In the mercilessly cruel financial world of small airplane companies, and the new companies that plan to build airplanes, bankruptcy may offer the only chance of success. Nobody can, you see, sell enough airplanes quickly enough to recover the development costs of starting a company and designing and certifying an airplane. That means somebody needs to lose millions of dollars along the way to give the infant airplane a chance to make it.
That's what has happened to the Extra aircraft company and its Extra 500 single-engine turboprop. Millions are gone following the bankruptcy of Extra, but that loss now gives the new company at least a chance for success.
These financial truths about the airplane manufacturing business have been obvious to many of us for decades, but the founders of new airplane companies can't seem to grasp them. Their company, they apparently believe, will be different because, well, because these are people who have been successful in life and can't imagine failure.
But Ken Keith, CEO and the main man behind the new Extra Aircraft, LLC, which has picked up the pieces of the German company founded by aerobatic champion and aerodynamic engineer Walter Extra, is different. He really grasps the harsh realities of airplane manufacturing.
"You can't ever make enough money building and selling airplanes to pay for the development cost," Ken Keith told me. Yes, I said, stunned to finally meet an airplane entrepreneur who understood the problem.
Ken had just finished ticking off the number of millions that had already gone into development of the Extra 500 and without so much as resorting to the back of an envelope calculated that you could never sell enough of the turboprops quickly enough to get those millions back. But, because he got all of that value for pennies on the dollar, he just might be able to make back the millions yet to be spent before the Extra 500 begins delivering in the middle of 2004, if all goes as planned.
Like all the other investors in new airplane companies, Ken made his money in other businesses and is following his passion for flying into the Extra project. In fact, the only individual that I can think of who actually has made money founding and operating an aircraft manufacturing company is Frank Robinson of helicopter fame.
Extra, too, is eyeing a niche that isn't served by any of the established companies. The 500 is the only single-engine turboprop in production, or development, that I can think of that doesn't use the Pratt & Whitney PT-6 engine. Extra has opted for the lower powered, more fuel efficient Rolls/Allison 250 engine, which costs less to purchase and operate, and provides more range than its nearest competitors.
The Allison 250 series engine has been around for decades, and thousands have powered the most popular turbine helicopters, including the Bell 206 JetRanger and the Hughes 500, among many more. The engine is tiny, measuring about 45 inches long, 19 inches across, and weighing in at just under 200 pounds. Despite its immense popularity in helicopters, the Allison 250 engine hasn't enjoyed the same success in airplanes, primarily because its maximum power output is 450 shp or less. That's not usually enough power, unless the airplane has been carefully designed for the engine, and the Extra 500 has been.
Another characteristic of the Allison 250 is that it has a fairly high lapse rate, meaning that its power output drops quickly with altitude above sea level and air temperature above standard. The engine will produce its maximum rated cruise power to about 16,000 feet, lower if air temperature is above standard, or higher on a colder day aloft. That means the Extra 500 won't be joining the other turboprop singles at FL 290, but will instead have a certified ceiling of 25,000 feet. Typical cruise altitudes, unless you're going downwind, will be in the mid teens. With a tailwind, a climb to FL 250, where true airspeeds are lower along with low fuel flows, would be very nice. Headed upwind, you can afford to fly the Allison at much lower altitude than the PT-6 without suffering the same fuel penalty and loss of range.
