Wednesday, October 1, 2008
Light-Sport Chronicles: A Tale Of Two Countries
In which princes and paupers strive to survive “interesting times”
|A well-known proverb, reputed to be Chinese, says, “May you live in interesting times.” What’s less well known: The phrase was a curse against enemies. |
Just a wee five years ago, thrifty-minded Americans saw LSA as the hot-ticket deliverance from ever-pricier private flying. The sporty, fast Flight Design CT, imported from Germany, cost around $60,000. Today, the current CTLS model is closer to $130,000. “$45,000 of that price increase,” Johnson says, “is due entirely to the exchange rate! Without it, the CTLS would sell today for about $85,000, given other market factors and equipment upgrades. That currency ‘bump’ doesn’t make Flight Design or their dealers one more penny
in profit. But that’s a huge leap for the average American consumer to make.”
Yet LSA are selling. Market share is now almost one percent of the total GA SEL fleet. “Put it in perspective,” says Johnson. “Would you buy a $130,000 LSA cruising at 120 knots, or a $500,000 composite four-seater cruising at 220? Yes, the big bird carries more people, but a 500-mile trip is still a time difference of only a couple hours, and an LSA offers a significantly lower fuel burn. For those retired pilots trading in the Bonanza they once used for business, that’s significant.”
And for pilots on a tighter budget, there are aircraft like the CGS Hawk (1,700 sold in various editions over the years), which just won ASTM approval—and costs just under $40,000. Both ends of the pricing spectrum are populated with models, although higher-end LSA still get the lion’s share of sales. “But the light-sport industry is still mostly a bunch of small players working day and night just to get the bus going,” says Johnson. “They have to build the LSA infrastructure—local dealers and support facilities—already in place for GA.”
And yet, even with all aircraft sales down 30%, as I reported last month, most of the players can hang in there. “These are small businesses that can weather this economic ‘perfect storm’ on surprisingly little. They don’t have 15,000 employees like Cessna; they’ve got 15,” says Johnson.
The frequent talk of the LSA industry saving GA isn’t unlike the A-league pitcher fresh out of high school pitching a no hitter in the 7th game of the World Series. It’s daunting to envision, when the industry is just beginning to bring the LSA experience to a flying field near you.
“But,” says Johnson, “it might indeed fall to the LSA industry and sport pilot rule to reverse the decline in GA. Maybe that is our job.” Johnson suggests the glint in that young pitcher’s eye may grow brighter by April 2009, when, just five years after the first ASTM approval, it’s possible that 100 new models will have been approved (it’s at 84 now). “There’s nothing like that,” he says with a trace of awe, “in FAA history.”
Peering deeper into the crystal ball, he posits a reverse hoodoo if Europe stays on its current track of accommodating America’s ASTM rules: “Then, American producers like American Legend and Rans could sell overseas very competitively.” He cites the Rans S-7 as a “solid, proven airplane that sells here for $85,000. In Europe it would go for 53,000 euros. A euro buys roughly the same there as a dollar here. So just over 50,000 euros for a Rotax 912–powered S-LSA? That’s a great value!
“It could also go the other way,” he notes. “If the euro drops to $1.25 or so, all those European airplanes will be cheaper here again.” That would likely kick off another strong growth phase. And what if, in 10 years, LSA account for not one percent but 10% of the single-engine airplanes in the States? Or 20%? It’s not blue sky to imagine—and believe.
These are “Wild West” times for LSA. But if world markets stabilize, can whole light-sport flight-school fleets and Euro-style aero clubs similar to Aerotrekkers, with organized adventure flights, be far behind? “We’ve yet to see the full impact of LSA,” says Johnson. “Cessna is 80 years old. The LSA is four—we’re just getting started!”
So stay tuned, propheads...it’s going to be an “interesting” ride.
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