Another perspective on the red safety handle in Cirrus

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Getonit

Pre-takeoff checklist
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I have been reading a lot about the safety benefit of the Red Handle but I am always interested in costs of things. So I did a quick and dirty analysis, Cirrus has sold about 6000 airplanes over the past 16 years. There is an installed cost of this system which I guessed at about $25,000, if somebody has an actual number I will recalculate. I also calculated the annual cost of the repack with an annual sales rate of 375/year (6000/16 simplified yes, but I can't find actual yearly numbers) and added a cost of $800/year for repacking costs, airplanes 16 years old would have $12,800 of costs incurred with repacking since new. Airplanes only 1 year old would only have $800 worth of cost. The installed cost of all of these parachutes is about $150 million and a total annualized cost of about $36 million for the repack since production began. Again these are simplified numbers and airplanes are scrapped, etc. but not enough that it will make much difference. The total cost is about $186 million. The internet of things tells me that 104 lives have been saved. If you divide the $186 million by 104 you get a per lives saved cost of $1,788,461. I was going to put some perspective on the value of life valuations, but that got real messy so I will just let the POA experts figure it out.
 
That 1.7M is amortized over 6k owners, so its really not 1.7M. Its actually what the individual has in it and for a 10y/o plane, thats a cost of one repack if they just bought it. 1st year after repack, its back to $800 or 13.6k.

If a guy buys new, sells on year 9.9, he has 12.8k in his pocket and the new guy bought the chute repack assuming they didn't negotiate the sales value dollar for dollar on the repack cost. Either way, one has 25k into it or 13k into it.

Numbers can lie better than Obama can if you put em in the right perspective. ACA is a great numbers mirror to view all that smoke in.
 
I think I remember reading that the commercial airline industry figures the cost of safety upgrades at 3 million per death. So if this parachute is 1.8 million per life, a) the commercial airline industry wouldn't bother and b) GA gets 1/2 off the cost to save their life, depending on how you wanna look at it.
 
Getonit said:
I have been reading a lot about the safety benefit of the Red Handle but I am always interested in costs of things. So I did a quick and dirty analysis, Cirrus has sold about 6000 airplanes over the past 16 years. There is an installed cost of this system which I guessed at about $25,000, if somebody has an actual number I will recalculate. I also calculated the annual cost of the repack with an annual sales rate of 375/year (6000/16 simplified yes, but I can't find actual yearly numbers) and added a cost of $800/year for repacking costs, airplanes 16 years old would have $12,800 of costs incurred with repacking since new. Airplanes only 1 year old would only have $800 worth of cost. The installed cost of all of these parachutes is about $150 million and a total annualized cost of about $36 million for the repack since production began. Again these are simplified numbers and airplanes are scrapped, etc. but not enough that it will make much difference. The total cost is about $186 million. The internet of things tells me that 104 lives have been saved. If you divide the $186 million by 104 you get a per lives saved cost of $1,788,461. I was going to put some perspective on the value of life valuations, but that got real messy so I will just let the POA experts figure it out.
Click to expand...

There is also the 6 year replacement of the line cutters on the CAPS that will add some $.

What this shows, once again, is that when all is said and done, safety is still an economic issue. The value of a life will always be seen by the tort lawyers as higher than all the money invested by the manufacturers. I am certain even Cirrus has been sued over fatal accidents.
 
Interesting idea, to figure out the valuation of a life saved. Kudos for thinking of doing this, and for making what looks like a reasonable calculation.

Overall, I'd guess the total cost per life truly saved is nearly double your result of $1,788,461. Because of a couple of the inputs to the calculation:

In the denominator, the number of lives saved is too high. You used a number found online that counts "saves" as all CAPS survivors, both those who would have died without a chute and those who would have survived anyway. There's no way to know how many are the former vs the latter, so it's impossible to correct the number, which is probably why the originator of that number doesn't do so. Anyway, the number of lives that would have been lost without CAPS is surely at least somewhat less than 104.

In the numerator, we don't know Cirrus's cost for the new chute but the cost for repacking is pretty well known, and I'd wager that repacking the fleet up to this point probably cost more more like $1100 per year instead of your $800 per year, and the line cutters should add a bit too, as was mentioned.
 
I think of it as an optional aviation insurance policy. Yes the chute costs more money no matter how you look at it. However, it gives you additional "insurance" options that not all pilots have for the extra cost.
The costs are amortized across all the owners, but only a few get to benefit from it directly. Similar to car insurance. I've been paying hundreds of dollars per month for more than 25 years and I've never once made a claim. So, I'm "wasting money" in reality but I'd never consider getting rid of the insurance.
 
Slightly off topic, but on the Piper sport /czech sport cruiser the chute repack is less than $2000. Just shows that you can have this feature without spending nearly as much. Good option if you don't need cirrus speed and ownership costs.
 
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