High Cost of Sportplanes

Jim,

I don't think the Rotax is much of a bargain at all. Mattituck will sell you
a brand new uncertified O200 for about $15000, which is about what the Rotax
costs.

There used to be a very good engine bargain in the Polish PZL Franklin, but
they are no longer being made, thanks to the company's acquisition by a
European aerospace concern. Too bad -- these were fully FAA-certified
engines that you could buy brand new for about $8000.

The fact that the company that bought the PZL plant immediately stopped
production tells you a lot about the business model of the aerospace
industry. It is based on low production volume and high profit margin. A lot
of the business comes from government contracts and that's the way the
industry likes it, as the government is the best customer you can have --
never any complaints about price.

So we couldn't well have a cheap, certified airplane engine spoiling the fun
now could we? So close the plant. We can see this to some extent in the
Rolls Royce acquisition of Walter engines in the Czech Republic. You can be
sure we won't be sseing any of the good Walter turbines or LOM piston
engines at cheap prices ever again. That is history.

It tells you a lot that these companies were bought simply to extinghuish
their cheap manufacturing capability. So much for supply and demand and all
of the meaningless crap that's always brought up as an excuse for corporate
greed.

However, when it comes to light plane manufacturing, it is really more of a
cottage industry than a corporate thing. The companies building the LSAs are
small concerns with very little connection to the commercial aerospace
industry -- with the possible exception of Tecnam, which builds components
for regional airliners and such.

Still, the engine is a major cost of the airplane and it's too bad that the
excellent Eastern European manufacturers have been swallowed up and taken
out of comission. Perhaps other options will emerge -- like a rotary or
auto-based engines. These should be doable under the LSA rules.

As far as the cost of materials goes, sheet aluminum is probably the best.
The total cost of metal in a Van's kit is probably no more than a couple of
thousand bucks. Of course that metal needs to be cut and shaped and bent
into shape, and this is in fact where mass production and technologies like
CNC come into play.

And speaking of Van's, they are probably the best value going in the kit
market. You can buy the entire airframe ready to assemble for $15,000 -- and
this leaves the company a good profit margin. If you hired someone at $20 an
hour to build that airplane, that's only $30,000 if you figure 1500 hours
build time. (This is legal in Canada and is spawning something of a
mini-industry as people look for alternatives to the high cost of airplane
ownership).

If you add $20,000 for the cost of an engine and firewall-forward
installation, you will have invested about $65,000 -- this is less than the
cost of new LSAs, but you are getting a heck of a lot more airplane by any
measure.

The idea that the pricing of LSAs realistically reflects cost conditions is
pure nonsense. But leave it to the magazines to try to pull the wool over
our eyes.

Regards,

Gordon.




"Jim Carriere" wrote in message
.. .
Jimbob wrote:
I agree. The thing I am hoping for is economies of scale kick in.
We've increased the number of potential buyers from Europe to USA +
Europe. I don't think relative demand per unit has increased because

snip

plane. # seats, stall and max speed are all fixed. Powerplant size
can only vary so much otherwise you're shooting youself in the foot.

I think the economy of scale kicked in a few years ago for powerplants.
The Rotax 912 nearly dominates this segment. Here is an engine whose
weight and power are ideal for a 2 seat LSA. It is also modern, light
weight, efficient, and about 3/4 the cost of an O-200. The next closest
competitors seem to be a mix of O-200, O-235, Continental C-xx, Subaru (if
you count non cert).

A lot of people think Rotax 2 strokes "saved" the ultralight movement, and
the 912 series is the next logical step in that line of engines.

Hopefully something similar could evolve with airframes, but other than a
few parts like wheels, hardware, paint, instruments, avionics... which are
already mass produced, I doubt it. Airframes and engines are like apples
and oranges.

On 2005-09-17 14:34:17 -0400, "Gordon Arnaut" said:

The fact that the company that bought the PZL plant immediately stopped
production tells you a lot about the business model of the aerospace
industry. It is based on low production volume and high profit margin.
A lot of the business comes from government contracts and that's the
way the industry likes it, as the government is the best customer you
can have -- never any complaints about price.

Interesting point. Vern Raburn wound up working with a lot of
non-aviation-contractors because he finds cost-plus contracting not
only inefficient but, quote unquote, "evil."

We can see this to some extent in the Rolls Royce acquisition of Walter
engines in the Czech Republic. You can be sure we won't be sseing any
of the good Walter turbines or LOM piston engines at cheap prices ever
again. That is history.

Walter was at NBAA, promoting what they call "the other turboprop."
Still significantly less to get into a 601P than a PT-6 or R-R 250. I
got to practice my Czech on them.

Still, the engine is a major cost of the airplane and it's too bad that
the excellent Eastern European manufacturers have been swallowed up and
taken out of comission.

What you had for a brief period was stuff being sold under cost due to
the economic dislocations created by the end of the closed Warsaw Pact
market. Following your logic to its ultimate conclusion, we should hope
that the Chinese start making aero engines and don't ever give up
Communism....

this is in fact where mass production and technologies like CNC come
into play.

If you are smaller than Van's -- and every maker is -- then you can't
exploit such economies of scale. The tooling cost needs to amortized
over a production run of some kind.


And speaking of Van's, they are probably the best value going in the
kit market. You can buy the entire airframe ready to assemble for
$15,000 -- and this leaves the company a good profit margin.

Not sure about the size of Van's profit margin -- enough to survive, I
think. One reason Van's costs are low is that he uses overseas labour
to assemble the QB kits. Again, you need to be of a certain size for it
to be worth your while to do that, and as economic conditions improve
in the nations where Van's assembly work is done, he will face the
choice of raising prices or relocating production again to another
distressed nation.

If you hired someone at $20 an hour to build that airplane, that's only
$30,000 if you figure 1500 hours build time. (This is legal in Canada
and is spawning something of a mini-industry as people look for
alternatives to the high cost of airplane ownership).

It is not legal in the US for amateur-built aircraft (see dictionary,
"amateur.") The US regulations say that you can build for education or
recreation. I dunno about you, but I paid my mechanics significantly
more then $20 when I had a repair station. Also, for a real employee,
wage is only about half the cost.

this is less than the cost of new LSAs, but you are getting a heck of
a lot more airplane by any measure.

Depends on the LSA. Float Planes and Amphibians was selling a Drifter
on amphib floats with radio and mode-C for $45k. Less profit in that
than in an SUV at the same price, for both manufacturer and dealer. The
only way people get a reasonable Van's airplane flying at under about
$60k is by valuing their labour at $0.

The idea that the pricing of LSAs realistically reflects cost
conditions is pure nonsense. But leave it to the magazines to try to
pull the wool over our eyes.

If there was this great delta between costs and prices, some hero would
go sailing in there and build his market share. The fact that no one
has done so, in a fundamentally free market, indicates that prices are
either reasonable, or being set by a cartel. Given the dozens of
producers, a cartel is unlikely to say the least.

cheers

-=K=-

Rule #1: Don't hit anything big.

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Kevin O'Brien,

Interesting posts. I wonder if you would agree with me that the
kit/small GA builders have wrung most of the fat out of the building
process and that any further gains are in incremental productivity /
materials handling procedures? If so, I wonder what you think could be
realized in savings over the current processes?

Evan
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On 2005-11-14 12:45:14 -0500, Evan Carew said:

Interesting posts. I wonder if you would agree with me that the
kit/small GA builders have wrung most of the fat out of the building
process

I'm not sure that's the case, because we're in the midst of several
real industrial revolutions -- materials, automation, organizational.
These add up to the possibility that we will see, someday soon,
airplanes assembled on a line-production rather than a bespoke basis.

If you've ever tried to fit a factory airframe part (that cost an arm
and a leg) to a Beech, you know what I mean.

and that any further gains are in incremental productivity / materials
handling procedures? If so, I wonder what you think could be realized
in savings over the current processes?

I know that everyone who's seen the Eclipse plant (including Dale
Klapmeier) has been agog.

The problem in the kit field is manifold:

1. Barriers to entry are almost nil. You can rivet up some tubes or cut
some foam, blow a couple grand on a booth at Oshkosh and you are a kit
manufactuer. And God help your customers. In fact, you can skip the
tubes or foam and just show up at OSH with a computer rendering or a
shiny model.

Even if you have a degree from a top AeroE program, certified aircraft
makers are not going to be interested in your design ideas. If you
start off in the kit market, no matter how flaky your idea, somebody
will try to buy it from you, if you can support yourself long enough.

2. For many, the kit airplane dream is built on a myth of vastly
lowered cost. Only if you ignore used aircraft, and value your labour
at a factor of zero.

3. Some companies try to drive the labor cost down towards zero by
doing work offshore. Van's does this, and Bearhawk frames are welded-up
in Mexico (which combines Third World wages with easy transportation to
US and Canadian first-world destinations). Do that, and you wind up
hoping that Mexico stays corrupt so that desperate Mexicans will work
for pennies on the dollar... there is no material reason prosperity
should stop hard at the Rio Grande, but it does; it's Mexican
government and elite policies that cause that. That's an unstable
situation that may last 50 or 100 years but won't last forever.

But the irreducible problem with lowering labor costs on the kit side
is that by law, you only get half of the benefit, because the ultimate
registrant must (under the law, must) do 51% of the work.

4. Many people in the kit field want to build, but my impression is
that more want to fly. Hence the popularity of "builder-assist"
programs, which are now getting a hairy eyeball from the FAA after
about a decade of abuses. One vendor rubbed the FAA's nose in his
disdain for the law, which is never really smart, and now a bunch of
people who were minding their own business and making for safe aircraft
and happy customers are at risk.

5. Many of the designers out there have a design bug or three that they
have to get out of the system, so they don't mind working for nothing
but job satisfaction. You can even build a small team of like-minded
volunteers. But you reach the point where this structure does not
scale... you run out of True Believers sooner rather than later.

To return to your question -- I do not think productivity in this
industry is anywhere near where it could be, but the economics haven't
been compelling enough to make anyone chase higher productivity, with
the couple of exceptions noted.

Sometimes people have mistaken getting wrapped around the axle of CAD,
for increasing productivity. Two projects that were going to
revolutionize the sport via CAD were the Prescott Pusher, and the
DreamWings Valkyrie. Worth a search through the back threads of this
group. I presume the CAD files of those two ghastly projects are still
sitting in somebody's closet... for the sake of pilots yet unborn I
pray that the guy's mother throws them out next time she cleans.

cheers

-=K=-

Rule #1: Don't hit anything big.

Kevin O'Brien wrote:
4. Many people in the kit field want to build, but my impression is that
more want to fly. Hence the popularity of "builder-assist" programs,

All good points.

One thing I'd like to add is that to a novice, kit-built is a less
intimidating first project than plans-built.

Of course, "knowing what I know now..." For example, the different
kinds of builder support available for plans-built (EAA chapters, online
groups), there is no such thing as a plans-built company getting behind
on parts delivery or going bankrupt, and finally plans-built
construction time isn't necessarily greatly increased from kit-built
(several sub-kits for popular designs are available from the major
homebuilder companies like Aircraft Spruce and Wicks).

And of course, again, these things are actually well documented on, oh,
say, this newsgroup, Ron W's book...

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Kevin O'Brien wrote:
On 2005-11-14 12:45:14 -0500, Evan Carew said:

Interesting posts. I wonder if you would agree with me that the
kit/small GA builders have wrung most of the fat out of the building
process


I'm not sure that's the case, because we're in the midst of several real
industrial revolutions -- materials, automation, organizational. These
add up to the possibility that we will see, someday soon, airplanes
assembled on a line-production rather than a bespoke basis.
Possibly, that is if you can afford the initial cost of 3D CAD &
fixturing at your local manufacturing house. I currently make water
treatment eq & typically spend ~ $8K / smallish device with moderate
complexity to have the CAD work done. This would translate to a typical
wing or fuse model in fiberglass with the moving parts ( metal models of
the same structures would no doubt cost more). These same parts I have
made up on CAD then cost me ~ $1.2K / unit with ~ $300 in materials
costs to be made on CNC machines. I typically have 10 made at a time.

The manufacturing house I use (one that typically makes transmissions
for GM) tells me that if I go to 100 or more parts at a time, the price
per part will come down to ~ $400.

If you've ever tried to fit a factory airframe part (that cost an arm
and a leg) to a Beech, you know what I mean.

and that any further gains are in incremental productivity / materials
handling procedures? If so, I wonder what you think could be realized
in savings over the current processes?


I know that everyone who's seen the Eclipse plant (including Dale
Klapmeier) has been agog.
Yeah, I've heard. Unfortunately, that tech isn't exactly what the
average kit / small GA aircraft manufacturer can afford to include into
their process. My understanding is that all of their FSW ops are under
CNC control with special fixturing.

[snip]
To return to your question -- I do not think productivity in this
industry is anywhere near where it could be, but the economics haven't
been compelling enough to make anyone chase higher productivity, with
the couple of exceptions noted.

Sometimes people have mistaken getting wrapped around the axle of CAD,
for increasing productivity. Two projects that were going to
revolutionize the sport via CAD were the Prescott Pusher, and the
DreamWings Valkyrie. Worth a search through the back threads of this
group. I presume the CAD files of those two ghastly projects are still
sitting in somebody's closet... for the sake of pilots yet unborn I pray
that the guy's mother throws them out next time she cleans.

Yeah well, organization doesn't always translate into producability. On
that note, I seem to get a lot of feedback from this group about along
exactly those lines. Either the respondents to this thread get hung up
on the idea of design & cost, or are stuck on the idea of producing a
final product. I can't seem to get anyone to twig to the idea that doing
research into processes capable of reducing the labor involved in small
parts count (lightly funded) ops has real merit for this interest group.
Specifically, summarizing final findings down to a collection of process
documents, associated costs, and estimates on final product impact.

IF you take a look at the Eclipse site's tech section, its all about
process. Every assembly is made so it fits in its assigned place
precisely (CAD == known tolerances) and every assembly has an exactly
known final assembly cost (manufacturing studies), and the sheet metal
is but welded with an exotic process adapted to thin metal aluminum
(process innovation). I have to do that for my business in the water
quality eq biz, why don't we do it in this biz? If there was someone who
was, they'd eat everybody else's lunch... oh wait, isn't that Eclipse?
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"Kevin O'Brien" kevin@org-header-is-my-domain-name wrote in message
news:2005111716222375249%kevin@orgheaderismydomain name...

But the irreducible problem with lowering labor costs on the kit side is
that by law, you only get half of the benefit, because the ultimate
registrant must (under the law, must) do 51% of the work.

Kevin............

Not true. Please rephrase.

Rich S.

On Thu, 17 Nov 2005 16:22:23 -0500, Kevin O'Brien
kevin@org-header-is-my-domain-name wrote:

On 2005-11-14 12:45:14 -0500, Evan Carew said:

Interesting posts. I wonder if you would agree with me that the
kit/small GA builders have wrung most of the fat out of the building
process

I'm not sure that's the case, because we're in the midst of several
real industrial revolutions -- materials, automation, organizational.
These add up to the possibility that we will see, someday soon,
airplanes assembled on a line-production rather than a bespoke basis.

If you've ever tried to fit a factory airframe part (that cost an arm
and a leg) to a Beech, you know what I mean.

Those parts are custom fit no less:-)) If you replace the cowl, you
have to hunt for one at least as long as the one you want to replace.
I think the tolerance in length is over half an inch.


and that any further gains are in incremental productivity / materials
handling procedures? If so, I wonder what you think could be realized
in savings over the current processes?

I know that everyone who's seen the Eclipse plant (including Dale
Klapmeier) has been agog.

The problem in the kit field is manifold:

1. Barriers to entry are almost nil. You can rivet up some tubes or cut
some foam, blow a couple grand on a booth at Oshkosh and you are a kit
manufactuer. And God help your customers. In fact, you can skip the
tubes or foam and just show up at OSH with a computer rendering or a
shiny model.

Even if you have a degree from a top AeroE program, certified aircraft
makers are not going to be interested in your design ideas. If you
start off in the kit market, no matter how flaky your idea, somebody
will try to buy it from you, if you can support yourself long enough.

2. For many, the kit airplane dream is built on a myth of vastly
lowered cost. Only if you ignore used aircraft, and value your labour
at a factor of zero.

If you stick with a very basic design with a real build time of around
500 hours (there aren't many) you really can save. Build a G-III,
Lancair, or any one of the other high performance birds and you could
easily purchase a really nice F-33 Bo for what you'll have in it, not
counting labor.

Purchase a fast build G-III kit, at roughly 80K, New K1A5 300 HP
IO-540 for another 40 to 50K, (50K might include the prop on special)
and at least another 30K for avionics although you could go with the
Full house Garmin set up with MFDs up to 75K for all the avionics
which brings the total to ... a bit over $200,000 plus labor and there
is a *lot* of that in a G-III. Go with a Lancair IV-P and you can
easily drop a quarter million into it.

Sure you can cut corners, go with an old engine and prop, simple used
avionics, don't go with the fast build options, or find a kit setting
in some ones garage but you can add at least a 1000 hours to the build
time. OTOH the G-III is one of the most labor intensive kits out
there.

But these are planes pilots built to go places or for serious playing.
Like the hybrid cars. They are not economy projects, nor are they
cheap to operate.

We have two Sonex, (one that looks much like a Sonex with a bubble
canopy..for which I've forgotten the name), kit foxes, Jabaru, Long
EZ, and some others that did not require a fortune, and are VFR only.
The build times vary widely but most with the exception of the LongEZ
had relatively short build times. They have various missions, but all
are relatively economical to own and operate.


3. Some companies try to drive the labor cost down towards zero by
doing work offshore. Van's does this, and Bearhawk frames are welded-up
in Mexico (which combines Third World wages with easy transportation to
US and Canadian first-world destinations). Do that, and you wind up
hoping that Mexico stays corrupt so that desperate Mexicans will work
for pennies on the dollar... there is no material reason prosperity
should stop hard at the Rio Grande, but it does; it's Mexican
government and elite policies that cause that. That's an unstable
situation that may last 50 or 100 years but won't last forever.

But the irreducible problem with lowering labor costs on the kit side
is that by law, you only get half of the benefit, because the ultimate
registrant must (under the law, must) do 51% of the work.

I keep hearing that, but I've never found it. It's not the ultimate
registrant either unless he, or she is after the repairman's
certificate. The project is supposed to be educational and a learning
experience and they figure if you build one aileron you know how to do
the other one. If you figure the actual labor there are a number of
kits that the FAA considers acceptable where you do not do 51% of the
work, particularly with the builder assist programs.


4. Many people in the kit field want to build, but my impression is
that more want to fly. Hence the popularity of "builder-assist"
programs, which are now getting a hairy eyeball from the FAA after
about a decade of abuses. One vendor rubbed the FAA's nose in his
disdain for the law, which is never really smart, and now a bunch of
people who were minding their own business and making for safe aircraft
and happy customers are at risk.

5. Many of the designers out there have a design bug or three that they
have to get out of the system, so they don't mind working for nothing
but job satisfaction. You can even build a small team of like-minded
volunteers. But you reach the point where this structure does not
scale... you run out of True Believers sooner rather than later.

To return to your question -- I do not think productivity in this
industry is anywhere near where it could be, but the economics haven't
been compelling enough to make anyone chase higher productivity, with
the couple of exceptions noted.

There is a lot of room to speed things up with advanced composites but
although that may speed things up and reduce labor it may not make
things less expensive. More use of Pre-preg is one place, fast curing
on assembly lines. "spinning" fuselages and other parts.

Roger Halstead (K8RI & ARRL life member)
(N833R, S# CD-2 Worlds oldest Debonair)
www.rogerhalstead.com

Sometimes people have mistaken getting wrapped around the axle of CAD,
for increasing productivity. Two projects that were going to
revolutionize the sport via CAD were the Prescott Pusher, and the
DreamWings Valkyrie. Worth a search through the back threads of this
group. I presume the CAD files of those two ghastly projects are still
sitting in somebody's closet... for the sake of pilots yet unborn I
pray that the guy's mother throws them out next time she cleans.

cheers

-=K=-

Rule #1: Don't hit anything big.