Cirrus Killer? Cessna just doesn't get it...

Matt,

Things could be phrased just a little differently he

The good part is they make reliable airplanes that have stood the test
of time.

The bad part is they have sat on their dollar-fat behinds for decades,
not taken any risks with developing new designs, blocked innovation and
milked everything they possibly could out of ancient, outdated designs
while...

They also have a world-wide support organization that few
other small airplane makers can match.


... conveniently excerting their monopoly-like power on a small market.

The above holds only for the piston market, of course, and is a
simplification - as much as your statements were.

I've said it befo We as a group can't complain all the time about
there being no development in this market and at the same time badmouth
every newcomer there is and standing fast with the old companies that
don't deliver the innovation. Cessna isn't looking into a new plane
because they WANT to, it's because they were MADE to - by Cirrus and
Diamond. Strong competition for Cessna is something we should ALL desire.
It makes them move - at long last. Their first try was just beginning to
offer "new" 50-year-old designs. It didn't work to squash Cirrus, so now
they're trying something else. Something at which Cirrus and Diamond
might well have way more experience.

--
Thomas Borchert (EDDH)

Thomas Borchert wrote:
Matt,

Things could be phrased just a little differently he


The good part is they make reliable airplanes that have stood the test
of time.


The bad part is they have sat on their dollar-fat behinds for decades,
not taken any risks with developing new designs, blocked innovation and
milked everything they possibly could out of ancient, outdated designs
while...

That is true with respect to their light airplanes, although the new
avionics are being fitted pretty much at the same pace as other
manufacturers. They have innovated a lot in the bizjet marketplace.
The reality is that the light plane business isn't all that lucrative.
It will be interesting to see if Cirrus survives longer term. I'm
guessing they won't, but hopefully they will get enough planes in the
market so that someone else will buy them and not leave them stranded a
la the Commander line and others.



They also have a world-wide support organization that few
other small airplane makers can match.



.. conveniently excerting their monopoly-like power on a small market.

The above holds only for the piston market, of course, and is a
simplification - as much as your statements were.

I've said it befo We as a group can't complain all the time about
there being no development in this market and at the same time badmouth
every newcomer there is and standing fast with the old companies that
don't deliver the innovation. Cessna isn't looking into a new plane
because they WANT to, it's because they were MADE to - by Cirrus and
Diamond. Strong competition for Cessna is something we should ALL desire.
It makes them move - at long last. Their first try was just beginning to
offer "new" 50-year-old designs. It didn't work to squash Cirrus, so now
they're trying something else. Something at which Cirrus and Diamond
might well have way more experience.

No, they want to. My guess is that making light planes is a losing
proposition for Cessna. From a purely business standpoint, they would
probably me money ahead if they had never re-entered the light plane
market. This is sad, but I'm guessing true. Cirrus is surviving on
OPM. It will be curious to see if their investors ever make money on
their investment.

How did Cessna try to squash Cirrus?


Matt

"Matt Whiting" wrote:
...
My guess is that making light planes is a losing
proposition for Cessna. From a purely business standpoint,
they would probably me money ahead if they had never
re-entered the light plane market. This is sad, but I'm
guessing true.

It is possible they make money too, as the light singles can share
some of the infrastructure in place to make and market the
profitable lines. However, Cessna is a small part of a big company
(Textron), and their financial statements by segment suggest only
that building Citations is certainly worthwhile even in bad years.
At the unit volume of piston singles, they may make some, or lose
some, and it's possible the Board of Directors cares little one way
or the other if Cessna managers have a rationale for their biz
model. As an inconsequential part of a big picture, I think it
erroneous to compare Cessna decision-making on the singles to that
of competitors who I think are all standalone companies and
nonpublic.

Fred F.

TaxSrv wrote:
"Matt Whiting" wrote:

...
My guess is that making light planes is a losing
proposition for Cessna. From a purely business standpoint,
they would probably me money ahead if they had never
re-entered the light plane market. This is sad, but I'm
guessing true.


It is possible they make money too, as the light singles can share
some of the infrastructure in place to make and market the
profitable lines. However, Cessna is a small part of a big company
(Textron), and their financial statements by segment suggest only
that building Citations is certainly worthwhile even in bad years.
At the unit volume of piston singles, they may make some, or lose
some, and it's possible the Board of Directors cares little one way
or the other if Cessna managers have a rationale for their biz
model. As an inconsequential part of a big picture, I think it
erroneous to compare Cessna decision-making on the singles to that
of competitors who I think are all standalone companies and
nonpublic.

Why? Most companies at least ostensibly exist to make a profit. Except
for the companies chartered specifically as not-for-profit, and even
some of them profit their managers quite nicely. :-)

Matt

"Matt Whiting" wrote:

Why? Most companies at least ostensibly exist to make a profit.

Matt

Sure, and Textron is profitable, but the impact of piston singles
on their financials is insignificant, perhaps less than 1% of their
$12 billion business. What I was trying to say is if they lose
money on singles, as you theorize and so might I, they can still
have a business reason to tolerate it and not uncommon in industry
at all. In their latest annual report, they mention the singles
only in passing, but as opposed to lengthy discussion of jets and
other product lines, they don't state the amount of "segment
profit" on the piston products. Maybe there ain't any?

Fred F.

TaxSrv wrote:
"Matt Whiting" wrote:

Why? Most companies at least ostensibly exist to make a profit.

Matt


Sure, and Textron is profitable, but the impact of piston singles
on their financials is insignificant, perhaps less than 1% of their
$12 billion business. What I was trying to say is if they lose
money on singles, as you theorize and so might I, they can still
have a business reason to tolerate it and not uncommon in industry
at all. In their latest annual report, they mention the singles
only in passing, but as opposed to lengthy discussion of jets and
other product lines, they don't state the amount of "segment
profit" on the piston products. Maybe there ain't any?

OK, I see what you were saying. I suspect it is mainly based on the
personal desires of some Cessna executives as well as a
marketing/strategic purpose to build brand loyalty in pilots early. I
don't think it was purely the airplanes themselves that catapulted
Cessna to the top of the bizjet market relatively quickly. I suspect it
was also at least partly due to all of the pilots trained in Cessna's
who now fly for, or own, many of the companies that fly Cessna jets.


Matt

"Matt Whiting" wrote in message
...

OK, I see what you were saying. I suspect it is mainly based on the
personal desires of some Cessna executives as well as a
marketing/strategic purpose to build brand loyalty in pilots early. I
don't think it was purely the airplanes themselves that catapulted Cessna
to the top of the bizjet market relatively quickly. I suspect it was also
at least partly due to all of the pilots trained in Cessna's who now fly
for, or own, many of the companies that fly Cessna jets.


From "70 YEARS OF EXCELLENCE -
AN OVERVIEW OF THE CESSNA AIRCRAFT COMPANY"

Citation Business Jets
In 1967, Cessna launched a new era in business aviation when it announced
plans to introduce the Citation. The new business jet was quieter, simpler,
more capable of operating safely in and out of short fields, substantially
more fuel efficient and much less expensive to own and operate than any
other business jet on the market or the drawing board.

Five years later, in 1972, Cessna delivered the first Citation. In 1976 the
company dramatically increased its leadership role by announcing three new
business jets: the improved Citation I; the larger, better-performing
Citation II; and the Citation III.

The Citation II quickly became the best-selling business jet in the world.
It was replaced in 1984 by the improved Citation S/II. The Citation III was
the first all-new business jet designed and produced in the United States
since the original Citation in 1972. More than 200 Citation IIIs entered
service after deliveries of the aircraft began in 1983. In response to
popular demand, the Citation II returned to the Cessna product line in 1987.
More than 800 Citation IIs and S/IIs were delivered by the end of 1994 when
the Citation Bravo replaced them in the Cessna line.

In September 1987, Cessna introduced the Citation V, a larger, faster
aircraft that has set sales records since deliveries began early in 1989. In
October 1989, Cessna introduced the CitationJet, a new aircraft tailored to
first time jet owners. The CitationJet was certified in October of 1992 and
the first delivery followed in March of 1993. The CitationJet quickly became
the most popular entry-level business jet in the world, and in July 1997,
the 200th CitationJet was delivered.

In May 1990, Cessna added two more aircraft to its business jet line: the
Citation VI and Citation VII, which were derived from and replaced the
Citation III. The first Citation VI was delivered in May 1991, with
deliveries of the higher-powered Citation VII starting in March 1992.

In October 1990, Cessna took another industry standard-setting step when the
Citation X was introduced. Flying at .92 Mach, the Citation X is the world's
fastest business jet. Among non-military aircraft, only the Concorde is
faster. The new Cessna flagship travels from Los Angeles to New York in
under four hours. The Citation X's first flight was in December of 1993 and
certification was received May 31, 1996. The first Citation X was delivered
to golf legend and Citation pilot, Arnold Palmer. By summer, 1997, the
Citation X fleet grew to over 30 and had accumulated over 10,000 flight
hours.

The National Aeronautics Administration recognized the Citation X's
accomplishments, bestowing upon the aircraft and its design team the 1996
Robert J. Collier Trophy. The Collier is awarded annually for outstanding
achievement in the fields of aeronautics or astronautics. Cessna has earned
the award twice, first in 1985 for the safety record of the Citation fleet,
and is the only general aviation manufacturer to have ever been honored with
the most prestigious award in United States aviation.

In 1994 Cessna introduced the Citation Ultra, an updated version of the
Citation V, and announced the Citation Bravo, a replacement for the Citation
II. Completing certification in 1996, the Bravo incorporates
customer-recommended improvements including upgraded avionics, trailing link
landing gear, more speed, range and payload. Deliveries began in February
1997.

In October of 1994, Cessna also announced the Citation Excel. The only light
jet to offer a stand-up cabin, the Excel approached the 200-order marker by
mid-1997. The Excel was certified in April 1998 and deliveries began in
early July 1998.

The Citation fleet of business jet aircraft, based in over 75 countries, is
the largest in the world as evidenced on September 10, 1997, with the
delivery of the 2,500th Citation - a Citation X.

At the National Business Aviation Association Convention in Las Vegas,
October 19 - 21, 1998, Cessna made the biggest new product announcement in
its history. Four new Citations were revealed: Citation CJ1, Citation CJ2,
Citation Encore and Citation Sovereign. The Citation CJ1 is the successor to
the best-selling CitationJet; the Citation CJ2 is a longer, faster version
of the CJ that seats 6 passengers; the Citation Encore inherits the
worldwide recognition and acceptance of the Ultra with new engines, a
trailing link landing gear and more; and the Citation Sovereign is an
all-new midsize business jet that will begin deliveries in third quarter of
2002.
----------------------------------------------

Yes, it many respects it WAS the aircraft, as a differentiated product, that
did catapault Cessna to the top of the BizJet market.

Learning in a 152 and flying a 182 or 210 is a world apart from the bizjet.
Cessna could not have "cornered" the market with a mediocre product.

--
Matt

---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

"Matt Whiting" wrote in message
...
TaxSrv wrote:
"Matt Whiting" wrote:

Why? Most companies at least ostensibly exist to make a profit.

Matt


Sure, and Textron is profitable, but the impact of piston singles
on their financials is insignificant, perhaps less than 1% of their
$12 billion business. What I was trying to say is if they lose
money on singles, as you theorize and so might I, they can still
have a business reason to tolerate it and not uncommon in industry
at all. In their latest annual report, they mention the singles
only in passing, but as opposed to lengthy discussion of jets and
other product lines, they don't state the amount of "segment
profit" on the piston products. Maybe there ain't any?

OK, I see what you were saying. I suspect it is mainly based on the
personal desires of some Cessna executives as well as a
marketing/strategic purpose to build brand loyalty in pilots early. I
don't think it was purely the airplanes themselves that catapulted
Cessna to the top of the bizjet market relatively quickly. I suspect it
was also at least partly due to all of the pilots trained in Cessna's
who now fly for, or own, many of the companies that fly Cessna jets.


Matt

If you would research the subject you would find that since 1927 Cessna has
found markets not exploited by other manufacturers. It was and is the
airplanes. Dwayne Wallace had unbelievable insight into the market and his
list of hits from 1933 to the late 1970's is unmatched. The Citation line
alone disproves your theory much less the dozens of other models that do
what no other airplane can do. On the other hand they have had flops along
the way which is to be expected. That thing they called a helicopter is one
that comes to mind.

I don't think it was purely the airplanes themselves that
catapulted Cessna to the top of the bizjet market relatively
quickly. I suspect it was also at least partly due to all of
the pilots trained in Cessna's who now fly for, or own,
many of the companies that fly Cessna jets.

Matt

I have little clue on that, but I would say that these are
hard-dollar propositions, with many competitive choices, new or
used. A corp's flight dept, or outside consultant even, in an
ideal world should do a purely objective analysis for top
management. Nevertheless, I suspect a more common personal bias in
the process is where a turboprop may be the correct choice, but the
guys would really rather pilot a jet!

I dunno, but do you think where a company upgrades from the rather
ubiquitous King Air, they'll tend to buy a Beechjet? Comparative
jet shipment stats don't look conclusive in that regard. Maybe
there's a growing factor in the female voices I'm now hearing
working radios in these things. Not to stir up trouble, but just
what is the cutest bizjet they make? :-)

Fred F.

"Matt Whiting" wrote:

Why? Most companies at least ostensibly exist to make a profit.

Matt

Sure, and Textron is profitable, but the impact of piston singles
on their financials is insignificant, perhaps less than 1% of their
$12 billion business. What I was trying to say is if they lose
money on singles, as you theorize and so might I, they can still
have a business reason to tolerate it and not uncommon in industry
at all. In their latest annual report, they mention the singles
only in passing, but as opposed to lengthy discussion of jets and
other product lines, they don't state the amount of "segment
profit" on the piston products. Maybe there ain't any?

Fred F.