Here's a theory (or series of conjectures). I'd very much like to hear your views on the following:
1. We have way too many LSA manufacturers/importers given the level of new LSA purchase activity (and it's getting worse)... rationalisation is inevitable;
2. flight training schools won't trade-up to LSAs because their students are happy to fly 50-year old 152s and 172s and the incremental cost of trading up can't be justified;
3. new pilots tend to acquire the aircraft (or aircraft similar to those) on which they initially train... in the absence of rapid growth of LSA-equipped flight schools, the odds of creating a financially sound LSA industry are getting longer.
All of this begs the $64 million question: "Which manufacturers/importers have the best crack at commercial survival over the long term?". For the sake of the discusion, let's ignore kit manufacturers.
Let me hasten to add that I'm training on a Sportstar and I've flown the Eurofox and Tecnam Super Echo (and I'd be happy to own any one of them). I'm a big fan, but I'm concerned that this economic crunch is going to massacre this fledgling segment of the GA industry.
Future of LSA industry?
Moderator: drseti
LSA Future
It will be interesting to see what happens once Cessna starts delivering Skycatchers. Presumably these have already been pretty much "pre-sold".
Who will survive
There is less "profit" in an LSA then say a more expensive aircraft making it harder to make money. Money is obviously required to stay in business therefore the folks that are selling the most LSA's on a regular basis and have and had deep pockets to begin with are probably the ones who will be around for the long term.
I would think the folks selling one or two dozen a year would have a hard time of it and will eventually drop off.....
So in other words - volume has to be the major key to hang in there. You have to have money to have inventory, advertising, sales team, etc., etc., etc.
That's my thought!
Roger H
I would think the folks selling one or two dozen a year would have a hard time of it and will eventually drop off.....
So in other words - volume has to be the major key to hang in there. You have to have money to have inventory, advertising, sales team, etc., etc., etc.
That's my thought!
Roger H
Just to make a contrary argument...
All airplanes are hand made, so the economies of scale aren't such a large factor in the price. This may let the little guys complete on a more even playing field with the larger companies. Also, smaller companies tend to innovate faster, and the LSA rule allows this to happen, unlike normal certificated production aircraft.
So, it may just be that the LSA companies that survive are the ones that are well run and put out a good product and have good service. And wouldn't that be nice!
Example: Look how long it's taking Cessna to get their LSA to market, and it looks like an also ran from a performance standpoint. Sure they'll sell a bunch to Pilot Centers, but I can't see them dominating the market with a plane with such low useful load.
Apparently, the LSA market is the only aircraft market that hasn't crashed with the down economy. Also, the FAA is about done with their review of compliance for manufacturers and they are liking the results. So maybe LSA's will be around for a long time to come.
Ron
All airplanes are hand made, so the economies of scale aren't such a large factor in the price. This may let the little guys complete on a more even playing field with the larger companies. Also, smaller companies tend to innovate faster, and the LSA rule allows this to happen, unlike normal certificated production aircraft.
So, it may just be that the LSA companies that survive are the ones that are well run and put out a good product and have good service. And wouldn't that be nice!
Example: Look how long it's taking Cessna to get their LSA to market, and it looks like an also ran from a performance standpoint. Sure they'll sell a bunch to Pilot Centers, but I can't see them dominating the market with a plane with such low useful load.
Apparently, the LSA market is the only aircraft market that hasn't crashed with the down economy. Also, the FAA is about done with their review of compliance for manufacturers and they are liking the results. So maybe LSA's will be around for a long time to come.
Ron
Great point about innovation, and the Skycathcer is probably a perfect case in point. I'm struggling to understand how an LSA with its specs will compete with some of the others, all of which seem to be less expensive. I doubt there will be any cachet to the Cessna brand in the LSA universe, but it will start life with an extensive dealer network which may make a difference.
Pitfield, I have to respectfully disagree with you on points 2 & 3.
Watching many traditional operations switch from the 152/172/182 to the Diamonds (not an LSA, but still...) was a "big deal" for a little while - until it wasn't. The impetus behind that switch was a more modern aircraft, better efficiency, for similar money. No doubt, the Cessna series aircraft are the Chevy trucks of the industry, but the schools will have to update their fleets sooner or later. Nobody wants to pay $100+/hr to train in a 40 year old 152 with shag carpeting when for the same money you could train in a new machine with all the bells and whistles - GPS/glass, etc. I've heard several university-based flight programs are looking at LSA for primary training too.
As for buying what you train in...I think that's true all else being equal. I think the economics and the "fun" factor associated with LSA, however, create a lot of curiosity and will pull enough people in to overcome that. Every day I hear of some veteran pilot selling his Bonanza and buying a light sport.
Additionally, you've got an aging pool of pilots who are looking to stay in the air despite the increased difficulties of making the medical. They're gonna fall right into the lap of the LSA industry.
I agree there are more companies out there than the market can support, but I don't think that's a commentary of the state of LSA. I think it reflects the boom in the industry many people think is inevitable.
Watching many traditional operations switch from the 152/172/182 to the Diamonds (not an LSA, but still...) was a "big deal" for a little while - until it wasn't. The impetus behind that switch was a more modern aircraft, better efficiency, for similar money. No doubt, the Cessna series aircraft are the Chevy trucks of the industry, but the schools will have to update their fleets sooner or later. Nobody wants to pay $100+/hr to train in a 40 year old 152 with shag carpeting when for the same money you could train in a new machine with all the bells and whistles - GPS/glass, etc. I've heard several university-based flight programs are looking at LSA for primary training too.
As for buying what you train in...I think that's true all else being equal. I think the economics and the "fun" factor associated with LSA, however, create a lot of curiosity and will pull enough people in to overcome that. Every day I hear of some veteran pilot selling his Bonanza and buying a light sport.
Additionally, you've got an aging pool of pilots who are looking to stay in the air despite the increased difficulties of making the medical. They're gonna fall right into the lap of the LSA industry.
I agree there are more companies out there than the market can support, but I don't think that's a commentary of the state of LSA. I think it reflects the boom in the industry many people think is inevitable.
Future
Predicting the future is always fraught with danger.
However, IMHO many or most of the light sport manufacturers will be out of business in a year or two.
Here is why.
1.Several LSA manufacturers are located in Eastern Europe where the economy has collapsed and it will drag them down with it.
You can't build airplanes if many of your suppliers go out of business.
Several of them are also dependent upon dying local markets for sailplanes and aircraft.
2.Several LSA manufacturers are in Western Europe but have their aircraft parts built in Eastern Europe by independent companies that may fail.
Additionally, the economy of Europe is in very bad shape and getting worse by the day.
Like Eastern Europe, the local market is important and shrinking.
3.The US economy is in very bad shape and getting worse.
Look at the unemployment numbers.
The current administration is doing exactly the wrong things and making the problem worse. We are in for a long downturn.
The US economy is important to US LSA sales no matter what anyone says.
4. I attended the 2007 and 2008 LSA Expo's at Sebring and the attendance was up in 2008 but many were LOCAL TIREKICKERS with kids in tow. Most of them were there to watch the "airshow". Factor them out and the fact that the 2007 weather was horrible and 2008 was great and I doubt if 2008 attendance was truly representative.
5. It may be that the small US manufacturers are simply too small to survive in a shrinking market.
If I had to bet on survival it would be Tecnam and Cessna not necessarly in that order.
What do you think????
Bill
However, IMHO many or most of the light sport manufacturers will be out of business in a year or two.
Here is why.
1.Several LSA manufacturers are located in Eastern Europe where the economy has collapsed and it will drag them down with it.
You can't build airplanes if many of your suppliers go out of business.
Several of them are also dependent upon dying local markets for sailplanes and aircraft.
2.Several LSA manufacturers are in Western Europe but have their aircraft parts built in Eastern Europe by independent companies that may fail.
Additionally, the economy of Europe is in very bad shape and getting worse by the day.
Like Eastern Europe, the local market is important and shrinking.
3.The US economy is in very bad shape and getting worse.
Look at the unemployment numbers.
The current administration is doing exactly the wrong things and making the problem worse. We are in for a long downturn.
The US economy is important to US LSA sales no matter what anyone says.
4. I attended the 2007 and 2008 LSA Expo's at Sebring and the attendance was up in 2008 but many were LOCAL TIREKICKERS with kids in tow. Most of them were there to watch the "airshow". Factor them out and the fact that the 2007 weather was horrible and 2008 was great and I doubt if 2008 attendance was truly representative.
5. It may be that the small US manufacturers are simply too small to survive in a shrinking market.
If I had to bet on survival it would be Tecnam and Cessna not necessarly in that order.
What do you think????
Bill
Re: Future
I agree with Tecnam (been in business since 1948). I would add Flight Design and maybe Remos to the list. Cessna I'm not too sure about. Might they not focus more on the upscale market?seastar wrote: If I had to bet on survival it would be Tecnam and Cessna not necessarly in that order.
What do you think????
Bill
Randy Epstein
so here are my rather uneducated thoughts ...
... the Russian and Eastern European manufacturers may have huge troubles... their economic woes surpass those of the US...this doesn't mean they'll all get torpedoed, but some will be toast for sure...I have heard, for example, that the Zlin Savage people are OK (but I don't KNOW that for a fact) and I have to believe that for every manufacturer who survives there will be a couple who sink...
... Tecnam is a larger, more commercial enterprise and I'm inclined to think they will have more staying power...I very much liked the Super Echo I flew and imagine they're all nice aircraft...
...Cessna has a huge edge in the LSA market because they have an existing distribution network, BUT questions remain: will distribution offset high sticker price; will buyers accept a low useful load; and will the heavier Continental successfully compete with the 912ULS in the LSA market? I'm guessing 'not'....
...I'm uncertain about the others, but I'm relatively uninformed...I think Eurofox may have a bit of an edge in that Rob Rollison is both the importer and distributor...it's a great little plane and he's taken a layer of margin out of the cost;
...there are countless other aircraft that are undoubtedly great to fly, but just won't sell enough aircraft to get by;
...of the kitplanes, the S-7 and Highlander may be survivors in the RTF space... Bush Caddy of Canada doesn't seem to attract much attention, but their RTF version appears to be a slick aircraft...Zenith and Savannah will probably sell tons of kits, but I suspect most kits remain partially done in somebody's garage...the other thing that sort of worries me is that they have a reputation (possibly unfair, I dont know) for high sink rates...I'm not certain that their fantastic STOL performance offsets the potential risk associated with losing power close to the ground... they also seem to lack useful load when compared to the others...
...forgetting those with slats (and I've not mentioned the Storch, which is undoubtedly a very, very neat aircraft), it strikes me that VGs will get one similar performance and I'm not sure I'd have an aircraft without them...
...the LSA industry doesn't seem to have penetrated the instructional universe to the extent that I'd have expected... this is a bit disappointing...I'd postulate that such penetration will be a precursor to broader acceptance, and I'm not certain the latter can occur without the former... this forum seems to regularly receive comments from guys unsuccessfully seeking a school close to home...there seem to be a billion 152s and 172s around and I suppose it's tough to contemplate an LSA for one's school when the existing aircraft aren't fully utilzed as it is...I'm blessed that I have a great school within 75 minutes of Toronto...without those guys I'd be nowhere...
...how's that for a novice's views?
... Tecnam is a larger, more commercial enterprise and I'm inclined to think they will have more staying power...I very much liked the Super Echo I flew and imagine they're all nice aircraft...
...Cessna has a huge edge in the LSA market because they have an existing distribution network, BUT questions remain: will distribution offset high sticker price; will buyers accept a low useful load; and will the heavier Continental successfully compete with the 912ULS in the LSA market? I'm guessing 'not'....
...I'm uncertain about the others, but I'm relatively uninformed...I think Eurofox may have a bit of an edge in that Rob Rollison is both the importer and distributor...it's a great little plane and he's taken a layer of margin out of the cost;
...there are countless other aircraft that are undoubtedly great to fly, but just won't sell enough aircraft to get by;
...of the kitplanes, the S-7 and Highlander may be survivors in the RTF space... Bush Caddy of Canada doesn't seem to attract much attention, but their RTF version appears to be a slick aircraft...Zenith and Savannah will probably sell tons of kits, but I suspect most kits remain partially done in somebody's garage...the other thing that sort of worries me is that they have a reputation (possibly unfair, I dont know) for high sink rates...I'm not certain that their fantastic STOL performance offsets the potential risk associated with losing power close to the ground... they also seem to lack useful load when compared to the others...
...forgetting those with slats (and I've not mentioned the Storch, which is undoubtedly a very, very neat aircraft), it strikes me that VGs will get one similar performance and I'm not sure I'd have an aircraft without them...
...the LSA industry doesn't seem to have penetrated the instructional universe to the extent that I'd have expected... this is a bit disappointing...I'd postulate that such penetration will be a precursor to broader acceptance, and I'm not certain the latter can occur without the former... this forum seems to regularly receive comments from guys unsuccessfully seeking a school close to home...there seem to be a billion 152s and 172s around and I suppose it's tough to contemplate an LSA for one's school when the existing aircraft aren't fully utilzed as it is...I'm blessed that I have a great school within 75 minutes of Toronto...without those guys I'd be nowhere...
...how's that for a novice's views?
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CharlieTango
- Posts: 1000
- Joined: Sat Jun 10, 2006 10:04 am
- Location: Mammoth Lakes, California
Re: so here are my rather uneducated thoughts ...
not bad but you have to include flight design, they are the market leader.pitfield wrote:...how's that for a novice's views?
Survival
CT
In my opinion, Flight design will lose the most when Cessna starts delivering and I understand that mary parts of FD's are built in Eastern Europe.
Never underestimate the power of marketing and the staying power of a large sucessful corporation.
I have four close friends who are lifelong pilots and are all about my advanced age and therefore could lose their medicals in the not to distant future. They all can afford to buy anything in the market.
I have talked to them extensively about LSA's and to a man they all would and may buy a Skycatcher over anything else in the market JUST BECAUSE IT'S CESSNA.
They own and fly an Eagle (P210 with a turbine engine), a Eurocopter, a Cheyenne, and a Bonanza so it's not brand loyalty.
I buy the argument of heavy, expensive and so on but still think Cessna will be one of the winners.
In my opinion, Flight design will lose the most when Cessna starts delivering and I understand that mary parts of FD's are built in Eastern Europe.
Never underestimate the power of marketing and the staying power of a large sucessful corporation.
I have four close friends who are lifelong pilots and are all about my advanced age and therefore could lose their medicals in the not to distant future. They all can afford to buy anything in the market.
I have talked to them extensively about LSA's and to a man they all would and may buy a Skycatcher over anything else in the market JUST BECAUSE IT'S CESSNA.
They own and fly an Eagle (P210 with a turbine engine), a Eurocopter, a Cheyenne, and a Bonanza so it's not brand loyalty.
I buy the argument of heavy, expensive and so on but still think Cessna will be one of the winners.
Seastar, do you know if those friends have sat in a SkyCatcher?
I was of a similar mind. Learned in Cessnas, got my commercial and instrument, but haven't flown in 25 years. Though my health is still good enough to get a medical, I have no need to fly nights or IFR or with more than one passenger, so the Sport Pilot rules brought me back to flying and I am buying a plane.
When I heard Cessna was building an LSA, I thought that would be the plane for me. Then, in Sebring, I sat in one. What a great disappointment! And I saw the useful load under 500 lbs. Cramped, poor visiblity, and insufficient load for 2-person cross country.
Other than the ability to be flown without a medical, the SkyCatcher seems to me to have virtually none of the benefits of an SLSA.
I'm curious if the friends you mention are at the preliminary "sounds good" stage or if they have actually compared the SkyCatcher to anything else.
I was of a similar mind. Learned in Cessnas, got my commercial and instrument, but haven't flown in 25 years. Though my health is still good enough to get a medical, I have no need to fly nights or IFR or with more than one passenger, so the Sport Pilot rules brought me back to flying and I am buying a plane.
When I heard Cessna was building an LSA, I thought that would be the plane for me. Then, in Sebring, I sat in one. What a great disappointment! And I saw the useful load under 500 lbs. Cramped, poor visiblity, and insufficient load for 2-person cross country.
Other than the ability to be flown without a medical, the SkyCatcher seems to me to have virtually none of the benefits of an SLSA.
I'm curious if the friends you mention are at the preliminary "sounds good" stage or if they have actually compared the SkyCatcher to anything else.
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CharlieTango
- Posts: 1000
- Joined: Sat Jun 10, 2006 10:04 am
- Location: Mammoth Lakes, California
my ctsw will routinely true at 125kts, it's very fun to fly, comfortable, holds a lot of luggage and i go 400-550nm without refueling.
any other slsa would be a compromise, a skycatcher would be a whole other class.
add their market share and you have why i think they (flight design) will do relatively well.
they are pretty forward thinking as well. even with lead position in the market they have introduced 3 new models and are now working on a hybrid.
time will tell
any other slsa would be a compromise, a skycatcher would be a whole other class.
add their market share and you have why i think they (flight design) will do relatively well.
they are pretty forward thinking as well. even with lead position in the market they have introduced 3 new models and are now working on a hybrid.
time will tell
