BizBlog: Making Believers of Light Jet Buyers
At this week's NBAA convention in Orlando, AAI Acquisitions—these are the Russian-funded guys who bought up the bones of the Adam Aircraft business—showed up to update the world on their plans. But I came away doubting how serious they are and whether the wobbly VLJ market really wants an odd-looking, twin-boom jet even if they are. Further, AAI's approach provides an interesting contrast with another new jet maker in how to make people believe (or not) in the likelihood of your success. The other company, in this case, is Piper, surprisingly enough.
Three weeks before NBAA, Piper invited a bunch of journalists and bystanders for an unusual glimpse into a new jet program that's just barely off the ground. The company's energetic CEO, Jim Bass, was made available and he seemed to offer forthright answers about the PiperJet, especially with regard to completing financing. This sort of thing is unusual because in the early stages of the developmental cycle, manufacturers are normally hyper-secretive, lest some basic flaw in the concept leak out and tarnish the program before it can be fixed. Like sausage and laws, these things should be made behind closed doors, goes the standard wisdom. In lifting the curtain, Piper basically said, "we're serious and we'll show you." I view that as smart business.
AAI, on the other hand, had a press conference during which the company's new CEO, Jack Braly, outlined the Adam revival program in general terms, with promise of a certified jet by 2010. Yet even though that's only a year-and-half away, AAI seems short on detail and filling in the blanks has been difficult. Calls aren't returned, details on the program are lacking and several attempts we made for additional interviews were simply ignored.
Of itself, that doesn't mean much. Some companies are just terrible at getting their own message out, preferring instead to focus inward and concentrate on building the airplane. You can't automatically fault that approach. Eclipse, it might be argued, was a towering example of the opposite: It erected lavish promotional palaces at all the shows but, behind the scenes, the airplane program itself was unraveling. Eclipse's fortunes have had far reaching impact on the VLJ sector and AAI will fight against that, in my view. There's a direct corollary to the wild ride of the Dow Jones this week and it relates to confidence in the idea of the VLJs. Do they really have legs and is the very concept of light jets going to survive?
Like it or not, there is no guarantee, despite what the marketing surveys say. There's little doubt that big companies like Cessna, Embraer and Honda will endure even if their light jet products do not, but there's less confidence about an Eclipse, a Cirrus or a Piper, which is why those companies have to work the angles differently to continually remind buyers that they're real, solvent and serious.
In my view, AAI has some distance to cover before it meets that standard. When Braly flashed a slide of the A700 on the screen, I was immediately struck by how dated it looked. What was innovative and fresh five years ago now looks just a little weird for weird's sake. And in an uncertain economy, buyers look for the comfortable, the reliable and the predictable, not something that may be a Hollywood director's idea of an eye-catching airplane. (The A700 actually played that role.) After all, all of the VLJs deliver similar performance so as it often has, the purchase gets down to not comparing airplanes, but comparing companies.
AAI needs to work on that, I think.