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A personal (pipe) dream of mine is to own a new aircraft, but the costs for certified GA aircraft is borderline outrageous. A new Cessna 172, considered an entry level aircraft, can go for well over \$250,000 new. The Icon A5, an entry level light sport goes for about \$190,000 for the base model.

Not discounting the engineering process or tooling required, but what really keeps the price of these aircraft so high? Is it possible that a company could bring an aircraft to market that is comparable to the A5 below the \$100,000 mark? I find it hard to imagine that a company couldn't take an aircraft like the SeaRey, certify it, and get it out for a reasonable price.

So the question is, what are the factors that make certified GA aircraft so expensive, especially for established companies like Cessna, Piper, or others? Does the mere presence of an FAA certification command a premium price?

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    $\begingroup$ I don't know about you, but I'd be happy to pay the extra 90k for an Icon A5 instead of asking for a bargain basement flying coffin. If your 5k Geely car conks out, it rolls to a stop. If your $20,000 bargain bin prop engine on a 100k plane conks out, and you don't have enough airspeed/altitude to land safely, you will crash and quite possibly die. Gravity is a harsh mistress. I wouldn't skimp on cost when building a machine that intends to fight her and win. $\endgroup$ – allquixotic Feb 4 '16 at 3:55
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    $\begingroup$ I'm not saying sacrifice quality, I'm wondering where the cost is, I wouldn't consider the SeaRey a "flying coffin", even in its homebuilt form. I wouldn't suggest any certifications be cut... $\endgroup$ – Ron Beyer Feb 4 '16 at 4:00
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    $\begingroup$ What I'm asking is if the certifications add that much cost to each component that it can't be amortized to zero over 10k units for example. It doesn't have to be glass cockpit, a 6 pack works just fine and isn't any less safe (arguably more so). $\endgroup$ – Ron Beyer Feb 4 '16 at 4:05
  • $\begingroup$ There are plenty of perfectly safe LSAs for below 100,000. The Aerotrek and MVP.aero come to mind. There's a whole slew of information about LSAs at www.bydanjohnson.com if you're curious. It's mostly certified LSAs on there, which have their limitations but are perfectly viable for learning to fly and short trips. $\endgroup$ – Jay Carr Feb 4 '16 at 5:03
  • $\begingroup$ MVP Aero is retailing for \$219,000, I'll look at the other things you mentioned but would still like to understand what makes am entry level aircraft so expensive... $\endgroup$ – Ron Beyer Feb 4 '16 at 5:26
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Low volume, high liability, and the overhead of certification all contribute to the high price of factory-new aircraft.

Certification

The process to design, build, and test an aircraft to receive a type certificate from the FAA adds time and cost to any new clean-sheet design (substantially more cost if the design is novel in some way).
The design and construction techniques must conform to the requirements in the FARs, and you have to demonstrate conformance to FAA inspectors (who will also want to see you assemble a few planes under their oversight before issuing you a production certificate to go ahead and make them on your own).

Volume

50+ year old designs like the Piper PA-28 and Cessna 172 that are still in production on an approved type certificate avoid that cost, but are still a low-volume high-touch product: Here's a wing being assembled.
Because of the relatively low demand (and thus low sales volume) the cost of the skilled personnel to build aircraft isn't spread out the way it is with cars (and the investment in large-scale low-touch automation isn't economically feasible). That drives up the manufacturing cost, and the price goes up with it to ensure the manufacturer is still making a profit.

Similar economies of scale affect all the third-party parts going into new planes as well: radios, instruments, lights, etc. that conform to applicable FAA Technical Standard Orders (TSOs) are rather expensive.

Liability

Finally, any new aircraft starts a new 18-year liability period for the manufacturer. Any accident that results in whole or in part from manufacturer errors, omissions, or negligence in a new aircraft can come back to haunt that manufacturer in the form of a lawsuit, so the cost of product liability insurance is baked into the price of every new aircraft. (After 18 years the manufacturer is off the hook thanks to the General Aviation Revitalization Act.)

All of these factors take the Searey from being a \$50,000 kit (airframe, engine, and propeller) to a \$150,000 factory-built Light Sport aircraft, and that is putting it on the market as a Light Sport aircraft under "consensus industry standards". Producing it as a Part 23 certificated aircraft would add the additional cost and requirements of FAA certification.
(I'm using the Searey as a convenient example since you mentioned it in your question and I could find kit and factory-built pricing easily, but other light sport aircraft available in both kit and factory models seem to stack up similarly. I don't know of any that have been subsequently "upgraded" to a Part 23 aircraft: Only a few manufacturers have successfully launched that sort of product, and those command rather substantial prices on the new market.)

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  • $\begingroup$ Yeah the volume & number of manufacturers is the issue: too much competition to risk the high investment cost to bring the unit cost down, not enough of a market to guarantee a ROI on that investment in face of heavy competition. Quite simply, you could produce a plane that cheaply, but the investment would be a huge risk nobody is willing to take. A typical modern high-volume car factory is perhaps \$5bn to build with tooling and robotics. That's 50,000x \$100k aircraft you need to sell to break even, ignoring the material costs of the aircraft which probably doubles that to 100,000+ needed $\endgroup$ – Jon Story Feb 4 '16 at 12:20
  • $\begingroup$ ...for comparison, Cessna has built 40-45k 172's in the last 60 years. The numbers just don't add up $\endgroup$ – Jon Story Feb 4 '16 at 12:24
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    $\begingroup$ I agree with the answer, but I still find it odd that an aviation 4 cylinder 180 HP engine designed in the 50s still costs more than a nice car with equivalent HP. $\endgroup$ – Greg Taylor Feb 4 '16 at 12:42
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    $\begingroup$ @GregTaylor: Same thing, really. You need to make sure the engine still works if it's banked 30 degrees to the right, and pitched 10 degrees down. Technically that's not very complex, but doing that in an FAA-certified way isn't cheap, and then you still have small production volumes. $\endgroup$ – MSalters Feb 4 '16 at 14:21
  • $\begingroup$ I can agree that the 172's wing is labor intensive, however with new composite materials and manufacturing processes I can't see that a wing couldn't be mass produced (even at the 5k quantity) for less cost. I also didn't think about liability insurance, but does it add that much to each airframe? $\endgroup$ – Ron Beyer Feb 4 '16 at 19:49
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Product liability destroyed this industry.

In the 1970s GA aircraft were much less expensive. A midrange model cost about twice the annual salary of the average US worker. Annual production was about 14k per year.

Then attorneys found out that juries could be persuaded to award ten times as much for a death in a small airplane as for the equivalent death in a car. Deep pockets law put manufacturers on the hook for compensation even though most accidents were due to pilot error, just as in cars. Product liability cost soared, rising from single digit thousands of dollars per aircraft sold to a hundred thousand. Purchase prices rose dramatically, driving demand lower. This increased unit production cost since fixed costs were now spread across fewer units.

By mid 1980 production had fallen to 800 units per year, and the cost of a midrange model had climbed to ten times the average US worker salary. All three primary manufacturers went bankrupt and the industry has never recovered.

Lack of funds has made the byzantine and costly certification process a nearly impossible obstacle, allowing very little new technology or new aircraft to be introduced, except in very expensive models. Certification cost has created effective monopolies in both airframes and parts. Aircraft engines cost ten times as much as similar power automobile engines. Most aircraft now flying are more than 35 years old, having been made prior to the collapse. Cars get refreshed about every five years or sales disintegrate.

The Harvard study, The Uneasy Case for Product Liability, describes how the intended purpose of product liability, improvement in product safety, is often frustrated by the excessive cost of the legal system. It discusses aircraft along with other consumer goods, and is an interesting read on the subject.

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  • $\begingroup$ Piper and Mooney have entered bankruptcy proceedings several times each but Cessna and Beechcraft weathered the 1980s without bankruptcy. Cessna stopped light GA aircraft production completely focusing instead on jets and the freight hauling C208. Beechcraft never completely ceased production of its GA aircraft though production numbers were low. They went through several sales/mergers and did file for bankruptcy as part of Hawker-Beechcraft in 2012 and were just about to declare bankruptcy in 2013 when they were acquired by Textron—who also own Cessna. $\endgroup$ – JScarry Aug 13 at 21:17
  • $\begingroup$ @JScarry Technically correct, though Cessna was forced to sell itself to General Dynamics in the '80s on the brink of bankruptcy, after burning through the cash it raised from selling its avionics business to Sperry. GD only cared about Cessna's jets and maybe turboprops; the piston business was dead and killing the rest of the company. $\endgroup$ – Pilothead Aug 13 at 22:47

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