Of course kit built aviation will survive even if Vans doesn’t.
Vans may be the biggest and more prolific by far but there are loads of kits out there. Most operating at a much more modest level but still having a loyal following.
gallois wrote:
Of course kit built aviation will survive even if Vans doesn’t.
That’s not obvious IMO. What has kept those (other) three alive (according to themselves) is organizing their business for sustainability rather than growth. They all said this, if they were to follow ordinary business practices, they would increase their kit prices by 40%. That would be OK for 2-3 years, and it would all collapse. Which has happened to several companies, Glasair for instance. What Van’s is doing now is exactly that, they have no other choice. How long will they last? I have no clue. What saves them could be that they are in fact eating into the certified marked rather than expanding the traditional kit market? I don’t see how that is going to add up though.
The others will survive as long as they run their businesses in a sustainable fashion. Then we have Cub Crafters for instance. They are doing well (by the looks of it) with very high prices, and has done so for a long time. They are probably targeting a very different niche of people rather than the traditional kit market also.
There are many kit builders. Quite a few before Vans and there will be quite a few afterwards.
Some have had financial problems in the past but seem to be okay now. Some concentrate on the retro market.
There is a market for kit builders and whilst there is a market there will be companies to serve that market. Aircraft designers will not just stop designing aircraft. Many of these designers are not just doing the job under the umbrella of Airbus or Boeing, they are passionate about aviation at all levels.
gallois wrote:
Aircraft designers will not just stop designing aircraft
No, but that’s not the problem here. The problem is kit manufacturers going out of business. If we are to take the CEO (and owners) of Sonex, Zenith and Rans seriously, and I think we should, then staying in business for more than a couple of years is a matter of NOT following normal “university business practice”. That’s not an easy thing to do when orders are skyrocketing as in the pandemic, and it’s difficult to get the products out (also due to the pandemic). This made Van’s bankrupt, and it’s not unreasonable to think the others have had the same problems. They obviously had, but managed to solve them, which Vans didn’t (but they also had other issues).
The main problem with covid is that most people got greedy.
Now they are paying for it.
There is a bloodbath in many areas now. Electronics, bikes, you name it.
Running a business where people want to buy your products is not difficult.
Sentiment can turn around fast, as Vans are discovering. They got bitten by bad QA.
Van’s became successful, big time. IIUC they were selling more kits than all the certified planes being sold each year.
That is a fantastic achievement by any stretch. The problem with being successful in the long term is that you need to keep pushing boundaries, meeting the needs of an evolving market (no company can stand still). The problem is that if you let quality standards slip or push prices too high, you will no longer be a market leader.
On the other hand there are the bijou companies. Ones that have accepted their limits. They don’t fight to be number one.
They look to produce enough to make a living for themselves and a small number of people. Niche manufacturers are what some call them. Germany has grown its economy on the back of these niche manufacturers. France have had a lot of them. Smaller and less successful than their German counterparts. As Peter rightly points out “one man and his dog in a shed”.
But they can’t mass produce in the way of Van’s. When they try to compete outside their area of expertise or try to grow too quickly, they fail. Eg Robin and Dyn Aero.
But despite financial problems they do tend to bounce back in one guise or another until again they try to surpass their limits and again they hit problems.
IMHO Robin Aircraft will always be a niche market yet as the case for Morgan motor cars or Aston Martin they need to stay within their niche. That doesn’t mean they shouldn’t innovate, and they will, it just means that mass production and mass markets will never be for them.
Peter wrote:
Running a business where people want to buy your products is not difficult.
It’s difficult when you are not able to produce and deliver that product, and when the increased costs, for instance during the pandemic, are not taken care of through contracts with customers. No one knew up front how the pandemic would affect their particular production. Lots of variations.
Bad QA is a red herring here. There’s nothing they could have done to prevent for instance the primer issue on the quick built, except what they did: preventing them from going to customers. Likewise the LCP. Completely invisible to the naked eye before dimpling/riveting. Of course, they could have made it more clear to the company operating the laser that it has to be done like specified, and controlled that regularly, but that is more of a hindsight thing. The only thing to learn from this is that laser cutting (rivet holes up to the correct dimension) simply is not a good idea due to the possibility of hidden faults that can only be discovered when the parts are further used by the builder. Then it’s too late. In an industrial setting, no problem, but it would also increase cost more than enough for it to make no sense compared with punching. It would only make sense where punching for some reason cannot be done.
For instance welding of engine mounts. Both Vans and Sonex subcontract that to small companies they know well (as far as I know). How are they going to suddenly increase that production by 2-3 times during the pandemic? It cannot be done. It would involve training new people for a long time for instance. Just getting enough steel was a problem, and certainly for extra deliveries at a reasonable price. The cost of that steel would be 3-4 times higher than normal, if not even more. There was no way of doing it that wouldn’t increase cost by 2-3 times, and would the customers pay for that? Some probably would, but certainly not the average “consumer oriented” one.
gallois wrote:
When they try to compete outside their area of expertise or try to grow too quickly, they fail.
Exactly the point. But that is not easy when you customers are literally 1000s of individuals, increasingly consumer oriented ones, screaming about their consumer rights. At some point there is a tendency to do something.
It makes me wonder. Van’s increasing the prices is not as much to cover their actual cost, but more to reduce the number of customers, keep the production at manageable size. But this is the killer of GA. It is always better to produce fewer items at higher prices. It’s much better business vise to produce one single biz jet each year, than to produce 50 small SEPs. Better still, producing 737s or F-35s, or simply parts for them 
The big bit I just don’t get is how can a company get into trouble when they are subcontracting almost all custom parts.
In my business (electronics) I contract out the pick and place assembly
so if demand went up 10x I could handle that. Similarly, knocking out CNC sheet metal (casually called “bent-up tin” in English ) is easily scalable – unless there is just one outfit with the machine and is already running at capacity.
Obviously there are caveats. You will need to pay for the parts/materials before you get paid by customers, though much depends on whether you sell B2B or B2C (the latter gives a much better cash flow – probably 2-3 months’ cash better, plus much lower sales ledger risk). This – called overtrading – can bring a company down if it expands too rapidly. But the covid-leisure-driven manic did not ramp up that quickly…
The “one man and his dog in a shed” is perfectly good if you contract out stuff, and have some number of customers. I have run a £3M (today’s money) business with 30 staff, and more recently a £1M business with 2 staff. The difference? Smarter, and contracting out capital-intensive operations. In both cases though we had a 100% eyeball on the finished product, so never had the Clive Sinclair " 100k Spectrums of which 10% are DOA " or the corresponding Vans situation where parts with bad holes arrived from the contractor and nobody noticed.
Looking at this over the past 20 years, I suspect that too many people thought “uncertified = nobody cares” which is obviously wrong. Worse than wrong because the customers will be highly emotionally attached to the project.
It’s much better business vise to produce one single biz jet each year
Until you realise that you have exactly one customer and when he gets into trouble, your operation is dead – regardless of your profit margin
Peter wrote:
The big bit I just don’t get is how can a company get into trouble when they are subcontracting almost all custom parts
They don’t. They try to produce as much as possible, but that depends on a lot of other stuff. For instance Sonex and Vans are situated in industrial areas, and using the welder next door that they know well simply makes more sense than doing it yourself (housing, equipment and so on, and welding is a very specialized thing). Zenith and Rans are more self sufficient, because they are situated in the middle of nowhere.
Peter wrote:
knocking out CNC sheet metal (casually called “bent-up tin” in English ) is easily scalable
Only by purchasing more machines, or running them 24/7, which requires more manpower (and lots of training). Even with CNC this is all considered hand crafted stuff, nothing like electronics production at all, which is what the LCP issue is an example of. You cannot simply send off production to any sort of “metal worker” and assume it will be OK.
