S/E VLJ programs still face significant hurdles

NBAA Convention News » 2009
October 14, 2009, 10:06 AM

Almost 27 years after bizjet legend Allen Paulson announced–and then abandoned–the single-engine jet known as the Gulfstream Peregrine, the single-engine very light jet (VLJ) concept is inching closer to fruition. Proponents point to the successful single-engine turboprop programs of the last two decades–Cessna’s Caravan, TBM’s 850, Pilatus’s PC-12 and Piper’s Meridian among them–and the tested durability of the Williams FJ-series fan jets slated to power the new single VLJs as reasons why the time is ripe for these smaller, more fuel-efficient jets.
Three established airframe makers–Cirrus, Diamond and Piper–are all flying single VLJ prototypes with Williams engines. The PiperJet uses a single FJ44-3AP, while Cirrus and Diamond are using the smaller FJ33-5A, an 80-percent scale derivative of the FJ44, an engine that powers the twinjet Citation CJs, Hawker Beechcraft Premier Is and the Emivest SJ30-2.

Others have been in the game as well:
• The single-engine Eclipse Concept Jet could not save Eclipse from the throes of bankruptcy;
• Epic shut its doors in July under the strain of trying to develop multiple aircraft, including its Victory single-engine VLJ;
• Stratos has a mockup but nothing flying yet; and
• Excel crashed its prototype Sport-Jet in 2006 and has not flown anything since.
As a class, these aircraft will burn 50 to 66 gph and cruise at 300 to 360 knots at altitudes between FL250 and 350. Diamond plans to make initial customer deliveries of its $1.89 million D-Jet next year, although it has only two aircraft in its test program so far. Cirrus and Diamond derive most of their revenues from the hard-hit piston airplane market, where new aircraft sales have fallen sharply. The delivery numbers are just plain ugly, and sales of new piston airplanes for the second quarter of 2009 dropped 58 percent from the same period a year ago.

While Piper has also seen its sales fall in the current down market, it was recently acquired by a Brunei-backed investment firm, Imprimis, which brings the promise of a large cash infusion and a gateway to increased Asian exports. Piper produces a variety of piston singles and the twin Seminole as well as the single turboprop Meridian.

However, according to the General Aviation Manufacturers Association, revenues and deliveries at Cirrus, Diamond and Piper are down dramatically for the first six months of the year. Without a large market improvement, all three companies are likely to have annual new-aircraft sales revenues less than half of their 2008 results, which, with the exception of Piper, were themselves down considerably from 2007.

Yet all of these new single-VLJ programs will cost anywhere from $95 million to $150 million by these companies’ own accounts, and most likely more in actuality, just to get the aircraft to certification and probably another $100 million each to put the aircraft into significant serial production. “Certification isn’t enough,” Cirrus’s former co-chairman Alan Klapmeier said two years ago when that company’s single VLJ, the Vision SF50, was announced. “You have to be able to produce a certified airplane and sell it at a profit that is good enough to pay back the cost of what it took to get there.”

For now it appears that the road to certification runs partially through the taxpayers’ pockets. All of these programs already have received significant government subsidies and/or tax abatements and incentives just to get them where they are today–Diamond and Piper received more than $30 million each.

Even with this government largesse, in the current market, revenues from piston airplane operations alone are unlikely to make up the difference needed to fund new jet development, certification and production tooling at any of these three companies.

Realizing this, earlier this year Cirrus’s Alan Klapmeier led an effort to raise approximately $120 million to fund development of the SF50 under a separate corporate umbrella. However, that effort collapsed when Cirrus and Klapmeier’s investors could not come to terms on price. Klapmeier subsequently left the company.

While Cirrus executives publicly have committed to continuing the SF50 program, it may have a very long duration. Company CEO Brent Wouters admitted earlier this summer that “without external capital” it would be difficult, if not impossible, to get the SF50 to market by 2012. In September Cirrus announced a sliding price and deposit formula designed to keep its 400 SF50 depositors from dropping out and to increase orders. Prices under the scheme range from $1.39 million to $1.7 million, considerably less than the cost for either the D-Jet or the $2.2 million PiperJet.

The Cirrus program’s single nonconforming prototype has accumulated more than 200 hours in the air since its first flight on July 3, 2008. Numerous and significant changes have been made to the aircraft. They include lighter and simpler flaps, changing the V-tail’s sweep and mounting enlarged dorsal fins beneath it to create an “X” tail. The thrust vector of the engine nozzle has also been changed “to make it feel more like a piston airplane,” Cirrus co-chairman Dale Klapmeier (Alan’s brother) said. Several other initiatives designed to take weight and cost out of the airplane are also under way. The company has not set a date when a conforming prototype is likely to fly. Its new-aircraft sales revenues for the first half of this year were $69 million.

Diamond was hit by the twin punches of the down economy and being forced to quickly develop a replacement diesel engine for its twin-engine DA42 after its engine supplier, Thielert, became insolvent. Diamond D-Jet director of sales and marketing Mark Lee conceded that these events have moved the program “slightly to the right.” However, he added that the company still plans to certify the airplane next year. The D-Jet is in its seventh year of development and only two test aircraft are currently flying, although two more were scheduled to join the program earlier this year. Diamond says it holds orders for 300 of the aircraft. The company’s new-aircraft sales revenues for the first half of 2009 were $30.2 million.

Piper plans to release a revised development schedule for the PiperJet this month, which is expected to push certification out to at least 2012 from the program’s original 2010 target. A single nonconforming prototype made its first flight in July 2008 and has accumulated 200 hours. The company says it has orders for 200 PiperJets, but some of those are orders from its dealers. Its new-aircraft sales revenues for the first half of 2009 were $44 million.

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