Orlando, Fla. – Aircraft Acquisitions Inc (AAI), the successor company to Adam Aircraft, is forging ahead with certification of its Very Light Jet, the A700, with the good fortune of having all the previous certification testing, already approved by the FAA before Adam went bankrupt last February, grandfathered in, according to newly installed President and CEO Jack Braly, who briefed reporters during the NBAA convention. However, little production tooling could be salvaged for use on the A700, with the singular exception of the wing tooling from the Adam A500, which did not survive the bankruptcy, and is now officially dead.
“We were able to pick up right where Adam left off and we got a half-certified aircraft for $10 million,” said Braly, who joined the company in June. “Our investors got a great bargain and the break-even point is just that much sooner. All these things make our outlook very good. Our whole message at this show is that the A700 is back. We are back in certification. We will bring the aircraft to the market on time and at a good price, the program is alive and well and is progressing.”
Certification is now set for the first half of 2010 with 85 percent of the company testing completed along with 50 percent of the FAA testing. Braly thinks certification can be completed by Q1 2010 but knows it can be done by the end of Q2. The AAI A700 has 1,357 flight hours flown with 365 hours, or one third of the flight test flown.
However, he avoided giving the exact price since materials have not been fixed. Braly would only say it would be competitive with the Mustang and Phenom on both price and performance which is expected to be about $3 million and 340 knots with a take-off field length of 3,250 feet. Braly added that the company wanted to wait until tests are complete before releasing any other specifications.
The A700 program was rescued by Russian investment from Industrial Investors that currently owns an air taxi service out of Moscow. The doors to the company were closed only two months before the acquisition was complete in April. Related Story In June, manufacturing of the test articles resumed for the A700 SN 004 as did the flight testing and, by September, 200 full time employees were at work with more under recruitment to meet a goal of 300 by year end, according to Braly.
“Industrial Investors were looking at the Cessna Mustang, the Embraer Phenom and the Adam Jet,” said Braly, who said the $200 million needed to complete certification is being provided as needed. “They liked the aircraft and decided to invest in the business. The investors didn’t buy the company to build an aircraft for themselves. They bought it to make a profit.”
Echoing descriptions of Eclipse problems, Braly said that, while the A500 was certificated, the company had never tooled up properly. (See related story in this issue) “So we made a conscious decision not to resume production in favor of the VLJ A700,” he said. “They were never really in production, anyway. There was an assembly process but they were still producing the A500 in an experimental mode. They needed tooling and planning. They were using A&P mechanics in the manufacturing process. The biggest problem I saw when I was consulting for the company is they never spent any money to ‘productionize’ the aircraft and their costs were sky high.”
While there will be no support provided for the A500, the liabilities for which ended with the Adam Aircraft bankruptcy, AAI has committed to work with the FAA to design a fix in the event the aircraft is subject to an airworthiness directive.
Despite its ownership by a company that runs an air taxi, for now, the company is not relying on the air taxi market since it sees that sector as still emerging. It is instead concentrating on owner and fleet operators. “To be successful you have to have good, experienced qualified people who have been there and done that,” said Braly. “The leadership needs to have done the things it takes to design, develop, certify and produce an aircraft. There are lots of start-up companies that come and go usually after spending a lot of money but the most valuable asset you can get is the people who are experienced, who know what you have to do. Most start-up companies don’t know what they don’t know so they sure don’t know how to fix it.”
Braly consulted for Adam at the request of the board of directors before the bankruptcy. He emphasized that the 58 employees that retained their jobs were the real assets behind the company when it was being acquired. “They were asked not to take other jobs and were kept on as consultants so from day one we had a very experienced knowledgeable work force,” he said. However, they needed a leader and Braly was asked to come out of retirement to head the effort, but on the proviso that he was no babysitter. “I’m there to bring the program to fruition while they look for a permanent CEO,” he said. “There is a big search going on and they are evaluating candidates who have experience and knowledge about the general aviation industry and marketplace.”
As for A700 position holders, many, said Braly remain very enthusiastic about the product. In May 2007, the company boasted a 50-aircraft order from Ameritech Aerospace, based in Hainan, China as well as a 96-aircraft order from an air taxi in Monaco. But it also lost a large order when POGOJet moved from the A700 to the Eclipse 500. Braly is still trying to firm up exactly how many aircraft have actually been sold. Nor is AAI taking any new orders. In addition to establishing an order book, the main focus of the company will be in developing a network of 10 to 15 independent distributors to sell and support the aircraft with the goal of having the network completed the day the first customer takes delivery.
“We are starting with a clean slate with a different marketing strategy using independent dealers,” said Braly, who hails from Beech, giving him not only a background in production but in using distributors for the sale of products. “That is an excellent idea for this company. If we have 10 to 15 dealers and, if each had two sales people, that means we’ll have a 30-person sales force along with 10 to 15 authorized service centers. The customer service will be there with the first aircraft and for a start-up company like ours that is very important.”
As it builds the company, certificates the aircraft and moves it into production, it is also in the throes of choosing an avionics supplier which must offer a modern three-tube system. “My commitment is that certification and production will all happen at the same time,” he said, and, alluding to Eclipse’s problems, he added, “We won’t have a partial certification with things coming on later.”
In the first quarter of 09 it expects to do the aerodynamics and performance testing with Serial Number 3 which is now being upgraded. Serial number four, which flew within 40 days of AAI taking over, will also be upgraded for power plant and avionics testing along with hot weather testing to ensure the engine cooling systems are fine. The program retains the Williams International FJ-33 engine originally planned for the aircraft.
Braly reported that Serial number five will be completed in April when it will enter the test program. Serial numbers six and seven will be manufacturing development units to test the line making Serial number eight the first production unit. AAI expects to produce 13 units in 2010 and double every year until full production is reached in 2014 at 100 units. “It’s a reasonable but aggressive growth schedule," said Braly. “By 2012 we will be at one per week and by 2014 it will be two per week. We expect to be profitable at four per month."