Will Only the Boutique Airframers Survive?
By Scott Spangler on November 9th, 2008Not a day goes by, it seems, when the aviation e-news organizations don’t report that another general aviation airframe manufacturer has reduced its work force and cut or ceased production to get through the globally self-inflicted economic meltdown.
What happens next for these aviation household names depends on how long the financial crisis lasts, and how messy it gets. Events over the past year suggest some will merge and others will fail. In November 2007 Cessna bought the composite Columbia line for what must be way less than the cost of seeing its rarely mentioned Next Generation Piston airplane through to certification. Since then Adam Aircraft closed its doors and Eclipse’s ongoing problems started making the news.
This turn of events doesn’t surprise me because these companies, Adam, Cessna, Cirrus, Eclipse, Hawker Beech, Mooney, Piper, and others like them compete with each other for a larger piece of a shrinking pie. With so many companies selling aircraft with essentially the same capabilities and performance, one doesn’t need a degree in economics to see the future of peddling these largely owner-flown aircraft to an aging and shrinking pilot population.
Absent from this stream of bad news are what I call the boutique airframers, the ones that make tens of airplanes a year, not hundreds. What is the economy doing to companies like American Champion Aircraft, Aviat Aircraft, and Maule Aircraft. So far, it’s not too bad. Naturally they’ve had some canceled orders, but they offer no hints of forthcoming layoffs or locked doors.
Digging through the available history it seems these boutique airframers have weathered past economic storms as well, and perhaps we can see our future in their past. They build aircraft that fit a specific niche without a lot of competition. Yes, they compete with each other, but not to the degree seen in the arena of aerial all-weather personal transportation. For the most part, every boutique airplane has an owner before construction starts, because a small company cannot afford a ramp full of unsold airplanes like a larger company can…when times are good.
In the coming days and months companies will continue to pay for past excesses that started in the 1970s when they saturated the market, which was showing the first symptoms of shrinking, with tens of thousands of airplanes. Some of them will not survive the perfect economic storm we now endure. Others will merge, and those that remain will likely be smaller companies that, by necessity, join the other boutique manufacturers and sell an airplane to an even smaller market before they build it. —Scott Spangler
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November 10th, 2008 at 10:18 am
yes
(and then only some of them)