By Dave Collogan

Cessna Aircraft added two new models to its single-engine line and found a Chinese partner to build Cessna's Light Sport Aircraft last week, as officials wrapped up two deals that promise to pay dividends for years to come.

On Tuesday, Cessna submitted the winning bid of $26.4 million in U.S. Bankruptcy Court in Oregon, clearing the way for the Wichita, Kan.-based aircraft manufacturer to acquire key assets of Columbia Aircraft Manufacturing Co. of Bend, Ore. this week. Columbia has been beset with a series of financial problems and production challenges, but its high-performance Columbia 350 and 400 single-engine models are seen as a prize. Those two models, built from composite materials and equipped with state-of-the-art avionics, will complement Cessna's existing line of older single-engine models (the 172, 182 and 206) and a new Next Generation Piston (NGP) aircraft that is well along in development (BA, July 30/44).

The following day officials of Cessna and its corporate parent, Textron, Inc., struck an agreement with China's Shenyang Aircraft Corp. under which the Chinese firm will become the exclusive manufacturer of Cessna's new Light Sport Aircraft, the Skycatcher. The Skycatcher is a lightweight, high-wing, two-seat aircraft that carried an introductory price of $109,500 when Cessna began taking orders for it at this summer's Experimental Aircraft Association convention in Oshkosh, Wis. (BA, July 30/44).

Shenyang, part of the Chinese AVIC aerospace consortium, is an accomplished aircraft manufacturer, producing a Chinese military fighter and major subassemblies for Airbus, Boeing and Bombardier, according to Jack Pelton, Cessna's chairman, president and chief executive officer. Cessna got into the LSA program so the company would have a low-cost airplane for the learn-to-fly market, but Pelton has said from the outset that Cessna would probably have to build the aircraft overseas in order to keep the price point low enough to make the project financially viable. Cessna officials had discussions with a number of companies around the world before selecting Shenyang.

Cessna is still engaged in flight testing and design finalization of the Skycatcher in Wichita. The Shenyang factory will begin working on tooling for the Skycatcher in 2008 and probably will start initial manufacturing operations late next year or early in 2009. Pelton told BA Friday he believes the Chinese factory - which is expected to have 400 to 500 employees working on Skycatcher when it reaches full production - will have the capacity to build 700 LSAs per year. Initially production rates will be closer to 150 to 200 aircraft per year, he said, ramping up from there.

Cessna has orders for about 880 Skycatchers so far, and Pelton said the agreement signed last week does not include any aircraft for the Chinese market. But Chinese officials have already bought more than 100 Cessna Skyhawks for flight training use and Pelton said he believes the Skycatcher will be well received in China, India and other nations in that part of the world where the demand for pilots far outstrips the supply.

Reassembled In U.S.

After construction, assembly and flight test in China, the LSAs will be partially disassembled and packed in containers for ocean shipment to the U.S. Pelton said at least three of Cessna's authorized service centers - including one in Wichita - will reassemble the Skycatchers in this country for delivery to retail customers through Cessna dealers.

In addition to keeping the cost of the Skycatcher down, Pelton said the Chinese agreement is advantageous for Cessna because "we didn't want to lose our focus" on the more profitable business jet market segment while ramping up the infrastructure necessary to build the LSA. Asked if the agreement with Shenyang will lead to production of other Cessna products in China, Pelton said that is "not our intent at all."

The full text of this story appears in the Dec. 3 Weekly of Business Aviation.