Waypoints: Why do airplanes cost so much?

Facing GA’s fiscal realities

January 1, 2013

Tom Haines

As AOPA President Craig Fuller suggests in “Strength in Purpose,” on page 28, 2013 is a pivotal year for general aviation. While the severity of the “fiscal cliff” is uncertain at this writing, there is no doubt that in the first quarter of the new year we must come to grips with the fiscal reality of today’s economy.

In general aviation, we face our own fiscal realities. Avgas prices are at near-record highs—both historically and from a “real cost” standpoint. While many of the other costs we pay in aviation are separated from the act of flying, the price at the pump hits us between the eyes after every flight. Hangar and tiedown fees, annual inspections, insurance, and other costs are usually paid while sitting at the kitchen table when we wish we were flying. The price of a fill-up haunts us standing at the airplane. Did I really just spend $350?

A few years ago, when avgas was about $2.75 a gallon, I received a fuel bill from my FBO for $250. I called them up and told them that if they could fit that much fuel (about 90 gallons) into my Bonanza (it holds 74 usable gallons), I would pay for it. I heard some paper shuffling and then, “Oh, a Baron was by for fuel. Its N number is close to yours.” Today, with a typical fill-up now costing me $350 or more, I would welcome a $250 top-off.

I’m as chagrined as the next pilot at $6 avgas, but the price is not completely off the scale from a historic standpoint. Looking back 40 years to 1972, avgas cost about 75 cents a gallon. Over the years, the price has fluctuated dramatically, but tracking the high and low spreads over those years, the price in constant 2011 dollars has hovered between $4 and $6. So, we’re near the upper edge of what avgas cost in round numbers four decades ago when you account for inflation. The same can be said for the cost of an hour’s time with a quality flight instructor, maintenance services, and aviation insurance—maybe even hangar rents and tiedown fees.

While $6 avgas is a challenge, where costs really run off the rails is in the price of new airplanes. The rising price of airplanes has far outstripped inflationary increases. A new Cessna 172 Skyhawk cost about $15,000 in 1972. Today a Skyhawk costs about $310,000, but includes a larger engine and better avionics and safety systems. All things being equal and adjusted for inflation, a Skyhawk ought to cost about $83,000 today; or closer to $100,000 if you want to account for the engine upgrade and better avionics. The reasons for the delta between then and now are many,and none of them are, I believe, because manufacturers are getting rich on producing piston-powered airplanes. In fact, those manufacturers are struggling to remain in business.

The average age of an airplane in the fleet is more than 40 years. Yes, they last a long time, but we must infuse new airplanes into the fleet for the future. The number of airplanes produced fell from more than 17,000 in 1977 to 1,950 in 2011, fewer than 900 of them piston-powered. That 1977 number wasn’t healthy either, as it resulted in softening of the market, but no industry can survive long on fewer than 2,000 units a year.

Aircraft manufacturers frequently cite the cost and complexity of certification as a reason for high retail costs and the reason that we don’t see much innovation in certified aircraft. Meanwhile, Experimental airplanes benefit from highly capable and low-cost avionics and such safety enhancements as angle-of-attack systems.

If the certified companies are correct, one thing we can do is simplify FAA certification requirements for light airplanes, which are governed by Part 23 of the regulations. The exceptions are Light Sport aircraft, which are built to industry-established guidelines. Even the FAA agrees that Part 23 regulations have become too complicated and expensive. As more and more complex GA aircraft have been developed, the FAA has applied the ever-more complex certification requirements for those airplanes on any new aircraft. So a simple hedge-hopping, fixed-gear piston-powered airplane gets dumped into the same bucket as a twin-engine, pressurized light jet meant to fly at 45,000 feet.

AOPA joined forces with the FAA and other aviation associations to establish an aviation rulemaking committee that will outline a new way to certify light airplanes while maintaining the safety we expect from certified airplanes. The FAA has been surprisingly supportive of the effort and it is moving at a good clip. You will read more about the Part 23 ARC in coming months, so pay attention and be informed because it will determine the future of the fleet.

There are plenty of issues facing us, but if we can make a meaningful difference in the value equation for new aircraft—lower prices or more utility, or both—we’ll go a long ways in improving the future of GA. AOPA

E-mail the author at thomas.haines@aopa.org; follow on Twitter: tomhaines29.