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Thu, Aug 12, 2004

Cirrus Design's Klapmeier On The Record: Cirrus Sells All It Can Build

An Aero-News Exclusive with Alan Klapmeier

By ANN Senior Correspondent Kevin O'Brien

Alan Klapmeier is the youthful, dynamic President and CEO -- and the public face -- of Cirrus Design Corporation of Duluth, Minnesota. In a very short time Cirrus has gone from test flights to challenging Cessna for the single-engine production crown, so we were eager to talk to Alan about production, about Cirrus's place in the market, and about future directions for the Cirrus product line.

Cirrus, which makes the eponymous aircraft in SRV (200 HP VFR), SR20 (200 HP), and SR22 (310 HP hot rod) flavors, was founded twenty years ago by Alan and his brother Dale as a kit airplane company, so it's hardly a green organization. The popular impression of freshness comes from the modernity of its airplanes -- the first, the SR20, was certified only in 1998 -- and the outside-the-box thinking for which Cirrus is known. Aero-News cornered Alan at the Cirrus booth and chased him onto the observation deck on the roof of Cirrus's giant transporter, where we wrung an interview out of him (if you know how easy it is to get him talking about his company and its products, you will be laughing at that...).

ANN: Well, the big news is sales. Your machines were the top sellers for the quarter just ended. What about the year? Can you beat Cessna?

AK: We are constrained by manufacturing: we can produce a maximum of 542 aircraft a year; we can sell more airplanes than we can build. Cessna is constrained by sales: they can build more airplanes than they can sell. GAMA sales figures are whatever you report to GAMA. Cessna reports sales to dealers; we report sales to individuals, to end users.

ANN: You sell direct.

AK: Yes, we sell direct; Cessna sells through dealers. There's nothing wrong with that, but it does give them a capability to ship whatever they need to ship to stay in the number one position. So they will do it.

ANN: They say they will ship 600 planes -- single engine planes -- this year.

AK: Well, they probably can.

ANN: For some buyers the Cessna may be the better airplane; the 182 has a greater useful load than any Cirrus, for instance.

AK: Does the Skylane really compete with our planes? I see it as more of an SUV. The SR20 and SR22 are more like a luxury sedan. There's room for both. We want to see the whole market grow, and that's good for both of us.

We encourage anyone to fly our airplanes and fly our competitors' airplanes, fly them all, and then buy the one that suits their needs best, whether or not it's ours. We're confident enough to believe that we'll get more than our share of the sales.

ANN: Looking down on your display, you make three distinct airplanes on a single 4-seat airframe. in the longer run, it seems like there is room at both ends of your line -- smaller and larger -- for another machine.

AK: Well, we really can't go to a smaller plane. What is in the SRV that you can take out? You don't save enough on a smaller airframe to let you sell it for less.

ANN: Your big expense is labor?

AK: Not really, our biggest expense is materials... we reduced labor hours considerably with the G2 redesign, but materials were always the major expense.

ANN: Engines, panels, bought-in assemblies?

AK: Those are certainly a major component of the cost of a Cirrus, but materials in general. So getting back to my point, there's nothing you can take out of the SRV to make it significantly cheaper.

ANN: And still be a Cirrus.

AK: Exactly. Now, at the other end, there is a possibility down the road we might do something there.

ANN: Really....

AK: In fact, I am pleased to announce exclusively to Aero-News that we are going to be introducing a six-place jet... it features Vertical Take Off and Landing (VTOL), supersonic cruise, and will sell for $129,000... [collapses into good-natured laughter, unable to keep pulling my leg].

ANN: Ok, Alan, we'll come to you for content for the April 1 issue. Seriously, now...

AK: Well, right now we make a good range of airplanes and we can sell all that we make. We certainly might introduce other aircraft but whatever we do, it will always be a personal aircraft. Not a transport or a business aircraft, a personal one. That's what we do.

ANN: Here's a question that I meant to ask you last year when we talked, and didn't. What ever happened to the SR21TD? [Note: this was an announced Cirrus powered by the SMA turbodiesel engine].

AK: Well, we've learned [from that] not to announce things before they're ready. We wanted to do it, we still want to do it, but it has been harder than it looked at first, and we announced it too early. There were a number of problems: for instance, cold weather. We have the best environment in the world for cold-weather testing in Duluth -- the military comes there to cold-weather test their equipment. And we had problems with cold starts in the diesel.

I want to stress that SMA have been just wonderful to work with. When we have any problem, they are determined to find the cause and resolve it. But this takes time. We'd still like to do it. Both for Europe, where there is a huge difference in the cost of Jet A and avgas, and for the future..

We're always interested in alternative engines. Or any other way to make a better product.

FMI: www.cirrusdesign.com

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