I so agree. I live very close to an uncontrolled general aviation airfield where anyone can see at least 20 wonderful old airplanes that are likely now beyond repair. I am old enough to remember when flying a light plane for pleasure was well within the means of the average working person. What caused it to become so terribly expensive is a mystery to me. There's more technology in a $50,000 Lexus than a $350,000 Cessna.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Brooke on May 17, 2020, 10:16:17 PM
Liability. Every accident was an expensive lawsuit for the manufacturer. They were sued out of the market.
That may have been true once, but it hasn't been for a quarter century. As it did with firearm manufacturers, Congress enacted protection for aircraft companies: https://en.wikipedia.org/wiki/General_Aviation_Revitalization_Act. Now it's much harder to put a finger on any one cause; see, for example, https://www.aopa.org/news-and-media/all-news/2013/january/01/waypoints-why-do-airplanes-cost-so-much ("A new Cessna 172 Skyhawk cost about $15,000 in 1972. Today a Skyhawk costs about $310,000, but includes a larger engine and better avionics and safety systems. All things being equal and adjusted for inflation, a Skyhawk ought to cost about $83,000 today; or closer to $100,000 if you want to account for the engine upgrade and better avionics").
- oldman
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Puma44 on May 18, 2020, 09:54:50 AM
That may have been true once, but it hasn't been for a quarter century. As it did with firearm manufacturers, Congress enacted protection for aircraft companies: https://en.wikipedia.org/wiki/General_Aviation_Revitalization_Act. Now it's much harder to put a finger on any one cause; see, for example, https://www.aopa.org/news-and-media/all-news/2013/january/01/waypoints-why-do-airplanes-cost-so-much ("A new Cessna 172 Skyhawk cost about $15,000 in 1972. Today a Skyhawk costs about $310,000, but includes a larger engine and better avionics and safety systems. All things being equal and adjusted for inflation, a Skyhawk ought to cost about $83,000 today; or closer to $100,000 if you want to account for the engine upgrade and better avionics").
- oldman
And some wonder why there’s a pilot shortage.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Busher on May 18, 2020, 10:33:47 AM
Congress enacted protection for aircraft companies: https://en.wikipedia.org/wiki/General_Aviation_Revitalization_Act.
It is nearly useless.
"The final law exempted manufacturers of general aviation aircraft (aircraft with less than 20 passenger seats, not operated in scheduled commercial service), and their component parts, from liability for any of their products that were 18 years old or older at the time of the accident. [4]
The "clock" resets when modified or replacement parts are installed, so that a 20-year-old aircraft may still be the object of a successful suit against a manufacturer if it contains manufacturer modifications or parts installed within the last 18 years.[6][18]"
Quote
Now it's much harder to put a finger on any one cause; see, for example, https://www.aopa.org/news-and-media/all-news/2013/january/01/waypoints-why-do-airplanes-cost-so-much ("A new Cessna 172 Skyhawk cost about $15,000 in 1972. Today a Skyhawk costs about $310,000, but includes a larger engine and better avionics and safety systems. All things being equal and adjusted for inflation, a Skyhawk ought to cost about $83,000 today; or closer to $100,000 if you want to account for the engine upgrade and better avionics").
$15k in 1972 is $92k today in 2020.
The additional $218,000 (to get price up to $310,000) isn't made up by some electronics or larger engine. Electronics get way cheaper over time on inflation-adjusted basis. Garmin G1000 is $50k today compared to whatever the avionics cost was from 1975, inflation adjusted to today. 1975's 172M had a 150 HP Lycoming O-320 engine (a new O-320 is about $55k in 2020 dollars). The current 172S has a 180 HP Lycoming IO-360-L2A (a new one today is $57k).
The additional $218,000 isn't from electronics or engine. It is because the market economics suck, and they need to charge enough to make it worth selling.
One reason the market economics suck is that manufacturers still are subject to large liability cost from lawsuits.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Shuffler on May 18, 2020, 12:32:29 PM
Rubber bands are more expensive.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: BoilerDown on May 18, 2020, 01:10:01 PM
If there's a public manufacturer of only small aircraft you'd be able to see for certain on their quarterly reports, if insurance liability is one of their dominate expenses.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Wolfala on May 18, 2020, 01:50:55 PM
If there's a public manufacturer of only small aircraft you'd be able to see for certain on their quarterly reports, if insurance liability is one of their dominate expenses.
I own an SR-20 and an SR-22. You can infer whatever demographic you want from that but I can assure you the cost of product liability is built into that price. It’s a number that varies based on attrition: getting revised up and down every year.
The solution for a lot of folks is experimental and if you have your insurance limits set high enough then that is an option but a plaintiffs attorney is going to go after you regardless if you have any assets. That’s a reason for putting things into trusts and their own individual corporations.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Brooke on May 18, 2020, 03:29:59 PM
If there's a public manufacturer of only small aircraft you'd be able to see for certain on their quarterly reports, if insurance liability is one of their dominate expenses.
From the reference quoted above, looks like $218,000 per airplane is probably all insurance cost ($100,000 per plane in 1988 is $216,000 per plane in 2010 dollars).
"Product liability costs
Those manufacturers reported rapidly rising product liability costs, driving aircraft prices beyond the market, and they said their production cuts were in response to that growing liability.[3][16][18][19]
Average cost of manufacturer's liability insurance for each airplane manufactured in the U.S. had risen from approximately $50 per plane in 1962 to $100,000 per plane in 1988, according to a report cited by the Bureau of Labor Statistics,[14] a 2,000-fold increase in 24 years.
Rising claims against the industry triggered a rapid increase in manufacturers' liability insurance premiums during the 1980s. Industry-wide, in just 7 years, the manufacturers' liability premiums increased nearly nine-fold, from approximately $24 million in 1978 to $210 million in 1985.[16]
Insurance underwriters, worldwide, began to refuse to sell product liability insurance to U.S. general aviation manufacturers.By 1987, the three largest GA manufacturers claimed their annual costs for product liability ranged from $70,000 to $100,000 per airplane built and shipped that year.[7][19]"
Also, insurance cost is only part of it. Agreements and lawsuits aren't 100.00% deterministic and predictable. There often remains troubling tail risk. Lawsuits and workings of agreements (including insurance agreements) are judged by humans according to written language, which is a lot more wobbly than a math equation. People who haven't been through bigger lawsuits often think that an agreement says X, which is 100.00% clear and certain, and will be 100.00% of the time judged as saying X in a lawsuit. However, judgements sometimes rule differently no matter how sure you and your lawyers were on what an insurance agreement says. You have to keep that in mind when making business decisions. Also, even if insurance does cover all nominal costs, they don't cover internal staff time and stress (which can be substantial in bigger lawsuits). Unless a product is making a lot of profit, if there is litigation risk, businesses often conclude it's not worth the trouble. To make it worth the trouble, you sometimes have to do something like, "Well, at what price is it worth doing this thing which we aren't so keen on doing? We'll sell it at that. If it doesn't sell, we will just cancel it."
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Shuffler on May 18, 2020, 04:17:31 PM
Even contracts are not X. They can be changed by a judge to mean anything. Not even resembling the original agreement as it was meant to be.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Oldman731 on May 18, 2020, 04:46:27 PM
From the reference quoted above, looks like $218,000 per airplane is probably all insurance cost ($100,000 per plane in 1988 is $216,000 per plane in 2010 dollars).
You're only quoting the pre-1994 figures. Continuing with the same Wiki page:
"Following passage of the GARA, U.S. general aviation aircraft production, in units, roughly doubled in five years, but still remained far below the 1970s production quantities (see graph). Meanwhile, contrary to an implied goal of GARA, average general aviation aircraft prices continued to rise. This was largely attributable to the shift of GA manufacturers towards building high-end turbine (turboprop and jet) business and luxury aircraft, while keeping piston aircraft productions at a small fraction of their 1970s levels. The manufacturers were able to get increased income with smaller numbers of far-more-expensive airplanes (see graph)."
You only have to grab a copy of Flying magazine, or AOPA's magazine, or any of the other aviation publications, to see how true this is. General aviation, with the notable exception of Wolfala's Cirrus products, is focused on planes that cost $1.5M and up (way up). So it's now a chicken-and-egg thing: The manufacturers don't get the economy of scale until lots of consumers buy little planes, and consumers can't buy little planes because they cost too much.
- jkw
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Wolfala on May 18, 2020, 06:08:56 PM
You're only quoting the pre-1994 figures. Continuing with the same Wiki page:
"Following passage of the GARA, U.S. general aviation aircraft production, in units, roughly doubled in five years, but still remained far below the 1970s production quantities (see graph). Meanwhile, contrary to an implied goal of GARA, average general aviation aircraft prices continued to rise. This was largely attributable to the shift of GA manufacturers towards building high-end turbine (turboprop and jet) business and luxury aircraft, while keeping piston aircraft productions at a small fraction of their 1970s levels. The manufacturers were able to get increased income with smaller numbers of far-more-expensive airplanes (see graph)."
You only have to grab a copy of Flying magazine, or AOPA's magazine, or any of the other aviation publications, to see how true this is. General aviation, with the notable exception of Wolfala's Cirrus products, is focused on planes that cost $1.5M and up (way up). So it's now a chicken-and-egg thing: The manufacturers don't get the economy of scale until lots of consumers buy little planes, and consumers can't buy little planes because they cost too much.
- jkw
There is definitely been a pendulum shift toward the pressurized single engine turbo prop market and single owner jet. The SE turboprop has replaced the cabin class piston twin. The King Air is still marketable for corporate and freight and overwater haulers. However, Insurance companies over the last 2 to 3 years have recognized the huge amount of liability exposure they have with single owner jet operations and not flown by professional crews: I know more than one instance of a phenom 300 owner being refused coverage as a single owner even with an additional crewmember. They just don’t want him up front. Additionally FlightSafety does not like working with single pilot owners in the Cessna mustang VLJ series.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Brooke on May 18, 2020, 06:18:56 PM
None of the stuff about increased sales or more are turboprops tells us anything about insurance cost.
Title: Re: For Cheap But Affordable Airplane Rentals
Post by: Maverick on May 19, 2020, 10:39:37 AM
I pretty much agree with Brooke. The cost of production of the aircraft is influenced most by the cost of insurance. There hasn't been much of any technical shift in the product outside of instrumentation (glass vs steam gauges and radio gear). To be honest most of the radio gear is only about one or two steps above CB radios and a hand held GPS. The larger engines aren't that much larger for the basic Cessna 172 or even 182 and until you get into turbos still 1930's tech. A Lycoming 4 banger is still virtually unchanged in over 80 years in design, only some material changes in composition of alloys used in the metal mostly. Even the mags are old school. Once you get into A&P training the small plane maintenance is really dirt simple, like it used to be for cars back in the 50's and 60's. To comment on another poster here, there is more technology in a $25k KIA than a Cessna 172, and the KIA is more reliable.