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October 18, 2010

Flight plan | Aircraft maker's project at BNAS gathers momentum

Photo/Carol Coultas Ed Underwood, CFO of Kestrel Aircraft, says the company plans to create 300 jobs at the redeveloped BNAS
By Carol Coultas

Ed Underwood has been doing business for a long time, so when things go as smoothly as they have for him and partner Alan Klapmeier as they set up an aircraft manufacturing company at the former Brunswick Naval Air Station, it’s a little unsettling.

“It’s keeping me up at night,” jokes Underwood, the CFO of Kestrel Aircraft. “Things are going smoothly and I’m used to rejection.”

The source of Underwood’s surprise lies in the progress he and CEO Klapmeier, who has been called the Steve Jobs of aviation, have made securing financing for the $100 million operation. By the end of the year, Underwood expects to have the first round of financing — $61 million — nearly complete and the second round — $39 million — by the later part of the summer.

Expected investments from Coastal Enterprises Inc., Finance Authority of Maine and Community Development Block Grants should round out $35 million pledged from a private investor. It’s enough for Underwood to feel pretty secure about taking the development of the Kestrel JP10 from its first prototype, which is being tested now, to its fourth prototype and eventual production. If all goes according to plan, Kestrel will deliver its first jets in the fall of 2013.

The Kestrel JP10 is made of composites, giving it the strength of a conventional aircraft, but at a lighter weight, which affords it better fuel efficiency and more maneuverability.

“It can take off and land at about three times as many airfields as most jets,“ says Underwood, a big advantage to the traveling executive, Kestrel’s primary market. “It can’t compete with a commercial jet flying from Boston to San Francisco, but it can beat the socks off anyone who wants to fly from Portland to Keene, N.H., or to Hershey, Penn. … places without direct connections.”

The jet’s anticipated price tag, under $3 million, also makes it more affordable than comparable aircraft from Cirrus, Gulf Stream, Pallatus and TBM, says Underwood. “Assuming the same engine and same payload, we expect the Kestrel will cost between 4% and 25% less per mile to operate than our competitors‘,” he says.

The company expects to make 35 of the aircraft in 2014, ramping up to 60 in 2016 and providing 300 local jobs in the process. Underwood, who previously sat on the board for Cirrus, says an executive who has to visit three satellite offices from a home base thousands of miles away can get the job done in two days versus the better part of a week flying on commercial airlines. “We expect the Kestrel will appeal to corporate flight departments,” he says, “for their mid-level executives who need it.”

Underwood — who has a resume that includes overseeing Arthur Young’s management consulting group in the Middle East; working as a financial controller for Investcorp., a billion-dollar international investment bank; and heading Arcapita, an international private equity group — and Klapmeier chose BNAS for multiple reasons. They are leasing 180,000 square feet of Hangar 6 for production space, which includes a good chunk of the tarmac and access to the two 8,000-foot runways. Underwood says Brunswick is also ideally located to tap into a labor pool familiar with composites due to the boat building industry. There have been preliminary conversations with neighboring Southern Maine Community College about designing a training program for Kestrel, and the Maine Technology Institute and the Maine Composites Alliance have extended a welcoming hand.

“We’ve been greeted with a friendly business environment and helpful people,” says Underwood.

 

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