BeechTalk - BT

Username Protected · **Posted:** 24 May 2013, 22:04

Username Protected wrote:

The future of aviation is the guy sitting at Atlanta airport right now getting bumped or delayed for 1000th time, receiving crap service and dealing with TSA. That guy wants to go to the dealership at the airport and see a Cirrus sitting there. It looks space age. It is the future.

The Cirrus has a damn "stick pusher" and a parachute. You can't crash that thing. It sells itself. That Cirrus is the future of travel in the United States. They will eventually sell a million of them. Cirrus will make it so you don't need a pilots license to fly. Just type in "Miami" and the plane does the rest. Guaranteeed, count on it.

Ever since GPS came out and we stopped getting lost as pilots, I have been saying that soon you won't need a pilots license to fly. Sad but true, the skies will be full of planes in 2050.

Username Protected · **Posted:** 24 May 2013, 22:09

Tony's math is pretty close to my (and my tax expert's) math. And that is why the Cirrus is calling me.

Now...as to the comment:"what fun is 100% business use?". Good point, no doubt. On the other hand, for me (and only speaking for me on this topic) the only reason I would buy a brand new Cirrus is for business use. Kind of a circular deal. If I personally had to eat the depreciation and such of a brand new airplane, I would NOT do it (well, I did do it with the Carbon Cub, but the reality of that deal was that the Cub doesn't depreciate...so far).

The whole reason for tax deductions is (as I understand it) using taxation as a tool to cause behavior. They did it in this case. And I wind up with a great traveling machine. And stimulate China's (oh well...) economy.

For fun stuff I'll fly the Cub. For business travel, I'll fly the Cirrus. And for the rare family trip, I'll pay my LLC for the use of the airplane. Truth be told, I'll probably wind up at 90% business use...but the math still works.

Jim

Username Protected · **Posted:** 24 May 2013, 22:15

Username Protected wrote:

Well, let us talk then about something in the same price range as the new piston planes....
http://www.controller.com/listingsdetail/aircraft-for-sale/DASSAULT-FALCON-10/1985-DASSAULT-FALCON-10/1268935.htm
Looks even good compared to the new Swiss Jet....
Above about a quarter million, the value-air becomes very thin for piston engines.... No matter what vintage.
Oh, did I say this thing travels at 500kn?

Love DA-10/100's. :cheers:

[youtube]http://youtu.be/mCrX9gx4iU0[/youtube]

Username Protected · **Posted:** 24 May 2013, 22:19

Username Protected wrote:

There have been lots of comments about how much the Cirrus costs relative to a used Bonanza, Baron, etc. Not so many comments about value compared to a new Bonanza or Baron. Obviously, you can buy the new Cirrus for much less than either new Beech.

But, Dr. Jim also pointed out that with a NEW airplane Uncle Sam is more willing to help you pay for it than if you purchase a used one. IF it's for business.

NEW Cirrus SR22T (yaw damper, Perspective Alerts, Premium Pkg,)
$654,500

Section 179 Deduction @ 39.6% tax bracket savings $287,258
Bonus Depreciation @ 39.6% tax bracket savings 1st year $30,591
Regular Depreciation @ 39% tax bracket savings 1st year $6,118
Total 1st year tax savings $323,967

Net Initial Capital Cost $330,533
Annual Capital Cost @ 5% $16,527
Annual Depreciation Cost @ 5% over 5 years 1st year cost $32,725
Total 1st year cost of capital $49,252

USED 1997 Bonanza A36TN (G600, Dual 530W, Engine Monitor, Ox, Tips, TN, 1,000 TTSN etc) $325,000 (basically my airplane as a point of comparison)

Section 179 Deduction @39.6% tax bracket savings $128,700
Total 1st year tax savings $128,700
Net Initial Capital Cost $196,300
Annual Capital Cost @ 5% $9,815
Annual Depreciation Cost @ 5% over 5 years 1st year cost $16,250
Side fund for engine overhaul at $26.50 per hour 1700 TBO $26,500 (to bring a fair comparison against a new engine in Cirrus)
Total 1st year cost of capital $52,565

If you extend this to 3 years then the Net 3 year cost of capital & depreciation net of tax savings is $129,402 for the Cirrus and $104,445 for the Bonanza.

Clearly, the Bonanza is cheaper even when you equalize the time on the engine (assuming you cannot get a discount on the new Cirrus - if you can then it's a wash). But it is 17 years old with attendant maintenance issues and the Cirrus is new, under warranty, and presumably has a lower out of pocket cost of maintenance over the hold period.

I'm not a tax expert but obviously at some point the depreciation on both airplanes gets recaptured. And if you don't hold them long enough the recapture would be at ordinary income tax rates not capital gains. That's obviously why you need a tax advisor which I am not.

And, I know there are probably other cost issues I haven't considered. And you can argue the relative merits of the two airframes for a given mission all you want (some of that is a small part of the last 40 pages

). Still, when you compare a used Bonanza against a new Cirrus it isn't as dramatic a cost difference as it first appears.

Tony, the stated premise and conclusion may end up being correct, but I think the depreciation calculation for the Cirrus is off by somewhere in the neighborhood of $100,000 in first year tax savings.

I found the chart below, which amazingly approximates the size of the transaction. It uses a slightly lower tax rate than yours but even adjusting for the difference in tax rate, it comes to about $100,000.

Username Protected · **Posted:** 24 May 2013, 22:32

Hey Mark: You are pretty close to right. Tony missed on the section 179 number. However, his general point was correct. And your number is a bit low, based on where our tax brackets are this year.

Only responding because I agreed in general with Tony...and still do. The rest is math... :oops:

Jim

Username Protected · **Posted:** 24 May 2013, 22:36

Username Protected wrote:

Tony, the stated premise and conclusion may end up being correct, but I think the depreciation calculation for the Cirrus is off by somewhere in the neighborhood of $100,000 in first year tax savings.

I found the chart below, which amazingly approximates the size of the transaction. It uses a slightly lower tax rate than yours but even adjusting for the difference in tax rate, it comes to about $100,000.

Oops!

You're right! I just knew I shouldn't do this on my iPhone!

:scratch:

Username Protected · **Posted:** 24 May 2013, 22:40

Username Protected wrote:

[youtube]http://youtu.be/1_47KVJV8DU[/youtube]

KInda how i am starting to feel about this thread... :deadhorse:

There are so many dead horses littering the 500,000 posts on this board...

You're right of course!

Please start a more interesting thread so we can all change the subject! :peace:

Username Protected · **Posted:** 24 May 2013, 22:48

Username Protected wrote:

[youtube]http://youtu.be/1_47KVJV8DU[/youtube]

KInda how i am starting to feel about this thread... :deadhorse:

There are so many dead horses littering the 500,000 posts on this board...

You're right of course!

Please start a more interesting thread so we can all change the subject! :peace:

Username Protected · **Posted:** 25 May 2013, 02:12

Username Protected wrote:

Tim,

Have you ever in your life actually owned a Beechcraft Bonanza or Baron or King Air ?

You keep trashing Beechcraft products with statements like they are out of date, have too many complex shapes, takes too long to build or you think the G1000 is not as good as some other system. Well the shapes on the Bonanza, Baron and Square Oval of the King Air lines are not overly complex, indeed I would say they are simple and classic. The NACA 23000 series airfoils on the Bonanza are stable and the couple of degrees of wash-out are not overly difficult to incorporate in the build process. Which by the way takes about 4000 man hours for a Bonanza. I'm not sure where the 6000
number came from earlier in this thread.

I'm glad you fly another aircraft and if I actually owned one of them I might have an opinion I'd be willing to share. Perhaps you could consider the same.

Chris,

Considering the number of people in this very thread that have trashed Cirrus but never owned one or even sat in one, I think your question is kinda funny.

As for out of date, yes Cessna has moved forward in a few aspects. Cirrus has moved forward a lot with each generation. Look how Piper has made changes to the PA46 line (adding the Matrix, changing the spar, changing avionics...) Beech has changed the paint on the piston line. Compare that to the number of changes in the KA line.

If I was to buy a Beech piston aircraft, it would not be a new one. As for the KA, I looked into the plane very closely; both new and old. I have multiple friends with KAs and my local shop here actually specializes in them. So yah, I know a lot more about KA ownership than appears at first glance (I actually know enough to get myself into a crap load of hot water).

In terms of build hours, that was not me.

I made the assumption the posted hours are correct based on looking at the financial performance and pricing of Beech, Cirrus, Piper and Cessna. That combined with the number of rivets, parts and details on the Beech planes does not lend itself to low cost production methods.

Depending on mission, the NACA 2300 series may or may not match and be a good selection. Others requested a lot of Aerodynamic clean up. I said that may or may not be required, but would not be cheap.

4000 hours is still to many. My point was Beech needs to focus on getting that number lower. A lot lower if they are going to be competitive. Beech needs to have a market perception that they continue to "innovate". The G1000 is getting a touch old, but it is still a great platform. But is the G1000 in a Cirrus G3 the same as in G4 or G5? Nope, Cirrus keeps adding more functionality to it. Even if Beech has done so, no one knows about it!

Tim

Username Protected · **Posted:** 25 May 2013, 06:50

Username Protected wrote:

This is an economic issue that feeds off the "generational instant gratification" conflict. Several have mentioned wanting their sky rocket NOW, not in 2 - 4 months for TAT, FIKI etc.

Rick Ott mentioned liking a Glock and AR15, and by inference Cirrus . . .
I prefer a 1911, Winchester Model 70 and the M1A1 or Garand . . . again probably generational as well.

Chicks dig 'em, novice pilots have more faith in them. Once more perception becomes reality.

Not better, just cooler.

No way Beech can win . . . very sad.

Changed my mind, not CIRRUS TALK, now it's CIRRUS BABBLE

This is such a strange post.......

An M1 Garand is not comparable to a modern AR15. You "preferring" it has nothing to do with with the thread title and it puts you in the minority. If everyone wanted "old stuff" we'd still be riding on a horse and buggy.

What car company's sales pitch is "we build them the same way we used too"?

Everyone wanting "new" doesn't mean everyone has ADD. Our purpose in life is to advance and grow and create "new". It's been going on since the beginning of time.

You should go be Amish.

Username Protected · **Posted:** 25 May 2013, 09:08

Username Protected wrote:

You should go be Amish.

Username Protected · **Posted:** 25 May 2013, 09:53

Well I started with a Ford ute then an R22 then an R44 then a Bonanza and now a Baron.

I thought my next step would be a KA 90 then a 350 but who knows now.... I'm thinking stuff it and order a PC 24

Username Protected · **Posted:** 25 May 2013, 11:17

Quote:

This is such a strange post.......

An M1 Garand is not comparable to a modern AR15. You "preferring" it has nothing to do with with the thread title and it puts you in the minority. If everyone wanted "old stuff" we'd still be riding on a horse and buggy.

What car company's sales pitch is "we build them the same way we used too"?

Everyone wanting "new" doesn't mean everyone has ADD. Our purpose in life is to advance and grow and create "new". It's been going on since the beginning of time.

You should go be Amish.

That's very special. "Chicks dig a cirrus" isn't strange? . . . or perhaps just juvenile.

Either you don't read previous posts, you forget what was said, or just prefer taking cheap shots.

The M1 Garand is considered by many military historians as one of the best military weapons in history, and while I have used the M16/AR15 in it's military settings and appreciate it's talents, it won't be placed in the forefront of most collections.

Again you revert to your prefer method of communication: The WISE PARENT assigning time out to the ignorant CHILD, in this case go be amish.

. . . your imperious declarations of self assigned clairvoyance certainly generate long threads.

And yes sticking with "old stuff" is short coming of mine. . . I still have my original wife after 40 years . . . how many relationships have you been through?

It may well be that Beech is in it's "death throes" due to their well listed short comings and cirrus will be the only remaining GA SEL builder. But that won't stop some from pointing out that the new chinese emperor has short comings and probably won't generate the loyal following that the Bonanza has.

Username Protected · **Posted:** 25 May 2013, 11:20

I hate this. Time to click IGNORE.

Username Protected · **Posted:** 25 May 2013, 16:44

. . . your imperious declarations of self assigned clairvoyance certainly generate long threads.

imperious----Arrogantly domineering or overbearing.

clairvoyance-- The supposed power to see objects or events that cannot be perceived by the senses.

:dancing:

Cirrus is so far out in front.......