Cessna has just announced the inevitable price increase(can you say gouge) for its Skycatcher LSA a mere 1 year after delivery of the first production aircraft. Cessna joins a long list of new and old manufacturers who use the tried and true marketing tool of setting an irresitable low acquisition price for a new to the market airplane to lure in deposits to artificially pad the order book to impress the investors, financiers, possible IPO's and the bank lenders. Then they protect themselves against potential profit losses by including "plus CPI"(consumer price index) in their purchase contracts. The Cessna increase amounts to a whopping $40K(37%) over the original announced price(from $110K to $150K)! For what??? A 2 place airplane with no interior, 100mph cruise and a questionnable useful load. Do you remember the original pricing claims of start-ups such as Cirrus, Eclipse, Liberty, Cubcrafters, American Legend Cub to name just a few? Same tactics, same result.

ICON has over 700 deposits to date(since July, 2008) for its A5 amphibian LSA(that's over $13million in a trust account including the first 100 orders at $100K each)). Fantastic success story, right? Yes it is, and moreso, with a textbook consumer recreational product marketing strategy that I'm sure will be a future source of case study at all the major business schools. A beautiful, pure fun product, perfectly marketed to the yahoo jetski set and boldly hard sold. Current price is $139K base model + CPI. What do you think the actual delivery price will be when/if they finally start deliveries in the last quarter of 2012 as Icon now projects? At least $200K, probably more. And thats just for the first year deliveries. What about the poor slob sitting at number 700 today who doesn't expect delivery until 2016-17 at the earliest? Sky's the limit. For an LSA!!!

The LSA category from the getgo was conceived, in part, to be a source of highly affordable(read under $100K) new aircraft ownership that would be the holy grail answer to stimulate the moribund and horrorably failing GA industry. Lessons have obviously not been learned well. The prohibitive cost of new aircraft acquisition is the GA killer and if this trend continues in the LSA category, it too is destined to go to an early grave where it will join many other well intentioned initiatives to save GA. And it won't matter how many new pilots the light sport certificate produces. Greed and bad business thinking trumps all.

So, want to protect yourself against increased prices of aircraft that have not yet been produced? Do not accept any terms and conditions in a new purchase agreement that speak to escalations. Delete them and insert that the price you are committing to today is the guaranteed delivery price. If the seller says no, just walk away. Consumers always have the power at the time of negotiation.