In aviation, as with any other business, the ultimate question is always: Will it fly?
Eight years ago Robert Adickes, a retired TWA pilot, founded Avtek Corp., a private Camarillo firm that has been developing a fuel-efficient corporate plane built mostly of plastic composites made by Du Pont.
Besides its plastic design, the plane offers some other different features. Its two "fanjet" engines are essentially jet engines that have propellers, and are capable of reaching speeds of 400 m.p.h., slower than the bottom-end corporate jets but offering better fuel mileage. The plane also features a small V-shaped wing atop the fuselage that, according to Adickes, creates less wind drag than the wider horizontal wings found on most planes.
Because the plane weighs less than traditional metal-bound corporate planes made by Gates Learjet, Gulfstream, Beech and Cessna, Adickes says his plane, which will seat six to 10 people, can travel 2,400 miles without stopping for fuel. Given the plane's $1.75 million price tag, Adickes is betting it will offer enough cost savings to appeal to buyers of executive jets used to paying $2 million-plus for new corporate planes in its class.
Adickes, 66, has lined up 22 would-be distributors who have ordered 110 planes and made down payments totaling more than $6 million. It adds up to more than $190 million worth of future orders.
But bringing a new plane to market isn't as easy as introducing a new personal computer. Adickes must still win the necessary Federal Aviation Administration approvals so he can commercially build and market his plane.
Thus far investors have put up $27.5 million, Adickes said, to produce a prototype of the plane, called the Avtek 400A, which he says he has test-flown 150 times. The money was put up by Adickes, Du Pont, Dow Chemical, Nomura Securities of Japan, the government of Finland and several other parties. Some of those investors acquired equity stakes in exchange for their investments, but Adickes said he still owns 65% of Avtek.
Adickes must raise another $20 million to pay for the necessary testing required by the FAA and for other development costs. Adickes, Avtek's president, said he has rejected three offers to sell the company. "I'm greedy and the offers they made me are a little bit low," he said.
At the moment, though, "We're in a holding pattern awaiting this financing," Adickes acknowledged. The company has only six full-time employees.
If Avtek gets the money it needs and if "everything goes well, we should be certified in the fourth quarter of 1989," Adickes said, adding that Avtek's first deliveries would begin shortly after that. The next question is: Will the aircraft sell?
The question goes beyond Avtek's novel design. Overall, the general aviation market, consisting of private planes and corporate aircraft, has been in a 10-year depression and shows little sign of improving. Annual sales now are less than 2,000 planes, down 89% from 1978 when sales peaked at 17,800 planes. And the sales slide produced a stockpile of used aircraft that corporate buyers can tap at bargain prices.
"The biggest competition we'll have is used airplanes," Adickes said.
But word of Adickes' new plane has started to make its way through the industry, and Alan Weber, head of Weber Avex, an aircraft consulting firm in Port Hueneme, said that the used-plane supply is starting to dwindle.
By the time the Avtek 400A could come to market in the early 1990s, he said, demand for new aircraft ought to be picking up. Weber said that if Avtek "can deliver what they say they have, at a competitive price, they probably stand a good chance of having a financial success."
Avtek will have plenty of competition from established, traditional corporate jet designs, including the popular Cessna Citation II, which seats eight and costs $2.5 million new, and the Beech King Air 300 (eight to 10 seats for $2.8 million.)
But Adickes figures his biggest competition will be from Beech's new Starship entry, which also has a radical design of graphite composites and uses twin jet engines. Beech's plane, which will seat eight to 10 passengers and cost $3.7 million, has yet to be certified by the FAA. But Beech, a unit of Raytheon Corp., expects certification this month and plans to make its first deliveries by the end of 1988.
Despite Beech's likely head start, Adickes is unimpressed. "The only advantage we have is we're faster, have longer range, twice the fuel efficiency and we sell for less than half their price," he said.
Andrew C. Nolin, Avtek's southeast director in charge of fund-raising, said the Avtek entry will appeal especially to charter services. If a charter manager "can cut his operating cost in half, needless to say which plane he would buy," Nolin said.