One of the oft-repeated questions about this new thing called LSA is: “When will the shakeout occur? When will some of these 75 companies disappear… and which ones will fail?”
First, my ability to see the future is no better than anyone else. We’ve lost a few suppliers (Taylorcraft, Urban Air, Spain’s CAG, Higher Class). But as a longtime observer of many sport aviation segments, here’s my view: The current market leaders — the top dozen or so — will likely remain, as they’ve already proven themselves. Remember, many overseas brands have world markets so they don’t rely 100% on U.S. sales. And should they fail, it will most likely be due to business practices, not their aircraft designs. A few newcomers will enter the top ranks, including such legacy brands as Cessna (which has presently delivered so few Skycatchers that the giant manufacturer is not yet in the Top 20).
I see room for a significant number of specialty producers who fill niches of interest to various pilot groups. Seaplanes, gliders or motorgliders, gyros, powered parachutes, and trike producers are examples of what I’d call “alternative aircraft.” Some aviators love these segments and will support producers of quality aircraft.
My best guess is that it’s a group in the middle that will quietly disappear, the “me-too” aircraft that don’t offer something different and cannot compete with the big boys.
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This question has been posed quite often in the past few years and indeed as in all free markets the answer is simply: “Let the strong survive”. While some companies have disappeared, the aircraft often reappear under new ownership, often greatly improved. For instance the early end to the Spanish Esqual kitplane inspired some of its admirers to improve on it, leading to the very successful Arion Lightning kits and new SLSA design. There are also many foreign designs that are not sold in the U.S. for various reasons, but we can expect to see a few of these to appear each year in LSA form here. In the end, the expected shakeout in the LSA industry will be no different than what we’ve seen in other sectors of the G.A. industry, or the auto industry for that matter. One disappears and 2-3 new ones appear, that is the nature of free markets and it is a good thing, for consumers and the industry as a whole. Nothing nurtures innovation more than profit motives or the fear of business failure. Let the strong survive.