Safire boosted by cash infusion

 - May 8, 2008, 7:22 AM
Safire Aircraft, thanks to a new “Swiss syndicate of investors,” has gotten fresh funding that it claims will carry development of the S-26 very light jet through the aircraft’s first flight.

Camilo Salomon, executive v-p of the West Palm Beach, Fla.-based startup jet manufacturer, said the agreement was signed November 1, but he declined to reveal the amount of the investment or the names of the investors. “What is important,” he said, “is that we have the funding now to take the airplane through its first flight.”

The original goal, as stated by Safire Aviation in 1999, was for the company to raise between $100 million and $150 million to see the project through aircraft certification. But apparently it has not been smooth sailing. A proposal to take the company public in summer 2000 was withdrawn in September of that year in favor of “alternative financing.” At that time, Safire founder Michael Margaritoff said the company had raised $3.5 million. The aircraft was expected to make its first flight in May 2002, and certification was expected by mid-2003. “The program is on schedule,” he said at the time.

Now the S-26 is expected to take to the air in February 2004, “but possibly before the end of next year,” said Salomon. A formal revised schedule, he added, is expected to be issued by the end of the year. An announcement was expected confirming the new assembly plant’s location at press time.

Salomon said the company expected to choose from among four sites in two states for the new plant, which all offered “very attractive tax incentives.” When completed, the plant is expected to reach a maximum production rate of four aircraft a day. Safire is hiring engineers, said Salomon, and it is expected to be fully operational by January 15.

As for a choice of engine, Safire had announced in February 2000 that it had “executed a purchase agreement for 1,000 turbofan engines.” The manufacturer was Agilis, a new company also based in West Palm Beach that was in the process of developing a line of turbofan engines for general aviation and business jets. The engine picked was the Agilis TF800 turbofan, rated at 800 lb thrust (sl). Aircraft weight increases later upped the need to 1,000 lb thrust, so Agilis tweaked the design of the engine and redesignated it the TF1000.

A Safire official told AIN in August, however, that the company rethought its engine choice. According to the source, Safire in June asked for bids from other engine manufacturers for a 1,000-lb-thrust turbofan. Besides the TF1000, the Pratt & Whitney Canada PW600 and Williams FJ33 are now in the running for the very light twinjet.

More recently, in an interview with AIN last month, Salomon said the company expected to “close a deal with a major engine manufacturer by November 30.”

This appears to contradict a press release from August last year. In it, Safire Aviation announced a program allowing delivery position holders to convert from non-binding purchase orders to non-refundable purchase orders. One of the reasons given was progress in development of the Agilis engine. The press release stated, “The Agilis engine design and production program is now established, allowing Safire to proceed with a high degree of confidence in the TF1000 engine performance data and program schedule.”

Agilis CEO Frank O’Neill last month confirmed the order from Safire for 1,000 engines. “We have a contract to provide 1,000 engines,” he said. “We based development of the engine on the order; we’re still operating under that agreement, and we think it’s the right engine for the market.” He added the engine could be certified in as little as 30 months.

In the meantime, Salomon said last month that Safire Aviation has non-binding orders, dubbed “position assignments,” for 920 S-26s, and that after first flight they
may convert to firm orders with a deposit of 10- to 15 percent of the target price for the aircraft, which is “slightly more than $1 million.” Salomon said 443 of the 920 position assignments have already been shifted to firm order status with non-refundable deposits.

In fact, the new price tag is the second increase since the company began assigning order positions. Safire had originally priced the airplane at $869,000, which it later described as “simply too low.” That was revised in August last year to $919,000 for a limited time. A new price for the S-26 is expected to be announced before year-end.

Safire Aviation was formed in September 1998 by Margaritoff, a German multi-modal transport entrepreneur, to create a very light “personal business jet.” He began work on the project shortly after moving to the U.S. in 1995. And even with the addition of new investors last month, said Salomon, the Margaritoff family–brothers Alexander, Dimitri and Michael– remains in control of the company.

While the original aircraft design has grown slightly during the development since 1999, it remains very much a very light business jet designed to carry a pilot and five passengers comfortably.

According to the latest design specs, twin turbofans producing 1,000 lb of thrust each would propel the S-26 to its ceiling of 37,000 ft. At a speed of slightly more than 300 kt, the S-26 would have a range of about 1,400 nm. Compared with the original design, the cabin length has been increased by six inches, useful load increased by more than 18 percent and empty weight by 13 percent. The new performance specs, said the company, show “a larger aircraft with a faster, more useful air envelope.”