High Cost of Sportplanes

Go look at a new car lot, and then go look at some new airplanes, and
give me ONE reason why an airplane costs ten times as much as a car.



Because there are 1000 cars sold for every airplane. The cost of special
tooling isn't being absorbed by enough volume.

In article uNZWe.123865$084.68527@attbi_s22,
"LCT Paintball" wrote:


Go look at a new car lot, and then go look at some new airplanes, and
give me ONE reason why an airplane costs ten times as much as a car.



Because there are 1000 cars sold for every airplane. The cost of special
tooling isn't being absorbed by enough volume.

Volume, my ass. I'll go back to Henry Ford again. The Model T was priced
at $825 when it was introduced in 1908. He continually cut prices. By
1916, the cars sold for $345. Every time he cut prices, more people
could afford cars, and his volume went up. Every time his profit per car
went down, his total profit went up. It was his pricing policies that
made him the largest carmaker in the world. And his accountants,
investors, competitors, and everyone else thought he was crazy. Yeah,
sure.

That's the real world. You can't wait for increased volume to decrease
prices. You have to work it the other way around. People here are saying
Skyhawks are a bargain at $150,000? What percentage of Americans can buy
a toy of that magnitude? Price them as though you were going to sell a
million a year, and by god, you will.

Try selling a product to Home Depot, as I've done. They RETAIL stuff for
less than their competition can buy it for. Why? Volume. You don't tell
them what your product costs, they tell you what they'll pay. Go to
Continental and Lycoming and tell them you want to buy a million
airplane engines per year, but you need the price to be $6500. Ask them
which one of them wants the contract. They'll probably both come back
begging to undercut that target.

Jeez, I've gotten myself all worked up again. I guess I better get a
small glass of wine and go back out to the shop and squeeze a few rivets
on the RV.

"Smitty Two" wrote in message
news
In article uNZWe.123865$084.68527@attbi_s22,
"LCT Paintball" wrote:


Go look at a new car lot, and then go look at some new airplanes, and
give me ONE reason why an airplane costs ten times as much as a car.



Because there are 1000 cars sold for every airplane. The cost of special
tooling isn't being absorbed by enough volume.

Volume, my ass. I'll go back to Henry Ford again. The Model T was priced
at $825 when it was introduced in 1908. He continually cut prices. By
1916, the cars sold for $345. Every time he cut prices, more people
could afford cars, and his volume went up. Every time his profit per car
went down, his total profit went up. It was his pricing policies that
made him the largest carmaker in the world. And his accountants,
investors, competitors, and everyone else thought he was crazy. Yeah,
sure.

Your analogy is off-base. The Model T offered more practical transportation
than the horse and buggy, and transportation is a must have. A LSA,
regardless of price, is a toy, not practical transportation. You won't sell
a million, and I think 5,000 a year will be a stretch if the cost is $50k.


That's the real world. You can't wait for increased volume to decrease
prices. You have to work it the other way around. People here are saying
Skyhawks are a bargain at $150,000? What percentage of Americans can buy
a toy of that magnitude? Price them as though you were going to sell a
million a year, and by god, you will.

Don't think so. You could give 'em away and there are not enough people
interested in aviation to take 'em all.


Try selling a product to Home Depot, as I've done. They RETAIL stuff for
less than their competition can buy it for. Why? Volume. You don't tell
them what your product costs, they tell you what they'll pay. Go to
Continental and Lycoming and tell them you want to buy a million
airplane engines per year, but you need the price to be $6500. Ask them
which one of them wants the contract. They'll probably both come back
begging to undercut that target.

Jeez, I've gotten myself all worked up again. I guess I better get a
small glass of wine and go back out to the shop and squeeze a few rivets
on the RV.

Enjoy the RV. Great airplanes. And you have a point about volume making
aircraft more reasonable. That's why Van's is able to offer competitive
prices on their kits, engines, etc. Still, even though they offer a heck of
a high performance airplane for $50k plus labor, there are only 4,000
flying...

KB

In article ,
"Kyle Boatright" wrote:

Your analogy is off-base. The Model T offered more practical transportation
than the horse and buggy, and transportation is a must have. A LSA,
regardless of price, is a toy, not practical transportation. You won't sell
a million, and I think 5,000 a year will be a stretch if the cost is $50k.


That's the real world. You can't wait for increased volume to decrease
prices. You have to work it the other way around. People here are saying
Skyhawks are a bargain at $150,000? What percentage of Americans can buy
a toy of that magnitude? Price them as though you were going to sell a
million a year, and by god, you will.

Don't think so. You could give 'em away and there are not enough people
interested in aviation to take 'em all.



The Model T sold because Henry Ford made it affordable, and sold it. No
one was driving around in a horse and buggy saying, "jeez, I sure wish
someone would invent a car." The T wasn't exactly a Toyota Avalon,
either. You actually had to get dirty and maintain and fix the damn
thing on a regular basis. The roads sucked. The whole automobile
infrastructure hadn't been built. There weren't a bunch of gas stations,
and Sears stores weren't selling tires and Die Hards. I'd say the T was
more of a novelty toy than "practical transportation" when it was
introduced.

Still he sold a half million $400 cars per year at a time when his
laborers were earning $2.50/day, and the US population was only
100,000,000.

Make airplanes actually affordable to someone other than the great-
grandson of a robber baron, and people will get interested. The boating
industry sells close to a million boats annually, and they aren't any
less of a toy than an airplane.

And despite the Moller fiasco, some certifiably sane real people really
believe that airplanes *will* become practical means of personal
transportation some day. But not at 150k per copy.

Volume, my ass. I'll go back to Henry Ford again. The Model T was priced
at $825 when it was introduced in 1908. He continually cut prices. By
1916, the cars sold for $345. Every time he cut prices, more people
could afford cars, and his volume went up. Every time his profit per car
went down, his total profit went up. It was his pricing policies that
made him the largest carmaker in the world. And his accountants,
investors, competitors, and everyone else thought he was crazy. Yeah,
sure.

That's the real world. You can't wait for increased volume to decrease
prices. You have to work it the other way around. People here are saying
Skyhawks are a bargain at $150,000? What percentage of Americans can buy
a toy of that magnitude? Price them as though you were going to sell a
million a year, and by god, you will.


You have an interesting theory. Why haven't you tried it?
Do you have any idea what it costs to tool up and build something like an
airplane at an affordable price?

I build plastic injection molds for a living. Although prices vary
considerably with the complexity of the part, figure $40,000 as an average
price for an injection mold. Multiply that times the number of parts in an
airplane. Don't forget that the right side is different than the left side
of the plane. Now, figure around $250,000 for each piece of metal working
equipment to build the metal parts. Now, you've just about gotten started
making the individual parts of the plane. I guess you can figure out what it
will cost to build the assembly line now.

In article XI5Xe.337964$x96.274400@attbi_s72,
"LCT Paintball" wrote:




You have an interesting theory. Why haven't you tried it?
Do you have any idea what it costs to tool up and build something like an
airplane at an affordable price?



If the tooling price tag were 10 billion dollars, and you sold a million
airplanes a year, the amortized tooling cost per plane over five years
would be $2000. Now just send me a check for ten billion, and I'll get
started cranking out affordable planes.

Dang,
Let me know the metalworking equipment you are paying 250,000 bucks for. A
decent brake is around 4000, a nice shear 4000-5000. Yes you could spend
some more, or if you were frugile alittle less. To build something like a
Cub or Champ you don't need 250,000 bucks of metal working equipment.
However if you want to spend that kind of money in your metalshop I'd love
to come work for you I guess if you really wanted to splurge you could
spend some bucks on things like water jet cutters or what have you..but they
could not pay for themselves unless you were selling airplanes like
hotcakes. So really something like that is something you buy when you know
you have the biz going strong, and not really a start up cost.
Some places I worked had shrinkers /stretchers, and a English Wheel was
a luxury. Of course working on airliners they definitely had CNC and such to
cut parts from...but that is not a sport plane A metal sport plane can be
built very very well with basic sheet metal tools. The high dollar stuff
would be a waste of money unless you needed production speed of an
automobile assembly line.
I've never built a plastic injection mold, but I've built airplanes

Patrick
student SP
aircraft structural mech

"LCT Paintball" wrote in message
news:XI5Xe.337964$x96.274400@attbi_s72...



I build plastic injection molds for a living. Although prices vary
considerably with the complexity of the part, figure $40,000 as an average
price for an injection mold. Multiply that times the number of parts in an
airplane. Don't forget that the right side is different than the left side
of the plane. Now, figure around $250,000 for each piece of metal working
equipment to build the metal parts. Now, you've just about gotten started
making the individual parts of the plane. I guess you can figure out what
it will cost to build the assembly line now.

Smitty,

Your point about pricing the product -- any product -- at a compelling price
point in order to build sales is absolutely true. A good product that is
priced to give great value is going to sell a lot, no question.

However, personal aviation has some structural limitations -- it is not for
everybody and never will be. It will always be a pursuit for a relatively
small segment of the population, for a number of reasons -- it is
challenging, it is risky and it is expensive (even if prices came down by
half it would still be expensive).

The personal airplane will never be a car, or even a jet ski or a
motorcycle, in terms of sales potential. Which is probably a good thing,
considering how many bad drivers and riders and boaters there are -- and how
many more bad pilots there would be. (Not that there aren't already).

And because there will never be a million personal planes sold, personal
aviation will always be something of a cottage industry with the attendant
poor value. The best we can hope for is a modest improvement, which is the
idea of sportplanes.

The idea was that by loosening the regulations, it would be possible to
build small airplanes more cheaply, and thereby provide better value and
attract new buyers. However, we are seeing just the opposite. The first
sportplanes actually give you less for your dollar than the Cessna I
mentioned.

I cited the Cessna not because it's a great deal by any stretch of the
imagination, but because it is still a better value than the new
sportplanes -- a lot better value any way you look at it.

This is a problem, because the whole idea behind sportplanes was to provide
a more compelling value propostion, not less. However, the people making
them have taken the marketing approach you see in movie theater snack bars:
There is no other place to get popcorn so why not gouge the customer? So you
look at a small bag of popcorn that costs eight dollars and you think to
yourself, "man that is a gip." And so the large box of popcorn which only
costs two bucks more, but is actually about five times bigger, doesn't look
so bad in comparison. Sure you're paying ten bucks for a crummy bag of
popcorn, but it's better than saving two bucks and getting one fifth the
product.

It's the same thing here. That $150,000 Skyhawk doesn't look so bad in
comparison to a $100,000 putt-putt that is not even one-third the airplane.
I bet the Cessna executives must be having a pretty good laugh looking at
the prices of some of these planes -- and no doubt shaking their heads.

But I agree wholeheartedly with your point that if these outfits building
sportplanes were smart, they would take a page out of old Henry's book and
price them to move. I do believe that some will eventually wake up to that
fact -- the economics are very real and viable, despite some of the comments
from those in industry who would have us believe that it is impossible to
build a plane for $50,000.

It is possible and it will be done. The main stumbling block, regulation, is
out of the way now. All that remains is for one smart individual to run with
this idea -- perhaps the Henry Ford of sprotplanes is still out there.

Regards,

Gordon.



"Smitty Two" wrote in message
news
In article uNZWe.123865$084.68527@attbi_s22,
"LCT Paintball" wrote:


Go look at a new car lot, and then go look at some new airplanes, and
give me ONE reason why an airplane costs ten times as much as a car.



Because there are 1000 cars sold for every airplane. The cost of special
tooling isn't being absorbed by enough volume.

Volume, my ass. I'll go back to Henry Ford again. The Model T was priced
at $825 when it was introduced in 1908. He continually cut prices. By
1916, the cars sold for $345. Every time he cut prices, more people
could afford cars, and his volume went up. Every time his profit per car
went down, his total profit went up. It was his pricing policies that
made him the largest carmaker in the world. And his accountants,
investors, competitors, and everyone else thought he was crazy. Yeah,
sure.

That's the real world. You can't wait for increased volume to decrease
prices. You have to work it the other way around. People here are saying
Skyhawks are a bargain at $150,000? What percentage of Americans can buy
a toy of that magnitude? Price them as though you were going to sell a
million a year, and by god, you will.

Try selling a product to Home Depot, as I've done. They RETAIL stuff for
less than their competition can buy it for. Why? Volume. You don't tell
them what your product costs, they tell you what they'll pay. Go to
Continental and Lycoming and tell them you want to buy a million
airplane engines per year, but you need the price to be $6500. Ask them
which one of them wants the contract. They'll probably both come back
begging to undercut that target.

Jeez, I've gotten myself all worked up again. I guess I better get a
small glass of wine and go back out to the shop and squeeze a few rivets
on the RV.

Would you really want as many planes flying as cars are driving? Do you
really want the plane to be so affordable that anyone can get one and
not care about it like a cheap car?
Personaly, I'd like to keep the price up there so the people who own a
plane keeps it up to higher standards. I really don't like the idea of
the LSA, although good idea for some, I think your going to start to
see planes falling out of the sky due to lack of experience. But if you
really want to know why the prices are so high, build one and then try
to sell it.
Lou

Smitty Two wrote:

If
Henry Ford were alive today, he'd be saying, "man, you're some kind of
sinner."

Don't forget that Ford took a shot at a LSA:

http://www.hfmgv.org/museum/heroes/e...rs/flivver.asp

I have to wonder what it would be like today if the prototypes were more
airworthy and he had carried through the venture.


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