Income and cost impact on general aviation hours flown by individual owners

Abstract

Using data from the Federal Aviation Administration's national sample of general aviation (GA) aircraft owners (1975), this study explores the impact of changes in family income, hourly operating cost, and other variables on five different measures of hours flown for aircraft owned by individuals (versus companies). Results for total, itinerant, instrument, and visual hours flown support the theoretical notion that hours flown rise until unit costs reach some critically high level, beyond which hours flown begin to decrease. For itinerant, visual, and total hours, the critical costs very closely approximate the mean total hourly cost (operating plus annualized fixed) of flying. Local hours respond negatively to operating costs increase over all positive unit cost levels. In all cases, the income elasticities of demand suggest that hours flown are a necessity. The low income and price elasticities of demand coupled with the insensitivity of owners to the availability of a substitute mode of transportation suggest that GA aircraft owners are strongly committed to their flying activities, exhibiting conventional, but weak, demand responses to economic stimulus.