Pacific Aerospace claims a $24m sales breakthrough
11 January 2005

Source: NZ Herald

Pacific Aerospace is claiming a sales breakthrough with a $24 million, 12-plane sale of its flagship aeroplane to North America.

The Hamilton firm's majority owner and managing director, Brian Hare, said he expected to receive a deposit at the end of the month from the unnamed buyer of the PAC 750XL aircraft.

" It's fantastic to get that traction in that market," he said.

" The United States market just opened up for us in September when we got our first demonstration aircraft up there."

The deal was worth "roughly $24 million" and equalled the entire number of PAC 750XL aeroplanes now in commercial use around the world.

Mr Hare said 11 of the aeroplanes were operating across England, Switzerland, the United States, Australia and New Zealand, and a 12th was about to go to Sweden.

The PAC 750XL is a single-engine turbine-powered utility aircraft.

It can be used for adventure sky-diving but also suits courier companies and other short-haul freight or passenger operations.

Pacific Aerospace raised $5 million last year by selling new shares to investors, including the venture capitalist Endeavour Capital.

Mr Hare retained about 70 per cent of the company.

Potential investors were told that a sharemarket listing was part of the company's plans.

Pacific Aerospace's ambitions for the American market suffered a big setback in December 2003, when a PAC 750XL being delivered to the US crashed off the coast of California, killing the pilot, Kelvin Stark.

The plane ran out of fuel.

In March last year, the US Federal Aviation Administration granted certification to the PAC 750XL - a first, the company said, for a New Zealand-designed and built aircraft.

In June last year, Pacific Aerospace announced a Canadian joint venture to partly assemble aircraft in Hamilton, then ship them to a plant near Montreal for completion.

The company has not decided when to list.

It is a likely candidate for the NZAX market, for small and alternative structure businesses.
The information memorandum for last year's capital raising said that, besides making a range of its own aircraft, Pacific Aerospace was a contract manufacturer of aircraft parts for the Boeing and Airbus Industries.

It had produced 580 aircraft in the past 40 years but changed dramatically when a new management team took over in 1996.

Investors were told that between 1978 and 1996 the company produced 11 Cresco aircraft.

" Since 1996 the company has produced 25 new CRESCO aircraft with another 6 aircraft turbine re-powered," Mr Hare said.

" The company has also since produced 34 CT4E Airtrainer aircraft and begun development of the PAC 750XL.

" In addition, in part due to the number of aircraft manufactured since 1996, spare part sales have been increasing."