why not? the original post was that innovation can't happen in aviation because of regulation. if we're shifting the argument to innovation doesn't happen because it's expensive, that's a much more solveable problem.
And that innovation is “just” glass cockpit, and some more advanced avionics. Not changing the principles - you fly a bit faster, a bit safer but still need a license and do all the preparation and checks. But it’s a bit more fancy. From 200k to almost 1 MM.
The Garmin Autoland you described bumps up the sum to 3MM (https://www.piper.com/press-releases/piper-announces-new-m60...).
So factor 10 for something “that was already unreasonably expensive”...
My argument was around “innovation has a horrible ROI” in the aviation industry.
Building a startup in that space has to take costs into consideration... I mean, Musk initially didn’t shoot people into space, there was an inefficient market and the margins were enormous... That’s a different story...
Cirrus: "new aircraft deliveries for the piston SR Series reached 380 in 2018"
By way of comparison, Ferrari delivered 9,200 cars in the same year.
Part of the problem with aviation has been that aircraft are boutique items and priced accordingly.
I'd imagine even a Toyota Camry would cost $150k if it was a one-off design.
This may be so, but I don't think you've really substantiated it; you're just talking about part of the "I", without any reference to the dollars of "R". Sure, $1m puts a plane out of almost everybody's recreation budget. But for a piece of transportation infrastructure with high utilization, it might not be prohibitive. (I mean, a jumbo jet costs hundreds of millions to build, involves significant R&D budgets on each new model, and is still positive ROI, just.)
You said "you fly a bit faster, a bit safer" in a dismissive way, but how much is this actually worth? I could easily believe that making flights slightly safer is worth an extra $1m of capex; I think your original claim would be much stronger if you provided some more concrete numbers/analysis here.
My comment was not dismissive of the innovation by Cirrus (which I think is great).
It’s about the costs getting it into the market and having it certified.
Imagine you buy a car for 50k USD. Now, you want an airbag and a better infotainment system. Not a problem. Price is now 250k. Is an airbag and a better Infotainment system worth that premium to you? I can’t answer that for you. But this is what we are dealing with in general aviation.
And it is not 1MM USD in Capex... It is 1 MM USD premium per PLANE.
And again: there is a reason why you have the B747 and 737 for like 40 years... Because exactly of that certification nightmare of new airplanes.
Now talk autonomous electric vehicles with passengers. How should the math ever add up?
Perhaps we're talking at cross purposes here; when talking about ROI, the numerator and denominator are usually both in dollars.
If I'm pitching Lilium to some VCs, I'd model out the cost of researching, developing, and building the fleet ("I"), and the revenue I hope to generate in a given timeframe ("R"). After adjusting for the risk of failure, if that ROI is higher than what you can get with other investments, the ROI is, in the relative sense "good". If it's worse than putting your dollars into treasury bonds, it's "bad".
Paraphrasing, your arguments earlier in this thread were that investing in aviation is brave, because the ROI on those investments is bad, because it's expensive to certify new inventions. I certainly agree that it's expensive to build a plane, or even add features to a plane, and even more expensive to build and certify a new plane. But that doesn't mean it's bad ROI. The return generated by building expensive things can be astronomical; see military and aerospace contractors taking in multi-billion dollar contracts with very healthy profits, for example. There should be clear numbers behind this; how many aviation startups succeeded in the last N years? How many folded? That would be the objective analysis I'm looking for when talking about ROI on investments in aviation companies.
Maybe that's not the point you were intending to make; perhaps you're just talking about the ROI for an individual buying a plane, rather than a business operating a fleet (like Lilium in the OP)? But if that's what you mean by ROI, then I don't think that is particularly relevant to investors; they are interested in ROI in the sense I outlined above.
Nah. Avionics, etc, and what goes into a plane is cheap compared to the purchase price. Even when you talk about G1000, G3000, etc, they are not the primary cost drivers.
What's killed the price of general aviation aircraft is that very few units are purchased. In turn, prices go up; in turn more old planes are kept flying and fewer units are purchased.
Four seat aircraft without glass cockpits and without notable innovation are a few hundred K.
It's the same with the first car you build. The first Tesla Roadster cost tens of millions to make. The second Tesla Roadster cost half that.
If there is a factor 10 whatever uncertainty in this equation - you are essentially just gambling like an Options-Day-Trader on Reddit. I understand that investors see “the hockeystick” unlimited revenue upside and justify everything around that.
But I personally would not want to so business in the most over-regulated, slow-growing and low-margin industry with a “factor 10 investment uncertainty”; that uncertainty btw renders your investment null, void and lost if your plane doesn’t get certified. And you don’t even have certification guidelines.
SpaceX is exactly the WORST example in this context: they just went ahead without all the bureaucratic overhead you find at NASA; they weren’t exactly transporting people at the beginning but cargo... And they had a pretty clear market with fat margins; those margins were fat due to the (unnecessary) overhead other agencies created.
You can’t do that in this case.
Put a bit differently: you can probably guess the magnitude of costs for a car to develop. In this case, I would be more than surprised if the get within a 10x magnitude in the end for their cost estimate and EVER get it certified. Again: there are currently NO guidelines how to certify that...
An example from Airbus and the A400 flagship:
https://en.m.wikipedia.org/wiki/Europrop_TP400
“Several technical problems delayed the engine's certification test program and pushed the entire A400M aircraft program into further scheduling adjustments. The engine delays were primarily due to problems with completing the full authority digital engine control (FADEC) software to the satisfaction of the civil authorities. More specifically, Europrop determined in mid-2008 that the engine worked correctly, but the FADEC software still did not meet EASA requirements.[27] Since the A400M was intended for humanitarian missions, the aircraft also needed to have a civil certification. Europrop did not realize that this meant the FADEC also had to show traceability and accessibility, so EASA denied civil certification of the software. Because of this problem, the first A400M test aircraft, which was flight-ready by September 2008, was not permitted to fly. Europrop had to triple the size of its workforce to fix the issue,[28] resulting in a FADEC system consisting of over 275,000 lines of code, which was four times more complex than the FADEC software for the largest civil jet engine.[29] Other problems included numerous plane subsystems providing insufficient logging to the main aircraft computer.[30]”
I'm not saying this is doable but those numbers show nothing.
100+k is expensive, but even a 162 is likely to be flying for 40+ years.
