Another very light jet – the Piper Altaire – has hit financial turbulence before coming to market, and the development program has been suspended, despite the first aircraft flying and certification less than 2 years away. A single engine jet with higher speed and a larger cabin than the twin engine Eclipse or Citation Mustang, the Altair should have competed well with those two programs and with single engine Diamond D-Jet and Cirrus SF-50 Vision programs under development.
The decision to suspend the Altaire was somewhat surprising, given the recent announcements of capital expenditures to modify the Vero Beach, Florida facilities to manufacture the Piper Jet. New CEO Simon Caldecott, who last week was named to replace former CEO Geoffery Burger, indicated that the program was “on schedule, on budget, and hitting its performance targets.” Yes, the engine through the tail was ugly, and reminiscent of the DC-10, but Piper does know how to build excellent aircraft.
Caldecott also indicated that after an evaluation, planned development costs for the Altaire had “risen above the point that would be recoverable under foreseeable light jet market projections.” Given that the program was “on budget”, their market projections were likely counting on significant orders from VLJ charter operations that would be an alternative to airlines, which have not materialized. Combined with the weak economy and anti-aviation policies of the Obama administration, the owner-flown market will not likely be large enough to support the program.
Unfortunately, this will result in a loss of 150 jobs in Vero Beach as Piper focuses on its existing turboprop and piston engine products, and refunds of deposits to customers. This cancellation may provide some stimulus to Diamond, which is just now re-funding its D-Jet program after a hiatus of its own, and the Cirrus SF-50 Vision, which has suffered with the downturn in the industry, and while technically still alive, has received minimal funding over the last couple of years.
We’ve seen wildly optimistic forecasts for VLJs, focusing on high growth of general aviation operators that would offer on-demand charter service to compete with airlines. That market simply hasn’t developed as NASA and other experts thought it would, and while a few operators have entered the market, the significant demand projected for VLJs does not appear to be materializing in the near future.
The problem for the VLJ charter market is quite simply the lack of visibility with those who plan travel within corporations. It is easy and simply to make airline reservations on line. It is very difficult to search a large number of operators for availability of unscheduled service, which needs to be described in more detail than picking an existing route. Until the distribution problem can be solved through easy to use technology, the dream of fleets of VLJs taking business travelers from point to point from smaller airports will remain just that, a dream. New aircraft programs basing their demand forecasts on such operations will continue to find themselves a day late and a dollar short.
RIP Piper Altaire.
President AirInsight Group LLC