This content is not included in
your SAE MOBILUS subscription, or you are not logged in.
Business Model for Successful Commercialization of Aircraft Designs
Technical Paper
2011-01-2502
ISSN: 0148-7191, e-ISSN: 2688-3627
Annotation ability available
Sector:
Language:
English
Abstract
In any new aircraft development program there are many important design decisions that determine profitability potential. The key to making new aircraft profitable is to design features that will command more money than the cost to provide them within the market's ability to absorb them. The business model in this paper shows how to predict or find: 1) the costs to provide various aircraft features; 2) the values that aircraft buyers place on these features; 3) the amount of money that buyers have to commit to them, 4) the open spaces in the market in which to place new designs and 5) the predicted profits from new designs.
In this process, this paper extends previous work on the law of value and demand, which states that attributes determine value; value determines price; and that price determines demand. This four-dimensional, non-negative system hosts a business model that describes the features needed to enable aircraft designs to go from concepts to profitable assembly lines.
Demand, cost and price, along with relevant constraints, form a market described by statistically significant equations bounded by technical, financial and legal limits. These equations predict producer and market responses given a set of aircraft attributes. Detailed market analysis reveals the market responsiveness to changes in attributes such as seating capacity, maximum cruising speed, maximum altitude, and range and cabin height. These customer responses may vary dramatically from the producer costs to provide them.
Mapping these attributes shows open locations within the market. These are positions with the least possible competition. Given features designed to satisfy demonstrated buyer preferences, these regions, defined by a set of optimized product attributes, offer the best potential profit points for the producers.
Recommended Content
Citation
Howarth, D., "Business Model for Successful Commercialization of Aircraft Designs," SAE Technical Paper 2011-01-2502, 2011, https://doi.org/10.4271/2011-01-2502.Also In
References
- Wallace, James Boeing presses on with Sonic Cruiser Seattle Post-Intelligencer July 24 2002
- Taylor, Alex III Boeing's Amazing Sonic Cruiser - It was supposed to change the way the world flies. Instead the world changed Fortune December 19 2002
- Wallace, James Sonic Cruiser is Shelved Seattle Post Intelligencer December 19 2002
- Moll, Nigel “Eclipse sees Light of Day as Prototype Preps for First Flight,” Aviation International News August 2002
- New Mexico Business Weekly Staff “Eclipse Raises Price of its Jet Plane,” New Mexico Business Weekly May 27 2004
- Eclipse Aviation “Cost of Ownership,” March 1 2005 January 2006 http://www.eclipseaviation.com
- Karlgaard, Rich “Flying Eclipse's Pocket Jet,” Forbes August 15 2005
- Howarth, Douglas K. “Financial Catscans and Time,” 2006 Institute of Electrical and Electronics Engineers (IEEE)/ American Institute of Aeronautics and Astronautics (AIAA) Conference Big Sky, Montana March 4 11 2006
- Niles, Russ “Eclipse Goes Ahead With Single, Hikes Price Of Twin.” September 22 2010 http://en.wikipedia.org/wiki/Eclipse_500 http://www.avweb.com June 2 2008
- George, Fred “Eclipse Aviation files for Bankruptcy,” November 25 2008 Aviation Week September 22 2010 http://www.aviationweek.com
- McClellan, J. Mac “What went wrong with Eclipse?” Flying Magazine December 2008 September 22 2010 http://www.flyingmag.com/
- 2 2 2 2
- Samuelson, Paul A. Economics Ninth Edition McGraw-Hill 1973 63
- Neumann, John von Morgenstern, Oskar Theory of Games and Economic Behavior Princeton, NJ Princeton University Press 1944 September 30 2010 http://en.wikipedia.org/wiki/Utility
- Nash, John F. Jr. “The Bargaining Problem,” Econometrica 18 155 1950 September 30 2010 http://en.wikipedia.org/wiki/Utility
- Bentham, Jeremy “on The Greatest Good for the Greatest Number,” The Classical Utilitarians: Bentham and Mill Troyer, John Hackett Publishing, Company 2003 92
- Troyer, John The Classical Utilitarians: Bentham and Mill Hackett Publishing, Company 2003 xxii
- October 1 2010 http://atlasobscura.com/place/jeremy-benthams-auto-icon
- October 1 2010 http://en.wikipedia.org/wiki/Jeremy_Bentham
- October 3 2010 http://en.wikipedia.org/wiki/P-value
- 2 2
- October 5 2010 http://www.aerospaceweb.org/question/atmosphere/q0112.shtml
- July 26 2010 October 6 2010 http://phx.corporate-ir.net/phoenix.zhtml?c=110047&p=irol-newsArticle&ID=1452443&highlight=
- George, Fred “Still No Viable Bidders for Eclipse Assets,” Aviation Week May 21 2009 October 6 2010 http://phx.corporate-ir.net/phoenix.zhtml?c=110047&p=irol-newsArticle&ID=1452443&highlight=
- Bednarek, Janet Dr. “General Aviation - An Overview,” United States Centennial of Flight Commission October 10 2010 http://www.centennialofflight.gov/essay/GENERAL_AVIATION/GA_OV.htm
- October 10 2010 http://en.wikipedia.org/wiki/Cirrus_Aircraft
- October 15 2010 http://www.whycirrus.com/safety/2008-ga-safety-record.aspx
- October 15 2010 http://en.wikipedia.org/wiki/Columbia_Aircraft
- http://www.genuinecontinental.aero/stockengines.aspx
- Raymer, Daniel P. , Ph.D. Aircraft Design: A Conceptual Approach 4th 2006