Election 2016: Crunching the Numbers To Find Bizav’s Best Friend

Looking for answers as to what November’s U.S. elections might mean for business aviation, AIN sister publication Business Jet Traveler interviewed leading political analysts Mary Matalin and James Carville—both of whom have distinguished careers working for, respectively, Republican and Democratic administrations. Despite their diametrically opposed ideologies, Matalin and Carville are happily married and they also are enthusiastic private aviation consumers.

Among many contentious comments in their respective interviews, Carville (who ran Bill Clinton’s 1992 Presidential election campaign and was an advisor for Hillary Clinton’s unsuccessful primary campaign in 2008) confidently asserted, “I bet business aviation has always done better under Democrats.” This bold claim piqued AIN’s interest, prompting us to search for evidence that might substantiate it.

The task of quantifying business aviation’s success or failure over the years is a thankless one, so AIN opted to keep it simple by analyzing general aviation aircraft shipment figures published each year by the General Aviation Manufacturers Association (GAMA). For the sake of consistency and simplicity, we focused on annual shipment totals for U.S.-made aircraft from 1946 through 2015.

Across this 70-year period, the U.S. had a Republican president for 36 years and a Democratic president for 34 years. The total number of U.S.-made aircraft delivered during the Republican administrations was 191,318—making an annual average of 5,314. The total number of U.S.-made aircraft delivered during Democratic administrations was 242,648—making an annual average of 7,136.

However, the exceptional total of 35,000 deliveries reported by GAMA for 1946 appears to have been a statistical anomaly—perhaps attributable to an abnormal number of former military aircraft reassigned to civil duties after World War II. Removing this apparent blip reduces the Democrats average to 6,292, but still gives the party the edge over the whole period.

What’s more, GA aircraft deliveries alone do not tell the whole story of the industry’s fortunes over the past seven decades. The raw numbers do not take account of factors such as billing value and drilling into these quickly reveals statistical complexities that do not make for true like-for-like comparisons.

Most seasoned business aviation analysts point to factors such as gross domestic product (GDP) as one of the more solid indicators of underlying economic conditions. Analyzing GDP annual growth rates since 1972 (the start of the Nixon administration) shows that the rankings seem pretty even between the two parties, with Republican presidents averaging 2.8 percent and Democrats 2.9.

However, what the GDP averages do not reveal is the wider economic context. For instance, President Ronald Reagan—hailed by many Republicans as a shining-light advocate of American free-market economics—inherited GDP that was declining by 0.2 percent from his beleaguered Democratic predecessor, Jimmy Carter, and managed to finish his second term with 4.2-percent growth. However, this included fairly extreme fluctuations between minus 1.9 percent in 1982 and plus 7.3 percent in 1984. Whether Reaganomics alone explains this turnaround is something that economists likely will never agree on.

Similarly, President Obama inherited GDP of minus 0.3 percent from George W. Bush and by last year this had been reversed to positive 2.6. However, the Obama administration also has the questionable distinction of the lowest average annual GDP growth (1.5 percent) of the last seven administrations (going back to 1972).

All of this begs the question of whether U.S. GDP alone is the dominant driver of the fortunes of the country’s business aviation industry. For instance, the financial crisis of 2008-09 had its origins in the sub-prime mortgage fiasco and resulting credit crunch, which hardly any economists foresaw and which had hardly anything to do with the core drivers of GDP. In so far as political blame for this can be attributed, there seems to be fairly clear consensus that the structural flaws in the financial system that allowed the crisis to occur did not have their origins in the policies of any one administration.

The fall-out from the calamities of 2008-09 is still reflected in GAMA aircraft deliveries, which remain at little more than half of the 2008 total of 3,079 aircraft. In so far as the industry has recovered from this setback, much of the credit would have to go to the temporary economic booms for the years 2011 to 2014 in key emerging economies such as China, Russia, the Middle East and Latin America. Conversely, softening rates of growth in these markets since early last year have clearly contributed to the continuing deceleration in business aviation growth that remains a drag on the industry despite relative stability in the U.S. economy (as evidenced by a largely strong stock market).

With the foundations for business aviation’s prosperity now more global than ever, it is harder to argue that the sector’s destiny rests squarely in the hands of even the world’s most powerful head of state. That said, the global industry definitely still looks to the U.S. as its still dominant marketplace for inspiration and so will be hoping for a higher degree of certainty over business conditions once the seemingly interminable 2016 election season is over.