The new Adam Aircraft is about the fire up the engines again.  Reports say Adam plans to rehire about 100 people to work at its Centennial Airport facility outside Denver.

We’ve learned that the new owners- a Russian investment firm- will keep the Adam name.

Analysts say Adam has an uphill battle ahead.  Many of the obstacles the VLJ maker faced before remain and the economy is only weakening.  Still, we believe a better organized management team might avoid the mistakes that burned through cash the first time around

Good luck!  We’re with you.

-Andrew

Adam Aircraft goes Shiny Side Down

According to aero-news.net , VLJ pioneer Adam Aircraft has closed its doors “to conserve cash.”  There’s no official work of bankruptcy or liquidation, but Adam is effectively out of business.

Two weeks ago, Adam told investors that  it needed to raise $30 million by the end of January or it would face liquidation.

Well, firing everyone and closing its doors sure would conserve cash.  But what it doesn’t do is build airplanes.  In typical Adam Aircraft fashion of less-is-more when it comes to honesty, Adam has not posted any information on its website about this decision and what happens to those who purchased positions on the A700.  Would their deposits be returned?   What about people who bought the A500. Will warranties be honored?  Who will maintain the airplanes?

There are a lot of questions and Adam owes it to their shareholders, employees, customers, and the VLJ industry some answers.

-Andrew

The hits keep coming for troubled Adam Aircraft.

The city of Pueblo, Colorado is asking for some, if not all, of the incentive money it gave to Adam to be returned.  Pueblo provided Adam with $3 million.  Adam promised to hire 448 employees.

Adam ended up hiring about 80 people.  Last month, they fired all of them.  And kept the  the money.
Adam is on the verge of liquidating.

The VLJ maker has laid off about 40% of its staff and closed manufacturing facilities.  Its founder, Rick Adam, has jumped ship to start a new company.

Unless Adam Aircraft Industries raised more than $30 million by today, the innovative twin and VLJ manufacturer may be forced to fold its wings.

Adam is not yet saying if it reached the funds needed to stay alive for a little longer.  Reports said if Adam didn’t raise the money by the end of January, it’d be forced to liquidate.  The company had already laid off 40% of its staff and suspended production.
The Englewood, Colorado- company’s demise would be a terribly setback to the baby VLJ business and analysts will spend a lot of time dissecting what went wrong.  Among the questions– should Adam have stuck with one plane (the push-pull twin) first before branching into the much harder jet market?  Unfortunately, that strategy would have ignored the complete market collapse of the twin piston market.  No one is buying them anymore.  Which begs the question– why did they build a twin in the first place.

Ah, much Monday morning quarterbacking.  Let’s pull for Adam to have some more time to right the ship.

-Andrew

Adam Aircraft, makers of the A700 VLJ and A500 push-pull twin prop, announced this week that it has laid  off 300 of its 800 employees.  Adam also said it is suspending some of its manufacturing operations pending the raising of additional capital.  The Englewood, Co-based company wants to raise between $75 and $150 million.

Adam positioned all of this as a “strategic adjustment.”

Adam is beginning 2008 just as it ran most of 2007.  Poorly.  Last summer, it even gave Mr. Adam the boot, kicking founder Rick Adam to the boardroom and replacing him as CEO.

These pages have long been critical of Adam.  They have a good-looking plane and an exciting vision, but they have lacked transparency, misrepresented when the A700 would be certified, and failed to execute.  The main crisis facing Adam is that without a certified jet and without the confidence of purchasers, the company faces a struggle to survive.

If you want an example of the lack of transparency of the company’s fortunes, read no further than their press release announcing the “strategic adjustment.”  Adam’s press release actually begins with “Adam Aircraft has been strengthening its operations throughout this past year with significant progress towards obtaining A700 Type Certification.”   The release goes on to say that Adam “regrets that these actions will result in a layoff for many employees.”  Many being nearly half the company.

We want Adam to succeed.  It has taken steps toward improving its VLJ and it could be a big seller.  But we’re afraid that the continued mis-firing of the current management has put the company on a course to doom.

-Andrew

Eclipse Aviation continues to espouse confidence.

Not really.

The VLJ start-up’s latest plan to raise working capital is to ask for it– from its customers. Eclipse CEO Vern Raburn is offering position holders a lock on the final price of $1.25 million if they send in $625,000 by December 14. Customers can save half a million dollars.

Here’s what’s troubling about the offer. Raburn hopes to raise $30 million to finance operations ahead of the next round of funding. He says the funds will be used to “”help meet our need for short-term funds while our production capability matures and we put in place additional long-term financing…. The financing we are seeking is relatively small as a percentage of the total capital we have raised to date.”
It also suggests an uneasiness in the company that a number of current position-holders will cancel their orders. Cancellations have been a problem as delivery delays have dragged on.

If you do the math (Eclipse wants to raise $30 million from this promotion) then they hope 24 position holders will come up with the advance. Since these customers will be getting a $500,000 discount, Eclipse is leaving $12 million on the table. Granted, this doesn’t factor in the present-day value of having the money now. And all start-up’s want more money.

But does this make you feel all-good about Eclipse?

At this week’s NBAA convention in Atlanta, Adam Aircraft unveiled a new, spruced up interior for their A700 VLJ.

As we reported earlier this summer, Adam has been working on several key design changes for yet-to-be certified light jet. The new interior features club seating, with a trademarked “Swifel Wing” design.  Adam says that allows each occupant their own table for independent work.

Adam also announced the first flight of Serial Number 04, which will be used in the FAA certification process.

Diamond Aircraft has launched a newsletter touting the new VLJ D-Jet.

As we have previously reported, the D-Jet is Diamond’s entry into the VLJ market.  The single engine jet, with the bubble cabin, is aimed at the personal jet market.   Its first flight was last week.

Here is the newsletter.  djet_flyer.pdf

Two dramatic moves in the fledgling VLJ air taxi business this week.

First, DayJet, a Florida based air taxi, officially launched service and hit a PR homerun with TWO network news stories.  Both NBC’s Today Show and ABC’s World News With Charles Gibson ran generally positive pieces about the start-up.

DayJet is flying the Eclipse 500 jets and has debuted a unique per-seat model for the charter industry.

Next, Pogo, which is headed by former American Airlines CEO Robert Crandall, announced its plans for service and that it will file for an initial public offering.  Nothing like going public when the only thing you have is a website.  Pogo is still looking for a chief pilot and director of operations.  As we reported last spring, Pogo has dumped the Adam VLJ for the Eclipse. Pogo will base its operations at Westover Airport in Massachusets.

- Andrew

(full disclosure note: I’m a partner in a start-up air taxi business. Those plans will be announced soon)

The Honda Jet did fly in. I saw it.  I was so quick on the camera, that I got it being towed to parking

Honda Jet Video