1970s

[outnabout]

In the 1970s, a huge number of new aircraft were brought into Australia.

Was import duty removed? Was there a government program to replace the ageing WW2 aircraft in the GA sector?

can anyone assist?

[Checkboard]

USA factories were producing 17,000 General Aviation aircraft per year in 1978-1979. By 1983 that had dropped to 2,700 and by 1987 to 1,000 per year - which is where it has stayed pretty much ever since, with a bit of a blip from 1998 to 2008 where it was 2,500-3000 per year, in part due to the introduction of The General Aviation Revitalization Act of 1994 (https://en.wikipedia.org/wiki/General_Aviation_Revitalization_Act), which limited product liability on aircraft over 18 years old.

That big drop at the end of the 70's was due to a couple of factors. USA airline dregulation over the next couple of years dropped ticket prices and increased flight availability to the point that the business case for owning an aircraft faded rapidly. The airways became conjested with airliners in the new system, and the market was saturated with the huge single-engine over-production at the end of the 70s.

In the early to mid 80s the product liability lawyers also had a field day - Piper went broke and Cessna stopped making singles. The average cost of manufacturer's liability insurance for each aeroplane manufactured in the U.S. rose from approximately $US 50 per plane in 1962 to $US 100,000 per plane in 1988. There was a second oil shock in 1979 and then another recession slowed the economy in 1980.

In 1978 one Australian dollar was equal to $1.14 US dollars. Prior to 1983 the value of our currency (the Australian pound then, after decimalisation, the Australian dollar) was always pegged to that of another currency (the British pound, then the US dollar), and then a moving peg in relation to a basket of currencies. When the Australian dollar was floated in 1983, the Aussie dollar value rose for a few weeks but then slowly dropped over the next two years until it stabilised around 77 US cents where it roughly stayed for the next decade. Since the float, the Australian dollar has fluctuated from a low of 47.75 US cents in April 2001 to a high of US$1.10 in July 2011.

So - massive liability increase in price, manufacturing increases with loss of economies of scale, falling Aussie dollar value, recession, cheap airline airfares. Perfect storm, really.

[Lead Balloon]

The exchange rate had a big part to play, too. Back then the AUD/USD exchange was fixed and an Aussie Dollar would buy you more than US 1.10.

[Checkboard]

Sorry Leady - you must have posted that while I was editing/updating my post. :)

[Lead Balloon]

No worries! (I remember that 'window' around July 2011. Purchased a bunch of parts from the US. Sold them back into the US a few years later and still made a profit after shipping costs.)

[Office Update]

It was the era of "bottom of the Harbor Tax schemes" the government had a 45% investment tax allowance..

Schutt's at Moorabbin sold out to car dealers "Brents" (Brian Foreshaw and Ted Sent) and the company became "Jet Corporation" they sold CASA 212's and Westwind Jets, a squadron of 12 C172's/C182' would arrive overhead in formation. Glorious times !

One of Foreshaw's daughters/neices/cousins fly for Qantas

[OZBUSDRIVER]

Found this little gem of a study from 1979 BITRE (https://www.bitre.gov.au/sites/default/files/op_033.pdf) 62% of pvt aircraft registered in 1979 date prior to 1970. The largest group between 65 t0 69. in 1970 Victa started manufacturing coincident with Cessna importing over a 1000 aircraft in that year

[deja vu]

It was the era of "bottom of the Harbor Tax schemes" the government had a 45% investment tax allowance..

Schutt's at Moorabbin sold out to car dealers "Brents" (Brian Foreshaw and Ted Sent) and the company became "Jet Corporation" they sold CASA 212's and Westwind Jets, a squadron of 12 C172's/C182' would arrive overhead in formation. Glorious times !

One of Foreshaw's daughters/neices/cousins fly for Qantas
Yes there was an investment allowance scheme that allowed any new equipment purchased to be offset against the income of successful business, wether it be boats, tractors or aircraft, whatever. I worked for a aviation company in OZ owned by 3 Americans and 1 Australian who imported 3 new Mitsubishi turbo props and 1 Mitsubishi Jet. The tax benefits were written off/claimed against cotton farms around Moree and Wee Waa and other lucrative outfits. It was good for everybody, especially GA with all sorts of great machines arriving to replace old bugsmashers.

[wombat watcher]

Yes. Devita

[Office Update]

The name is: Davida

[Pinky the pilot]

Tailwheel; Thought you may have had something to contribute to this thread, as I seem to remember a similar thread years ago where you explained quite well the exact circumstances that were applicable at the time.

Leady, Office Update and dejavu have summed it fairly well though.

[Checkboard]

My sum up was rubbish, then? :)

[Pinky the pilot]

A thousand apologies Checkie! I shall flagellate myself with whipcord and dress in sackcloth and ashes as penance!:D

Ahhh, what the heck...I'll just have another glass of Barossa Shiraz!:E

[601]

A certain country south of the border were offering loans for aircraft produced in that country at interest rates way below what could be obtained elsewhere

[tail wheel]

Interestingly in the 1970s I seem to recall we required the approval of either the Minister for Aviation or Director of DCA to import aircraft or engines?

Pinky, Checkboard answered the question better than I could. The relative cost of aircraft was much less before the absurdity of product insurance etc. In the early 1960s I was offered the very low time Victor Airtourer demonstrator for £3,800 with a flying school contract. In 1975 a new Embraer Bandeirate cost US$580,000 and extraordinary low export finance costs and a spare PT6A-34 engine was US$90,000. In 1987 I bought a Cessna 150 with 1,200 hours for $12,500 and a Grumman Cougar twin with 1,000 hours for $99,000.

Compare those to todays prices for tired old high time GA aircraft.

[Barraman]

The tax incentives delivered by the investment allowance were the biggest driver of new aircraft sales in the 70's. I got to fly many brand new aircraft at that time - C150, Warrior, C182, C210 x 4, C185 x 2, C206, BE36!