Israel Aerospace Industries looks unlikely to bail out strategic partner Aviation Technology Group (ATG), which last week halted development of the Javelin very light jet after efforts to raise financing failed.
ATG teamed with IAI in 2004 to co-develop the two-seat Javelin as a business jet and a military trainer. At the beginning of 2007 the companies engaged Citigroup to help raise some $200 million to finance certification of the Javelin.
After laying off most of its workforce, the Colorado-based company issued a statement on 18 December saying "it is unlikely that adequate funding can be secured in a timely manner. ATG has therefore decided to halt development of the Javelin at this time."
ATG planned to hold talks with its business partners in the hope of a bail-out, but a senior IAI source told Flight International: "We don't have anything to add to the statement made by ATG."
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ATG Javelin timeline 2002 - ATG rolls out Javelin mock-up plans first flight for 2004, service entry for 2005 2004 - selects Albuquerque, NM as final-assembly site teams with IAI to co-develop the Javelin as a business jet and military trainer 2005 - switches to Front Range, CO as final-assembly site reaches 100 deposits flies prototype in September plans first deliveries in 2008 2006 - redesigns wing to cut approach speed redesigns cockpit switches avionics suppliers plans to fly conforming aircraft by late 2008 2007 - engages Citigroup to raise more than $200m to fund certification programme begins layoffs in November halts Javelin development in December |
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If it fails to find funding to continue operations, ATG will become the latest in a long line of failed general-aviation start-ups. The company unveiled a mock-up of the Javelin in 2002 and flew a proof-of-concept prototype in 2005.
ATG targeted a narrow sector of the VLJ market - pilots looking for a high-performance aircraft - but hoped to expand its appeal by developing military trainer derivatives jointly with IAI. The company claims to have around 150 deposits.
Several would-be manufacturers have struggled to raise funding, with Avocet, Century, Safire and VisionAire among those that failed. Unrealistic cost estimates, lack of capital and a difficult investment climate doomed several projects.
Others have succeeded in raising needed financing, although the recent credit crisis has made it more difficult to find investors.
Earlier this year Adam Aircraft raised private funding to certificate and produce its A700 VLJ, while Epic Aircraft secured a personal investment from Indian brewery and airline owner Vijay Mallya to help develop a line of light turboprop and jet aircraft.
UK distributor Action Aviation and US private equity firm ACQ Capital announced in September they would take over Sino Swearingen, providing a cash injection to ramp up production of the SJ30 light jet. Action is also a distributor for the Javelin.
One of the more successful fund-raisers, Eclipse Aviation, is also working to arrange new financing after falling far short of its first-year delivery target of some 500 Eclipse 500s because of problems ramping up production of the VLJ.
Source: FlightGlobal.com
