Have we seen the last clean sheet piston airplane design?
It’s a fair question given the current state of affairs. Faced with nonexistent demand, the high cost of certification and the declining availability of avgas, most airframe manufacturers have made the rational decision to squeeze more out of their existing line rather than invest in all-new models. It’s hard to see this changing anytime soon, either, because the economics simply don’t work. With piston airplane sales in the tank, airframe manufacturers have fewer and fewer units over which to spread the huge costs of certification and liability. Toyota can drop $100 million on a new Camry because it can amortize that investment over 300,000 cars per year; Cessna sells fewer than 500 units per year.
The new Baron is a wonderful airplane, but it carries a $1.3 million price tag.
The result is a series of fairly safe, derivative models, like the Piper Matrix or the 5th generation Cirrus. While I would love to own a new Cirrus, it’s not radically different from the SR20 that was first introduced 15 years ago. For comparison, 15 years after introducing the 172, Cessna launched the Citation jet. That’s not meant as a criticism (Cirrus is more innovative than almost any other manufacturer) but it does show how dramatically the market has changed.
While these derivative models make economic sense in the short term, they present some major problems in the long term. Most significantly, used airplanes compete very well against new ones.
Start with the prices, which are simply breathtaking. A new Beech Baron is $1.3 million, a Cirrus SR22 is over $700,000 and even the everyman Cessna 172 pushes $300,000. For pilots of a generation ago–not to mention the glory days of the 1970s–these prices look outrageous. But as any aircraft salesman will tell you, these high prices aren’t leading to big profits. That Baron may cost a lot of money, but Beechcraft only recently emerged from bankruptcy. Likewise, Cessna has cut its staff by over 50% and is a shadow of its former self. Manufacturers are selling airplanes at higher prices than ever, but making less money than ever.
What’s going on here? As you would expect, the law of supply and demand is at work. In the new airplane market, demand drives prices–as buyers for new airplanes have disappeared, prices have gone up. The only good news is that, in the used airplane market, supply has more to do with prices than demand. And right now there is a lot of supply.
That glut of used airplanes has led to some great values. For example, a well-equipped Baron from the 1980s costs under $200,000, a savings of over 80% compared to new. Certainly that new Baron is a beautiful thing, with a G1000 glass cockpit, a gorgeous interior and zero time on the airframe. But the used Baron still carries the same load (if not more), goes just as fast and burns the same amount of fuel. It may not be brand new, but it’s certainly not 80% less airplane. The story is the same for the SR22 (under $250,000 for one with WAAS, air conditioning and a new autopilot) and for the Cessna 172 (good ones around $50,000).
Because these used airplanes are such a good value, you can buy one, completely overhaul it and still save 50% over a new airplane. I was involved with an airplane like this a number of years ago, and it’s one of the finest airplanes I’ve ever flown. By the time we were done, our Cessna 210 had a brand new engine, new paint, new interior, all-new avionics and even a FIKI deice system. It could haul four adults and bags over 600 miles at 160 knots in all kinds of weather–and it cost less than a new 172.
Individual pilots have done these overhaul projects for years, but recently a number of new companies are starting to make big business out of it. Nextant Aerospace has found success with its 400XT, a re-engined Beechjet 400 that competes head-on with Cessna’s brand new line of CJs. Even Beechcraft, the original manufacturer of the Beechjet 400, has launched an overhaul program. It’s the first time I can remember a major aircraft manufacturer closing its new production line but launching a refurbishment program for the same model.
The Excalibur 421 is a Cessna 421 with Pratt & Whitney PT-6 engines. Is this the future?
Likewise, former Cessna CEO Jack Pelton has launched the Aviation Alliance, which will offer the Excalibur 421. This features the airframe of a Cessna 421, but adds PT-6 turboprop engines for a 300 knot cruise speed, making it at least 50 knots faster than a new King Air 90 for $1 million less.
It may sound defeatist to some, but I think these remans could be an important path forward for general aviation. While I’d love to see Cessna introduce an all-new cabin class twin turboprop, the likelihood of that happening in 2013 is virtually zero. But with the Excalibur 421, pilots can have both good performance and good value, and they don’t have to wait on a decade-long certification process. That’s real progress, even if it’s not a “new” airplane.
The idea of remanufactured airplanes certainly isn’t new. Companies like O&N Aircraft and JetProp have been doing this for years. What’s different this time is the spread between new and used airplane prices, which is widening every year. That makes these remans a lot more attractive to both the companies that do them and the pilots that fly them. It’s not hard to imagine a similar program for 182s or Saratogas.
Airplanes are ideal candidates for this kind of work, since they can be retrofitted far more easily and extensively than cars or boats. They’re more like houses, which can be updated to look new even 100 years after being built. Nobody considers a 30 year old house to be obsolete, and neither should we consider a 1978 Cessna to be past its prime.
The huge number of airplanes that were delivered in the 1970s and 1980s helps too, offering a large pool of airframes that are candidates for remanufacture. With nearly 2,000 Cessna 421s delivered, the Aviation Alliance could sell 200 Excalibur 421s (surely a home run at that number) and still only use 10% of the fleet. Cessna shipped over 40,000 copies of the 172 over the years–just imagine what could be done with those.
General aviation isn’t dying, it’s just changing, and our view of what a “new airplane” is needs to change too. It’s time to stop looking at used airplanes as fading relics, and start looking at them as a path forward to more affordable airplane ownership.
What do you think? Would you feel as good in a remanufactured, 30-year old airplane as you would in a brand new airplane? What if it were 50% less than the new airplane? Add your comment below.
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As the owner of a Cessna 180 manufactured in 1956, I can hardly argue, John. This will go on for as long as we have safe used airframes out there. Not sure how long that will be. I hope we don’t simply lose the GA industry when we run out of those airframes.
My 1968 Cessna 182, with recently overhauled and bored out additional 30 horses, Garmin suite and S-Tec Autopilot is all the Airplane one would ever need for personal transportation.
The King Air Blackhawk Conversion my partners and I operate is exactly the aftermarket modification that will inspire the market and allow many aspiring small companies the entry into General Aviation. 249 knots and FL230 in air conditioned, pressurized comfort are what regional flying was meant to be! We have less than 40% of the cost of a new C90GTX in our plane and don’t miss the winglets at all. Like Jack Pelton’s 421 redo, this will likely be the most cost effective way into Corporate Aviation for many Companies and families.
I couldn’t agree more with your GA overview. I recently finished the same thing on a 172RG, a great little biz tiger…. 140 Kt TAS at 0100 and maybe 7 GPH if I pay attention. Probably did it at ~$30% of anything like it new, if it (the RG)was even still being made.
Makes perfect sense to me!
I agree with Todd. I could buy a C-150, upgrade the avionics to an Aspen suite, add the leather seats, new paint and windows and an overhauled engine and still come out well ahead of a comparable LSA. These airframe/engine combinations were obviously built to last, so it only makes sense to keep them going.
I live in a house that was built in 1742. My Luscombe was built in 1947. I am saddened that the lawyers have brought the manufacturers to their knees, but it seems that personal aircraft will be with us for a very long time. But it could be a wonderful industry if we ever get product liability insanity under control.
Remanufactured is the only thing saving aviation. I bought a ’62 Mooney for less than an SUV, even after I modernized it with bladders, rebuilt exhaust, chrome spinner and two new cylinders. Now I cruise the sky of Western USA and Baja California, inexpensively and safely. Banking, lawyers and computers are a choking aviation.
I’d love to see this reman trend trickle down to Piper Warriors and Cessnas. Reman singles for $150k?
Me too, but make mine burn Jet A.
Customized, “re manufactured” airplanes has been the norm in the Beechcraft world for decades. I know owners who have sunk $300,000 into a $60,000 airframe, and ended up with something far more capable than the current $700,000 G36. In fact AOPA is currently doing that with its sweepstakes Debonair (although AOPA is undoubtedly getting deals on STCs and installations). More commonly, we see owners putting $100,000 -$150,000 into avionics, paint and interior jobs into airplanes costing about that same amount. It’s still $200,000 to $300,000, so it’s not everyman’s airplane, but when you consider that’s on,y about twice the cost of a new LSA it puts it in perspective.
There was a company in Colorado a decade or so ago that was trying to make a go of re manufactured Piper singles, usually Warriors and Archers. It didn’t last long. But was the idea just ahead of its time?
I am not taking a position on this matter – I only want to state a few “facts” of my experience that pertain to it. I need to say that one of my post aviation careers was as an economist – I taught it at the university level, and authored several papers, some concerning aviation. My comments start with my wanting an explanation of the dramatic fall in the market for general aviation airplanes in the 1980’s.
That market had taken on the nature of what economists characterize as a saturated market. That means the greatest majority of potential owners already had one. Then the continuing market consists “only” of replacements for those that already owned one. It could also be affected by a change in the market, and the most relevant one was airline deregulation, that had two effects. One was it made airline travel something for the common man, not just better off, especially business, travelers. Then the growth in airline traffic saturated the airways, and preference was given to airline traffic, to the somewhat detriment of general aviation traffic. General aviation travel was thus less “efficient” than it was before, and getting a pilot’s license more costly because instrument ratings were more necessary to cope with the air traffic control conditions.
Back to the now replacement market for general aviation airplanes – which replacement markets are limited by the longevity of the product, and for general aviation airplanes, at least the airframes themselves, it was long. One reason is “minimum gauge”, particularly of sheet metal components, which in many cases are designed by what can be handled and manufactured, not by the airloads to be carried. As one of my mentors used to say, if they were the thickness to handle the airload they carry, you could stick your finger through them. This excess thickness leads to long airframe longevity, and not wanting to step down thickness of adjacent areas too frequently because it would make extra parts and joining only adds to this effect.
Back in the 50’s, where my general aviation industry experience lies, the general rule at my employer was that you didn’t proceed with a new airplane unless your expectation of sales was reaching a “break-even” point of about 200 airplanes. Beyond that nominal figure your startup costs and unit manufacturing costs would be covered and you could make a profit, and the more you sold above that the more project profit. This might be compromised some by the normal model changes you would feel warranted. I have not followed the change in regulations required to be met in certification, but my expectation is that they have increased markedly, and thus break-even points would be moved substantially outward. This means fewer new airplanes.
This comment is for everyone that is reading this blog.
If you look at what the industry is doing today with the market that we have today you can conclude that they are trying to live a fery tale.
I am a sport pilot and I rent because is cheaper to fulfill my lifelong dream of being a pilot. The aviation industry still thinks that to make money you have to make everything expensive and in reality all it does is to maintain an elite group of society, instead ofmaking it an even playing field for those who whant to reach the dream of becoming part of this special group.
The issue of buying old General Aviation aircrafts is related to the issue that I talked about in the previous paragraph. If you can get an airframe in good condition that can save you thousands of dollars, why not buy it? It is the perfect solution for the economics that we have to deal with.
If you are an industry insider you can say thousands of things about how much money is spent in Research and Development, and how much the parts suppliers charge for specific “proven” and reliable materials, but the truth is that after a small period of time that becomes irrelevant and still the prices remain the same. An example of this is (For the LSA Customers) the Rotax engines, they cost an arm and a leg, for a four stroke engine that if you compare it to an auto engine cost is completely absurd. The cost of this expensive hobby is going thru the roof but you still see more foreign compannies introducing more aircrafts, Why is that?
Most of the people that are getting their sport pilot liscence are older gentleman like myself and a lot of them are old pilots returning to their first love, when you talk to them the first thing that comes out of their mouth is the same thing that the regular folks say about this industry and is that “IS TOO DAMNED EXPENSIVE” and that the old days they could afford an airplane. As long as good old airframes are out there people are going to buy them.
Would you buy a shirt at an expensive retailer for twenty dollars or would you buy the same shirt at Walmart for ten ninetynine? think about it they may not make the same amount of money on one sale but Walmart ends up selling more and at the long run they eventually make more money than the other retailer.
Everything is co-related, just think about it.
You make some good points here, and there’s no doubt about the cost. But it is not because of fat profit margins at the aircraft manufacturers (like your expensive shirt example). The margins are terrible. That points to a systemic problem (i.e., Part 23) more than greed.
Did we simply build too many airplanes in the 1970s???
Interesting perspective Harry. Deregulation did indeed have many of these effects. However, there’s something I think is important missing from your analysis. Let’s take Pueblo, CO, for example. Pueblo gets airline commuter flights to and from Denver. How do they afford this, especially when the flights are almost empty? Answer is: flights to such cities are often subsidized by your tax dollars. This creates an unfair advantage for the airlines over GA. These people would otherwise have driven to Denver, or caught a (GA!) charter into Denver, or, in some cases, found ways to fly themselves.
Not sure I completely agree on instrument ratings. One thing I firmly believe is that in order to effectively utilize my GA airplane on business travel, an instrument rating and ability to use it is required. The reason why is that without it I am insufficiently reliable, and it’s not appropriate to impose that lack of reliability on my business when they’re expecting me to “be there”.
I think the case for a reman is kind of difficult. A real reman should consist of more than just paint, interior, avionics and an engine overhaul. I suspect that by the time you replace the wiring, unrivet and remove corrosion, replace or overhaul the instruments, overhaul or replace all control cables, joints and actuators,then get approval to install substitute parts for all those that are not available;the cost would approach that of a new aircraft.
If you are willing to accept something that is almost as good as new by deleting a lot of these replacements, then perhaps. And then there is the resale issue. Everything eventually becomes for sale. A new airplane depreciates at a fairly well known rate. A reman, once used, is just another old airplane competing against other old airplanes in the market; I don’t think they will do as well.
As I said, I’m just adding thoughts about the topic as facts as I know them – and it is more complicated than a few facts can explain. For instance I mentioned break-even analysis that relies on unit manufacturing costs, but it also depends on overhead costs – which I expect are relatively higher today because of less total dollar volume of business for airplane companies.
About instrument ratings, when I got mine only 17% of pilots had one. The last figure I heard was that 75% of active pilots had one – which I think goes along with your comment that you need one nowadays in order to be reliable within the system.
Also when I flew out of Wichita’s MidContinent airport in the fifties I dealt with one control unit – the tower. When I flew out of there, on business, in the nineties I dealt with four – and to me the overall level of traffic was about the same in the two decades (but not the balance between airline and private traffic). Departure control put me on a vector away from my destination – and forgot about me, which they admitted when I called them after about twenty minutes. And I was renting an airplane for my business trip, and was not happy about that added expense. I never flew out of MidContinent again.
My comment just above was in response to the comment by Jim D.
But I think what Steve Phoenix brings up has validity. My comment on longevity emphasized the airframe, and removing corrosion from an old airframe might be considered routine even if it wasn’t going to be remanufactured (though that process might reveal some corrosion you might otherwise miss). And engines have to be overhauled periodically anyway.But replacing instruments, avionics and system components would show that modern versions are better, but a lot more expensive, relatively, than the old ones they substitute for.
Viscous circle. Price of airplanes goes up, fewer people can afford them, fewer people purchasing means price per unit must go up to justify operation of the factory, price goes up again, and then fewer people purchase them, round and round it goes.
I read in so many aviation magazines everyone wondering about the decline of pilots in the US. Really??? It is not THAT hard to figure out. Airplane ownership is a luxury in most cases. I know a lot of people who would love to have a pilots license, but when they find out it could cost 10 to 15 thousand dollars to get the license most people just shake their heads and walk away. My 43 year old airplane cost $50,000. A new one runs 1/2 to 3/4 of a MILLION dollars. And that does not even touch the cost of ownership. Now ask yourself. How many people have that kinda money to toss on a luxury (again, some people NEED an airplane, but that is rare). And of that, what percent even wants to be a pilot. And of that, what percent has the skill to become a pilot. Talk about fishing for trout out of a farm pond.
ReMan airplanes would help. The available pool gets a heck of a lot larger when the entry cost is $100,000 to $150,000 compared to $500,000 to $750,000. But still. When the average income in the United States is $50,502 (in 2011), 1/3 of that goes to taxes (now your down to a pool of available cash of $33668), subtract living expenses, house payment or rent, car payment (for most people have either house or car payments or both), food, retirement fund, kids, braces and on and on. For me, it cost about $10,000 to $15,000 a year to own an airplane (rental for hanger, insurance, annual, fuel). Who is going to do this, how many can afford it. Not saying everyone should own an airplane.
But.
It is no mystery why there are not more pilots.
Taking kids up for introductory flights is great and all, but that is not the main problem.
It is simply JUST NOT ECONOMICALLY VIABLE for most people to ever own an airplane.
Would I feel safe in a reman airplane. Of course, I am flying what is essentially that right now.
Very good point made.
I bought a 1966 182 in 1999 and added paint and a new (at that time) Garmin 430, modern panel layout, auto pilot and storm scope. Over the next 7 years added Garmin 530, NextRad and Mode S traffic and finally WAAS. The avionics doubled the investment to approximately $100k.
Compared to today’s prices I think I have a screaming deal. No I do not have glass or ADS-B but I am still financially ahead of a $500,000 new 182.
My experience is that the person who really wants a career in aviation can go get one, including flying. And the person who wishes to own an airplane can do lots of things that get one part way there: shared ownership, renting, etc. I do question, given David Heinke’s analysis, with which I generally agree, how much longer that will be the case. It’s one thing for the economy to be bad and for airplanes to be expensive and all that. However, it’s another for the industry to be under attack from our government, and I believe that it is. I hope we are able to survive that. When they get done with our industry (and soda pop manufacturers, et al), what will be the next industry to be attacked by our government?
John Z: Your point is well taken. How many among us can even think about plunking down $829,000 for a new Cirrus G5? That’s the price quoted in the May, 2013 Flying mag article on the G5. Add tax, etc. and you’re creeping up on One Million Dollars: for an SR22. Admittedly a great airplane, but come on. New airplane manufacturers are in a Catch 22. When the demand for a comodity goes down, price should go down. But as you point out, the manufacturers can’t afford to lower the price. Result: End of the road for the new plane manufacturers. Name of the new game is reman. At least until the everyman economy really recovers, and then for a period after that to let the general population feel secure and well off again. You’re on the right track John.
As previous submissions have indicated,a great part of the high costs can be atribuited to lawyers!Back in the 70s when we had a lot of Vietnamese boat people and there was a lot of controversy about them,I made a suggestion that we accepted them on one condition:that for every boat load of Vietnamese arriving in Australia, they take a boatload of lawyers back to Vietnam!The idea of rebuilding old and high hours GA aircrafts has been used in Australia more than probably anywhere else, when our dollar was in the 50 to 70s USA cents.The other thing that comes to mind is that fusilages can last near/forever and as long as we replace wing spars and tail plane parts when they build up excessive hours, then we could extend the life of aircrafts even longer
I needed 6 people with bags, but on a budget. I tripped over (vs found) a great Baron 56TC (Duke 380HP engines on a upgraded 55 body) for under $50K. Put another 60K into it over the next year, now I’m good to go for 4-5 years until the engines are done. This worked much better than I expected as I wanted to buy NEW or near NEW, but the useful load of new twins and singles (Matrix/Mailbu, Saratoga, Seneca 5, etc.) just was not there. The only entity is the fuel flow, but I fly over 200knts at economy cruise and 240 in high cruise, so I get there.
Jack: nice!! And I’ll bet it’s faster than a Duke would have been …
Much faster, in fact, in the day, it was faster than a King Air 100. We get called King-Air a lot by the controllers vs Baron. No one knows what Baron 56 is, almost every clearance they ask if that is the correct aircraft type and about 50% of our approach controllers ask what we are. As I say to other pilots, “Eats gas, goes fast’ but the fuel burn really is pretty OK (24-30 Gal economy cruise total)for the speed and time is money for my company getting between customers at various FBO and flight schools.
It is a 4 year plane for me, so the “rebuild” story worked, but I did not start down this road but a very good mechanic/pilot that maintained the plane until I purchased ran the numbers and the reasoning with me and it make a TON of sense. (I have over a TON (over 2200lb) of useful load).
FYI – for everyone, this is the 2nd plane I’ve purchased out of bankruptcy/owner short sell and if the plane has been maintained to some decent level, it works out pretty well well (the other was a DA-40 G1000). Got it for under $135K with 1200 hrs left on the engine.
I have only one concern with a rebuilt or updated airplanes.
That concern is the banks!!
I don’t personal know about piston aircraft loans, but in the Jet world, banks are not willing to loan over the original loan value of a a un modified airplane. Meaning if the value of airplane X is $1m and the Remanufacture cost adds $1m more to the cost. The banks are not willing to loan you $2m. They don’t care if the replacement cost of a new plane is $6m.
The banks will give you $1m and you have to the rest out if your own pocket.
I like the idea of modifying and updating older airframes, but without the banks on board, I don’t really think large numbers will be done.
That’s because, in your example, people will take the second million and pocket it. I know of a dealer in Asheville,North Carolina, who did exactly that on a fleet of Citations where he had a floor plan and he’d buy a plane at wholesale and borrow 100% of the retail price. The bank is going after the man for fraud – but the point is clear.
We, in the rotorwing category, have been doing this for decades.. In the 80’s my company procured, frame-up detailed and upgraded 26 MD 500’s. It was a great program, a nearly new aircraft for about 60% of new.
It was such a good program that the Asians copied it, scarfing up all the remaining available helo’s in our market. We didn’t worry about a program break-even point because we sold each model at, costs plus profit at our FBO’s.
Though I’m retired many years, I still know where several of our helo’s are flying today. You can put a lot of annuals and new life-limited parts on an aircraft that is half a million less to acquire.
It’s the detail and integrity of the re-manufacturer that is most important in this industry. That, and a very good per-buy inspection.
I’m very concerned about the direction of GA today. My grandchildren are beginning to flying now, and it doesn’t look like their kids will have the same opportunity. Lawyers, politicians and the lure of someone else’s money is the Devil’s brew.
R. Kipling
I am a student pilot, 62 years old, and at the solo stage of the training. I enjoy the experience and hope in the coming months to be able to get my ticket, but I never expect to own a plane. Thus far I have about 40 hours into the training at about $8000, assuming I get done in another 15 hours we are looking at $11,000. Now I knew that going in, but none of my younger friends think its worth it. My brother has been a pilot all his life and when he trained in the 70 the plane cost $10/hour wet and the CFI was free because he just wanted the hours! I plan to budget almost $800 for my check-ride, between the FAA examiner and the plane. But I am ready for that. Just knowing that I can learn to fly at 62 is kick enough for me. However, unless I win the AOPA sweepstakes, I plan to just rent my ride. Why should I buy? I can rent a 172 glass cockpit plane, well cared for, a couple times per month for a few hundred dollars and have no related expenses, I could also join a club and accomplish the same. I also have a friend who owns a float plane, I’ll be happy to split some of those expenses. See you in the air soon, breakfast at OBE!
I agree with most of the points John makes, especially his observation that purchasing a used aircraft in the current buyer’s market and upgrading systems does offer far more bang for the buck versus buying new. However the answer to the initial question he poses in the article — Have we seen the last clean sheet piston airplane design? — is clearly no: Witness the Pipestel Panthera, Icon A5 and others. Thankfully, true innovation continues at least to a degree, despite the poor economic picture the players find themselves in.
As a former aircraft inspector, I would not have any problems with a remanufactered aircraft. After so many years the wear and tear tells it’s own story. So you R & R and press on
I think this is a great idea. The marine industry has been doing this for years. There is a place that specializes in restoring old Whalers as well as two other places that rebuild older Bertrams and SeaCrafts. A reman 172 for half the price of a new one, sounds great!
First, an admission. I skimmed the comments. I might have missed someone making the same point as I and wiser about it. So….
remanufactured airplanes, so long as the wearout parts (door, latches, wiring, glazing) are shiny new as is everything that would get inspected on an annual, sound like a wonderful deal, though in my case, like so many others, I’m still priced out of the market. But, and here’s the point of my posting, the remanufactured airplane carries virtually none of the product liability of the airplane. The remanufacturer can make money if he starts with a salvaged airframe and stuffs it with all new systems and equipment, and pays no product liability insurance, which would be required if it were a newly manufactured airplane. The remanufacturer can walk away with a profit at a far lower price point than if he started with a shiny new bare arframe made up for him, and then populated it with the exact same stuff he’s installing on the ‘overhaul’. Look at the price points for a Glastar ‘two weeks to taxi’ ‘experimental’ airplane.
Response to Johhn Zimmerman, April 25th. The industry built just the right number of airplanes in the 70’s to, according to economic theory, saturate the market. It was on the threshold of saturation anyway when airline deregulation caused enough disruption to general aviation to take it over the foreshortened brink.
In these posts, I’ve seen airline deregulation mentioned twice as a factor for the decline of GA. I’ve never heard that before. If I understand the logic being presented, it’s because of lower air fares that people have no incentive to get a pilot’s license or own an airplane. The other concept is that every pilot needs an instrument ticket, because deregulation has made the airspace more complex.
I agree with neither. I think with the disappearance of point-to-point airline travel, in lieu of hubs, it would be more of an incentive for using GA than a detriment. As for airspace, that situation would have evolved, deregulation or not. Most of the modern complexities of airspace, have their origins in the late 1960’s, when several deadly midairs occured between GA airplanes and airliners. The first TCA’s (now Class B) were established soon after that, and almost a decade before The Airline Deregulation Act of 1978.
I studied the fall of general aviationin the 1980’s as an economist in the 90’s and found the accumulative sales of GA airplanes fit perfectly with the saturated market phenomena. I had my paper peer reviewed and presented at an international symposium. NASA came up with the same explanation about a year later and published their result – I guess they hadn’t read my paper. Fitting a theory doesn’t make it infallible, but what happened subsequently in the industry supported that theory’s conclusion.I looked for explanations for the limiting of the market and found contributions from certain favorite causes, but none as statistically significant as the timing and relationship of airline deregulation – the curve of sales made a sharp downward bend not when dereg occurred but about two years later when the effect of lower airfares made possible by economic dereg took real effect. I think saturation was happening anyway – meaning the industry had tapped most prosepctive customers – but the total effects of dereg I mention above made saturation conclusive.
My comment to Zimmerman about the industry making and selling just the right number of units to satisfy the market may be a little strong – I imagine the companies didn’t see the dramtic decline in time and had inventory left over.
I have one further comment on did we build too many airplanes in the 70’s and about airline deregulations hurting GA.
I read an article a few years back that brought up a point I’ve never thought of and no one has mentioned. The article explained the real reason for the fall the of 70’s level GA and more to do with aging of WWII pilots than any other single factor.
Following WWII hundreds of thousands of pilots came home and went back to work in non-aviation occupations; couple with another large group of WWII vets using the GI bill to learn to fly.
This group grew up with the idea an airplane would be in every garage in the future. By the 1970 they had raised their kids, the disposable income and the desire to return to flying for pleasure or business.
I know in my own family we had three airplanes. My grandfather learned to fly on the GI bill, his two brothers flew in the Army Air force. By the 1970 all three purchased Cessna or Beech aircraft for personal use. In the 1980’s they sold them because of age or lost medicals.
For me it was cheaper to rent than to purchase.
The article went on to say it was bubble market, which would have never happened without a large group of trained pilots with disposable income who chose to spend it on airplanes.
In recent time I know I could fly myself instead of using airline for business. Except for one problem, my last two employers large Aviation OEM’s will not allow us to fly personally for business. They’re afraid if there is an incident they are liable in a suite.
So even they don’t practice what they preach.
I believe a reman aircraft to be the only option realistically available today. This was also true in the ’80s and ’90s. Back then I decided I needed a fast, reliable twin and an IFR competence to get where I promised to be on time.
A 1968 Cessna 310 Executive 600 conversion with new paint, interior, suitable avionics, etc. did what was needed. I guess I did also as I never scared myself (too much) and I’m here to type about it.
I’m not sure what new aircraft were available as there were just not considered.
Today, retired, I operate a 1978 Cessna 340 RAM VII used on occasion for consulting work, but more commonly to commute between our two homes.
In todays world, there are absolutely no options if you want a fast, pressurized, turbocharged twin. Currently only 250 hrs from new everything FWF and a nice suite of Garmin panel stuff.
The irony, I don’t have to be anywhere at a certain time.
Regardless, people in the following decades will not have such options. Even the best remans will be fewer and fewer.
I’here
The thing that amazes me is how little is said about the drag that the FAA represents on the general aviation scene. Anyone would be a fool to say that the FAA does not have a very important role to play in all parts of aviation, general as well as commercial. But, this government entity has been a huge drag on aviation for a long time.In the case of old general aviation planes the FAA is simply a guarantor of the shops which have climbed the ladders set up by the FAA to become a favored producer of necessary parts for the old airplanes which we all love. There is no telling how many old airplanes (I am talking here particularly of Cubs, Ercoupes,etc) are flying today with patched up parts because the owners cannot afford to fly the enormously expensive parts the holders of FAA permits sell. For one instance, there are great numbers of shops in the US who can and will make fine gas tanks for a few hundred dollars whereas the FAA approved ones go up into $1500 to $2000 or more. One example I would quote is that a Ford pickup fuel pump is almost identical to one required for an approved FAA replacement for one old small airplane but the approved one runs into hundreds of dollars. My question- how long must our aviation scene be saddled with the vulgar excesses of the FAA before they are forced to get reasonable? Thank God for the EAA because we would have almost no small general aviation planes except for those dedicated people.Isnt it time we stood up and said, “No More!”
I’ve heard that three out of every four new airplanes registered in the US is an amateur-built airplane. The total number of pilots still shrinks precipitously, but many have chosen this route.
I’m hoping to find a good, used, 172 to buy within the next 2-3 years and stop renting. If some of these rebuild companies start buying up Skyhawks … the prices for a ’70’s model plane with steam gauges, will go out of my reach. :(
I think we get to enthralled in the ideas of COST….. I learned to fly later in life because I absolutely love the feeling of being free from the earth… all of us have hobbies….this is one.. I share a 182 with two other pilots and we can take the plane as long as we want for trips and all of this is affordable…. Their is no experience to match climbing VFR over LAX at 12,000 direct to San Felipe, Mexico…
John,
Great outlook on this problem.
I know this probably echoes a lot of the comments above, but:
I think the problem of aircraft ownership is indicative of a problem across general aviation, which is that it is simply so expensive to get into.
A lot of people say, essentially, that aviation is a rich man’s game and that’s all it’s ever going to be. But I don’t believe that it has to be that way.
I think there’s a very large number of people who would be delighted to learn to fly and own an aircraft. If only there were a way to make it at least minutely practical.
When it comes to the aircraft themselves, I think manufacturers need to focus a little bit less on coming up with the “latest and greatest” and start asking the important questions: How can we bring more consumers into the aviation market? How can we make buying an aircraft more than just a pipe dream?
I agree with the comment about always adding “the latest and greatest.” Here’s the issue, from the airframe manufacturers’ side–no one ever buys the stripped down models. I don’t know why this is (my guess is used airplanes fill this niche very well, so you don’t have to buy new), but it’s evident from the history. Look at the Piper Cadet, Cessna 172R vs. the 172S and lately the LSA market (where everyone buys all kinds of options). It’s a tough situation on both sides.
It would be interesting to understand from a manufacturer like Beech, and also an LSA manufacturer, what their cost breakdown is and how they determine their selling price.
I think GA still has a terrible yet unwarranted safety perception with the public and is still perceived as rich kids with toys. Most of the public do not realize that Airline Pilots start learning to fly in Single Engine props. I also think the rules around carriage for compensation need to be relaxed but the Airline Lobby won’t allow that. FlightHike launching soon will I hope really help GA.
While we’ve had some very good discussion on this topic, I’m surprised that no one has pinned insurance costs for some of the obvious decline? The high cost of insurance has always figured prominently into my flying and ownership calculations.
Add the complexity and constant restrictively growing ATC system and the pleasure/small business flyer is easily overcome by the practicality of getting there some other way. The insurance/legal industry has killed more promise than Pandora.
Kip
Aircraft insurance costs are at an historically low levels when adjusted for inflation. Certainly the cost per thousand of dollars of hull coverage is much lower now than it was when I sold aircraft insurance me I. The mid 1990s. My contacts in the industry confirm that rtes have been “artificially” low (their words) for several years because accident rates are down. Several underwriters have warned that rates will be going back up.
Dropping insurance rates from outrageous to ridiculous is not a thing to be happy about. Insurance rates for a recreational flyer can double or triple hourly costs. Commercial costs can get even higher.
Kip
This sure is a long discussion! The insurance notes reminds me about manufacturer insurance. My guess is that is a major contribution to cost. The GA Revitalization Act of 1993 made insurance rates and tails tractable. That doesn’t mean they became small. How much of the cost of an airplane is manufacturer liability? I’ll bet it’s significant, like 30% or so. Note that a couple LSA manufacturers might be able to get their flyaway cost under the “magic” $100,000, if they could magically remove 30% of their cost of manufacture.
I’m also with Bart. I think the drag the FAA supplies on our industry is difficult to imagine, and probably a lot. I know enough about the drag supplied by regulation in the auto industry. It’s really significant, mitigated only by the fact that everyone buys a car, so much greater numbers and economies of scale.
Perhaps there’s another possibility to make “oldies” run longer and faster. We’re close to the first machine working in praxis. But not with a Jet A1 guzzler, but via ECONIMO electric engines! Just watch:
http://www.silent-power ag.com and econimo-drive.com!
Reality check here; consider this, you can buy a Conquest I which is in essance a turbine powered 421 with a 0 SMOH Blackhawk conversion for 50% of the price of the Excalibur 421’s. This refurbishing doesn’t pencil out to well especially when a Conquest II with a Garrett -10 mod which is much faster with bigger seating and useful load is $800,000 less than an Excalibur 421.
Ernie:
Please review “Aviation Consumer’s” test of the Cessna Conquest I.
In it they point out that the Conquest only bears a resemblance to the Cessna 421. These are VERY different airplanes.
One thing I have not seen mentioned is corporate greed driving up the price of our airplanes.
Hopefully, some read about the Beech bankruptcy and the demand for 6 million dollars in bonuses for bringing them into bankruptcy!
The auto business is no better and maybe worse, it would make a good read for those who need a better understanding of our gouge the consumer businesses.
What investors really need to see is a breakout in the financial statements of compensation.