates within the agency.

For more information, see

http://www.dhs.gov/dhspublic/.

Department of Transportation (DOT) The DOT is the parent agency of the FAA and

is responsible for oversight of all modes of trans-

portation. Links to other DOT agencies and

numerous transportation statistics are available at

http://www.dot.gov/.

Federal Aviation Administration (FAA) The FAA is charged with ensuring the safety of

air transportation in the United States. This agency

regulates all aircraft operations and maintenance.

In addition, it administers federal airport develop-

ment grants and operates the U.S. air traffic con-

trol system. With about 44,500 employees, the

FAA is a large organization. For that reason, the

local FAA office is a good starting point to obtain

further information about the agency. FAA contact

information information including current and

proposed regulations, publications, advisory circu-

lars and other guidance materials are available at

http://www.faa.gov/.

Environmental Protection Agency(EPA)

This agency is also closely involved with avia-

tion businesses. Fuel storage and handling as well

as the use of chemicals in maintenance facility

activities, aircraft painting and stripping, and

cleaning agents in washing aircraft are all covered

in some way by EPA regulations. The EPA Web site

is http://www.epa.gov/.

Internal Revenue Service (IRS) The IRS is involved in aviation businesses in

two ways. All fuel sales are subject to federal

excise taxes that must be collected and remitted

by the seller on a quarterly basis. Businesses offer-

ing air charter must collect and remit passenger

and cargo taxes. The IRS Web site provides access

to regulations, and most forms and publications

can be downloaded or printed. The IRS Web site is

http://www.irs.gov/.

National Transportation Safety Board(NTSB)

Since its inception in 1967, the NTSB has been

tasked with investigating every civil aviation acci-

dent in the U.S. In addition, the NTSB focuses on

all other forms of transportation under certain

conditions, normally where fatalities, major prop-

erty damage, or the release of hazardous materials

occur. Additionally, the NTSB is charged with

determining an accident’s probable cause and issu-

ing safety recommendations for preventing future

similar accidents. The NTSB is not involved with

regulatory matters or enforcement actions.

As of January 2007, the NTSB has investigated

more than 124,000 aviation accidents and over

10,000 surface transportation accidents. This has

resulted in more than 12,000 safety-related recom-

mendations in all transportation modes. Of the

Government Agencies That Regulate General Aviation

36

recommendations, 82 percent have been adopted

by the appropriate regulatory authorities.

The NTSB maintains the U.S. government’s

civil aviation accident database and conducts spe-

cial studies of transportation safety issues of

national significance. It also provides investigators

under international treaties for aviation accidents

that occur outside the U.S. or that involve U.S.-reg-

istered aircraft or aircraft using major components

manufactured in the U.S.

Established as an independent agency, the

NTSB was originally funded through the

Department of Transportation, which also provid-

ed administrative support. But in 1975, all NTSB

ties to that department were officially severed.

Since then, the NTSB has been an independent

agency.

The NTSB Web site is

http://www.ntsb.gov/default.htm.

Occupational Safety and HealthAdministration (OSHA)

OSHA is responsible for ensuring the safety of

workers through regulations and inspections. The

OSHA Web site, http://www.osha.gov/, provides

access to regulations.

Small Business Administration (SBA) The SBA was created to assist small businesses

in the U.S., including aviation ventures. The SBA

offers information and advice on starting and

financing a new business and publishes numerous

statistics on small businesses. In addition to the

Washington, D.C. headquarters, the SBA has

numerous local offices across the country. Most of

the SBA’s publications may be downloaded from

the SBA Web site, and an office locator also is avail-

able at http://www.sba.gov/.

Transportation SecurityAdministration (TSA)

The TSA was created in November 2001 in

response to the terrorist attacks of 9/11. Tasked

with implementing and maintaining security meas-

ures to ensure the safe movement of people and

cargo via air and surface transportation, the TSA

commenced operations in January 2002.

As of February 1, 2007, the TSA had 43,000

transportation security officers, most of whom

have been trained in both passenger and baggage

screening, at 450 airports. Of that number, about

80 percent are full-time employees. The total TSA

workforce is currently 50,000.

The TSA continues to be involved in any deci-

sions to establish no-fly zones in the U.S., based on

security concerns. Notification of restricted air-

space is communicated by the FAA via Notices to

Airmen (NOTAMS). The TSA Web site is

http://www.tsa.gov/public/.

United States Customs and BorderProtection (CBP)

Formerly the U.S. Customs Service and now a

part of the Department of Homeland Security, this

agency administers regulations that apply to all

businesses transporting passengers and cargo into

the United States. The agency is also tasked with

the collection and remittance of any mandated

fees and tariffs on imported goods. Further infor-

mation on CBP regulations and fees can be

accessed at the CBP Web site at http://www.cus-

toms.ustreas.gov/.

37

NATA Associate Members NATA’s Associate Members provide numerous

services to the regular membership, including

business plans and management assistance, busi-

ness valuation, efficiency tools and evaluations,

software, insurance, equipment, education and

legal services, to name a few.

All Associate Members are listed in the NATA

Membership Directory.

NATA Compliance Services NATA Compliance Services is a single-source

solution to total security compliance, managed by

aviation experts for aviation companies. Services

include employee background checks, drug test-

ing and fingerprint collection. Access

www.natacompliance.com or call 800/788-3210.

NATA Publications NATA offers numerous publications that deal

specifically with many of the topics presented in

this general aviation guide. Additionally, guides for

compliance with, or more information on, federal

regulations are also available. Access

www.nata.aero,

or call 800/808-NATA (6282).

Other Sources of Information

National Air Transportation Association4226 King Street

Alexandria, VA 22302

(800) 808-NATAwww.nata.aero