Aircraft Review

February 2018 Issue




Mooney’s Place In The Universe

Buying a new airplane is both an act of passion and an act of faith. The very idea of sinking so much wealth into an asset used but 100 hours a year has to be driven by blind love for flight. The faith part has to do with the company remaining solvent to support such an investment.

Anyone looking at the sales graph below might understandably have second thoughts. And not just about Mooney, but the industry in general. But readers and would-be buyers do ask us from time to time if these companies are on solid financial footing. Without the luxury of reviewing the company’s P&L, we can only guess. But we do ask around.

The chart shows or at least implies that Mooney’s economics are very different from those at Cirrus. The last high water market in GA sales occurred in 2007, when the industry sold 4276 aircraft. (That’s everything in GA; not just pistons.) That year, Mooney sold 79 airplanes. Its best recent year in the modern era—since 1997­—was 100 aircraft.

But can a company survive on such low production? Evidently it can, because even in years of producing no airplanes, Mooney kept the lights on, building parts and servicing 60 years’ worth of installed base.

We don’t know the size of the investment the China-based Meijing Group made in Mooney, but the company’s marketing director, Lance Phillips, says the investors are committed to sustaining the Kerrville operation. It has, however, placed in stasis the M10 trainer project it announced in 2015. 

11 Mooney-M10-Zhengzhou-Soaring-Aviation-Company

Mooney announced the M10, below, at the Zhuhai airshow in China in 2015.

That model’s conceptual framework was developed in a skunkworks operation in Chino, California, but that shop has since been darkened, if not totally closed. When I visited Kerrville in early 2016, the company was considering building an M10 production line. That work has since been reduced to a simmer; not cancelled, but not front burner, either.

In April 2017, the company’s then-CEO, Vivek Saxena, stepped down and has not been replaced. Phillips said the company hasn’t made a decision on a new executive. 

The current laser focus is on improved manufacturing efficiency for the M20 models. ”Coming up to full speed, on really a new product, we need to scale. I want [the team] focused on the next iteration of the M20,” Phillips says. Is there yet another model under consideration? “I think a lot of things are under consideration,” Phillips says, but Mooney sees potential in the training market. 

He believes Mooney is in a strong sales position because it can focus solely on its two piston models, while Cirrus is distracted by its jet sales and Textron has drifted from its commitment to piston aircraft. “We have an opportunity now that Mooney really hasn’t had before,” Phillips adds.

12 SALES DATA GRAPH

The view from the field is similarly bullish. Premier Aircraft’s Lee Drumheller said he was busy courting qualified buyers and in a strong economy and stock market, they’re more readily pushing the button. Premier principal Fred Ahles agrees.

“Sales have been bad for so long for no good reason. People just had no confidence. But over the last year, they’ve started to gain confidence,” Ahles says. The recently passed tax reduction, predicts Ahles, will stimulate sales of new aircraft. 

“I get a lot of people in here who own small businesses. So what’s a guy gonna do who all of a sudden gets $200,000 in his pocket? I’d say the answer is either reinvest in his business or buy something for himself, or some combination,” Ahles says. When I spoke with Ahles just after the tax bill was signed, he said Premier already had a number of aircraft deals near completion. He expects to see more in 2018. Ahles agrees with Phillips on the timing. “Mooney is coming to market with the best high-performance single when the fish are biting,” Ahles says.