Hey, do you
have a VLJ?
by Jay Mesinger
a VLJ position, what do you think?” For the fourth time in
as many weeks, at a dinner party or cocktail party, and in
every case a couple, proud and I must say genuinely excited
about their investment, have asked me this question. There
is a new phenomenon in aviation. The VLJ. In fact the first
time I was asked this question, luckily for me I had just
attended an NBAA/AMAC meeting and the subject was discussed
So what is
the VLJ? It is the new category of jet aircraft being
produced by as many as six players. It is the Very Light
Jet! To those who are designing and building, to those who
are caught up in the chatter, it is no less than a Wright
Brothers moment. This article is about the phenomenon; the
mini ground swell of a new category of aircraft. It is
really interesting to me to see what a great number of
people and market segments are touched by this type of
introduction. Let's begin.
How did it
start? Why did it start? What premise was its success based
on? It seemed to have started with the announcement by a new
plane company called Eclipse. Its CEO, Vern Raburn, a former
Microsoft executive, had a vision of a low cost jet, first
announced to be delivered for under $1,000,000.00, with an
aggressive production schedule of over 1,000 units per year.
That is 3 times the amount of business jets produced from
the total number of jets built and delivered in 2003. This
plane, on every corner, ready to be hailed by a customer
much as one would a taxi cab, would revolutionize the way we
think about one way trip segments, there by changing forever
the business model for charter and even fractional
operations. So you see from the very beginning Vern Raburn
was designing a phenomenon, not just an aircraft.
ahead. As I mentioned there are as many as six entrants into
this VLJ category. A few years ago, Citation, legitimized
the category by announcing the introduction of the Mustang.
Now, at least in my opinion, the category had legs. The
introduction made by Citation had a price over twice as much
as the introduction price of the Eclipse. The other entrants
coming into this phenomenon have been much closer to the
Eclipse in price. Except Citation, all of these entrants,
including the Eclipse, have inched their respective prices
higher as production realities and engine providers have
So what is
the big deal? I have never heard as much chatter, industry
reporting, association vying as with this introduction. In
fact since there has not been even one of these VLJ's
delivered; the talk is all-conceptual.
a moment and look at the industry touch points. The buyers,
who will they be? I have a vision problem on this one. I
cannot see one of these jets on every corner waiting to be
hailed. But what I do see is this category replacing the
aging turbo-prop fleet. Do you remember a few years ago when
airlines began replacing older turbo-props with newer
efficient jets like the RJ(Regional Jet)? I think in
reality, this VLJ jet, will (at the very least) be that
solution to our general aviation aging turbo-prop fleet.
This will not produce the massive sales that some of the VLJ
manufacturers are counting on. However, this will provide a
needed fleet replacement.
consider the pilots. I cannot even visualize where are the
qualified pilots going to come from to handle the original
dream of thousands of these VLJ's criss-crossing the
country, while still having an adequate number fly what is
currently out there.
consider the insurers. Insurance companies have already been
tightening the noose around owner-flown high performance
aircraft. It will be interesting in the final analysis to
see the appetite for these risks from an insurance
standpoint. Insurance companies really seem to shy away from
single pilot, ownerflown high performance platforms. Lenders
will of course be watching the insurance companies reactions
as well. Lenders will not finance uninsured risks. They will
want to know that their assets are covered.
Now the up
side may be a new generation of better-qualified
owner/pilots. This could be a real great thing. This
phenomenon is also catching the eye of the aviation trade
associations; NBAA and AOPA, who will embrace these new
owners and operators. Each one of the above mentioned
associations are looking with great interest at this new VLJ
category. They are developing good, important and relevant
representation models to attract the owners and operators of
there are so many questions yet to be answered. Who will
embrace the pre-owned market? Will it be the traditional
turbo-prop sellers? Will the jet brokers focus on this new
area? What is a current position worth? Can you trade or
resell one? Since no product is really certified, it may be
too early to answer all the remarketing questions. How about
ultimate price? Why such disparity between the Eclipse
pricing and the Citation Mustang? Does Vern Raburn, know
something that Cessna does not, or visa versa?
new aircraft introduction, deposits are taken for positions.
As the product makes its way down the path of development,
the progress payments increase. When the product gets closer
to certification and final delivery, the value of the
position increases. I would say that many of the deposits
taken for the Eclipse, were taken on the basis of the
phenomenon rather then the need for an aircraft on the part
of the position holder. That may mean some drop out.
as the process for all of the providers moves along, the
positions will probably ultimately be held by real users;
excited about the category and looking forward to replacing
the aging turbo-prop. We will continue to report on the
ground swell and it's collateral excitement. Keep both eyes
open and prepare for an interesting ride!
Jay Mesinger is the CEO of J. Mesinger Corporate
Jet Sales, Inc. He is on the NBAA Board of Directors
and is Vice Chairman of the AMAC. Additionally, he
served on the Duncan Aviation Customer Advisory
Board for two terms, is a member of MEBAA, EBAA
and is associated with IBAC.