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THE PRESENT ENVIRONMENT 48 are moving to form joint ventures in Canada and elsewhere, on the basis that part of a loaf is better than none. General Aviation Unfortunately, the various categories of aircraft comprising general aviation are not always defined consistently and unambiguously. General aviation will be taken to include regional aircraft (often referred to as commuters), business aircraft for executive travel and other uses, and light (piston-powered) aircraft for both private and business use. Although the United States manufactures some 90 percent of the world's fleet of general aviation aircraft and represents the largest single market by far (two-thirds of total world demand), significant inroads are being made by foreign manufacturers. In 1981 our trade balance in general aviation aircraft was negative due to imports of turboprop transport aircraft for the regional market and business jets (Figure 2-6), and the negative balance persisted into 1982 and 1983. It should be noted, however, that these imports have significant U.S. content in terms of materials, components, and subsystems. Regional Transports Regional transports (defined as commercial transport aircraft with less than 60-passenger capacity) present a bleak picture for the four U.S. manufacturers in this market, despite the fact that there is a strong growth pattern in this segment of air transportation. The financial, technological, and managerial requirements for launching these aircraft are less severe than for large transports. However, the investment needed is still beyond the capability of those U.S. companies normally involved, and the regional airlines are too small and too thinly financed to support launching size purchases. This smaller investment for development is, however, within the capability of smaller economies and single nations. Consequently, in addition to Canada, the United Kingdom, France, Italy, Holland, Sweden, and Israel, the Brazilians, Spanish, and Indonesians also perceive this segment as a means of participating in air transport design and manufacture. Some of the programs in these countries are being undertaken as international partnerships. For example, the Canadian government has supplied Pratt and Whitney Aircraft-Canada with $130 million (Canadian) of R&D for the PT6âan engine for regional and business aircraft. Of this $130 million, $110.5 million was in the form of an interest-free loan; the rest was direct support.
THE PRESENT ENVIRONMENT 49 Figure 2-6 Balance of Trade in General Aviation Aircraft, 1977â1982 (general aviation aircraft, fixed wing of less than 33,000 pounds) Source: Aerospace Industries Association of America, Aerospace Facts and Figures, 1983/84, p. 132. United States manufacturers estimate their engines could be priced 10 percent lower under comparable terms.7 This level of activity is indicative of the importance and status attached to aircraft manufacture and to the growing commitment of many nations to participate in the industry. The inroads appear to result from purchases of aircraft on which U.S. manufacturers have heretofore chosen not to risk development funds. U.S. regulation, both CAB capacity-limit rules and FAA certification rules, had for a long time suppressed growth of the regional market. Meanwhile, the rest of the world had developed a need for small (less-than-30-seat), turboprop transports. This need stimulated foreign manufacturers to pursue the development of this class of aircraft, e.g., CASA-212 (Spain, Indonesia) and Shorts-330 (United Kingdom). However, with low fuel prices and limited U.S. demand, total world sales remained low. Increased fuel prices and deregulation changed this situation. Regional airlines, which use efficient turboprop equipment for short-range operations, are now projected to grow signifi
