Graham Warwick/WASHINGTON DC

Fairchild Dornier says "up to $350 million" of the $850 million required to develop its 728Jet 70-seat regional jet "-is already on the table" from potential risk sharing partners and equipment suppliers.

President Jim Robinson says risk-sharing suppliers of the wing, fuselage and empennage would contribute $220 million, while the rest would be in the form of launch aid from vendors in return for participation in the programme.

The company is counting also on repayable launch aid from the German federal government, which Robinson stresses would comply with international rules on development subsidies. The Bavarian state government, meanwhile, is expected to provide assistance in the form of training and other grants to Fairchild Dornier's Oberpfaffenhofen plant, where the aircraft would be assembled.

The rest of the funding will have to be raised by the privately held company, and Robinson says that two parallel tracks are being pursued: a private debt placement and an initial public offering (IPO). Planning is under way already, and an IPO could come as early as the beginning of next year.

The financing must be in place, he says, before the supervisory boards of potential launch customers Crossair and Lufthansa meet in September and October, respectively, to approve plans to place 60 firm orders and 60 options each for the 528/728/928Jet family. "Expressions of desire" from both airlines are based on draft contracts outlining basic terms and performance guarantees, he says.

Fairchild Dornier has received at least two risk-sharing bids for each of the major sections of the aircraft, from companies including AIDC in Taiwan, Aermacchi, Fokker and Hurel-Dubois in Europe, and Aerostructures and Northrop Grumman in the USA. The wing supplier will be selected first.

An engine selection is imminent, but believed to have been held up as Crossair favours the Snecma/ Pratt & Whitney CanadaSPW14, but Lufthansa prefers the General Electric CF34-8, a growth version of the engine powering its 50-seat Bombardier Canadair Regional Jets. Both bids include direct payments to Fairchild Dornier in return for participation, Robinson says.

Source: Flight International