Despite COVID, North Dakota’s noncommercial aviation sector speeds down the runway
The state’s aviation industry saw a 30% surge in plane transactions in 2019, from 118 to 153, per the North Dakota Aeronautics Commission. That was followed up with another strong showing in 2020 at 148 aircraft.
GRAND FORKS — It’s a promising time for North Dakota’s aviation industry, with the number of airplane transactions — purchases, trade-ins and the like — absolutely soaring.
Aviators say it’s no surprise. A decade after the beginning of the oil boom, North Dakota has seen investments in airports all across the state, plus perennially strong flight training programs such as those at the University of North Dakota. Now all those investments in the industry are taking off.
"It's not easy to get from Grand Forks to Williston,” Kim Kenville, a UND aviation professor, said this month. The same goes for Dickinson or Fargo or wherever the region’s business travelers might want to be.
In North Dakota, car rides can be long and there’s no intra-state airline carrier. That’s led companies to do it themselves.
“A lot of corporations in North Dakota see the value in being able to get all over the state in a short amount of time,” Kenville added. “It's just the only way to do it.”
That economic pressure — combined with ample opportunity for any other fliers — makes a big difference. The state’s aviation industry saw a 30% surge in plane transactions in 2019, from 118 to 153, per the North Dakota Aeronautics Commission. That was followed up with another strong showing in 2020 at 148 aircraft.
Those two years’ transactions are nearly as many as the previous three years combined.
"Primarily, I would say just the attitude and the culture of aviation that North Dakota has is the primary driver for this,” Kyle Wanner, the North Dakota Aeronautics Commission chief, said.
The same surge in aircraft transactions shows up in NDAC data on excise tax collections. Those are the 5% tax applied to those transactions, or 3% for crop dusters. For the 2020-2021 biennium, which ends this summer, those tax collections are at nearly $5.5 million and counting. That’s millions above the last decade-plus collections average.
The bump in aviation comes amid the COVID-19 pandemic, which had a brutal effect on commercial air travel and manufacturers. The General Aviation Manufacturers Association describes 2020 as something of a disaster for producers.
“The value of aircraft deliveries decreased by 16% from 2019. Each segment of the industry suffered losses,” a GAMA report on 2020 states, “some more than others.”
But North Dakota’s transaction numbers persevered. Wanner points out that low interest rates made it a good time to buy, and that plenty of buyers might have been trading in or buying pre-owned planes.
That means that while plane-makers suffered, plane buyers fared far better. The Financial Post reports that preowned business jets saw a 5.2% boost in worldwide sales in 2020; new purchases, though, fell about 20%.
Duluth-based Cirrus Aircraft, which has a manufacturing facility in Grand Forks, wasn’t spared either, slashing its workforce by about 100 workers across the pandemic before looking to grow again this spring. Ben Kowalski, the company’s senior vice president of sales and marketing, said production was dampened by supply chain snarls.
“It takes quite a few parts to build an airplane, and we need all of them to build the airplane. You can’t not have a part and complete it. So, we had a few suppliers who got into some tight spots and weren’t able to continue shipping,” Kowalski told the Duluth News-Tribune in early March.
But the pandemic is passing, and Cirrus’ job numbers are rebounding.
"Airports across the country, as well as within the state, are tracking about 30 to 40 percent down (in passenger traffic) compared to what we were in 2019,” Ryan Riesinger, the executive director of Grand Forks International Airport, said earlier this month. “But that's still a significant improvement to where we were last year at this time. So that's kind of where we're at on the coronavirus front."
Kenville, a fellow member of the NDAC, said the pandemic had far less of an impact that might have been feared on UND’s aviation program, where she said she hardly noticed a slowdown in students showing up for flight training. And as aviators look to the future, there’s still plenty to do to propel North Dakota into the next generation of flight.
More airplanes will mean a need for more hangars. New types of aviation fuel will mean more kinds of pumping stations. The list goes on.
Wanner said that’s where those rising excise tax revenues will go.
“Really, a majority of the funding we bring in, the purpose of it is to provide it right back to communities,” Wanner said.