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The Icon5 – can it make it into the marketplace?

Airplane Business 3 Comments

So here we are, after the concept, the design and engineering that goes into building a prototype, ironing out any bad tendencies during development, it is now time to manufacture.  From the initial prototype that was finished in 2008, we have another eight years of updates and development to bring the airplane to market.  All things considered, eight years is a long time, the worlds fastest airplane was designed and built in 26 months by Lockheed Skunkworks. This leads to my question – will the A5 survive the marketplace.  Time is money, lets explore the realities of aircraft design!

The Icon 5 is no doubt, one cool amphibian airplane that is in the category that qualifies it as a Light Sport Airplane.  That element is important in this case, because the majority of Icon 5 on the waiting list are currently NOT a pilot!  Wow, that is crazy but I think a smart move in developing an airplane like this, since it is in the “recreational” category for buyers.

To make this project work, you have to go where the money is, so invite the largest audience with disposable income…and you are going to need cash flow and money to turn this into a profitable venture. And that is where we are today, where the money meets the road and I am unfortunately seriously concerned with the future of the Icon company and the production of the airplane.

Hindsight is always an easy way to act like you are smart, but not getting the product to market quicker is a way to eat a lot of capital that would have been better used to further the development of the airplane.  Just like software or any other product, at some point you need to establish the benchmark performance, meet those elements, and freeze the design.  You can’t continue wishing and thinking there is a way to make the product better, that will never and as the evolution of design is going to happen.

Being that airplane development requires so much capital, building the prototype as a concept is one thing, but once you have a certain level of satisfaction in performance and handling, the need is to figure out how to manufacture it.  We seem to get caught up in all the features that ARE possible, but forget that getting the product to market is critical, ever heard the pilots creed “speed if life”?  Software is no different, you can develop it and the design process never ends and because it is such a dynamic environment, you have to accept a certain development level, produce the software, and make revision by release methods to keep up!

I think the most recent relevant example of getting  a project to the market…because timing is everything, is to study the Honda Jet.  Honda…well, they have the capital to do develop an airplane and have the development cost paid for in cash almost, but they sort of missed the market too.  If you look at the Honda Jet, it took eighteen years to develop. When it was first announced, it had all the elements of a successful design project, not only because the market was ready for such an airplane, but the performance and unique engineering concepts really made this airplane desirable.

What has happened in eighteen years?  Well, glass panel technology has advanced to a much higher level, including touch screen and better integration.  Something Honda wanted to develop at the same time the airframe was developed.  Always a bad idea…just reference the Eclipse 500!  Not only has engine technology and glass panel technology advanced, but the largest problem is the market is changed – Cessna is not building the Mustang, Embraer is considering the end of production for the Phenom 100.  This tells me that market is a SLOW mover, not much demand, and the Honda Jet may be in trouble also.

Getting back to the Icon5, the development time has eaten a lot of capital, and with the recent crash of two Icon owned airplanes…well, that is never good news whether you have hundreds in service, or just waiting to deliver the first one out the door to a customer.  The Ultra-light aircraft at one time, was the biggest racket back in the early 80’s, it just took a few deaths to quench that market demand. I am not saying that this will have a big effect on the Icon5 buyer, just that bad news travels fast.

But lets get into reality here, and determine what the future of the Icon 5 really is.  I believe this is one cool airplane, I absolutely love what Kirk Hawkins has done with regards to approaching the market a refreshing new look at how airplanes should be designed.  Sex appeal is important, the airplane looks great, the interior is fantastic, and as many safety features were designed into the airplane that it truly is a great product.  In addition, CEO Kirk Hawkins grasped the marketing fundamentals of creating excitement and generating orders for the airplane, I have to commend him for that.

On the negative side of the airplane, I don’t think it can satisfy the demand for the airplane and be profitable.  The NEED for a recreational amphibian at an equipped out the door price of $249,000 is a tough one to handle.  Because of the limited utility of the airplane IE useful load, cruise speed, and other factors, I am not sure if the company will produce a profit.  Investors get impatient, and what CEO Hawkins is experiencing is that you can design a safe airplane, but things happen and the airplane crashes.  He realized that you can’t prevent people from doing stupid things, and created a “contract” for operation of the airplane, but the prospective purchaser didn’t want to have anything to do with a too restrictive contract in their eyes.

Which…if I can digress here, I would have to say I am very much in agreement to the type of contract originally put forth by CEO Hawkins.  I do believe that a manufacturer has the responsibility to build a product that is not flawed knowingly, and that if there is evidence of the fact, that the manufacturer correct the problem.  However, as I am sure Icon is feeling right now, not only the loss of two employees, but the finger pointing and lawsuit engine is at full speed.  For some reason, we just can’t seem to accept personal responsibility anymore, when in fact, it is what causes most aircraft fatalities.  In addition, knowing the “expected” condition of airplanes with a life limit for the airframe, and specific maintenance requirements…is that too much to ask?  I think putting the contract out there with people who had a deposit on the airplane, were maybe given a surprise, but going forward, people need to know what they are getting into and what THEIR responsibility is with aircraft ownership and the operational aspects of the airplane!

There is a certain element of risk flying an airplane, much beyond driving a car if something goes wrong or bad decisions are made.

There are two elements of extreme importance to the aviation development side of things is this.  First, you need to produce something that will have long term demand…as best as you can forecast this.  I don’t want to convince a small market that this is what they need, I want a large market that will have long term stead demand.  I think there are opportunities in aviation for a product that meets the current demand for new aircraft.  Second, you have to develop the product and manufacture it quickly.  Bill Lear didn’t have that much capital and certified the original Learjet relatively quickly, because he had to.  In the days and age of computer technology, 3D printers, and off the shelf components that can be used as a plug and play approach to aircraft design, you need to get certification and cash flow going quickly to succeed.

Time will tell, but I think I am right on this one, the Icon 5 is going to go through a few business transactions to maintain funding, but the company may not be able to make it in the long run. Perhaps this is why we all complain about the cost of a new airplane, the development process is onerous, meanwhile the liability cost both emotionally and financially is too much for a “normal” business person/company to get involved!

3 Responses to “The Icon5 – can it make it into the marketplace?”

  1. Ben Says:

    Good points and I agree. Personally, what I think the market and consumers need is an affordable recreational single piston that can also be use for business regional travel. Take the new Bristell LSA that has a full glass IFR panel and cruises at 120 kts on 5 gph for under 200k. That blows away a new Cessna 172 and can even be useful for weekend getaway trips without breaking the bank.

  2. admin Says:

    Ben,

    Instead of developing an airplane with VERY limited demand, why not using the capital and engineering talent, to figure out how to build a cool airplane, automate the manufacturing, and build a 200 mph four place with a sticker price of less than $200,000? If I were sitting down with a clean sheet of paper, and wanting to be in the aviation business for a longer period of time, that is what I would do!

  3. Ben Says:

    Agree! In fact with CNC technology and open source electronics low cost options exist to build such an airplane. Engine costs the most. One guy built an avionics kit for $100 using Arduino hardware and cutting parts with CNC technology from a clean slate design is not difficult. Getting past the FAA red tape and legal liability paperwork and STCs are the hard part.

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