Waypoints

Editor in Chief Thomas B. Haines owns a Beechcraft A36 Bonanza.

Much is made of airframe manufacturers' efforts to certify a new aircraft. For start-up companies such as Cirrus and Lancair, it's a daunting task that can cost $50 million or more, even for a four-place, piston-powered single. Hang a couple of turbine engines on an airframe and add pressurization, and the cost goes up exponentially. But as the founders of Lancair, Cirrus, and others have discovered, certification is only half the battle — or less. At least as big a challenge is moving into meaningful (read profitable) production and then servicing and supporting the fleet.

In some ways building a company is a chicken-and-egg thing. Prospective buyers are reluctant to partner with an unknown company until it has delivered a few dozen or hundred airplanes and set up a service network. But the company can't afford to build the service network until it has established itself with a reasonable number of sales and deliveries.

Mature companies such as Cessna, Beechcraft, Mooney, and New Piper can enjoy the barrier to entry that comes with their long-established sales and service networks.

It's been interesting watching how the new companies approach the sales and service of their airplanes. Some have gone with rather traditional dealer networks. Some are sticking with only factory-direct sales. Some are establishing traditional independently owned service centers; others are building their own service centers. There is no definitive "right" answer to the question of how to sell and service a fleet of airplanes. Even the traditional Big Four have tried various models.

Mooney has changed its corporate mind several times over the years — going from independent dealers to factory direct to independent dealers and back to factory direct — all in the course of about 15 years. I attended a meeting in New York City in about 1990 when Mooney announced that it was abandoning its traditional approach of selling new airplanes through dealers and instead hiring a handful of sales representatives to be positioned around the country. The feeling was that dealers were not professional enough in their approach to selling and that the cost to support the dealers was too high. As you can imagine, the dealers complained loudly. Mooney attempted to leave its service network in place, but some dealers who also operated service centers said they would refuse to work on Mooney aircraft. The passage of time smoothed things over a bit.

A few years later, with Mooney under different management, the company decided that the best way to expand its sales was to reestablish the dealer network. Company executives realized the value of the dealer network — its ability to absorb inventory, which can allow the factory to work more efficiently by producing airplanes at a more constant rate rather than having to build them only as orders come in. So Mooney brought the dealers back online. Bankruptcy a few years later severed all of those relationships. Now Mooney, back from bankruptcy, is selling airplanes through four sales reps around the country plus the headquarters in Kerrville, Texas. Its network of more than 40 service centers is still in place (see " Mooney Gets Glass," page 72).

Sales masters

Cessna is often seen as the master of aircraft sales and marketing, especially with its jets. But back in general aviation's Golden Age of the 1970s, no company had a more savvy piston-dealer setup than Cessna had. Since reintroducing its piston products in the mid-1990s after a decade of producing none, Cessna has attempted to jump-start that sort of dealer network. As it did in the past, the company has closely aligned its Cessna Pilot Center flight school program with its Cessna Sales Team Authorized Representatives, which are the companies authorized to sell its piston airplanes. In the 1970s, the flight schools were a natural outlet for the training airplanes, with many owners putting their 152s and 172s on leaseback at the schools. Once the airplane was a year old or so, it was sold as a used airplane and the flight school got a new airplane. Of course, the hope was that those who learned to fly in a Cessna would want to buy a bigger one later — and it worked marvelously, with customers migrating right up the line to 182s, 210s, and into the 300- and 400-series twins, and ultimately to the jets.

The system works similarly today, except that now once you migrate up to a 206 it's a big leap to a CitationJet, or even to the smaller Mustang very light jet that is in development. The only steppingstone in the middle is the 208 Caravan single-engine turboprop. It's a terrific hauler, but because of its relatively slow cruise speed it is not an ideal transportation machine for most private owners. The gap in the product line has led to an enormous amount of speculation. Rumors regularly fly about Cessna's being on the verge of introducing a new high-performance airplane to fill that hole. Industry wags sometimes peg it as a single-engine piston, sometimes as a single-engine turboprop. Cessna, meanwhile, is mum on the subject, except for Chairman Russ Meyer's declaration a few years ago that the company would not be bringing back the 210.

If you need your piston-powered Cessna repaired you can take it to one of more than 350 service centers around the world. On the jet side, Cessna pioneered the idea of the company-owned service center. Today, Cessna owns 10 Citation Service Centers in the United States and a couple more internationally. The company recently built a new Citation Service Center in Wichita that can service more than 100 Citations at the same time in its 443,000 square feet of space. The building is two and a half city blocks long.

The new and improved approach?

Interestingly, Eclipse Aviation, which sees itself as Cessna's biggest competitor in the very-light-jet market, recently announced that it is following Cessna's lead. Eclipse is building a network of seven company-owned service centers around the United States with plans for more as the company grows. The first two are scheduled to open next year at the same time that deliveries are scheduled to begin. By 2008, the Eclipse officials say, no customer will be more than a 1.5-hour flight from a service center. Also like Cessna (and most other jet manufacturers), Eclipse will sell its jets factory direct.

So company-owned service centers must be the future, right? Not for the piston market. When it started manufacturing a few years ago, Cirrus was in a position to adapt to the latest strategies, and it chose a traditional network of independently owned service centers, with more than 100 already in place to service its fleet. With Cirrus delivering three airplanes a day, the fleet is growing quickly.

Unlike most piston-airplane manufacturers, Cirrus does not use independent dealers for aircraft sales. Instead, all Cirrus sales are coordinated through the factory and its team of 22 sales representatives around the country. Cirrus officials believe that the only way it can manage the customer experience effectively and keep bringing current customers back to buy new airplanes is by maintaining control of the relationship between the manufacturer and the owner.

Lancair, though, is taking a different approach. It has established a dozen independently owned sales centers. Another newcomer, Diamond Aircraft, is using a similar system. The New Piper Aircraft has used this model successfully for many years. Its 19 dealers and 40 service centers all operate independently from the factory, but with a great deal of support from the sales and marketing staff at Piper headquarters in Florida.

Raytheon Aircraft uses a variety of methods to sell and service its mix of airplanes. Beechcraft piston airplanes are sold through a network of 11 independent dealers. Some of those dealers also sell the C90B King Air twin turboprop. But if you want a larger King Air, a Premier I jet, or any of the Hawker jets, you'll be talking to a sales rep employed by the factory.

Raytheon has a service system similar to Cessna's. Its Beechcraft piston airplanes are serviced by dozens of independently owned shops around the world. Eleven factory-owned service centers and a few authorized independent shops look after the turbine equipment.

Unlike in the automotive world where the sales and service networks are closely linked, the price points of general aviation airplanes and the far more limited market require that companies use different methods to accomplish the same goal. Fortunately for those of us who fly light airplanes, the similarities among all of the aircraft make it likely that just about any aircraft technician at any airport can get us back into the air again. And if we want to buy a new airplane, there's definitely no shortage of people willing to make that happen.

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