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Q: Aircraft Manufacturing ( Answered,   0 Comments )
Subject: Aircraft Manufacturing
Category: Business and Money > Accounting
Asked by: stumped50-ga
List Price: $50.00
Posted: 10 Dec 2002 15:51 PST
Expires: 09 Jan 2003 15:51 PST
Question ID: 122656
What are the current industry standards for the costs of manufacturing
business aircraft (jets) from prototype to production line?

Request for Question Clarification by krobert-ga on 10 Dec 2002 16:04 PST
Are you looking for an average cost to bring a new business jet to
market? It will be a fuzzy number at best, I have a background in this
and might be able to find a few examples. I could go over estimation
techniques for cost-to-design. Production line is a little different.
It would depend on whether you had an existing factory, outsourced
some production, etc.

So... could you be a bit more specific on what you're looking for?
Could you describe a bit better what "process" you have in mind? There
are no "standards" per se.

Even with the information I am asking for it would take a great deal
of effort to come up a solid estimate of cost to design, build, and

If you were to narrow down the focus of your question a bit I should
be able to provide a satisfactory answer.


Clarification of Question by stumped50-ga on 11 Dec 2002 09:27 PST
Price point for product will be between $1.5 & 2.5 million;  Total
estimated production costs including
prototype/certification/production is between $300 and $400 million. 
Assume will outsource production line  utilizing excess capacity in
existing facility.  Will produce 50 to 100 product per year initially.
 Comparable product might include Smaller Lear Jets/larger Pipers/mid
range Cessnas.  Attempting to provide a proforma with time frame for
ROI for investors to review.

Request for Question Clarification by krobert-ga on 11 Dec 2002 15:27 PST
So am I to understand that you are looking for comparisons to your
product? Comparing the numbers that you specified? e.g:

                   Mine      Comp1     Comp2
Price Point:
Production Costs:
Units per Annum:

Supporting Data... etc...



Clarification of Question by stumped50-ga on 11 Dec 2002 16:33 PST
krobert - I need to know how to allocate funding to the various
aspects of  development to product launch - what % of the total (let's
assume my lump sums are adequate) is labor, what % toward engines,
what % is tooling?  Then I can allocate for a pro forma.

Request for Question Clarification by krobert-ga on 11 Dec 2002 17:05 PST
Gotcha... Let me do some preliminaries on this and I'll get back to you.


Clarification of Question by stumped50-ga on 11 Dec 2002 20:24 PST
krobert - also identify if possible what are the non-recurring (start
-up) expenses and the ongoing production costs.  Thanks.

Request for Question Clarification by krobert-ga on 18 Dec 2002 11:20 PST

Rather than provide this as an answer just yet, I will point you to
this publication by RAND:

It covers cost estimating the design, production, and maintenance
costs of aircraft (primarily military, but applicable to others). 
From the abstract:

"It provides separate cost estimating relationships (CERs) for
engineering, tooling, manufacturing labor, and quality-control hours;
manufacturing material, development support, and flight-test cost; and
total program cost."

This looks like it fulfill your needs.

If this suffices as an answer, I'll post it as such.  If you would
like me to take a stab at breaking down the costs for you I will need
more detailed information about the configuration of the aircraft.

The alternate source that I have (in my library, a stripped down
version of the RAND document), states that I will need such
information as the empty weight, max velocity, number of flight test
aircraft, turbine inlet temperature (based on my experience, I'm
guessing this is because the greater the temperature, the more
espensive the engine), and avionics cost (bulk), among others. It also
has some fudge factors that you can use to account for newer materials
and better R&D and production methods (say, improved tooling and
bigger and better CAD).

FYI, the RDT&E expenses (Research, Development, Test and Evaluation)
would be the start-up costs that you are asking for.  This RAND
document covers estimating these as well.

Additional FYI, this document is about 14 years old, but aircraft
manufacturing tends to be a bit behind the times anyway you look at
it.  Obviously, if inflation is not accounted for in the equations
listed in the document, they can be estimated from historical data.

Best Regards,


Clarification of Question by stumped50-ga on 18 Dec 2002 13:26 PST
Krobert - I have ordered the document.  I think that is all I need for
now.  Consider the question answered.  Thank you.
Subject: Re: Aircraft Manufacturing
Answered By: krobert-ga on 18 Dec 2002 14:49 PST

The following RAND document covers your needs:

The supplemental material I spoke of is in this book:

"Aircraft Design: A Conceptual Approach" by Daniel P. Raymer, 1st Ed.
(Chapter 18, Cost Analysis).

This book is currently in it's third edition now, so the chapter may
have changed or been deleted in later editions (Though I'm guessing
it's not because the newer edition is considerably thicker).  This
book can be acquired through or through the AIAA

I hope you find this useful.  Request a answer clarification if

Best Regards,

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