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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 18 Mar 2019, 14:47 
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PC24 is just getting started. It'll outsell everything in a couple years. I can't even order one right now. Pilatus won't take my money. They told me to "get in line, maybe 2021 they could have one for me".


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 18 Mar 2019, 14:56 
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When looking at Beech/Cessna/Textron vs the competitors who are very successful in a given segment, those competitors are out-innovating Beech/Cessna/Textron in both step-change and incremental ways. But those competitors are also concentrating their resources on a more limited number of aircraft models. Is Beech/Cessna /Textron breadth of the product line is working against them vis more focused competitors?


Agree and I think this hurts Textron to have so many models that are so close. There is a lot of overlap and most customers would sacrifice in mission a bit or expand the budget a little more to have a better product. For example the CJ3/4 are close in mission and cost, but the R&D and certification cost to innovate 2 separate models are almost double vs consolidating to 1 model.

Seems as Textron is recognizing this and doing some consolidation with the Mustang/CJ2 into the M2. Maybe we'll see a M4 someday.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 18 Mar 2019, 18:59 
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Username Protected wrote:
I think this hurts Textron to have so many models that are so close. There is a lot of overlap and most customers would sacrifice in mission a bit or expand the budget a little more to have a better product. For example the CJ3/4 are close in mission and cost, but the R&D and certification cost to innovate 2 separate models are almost double vs consolidating to 1 model.

Not really, they are on the same TC, so most of the work is already done. Don't have to design a lot of things that are common to each one, just reuse what has been used before, so the model variations are relatively low cost for Textron, and they get to feature and cost spread the market. M2 entry level, CJ3+ medium feature set, CJ4 premium. As a bonus, they all use the same type rating as well.

The M2, CJ3+, and CJ4 are from the same development tree, the 525 series. In 2018, Textron sold 100 units of 525 series, the most sales of one type certificate for a GA jet, single pilot or otherwise.

In terms of GA revenue:

Gulfstream: $6.8B
Bombardier: $5.1B
Textron: $3.2B
Dassault: $2.0B
Embraer: $1.1B
Pilatus: $0.6B
Cirrus: $0.4B
Daher: $0.2B
Honda $0.2B

If you take out the "big iron" makers Gulfstream, Bombardier, Dassault, it is clear Textron is way ahead of everybody else in making light aircraft, 3 times that of Embraer, more than 5 times that of Pilatus.

As for PC-24 outselling everything, that's a dream, they haven't got the manufacturing throughput to do that and the PC-24 will be a good seller, but limited in total numbers. Pilatus simply hasn't built their business around volume.

Mike C.

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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 19 Mar 2019, 07:32 
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Not really, they are on the same TC, so most of the work is already done. Don't have to design a lot of things that are common to each one, just reuse what has been used before, so the model variations are relatively low cost for Textron, and they get to feature and cost spread the market. M2 entry level, CJ3+ medium feature set, CJ4 premium.


So you think the development and certification cost are trivial to install at G3000 or Proline Fusion in the CJ4? I’m certain Cessna would have it done by now if the costs were “relatively low.”

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As a bonus, they all use the same type rating as well.


Would you jump in a CJ4 with a M2 pilot? Same type ratings don’t mean much when insurance underwriters don’t agree with Cessna or the FAA. Since Textron owns the sims, each time the CJ3 avionics are updated, new sim. Same for the CJ4.

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If you take out the "big iron" makers Gulfstream, Bombardier, Dassault, it is clear Textron is way ahead of everybody else in making light aircraft, 3 times that of Embraer, more than 5 times that of Pilatus.


No doubt, Textron sells a lot of airplanes. A lot of balls to juggle, well, at least.

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As for PC-24 outselling everything, that's a dream, they haven't got the manufacturing throughput to do that and the PC-24 will be a good seller, but limited in total numbers. Pilatus simply hasn't built their business around volume.


Agree, and I predict PC24 preowned resale prices will not track the high depreciation rates of new P300/CJ3/CJ4s.

Don’t take my post wrong, Textron makes a lot of good aircraft, but I think Textron and consumers would benefit long term if they consolidated a few of their product lines. Just my opinion, they have much smarter people than myself to make these decisions.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 19 Mar 2019, 08:46 
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Revenue and Profit are not the same thing. Profit drives innovation. Revenue is nothing without profit. Pilatus is a private company.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 19 Mar 2019, 09:00 
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So you think the development and certification cost are trivial to install at G3000 or Proline Fusion in the CJ4?

Relative to a new airframe design, yes.

The CJ4 was much simpler to certify than, say, the P300.

Mike C.

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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 19 Mar 2019, 22:31 
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Revenue and Profit are not the same thing. Profit drives innovation. Revenue is nothing without profit. Pilatus is a private company.


No, revenue is nothing without bankers. I've owned quite a few companies that were extremely profitable to me over the years without once turning positive cash flow before sale.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 08:28 
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No, revenue is nothing without bankers. I've owned quite a few companies that were extremely profitable to me over the years without once turning positive cash flow before sale.

You're assuming Pilatus is trying to get bought?

Profit drives growth. Pilatus put up $1B of their own money to build the PC24 and they did it in record time. You can't assume everyone borrows to grow. Grow with cash flow. And then keeping the bank out of your business makes you even more profitable compared to your competition that needs bankers to grow.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 10:44 
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Pilatus put up $1B of their own money

I don't know anything about Pilatus' finances but I would be extremely, extremely surprised if they were able to pay $1B for the PC24 development solely from retained earnings. Like they had a savings account with $1B in it and just paid for the development from that. No way. They had to borrow money which is smart. Money is cheap to borrow and allows a company to do strategic things that they otherwise wouldn't be able to do. If a company has a strategic venture that is a guaranteed positive ROI (more return than the cost of borrowing the money) then why on earth wouldn't they do it? Stupid not too. It's when companies borrow to cover a failing business or stay afloat when they should really just go BK is when they run into trouble (and the lenders too).

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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 16:15 
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...If I were the boss at Textron, I'd be crushing the competition with my newly redesigned, bad ass looking, 350 knots+ KA.

I was looking at the picture of a KA350 in a Blackhawk advertisement and I remembered Jason's comment about redesigning the King Air. I looked at the picture trying to see an obvious area needing improvement/redesign. Other than the somewhat stodgy looking windshield frontal area, I couldn't really see anything on a King Air looking like it needed to be redesigned. I also looked at the engine inlet but I'm not educated enough to make a judgement there. Am I missing something?

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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 20:26 
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Quote:
Pilatus put up $1B of their own money

I don't know anything about Pilatus' finances but I would be extremely, extremely surprised if they were able to pay $1B for the PC24 development solely from retained earnings. Like they had a savings account with $1B in it and just paid for the development from that. No way. They had to borrow money which is smart. Money is cheap to borrow and allows a company to do strategic things that they otherwise wouldn't be able to do. If a company has a strategic venture that is a guaranteed positive ROI (more return than the cost of borrowing the money) then why on earth wouldn't they do it? Stupid not too. It's when companies borrow to cover a failing business or stay afloat when they should really just go BK is when they run into trouble (and the lenders too).

I never borrowed for my company. I built factories and buildings all through cash flow.

Nobody knows Pilatus's financials but the CEO of Pilatus told me they spent $1B developing the PC24 and it was all done internally. Maybe they borrowed..... who knows. Still has nothing to do with profitability.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 20:26 
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Am I missing something?

Have you ever looked at a PIaggio Avanti?


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 21:26 
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I never borrowed for my company. I built factories and buildings all through cash flow.

I will say that I don't like the idea of borrowing for my business. I just don't like owing money. But I think it's going to help my business grow faster than if I don't borrow, so I do it.

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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 21:27 
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I never borrowed for my company. I built factories and buildings all through cash flow.

I will say that I don't like the idea of borrowing for my business. I just don't like owing money. But I think it's going to help my business grow faster than if I don't borrow, so I do it.

Everyone's situation is different. I hate banks. I also feel when you really add up the cost of borrowing it's never as cheap as you think it is. Fees, closing costs, appraisals etc. It's not cheap money.

Besides, you either spend it on your business or you send half to the government anyways. It's cheaper to spend it.


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 Post subject: Re: Cessna Denali - First Impressions
PostPosted: 20 Mar 2019, 21:29 
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Have you ever looked at a PIaggio Avanti?

TBM went through an aerodynamic cleanup too with the 900 (I think). The end result wasn't much different looking but it helped with the speed. I cannot see how there is no room to improve the drag and efficiency of a 60 year old airframe, even if you retain the same basic structure.

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