"Brian Sponcil" wrote in message
...
"Matt Whiting" wrote in message
...
I don't think Cirrus has come even close to making money yet, on a total
investment basis. I haven't keep track of the total amount of venture
capital they've secured, but I think it was north of $200MM. That will
take a long time to recoup. They may well be profitable at the
operations level, but that isn't the same thing as "making money"
overall.

I'm sure you're right but a quick look at the numbers makes me wonder how
they AREN'T going to recoup that $$. Cirrus is selling something like 50
planes a month. You'd think their profit margin on a 300k airplane would
be at least 20k. If so, that's roughly 10Mil in profit every year and a
20 year break even on the initial 200Mil investment.

The gross margin on aircraft is much higher than 6.7%, it is more like
35-40%. Of course they have SG&A and R&D to cover but they are making an
incremental $100K+ on every plane.


Diamond's numbers are roughly the same. Supposedly the Austrian factory
pumps out 400 planes/year and another 100 come out of Ontario. Unless
these guys are operating on Dell like profit margins it's hard to see how
they won't make their investments back.

Dell's gross profit margins are much smaller than any aircraft maker

I suspect that Cessna has run the numbers and realizes that the cost of a
"clean sheet" light airplane would simply never be recovered in today's
market.

Agreed, but Diamond nonetheless managed to come up with 4 "clean sheet"
designs in less than 10 years - including a light jet. Why can't Cessna
and Piper do it? Is the FAA THAT much worse than the JAA (or whatever the
european equivalent is)? You also have to wonder how much longer Cessna
and Piper can afford to NOT bring out a new design.

Cessna and Piper are tooled up to produce metal airplanes while most
successful new designs are composite. Cessna, Piper and Mooney have the
wrong tooling and their workforce has the wrong skills to produce "modern"
light aircraft.

Mike
MU-2


-Brian
Iowa City, IA