"The biggest mistake people make when getting into the aircraft business is (thinking) that the cash hemorrhaging ends once you start delivering aircraft," said Aboulafia.

    "But very often, it increases," he said, citing marketing and production ramp-up costs.

    Fujino, CEO of Honda Aircraft Company, has said he expects it will take at least five years to start generating profits, and Aboulafia thinks it could take much longer to recoup sunk costs.

    "If they, miraculously, can generate $1 million in profit on each aircraft, then they need to sell 1,000 planes, after they build the (first 100 or so) aircraft that are unprofitable," he said.

For comparison, Gulfstream delivers 100-150 planes a year.


Well, you can't go from this

to this

Without taking a few risks.

posted by kleinbl00: 443 days ago