Single-engine VLJ makers see programs stall

NBAA Convention News » 2010
October 13, 2010, 8:19 AM

The trajectory for single-engine very light jets is up and to the right. List prices for what were initially envisioned as $1 million pocket rockets are now bumping up against, and in some cases through, $2 million–and likely to go higher.

Meanwhile, program development is slowing, even stalling. The central reason for the continuing delays is lack of cash and lingering uncertainty about how many deposits can be converted into firm orders if and when aircraft are certified. 
 
Much like their twin-engine cousins, when the fog lifts there may be only one or two single-engine VLJs that actually make it to market–and stay there. But which ones?
None of the four OEMs that are seriously campaigning aircraft in this category–Cirrus, Diamond, Piper or Stratos–have sufficient internal resources to both get their designs certified and to place them into production. Newcomer Stratos is the lone entry in this group without an actual aircraft flying; it does have brochures and a mock-up.

Only Diamond is flying anything approaching a conforming, flying test aircraft; however, the D-Jet is now in its eighth tortured year of development and its estimated certification date–now set for the end of 2011–has fallen behind yet another year. Meanwhile, CEO Christian Dries spent the better part of the summer talking up a yet-to-be-developed variant of the airplane as a primary military jet trainer, envisioned complete with Martin-Baker ejection seats. Despite hefty Canadian government subsidies for the D-Jet, he also is seeking an investment and/or production partner for both military and civilian variants of the aircraft.
 
Cirrus remains in the hunt for external financing for its jet program as well. ­
Realistically, the program hinges on the sale of Arcapita’s 58-percent majority stake in the company to a new owner willing to make a sufficiently large investment to carry the program. If the cash comes in, Cirrus may have a conforming prototype flying by 2012, but for now it is continuing limited flight test with its nonconforming SF50 prototype. However, that aircraft’s main value to the company at present appears to be as marketing bait for pumping its upgraded, but still anemically selling, ­piston-engine aircraft at sales road shows. 

The need to use revenues from ­piston aircraft sales to finance jet development also appear to be a retarding issue at Diamond and, like last year, this year’s sales numbers from the General Aviation Manufacturers Association (GAMA) tell the tale.
The stagnant economy’s tractor beam has depressed sales of new piston aircraft across the board. While piston sales are marginally better at some companies than at their 2009 nadir, they are hardly sufficient to sustain the $100 ­million to $150 million new aircraft certification programs require and almost equal additional amounts to put any newly certified aircraft into meaningful serial production.

For the first half of this year, Cirrus had new aircraft sales of $70.7 million, Piper posted $49.5 million (that includes the Meridian turboprop) and Diamond rang the register for only $21.7 million–down from $30.3 million over the same period a year earlier. At this level, Cirrus CEO Brent Wouters said his company is breaking even. 

These types of numbers cannot sustain existing payrolls, much less expensive development programs.

Piper Aircraft’s new owner, the Brunei-backed ­investment firm Imprimis, seems to grasp the point. At this year’s EAA AirVenture, Imprimis managing director Geoffrey Berger said the company is committed to fully funding the PiperJet (now the PiperJet Altaire) and is prepared to carry it to certification and beyond, even if Piper’s current revenues could not. A nonconforming prototype made its first flight in July 2008, but the economic downturn forced Piper to move the development schedule to the right and customer deliveries now are not scheduled to commence until mid-2013.

However, the company began cutting metal for a conformal test aircraft this summer and has more than 100 engineers working on the program in-house. Although the company instituted a mandatory shut down the week of August 9 to 13, it excluded those working on the PiperJet and Piper’s payroll in Vero Beach rose from 540 last year to 890 but dropped to 830 this month.

Of all the single-engine VLJ survivors, Piper is perhaps best positioned to ­succeed in the near-term thanks to its parents’ deep pockets and the fact that it has logical “step up” aircraft in its product line en route to the PiperJet Altaire, including the piston Malibu Mirage and the Meridian turboprop. Nevertheless, having a new jet pass muster is a bit more daunting than tweaking an existing airframe and stuffing a PT-6 in the nose, which is what Piper basically did when it launched the Meridian more than a decade ago. 

However, it appears that none of these programs will succeed without a steady flow of capital, either from well-heeled parents or outside investors. Single-engine VLJs can fly, but not alone.

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