Monday, January 21, 2013

Zenith Aircraft draws business from flying enthusiasts around the world with its assembly-kit airplanes

By Jacob Barker

Saturday, May 26, 2012 at 2:00 am 

 
Updated: 9:09 am, Monday January 21, 2013.
 
Bob Hannah works on airplanes for a living, but the mechanic from Rising Sun, Ind., has always wanted to build his own. At Mexico, Mo., Memorial Airport last week, in the only hangar with any signs of life, Hannah and his son, Tyler, finally began the project they had long dreamed of.

"I've been wanting to do this for a long time," Bob Hannah said. "I thought if I didn't do it soon, it's going to be too late."

For the small but committed national community of airplane enthusiasts, Zenith Aircraft Co. is one of the few places they can get a kit to assemble their own plane. Based out of Mexico Memorial Airport, it has been making light sport airplane kits for 20 years. People from around the globe buy the company's kit airplanes, and last week, during one of the monthly training workshops Zenith offers to its customers, enthusiasts from across the United States stopped in Mid-Missouri to pick up their kits and get a feel for the assembly process.

"It's kind of one of those hobbies that's off the radar for most people," Zenith President Sebastien Heintz said.

Heintz walked from table to table offering insight to his customers while, in the back of the hangar, some of Zenith's 16 employees put finishing touches on the parts future customers will assemble themselves. Heintz pointed to a huge crate nearly filled with crafted metal — the wings, tail, everything but the engine and instrument board, which customers buy separately. "You got a big Erector Set, is what you're looking at," he said.

That might be a bit of an oversimplification. It takes 400 to 500 hours, about a year's commitment if you aren't working all day, to put together one of Zenith's four plane models, Heintz reckons. But for someone who grew up around planes, it doesn't seem that complicated.

"At the end of the day, airplanes are pretty simple machines," Heintz said.



Heintz started Zenith in 1992. It's actually an offshoot of the family business, Zenair Ltd., based out of Ontario, Canada. Heintz, a Canada native, wasn't sure growing up whether he wanted to be part of the family business, but after graduating from business school, he decided to launch the separate company to sell kits for the airplane models designed by his father, Chris Heintz, in the U.S. market.

Scoping out a place to launch Zenith, Heintz had a lot of options. The United States has thousands of small airports, many of them underused, he said. Mexico offered a good spot in the middle of the country and an airport with plenty of space for tests and a manufacturing facility. He doesn't have to worry about coordinating with commercial airlines or many private planes, yet the airport has been pretty well-maintained. That's probably thanks to former Missouri Sen. Kit Bond.

"With his hometown being Mexico, he always made sure the airport was taken care of, I guess," Heintz said.

Heintz's brother, Matt Heintz, now runs Zenair, which licenses its designs to Zenith and also does some manufacturing and assembly. Zenith, on the other hand, focuses solely on putting the kits together, and although it started as a company dedicated to the North American market, it has since seen demand for the kits pick up in emerging economies.

Heintz estimates about 30 percent of his sales are now exports, mainly to markets with growing middle and upper classes, such as Brazil and China. "We're a little Mid-Missouri company that exports quite a bit," he said.

Although getting into the foreign markets has its challenges — he doesn't speak Portuguese, for instance — the increase in foreign demand for kit airplanes has kept business steady through the recession. And going forward, Heintz, like most good businessmen, knows it would be foolish to ignore the potential of countries such as China.

"Doing business with the Chinese is tough sometimes, but at the same time, we can't ignore that's where the growth is," he said.

Getting into the foreign markets wasn't something Heintz set out to do. For an industry as niche as kit airplanes, Heintz said sales initiatives aren't really necessary. Only a few people want to build an airplane themselves, and those who do will seek Zenith out themselves, he said.

"We're kind of unique," Heintz said. "We don't have any salespeople, for instance. ... An airplane is not sold. An airplane is bought."



The expected increase in foreign customers couldn't come at a better time because, domestically, Heintz has watched the pool of aviation enthusiasts shrink for years. In 2011, there were 195,650 private pilots registered in the United States, the lowest number since 1964, according to statistics from the Aircraft Owners and Pilots Association. When Heintz started in 1992, there were 288,078 private pilots, but that number has fallen almost every year.

Heintz points to the high cost and time commitment of learning to fly an airplane as well as the heavy regulatory hand of the Federal Aviation Administration. Although he understands the need for safety, he likens a recreational pilot flying a small sport plane such as those Zenith's kits produce to a motorcycle enthusiast: Both vehicles can be dangerous, but planes and pilots are much more regulated.

"It ends up being quite burdensome for the average recreational pilot," he said.

In the recession, it would seem that an expensive hobby such as building a kit airplane would take a major hit as people cut discretionary spending. For Zenith, Heintz said he was pleasantly surprised that sales stayed pretty much flat. But even with flat sales, he gained market share as the industry as a whole contracted.

Despite the downturn in the number of pilots, there are some bright spots. In 2005, the FAA approved a new, easier-to-obtain license for sport pilots, and those numbers have risen every year and stood at 4,350 in 2011, according to the pilots association. And the types of planes Zenith produces — technically referred to as "experimental" — have been on the rise, too. The number licensed stood at 24,685 in 2011, a 20 percent increase from 10 years earlier.

Even though Heintz does worry a little about a declining aviation community, he points to the increase in recreational flying. "The die-hard aviation guys, they're always going to be around," he said.

Last week, during the workshop, Julius Salinas was learning how to assemble one of Zenith's airplanes so he could try to pass on his love of flying to a younger generation. Salinas, an industrial education teacher in Cloquet, Minn., persuaded the school district he works for to buy a kit for a class project. Not only will his students build the plane — which has to be certified by the FAA before it is deemed flight-worthy — but also Salinas, a certified pilot, plans to take each of them up in it.

"I've always thought building an airplane with kids would be the ideal project," Salinas said. "It's just a way to teach kids hands-on instead of everything being theoretical or conceptual."

The hobbyists are here to stay, Heintz said, and many of them try to pass on the enthusiasm for flight. "For Zenith and the pure hobbyists, I'm not worried," he said. "We're going to be around 10 years from now, unless we come up with a better flying carpet."



These days, Zenith sells about 250 airplane kits a year, a sizable increase from the 75 or so it sold annually when it first went into business.

"We're quite a bit bigger than when we started out, but we're still a small shop," Heintz said.

One of the barriers to growth Heintz has always had to deal with is the risk of litigation and stricter aviation policy. He doesn't have to deal too often with new and burdensome regulations, and he said he doesn't worry too much about policy changes. But the rarity of airplane crashes makes them sensational, and "all it takes is one or two spectacular ones and a few politicians to get involved."

Although selling kits to amateurs sounds like an extreme liability, Heintz said he has been sued only three or four times. People building their own airplanes have an incentive to be careful and thorough, he said, more so "than an hourly employee on a Monday morning with a hangover."

"You're going to take the time to do it well," Heintz said. "It's your ass up there."

But with a country full of settlement-happy lawyers, he worries about getting too big as a company and putting a bull's-eye on his back. He's happy with the sales and market share Zenith has, and although he thinks he could grow more, the litigation risk makes him hesitate. Still, he just looks at it as a cost of doing business. "If you're successful, you're going to get sued," Heintz said.

All in all, Heintz loves the job. He's passionate about flying, and all of his customers are, too.

"Every day, I look forward to going to work because our customers are good people, and flying, it's a really fun thing," he said.

Back at the workshop last week, at least one member of the younger generation already had gained an appreciation for the hobby. While he helped his father, Bob Hannah, assemble the kit airplane, Tyler Hannah talked about his plans to go to college to become a pilot.

"I'm not much of a mechanic," he said. "But I can't wait to fly."


Story and Photos:   http://www.columbiatribune.com

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