US shutdown poses $1.5 billion in lost deliveries for general aviation

Washington DC
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Nearly 150 general aviation aircraft deliveries worth $1.5 billion could be delayed if the week-old US government shutdown continues until mid-October, says the General Aviation Manufacturing Association (GAMA).

The industry trade group also says that a recent order by the US Federal Aviation Administration (FAA) to recall 800 furloughed employees will have no impact on the aircraft deliveries halted by the shutdown.

“The Registry closing threatens our economic recovery and our ability to provide good, high-paying jobs at a time when the industry is making a comeback,” says GAMA president and chief executive Pete Bunce.

The forced halting of most aircraft sales and transactions early in the fourth quarter is especially hard on manufacturers, as the last three months of the year are traditionally the peak delivery period for the general aviation industry, says Jens Hennig, GAMA’s vice president of operations.

The FAA’s Aircraft Registry office in Oklahoma City usually operates in the background, but it serves a critical role in aviation commerce.

The Aircraft Registry must process all aircraft imported or exported to or from the USA. Most domestic sales involving loans usually require documentation from the Aircraft Registry before the transaction can be completed.

The only domestic sales that can occur while the Aircraft Registry is closed are typically deals that do not require financing.

The closure of the Aircraft Registry is one of the most painful implications of the government shutdown for the aviation industry.

The government was shutdown and more than 800,000 employees were furloughed on 1 October, the beginning of the Fiscal 2014 financial year. A standoff between the White House and Republicans over health care insurance reforms prevented Congress from passing a budget.

A second dispute over deficit spending also has led to a stand-off over a legal requirement to raise the debt ceiling on 17 October, or the USA risks defaulting on loans to itself and foreign governments.

The terms of the shutdown allow the FAA to recall furloughed employees who are necessary for keeping the air traffic system running and safe.

The 800 workers recalled by the agency on 7 October were mainly aircraft and airline inspectors, who conduct site visits on intervals of every two to three weeks.

GAMA and other aviation industry lobbying groups had argued that the Aircraft Registry office are also needed to ensure the safety of air travel in the USA, Hennig says.

So far, however, the FAA’s attorneys have not agreed with GAMA’s position, and the Aircraft Registry remains closed.