FloridaPilot
Pattern Altitude
My issue is new airplanes wouldn't be that expensive unless people are buying them, how would they ever stay in business if no one is buying them?
Aircraft Prices Versus Annual Income in the 1930s
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Hank S
En-Route
How many of these underpowered wonders are sold compared to, say, Skyhawks?
The original comparison was to current, available, factory new planes, not to "modernized" old planes with old designs. Or else the whole house comparison must be redone, with the 1930s reference being to homes without running water or electricity, and to modern homes built in the 50s with 2-3 BR, 1 BA AND ON-street parking on a quarter-acre lot in a subdivision full of carbon copies. Oh, no AC, either. Bet those are plenty cheap now, maybe even less than they sold for new.
A Skyhawk equivalent plane in 1930 would have been considerably more expensive than the 38hp cub. Even then that was a bare bones plane of minimum capability. The Skyhawk equivalent would be over $5k back then.
Hank S
En-Route
Basic trainers were $5000 during the Depression???
Methinks you're looking at an hp comparison. Don't judge new planes to be as (in)capable as 1930s models--look instead at other contemporary planes and judge capability against them. Or else you need to adjust median income to be overwhelmingly blue collar, and modern houses to be small, without many modern conveniences now included in even "starter" homes.
Methinks you're looking at an hp comparison. Don't judge new planes to be as (in)capable as 1930s models--look instead at other contemporary planes and judge capability against them. Or else you need to adjust median income to be overwhelmingly blue collar, and modern houses to be small, without many modern conveniences now included in even "starter" homes.
A 172 has never been a basic trainer, it's always been an 'upgrade' plane.
petrolero
Pattern Altitude
Business makes more money? The prices quoted above do not prove that.
What does "makes more money" even mean in this sense? More absolute revenue? Absolute profit? Definitely.
But what is their profit margin? That has not gone up at all and in many cases has gone down.
Margin is not as important as quantity as long as it is positive. The main thing to look at is not the price of the cars, because they are not the product of the business, money is. Most of the money value is in the stock value, and stock value is driven by market share to a greater effect than margin. Remember, our entire economy is driven by speculation on who will win a market.
petrolero
Pattern Altitude
CPI is a garbage indicator of inflation.
http://www.investopedia.com/articles/07/consumerpriceindex.asp
The simple fact is that when they print more dollars, nominal prices and nominal wages go up as do things excluded from the CPI like stocks, energy and housing... and airplanes. The more dollars printed the more the inflation.
http://www.investopedia.com/articles/07/consumerpriceindex.asp
The simple fact is that when they print more dollars, nominal prices and nominal wages go up as do things excluded from the CPI like stocks, energy and housing... and airplanes. The more dollars printed the more the inflation.
petrolero
Pattern Altitude
It is true enough that the nominal stock prices have risen. See my comment above about inflation. Those printed dollars have to go somewhere and CPI is an incomplete measure of where they've gone.
But if you were trying to prove that businesses were "making more money" and using car prices as proof I just don't think that holds. They charge much more but cars also cost much more to make - and as a percentage of that price it has held pretty constant or gone down.
My point was that all the businesses had done similar, and that the GA industry was not any particular anomaly in industry.
denverpilot
Tied Down
I had to get a ride to the mall and put quarters in them. The waste of money quickly led to me doing something else that didn't require quarters.
jspilot
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jspilot
I've always been fascinated by relative wealth. I would imagine that the buying power of the average American was at it's highest in the early 70's.
My parents house cost them 4 times on years salary. Now, that same house would cost me about 6 times my average salary and is 40 years older. I grew up in the middle class and am firmly in that same class now. I argue about this all the time because the young adults growing up now literally have no chance to get ahead in the world of today!
My parents house cost them 4 times on years salary. Now, that same house would cost me about 6 times my average salary and is 40 years older. I grew up in the middle class and am firmly in that same class now. I argue about this all the time because the young adults growing up now literally have no chance to get ahead in the world of today!
IIRC the buying power of an average American was strongest in the 1950s when the top marginal tax rates were over 90%.
drotto
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Earlier a poster had brought up that we have many more expenses now than 50 years ago. So I did a little mental math. If I cut out the items which either did not exist, or were not commonly done (like having two cars, house cleaners, lawn services, etc) I would be spending $750 to $1000 less per month. Dame I could run out and buy that 10k 50's new Bonanza!!! Wait I do not have a time machine.
jspilot
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jspilot
Thanks for the info! I would imagine though, that the children of those people had the best buying power relative to prior generations because their parents had disposable income to get them started off on the right track-- and still buy the airplane!
That generation of children were the Boomers, there is another thread extolling their virtues being born with that pollution fueled silver spoon has wrought.
FormerHangie
En-Route
50 years ago was 1965. Most suburban families had two cars at that time. And that amount of money you were saving would still not be enough to buy a Bonanza and fly it. They were called Fork Tailed Doctor Killers for a reason, it took a doctor's income to own one. If everyone could have had one, they'd be known as Fork Tailed Blue Collar Worker Killers.
ClimbnSink
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Greg
Dang I thought everyone had a Bo, but only doctors crashed them.
The Cirrus crashed the Bonanza-Doctor market.
Everskyward
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Everskyward
Growing up, I didn't know a single person who owned an airplane and I grew up in a middle-class community in the 1960s-70s.
tlrussell
Pre-takeoff checklist
The "tax rate" had nothing to do with it. So few people paid the govt fantasy rate it was a statistical anomaly. The reason that era had was so advantageous was everyone had a job and very little incentive to go on the dole. I could have picked source form thousand of choices here was the first that supports my claim. http://www.wsj.com/articles/SB10001424127887324705104578151601554982808
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drotto
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In this very unscientific thread, it has become apparent that the price of an airplane as compared to household income, and inflation, likely has not changed that much over the years. An airplane purchase has always been expensive, and limiting to who can buy one. Despite that, the number of planes sold is down, even more so if you take into account the increase in US population. So what is happening here? My ideas.
1. People just plain spend more money than they used too. We have more services we want, we have more material things in our lives. 50 to 60 years ago, we did not have cell phone, ipads, computers, cable, gym memberships, lawn services, multiple cars, etc. Our houses have gotten bigger, and cost more in upkeep. We go out to eat more, and take more expensive vacations. As a society we have more expenses and spend more freely.
2. Certain staple goods do make up a greater portion of income. Yes we have always bought gas, and heated our homes, and put food on the table. Over the years though many of these items have gotten more expensive relative to household income.
3. There are a lot more activities, hobbies, and interests that people spend money on. I know this seems tied in with number 1 and it is, but there is just more out there to do, and it costs us.
4. This one is not meant to be overly political, and I know these things vary over time and between states. In many areas of the country, taxes and fees are much higher now than they used to be, these eat up more of our income.
What this all means is there are more distractions, and a wider base of activities that people now spend money on. So even if the actual cost of an aircraft is similar based on inflation, etc., there are many more thing that take our cash. We live in a society were savings and retirement founds have reached almost a critical mass of being under funded. People do not seem to plan or save as well as we once did. All this means the average family has less money at their disposal. Less money at their disposal means the big ticket items (especially ones that are not "cool") are going o see the biggest hit in popularity and sales. Add to that expensive training and commitment in an easily distracted society, and you get these results.
1. People just plain spend more money than they used too. We have more services we want, we have more material things in our lives. 50 to 60 years ago, we did not have cell phone, ipads, computers, cable, gym memberships, lawn services, multiple cars, etc. Our houses have gotten bigger, and cost more in upkeep. We go out to eat more, and take more expensive vacations. As a society we have more expenses and spend more freely.
2. Certain staple goods do make up a greater portion of income. Yes we have always bought gas, and heated our homes, and put food on the table. Over the years though many of these items have gotten more expensive relative to household income.
3. There are a lot more activities, hobbies, and interests that people spend money on. I know this seems tied in with number 1 and it is, but there is just more out there to do, and it costs us.
4. This one is not meant to be overly political, and I know these things vary over time and between states. In many areas of the country, taxes and fees are much higher now than they used to be, these eat up more of our income.
What this all means is there are more distractions, and a wider base of activities that people now spend money on. So even if the actual cost of an aircraft is similar based on inflation, etc., there are many more thing that take our cash. We live in a society were savings and retirement founds have reached almost a critical mass of being under funded. People do not seem to plan or save as well as we once did. All this means the average family has less money at their disposal. Less money at their disposal means the big ticket items (especially ones that are not "cool") are going o see the biggest hit in popularity and sales. Add to that expensive training and commitment in an easily distracted society, and you get these results.
You have a point. Only person I knew that owned an airplane was my uncle. He was a surgeon.
denverpilot
Tied Down
You'd have to remove debt and debt service from your budget to make it work. Also various forms of insurance that didn't exist.
FormerHangie
En-Route
One thing that is not the same as it was 40 years ago is the affordability of a new airplane. Back in the 60's and 70's there were quite a few doctors who did buy new Bonanzas. At the near million dollars they are now, I'm thinking most doctors are priced out of the market. Doctors in the US are well paid, but they're not that well paid.
Jimmy cooper
En-Route
50 years ago was 1965. Most suburban families had two cars at that time. And that amount of money you were saving would still not be enough to buy a Bonanza and fly it. They were called Fork Tailed Doctor Killers for a reason, it took a doctor's income to own one. If everyone could have had one, they'd be known as Fork Tailed Blue Collar Worker Killers.
I thought the question was the 1930s. There were no bonanzas in the 30s and the airplanes available to the average person were usually 65 hp trainers that cost around two grand brand new. Very few airplanes were flown back then compared to today and the larger aircraft, like a vega, etc. Were owned by those in the high income bracket. When the bonanza first appeared , in the late fourtys early fiftys, it cost around ten grand. At that time the economy was booming. Lots of good paying middle income jobs. No longer true. The bonanza is now half a mill.( don't kid yourself , doctors today make big dough, especially if they specialize. A new bonanza is well within their reach.) women were not as prevelant in the job market in the sixtys! many more stayed home then and banks were very VERY reluctant to offer a car loan to a married couple as she might get pregnant. Most couples I knew had one car, wife raised the kids, stayed home. Not possible today. Wages did not keep up. Too many good jobs gone overseas or automated.
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txflyer
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Fly it like you STOL it ♦
We've had one brand new bonanza show up at our field. It was bought by a guy who owns a polo pony ranch nearby. I hear tell he sold his Houston business for mega-millions but that's heresay.
The only other brand new certified plane I've seen at our field is a C-206 bought by a very famous criminal defense attorney who works out of Houston and has a ranch here and one down in the valley where he hunts dove.
I knew 2, my great uncle who was a working pilot with his own 135 seaplane service and his P-51 he brought home from the war, and my friends' dad who was a Pipefitter and had a 172.
FormerHangie
En-Route
So, since when do we stay on topic around here?
Anyway, price of a new Bonanza is tickling $1,000,000, not $500,000. Half a million will get you a nice Arrow, though. Using my totally unscientific SWAG ballpark analysis, new airplanes cost roughly double what they did during the production boom of the mid 60s - late 70's. Personally, I blame the rise in airplane prices on the death of disco music, which for me at least is a worthwhile tradeoff.
To be a little more serious here, from what statistics I've read, physicians in this country make between $200K for internists and pediatricians, to as much as $500K for some specialty surgeons. I'm thinking that the pediatricians are shut out of the new Bonanza market, while the brain surgeons could probably swing it, but probably wouldn't. I sure wouldn't spend twice my gross income on what is essentially a recreational item, I'm guessing most doctors would feel the same.
You're totally right on the 30's, traveling machines were pretty much only available to the very wealthy. Not many people flew, either. http://www.aopa.org/About-AOPA/General-Aviation-Statistics/FAA-Certificated-Pilots
New private airplanes cost roughly the same as the houses of their owners, and that has remained relatively constant.
SkyDog58
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Canis Non Grata
Some of my friends and coworkers ask me how I can afford to fly and that question really makes me laugh. I live modestly in a 2 bedroom condo with my wife and we each have one car and have one TV in the living room.
Most of them:
Live in McMansions
Have more cars than family member and have boats, motorcycles and other such toys
Are paying for private school for their kids and saving for their kids’ college
Have their kids involved in every imaginable after school activity
Have a TV and computer in several rooms including each kid’s bedroom
Have provided each of their kids with cell phones
Either smoke or drink or both…. a lot
Not only do they live so much higher on the hog than I do but their kids have it far better than I ever did.
Yet they want to know how I can afford to fly. Seriously?
Most of them:
Live in McMansions
Have more cars than family member and have boats, motorcycles and other such toys
Are paying for private school for their kids and saving for their kids’ college
Have their kids involved in every imaginable after school activity
Have a TV and computer in several rooms including each kid’s bedroom
Have provided each of their kids with cell phones
Either smoke or drink or both…. a lot
Not only do they live so much higher on the hog than I do but their kids have it far better than I ever did.
Yet they want to know how I can afford to fly. Seriously?
Jimmy cooper
En-Route
Im totally right about everything I wrote. A doctor would be foolish to spend a million on bonanza when there are many available with less than 300 hours for less than half a mill. Doctors who specialize make well over half a mill a year and there are lots of those. Many rip off Medicare for big bucks. Some are caught each year. Anyone who spent over 500 thou for a modern bonanza would be crazy. Most doctors are not.So, since when do we stay on topic around here?
Anyway, price of a new Bonanza is tickling $1,000,000, not $500,000. Half a million will get you a nice Arrow, though. Using my totally unscientific SWAG ballpark analysis, new airplanes cost roughly double what they did during the production boom of the mid 60s - late 70's. Personally, I blame the rise in airplane prices on the death of disco music, which for me at least is a worthwhile tradeoff.
To be a little more serious here, from what statistics I've read, physicians in this country make between $200K for internists and pediatricians, to as much as $500K for some specialty surgeons. I'm thinking that the pediatricians are shut out of the new Bonanza market, while the brain surgeons could probably swing it, but probably wouldn't. I sure wouldn't spend twice my gross income on what is essentially a recreational item, I'm guessing most doctors would feel the same.
You're totally right on the 30's, traveling machines were pretty much only available to the very wealthy. Not many people flew, either. http://www.aopa.org/About-AOPA/General-Aviation-Statistics/FAA-Certificated-Pilots