CIRRUS BELIEVES ‘MARKET IS HUGE’ FOR LIGHT AIRCRAFT THAT OFFER VALUE
By David Collogan (email@example.com)
The Weekly of Business Aviation
(Copyright 2000 McGraw-Hill, Inc.)
Officials of Cirrus Design Corp., the Duluth, Minn. company that is ramping up production of its SR20 single-engine aircraft, say orders have exploded since deliveries began last August (BA, Aug. 16/77), foretelling what they believe is a huge demand for light aircraft that meet customer expectations for value, comfort and safety.
Dale Klapmeier, executive vice president of Cirrus, said orders for the SR20 “skyrocketed” late last summer and into the fall, adding that “people are now taking the airplane seriously” since it’s in production. Orders jumped from 200 units when the SR20 won type certification in late 1998 (BA, Oct. 26, 1998/186), to 501 last week.
Cirrus said 16 airplanes have rolled off the line since production began and the company is now concentrating on boosting the production rate from one aircraft every five days to one per working day by the end of the third quarter. There are three primary requirements to meet that goal, Klapmeier told BA Friday: having sufficient financing to support the company’s growth; ensuring that vendors will ramp up to meet Cirrus’s demand; and, adding more production employees to handle the increased output.
While Klapmeier says Cirrus officials are always willing to talk to potential additional investors in the privately held company, he said there is sufficient financing in place for the planned production increase. The company has about 400 total employees - 350 in Duluth where final assembly is done, 50 at a manufacturing facility in Grand Forks, N.D. and five at the company’s paint facility in Hibbing, Minn. - and is hiring about 15 employees per week. He said Cirrus is able to find and train qualified personnel and praised the quality of the work force - “work starts at 7:30 and they’re on the line ready to work, not walking in the door,” Klapmeier said. The biggest concern is with vendors, making sure they not only can produce the components needed, but have the product scheduled and in place when Cirrus needs it.
Klapmeier, and his brother Alan, the president and CEO of the company, got into the aviation business in the mid-1980s when they designed and developed the VK-30 kit plane. While the VK-30 was not a commercial success, Klapmeier said talking to potential customers for that product and finding out why they decided not to buy it, focused the brothers’ attention on what the market really wanted. Comparing small aircraft with automobiles, Dale Klapmeier said light aircraft and cars were comparable in the 1950s and early 1960s in terms of safety features, comfort and customer perceptions of value. However, while automobile manufacturers dramatically increased the value perception of their products by adding new features, small airplanes remained relatively unchanged, he said, as their relative price compared with automobiles increased dramatically. The result was that people perceived there wasn’t sufficient value in small aircraft to warrant buying them.
The SR20 is aimed at providing the same comfort levels in flight that the owner of a $40,000 automobile enjoys during his ride to the airport, Klapmeier said, along with giving customers a heightened feeling of safety. He said the No. 1 reason given for not flying in small aircraft is that “people are scared.” Cirrus has addressed that concern by installing the Cirrus Airframe Parachute System (CAPS), which can be deployed in an emergency to prevent a high G-force crash.
People “don’t like noise and being crowded like a sardine in a can” while trying to look over an instrument panel that blocks the windshield, Klapmeier said. The SR20 was designed with those concerns in mind and incorporates an interior that’s comfortable for all occupants for a four-hour flight, he said. The SR20 also is designed to be user-friendly for the pilot, with features like a moving map display “to make it easy to fly.”
Even though orders for the SR20 have increased sharply in recent months, Klapmeier believes the 500 sales to date are just the beginning. The company is receiving 300 to 400 inquiries a month, he said. Cirrus has only three U.S. sales representatives, who are currently selling nearly 75 aircraft per month. One of the principal reasons those salesmen don’t close more sales is the two-year wait for an aircraft, Klapmeier said, predicting that sales will keep growing as the backlog begins to shrink.
Klapmeier’s enthusiasm isn’t limited only to prospects for Cirrus. Noting that GA manufacturers were selling 10,000 to 12,000 single-engine planes annually in the 1970s, he said, “I believe the industry can get back to where it was in the 1970s. We believe the market is there and that big,” if manufacturers can deliver products customers believe are a good value.