The name ‘A700’ dwarves that of ‘AAI Acquisitions’ (Booth 3383) on the company’s booth, as a company name change is on the cards before the A700 VLJ receives certification in 2010.
The company needs $200 million to achieve that type certificate, says AAI Acquisitions CEO Jack Braly. Half the work was already completed by Adam Aircraft Industries before its bankruptcy. AAI Acquisitions acquired the company’s assets in April for $10m, paid by Air Management Group (AMG), a joint investment by Russian companies Industrial Investors and Kaskol.
Key engineering personnel were among the 58 who returned to the new company, and the growing payroll has now hit 200. “So there will not be a delay for our anticipated target of FAA certification in 2010,” says AMG chairman Evgeny Andrachnikov, adding that AMG will inject $150 million to the program to accelerate production and certification.
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Andrachnikov praised AAI's new management team and CEO Jack Braly, who has served in executive positions at several aircraft firms, including Sino Swearingen and Beechcraft. “Jack knows how the process should be paralleled for EASA series production so there should be no extra delays. We will start the process simultaneously with the FAA.”
Braly is cautious about specific a price and performance stats while testing continues and a final avionics package is selected. “We will be priced right with the Mustang and the Phenom 100, and we will be very competitive in terms of performance.”
Andrachnikov is more specific, saying the A700 will likely cost between $2.5m and $2.9m. "We are having to renegotiate with our supply chain so we know how much it will cost to build,” he says. In terms of support, AMG may sign up with one of the larger global players, but the possibility of acquiring a smaller group and growing organically is also under consideration.
Andrachnikov says his management team has been talking to the prospective owners who built Adam Aircraft's order backlog to 322, assuring them that the company is fully committed to bringing the aircraft to market as quickly as possible and that most will stay on board.
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Orders will not be taken until that price is settled, Braly says. Profitability will be reached by 2012 when the company is producing four aircraft each month.
Before then a dealer and service network of authorized representatives will be in place, Braly says, though the first has not been selected yet.
They will not be selling the A500, AAI announced in July, with Braly saying "the market for piston twins is dead."
The A500 type certificate was among the purchased assets but it carries liabilities, Andrachnikov says. “We are concentrating all our resources on the A700,” he says. Adam had sold around half a dozen of the FAA-certified twin-engine, piston-powered A500s, most of which need some additional work.
AMG’s acquisition of a very light jet was a significant display of confidence both in the future of the airframe and in the reputation of the VLJ air taxi market, which has taken a battering recently with the recent high profile collapse of DayJet.
Despite production and economic troubles of competitor Eclipse, Andrachnikov believes the A700's future is rosy for private operators and for air taxis. “We are looking at Russia, India, China and the Middle East. In Europe, the less developed areas will see more demand. In Russia, for example, there are 9,600 city pairs and no direct air link to reach them,” he says.
Andrachnikov also heads up Russian air-taxi company Dexter, which operates a fleet of four Pilatus PC-12 and three Myasischev M101T Gzhel single-engine turboprops. Dexter also has 20 Cessna Citation Mustang VLJs on order.
Andrachnikov says the air taxi operator is already putting 70h per month on each of its four PC-12s. Dexter will take on A700s for its operations, but Andrachnikov denies that the acquisition of Adam is connected to growing the air taxi company. He says: “We decided to buy Adam on a standalone basis, not as a feeder for Dexter.”
Source: Flight Daily News
