Your background is predominantly in technology companies like Bang & Olufsen and Tesla. What motivated you to join an aviation company like Cirrus in 2019?
I’ve always been drawn to high-tech, direct-to-consumer products where design, craftsmanship, and the human vs. machine interface are core to the experience. At Bang & Olufsen, it was about music, lighting, and home theatres enhancing the home experience turning houses into homes. At Tesla, it was about advancing sustainable transportation and autonomous driving, improving people’s lives through technology.
Similar to the Wright Brothers, and so many others at Cirrus, I have always been fascinated by flight and how personal aviation can bring people closer to moments that matter like bringing people closer, allowing face-to-face business meetings and family visits. We strive to make owning and flying in our aircraft as accessible as owning and operating a car. The SR series being a five-seater and the Vision Jet a seven-seater, are akin to SUVs with wings. Additionally having modern features like touch screen avionics, the Cirrus Airframe Parachute System (CAPS) in every aircraft offers owners additional peace of mind in the event of an emergency.
How does the current demand compare with the available supply for Cirrus in 2024?
We have a one-to-one book-to-build ratio, with a backlog of about 1,000 SR Series aircraft and 250 Vision Jet orders. This means we have sold everything we can produce over the next two, equating to about $1.5 billion in future deliveries. We're not constrained by demand but by our production capacity. While COVID partially drove demand, learning to fly and buying an airplane involves more commitment than buying a boat or RV so you cannot compare aviation with other recreational purchases.
COVID allowed people more time to train and study, but the real driver is our comprehensive ecosystem and innovative product portfolio. About 30% of Cirrus buyers are new to aviation. We focus on creating new pilots, offering a three times safer flight experience than the general aviation average. We designed our training to be accessible, with online classes, simulators available when weather conditions aren't suitable for flying, our own Private Pilot License (PPL) syllabus, and a global network of training partners that prepare you for your PPL exam. We also provide aircraft management like financing, insurance, maintenance, and even piloting services, making aviation accessible and less daunting.
What locations are you targeting for your training centers, and are you expanding beyond the US?
When I joined Cirrus in 2019, we had three locations: Grand Forks, North Dakota; Duluth, Minnesota and Knoxville, Tennessee. We now have seven locations and 1,000 training partners worldwide. Factory-direct service and training centers were opened in Greater Orlando and Greater Dallas to meet growing demand, supplementing markets that don’t organically scale fast enough on their own. We’ve gone direct in some European markets, like France and the UK, for a consistent customer experience. We aim to provide quality service whether through independent partners or directly.
Given the global pilot shortage, what can companies like Cirrus do to reduce costs and make aviation more accessible?
Our aircraft are designed for single-pilot operation, unlike many others requiring two pilots. Our Vision Jet features Safe Return Autoland powered by Garmin, which when engaged can autonomously land the aircraft in the event of an emergency. A passenger can activate the Safe Return system simply by the touch of a button if the pilot becomes incapacitated. Technology like this improves safety and reduces reliance on multiple pilots. However, the FAA currently allows such technology only for emergencies. As regulations evolve, we hope this technology will become standard, simplifying operations and enhancing safety, ultimately making aviation more accessible.
Why isn't autonomous landing technology more mainstream in the aviation industry?
Decades of work go into developing this technology. The FAA currently permits this technology only for emergency use. Familiarity and time will likely lead to broader acceptance. We're focusing on Simplified Vehicle Operation (SVO), aiming to make flying easier and safer by reducing pilot workload through advanced technology.
Aviation technology is expensive, and the industry is slow to adopt innovations because of challenging certification compliance. Companies investing in innovation and scaling up can drive costs down and improve accessibility. While some OEMs have long innovation and release cycles, we strive to continuously improve and provide compelling reasons for customers to upgrade, similar to the iPhone model.
What are the barriers to entry for potential pilots and Cirrus aircraft owners?
Flight training costs include $1,200 for our PPL course and the industry standard varies, depending on hours required and aircraft type. We offer tailor-made premium flight training experience with a dedicated Cirrus flight instructor in a new aircraft and as a result we have higher completion rates.
To purchase our entry-level SR20 aircraft, the price starts at $626,900, with the SR22 at about $838,900, and the Vision Jet at $3.24 million. Many customers start their training in an SR20 and gradually upgrade. About 75% of those who eventually bought the Vision Jet started with an SR Series model. Our customers often use their aircraft for business and personal purposes, sometimes renting them out when not in use, creating a revenue-generating asset.
What challenges are you facing with capacity expansion, and what steps are you taking to address them?
We've doubled our workforce from 1,300 in 2019 to about 2,600 now, with 100 roles to fill in 2024. Finding talent, especially for manufacturing in Duluth and Grand Forks, is a key challenge. We’ve also outgrown our physical footprint, necessitating significant investment in new facilities and programs.
Our capex investment has increased from approximately $12 million in 2018 to nearly $100 million last year. We're hiring across the board, including engineers, mechanics, salespeople, and IT staff. Our IT initiatives, like Cirrus IQ mobile app, aim to create a connected ecosystem for seamless operations and service, enhancing the overall customer experience.
How do you support customers through the aviation journey, and how does this impact sales?
We help customers with every aspect of aviation, from learning to fly to financing and maintenance. Our sales team, consisting of just 23 people in the US, provides personalized support, creating a tight-knit community. Our salespeople are pilots themselves, enhancing their ability to connect with customers and demonstrate the aircraft’s capabilities. If you are qualified, then we will fly to your local airport and demo the aircraft for you and your family.
What are your thoughts on electric vertical takeoff and landing (eVTOL) aircraft and sustainability in aviation?
We’re not focused on electric aviation currently as the technology isn’t viable for meaningful range and payload. However, we are committed to sustainability. Our Vision Jet is the most CO2-friendly jet on the market and is certified for sustainable aviation fuel (SAF). A major focus is removing lead from aviation fuel. The industry needs a drop-in replacement fuel that works with existing engines. We’re working with GAMA to drive this change. While eVTOL technology is promising, current battery technology doesn’t support practical applications for our use cases.
The eVTOL industry faces significant challenges, including battery weight and energy requirements. Current technology offers a limited range, making it impractical for most applications. While companies like Beta Technologies, Joby, and Archer are making strides, no eVTOL aircraft has been certified for real-world conditions yet. Successful eVTOL adoption requires overcoming these technological hurdles and addressing practical issues like urban airspace regulations and infrastructure. Despite the promise, widespread use and a viable business model are still years away, given the current state of technology and regulatory environment.
