The Economic Life of Airplanes
Airplanes, particularly in general aviation, are living longer than anyone could have imagined 40 or 50 years ago. To most of us, an A36 Bonanza, for example, built in 1970 is still a perfectly good and useful airplane. And there are many airplanes, particularly piston singles, still regularly flown that were built a decade or two before 1970.
For some reason when it comes to airplanes we count time in dog years. The 1970s, or 80s seem like yesterday when assessing the age of an airplane. But do the math. We're talking 30 to 40 years ago. If an airplane were any other type of vehicle, it would be enshrined in a museum by that age, or at least awarded historic license plates by the owner's state DMV.
But airplanes cannot continue to live forever without significant economic investment in their longevity. Hawker Beechcraft reminded us once again of the high cost of keeping airplanes airworthy when it announced a new plan to charge for technical support of airplanes it built many years ago. Now when you call the Hawker Beech technical support people with questions on part numbers, service instructions, serial number searches and so on you will have to pay for that information that had been previously provided at no charge for an airplane of any age. The new policy applies to airplanes that have been out of production for nearly 30 years, such as the V-tail Bonanza series and the Musketeer family, but also to older airplanes even though the models are still in production such as the King Air 90 and 200.
Since my Baron 58 has a serial number low enough to fall into the "legacy" category for which technical support charges will be made, I expect to possibly feel some financial pain in the future. But I do understand the position all of the manufacturers are in when it comes to support, whether they build airplanes, or the engines, avionics and accessories it takes to make the airplanes fly. The manufacturer sold the airplane or component many years ago and earned some level of profit then, but the revenue stream has dried up. It costs a great deal of money to keep the technical experts employed to provide the necessary support and that money has to come from somewhere.
There is, of course, profit in selling spare parts, but why should an airplane owner who needs no technical assistance, just a replacement part, pay for the staff who is researching information for other owners? I think the new Hawker Beech support policy for older airplanes is logical and fair, and I wouldn't be surprised to see other aviation product manufacturers follow the lead. Hawker Beech is doing the right thing by not cutting back on support, or walking away from its legacy airplanes, but is simply asking owners of older airplanes to pay for their upkeep. Our airplanes really can live almost forever, as long as we are willing to spend the money it takes to keep them in airworthy condition.
All Comments
Hi there,
While I must defer to Mr McClellan on most matters related to aviation, I disagree with this comment. Plenty of industries have manufacturers who maintain extensive parts supplies for older models and they simply pass on the cost of sourcing, storing and facilitating the purchase of the parts through the actual cost of the parts. Thats why the window rubber for an old Ford cost many times more than the part that went on the car in the factory.
Hawker Beechcraft surely does this as well - they would be out of business otherwise - but now they are adding extra charges on top. It doesn't affect the degree to which I aspire to owning some of their aircraft and it is not a huge deal either way but I am surprised Mac is coming out with some unsolicited support for this move.
regards,
John Hogan, Brisbane, Qld. (Australia)
I agree with Mr. Hogan on a more appropriate model for funding the supply of spare parts and support for older aircraft. It seems to me that what Beechcraft is doing, and Mr. McClellan is supporting, is a user fee. I'm opposed to user fees in all forms for aviation. User fees drive down usage. I don't think we can afford the safely hazards caused by deferred maintenance due to charges for asking questions of the aircraft manufacturer, any more that we can afford the hazards caused by a reluctance to use ATC due to a user fee. It's a bad model for safety.
David Montgomery
Oak Park, Illinois
If you want to get technical advise and save money also, try any number of Aircraft Salvage Companies operating around the U.S. We often research part numbers and prices applicable to your Model and Year as a part of the process in supplying good "As Removed" items. And we don't charge for the advise. Considering the outrageous prices now being quoted by the Factories, I believe this to be a viable option when seraching for parts for the aging fleet of general aviation airplanes.
Bruce Ruddell, President.
OK Aircraft Parts, Inc. Hollister, California.
This issue is highly debated worldwide, and the pros and cons of HBC’s decision to charge for service are varied and numerous.
As a young man I worked for an aircraft salvage company, and as Mr. Ruddell states, that avenue is a viable option for many. The customer service provided by the leading salvage companies is excellent and an economical solution for legacy aircraft owners.
There are a lot of aircraft owners who will not, under any circumstance, use parts from “salvaged” aircraft. I can truly understand this reasoning and the various causes for that thought process. Although I’m not sure if current regulations allow this; the company I worked for (many years ago) had hulls from fatal accidents and memories of sifting through cabins of those aircraft are permanently etched in my soul. That experience will definitely change the way you approach flying. For me, I could never use a part of an aircraft where someone lost their life.
It is my understanding it costs HBC exponentially more to provide the services then they were making on the sale of the parts. From what I’ve read, the employee hours dedicated to researching part numbers on aircraft they haven’t manufactured in over 30 years is astronomical. On the other side of that same coin, the price for “factory” parts is so high; the profit margin is surly enough to cover that same labor cost.
At the end of the day, unless you are a “bean counter” at HBC and know the actual Profit & Loss on the service charge versus part cost, all we have is speculation and sadness it has come to this.
Across the country government agencies and corporations of every size are creating new and innovative ways to tax consumers. It will come as no surprise if several other leading aircraft manufacturers follow HBC’s lead.
In Washington State, legislation recently enacted charges web based business an additional tax based on the amount of data transferred by subscribers watching streaming video on the website. Fortunately ours is a free aviation site, but other sites are feeling the additional pinch when it’s the last thing we need right now.
I would like to point out HBC could have charged much more for their services, and depending on the economy, wouldn’t rule that out.
Philip Wilson
-Aerorush.com
I understand that there are a lot of pros and cons to HBC's decision, and they obviously decided that it was the best business decision for their stockholders.
I'm a member of the Beech Aero Club which is the type club for the Musketeer / Sundowner / Skipper / Duchess line of aircraft, and we would have a more difficult time keeping these wonderful airplanes flying if it weren't for the BAC support.
I don't know what the long-term effects of HBC's decision will be, but I would hope that they would be cooperative with type clubs who are trying to keep pilots in the air. Remember, we're a decreasing group.
I waited a long time to be able to purchase my own airplane, and to live my life's dream. I'm sure there are many like me across this wonderful nation who are in a similar situation, that is, I cannot afford a newer airplane. I must keep mine in the best flyable condition possible given it's 33 year age.
Maybe the manufacturer's (others to follow I'm sure) could consider transferring the type certificates, data, plans, tooling, etc. to the type clubs. At least it would be a "plus" for their brand.
M. Greg Johnson
Marietta, GA
Sooner or later, everything including us wears out and is replaced. Some have very short life cycles like Microsoft Windows. Others seem to hang around seemingly forever like the A36 and the Baron. Not because they're nostalgic pieces of retro art but because they are reliable, dependable solutions to largely unchanging tasks.
But leaded fuel has an approaching horizon. Carbon-based anything is going to help service Chinese debt. General Aviation in general is threatened with encroaching regulation and political holy grails. The only solutions are new airplanes and an analog of a 1930s program called the Civilian Pilot Training Program or CPTP. Without an imminent world war for motivation, we will have to convince Washington and the US, in that order, of aviation's socio-economic value and its ability to influence human rights. Good luck.
I doubt seriously if Cessna will "Fill the Skies With Pilots." Neither will Remos or Diamond or Hawker-Beech or Mooney or Piper. But without numbers there is no leverage and the NTSC witch hunts will continue. We need recruitment and celebrities and subsidies and politicians to make diesels and carbon fiber and NexGen feasible.
Beech makes money off the parts, but admittedly there is tax on inventory every year. I disagree on having to pay for them just to look up part numbers if you are purchasing the part. If OTOH you are getting a part # to hunt for the cheapest price elsewhere THEN I think the charge is legitimate. The downside for them charging like that is chasing owners of older aircraft to the junk yards and surplus sales. As I fly the oldest Debonair in existence with S# CD-2 I'm well into the "charge for information". So I use the ABS as well as the maintenance CD for part numbers.
Not to say Beech has the best products. Many years ago I hit a deer when landing at GDW. Yes I flew over and did all the things we are told will help clear the runway. It's just a big doe had never been informed and decided she wanted to be on the other side of the runway as I was landing.
The left main with just touching down with a light crosswind when her head hit the underside of the leading edge of the starboard wing well within the prop circle. That drove her body down and under the right main while removing the outer gear door and busting the brake line. That left the Deb riding on the left main with the nose high and me not knowing if the Deb still had the right main or nose gear. It did, but I have to admit watching the runways lights going by *above* the left tip tank was a bit disconcerting.
When we replaced the gear door and hinges (each half of those little stamped hinges cost more than the door) We had to go through 4 hinges to find two good ones. They came from the factory badly bent in a manner that appeared to have been a misalignment in the press when they were formed. If so they made it through QC like that. We called the factory and out of all they had there was only one good one.
I'm a member of a flying club, with a 1970 C-182. Seriously, this has to be the best value ever in aviation - 70 gallon tanks, burns 10-12 GPH, hauling 1,000 pounds, with full fuel, at just over 150 MPH, good STOL performance, you name it.
For all its good points, however, it *is* a 40 year old plane. I certainly enjoy flying it, but I won't pretend that it's a shiny new bird.
But there's another story to be told.... Airplanes are essentially hand-made. All of them are. From the obscure to the Cessna 172, they've *never* been able to be mass-produced like cars. Cessna almost made it, but not quite. And the price of planes is high, always has been high, and unless market forces change, always will be high. You basically can't buy a new certificated plane anywhere for anything near the cost of a high end car. You have to get into Italian super-exotic hand-made genre to approximate the cost of a basic model 172! And we won't even discuss anything with a turbine or jet engine which starts at about a cool million and climbs (rapidly!) from there.
The large, aging fleet actually makes the problem worse - pilots (like me) who hang onto their aging planes provide a disincentive for anybody to innovate and develop the mass-production economies of scale to drive down the cost of flying! It's an entire marketplace that's extremely well balanced to keep costs high and innovation stagnant.
The Cessna 172 airframe has suffered only mild changes from 1955 to 2010 - a period of FIFTY FIVE YEARS. There are hardly pilots alive who were flying when the first 172s rolled out of the factory! Compare that to the Ford Mustang... Comparing a 1969 to one built even 10 years later - they were totally different cars, totally re-engineered from scratch at least once in that time.
The aviation industry is a curious backwater in the modern marketplace, where innovation is slow, and prices are high. Part of this is the fact that aviation is simply more dangerous than driving - it's only with extreme care that we can approximate the safety of a cars which are otherwise driven haphazardly. It is, to me, frustrating, because I can see that while the population at large is growing, the pilot population continues to dwindle, causing the problems I outlined to slowly get worse....



