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As Goes Cirrus, Cessna Too?

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When I stopped in at Cessna's Wichita HQ on a Midwestern swing last week, the lunch time conversation settled briefly around the AVIC acquisition of Cirrus. I asked Cessna's VP of U.S. sales, Tim White, what he thought of the deal. He laughed and said, "I was going to ask you the same thing." His answer didn't surprise me in the least, for everyone I talk to seems to have the same baffled, uneasy reaction. It's not that we think the Cirrus deal makes no sense, it's just that we can't figure out what it means in the larger context.

The reason is that we are in the midst of major sea change, an economic realignment so large that we're unable to wrap our heads around it. And it's getting faster faster. As the world economy becomes more interconnected, interdependent and hyper-competitive, acquisitions like these are going to continue to come out of left field. Parsing them on the fly is like trying to summarize the arc of western history on the basis of a single day's events. It's impossible. All you can do is strap in and hold on for the ride. Cessna, of course, has a global strategy. It has to, with the likes of Gulfstream, Embraer, Bombardier and others breathing down its neck. The competitive environment today makes the 1970s, when Cessna owned GA, look like a church social.

Every aircraft manufacturer faces the same competitive heat, but each has its own unique baggage to carry. Cessna's is that it's an old line maker of metal airplanes bashed together with rivets and hammers competing with new-age upstarts like Cirrus and Diamond and who knows who else who can conceivably start with clean-sheet, efficient manufacturing methods. The short term verdict on the new age guys is that the re-invented wheel is white, slicker and made of different stuff, but if there have been meaningful efficiency gains in manufacturing, the buyers haven't noticed in lower prices. Or maybe they haven't noticed that the prices of new aircraft haven't increased more than they otherwise might have.

So where does this leave Cessna? Scrambling to find production economies and efficiencies wherever it can in a process that is fundamentally inefficient. When car guys go into aircraft plants—and they do—they're appalled at how much one-off piecework assembly goes on. Sure, there are jigs and fixtures, but there's also a lot of hand drilling, bucking, filing and bending to get things to fit. In a modern car plant, identical parts arrive just in time and fit into the whole in mere seconds as the line moves on. At Cessna, the CJ4 line moves once a week.

Still, there are gains to be made. "Lean" is the buzzword these days, meaning the less inventory and seldom-used tooling hanging around, the better. Manufacturing has become a value-added process and margins and competition have become so tight that companies don't even buy the high-value stuff like built-up assemblies, engines and avionics until 15 minutes before they're needed. (Ten if you can manage it.) Have you seen those relentless UPS commercials about logistics? This is what they're all about. Cub Marion, who oversees the CJ4 line at Wichita, has to dance cheek-to-cheek with his suppliers and good luck to the guy who's a day late on a shipment.

Still there are gains. In this podcast, Marion told me something astonishing. Cessna has done away with green flights for the CJ4. Green flights are an aviation tradition in which the airplane is test flown sans its interior, paint and other "stuffing." That way, the factory doesn't have to rip up floorboards and panels fixing stuff that they didn't get right during assembly. Cessna has stopped doing green flights on the CJ4.

The airplane is completed, with paint and interior, then flown for acceptance. Cessna did this because it had to. It re-jiggered the line and adjusted QC to capitalize on the fact that it had reams of data describing green flight fixes. All it had to do was to get these things right in the first place. Maybe easier said than done, but that's not the same as can't be done.

Down at Cessna's Independence, Kansas plant, they're doing the same, as described by Terry Clark in this video. Since the plant opened in 1997, the line has collapsed on itself to such a degree that there was more than enough room to take on the Mustang production. Mustangs still get green flights, but Marion figures that some day they won't. Even though we tend to think airplanes are made as they always have been, that's not necessarily true in detail. For example, at Independence, Clark told me they figured out that the simple expedient of installing the engine last rather than first kept workers from having to walk around it or bang their heads on it during routine work. Some gains are counter-intuitive: They fuel the wings before installing them to check for leaks and proper function rather than waiting and fixing the leaks later, when the airplane is at a higher-value state and gathering dust, not customer dollars.

Clark can only sigh when he hears pilots and would-be buyers ask for the $100,000 Skyhawk which they insist can be built if Cessna would just invest in automated tooling and robots. But robotics are high-cost assets that make money only if they're running 18 hours a day feeding a torrent of volume. Even Cessna has just a trickle so it does what other manufacturers do: It pays for manual labor to match the real-world volume, thus the $300,000 Skyhawk.

In a certain sense, Cessna is actually training its workers to work as reliably as robots. Robots are the best welders and painters so if you want the best welding and painting, you assign it to a robot. At Cessna, they use an electronic training simulator to hone a human painter's skills: squeeze the trigger here, move the gun this fast, return the stroke here—same way every time, just like a robot. Buyers have, in the past, complained about paint on a $300,000 Skyhawk not matching the quality of a Lexus. "That used to be true," Clark says, "we couldn't match that quality. But now I'm willing to take them on."

Completing the circle, does any of this mean that you won't one day read that AVIC or some other Chinese interest has bought a chunk of Cessna? It does not. Textron is a $10 billion conglomerate and Cessna once accounted for 40 percent of its total revenues. That has declined to about 30 percent, putting Cessna more on par with the Bell Helicopter division, but still a big dog. The piston division is a mere 4 percent of Cessna's total take. The global market forces that ignited that shift are not trivial, nor are they necessarily predictable, thus speculating on where Textron will go—or be forced to go—with its various divisions is thin ice I'm not inclined to dance on. My gut instinct is that Cessna is committed to keeping pistons in its stable, but I could be confusing hope with intuition. In a sense, with the Skycatcher, Cessna has already made a China play and subassemblies for the singles are now made in Mexico and shipped to Independence for completion.

So all Cessna can do is continue what it is doing: Looking for efficiencies at every turn and trying to keep at least an airplane or two ahead of its competition.

Comments (39)

I agree with you, Paul, that the world is changing. Currently, there are a couple of big differences between the USA and China when it comes to manufacturing airplanes. Both of them suggest that China will be doing a lot of the manufacturing in the future.

The first big difference is the cost of labor. China has lots of people who need jobs. While there are capitalist style forces at work it is still a centrally controlled Communist country. They can assign as many people as they want to build airplanes. This need not be justified by private sector profits. A desire to move China into aviation is sufficient.

Second, our public education system has fallen apart. In the Kennedy moon shot days we had a huge focus on math and science education and all high school graduates could read and write (after a fashion). I think it was in the 1980s that this all changed. We now have the world's most expensive public education with the world's worst results. While the impact of this on aviation is not terribly clear the impact on manufacturing in general and our ability to compete in the world marketplace is huge.

There are some minor things happening too. Union shops insure the workers are very highly paid compared to foreign competitors. Overspending in Washington has destroyed the US dollar's buying power.

Unless we change our ways, our kids should look forward to a low to moderate paying service sector careers.

Posted by: PAUL MULWITZ | March 7, 2011 7:21 AM    Report this comment

Cessna designing production planes that require a bazillion rivets and then discussing efficiency is ludicrous. Efficiency starts on the FRONT end, not marveling at how well shop robots(or Chinese) can hammer out inefficient designs.

Posted by: Mark Fraser | March 7, 2011 8:23 AM    Report this comment

I think what Mark is saying is Cessna is stuck with highly inefficient designs. Clean sheet newness would help them a bunch. I'm sure they've discussed this; and concluded the older designs were riveting enough to continue...

Posted by: Peter Kuhns | March 7, 2011 9:18 AM    Report this comment

Hi Paul, Buying engines ten minutes before they are needed is not a new thing for GA manufacturers. At Piper, in the late 1940s when the business was literally hanging by a thread with no credit from the bank, they actually bought engines after they were needed.

It worked like this; a customer would arrive in at the Lock Haven plant to pick up his new airplane. The Piper sales exec would sit down with the client in the sales office and accept payment. Shortly thereafter the exec would take the customer out for a nice, long lazy lunch. Meanwhile the customer's check was whisked the bank for verification, Lycoming was alerted and paid, and the engine was shipped over and hung on the plane and a quick flight test and fine tune of the rigging was accomplished. By the time the customer returned from lunch, the ship was ready to go. It helped that Lycoming was based only 30 miles away, but I believe they also had a local Lock Haven depot for quick Piper support.

I heard this story from Bill Piper and Walter Jamenau (the design engineer of the Cub) themselves back in 1986 at a dinner during the first Sentimental Journey fly-in in Lock Haven, PA.

Posted by: A Richie | March 7, 2011 9:24 AM    Report this comment

My opinion and support of Cessna went south when they announced that they would build their LSA in China. The pilot community feedback the fist several days after the announcement caused Cessna to "shut down" their blog. It was overwhelmingly negative. I think that if Cessna had not already inked the contract with the Chinese, based on pilot/buyer feedback, they would have found a better option. Meanwhile Remos, a German company, decided to build an aircraft assembly plant in Arkansas. If the Germans can build planes in the US, why did Cessna need to go to China? I do understand Cirrus taking investment money from Chinese interests. The banks in the US are not lending, and China has lots of money (previously ours)--Cirrus builds a popular modern airplane with modern materials and needs money for expansion and development. It is interesting that the Chinese investors plan to keep building Cirrus in Grand Forks ND and Duluth MN. Yet Cessna runs off to China?? I thought that perhaps Cessnas purchase of the Lancair Columbia--which they call the Corvallis, would move them in the direction of composites. but no--The Flycatcher will be another Cessna soda pop can--all aluminum. And given the cost saving (or was it?) move to manufacture in China, a disappointingly high asking price. They need some new blood at Cessna in the piston division. And some new thinking on better ways to handle labor costs than hightailing to China.

Posted by: karl hipp | March 7, 2011 9:32 AM    Report this comment

Pete, I'm saying that Cessna designers are stuck in 1950's (as seen in their Sky Catcher). When given a clean sheet they still make same-old riveted planes using the same-old O-200 engines. They designed a plane that CAN'T be built without cheap labor in China.

Posted by: Mark Fraser | March 7, 2011 10:09 AM    Report this comment

Amen to Karl. The problem is not the Chineses, it's us. Let's support the germans untill things get done right here. American aircraft manufactureres are not up to the new market demands and I would rather buy a boat (at least I can swim out of it) then a Chinese made aircraft.

Posted by: Ralph Wishart | March 7, 2011 10:34 AM    Report this comment

I do understand Cirrus taking investment money from Chinese interests. The banks in the US are not lending, and China has lots of money <<<

Karl,

I don't understand the relationship you draw between investment money and banks lending. Do you think investment and lending have something in common? If a company is able to attract capital then why would they go to a bank to borrow money?

Posted by: PAUL MULWITZ | March 7, 2011 10:35 AM    Report this comment

the fact of the matter is that the market for new airplanes is small especially when you look at what is available on the used market you can get equivalent performance in the used market with full upgrades to the latest avionics and the same powerplant for 1/3 the cost of a new cirrus. until something really new that carries much more, is faster and uses less fuel is available will the new market take off. Light sport is going to have real problems when a good Cessna 172 or Cherokee is $30K or less compared to a new light sport for $100K. only with high volume production will we get new good cheap airplanes and the market is not there with 100,000 good used airplanes available to buy.

Posted by: BILL LAWSON | March 7, 2011 10:54 AM    Report this comment

Paul,

Bankers lending, investment bankers or investors investing. I don't see a big difference. Either way, Cirrus was obviously not able to get US money. so what's the point?

Posted by: karl hipp | March 7, 2011 11:07 AM    Report this comment

Karl,

I guess I understand your confusion. For people who don't invest there is not an obvious difference between one kind of money and another. For those who own and run businesses the difference between capital investment and borrowed money is as different as night and day. Investment bankers would have no role in either kind of money since they only deal with large buyouts of public companies.

When a company borrows money from a bank (or anybody else) they issue debt instruments and back up the debt with collateral that is worth more than the loan. This is just like an individual taking out a mortgage on a house (without a government guarantee). If they miss a payment the collateral is forfeited to the debt holder.

When a company takes an investment they get cash in return for a share of ownership of the company. There are no monthly payments and no risk of losing the company to the investor. Instead they share profits, if any, with the new owner of the business. This is much more desirable for the future strength of the business than taking on debt.

If, as I suspect, the company in question is failing then they will not be able to borrow money to stay in business. Nobody would give them a loan. Only the federal government borrows money to pay off previous debt obligations. For the rest of the country that is simply impossible to do.

Posted by: PAUL MULWITZ | March 7, 2011 11:23 AM    Report this comment

Karl

The simple answer to Paul M's rather convoluted one is this, if Cirrus were profitable they could borrow money, if not, they can't. If they were profitable they could afford to borrow money to invest in process improvements and to develop new products but they can't borrow to pay expenses because there's no way to pay it back. Also, in the US the cost of borrowing is tax deductible, but if the company isn't profitable, it's tax burden is minimal anyway and isn't helped by deducting the cost of borrowed capital. An investor comes in with the idea that by adding cash to the equation they'll improve the profitability of the company, time will tell if that's the case here. There is a significant risk and if the investor sees continued losses kiss Cirrus goodby. It will move to China, period.

Posted by: Barton Robinett | March 7, 2011 11:49 AM    Report this comment

Until the USA reforms it's tort litigation system, ALL domestic manufacturing will have pressure to leave the USA, especially aircraft manufacturing. Leaving the USA is the the only protection they can get from the "Lawyer Lottery" that has struck dead most manufacturing in the US

Posted by: Brian Baldridge | March 7, 2011 12:16 PM    Report this comment

Everyone needs to stop drinking so much coffee and relax a little. The biggest problem with aviation is volume. It isn't the American education system, tort litigation, evil foreign ownership, or unions. It's volume. We all love aviation, but we need to resign ourselves to the tiny volume of planes that are manufactured. Why the tiny volume and when will it change? It might change when Chinese pilots start graduating from flight school, something we should welcome, not fear.

I spoke with a venture capital fund last week, and there is plenty of money waiting to be invested in great American ideas. Why Cirrus courted the Chinese (or vice versa) I do not know. But I wish them well and hope it will create more great products for all of us.

We all fear change, but some of us roll with it. For those who do not, may I recommend de-caf...

Posted by: Peter Kuhns | March 7, 2011 12:41 PM    Report this comment

As China continues to grow and looks for investment opportunities, I am surprised they hadn't gotten into aviation before. Guess they too have heard about a small fortune from a large one. It is confusing as to the undercurrent of resentment by some, about China with their heavy investment in the US...akin to hating the Banker who holds the note to ones house. They do not have to do it but, makes a good story line for The Miracle on 35th Street.

People talk of a World Economy, well...

Posted by: Chuck West | March 7, 2011 1:04 PM    Report this comment

I think you are all viewing this through narrow vision rose colored aviation glasses. It is really much simpler. The Chinese are rapidly buying just about anything of perceived value with continuously shrinking dollars. They are buying energy, land, property, etc. while the dollar still has some value, and because they have so many to get rid of.

Posted by: DALE RUSH | March 7, 2011 2:26 PM    Report this comment

Seems to me that the point of foreign acquisitions of U.S. assets is the historically tried and true axiom, "He who has the gold makes the rules". Is economic warfare still so deniable? Few will use that terminology, preferring the more benign Global Realignment - but that's where its going.

Posted by: Tom Mitchell | March 7, 2011 6:07 PM    Report this comment

With the cost of certifying a new design pegged recently at $100-$150 MILLION Thera a reason there's no new designs in the works. Adam, Eclipse, and other "newbies" got crushed by the certification process. GA as a growth industry capable of attracting new investment is history in the USA. The Chinese MAY make it a growth industry once again but the designs, investment and jobs will be a long ways away from Witchita. Our lawyers and bankers and politicians killed another uniquely American industry and it's not coming back.

Posted by: Lee Dehmlow | March 8, 2011 8:22 PM    Report this comment

Lets not blame the demise of Adam on the certification process. When a company builds an aircraft with an Aluminum firewall and the regs. say it must be fireproof that's not putting onerous requirements into the certification process. Adam also had many build problems and not enough fuel capacity to make meaningful trips. When you look at the CG problems you can assign the failure of Adam to one primary reason and that is very bad engineering.

Posted by: Jim Alexander | March 9, 2011 6:43 AM    Report this comment

Will Cessna go? Textron? Boeing? Yes - but its just a matter of time and when. The third world is catching up at a mighty pace and we gave them the know how and money by purchasing all the cars, cell phones and flat screens over the last 25 years.

Take a peek at this rant on GA avionics. I think it sums it up. http://www.edprest.ca/page7ga_avionics.htm

Posted by: ed prest | March 9, 2011 5:45 PM    Report this comment

Having intimate familiarity with the cost structure in General Aviation companies, I have to point out two facts: 1. Direct labor is nowhere near the main cost item. 2. It costs more to hand-build a composite airplane than an equivalent metal one.

The real costs in airplane manufacturing have to do with the dreadfully low production rates that are not seen as justifying the expense of automated tooling. I disagree with the conclusion that automation is unaffordable, because adequate automation needn't be as costly as companies think. Most automation processes are overdone.

In addition to the high direct labor costs associated with low volume, the indirect costs are also higher. Low volume has as much to do with the very high per-airplane cost of government compliance across the wide spectrum of local, state, federal, and international regulations (not just certification, but everything from labor and environmental laws to Sarbanes-Oxley -- and there are hundreds of others). Low production volume also raises the per-airplane cost of marketing, sales, distribution, warranty, and support of the airplanes. All these indirect, but real costs together can account for as much as half the price you pay for a new airplane, especially one from a smaller company.

Posted by: S. Lanchester | March 10, 2011 1:11 PM    Report this comment

Guess I'm always looking for a reason to flog this horse but I'll say it anyway - I reckon the key is to drive demand and then the production numbers have a chance of making sense again. Plus you guys over there in the US might be able to save a lot of that awesome infrastructure you will otherwise lose in the next 20 years. I see this as a simple pathway forward, given the right ideas and specifics. Avweb, can I propose a permanent forum for a discussion of this nature?

Posted by: John Hogan | March 11, 2011 2:27 AM    Report this comment

1. Direct labor is nowhere near the main cost item. 2. It costs more to hand-build a composite airplane than an equivalent metal one.<

About 15 percent, I am told. And Cessna's experience with the Corvalis seems to support the view that composite is not more efficient, but probably less efficient than metal. This is supported by comparing Cessna and Cirrus prices.

But there's a trade off, too, in how investments in automation can work. Even with cheap automation, you may invest a lot to save only a small portion of that 15 percent. It won't impact your potential sales price enough to drive volume up if, indeed, lower prices would drive volume up. I'm not convinced it would because of significant factors not related to the cost of the airplane. I have some data on this I'll publish in the future.

Just curious: Where and how would you apply automation in the manufacturing process of a metal, riveted airplane? And what are the impacts on low volume on that investment?

Posted by: Paul Bertorelli | March 11, 2011 4:11 AM    Report this comment

Let me offer some answers to your questions:

I understand composite structure allows for more complex shapes than metal. This can be a big advantage for high speed airplanes, but not very noticeable for low speed ones. The impact is higher material cost, labor, and weight.

While automation is sexy, I think the more useful enhancement in light airplane manufacturing would be more properly called tooling. Auto manufacturers use very large and expensive hard tools to stamp out body parts, but I doubt airplanes will ever be suitable for this approach. Much smaller gains can be made with incremental advances in jigs and other lower cost tooling. Van's uses automated pilot hole punching to prepare sheet metal for further processes. Clearly this works in small to moderate volume production, but the prices for Van's kits are on the high side. In return for this price you get more consistent airframe shape and strength.

Competition is important in aircraft as with all products. I am not sure price is the most important component here. Some pilots will only choose to fly low wing airplanes because they look more like WW II fighters than high wing ones. Indeed, I would guess the plane's looks are more important to buyer's choices than price.

Posted by: PAUL MULWITZ | March 11, 2011 5:29 AM    Report this comment

Paul, From a friend: "In 1987, a Cessna engineering manager published a paper on the technologies needed to revitalize GA. It agreed that lower prices would increase sales, but showed that price isn't the only problem.

The cost issue has many facets, and the most important one may be the issue of value – i.e., what you get for the price. There are millions of millionaires in the world, and hundreds of thousands of them have enough assets and income to buy any light airplane -- if they wanted one; but vanishingly few do. The value -- measured in terms of access, utility, comfort, and user-friendliness -- isn't there. And the negatives -- perceived safety, personal liability, and high training and currency time commitments are real issues. So, most of those who could afford a light plane usually choose fractional jet ownership or charter services, instead.

The impediments are similar for people in other income groups. For example, those professionals and business owners who would like to have an airplane and could afford one, just don’t have time for it, or can’t convince their spouse to like it. There are solutions for all these issues, but no one is working them enough."

As for properly applying automation in GA mfg., that’s a long subject for a 1500 char. limit.

Posted by: S. Lanchester | March 11, 2011 1:49 PM    Report this comment

Paul B, as Mark Fraser noted earlier the efficiency starts at the front end, the design.

Now I have been looking into how to design a light airplane that could be built very cheaply. First you need a good cheap engine that does not cost $50 grand.

Next you need to work in sheet aluminum for the airframe because of a number of factors, including cost and flexibility of fastenings etc.

The main thing is you need to make heavy use of COTS, commercial off the shelf components. You let the big players who already have the automation and are already stamping out high quality stuff for peanuts, do the heavy lifting.

There are any number of ways of doing this, but the airplane is NOT built the way Cessnas are built now, 1950s style. And no you do NOT need big investment in automation.

Posted by: Gordon Arnaut | March 12, 2011 3:47 PM    Report this comment

As I noted in the engine thread: show me.

I've heard this story so many times I've lost track. And now you come along and, I guess, to suggest...no, my idea is different.

Fair enough. I have an inexhaustible ability (almost) to listen to new ideas. Talk is one thing, flying metal (or glass) something else.

Sorry for being so cynical. But I've heard a lot of talk. Remember, Cessna et al are actually building airplanes. And all we are doing is heating the alclad surfaces of those airplanes with hot air.

Standing by to impressed.

Posted by: Paul Bertorelli | March 13, 2011 2:20 PM    Report this comment

A low cost aircraft is the holy grail of aviation. There is always someone with a new idea; yet it never happens. The automated composite fuselage on the Beech (Raytheon?) Horizon was going to save $3M – never mind that it doesn’t cost $3M to build any aluminum bizjet fuselage, even today. I think Eclipse was the most spectacular recent failure. An inexpensive twin-jet; but even after bankruptcy erased the $Billion++ "development" costs and their due dividends, the resurrected company still needs to sell them for 2.7 times more than originally priced ($2.15M vs. $0.80M). The details are unimportant. All efforts to bring an "affordable" airplane to the market have failed. I agree that adaptation of mass-produced hardware is good – as Cessna did for many years with Delco alternators and other components. But, there aren’t many COTS parts that have acceptable weight and meet manufacturing certification rules – and those that do cost a lot more than your Asian remanufactured scrap. Worse, most non-aviation suppliers won’t sell to you, due to liability costs. What I called “adequate automation” above would help mostly by improving quality and reducing rework & scrap; so costs are reduced, not a lot – maybe 20% tops. But, prices would come down less than half that, because automation isn’t free. Building airplanes in Mexico or China isn’t the complete answer to low prices, either – as shown by the Skycatcher and Corvalis prices.

Posted by: S. Lanchester | March 13, 2011 10:56 PM    Report this comment

Twenty percent on the total cost of goods is a believable number. Cessna is starting to nibble a little in that direction, but it's a tough nut to crack.

Reminds me of something: Somewhere in the 1989 time frame, I attended a conference somewhere--can't remember the details-but I think it may have been something on GAP or SATs.

At this conference was a fellow from Boeing giving a sort of future-of-the-airplane talk. What he essentially said was that for transport aircraft, what you see is what you get--the technology is at a dead end and will not progress significantly, ever. He made the point that there would be incremental gains in manufacturing efficiency--there have been--some gains in flight efficiency--true again--and improvements in avionics, but no fundamental rethinking of the basic airplane design/build.

Posted by: Paul Bertorelli | March 14, 2011 5:46 AM    Report this comment

He flashed some slides showing trend lines of various technologies and argued that none of them would be transformational, only evolutionary.

I remember thinking this guy had a cynical, narrow view of the future. Rather like the patent office saying everything that could be invented, had been invented. But then I grew up reading Popular Mechanics with the fabulous cover art depicting the amazing flying machines of the future.

Turned out he was right. At least so far. I think it's even more true of light aircraft.

One area where there has been near revolutionary efficiencies is in turbine engine manufacture, particularly Pratt's 600 series, which, as predicted, benefitted from wide advances and lower costs in CAD/CAM technology. When Eclipse emerged, the prediction of many was that the same efficiencies could be realized in building the airplane itself. That most definitely did not happen, thus the 2.2M Eclipse or whatever it will be.

Posted by: Paul Bertorelli | March 14, 2011 6:04 AM    Report this comment

The ubiquitous automobile establishes people's expectation for the price of personal transportation, but any comparison to possible light airplane pricing is illusory. Certainly, aside from avionics, there is nothing in the design of a lightplane that makes it inherently more expensive to build than an automobile -- actually, quite the opposite; there are thousands more details in a modern automobile. Still, airplanes cost far more; and the essential differences that set their pricing apart are the vastly different size of the two markets and their widely different economies of scale. How different? Worldwide, piston aircraft deliveries in 2010 were only 889 units, compared to 72 million cars and light trucks sold. In the USA, the numbers were 475 vs. 11.6 million. So, 24,000 cars were sold in the USA last year for every light plane sold. Consequently, the scale of automation in the automotive industry is spectacular, far more than GA manufacturers could afford at their tiny sales volumes.

Posted by: S. Lanchester | March 15, 2011 12:21 AM    Report this comment

One could make a leap of faith and invest ~$2+B in automotive-level automation for a personal airplane, including its engine, systems, hardware, and avionics; and the cost of building that airplane would be close to that of a luxury car -- if sales were equivalent to sales of luxury cars (~40,000 per year). Also, it would take that level of sales to justify the investment in automation. But, who will buy them?

Back in 1946, the US General Aviation industry did build almost 40,000 light planes in the euphoric expectation that many of the GI's returning from war would want to fly. Well, it turned out that most didn’t want to fly. In fact, there were more GI’s who did nothing with their GI Bill opportunity than GI’s who chose to learn to fly for free. Keep that thought in mind when contemplating the potential for a large light plane market. As a result, it took several years for those airplanes to be sold at fire sale prices.

Posted by: S. Lanchester | March 15, 2011 12:22 AM    Report this comment

Today, there are roughly 600,000 licensed pilots. Nowhere near that many are truly active, and the number has been declining for decades. Worse, the number of student starts has been in general decline since the mid-1960s. One can argue that new pilots would flock to aviation if prices were brought down substantially, and I would agree. Still, after a few years the market will dry up, because everyone who wants one will have one, and we can’t find or produce new pilots fast enough.

Why not? In addition to my quoted March 11 comments above, there is this most meaningful contrast between autos and personal airplanes: most people need a car in order to fully participate in US society; but, almost nobody ever really needs a personal airplane.

All this was pointed out in that paper I referred to above, but nothing has changed in the industry for almost 25 years since, except that the business climate has become more risk averse, regulatory creep makes profitability more difficult, and production is being outsourced to foreign shops.

I am not optimistic, except for one thing. The technologies to make light airplanes more acceptable to those who can afford them are being developed for other things. One or two more development generations and there will be renewed interest in personal airplanes, possibly enough to warrant production rates that substantially reduce prices.

We can hope.

Posted by: S. Lanchester | March 15, 2011 12:22 AM    Report this comment

Dunno what to think. I would hate to see all of U.s. producers go to china. I wonder if Cessna could just start making all aircraft composite. like the skyhawk stationair skylane so on so forth. I wonder if this would help and U.s. could keep the jobs.

Posted by: Jerry Witt | March 17, 2011 4:14 PM    Report this comment

@ S. Lanchester:

I agree, sadly. That's why I keep tossing over in my head ways to make aircraft seem more useful/justifiable to a bigger percentage of the population. For me, and sorry for being self evident, the angle is the massive expansion of possibilities and time savings a licence gives you. Maybe like the step up from cycling and catching the bus/train to getting your own car. Sure, the costs are higher but the benefits are inarguable. I have heard that a lot of those people who do get their PPL then barely use it. I think some sort of integrated system of aircraft, hire cars etc is what's needed so people can fly cross country at maybe 4 times the speed of driving, hop in a cheap hire car or pool car at the other end and head off to do whatever. I know plenty do this already but I think the trick is integrating everything and bringing the cost right down to the point of being not a factor. It might mean an expansion of the shared ownership model to include cars and even boats in some cases.

Posted by: John Hogan | March 17, 2011 7:27 PM    Report this comment

Jerry W

No. omposite light planes cost more than aluminum, are heavier, and are more difficult to repair. Composites airplanes are usually faster for a given engine size, but metal can be formed to be just as sleek, and it has been done.

The buying of US assets by China is solely due to the fact that China has lots of US dollars, because we keep buying their cheap stuff. So, the Chinese will be buying our land, resources, and companies for a long time. China's enviably low prices are due to its artificially low currency, its allowing slave-level wages, and its having no lawyers to hogtie everybody with paperwork and productivity-sucking training in all the PC sophistry that motivates politicians and victim groups.

China has more efficient methods of control. Unlike the USA, where millions of us have to take repetitive, insulting ethics courses after some grandee gets caught being a schmuck, the oligarchs running China just send out the black coats to arrest and execute the schmuck. Very effective, extremely efficient; but a little rough for America's excuse-making relativism and enabling politicians.

Anyway, if labor unions in the western world would stop milking our companies & governments for eaasy pickins,and instead worked to unionize Asia, Africa, and S. America, the working poor in those regions would be able to live like human beings, and we could keep more of our jobs in America.

None of which could be solved just by building composite airplanes.

Posted by: S. Lanchester | March 17, 2011 10:03 PM    Report this comment

John H.

I never looked hard at that approach. So much of our population is so thinly distributed over so much territory that it it hard to profitably field such a system. It would take $$$$ to create it, and a lot of staying power before it became profitable. Still, it can be done and it would work.

The closest thing to date has been the recent attempts to create broad air taxi networks using everything from Cessna 4-seaters to chimerical Eclipse jets. Those air-taxi plans almost worked, and I'm not sure any still exist.

Within the next two decades, when it becomes clear that environmentalists have made it impossible to continue building enough highways to accomodate our increasing population, we will see automated Interstates happen. Roadway automation technology already exists to more than double highway speeds with much higher levels of safety, making a 750 mile trip by car so easy and quick that everything from light aircraft to regional airlines will have serious problems competing with the automobile.

I'm kind of looking forward to it -- won't miss the TSA or the airline cattle-cars one bit. Slower light airplanes will still be around, though most will be almost 70 years old.

In China and India, for example, where no major road structure exists, light planes could be a bigger factor than here.

We shall see.

Posted by: S. Lanchester | March 17, 2011 10:53 PM    Report this comment

John H.

More directly on your point: the lowest cost personal transportation would use only shared conveyances. If a company or communal motor pool had cars and lightplanes available for qualified users, and put them all over the country, including cars in a communal garage on every block, and lightplanes and cars at every airport, then most people wouldn't need to own one.

But, auto production would be severeky reduced and Detroit would look like even more of a post-apocalyptic tragedy.

The main problem with shared personal cars is that being in a woman's car is often like riding around in a purse -- you know, makeup kit, coupons, spare earrings, loose coins, CDs, cracker crumbs, etc. The cleaning fees would kill the whole idea. Sexist? Sure, tough. And just to prove I'm an equal opportunity sexist: where will I put my toolbox, shotgun rack, and pool cue when someone else uses the community truck?

The convenience of personally owned and operated vehicles is too ingrained to settle for anything less. Joint ownership, or having only rentals, might play in places where population density is extreme or where communes are still big, but not where people have the space to enjoy the freedom of private ownership.

Posted by: S. Lanchester | March 17, 2011 11:51 PM    Report this comment

>I have heard that a lot of those people who do get their PPL then barely use it.

I know quite a few people who have done that, but it's not because there are no cool new airplanes to fly. It's because flying bores them. They enjoy the challenge of obtaining the certificate, but quickly tire of the expense, noise and glacial pace of piston flying.

Most enthusiastic pilots seem to believe that if the industry were to change in some significant way, if competent airplanes were available for the price of a nice car, the number of pilots would go up substantially. I don't. How many active private pilots do you know who learned to fly for exclusively utilitarian reasons? I've met one and he quit flying long ago after a mild scare he wasn't prepared for.

The entire non-commercial flying industry is supported by fanatics who a have an unquenchable passion for flight. I'm one of them and so is every one of you. There will never be "an everyman's flying machine" because that concept is predicated on a fallacy. "Everyman" might like to fly in principal, but unless the vehicle is a completely automated device more akin to an elevator than a Bonanza, he never will or if he does, he won't for long. It takes passion to do this, to find the means to pay for it and to keep doing it in the face of an ever multiplying array of obstacles. At ANY price there are only so many people who have that passion.

Posted by: PAUL DE ZAN | March 24, 2011 9:52 PM    Report this comment

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