In the realm of industries done in by capricious market forces, Lycoming and Continental arent just survivors, theyre evolutionary standouts. The entire GA industry imploded between 1980 and 1985 when sales rode over a cliff and both Lycoming and Continental had to rapidly reinvent themselves to survive in a world where 85 percent of their new engine business simply evaporated into thin air. Not
many companies have weathered such a drubbing. (A captive replacement market helped.)
The sun shaft in the gloom is that in 2006, about 2750 piston aircraft were built in the U.S., a healthy 12 percent increase over 2005, but still a pale shadow of the 17,811 piston airplanes shipped in 1978. By our calculations, Lycoming has a razor- thin market advantage in the certified fixed wing segment, but if you add Experimentals and piston helicopters, Lycoming holds a dominant share of the total piston engine market. (Continental has no presence in the helicopter market and minimal Experimental penetration.)
This sounds like good news for Lycoming, but there’s a problem. How do you eke out meaningful growth in a fragmented market with intense competition where the usual way of obtaining new business is to steal it from someone else and where it costs millions to develop new products that will, at best, sell in the hundreds of units, not in the thousands? Further, in the fixed-wing market, Cirrus, Cessna, Columbia, Beechcraft and Mooney have all proven that what profits there are to made are likely to be on expensive, high-performance aircraft with large-displacement engines. And its here that Continental leads and Lycoming lags, by a margin of nearly two to one.
Continentals success is built almost entirely on the strength of one engine series, the IO-550, lately with top down, tuned induction. The engine usually runs glass smooth and has the best fuel specifics of any aircraft gasoline piston engine widely