For a rough estimate it looks like the average price of this prop turning thing has gone up 1,000.00 a year for the last 10 years? any economist care to jump in and explain? has inflation been this high or is there another factor at play here?
Three things come to mind when I hear this discussion; quantity and liability.
How many new engines do you think Lycoming, ECI, and Superior sell every year? Call it 5,000 total? Be generous and call it 10,000 engines a year. Profit from those 10,000 engines must support the manufacturing staff, tooling, licensing, paperwork, fixed costs, etc.
Then add to the cost of those dwindling numbers the cost of liability insurance, whether self insured or via Lloyd's of London. Again, that "risk" must be spread over those few engines. As an industry, if their liability insurance is $10,000,000/yr, that comes out $1,000 per engine.
One other thing, ECI was just purchased by Continental. Superior was also recently (last few years) acquired by another company as well. Both of the new owners of these two companies will raise prices to cover the cost of their acquisitions.
It is kind of the perfect storm; reduced manufacturing quantity, insurance liability, and debt load.
Three things come to mind when I hear this discussion; quantity and liability.
You make a good point but how do you explain the cost of a $22k engine over haul?
I paid for the whole seat, but so far I've only needed the edge! The suspense is killing me
I would sure love to know where all these good used lycomings are for $8k. Maybe i should call vans and ask them to point me to some?
Last i checked you can't buy a run out core for less then 10k.
I know most will say thats an old quote and that would be true but i don't think its old enough to justify nearly 3 times the cost of what vans has printed on the site.
On a $25k engine, $1k per year is only 4%. Although overall inflation has been a bit lower than average over the last few years, I'm not surprised at $1k.
I think a little research will show that this statement was made in the 1980s. At that point in time, the $8K price was in line.
In 1992, I paid $3.5K for a first run O-320. I put it on my RV-6 and flew it for 3 years before overhauling it @2800 hrs. Even then every part I removed was well within serviceable specs.
If it were made in the 80,s which is probably pretty accurate with the cost of inflation from the 80,s we should be about 16-19k for a engine I think
Not 30k range
So it certainly can not just be attributed to inflation. Must be like others have said with liability etc
$8k was for a mid time used engine, circa 2000. At that time, new 4 cylinder engines were in the mid to upper teens, IIRC. At 3% inflation over 15 years, those $17.5k engines are in the mid- upper $20k region now.
The only real alternative today is some of the new diesel technology, which is coming out at the $60k-$80k price point. There is no economic incentive for Lycoming and Continental to keep their prices down. If you don't like it, what choice do you have?
For a rough estimate it looks like the average price of this prop turning thing has gone up 1,000.00 a year for the last 10 years? any economist care to jump in and explain? has inflation been this high or is there another factor at play here?
Textron which owns Lycoming and many other brands (including one I represent overseas) adjust their prices 3 to 5 % annually.
As a reference only: a 1997 Cessna 172S use to cost factory new delivery/ basic price $124,500. Move forward to 2015 and the same aircraft (newer avionics) cost $364,000. Reasons? Inflation is #1. Cost and availability of materials #2, believe or not TORT is #3 and Labor cost #4
I think cessna is going to have a real winner with the new 182 diesel but at a cost of $569k i don't know who they think they are going to sell it to.
You must be using the same math for this as you used above to explain how an engine rebuild cost $22k
You forgot with that retailers are also making profit on your 12k of parts as you stated above.
Just an FYI A commutative rate of inflation of 38.2% with a 15k new engine makes an engine today cost 20.7k and change not 29-32
The 182 Diesel they delayed, delayed, delayed, and then cancelled 6 months ago?
Sorry I'm out of date. I saw a flying version of it once at an aviation expo. Looked promising.
I guess your right. Was canceled. Some turbo problem I guess