Aero Notes: The Skyhawk as Target

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Complaining about the high cost of flying is more or less universal, but here in Europe, where the Aero show is in full swing, they seem to be used to it. Just as in the U.S., general aviation at a serious level—and by that, I mean maybe owning a Cirrus or a Mooney—requires significant wealth. Just tanking up such an airplane is a $700 load test of a VISA card.

Yet still, there’s discernible interest in the weak, but persistent narrative that there’s a sea change afoot with regard to the price of at least some airplanes. The other day when my friend and colleague, Thomas Borchert of fliegermagazin and I were walking over to cover Vulcanair’s new V1.0, he asked me if I thought they could really build the thing for $250,000. He asked me the same thing about the Flight Design C4, a similar airplane at the same price point. This is sort of game we play between us, I think, because I have no better idea of whether they’ll hit these price points than does anyone else. I do know this: It’s kind of pathetic that we now think an airplane costing $250,000—the price of a Skyhawk in 2007—is somehow unachievably inexpensive. Like I said, we’ve readjusted our expectations.

Speaking of Cessna 172s, the highwing four-placer seems to be the design of choice for would-be pretenders to the Cessna throne. The C4 and Vulcanair V1.0 are both of that ilk, albeit with different details and performance. On paper, they’re both better airplanes but, unfortunately, they aren’t off the paper yet. My guess is that Cessna will continue to blithely raise the price of the new Skyhawk until no one will be able to buy it, much less want to. Looking over GAMA’s delivery data, Skyhawk sales have trended steadily downward since 2007. Last year, it sold 106 172s. In fact, at its Wednesday presser, Cirrus pointed out that it’s now the world piston aircraft sales leader. In just the high-priced, high-performance segment--the SR22 against the TTx—Cirrus dominates by a margin of six to one. I suppose the Cirrus CAPs is a factor in that, but I also think Cirrus has figured out something that Cessna has forgotten: how to sell piston airplanes that have high value for customers.

We hear rumbling from Cessna dealers and sales people about lack of interest and commitment from Wichita. When we’re offered interview opportunities with Textron execs hoping to hear a return to that full-throated support of piston aircraft, we get corporate platitudes instead; they’re pretty much faxing it in.

This has produced enough of a rising disgust in the market that projects like the C4 and the V1.0 attract cheers for no other reason than someone is trying to tap the brakes on escalating prices, as Cessna is clearly not. The higher the Skyhawk price goes, the more viable are would-be challengers to it. These are mostly likely to come from the refurb side. It didn’t escape my notice that Continental had in its booth a tastily painted up Skyhawk with Centurion 2.0s plastered on the side.

Continental is going after this market aggressively and it's going to cost Cessna new sales, first in onesies and twosies, then in the dozens. Redbird alone already has some 40 orders for its Redhawk conversion. If Cessna is only selling 107 Skyhawks a year, can it afford to lose 25 or 50 of those sales to a combination of Redbird, Flight Design, Vulcanair and other companies getting serious about less expensive airplanes? Worse, will it just raise unit prices to make up the margins? At some point, those curves are going to diverge. I’m just wondering if they haven’t already, with just enough space for a Centurion 2.0s Skyhawk to fly right through.

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Comments (39)

How about a little reality check, here? An airplane costing $250,000 is "unachievably inexpensive?"(to build, I assume)

Let's see: an auto has four wheels, plus a spare - all of which are larger, more sophisticated. An aircraft has three little ones. Then there is the drive train to power at least two of them; aircraft wheels are unpowered. Autos have four high-speed antilock brakes; airplanes have two, certainly not antilock, except in an aircraft costing more than $250K.

Airplanes hook the engine straight to a propeller; autos have a transmission and sophisticated drivetrain to be machined and assembled.

The list goes on and on. Yet my 182, if bought new, would cost over $500K, and my Land Cruiser, arguably many times the quality, ruggedness and reliability - and, as above, complexity - is less than 10% of that?

If there were ever the perfect example of how government over-regulation and interference has destroyed an industry, the light aircraft industry is it. Don't suggest to me that I should be happy with a $250 K aluminum spam-can, when I live every day with the perfect example of how things could be.

Posted by: JAMES WILLS | April 11, 2014 6:50 AM    Report this comment

" Yet my 182, if bought new, would cost over $500K, and my Land Cruiser, arguably many times the quality, ruggedness and reliability - and, as above, complexity - is less than 10% of that?"

Can't argue with that, but the fact is for all it's complexity, quality, ruggedness, reliability and comparative inexpensiveness, your Land Cruiser won't fly. What really counts is where the rubber leaves the road and that's where the high dollar magic comes in.

Posted by: Richard Montague | April 11, 2014 7:15 AM    Report this comment

The comparison to the car making industry is valid but then you have to take all factors into consideration. The development of a new car has a completely different contribution factor to the overall cost. I come from Germany and visited the Audi headquarters 3 years ago. They told me that the development of a new model costs around 1bn Euro! I wouldn't say that this is cheaper than the development cost for a new 4-seated plane but the big difference is that they can divide this cost by - let's say - a million sold units. The development cost per sold unit is then around a thousand Euro. Same story with supplier parts or engines. The units amongst which they can divide development costs are massive in quantity.

Let's assume a new plane model will cost around 50m Euro in development. I have no idea whether that is in a realistic range but I just assume that certification processes alone will go into millions. Paul quoted 106 Cessna 172 are currently sold per year. If someone is really lucky to get a 50% market share then he will sell 50 planes a year. Over 20 years that would be a thousand units. Now we can do the math of development cost per unit: 50m divided by 1,000 equals 50,000 Euro per unit.

Maybe you get an idea why a total of 400 produced Bugatti Veyrons cost more than one million each although they are lighter and less equipped than the biggest Lexus.

Posted by: Michael Bruening | April 11, 2014 7:48 AM    Report this comment

Paul, you meet some neat people! Thomas Borchert is a cool guy and runs an amazing GA publication. Very neat person and very nice editors and articles.

It seems as if Cessna's bread and butter is in turbine and jet-powered luxury particle acceleration not general aviation and its customer base, which is trying to keep or make flying affordable again. I got that impression years ago while involved with a Cessna Pilot Center. What a lot of glory and glitter just to get people converted up the ranks in flying Cessna products. C162 - 172 - 206 or 208 - and onwards to the Jet! The Luxury Jet Setters path to flying their own aeroplane! Look at Cubcrafters! They're expanding and selling planes like cookies. The company reacts and acts and even though their airplane isn't the cheapest on the block, its being bought. No talk of producing in China, and no apparent ambitions to besiege the Cubcrafters Jet Market.

Arrogance and misinterpreting the GA market comes before the fall but with its current course the company is setting itself distinctively apart from general aviation. That's extremely sad but obvious. The double left handed birth and self- induced failure of the China 162 was the onset of this trend. One must have some serious coin or a tremendously good relationship with their bank to put a brand new Skyhawk on the line for students to beat up. $14.97/ Gallon for the stinky leaded blue stuff a of yesterday at my old airport. Filling up a 400 Series twin exceeds the average monthly salary of most normal working stiff class.

You'll pay almost 250K Euro's for a 172 in Europe. In reality you'll charge $250/ hour for a Skyhawk, pay for the noise modifications it needs right out of the factory to put it in tune with other airframes (landing fees double and triple, according to whats printed in the noise certificate) and if the darn rivet-box flies a 100 hours per year in a club with 60-100 members and 4 airplanes, you'll be lucky. Why? Because the price is so darn high! Most students at my old airport train light sport airplanes - upgrading to the more expensive equipment only shortly before their check-rides. Our instructors don't charge and the price of obtaining a PPL is well north of 12000 Euro's.

Europe has changed a lot and is on the baseline of what could be perceived as a recovery from 25 years of steady decline in general and sport aviation. There definitely is more light and EASA is very slowly turning into what it was supposed to be. In order to co-exist amongst other recreational activities requiring less or no licensing, regulatory, technical and medical nightmares, we here in the U.S. would need to change course by 180 degrees "yesteryear".

The way out is by innovation and new design at affordable rates, hopefully without having to rely on Chinese reverse engineering finesse and labor. I hope nobody is waiting for a sudden influx of common sense in Washington or Oklahoma City. It ain't happening anytime soon, friends.

Cessna showed us that the next generation of light aircraft won't be selling for $100-150K and the price of its current single engine GA fleet (not a Cessna specific problem) seems to indicate a departing role from high liability, low profit margin, and under constant attack, GA. Others will hopefully have the energy and capability to fill the gap.

Posted by: Jason Baker | April 11, 2014 7:48 AM    Report this comment

"Arrogance and misinterpreting the GA market comes before the fall..." I loved your line, well put Jason Baker, thanks.

This applies to the irresponsible media hype on the acceptance and embellishing of the sad state of American and international aviation. Germany and the rest are in a worse position with pilot ranks amounting to a mere 5% of that of the US and declining. The ship is sinking - affordable flight training pricing via low hull valued aircraft is the key. Keep the $50,000 trainers alive - and keep using the "stinky" stuff.

Posted by: Rafael Sierra | April 11, 2014 8:24 AM    Report this comment

Of course there is always too the notebook factor: A small cardboard bound notebook from a supermarket is $1 -- the same notebook but with "Pilot's Notebook" on the cover from an airport is $10.

Posted by: John Patson | April 11, 2014 8:31 AM    Report this comment

"Witchita"; ha ha that's a good one you slipped in there Paul!

Posted by: A Richie | April 11, 2014 8:48 AM    Report this comment

"If there were ever the perfect example of how government over-regulation and interference has destroyed an industry, the light aircraft industry is it."

Not to say that automobiles aren't regulated at all, though; especially when it comes to fuel economy and crash safety. But you also can't just pull an aircraft off the side of the road if something happens, particularly if you happen to be in IMC. I don't claim that GA *isn't* over-regulated and over-priced, but at least some of it does make sense. It also doesn't help that the total volume of new aircraft produced is much less than 10% of the total number of automobiles produced.

I welcome these new-comers to the 4-seat "trainer"-type piston single market, and hope they really can pull it off. I can't think of any reason why anyone other than a well-established, highly-profitable (read: many diverse locations) flight school would justify the cost of a new 172 (which can really only carry 2 normal adults with full fuel, maybe 3 if everyone is the FAA-standard 170lbs) at the price-point they are selling. But with LSAs not meeting the needs of everyone in the segment, without any of these upcoming aircraft, the only choice is to buy a used aircraft or over-priced new aircraft.

Posted by: Gary Baluha | April 11, 2014 8:50 AM    Report this comment

Having tried to sell superior aircraft to flight schools, I wish these guys luck. It's not that the 172 wins by being better, it wins because it's the incumbent. When you show superior stall handling, and get comments back that it doesn't stall properly, you start to figure out you aren't just trying to sell a better airplane, you are upsetting a religion with "Apostates R Us" embroidered on your shirt. Anyone wanting to displace Cessna needs to get ready to start a new religion, and use those sort of tactics. Going to the local reverends and asking them to change churches isn't going to work well.

Posted by: Eric Warren | April 11, 2014 9:44 AM    Report this comment

Michael Breuning is spot on as regards amortizing the development cost of a new aircraft. But the 172 was designed 50 years ago! No doubt there's some ongoing development for updates, but nothing that justifies the exorbitant price of the whole product. Nope - Cessna is just milking the brand for what they can.

- Andy

Posted by: Andy Goldstein | April 11, 2014 10:19 AM    Report this comment

Comparing the cost of a low volume aircraft to an automobile is not a valid argument for determining cost realism. Cars are built on production lines optimized to reduce labor costs, aircraft do not have anything near that level of efficiency. I understand the typical car can be assembled with something in the range of 40 man-hours vs. riveted aircraft that seem to be more in the thousand hour category (typical Van's RV is 1,500-2,000 man-hours to build). Add in the additional cost of buying materials in low qualities and you end up with items like an engine that costs $30,000 (IO-360) to $50,000 (IO-540), TSO ed avionics for another $50,000 to $100,000 and suddenly you understand why the $250,000 price point is hard to achieve. Add in all the indirect engineering, regulatory compliance, and administrative support costs that are amortized over a few hundred units a year and the $500,000 cost does not seem unreasonable (of course not forgetting to include a 20% profit in that number).

The only real answer to lowering the cost of new aircraft is to overhaul the production process to drive down the labor costs and implement a regulatory process that does not require years of certification testing before you can sell the first item. If you had to build an automobile the way aircraft are required to be built (certified everything), I have no doubt the cheapest car you could buy would cost $100,000.

Posted by: John Salak | April 11, 2014 11:28 AM    Report this comment

Eric makes a nice point with the [slightly changed] "Status Quo R Us" statement. We seem to have two industry player groups left in the U.S. currently. One of them is aware of whats going on and dedicated to milk the last drops of milk out of the dying cow by whichever means necessary - and then there are those who are trying to drum up the masses to put the cow on life-support and stop milking it until it can produce healthy milk again. Mooh! The first group is quite contempt with having GA reserved for the richest and most beautiful parts of society.

The current big three producers of rivet bombers, powered by the blue stinky stuff were outdated 25 years ago. We can put lipstick on a pig, and golden earrings too (Glass Panel & Fresh Paint) but its still the old grumpy hog still won't become a pole dancer. Nothing powered by AVGAS or its derivatives and modified synthetic versions will bring mentionable relief. The technology is out there and so are the engines - but most of it is prevented from interfering with the status quo and for that we can't just blame the regulatory situation.

Posted by: Jason Baker | April 11, 2014 12:05 PM    Report this comment

Independent of the Old Grumpy Hog is it valid to say that what we have here is a failure to admit that COST is an issue?

Posted by: Rafael Sierra | April 11, 2014 1:14 PM    Report this comment

Cost is an issue, but it really wasn't much of an issue fifteen years ago, and yet here we are today.

The real issue is how the money gets divided up. Look at GA as a single company with competing departments and you will see that no one is trying to create new customers. Everyone is totally focused on dividing the existing and naturally occurring business. Cirrus stepped out of that mold for just a few years and is now number one and they NEVER had a price competitive training aircraft. They only created new customers who could afford a high end plane.

We need better and more well located airports, but what we lobby for is bonus depreciation. We need realistic, streamlined certification rules, but we get a whole new class of aircraft with their own new set of rules. We need safer, more desirable aircraft, but we have a huge population of old farts that will tell you nothing is, or ever will be, better than a Cxxx.

Posted by: Eric Warren | April 11, 2014 6:03 PM    Report this comment

Frankly, the "SMART" money (profit) ISN'T in any aspect of the light aircraft business. As the "cost" increases, you'll see the demographic of the "aviation consumer" to change - as it is already - REALITY!

Would an investment in ANY light aircraft manufacture, with the exception of a niche market like Cirrus, or "retail" (small FBO/flight school) past muster by the judges of "Shark Tank" or Marcus Lemonis of the "Profit" - they would run you off the stage!

Posted by: Rod Beck | April 11, 2014 6:28 PM    Report this comment

"Independent of the Old Grumpy Hog is it valid to say that what we have here is a failure to admit that COST is an issue?" -

Raf, we agree on so many issues, I usually miss half your stuff because I am nodding my head while reading it. Absolutely a cost issue in my opinion. Also a lack of involvement issue and a habituated desire of people to think that the associations will fix everything and keep the show going. We're learning the hard way that what we did 25-30 years ago ain't working today. When I ask people what value they see in their association memberships the standard answer I get is the "not much but something is better than nothing" answer. God knows how many rivet bombers were sold this way.

Something is better than nothing isn't good enough in today's marketplace.

Posted by: Jason Baker | April 11, 2014 8:28 PM    Report this comment

Witchita"; ha ha that's a good one you slipped in there Paul!

Actually, I wasn't being clever. I was being sloppy after a long day here.

Posted by: Paul Bertorelli | April 12, 2014 12:09 AM    Report this comment

"Cirrus stepped out of that mold for just a few years and is now number one and they NEVER had a price competitive training aircraft. They only created new customers who could afford a high end plane."

Eric Warren, you are correct. Similarly, now it is the time to create new customers who can afford a low end plane. Perhaps enticing Cessna to manufacture C172H or C152 "experimental" airframe kits. Engine and avionics by others. No need to reinvent or retool or TSO.

Posted by: Rafael Sierra | April 12, 2014 9:25 AM    Report this comment

The largest reduceable single cost in production of a certified aircraft is probably the certification. Not that all those production man hours don't have a cost, sure they do.

That you can buy a very nice uncertified autopilot for a LSA or experimental for a few thousand dollars, but a certified version is more like $30,000 is telling. The cheaper one works great, very modern and nice. The certified version likely doesn't work nearly as well.

The purpose of certification is not to make sure things cost 10x or 100x as much, they are to make sure the plane doesn't crash because of that part. Since the cheaper autopilot doesn't make the plane crash, it should be fine to use on a "certified" aircraft. But no, the horrors!

Why is certification so expensive?

Because the "engineers" at the FAA have a vivid imagination, and they drag everyone through the mud so that costs are greatly amplified. This is ripe for deregulation, and for getting the FAA to back off 95%. I don't think there is no place for setting standards, just that the standards over time have gotten too strict. Maybe 100x too strict.

It's the same FAA and the same vivid imagination that has caused such mayhem in the medical "certification" area. If they had their way all the flying would be done by 20 something pilots on no daily meds. If that medical certification had any effect on safety all the sport pilots would be dead right now. They'd have all crashed due to pilot incapacitation! They are not medically certified! The horrors!

But we are getting the FAA out of that medical certification business completely, and pretty soon.

If certification of most things in aviation were reduced to reasonable standards, the problems of GA would be largely resolved. The pilot community would increase greatly, volume would improve, and there would be a $3000 glass cockpit made for those old Cessnas that would work great, be easy to install and cheap to maintain.

I am pretty sure a slightly modified Mogas would solve a large part of the other problems, so we need to work toward that.

Posted by: Steve Waechter | April 12, 2014 11:25 AM    Report this comment

Nice article Paul.

@ James Wills - as others have said, the problem is that general aviation is a cottage industry these days. The population of people who understand the wonder and utility of private flight has been declining since the WW2 generation retired and the experience of airline travel for everyone else commenced sucking.

There is no passion or vision for general aviation among those making the decisions at Cessna. That isn't a criticism either. They're running a business which is making almost all of it's money from turbine powered stuff. If the wind was blowing in a different direction, the same people acting rationally by winding down the GA division would be ramping it up. They're not my kind of people but they're only being professional. It falls to others to feed the passion and to create the markets.

I think the environmental movement has finally tweaked about where the power to influence things lies - it's not by attacking companies, it's by influencing the markets in which they operate. I'm not trying to troll here, just making a point. Cessna is being rational based on their overall and we don't like it. I hope these smaller mobs do well but they're only going to influence the market marginally. They should be able to create total sales that are higher than Cessna, if only by feeding the training market. Best wishes. I don't think we've really begun to tap into the potential to reduce production costs using new tech but ultimately the real trick is influencing the market to create significantly higher demand. Forget new aircraft sales, I'm thinking here about the loss of most of the infrastructure over the next generation. I spend a fair bit of time pondering that and I urge others to do so as well.

For me, even though recreational aviation is a great end in itself, I think GA needs a revolution in utility. I think the lightbulb moment for me was when I got a long way very quickly in something the size of a car. It made my head spin to accept that I was hundreds of miles away from home in a crazily short space of time. It was an empowering moment when I realised that my previous understanding of where/when/how/how cheaply I could be somewhere was too small. I reckon that is a transformative experience (sorry, I hate that kind of language) that a lot of people need to have for GA to flourish again.

I've heard some great news about "flytenow" recently - I reckon they're on the right track. Suddenly you don't need a friend with a Cessna to be able to fly somewhere useful for the actual cost of the seat. $100 bucks from Boston to Martha's Vineyard? Directly? You mean, straight there? Yes please. (Actual example) In addition though I reckon we need to get the transport at either end of the GA flight down into the price range and use-of-use of private cars. Speaking of islands, I'm about to try an experiment in my neck of the woods. When I bought a new car recently, I didn't sell my previous, 7 year old hatchback. I'm going to ferry it over to a popular tourist island in the bay near me and leave it at the local airfield. I'm going to make it available for visiting pilots to drive at a cost-per-km that covers it's upkeep. Obviously there is plenty of room for trouble but I'm going to give it a go. It's insured and owes me very little. For most people, a trip to that Island is a 2.5 hour process of driving, waiting, ferrying and driving, plus a hefty car ferry ticket. With a light aircraft, it's a 15 minute flight. I'm not going to change the world but I am going to see if I can give a few people the experience of how useful, affordable and mind-alteringly fast GA can be. Maybe even encourage a few other people to "donate" vehicles at other locations too.

Apologies for the thread creep :-)

Posted by: John Hogan | April 12, 2014 7:57 PM    Report this comment

The GA industry is a mess stateside.

It's just flat-out impossible to produce a reasonably priced type-certified plane these days. Even after litigation reform! Fortunately there are so many fantastic used planes available that linger from America's exciting heyday in the 60's and 70's. They aren't that modern but they aren't $250k either.

Why is Europe constantly and consistently turning out amazing new designs, where gas is double or triple the price? Is it regulation that's successfully crushed American ingenuity? Or the business model?

Fortunately it isn't so screwed up across the pond. Even with obscene, Byzantine EU regulations we still see fantastic choice in the LSA market.

Posted by: Peter Kuhns | April 12, 2014 10:13 PM    Report this comment

What we really don't need is any new ways to continue using Cessna spam cans. Everyone in the world who wants to fly one, and can afford it, likely has. Most of them then found the experience wanting and quit.

Posted by: Eric Warren | April 12, 2014 10:52 PM    Report this comment

The Cessna family of trainers is a hard act to follow. They are predominant in flight training even after sixty years. Others designs have been second to Cessna - the rugged design and familiarity in upgrades, the C150 through the C182, is a winner. Cant take that away. My concern is a need of fresh airframes at an affordable price where the consumer can dictate what goes into the aircraft. I have a C172H that meets 2020 standards, with an 180HP conversion, autopilot, alt. hold, two GPS, three radios, new paint and decals, new plastic and other stuff all at a price tag of $94M. As a flight school operator I can afford this - I can't afford $200M or more for a any trainer. Build on the solution Eric Warren.

Posted by: Rafael Sierra | April 13, 2014 9:34 AM    Report this comment

Hi Rafael;" your "restoration" concept is nothing short of BRILLLANT - I totally agree and have had the same view for years! For a flight school, the objective is to keep the "capital cost" down on the fleet - impossible with NEW birds at $300K+ plus on less on a profitable "leaseback" arrangement - other peoples money'!?

The "sleeper" market is, like Rafael stated, in the mid 70's M/N model birds FULLY restored - and priced UNDER $100K, even for a "retail" buyer - a "win-win" for both the fight school (seller) and the
newly minted Private pilot.

And the good news is a plentiful supply of these birds are ripe for this creative solution to bring "cost" down to both flight school operators AND aviation (buyers) consumers a like!

ANOLOGY: Why drive a NEW $50K+ Lexus, Mercedes, or BMW, when a "pre-owned" off lease 3-4 year old model will do the SAME job for about $20-25K - that's what I do - having been in the auto business for 30 years+ know well this concept makes cent$!

Posted by: Rod Beck | April 13, 2014 10:05 AM    Report this comment

Undoubtedly, lower cost is better for a flight school. Unfortunately, doing the same thing that is failing is a really bad idea. Flight schools training up and coming commercial pilots need to compete on cost, but schools trying to make money on private flyers really need to sell something other than the cheapest license.

To increase the rolls of owners and renters we need to sell an enjoyable experience from day one. Learning to fly needs to be enjoyable, not something you have to do to get a license to fly. Otherwise, your customers are soon going to figure out that the goal is worthless because all it does is allow you to do what you are not enjoying.

Unfortunately, we are an almost pure group of people who thought going through a Cessna school was worth it and the rest is mostly used to non Cessna copies.

Imagine if your car riding experience was only in the back of a high end bus. You go to learn to drive and they put you in an old mail jeep with an engine so loud you need earphones, no AC, and a top speed one fifth of the bus. And, after you master this, you can move up to the army jeep! It goes 40 mph and has AC! Have fun explaining to your friends that you are risking your life doing this since it has no air bags, crumple zones, or anything else for crash safety beyond a three point belt.

That analogy is only mildly unfair to the Cessna. It was well designed for its time, but it's time was sooooo loooong ago.I know the competition isn't light years ahead either, but let's face it, the economic advantages of the Cessna is actually holding us back.

Posted by: Eric Warren | April 13, 2014 11:10 AM    Report this comment

Eric, sooooo loooong ago seems to me like only yesterday.

Posted by: Rafael Sierra | April 13, 2014 11:29 AM    Report this comment

For the sake of discussion. Cessna is not interested in the single engine piston aircraft market as it is now. But, they have tooling for C172s in dark hangars ready for immediate production. I propose requesting a unit price for 20,000 assembled airframe kits, wings packed and ready for shipment. No engine, no instrumentation. One production run with shipments directly to a pool of buyers worldwide. The concept then is to allow buyers to decide what to install in the airframe. Diesel or avgas, glass or round dials. My guess would be that regardless of the ultimate configuration the completed unit price should be around $150,000 or less. $50m fir airframe, $50m for avionics, and $59m for engine. I would think the Italians and Germans would like this approach. Ahh, the beauty of it all!

Posted by: Rafael Sierra | April 13, 2014 2:09 PM    Report this comment

I understand, but we aren't failing in the over sixty crowd. Attacking that market is low payback anyway. Cessna tried and failed to update the 172 in the seventies and realized the economic pains of the situation. The 172, and Textron itself, are at this point vodka to an alcoholic GA. We need treatment.

Posted by: Eric Warren | April 13, 2014 2:16 PM    Report this comment

Eric Warren, are you suggesting a Twelve Step program for GA? How about a "bitch-slap" as an attention getter?

Posted by: Rafael Sierra | April 13, 2014 4:18 PM    Report this comment

'I can't afford $200M or more for a any trainer'

No wonder flight schools are hanging on to the old airframes...

Posted by: David Miller | April 13, 2014 4:31 PM    Report this comment

Having been in the "fright school" business decades ago, young and foolish, I can tell you this: the investment in ANY training or rental (owned) aircraft by a flight school today needs to be well under $100Kl The "ROI makes NO CENT$ otherwise! But, then again most flight school operators believe "ROI" is an instrument approach only available at "up-scale" GA airports and markets? Rubic's Cube anyone????? Sorry - laugh track is broken!

And YES, Cessna could care less about the light piston market; why should they when the $$ is in the Citation line -. makes good cent$ to me! They're in business to make MONEY - not "friends"!

Posted by: Rod Beck | April 13, 2014 8:06 PM    Report this comment

Rafael, good one. My suggestion is for the manufacturers to change the requirements to be a reseller. Put a quota and incentive system on private pilot creation in order to keep a sales territory. Ensure the schools are desirable destinations. Ensure the entire process is fun and challenging and addresses private pilot scenarios.

Rod, the numbers change when you average over sixty hours per month don't they? Besides that, leasebacks are really the way to go, but so many schools try to screw leaseback owners rather than really partner with them

The best thing ever to happen to flight schools could be the new insurance product reportedly allowing per hour supplemental insurance for owners.

Posted by: Eric Warren | April 13, 2014 8:44 PM    Report this comment

Eric: Very famliar with "break-even" costs, etc Naturally, the cost goes DOWN as the fixed cost are divided by a greater number of hours flown. I've found, that MOST flight schools are "over fleeted" and not in control of scheduling. Flight school business math 101:For ANY bird to make ANY $$, you'll need about 60 hrs monthly or 700 hrs annually. A good efficient student/bird ratio is for every 10-12 students, say averaging 10 hrs/mo
10 x 6 =60 hrs) or about 2.9 VFR hrs/day (21 VFR flying days average) on a national basis , the 60 hr mark is obtainable. In Florida, Arizona, or California for example, an operator can reach 90-100+hrs/mo/aircraft with good scheduling. hat said, with 40 students on average, a fleet of 4 aircraft will be adequate - some may disagree - but I can assure you, they're not "profitable" (sober CPA!) with less than these numbers.

Leasebacks: the ONLY way the fledging flight school could operate newer birds given the "cap cost" of $300K+ - other peoples (fools) money! Again - the ROI just doesn't make any cent$ otherwise!

And a emphatic YES on the per hr insurance concept - excellent idea to reduce operating cost!

Posted by: Rod Beck | April 13, 2014 10:18 PM    Report this comment

I'm interested in your SR-22 vs. TTx comparison comment, where you say that Cessna "has forgotten how to sell piston airplanes that have high value for customers".

I'm not sure how to interpret that statement. Are you saying that the TTx delivers less value than the SR-22? If so, how so?

I have no opinion on this myself -- I haven't flown any of the Lancair-derived Cessnas -- but I've always wondered why Cirrus outsells them so dramatically. For sure, the CAPS is a factor, but you seem to imply that there's more.

Posted by: MICHAEL KOBB | April 16, 2014 6:57 PM    Report this comment

Michael, there was a time that Cessna could have, on pure sales expertise, outsold any competitor with airplanes that weren't necessarily better, if they were better at all. They did it with a combination of hard work, interest in the market, financing and the ability to show the customer value.

The TTx is basically an $800,000 airplane, selling against a Cirrus SR22 that's a little slower, but really just as capable for $660,000 or thereabouts. I think you could make the argument that the fact that Cirrus outsells the TTx five to one in the same category could be as a statement about relative value.

And just one datapoint for you: When we call Cessna for questions about anything--prices, technical matters--these calls (or e-mails) are rarely returned or answered in any way. Others report similar experiences.

When companies show they don't care, customers get the message.

Posted by: Paul Bertorelli | April 17, 2014 6:35 AM    Report this comment

Paul: YES - Cessna HAD a complete dealer/distribution/marketing/financing "package" 30-45+ years ago (CPC) and THIS is the reason GA is failing at the "retail" level (FBO/fight school) today.- a lot of non-business experienced or educated in management/marketing type trying to figure out where the master switch is?

Posted by: Rod Beck | April 17, 2014 8:52 AM    Report this comment

volume ..... volume ....... volume
it's a numbers game, yes relief in the certification & continuing airworthiness requirements will help, but the major problem/issue is paucity of owners & pilots.
we need to get more people flying & that's a whole different matter

Posted by: john lyon | April 17, 2014 9:31 PM    Report this comment

"we need to get more people flying & that's a whole differient matter"? NOW ADD TO THAT AIRCRAFT OWNERS AND PILOTS WHO SPEND $$$ MONEY $$$ - for AIRCRAFT, FLIGHT TRAINING, AVIONICS, MAINTENANCE, FUEL, STORAGE, etc -AVIATION CONSUMERS! !!!!!!!!!!!!!!!

Posted by: Rod Beck | April 19, 2014 12:54 PM    Report this comment

Sorry for late response.

Cirrus outsells by excelling in a few areas. Some of this may have changed over the last few years.

1. Better marketing, especially to wealthy non pilots.
2. The parachute is a HUGE seller to non pilots, passenger influencers (spouses) and people who don't know the safety stats.
3. No parasitic distributors. Most distributors are not a value add to the chain. A smart manufacturer would compare market share vs. competitors by territory and fire those who aren't winning. Actually, dump distributors and partner with schools.
4. Many, many more demo flights - see number 3.
5. Easier in and out, more car like.
6. I never lost a deal to Cirrus if I got the prospect into the competitive model plane for a demo. NOT ONCE. I lost because I likely never even talked to the prospect who would call Cirrus or show up at a Cirrus event, get an excellent sales presentation and demo ride, and get closed before he called us or, before I could get a plane for a demo. Plane sales beget plane sales.
7. CPC has become a system to sell to the schools, not through the schools.

Posted by: Eric Warren | April 27, 2014 10:09 AM    Report this comment

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