Can we build them less expensively?

August 4, 2010 by Bruce Landsberg

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Does anybody, besides me, think the cost of new aircraft is a bit high? Those who know better have constantly advised  that it’s not the absolute cost but the value that one derives from the purchase.  And how does this tie into safety and training anyway? Hold that thought.

Up to a  point, the value argument is true. However, when one gets far enough up the economic pyramid the  equation becomes moot for most of us.  I just can’t stand that much pleasure or utility out of whatever the product purports to offer.

Untitled-6Doing some back-of-the-envelope calculations, I came across the pricing of a 1980 C172 (with Navpak II option – basic IFR) at approximately $40,000. By comparison, a  mid-priced car was about $7,500.  In 2009, the Skyhawk, admittedly with Garmin 1000 and perhaps a larger engine was about $280,000.  It appears that the market is not quite convinced that the performance and utility benefits are worth the differential.  The car weighed in at about $30,000.

That works out to a four-fold increase for car and seven-fold increase for aircraft. We could certainly indulge in the value discussion and this is NOT intended as bash of the manufacturers. Business these days is expensive and the government, despite adding lots of benefit, doesn’t make it any cheaper.

Light Sport Aircraft are much less expensive but even they are not cheap and then the discussion turns to why buy a new LSA for $130,000 when perfectly good used Skyhawks or Warriors are available for $80,000. My point is that somebody, at some time,  HAS to buy new aircraft. We won’t survive on recycling forever.

Why focus on redesigning or incrementally improving  the product instead of figuring out how to build an existing aircraft more affordably? When NASA and various organizations sponsor design competitions they invariably look to newer, faster, more capable but I don’t recall anybody looking at how to build a Cessna 182, Warrior or Bonanza (all mature designs) with fewer parts and reduced labor cost.

Getting back to training and in looking at the cost of becoming a pilot, the only thing that appears to be disproportionately expensive is the aircraft. This all ties into our initiative to address the shrinking pilot population.  Fuel, instructor pay, basic avionics and course materials have either kept up or lagged with inflation. So, what am I missing ?

Bruce Landsberg
President, AOPA Foundation

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27 Responses to “Can we build them less expensively?”

  1. David Reinhart Says:

    Maybe there hasn’t been much work on how to make the airplanes you mention with fewer parts and cheaper, but that has certainly been the case for Cirrus. I believe Cessna has done much the same kind of effort for the Corvalis.

    Note that the two airplanes that have gotten the benefit of improved manufacturing techniques are both composite aircraft. I don’t think that’s a coincidence. They’re both relatively “immature’ products with more room for tweaking. There just may not be as much “wiggle room’ in the older metal designs to simplify construction and reduce parts count.

    I also wonder just how much can be done to an airplane by the mfgr. before it has to be recertified. I’m amazed at the extent of the changes Cirrus has made in the SR-20/22 lines while (evidently ) keeping the same type certificate.

  2. Don Kelly Says:

    The increasing cost of purchasing a new airplane is ridiculous and unsustainable in the long run, even with developments in light sport aircraft. There are many reasons for the high cost. Manufacturers set their prices with an eye towards making a profit in a given market climate. The multitude of stakeholders in the manufacturing process only increase this problem. Legal liability also takes a great toll. Everyone with a hand in the process fears being sued and the inevitable pay outs that occur, regardless of who was at fault. As mentioned in the article, market size affects profits which limit R&D and the effort put into the certification process. Finally, the role of the government has been largely used to reinforce the status quo, rather than encouraging the development of new technologies, cost savings, and improvement to the industry.

    I’ll use the comparison to the automotive industry. The auto industry has made significant improvements in the safety, efficiency, and comfort of automobiles over the last sixty years, often with prodding from the government. There are still many cars from the 1960s driving around in the hands of collectors, but few us would be satisfied with a new car using 1960s engine technology. Yet the aviation industry recycles airframe and engine designs that were paid for half a century ago year after year and says not only be happy with it but pay more for it. The government encourages this mentality with ridiculous volumes of regulation intended to make aviation safer but usually functioning to totally gridlock innovation and improvement. How many start up aviation companies have been driven completely out of business by the FAA before they even got to market? How many old planes that could be updated and made safer, fly with obsolete, broken equipment because they can’t install new instruments or engine controls?

    Liability is another area where changes need to be made. It took an act of Congress to get Cessna back into the light plane market in the 1990s. I’m sorry, but if a Cessna 172 built more than 10 years ago crashes at this point, Cessna should have zero product liability. Suing aircraft manufacturers for mishaps created by maintenance, poor piloting, or bad luck makes about as much sense as suing a Church because you cancer. You can blame God, but we all have to play the hand we’re dealt.

    I got my Pilots license 20 years ago when I was a 25 year old college student. I have no idea how a college student today can do what I did. At the time my club airplane cost me $26.00 an hour wet to rent. Today, the club I belong to (fractional ownership) charges $30.00 per hour dry for a 1974 C-172 and I put in between $30 and $40 dollars per hour of fuel. For environmental reasons alone, 100 LL should have gone away years ago. Today, it’s a major factor making the cost of flying high, but we stick with it because it’s what we know. The 1999 C-172 my club owns prefers 100 AV fuel, but good luck finding that!

    As aviation enthusiasts we should be doing everything in our power to make our field more accessible, not less. I see too many old pilots who are happy tinkering in the hanger or drinking coffee together in the terminal and are unwilling to share their passion with the next generation. Their shortsightedness will cripple aviation for many years to come.

  3. Tim Metzinger Says:

    One significant difference between cars and planes is the sales volume. The development costs of a new car (even if it’s just a “refresh” of last year’s model) are recouped over tens or hundreds of thousands of units, which translates to “not much more $$$ than last year”.

    The sales volume of autos makes investments in automated manufacturing processes reasonable as well.

    The useful life of an automobile is much shorter than an aircraft too, so the manufacturers know that they’ll be getting a replacement sold in less time.

    So, I’m sorry but I don’t think it’s reasonable to compare autos and airplanes – perhaps boats, or other low-volume items.

  4. Bruce Landsberg Says:

    Great commentary! This is not an easy problem or it would have been solved a long time ago. Dave’s comment regarding Cirrus is interesting and someone with better economics and manufacturing background than I should weigh in. They learned a great deal and improved the product a lot. It seems as if the new Cirrus’s have also outpaced inflation and if so, why?

    Liability is certainly an issue ( not the only one) and we, as a country, have not been able to figure out how to fairly hold individuals and manufacturers properly accountable.

  5. Steve Kittel Says:

    I dont understand it either ( and I worked as an a/c mechanic for DOD). Aircraft that havent really changed over the past 30-40 years. Why havent costs come down when the manufacturer is probably using basically the same designs, with the same jigs, wiring, components, etc. The build process has to have improved over the years, typically with just-in-time parts delivery. And how can engine manufacturers justify over $30,000 for a basic 1940′s engine design that is less complicated than todays automobile engines?? Same for avionics … it all has to come down to regulation requirements and our sue-happy culture. Not to mention the short-sighted American way of trying to milk the customer for as much as they can at the initial purchase. Car manufacturers make probably more money on the replacement parts side of the equation once the car has been sold. Aircraft manufacturers should think the same way…get more people into flying, and you’ll make more in replacement parts due to regulations….otherwise, GA is just going to dry up as more and more people get priced out of it.

  6. Mark Willis Says:

    Bruce Landsberg writes, “Liability is certainly an issue ( not the only one) and we, as a country, have not been able to figure out how to fairly hold individuals and manufacturers properly accountable.” Well, we certainly have figured this out, over a couple hundred years ago, and the system has worked brilliantly—- a free market system. We vote with our wallet regarding the worth of a product. These manufactures know their costs and the number of units they must sell to stay in business.
    I really don’t want to get into a discussion of how it seems that government control of the system just seems to screw it up more and ends in more bureaucracy, money and power to those elected officials (seems like more politicians are in trouble with ethics lately and will most likely get a slap on the wrist). That’s not to say that government shouldn’t have a role in safety and maintaining fair competition in business, but unfortunately they don’t do a good job of this either.

  7. Thomas Boyle Says:

    I’m mystified too. With Cessna, Piper and Cirrus, it could be argued that the FAA acts as a barrier to competition, allowing the companies to charge whatever they like.

    But there are over 100 types of LSA out there – it’s a competitive market with minimal FAA interference, and in a competitive market it tends to be cost, rather than “value to the user”, that sets the price. Even so, the cheapest, brand-new, off the shelf LSA costs $60k. Yes, it is a real airplane, with comfort and performance to knock the socks off a Piper Cub – bit it’s still a basic rag-and-tube (“I can see the light coming through it”) airplane for the price of a large luxury car. And even an assembled (2-stroke) 3-axis ultralight is hard to find under $30k.

    In the case of LSA we can say it’s $20k for the engine, about $30k for structural materials, parts, and the panel, at a minimum. There isn’t much left out of $60k for assembly and profit, by that point.
    One thing that several people have commented is a real standout is the engine: you can buy a marine engine, similarly designed to operate at a high continuous power setting, for about 1/3 the price (at a similar continuous power rating). Modern 4-stroke marine engines are really quite reliable – and Rotax builds them too. This is probably due to production volumes, but so what? – Maybe someone should figure out how to cool one without a large water bath!
    So it’s conceivable an LSA could be built for something more like $50k, but that’s about it.
    Some people have remarked that the problem may be that aircraft are assembled using a “luxury goods” model – cottage industries with high labor content. That may be – I’d love to see someone who knows what they’re talking about, actually do a cost analysis of light aircraft manufacture – how much cost goes into the hull and wings compared to, say, the engine, or installing the systems?

  8. David C Says:

    I think liability and labor costs (thanks to greedy unions) keep the cost of aircraft up. You know the aircraft manufactureres are charging high prices and after covering their costs, stuffing some of teh money away to fight lawsuits that will inevitably come in our sue-happy country. Unions are another issue though. It’s time for them to go! There was once a need for them in this country when teh government (in the form of OSHA) didn’t look out for workers health, safety, and well-being on the job place. However, that’s no longer the case and unions are basically running a protection scheme with their members and the manufacturers. Get rid of the unions and limit liability of teh companies and then demand that prices drop!

  9. Roger Mullins Says:

    The term “greedy unions” could very easily be replaced by “greedy companies”.
    OSHA and other agencies looking out for workers safety? Tell that to the families of the mining accident victims in West Virginia and the oil platform explosion in the Gulf of Mexico. I personally want the MOST QUALIFIED people building any aircraft that I fly (union labor) and not anyone paid slave labor wages, either in this country or in third world countries. In the pro business times in which we live, the need for unions to protect working men and women has never been greater.

  10. Thomas Boyle Says:

    Bruce,

    There are some people out there who actually know something about the costs of producing aircraft, who might be able to start answering your question by explaining why they cost as much as they do today. The rest of us are merely speculating. Why don’t you contact Dick VanGrunsven and Randy Schlitter, both men who know the costs of aluminum kitplanes intimately (and Schlitter is doing production aircraft now too). They might enlighten you – and you could enlighten the rest of us.

    What they won’t tell you, of course, is how to build less expensively – because if they knew, they’d be doing it.

  11. Phil Solomon Says:

    As a few people have said above, volume, standardization and less law suits are the three key factors that would enable aircraft to be priced closer to what you might expect for a high end car. Consumers, and especially pilots do not like excessive standardization so that automatically makes achieving large volumes difficult. FAR 23 requirements create the conditions that encourage and protect monopolist type behavior and, along with lawsuits, ensure that innovation can only come at a huge cost.

    To a large degree, people are perhaps asking the wrong questions. The right question is more to do with the costs of access. Owning any plane can be very expensive due to the high fixed costs which, when combined with very low utilization (often 40 hours per year or less) can take even a modest mid 1970′s aircraft to over $300 per actual hour flown.

    Light Sport aircraft in particular and the new Tecnam twin (I have a vested interest as CEO of Tecnam North America) can bring down the costs of ownership considerably through lower insurance rates, use of autogas and the frugal Rotax engines but some form of shared ownership, flight clubs and enlightened rental fleets can also lead to costs of access that would seem more reminiscent of the glory days.

    The barriers to achieving this are pretty much all self imposed. The culture we live in does not encourage shared use so we pay the price in the form of limited access at very high prices.

    We are working hard to change this culture but most people can find 1,000 reasons why it will not work but in the meantime one person, one aircraft is clearly not having the desired effect either so trying something different is the only way forward to address the root of the problem.

    I fervently believe that we can turn around the decline in aviation but it will take vision and the willingness to “suspend disbelief”.

  12. Nick Says:

    I guess I’m part of the problem, I’m an aerospace engineer (though I work on the space side for the most part). The cost is related to many of the aspects you have here – labor, parts, low volume to spread out R&D costs – but the elephant in the room is safety and reliability. Sure, that engine may be far lower-tech than what’s under the hood in your car. But that engine has to go through a rigorous inspection and testing process that your car doesn’t. If your car’s engine quits, pull over and call AAA. If your plane’s engine quits, you have a forced landing, and I’ll venture that those have a higher probability of ending in more damage and injury.

    In effect, you’re paying for testing and quality assurance. That takes a lot of time and special equipment, both of which cost money. Some of this testing is required by the government, some for insurance, and some for plain old prudence. There may be no physical difference between the oil lines on your airplane and your car, but I’ll guarantee that the ones installed in your airplane will (at least, legally) have a lot more inspection and QA before they ever made it onboard – at least, if you have a certified airplane and are playing it straight. That’s why those same $40 lines cost you $2 at Autozone – the person selling you the parts puts some (or a lot) on for liability, and some (or a lot) for testing. And I’m certain they tack on a little more because they know you’re a captive audience and probably have more money on average than the guy buying the $2 lines at Autozone.

    Unless we change the mentality of the public to accept airplanes dropping out of the sky with higher frequency, aircraft will be expensive. That safety and reliability comes with a high price.

    And as for low-tech engines… there’s a good reason for that. Less stuff to break. Most are air (oil) cooled, meaning there is no cooling system to malfunction. Ever had a water pump go on a car? I’ve lost three. How ’bout an alternator? I’ve lost two in my cars. That’s why you have magnetos. And you drop all the other claptrap – sensors, valves, whatever – because each of them can fail. I haven’t seen a airplane yet with a “check engine” light. (You can also thank emissions standards for that.)

    I wish there was a better answer. Guess it’s up to us to figure it out. Light sport is a step in the right direction, but I agree, it has to get better.

  13. Larry Says:

    I think Nick has hit on the core reason. Neither the people flying nor the people on the ground want aircraft falling from the sky. Especially with today’s climate of uncertainty and fears about general safety.
    Much of the electronics however has continued to improve and seen significant reduction in price while adding features. But, I venture to guess that most of us aren’t too worried about crashing due to our GPS navigation failing. We have ample options for backup systems for electronics. Not so for the single engine land pilot when the prop stops turning.

  14. Bruce Landsberg Says:

    Would this be a good topic for AOPA Summit in Long Beach this fall? Suppose we got a combination of economists, manufacturers and engineers together?

  15. Dave Says:

    But how much reliability is the expensive certification system really getting us, and is it worth the cost? What’s the first-year failure rate of Lycoming engines vs, say, Toyota engines? Or automotive panel mounted GPSs vs 430/530s? Or a pair of magnetos vs a single electronic ignition system that’s been widely used in cars for TRILLIONS of hours? Until we compare the data, we don’t know what we’re doing because we think it SHOULD be more reliable really IS more reliable.

    Try this thought experiment. What if you had the option of buying an uncertified plane designed and built by a major car manufacturer, say Honda or Porsche? Would you consider it, and at what price? What if it had a built-in parachute? What about after it’d been in production for a few years? Or would you pay more for a similar plane, from a startup, with no track record, but certified?

  16. Stefan Says:

    I will argue that the value of the GA airplane is worse now than in 1980.

    Here are some of the factors.
    -The availability of a suitable airfield near a potential destination is worse.
    Many have been closed in the last 30 years, others restricted.
    -Alternative transport has gotten better. Motorway speeds are near 80 mph
    now. Changes to commercial flight alternatives are mixed: more options,
    especially more low priced options, but more hassles vs. 1980, probably
    on the whole, the commercial alternative has improved.

    None of the material changes to GA in that period really affects the value of
    it to me. GPS is nice, but we used to navigate without it. In-cockpit weather
    maybe comes closest to really changing the utility of the machine. Two things
    that would indeed change things from my point of view are better high altitude
    capability (say via turbocharging, etc.) and deicing gear. This stuff is maybe
    a little more available in the lower end of the GA market, but not much. Better
    speed would help of course, but this has not changed.

    So I say the 2010 GA airplane is less valuable than the 1980 airplane.
    Moreover, it ties up relatively more capital, so the overall cost-effectiveness is
    substantially less.

  17. Ted Says:

    I recently completed an RV7A quickbuild kit. It took 5years and 3200 hours of labor. It was my first build. If I built a 2nd one I could build it in half the time. So let’s do the math to come up with a simple cost analysis to build this A/C commercially:
    1600 hrs labor @ $40.00 ( Conservative pay and benefits) $64,000
    Lycoming IO 360 M!B $32,000
    Hartzell Constant Speed Prop $7,000
    Airframe Materials $23,000
    Panel /Avionics/ Wiring ( Lite GPS Based IFR) $36,000
    Total $162,000

    Now some of these prices are retail so maybe the total number is $150k
    Add $50k to the price for some liability insurance and we can see how we can get this simple 2 seat a/c to $200k. That said. there are oppportunities to reduce labor hours on commercial A/C construction. The later RV aircraft series employ CAD designed airframes and parts. Skins and bulkheads are pre-punched by a computer guided punch machine for rivets. No jigs are required for airframe construction and labor hours are significantly reduced. You also end up with a very straight airframe. If a little company in Oregon can do this ( Bravo Van’s A/C!!!), why can’t Cessna, Piper, Mooney and Beech employ this modern technique. We have commercial aircraft that are built by large corporate companies that are unwilling to spend capital to modernize production lines.

  18. Brian Says:

    As an aerospace engineer that does work in general aviation I have to respectfully disagree with Nick.

    Honda has anti-lock brakes on their crotch rockets that retail for something under $15k. On the other hand high end turbine ga, over 1 million do not have abs because it’s unaffordable. Think about that. The consequences of losing brakes on a motorcycle are just as grim, if not more so, than on a small airplane.

    So far as rising cost, look at the chart pg 18 here:

    http://www.faa.gov/about/office_org/headquarters_offices/avs/offices/air/directorates_field/small_airplanes/media/CPS_Part_23.pdf

    If ga cost just followed the standard inflation curve you could buy a new, certified, 4 seat airplane for ~$75k. A modern, certified version of a piper cub would cost ~30k. Can you imagine? I’d be first in line with my money, no kidding. Instead I’m flying a 40 year old airplane that I can just barely afford, despite making a very decent salary.

    To me the major cause of lack of innovation is that there is no money to be made in piston GA. After all despite even heavier regulation there is respectable progress and innovation going on in the turbine world.

    The regulations aren’t that onerous. Any company trying to produce a safe, modern, well designed product would very easily meet the vast majority of part 23 requirements, anyway. Yes the regulations add some cost, no doubt. But you are talking about fairly small percentages. Look at Ted’s example above. His homebuilt is no cheaper than a certified airplane would be.

    It’s sort of like pilot training. If there was no faa pilot licensing requirements at all, how much cheaper would it be to learn to fly? Well on one hand you could just hope for the best with no training whatsover. Then, you might argue you’ve saved yourself 90-100% of the cost. That’s basically the equivalent design by faith approach taken by most experimentals/lsa/ultralight companies. To greater or lesser extent depending on how reputable the company is. On the other hand if you looked for an equivalent level of performance so you trained up to be a good, safe pilot how much less would that cost with no FAA oversight at all? 10%, maybe? Which is pretty much the same on the aircraft design side, in my opinion.

    To me the only way for small piston GA to survive is to on the coattails of other industries where there is enough money to be made to drive heavy competition and the resultant innovation. Engines for example borrowed/adapted from marine or motorcycles etc. Except that the lawsuit climate means that no one in their right mind will take that deal. Lets say I go to Honda for a partnership to adapt their anti-lock brakes for aviation. Basically what I’m offering them is a chance for negligible profit in exchange for massive liability exposure. After all, after the first runway overrun under joint and several liability a court only has to find Honda 1% responsible for the accident and cha-ching.

    The other problem, and I think maybe the LSA problem, is weight is money. To make something light takes more engineering work, more sophisticated manufacturing processes, better materials, or even more maintenance (everything from more frequent inspections to smaller access panels, etc). All of which cost money. If I could make a 2 seat light sport airplane at 2000 lbs gross wt instead of 1320, all other specs the same there is no question it would be cheaper. Sure it might take 120 hp instead of 80 hp and burn 6 gal/hr instead of 4. So what? At least people could actually afford it.

    If AOPA wants to make aviation more affordable the two things imho are to somehow get the liability monkey off our back, and raise the weight of LSA (even if all other performance limits are the same).

  19. Steven Says:

    Brian

    I think you may be on to something with piggybacking off of the marine industry for innovations, as well as limiting the liability, but increasing the weight of LSA wont do anything for costs. If anything, it will increase it.

    Just as an example, at the current weight limit of 1320lbs, the wing spar has to be built to withstand a force of close to 8000 lbs, in order to meet a 4G force with a 150% saftey margin. if you, as you suggested, increased the max gross to 2000 lbs, you make the wing spar have to withstand a 12000lb load. The increased engineering of the structure to withstand the load will far exceed any potential cost savings from weight shavings.

    Limiting structural weight is not just an added expense, it’s good engineering.

  20. Brian Says:

    Sorry Steven I can’t agree with that. If I build it in the same way the engineering cost is the same. Maybe I had an 0.050 web originally now I have 0.063, etc. Slight increase in material cost.

    Of course if I build it the same I haven’t gained anything.

    Where I gain is:
    -Use a less expensive (lower performing) material. Fiberglass instead of carbon fiber. Steel instead of aluminimum instead of titanium. Etc
    -Use less manufacturing operations. Delete some lightening holes. Use a single thicknesses material root to tip even though it’s oversize at the tip. Eliminate a complex machining operation.
    -Reduce engineering manhours and cost by analyzing it with simpler, conservative methods, i.e. hand calcs instead of FEA

    None of these ideas are new or radical, it’s already the industry works. All of them add weight. Weight is money & it’s a major reason why airplanes are so expensive.

  21. Thomas Boyle Says:

    Steven,

    The little digging I’ve done causes me to think Brian’s got the right idea. Aircraft are like bicycles: the more you pay, the less you get.

    For example, you can buy an automotive derivative engine delivering 100hp, ready to install in a homebuilt aircraft, for about $3,500. Compare that to a Rotax 912, which would leave little if any change out of $20,000. What’s the difference? Quality issues aside (gearboxes are harder than they look, in particular), the Rotax weighs something like 50lbs less.

    A lot of the things you could do to modularize aircraft don’t happen because they’re heavier.

    At the end of the day, there’s almost certainly the potential to build aircraft that have much less impressive performance specs – relatively high fuel burn per payload/speed, in particular – but that are much cheaper to build.

    Brian,

    I’m skeptical about the non-cost of regulations, although it may be more to do with the cost of certificating modifications/upgrades than with the cost of original design. My skepticism is based on the very simple observation of the rate of innovation in LSA, ultralights and homebuilts versus the rate of innovation in Part 23 certificated aircraft. I don’t know how exactly regulation is killing innovation – it may not be cost directly – but it’s pretty clearly a culprit. Part of how you get costs down is through lots of little innovations; it may be that Part 23 is killing the little innovations, and over time that has added up to a big shortfall relative to the progress made in other industries.

    I do agree that piggybacking on other industries is key. Aviation needs to start using parts whose quality/reliability derives from millions of hours of experience, rather than from design-for-aviation.

    Bruce (Landsberg):

    It sounds like you’ve found a topic that should be well-attended! I’d suggest posing a challenge – “how can we build aircraft at 1/3 the price” or somesuch – and see if you can select at least some of your panelists from the ones who give you more credible out-of-the-box ideas for doing it.

  22. Nick Says:

    Brian – good thoughts, though I’m failing a bit to see the comparison to the Honda with the ABS. I think that testing for certification and reliability have to add substantially to the cost that Honda doesn’t have to worry about or can spread out through volume. How many of those crotch rockets do they sell per year? I’d imagine at least two orders of magnitude more than your bizjet manufacturer. So even if Honda had to do the same amount of testing, they get to spread it out over much more volume. Guess that dovetails into your argument that there is little more business for a lot more risk, so why would an ABS manufacturer get in on it?

    One of the things that struck me with Ted’s example was that he spent $75k for an engine, avionics, and prop. How much would the same stuff cost if it were for a Lexus? You’re arguing both will have about the same amount of reliability testing. Okay, I’ll buy that. But now Lexus will put them on 20,000 cars in one year (and in the case of engines and avionics, may be spread over an entire product line, not just one vehicle). That’s a big denominator for dividing your fixed cost. Labor and materials will remain fairly constant (sure, learning curves, economy of scale will have an effect) with sales volume, but up-front testing is a fixed cost that you can only reduce with more volume.

    Hence, without more volume, we either have to accept less testing, or accept a high(er) cost.

  23. Brian Says:

    Nick,
    The Honda ABS I like I think it illustrates all kinds of “what’s wrong with aviation” things, more than I’m willing to type but the basic point was to compare something that has equal performance / reliability requirements as aviation but is much much much cheaper. i.e. if TomTom gets alzheimers no big deal if my garmin 430 steers me in a mountain in imc it is. So comparing the cost of the two arguably isn’t fair. Actually that was your reliability point I think. On the other hand I’d much rather be in any light plane with any abs/brake failure you can imagine than on a rice rocket with the same. So, you can’t really use safety/reliability to explain the cost difference.

    Your original point that reliability drives costs I totally agree with above a certain level of the aviation food chain – when you start having to depend on the airplane systems as life critical the cost starts up exponentially. I was actually focusing entirely on the low and slow vfr end of ga, I guess because Bruce threw out 172′s and LSA

    Thomas,
    I don’t want to go too far into how innovative lsa/ultralights/homebuilts other then to say I’m skeptical (if by innovative you’re implying improved, not just different). I would point out vans rv which I think is the most popular homebuilt by far is very throughly conventional. And that’s not bad in my opinion. Convention came about from a lot of smart creative people attacking the same problem.

    So far as the cost of regulations what I was trying to get at with my flight training analogy is you have to split the cost from mandated level of performance vice cost from pure bureaucracy. If you believe the mandated level of performance is too much, then for sure it adds cost. But I don’t believe that in fact I think responsible manufacturers would do 90%+ of the mandated testing anyway even if there were no regulations. And I don’t think the bureaucratic cost adds enough to change where aviation is. I do think the liability problem is doing massive damage to ga though, most especially from the indirect effect of essentially walling off aviation from the rest of the world.

    If we’re talking about sport airplanes I think they could be made cheaper by accepting more weight and less certainty of reliability on everything except structure.

    Serious traveling machines, you might have to just accept that going a couple hundred miles an hour in all or most all weather safely and reliably costs a lot with the knowledge and technology we have today. If you’re willing to give up some of those requirements (like safety) you can save money.

  24. Nick Says:

    I had a longer reply, but guess I was too long-winded for the comments section. Basically, it goes like this…

    When you make something, you have fixed costs, that are the same whether you build 1 or 100,000, and you have variable costs, that go with the number of things you build. As an analogy, consider airplane ownership… you can do things to bring down the fixed costs, like move from a hangar to a tiedown, or bring down the variable costs, like saving fuel by flying lean-of-peak.

    In volume-intensive industries, anything to bring down the per-unit cost is huge. That’s why J&J will spend millions of bucks of engineering time to get a lighter weight or cheaper material shampoo bottle. Car companies use robot welders instead of human labor, because the up-front cost of the machine can be spread over a large volume.

    In boutique industries, where you make only a few items, you save money by not spending all that much time on engineering and just build the thing. After all, you can only spread out that cost on a few items, so maybe you don’t need to over-engineer it and instead just test & fix as problems come up.

    Airplane manufacturing is in the middle, let’s say a volume of ~1 per day or (sometimes much) less. So, you have to balance the effort between reducing fixed costs and manufacturing costs.

    I’ll soften my previous argument and agree with Brian, even without part 23 you’d probably still want a decent amount of testing. Hence, light sport, which pushes testing requirements onto manufacturers via ASTM approved processes, does reduce cost, but didn’t cut it by 75%. You still have to test the thing. I’d just say that you may be able to reduce per-unit testing. Take rule #8 from Kelly Johnson’s 14 rules – don’t duplicate testing. If your vendor says they have tested a component, empower them to do so and don’t test it again when it gets in the factor door. Probably requires a bit of liability reform.

    Liability reform also helps to reduce fixed costs. But again, the General Aviation Revitalization Act didn’t make planes that much cheaper – it just meant that manufacturers could actually afford to build planes again.

    In manufacturing, consider balancing engineering time with manufacturing decisions. I’d argue more analysis, not less, can be helpful (making informed decisions on cheaper materials vs. loss of performance, etc.), but there is a “sweet spot” that is a function of manufacturing volume. Design changes (due to mistakes, etc.) get exponentially more expensive to fix the further down the timeline you go – both in terms of retooling and the amount of time to market (incurring interest, penalties, etc.). How much have Boeing’s delays on the Dreamliner cost them? Cessna for the Skycatcher? That cost has to be absorbed in every airframe they sell. So sometimes more up-front engineering, which costs money and takes time, can save lots of money down the road.

    Then, make it cheaper for the user to operate. If it’s way more efficient, the user may be willing to pay more up front. The users can get in on the game by increasing volume – get more pilots into it. Manufacturers can compete in other markets, consider dual-use designs. I know that some designs are already used by the military, hospitals, etc., but really try to tap that market with purposeful designs.

    So you bring down costs with a balance of all of these. I’d love to start with some real date – how much Cessna, Piper, Lycoming, Van’s, etc. spend on engineering, test, liability, manufacturing (after all, Van’s does manufacture parts). Then we, as a community, can get together and everyone do their part. The FAA can make ATSM acceptable for all certified aircraft, not just light sport. AOPA and Congress push for better liability reform. Manufacturers take advantage of the latest systems engineering techniques (paid for in part by NASA) and do more up-front work before cutting metal and crashing test airframes. Homebuilders come up with innovative technologies and concepts. And pilots get more people involved.

    No one said it would be easy!

  25. Alex Jonischkies Says:

    Bruce Landsberg Says:
    “Would this be a good topic for AOPA Summit in Long Beach this fall? Suppose we got a combination of economists, manufacturers and engineers together?”

    This would be a very good idea in my opinion. This is one of the biggest factors, if not the outright biggest by a large margin, preventing more people from taking up aviation.

    As a college student, pilot and aircraft owner I really feel the pain of expensive parts and, particularly, avionics capability. GPS approaches are fast replacing ILS just about everywhere but the largest airports with no thought to the fact that some of us simply cannot afford to drop $2k on even the cheapest, simplest form of IFR approach GPS. I can say for sure that I can build a high performance computer, liquid cooled, overclocked to 150-200% that can run any software reasonably purchasable anywhere and still have the $250 left over for a GPS receiver for my car, so there is no doubt that prices there are still unsustainable.

    More relevant, however, is the fact that I have a good friend and roommate who is very interested in aviation but simply cannot afford (nor can his family) to get started. Seeing as his career choice is the music industry, it is likely he will never afford to – and that on an above average salary. I believe that as long as aviation is only available to the upper middle class or higher, we will never see pilot numbers grow.

    Obviously, there are issues with lowering costs or it would have happened already. Safety cannot be sacrificed (nobody would rightly want that), and that costs – both in quality of materials and assembly labor. The low unit count amplifies the effect of R&D costs to high levels compared with cars, and that unit count will not be the first thing to change (prices must change first). That leaves the primary variable to be adjusted as R&D costs themselves.

    One avenue of this is to lower the cost of FAA certification – you can see this in GPS receivers handily. The handhelds that are not certified are 1/10 the price of a certified unit which does the same thing. That is an unacceptable cost of doing business with the government that likely would not be tolerated in any other industry. Either removing unnecessary requires or lowering the time associated with some (which would have very little if any effect on the assurance of reliability) could help here.

    Engine cost is another big issue as has been mentioned, and strikes repeatedly at existing owners with overhauls and other maintenance. It is true that these engines are tested and inspected far beyond an automotive engine before delivery and that adds cost. But anyone who tells me that it should multiply the cost by 10 for effectively the same product is simply lying or doesn’t know. Assuming the same materials used in construction (same price), less complexity (lower price) and extra testing and inspection (more added price), realistically we should be looking at something more like 2x the price, not 10x.

    Hopefully there will be answers in the future. As an aerospace student I hope to do my part in helping with this most fundamental of problems in GA in the future, but it will likely need to be initiated by the FAA and not the industry – they have no room to wriggle free of their current structure with what the FAA gives them for the time being.

  26. stan pace Says:

    The price of the LSA will decrease when the industry steps away from the current paradigm of focusing on just training people to become pilots to fly unaffordable aircraft and rather markets “safe, fun, affordable and exciting” flying. The majority of the population has no connnection or understanding of what is going on the general aviation industry. The GA industry markets within itself to the diehard flying enthusiast that are going to be involved anyway. The potential market is not at the hangar and airports. And when and only when the masses are touched in a continually dripping manner about the great experience of flying will the price come down.
    People will gravitate to the “experience and enjoyment”. I’m a 51 yr old businessman and as I read about aviation and slowling gravitate into sport pilot arena, I realize hardly anyone I know is exposed to general aviation/sport pilot type flying.

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