Piper Bets Big On Envelope Protection


Viewed from over here in the cheap seats, Piper’s revelation this week that it’s retooling its M-Class line is more significant than it looks for two reasons I can think of: business/marketing savvy and for a clear signal on where general aviation autoflight might be going.

I’ve been watching Piper’s sales numbers for 10 years and conclude that it might be a textbook example of how a modern light aircraft manufacturer can survive. The company hasn’t favored me with a look at its P&L, but the sharks don’t appear to be circling so I’m going to assume it’s in the black or at least throwing off value sufficient to keep its investors happy. That may be the best one can expect these days. It’s also a classic example of low-volume/high mix in the way that Lycoming and Continental are.

In 2014, according to GAMA data, Piper sold three Warriors, 45 Archers, eight Arrows, 10 Senecas, 23 Seminoles, 37 Mirages, 11 Matrices and 36 Meridians. That’s a total of 172 aircraft and down a little from 2013’s total of 188 aircraft. Anyone familiar with serial production will tell you that this much variety at low volume is challenging to build profitably and requires unrelenting cost control. If Piper’s persistent market presence suggests they’ve got this knocked, bully for them. Note that nearly half of all the airplanes produced are the high-margin M-Class—the Mirage, Matrix and Meridian. If there’s a market sweet spot for a low-volume manufacturer, I’ll bet that’s pretty close to it, even if the total numbers aren’t that impressive.

During the past seven years, Piper has moved an average of 38 Meridians a year and 30 Mirages. Those aren’t huge numbers, but then these are high six-figure or million-dollar-plus airplanes so it’s reasonable to expect that they have a nice margin to offset the rather more modest numbers on an Archer or an Arrow. Piper took a hit on the M-Class airplanes during the financial meltdown, but even so, it was still selling them. Volumes have recovered but not quite to the salad days of 2007 and 2008, when Piper sold more than 50 Meridians.

Piper has also been fairly canny about market realities. I thought its 2011 decision to cancel the PiperJet was one of the smartest I’ve seen an aviation company make. Light jet cert programs have proven to be nightmarish money burners with limited market legs. I wonder if Diamond wishes it had followed Piper’s lead. Maybe Cirrus has had similar thoughts. This week, Piper did another thing that looks smart to me and that might only occur to us pixel-pushing wretches in the media. It announced its new product revisions ahead of Sun ‘n Fun, not at Sun ‘n Fun. Finally, a company realizes that buzz is generated online, not at physical shows and press conferences. Having announced early, they’ll get attention at Aero, which opens Wednesday, and at Sun ‘n Fun next week. People going to those shows will put Piper’s booth on the to-do list. Second-day media coverage at the shows will sustain the interest. Marcomm folks (and CEOs enthralled with press conferences), take note. This is how it should work.

As for the airplanes, clearly Piper is looking to refresh the line and maybe find some step-up/trade-in buyers or siphon some sales for buyers shopping the TBM or a Mirage conversion. But there’s something else going on here, too, and it’s the confluence of avionics capability as a metric of airplane capability and value. Increasingly, what’s in the panel matters as much as what’s in front of the firewall; not for nothing are new 172s called G1000 Skyhawks.

As we reported in this week’s news story, the new M600 will have more power than the original Meridian—now renamed the Meridian M500—and a redesigned wing carrying more fuel. Piper gives the speeds as similar, at 260 knots max cruise, and a 1200-pound payload for the M600. I’ll get to a detailed comparison when I’ve seen the POHs, but at a glance, it looks like the M600’s performance edge is a bit of additional range and maybe some payload flexibility. It’s not going to outrun a TBM nor outhaul a PC-12.

The draw? A cutting-edge avionics package. That would be the new Garmin G3000, which we’ve reported on previously. I say “new” advisedly; it was announced six years ago.Garmin said from the beginning that this system would incorporate some version of its Electronic Stability and Protection system (ESP) that’s basically a background routine that automatically intervenes if the pilot gets the aircraft to near or outside of its operating envelope. When introduced, Garmin said ESP would have overspeed envelope protection and although I don’t recall them saying then it would have underspeed capability too, the version in the M600 will have that as part of a general EFIS technology upgrade that’s been available on new G1000s since 2010. It will be capable of avoiding stall angle of attack in circumstances where the pilot has ham-fisted the throttle and gotten too slow. I’m sure it will be festooned with all sorts of alarms and cautions, too.

Raising cockpit Nannyism to the next level is hypoxia envelope protection, which is basically an aviation version of the dead man’s switch found in trains. This is not new with the G3000, either. Cirrus announced it in Perspective-equipped aircraft in 2010. In the new Piper aircraft, it’s simply combined with larger displays driven by touchscreens. When the aircraft is on autopilot, if the suite detects that the pilot isn’t engaged because no controls have been touched or radio traffic transmitted, it will assume a hypoxic non-response and automatically descend the airplane (on autopilot) to a safe altitude. This is what I call “between-the-ears” safety appeal. It’s comfort factor.

Hypoxia is responsible for an unknown number of accidents. Some that appear to be caused by something else might have been hypoxia. Or not. But there have been enough high-profile hypoxic accidents—most recently the TBM 900 accident that terminated near Jamaica and an SR22 fatal during the same week last year—that this capability may have definite appeal to the buyers of these airplanes. Or the spouses of the buyers.

In a way, this represents small GA aircraft trending toward fly-by-wire control laws without actually having fly by wire, even though that capability is in the works too.But do such things represent an overall improvement in safety? In perceived safety, yes. In actual safety, who knows? While hypoxic accidents are an uncertain percentage of the total, they’re occasionally the ones that make the evening news. But loss of control of some kind is a leading cause of fatal accidents and if such protective systems prevent a handful of those a year, we’re making progress. It would be silly to argue that real men don’t need envelope protection. Frankly, I’ll take all the help I can get since it’s abundantly clear that the training cudgel can do only so much.

In totality, the trend toward angle-of-attack indicators and autopilot or servo-based envelope protection represents two things: a technologically based solution to a genuine problem and something to sell pilots because modern digital processing has made it possible to build and certify such capability. That last bit is hardly trivial; the people who buy high-dollar airplanes—or maybe any airplanes—like gadgets and the more cutting edge, the better. If it has “safety” attached to it, better still.

That is, in part, why Cirrus has been so successful. The appeal of CAPS has, in my view, sold a lot of airplanes for Cirrus. But it has taken the better part of 20 years for Cirrus and owners to pull things together and capitalize on the airplanes’ inherent safety features enough to demonstrate better than a just-average accident rate. I don’t know if envelope protection will require a similar gestation period. Newer Cirrus aircraft do have it, but I haven’t isolated those accident numbers. And there is a tradeoff of sorts. The emergency descent feature works irrespective of terrain or traffic considerations; it’s just going to descend. Fortunately, there’s not too much terrain in U.S. that’s above its lowest descent limits.

As for single-engine turboprops, the accident rate doesn’t appear tobe particularly high, perhaps because the pilots who fly them tend to be experienced and insurance companies require a tad more training for an owner looking for two million smooth on a $2.5 million airplane. But I’m sure they would rather insure an airplane with envelope protection than one without it.