Cessna profits plunge......OT (or is it?)

It seems to me that there must be a lot of risk in the small piston plane
market.

This means that a company without a high degree of ability to accept risk
will eventually fail a critical gut check. The question is - Can a public
company stand the risks it takes to be number one?

I believe Cessna simply will not do what it takes to win in this business
because it has become too risk averse. It may survive, but I don't see it
thriving. Strangely, its the same attitudes that kept them in business all
this time, that may now be their downfall. Until the recent entries of new
players, Cessna was king.

Cirrus has done well, and much of it is due to the passion of the founders.
I may be mistaken, but I believe that the investors are likewise passionate.
They are not presently trading the stock on an exchange, are they? If not,
then the company is still reasonably closely held.

What about the rest?

Also, someone mentioned American companies. I understand that the Canadians
are all about tax incentives to attract manufacturing companies, and they
have grabbed a few that way.




"C J Campbell" wrote in message
...

"Dan Luke" wrote in message
...
| C J Campbell wrote:
| In every sector of aviation there appears to be bunch
| of losers that are barely able to tie their own shoes, and a
| couple of performers that seem to make money despite
| all the excuses the losers have.
|
| And why is this so? Because aviation businesses are almost all terribly
| difficult to be successful in:

Every field of business is terribly difficult. No excuse. If you can't
stand
the heat, get out of the kitchen. What I said about aviation can be
applied
to almost every other field of business. There may be exceptions, but I
can't think of any right now.

I have had just about enough of the idea that aviation is somehow
different
than other businesses, that ordinary business principles don't apply to
aviation, that the only reason to get into aviation is that you love it,
etc. Well, here's a news flash: people succeed because they work hard, use
their imaginations, keep costs to a minimum, and charge enough for their
labor and capital to get a reasonable return. They try to sell a product
that people actually want. Loving your work makes all that a lot easier,
but
it is not totally necessary. Nevertheless, I'll bet that Bill Gates loves
his job.

Now, there is no question that people want to fly. Look at what they put
up
with in order to do it. The customer in this industry is generally treated
like crap. The whole message from the time he walks in the door is, "We
don't value our jobs very highly, and we think even less of you. At best,
you are an inconvenience. At worst, a dangerous criminal."

On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:


Cirrus has done well, and much of it is due to the passion of the founders.
I may be mistaken, but I believe that the investors are likewise passionate.
They are not presently trading the stock on an exchange, are they? If not,
then the company is still reasonably closely held.

Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

The stock is publicly traded, it is not on the NYSE because the
company cannot meed the financial requirements for being listed.

ArtP wrote:

On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:



Cirrus has done well, and much of it is due to the passion of the founders.
I may be mistaken, but I believe that the investors are likewise passionate.
They are not presently trading the stock on an exchange, are they? If not,
then the company is still reasonably closely held.


Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.

On Tue, 03 Feb 2004 17:04:41 -0500, TTA Cherokee Driver
wrote:


My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.

The plane is now 2 years and 1 month old. I just got 3 "mandatory"
SB's (2 for the parachute and one for the starter). The estimated cost
is over $1,000. This is just after the 2nd annual ($2,000 and 6
weeks).

While new Mooneys are expensive, they sure are nice. I sat in one at an
open house they other day. Sweet!


"TTA Cherokee Driver" wrote in message
...
ArtP wrote:

On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:



Cirrus has done well, and much of it is due to the passion of the
founders.
I may be mistaken, but I believe that the investors are likewise
passionate.
They are not presently trading the stock on an exchange, are they? If
not,
then the company is still reasonably closely held.


Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.

Of course ours are not new, far from it

That's why the financial folly of starting to buy $300K airplanes is so
apparent, even if the Cirruses were great and reliable planes.

Dude wrote:

While new Mooneys are expensive, they sure are nice. I sat in one at an
open house they other day. Sweet!


"TTA Cherokee Driver" wrote in message
...

ArtP wrote:


On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:




Cirrus has done well, and much of it is due to the passion of the

founders.

I may be mistaken, but I believe that the investors are likewise

passionate.

They are not presently trading the stock on an exchange, are they? If

not,

then the company is still reasonably closely held.


Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.

Dude wrote:
...
I believe Cessna simply will not do what it takes to win in this
business
because it has become too risk averse. It may survive, but I don't
see it
thriving. Strangely, its the same attitudes that kept them in
business all
this time, that may now be their downfall. Until the recent entries
of new
players, Cessna was king.

Cirrus has done well, and much of it is due to the passion of the
founders.
I may be mistaken, but I believe that the investors are likewise
passionate.
They are not presently trading the stock on an exchange, are they?
If not,
then the company is still reasonably closely held.
....

We can't look at Cessna single production as a financial entity by
itself. The profit is in the jets, the singles are likely a division
of a corporation which is a subsidiary of the big parent company.
Money is no controlling factor. If they want a full product line,
then 172/182s make sense, and some auto mfrs lose money on each
compact they sell.

Cirrus doesn't enjoy that luxury, and capital is from private
investors and lenders. The recent infusion of $100 million was mostly
to pay debts, and a recent local news article hints they still have
liquidity problems. So if Cirrus is still losing money, as quite
possible, it really matters. If Cessna loses on a 172 (bet in most
years not), it's just like a Dodge Neon in a full product line.

Cessna may not even view themselves in substantial competition with
Cirrus. Beyond flight schools, there may be a significant number of
buyers loyal to the high-wing brand and/or those who think a plastic
airplane is just wrong. Marketing strategy is a matter of judgment in
what they may view as a niche market. Are flight schools buying SR-20s
much at all?

Fred F.

On Mon, 2 Feb 2004 08:04:42 -0500, "TaxSrv" wrote:

Are flight schools buying SR-20s
much at all?

Considering insurance companies are balking at quoting low time pilots
without an IFR rating and yearly factory authorized training, I would
think that a flight school would have little use for the plane.

"Dude" wrote in message
...
It seems to me that there must be a lot of risk in the small piston plane
market.

This means that a company without a high degree of ability to accept risk
will eventually fail a critical gut check. The question is - Can a public
company stand the risks it takes to be number one?

I believe Cessna simply will not do what it takes to win in this business
because it has become too risk averse. It may survive, but I don't see it
thriving. Strangely, its the same attitudes that kept them in business
all
this time, that may now be their downfall. Until the recent entries of
new
players, Cessna was king.

Cirrus has done well, and much of it is due to the passion of the
founders.
I may be mistaken, but I believe that the investors are likewise
passionate.
They are not presently trading the stock on an exchange, are they? If
not,
then the company is still reasonably closely held.

Cirrus is riding the new plane bubble. Time will tell ahow they do and they
will need to come out with something new when the market for the present
model becomes saturated. Certainly one would rather be in Cessnas financial
position than that of Cirrus. Cirrus had to sell their soul to stay in
business.

Wow, with all this bad news about Cirrus, should buyers be concerned?

I thought they had to be doing well selling so many planes. I still think
the investors have got to be aviation fans more than Wall Street types, but
we may never know.

As for flight schools, it seems that Diamond is getting more and more of
that business, but I hear the owner has some serious pockets.


"Dave Stadt" wrote in message
...

"Dude" wrote in message
...
It seems to me that there must be a lot of risk in the small piston
plane
market.

This means that a company without a high degree of ability to accept
risk
will eventually fail a critical gut check. The question is - Can a
public
company stand the risks it takes to be number one?

I believe Cessna simply will not do what it takes to win in this
business
because it has become too risk averse. It may survive, but I don't see
it
thriving. Strangely, its the same attitudes that kept them in business
all
this time, that may now be their downfall. Until the recent entries of
new
players, Cessna was king.

Cirrus has done well, and much of it is due to the passion of the
founders.
I may be mistaken, but I believe that the investors are likewise
passionate.
They are not presently trading the stock on an exchange, are they? If
not,
then the company is still reasonably closely held.

Cirrus is riding the new plane bubble. Time will tell ahow they do and
they
will need to come out with something new when the market for the present
model becomes saturated. Certainly one would rather be in Cessnas
financial
position than that of Cirrus. Cirrus had to sell their soul to stay in
business.