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Thread: Cessna Skycatcher Price Increase. What a surprise!

  1. #1
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    Sad Cessna Skycatcher Price Increase. What a surprise!

    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.

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    The real salt in the wound on the Skycatcher was how Jack Pelton proclaimed in front of all us budget flyers at AirVenture how he was working hard to keep the price "well South of $100K"
    Certainly he knew from square one that was not possible.

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    Perhaps this is the very reason why Jack Pelton was so mysteriously and unceremoniously dumped by Cessna earlier this year. Perhaps he fought so hard to prevent an unjustifiable price increase, p...ed off his Textron masters and got a golden handshake for his troubles.

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    Quote Originally Posted by martymayes View Post
    The real salt in the wound on the Skycatcher was how Jack Pelton proclaimed in front of all us budget flyers at AirVenture how he was working hard to keep the price "well South of $100K"
    Certainly he knew from square one that was not possible.
    I bet it would be possible if they sold enough units. My guess is that with the soft economy they are stuck with a product that isn't selling nearly as well as projected and their overhead costs are killing them. It is a nasty business spiral.

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    Hiperbiper's Avatar
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    $100,000.00+ for a Cessna Prius?

    Just say no...

    Chris

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    [Shock]

    Are you saying that a GA manufacturer misread the market potential of their aircraft (with a super rosy picture) and overestimated both production numbers and underestimated the price they could deliver them at?

    Well, that's never happened before!

    [/Shock]
    The opinions and statements of this poster are largely based on facts and portray a possible version of the actual events.

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    s10sakota's Avatar
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    Here's what I don't get...why would anyone buy a new Cessna LSA anyway? One could buy a brand new, factory built RANS S-6 or a factory built Kitfox for less than half the cost of the Cessna with equal performance. These are two planes I'm familiar with and there's probably a lot of other factory built planes available too. I guess having the name "Cessna" on the side of the plane is worth an extra 100G's?
    Mark

    2003 RANS S-10
    2011 RANS S-6S
    Zenith Cruzer

    www.aircraftstickers.com Very cool aircraft stickers. Vans, RANS, Kitfox...more!

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    Cessna LSA

    You could built two complete RV-12's for a bit less than the Cessna LSA

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    Quote Originally Posted by Floatsflyer View Post
    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.
    No, no it was not. I don't know why people can't get this through their heads. LSA was meant to regulate those people who were illegally operating under "part 103". In order to prevent that, LSA and sport pilot was created. Yes, new airplanes came out of it, but those airplanes weren't the reason to make LSA. The illegally operating factions of the 103 crowd were.
    KSCessnaDriver
    ATP MEL, Commercial Lighter Than Air-Airship, SEL, CFI/CFII
    Private SES

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    Quote Originally Posted by kscessnadriver View Post
    No, no it was not. I don't know why people can't get this through their heads. LSA was meant to regulate those people who were illegally operating under "part 103". In order to prevent that, LSA and sport pilot was created. Yes, new airplanes came out of it, but those airplanes weren't the reason to make LSA. The illegally operating factions of the 103 crowd were.
    Strictly a technicality and a lame one at that. Don't be naive, Part 103 and those so-called illegals was used as an excuse and a political justification by EAA, LAMA, AOPA and others to get the FAA on board to seriously consider a rule change that would eventually lead to LSA.

    The alphabet groups didn't give a sh--t about the illegal operators. As politically motivated groups and essentially lobbyists, they astutely understood they needed a "credibility red flag" to grab the FAA's attention in order to manipulate a whole new category of aircraft classification and pilot licensing, the motivation of which was first and foremost to bring new, quasi-affordable factory built airplanes to market. It was always conceived as an initiative to economically stimulate GA; the Part 103 illegals were the trojan horse used to get inside the gates to begin the long process.
    Last edited by Floatsflyer; 11-21-2011 at 09:36 PM.

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