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View Diary: Empty Skies - Trickle-Down Economics and the Death of Private Aviation (23 comments)

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  •  I don't think this affects your thesis much, but (1+ / 0-)
    Recommended by:
    raincrow

    didn't the price of planes skyrocket because of lawsuits and insurance costs? I thought that a couple of manufacturers stopped production 20+ years ago because they couldn't bear the insurance costs for their products ... or they couldn't up the price enough to pay for it, or something.

    Actually, just googled a bit, and I'm right, at least relative to Piper:

    Manufacture of light aircraft was impacted in the mid-1980s when increasing product liability insurance premiums made operation financially difficult for Piper Aircraft and other American manufacturers of light aircraft. In a bid to improve sales, Piper cut prices for its aircraft and the company became unprofitable. In 1991 the Lakeland, Florida factory was sold and closed and by July that year the workforce had shrunk to just 45; with only $1,000 in available cash remaining, Piper filed for Chapter 11 bankruptcy after a proposed takeover by competing French manufacturer Socata failed over the issue of product liability.
    •  An in-depth analysis of the (0+ / 0-)

      product liability issue is available at:

      http://www.freepatentsonline.com/...

      I quote a fragment below:

      "These reports occasionally note that other political and economic issues played some role, but generally there is a wishful optimism in forecasts that claim product liability reform will create as many as 25,000 new jobs.(2) More realistic accounts of the decline of the general aviation industry point to a number of factors besides product liability that sent the industry into a tailspin fifteen years ago. Generally, these analysts recognize product liability as merely one aspect of a more general malaise in general aviation. They are, however, more pessimistic about the positive impact of product liability reform."

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