By Karen Di Piazza
For the past four years, Cirrus Design has claimed the dominant position in the marketplace, in the sale of its all-composite, single-engine piston SR series aircraft. The aircraft’s selling point is the all-digital glass cockpit, which Cirrus says simplifies piloting duties and enhances safety. But its aircraft have other features that Cirrus officials say others don’t, making its SR series planes the world’s bestselling aircraft in its class: a built-in parachute system and a comfortable, roomy interior.
Cirrus has experienced such extreme growth that it has expanded two of its manufacturing facilities, one in Duluth, Minn., and one in Grand Forks, N.D. To add to the company’s portfolio, Cirrus Industries, the parent company of Cirrus Design Corp., plans to acquire Greenville, S.C.-based Smart Air Travel Solutions Air. SATS Air, a FAR Part 135 charter company, currently operates 13 SR22s.
“We haven’t purchased the company; we’ve signed a letter of intent,” says Alan Klapmeier, cofounder, president and CEO of Cirrus. “We forecast finalization of the acquisition long before June 2006.”
When it’s finalized, SATS Air will become a wholly owned subsidiary of Cirrus.
“Based on what we think the air taxi is, it’s a way for us to demonstrate that it works,” Klapmeier said. “After that, it can go a lot of different directions. Bring on other partners, spin it off separately or fold it more into our operations.”
He declined to disclose how much this acquisition was worth, but confirmed that SATS Air will add an additional 87 SR series aircraft to its fleet, with a total of 100 aircraft operating by year-end. It’s not certain if the 100-fleet air-taxi operation will be a combination of SR22s, SR20s or SR22-GTS aircraft. The GTS model has been out for two years, and is fully loaded with many upgrades as standard features (except air conditioning).
“This initiative proves that a single-engine piston plane can be certified all weather day/night IFR Part 135,” he said. “For non-aviation people, this air-taxi concept works. Primarily, trips will be in the 200- to 300-mile, short-leg range, so it’s not something for which people would be taking airlines or would charter large planes.”
Klapmeier said the concept could reduce time spent driving automobiles.
“During these short trips, people will travel in comfort,” he said. “The aircraft is comfortable and the information systems on the glass cockpit provide information in such a way that non-pilots understand what’s going on as well.”
Because passengers know each airplane is equipped with a Cirrus Airframe Parachute System, he said there’s a certain level of confidence.
“Basically, it removes the question of what kind of airplane they need in order to feel safe,” he said.
With one pilot and three passengers, Klapmeier said it would take a little more than an hour to fly a 200-mile trip.
“Opening up personal transportation opportunities for the public additionally increases the usage of small airports, which adds income for businesses at each facility,” he said. “The cost is reasonable. It’s not a per-seat sale; it’s a per-hour sale, now sold in 10-hour blocks. That works out to be about $425 an hour. It’s a very good price. If you fill all three seats, it’s really cheap. If you’re just flying yourself, think in terms of a lawyer or accountant; what do they charge per hour and how much time can they save by spending an hour on an airplane versus three or four hours in a car?”
Corporate travel managers, trying to manage travel expenditures, agree that if two or three executive passengers are traveling to the same location, putting them on the same plane makes sense. Airplane passengers avoid stressful drives and traffic delays, and quick trips also eliminate the need for overnight lodging and other additional expenses.
Managing overall travel spend is on the minds of all corporate travel managers throughout the country, according to the National Business Travel Association. If you can charter a smaller plane, paying less per seat-mile, and less per hour, and accomplish travel missions, larger corporations may also consider Klapmeier’s personal transportation idea–not just the independent professional.
“Since our business model has shown tremendous acceptance with piston, single-engine aircraft, we’ll focus on the continued expansion of the air-taxi operation and further development of a personal transportation network,” he said.
Steve Hanvey, CEO of SATS Air, observed, “The air-taxi concept is successful because people sense there’s a high ratio of value to cost.”
Cirrus’ “personal jet”
During a June 2004 AJ interview, Alan Klapmeier said Cirrus planned to produce “a single-engine, turbine-powered personal jet,” but it wasn’t until recently that he provided details about the aircraft’s design.
“Although we haven’t begun the process of a prototype of our jet, I assure you we’re not producing a VLJ,” he said.
Klapmeier said Cirrus would manufacture a “personal jet.” That concept is based on an all-pilot-design aimed for pilots’ comfort. The jet will have controls on both sides of the cockpit, so it could be a two-pilot operation.
The first phase of a marketing strategy, he said, would be to “get the industry and the press to stop clumping all these airplanes together as very light jets.” As an example, he explained that the 12,000-pound Embraer VLJ and Aviation Technology Group’s Javelin have little in common.
“We think that the first thing that needs to be done is to separate the concept of VLJs from personal jets, to recognize they’re different category airplanes,” he said. “We’re not a VLJ, and we’re not a smaller business jet. We’re talking about aircraft for personal use. The single most important criterion is the ease of operation, which is why I’m not sure I’d throw the Javelin into this category.”
In other words, he doesn’t believe the Javelin’s focus is ease of operation.
“The Javelin will be a very fun airplane for personal operation, but I wouldn’t put the majority of our customers in one,” he said.
He said he would consider Diamond’s D-Jet and Excel-Jet’s Sport-Jet in the personal-jet category, but couldn’t say how Cirrus’ personal jet would compare, because the company’s jet is only at the initial paper design phase.
Klapmeier says another difference between a personal jet and VLJ is training and operating requirements. A VLJ, such as the Eclipse 500 or the entry-level jet offered in the Citation Mustang, reaches higher speeds and higher altitudes, compared with personal jets. For example, both the Eclipse 500 and Citation Mustang will reach a 41,000-foot ceiling, compared to the D-Jet, Sport-Jet and Cirrus’ PJ, which will reach a 25,000-foot ceiling.
“The Eclipse and Mustang have similar altitude and speed capabilities that require ‘professionally’ trained pilots,” he said. “So the industry needs to focus on the concept of a personal jet. How does that concept fit into the market? How does a personal jet fit into the air traffic control system? What types of people would operate these airplanes, and what kinds of pilot requirements would be necessary for safe operation? That’s what we really think needs to be the industry’s focus.”
Compared to corporate jets, he said Cirrus’ PJ would operate much the same way as its SR22 four-place, single-engine pistons. He said that would be achieved by “limiting the jet’s performance and staying within the capabilities of pilots moving up from a high-performance SR series piston.”
He added that it was time someone designed a front-left-seat jet, the same concept the company has used for its current composite piston planes, designed with the pilots’ comfort in mind.
“Our PJ will actually be complementary to current VLJs, as it will create customers for other aircraft when people move up in type to the Eclipse or the Mustang,” Klapmeier said.
He said producing a personal jet was a “growth-oriented view of the industry.” In fact, the design of a personal jet has become the company’s new focus.
Dale Klapmeier, Cirrus’ executive vice president and cofounder, said because the plane’s design was for the pilot, it’s a different concept than what’s currently being built as a VLJ.
“The VLJ design is focused on people sitting in the back of the plane, whereas our design will be comfortable for the pilot,” he said. “It’s going to be an easy-to-fly, easy-to-operate jet in all environments.”
He said other aircraft being built today, larger than single-engine piston aircraft, “aren’t designed around the front left seat,” and they don’t accommodate pilots’ needs.
“If you’re a passenger in the back of the airplane, your requirement is to have a nice big comfortable seat,” he said. “You don’t necessarily care about the comfort of your pilot or how complex the flying may be.”
He said that to grow a personal jet concept in the market, Cirrus will need to bring its design philosophy into the next level of general aviation in the form of a single-engine jet. That philosophy would have to incorporate a jet that’s also easy-to-fly. Information provided to pilots would have to be in a simple and quickly intuitive format.
“Those design principles will be applicable far beyond just the front left seat,” he said. “Typically, if the owner sits in the front left seat, someone else–a spouse, a business partner, a board of director–usually sits in the front right seat. Whatever the scenario, there’s somebody else who has a requirement for that investment. In designing an airplane around being a personal transportation vehicle, you really do have to take the rest of the airplane, the rest of the passengers, into account, to even a greater degree than a business airplane does.”
Aircraft comfort isn’t just about cushy seats. He said comfort is also about “good visibility and having big windows to easily get in and out.” He said non-pilots had to easily understand the aircraft as well.
“If the airplane is ‘difficult’ to fly, then I’m not comfortable flying. The whole design must be comfortable,” he said.
Cirrus hasn’t determined how many seats will be on the PJ. The aircraft, which will be priced about $1 million, will be constructed of composite material and will have a parachute system. The design process hasn’t yet graduated to the point of being able to build a prototype.
“We’re barely on paper,” he said. “We’re talking about the market–what will it require? We want to people to start thinking in terms of a personal transportation jet. We’ve become so committed to this, because we see how it works everyday.”
He said people purchase pressurized twin-piston planes and fly them because they “perceived better performance, safety and a more comfortable airplane,” but they aren’t necessarily happy about their choice.
“If someone purchased a Cessna 340, the pressurized piston twin, they bought the airplane because they wanted the comfort, performance and the safety,” he said. “But what they got was an airplane where the left front seat is the worst seat in the plane. They got an uncomfortable, extremely complex airplane.”
He said Cirrus research shows that these types of twin aircraft don’t have the performance buyers had expected.
“We’ve shown that these types of airplanes don’t have a very good performance (value) compared to what’s available today,” he said. “We’re going to give people what they’re really after in an airplane. We’re going to remove all the complexities and truly give people better comfort and performance.”
Because Cirrus’ PJ is at the planning stage, the company hasn’t yet decided on the type of power plant. And although people have inquired about deposits, the company isn’t ready to accept them.
Both brothers agree that when they actually have personal jets rolling off the assembly line, because of the jet’s design, more people will fly. The reasoning behind their assumptions is simple: because of the PJ’s design simplicity, safety will increase, avionics will be better, and a more intuitive and safer plane will evolve.
Meanwhile, Cirrus is eager to receive feedback on its design philosophy.
“We really welcome feedback from pilots,” Alan Klapmeier said.
New Europe-based reassembly, China’s market and UND
In order to compete in today’s market, any aircraft original equipment manufacturer must penetrate the emerging markets of Europe and China. In mid-December, Cirrus made its first deal with a European-based company to reassemble its aircraft. In February, Cirrus opened its first sales center in China.
An agreement with UK-based Britten-Norman will provide for final reassembly of the company’s SR20s and 22s. This agreement will give Cirrus the opportunity to compete against other American-based aircraft OEMs.
The agreement opens up a larger European market, and will also serve as a future entry point for other geographic markets. It’s possible that Cirrus’ air-taxi service, using SR22s, will be a viable option for Europe, as congestion is a problem at the larger airports.
Congestion isn’t a problem in European airspace, so the use of smaller planes and better use of smaller airports would provide better travel options in its growing economy. If Cirrus produces a single-engine jet, that aircraft could compete with other small jets available in the European market.
As part of the delivery process to European customers, the agreement ensures that flights can operate from the Britten-Norman airport facility at Bembridge, on the Isle of Wight. This will eliminate the high cost of transatlantic ferry flights.
David Coleal, Cirrus’ executive vice president and COO, said the partnership with B-N gives Cirrus the opportunity to deliver planes to European customers, just as if they were coming straight from the Minnesota-based factory.
“The value that this collaboration provides for the customer is that each plane will arrive after amassing only a few hours of flight time and engine hours, versus the 30 to 40 required for a ferry flight,” he said.
He added that a reduction in overall wear and tear would be a significant benefit to European-based customers. Cirrus has delivered about 250 planes to the European continent. This past January, the European-based reassembly process began. Cirrus forecasts 100 plane deliveries by 2006 year-end.
The European market has opened up significantly, and Cirrus isn’t the only aircraft OEM to put its focus there. In the past 20 months, Cirrus has increased the number of its European sales centers from three to 12. Selling aircraft throughout Europe is key to the company’s overall financial success.
John Bingham, executive vice president of sales and marketing, said the company’s airplanes were a natural fit for the wide cross section of uses and requirements demanded by the European marketplace.
“Cirrus aircraft are especially suitable for intra-country travel throughout the EU. It makes the personal transportation experience very simple, safe and seamless,” he said.
The company is excited about its new agreement to launch the Cirrus Shanghai Sales Center with the Shanghai AVMall International Trading Co., Ltd. This will be the first authorized Cirrus sales and support center in the Chinese marketplace.
Li Linhai, who will oversee Cirrus’ Shanghai operation, is manager of government-owned Qianyuan, China’s first private flight club. The name Qianyuan, translated in English as “Frontier,” has special meaning. In November 2003, Linhai became China’s first private citizen to obtain ownership in a private GA aircraft, a four-seat Robinson helicopter.
Shanghai is known for its centralized geographic location and its strength as a center for commerce and finance. Other aircraft OEMs have made significant inroads into China’s budding aviation market, and Cirrus plans to compete.
Peter Claeys, the regional sales director who oversees Cirrus sales in China and Southeast Asia, said his group is working to obtain a “validation” of type certificate for the Cirrus aircraft series in China. A validation is a prerequisite for the application of airworthiness certificates granted by China’s governing aviation organization, which is known as the Civil Aviation Authority of China.
“Entering the potentially enormous Chinese marketplace has been severely restricted for private aircraft OEMs,” Claeys said. “According to the CAAC, less than 100 privately-owned aircraft exist on the Chinese mainland, in contrast to 200,000 in the U.S.”
China is the world’s most populous country with more than 1.3 billion people. Prior to May 2003, before China’s Regulation on Flight Control of General Aviation took effect, the government prohibited airplane ownership licenses for individuals.
“We see the personal transportation airplane concept developing in the market, much the same way the automotive industry grew in China,” Claeys said. “The Chinese market appreciates state-of-the-art technology and has a desire for quality imported products. China is forecast to become the second-largest aviation market by 2020.”
Cirrus and other aircraft OEMs are positioned to take advantage of unprecedented growth in China. Once China’s GA regulations are in place and the market grows, Cirrus will expand to accommodate not only aircraft sales but also aircraft support.
Overall, Cirrus has grown its direct sales forces across North America and internationally as well. Today, they have sales centers across South America, and in Australia, New Zealand, South Africa, Mexico, the Caribbean and Russia.
As the company continues to deliver more aircraft worldwide, Cirrus forecasts that it will support production growth with additional sales centers and sales forces. Aircraft deliveries in 2005 totaled 600 and exceeded $250 million. Total aircraft sold in 2005 were 701, according to Bingham.
As more Cirrus aircraft continue rolling off the production line, more training centers will open up as well.
More than 2,500 pilots have attended Cirrus’ customer transition training courses. The aerospace program at the University of North Dakota, Cirrus’ training partner for the last three years, geared up for more pilot and instructor training when it took possession of four new SR20 aircraft in mid-January.
Initially, the new SR20s at UND Aerospace will be used for advanced flight training, such as instrument ratings training and flight instructor instrument coursework. UND currently maintains a fleet of 112 aircraft, and uses 15 flight training devices (not full-motion flight simulators), but forecasts it will eventually operate an entire fleet of all-glass cockpit “technically advanced aircraft.”
Cirrus’s aircraft are responsible for the industry’s definition of TAA. The aircraft have officially become a new designation under FAA/Industry Training Standards, a partnership between the Federal Aviation Administration, industry and academia designed to enhance general aviation safety.
Using the FITS scenario-based training curriculum assists pilots of TAA. Today, FITS training methodologies are a staple training method, due to the increased automation characteristics of TAA. Hence, Cirrus’ all-glass cockpits have replaced those six-inch round knobs in piston aircraft.
In other words, TAA are exceptionally fast planes with extremely advanced avionics. Before the production of TAA, pilots’ training criterion wasn’t sufficient to handle TAA, as there was no such piston animal like Cirrus.
“It’s really true. After 25 years, our state-of-the-art airplane designs have gotten the attention of pilots and the industry,” laughed Alan Klapmeier. “Everyone’s starting to get it.”
For more information, visit [http://www.cirrusdesign.com].