Cessna Aircraft has chosen Spirit AeroSystems to help build its new large-cabin business jet, the Model 850 Citation Columbus, company officials said Wednesday.
The intercontinental plane will be Cessna´s largest and most expensive jet. The company plans to spend $ 780 million to develop the aircraft, which has a price tag of million.
It´s slated to make its first flight in 2011 and enter service in 2014.
The companies reached an agreement in principle, but no contract has been signed. Details will be finalized in the next few weeks, the companies said.
Spirit will build the plane´s fuselage and empennage, or tail section. It plans to build the tail section at its Prestwick, Scotland, facility, officials say.
Cessna chairman and chief executive Jack Pelton said the fuselage will be built in Wichita, but Spirit officials say no final decisions have been made.
"Cessna knows that´s certainly our desire, and we certainly hope that´s where we end up," said Spirit spokeswoman Debbie Gann.
Cessna has not decided where it will assemble the plane. A decision is expected around the end of February.
It´s "highly likely," however, it will be done in Wichita, Pelton said. That will require Cessna to expand its facilities.
Pelton said the company is in negotiations with the city, county and state on a package of incentives.
Expanded product line
Cessna released details of the jet at a news conference in Washington, D.C.
Previously, Cessna customers wanting to move up to a large size jet had to choose a competitor´s plane. Now, the Citation Columbus "gives them a place to go," Pelton said.
The aircraft will be able to fly nonstop routes such as Munich to New York, London to Dubai, Sydney to Singapore or Sao Paulo to Miami, the company said.
Before launching the program, Cessna spent five years on market research and developing a business case for the aircraft. The board of directors for Textron Inc., Cessna´s parent company, gave its approval last month to launch the program.
Building the plane
Choosing another company to manufacture the fuselage is a departure for Cessna, which typically does the work in-house.
But Cessna is running at capacity to keep up with its existing business. It also didn´t want to add employees for the design work, then lay them off when that phase is over, Pelton said.
Building a business jet fuselage is also a departure for Spirit, which -- as an established supplier for Boeing Co. --has been working to diversify its customer base.
"Anytime we have the opportunity to add a customer like Cessna, who is the market leader in the business aviation business, I think that´s a good move for us," said David Walker, Spirit senior vice president for marketing and sales.
For the past year, the two companies have worked together on the design concept. That will continue.
Over the next year or two, nearly 200 employees at Spirit in Wichita and about 75 in Prestwick will work on the aircraft´s design. It´s not yet known how many employees will be required to build the structures.
If Spirit does decide to build the fuselage in Wichita, there are a number of advantages..
For one, it would be convenient for two companies based in the same town to work together, Pelton said.
"We can be over there in five minutes," he said.
It also would be easy to transport the fuselage to Cessna on the back of a flatbed truck, he said.
"Wichita would be a leading candidate to do the work... "said Buck Buchanan, vice president and general manager of Spirit´s billion fuselage business.
Spirit will likely finalize its contract with Cessna in March. But it will be summer before it makes a decision on where to build the fuselage, Buchanan said.
Spirit has been talking to a number of cities and states about incentives or tax breaks in exchange for jobs and facilities on a number of projects, Buchanan said.
The company has an understanding of Cessna´s product and what it will take to produce it, including the square footage and equipment required, Buchanan said. Building it in Wichita will require additional space, he said.