60 Minutes 4/17

"aluckyguess" wrote:
If there was enough volume they could build the plane for less than 50k. It
would replace all the old Piper, Cessna and Beech 2 and 4 seat aircraft.
They sell new cars for way less and there looks to be more work in a new
car
than a small plane.

You have confused the auto business with the airplane business. Auto
manufacturing allows economies of scale unatainable by aircraft mfg. And
remember, auto makers break even or lose money on many of their models.

I think if they could sell 1000 a month you could build it for under 50k or
close to it.

And if frogs had wings...

Therein lies the main weakness in your argument. You imagine there is a vast
pool of pent-up demand. Do you believe there are buyers for 1,000 Cherokee
180s/month? How about after the first, second years? Remember, over the 40
year production history of all models of the Cessna 172/175, only 43,000 have
been built. That's a long way from 1,000/mo.

[snip]

I know if Lycoming had a quote come in for 12000 IO 360 engines the price
would drop quite a bit.

Maybe not, because they would still build them the same way at first.
Mobilization costs to handle the increased volume would have to be added to
the margin made on each engine. The same thing goes for New Piper: if they
suddenly had a backlog of 12,000 airplanes, they'd have to build new
factories and so would all their suppliers. It would take years to reach the
capacity to meet that demand efficiently. And here's the rub: by the time
they had all this capacity was built, practically everyone who wanted a new
180 would have one, and there wouldn't be enough new customers to pay off the
enormous debt NP (and its suppliers) would have after they built all those
factories.

You can buy a brand new LS6 corvette engine for 5000.00 that tells me they
are building it for around 1500.

Why does it tell you that? And what do you reckon the liability cost
component of an LS6 is compared to a Lyc. O-360?
--
Dan
C-172RG at BFM