Specifically, Lockheed Martin. Disclaimer: This is for homework, but I’m not asking anybody to do my homework. We’re just having trouble coming up with some data.
My group is considering proposing a strategy that Lockheed Martin retrofit and sell C-5’s and C-130’s for commercial cargo. I’ve found sales prices for the C-5 that range from ~$150 to $175 million, and for the C-130 that range from $11.9m to $48.5m, but that’s with a bunch of stuff that is not needed (and likely not allowed) for commercial use. We need to know what it costs LM to manufacture these, and, specifically (if possible) what it would cost to manufacture these without all of the weaponry, avionics, etc. that wouldn’t be necessary for commercial use. In other words, how much to manufacture a C-5 that would be used to transport commercial cargo.
Other info that would be helpful: Costs of production facilities. For example, how big (sq. footage) a C-5 manufacturing site is. Cost of maintenance per man hour.
Also, a big question would be “why hasn’t LM done this before?” The short answer would seem to be that they’ve had their hands full so far with government contracts, but if a debate were to break out on this, that would make me happy.
We have financial data out the wazoo, but not broken down in detail by division. If we could find some info (for example) about how much the aeronautics division garners in revenue, and spends in expenses, then that would help towards estimating how much it costs to produce a particular airplane.
I would appreciate any info on this subject. Hell, if you have any possibly relevant info regarding airplane manufacturing in general, it would be appreciated.
Thanks,
Any C-5 new-production data would be well out of date, so you’d have to factor in a huge amount to restart the line, something in multiple billions. The C-130 is still humming along, of course, and Lockheed even once offered a civilian model as the L-100. The military-only doodads that you could do without don’t add up to much, just the in-flight refueling plumbing, a couple of electronics boxes, the air-drop riggingand no weaponry or even armor.
Bear in mind that both planes were designed for military requirements - roll on/ roll off cargo ramps, short/soft field landings, no ground equipment, global range with in-flight refueling - none of which a commercial outfit needs. That comes at the cost of considerable extra flight weight and complexity that you can’t just delete from the bill of materials. The job is doable technically, of course, but it would take a large part of the total cost of designing a new aircraft. Lockheed and Boeing have repeatedly studied the possibility of civilian versions of military transports, Boeing most recently with their MD-17 study version of the C-17 (which is in production), and can’t make even that attractive to the freight lines. It simply costs those guys less to buy derivatives or even conversions of passenger planes, put big doors in the side, and use their existing ground equipment and the existing large global pool of airliner parts and so forth.
That said, there are things a C-5 can carry that a 747-400F cannot, just because of its end doors. That market, however, is pretty well covered already by Antonov Airlines and its small fleet of An-124’s (and the only An-225).
Oh yeah, what are Lockheed’s costs? HIghly confidential, certainly, even to the military customers, but probably not much less than their sales prices, when overhead is included. The military biz is large and fairly stable but not hugely profitable, despite its public image.
Well, it looks like the C-5 is out. One of the guys in my group talked to a guy from Lockheed, and he said that it would take about 2.5 years to start churning out C-5’s. I think we’re gong to go with the L-100.
Ploease correct this statement if it’s wrong:
The C-130/L-100 can land in airports with shorter runways that other cargo planes cannot? If so, this would be an advantage, since items for shipment wouldn’t have to first be transported by truck to a large enough airport.
Sorry, that should be:
Please correct this statement if it’s wrong:
The C-130/L-100 can land in airports with shorter runways that other cargo planes cannot. This is a significant advantage, since items for shipment wouldn’t have to first be transported by truck to a large enough airport.
Boeing tried to market the C-17 (I believe as the MD-17) without some of the military-specific hardware as a commercial cargo plane. IIRC it didn’t generate much interest - not as cost effective for commercial cargo or something. A little bit of googling would probably turn up some articles that’ll give you an idea of how Boeing tried to market the MD-17, how much it would have cost, and why it didn’t work for them. Also, the military-specific equipment they were planning to dump (aerial refueling plumbing was definitely one of them).
The downside of this approach is ensuring there’s enough stuff at the small airport to make a stop there worthwhile. If you’re landing a large (and thus expensive) aircraft at many small airfields and loading small quantities at each, the cost of this is going to make truck transportation look like a bargain.
Don’t forget that you’re going to be going up against FedEx, which has a mess of small airplanes (Cessna Caravans) to serve the small airfields at reasonable cost.
Need a little more info. We’re having trouble coming up with market share numbers. If anybody could provide numbers, or preferably a link, to a figure regarding the total number of dollars spent last year on sales of aircraft, that would be wonderful. If we had a figure regarding any major corporation’s market share, then we could use that to estimate what we need. We know sales figures for the major players in the market, but not a total for the industry.
We have. That’s where we got estimates about how much it would cost to restart the C-5 line, and approximate costs for the L-100. We didn’t need to talk to them to find out that they have sales around $11.781B, or that Airbus had about $28.8b; this stuff is publicly available. But we don’t have a figure for the entire industry.
C-130s got some bad press a couple of years ago when a couple of them had wings depart the airframe. These aircraft were used in firefighting, where there’s a lot of stress imposed by the maneuvers. Additionally, I wouldn’t be surprised to find out they were A-models. I don’t know what they were, but the A-models are the oldest (and cheapest). I’ve heard that C-130s burn fuel at something like 5,000 pph on take-off.
As Xema points out, there are other aircraft that are more suited to the majority of small airports. The Cessna Caravan carries a decent load on a single turboprop engine, and is relatively inexpensive to buy. I’ve heard there are still DC-3s/C-47s delivering large payloads to remote areas. These aircraft are cheaper than C-130s, and some of them have been converted to kerosene-burners.