High Cost of Sportplanes

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.

On Sat, 17 Sep 2005 13:44:06 -0400, "Gordon Arnaut"
wrote:

However, Cessna has all of these costs -- and more --and is still able to
price a brand new Skyhawk at $155,000. This is a tremendous value when
compared to one of these new LSAs that cost close to $100,000.

Without considering whether of not I disagree on the overpricing of
the modern crop of (LSA legal) craft in general, one question that
comes to mind is how much it costs to make it lighter. Yes, the 172
has 4 seats, but it is 1600+ lbs empty. A new (2 place) Katana is
about $135k in basic form and weighs about 1150 empty. The Symphony
160, another 2 place, is 1450 empty. The Liberty XL2 is about 1050
empty; this is a unit convreted to certified from an experimental
design.

If any of these were rolling in the dough, they would, it seems,
lighten them up and get LSA compliant; one ASSUMES they could meet the
standards.

Maybe making something sturdy and light takes either money or time?
Maybe it takes both?

Yet somehow Cessna manages to give you all this for a cost of only about 50
percent more than the CT2K. Either Cessna is some kind of manufacturing
genius or the LSA is way overpriced. You are literally getting more than
twice the airplane for only half again as much cost.

What does Cessna/Piper/Diamond/Symphony/Liberty get to leave off to
save money? I intuitively feel that if they could make it lighter
they would, because weight is the enemy. The only disadvantage that
comes to mind is lower wing loading would make it less smooth in
flight.

All are handmade, a real issue. The ones who have done more to cut
costs are the Cirrus folks, and they are no cheaper.

While I have no source of even guesses to back this up, look at "18
wheeler" tractors ... MUCH higher volume, and still lots of $$$. I
bet the commonly used engines number in the same range as that of
Continentals and Lycomings, and that they build MANY more ... how much
$? The only creature comforts are in the seat; beyond that, there is
little beauty. How about off-road equipment ... that is not
inexpensive, either.

I _DO_ believe that Toyota (or Ford/GM/Chrysler/VW/Honda/whoever)
could build 50,000 a year of a similar model (one production line) at
a much lower price. They need to "know" that this market would
continue to buy for 5+ years to justify the tooling / plant / design.
Recall that automakers kinda look at 50,000 as the minimum number of a
product to be profitable. I found one statistic that 48,000,000 per
year are built.

We (collectively) probably average keeping a new automobile 4 years
(I'm guessing) and sell it for 30% of what we bought it for.

When we even APPROACH that kind of saturation, costs will fall. Wrecks
will go up, repairs will go up, the economy will grow sarcastic mode
was on.

I think that the prices being charged are fair at this stage of the
market cycle. They are probably making FAR less on investment than
Intel, or Merck, or Pierre Cardin.

I cannot afford one. If I could, I would use it as a toy, not a tool.
When some large number of the world's driving population needs one as
a tool, the price will drop. I predict that won't happen. I WISH IT
WOULD.

There is some of the chicken egg syndrome, but I don't think that if a
Cessna (172/182/206) could be sold for (40k/50k/70k), that there would
be a combined market of 100,000 per year, EVERY YEAR. That's what it
would take.

Just my 2 cents worth ... well, not worth that.

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.

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.

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.

George,

The sportplanes are so light because it costs less to build with less
material. Any material costs money, including aircraft aluminum, composites,
wood, steel tube, fabric, or anything else. And if you have more material
you also have more work in shaping and fitting it.

There is no magic in this. None of the sportplane makers set out to take a
2000 pound plane and whittle it down to a 1000 pound plane. They started out
trying to make a small basic plane. By design, such an airplane can be very
light.

To assume that building light actually costs more is wrong. It weighs less
because you are getting a lot less airplane.

Regards,

Gordon.






"GeorgeB" wrote in message
...
On Sat, 17 Sep 2005 13:44:06 -0400, "Gordon Arnaut"
wrote:

However, Cessna has all of these costs -- and more --and is still able to
price a brand new Skyhawk at $155,000. This is a tremendous value when
compared to one of these new LSAs that cost close to $100,000.

Without considering whether of not I disagree on the overpricing of
the modern crop of (LSA legal) craft in general, one question that
comes to mind is how much it costs to make it lighter. Yes, the 172
has 4 seats, but it is 1600+ lbs empty. A new (2 place) Katana is
about $135k in basic form and weighs about 1150 empty. The Symphony
160, another 2 place, is 1450 empty. The Liberty XL2 is about 1050
empty; this is a unit convreted to certified from an experimental
design.

If any of these were rolling in the dough, they would, it seems,
lighten them up and get LSA compliant; one ASSUMES they could meet the
standards.

Maybe making something sturdy and light takes either money or time?
Maybe it takes both?

Yet somehow Cessna manages to give you all this for a cost of only about
50
percent more than the CT2K. Either Cessna is some kind of manufacturing
genius or the LSA is way overpriced. You are literally getting more than
twice the airplane for only half again as much cost.

What does Cessna/Piper/Diamond/Symphony/Liberty get to leave off to
save money? I intuitively feel that if they could make it lighter
they would, because weight is the enemy. The only disadvantage that
comes to mind is lower wing loading would make it less smooth in
flight.

All are handmade, a real issue. The ones who have done more to cut
costs are the Cirrus folks, and they are no cheaper.

While I have no source of even guesses to back this up, look at "18
wheeler" tractors ... MUCH higher volume, and still lots of $$$. I
bet the commonly used engines number in the same range as that of
Continentals and Lycomings, and that they build MANY more ... how much
$? The only creature comforts are in the seat; beyond that, there is
little beauty. How about off-road equipment ... that is not
inexpensive, either.

I _DO_ believe that Toyota (or Ford/GM/Chrysler/VW/Honda/whoever)
could build 50,000 a year of a similar model (one production line) at
a much lower price. They need to "know" that this market would
continue to buy for 5+ years to justify the tooling / plant / design.
Recall that automakers kinda look at 50,000 as the minimum number of a
product to be profitable. I found one statistic that 48,000,000 per
year are built.

We (collectively) probably average keeping a new automobile 4 years
(I'm guessing) and sell it for 30% of what we bought it for.

When we even APPROACH that kind of saturation, costs will fall. Wrecks
will go up, repairs will go up, the economy will grow sarcastic mode
was on.

I think that the prices being charged are fair at this stage of the
market cycle. They are probably making FAR less on investment than
Intel, or Merck, or Pierre Cardin.

I cannot afford one. If I could, I would use it as a toy, not a tool.
When some large number of the world's driving population needs one as
a tool, the price will drop. I predict that won't happen. I WISH IT
WOULD.

There is some of the chicken egg syndrome, but I don't think that if a
Cessna (172/182/206) could be sold for (40k/50k/70k), that there would
be a combined market of 100,000 per year, EVERY YEAR. That's what it
would take.

Just my 2 cents worth ... well, not worth that.

Gordon Arnaut wrote:
It seems a lot of people have been writing letters to Kitplanes magazine
complaining about the unexpectedly steep prices of the new crop of
factory-built sportplanes. So the editor of that publication decided to
respond. His message: Get used to it.

This really infuriated me, not only because the commentary lacked any
substance about why prices are what they appear to be, but also because this
is another example of the shameless pandering to advertisers, or potential
advertisers.

Pandering to advertisers, eh? Did you go into work last week and tell
your boss that he was a dip**** for such-n-such a decision? Naw, I
guess your pandering is acceptable then.


The "yes, boss" attitude toward industry is nothing new in the enthusiast
magazine sector of course (cars, bikes, what have you), but it is really
plumbing new lows lately. Flying, which used to be a decent rag under Dick
Collins, has zero integrity nowadays. A couple of years ago I read with
interest as Collins commented pointedly about the spate of deadly crashes in
Cirrus airplanes. He questioned whether the airplane was dangerous in spins
since it had not been certifed for such -- the parachute being considered as
a kind of substitute by regulators, apparently.

I silently applauded Collins' integrity, but remember thinking that such an
editorial faux pas as daring to criticize an advertiser -- even on something
as crucial as safety -- would not go unpunished. I was right. The very next
month's issue did not have an ad from Cirrus, which had been advertising
every month until the Collins commentary.


Way to go. No need to speak up when someone does the right thing, now
is there? How come you didn't volunteer to replace the lost add revenue
while you were remaining silent?

In fact it was quite a few months until the Cirrus ads reappeared in that
august publication -- with the spineless J. MacLellan , taking every
possible opportunity to gladhand Cirrus in the meantime, with all kinds of
glowing write-ups, cover photos, you name it. I guess the grovelling finally
paid off, and Cirrus decided to start writing checks to Flying again.

This is the tragi-comic state of "journalism" in the enthusiast magazine
sector. The bottom line is that the reader counts for zero, while the
advertiser is king. And issues like safety and price-gouging are swept under
the carpet by editorial apologists.


Bzzt! Wrong. The reader accounts for about $4.50 per magazine. That
just barely will cover the cost of printing...maybe. The major revenue,
the money that will keep the lights on, comes from....you guessed
it...the advertisers!!! And guess, what...I don't give money to people
who say bad things about me. And I don't ask that from others. You
could have kept Flying honest if you were willing to open your
checkbook. But of course, as is all to typical now days, you expect
others to sacrifice to coddle you.

Want a magazine that tells the truth and isn't worried about advertisers
(cause they don't have any), the subscribe to "Consumer Reports".

Now back to the issue about the high cost of sportplanes. What should have
been said in this "editorial" but wasn't is that the prices are too high.
Way too high in fact.

Frankly I don't think this price level will hold. I think there is a real
opportunity for enterprising individuals to jump in and build a nice little
sportplane at the $50,000 price point. Only then will this category take
off. If we don't see prices come down to this level, sportplanes will turn
out to be nothing but a marginal part of the aviation scene.


Maybe you can be that enterprising individual that is so much smarter
than all the guys-n-gals that are giving it their all, Gordon.
Personally, I've been building my Delta for over 3yrs now, in conditions
not far removed from the Allegro's that are being put together down in
Sanford. If I was expecting to feed and house my family from building
airplanes, I'd have to look at $100K as fairly minimal.

Furthermore, sportsplanes will be a marginal part of the aviation scene,
even if the planes were available for $25k. You don't make any money
with a light plane. They can't even be used as a serious mode of
transportation with most pilots, because the weather can rise up at any
time and destroy the best laid plans. Very few people could even use
one to get to work. They are toys, and they will always be toys until
someone finds a way to make money with them other than building and
selling them or giving flight training. That keeps the market volume
low, which drives the price up.

So, get over the price-gouging bull, until your ready to introduce the
Arnaut CloudWunker costing less than an average family sedan. If you
don't like the prices of the products of offering to you, don't buy it.

--
This is by far the hardest lesson about freedom. It goes against
instinct, and morality, to just sit back and watch people make
mistakes. We want to help them, which means control them and their
decisions, but in doing so we actually hurt them (and ourselves)."

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

On Sun, 18 Sep 2005 05:44:24 GMT, Ernest Christley
wrote:

This is the tragi-comic state of "journalism" in the enthusiast magazine
sector. The bottom line is that the reader counts for zero, while the
advertiser is king. And issues like safety and price-gouging are swept under
the carpet by editorial apologists.


Bzzt! Wrong. The reader accounts for about $4.50 per magazine. That
just barely will cover the cost of printing...maybe. The major revenue,
the money that will keep the lights on, comes from....you guessed
it...the advertisers!!! And guess, what...I don't give money to people
who say bad things about me. And I don't ask that from others. You
could have kept Flying honest if you were willing to open your
checkbook. But of course, as is all to typical now days, you expect
others to sacrifice to coddle you.

This is bordering on troll territotory, but I will bite.

I think he expects what everyone else expects. An honest review.
Anything less than that is just marketing. I have a susbscrition to
Flying, but I'll be damned if I am going to buy the magazine if it's
just a schill for the aviation comanpies.

There are plenty of "Marketing" mags out there for many industries.
All they are is marketing slicks and maybe an occasional fluff
article. They beg you to get a free subscribtion so their demos are
better and advertising revenue goes up. That not what I expect from
Flying. If I pay, I expect information.

The thing you forget about in you money equaiton. Advertising pays
the bills, but without subscribers, their advertising doesn't bring in
squat.

I used to subscribe to a SCUBA magazine that was pretty good in the
past, but then it really started regurgitating the marketing slicks
that the regulator companies produced. So I stopped subscribing.
They didn't miss me perhaps but that rag is known in the industry as a
hack magazine and I think that the only people that subscribe are
newbies that don't know any better. Their revenue is currently
suffereing.



Want a magazine that tells the truth and isn't worried about advertisers
(cause they don't have any), the subscribe to "Consumer Reports".


Good magazine. Doesn't have a lot to do with aviation.


Maybe you can be that enterprising individual that is so much smarter
than all the guys-n-gals that are giving it their all, Gordon.
Personally, I've been building my Delta for over 3yrs now, in conditions
not far removed from the Allegro's that are being put together down in
Sanford. If I was expecting to feed and house my family from building
airplanes, I'd have to look at $100K as fairly minimal.

Hope your plane turns out well.

And I would expect that most of your equipment is idle while you are
working on one particular part. This is called inefficiency of
production. I'm betting Allegro is using an assembly line concept
that is a little more efficient with their resources.

If not, than that's the problem.


Furthermore, sportsplanes will be a marginal part of the aviation scene,
even if the planes were available for $25k. You don't make any money
with a light plane. They can't even be used as a serious mode of
transportation with most pilots, because the weather can rise up at any
time and destroy the best laid plans. Very few people could even use
one to get to work. They are toys, and they will always be toys until
someone finds a way to make money with them other than building and
selling them or giving flight training. That keeps the market volume
low, which drives the price up.

Agreed, but even toys have to reasonably priced.

So, get over the price-gouging bull, until your ready to introduce the
Arnaut CloudWunker costing less than an average family sedan. If you
don't like the prices of the products of offering to you, don't buy it.


He isn't buying. That's the point.

Jim

http://www.unconventional-wisdom.org

Along the lines of my previous posting regarding the theoretical base
price of any LSA plane produced commercially, I've provided the
following numbers for comparison. Note that the single biggest cost is
labor ( even at the ridiculously low rate I specified):

Airframe + avionics + engine + labor
kit basic O235
20000 + 4000 + 15000 + ( 500 * 45 ) = 61500

Note that labor costs 22500 and that the above number doesn't specify
any profit or liability insurance. Adding these two in easily puts the
base price over $80.00.

Of particular note, if the quantity of labor could be reduced by half on
both the production of the airframe parts and assembly, you might
conceivably squeeze out 20K from the base price. I'm not sure if your
average LSA/kit manufacturer is up to the task of tackling all the
required process/materials/FEA engineering necessary to realise those
savings, but I have a feeling a community effort might succeed if the
information were pooled.

I've seen other kit manufacturers attempt to recover these costs the
easy way over the last few years by moving operations to places such as
south america or south east asia. This however, seems to me to be a
short sighted way to recover assembly costs, particularly with the costs
of oil these days. If only these manufacturers would spend the money
they are going to spend on moving operations off shore on better
engineered products, then not only would we have better airplanes, but
they would be made at home.

Evan Carew