Duluth, Minn.-Based Aircraft Maker to Unveil Newest Plane
KRTBN Knight-Ridder Tribune Business News: Duluth News-Tribune - Minnesota
Copyright © 2000 KRTBN Knight Ridder Tribune Business News; Source: World Reporter ™
The public will get its first look at Cirrus Design’s newest airplane, the SR22, on Wednesday. The Duluth-based company will unveil the aircraft at the Airplane Owners and Pilots Association Expo in Long Beach, Calif.
The SR22 is a beefier version of first and only factory-assembled product made by Cirrus to date, the SR20. It looks almost identical to the SR20, but open the cowling (the airplane’s equivalent of an automobile hood), and the difference is clear. The SR22 is powered by a 310-horsepower engine, as opposed to the 200-horsepower SR20.
The cruising speed of the new aircraft is 180 knots – the equivalent of 207 mph in still conditions. The SR20 cruises at 160 knots or 184 mph.
The two aircraft share the same fuselage, but the wings on the SR22 are about 3 feet longer and the cab comes standard-equipped with leather upholstery.
Those extras show up on the invoice. The SR22 has a base price of $276,600, as compared with the $188,300 base price of the SR20.
The Federal Aviation Administration is still testing the SR22 and has not yet approved it for sale, but would-be buyers are already lining up.
Company spokesman Chris Maddy said Cirrus hopes to obtain the approvals it needs to begin mass production of the SR22 by January 2001.
Cirrus has received 65 orders for the SR22 so far, and Maddy said about 30 percent of the people on a list to buy SR20s have expressed interest in upgrading to the new plane. At present, the company has 661 people waiting for SR20s.
Kevin Moore of Palo Alto, Calif., placed his order for an SR20 in October 1998 and recently decided to upgrade to an SR22. He had already put $15,000 down on an SR20 and will need to double that upfront investment to reserve an SR22. He expects to take delivery of the aircraft in 2001.
Considering the regulatory and production hurdles facing an upstart aircraft manufacturer, he said “I’m not so surprised there have been delays.” Moore draws encouragement from the positive reviews the SR20 has received and the company’s steady production growth.
In the first nine months of this year, Cirrus has delivered 60 SR20s – 15 in the first quarter, 20 in the second and 25 in the third. Cirrus has set a 40-airplane production goal for the final quarter of the year, which would enable it to deliver 100 aircraft before 2001 arrives.
If Cirrus hits those marks, it will still fall well short of the lofty goal set forth in its original 1997 business plan – producing 424 airplanes in 2000.
Maddy said Cirrus underestimated how long it would take to get the SR20 FAA-certified and how challenging it would be to attract investment.
Cirrus delivered its first SR20 in July 1999 and produced seven planes before the calendar year ended.
“We haven’t reached our milestones in as timely a manner as we’d hoped to,” Maddy said. “But we are reaching them.”
Lancair Co., another upstart aircraft manufacturer in Bend, Ore., has encountered similar challenges meeting market demand, following its launch of the Columbia 300 this year. North American Sales Director Mike Schrader said the company has about 150 people waiting for airplanes.
“We’re booked out for two years,” he said.
Schrader said ramping up production of a new airplane is tough in such a highly regulated industry. He said the FAA had to certify 1,600 separate components in the Columbia 300 and one-quarter of those items were new to the agency.
The Columbia 300 has a base price of $285,500, features a 310-horsepower engine and cruises at 190 knots or 219 mph.
The going has been slow for new entrants into the airplane manufacturing business, but Moore credits Cirrus for not cutting any corners, based on what he’s heard from customers. “I’d rather have it right than have it Tuesday,” he quipped.
Maddy acknowledged that Cirrus has failed to meet delivery dates it had set because of lower than projected production. While some grumbling has resulted, Cirrus customers, as a group, have remained remarkably loyal.
The faith in Cirrus that buyers have demonstrated also is evidenced by the financial stakes they’ve put into play, according to Chris Jones, a recreational pilot from San Francisco. He was already in position to purchase the 672nd SR20 Cirrus delivers and recently placed an additional order for an SR22.
In all, Jones has $45,000 riding on the company’s ability to deliver the aircraft it has promised. He may sell one of his positions.
“Basically, it’s an unsecured deposit,” Jones said. If the company failed, Jones and others who have placed orders would have no certain claim to company assets.
“In some ways, Cirrus’s early customers are like stockholders,” Moore said.
As the company establishes a track record, its future is looking more certain. Maddy said Cirrus expects to turn its first profits next year.
Maddy expects production to reach the level of one airplane each business day by the end of the year.
He’s convinced the introduction of the SR22 won’t set back production much, since it is built on the same air frame as the SR20. Both planes will start on the same production line.
Maddy pointed out that the Cirrus production staff is gaining experience and growing more efficient by the day.
Cirrus employs a work force of about 600 people, including 450 people in Duluth and 18 at a painting operation in Hibbing. The remainder are employed in Grand Forks, N.D., where Cirrus manufactures its fuselage.
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