IW: How far along are you in obtaining the necessary regulatory approvals for the Transition?
CD: We've received all of the exemptions that we need from both NHTSA and the FAA.
We still have to complete our own testing process before we certify that it meets all of the applicable standards. But it's a self-certification process for both the ASTM standards and for the NHTSA standards.
And we're not prepared to do that just yet -- we have to complete all of our internal testing before we'll be ready to do that.
With the Sport Pilot rule, the FAA doesn't come out and certify your aircraft the way they did prior to the emergence of this rule. And that's one of the reasons that the capital costs are lower, because we don't have a government agency basically involved with our engineering.
So we declare compliance to ASTM standards and fill out forms with the FAA.
Then the FAA will come out and do a spot check. They'll do an inspection of the aircraft and an inspection of all of our documentation to make sure that our ducks are in a row, and that we're not obviously out of compliance.
But they do not certify that the vehicle meets the standards; Terrafugia certifies that the vehicle meets the standards. It's a slightly different process than what existed before this rule.
IW: When do you anticipate having that self-certification process finished?
CD: Well it depends significantly on how the testing goes. But if the testing goes relatively smoothly, it should be by the end of this year.
IW: What's your launch strategy?
CD: We're going to do a staged rollout.
So we're going to deliver what we're calling our Premier Edition fleet first, and that's just 10 aircraft. We're handpicking our earliest customers -- these Premier Edition customers -- because we want to have a large cross section of potential uses of the vehicle.
And because this is a new type of vehicle, we want to have that pilot fleet out there to get some field experience before we really ramp up for larger-volume production.
We're talking about starting delivery of that Premier Edition in 2013.
And then if we find that it rolls out pretty smoothly and that there aren't many issues in the field, we'll go right into larger-volume production.
If we find that there are some issues and we want to make some design tweaks, we'll go ahead and implement those before we ramp up production.
IW: What can you tell us about the manufacturing process for the Transition?
CD: The Transition is fabricated primarily with carbon fiber, [and] a little bit of fiberglass. We outsource machined components, and we do all final assembly in house. We do our own composite work in house.
The composite technology is very similar to what's used in other certified light aircraft, like the Cirrus SR20 and SR22, so it's fairly standard composite-construction technology.
It is still fairly labor-intensive.
Composite construction is quite labor-intensive compared to what you think of for an automotive assembly line, where they just have stamped steel panels.
The carbon fiber is actually hand-laid up into molds and cured at an elevated temperature in an oven, and trimmed and then bonded and made into subassemblies. Then subassemblies are packaged into full final vehicle assembly.
IW: Will you manufacture the Transition in Woburn?
CD: We don't have a full-volume manufacturing facility at this time, because the vehicle is still undergoing testing.
The facility that we have is large enough to deliver our Premier Edition fleet of aircraft, but it's not our final facility where we'll be doing our larger-volume production. That location is still to be determined.
The space that we have right now is 19,000 square feet in Woburn, and we currently employ about 24 people.
In the long run, we'll be creating on the order of 300 to 500 jobs for production.
IW: How scalable is your manufacturing process?
CD: There are companies that have used this manufacturing process that have delivered on the order of 1,000 units per year.
It is labor-intensive to do this sort of construction with composite materials, but the composite materials really are key to achieving the weight targets.
So we're talking about hundreds of units per year in the foreseeable future. We'll see where demand goes, but that's where we expect the demand to be.
The core market is the general-aviation industry. And the GA industry sold about 1,200 single-engine piston-powered aircraft in 2010.
The high-end super-sportscar market sold about 5,400 units that year.
So we might get some fraction of the super-sportscar market, and a fraction of the single-engine piston market.
But you're still talking hundreds of units per year, not tens of thousands of units per year.
IW: Is there anything you'd like to add?
CD: We are going to be looking to hire a vice president of manufacturing sometime within the next year or so as we move into the Premier Edition fleet.
We'll be looking for somebody with a background in the general-aviation industry, ideally with composites.
But also, since there are a lot of suppliers for a vehicle like this, [we'll be looking for someone with] preexisting relationships with a lot of the aviation suppliers. There are a lot of common suppliers that are used in our industry, just like in any other industry.
This is Part 2 in a two-part conversation. To read Part 1, click here.