A Visit to Zulu

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On a swing through Continental Motors’ factory in Mobile this week, I spent a couple of hours touring the company’s new Zulu Flight Training center in nearby Spanish Fort, Alabama. We first reported on Zulu a year ago and my visit coincided with its one-year anniversary.

Zulu, you may recall, juxtaposes an intimate little flight school—simulators only—in an urban store front, the theory being that it will draw would-be pilots who wouldn’t necessarily trot out to the airport. The training, even for the private certificate, is sim heavy, using three Redbird motion machines and a couple of tabletop ATDs. The students learn and practice the maneuvers in the virtual world before trying them in the airplane.

So how’s it working? So far, so good, says Zulu’s general manager, Gloria Liu. We’re not talking huge numbers here, with a client load of under 40 customers in various stages of progess. But if Continental posited that professional customer service and a bright, clean facility will encourage students to stick around, they seem to be on to something. Liu said the retention rate is about 90 percent, which is another way of saying that only one in 10 customers who sign up for a program or a flight lesson of some kind doesn’t come back. Not many conventional flight schools can make the same claim. Continental CEO Rhett Ross says the business is growing sufficiently fast to consider opening centers elsewhere.

While it may seem odd for an engine company to get into front-end flight training, Ross seems to be acting in enlightened self interest. If there aren’t more pilots, Continental isn’t going to be selling many engines, visions of global business strategies not withstanding. As I said of Redbird’s efforts in the same direction, I see these programs as creative, effective ways to get customers in the door, train them and retain them until the training completes. Treating them like actual customers rather than voice-controlled wallets is unique to all of aviation. We’ll just have to see if such business models can be profitable enough to sustain over the long haul.

For a private certificate, Zulu quotes a flat rate of about $8500. That’s competitive with conventional flight schools, so what Zulu is clearly selling is a friendly, fulfilling customer experience that extends from the moment you walk in the door until you leave the airport after a flight lesson. Stipulating that they’re doing that, I’m less worried about what kinds of legs the concept has than I am what comes next, specifically keeping new pilots engaged by making aircraft access affordable. I noticed on the price sheet that Zulu’s airplanes—new, G1000 Cessna 172s—rent for $155 an hour. Surveying around the country a bit, I find that rate is on the low side of competitive. These airplanes rent for as much as $185 in some locations.

That’s a hit for the freshly minted private pilot who might want to fly a modest 50 hours a year in a rental airplane with a glass cockpit. When new pilots see those numbers, I wonder if a little timer goes off in their heads suggesting they can do this flying thing for awhile, but not a very long while. So to me, what’s more important than how well they’re trained or at what cost than how many of them stick around as active pilots for two years, five years or 10 years. That’s the most important retention rate.

We’ve pulped the deceased horse to a red puree on discussing how much the cost of airplanes and fuel affects retention. It’s certainly a factor, although how big a factor, no one really knows. As Zulu (and Redbird) progress in an age when we track everything from your pulse rate to the brand of yogurt you bought at Safeway last week, we ought to have some meaningful data in a few years for this subgroup of new-age pilots who are, after all, the future of aviation.   

If the cost of flying doesn’t at least moderate, they’ll have to be made of stern stuff to stay in the game or, as seems to be increasingly true, be limited to high income earners. There are efforts to arrest the spiraling cost of getting airborne and Continental is involved in two of them: its newly certified TD300 diesel has proven economics and while it may not be cheap to operate, it’s certainly less expensive than a gasoline engine. (I’m basing this on economic analysis of limited experience with the SMA SR305, which served as a technological base for the TD300. )

Second, Continental recently raised TBOs on some of its popular engines by 200 to 400 hours. Of course, Part 91 operators can do that on their own, but having an engine company get behind it is another step in the right direction. In the larger world, we’re told that the revision of FAR Part 23 will reduce certification costs and thus aircraft costs, too. We’ll see how that plays out. Right now, it’s too nebulous to judge.

But the fact that these developments are afoot is encouragement enough to be hopeful.

Comments (5)

Just out of curiosity and since you mentioned it, what percentage of a piston single's price comes from certification costs? Cherokees and 172s were certified decades ago, so I can't imagine today's buyers are still paying for it. Okay, maybe these two make up for the lack of certification costs by using costly labor intensive stone-aged construction techniques. If so, what about the AG-5B Tigers? Those were also certified a couple generations ago and don't need a bazillion rivets shot by hand, yet they cost about the same as their 180hp fixed-gear fixed-prop brethren at the time. Cirrus and Diamond got their certifications around 15 year ago, so are they still paying those costs down?

Posted by: Dennis Lou | July 18, 2013 2:27 AM    Report this comment

The usual figure given is a quarter to a third of the total cost of the airplane goes into cert related expenses. This is difficult to pin down accurately, leading me to believe it could be as little as 10 percent. Most of this will apply to the development of new models.

Posted by: Paul Bertorelli | July 18, 2013 6:32 AM    Report this comment

What hooked me as a kid was the atmosphere hanging around the airport. Even during ground school you heard the hum of airplanes taking off outside. And the big old hangars, if they could only talk. Actually flying (especially solo) was the culmination of this experience. Also the support from the regular airport characters was encouraging.

Somehow I just can't imagine any of this going on in a strip mall simulator.

Posted by: A Richie | July 18, 2013 9:02 AM    Report this comment

It is a different twist to have an engine company pushing flight training. Historically, the airplane companies were the pushers. I think that went out with big corporate ownership needing to see big profits on every sale. This presents an opportunity for the new small guys though; that's how Piper got started.

Posted by: Stephen Phoenix | July 18, 2013 10:09 AM    Report this comment

Engine companies have generally always had more money than airframe manufacturers.

In the 1940s when a customer showed up at Piper to pick up his new airplane, they would have the customer first do the paperwork and write a check, then they would take him out to a nice long lunch. While they were gone, Lycoming would deliver an engine then Piper would hang it on the plane and give it a quick test flight. Piper didn't have the money or credit to attach the engine until it was paid for.

Posted by: A Richie | July 18, 2013 3:12 PM    Report this comment

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