2009 New Business Jets: Spiraling down: Goodbye Columbus & Epic meltdown
The recession has put the spike to some major new jet development programs, delayed others and shuttered some undercapitalized aircraft companies altogether.
Supersonic Proceeds at a Snail’s Pace
Fuel prices and a distressed global economy are clouding the immediate future for supersonic business jets. Neither company involved in the Mach race– Aerion or Supersonic Aerospace International–has plans to build a prototype. So the question remains: If they don’t build it, will risk-sharing partners and customers still come?
Aerion, the more visible of the two programs, seems to think so. The program was first announced in 2004 and the company currently claims an order backlog of $4 billion, or roughly 50 aircraft, backed by refundable deposits.
In June Aerion said it was close to formalizing a relationship with an OEM that could build the aircraft after a joint feasibility study phase, likely to be completed near the end of next year. Optimistically, that would lead to certification sometime in 2015. SAI said its competing QSST could be certified by 2016; however, like Aerion, SAI is a long way from a final design and does not have a way to build the airplane.
Meanwhile, research on Aerion’s natural laminar flow wing design will continue through this year. The new batch of tests– in both university and government wind tunnels and on NASA’s F-15B supersonic test bed–are designed to set baseline configuration details and validate the design of key components such as strakes, flaps, elevator and rudder. Aerion intends to perform these tests later this year.
Scale models of the JT8D engine nozzles are also being tested for thrust performance and noise characteristics.
Aerion is putting a positive spin on research to date. “Test results continue to validate computer modeling conducted over many years to refine the supersonic laminar flow concept,” said chief technology officer Richard Tracy. “These positive results confirm our confidence in our cutting-edge analytical tools, and the Aerion design concept. The reintroduction of civil supersonic flight is a big task, but it is now well within our technological understanding and capability.”
The science may be within reach, but the funds remain over the horizon.
Given the enormous financial pressure on its beleaguered corporate parent, Textron, it came as no surprise when Cessna pulled the plug on its $775 million development program for the wide-cabin, $28 million Citation 850 Columbus. Officially launched on Feb. 6, 2008, the 4,000-nm-range Columbus had been under development, in one form or another, since the mid-1990s. At the 2006 NBAA Convention, Cessna revealed a conceptual mock-up of the aircraft’s cabin it dubbed the LCC– large cabin concept.
The futuristic, curved cabin sported a look that was a dramatic departure for Cessna. The 10-passenger aircraft was designed to have a maximum cruise speed of Mach 0.85 and was to be powered by Pratt & Whitney Canada’s new, fuel-efficient, low-noise and low-emission PW810 turbofans. The cockpit was slated to incorporate the new Rockwell Collins Pro Line Fusion avionics system and the cabin would have the latest in-flight entertainment options, including airborne Internet.
Cessna’s decision not to recruit risk-sharing partners for the project may have made it impossible to keep in the current environment. Initial customer deliveries were scheduled for 2014 and, by the project’s official launch, Cessna claimed it had already received letters of intent for 70 aircraft. For Cessna, the Columbus was more than a new aircraft; it was an experiment in remaking the company, to make it more efficient by acting as more of an integrator and assembler on the Columbus and by farming out major exterior and interior components to suppliers.
But late last year, when Textron CEO Lewis Campbell announced that the company might have to sell either Cessna or Bell Helicopter to raise cash, the die for the Columbus was cast. An expensive, cash-hungry $800 million development program would significantly decrease Cessna’s attractiveness to any potential buyer, especially one that had a product that competed directly with the Columbus. On April 29 Cessna announced it was suspending the program and laying off the 700 employees working on it. On July 10, the airframer formally canceled the program in a filing with the Securities and Exchange Commission. Pratt & Whitney Canada immediately pulled the plug on the PW810 engine program. Cessna walked away from $43 million already sunk into the Columbus and another $10 million in government incentives to keep it in Kansas. The company’s entry into the wide-cabin bizjet market was brief, exciting and over.
No Chinese Grob
For decades Germany’s Grob Aerospace survived building gliders, piston-powered trainers and specialty turboprop research aircraft. Those close to the company claimed it was never a money-making proposition. Rather it survived due to the largesse of its owner, Burkhardt Grob, an aviation enthusiast whose family also owns one of the largest machine tool companies in the world. When Grob Aerospace was sold in September 2006 it was in the middle of developing the $7.1 million SPn “utility jet,” an all-composite, eight-passenger, 1,800-nm single-pilot aircraft that could land on unimproved airstrips and quickly be converted to cargo missions. Just two months later the second prototype aircraft crashed, killing the test pilot and prompting a redesign that moved the program substantially to the right.
It was too much for the company to absorb and less than two years later, in August 2008, Grob Aerospace filed for insolvency. Bombardier then terminated its contract with Grob to develop the composite structure of the new Learjet 85. That program had been a major source of company revenue. The training aircraft part of the company was sold to new owners earlier this year for $4.5 million, but Grob’s largest creditor blocked the sale of the SPn program to China’s Guizhou Aircraft for $3.5 million, a tiny fraction of its actual development cost. No other buyers have come forward to date.
Adam A700 Resurrection Fails
After 10 years, Adam Aircraft filed Chapter 7 liquidation bankruptcy on
Feb. 20, 2008, after plans to morph its $1.2 million A500 push-pull piston twin into a $2.25 million VLJ ran out of time and money.
In April 2008 former Adam employees and a Russian company called Industrial Investors purchased the company’s assets for $10 million under the banner of AAI Acquisition. They planned to certify and place the A700 very light twinjet into production, but that goal faltered by November. AAI soldiered on, seeking additional capital and consulting work, but by March of this year it was all over. AAI folded and the assets of the company were purchased by industrialist Thomas Hsueh, who is evaluating whether to place the Adam A500 piston twin back into production; however, Hsueh says he has no plans to resurrect the jet program.
At the 2007 NBAA Convention, Epic Aircraft CEO Rick Schrameck insisted the company was on the verge of receiving a $200 million cash infusion from Indian industrialist Vijay Mallya and sealing a technical cooperation agreement with Airbus. Neither happened.
By July this year Epic had dismissed most of its 150 employees and defaulted on its Bend, Ore. plant lease. By the end of August the company had been forced down the path to involuntary bankruptcy after a customer brought suit claiming Epic took aircraft deposit money for an engine it never ordered from Pratt & Whitney Canada.
The scope of Epic’s ambition cast serious questions on its business strategy and the veracity of claims of a $170 million (2007 $) order book and target of producing 400 aircraft per year by 2010. The company claimed to be developing three turboprops and three very light jets, with plans to build them in Oregon, Tblisi (Georgia), Canada and possibly India. Epic arrived in Bend in 2004 with the help of $1.3 million in State of Oregon loans and grants on promises of eventually employing almost 4,000 there.
Epic said it was going to develop this diverse stable of aircraft initially as kits and then pursue certification. It did not certify any aircraft. The company did deliver 35 single-engine turboprop kits for its LT model and another 12 of those aircraft are currently locked up on the production line in Bend under the company’s “builder assistance” program.
Prototypes for two of Epic’s three jets actually did fly; the Elite twinjet made its maiden flight on June 7, 2007, and the single-engine Victory first flew on July 5, 2007. But Epic is likely to be remembered as a company that tried to do too much, too fast, with too little. Meanwhile a court-ordered receiver has taken possession of the business.