Diamond vs. Cirrus

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At Sun ‘n Fun, after I’d interviewed the soon-to-depart Mooney CEO Vivek Saxena, I found myself fairly perplexed about his comment on seeking the “next-generation piston aircraft.” As he was telling me about that, of course, Diamond was busily introducing it 5000 miles away at Aero. (Reason number 237 why I should have gone to Aero instead.)

As is obvious by now, Diamond’s idea of the next generation goes in perhaps the only direction it can go: bigger, faster, more luxurious and yes, more expensive. And let’s be honest girls, at $900,000-plus, the core of the market represented by the Cirrus SR22 is a million-dollar airplane. I could suck in my editorial breath about this, but I no longer get my pants snagged on the high price of airplanes, for nothing I can possibly say here will change it in the slightest. New certified airplanes are for the wealthy among us and that’s just the way it is.

Mooney came to the realization that the millions it was sinking into new singles for the training market probably would not pay off in high-volume sales. The reason trainers aren’t selling isn’t because there aren’t any good ones, it’s because the world just doesn’t need that many of them. Cessna has been selling a hundred Skyhawks a year, plus or minus, and Piper does about half that many Archers. Throw in a few Diamond DA20s and that’s the sum of it. Well, Cirrus puts SR20s into the training field, too. Still, add it all up and trainers are and always have been low-margin products. The money is made at the upper end of the price tier.

Diamond’s big-cabin DA50s are really a reheated idea. Recall that the idea was trialed at Oshkosh in 2007, but Diamond’s travails with the Thielert diesel fiasco and the world economic meltdown tanked it. While other companies have been satisfied with incremental model changes that are little more than cosmetic redos, Diamond is coming at it with a vengeance, offering three models—one a retract—with three different engines in the mix. By any standard, it’s as gutsy a move as was the diesel-powered DA40 twin introduction in 2002.

They’re going after Cirrus, of course. And Cirrus is probably vulnerable because it has been selling about 300 or so SR-series aircraft a year, but hasn’t introduced anything really new, the attention being siphoned off to complete the SF 50 Vision jet. But is what Diamond has in mind new enough to stimulate the market? Nobody I talk to these days thinks anything will expand the pie by enticing people who otherwise wouldn’t buy an airplane to do so by offering something utterly irresistible. We’ve been in the cannibalistic phase of new aircraft marketing for a while now. Cirrus is probably overdue for its own new model and I suspect it will be one with Continental's improved FADEC engine, plus a diesel option.

With the right sales apparatus, I think Diamond can find 50 to 100 sales a year for a near-million-dollar single in the world market, if not the rich vein of the North American market. But they will need to invest in sales and marketing because Cirrus is a lot better at it than Diamond, in my opinion. About three times a year, I get an expensive direct-mail piece from Cirrus imploring me to come for an SR22 demo. If Diamond does that, I’m not on the list. The product is important, but sales is just as critical. Clearly, Cirrus is finding several hundred wealthy GA buyers a year and anyone who hopes to succeed will have to do the same.

When I talked to Diamond’s Christian Dries about the new singles last week, he conceded as much and also said something interesting: “What’s the American saying, if you can’t beat them, join them?” That prefaced his explanation of why the DA50-VII will have a Lycoming TEO-540, the iE2 FADEC engine. Dries said he’s sure it will compete better in North America because gas is cheap here compared to the rest of the world and, as Cirrus owners have shown, buyers will pay eye-watering sticker prices if the performance is there. Having said that, Diamond will still offer an as-yet-uncertified 370-HP diesel from Safran/SMA in lieu of the Lycoming, but I’d be surprised if that found much traction in the U.S.

I didn’t answer the question asking if the DA50 is new enough. Perhaps no one can, but looking back at the success of Cirrus, it was only incrementally new when it appeared in 1999. Yes, it was composite, it had the spin-resistant wing and the BRS system, but it—the SR22, that is, which emerged in 2001—wasn’t any faster than a Mooney Ovation, carried less than a Piper Saratoga or a B36TC Bonanza and had range and endurance with its peers. Yet, its combination of qualities evidently gave buyers the feeling that it was something new and the parachute appealed to spouses who might have been otherwise reluctant to pull the purchase trigger. Indeed, the same sentiment applied to many pilot-buyers themselves.

So the DA50—the top-of-line –VIII model—may have a combination of things to entice buyers. A 200-knot-plus cruise speed, a sophisticated electronically controlled engine, five seats with an option for two more and advanced avionics that will likely include an autoland function, what Dries has called an “electronic parachute.” That gives an aggressive sales force something to work with, I’d wager.

A word here about diesel. My most recent survey of the market indicates that diesel is showing glacial growth in market share. The last time I looked, it was about 10 percent of all new piston aircraft. Since 2010, diesel-powered airplanes have averaged about 14 percent, with a high of 18 percent. This number is rubbery because GAMA includes some (but not all) ASTM-approved aircraft in its piston totals and I haven’t had time to extract the noise from the data. But this much is certain: With its diesel-powered twins, Diamond owns the multi-engine space because the aircraft are so popular as trainers. Diamond has a Lycoming-powered version of the DA42; it hasn’t built one in eight years.

When it introduced the $1.3 million DA62 not quite two years ago, I figured Diamond could sell a few dozen a year. They’re approaching 100 orders. That tells me that like Cirrus, Diamond’s combination of good performance, payload and smooth-running, economical diesels found a niche no one else could. We’ll see if they do the same with the big singles, regardless of what kind of engines they have.   

Oooh, That's Gonna Leave a Mark

I'm on my way to Dallas for the AUVSI Xponential 2017 show this week. Watch for coverage starting tomorrow. On the flight in, a Southwest Airlines flight attendant brought the cabin to an uproarious standing ovation with this crack: "Thanks for flying Southwest Airlines, where we try to beat prices, not our passengers."

So much for the friendly skies.

Comments (16)

An "electronic parachute." Whoda thunkit?
Well, it does reinforce one axiom: nothing is a good idea, until it's YOUR idea.
The good news? That particular good idea is retrofittable to just about everything that flies.

Posted by: Tom Yarsley | May 6, 2017 7:34 PM    Report this comment

"Diamond vs. Cirrus" ?
I the words of Sugar Ray, I just wanna fly. 1/2 million is reeking insane. Happy with may 25K Grumman thank you very much.

Posted by: Mark Fraser | May 6, 2017 10:13 PM    Report this comment

While we're waxing over near-million-dollar production singles (4-seat; piston-engine; fixed-gear; non-pressurized), let's not forget the Cessna (nee Columbia) TTx. These things make the $2 million Vision jet look like a sensible and compelling alternative.

Posted by: Tom Yarsley | May 7, 2017 5:34 AM    Report this comment

One million. Seriously?

Posted by: Rafael Sierra | May 7, 2017 5:42 AM    Report this comment

For the mass affluent, as apposed to the truly wealthy, $1m is not "insane" for someone seeking an investment in an asset the will only periodically personally use. Think about the $1m airplane as merely the aviation equivalent of a vacation home that is in a weekly rental program. The home is used when you aren't; generates some income as well as a set of expenses against that may (depending on details) be deducted against the cost of operating it for rental.

The airplane is more advantageous than that vacation home because the buyer may depreciate the asset ... My only point is that circumstances vary and a buyer doesn't have to be fantastically wealthy to make a case for a $1m airplane. Your local dentist, for example, could easily do it. Heck, the lawn service franchise guy in my zip code could too.

Posted by: DON HUDDLER | May 7, 2017 8:10 AM    Report this comment

One nice thing about Cirrus is that with their continued production, it is creating a good market for their used aircraft. There are a lot of fairly nice SR 20's and 22's available in the $100-200K range. They seem to have a pretty steep depreciation curve, so buying used appears to be the smarter investment. It will be a while before Diamond makes much of a stir in the used market. I'm not sure if Cessna will stick with the TTx long enough to create much of a used market. Sure don't see many of them around here.

Posted by: John McNamee | May 7, 2017 3:58 PM    Report this comment

The caveat to buying a used Cirrus is that while you may have paid "only" $200,000.00 for it, you are supporting a million dollar airplane, parts, maintenance and parachute replacement are in keeping with the price for a new plane. Cirrus keeps a tight grip on parts availability and modification approval.

Posted by: Richard Montague | May 8, 2017 7:44 AM    Report this comment

By economic need, the life expentancy of GA flight training and recreational legacy aircraft continues to be extended.


Posted by: Rafael Sierra | May 8, 2017 8:47 AM    Report this comment

Don - you are so right. We peons forget these airplanes aren't purchased because their owners love to fly around. They are only purchased if their owners can manipulate the system, financially. It's a sport enjoyed by the wealthy.

Posted by: Ken Keen | May 8, 2017 12:36 PM    Report this comment

Forget about "electronic" parachutes, I want an actual physical parachute! I fly over the Canadian Rockies, and there are many areas where an electronic parachute would be totally useless. Flying with a real parachute over mountains makes the pucker factor more acceptable. If Cirrus and do it, then so can Diamond (especially at the $1M price point!).

Posted by: gill bates | May 8, 2017 4:09 PM    Report this comment

" There are a lot of fairly nice SR 20's and 22's available in the $100-200K range. They seem to have a pretty steep depreciation curve, so buying used appears to be the smarter investment".

Investment is what you call it if your significant other doesn't have a clue about the expense of owning an airplane, and I've suspected the SR22 depreciation has also been responsible for the drop in the price of used Beech Debonair, Bonanza and Stretch Debonairs with similar engines and performance.

I remember chatting with a couple who had flown their SR22 to Ashland OR for the Shakespeare Festival as we had... the non pilot kind of blanched when I described my '68 Bonanza as doing everything the '22 can do for a quarter of the price... the pilot mumbled about retractable gear and the parachute.

Of course, the reason I was flying a BE35 was *because* they'd been beat down in price... otherwise I might have ended up with a PA-28R which have been beaten down further, or a PA-28-181 Archer that were overpriced (for me) when I was looking to buy in the go-go mid '90's.

Thank you to the MD who bought my Bonanza in the 70's kept it maintained, avionics up to date, and didn't let it kill anybody.

Posted by: Greg Goodknight | May 8, 2017 6:39 PM    Report this comment

Million-dollar production airplanes are why I increasingly believe that homebuilts are going to be the future of personally-owned light airplanes.

Posted by: Robert Gatlin-Martin | May 8, 2017 7:37 PM    Report this comment

"Million-dollar production airplanes are why I increasingly believe that homebuilts are going to be the future of personally-owned light airplanes."

From a pure cost perspective for those who have the space and time to build their own, yes. Unfortunately, not everyone has both in ample supply, and one can't always find what they're looking for on the used market. Given time and more people building closer to a standard design (as opposed to customizations that may have limited use or are counter-productive to anyone other than the builder), that may be true. But for the time being, my own market (in as much as I can afford *any* plane that meets my mission needs) is limited to older certified aircraft (many of which have been out of production for decades).

Posted by: Gary Baluha | May 9, 2017 9:43 AM    Report this comment

" for those who have the space and time to build their own, yes."

Change the home-built rules.
Drop the requirements from 51% down to 10-20%.
Give people really "fast build" kits much like ARF model airplanes.
Mass production and automation lowers the cost of the assemblies.
You almost instantly have a fleet of new low cost aircraft on the scene to replace the aging aircraft.

Posted by: Mark Fraser | May 9, 2017 11:07 AM    Report this comment

Where the "Refurbs" at?

Posted by: Rafael Sierra | May 9, 2017 12:39 PM    Report this comment

"...for those who have the space and time to build their own, yes..." or just finance the build of a new one. Don't try to bs your way to a repairman certificate, but you can own and operate an experimental amateur built aircraft you didn't build. As a San Antonio doctor who was operating a beautiful SX300 once told me, "it only took me a couple of weekends and $xxx,000 to finish it up."

Posted by: MICHAEL MUETZEL | May 9, 2017 1:01 PM    Report this comment

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