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On the Record With
'RICK' ADAM, CEO, ADAM AIRCRAFT INDUSTRIES
"For a bargain like that, people will be patient." George F. 'Rick' Adam, founder and CEO of Adam Aircraft Industries, is confident that customers will stay loyal to his A700 twinjet despite delays in its development.
The all-composite A700, he says, offers "very similar specifications to a (Cessna) CJ at half the price." Adam's company took in twice as many orders in 2004 as in 2003.
The fact is, though, that the A700 and its piston-engine stablemate, the A500, are not much closer to certification than they were a year ago. At Oshkosh 2003, Adam predicted that the A500 was "a few months" from FAA approval. Now, that event is expected in November 2004. Two A500s are flying, a third has moved into static testing and a fourth was ready to fly in mid-September.
One year ago, the A700 jet was due to reach customers in 2005. Today, Adam's "best guess" is that the jet will be certificated in the third quarter of 2005. A conforming prototype is expected to fly "in late 2004 or early 2005."
"The deeper you get into FAA certification, you find that there is more to do than you thought," Adam says now. "The lists of tests and documentation that they needed was significantly bigger than it looked. We had a surprise in store for us."
Getting the A500 certificated is a key event, Adam believes. "The backlog will get very big." Also, Adam's strategy continues to stress commonality between the A500 and the A700. Adam's prediction of a 2005 ticket for the jet is based on the fact that they have many common parts and a very similar outer mold line.
Boosted by a 75-airplane order in May from start-up air-limousine operator Pogo, the A700 has now outsold the A500, Adam says. "Look at the GAMA figures—the number of people willing to pay $500,000 to $1.2 million for piston airplanes adds up to a $400 million market. Light jets are a $1.5 billion market, and that will get a lot bigger with the new-generation airplanes.
"A lot of people have signed up for both airplanes", he says. "Owner-pilots who are flying Malibus and Bonanzas today are looking at flying the A500 first, and then transitioning to the jet. We have good signals that pilots will be insurable at a reasonable cost."
The A700 is being designed to have the durability and reliability needed for the air-taxi market, which Adam expects to boom. "Trust me, there's an enormous amount of activity," he says, although much of it is being kept quiet until operators are closer to rolling out their new services. "People have already spent millions of dollars on high-powered mathematicians, modeling networks."
From his contacts with potential customers, Adam has concluded that most air-taxi operations will be regional, flying 300-mile legs—giving the operator a better chance to fill both legs of a trip, and ensuring low response times. "You can conceivably go 500-1,500 miles, but the price goes higher."
Adam Aircraft Industries is at Booth 12738.
—Bill Sweetman
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