Avionics News August 2015 - 53

THIS SHIFT IN MARKETING TO THIS GENERATION
WON'T HAPPEN OVERNIGHT. BUT AS AN
INCREASINGLY AFFLUENT GROUP OF CUSTOMERS,
THEY SHOULD GIVE YOU SOME OPTIMISM ABOUT THE
FUTURE OF YOUR AVIONICS SHOP -

IF YOU LEARN HOW TO
TALK TO THEM.

- down from 45 .5 in 2005 but up from 41 .3 in 1 993, according to the Federal Aviation Administration. The student-pilot
average age has decreased to 31 .5 from both 2005 ( 34.6 ) and
1 993 ( 33.7) , and so has the commercial-pilot average age, at
least since 2005 , from 46 to 45 .5 . This almost certainly comes
from university professional-pilot programs, and these nex tgeneration airline pilots fall smack into the millennial generation, which at about 80 million will eventually become an even
bigger " pig in the python" than the baby boomers.
But private-pilot numbers are less rosy. In fact, they' re wilting, especially since not all of these pilots still actively fly. They
average 48.5 years old, up from 47.7 in 2005 and 42.7 in 1 993.
For what it' s worth - and that' s a lot if you listen to the airlines
that are seeing the biggest shortage of pilots since the 1 96 0s -
ATP s also are getting older; at 49.8, that' s an increase from 47.8
in 2005 and 44.1 in 1 993.
Today, there are nearly as many millennials with commercial-pilot certificates as there are baby boomers, but also 30
percent fewer ATP s among Gen X ers than boomers. This, in
the short term, may cause some airline operators sleepless
nights as they seek to hire 6 0,000 pilots by 2025 , according to
the U niversity of North D akota.
But the drop in potentially aircraft-owning private pilots
may be j ust as big a concern. Baby boomers account for about
88,000 private certificates, with the 5 5 - to 5 9-year-old segment
being the largest cohort. Those are prime earning years, with
kids out of college ( and hopefully out of the house) , which
generally eq uates to more disposable income. Y et, so far,
Generation X has only produced about 43,000 private pilots,
and mostly among 45 to 49 year olds. In fact, millennials
account for nearly as many total private certificates, and Gen X
had a head start.
W hat' s at stake is the approx imately 1 6 0,000 personal-use
production-piston, amateur-built, and ex perimental- and special-light sport aircraft currently registered in the U .S., accord-

ing to the General Aviation M anufacturers Association. Sure,
some will continue to fly with older owners. But others will
need a younger pilot in command.
SPENDING POWER
Surprisingly, though, the outlook may not be as bad as pilot
numbers suggest. Forget what you' ve heard about X ers never
achieving the standard of living of their parents. Even 1 0 years
ago, the median family income for this group was, at $ 71 ,1 00,
nearly $ 8,000 more than baby boomers at that age, according
to a study by the P ew Charitable Trusts. W hile many of them
suffered during the Great R ecession, they' re set to boost their
earning potential as the economy improves - about 70 percent
of startups today are created by Gen X ers - and they' re the
best-educated generation of Americans ever; 43 percent have
college degrees, according to a M etLife study.
H alf of their households are headed by workers in highpaying professional, technical or management positions, according to Bonnie J. K nutson of M ichigan State U niversity. W hile
they account for only 1 3 percent of the total affluent population,
they' re 20 percent of the mass affluent and more than one-third
of the emerging affluent market.
P ut another way, they have 29 percent of estimated net
worth dollars and 31 percent of total income dollars in the
country now, according to R ieva Lesonsky, author of Start
Your Own Business, and 1 0 percent of them are " upscale X ers"
who have incomes greater than $ 25 0,000 or net worth of more
than $ 1 million. P lus, the 1 8 million X ers who will turn 5 0 in
the nex t five years will have higher incomes and nearly eq uivalent net worth to any cohort of baby boomers.
The only problem? They' re at the stage of life where they
have kids, college-savings worries, retirement concerns and
house payments. Still, their millionaires own more vacation
Continued on following page
AVIONICS NEWS

AUGUST

2015

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Table of Contents for the Digital Edition of Avionics News August 2015