'Best of Times' for Fairchild

Asian Aerospace 2000 -- Reports that Fairchild Aerospace will launch a 115-120 passenger version of its new 728JET for delivery in 2005, rather than producing a cut-back 528JET, "remain speculation", according to executive vice-president Barry Eccleston. Firm delivery dates have been set for the baseline 728JET and the 90-105-seater 928JET, but not for the smaller 528JET. "We have not taken a final decision, but our plans protect our ability to do a third aircraft in 2005."

Fairchild expects to be delivering 175 regional jets per year by 2008, with annual sales of $5 billion, Eccleston predicted here on Tuesday. Standing in for chairman and CEO Carl Albert and Albert's designated successor, Chuck Piper - who are tied up with details of the company's $1.2 billion recapitalization ­ Eccleston said that he expects the regional aircraft market to support three jet manufacturers into the foreseeable future.

"These are clearly the best of times," he said. "We expect to see 8,000 aircraft below 100 seats to be sold between now and 2020. In fact, we are revising our forecasts, and that number may go up."

Fairchild counts 534 regional jets sold in 1999, and "virtually no turboprops -- it is confirmation that the regional jet revolution is almost complete." Fairchild claims one-third of those orders and aims to maintain that share of the market.

The all-new 728 and its derivatives will account for most of Fairchild's sales. In 2008, says Eccleston, the company expects to be building about four 328JETs per month, together with four stretched 428JETs assembled by IAI in Tel Aviv. (In a new development announced here, IAI will be responsible for JAA and FAA certification of the 428JET.) The company should be building seven or eight of the larger, more expensive 728JETs per month.

The baseline 728JET will be certificated and delivered in November 2002. Detail changes include a one-row increase in seating capacity, made possible by a change to the exit location. The 95-105-seat 928JET is to be delivered in February 2004.

US venture capital specialist Clayton, Dubilier and Rice, which will own the majority of Fairchild's equity under the recapitalization deal, last made its mark on aerospace in the mid-1990s, when it supported Allison management's buy-out of the company from General Motors. In that case, CD&R upset predictions by selling Allison to Rolls-Royce in 16 months, but Eccleston believes Fairchild is a different case. "We'll be cash-negative for three or four years," he said here. "As we go positive in 2005-2006, it would be time for someone else to look at the company."

By Bill Sweetman