Light Sport Aircraft (LSA) - priced too high 4

[plasgears]

LSA is an outgrowth of the ultralight movement, and the general expectation was that the production LSA would be priced 3X the price of production ultralights. They are coming in about 5X to 6X! The European mfrs are trying to cash in on what they think is a hot American market.

I suggest that the LSA purchaser cool his/her enthusiasm until the prices come in where they ought to be. Any comment?

 

[MiketheEngineer]

Not real familiar w/ the subject but I am an aviation "nut"

I completly agree - I was shocked at the prices. From what I see you could buy a nicely outfitted used 152 or maybe even a 172..

 

[reidh]

The LSA's are overpriced in my opinion. I also don't believe that the manufacturer's of these planes are making tons of money on them, so I would expect the segment to either dry up or undergo significant changes in the coming years.

A bit off topic, but I would never compare an ultralight to a LSA, or any legitimate aircraft. The engineering of most ultralights is horrific, to the point that I fear for my family when one flies over the house!

Reidh

 

[kenvlach]

Light planes are more expensive in the US due to operating in a polluted environment containing excessive concentrations of personal injury lawyers. At one point, this had virtually shut down the light aircraft industry, so in 1994 Congress passed the General Aviation Revitalization Act (GARA), which created "an 18-year statute of repose indemnifying manufacturers against legal action for defects in the design or manufacturing of all types of general aviation aircraft and their components."

http://web.nbaa.org/public/news/pr/1994/19940804-035.php

http://www.gama.aero/resources/productLiability/index.php

Lawyers are still nibbling away at GARA

http://www.wilsonelser.com/files/repository/GARA_April2006.pdf

and of course, any crashed aircraft < 18 years old draws lawyers as surely as a carcass draws vultures.

 

[plasgears]

I did some should-cost analyses and came up with:

typ.homebuilt LSA est

kit cost, matls $15K $5K basic matls
engine cost, 100hp 20K 18K discounted
labor, 2000hr@10 20K 5K using prod tools
tooling 2K 1K amort. 500u
special tools 10K 1K as above
..........................
total homebuilt $67K
prod overhead, 2xL 10K
profit, 15% 6K
........................................
total LSA $46K

This comes in lower than building it yourself, which makes sense in a production environment. LSA's are overpriced!

 

[plasgears]

I believe that Cessna is in good position to produce an economical LSA aircraft. An article in Sport Aviation indicates that they can use existing tooling for the LSA.

 

[kenvlach]

plasgears,
Try figuring the cost of liability insurance that covers products out to 18 years from leaving the factory. Wasn't Cessna almost bankrupted before the 1994 law gave some legal relief?

 

[plasgears]

ken,
That's correct; Cessna and the others got into trouble with claims.

Id rather see the big old mfrs involved in LSA than some greedy European companies. Cessna, Piper, and Beech showed how to mass-produce light aircraft.

 

[sigma38]

Better quadruple that profit number- there's not nearly enough volume to justify a mere 15%. This brings the numbers up fairly close to where they are now- and that's what the market will bear. Currently every reputable LSA has a long delivery.

 

[GregLocock]

Markup on most goods is 100% from factory gate to consumer, why would a/c be different?



Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[dgapilot]

And 2000 hours at $10 per hour? What planet do you live on. The shop I work at charges $79.00 per hour. When I ran a machine shop back in the mid 1990's we were charging $125.00. A more reasonable 2000 hours @ $50.00 comes out to 100 k just in labor. With some production efficiency you may be able to bring the labor down to 1000 hours, so now you are looking at about 75K without any profit. American Champion just announced their entry at $89k so that sounds just about right.

 

[berkshire]

In the mid 1970's I was a production manager for a company producing fiberglass sailplanes and later a consultant for another company doing the same thing.
The best we could do on production at that time was 800 hours per aircraft.
The selling price at that time was $10,600 of which $3,000 was the premium per aircraft for liability insurance.
If you translate those numbers into today's dollars you are looking at $100,000 with about $28,000 for an insurance premium. This does not leave the manufacturer getting very fat. Hopefully the insurance premium has gone down, but I doubt it.
B.E.

 

[dgapilot]

Berkshire,
From your discription, sounds like you worked on the C-70, and if that is the case, we worked together at ARC for a short time. If that's the case, email me at n14ky@comcast.net. I'de like to catch up.

DS

 

[berkshire]

dgapilot (Aeronautics)
Yes that was me.
B.E.

 

[Stache]

I happen to be up on the Light Sport Aircraft (LSA) certification and have certified several to date. The cost of the part 103 (Fat Ultra lights) are within the 3X (Experimental-LSA).

However the Special-LSA are a different story many are between 60K and 120K at the present time. Currently there are 20,000 LSA’s certificated in the U.S. and many flight schools are purchasing the Special-LSA for flight training to cut costs. I think in the next 3-years we are going to see a bib shake out in the LSA area.

So far from what I have seen most of the LSA are built better than the type certificated aircraft as far as quality control goes. However the powerplants are a different story, again time will tell if the LSA’s are worth the money/investment.

On my private web site I have all the certification data for LSA's you can find it at:

http://www.stacheair.com

Look under Light Sport.

 

[plasgears]

dga,

Let me explain my ballpark calcs. If I am a homebuilder, I will account for my time [casual hobby time] as $10/hr. Note that I accounted for overhead, markup, tooling, etc. I was trying to make sense out of overpriced LSA's.

Those who are overpricing their S-LSA's are doing the industry harm by marginalizing the production LSA. Mittel Europa pricing of cars and other commodities will limit LSA production to a narrow superluxury.

Many years ago when I was in the armored limo business, we built full armored Cadillacs and Lincolns for approx $160K. The European armored 600SEL was about twice the price. I got a call from a customer who wanted to armor his 600SEL. I told him to buy a Cadillac or Lincoln and get it armored. He was one confused and disappointed fellow!

 

[dgapilot]

plasgears,
Comparing homebuilding and LSA isn't a fair comparison. An Experimental Light Sport may be comparable, but a Special Light Sport is a completed factory airplane, so all the labor to assemble and finish the airplane is done on a commercial basis and needs to cover the true cost oflabor, benifits, overhead, engineering costs, and a reasonable profit for the investors.

An Experimental Light Sport is a partially finished aircraft that the buyer completes. This may be more comperable to a homebuilt, but keep in mind that the 51% rule of the homebuilt doesn't apply to the Exp. Light Sport, so more like 80-90% of the total labor for the airplane may be completed in the factory.

The Operating Limitations of a Special Light Sport allow more options than those of an Experimental Light Sport, so the additional cost may lead to better utilization and higher resale value.

Hope this helps