Government Shutdown Nearly Grounds Sales of Private Planes
October 8, 2013
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  • Spending battles in Washington and the ensuing partial government shutdown have all but grounded private plane sales and are starting to disrupt charter flight operations.

    Recovering from the morass promises to be a bumpy ride as well.

    That’s largely because paperwork for airplane sales, as well as certifications for pilots and aircraft, is piling up at Federal Aviation Administration offices, including the aircraft registry in Oklahoma City, a casualty of the government shutdown. It’s affecting corporate jets, charter flights and planes used by recreational fliers.

    “You can’t buy or sell an airplane right now,” said Robert Mark, CEO of aviation consulting company CommAvia in Evanston. “Anything that requires any FAA signature is dead in the water.”

    Aircraft dealer-broker Rick Bodee, president of Chicago Aviation, said he has five or six aircraft deals “ready to go, but we’re sort of in limbo.”

    “I hope this gets straightened out because there are no paydays for us. We can’t close any deals,” Bodee said. “We’re just waiting.”

    Air traffic controllers and airport security personnel stayed on the job after the Oct. 1 partial U.S. government shutdown that furloughed workers deemed nonessential. So U.S. airline passengers have hardly noticed a change at American airports.

    But the FAA halted many of its other functions, including its Flight Standards District Offices, such as the one in Oklahoma City. And while the FAA this week recalled some 800 workers, they were mostly airline and aircraft inspectors, which offered little relief to general aviation, the term for much of the civil aviation industry outside of commercial airlines.

    For general aviation, a variety of pending FAA approvals came to a screeching halt last week, and the ripple effect is being felt throughout the industry, said Ed Bolen, president of the National Business Aviation Association, which  represents more than 9,000 companies.

    For example, more than 10,000 aircraft registrations expire each month in the U.S. They can’t be renewed while the registry in Oklahoma is closed, effectively grounding those planes, according to the association.

    “We’re hearing from a huge portion of our membership, from every area of the United States,” Bolen said. “We’re very concerned the impact can grow exponentially with time.”

    Even if the shutdown ended in the near term, delays from a longer-than-usual backlog of approvals would be disruptive, he said. “It takes a while to dig out of that paperwork,” he said.

    About 85 percent of the general aviation industry in the U.S. is made up of small and midsize companies, Bolen said. “How long can they hold on in this kind of environment, where no transactions are possible?”

    For John Bullock, vice president of DuPage Aerospace in West Chicago, the problem is the shutdown of the local FAA Flight Standards District Office at DuPage Airport. That’s where pilots who fly his chartered jets get recertified. They could be out of a job if the shutdown endures and their 30-day grace periods expire, he said. “It translates into a pilot’s inability to make a living,” he said.

    Meanwhile, he has two aircraft awaiting FAA approvals. “We have an airplane in the hangar that they have to inspect to authorize us to do charter, and those guys aren’t there,” Bullock said of FAA personnel. “Literally, the airplane sits in the hangar and can’t be used.”

    Bullock said he expects hassles to last longer than the shutdown. “It was difficult to schedule something with them to begin with,” he said. “I can’t imagine the challenges we’re going to have when they get back because the workload doesn’t go away. It just stacks up.”

    B. Coleman Aviation, a startup aviation company at the Gary-Chicago International Airport, can’t get its certification to begin charter flight operations, said General Manager Benjamin Toles. “We’re just at a standstill,” he said. “We hope and pray that this thing is over with soon.”

    In just the first two days of the shutdown, deliveries of 12 new general aviation aircraft were halted, according to the General Aviation Manufacturers Association. If the shutdown continues until mid-October, it will affect delivery of an additional 130 general aviation aircraft, for a total of $1.5 billion, it said.

    And the fourth quarter of the year is the peak time for aircraft deliveries, typically accounting for 35 percent of annual deliveries in general aviation, worth some $8 billion, the association said.

    “If this backlog lasts more than a few days, it could potentially devastate the industry’s fourth-quarter deliveries,” Bolen wrote in a letter to President Barack Obama on Friday. The National Air Transportation Association on Tuesday also made a plea to the Department of Transportation to open the aircraft registry.

    The FAA closings are also affecting commercial aircraft deliveries.

    Airbus said Tuesday that the office closing in Oklahoma prevented it from delivering jets to JetBlue Airways and US Airways. And AMR Corp.’s American Airlines won’t receive an A319 aircraft from Airbus that it expected Wednesday.

    Chicago-based Boeing Co. has also seen delays in some aircraft deliveries because of shortages in FAA inspectors and employees who register aircraft. But it has special authority from the FAA that allows it to complete some of its own certification work, and it has made several deliveries in October, a Boeing spokesman said.

    “The FAA is constantly evaluating safety risk,” the agency said. “As the government shutdown continues, the agency will determine whether additional employees need to be recalled to provide oversight of potential risk.”

    Reuters contributed.,0,4812895.story