M600 SLS
Between 2010 and 2016, I work-ed with an industry veteran in aviation operations, marketing and sales. He and I shared a common wall adjoining our offices in a unique building constructed
after Raytheon had acquired Beechcraft in the 1980s.
By the time Ron Gunnarson and I occupied those adjacent second-floor offices, Raytheon had sold Beech to private equity in 2006, calling the new company Hawker Beechcraft Corporation. Hawker Beechcraft brought me in to help ensure customer needs were front and center throughout its jet aircraft development, certification and production phases. The goal was to help facilitate communication between engineering, production, aftermarket support, sales and the end users.
Jet production stopped eventually, so we narrowed the company name to Beechcraft (dropping the Hawker). Textron, Cessna’s owner, showed genuine interest in its long-time competitor. Following Beech’s acquisition by Textron, Ron went on to lead Piper’s sales and marketing group in Florida, and I followed suit a couple of years later, going south to Mooney Aircraft in Texas.
Ron’s tenure at Piper as VP of sales, marketing and customer support has seen the brand lead the industry in innovative new technologies, new aircraft models, and new ways owners can do more with their equipment. EAA AirVenture 2023 brought some exciting announcements for Piper, and afterward, I had the chance to catch up with my former boss and friend to learn more.
Lance Phillips: First of all, Ron, congratulations on all the positive stories coming out of Vero Beach. Since you transitioned to Piper, the good news has been nonstop.
Ron Gunnarson: Thank you. It’s a good time from a market perspective for the industry, and Piper has set itself up to take advantage of the environment based on strategic investments and positioning.
LP: That’s great. Q2 revenues are up around 19%. Where are you seeing the most lift from Piper’s lineup?
RG: Q2 is an acceleration point for Piper. While some areas of our supply base remain difficult, the labor challenges everyone in the industry has experienced are easing, and we see Q2 as the first acceleration point for production. Our aircraft are all retail sold. For Piper, comparing Q2 2022 to Q2 2023 shows:
- M-Class deliveries increased 50% from 8 to 12
- Trainer deliveries increased by around 20% from 34 to 41
There is continued demand in both of our primary markets, and we plan to deliver somewhere between 270 and 275 aircraft in 2023, all of which are already retail-sold.
LP: Piper recently announced MEL (minimum equipment list) approval for the M600. How does that apply to helping your customers?
RG: The MEL approval for the 260 M600s already operating worldwide allows those operators to put their aircraft on charter certificates, adding an extra revenue stream for those assets. We won’t see an influx of orders because of the MEL approval, but it will be an incremental benefit to ownership, which will reflect in sales down the road.
LP: How about the unimproved field performance for the M600? Who benefits from this certification, and how did you get there?
RG: Piper began testing for unimproved field performance for the M600 three years ago, mirroring our investment in the Meridian and M500 programs. We redesigned the nose gear fork to accommodate higher loads. That’s a significant investment in engineering resources, time and testing. The demand comes from Europe and Latin America, Brazil particularly. For these markets, we have seen a direct increase in orders because of the added capability, and also, current customer satisfaction increases because the installed base is retrofittable.
LP: HALO was a significant accomplishment for Piper in 2021. HALO seems to provide the best way to overcome challenges from competitive parachutes. Can you pinpoint and attribute incremental sales directly to HALO, especially as Piper was the first OEM to implement it on its aircraft?
RG: There is a direct correlation between M600 SLS sales increases and HALO. We have seen continuous overall market improvement since HALO’s implementation, which provides overall lift, but HALO is undoubtedly attributable to the improvement as well. It’s more evident if you take a step back and look at M600 delivery improvements between 2021 and 2022. In 2021, we showed +3 M600s delivered; in 2022, we improved with another +3 deliveries. Now, this year, Piper will deliver +7 M600s over 2022. The overall economy combined with HALO and the Autoland system all have a direct positive impact on deliveries.
Piper was the first OEM to go all-in with Garmin on HALO and, subsequently, the first to certify it on the M600. Piper also insisted that HALO be standard equipment as a testament to our dedication to customer safety.
The level of comfort the HALO system provides non-flying family members is tremendous. Having flown many automated landings now, seeing how the system displays its position and communicates with the non-flying passengers is remarkable. It calmly and intuitively provides passengers with distance and time-to-destination information while navigating around weather and terrain and communicating with ATC via transponder and VHF radio.
LP: I love it. Let’s switch gears. You mentioned how labor markets are improving somewhat. Piper implemented the Ambassador Program recently. I see that program potentially going further and helping others in the industry, too. Do you see that?
RG: The Ambassador Program with our larger flight schools provides a connection to the Piper factory. Every year, we have three or four summer interns who have the opportunity after graduation to become Piper employees. The partnership provides avenues to students’ growth and gives Piper a strong funnel of enthusiastic employees. And it even strengthens our collaboration with Piper’s dealer network. I know three individuals who started as Ambassadors, became interns, worked for Piper as employees and then transitioned to sales for our dealer network. I see it as benefitting the industry. We are also discussing with maintenance training schools how to incorporate those interested in technician roles as Ambassadors.
LP: The Pilot 100 training platform is a home run. Sales are off the charts. How did the Pilot 100 come about, and what are you seeing for the future in training? Has it helped revenue numbers and earnings? And finally, how does the Seminole, a fantastic twin trainer, fall into your business plan?
RG: There’s a lot in that question. The Pilot came about as an opportunity to build a real-world training aircraft that can handle the rigors of 1,000 training hours per year at a lower price point. Most OEMs have tried to answer the question, “Where can we shed some cost to fit a particular price point and meet specific mission requirements while maintaining the brand?” The Pilot 100 answered that question for us. Quality training aircraft, used or new, are getting harder and harder to find. Hence, Piper had the opportunity to take the PA-28, arguably the best training platform in the industry, and take some things out while adding new technologies, lowering the price point and improving access to a proven airframe. With quality used aircraft becoming unavailable and light sport aircraft unable to handle the rigors of flight training, Piper launched the Pilot 100 to huge success. We have a backlog that stretches into 2026, and it’s a perfect fit for our lineup, including the 100i, the Archer TX, DX and Seminole.
When it comes to the Seminole, demand also goes out into 2026. Viable multi-engine training aircraft, like the single-engine trainers, are getting very hard to source. Piper is ramping up production to meet demand for it. Some flight schools are experimenting with alternatives, but they’re finding it difficult to compete with a platform like the Seminole that has proven to handle the rigors of training 800 to 1,000 hours per year over decades. The flying characteristics of the Seminole, along with its counter-rotating props, wide cabin, and G1000 NXi avionics, make it highly competitive. Flight schools look for availability and maintainability, which affect direct operating costs. Along with the Seminole’s class-leading flying characteristics, it answers all the questions for a flight school.
The training segment is strong, sales are improving, and production is increasing to meet demand. And we see the market improvement as sustainable. Training aircraft retirements are growing, and the airlines are doing their best to push people to personal aviation, which means more training aircraft are needed. We see a solid, sustainable market for training aircraft. Piper’s robust support structure and parts distribution network also give our entire aircraft lineup a substantial competitive advantage. In context to the Seminole, it’s almost unfair for our competition.
LP: That’s all great news, Ron. Thanks for spending the time with me.
