The aviation industry has always had its ups and downs.
"In 1860, French economist Clement Juglar identified the presence of economic cycles 8 to 11 years long, although he was cautious not to claim any rigid regularity. Later, Austrian economist Joseph Schumpeter argued that a Juglar cycle has four stages: (i) expansion (increase in production and prices, low interests rates); (ii) crisis (stock exchanges crash and multiple bankruptcies of firms occur); (iii) recession (drops in prices and in output, high interests rates); (iv) recovery (stocks recover because of the fall in prices and incomes). In this model, recovery and prosperity are associated with increases in productivity, consumer confidence, aggregate demand, and prices.
In the mid-20th century, Schumpeter and others proposed a typology of business cycles according to its periodicity, so that a number of particular cycles were named after their discoverers or proposers:
-the Kitchin inventory cycle of 3–5 years;
-the Juglar fixed investment cycle of 7–11 years (often identified as 'the' business cycle);
-the Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets);
-the Kondratiev wave, or long technological cycle of 45–60 years (after Nikolai Kondratiev).
The Wikipedia goes on to caution that "Interest in these different typologies of cycles has waned since the development of modern macroeconomics, which gives little support to the idea of regular periodic cycles."
(Maybe true, but it sure seems like aviation goes is pretty close to the proposed Juglar cycle).
From what I've read, the business aviation market has had/is forecast to have the following extremes:
Peak years 1968, 1974, 1980, 1991, 1999, 2008
Trough years 1972, 1977, 1984, 1995, 2003, 2011
Which, comes out to an average, for this 40+ year period, of about 8 years per cycle.
In the March 2009 issue of Flying magazine, J. Mac McClellan has an excellent article regarding the business plan challenges faced by Eclipse Aviation (not the current Eclipse Aerospace), What Went Wrong With Eclipse , he mentions the unsustainability of the post World War 2 general aviation boom:
"But the aviation industry has deluded itself about the size of demand many times in the past. In 1946 and '47 it is believed about 50,000 airplanes were built by the manufacturers who imagined a giant demand from returning military men. The market wasn't there and dozens of airplane manufacturers went out of business, and it took at least 15 years to build the next 50,000 airplanes. There was a spectacular boom in the late 1970s with total GA production reaching about 18,000 airplanes in both 1978 and '79. A few years later production rates dropped to one-tenth of that number, and at the low end not even 1,000 airplanes per year were built."
Now THAT was a rough time. The mid-1980's collapse brought big changes (including bankruptcy of Piper, and Beech bought by Raytheon, Cessna bought by General Dynamics, and then by Textron, and Learjet -already owned by Gates- bought by Bombardier). These calamitous times were well documented by Scott E. Tarry, in a June 22, 1995 article in Transportation Journal (The rise and fall of general aviation: product liability, market structure, and technological innovation.; This is an excellent article- long, but detailed- the single best one I have read; remember, it was written in 1995, so our current perspective is a bit different).
Quoting from this same article,
"Following the recession in the early 1970s, production rates began to increase very rapidly, from 7,466 units in 1971 to 17,000 in 1977 - an increase of more than 125 percent in six years. Production in recent years is a trickle when compared to the heyday of general aviation. The numbers are compelling: Since reaching a peak of 17,811 shipments of light aircraft in 1979, U.S. production plummeted to 811 units in 1993, a decline of 95.5 percent."
That was a really tough time. But, the industry recovered a few years later. The General Aviation Manufacturers Association has GAMA sales figures for the current decade available on-line:
2000 2,816, $8.5 B
2001 2,994, $13.8 B
2002 2,432, $11.8 B
2003 2,686 $10.0 B
2004 2,963 $ 11.9 B
2005 3,580 $15.1 B
2006 4,053 $18.8 B
2007 4,272 $21.9 B
2008 3,967 $24.7 B
(Amazingly, considering current difficulties, 2008Q4 was the all-time billing high, $6.8B; great news, if it were still 2008: GAMA reports for the first half of 2009, units down 45%, billings down 21%, compared to the first half of 2008).
And it's not just general aviation that faces cyclical demand, note the Boeing deliveries on this chart. Pretty up-and-down too. (I cannot explain why the Airbus deliveries are more stable- anyone? More Boeing versus Airbus shipment information here).
Things might seem bleak now, and they are, and might get a little bit worse yet. But, the industry has been through it before, and although many of us are rightfully wondering Will General Aviation Survive? (article circa 1995), from observing historical patterns, yes, it will. Our thoughts are with each one who is in a difficult way until the recovery begins.