Piper Aircraft “indefinitely suspended” the PiperJet Altaire today, just one week after announcing that the single-engine jet program was put “under review.” The Vero Beach, Fla.-based aircraft manufacturer also announced that it will lay off 150 of its 850 employees and 55 contract workers due to the program’s cancellation.
“Following an evaluation of Altaire development and light jet forecasts we determined the best course of action for the company going forward is to suspend the program indefinitely, preserving intellectual property and progress to date,” said Simon Caldecott, who was named Piper’s interim president and CEO last Monday. “This will have serious consequences for…Piper employees and for our Piper Altaire customers.” It is unknown how many customers will be affected, as Piper never disclosed how many copies of the jet single were on order.
Though the Altaire program “was on schedule, on budget and hitting aircraft performance targets, planned development costs had risen above the point that were recoverable under foreseeable light jet market projections,” Caldecott said. Had the program continued, the $2.7 million PiperJet was expected to obtain FAA certification in late 2013.
The company said it will not release the budget for the Altaire development program or expenditures to date. Additionally, Piper will refund customer deposits of Altaire position holders, it noted.
According to Caldecott, “The market for light jets is not recovering sufficiently and quickly enough to allow us to continue developing the [PiperJet] program under the economic circumstances we face.” However, Piper will continue to invest in product improvements, though only for its turboprop and piston lines. “As a result, Piper will increase the number of personnel dedicated to our sustaining engineering function,” the interim chief noted. “The company is [also] initiating third-party engineering and manufacturing services to preserve as much of our talent pool and as many jobs as possible.”
It is unknown yet how this move will affect incentives and tax breaks that Piper accepted for the PiperJet program, namely if cash-strapped Florida and Indian River County will claw back millions in government money given to Piper for the PiperJet program. The company accepted $10.667 million of a $32 million incentive package from the state and county in exchange for making a commitment to remain and grow in Indian River County. It was never able to receive more of the incentives–to qualify for the second $10.667 million, Piper would have needed to employ 1,166 people by the end of 2009. Employment at Piper peaked at 1,000 in May 2009, dipped to 540 later that year after layoffs and eventually climbed to the current 850 workers, mostly due to ramp up of the PiperJet development.
Asked if the PiperJet program was actively being sold, a company spokesman told AIN, "There are no plans to put the PiperJet program up for sale, but the company would entertain a credible offer for the aircraft program."