Old 08-07-2010, 09:05 PM
  #31  
Cubdriver
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Joined APC: May 2006
Position: ATP, CFI etc.
Posts: 6,056
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I must keep things somewhat confidential about what I do because APC is a public forum and I intend to keep my job. However, I feel your pain in terms of the steep prices these days for new GA piston aircraft from Cessna and other domestic makes. Bruce Landis and the rest of us are not alone in this regard. A new airplane is a daunting purchase for most of the middle class. Even the upper-middle has trouble with it. As a Wichita engineer I am sorry we have to buy a share of a single engine airplane while hoping the other 2 owners takes care of our shared airplane. It is a humble proposition.

What I know about Wichita manufacturing cost and profit on a new piston aircraft is fairly limited, just what I read in the papers. I will venture the guess that profit on a new Skycatcher is fairly low. The volume of sales is low and I have heard the profit on Cessna props like the Caravan, C172SP, C206H, and C182 is perilously small. Cessna is challenged by labor and supply costs on these models. Cessna has laid off some Independence, KS workers and cut production on all its models. Cessna would only do this if they were not selling as many airplanes as before the recession. As a businessman you know that reduced production means higher costs per unit. They can't make money on low volume.

The best way to make money is through volume sales. None of these airplanes is selling in enough to make a serious profit. All of these models are losing money right now including the business jets. I am certain about that, and I give you that as an insider. The name of the game these days in Wichita is cost-cutting. Many companies are getting radical in this regard. Cessna has Indian and Mexican facilities for engineering and assembly and has laid-off American employees by the thousand since 2009. Just this month another large Wichita small aircraft manufacturer has indicated they wish leave the state altogether if costs cannot be cut drastically. The reality is, we are lucky to have a viable American small aircraft industry at all these days.
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