US$ 1 million Jet Planes

The new wave of very light jets, costing as little as US $1 million, promise to revolutionise travel by making private air transportation available to many more people.

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By  Neil Denslow Published  August 4, 2004

|~|e500_m.jpg|~||~|Long the preserve of just the very richest, business jets may be about to enter the mainstream through the launch of a number of small aircraft priced at around US $1 million. The jets are primarily targeted at the fledgling US airtaxi market, but they could also find corporate and private customers in the Middle East. A number of manufacturers are looking to develop aircraft for the very light jet (VLJ) sector, lead by Colorado-based Adam Aircraft, which expects to deliver its first plane by the end of the year. The twin-engine A700 jet is priced at just under $2 million and can fly four passengers 2000 kilometres non-stop. Adams, which says it has already secured thousands of A700 orders, is also developing a twin-propeller aeroplane, the A500, which will cost $895,000. Another US-based company, Eclipse Aviation, is looking to produce an even smaller and cheaper jet than the A700. Its aircraft, the Eclipse 500, will carry four passengers and cost around $1.2 million. However, the Eclipse, which has secured around 2100 orders, has suffered from a few design problems, notably a decision to switch engine supplier, which have pushed back its release date until 2006. A third start-up, Saffire Aircraft Company, was also developing a VLJ, but it has seemingly fallen out of the race after running out of money. Two established players are also eyeing the VLJ market, including Austria’s Diamond Aircraft. Its D-Jet, which will be priced at less than $1 million, will be able to carry five people at speeds of up to 315 knots at an altitude of 25,000 feet. Cessna is also developing a new entry-level jet, the $2.3 million Mustang, which will carry four passengers. The new generation of jets mark a significant change from existing aeroplanes in terms of price at least. Current entry-level jets start from around $4 million, which limits the global market to less than 1000 new aircraft per year. Lower cost jets may not expand the market to 10,000s a year, but it is clear that they have the potential to greatly increase the number of jets sold. “More people are able to buy a $1 million aircraft, or three people buying one together, as it is much easier than finding the $4.2 million needed today,” comments Michael Feinig, managing director, Diamond Aircraft Austria. The aircraft are also a more affordable option, as they have much lower operating costs than traditional jets. The D-Jet, for instance, costs around EUR 250 ($300) per hour flown, and the other manufacturers tout similarly low costs. “We are hoping to achieve a one-third reduction in operating costs compared to the closest entry-level twin-engine jet on the market,” says John Hamilton, marketing manager, Adam Aircraft. The primary market for VLJs is expected to be airtaxi services, a new market segment that is being heavily promoted in the US at present. These taxis work like regular taxis, on call to the public, and flying in and out of the numerous small airports around the world, many of which do not have any regular commercial traffic. To meet the needs of this market, the VLJs are designed to operate from short runways, around 2000 feet long, and to quickly reach their cruising altitudes, as they will mainly be used on short hops. The airtaxi idea is also attracting interest in Europe, which also has a number of small airports, but the model may be unable to spread much further at present because of regulatory restrictions. This is especially true within the Middle East, due to the difficulties found by new commercial operators looking to gain air operating certificates (AOCs). “The air taxi market today is a US product and a US idea,” comments Mike McConnell, vice president, sales & product support, Eclipse Aviation. “We have had a number of conversations with people from the Middle East, but to my knowledge, no one has wanted to do pure charter,” he adds. “They might eventually do it, but the conversations we have had haven’t revolved around air taxis.”||**|||~||~||~|However, while the region may not yet be ready for air taxis, the vendors are still hopefully of finding corporate or private customers within the Middle East. Diamond, in particular, which is the only major VLJ manufacturer not based in the US, has identified the region as a target market. “The Middle East may be a better market for bigger size aircraft, Challengers or whatever, but we think there will also be a market for us,” says Feinig. “Between 10 and 20 aircraft a year may be possible,” he suggests. A combination of factors explain why the manufacturers have been able to bring down the price of jets to as low as $1 million. The first is the fact that the VLJs have been specifically designed to be cheap utility planes rather than flashy status symbols. In this way, the VLJs can be compared to the cheap and efficient Japanese cars that almost killed the US motor industry in the 1970s. These cars were designed to meet the requirements of the average motorist, driving to and from work, and the VLJs are similarly designed just to carry a few passengers a short way. “It’s not that we are doing anything extremely different [technologically]; all that we are doing is designing the aircraft specifically for the average mission, so that we can deliver more efficiency to the operator,” Hamilton explains. However, the manufacturers have benefited from a number of developments in their bid to cut costs and to reduce the size of their aeroplanes. For instance, small powerful jet engines are a key requirement, and these have advanced rapidly over the last few years, driven largely by the use of similar engines in missiles. Both Adam Aircraft’s A700 and Diamond’s D-Jet, for instance, are powered by Williams International FJ33 engines, which were largely derived from the company’s work making engines for cruise missiles. Eclipse was also originally using Williams engines, but later changed to Pratt & Whitney Canada’s PW610Fs; lightweight turbofan engines able to produce 900 lbs of thrust. “What is available today in the engine size is far greater than 10, maybe even five years ago,” notes McConnell. The VLJ manufacturers are also looking to leverage on modern manufacturing techniques to cut the cost of production. Diamond Aircraft, for instance, recently opened a 10,900 m2 composite facility outside Vienna, which will house production of the wings and fuselages of both its four-seat diesel engine Twin Star and the D-Jet. The facility is designed to boost annual production capacity to 600 aircraft — around half of which will be shipped to the company’s plant in Canada for final assembly — and it boasts a number of technologies to improve production speeds and cut costs. These include, for instance, the introduction of a five-axis machine and an automatic paint machine, which will significantly cut the number of man-hours needed to build a plane. Eclipse also highlights new manufacturing techniques, such as friction-stir welding, an innovate way of joining together pieces of aluminium, which is 10 times faster than manual riveting and about three times quicker and stronger than mechanical riveting. “The dirty secret about building aeroplanes is overhead absorption,” says McConnell. “All of these advances enable you to streamline a production line for manufacturing and take overheads out of the equation. This then enables you to produce more and it costs less to do it.”||**|||~||~||~|The Eclipse 500 also makes extensive use of new generation onboard electronics, reflecting the company’s IT background; Eclipse was founded by an ex-Microsoft executive, Vern Raburn, and his former boss, Bill Gates, is an investor. The jet is promoted as the first all-integrated aeroplane, which makes it both cheaper and easier to fly. “It is not just the cockpit, it is the aircraft communicating with other bits of the aircraft, and communicating to the pilot what information he needs to know. Not making him a systems integrator with massive amounts of data to interpolate and figure out what to do for that,” says McConnell, a former Dell Computer executive. “We feel that the aviation industry sorely needs this kind of innovation. We might even argue that there has been relatively little innovation in aviation over the last 30 or 40 years,” he adds. Yet, despite the optimism expressed by the manufacturers, the VLJs and the airtaxi market they support still face a number of hurdles. The planes themselves still need to complete a number of stages of the certification process, although they seem to be on course to achieve this on schedule. The wider regulatory environment also needs to be set up if 100s let alone 1000s of these airtaxis can enter regular service. In particular, air traffic control (ATC) systems will need to be able to handle a significantly larger number of planes. However, the manufacturers believe that the current set-ups will be able to manage this. “The burden on ATC should not be increased… the fact is that today the skies are not crowded, it is the hub airports that are crowded,” says McConnell. The VLJs will be able to find clear air lanes, as they will fly at between 25,000 and 30,000 feet. The planes have been designed to fly at this altitude because it will best suit their average mission, an hour long flight of around 300 miles. It will also enable them to fly in clear air lanes, as they will be well below mainline aircraft in the skies. “You will never get a slot flying [above 30,000 feet]… in Europe or North America as you are an obstacle in the air lanes,” notes Feinig. A more serious limiting factor on sales may therefore be the number of pilots available to fly the aircraft. Eclipse, alone, is aiming to manufacture up to 1500 aircraft a year, but whether there will be enough pilots available to fly this number is open to question, as each one will need to have passed through a stringent certification programme. In the US, for instance, it is impossible to get insurance for a jet unless the pilot has 1500 hours of command experience. “This means that even if someone has the money to buy an aircraft, they are not going to be able to fly it,” notes Feinig. “They will have been busy earning the money, and so not had time to get the 1500 hours of jet time needed to get insurance coverage.” “The FAA doesn’t want to fill up the airspace with pilots who have 250-300 hours… so a couple of hundred [jets] a year will be sellable, but 1000 never,” he predicts.||**||

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