Piaggio Aero Industries, which emerged from bankruptcy five years ago and has gradually stopped bleeding red ink, last month received a record order valued at approximately $200 million for 29 Avanti turboprop twins, including the conversion of five options to firm orders from an earlier acquisition by the same buyer.
The order came from fractional operator Avantair of Fairfield, N.J., which currently operates a fleet of 10 Avantis. Under the new contract, one Avanti will be delivered next year, 11 in 2006 and 12 in 2007. The converted options are all scheduled for delivery in 2005.
The new order creates a greater challenge to Piaggio as the company works to increase the production at its Genoa plant. According to Piaggio America president Tom Appleton, the Avantair contract “implies a decision to ramp up production. While we are committed to that, the logistical details are now in development [and] the goal is to have Avantis rolling off the line at an annual rate of 36 by sometime in 2007.” And he added that this must be done while at the same time, “…maintaining a balanced ratio between those aircraft dedicated for fractional use and those for individual owners and government customers.”
Avantair CEO Steven Santo launched the all-Avanti fractional operation in 2001. Santo said the company, then based at Stewart International Airport in Newburgh, N.Y., had made a dozen demonstration flights in the Avanti and subsequently bought one airplane. Every demo flight thereafter, he said, led to the sale of a fractional share. “The performance, cabin size and operating efficiency make the Avanti a perfect aircraft for our customers,” said Santo.
According to Piaggio America v-p and COO Jim Holcombe, it is precisely those features that are responsible for the revival of the Avanti, in addition to a major company restructuring and re-introduction of the turboprop twin.
In 1998, Piaggio delivered just one Avanti and its only major customer was the Italian government. In bankruptcy at that point, it appeared all that remained was to shovel in the dirt and say a few kind words. But 1998 was also the year of the rescue, led by Piero Ferrari, son of Enzo Ferrari of race car fame. Piaggio was purchased by a consortium that included Aero Trust, a British-based fund managed by the Royal Bank of Canada and representing three prominent Italian families–Buitoni, de Mase and Ferrari. The company was renamed Piaggio Aero.
Ferrari and others at Piaggio were convinced that the turboprop twin was a true contender, even among lighter business jets. The Avanti’s max cruise speed of 395 knots is 14 knots faster than the Citation CJ1 and only eight knots less than that of a Citation Bravo. Its certified ceiling, at 41,000 feet, compares favorably with that of the Bravo, which is certified to 45,000 feet, and the Avanti’s cabin is actually larger than that of the very same business jet.
The Avanti’s 2004 price of $5.495 million is about $400,000 less than that of the Bravo. However, no Avantis are available in current-year dollars. The backlog now stands at 50 aircraft, and the next available Avanti delivery slot is in 2007, with a price of $6.2 million in 2007 dollars.
On the other hand, said Holcombe, consider the fact that the fuel burn at cruise altitude and max cruise speed is approximately 100 gallons per hour, “about 40 percent less than that of a comparable jet.” As fuel prices rise this is likely to become a major selling point.
The re-emergence of the Avanti as a contender came after the airplane was relaunched worldwide in 2000 and Piaggio America was formed as a North American regional sales, service and marketing subsidiary. A new emphasis was placed on service and support, particularly in the U.S., which was and remains the largest
market for the Avanti.
Today, Piaggio manages six service centers in the U.S., and the Avanti fleet in North America numbers 42, an increase of 16 airplanes since 2002. The worldwide fleet now stands at 76 aircraft, 23 more than in 2002.
In April Piaggio announced the sale of its first Avanti in Latin America. And, in the same month, the company delivered an Avanti to Lotnicze Pogotowie Ratunkowe of Poland. The aeromedical company cited cabin size and low ambient cabin noise levels as key in its decision.
Piaggio Aero has also recently begun to capitalize on the worldwide brand recognition of its association with the Ferrari name. Piaggio is now a sponsor of the Ferrari Challenge classic Ferrari race series in North America, “which will give us a lot of visibility,” said Holcombe.
Earlier this year Piaggio America completed a move from Greenville, S.C., to West Palm Beach, Fla., where it leases space from Jet Aviation. The relocation, said Holcombe, has resulted in a lot of additional “walk in” interest. “It’s been a good move.”
What’s next for Piaggio and the Avanti? The most persistent scuttlebutt has been that a new airplane is being considered. Perhaps the most realistic speculation right now is that a major avionics upgrade for the Avanti is imminent. In fact, an announcement regarding the selection of the Collins Pro Line 21 system for the turboprop was expected late last month at EBACE.
Meanwhile, Piaggio Aero and Piaggio America plan to mount a “substantial” presence at this October’s NBAA Convention in Las Vega