Nicely put BFJH. It does seem to show the dilemma the Board is in.
On the one hand the LAA could grow and take on some of the roles the CAA don't want to do - namely deal with light GA.
It would take the will to move beyond the narrow remit of the Permit fleet but would bring status, additional income but also cost.
On the other hand the LAA could remain in its comfort zone and stick with the Permit fleet, kit-building and youth activities.
It gives guaranteed membership and as costs rise and owners move away from CofA types, the LAA can gradually 'hoover-up' the new members.
The latter is certainly safe and the evolutionary approach minimises risk.
I suppose that which option you will choose depends on the character and commitment of the Board and CEO.
Given that you have a very small employed staff, I would guess you will go for the safe option and grow the business over time.
Over the next few years the LAA will have a once in a lifetime opportunity to become much more than a members association. It will take courage and commitment to do it especially when it comes to reconciling the conflicting views of the membership.
As you say, standing still isn't an option and the chance might not come again, .