INDIA BUSINESS WORLD SEPTEMBER (16th - 30th) 2007
The Month that was ...
VIJAY MALLYA PICKS 50% STAKE IN THE BEND OREGON-BASED SMALL AIRCRAFT MANUFACTURER AIRCRAFT EPIC AVIATION FOR $120 MILLION
VLJs (very light jets)-small 4-8 seater jets, that have been creating a minor flutter in corporate America as the latest way to fly, have a new backer. Liquor baron Vijay Mallya has picked up 50% stake in the Bend Oregon-based small aircraft manufacturer aircraft Epic Aviation for $120 million. For the last two years, business aircraft circles, particularly in the United States, have been bullish about the new planes that are being manufactured through 'disruptive' technologies with new engines, avionics and materials.
For Mr Mallya, who is buying the stake in his personal capacity, the move marks an entry into aircraft manufacturing. Once the aircraft are certified, he plans to start producing them in India for the Asia-Pacific market. He said: "Epic is an outstanding global business opportunity as they have four world beater aircraft. There is a growing demand for business jets in the region, that we hope to tap.'' Mr Mallya, a pilot with a multi-engined rating and close to 2,000 flying hours, flew the aircraft earlier last month. He refused to comment on the investment in the venture.
The aircraft are on display at the NBAA (National Business Aviation Association) convention at Atlanta this week. Mr Mallya, who was earlier slated to attend the event did not make it as he was at Johannesbourg to witness the India-Pakistan cricket finals.
Aviation sources said Epic has recently introduced two new prototype jets, the Victory a single engined plane and Elite a twin engined aircraft. Since the aircraft are not certified yet and cannot be sold off the shelf, the company has an interesting model and offers them as owner built planes in the 'experimental aircraft' category. Here the owner gets to assemble the machine she eventually flies. Epic CEO Rick Shraemeck launched the concept three years ago with the Epic LT, a turboprop. The trend even with its new VLJs, that are expected to fly by the end of the year. The concept of owner built aircraft has turned out to be very popular in the US which has thousands of hobby fliers.
Mr Mallya has brought in Airbus and Pratt & Whitney into the company as consultants for the certification programs. This is expected to speed up the process for the planes.
The planes, retailing for under Rs 10 crore, have lower operating costs than conventional business jets and are expected to be used as air-taxis for point to point operations. Epic has recently experienced an unprecedented surge in sales, booking more than $23 million dollars worth of orders at the Sun 'n Fun fly-in April of this year, then selling another $40 million worth of aircraft only 3 months later at AirVenture in Oshkosh, Wisconsin, a company release said.
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