Flying High

On December 17, 1903, the Wright Brothers made the first machine-powered flight in the history of the world. Today, Jim Rice is following in their footsteps. “Visionaire Corporation is making aircraft history,” says Gilles Ouimet, president of Pratt & Whitney Canada. “They’ve got a whole new type of plane. History is being made here right now.” Ouimet was referring to the Visionaire Vantage, the single-engine business jet Rice’s company, Visionaire Corp., is producing. Set to deliver his first finished aircraft next year, Rice launched the company in 1988 and has already taken orders for more than 100 of the new machines.

Not many people can start a company that manufactures business jets and Rice admits he’s an unlikely candidate. “I’m not a person who should ever have started his own airplane company, because the whole business was new to me,” he says. His introduction to business airplanes was through a marketing job at Superior Continental Corp., a telephone cable manufacturer in Hickory, NC, where Rice flew in a company plane on sales calls. “My ideas about how jets can be used to build businesses started there,” he says.

After leaving Superior, he started a consulting firm and bought his own plane and learned to fly it. He says the plane was a business tool that enabled him to get from Hickory to Knoxville, TN, a five-hour drive over the mountains, in a single hour.

After moving to St. Louis to help raise money for the Lutheran Church, he enrolled in an MBA program at Washington University. Upon graduation, he was ready to start his business. He’d spent a year and a half researching the business aircraft industry, realizing there was a huge opportunity because Cessna Aircraft, the major manufacturer of piston-engine planes, had abandoned the business and Piper Aircraft, another industry leader, had declared bankruptcy.

As he examined the market he noticed that most of the business aircraft being sold were high-end planes bought by Fortune 1000 companies for up to $30 million. Only two models were being sold to the entry-level turbine market, which meant there was “a significant price/performance gap in the entry-level segment of the market,” Rice says.

His solution was to build a low-cost plane for the low-end market. The Visionaire Vantage, which sells for a base price of $1.75 million, is a single-engine plane, not twin-engine like most business planes. And it is made of fiberglass instead of metal, which is less expensive. Some military planes are made of fiberglass, so the technology isn’t new, but it’s the first time business planes have been made this way. Rice calls it “new technology coming into the air industry,” saying planes were first made of wood, then metal and now fiberglass.

The Visionaire Vantage seats six, has a cruising speed of 400 mph and a range of 1,000 to 1,600 nautical miles depending on payload. Rice calls it a “regional aircraft,” ideal for shorter trips most businesses take, but not cross-country excursions.

The company, which is based in St. Louis, will build the planes in a new 105,000-square-foot plant it opened in Ames, IA. It will use parts purchased from other vendors, including Pratt & Whitney engines and AlliedSignal avionics systems.

Though Rice started the company a full decade ago, he has yet to manufacture and deliver a single plane. That’s because starting such a corporation is a major undertaking and it’s not that simple to make jet airplanes. Rice’s first major problem was financing, which he eventually solved by acquiring $40 million from more than 400 investors. “I invested my own money originally,” he says, “but it was hard to find other investors early on. If you tell someone you’re starting an airplane company, the quicker they can get out of the room the better.”

He also says raising money for a company that’s “going to wait 10 years for cash flow was another major problem. Most of the time, people in this country are looking for returns the next quarter, not 10 years later.”

But eventually, Rice was able to find many investors, including foreigners from Germany, Switzerland and Jordan and Americans, many in the Iowa area where the manufacturing plant was being built.

While Rice was raising money, he was also designing the plane. “I didn’t know about aircraft design so I talked to people in the industry and owners of planes and found out what they wanted,” he says. He hired a team of engineers who created 17 different designs and tested them on focus groups before developing the one they built.

It was 1993 before the design was approved and 1995 before the first mock-up was built. “We flew the first one in 1996,” he says.

The company is currently building a series of test planes that will be used to win certification from the Federal Aviation Administration, a laborious process that tests the design and airworthiness of proposed planes. The company expects to win certification by the fourth quarter of 1999 and begin delivering planes immediately. It has orders for more than 100, not all of which can be delivered at once because the plant has a capacity of 115 a year. So there is a backlog of orders for new planes already.

Rice’s market for the planes is medium-size companies with sales between $10 million and $500 million per year. He will try to sell to companies that already own piston-driven aircraft, because many of their planes are used and infirm. Many companies bought used jets because of the limited selection and high price of new ones, but they require high maintenance, so Rice believes companies that own them may be willing to invest in a new Visionaire Vantage, since the price is reasonable.

Meanwhile, companies that have never owned business jets are also a target because they may be interested in buying their first jet to meet their transportation needs. There is an annual growth rate in the turbine business aviation industry of 2.5 percent, or 300 aircraft per year, the company estimates. Meanwhile, escalating business fares on commercial airline flights could make companies more willing to buy their own planes.

To find this market, Visionaire has developed a database of companies that own aircraft “or should own aircraft,” Rice says. The company has hired a sales force that is making outbound calls to the database. The company has hired five reps so far, none experienced in selling planes. “I brought people in who hadn’t sold planes because I needed people who could sell the concept of planes. They have to be able to sell the air part of the airplane,” Rice says.

They may be selling air now but before long the first Visionaire Vantage planes will be built and delivered and Rice’s company will lift off the ground, just like the Wright Brothers at Kitty Hawk almost a century ago.