What should a plane really cost?

[TheTraveler]

Textron is a public company. You can look at their financials to see what margins they get on aircraft production. Cirrus makes hundreds of planes per year. If margins were all that great they likely could have avoided needing Chinese cash to avoid bankruptcy trying to bring the SF50 to market. Also, the leader in SLSA was Flight Design in Germany. Despite selling the most new SLSA (non certified and non TSOd avionics) at an average price of over $150k they went bankrupt too.

The boneyard of bankruptcies is full of aircraft manufacturers.

Even with 200% margins, a company can go out quickly, especially when they are public. Too easy to get loose with what you are spending your "HUGE MARGINS!" on. While there may be a lot of oversight, there are a lot more hands in the pot. You just need to paper-fudge your way to justification.

 

[cowman]

That's an overly simplistic comparison. Bread cost 19 cents in 1957, today it costs what? $2.00? Did dough become different? Has water changed? No? So why the markup?
It ain't litigation on bread. Even with a 3% inflation, bread should cost half of that today, or less.

Consider the equipment in a 1957 plane compared with a 2017 plane. It definitely ain't 400K, but it also ain't 77K either. I'd put it somewhere in between.

@midwestpa24 do you really believe they are ONLY making 10% margin on aircraft? It's a heckuva lot more than that I'd bet. I know your example was just to make a point, but 10% is probably way low.

That's why I'd like to see it investigated by someone who is able to look these things up. Anyone employed by aviation magazines around? Someone with the right contacts to investigate it? I think this could be valuable... if we can identify where the cost skyrocketed maybe we can identify ways to build more affordable aircraft.

 

[ktup-flyer]

That's an overly simplistic comparison. Bread cost 19 cents in 1957, today it costs what? $2.00? Did dough become different? Has water changed? No? So why the markup?
It ain't litigation on bread. Even with a 3% inflation, bread should cost half of that today, or less.

Consider the equipment in a 1957 plane compared with a 2017 plane. It definitely ain't 400K, but it also ain't 77K either. I'd put it somewhere in between.

@midwestpa24 do you really believe they are ONLY making 10% margin on aircraft? It's a heckuva lot more than that I'd bet. I know your example was just to make a point, but 10% is probably way low.

19 cents in 57 is worth $1.57 now. That pretty close to what a loaf of bread costs.

 

[Caramon13]

19 cents in 57 is worth $1.57 now. That pretty close to what a loaf of bread costs.

I used a flatline 3%, but yeah I get that not every year was 3%. Example is flawed but you get my point I hope.

 

[JOhnH]

This is something that's bothered me a lot. We always assume the reason for this cost jump is litigation/regulation but is there really THAT much more today than there was then? Maybe there was but we're just assuming and making guesses here, that's a MASSIVE jump.

I would love to talk to someone in the industry who actually knows... or if they don't know research it. Heck the company might learn something valuable in the process. Unfortunately I don't know anyone like that... POA is the closest I'd have to a contact in that regard.

You also have to take into consideration that $100 in 1970 equates to $640 in today's dollars.
http://www.saving.org/inflation/inflation.php?amount=100&year=1970

 

[midwestpa24]

do you really believe they are ONLY making 10% margin on aircraft? It's a heckuva lot more than that I'd bet. I know your example was just to make a point, but 10% is probably way low.

Actually I wouldn't be surprised if it was less. Just because a product is expensive, doesn't mean the business is flush with cash. If GA manufacturing was highly profitable, you'd see a lot more of it.

 

[labbadabba]

I think judging by a complete rv 10 being less than 150k kitted out with glass and nice paint and interior you could probably come out under 200k well equiped if airplanes just cost what it takes to make it.

I've kind of wondered if you could crowd fund the development of a "skyhawk 3" 180-200 hp 140kts tough, decent useful load, and nothing exotic.

Sounds like the new Tecnam...

 

[SoonerAviator]

I have a slightly different take. If Cessna, Piper, and Cirrus were making a killing on producing single engine piston aircraft, someone else would jump in. Instead, Cessna is part of a global aviation franchise, Piper is owned by Brunei Ministry of Finance, and Cirrus was sold to the Chinese.

Hate to tell you this, but maybe new airplanes really cost $400K plus.

The barriers to entry are pretty high in the certificated market. Hence why most new companies go the homebuilder/experimental route. I bet that explains most of why so few enter the market against C/C/P/M. I wouldn't want to mess with it, either. If a manufacturer were able to make aircraft the same way homebuilt-companies do, only with the ability to finish the aircraft instead of just smaller sub-assemblies, they would. Unfortunately, the FAA rules don't allow that, and you end up with $400K C172 aircraft.

 

[drotto]

Actually I wouldn't be surprised if it was less. Just because a product is expensive, doesn't mean the business is flush with cash. If GA manufacturing was highly profitable, you'd see a lot more of it.

I would love to see a line item report on what is costs to build a plane. It does not need to be exhaustive, but materials, equipment, labor, development, regulation/ certification cost, and legal costs, would be a great starting point and give a good picture.

Sent from my SM-G920V using Tapatalk