Adam Aircraft’s $105 Million to Boost A700 and A500 Planes
20-Jun-2007
By Karen Di Piazza
Adam Aircraft Inc. is getting closer to being able to certify its AdamJet A700, a seven-place, twin-engine very light jet, and to make good on delivery promises of its 2005 certified twin-engine piston A500, as a round of funding for $105 million is approved.
Financing, including a senior secured credit facility with Morgan Stanley Senior Funding Inc., is acting as lead arranger, according to Adam. The company said new capital would be used to accelerate the production rate of its all-carbon A500 and to complete the certification process of its carbon-constructed A700. After the Federal Aviation Administration certificates the A700, Adam said it would move to full-rate production.
Rick Adam, founder and CEO of Adam says the company's order backlog, valued at nearly $800 million, will further give its investors and customers added confidence.
Company CFO Chris Naro, said, "Our innovation and creativity places us in a superior position to be a competitive airframe manufacturer--now and into the foreseeable future."
GA in China
China has taken notice of the A700, too. Earlier this month, Adam announced that Hainan Zhong Hang Tai General Aviation Airlines Ltd., the Hainan, China-based operating entity of Ameritech Aerospace, placed a firm order for 50 A700s. HZHT's CEO Jason Fan, said, "The business plan of the company has been developed with the goal of capitalizing on the fast growing general aviation market in China, with fractional-share programs and air-taxi operations in mind."
Fan said the company chose the A700 because it has the largest cabin space of all the VLJs, and because he believes the aircraft's "innovative twin-tail design remind people of a Formula 1 race car."
But flying this Formula 1-like jet in China's airspace is another matter; the airspace is under military control. Owners of private aircraft in China face many difficulties; asking the government's permission to fly a private plane can take up to five days. Plus, the 21-percent import tax of planes makes it very expensive to order aircraft outside of the country. As for fixed based operations, there are few available to service owners of private aircraft, and ground handling and maintenance issues continue to plague individual aircraft owners.
However, the newly constructed and world's largest FBO at Beijing Capital International Airport (PEK), will be one of the focuses at the fifth Annual China General Aviation Forum, scheduled November 7-9. Outside of the fact that China is slow to open GA airspace, there's a shortage of professional pilots.
Fan says owners of the A700 will be served by a professional pilot/aircraft manager on all flights, inclusive of training during a renewable six-month period. "This new revolutionary program provides the owner with a stress-free aircraft ownership experience," he said.
Adam Aircraft headquartered at Centennial Airport (APA), located in Englewood, Colo., with additional facilities in Pueblo, and Ogden, Utah, said the A700 will offer "the best people-to-price performance ratio of any VLJ." According to the company, the A700 is undergoing flight test and development processes.
To send news tips or feedback, email CharterX news editor Karen@CharterX.com.
Adam Aircraft A500 during flight test program at the Mojave Spaceport. US aircraft manufacturer Adam Aircraft have received US$105 million in funding for two aircraft that they currently produce, namely the Adam A500 and the Adam A700 AdamJet. Both are carbon-bodied six-seat civil utility aircraft. The A500 is piston-engined and has a Push-pull configuration and the A700 is of a new variety of aircraft known as very light jets (VLJs).

A significant proportion of the money came from a senior secured credit facility from Morgan Stanley Senior Funding Inc. Adam Aircraft say that the money will be used to accelerate the production of the A500 and to move the A700 through the certification process with the Federal Aviation Administration (FAA).

Founder and CEO of Adam Aircraft Rick Adam said that investors were given confidence by the company's order backlog, currently valued at around $800 million. Earlier this month, China's Hainan Zhong Hang Tai General Aviation Airlines expressed their confidence in the uncertified A700 when they announced that they had placed an order for 50 of the new aircraft. They say that they chose the A700 because it had the largest cabin space of any VLJ, with company CEO Jason Fan adding that he thought the "innovative twin-tail design remind(s) people of a Formula 1 race car." It is an expensive purchase, as the Chinese government charges a 21% import tax on new aircraft.

Rick Adam said of the new funds "this financing allows Adam Aircraft to aggressively pursue our product development and production growth plans,".

Adam Aircraft say that the A700 is presently undergoing flight tests and development processes. The company hopes to certify it with the FAA in 2008.