Aviation Consumer: LSA Shoppers Face Financing Challenges

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Shoppers in the market for a light sport aircraft have lots of choices, but according to a report in the February issue of Aviation Consumer, those choices get thin when it comes to finding a loan. “The LSA industry is stuck in a Catch-22,” the report found, “where low volume of sales hinders financing, but the impediments to financing hinder sales volume.” The impact of the credit crunch is widely variable. Well-qualified buyers are most likely to find financing for well-known LSA models that can show a track record of holding their value. But the report concludes that financing for less-common models or commercial use is virtually unavailable.

Phil Solomon, CEO of Tecnam North America, told Aviation Consumer his sales were cut in half because flight school operators couldn’t get loans. Cessna, however, eliminates that obstacle by providing its own financing. In fact, three out of four Skycatchers financed by Cessna are for flight schools. Some specialty LSA manufacturers, like Cub Crafters, sidestep the issue by appealing to buyers who can write a check for a $165,000 airplane. While the picture is mixed for LSAs, Aviation Consumer found that overall, financing for aviation has been increasing, with one lender reporting a 30-percent rise in approvals in 2010 over the year before, and 18 percent more transactions.

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