If ever we needed more proof that yesterday’s conventional wisdom is today’s grim reality, the Cessna Skycatcher may be Exhibit A. Five years ago, it was destined to sweep its way to the top of the light sport aircraft market, mowing down most of the competition in a relentless drive to market dominance. Today, the Skycatcher is just another dead-end GA product, leaving owners, if not stranded, definitely baffled.
In a move that stunned reporters at the NBAA show in Las Vegas last fall, Cessna CEO Scott Ernest abruptly announced that the Skycatcher program had no future and with some 200-plus aircraft in the field, dealers and Cessna Pilot Centers have been told nothing to suggest Cessna doesn’t mean what Ernest said.
So where to from here? Cessna will continue to support the airplane and sell off the airframes in the pipeline, but after that, no more new Skycatchers. The immediate effect may be a softening of Skycatcher used prices, which may have been inflated to begin with. In the longer term, dealers, flight school operators and instructors tell us that just as Cessna’s impact on the LSA market was probably overstated, its exit from the business may have minimal impact, given the overwhelming choice of aircraft in the light sport segment and the fact that Cessna may not have been taken all that seriously as an LSA player.
Cessna has always cast a long shadow at every level of the piston aircraft market, no more so than in training. When it revealed details of what would eventually be called the 162 at AirVenture in 2007—including a price of $109,500—buyers (many of them dealers) erupted in what then passed for a buying frenzy. At its AirVenture booth, a digital display tracking orders reached 720 by week’s end and the company claimed more than 1000 orders a year later.
But when Cessna announced that the aircraft would be built in China by Shenyang Aircraft Corporation and shipped to the U.S. for assembly by a Wichita subcontractor, it caught significant blowback for moving jobs out of the U.S. and to China. But Cessna was unapologetic, explaining that its parent company, Textron, insisted that the 162 had to be profitable and although Cessna targeted a $100,000 entry price, that proved undoable.
Cessna committed to deliveries by mid-2009, but design issues with the aircraft and production snags delayed deliveries until 2010 and early that year, Cessna said volume deliveries would be delayed six to 10 months because of production and design issues related to the Skycatcher’s spin characteristics. Cessna lost two 162s in flight testing due to unrecoverable spins.
Although industry observers expected Skycatcher deliveries to rapidly ramp up and make Cessna the top seller of LSAs ahead of the German-based Flight Design, it never happened. Deliveries continued to lag as the cost of the airplane escalated, first in small increments and then, in 2011, to a whopping $149,000-plus, making the Skycatcher not everyman’s LSA, but a premium-priced trainer.
Following the 2011 price increase, position holders were allowed to cancel their orders and hundreds did just that. By November 2013, Cessna said it had delivered 202 Skycatchers and that it had a number in unassembled inventory at its Independence, Kansas, plant. Cessna wouldn’t confirm the number, but it’s believed to be between 70 and 80. Cessna spokesman Andy Woodward told us these aircraft would be actively sold by the Cessna dealer network. But Cessna isn’t saying production is halted, just that there’s no future for the airplane.
The $149,500 question dogging dealers is, does anyone want these airplanes or will they be marked down just to unload them, tanking used values in the process? In interviews with dealers and Cessna Pilot Centers, we were told that the market is uncertain at best, but even though Cessna hasn’t informed the dealer network of its short- or long-term strategy, everyone expects aircraft already in the field to be fully supported. Cessna’s Woodward confirmed this. But the price is a problem for sustained sales.
“At $149,500, it’s a problem,” says Tom Wood of Tom Wood Aviation in Indianapolis, who’s both a dealer and a CPC. “When the price starts creeping up, you definitely cut people out of the market,” he adds. None of the more than a dozen sources we spoke to thought the Skycatcher price was sustainable, even though they recognize that Cessna had to reach that price to make the aircraft profitable.
Wood thinks there’s some chance the value of used Skycatchers will actually increase because with fewer available, they are—and might remain—a desirable airframe, thus driving prices. But another dealer/CPC we spoke to believes the opposite: “It’s going to affect the market a little bit and we’re already seeing it. On the current pre-owned airplane I have here, it’s probably going to take it down about 10 percent in value,” he said.
Further complicating the sales equation for dealers is that the Skycatcher always was a low-margin airplane and Cessna made this worse by chipping away at dealer margins on all aircraft. One dealer told us he makes about $5000 on a Skycatcher sale and it’s a tougher sell than other models because potential buyers are more price sensitive. Many niggle over options the airplane can’t even have, forcing the dealer into an extended educational process about the limitations of light sport aircraft.
Judging values of used Skycatchers is like nailing Jello to the wall. The Aircraft Bluebook Price Digest gives the value of 2009 Skycatcher as $90,000 on an original price of $110,000, for a depreciation of 18 percent. By our estimation, if that value is reasonably accurate, that’s typical depreciation for a new aircraft and perhaps even a little less. A new Skyhawk of the same vintage depreciated 24 to 26 percent during the same period.
As for inventory, there are plenty of new and used 162s to pick from. The Controller and Trade-A-Plane recently had more than a dozen listings of various vintages, with 2010 models showing asking prices in the mid-80s. We suspect it’s a buyer’s market and likely to remain that way.
For all its travails getting to market and minor warts in service, the Skycatcher has proven to be a satisfactory if not stellar performer in the field. Operators, students and instructors like the airplane and renting it at a few bucks either side of $100 turns a profit. According to our survey, it has shortcomings no more serious than other LSAs. The two big ones are door openings in flight and a structural fix to the wing where the struts attach. Cessna found some cracking and released a mandatory service bulletin to address this.
“The door opening is kind of a big deal,” says Chris Dillis of Aspen Flying Club near Denver, which operated a Skycatcher for a short time. The doors open from top-mounted hinges to allow easier ingress/egress, and if they open in flight, they can be damaged enough to require replacement. We know of at least one incident in which the door separated from the airframe, but there could be others. Cessna addressed this by requiring the installation of a secondary door latch.
Enthusiasm for the Skycatcher as a primary trainer varies with operator, but none of the instructors, schools or owners we interviewed said the airplane wasn’t suitable for the typical flightline or that it couldn’t be flown profitably at a reasonable rental rate.
“I actually like them better than the Cessna 152,” says Jim Whitt, director of J.A. Air Center’s busy flight school in Aurora, Illinois, near Chicago. “It flies great, it’s fun to fly and customers really like them. We’ve gotten to the point where they are very good flight trainers,” he says.
But that’s not necessarily true everywhere. Some schools report that while the Skycatchers attract some business, customers also gravitate toward older airframes including the 152 and 172 and they aren’t necessarily sensitive to whether an airplane is new or old or even how it’s equipped.
“Probably more people want to migrate to the 150, that way they can migrate to the 172 and the 182 and move on from there,” says Mark Strafuss, a co-owner of Downtown Aviation in Memphis, which has been operating Skycatcher serial number 11 for a couple of years. But don’t students and renters care that the Skycatcher is new and shiny and the 150 isn’t?
“No, not at all. In a flight school you have very well-maintained aircraft. It’s hard to beat a 150,” Strafuss says. He estimates that about half his students obtain the light sport certificate and half train for the PPL. All of the schools we interviewed said that LSAs are an economical, practical way to train initially for the private certificate.
While we’ve heard from operators in general that light sport aircraft aren’t up to the rigors of U.S.-style flight training and thus break often, we heard little of that aimed at the Skycatcher this time around, other than it being a handful in crosswinds and gusts because of its light wing loading. Brakes and tires don’t hold up as well on the Skycatcher as on the 152 or 172, but operators simply budget for that. None of the operators we interviewed reported significant AOG events.
But when asked if the Skycatcher will be as long-term durable as the 150/152 has been, operators have few illusions. “I don’t think these will last like that. I think they’re going to be 6000-hour airframes at this point. But who cares? It’s a reasonable cost airplane. What more can you ask for?” says J.A. Air Center’s Jim Whitt.
Wrapping It Up
If Cessna’s surprise—and discouraging—announcement that the 162 has no future shook the LSA world, we’re not able to see the ripples. There are several reasons for this, we think. One is that owners and operators are confident that Cessna will continue to support the Skycatcher, so the 162 becomes the new 152. Airframe values may erode a little, but there’s no initial evidence that they’re going to tank. We’ll see what happens during the spring selling season.
Second, the LSA market continues to be broad, fragmented, competitive and with many more choices in aircraft than it seems able to support. While Cessna was expected to validate the market and ignite the long-awaited shakeout, neither of those things happened. When Cessna entered light sport, the market was dominated by small manufacturers, mostly of European origin, and as Cessna withdraws, that hasn’t changed. What is obvious is that three major airframe makers—Cessna, Cirrus and Piper—have ventured into light sport in varying degrees only to pull out, suggesting that the low-volume, low-margin business model just doesn’t work for big companies.
“There’s not too much rumbling going on about this,” says Dan Johnson, chairman of the Light Aircraft Manufacturers Association. “Within the industry, many had already dismissed Cessna some time ago for the reason that the airplane never seemed to really meet what the market wanted,” he adds. The buying frenzy was strongly dealer driven and many bought sight unseen. When they did see it, many backed out of orders when given the chance at the 2011 price increase. “So I don’t think there’s any great rush to say, oh great, now there’s an opportunity, or, oh dear, we don’t have the validation of Cessna being in the market anymore,” Johnson says.
One other factor, Johnson adds, is that Cessna’s prices on 172s are projected to be well north of $400,000 for 2014 and some buyers are questioning whether the company is serious about staying in the piston market at all. Bailing on LSA only adds to the speculation and at his contentious press conference in Las Vegas, Scott Ernest did little to spread the love toward the piston division.
This uncertain chain of events may represent an opportunity of sorts for buyers with stout hearts and healthy wallets who don’t particularly worry about whether the company will stand behind the Skycatcher model.
Cessna says it will and everyone we talked to said they take the company at its word. In the broad world of light sport airplanes, the Skycatcher is credible; neither a standout nor a laggard. Given the premium price, we can’t really recommend the purchase of a new Skycatcher by an individual owner. We think there are better airframes for less money.
But if used prices tumble, there could be a good buy or two out there and we see the risk of Cessna truly orphaning the Skycatcher as no more or less than with any other LSA company.