Another relatively young aircraft company announced yesterday that it was closing its doors due to a lack of funding. Adam Aircraft, of Englewood, Colorado said it is suspending operations until it could arrange additional financing. Adam  had certified the A500 push/pull twin (you may have seen one of these planes in the movie "Miami Vice", released in 2006) and was trying to certify the jet version, the A700. Adam joins another Colorado aircraft startup with money woes, Aviation Technology Group (ATG), which halted work on its tandem seat Javelin private jet in December 2007.

Though both companies had sound designs, flying aircraft, and plenty of orders, they still had trouble raising money. I suspect both of these aircraft companies were caught in the fallout from the sub-prime mortgage fiasco that is impacting the U.S. economy. These days it takes tens of millions of dollars and several years to certify an aircraft to Federal Aviation Administration (FAA) standards. Unfortunately, until you start producing aircraft and have steady revenue coming in, you usually need to borrow money to carry you through until production ramps up. Several large and well known investment banks and lending companies have lost a lot of money on those sub-prime mortgages, and are probably not in a very good lending mood right now. Especially when it comes to a relatively risky venture such as a startup aircraft company. So unless the the lending crisis in this country straightens itself out quickly, which seems highly unlikely, or Adam and ATG can find an "angel invester" with very deep pockets, we probably will not be seeing either of them back in business anytime soon.

I should note that I did some work with ATG several years ago on their prototype aircraft, and the engineers I worked with were quite competent and very enthusiastic about what they were creating with the Javelin. I feel bad for those folks now, but I've realized from working in the aerospace industry for almost 30 years that good engineering is only 50% of the battle when developing a new aircraft. Good management, effective marketing, and most of all adequate funding, make up a good chunk of the other 50%.