Why avionics cost so much

[GeorgePerry]

Its a rhetorical question but why is a garmin system that does less, cost 10 times as much?  Experimentals have all the nice stuff...Another example of the FAA being an impediment to progress.

$3,900 SkyView System Heading For EXP and LSA Markets 

Dynon Avionics announces SkyView, a new generation glass cockpit system destined for the Experimental and LSA markets. Dynon's SkyView reportedly offers high quality glass panel avionics with 'incredibly bright' screens, redundant systems, design flexibility, and future upgradability -- and at an affordable price.

[LuvFlying]

Why? One word...lawyers.

[skyking]

I dont know about the US but if you live in Canada you can change your plane to the owner/ maintenance category and get all the nice cheap stuff.

I would not do it personally but i do know a few Mooneys out there that have been moved over to that category.

 

russ

[Guest Anonymous]

Quote: skyking

I dont know about the US but if you live in Canada you can change your plane to the owner/ maintenance category and get all the nice cheap stuff.

[skyking]

SagemGuy: Same here. If you move into the owner-maintenance catagory your value drops like a rock and it is almost impossible to get it back into the certified catagory if you ever wanted to.

Thats why i would never do it. But i do know 2 model M20A's that are here in Canada that are in that category because the owners bought them out of the US and found way more restoration was required than originally thought and it was just less expensive to go that route.

 

Russ

[fantom]

Quote: LuvFlying

Why? One word...lawyers.

[Cruiser]

I think George hit it on the head in that the FAA certification process is ridiculous. Also, you pay a huge premium for the certified stuff, only because the manufactures keep the price high. They are making a boat load of profit on these TSO units. I don't think lawyers have much to do with the avionics companies.

On the other hand, specialty items are very low volume and the economics of scale just can't trim enough cost out of the system.

[GeorgePerry]

Being a career military officer I know alittle about government bureaucracy...  I understand that in every organization there are great, so-so and terrible individuals that make up the ranks. The military and the FAA are no different in that regard.  However, as an organization the FAA is the poster child for what’s wrong with government agencies.  As an organization they are a slow, un-innovative, bloated agency who's default answer is "no" and puts the safety of inaction ahead of the public interests they should be serving. 

Point being, the FAA is not interested in facilitating improvements in aviation.  The FAA is a bureaucracy more focused on process and paperwork than safety, mishap reduction and innovation.  The difference between a TSO'd system like a G600 and the Dynon has little if anything to do with functionality or reliability and everything to do with paperwork.  By default the FAA keeps quality aviation products such Dynon's out of the "certified" aircraft marketplace.  Small companies like Dynon don't want to deal with the FAA nor can most afford the TSO certification process.  It literally takes years, untold amounts of money and the patience of saint to work through the FAA's bureaucratic red tape.

Take for instance the use of the Garmin 496.  Just about every GA plane has one and it's used extensively.  Does the fact that they are not "permanently" mounted somehow change their functionality or utility...Of course not.  It’s just the way we "get around" the silly rules the FAA places on non-TSO'd components. 

Another example is ADS-B (GPS based air traffic control).  The FAA ADS-B contract is worth over $200 Million Dollars.  Give me a break.  If ups and fedex can track a package within 10 feet around the clock and nationwide trucking companies can display the position of thousands of trucks instantly on a computer screen, the FAA ought to be able to shift over to a GPS ATC system without spending the GDP of a small country to do it.  I think we all can agree that profit driven businesses are already using systems very similar to ADS-B and it’s safe to say they didn’t spend $200M.

Bottom line is:  New and innovative aviation equipment that would improve safety, aid pilot SA, and reduce everyone's costs are not readily available and affordable to the aviation public.  If the FAA followed its own charter they would streamline their processes and make TSO certification more manufacturer friendly.  As it is now, the FAA is an impediment to progress and as an organization is happy with the status quo...our tax dollars "not so hard" at work.

[Guest Anonymous]

Quote: GeorgePerry

It literally takes years, untold amounts of money and the patience of saint to work through the FAA's bureaucratic red tape.

[GeorgePerry]

 

Below is an email from a local shop in response the TSA's new "repair station" security policy. 

http://www.avweb.com/avwebbiz/news/TSA_Rule_Targets_Repair_Stations_201548-1.html

 

George,

I saw this the other day and was appalled. Just what we need to drive up prices, another unfunded mandate from big brother. The longer I live the more I am convinced that the real enemies are not beyond our shores but in the U.S. Government. This is what happens when government bureaucrats have too much time on their hands.

Thanks much...

 

 

Another government agency that may have good intentions but in practical application they hurt small business owners who are just trying to scratch out a living.  Who are they kidding....I mean really.  If someone wants to steal a plane to do harm, then they will.  No silly TSA program is going to limit or in any way prevent that.

 

Unfortunately this is another case of when government gets out of control.  Those in power feel the need to create another "needless" rule.  These rules are conceived, written and approved by bureaucrats, who know little or nothing about the realm over which they preside.

 

Risk is inherent in life.  Each time they institute some pointless rule that limits our hard won freedoms, we surrender little by little to those who wish us harm.

 

[flyby201]

A little off subject, but not much.   Why does Jeppesen charge $440.00 for a database subscription for my GPS?  The data comes from the government for free.  The only thing they do is pass it thru their computer so I can download it.  Highway (airway) robbery!!!!

[GeorgePerry]

Basic economics: It’s the price equilibrium for a Monopoly…

I’m sure some wiz kid MBA plotted a cost v/s demand curve and determined that any price higher or lower would result in lost revenues, thus $440.00

If I had the time, and the expertise I would start a company to compete with Jeppesen and target the market segment for "older" gps databases.  Until someone does this and market becomes a duopoly you will not see prices come down.

 

[Cruiser]

It's a lot like the inkjet printer cartridge business. You have a captive customer. Once they buy the product they have NO CHOICE but to get replacement ink cartridges. So, why not charge 10x the value and make a huge profit. Customers will have to buy them no matter what the price. Same with our databases, EXCEPT there is no 3rd party option to update these OEM databases so the price stays high.  

[jlunseth]

There actually is a service that competes with Jeppesen on the older databases, and that is GarminAT.  My Apollo GX 60 is now gone, but when I had it it was both cheaper and better to get a datacard subscription from GarminAT.  Every month they would send a new card, two actually, one for the GX60 and one for my Apollo MX20.  The new card had the new data, and you were required to mail the expired cards back.  Worked fine until about a month ago when the GX60 died.  I am putting in a new 430W to replace it, so I will probably be stuck with the Jeppesen system, which to me is the epitome of zero cost-high pricing.  You buy the hardware to do your own data upgrade.  You access their website, download the data, and put it on your card.  They get $900 plus per year for letting you access their computer. 

[skyking]

One should also note that a big portion of the cost of a new aircraft is the liablility insurance that the manufacturer has to bear. That cost is built into the price of a new aircraft.

I would have to assume that there is also a liability factor build into the price of anything "certified" that we purchase for our planes.

That may explain part of the cost along with the very high cost of dealing with the FAA, Transport Canada etc. to get the plane/ avionics certified in the first place.

(not that i am defending it). I just spend over 2 grand on a Transponder and i think thats robbery when i can get a passive Collosion avoidance unit ( uncertified of course) for 500 bucks.!

 

russ

[Guest Anonymous]

Quote: GeorgePerry

 

If I had the time, and the expertise I would start a company to compete with Jeppesen and target the market segment for "older" gps databases.  Until someone does this and market becomes a duopoly you will not see prices come down.

 

[Buster1]

Avionics prices are too high, and the main reason I will someday build my homebuilt when it's just me, the wife and a plane.  You can get what you want, at much cheaper costs, and it's more advanced than some airliners!

It's also crazy to look at some avionics that at least one Third of the hull value of some of the planes I'm looking at!  I'm really searching for the right plane with some glass GPS stuff, but it seems to be rare.  And buying a nice Mooney with no glass or GPS and then later installing some stuff, seems unreasonable and cost prohibitive.  Especially after dropping some major coin on a plane!

Something needs to change as general avionics abilities go up and up every year, as will the prices.  Eventually, all we'll be able to afford are old steam gauges.

[Jerry 5TJ]

Maybe the question should be:  Why are our airplanes so cheap?   

If Mooney produced a new M20C today, it would probably sell for at least $300K (in 2009 dollars) , not the $40K (in 2009 dollars) or so it is worth used, but heck, they're over 40 years old.   If I were to buy vintage 1960's avionics they would be darn cheap, too (even in 2009 dollars they're worthless). 

My point is the obvious one -- we're putting new avionics into our antique airframes, and we should not compare a new-in-2009 radio with the used price of the old airframe.  

Elsewhere on this forum are some original Mooney factory invoices from the 1960s.  It is interesting to see how much the optional avionics added -- more than 15% was not uncommon for a "full panel" with VOR, ADF and Brittain autopilot.   At today's hypothetical M20C $300K base (in 2009 dollars) that woud be over $45K (in 2009 dollars) --  just about the price of a nice panel upgrade today.

 

 

 

 

[GeorgePerry]

You can't compare the value of a 1960's dollar with the value of a 2009 dollar.  That argument discounts inflation and about a dozen other laws of macro ecomomics.

[Cruiser]

I will offer just two examples that show avionics pricing to be absurd. Both are top of the line best in class units for marine use.

RAYMARINE INC. RAY218 Class D DSC VHF Radio $519.99 USD
compare to:

Garmin SL-40 COM $1,895.00

and

ACR ELECTRONICS Satellite2™ 406 MHz Category II EPIRB  $699.99 USD

compare to:

AK-451 406 MHz ELT Emergency Locator Transmitter $3,339.00

Now, tell me why the aviation units cost 4x - 5x more than the marine eqivalents?

[Cruiser]

This comparision is even better,

Garmin GPSMAP 546, a marine chartplotter with preloaded marine navigation maps and obstruction charts, XM weather capable. In fairness, it does not have any comm capability. Compare this to a Garmin GNS 530, about the same size screen

Marine = $999 MSRP

Aviation = $16,495 MSRP

[FlyDave]

Both Jim and SagemGuy's posts are, I believe, the reasons for the prices we pay for aviation equipment - not just avionics.

SagemGuy's post on insurance covers a piece (not sure what percentage) of the cost of doing business. These are not only the insurance policies but also attorneys fees (potentially huge) and numerous other fees incurred during the course of normal business as well as before, during and after a lawsuit. We live in a litigeous society, period. There are many frivolous lawsuits and unconscionable claims that somehow get validation in the legal system. This is a problem in all aspects of business but probably more so in aviation with the potential for physical harm or death and damage of personal property. I don’t think the legal aspects of a marine GPS are a good comparison to an aviation GPS.

The flip side of this is, if some guy in a Bonanza augers into YOUR house, are you just going to file a claim with your homeowners insurance? Probably not. Some attorney will get a hold of you (they'll be lined up 10 deep at what used to be your doorstep) to sue everything and everyone that ever touched the plane or anything in it. We, as pilots, may not persue all those avenues but, when you've lost your house or, god forbid, a loved one, emotions run high and someone will pay.

Jim’s post on business is spot on as well. People go into business to make money. When you consider the costs of doing business, including insurance, legal/attorney fees, R&D, production, support, labor, and, oh yeah, profits, there may not be as much in the end as some people think. People that go into business take many risks with the expectation that there will be a good living at some point. Many people that go into business don’t make anything for the first 3-5 years and go deep in debt doing so. It’s pretty scary! Could/would you do that?

The flip side of this is, as a consumer, I want all the features I can get as cheap as I can get them. Aviation has never been a low cost endeavor. I’m looking at buying a Mooney and when I get one, I’ll spend considerably more on it than I did on my first house – and it will probably need upgrades at $5K - $15K+. The bottom line is if you can’t pay, you can’t play. We don’t need airplanes, we want airplanes.

I’m not defending business people or attorneys, just putting my own observations and thoughts on the table as others have.

Flame away...

 

[mjc]

Quote: Cruiser

I will offer just two examples that show avionics pricing to be absurd. Both are top of the line best in class units for marine use.

RAYMARINE INC. RAY218 Class D DSC VHF Radio $519.99 USD

compare to:

Garmin SL-40 COM $1,895.00

and

ACR ELECTRONICS Satellite2™ 406 MHz Category II EPIRB  $699.99 USD

compare to:

AK-451 406 MHz ELT Emergency Locator Transmitter $3,339.00

Now, tell me why the aviation units cost 4x - 5x more than the marine eqivalents?

[mjc]

Quote: GeorgePerry

You can't compare the value of a 1960's dollar with the value of a 2009 dollar.  That argument discounts inflation and about a dozen other laws of macro ecomomics.

[seaero]

Sadly the price issue all comes down to liability.  When/if something goes wrong, someone's always to blame.  That's the way society thinks.  Avionics are expensive because of the TSO process, FAA paperwork, warranty, liabilty, intricacies, and so on.  Contrary to what someone mentioned previsouly, avionics manufacturers do not make a killing on the sale of TSOd products.  The shops that install them make even less.  Most people would be surprised if they realized that the profit margins are sometimes below 20% after all is said and done.