Aircraft Refurbs: To Get the Price Right, Control the Wish List

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Last month, I spent a solid week on the phone talking to flight schools about their operations, their marketing and, especially AOPA's idea to refurbish older Cessna 150s and 152s and feed them into the training and flying club market.

While they were intrigued by the idea, almost all of the schools were put off by the numbers. Why spend $99,000 for a nicely restored 30-year-old 152, asked one operator, when I can make more money with one that costs a third as much but isn't quite perfect. In fact, "not perfect" is a polite euphemism for just on the acceptable side of ratty. Most of these schools told me they do enough repair and refurb on these old airframes to keep them airworthy, but not enough to make them what anyone would consider good as new.

This highlights what may be a sticky challenge in the burgeoning refurb business, especially at the low end of the market. It's well-established that when presented with options, aircraft buyers will tend to load up an airplane with everything that can be stuffed into it. Buyers aren't particularly warm toward stripped down airplanes, but for refurbs at the trainer end of the spectrum, they'd better get that way.

In bringing the 152 it showed at AirVenture in July up to near-new standards, AOPA discovered that just as building new airplanes is expensive, so is refurbing them to near-new standards. Redbird has learned the same thing with its Redhawk diesel conversion project. It hoped to bring these airplanes in for around $200,000, but the price has escalated to $249,000. Why? Because anything to do with airplanes—buying them, fixing them, upgrading them—is always more expensive than even the most conservative estimate imagines.

AOPA's Woody Cahall, who oversaw the 152 Reimagined project with Aviat, told me that the original plan envisioned replacing everything in the airplane with new and bringing the airframe to essentially new standards, perhaps with some upgrades. "We put together a wish list at the start, and all of that added up to about $135,000," he said. Curiously, that's about the price of a new, lavishly equipped LSA with a glass panel and probably a ballistic parachute system. And clearly, it wasn't going to work for trainers in the refurb market.  AOPA, rightly I think, kept the airplane refurb modest and the price below $100,000.

Another thing anyone dabbling in this market may have to realize is that the margins on such projects won't be anything like margins on new airplanes. There's profit there, probably, but I doubt if anyone is going to get rich on the idea. "One of our efforts on this airplane was to set a duplicable model that other people could follow and come up with a good airplane. You could easily get the airplane to a ridiculous price," Cahall said.

As with new airplanes, there will be fatter margins at the top tier of the market, the refurbed cabin-class twins, for example, or expensive singles like 36 Bonanzas and Piper Saratogas, which are much in demand on the used market. Those buyers will want every bit of bling they can get into the panel and will understand they'll have to pay for it. But in the two-place market? Not quite.

And that's why the AOPA 150s and 152s are modestly equipped. No glass, no expensive STC mods and certainly no autopilots. "The cost to repair that stuff and the expense of databases is just outside the scope of the kind of airplane we wanted to provide," Cahall said. As you may have seen at AirVenture, the interiors have nice new metal panels with a basic Garmin GTR 225 digital navcomm and a portable aera GPS. But no ADS-B of any kind and no upgrades like LED lighting.  

I continue to believe that this refurb idea is a good one and it'll have legs. But it's going to take a year or two to confirm that, by which time AOPA expects they will have completed as many as 20 refurbs. That's a sizable enough fleet to determine if the expense of restoring an airplane to near-new standards will reduce maintenance and operating costs enough to make it worth the investment. And if buyers, renters and students will really respond to like-new airplanes instead of being put off, as AOPA says its surveys insist they are, by worn out ones with old radios, crappy upholstery and faded paint.

The flight schools I spoke to had mixed reactions to the question of presentable airplanes. Some said spiffy interiors mattered, some said not so much. Price does matter, though. Several schools told me they had new Skycatchers on the line renting for $110 or $115, but students preferred the old 152s at $90. AOPA's real target for these refurbs is newly formed flying clubs, which have their own economics and preferences. Cahall said AOPA got surprising interest from the private owner segment, too. 

The industry got to this state because new airplane prices, even in the training market, have become prohibitively expensive with no prospect of them retreating. (There are other, larger forces at work, too.) If these organized refurb ideas don't make a meaningful dent in the cost of owning airplanes and learning to fly them, we all know which way the trend line is going. It's going there anyway, but the first step is to try to wrench it flat and worry about pointing it upward later. We're so far from that that I don't expect to see it while I'm still healthy enough to fly.

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Comments (25)

All 2 seat trainers need are a good engine, good radios, and a sound airframe. The rest is irrelevant in getting people flying.

Posted by: Mark Fraser | October 14, 2014 9:14 PM    Report this comment

Nothing is quite as effective at turning a like-new airplane into a flying outhouse, as life on the line at a flight school. AOPA et al can refurbish all of the planes they want to. Unless/until flight schools can figure out how to keep them looking that way, it won't matter very much.

Bling and the aroma of plush leather may sell flying lessons to yuppies in an SR-20, but in a C-150? Seriously? The only flight schools that are going to buy these things are the big pilot farms and MAYBE some university programs. The real market for "like new" is newly-minted private pilots who have discovered that the local FBO won't let them rent an airplane for much longer than a 3-hour $200 hamburger trip. And the vast majority of them are going to want a 4-seater.

If I still was in the FBO business, I'd put my efforts into assembling 4-packs of such pilots, and setting them up with little LLCs to own clean, mid-time $100k vehicles. That probably means careful $45k buys; new paint and interior (and window glass for some); and a spray can of "new car" leather aroma. I still could make money doing that - if there were a supply of newly-minted private pilots. Which, around here, there most definitely is NOT.

Posted by: Tom Yarsley | October 14, 2014 11:04 PM    Report this comment

New 4-place airframes. One order, 20,000 units, Cessna or Piper or the italian job. Engine and instruments by buyer(s). Central (cooperative) purchasing. Prepaid orders under escrow. One aircraft management entity. Worldwide sales. Assemble your own or by pre-approved shops.

Market: Flight schools are primary buyers and leaseback sources. Target price less than $130K

Posted by: Rafael Sierra | October 14, 2014 11:37 PM    Report this comment

Completely agree with Mark Fraser above. Airworthy and the minimum standard instruments are all that's needed - keep it cheap for primary training! I spent a great deal of lessons / time in my brother's ancient Cherokee (he had moved on to a Bonanza and wasn't using it) and I swear the only (2) things that worked all the time were the "whiskey compass" and the Garmin 250 - as the primary radio only - none of the instructors would let me use the GPS function. Okay, the Airspeed and turn-bank worked too. But the CFI's wanted me to learn the basics, and as it turns out I had everything down pretty good, except, for the longest time, landings. Sure that old Cherokee was a piece of junk, paint flaking off, etc., but it was better than renting @ $150/hr!

Posted by: Peter Hamilton | October 15, 2014 5:34 AM    Report this comment

"The industry got to this state because new airplane prices, even in the training market, have become prohibitively expensive with no prospect of them retreating." " ....It's going there anyway, but the first step is to try to wrench it flat and worry about pointing it upward later. We're so far from that that I don't expect to see it while I'm still healthy enough to fly."


Now, what does it take to get all stakeholders united for the good of American General and Commercial Aviation?

Posted by: Rafael Sierra | October 15, 2014 7:21 AM    Report this comment

I like the psychology of having a nice looking airplane for $20 to $25 more available to the student. The student makes the choice to fly cheap with antique character but knows it is his/her choice. That takes the fangs out of the ratty-airplanes-only argument many students adopt. Not sure having an expensive, under-used airplane sitting on the ramp is smart business but it provides some student incentive that if they continue (and can afford it), there is potential glamor in the future. I speak from experience. Our aero club had a progressive pricing structure with some "training" machines and "business travel" options. It incentivized me.

Posted by: Robert Mahoney | October 15, 2014 7:37 AM    Report this comment

"Most of these schools told me they do enough repair and refurb on these old airframes to keep them airworthy, but not enough to make them what anyone would consider good as new."

The flight school margins are far too tight to support much else other than "just on the acceptable side of ratty." There are clearly "gold plated" schools serving a higher end flight training market with relatively new SR20/SR22's on the line; however, they are the exception. The small school at a random little airport can't justify the $99k for a (nicely) refurb'ed 150/152. Heck, at my local 'drome $99k is probably the total resale value of the entire rental flight line (2 150s and 2 172s)!

Posted by: George Kaplan | October 15, 2014 7:39 AM    Report this comment

Unless I misunderstand the FAR's & please correct me if I'm wrong but why does Part 21 need to apply to GA manufacturing? Shouldn't there be a less strict regulation for us GA's & wouldn't that allow for a significantly lower manufacturing cost?

Posted by: Ray Svobodny | October 15, 2014 8:49 AM    Report this comment

If you want a relatively-affordable 2-seat trainer that looks (and actually is) much more modern than even a refurbished 152, there are used Diamond DA20s out there for $80-90K.

When I took my "discovery flight" with a CFI about 6 years ago to begin flying, I got the CFI to split the flight between a DA20 and a C172. It was no contest: The ramp (and flying appeal) of the DA20 with its sleek lines, stick, and bubble canopy reminded me of a fighter plane; the C172 reminded me of "your father's airplane." After learning to fly the DA20, I bought a DA40, and then got a DA42 twin.

Posted by: DAVE PASSMORE | October 15, 2014 8:51 AM    Report this comment

We need to cater to the market we want to attract to GA. I seriously doubt a trainer that is "just on the acceptable side of ratty" will appeal to the younger element we need for GA to survive and grow. I came to GA from flying hang gliders and the schools using ratty 40 year old trainers had zero appeal to me.
Luckily for me, one school within a 40 mile drive had Diamond DA20-A1's as their trainers. It was worth the drive and actually a bit less money to rent them than a clapped out 172. After earning my private and renting ratty old Cessna's that had barely functioning equipment on board, my wife and I bought a used DA20-C1 and never looked back.

Look at a college campus today. The students there zip between classes on $300.00 skate boards,
so they will spend the money on things that excite them. Those old trainers are not going to impress them when they inquire at the local flight school about lessons. Charging $150.00 per hour for a forty year old plane just does not make sense to me. Is that business model really working out for
today's flight schools or are they slowly dying on the vine?


Posted by: Ric Lee | October 15, 2014 9:45 AM    Report this comment

"If you want a relatively-affordable 2-seat trainer that looks (and actually is) much more modern than even a refurbished 152, there are used Diamond DA20s out there for $80-90K." There are used VFR/IFR C150s, C152s, C172s, PA28s and alike out there for less than $40K. However, all these airframes will probably soon fade away. I think that the solution process begins with targeting VERSATILE NEW AIRFRAMES and remaining within economically viable unit prices that will eventually help save the industry. The ultimate aircraft design choice may be determined by its price, operating costs and merits. The industry's decline problem needs solving.

Posted by: Rafael Sierra | October 15, 2014 9:57 AM    Report this comment

I can't see that a $99,000 C152 is that much better deal than say, a $115,000 Van's RV-12. From a renter's standpoint I would think the Van's has much more appeal for the very small cost difference.

I understand the school's desire to keep costs down, but really I don't think you can count on making money training people to fly. It's the after license sales and service that count. Also, there's a reason that Rent-a-Wreck folded and Hertz is still in business.

Posted by: Stephen Phoenix | October 15, 2014 10:17 AM    Report this comment

Ray, you're spot-on that Part 21 imposes absurd restrictions on light airplane manufacturing. The microscope-level redundant supervision imposed by the FAA adds tremendous costs in time, manpower, and trees to an already-expensive process. Other FAA regulations create tremendous disincentives to improve the product or the processes because the paperwork to certify the change just costs too much.

There's hope that an ASTM-based certification of light airplanes will ease some of the certification costs, but I don't think we'll truly benefit without a comparable improvement to Part 21 and some means for personally-owned non-commercial aircraft to be maintained by their owners. Unfortunately, it appears that even given three whole years and an incredibly rare unanimous endorsement by Congress AND the President, the FAA can't even manage to implement a set of rules its own committee already developed.

Posted by: Bob Martin | October 15, 2014 10:34 AM    Report this comment

To add to Ray Svobodny and Bob Martin's comments, I heard that to certify the Cirrus SR20 the cost was North of 60 million! Absolutely ludicrous.

Posted by: Ric Lee | October 15, 2014 12:57 PM    Report this comment

AVweb's publisher flies the new, sexy, composite two-place trainer from Diamond Aircraft and finds it...well...FUN! If the industry is going to stem the decrease in student starts, this just might be the airplane that does it.

By Carl Marbach | April 4, 1998

Bkah, blah, blah, blah. The DA20 has had its chance to save the decline.

Posted by: Rafael Sierra | October 15, 2014 5:55 PM    Report this comment

Dear Mr. Cahall,

The efforts made by you and AOPA deserves mild (but respectful) applause. I understand that you are limited by the constraints of your leadership and the Board.

Please pass on the following suggestions to your boss(es) and BOD:

1. Get the FAA out of pilot certification for student, recreational, sport and private certificates. Get them out of ratings and endorsements for these certificates also.

2. Get the FAA out of medical certification for student, recreational and private certificates.

3. Get the FAA out of the certification of small aircraft, their power plants, and propellers. Industry consensus standards can work, if allowed.

4. Get your Regional Reps to lobby their state governments to push for State-based pilot certification. Let the states be creative.

5. Encourage small GA airports to not apply for and receive federal dollars for their airports; tell them to get creative with revenue generation.

6. Encourage the GA manufactures to go overseas if necessary to manufacture aircraft. Get the cost (and price) lower. Encourage them to go to right-to-work states so that labor costs can decrease, but still keep jobs in the states.

We can only increase pilot numbers by easing access for everyone. I believe that the ideas above can help. I hope this helps to spur more ideas. The current methods aren't working, and never will.

Al Dewey

Posted by: Albert Dewey | October 16, 2014 5:49 AM    Report this comment

Forgot one more suggestion:
Encourage private airport ownership over government sponsorship/ownership. This offers more freedom in my opinion for airport managers, and pilots/tenants.

Al Dewey

Posted by: Albert Dewey | October 16, 2014 6:04 AM    Report this comment

The discussion about the cost of airplanes is irrelevant. My point is people tell me it is all about price, and they are absolutely wrong. When you do a price analysis and compare value for the money, you don't have an argument, flying really hasn't increased in price...perhaps within 5% of total cost, yet there are fewer people that WANT IT!

This is a DEMAND equation, and it is just like a discussion about a country club membership at half price...forget it, I don't want it. I would agree that the price of a new airplane is ridiculous, but from here on out my friends, buying a new airplane for under $199,000 is a pipe dream. Labor costs and liability costs are crazy expensive, and the solution is not to invent the flying car, but to figure out a way to produce an airplane without the labor costs. Something automation did for the motor car, something that has not been worked on the engineering side, we accept the high number of hours for assembly and invent a novelty instead.

Why the price of aviation is not the relevant topic, is because as stated, you can buy cheap Cessna 150's that are less price than a new motorcycle and still have a lot of value. Consider how much more of the enjoyment that can be derived with an airplane...the places you can go, the experiences you can derive, yet the younger generation has no use for an airplane, they aren't interested and they aren't going to be interested. What...yep, the millennials don't want to own cars, they aren't interested in motorcycles, and airplanes mean nothing to them.

So who is the buyer? Ask the 101 manufacturers of LSA airplanes how it's going? NOT!

Posted by: Michael Dempsey | October 16, 2014 10:18 AM    Report this comment

Many would-be private pilots and in some cases, their parents, approach flying with some apprehension. I have seen that well-kept, fairly new airplanes can help ease their minds. Additionally, I think it would be a mistake to project our own past willingness to fly around in beaters with torn upholstery onto the younger generation. Sure, there will be some kids who couldn't care less. But by and large, young people today are used to new phones, new tablets and new television sets every two or three years. Selling them on the virtues of torn headliners and steam gauges won't be easy. And by all means get them started with GPS if they're serious about flying.
I know there are curmudgeons out there who will insist their students learn dead reckoning and pilotage. Fine. But don't waste too much time on it.

Posted by: Jerry Fraser | October 16, 2014 1:56 PM    Report this comment

Bad prediction?

June 2006

Cessna publicly announced it was working on an LSA concept airplane at AirVenture.

"After conducting extensive market research, it is clear to us there is a great need for this aircraft as we strive to drive down the cost of flying and learning to fly,"

"We believe this aircraft will make a major contribution to stimulating new pilot starts and will encourage already-licensed pilots to continue to fly because it will be more affordable."

"We have developed a business case that makes sense; we have incorporated several innovative features into the design; and we believe we can deliver the finest aircraft in the category, combined with our extensive customer service, flight training and distribution in networks, at an attractive price."

How could Cessna's market evaluation have been so wrong?

Perhaps the answer is in aircraft refurbs.
Perhaps the market is in "ratty" but affordable aircraft.
Perhaps we're just going to have to get used to it.
Perhaps we are not resourceful enough to solve the problem.

Posted by: Rafael Sierra | October 16, 2014 9:44 PM    Report this comment

Rafy, respectfully; it's not about COST/PRICE - it's about interest and motivation.

It seems to me the only one's who are using the cost/price issue as the "reason" for lack of DEMAND probably aren't realizing that the cost just out weights the benefit BIG time!\

And YES, I'm all for lowing the cost of a C-172; makes a lot more cent$ to buy a refurbished bird with updates than a "new" one for near $400K! But that mean more students and future aviation consumers - I doubt it!

And Cessna; the LSA attempt (my conclusion) was to merely appease the "piston" recreational crowd - why wasn't that Cessna main thrust 40+ years ago - ps MORE ROI in the turbine profit and market sector?

Posted by: Rod Beck | October 16, 2014 10:03 PM    Report this comment

Rod, all factors are connected. Demand, regulations, legislation, unit price, operating cost, flight training cost, quality, marketing, interest in aviation, product design, innovation in manufacturing, service, maintenance, sound marketing practices and our ability to sensibly promote and sell product and services. Cessna's decision to pull back the Skycatcher was probably correct - still a disappointing resolution for some of us.

The hope of the industry's recovery is pretty much gone. Year after year we continue to fail. As I see it, we are vectoring ourselves into oblivion. We have no unity, no effective leadership, no positive action. IMHO, GA IS TOAST!

Posted by: Rafael Sierra | October 17, 2014 12:05 AM    Report this comment

I run a flying club with about 20 airplanes. I have trouble renting a cessna 150 aerobat with GNS430W, S-mode Traffic, etc. for 85.00/hr. Instructors consistently steer students from it to fly in larger airplanes. Pilots won't rent it either because it is slow, small, and 'doesn't climb well'.

If GA aircraft providers can't charge a fair price for aircraft, they can't buy decent aircraft. People want everything cheap and aviation isn't. This business is filled with short term entrepeneurs that try to under charge the competition resulting in a perpetual price war between providers.

Based on the economics we see here in Southern California, nobody's going to buy an 80k C150 or anything similarly priced.

Posted by: jeff white | October 17, 2014 6:06 AM    Report this comment

Jeff, I've been there. I learned to fly in C150s and 48 years later I am still instructing in them. However, a flight school can buy a presentable C172 or a PA28 for about $50K similarly equipped as your C150 and rent it for a marginally profitable $130/hr. I think that the renter's and CFI's interest includes comfort, usefulness, performance and perhaps status then the price determines their choice of aircraft.

Posted by: Rafael Sierra | October 17, 2014 8:09 AM    Report this comment

I work in the medical device industry. If you knew just how far down the corporate rabbit-hole the FDA and other bureaucracies probe you would understand clearly why medicine in this country is so damn expensive.

The same is true for aviation: to change the game completely either let us instruct in experimental planes or lighten the absurd burden of GA regulation.

Until that changes no lipstick will work...

Posted by: Peter Kuhns | October 17, 2014 8:53 PM    Report this comment

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