Variation on Gary S.'s theme:
Cirrus needs to design and sell fat-margin turboprops to offset its thin (SR22), or nonexistent (SR20), margins in pistons. That or raise prices. (Or hope for volume in the 1000-planes-a-year range, at which point their current prices might make sense.)
Of course, tooling up for turboprops requires a boatload of capital, probably $150 million or more. That’s how much Eclipse raised.
A venture capitalist would look at it this way: The Klapmeiers soon may have to decide whether they prefer majority control of a small company in a risky market (piston aircraft), or minority control of a 21st century broadline aviation company. With their current success and backlog, I bet they could raise the money. The issue is: at what price. The Klapmeiers strike me as typical entrepreneurs who hate giving up control.
I would recommend they do: raise a ton of money, give up control, perhaps join forces with Eclipse, and kick ass. But I admit I haven’t walked the Klapmeiers’ path: a 20-year dream, betting the family fortune, living on macaroni and cheese, etc.
These are hard decisions. My hat is off to them.
Here’s my two cents on what Cirrus needs to do to become a profitable company that meets market demand . . .
The production problem stems from one thing, mainly – that’s price! The SR20 is now priced way too low. Evidence of this is the incredible backlog. The new SR20 still sells way below the market for an aircraft better than the Archer, Skyhawk SP, and Skylane. If I was willing to give something good away, I’d have a huge waiting list too. Although the price should have been substantially raised a long time ago to prevent this kind of backlog (and resultant need to produce at break neck speeds), it’s still not too late to up the price. Let’s face it – the A config plane should sell at $250K+. That way you’re more likely to make a profit – which has to be the idea here. Cirrus: Don’t lock yourself in to any future contracts at these prices!