It has been one year since one of the world’s largest industrial conglomerates, India’s Tata Sons, purchased a one-third share of Piaggio Aero Industries, joining Italy’s Ferrari and Di Mase families and Mubadala Development of Abu Dhabi, UAE, as a primary shareholder.
Since then Piaggio Aero (Booth No. 1097) has conducted an extensive rebranding campaign, installed a new CEO, made plans to boost production and build a new assembly factory, enhanced its customer service and support and doubled its North American sales force. It also dropped more hints concerning a follow-on aircraft to its P.180 Avanti II turboprop twin, widely believed to be a jet wrapped in the Ferrari brand. Tata invested an undisclosed sum in the company and received three seats on its nine-member board.
Piaggio Aero’s new marketing campaign was designed to strengthen overall product awareness. Earlier this year Piaggio Aero’s board installed Alberto Galassi, former head of sales and marketing, as CEO. Former CEO Jose di Mase remains on the board of directors. Galassi was heavily involved with Piaggio Aero’s engine assembly, repair and overhaul business and in bringing new international shareholders to the company. Piaggio Aero expects to leverage its new shareholders’ vast network of international contacts to build a much stronger export market for the Avanti worldwide.
Team at Work on Jet
At this year’s EBACE show in May, Galassi dropped broad hints about the new Piaggio “Ferrari jet” but would not commit to a development timetable. However, company spokesman Enrico Sgarbi said at this year’s EAA AirVenture show in July that a dedicated team based out of the company’s Naples, Italy research-and-development center is actively working on the project. However, Sgarbi said a formal product launch was still some time away. The decision to delay the program is more about current market conditions and less about capital requirements, thanks to the Tata and Mubadala investments.
“Look at Tata and Mubadala,” said John Bingham, Piaggio America’s new executive vice president for marketing and sales, who joined the company this year after tenures in similar positions in the automotive industry and at aircraft maker Cirrus. “They don’t invest in stuff that isn’t going to be meaningful. They didn’t get to be the corporate entities they are by backing losers. They have both made a heavy investment in Piaggio Aero because they see a long-term future in it that goes way beyond Avanti.”
Bingham reiterated that any follow-on aircraft announcement “won’t be in 2009.” He said the new aircraft “will be very exciting and quintessentially Piaggio, but having done all this work on the brand, we want to make sure we deliver the brand through our existing aircraft as well.”
For Bingham, enhancing the brand near-term means increasing the number of U.S. and Canadian Piaggio Avanti authorized service centers this year. “I looked at our map of service centers and realized that the average customer would have to fly about two and half hours to get service. That’s ridiculous. When we looked at our service problem, we realized we had to double our service network. By the end of this year we will have 12 or 13 service centers up and running, all trained and all signed up, and for an owner it will be only about an hour’s flight. We cannot sell planes if we cannot support the planes and inspire confidence in them going forward,” he said.
New service center locations being considered include Toronto and Montreal in Canada and the U.S. Northeast, the Pacific Northwest, Los Angeles and Florida. Six service centers are currently operating in northern California, Colorado, Florida, Massachusetts, South Carolina and Texas. Piaggio America’s headquarters and parts distribution center will remain in West Palm Beach.
In July, 113 Avantis were registered in the U.S., 47 of those operated by fractional provider Avantair. Bingham pointed to Avantair’s annual 18-percent growth rate–even as other fractional providers are contracting–as testimony to the Avanti’s popularity and efficiency some 19 years after it was first delivered. He also noted that the Avanti has half the carbon offset charge of a comparable jet.
Bingham said Piaggio Aero still has a substantial order backlog, even with a few economy-generated cancellations. “We are quite fortunate compared to other players,” he said.
Sgarbi said the Genoa factory is basically at a full-production rate of 30 aircraft per year, but that Piaggio had made significant production-process improvements by implementing lean-manufacturing techniques that significantly cut aircraft production time.
About half of the Avantis produced are destined for the U.S. market. Those aircraft are completed at Jet Works Air Center in Denton, Texas. Sgarbi added that the new factory being built in Villanova d’Albenga will be capable of producing 50 aircraft per year when it opens in 2011. That plant will also include helicopter engine production lines for Turbomeca and Pratt & Whitney Canada.