General Aviation in China

The aviation industry in China has drastically changed in the last decade.  The reasons for the change include some of the demands that have created a large aviation industry in the United States.  Here in the US, we use aviation for the movement of goods and people, medical purposes, and pure enjoyment.  Unfortunately, the people of China are not able to make decisions for themselves.  The government (more specifically the military) of China has always been in control of aviation and the country's airspace.  In the last decade, the government has decided that they would like to develop a general aviation industry.  The military has worked on opening and redeveloping airspace.  The most likely reason for this change is the government's interest in making more money, and growing their country and economy.  In 2003, China ended their ban on private airplane ownership, opening a whole new world for the country of China.
As everyone knows, people and companies in the United States ARE free to make their own decisions.  Several aviation companies in the United States have used the Chinese aviation boom to their advantage.  Hard times in the US economy have severely hurt our aviation industry.  A few general aviation companies have been near bankruptcy, or have already filed bankruptcy.  Hawker Beechcraft filed bankruptcy in May, 2012, and shortly after, engaged in talks to sell to a Chinese company.  The sale DID NOT happen, and Hawker Beechcraft is still a US based company.  This attempted sale is just another example of a relationship that has been created between the United States and China.  The economy in the United States has been hurt, and the economy in China is growing.  Companies in the United States are in need of money, and have technology that Chinese companies are looking for.  Chinese companies can buy American companies, and their technology, for a lot less than doing research to develop their own technology.

The development of general aviation in China has affected other companies based in the United States.  A few companies in the United States are developing relationships with China, and will begin to manufacture airplanes in China.  Other US companies are being sold entirely to Chinese companies.  One such example is the United States kit plane company, Glasair.  Glasair was sold to the Chinese company, Fang Tieji, on July 20, 2012.  Fang Tieji plans to keep Glasair based in Arlington, Washington.  The Chinese company also plans to fully certify the Glasair Sportsman airplane.  The purchase of this company will allow Fang Tieji to bring this technology to their country as well.

This activity creates opportunity for the US general aviation sector.  Companies can help rebound financially by getting involved in the Chinese market.  This can be done in a few ways.  Companies can sell all or part of their business.  There are Chinese buyers, and it might be a great way to stop losing money.  US companies that do not want to sell could try and get involved with sales in China.  Individuals could also find creative ways to make a profit.  Working in China might be a great way to find a job.  Transporting general aviation airplanes to China might eventually create a job market.  There are many opportunities to make money for both companies, and individuals looking for jobs.

Comair

This week's post is about Comair, a company I know little about.  I've heard bits and pieces about Comair over the past few years, and have studied the unfortunate accident of Comair Flight 5191.  A few of our classmates have also posted blogs about the airline before this assignment was due.  Wikipedia has been my friend for this post, and I am regurgitating their information.  Comair started as a private operation in 1977 by four guys in Cincinnati, Ohio.  They began scheduled service with two Piper Navajo, but in 1981, made the company public to raise funds to update their fleet.  In 1984 Comair became a Delta Connections carrier.  Things worked out well, and Delta purchased 20% of Comair in 1986.  Finally, in 1999, Delta purchased the rest of Comair for over two billion dollars.

Since 1999 Comair has been owned by Delta, and has ridden the waves of the airline industry.  They have experienced a strike, bankruptcy, poor management, and even two years of having the lowest percentage on on-time flights.  The industry has changed, and Comair's practices and fleet of airplanes have not kept up with the times.  Their fleet of 50 passenger jets was finally deemed inadequate to do business, and on July 27, 2012, Delta announced the closure of Comair.  Crain's Detroit reported that federal law requires companies to give 60 days notice to state and local governments before closing companies that will affect 50 employees or more.  Crain's also reported that Delta plans to reduce their 50-seat regional jet fleet from 350 to 125.  The 50-seat jets will be leased to other airlines and will be replaced with 76-seat regional jets.

The outlook for regional carriers is grim.  According to Reuters, there are currently 61 regional carriers.  This is down from 247 three decades ago.  Earlier this year, both Pinnacle Airlines, and American Eagle Airlines filed for chapter 11 bankruptcy.  Most of this business shifting is due to the rising costs of fuel.  It is causing airlines to focus more on longer routes.  Larger airports are seeing an increase in travel, and smaller hubs are seeing the opposite.  More people are flying to larger airports and then commuting the rest of the way.

Regional airlines have typically relied on contracts from major carriers.  Regional carriers will need to update their fleets in order to stay in business.  They might also want to think about operating as their own company, and scheduling their own routes.  Maybe it is time for airlines to operate all of their own flights, and regional carriers to be out on their own.

ExpressJet is currently hiring pilots.  It doesn't list the starting pay, but an inside source says the first year pay for a first officer is $23.00 per hour.