In The Works Analysis: Startup OEMs scratch for financing | Aviation International News

In The Works Analysis: Startup OEMs scratch for financing

This year and last were not kind to the startup airplane manufacturers, those OEM wannabes that are–or in some cases were–attempting to grab the brass ring

By AIN Staff • AIN Staff

May 9, 2008

This year and last were not kind to the startup airplane manufacturers, those OEM wannabes that are–or in some cases were–attempting to grab the brass ring of success by riding on the wings of their first turbine-powered airplanes. It takes hundreds of millions of dollars to run the new-aircraft triathlon of development, certification and production. Financing opportunities for such programs, never a top draw in even the best of economic conditions, have been well-nigh nonexistent for the last 18 months or so.

Private and institutional investors, burned severely in the dot-com nosedive in spring 2000 and scared again by the general recession and unstable stock market after 9/11, have left the venture-capital market in droves. Continuing a two-year trend, third-quarter venture-capital investment in the U.S., according to the National Venture Capital Association, dropped to $4.5 billion, a 26-percent decrease from the second quarter ($6 billion) and a 48-percent decrease compared with the third quarter of last year.

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