LSA Values Declining?

[MrLupin]

I'm curious as to what others have seen regarding the values of LSAs. I've noticed a significant decrease in the asking price for Skycatcher's on trade-a-plane in just the last few weeks (an average of about $15,000). Has anybody else noticed decreased prices? What do you think will happen if the FAA does actually relax the medical requirements for private pilots? It seems to me that such a policy change would decrease what appears to already be a relatively low demand for LSAs to an even lower level. On the other hand, the low operating cost for the LSAs compared to the regular GA fleet, at least in my limited experience, seems as if it may continue to attract some additional entrants into the market. I know that regardless of the medical requirements I'm still very much interested in flying an LSA due to my perception of lower variable costs. If values continue to decrease I'll be even more interested!

(My apologies if this is already being discussed elsewhere - I searched and couldn't find it.)

[MovingOn]

.......

[CTLSi]

......

[MrLupin]

I'm curious as to what others have seen regarding the values of LSAs. I've noticed a significant decrease in the asking price for Skycatcher's on trade-a-plane in just the last few weeks (an average of about $15,000). Has anybody else noticed decreased prices? What do you think will happen if the FAA does actually relax the medical requirements for private pilots? It seems to me that such a policy change would decrease what appears to already be a relatively low demand for LSAs to an even lower level. On the other hand, the low operating cost for the LSAs compared to the regular GA fleet, at least in my limited experience, seems as if it may continue to attract some additional entrants into the market. I know that regardless of the medical requirements I'm still very much interested in flying an LSA due to my perception of lower variable costs. If values continue to decrease I'll be even more interested!

(My apologies if this is already being discussed elsewhere - I searched and couldn't find it.)

The Skycatcher is a dead aircraft. No one makes them anymore. Generalizing on all LSA is like generalizing on all cars. The Skycatcher is in a class by itself, a dead end class.

Yes, good point - I had forgotten about that. I did hear at one point that Cessna was going to continue building the Skycatcher but not as an LSA. Do you know if that is still the case?

Any idea as to what will happen to the LSAs not discontinued?

[MrLupin]

I think there is no question, used LSA's will decrease in value and used certified airplanes will increase. How much is anybodies guess. For people who can afford the high priced LSA's, it's probably not that much of a concern. As far as operating cost, I don't see any significant difference between a Cessna SkyCatcher and a Cessna 150 or a Flight Design and a Cherokee 140. When you include insurance and opportunity cost on money invested, the LSA might be more.

I suppose much of the increase in demand for certified planes has a lot to do with the make-up of the sport-pilots and the grounded third class pilots who would transition back to the certified aircraft. Interestingly, there is data out there that might give some information concerning these numbers (the FAA pilot database) but I haven't got the time to research it. My information concerning the operating costs is limited. I have a friend who rents a few LSAs and his variable operating costs are around $50 per hour, wet. Another friend is in a club which operates its 172 at $65 per hour wet. So, yes, not a huge difference. However, the $50 for the LSA is with a shop doing all the work and the $65 is with a very involved hands-on club (and one member who is an A&P). Of course, this is only one example.

My reason for the discussion is I'm in the process of organizing an flying club based upon, at least initially, an LSA. Given the potential changes coming down from the FAA I'm tentative about making any purchase/lease decisions. Thanks for your input.

[MrLupin]

[quote]I did hear at one point that Cessna was going to continue building the Skycatcher but not as an LSA. Do you know if that is still the case?

Nevermind. I found the following: http://www.aopa.org/News-and-Video/All- ... tcher.aspx

[CTLSi]

......

[Nomore767]

The LSA is currently flown by mostly Sport Pilots. That doesn't preclude a PPL or above from flying one. If the 3rd Class Medical rule is relaxed then current sport pilots could move up to the aircraft designated in the relaxed rule.

That being said, the rule change may mean the line between sport pilots and say PPLs becomes blurred. However, if you want a newer, more modern and sophisticated, cost-effective airplane then the current choice is probably from the LSAs unless you can afford a new Piper or Cessna.

The depreciation for airplanes has always been high. A current problem, if you anticipate financing an LSA, is getting the finance company to appraise the LSA you want. Many models have had limited sales and so there aren't enough to allow the finance company to accurately appraise them. Some finance companies won't appraise LSAs at all, and others won't appraise a particular model, or can't find enough recent sales to use.

Cessna have indeed stopped making Skycatchers. However, by comparison, Glasair have a new model coming out, the Merlin, which to me looks a lot like the Skycatcher with many excellent improvements. It will have Dynon Skyview Touch EFIS (optional dual screens), "stoke' control, Rotax 912Sport engine, 24 gals in wing tanks, all composite, and a much lighter empty weight than the Cessna. In a way it 'fixes' many of the issues people reported with the airplane.
It is due to be priced at about $150k and $160k with the 2nd Skyview upgrade and autopilot package. This would price it lower than Tecnam and Flight Design, although Flight Design is much further ahead of Glasair in production techniques and units sold.

For me, I think LSAs will still offer the private owner the best choices, and the most choices, for a newer, low cost airplane compared to the dated Cessna/Piper airplanes out there. If they changed the rule I would still look at an LSA as opposed to a Cessna/Piper or Mooney. That's MY opinion and it's true that some nice enough airplanes can be found at low prices.
The recent AOPA announcement of a project looking into refurbishing a number of Cessna 150/152s for a good price to increase interest in new pilots and customers is a great idea. The price would be lower than most LSAs but also would not have the technological advances of most of the new LSA models. On the other hand, LSAs are currently limited by the 1320lb weight limit, although I would argue the Cessna 150/152 don't perform as well as most LSAs except in the ability to carry more weight.

[drseti]

there are already guys flying with medical conditions under SLA rules that should not be in the air.

And, there have long been guys (and gals) flying with current medical certificates, and undisclosed medical conditions, that should not be flying. What's your point? Without hard data to back them up, statements like that are meaningless.

[Nomore767]

"Consider, there are already guys flying with medical conditions under SLA rules that should not be in the air - self assessing is the theory."

This is a bogus statement. you have to take a 3rd class physical every 2 years. So, you actually take a 1-2 hour medical with no EKG, no urinalysis, or blood work, to 3rd Class standards and then don't need to do it again for another 2 years. Practically, this means that you took one 3rd Class medical in the middle of a 4 year block. So, for the duration of the 3rd Class medical exam, this is the only time that one is checked by an AME. The rest of the time we all have to assume that you are feeling okay to fly, based on your self-assessment.
The same applies to 2nd and 1st Class physicals.

The rest of the time…pay attention here…YOU have to personally assess YOURSELF before each flight as to whether you're safe to fly. If you don't feel good, have had a couple of drinks, feel dizzy, nauseous whatever…none of the rest of us have any idea, only YOU. Which is why it's called 'self-assessment'. It's not a theory, it's a practice. In fact YOU do it, or should be doing it, before every flight. Apparently you don't !?

If you don't like this, or don't agree, that's your problem. Tell it to the FAA . Just spouting your own particular whine about it doesn't mean anything, other than showing, once again, your ignorance of the subject, and your spouting bogus mis-truths.

[MovingOn]

.......

[drseti]

You're an idiot.

Gentlemen and ladies, I must insist that we all refrain from name-calling in this community. Think what you will about each other, but please have the decency to self-censor, so I don't have to censor anybody myself.

[MrLupin]

Whoooaaa!!! Easy there guys. No need to get your feathers all ruffled. Its just a discussion board!

[MrLupin]

Does anybody here have any experience as a lessee or as a lessor of an aircraft? I'm in the learning stage at the moment and am trying to learn how leases are commonly structured, particularly for flight clubs. A common theme I'm hearing is that a lessor should generally not expect to make a profit off of a lease but could reasonably expect to have a significant portion of the fixed costs of owning covered. Given such a view it seems that a club would cover insurance, tie-down costs and other fixed costs. Any insight and/or direction to sources that discuss lease structures would be appreciated. Also, I'd be interested in hearing your thoughts (pro or con) concerning an LSA based club. Obviously, there is an issue concerning membership critical mass. That aside, what are your thoughts? Thanks!

[drseti]

Generally speaking, leaseback arrangements are usually structured such that the aircraft owner breaks even. Any advantage to the owner accrues in the form of tax benefits. For a highly paid working professional in one of the upper tax brackets, needing to tax-shelter some income, that can be substantial. For an ordinary wage slave, it is probably insignificant.