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at larger RJs. Today, China, Japan, and Russia are all funding larger RJs—just as that market is plateauing and props are growing again. For the future, there is one exception to both of these


problems. Honda Corporation is seeking to manufacture its HondaJet, a light business jet. A prototype aircraſt flew in 2003. It features an over-wing configuration for its two Honda engines. It will enter service in 2014—four years late—and will be built at a new facility in North Carolina. Honda, of course, has very deep pockets and considerable


production experience. If its new jet finds a receptive market, the company could spend billions developing a worldwide sup- port network and additional products. Or, it could decide that the money is better spent on a market it understands—cars. It will be interesting to follow


HondaJet’s fortunes. If it fails to find more than a niche market, it will be a clear lesson that new market entrants are basically doomed, no matter what finan- cial advantages they enjoy.


The Latest Attempts Embraer’s 45-year reign as


sole new market entrant has been challenged in the past three years. Tree new market entrants show varying degrees of success. Te first is Korean Aerospace


Boeing 737NG/MAX Boeing 787 Boeing 777


Lockheed F-35


Bombardier Global Embraer E-Jets Boeing 777-X Boeing 747


Sikorsky H-60 Gulfstream 650


Boeing 767/KC-46 Gulfstream 550 Lockheed C-130J


Industries (KAI). A merged entity incorporating older South Korean companies with experi- ence in subcontract work and license production of foreign aircraſt, KAI has introduced two new trainer/light attack aircraſt. Te first was the purely indig- enous KT-1 turboprop trainer. Te second is the T-50/A-50 jet trainer/attack aircraſt, developed with assistance from Lockheed Martin. Both types have successfully entered series production. The reason for KAI’s success in entering the market


Gulfstream 450/P42 Eurofighter


$0


is extremely simple—government funding created it and maintains it as an ongoing enterprise. KAI’s business future depends on the Korean government’s continued willingness to fund it, and the occasional export sale as a modest enhancement to national defense work. It does not need to worry about commercial aircraft marketing and support, or about up-front new product development ex- penses. KAI’s international presence has also been helped by Lockheed Martin. Te lesson of KAI, therefore, is to obtain enormous amounts of government money. Tis is a difficult prospect.


Defense self-sufficiency has been proven to be illusory, with even medium powers like Israel and Japan abandoning hope of meeting national needs with indigenous products. And in a time of economic reform and free enterprise predominance, government industrial policies that favor new civil aircraſt companies are almost nonexistent. Te other two new entrants have no government funding


advantage, and have suffered for it. Te second new entrant was Sino-Swearingen, with its SJ30 light business jet. Te first of these was delivered in late 2006. Tis development followed well over 20 years of slow, frequently confounded develop- ment efforts. Unfortunately, there were only a few deliveries. Te program is dead again.


Top 20 Aviation Programs: Volume Matters Cumulative Deliveries Value in ’13 $ Bns


2013-20222003-2012 $60$120$180 $240 Te third new entrant is Eclipse Aviation, manufacturer of


the Eclipse 500 Very Light Jet. Tis company also achieved its first delivery in late 2006. By December 2007 Eclipse had de- livered about 68 planes to customers. However, the company’s admitted break-even point is 600 jets per year, a virtual impos- sibility. Inevitably, the company went bankrupt in October 2008. If it is successfully revived, it will only be with the mas- sive help of UTC (Pratt & Whitney and Sikorsky), making it effectively a legacy company program. In all, the aircraft industry stands in stark contrast to


its cousin, the airline industry. The airline business has been very tough to exit, due to political interference and lenient bankruptcy regulations. It’s also easy to enter, thanks to plentiful manufacturer finance for new planes, a surplus of easily obtained used planes, and a broad variety of unexplored service niches. The aviation manufacturing industry suffers from the exact opposite situation. ✈


Aerospace & Defense Manufacturing 2013 27


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