Small planes flying high

BEND, Ore. — Central Oregon's aircraft manufacturers say business continues to climb, despite today's economic woes.

Oregon is home to several aircraft manufacturers, and some have seen significant changes in the past year that they say are helping business cruise comfortably.

"Our particular company and our particular business model and our particular market is more than robust," said Rick Schrameck, president and chief executive officer of Epic in Bend.

Epic caters to "high net-worth guys who want to get from point A to point B quickly" in their small planes and jets.

The company launched in 2003 and had already grown significantly — to about 150 employees and a healthy backlog of orders — when it got a boost last year.

Indian billionaire Vijay Mallya, who owns and operates India's premiere private carrier Kingfisher Airlines, decided to invest $200 million in the company. The deal is nearing completion and should continue Epic's growing operations.

The investment is intended to help take Epic from its experimental-aircraft market into the certified market, a more expensive and time-consuming process of Federal Aviation Administration approval. Mallya's ties are also expected to open doors in expanding international markets.

But still, why the popularity of airplanes and jets at such a bleak time in the economy? And what about the gas?

"It's kind of simple," Schrameck said. "The customers that buy our planes are owner-operators, they use the planes for their own personal use. The people that can spend $1 million to $2.5 million for their own personal transportation are generally not affected dramatically, their lifestyle is not affected dramatically by the fluctuations in the economy."

He says he sees other parts of the industry are suffering: Everyday enthusiasts are less likely to get lower-cost planes and corporations are going to be less likely to spend in the higher-end market.

"We are in this really unique market segment and we're happy to be here," Schrameck said.

Another Bend company, the former Columbia Aircraft Manufacturing, has seen its fortunes turn around after it was acquired by Cessna and its parent company Textron in December 2007 for $26.4 million.

Columbia was part of The Lancair Co. until 2005. The company reduced its work force and filed for bankruptcy protection in 2007. Before Cessna, workers say they didn't even know if their paychecks would clear at the bank.

But new ties to one of the industry leaders has revived the company.

Cessna has more than 400 employees in Bend. It is still hiring and ramping up to hit a goal of producing 150 planes by the end of the 2008.

The company's high-performance single-engine airplanes, which run from $500,000 to $600,000, are targeted at entrepreneurs, small-business owners and some high-end flight schools.

Bend's product lineup made a steppingstone between lower-end kit planes and jets that Cessna needed in its portfolio, said Mark Withrow, general manager for Cessna operations in Bend. That meant there was a pent-up demand for Cessna customers who wanted to step up — by March, the company had its orders booked through 2008.

Asked why the business for its planes like the Cessna 400 remain so bright during dark economic times, Withrow replied: "Have you seen it?"

Indeed there are some luxury planes flying out of the area. Some say the composite aircraft construction used in such planes could become a niche industry for Central Oregon with investments in training, facilities and other services.

"There is, in this unique little spot in the world, there is probably as much composite knowledge as any place in the world," Schrameck said. "Not taking advantage of that seems kind of silly."

But the area continues to struggle with high home prices that make it difficult for employees to stay.

Roger Lee, director of Economic Development for Central Oregon, said some deals to attract other businesses to the area have unraveled because of high housing prices.

"We've got things to learn when it comes to attracting and retaining companies here, but we have a unique mass of knowledge," Lee said.

Some industry experts say general aviation generally experiences a lag time from when economic indicators change to when the tide turns because of the lead time required to construct their products.

"Everything in this industry lags," said Robert Stallard, an analyst with Macquarie Research Equities, who covers Cessna's parent company Textron. "It doesn't surprise me they haven't been walloped."