These are not YOUR airplanes - Was: High Cost of Sportplanes

Start with this: How many people do you know who own a $45,000 SUV?

Light Sport Aircraft are not intended for people who are already pilots.

The whole purpose of the Light Sport Certificate is to draw new people,
along with new money, into the sport side of aviation.

Consider someone who has never flown before. He's run through golf, and
tennis, and skiing. He has a nice house, with a home theater and possibly a
pool. He has reached the point where there are almost no "toys" left for him
to spend his money on.

Ask this guy if $80,000 dollars is too much to pay for an airplane, and he
will consider the $45,000 he paid for his SUV, and quite probably say that
it IS NOT too much money.

Just as a side note: I'm unable to get a medical, so Sport Pilot is the only
way for me to go. I don't have $80,000, so I'm planning to build an eLSA. So
I have been doing a lot of research on LSA's.

And one thing I have learned is that most of the people in the aviation
business are really lousy at marketing their products to anyone other than
other people in aviation.

When was the last time you saw a Tecnam or Cub Crafters or Legend Cub ad in
the Wall Street Journal, or Time magazine, or your local newspaper?

Just as is happening with this thread, far too many people with a stake in
LSA have simply been preaching to the choir. But the choir has been there,
done that, and isn't going to pay $80K for a "toy" airplane.

There's one other factor at work with "conventional" aircraft, that is also
in play to some extent with LSA's. Consider a non-flyer who gets out of his
car and climbs into a Warrior or a 172. In his car, he's got GPS, he's got
satellite radio, he's got digital everything. But when he climbs into a
light Piper or Cessna, he's got his grandfather's Buick. Why would he want
to fly around in something that clunky looking?

LSA has one big advantage: it can be very nimble. Most of the smarter LSA
manufacturers are offering goodies like the Dynon EFIS ($2,500 +/-) or a
panel-mounted Garmin GPS 296 ($3,000 +/-). No more row after row of
incomprehensible steam gauges, now they have a cockpit with a sports car
feel.

It is quite possible to go out and SELL 10,000 $80,000 airplanes to people
who have never set foot in anything smaller than a 737. But the operative
word is SELL.

Five years from now, you'll have may 1,000 - 1,500 of those people still
flying; all of the rest will have moved on to the next new and hot hobby.

Which means you'll have 8,500 - 9,000 $80,000 airplanes that can be bought
for less than $40,000. And they'll be far better equipped than the airplanes
now rolling out of the doors at Cessna or Piper.

So, the $80,000 airplane model can work, if the manufacturers learn how to
market them properly, to people who are not yet pilots.

And Sport Pilot can work to all of our benefit, because if enough new people
come into GA, it will thrive. But with no new pilots coming in...

Bill,

First of all, the issue is whether these sportplanes are overpriced and
delivering poor value for the buck, not whether there are some people who
will actually pay the artificially high price, regardless.

I agree that the idea is to attract a wider audience to recreational flying,
but $80,000 is too much money for a toy, for most individuals. If you talk
to people on the marketing side of recreational products they will tell you
that $50,000 is a very real psychological barrier. That's why you the vast
majority of boats and other recreational vehicles priced below this point.
As you go over that threshold it becomes a niche market for hardcore
enthusiasts or the very affluent.

Also, I don't believe it is a marketing problem. It is a value problem.
These planes just aren't worth what the manufacturers are asking for them.
No amount of marketing is going to overcome a porr value proposition.

Advertising is not going to change that. It will just add more cost to the
product. Do you know how much it costs to run an ad in a mainstream media
publication? It is a lot more than in the enthusiast magazines -- and is out
of reach for these small, bootstrap companies. Advertizing in the WSJ or
Time is bizjet territory, not LSA.

What might work is advertising in enthusiast magazines other than aviation,
such as boating, skiing, motorcycling, etc. Here you already have the "toy"
demographic who are likely to consider something new.

But the best marketing approach is going to be to provide a good product at
a realistic price. At $80,000 (Really closer to $100,000 if equipped with a
few of those options you suggested), there are very few individuals who will
buy them. Right now the only ones I can think of are those who can't get a
medical, are desperate to fly and don't care about the value they are
getting for their dollar.

I agree with some of the comments that have been made that the first
entrants are pricing high and aiming for just the desperate medical-less
demographic. That market will soon be saturated and then who are they going
to sell these $100,000 toys to? In a few years, I expect prices to be
considerably lower as smart entreprenurs get into this business and begin
offering planes that are better value.

I also expect that the resale value of the planes that are selling now to do
a graveyard spiral. In Canada, we've had what the advanced ultralight
category for a number of years, which is very similar to your Sport Pilot,
and have had the Tecnams and a lot of these other European planes for some
time. Try to sell a used one and see how much you get. As soon as you fly it
off the dealer's field it will have dropped at least a third of its value.

Regards,

Gordon.






"Lakeview Bill" wrote in message
...
Start with this: How many people do you know who own a $45,000 SUV?

Light Sport Aircraft are not intended for people who are already pilots.

The whole purpose of the Light Sport Certificate is to draw new people,
along with new money, into the sport side of aviation.

Consider someone who has never flown before. He's run through golf, and
tennis, and skiing. He has a nice house, with a home theater and possibly
a
pool. He has reached the point where there are almost no "toys" left for
him
to spend his money on.

Ask this guy if $80,000 dollars is too much to pay for an airplane, and he
will consider the $45,000 he paid for his SUV, and quite probably say that
it IS NOT too much money.

Just as a side note: I'm unable to get a medical, so Sport Pilot is the
only
way for me to go. I don't have $80,000, so I'm planning to build an eLSA.
So
I have been doing a lot of research on LSA's.

And one thing I have learned is that most of the people in the aviation
business are really lousy at marketing their products to anyone other than
other people in aviation.

When was the last time you saw a Tecnam or Cub Crafters or Legend Cub ad
in
the Wall Street Journal, or Time magazine, or your local newspaper?

Just as is happening with this thread, far too many people with a stake in
LSA have simply been preaching to the choir. But the choir has been there,
done that, and isn't going to pay $80K for a "toy" airplane.

There's one other factor at work with "conventional" aircraft, that is
also
in play to some extent with LSA's. Consider a non-flyer who gets out of
his
car and climbs into a Warrior or a 172. In his car, he's got GPS, he's got
satellite radio, he's got digital everything. But when he climbs into a
light Piper or Cessna, he's got his grandfather's Buick. Why would he want
to fly around in something that clunky looking?

LSA has one big advantage: it can be very nimble. Most of the smarter LSA
manufacturers are offering goodies like the Dynon EFIS ($2,500 +/-) or a
panel-mounted Garmin GPS 296 ($3,000 +/-). No more row after row of
incomprehensible steam gauges, now they have a cockpit with a sports car
feel.

It is quite possible to go out and SELL 10,000 $80,000 airplanes to people
who have never set foot in anything smaller than a 737. But the operative
word is SELL.

Five years from now, you'll have may 1,000 - 1,500 of those people still
flying; all of the rest will have moved on to the next new and hot hobby.

Which means you'll have 8,500 - 9,000 $80,000 airplanes that can be bought
for less than $40,000. And they'll be far better equipped than the
airplanes
now rolling out of the doors at Cessna or Piper.

So, the $80,000 airplane model can work, if the manufacturers learn how to
market them properly, to people who are not yet pilots.

And Sport Pilot can work to all of our benefit, because if enough new
people
come into GA, it will thrive. But with no new pilots coming in...

Gordon,

Based on my back of the envelope analysis of the theoretical base price
of a 2 place aircraft, I think wishing for a plane costing less than 50K
is nothing more than a pipe dream. If you use the following numbers as a
guide, you'll see what I mean.

Airframe + instruments + basic engine + labor = theoretical base
price
20000 + 4000 + 15000 + ( 500 * 45 ) = 61500

Notice that this price doesn't include any profit, overhead costs or
insurance. Add those in, & you quickly get to a point where $80K looks
reasonable & $100K understandable.

As I've mentioned before, until the structural issues affecting cost
(labor & machined materials) are addressed with better up-front
engineering, these costs won't come down.

Evan

Evan,

I understand the point you are trying to make and your numbers are not
unreasonable.

However, just for the same of argument, what if the airframe parts, ready to
be assembled could be punched out for under $10,000? This is not
unreasonable considering that Van's can sell a kit for $15,000 and still
make a profit.

And what if the engine could be supplied for under $10,000 too? This too is
not unreasonable, considering you could buy a brand new PZL four-banger for
that much money for a number of years.

So now your total figure has dropped by $15,000 to $46,000. True this does
not leave a lot of profit margin, but you are getting very close to the
$50,000 factory-built airplane.

Regards,

Gordon.




"Evan Carew" wrote in message
...
Gordon,

Based on my back of the envelope analysis of the theoretical base price of
a 2 place aircraft, I think wishing for a plane costing less than 50K is
nothing more than a pipe dream. If you use the following numbers as a
guide, you'll see what I mean.

Airframe + instruments + basic engine + labor = theoretical base
price
20000 + 4000 + 15000 + ( 500 * 45 ) = 61500

Notice that this price doesn't include any profit, overhead costs or
insurance. Add those in, & you quickly get to a point where $80K looks
reasonable & $100K understandable.

As I've mentioned before, until the structural issues affecting cost
(labor & machined materials) are addressed with better up-front
engineering, these costs won't come down.

Evan

Gordon,

This is exactly how the problem space needs to be framed. The economic
solution to this problem is to rely on donations of high value
engineering skills to jump start the production of aircraft parts with
an eye to minimizing input labor costs.

I own a company here in South-east Michigan that makes filter parts for
oddball filtration systems. Since these parts are all custom, we paid a
local CAD firm to do the designs, then passed those off to a machine
shop that does work for GM. Its amazing how cheaply you can make parts
if you do the up-front engineering on them first. IT also helps that we
have underutilized quality machine shop capacity here surronding the
auto companies.

Should someone in the EAA, familliar with engines, whish to design a new
engine (like the Jibaru) from scratch. This would be a good place to do
it. I say from scratch because the Lycoming/Contenental combo aren't
what I would call engineered for efficient manufacturing. Perhaps
something like a cross between the Rotax & the Jibaru would work.

As for the airframe parts, unless someone comes up with a process to
dramatically reduce the labor in making a fiberglass fuse, I don't think
we will be seing cheap airframe parts any time soon. On the other hand,
if you don't mind assembling yourself, the aluminum option could work
with CNCd parts.

No, until someone comes up with a way to pull a fully primed and painted
fiberglass part from a mold (no trimming/sanding required), we aren't
going to see cheap airframe parts, however, maybe that's not as critical
as it would seem. Looking at my numbers, a well engineered airframe for
20K still might not break the bank if you could get its assembly/surfas
prep/painting labor costs way down. You'd literally have to engineer the
entire process. So lets see...

Time Process descrip cost at $45/hr
20 Airframe assembly $900
5 powerplant install $225
10 airframe surface prep $450
10 airframe painting $450
5 instruments $225
5 interior $225
5 testing $225
----------------------------------------
60 $2700

Now that's getting the price of the airplane down! Combine that with an
engine for ~10K or even a little less & you have something:

Airframe + instruments + basic engine + labor = theoretical base
price
20000 + 4000 + 9000 + ( 60 * 45 ) = 35700

Evan,

I think your analysis is realistic -- and forethought in process engineering
is critical.

In fact, I think a lot of the European manufacturers already have a lot of
these efficiencies in place. Europe and other parts of the world --
including Canada -- have already had special rules for light sport-type
aircraft for a number of years and many of these airplane makers have been
making these light planes for years. That's why they were srping-loaded to
crank out these planes for the US market.

However, there are a couple of factors here that work against a low price,
chief among them being the strong Euro relative to the US greenback. The
Rotax engine is expensive too and combine it with the fairly expensive and
labor-intensive composite manufacturing process you have prices that are not
as good as they could be. Also the European JAR certification is not as
simple as LSA certification -- it more like "real" certification, but not as
rigorous. So these outfits did have some real certification costs that are
built into the planes.

However, having said all that I still believe that there is an element of
opportunism in their pricing -- which is only shooting themselves in the
foot, by overpricing this market before it has even had a chance to flower.

Don't forget that there is also an additional layer here for the US
importer, so there is another middleman taking his cut. This is why you are
seeing the $80,000 sportplane (more like $100,000 with decent panel
options).

In reality these planes already could be $50,000 planes if they were made
here in North America -- Canada is a great manufacturing base, as Diamond
Aircraft, Symphony and others will confirm.

And if you had a good $10,000 engine you could make a nice profit with those
$50,000 sportplanes.

I really belive that aluminum is the way to go, however. Again, look at the
Van's kit. Suppose you wanted to set up a factory to produce sportplanes.
Your business plan would include a CNC facility for machining the metal
pieces and you could stamp out parts with very high efficiency. The cost of
aluminum is quite modest. I doubt there can more than about $1500 worth of
aircraft aluminum in a 1,300 pound gross weight sportplane.

With the right process in place and the tooling to crank out parts
pre-finished to a reasonably high degree, the assembly time can be brought
down to quite an efficient level.

I think people like Van's and Murphy Aircraft in Canada, both of whom have
facotries with lots of CNC and other sophisticated tooling already in place,
are going to be thinking seriously about putting together finished
all-aluminum sportplanes. (Their kitplanes are already aluminum-based.)

I think in Europe composites have taken hold because of the vibrant
sailplane industry that has existed there for decades and where composites
have replaced wood construction for quite some time. I think the better ones
are pretty efficieent at it by now.

And once they see a North American company selling $50,000 sportplanes like
hotcakes, you will see them suddenly jumping in with competitive pricing as
well.

And if none of that happens, the kit industry will keep on thriving. A kit
from Van's or Murphy is a good value proposition. (For the really
parsimonious, plans building is even more of a value propostion, as long as
you don't count the TV-couch time that you are sacrificing to your airplane
project).

I think someone mentioned that there are about 20,000 amateur-built
airplanes on the registry rolls now, but an even more impressive statistic I
have heard is that there are actually more homebuilts certified each year
than factory-built GA airplanes. If people vote with their wallets, which
happens to be a good truism, this is a good indicator of what people think
about the "value" of factory-built airplanes -- which is to say not much.

Regards,

Gordon.



"Evan Carew" wrote in message
...
Gordon,

This is exactly how the problem space needs to be framed. The economic
solution to this problem is to rely on donations of high value engineering
skills to jump start the production of aircraft parts with an eye to
minimizing input labor costs.

I own a company here in South-east Michigan that makes filter parts for
oddball filtration systems. Since these parts are all custom, we paid a
local CAD firm to do the designs, then passed those off to a machine shop
that does work for GM. Its amazing how cheaply you can make parts if you
do the up-front engineering on them first. IT also helps that we have
underutilized quality machine shop capacity here surronding the auto
companies.

Should someone in the EAA, familliar with engines, whish to design a new
engine (like the Jibaru) from scratch. This would be a good place to do
it. I say from scratch because the Lycoming/Contenental combo aren't what
I would call engineered for efficient manufacturing. Perhaps something
like a cross between the Rotax & the Jibaru would work.

As for the airframe parts, unless someone comes up with a process to
dramatically reduce the labor in making a fiberglass fuse, I don't think
we will be seing cheap airframe parts any time soon. On the other hand, if
you don't mind assembling yourself, the aluminum option could work with
CNCd parts.

No, until someone comes up with a way to pull a fully primed and painted
fiberglass part from a mold (no trimming/sanding required), we aren't
going to see cheap airframe parts, however, maybe that's not as critical
as it would seem. Looking at my numbers, a well engineered airframe for
20K still might not break the bank if you could get its assembly/surfas
prep/painting labor costs way down. You'd literally have to engineer the
entire process. So lets see...

Time Process descrip cost at $45/hr
20 Airframe assembly $900
5 powerplant install $225
10 airframe surface prep $450
10 airframe painting $450
5 instruments $225
5 interior $225
5 testing $225
----------------------------------------
60 $2700

Now that's getting the price of the airplane down! Combine that with an
engine for ~10K or even a little less & you have something:

Airframe + instruments + basic engine + labor = theoretical base
price
20000 + 4000 + 9000 + ( 60 * 45 ) = 35700

Based on my back of the envelope analysis of the theoretical base price
of a 2 place aircraft, I think wishing for a plane costing less than 50K
is nothing more than a pipe dream.

I don't buy it. When I
was in the Keys, I saw a two-seat UL trainer on floats. It was open
cockpit (very open), and had a Rotax engine and Dacron-sailcloth
covered wing, but it was $25K new. Presumably the manufacturer
was making a profit.

I think all your prices are WAY too high. $15K for an engine? A Rotax
retails for half that. That's RETAIL - if you're a manufacturer you
should be able to get a better deal.

$20K for airframe components? You can buy a quickbuild kit for a
pretty advanced (high-speed all-metal RV) for less. Retail. Prebuilt
and predesigned for home assembly.

$4K for instruments? For an IFR panel with certified components,
maybe. For day-VFR, you need a non-sensitive altimeter, an airpeed
indicator, a compass, and some engine gauges. The retail price on all
this (assuming non-certified stuff) is maybe $1K.

I think everyone pretty much expected that when the LSA rules came out,
the UL trainers (2 seat) would be sold as LSA's for about the same
money they cost as UL trainers - about $20K-$30K ready to fly. This
isn't happening. There really are only two possible reasons. Either
the LSA 'certification' process isn't really all that simple or cheap
(meaning that, as with the recreational pilot and VLA, the FAA has
botched the job again) or the manufacturers figure they can skim the
cream at a higher price.

Michael

Michael,

I've interspersed my data (gleaned from today's online prices)
throughout your message. Add them up yourself.


I don't buy it. When I
was in the Keys, I saw a two-seat UL trainer on floats. It was open
cockpit (very open), and had a Rotax engine and Dacron-sailcloth
covered wing, but it was $25K new. Presumably the manufacturer
was making a profit.
We were talking about an enclosed aircraft with a fiberglass or aluminum
body, 4 stroke engine, and 2 seats with a cruse of ~100 knots.

I think all your prices are WAY too high. $15K for an engine? A Rotax
retails for half that. That's RETAIL - if you're a manufacturer you
should be able to get a better deal.
sigh I just went to a common retail website & found that a rotax 912
(the most commonly used for aircraft of the type we are talking about)
lists for between 16 & 22K. The difference being the options & accessories.

$20K for airframe components? You can buy a quickbuild kit for a
pretty advanced (high-speed all-metal RV) for less. Retail. Prebuilt
and predesigned for home assembly.
On the RV site, they do in fact sell the early model RV for 11.7K,
however, the finished cost is listed at 45K. That would be 10K more than
my fiberglass KIS.

$4K for instruments? For an IFR panel with certified components,
maybe. For day-VFR, you need a non-sensitive altimeter, an airpeed
indicator, a compass, and some engine gauges. The retail price on all
this (assuming non-certified stuff) is maybe $1K.
Er, I just bought mine & even my radio cost ~1k. If you would be kind
enough to tell me where you purchase your instruments, I'll start
purchasing mine from your supplier right away!

I think everyone pretty much expected that when the LSA rules came out,
the UL trainers (2 seat) would be sold as LSA's for about the same
money they cost as UL trainers - about $20K-$30K ready to fly. This
isn't happening. There really are only two possible reasons. Either
the LSA 'certification' process isn't really all that simple or cheap
(meaning that, as with the recreational pilot and VLA, the FAA has
botched the job again) or the manufacturers figure they can skim the
cream at a higher price.

Michael

We were talking about an enclosed aircraft with a fiberglass or aluminum
body, 4 stroke engine, and 2 seats with a cruse of ~100 knots.

We were? In that case, forget it. You can't sell that for under $60K
and make a profit in anything less than quanities of 10,000. Anyway,
what's the purpose of that speed? You can't go anywhere anyway. You
are limited to daytime flying only, and only in good weather. That's
not a practical traveling machine, that's a toy.

Er, I just bought mine & even my radio cost ~1k.

Portable aviation radios start at $200. And they're not required
anyway.

See, what we've got here is a mismatch in expectations. LSA's are not
supposed to be C-150 lookalikes/workalikes. There's a reason the C-150
and similar modern 2-seat trainers don't fit into the LSA category -
they're not supposed to. These are not supposed to be planes that
provide utility. They're supposed to be sport aircraft - stuff you fly
for the fun of flying.

We're not talking aerial Mercedes here - we're talking aerial Harley.
So where are they? Where are the UL's and UL trainers being sold as
LSA's? When we can make one that sells new for what a Harley costs,
we'll be getting somewhere.

Michael

On Sat, 17 Sep 2005 23:19:54 GMT, "Lakeview Bill"
wrote:

Start with this: How many people do you know who own a $45,000 SUV?

Light Sport Aircraft are not intended for people who are already pilots.

The whole purpose of the Light Sport Certificate is to draw new people,
along with new money, into the sport side of aviation.



Maybe, but the bright businessman would understand that existing
pilots are a far more readily available source of funds until the
sportpilots start rolling in. I live in charlotte, #25 in city size
and North Carolina was the birth of powered flight. I don't know of
ANYONE who is offering sportpilot. And the planes are selling now.
Ergo, who are they selling to?

In reality, I see SP as a bust until someone gets the price down. The
potential market isn't that blame rich. They are upper-middle class.
80K is a lot of scratch. 40-50K is an extra SUV.



Jim

http://www.unconventional-wisdom.org