Backlog of Orders

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!

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 –
I agree with you eccept 250,00 is little high and part of the problem now is that they are geting thelow price contracts deliverd as time goes by the contract prices go up and im sure they know it.And thet is there saving grace.so i Think we will see another price incress of 10,000 in 6 months and will then get up to speed .Anther itim is contract buying I did buy mine but still im suprised they let us do that if they would have not then they could have moved up other more money ones and even if they would have given back the deposut so what when costimers can get them sooner they will pay more but to wait 2 years i dont know if the market will beer this.from Don 215

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!

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.

My first choice was a Diamond DA40. Cheaper, less fuel consumption, and not much slower (147 knots). Their only problem was they could not deliver, so when I got a chance to partner with someone with a first quarter 2001 SR20 delivery I went with it. The first quarter is now July 15. Although if Cirrus does go belly up before they deliver I am now leaning toward a TB21GT with known ice capability.

Gary,

I bet when you bought your position at what? 169K? you were tremendously happy not to pay 250K. Why should all people either willing or financially capable today pay almost 100k more than you did. I’d be disappointed if Cirrus would embark this way. Their business model is volume at lower prices. They wouldn’t differentiate themselves anymore from the rest of the GA pack if they went your desired way. Having such an enormous backlog is evidence that they are revolutionizing the GA marketplace not only from a product point of view but also from a business model point of view, and that is exactly what I hope they will achieve.

Placido

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!

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!

One of the reasons the SR 20 is so popular is because of its price. If CD were to have introduced it at 250k, I bet there would not be that many takers. I for one would start to consider other “proven” models if the SR20 A model was priced at 250k. Lets face it,I love the SR20, yet, it is still a new product with a new company with no experience in mass production in an entirely new field (Composite vs. Aluminum). Hopefully this year CD will sort things out - I firmly believe they will.

Other things to consider would be a higher hull insurance premium if the SR20 is priced at 250k.

One more thing, General Aviation collapsed in the 80’s because it’s products did not change while its prise rose dramatically.

Cheers,

Mario #411

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.

Well, thanks, buddy, you just priced me out of the ability to own one of these planes at that price. In fact, the backlog works to my advantage. In 2004, my kids get out of day care and free up a bunch of money. Even with that, it will be extremely tight. But we (my wife and I) figure you only go around once.

I wish I was in your position and grew my money on trees.

What GA needs is more affordable planes, not less.

Tom

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.

I tell you what, if you want them to move up the delivery on a plane you paid so much less for, and you really feel that they should charge more money, why don’t YOU pay more money. I bet you could work something out with them.

Tom

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!

part of the problem now is that they are geting thelow price contracts deliverd as time goes by the contract prices go up and im sure they know it.And thet is there saving grace.so i Think we will see another price incress of 10,000 in 6 months and will then get up to speed .Anther itim is contract buying I did buy mine but still im suprised they let us do that if they would have not then they could have moved up other more money ones and even if they would have given back the deposut so what when costimers can get them sooner they will pay more but to wait 2 years i dont know if the market will beer this.from Don 215

I too am somewhat surprised that they allow contract assignment since they are allowing sales at old contract prices when they might be getting higher prices on new contracts. Notice I say might – this is because the contract holder is creating the sale in an assignment situation that Cirrus may or may not make. Apparently, they want to keep the sales they’ve got and not lose a one. This is probably good business in another respect. There is security in knowing that you can sell your contract without losing your deposit and progress payments. We may not have stayed with it this long if we did not have the ability to sell the contract and recoup our deposit/progress payment if need be. I have had offers well above the current pricing ($10K and more) just to move up in line. We now have $30K sitting with Cirrus. Too much to lose? It’s nice to know we have a golden parachute if our personal situation requires us to bail out.

part of the problem now is that they are geting thelow price contracts deliverd as time goes by the contract prices go up and im sure they know it.And thet is there saving grace.so i Think we will see another price incress of 10,000 in 6 months and will then get up to speed .Anther itim is contract buying I did buy mine but still im suprised they let us do that if they would have not then they could have moved up other more money ones and even if they would have given back the deposut so what when costimers can get them sooner they will pay more but to wait 2 years i dont know if the market will beer this.from Don 215

I too am somewhat surprised that they allow contract assignment since they are allowing sales at old contract prices when they might be getting higher prices on new contracts. Notice I say might – this is because the contract holder is creating the sale in an assignment situation that Cirrus may or may not make. Apparently, they want to keep the sales they’ve got and not lose a one. This is probably good business in another respect. There is security in knowing that you can sell your contract without losing your deposit and progress payments. We may not have stayed with it this long if we did not have the ability to sell the contract and recoup our deposit/progress payment if need be. I have had offers well above the current pricing ($10K and more) just to move up in line. We now have $30K sitting with Cirrus. Too much to lose? It’s nice to know we have a golden parachute if our personal situation requires us to bail out.

Totally agree with the golden parachute situation. Also the price is one of the reasons that I went with a “start-up” company. Lets face it, while I honestly believe that Cirrus will make it,( I sent them 30K of my money) there is an element of risk involved that is not present with someone like Beechcraft or Cessna or now even with Piper. I feel we are somewhat like the investors in the company and deserve a “better deal” than if Cirrus was an established company like Cessna. Without this I wouldn’t have bought in when I did.

A few years ago I was looking at getting a kit plane called the Glastar by Stoddard-Hamilton. This was a small company but one that seemed to be in good shape. They were in the process of selling a ton of kit planes, I think I heard second only to Van’s R/V series. They are now in bankrupcy court.

My point is that anyone to date who has sent a deposit in needs add incentive in the form of price or contract assignment to make up for the “pucker factor” that is especially present now. In four or five years with an established product and company that brings added security to the table a higher price may be justified.

Mike Myers