Avionics and Your Airplane
Advertising in glossy airplane magazines (and, let's be honest, sometimes here on AVweb too) exhorts you to buy the latest, greatest, bleeding-edge avionics for your plane. Come time to sell it, though, and you might not get back what you put into it. Brian Jacobson discusses the value of upgrading your panel.
Thirty-some-odd years ago when I started flying, general aviation had barely reached the age of DME, and RNAV was just beginning to allow some of us to fly straight lines between points. Today, DME is still useful in many applications; but for the most part the avionics we considered mainstream through the '70s, '80s, and most of the '90s are obsolete. They were some great radios that provided guidance for me through some of the worst weather one could fly in.
The truth is that if it had not been for the economic downturns of the '80s and early '90s those radios probably would not have had as long a life as they have. During those years aviators and air traffic engineers cried out for gear that would allow airplanes to fly more direct routes than the cumbersome and restrictive airways designed between VOR systems.
In the early 1980s LORAN, essentially marine navigation, was adapted to airplanes. At first the units were extremely difficult to operate because one could only enter latitudes and longitudes of waypoints. After a while avionics manufacturers were able develop databases that allowed pilots to input names of waypoints instead of lat/longs. That made LORAN indispensable, and led to the modern era where pilots can change the course of their airplane by entering a three- or four-letter identifier into what is essentially a computer.
Today, new technology is taking over rapidly, and its infiltration into our cockpits is likely to continue for many years to come. Not everyone can afford to upgrade their avionics panel, though most of us fly with some semblance of new technology, be it a handheld GPS or perhaps an inexpensive panel-mount unit.
As an aircraft owner, or one responsible for the outfitting of one or more general aviation aircraft, you may be dazzled by all the new electronics that are available. But before you decide to upgrade your aircraft or fleet of aircraft you have to consider what the upgrade will do to the value of your aircraft.
Traditionally, avionics purchases result in about a 50% gain; that is, for every dollar spent on avionics the direct increase in aircraft value upon completion of the installation was 50% of the cost of the upgrade. That number is changing now because there is very little of the new electronics available for purchase on the used market; the value of the installed equipment is maintaining 65% to 75% of its initial value in most cases.
At the same time the values of our traditional Nav/Coms and other "old-style" avionics have been falling rapidly as aircraft owners upgrade their equipment. Avionics installation shops have an abundance of the old gear on their shelves with few buyers in evidence. So, while aircraft values are beginning to increase once again, the value of avionics packages that have not been updated are dropping, thereby reducing the value of those airplanes.
Appraisal is Vital
Aircraft purchasers must be very careful how they evaluate aircraft that do not have upgraded avionics. A professional appraisal is the best way to know for sure that what you are paying is the right value.
If you own an airplane and are considering upgrading the avionics, the first concern is that you are going to put money into the airplane that will not be returned in added value. For example, you can keep pouring money into an airplane in the form of equipment, but at some point it will "top out" -- that is, the value of the airplane will not increase any more. What happens is that a potential purchaser will look at the price of purchasing that airplane and decide that he can step up to the next level for the same amount of money. He will reject the over-equipped airplane.
Another concern is that technology is changing so fast that the new equipment you buy today may become obsolete in a few short years, rather than the decades it has taken for the last generation of avionics to be replaced. While it is tempting to remove all of the older gear and replace it with new, it might be prudent to do a partial upgrade now with an eye toward replacing the rest of the gear with the next generation that comes down the pike.
So, if you own a general aviation aircraft, how far should you go in updating its avionics equipment? Of course, the answer to that question has to depend on how you use your airplane. If you are a VFR-only pilot who flies a light single to breakfast with friends on Sunday and does an occasional cross-country trip, perhaps all you need is a simple GPS, one with a moving map, if you are so inclined.
If you are one who uses your airplane for business, and you have a need to fly regularly in instrument weather conditions, you will be tempted by all the new bells and whistles that are available. Do you need it all? Probably not. But there is no question that -- after a learning curve -- new computer-driven avionics will enhance your ability to fly safer and more efficiently in instrument weather conditions. But for those who may have financial limitations, or those who have a real concern about getting on the back side of the financial curve by putting more dollars into the airplane than they can get out of it, a combination of the old and the new will enhance your ability to safely navigate the ATC system in weather without breaking the bank.
The Hybrid Approach
For example, a GNS-430 or GNS-530 will enhance any instrument panel while simplifying and reducing the pilot's workload. Is it necessary to remove all of the older equipment and install two of the units? If your aircraft is now equipped with two Nav/Coms that have a history of reliability, you might want to consider removing one of them, keeping it as a spare, and installing just one of the newer units. Many aircraft owners remove the ADF as well, because the new GPS unit should be capable of flying most of the approaches that the ADF may have been used for. Also, the same airports that have NDB approaches are very likely to have at least one and possibly more GPS approaches.
Another upgrade you see often in piston-engine aircraft is the removal of the old audio panels and intercom units and installation of modern audio panels that incorporate intercoms. The combination of these two units has proven to be an outstanding development because, in the past, separate intercoms often interfered with the amplification of the audio and resulted in poor quality at the headset or speaker level. The audio panels are relatively inexpensive, and it makes sense that an upgrade will enhance safety by improving communications quality.
One of the most costly pieces of gear in the cockpit is a modern autopilot, especially if you have a fully decked-out one that interfaces with all of the navigation equipment. Many light singles and twins still have their original autopilots installed. They have survived over the years because replacement costs are high and the 1960s- and 1970s-era units were economically repairable. As time goes on, though, replacement parts are likely to be harder to come by; and as fewer of them are repaired, avionics shops will find other uses for the space that the current test equipment occupies.
Why Not Do It All?
One of the big mistakes in aircraft acquisition is when the new owner, who is completely dazzled by all of the new technology gear (who wouldn't be?) rips out the entire avionics suite and starts over with all new gear. Why is it a mistake? Because a year or two later he will decide that the airplane he bought is not sufficient for his needs and puts it up for sale with the intention of moving up. He spent so much money on that avionics panel that there is no way he can get it back out. In fact, between what he spent on the purchase, what he owes the bank, and what he spent on the avionics, he is going to own that airplane until he gets his investment out in utility or the market appreciates enough to cover his investment, or he is going to lose his shirt. Losing his shirt on that airplane means he has less money available to buy the upgrade.
Part of any avionics upgrade is the cost of the installation. After the gear is installed, if you were to remove it from the aircraft and sell it, you could not charge someone the going rate for the radio plus what it cost to install in the aircraft. So, while the box itself may retain up to 75% of its value in the present market, any money that was spent on installation is lost. And with today's modern gear that can be a fair amount, with all of the interfacing that is done between the various units.
So, if you are considering changing airplanes or modernizing the avionics package in your present airplane, do your homework. If there is a chance that you will be upgrading to a new aircraft in the next few years, be careful how much money you put into the panel. Sure, new avionics will help sell your airplane, but at what cost?
One more thing: I have seen people remove the new gear from the airplane they are selling and install it into the new airplane they are purchasing while taking the old gear from the new airplane and putting that into the old airplane. If you are paying retail labor rates for the swap, this doesn't make much sense either, because the cost of redoing both installations will be high. Also, a potential purchaser of the old airplane will look at the entries in the logbooks and wonder if the old equipment that was installed is any good, or if the installation was done too quickly, leaving wiring problems behind because the owner didn't want the costs to be any higher than necessary.
So, make sure you do your homework on avionics installations and think rationally about upgrading your panel. No question that the new technology gear is outstanding, but think ahead with regards to aircraft upgrades before you commit to ripping out all of the old gear and replacing it with a completely new package.