Industry officials say Sino Swearingen will enter busy market

August 21, 2005|By DANIEL J. SERNOVITZ


Sino Swearingen Aircraft Corp. hopes to gain final certification in October to begin selling what it has heralded as the next great innovation in private aviation.

The company, which assembles the main shell of its SJ30-2, seven-person "regional jet" in a plant outside of Martinsburg, received final Type Inspection Authorizations from the Federal Aviation Administration on Tuesday and hopes to gain certification, the final step before production, in October.

After more than two decades in the works, however, industry analysts are divided about how well the company's SJ30-2 twin-jet aircraft will compete in an increasingly crowded marketplace filled with brand names including Learjet, Cessna and Raytheon.


"It's coming out in a crowded marketplace," said Gerald Bernstein, partner with The Velocity Group, a Washington-based airline consulting firm. "It's really all going to be up to the initial operators."

The twin-jet plan was engineered from the ground up, and the company was praised for its innovation at the time of the project's inception in the early 1990s.

Since then, the company has had to contend with numerous problems that slowed its progress and allowed other companies to develop competing lines at a faster pace. Tuesday's announcement paves the way for Sino Swearingen to enter the marketplace and strive for its place within that environment.

Clearing a hurdle

Henry Ogrodzinski, president and chief executive officer of the National Association of State Aviation Officials, said Sino Swearingen cleared a significant hurdle in getting Type Inspection Authorizations from the FAA.

While Sino Swearingen lacks the name recognition of Cessna and Learjet, he believes with proper marketing and a carefully developed support system, it should be able to compete with its already-established competitors.

"The jet market, currently, in my view, is growing. There are many niches being filled by new operators," said Ogrodzinski, who previously worked in the aircraft manufacturing industry. "In the marketplace, you could say there are some aircraft that already have a marketing boost and a product boost. I think there are a number of issues that are yet to be resolved."

On one hand, experts say, the SJ30-2 is not the least expensive small-engine private jet in the market. At $5.5 million, it is more costly than the Eclipse 500 at $1.5 million and the Cessna Mustang at $2.5 million. On the other hand, experts question whether features, including a range of 2,500 miles without refueling, will be enough to propel sales above other aircraft in its price range, including the Bombardier Learjet at $7.8 million and the CJ2 at $5.7 million.

Ogrodzinski said he believes there is room in the market for Sino Swearingen, but only if it is able to carve out that space for itself through marketing and by providing enough of a support infrastructure to justify its price.

"The decisions are not being made based upon the name of the aircraft, but rather based upon their market performance," he said. "It depends upon the promotion and how well you can penetrate the market that you're going for."

Steady progress

Bernstein said that when initially introduced, at a considerably lower price tag, a large part of Sino Swearingen's market was in being the least expensive aircraft out there. Now that the Mustang and Eclipse have overtaken it in that category, he said, the company's efforts to promote its new aircraft will be that much more critical to its success.

"It certainly was a novel concept. It certainly opened up the whole idea of having a low-priced jet in the marketplace," Bernstein said. "The aircraft, while still an attractive competitor, is probably not as fully unique an aircraft as it was when it was originally introduced. It was really competitively positioned. I think they've lost a little bit of that."

Susan Chernenko, director of the aeronautics commission of the West Virginia Department of Transportation, said while it has taken Sino Swearingen longer than some expected to reach the point where it is, she believes its progress has been steady. She said the project has meant a great deal not just for West Virginia, its residents and its economy, but also for the aircraft industry as a whole.

"Things do not happen overnight, particularly with aviation it takes many years and it takes a lot of patience, and they certainly have the technology and the people to do this," Chernenko said. "From what I've seen, it's very exciting for the industry. Obviously, their hard work has certainly paid off."

U.S. Sen. Jay Rockefeller played a major role in influencing Sino Swearingen's decision to locate its assembly plant near Martinsburg.

In a written statement issued this week, Rockefeller, D-W.Va., praised the company's success in gaining FAA inspection authorization and said he was hopeful the company soon will be in position to market the aircraft commercially.

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