In March of 2002, Fairchild Dornier collapsed, taking the 328JET and 728 regional jet (RJ) families down with it. One year later, the 328JET program was resurrected when it was purchased by Ben Bartel, head of Leesburg, Va.-based AvCraft Aviation. Bartel also purchased the rights to the name "Fairchild Dornier." Although initially announced in January (C/R News, Jan. 6, 2003), completion of the sale was held up by a series of what Bartel described as "fits and starts." But with the sale now fully completed and a new Fairchild Dornier management team being created, Bartel sat down in his office at Leesburg Airport with C/R News Senior Editor Douglas Nelms to discuss where he wants to take the 328JET program.

C/R News: Having bought both the 328JET program and the Fairchild Dornier name, you must feel that there is a good market out there. Could you describe that market and estimate its size?

Bartel: Based on a lot of different studies we've done, as well as looking at markets that were never aggressively pursued by the previous owners, we feel there is a market for 300 to 500 aircraft in the 328JET size. One market is the 30-seat RJ, which doesn't really compete with the Embraer ERJ 135 or Bombardier CRJ 440, since they would really be considered in the 428JET [37- to 42-seat] market. On the corporate side, it is a bit more complex, but it roughly runs from the 29-seat shuttle configuration to an 18-seat executive configuration or even down to a 12-seat Gulfstream II substitute. The airline market really takes care of itself for the 32-seat aircraft, while the corporate would be a different grouping for executive, corporate shuttle and special missions. These would be more in the Envoy class.

C/R News: Didn't Fairchild Dornier try to sell to the corporate market without much success?

Bartel: In the last year there was a bit of effort on the corporate side, but the company never seemed to be fully behind it. All the focus seemed to be on the airline market.

C/R News: Do you plan to separate the marketing to the airline and corporate market, as the old company did?

Bartel: No, all the marketing will be done by Bob Stanford, our new senior vice president of sales and marketing, based in Fredericksburg, Va. He will head our marketing efforts on a worldwide basis.

C/R News: For the regional airline market, do you consider the ERJ 135 a competitor?

Bartel: To a certain extent it is. We recently lost out on an airline deal due to Embraer's financing package. At this point, we cannot afford to offer financing with the equivalent to state support and expect to remain a viable entity. We lost to Embraer, even though the 328JET was ideally suited to the customer's market and route structure. They are actually going to have to delete a couple of their destinations because of their greater runway requirements. As everyone knows, one of the 328's strengths is its unparalleled balanced field performance. So in the airline market the competition would be the ERJ 134, possibly the ERJ 145, although in the [Eastern United States] I don't think their speed and range advantage are as important. In the East how often do you need the speed? How often do you need the range? In the East, you don't.

C/R News: When you bought the 328JET program, you inherited a collection of completed and nearly completed aircraft. What is the status of those? Bartel: We have a total of 18 completed aircraft, of which 14 are in airline configuration and four in corporate. Another five are in various stages of completion on the production line. Those five have virtually all the components needed to finish them, such as wings, avionics, landing gear, etc. The only parts missing are the engines.

C/R News: If you sold those five tomorrow, how long would it take to get the engines?

Bartel: You would have to ask Pratt & Whitney. But from what we are hearing, Pratt & Whitney is a strong supporter of the program and if we needed the engines tomorrow, they could take them out of their spares pool.

C/R News: Out of those 18 ready for delivery, how many have you sold and when will deliveries begin?

Bartel: We have sold three aircraft to [Nuremberg, Germany-based] Aero-Dienst, our first factory authorized service center, which will also serve as a regional distributor for the Envoy corporate 328JET. They will provide complete maintenance and repair service for the 328JET, covering the territory basically from Germany eastward across Eastern Europe and Russia. We are still evaluating candidates to serve the western portion of Europe.

We have another seven aircraft in the paperwork phase. Stanford has also stated that he can sell the remaining available aircraft with about three months, although our business plan calls for those to be sold over the course of the year. Deliveries can begin within the next 60 days.

C/R News: If they are sold that quickly, how soon can you have the production line up and running? What do you plan as a production rate?

Bartel: Based on the schedule we've set, from the time we say "go" until the first aircraft is out the door is about six months. With the way things are going now, we expect to pull that trigger anywhere within the next three to four months. Production will be under the guidance of Wolfgang Walter, our new senior vice president of aircraft programs & customer support, who is the senior operations executive for Fairchild Dornier and is in overall charge of the production facilities and customer support function in Oberpfaffenhofen.

As for the production rate, we are using a very conservative business plan that has us starting at about 20 per year and ramping up over the next couple of years to around 35 or 40. However, Stanford feels that we will have to get the rate up to 50 to 55 per year based on his projections of a market for 700 aircraft. While that would be nice, for now we're staying on the conservative side. I should note, though, that so far his forecast of the interest in the 328JET has been a lot more accurate than mine. His projections so far have been right on the numbers, and since my projections are for a total market of 300 to 500 aircraft, I hope he's right.

C/R News: If you had to define your philosophy toward the "new" 328JET program, what would it be?

Bartel: Simply put - support. The best product in the world without support has its value degraded to the point that it is probably valueless. But you can take even a marginal product and totally support it, and it is going to retain its value. The 328JET is a fantastic airplane. It's robust, it's the cheapest in its class to operate, it's inexpensive to purchase - and to date it has had sub-standard customer support. So what we have to do is develop a customer support package behind the airplane with the same level of quality for support as for the quality of the airplane itself. If we do that, we'll be successful.

We're also planning to have that support as close to the customer as possible. We went and talked to the current operators, who told us they want to be able to pick up the telephone and talk to the source of the information. As a result, we are not going to continue any operations in terms of global support in San Antonio. In addition, we had to move the service component closer to the customer. In San Antonio, on the average, customers had a mean travel time of three and a half hours, one way. With Akron, Ohio, 95 percent of the U.S. fleet is within an hour and a quarter flight time. So that is our new main service center.

C/R News: When the old Fairchild Dornier went under, it had orders for 21 aircraft from Hainan Airlines that it couldn't deliver because of the refusal of the Chinese government to issue import licenses. What happened to those orders?

Bartel: Hainan now has import licenses for eight of the aircraft, four of which are ready to go and four of which are essentially mothballed and would have to be resurrected. Dialogue with Hainan is still open, although their issue is the same as for any customer, the issue of support. There is a possibility that Hainan will ask for the four that are ready, but that will probably be protracted because of the service issue. But to my knowledge the Hainan order is not a dead issue.

C/R News: There was also the 428JET program that was cancelled back in 2000. Any interest in that?

Bartel: We have the rights to the 428. We will be looking at it in the future to determine the need for it. When we've gone out and talked to the operators [of 328JETs], about 80 percent have asked what we are going to do with the 428. I really like the concept of the 428, and I realize that the family concept [for a line of airplanes] is an issue with the 328JET program. However, because of its characteristics, the 328JET is, in a sense, a family. Not in terms of its size, but in applications. It is ideally suited for a number of different applications that have never been pursued. So in a way, it's a miniature family because of the number of applications for which it is suited.

C/R News: The old Fairchild Dornier was headquartered at Oberpfaffenhofen Airport near Munich, with production, maintenance, administration and basically everything but marketing centered there. Will you have a headquarters there?

Bartel: Although our primary support facility will be in Akron and marketing in Fredericksburg, our headquarters will basically be wherever I am, which is here in Leesburg. As for Oberpfaffenhofen, it will remain the home of all the final assembly, customer support, training, engineering and wiring harness production.