Saturday, May 24, 2014

Eclipse Aerospace hoping to provide Air Force training jets

Eclipse Aerospace has cleared the first major hurdle in efforts to land a government contract to provide a fleet of its twin-engined very light jets to the Air Force for pilot training.

The prize would be an Air Force contract to replace an aging fleet of 178 Beechcraft T-1A Jayhawks. Competition for the contract could come from Brazil’s Embraer Phenom 100 and the Cessna Citation Mustang out of Kansas.

“Just to be in the running is a beautiful thing for Eclipse,” Chairman and CEO Mason Holland told the Journal. “I think it’s great for Albuquerque. I think it’s great for New Mexico.”

Landing a contract to provide the training jets could generate as many as 300-400 jobs at Eclipse’s Albuquerque facilities, primarily in production, Holland said. The company currently has about 200 local employees producing 1½ to two planes a month.

A provision included by the Senate Armed Services Committee in its approval of a $514 billion Department of Defense funding bill for the 2015 fiscal year potentially opens up to competition a contract that effectively has been a decades-old monopoly for Wichita, Kan.-based Beechcraft.

The provision, one tiny element in the legislation, directs Air Force Secretary Deborah Lee James “to report on the options for replacing or upgrading” an existing small jet used to train pilots.

“There’s now a lot of work to do with the Air Force about what the trade-offs are,” said Mike Press, Eclipse vice president. “They’ll have to run some costs analyses.”

A contract could take one of three basic forms: an outright purchase, a lease agreement or an arrangement through a third-party defense contractor that would provide the planes and instructors.

Whatever form the contract takes, the Air Force would likely stagger its replacement of the 178 jets over a five-year funding period, which would equal 35 planes a year or roughly the number needed for a squadron at the five bases where the planes are in use.

Eclipse’s Albuquerque facilities have the capacity to produce up to 10 planes a month, Holland said.

“We can provide them at a speed faster than the Air Force can absorb them,” he said.

Asked whether a military version would be different from the civilian Eclipse 550, which is a more technologically sophisticated version of the company’s original 500 model, Holland said: “I build only one version. Functionally, they will be the same, maybe without leather seats and the finishes.”

The T-1A is the military version of Beechcraft’s Beech 400A, a twin-engined business jet developed in the 1980s and first used by the Air Force for pilot training in 1993. According to the Air Force website, the plane is used for students identified to go into airlift or tanker aircraft.

Beechcraft’s contract with the Air Force elevated the status of the T-1A around the world. A similar dynamic would likely play out with the Eclipse 550, generating sales to militaries around the world, Press said.

“It opens the market overseas for other air forces, even airlines, to look at the Eclipse as a trainer aircraft,” Press said. “The international trainer market is about 100 planes a year, from initial trainers to advanced trainers.”

Although upgraded over the years, the basic T-1A aircraft is well over 20 years old.

In a proposed budget request, the Air Force had sought $140 million over five years to modernize the T-1A’s avionics package. An Air Force briefing memo notes the plane still has engine and airframe issues to address.

The proposed request triggered a more than two-year debate over whether the more cost-effective approach would be to find a replacement trainer jet that would already have advanced avionics and be more fuel-efficient than the aging T-1A.

Holland and Press credited Sen. Martin Heinrich, D-N.M., and Rep. Michelle Lujan Grisham, D-N.M., with helping to get the replacement option for the T-1A on the table. Holland noted that it’s not unusual for politics to play a role in military decisions on what equipment is replaced or what equipment is purchased.

Politics have certainly played a major role in cuts to defense spending. The Senate Armed Services Committee’s news release outlines all kinds of spending cuts, from travel and food budgets to equipment purchases and assorted system upgrades. As for the T-1A, Holland said the cost to modernize the plane would be comparable to replacing it with a next-generation very light jet like the Eclipse 550. In addition, the 550 has a “fuel burn” that’s a fraction of the T-1A, thus making it cheaper to fly, he said.

“I’ve read that it costs in excess of $3,100 an hour to own, service and operate a T-1A,” he said. “An Eclipse costs less than $1,000. We could save billions of dollars on this program alone in the next five to seven years just with the greater fuel efficiency and a closer training platform for pilots.”

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