Last year was not friendly to startup companies dreaming of producing airplanes, but there are glimmerings of hope for some. Financial issues, however, continue to dominate the agendas of companies like AASI, American Utilicraft, Phoenix Fanjet (Alberta Aerospace), VisionAire and others, while development of their respective aircraft takes a backseat.
Wall Street views aviation in two primary colors–airlines and military–and it has never shown much interest in funding unproven companies with plans to build their first aircraft. “The risks are binary,” one investment analyst, who wished to remain anonymous, told AIN. “If the proposed airplane can’t be certified, there is no return for the investor. If a new engine has to be certified too, the risks are even higher.” Rendering such investments even less attractive are the relatively low probable returns and the long lead time to reach those returns. Said the analyst, “It is simply too hard for private equity guys to make money compared to other types of investments.”
