Cessna 152 vs. LSA: Vintage Wins the Day
On the flight training line, ancient 152s can still be more profitable, chiefly because LSAs lack a mature parts chain and repair support infrastructure.
It's fair to say the entire foundation of the GA industry was built on the back of the dowdy Cessna 150 and 152. But even the newest of these airframes date to aviation's Jurassic age. Some in the industry thought the light sport wave would fill the need for new airframes as the old 150s and 172s become uneconomical to operate. To a degree, that has happened, but the wave has been more of a ripple than a tsunami. LSA sales have been modest at best and these airplanes have proven more kite-like than even the venerable Piper Cub. Flight schools have found LSA economics less attractive than was originally thought and maintaining an old Cessna is just more profitable.
To put some numbers on these otherwise vague sentiments, we recently visited a busy commercial flight school near Dallas—U.S. Aviation Group—which operates both older 152s and newer LSAs, specifically the Remos line. We flew both airplanes, compared their flight characteristics and spoke with the staff about their impressions of teaching in both.
U.S. Aviation is headquartered at Denton, Texas, tucked in under the Dallas-Fort Worth Class B airspace. It's a relative rarity—a recently organized flight school that's a full-service business, including light and heavy maintenance, avionics, training, charter and an in-house engine overhaul shop. It was founded by three aviation-interested investors six years ago and has grown rapidly enough to employ more than 170 people in a sprawling facility in Denton and a second in Hondo, Texas.
U.S. Aviation specializes in training foreign students, including Chinese nationals. A lot of them. When we visited in early March of 2012, more than 100 Chinese students were enrolled in various phases of training. The company's general manager, Jeff Soules, told us these pilots are exposed to intense, drink-from-a-firehouse training that takes them from zero to 250 hours, a commercial ticket with instrument rating and 20 hours of turbine time in about 10 months. The school's two dozen or so Cessna 152s—in fact, all of its airplanes—are constantly on the move and the maintenance shop is hopping with mechanics to keep them airworthy.
What we found most intriguing about this operation is how well it tracks every dime that goes in and out and every maintenance metric that can be measured. Given the large number of hours flown, U.S. Aviation struck us as the ideal laboratory for a hardnosed comparison of old-school 152s against new-age LSAs.
With 77 aircraft in the fleet, Jeff Soules told us the company's aircraft choices are driven by cost, availability and dispatchability and it gains by having fleet commonality. Nonetheless, it decided to try the LSA route because these airplanes are new, more technologically advanced than the older Cessnas and because selling airplanes is part of its business strategy.
Before 2008, when LSA sales looked promising, U.S. tilted toward two LSAs, the Breezer and the Remos G3, both German imports. Soules said U.S. Aviation liked the G3 because it has slightly better payload than other LSAs they shopped. "You can carry a couple of people with no problem. We found them to be a stable airplane to fly," he says.
Although would-be buyers and LSA companies complain that banks are reticent to finance light sport purchases, U.S. Aviation didn't have this problem, probably because it's well capitalized and can show a lender a positive P and L. As part of its continuing expansion, U.S. Aviation put a couple of new G3s on the line in 2008. Soules told us the airplanes were well received if not enthusiastically sought after. They liked the G3's folding-wing option, which they put to use in trailering the airplanes around to various promotional events. "We had an airplane at the Dallas boat show. We had one at one of the malls for most of December," he said. You can't do that with a 152.
But from the purchasing point of view, the G3 and the other LSAs are at a significant disadvantage compared to legacy 152s or 172s. "In the LSA market, you put a lot of money down up front, wait a few months and they start to build your airplane," Soules says. That ties up capital but, more important, you can't fly what you don't have. "You just can't make money like that," he says. In buying a 152, says Soules, U.S. Aviation shops the used market, makes a deal and gets the airplane on line quickly.
There are tradeoffs. There aren't many, if any, cherry 152s out there and cosmetically, the legacy trainers won't win best of show. "Before we even put them on the line, we do about $10,000 worth of work on them," says Soules. "We put in a Garmin radio, we paint them. We do any repairs to bring them to our standards."
Cost wise, you can buy 152s all day for about $20,000 to $25,000 plus or minus 20 percent. Add another $15,000 for upgrades and perhaps even an engine overhaul and you're into the airplane for $35,000 to $40,000, less than a third of the cost of a new LSA. We asked if U.S. Aviation views the supply of used 152s as sustainable for the long haul. Is there a shortage of serviceable 152s?
"Right now, no," says Soules. "But I think there's going to be. You know, South American buyers are going after these airplanes. I bought one for $24,000 that the seller had listed for less than that. We've gone as far as California and Florida to pick them up and truck them back." Despite their age, support for these airplanes remains good. U.S. Aviation has a large, computer-inventoried parts system and neither Soules nor the maintainers we spoke to suggested that the 152s or older 172s go AOG for lack of parts.
But that's not the case for the LSAs. It's not so much availability of parts for the newer airplanes, although that can be a spotty problem, so much as it is documented procedures to repair things that break. And that's where LSA costs spiral out of competition.
U.S. Aviation presented us with a detailed spreadsheet comparing direct operating costs—maintenance and fuel only—for all the airplanes in its fleet. It has accurate tracking for these numbers because the company's mechanics keep careful tabs on both the hours spent slinging wrenches and time burned to chase parts and doing the paperwork necessary to keep the FAA happy.
That's where the numbers run off the rails. Soules' spreadsheet showed direct hourly costs for the Cessna 152s to be $27.80 per hour, not including the engine reserve. Block fuel burns are 5.2 GPH at about $5.15 per gallon, so call that $55 per operating hour, plus engine reserves of $9 an hour. Our estimate of the all-in total is about $64 an hour, if the engine is outsourced for overhaul.
Scrolling down the columns for the LSAs—U.S. Aviation lumps the Breezer and Remos together, since the costs are similar—revealed a maintenance cost of $69 per hour and block fuel burns of 3 GPH for a total of $84.45. Add the Rotax engine reserve ($11) and the total is about $96—$32 more than the 152s or 50 percent. (Later Rotax engines, with 2000-hour TBOs, reduce this $3 per hour.) These numbers don't include the capital costs of buying a new airplane against an older airframe. What's going on here? Do the LSAs break so much more often than the 152s to drive the costs this much higher. Or are parts more expensive?
Neither, really. The higher costs relate to the way maintenance happens at a busy flight school. Dispatch reliability is everything and when an airplane goes down for maintenance, the less time it's down, the better. But Soules told us the Rotax-powered LSAs soak up more time for routine scheduled maintenance. "An oil change on a Rotax isn't difficult," he says, "but it takes just a little longer than it does on the O-235."
But the larger component of the higher LSA costs probably relates to the paper chase, according to Nathan Probst, who is the LSA go-to guy at U.S. Aviation. "The problem is that the manufacturers may have the guidelines out there for maintenance, but they're not the best at making sure you can get them," Probst says. "Part of the reason is that a lot of the LSAs are made overseas. They're coming from the Czech Republic, from Australia and from Germany. The support over there may be fine, but it's not here." Parts can be a problem, more in delay in getting them than in getting them at all. Delays also accrue from having to do repairs not listed in what may be a sketchy repair manual to begin with.
"So the snag you run into there," adds Probst, "is that you have to get a letter of authorization for the repair. What's in the maintenance manual is the bare minimum according to ASTM." But quality of the documentation varies widely, says Probst, with companies like Jabiru and Remos near the top, but others less so. U.S. Aviation does volume work on LSAs outside its own fleet, and is approved to repair most LSAs.
When the repair manual offers no solutions, that entails not just contacting the company to obtain the LOA, but finding the right person who can or even will respond. Meanwhile, the airplane just collects dust. This sort of thing might not be much of an issue for a private owner who can tolerate an AOG airplane for a few days or even weeks, but a flight school doesn't have that luxury. By comparison, legacy Cessnas can be repaired flexibly using accepted practices well-established in Cessna documentation or in advisory circulars. For the would-be LSA maintainer, the process is fuzzier and improvisation is much less certain. The FAA gives no prizes for creative maintenance solutions.
Theoretically, as the LSA industry matures, shouldn't it get better at providing the kind of documentation that Cessna developed over 50 years? "Absolutely, it should," says Soules. But who's supposed to fund that learning curve? If U.S. Aviation doubled down on its LSA fleet, it would have much higher capital and investment costs and significantly higher hourly operating costs in return for…what?
Does New Matter?
We asked Soules if it mattered to his customers if an airplane was new or 30 years old. Does the cosmetic condition of the airplane have a bearing in attracting new students? His answer was a qualified no. The core of U.S. Aviation's market is contract foreign training, mostly from China. It gets some local flight training prospects who may or may not be attracted to shiny new versus rough around the edges. But neither Soules nor the company's in-house examiner, Howard Hurlbut, were sure they could detect such a preference.
For flight hours bought in block time, U.S. offers its 152s at $90 per hour and the LSAs for $95 an hour. Soules says he thinks the LSAs should probably be billed at closer to $110, almost what it charges for a Cessna 172. The G3 we flew in was a steam-gauge airplane and we asked if a slick glass panel might prove more attractive to foreign students.
"No," said Soules, without hesitation. "The graduates coming out of this school will probably never see another light sport or light airplane. They'll go straight into an Airbus or a Boeing." Those aircraft will likely be glass airplanes, but with systems that bear no resemblance to a Dynon or Garmin system. Besides, he adds, adding the task of mastering a glass system slows for a zero-time student's learning of the stick-and-rudder skills necessary to solo an airplane. (And the LSAs' twitchy control forces make soloing a little harder, too.)
None of the foregoing suggests that light sport airplanes can't or don't have a role in the training market. We have spoken to operators who are succeeding with them, especially those plying the recreational market where glass panels and shiny white paint matter more than they might with young Chinese students just learning to fly.
But there's little question that in the training role, LSAs aren't cheaper, despite their lower fuel burn. Even though the lower fuel burns can be offset further by using mogas, higher capital costs and less efficient maintenance flow keeps costs higher. It remains to be seen if costs will come down as LSAs age, just as they have with legacy Cessnas. A more mature parts and support chain would help.
But say this about an old 152 with 8000 hours, of which U.S. Aviation has several: It has stood the test of time. These airplanes have been beat mercilessly for 30 or more years and not only are they still flying, they're still making money. If you're in the flight training business, isn't that the point? Find out more about U.S. Aviation Group at USAviation.aero and 866-383-2400.
This article first appeared in the April 2012 issue of Aviation Consumer magazine.