Understanding General Aviation & Flight Training

The Federal Aviation Administration (“FAA”) grants authority to operate scheduled air service in the form of Federal Aviation Regulations (“FAR”). Air carriers authorized to operate under Part 121 are generally large, U.S.-based airlines, regional air carriers, and all cargo operators. Most would consider the General Aviation (“GA”) category to include only light, small-engine private aircraft but even a jet or cargo aircraft that are operated under Federal Aviation Regulations may be considered GA aircraft. General aviation typically encompasses Part 91 and Part 135 operations. Part 91 operations fall into the category of a private pilot flying with friends or family. Part 135 operations detail the regulations for commuter operations and on-demand air charter operators. Part 135 only applies to aircraft with 30 or fewer seats or a maximum payload capacity of 7,500 pounds (including private jets). General aviation aircraft account for 92% of all aircraft in the U.S. and more than 65% of flight hours flown. More than 5,000 local and community airports are exclusively built to service general aviation aircraft. Flight training is governed under one of two parts: Part 141 pilot schools offer structured training suiting full-time students with an aviation career in mind. Part 61 schools provide the flexibility to train at your own pace with a personalized program.

On May 16, 2024, the President signed legislation reauthorizing the FAA through Fiscal Year (“FY”) 2028 stating; “It will expand critical protections for air travelers, strengthen safety standards, and support pilots, flight attendants, and air traffic controllers.” The reauthorization includes aviation workforce development grants to help flight schools prepare students to become aircraft pilots which can also be used to support the professional development of teachers delivering eligible aviation curriculum. It authorizes more than $105 billion in funding for the FAA as well as $738 Million for the National Transportation Safety Board for fiscal years 2024 through 2028. It left in place the requirement of a minimum of 1,500 hours of flight time as a Pilot in Command before receiving a commercial airline pilot certification (the Airline Transport Pilot, “ATP” certificate is the highest pilot license the FAA issues). Older commercial airline pilots continue to face a mandatory retirement age of 65 which was put in place in 2007 when it was raised to be consistent with international rules that prevent pilots older than 65 from flying internationally.

As new Boeing aircraft deliveries have been scaled back commercial air carriers are slowing or pausing pilot hiring. Flight schools are exploring alternatives that will get students on a flight deck sooner^[1]. The Aircraft Owners and Pilots Association (“AOPA”) reports commercial airline pilot hiring softened in the first months of 2024. As a result, the outlook for pilot supply looks better than a year ago. But it’s the regional carriers who are short pilots in Command Captains. The Regional Airline Association reports FAA pilot certifications of 11,225 in 2023 while major airlines hired 12,193; in 2022 the majors hired 13,128 pilots while only 9,491 new pilots qualified^[2]. The majors are hiring away regional airline Captains (Pilots in Command).  Compounding the pilot challenge is the fact that over the next 15 years, 50% of commercial airline pilots will be forced to retire at age 65.  

With the recent acquisition of the assets of Brown Aviation Lease, RESIDCO plans to actively support aircraft lease financing for flight school and university aviation training programs. To investigate other General Aviation investment^[3] opportunities, Call RESIDCO.

Glenn Davis 312-635-3161

davis@residco.com

[1] Pilots operating a Part 135 (Private Charter) aircraft need at least 500 total flight hours, 100 cross-country, and 25 hours at night.

[2] Regional Airline Association statement released February 7, 2024.

[3] For 2023, the General Aviation Manufacturers Association (“GAMA”) reported new deliveries of 1,682 single-engine piston aircraft, 638 turboprops, and 730 business jets. At the end of 2022, the FAA reported a total of 164,567 fixed-wing GA aircraft in service.