Avantair expands its all-Avanti fractional

 - October 4, 2007, 6:45 AM

When Steven Santo announced the creation of a fractional ownership program with an aircraft fleet consisting solely of Italian-built Avanti turboprop twins, some reacted to the news with skepticism. The economy was entering a recession, they said, and the airplane itself had never sold well.

Now the skeptics are silent, and Santo typically shows up for work with the smile of a man well satisfied with his lot in life.

And why not? Avantair launched operations in 2001 with two Avantis and now has 10 of them in its fleet, with two more scheduled for delivery before the end of the year. The company has sold out shares in seven aircraft, and Santo claims his only concern at this point is whether deliveries of new Avantis from Genoa-based Piaggio can keep up with Avantair’s sales of shares.

In fact, the most recent addition to the fleet is a low-time Avanti purchased from a European owner in an effort to keep up with customer demand. Starting in January, Piaggio has promised one Avanti a month for the next two years as
it makes good on a firm order for 24 aircraft placed earlier this year. By the time the last aircraft of the most recent order enters service at the end of 2006, Santo expects to have a fleet of 36 airplanes in service nationwide.

Despite the company’s success, Avantair is a relatively low-profile operation, based at Essex County Airport in the quiet town of Caldwell, N.J., a 45-minute drive from Manhattan.

Facilities leased from the airport include a 14,000-sq-ft hangar and administrative offices. There’s another 5,000 sq ft of office space and an additional 7,000 sq ft of hangar space available. Avantair also operates a Piaggio-approved maintenance facility in Tampa, Fla., that was opened late last year. The staff, including those at the Tampa facility, now totals more than 70, of whom 30 are pilots.

With the opening of a sales office last January in Reno, Nev., staffed by five people, Santo expects the West Coast program to grow rapidly. The airplane scheduled for delivery in December is already earmarked for the West Coast operation.

As a matter of fact, according to Santo, the Avanti is in such demand that “We get e-mails almost daily from brokers trying to buy one of our delivery positions, and they’re willing to pay thousands more for the airplane than we’re paying.”

Has he sold any? “Not a chance,” said Santo.

The Avantair program begins with a one-sixteenth share, but one-eighth remains the most popular share size. A one-eighth share entitles the owner to 100 occupied hours a year at an initial buy-in cost of $750,000 and a “user” fee of $14,000 a month. “We don’t call it a ‘management fee,’” said Santo, “because we include in it the hourly occupied fee that most fractional operators bill separately.”

Most of Avantair’s customers are individuals, and most of them have never been involved in any way with general aviation, said Santo.

As of the middle of last month, Avantair had 80 share owners. “We’re selling shares at the rate of 12 to 14 a month, and we’re not doing a lot of advertising,” said Santo, adding, “We haven’t lost a single share owner since we began operations in 2001.”

Santo got the idea for an all-Avanti fractional operation when his law firm opened a new office. A pilot himself, Santo flew the company’s Piper Mirage, and often found himself demonstrating to fellow attorneys the convenience of the pressurized piston single. His firm soon bought a Raytheon King Air and a Piper Cheyenne and began leasing them to other law firms.

At that point Santo’s law firm, along with three others, decided to buy two Cessna CJ2s and operate them under a fractional partnership agreement, which Santo would run “at a small profit.” Instead, Piaggio persuaded Santo and the other partners to take a flight on an Avanti. “We got on it, and that was it,” he recalled.

By all accounts, the cabin is a big part of the airplane’s growing popularity. At 6 feet 1 inches wide and 14 feet 7 inches long, with 5 feet 9 inches of headroom, the drop-aisle cabin is about the same size as that of a Hawker 800 midsize jet. “Since we began selling shares, we’ve never had a complaint about cabin comfort,” said Santo. The baggage compartment, Santo pointed out, will carry as many as seven “real full” golf bags, and there is also a hanging closet in the aft end of the cabin.

Despite a radical design that was born more than two decades ago, the airplane remains unusual in the world of business aviation. It is radical in appearance, with a sleek, porpoise-like fuselage, slotted-flap foreplanes on either side of the nose, a main wing placed well aft, and twin counter-rotating pusher propellers. The engineering is no less radical. In addition to the laminar-flow wing, the fuselage and both engine nacelles are designed to provide lift and reduce drag. Piaggio chose to use composite materials, but only for the vertical and horizontal stabilizers, engine nacelles, forward lifting wings, outboard wing flaps, landing gear doors and tailcone.

Less Noise in the Cabin
With the engines on the wing and pusher props well aft of the cabin, interior noise is considerably less than that in conventional turboprop twins. On takeoff, with the Pratt & Whitney Canada PT6A-66 engines at 2,400 rpm, the noise produced is akin to that of a nest of angry wasps. As the power comes back to 1,800 rpm at 12,000 feet, the comparative quiet is remarkable.

With a max cruise speed of 395 knots, the Avanti is 14 knots faster than the Citation CJ1 at max cruise and only eight knots behind a Citation Bravo. The certified ceiling of 41,000 feet compares favorably with that of the Bravo, which is certified to 45,000 feet. Adding to the comfort is a cabin pressurized to 6,500 feet at FL 410.

Santo expects the Avanti to become an even more attractive alternative to entry-level business jets as the price of fuel continues to climb. Fuel burn at max cruise is approximately 100 gallons per hour, “about 40 percent less than that
of a comparable jet,” according to Piaggio. “We’re already seeing prices of $4 a gallon at some FBOs,” said Santo. “The cabin may be the airplane’s best feature now,” he added, “but as fuel prices continue to climb, efficiency is going to become the major issue.”

Green Avantis are ferried from Genoa to Greenville, S.C., where Stevens Aviation installs the cabin interior. The cabins in eight Avantis are configured for eight passengers. The other two airplanes are configured for seven. There is a mini-galley forward for snacks and drinks and an enclosed lavatory aft. Amenities include two DVD players and an Iridium flight phone.

Avantair expects to swap out its fleet aircraft at some point between five and 10 years. “The business plan calls for a seven-year average life,” said Santo. He expects to have no difficulty finding buyers for the aircraft he replaces. “These airplanes hold their value very well,” he said. “Brokers say some newer Avantis have actually sold for more than the first owner paid for them.” The “base list price” of the Avanti, as quoted by Piaggio, is $5.35 million in 2004 dollars and delivery slots are sold into 2006.

Finding pilots is apparently not a problem. “Pilots want to fly this airplane, and we have no lack of résumés.” As of mid-September, Avanti had 30 full-time pilots and was about to begin training a new group of 15.

Pilot Training
At this point, pilot training is performed in-house, with students spending approximately 40 hours in the classroom, 12 hours in the cockpit and 12 hours at company indoctrination. But that is due to change next year. A new level-D simulator is nearing completion by FlightSafety International and is scheduled for installation in July at the FSI learning center in West Palm Beach, Fla. FSI expects it to be operational by the end of next year.

Piaggio has been supporting the current in-house pilot training program since Avantair began operations. The contract with Piaggio includes 1,000 hours of maintenance, a five-year avionics warranty and pilot primary and recurrent training.

According to Santo, the simulator will not only facilitate pilot training but also reduce insurance premiums. The insurance rates now, he said, are a little higher than those on light jets. “But having the simulator will make a big difference, about 20 to 30 percent,” he estimated.

Word continues to circulate that Piaggio is about to unveil an Avanti avionics update with Collins’ Pro Line 21 suite, a development that Santo said is of little concern to the Avantair operation. The existing Pro Line II avionics suite is more than adequate to the current task, said chief pilot Dave Ovad, who added that the autopilot interface is particularly effective, as is the high-resolution, digital airborne weather radar.

Avantair has also begun adding WxWorx from XM Satellite Radio to its fleet. The system includes Nexrad, five-minute lightning-strike awareness, METAR and TAF graphic and text display, and a five-minute update cycle.

Part 135 Soon
Avantair is a Part 91, Subpart K operation but Santo said the company expects to get Part 135 certification “definitely by the end of the year.” Among other advantages, Part 135 will allow Avantair to sell shares to membership clubs. “Under Part 135, there is no question as to ownership and liability, and we’re getting a lot of interest in club share sales,” said Santo.

He is happier with the recent increase in TBO from 3,000 to 3,600 hours, and with the maximum takeoff weight increase from 11,550 pounds to 12,000 pounds.

Asked to characterize his confidence in the company’s growth, Santo said, “Piaggio is making the airplanes and we’re going to buy them. We’ve laid out $10 million in non-refundable deposits. That’s a pretty serious commitment.”