To: Jim Spitz who wrote (120 ) 4/4/2000 10:20:00 AM From: Harpo Read Replies (2) | Respond to
Jim, It is not so hard to obtain STC's if you know what you are doing, the problem is selling what you make. The market is limited. If you own a helicopter or plane for example, and the battery you are using starts the aircraft ok, why change it? Unless there is a clear advantage. There are already a lot of good batteries on the market. A lot of people have ekked out a pretty good living in the STC business, but typically the volume for this type of operation just doesn't justify the valuations we see with ELSI. The numbers just aren't there. Take for example the world's most popular business jet, the Cessna Citation. Only 3000 have been built. The vast majority use Ni-Cad batteries, however you can put lead acids in 'em aftermarket. There are advantages to both types but I would guess that only 10 or 20% of these aircraft are customers for lead acids. If you figure that say 400 of these aircraft would buy a new battery every 3 years on the average (priced retail at between 600 and 1000 each, less wholesale, let's say 500 just to be generous), that would come to about $200,000 in revenue per year divided between the major players, like GILL and SAFT (ELSI is not even a player, let alone a major player). Let's say ELSI did come up with at product good enough to make inroads into this market and capture say a third of it in 5 years. That would ammount to $66,000 per year in revenue for that aircraft type. I can guarantee you that it would be some years before ELSI would even recoup the certification costs, let alone make anything. And that's for one of the world's most popular aircraft. Remember, approval is required for each Aircraft type, so you can see the difficulties.
