Up and Adam

VLJ shopping at the newly flush upstart Denver aircraft manufacturer.

by Scott Eden

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Everyone who works at Adam Aircraft seems to be a pilot, from the executive suite all the way to the break room, President Duncan Koerbel, who studied aeronautics at Penn State, learned to fly at his first job, working as an engineer for Beech. Pete Walseth, a sales rep, used to fly for United. Malcolm Thomson, an Adam engineer, keeps his P-51 Mustang kit plane in a hangar on the premises of the company’s headquarters, near the Centennial Airport just outside Denver in Englewood, Colorado. Even Adam’s publicity director, Shelly Simi, grew up flying crop dusters over rural Mississippi. You get the feeling that if you met an IT guy, he’d tell you about his salad days flying seaplanes into the Alaskan bush. Perhaps because of this, a certain purist mentality seems to hang in the atmosphere above Adam. It’s a feeling that extends to the manner in which the company treats prospective customers: on a visit to headquarters to check out the merchandise, the frills are minimal and the sales pitch is focused. It’s all about the plane.

On my own recent visit to kick the tires, so to speak, on Adam’s hotly anticipated VLJ, the A700, I had to make do with a test flight aboard the $1.25 million A500, a six-seater twin-engine prop and, at the moment, the only model that Adam is delivering to its earliest placeholders. Because the $2.25 million A700 isn’t expected to receive full FAA certification at least until fall 2008, the A500 serves as a stand-in for those customers jazzed to be among the first VLJ owners on the planet.

It’s also helping Adam get FAA approval for its jet more cheaply and quickly than it might otherwise have, because the designs of two of the aircraft are essentially the same. About 60 percent of what goes into the 500 goes into the 700, as well. The plane I took up on my demo flight, serial No. 4, actually belongs to Rick Adam, who founded the company in 1998. With $26 million of his own money plowed into the venture, he is its financial and spiritual prime mover. A software mogul and former Goldman Sachs executive, Adam, 61, has recently returned to the tech world — he’s starting another software company — and he willingly abdicated his role as chief executive in August. He handed over the reins to two experienced aerospace manufacturing men: John Wolf, most recently chief operating officer of Fairchild Dornier and now Adam’s CEO and chairman; and Koerbel, most recently of Bombardier, who oversees the company’s day-to-day operations.

It was 9 a.m. on a Tuesday in late October, and the conditions were nearly perfect: visibility forever, some high cirrus over the Continental Divide, temperatures in the 60s, calm winds. My pilot was a 25-year-old named Matt Meraz, who learned to fly here at Centennial while in college in Denver. He obviously had the drill down pat, and he dutifully demonstrated the A500’s differentiating characteristics. Not long after takeoff, at about 90 knots, he put the plane into a climbing rightward bank, then removed his left hand from the stick and his feet from the floor.

The plane was stuck on course as if glued there. “It steers itself,” Meraz said — stability made possible by the engine configuration, one on the nose and one in back, and the consequent center line thrust. The distinctive twin booms also help, Meraz said, allowing the A500 to ride through turbulence better than almost any other small aircraft. When I took the stick, it was no different, and I confidently executed some basic maneuvers directly above the foothills in the turbulent air coursing over the Rockies from the west.

Meraz then cut the back engine and feathered it — Adam’s people are especially proud of the A500’s retention of power should one of the engines go out — and, indeed, control was only slightly diminished.

Later, I told Meraz that I wanted the full monty, and he obliged with a few “air-show maneuvers.” He dived steeply and did a simulated low pass, then a fast pitchout at around 200 indicated knots. A force of about two G’s sucked us back into our seats, the windshield filled with nothing but Colorado sky. Next, he showed how the plane behaved in the lower speed regimes. With the gears down, flaps up and the plane inching along at 100 knots, he said, “Again, we’re hands-off stable,” and noted the superior roll control that might not exist in some bigger planes in the same class. He added that aside from the center line thrust (the A700’s twin engines sit on either side of the rear fuselage), the 700 shares many of the characteristics as its prop brethren, especially stability and simplicity.

Backing this view is longtime Adam placeholder Mike Leahy. A Colorado Springs–based chiropractor whose clients include the Denver Broncos, Leahy was to take delivery of his A500 the day after I visited Adam, but he intends to trade in the twin prop and upgrade to a 700 as soon as the jet is ready. While researching the market for VLJs three years ago, Leahy, an Air Force Academy graduate and a fighter pilot in the ’70s, flew an early 700 demo that has since been decommissioned (another will be ready in the spring). “It had been 27 years since I’d flown a jet, but it was a piece of cake,” Leahy says. “The Adam pilot who was up there with me never even touched the stick.” Particularly surprising to Leahy were the simplicity of the throttle controls and navigation systems. Since he’ll be flying his Adam mostly solo, he says, safety was a big priority for him.

After my own demo flight, the day continued with a tour of Adam’s manufacturing facility alongside Walseth. Adam’s planes are made from carbon fiber, and the supremely high-tech lay-up facility is in the company’s complex at Centennial, though when full production ramps up next year the majority of the assembly will move to a new 57,000-square-foot facility in Ogden, Utah. After the tour, we had lunch with Koerbel at a restaurant called Perfect Landing in the main terminal at Centennial, the third-busiest general-aviation airport in the country. Our table, next to a window, had views of a tarmac filled with Gulfstreams, Citations, Pipers and Bombardiers. A V700 went careering down the runway — one of the company’s prototypes, it was full of instrumentation and on its way to perform a series of tests in preparation for FAA certification. “There,” Koerbel said, “goes a really good-looking airplane.”

Adam had just received a huge package of financing — $105 million in debt and equity led by Morgan Stanley — this past June. “If we need to raise anything else, it will not be that significant,” Koerbel said. “A year from now, our risk is virtually gone.” With about 400 orders for both the A500 and A700 in the books, he is confident that once the company has its FAA certs in hand and production is ramped up, cash flow will be sufficient to cover costs. Within five years, the company hopes to build 240 planes annually between its two models.

Koerbel was sanguine, too, about what he saw as Adam’s core customer base. “We’re not trying to invent a new market,” he said. “There are 40,000 high-performance signal-piston or cabin-class twin airplanes out there that are 25 to 30 years old just in general aviation alone. No one has come along to give them a reason to buy a new one.” He also shrugged off the notion that the air-taxi market — once seen as the commercial boon for all VLJ makers — was overhyped and oversold. Despite considerable media attention the last few years, air-taxi services, as a market, have failed to materialize. But Koerbel says that just as it took a decade for regional jet service to take off among the big commercial carriers, the same will be true for the point-to-point air-taxi business.

“I think when people talk about the VLJ market, they think that overnight the skies will darken with these very light jets,” he said. “That’s not going to happen. It’s going to take time.” I also wanted to know about some of the company’s production delays: Last year, it had issued a service bulletin regarding several of its earliest production A500s in order to strengthen the planes’ tail booms. Koerbel downplayed the issue, saying that such “tweaks” are “not uncommon in the course of developing an airplane. I don’t mean to make it sound trivial, but in the big scheme of things it’s just part of the process.” Though well funded already, the company still needed to secure that most recent round of financing. Does that indicate that manufacturing costs and FAA certification costs were higher than expected? “In aviation,” Koerbel said, “everything’s more expensive than what people originally expected.” He then recited an old joke: “How do you make a million dollars in aviation? You start with five million.” But Adam is hoping that old joke has a different punchline this time. After all, the company is counting on making its own million(s) by starting with the A500.

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