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From: doug@terak.UUCP (Doug Pardee)
Newsgroups: net.aviation
Subject: Re: The price of competition and the PA
Message-ID: <263@terak.UUCP>
Date: Thu, 17-Jan-85 11:17:57 EST
Article-I.D.: terak.263
Posted: Thu Jan 17 11:17:57 1985
Date-Received: Mon, 21-Jan-85 02:36:37 EST
References: <19504@lanl.ARPA>
Distribution: net
Organization: Terak Corporation, Scottsdale, AZ, USA
Lines: 70

AT LAST!  A response which takes some issue with some of the
evidence that I've been dumping onto the net for weeks.

I shall only address the questions regarding the basis for my
numbers.

> > From Burt Rutan, as good a spokesman for the "New Wave" as any:
> > "Part 23 is really just a minimum requirement.  If you designed
> > an airplane just to meet the present Part 23, it would be a
> > very marginal airplane.  The problem is not with the regulations;
> > the problem is with the...FAA... Nobody wants to sign anything
> > off... And the only way to solve that problem is to kill all the
> > lawyers."
> 
> I think I read that interview.  It seems like his full remarks were in
> favor of the PA proposal and that he thought it would help bring the cost
> of flight down (probably in the parts of the quote you left out).
 
I wish I had the copy of the magazine here to quote verbatim, but I
will assure you that the edited-out sections were simply redundant.
It was something to the effect of "The problem is with the way that
everybody in the FAA is scared to death they will be sued in case
something goes wrong.  Nobody wants to sign anything off because
they're afraid they'll be held liable.  And the only way to solve
that problem is to kill all the lawyers."

> Item 3 - isn't that one of the things that the PA proposal will
> specifically reduce?  Guess I'll have to go home and reread the whole
> proposal.  Anyway, I'll use the 10% figure given for the sake of argument.

Item 3 (Manufacturer's liability insurance) is to cover lawsuits against
the factory in the event of a crash.  In 1980 GAMA stated that their
members were paying 7% for liability insurance.  Given the rash of
HUGE settlements against GAMA members recently, I would guess that
GAMA members are paying more than 7% now.

In the case of a Rutan-type plane, I speculate that insurance will
probably be higher than GAMA for 3 reasons:  1) no track record; 
2) high injury and fatality rate in forced landings;  3) any
radical design in any kind of product is a huge "SUE ME" sign.
 
> Item 7 - seems a bit high - most kits advertise only a few hundred hours
> construction time and I can't believe that mass production techniques won't
> be applied even for relatively small production volumes.  Of course, when
> an add says 100 hours to construct that may just be advertising hype, but I
> can't believe the add is off by a factor of 12 1/2!

This figure was based on the time that Rutan's construction people
stated that it took them to build Long-EZE's -- about 1300 hours.
These are people experienced in the job, working with the same
equipment that Rutan uses to build his concept planes.  Aviation
Consumer reported that they talked to a (a statistical sample of 1 :-)
person building a Long-EZE, and he had over 2000 hours in it and didn't
have any idea when he would be done.

> Item 9 and 10 - call it $20,000 for the whole thing ($15,000 for kit, $5,000
> for avionics - if they want more avionics they pay for 'options' just
> like everywhere else.  Note that because of all the percentage mark-ups
> on this list, it would probably be cheaper for the end user to buy all
> his instruments retail anyway.

First -- exactly right about buying instruments retail.  My (small)
point is that the same is true of current factory-built planes.
You can buy a stripped Wichita Spam Can brand new for half of
what it would cost fully equipped and upgrade it for a lot less
than you saved.  In the case of Cessna, their factory avionics are
the laughing-stock of the industry, yet people still insist on
buying their planes loaded with factory avionics.  I can't explain it...
-- 
Doug Pardee -- Terak Corp. -- !{hao,ihnp4,decvax}!noao!terak!doug