Getting New Plane Off the Ground : Manufacturing: Advanced Aerodynamics’ Jetcruzer is a long shot for quick FAA approval and market success.

With money from a Taiwanese industrialist and the skills of former Lockheed workers, a fledgling company in North Hollywood is trying to accomplish what very few have in many years: successfully bring a new small aircraft to the market.

After two years of development, Advanced Aerodynamics & Structures Inc. last month sent a prototype of its single-engine turboprop--called Jetcruzer--on its maiden flight. The six-passenger plane was then shipped to the National Business Aircraft Assn. convention in Dallas, where its composite body and unusual features, including canards--or short front wings--raised more than a few eyebrows.

So far, Advanced Aerodynamics has spent $18 million designing and building the prototype. Company officials hope that with another $7 million, they will be able to finish the testing needed to get Federal Aviation Administration certification by next summer. The company plans to price the plane starting at $900,000, and would build Jetcruzers at the company’s 30,000-square-foot plant along Vanowen Street.

But getting FAA approval for a new design typically takes five years or more. Advanced Aerodynamics is trying to do it in three.

“It’s a very difficult road and has killed off a lot of planes,” said Ron Swanda, vice president of operations at the General Aviation Manufacturers Assn. in Washington, which represents makers of corporate jets, small personal aircraft and commuter planes with 19 or fewer seats.

To cite one example, Avtek Corp. in Camarillo has been trying since 1982 to get FAA clearance for its Avtek 400 twin-engine turboprop. In the process, Avtek has spent more than $32 million and gone through bankruptcy reorganization. Its president, Robert Adickes, said last week he was now “shooting for 18 months” more to get FAA certification.

But even if Jetcruzer is cleared by the FAA, most aviation experts believe Jetcruzer is a long shot to succeed. A big problem is that there are other planes in Jetcruzer’s class and with a similar design already in the marketplace. And those aircraft, which are made by giant aviation companies, aren’t selling well.

Indeed, Jetcruzer is facing an industry that has been in a nose dive since 1978, when shipments of small airplanes by U.S. concerns peaked at 17,811. Last year, U.S. makers delivered only 1,021 units, according to GAMA, and shipments through June this year totaled just 389 planes.

Carl Chen, Advanced Aerodynamics’ president, acknowledged the aircraft industry was troubled. But he said the Jetcruzer has received 19 down payments from customers in Brazil, Israel, Norway and elsewhere. Chen wouldn’t identify the potential buyers, but he said each had made refundable deposits of $10,000 that have been put into an escrow account in a U.S. bank, which Chen also declined to disclose.

Advanced Aerodynamics hopes to sell its craft to the business market. And while business aircraft sales have held steady in the past few years, in 1992 corporations have cut back because of the recession. From January to June, business jet shipments dropped 4% to 82 units, compared with a year ago. Sales of turboprops, meanwhile, plummeted 39% in the first half of this year, to 113 planes, from a year earlier.

Chen, 47, a former Hughes space scientist who also runs a separate electronics trading company in Monterey Park, is betting the Jetcruzer will appeal to business executives because of its price and its unusual look.

“It has a lot of novel features,” agreed Jim Holahan, editor of Aviation International News, an industry publication based in Midland Park, N.J.

The Jetcruzer was created by Darius Sharifzadeh, a 48-year-old pilot who is Advanced Aerodynamics’ chief executive officer. Financing the project and Advanced Aerodynamics’ chairman is Song-Gen Yeh, 52, head of Yeu Tyan Machinery, an auto manufacturing company in Taiwan.

Unlike conventional turboprop planes--whose propellers are driven by turbine engines--the Jetcruzer’s engine and propeller are mounted in the rear. Its graphite composite fuselage make it lightweight and more fuel-efficient; and the canards, besides providing better stability and less drag, give it the look of a jet fighter. The Jetcruzer has a maximum cruise speed of about 300 m.p.h. and a range of 1,200 miles.

But a similarly designed plane already in the marketplace has floundered. In 1989, Raytheon’s Beechcraft subsidiary launched its Starship--a twin-engine, composite turboprop with canards that now retails for about $4.7 million. The plane was also intended for business executives. But Beechcraft has only delivered a dozen of these planes, and it recently resorted to leasing the Starship in an effort to invigorate slow sales.

“The record of bringing a canard aircraft to the market is not that great,” said Drew Steketee, senior vice president of Aircraft Owners and Pilots Assn. in Washington.

The Jetcruzer, of course, is much cheaper than the Starship, and it is a single-engine turboprop. But in that niche market as well, there is another player.

For two years, Aerospatiale of France has been selling a conventional single-engine turboprop, called TBM 700. That plane, listed at $1.4 million, was also intended to appeal to corporate America. The maker of TBM 700, which is slightly roomier and faster than Jetcruzer, has sold more than two-dozen of the planes worldwide, but conceded it had few buyers from the business community.

The main reason: “Many corporations still have the conservative mentality that planes should have two engines,” said Bill Monroe, vice president of sales and marketing for Aerospatiale General Aviation near Dallas. “There’s still a perception that twin engines are safer, and corporations are sensitive to the anxiety their employees may have.”

Beyond that, sales of single-engine planes have been hurt also because it faces more FAA restrictions. For example, single-engine planes used for charter purposes are not allowed to fly in cloudy weather.

Clay Lacey, a veteran pilot who runs a jet charter and services company at Van Nuys Airport, said of the Jetcruzer idea: “There may be a market for a few of those things. But how many people are going to pay a million bucks for a single-engine turboprop?”

Experts say Jetcruzer will also face competition from sleeker, faster jets, whose prices are coming down. Cessna, for example, plans to introduce a new CitationJet business aircraft in December that will have a maximum cruise speed of 440 miles and a price tag of $2.6 million.

And then, “there’s also a very active used market out there,” said Gerald McDougall, an economics professor who specializes in aviation at Wichita State University in Wichita, Kan., where Beechcraft, Cessna and other major general-aviation makers are based.

Chen agreed that these are all potential obstacles. But he said the company, which employs about 100 workers, most of them laid-off Lockheed workers, is committed to seeing the project through.

Chen said he expected sales to pick up with the economy, and he is relying on the export market to grow, particularly sales to the Pacific Rim and Asian countries. “It’s a long-term investment,” Chen said. “We’re talking about three to five years to break even.”