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The VLJ Update

September 2004

Reprint from Airport Journals - by Karen Di Piazza

It's still debatable whether or not there's a potential air-taxi/limo market to the extent that VLJs (very light jets) will create a new market or take business-class fares away from an already shrinking segment of the airlines market. Remember the failing of Russian retailer taketoauction.com, which became the Nimbus Group two years ago, a startup air-taxi company that ordered 1,000 jets from Eclipse? They believed there was a market on a grand scale for air taxis using small jets, but after they couldn't raise enough capital equity from institutional investors, the company closed its doors and returned to the retail perfume business. They couldn't convince investors that the air-taxi/limo concept would work, in part, because no one believed that, as a group, all air-taxi providers could unite in some fashion offering a truly national service.

Richard Aboulafia, self-admitted "air-taxi atheist," who is a business analyst for the well-known Teal Group, a Fairfax, Va. research company, has done numerous studies on the possibility of an air-taxi market being viable. He doesn't agree that even 1,000 small jets will ever be brought to market for air taxi use. In a recent business-jet overview, he forecast that one or two new manufacturers would succeed in bringing any VLJs to market. Instead, he predicts that about 6,413 traditional bizjets will be delivered between 2004 and 2013, and forecast that only about 450 VLJs will be delivered.

Jack Pelton, Cessna Aircraft Company's CEO and president, told Airport Journals (July 2004) that he wasn't convinced there was a significant air-taxi market, because, as of yet, he hasn't been able to see where that market will come from, and he questioned if it existed at all. Why is Cessna then in the process of producing the Mustang?

Pelton said they've had this design for quite sometime; he believes existing Cessna cabin-class piston twin owners will move up to the Mustang because it's more affordable than Cessna's larger Citation jets. As well, he believes another market will come from piston twin owners who have purchased competitors' aircraft. Overall, he said, from a study that Cessna conducted, there are about 15,000 cabin-class twin owners that are available to purchase VLJs.

In case Aboulafia is wrong, and new Pogo air-taxi founders Donald Burr and Bob Crandall are right, he says Cessna will be poised to compete in the air-taxi segment-whatever that turns out to be.

Is Cessna's Mustang wild?

The Mustang Citation, a six-place twinjet Cessna is producing, is on target for FAA-certification in mid-2006. Thus far, the company confirmed having 229 firm deposits of $75,000/each, figures they disclosed for the first time to Airport Journals. Further, production deliveries on the Mustang are sold through 2009.

Cessna Mustang

Cessna's Citation Mustang, a six-place, twinjet, is making significant progress as it completes its first in-flight 80-hour milestone, with FAA-certification in mid-2006.

Meanwhile, the company's test bed CJ 525 completed 80 in-flight hours with the PW16W engines, which will be the power plant for the new Mustang. Previously, they had completed five hours of ground testing. This is the first time Pratt & Whitney Canada has allowed engine testing preformed outside of the company.

The Cessna Citation CJ3 is now flying with the newly FAA-certified Williams' FJ44-3A, 3,000-pound-thrust engines. The new FJ44-3 took awhile to certify as it has full authority digital electronic control, a control that provides pilots with simple management of their engines, and as well, advanced engine diagnostics and trend monitoring. Williams reported they were the first engine manufacturer to win FAA-certification for an engine of less than 6,400-pounds of thrust that incorporated a dual-channel FADEC.

Adam A700 FAA-Certification on "fast track"

According to Gregg Williams, president of Williams International, it's just a matter of the FAA processing the paperwork on the FJ33-4, making the Adam A700 all composite, six-seat, twinjet the only VLJ flying with certified Williams' FJ33-4 engines. Colorado-based Aviation Technology Group will also equip its two-seat Javelin with the FJ33-4, as will Diamond Aircraft on its D-Jet.

Adam A700

Colorado-based Adam Aircraft Industries forecast its six-place, all-composite Adam 700 Jet to win FAA-approval sometime in 2005.

The FJ33-4A-15 weighs less than 300 pounds, has an initial certified thrust rating of 1,568 pounds, and is the smallest and lightest turbofan engine in the world to have passed all the rigorous FAA-certification tests.

Since Oshkosh, the A700's price has increased to $2.1 million, from $1.995 million.

Joe Walker, Adam Aircraft's president, told Airport Journals before going to press that they hoped the A700 would win FAA-approval "sometime in 2005." Other than the 75 orders placed by newly founded Pogo, a Part 135 charter company that plans to use A700s for its air-taxi business, he declined to disclose how many total firm orders the company had. However, he confirmed the deposit schedule for placing an order on the A700 was in increments of $125,000 with contract and $125,000 upon certification.

Since Adam first unveiled the twinjet in October 2002, the company hasn't released performance and weight specifications. Walker declined to provide that information, saying it would become available with FAA certification. Preliminary performance data published on their website shows 1,100-nm NBAA IFR range, 0.65 Mach maximum operating speed and a 340-knot cruise speed.

"I think that's enough information in which purchasers can decide whether or not to place a deposit, and it hasn't been a problem," said Walker.

He forecast FAA certification by year-end for the A500, a piston-powered twin priced at $1.15 million.

"In the next 30-day period, we will receive FAA-TIA (type initial authority)," he said.

If Adam wins FAA approval "sometime" next year on the A700, they'll be the first startup manufacturer to certify a production jet since Learjet did in 1964, with its Lear 23. The A700 would also be the first VLJ to enter service.

Eclipse far ahead in orders

Eclipse Aviation, Albuquerque, N.M.'s Aerospace Technology Park's anchor tenant, is far ahead of competitors, with 2,111 deposits on its Eclipse 500 Jet, priced at $1.175 million. According to Vern Raburn, the company's founder and CEO, second flight with PW610 engines will fly by December 31. FAA certification is forecast for 2006, followed by European certification.

Eclipse Aviation Corp

Albuquerque-based Eclipse Aviation Corp. prepares its five-place, Eclipse 500 Jet for its second in-flight test by year-end.

Eclipse is the only VLJ manufacturer with a training program approved by Global Aerospace, who has agreed to underwrite the jet for pilots that complete and pass the company's in-house training program. Today, a $97,500 deposit is still required-the same amount under the original "Sterling Deposit Program," before the divorce from Williams', when, according to Raburn, its engine failed to meet Eclipse's specifications.

Raburn said Eclipse Aviation has raised a total of $325 million of equity investment to date in five rounds of funding.

"The investments have come mainly from private individuals, including Microsoft cofounder Bill Gates and Alfred Mann (inventor of insulin pump maker MiniMed Inc.), with $10 million from the state of New Mexico," he said.

"I'm more than confident we have enough money to bring the 500 to production," said Raburn.

Eclipse, with manufacturing principles adapted from the auto industry, has won FAA-approval on its innovative friction-stir welding process. Eclipse is the first to employ the technique for production aircraft assemblies.

One question. Who is purchasing all of these aircraft? Raburn says approximately 600 orders are from owner/operators, while the rest are from future air-taxi operators. Eclipse has sold 112 airplanes to Swiss company Aviace, an additional 50 or so to Europe-based operators, and another 25 are headed for operators in South America, Asia and Japan. Eclipse declined to disclose where the rest of its aircraft orders have come from, and how many might be "early price and delivery position" speculators, with no intention of ever taking delivery of the aircraft for their own use.

Diamond Aircraft Industries develops its D-Jet

Diamond Aircraft D-Jet

The five-place, all-composite D-Jet is on target, priced for under $1 million, with its development being split between Diamond's two locations in London, Ontario, Canada, and Wiener Neustadt, Austria.

Peter Maurer, the North American president of Diamond Jet Aircraft Industries, said the five-place, single-engine D-Jet is on target, and there haven't been any delays with the project.

"We forecast first flight before April 5, 2005, then certification following at year-end of 2006," he said.

He added that reports that they are considering the use of a parachute for the jet is false.

"It's not possible to use a parachute because of the speeds involved with the jet, but if we found a system that could support a commercial system, we'd look at it," he said. "After spending 10 years at Diamond as their chief engineer, there isn't anything more I'd like to see for safety purposes."

He said they had taken deposits on the D-Jet, but he declined to confirm how many or what the deposit amounts had been. He added that the price for the D-Jet would come in at around $1 million or less, but they haven't been actively marketing it yet.

"The D-Jet's maximum ceiling is FL250 and attainable speed is 315 knots-not the fastest, but it's fast enough for the owner/operator," he said. "The D-Jet isn't designed for Part 135 operations; however, it will have very sophisticated avionics, weather-uplink systems, traffic avoidance, etc."

Maurer said they had some delays on the DA-42 twin-engine diesel, which was certified in May, in time for the Berlin air show. He added that it was critical to get the DA-42 certified before they could fully concentrate on the jet.

New VLJ maker Excel-Jet

Colorado-based Excel-Jet Limited, a startup, announced several months ago that it was producing the Sport-Jet, a four-seat, single-engine turbofan-powered aircraft, with a 350-knot cruise speed at FL250. The creator of the Sport-Jet, Bob Bornhofen, was the original mastermind and designer behind the Maverick Jet kit, a five-place twinjet. He later sold the plane rights to Jim McCotter of Maverick Jets, Inc., which since has closed its operations at Florida's Melbourne International Airport.

Excel Jet Ltd

Colorado-based Excel-Jet Limited has decided to enter the VLJ race, producing its Sport-Jet, a single-engine, four-place turbofan jet with first flight forecast by year-end.

Bornhofen said the Sport-Jet's cabin is carbon composite material with aluminum wings and tail.

"We built the plane's "mockup" months ago; now, we're just about finished with the real thing," he said. "The first test aircraft will fly by December 31."

He said the aircraft is designed "with the owner/operator in mind, not for commercial use in Part 135 operations."

Bornhofen said he's producing the Sport-Jet for FAA-certification and expects first productions to sell for $950,000.

Safire Aircraft?

At press time, Camilo Salomon, Safire Aircraft CEO and president, told Airport Journals he's still confident he can secure new funding from two potential investors, after the company's new investor deal fell apart. The company was in the process of building its first test bed aircraft, but right now, the Safire Jet, a six-place, all-metal twinjet, is on hold.

Safire Aircraft

Miami-based Safire Aircraft's CEO and president, Camilo Salomon, said he's still confident they can secure new funding to continue the Safire Jet, a six-place, all-metal twinjet. "We're not giving up on this; we plan to continue building the Safire Jet," he said. "We're so close."

Is Avocet in or out of the race?

Carey Robinson Wolchok, founder, chair and interim CEO (since David Tait left in April to start his own commercial start-up) of Westport, Conn.-based Avocet Aircraft, has declined comment about future plans to produce the company's ProJet, a six-place, turbofan twinjet that was to rock the air-taxi world.

Wolchok told Airport Journals in April it was a go. Ofer Shifris, Israel Aircraft Industries' manager for the Avocet/ProJet program, told Airport Journals on April 28 that they and Avocet had signed an agreement and were in the final stage of evaluating the overall results of the "program definition phase."

"Then, IAI shall design, develop and manufacture the ProJet aircraft in its facilities as well as with our partners," Shifris said. IAI was to be the manufacturing arm. Avocet was responsible for marketing and funding the project for its $2 million jet.

Since that time, Avocet's toll-free number has been disconnected, and its toll number now rolls over to an automated service. Also, Wolchok had told Airport Journals that Avocet would be an exhibitor at NBAA's annual convention this October, and would have "a big announcement" at that time. He said he would "confirm a giant new order." But Avocet isn't on this year's NBAA Convention roster as an exhibitor.

Last fall, Cleveland-based Jet Partners placed an order for 105 ProJets at the NBAA Convention, but company officials say they haven't been able to reach Wolchok or anyone else at Avocet.

The Javelin - Small but mighty

Javelin

Colorado-based Aviation Technology Group, Inc. decided to produce its two-seat "executive sport" Javelin in New Mexico, after George Bye, CEO of the company, became impressed with what Eclipse is doing.

Colorado-based Aviation Technology Group, Inc. says its two-seat, $2.5 million Javelin twin turbofan jet is going to race across the sky at Mach 0.92.

He said being near Eclipse would give them "access to raw materials, similar suppliers and importantly, skilled workers." He added that New Mexico's Investment Council kicked in $6.25 million in support, but another $6.25 million is still needed to proceed with prototype production, which Bye said would take three to four years. The Javelin's cockpit will utilize avionics keyed to NASA's Small Aircraft Transportation System, a plan to develop a technology linking GA airports throughout the U.S. The Javelin is not designed for Part 135.

Will Honda Step up to the Plate?

A couple of months ago, the Honda Motor Company announced that it formed a subsidiary, Honda Aero Inc, which Junichi Araki, will head. Meanwhile, Honda consolidated its turbofan/piston engine research at the Wako Nishi R&D Center in Japan. The new facility will focus on R&D on the HF118 engine, which company officials say they hope to mass-produce.

HondaJet

The HondaJet completed initial flight tests at Piedmont Triad Airport in North Carolina.

Honda Aero's role is to take on responsibility for procurement and preparation for production of the HF118 turbofan, a 1,670-pound-thrust engine that would include applications for the VLJ market. Honda Aero declined to say how it would interact with its new partner, General Electric; earlier, the company announced it would jointly market and develop the engine. A final agreement is expected by year-end, at which time Honda Aero forecasts starting its new operations.

Honda has denied it has plans to produce the HondaJet, saying the company has "no business plan." Yet, the HondaJet, a composite-fuselage, six-place twinjet, has logged about 40 hours of test flying using the HF118.

Airport Journals scooped the aviation press with our publisher's Read My Lips column on the HondaJet, October 2002. Until that time, it had only been reported that Honda was making a small turbofan engine that was being tested on a Cessna CJ. Airport Journal's source within the secret skunkworks complex at Greensboro, N.C., revealed that there were, in fact, two new jet aircraft wearing Honda's distinctive red Honda brand. Various components of the aircraft were arriving from Japan and being assembled by a group of about 30 workers-20 Japanese nationals and 10 Americans.

Airport Journals published the first pictures of the HondaJet in December 2003. We wrote: Compared with conventional jets, this experimental aircraft claims to offer superior fuel efficiency and remarkable cabin space. The engines are positioned on the upper surface of the main wing in a unique configuration.

This layout also eliminates the need for structural engine mounts in the fuselage, creating more cabin space than in a conventional aircraft. The fuselage is a compact and lightweight co-cured carbon composite structure. The main wing features aluminum skin panels formed from single sheets of aluminum.

So, why is Honda so secretive? No hype, no press releases, no big announcements at NBAA. What's up? Certainly "Japanese culture" is partly the reason, but more importantly, Honda is not an aviation company; it's a motor company. With expected motor group sales over 75 billion dollars and profits exceeding 4 billion dollars for 2004, the Honda "mark" rivals the value of the top trademarks of the world. One misstep in aviation could cost billions. Example: One Honda market study shows American women hold the Honda name almost sacred; their loyalty is tied to dependability and safety. Result: Honda Accord is America's "Number 1" bestselling car, contributing to nearly three million auto units sold annually. Any slight change in perceived safety or downward sales shift would translate to serious yen.

The Japanese translation for the word "soon" means within one's lifetime; Honda will probably manufacture an Accord VLJ before Cessna begins building its first Citation lawnmower.

Scuttlebutt that Brazilian Embraer will produce a VLJ

Embraer, which already manufacturers regional bizjets and the Legacy business jet, a derivative of the ERJ-135, is looking at possibilities of new aircraft, including a light business jet, according to its U.S. office in Florida. The company, though, isn't providing details at this time, except to say that projects wouldn't include an aircraft in the VLJ market. However, the company hinted that a major announcement was in the works, which would be made at the NBAA Convention.