Overview
In December of 2007, Freight Feeder Aircraft Corporation ("FFAC" or the "Company") acquired the Freight Feeder aircraft technology and development program from Utilicraft Aerospace Industries, Inc., which included the aircraft design, related intellectual property, patents, and developed hardware and software including a mockup aircraft, and fuselage tooling -- with the intention of completing the development of the aircraft project, and to bring the Freight Feeder aircraft into commercial production for global sales into the freight aircraft market. Inclusive in the acquisition are the Aircraft Design Patent, the ETA Freight Tracking Method Patent, and the AFRS Automatic Flat-Rate Power Management Patent.
The Freight Feeder aircraft -designated the FF4000 and FF5000 by the Company -- is specifically designed to address a niche segment of the global air freight market, specifically:
The "Niche"
"The need for a new and updated state-of-the-art effective containerized freight feed air transportation system requiring the development and implementation of a new regional-sized-container-capable turboprop-aircraft, specifically designed to economically transport containerized/palletized air shipments to and from regional manufacturing and freight distribution facilities (located in smaller communities) to and from the major international hub airports -- world-wide."
Market Capture
An estimated 6000 aircraft will be needed to accommodate the feed segment in the world by the year 2025. It is reasonable to assume, based upon the market leads that the Company now has, that a minimum of 52% of this market is a reasonable estimation for the FF4000/FF5000 through the year 2025. The Company's 8 year maximum production capacity allows it to produce 672 FF4000/FF5000 Freight Feeder Aircraft, capturing 11.2% of the projected market. This equates to a minimum of $12.2 Billion in potential sales for the Company during the first 8 years, with a reasonable potential of a least 3 to 4 times this amount after the initial 8 years.
FF4000/FF5000 Aircraft Development
The Company is in the process of building a flying POC prototype of the FF4000 aircraft. The Company expects to complete construction of the prototype by the end of 2010 and to begin the FAA Part 25 Certification process which, when completed, will allow the Company to produce the FF4000 and FF5000 aircraft for commercial sales for delivery to customers worldwide, by the end of 2013.
Primary Subcontractor
Metalcraft Technologies, Inc. (MTI) is the primary subcontractor to build the FF4000 Prototype and Production FF4000 and FF5000 Aircraft. They provide parts and components to nearly all the major aircraft manufacturers such as; Boeing, Northup Grumman, Lockheed Martin, Sino Swearingen.
Metalcraft Technologies, Inc. is a vertically integrated manufacturer of aircraft details and assemblies. MTI is capable of taking design models in CAD/CAM format; planning the production of details, and developing such drawings from the models as are required for production; fabricating and processing the details to completion; and then assembling the details into complete assemblies. MTI operates under an AS-9100 registered quality system which ensures traceability of details, subassemblies, and finished assemblies back to the requirements as defined.
POC, Phase I and Phase II FAA Certification
Proof Of Concept (POC) Phase - We are in this phase and it is expected to take 12 months to complete. POC Phase includes the use of years of previous design engineering, wind tunnel testing, etc., and is now ready to go forward. This Phase will include the construction of the POC (Proof Of Concept) protptype and final OML (Outside Mold Line) for the aircraft.
Phase I FAA Certification - is expected to take 18 months to complete. Phase I will include the construction of the Pre-Production Prototype Aircraft (also referred to as a Conformity Prototype), development of the certification plan, filing of the certification application, certification of the detailed production engineering, and initial certification flight tests using the "Pre-Production" Prototype Aircraft (Conformity Prototype). Most of the funds (84%) in this Phase I, will be expended on engineering and the Pre-Production Prototype Aircraft.
Phase II FAA Certification - Most of the funds in this Phase will be expended almost evenly between engineering and the second Conformity aircraft (not considered a prototype), taking 18 months to complete. This will include completion of the Conformity -1 test aircraft (mentioned above), construction of the static test articles, and certification flight and static testing, and receipt of final FAA Part 25 Aircraft Type Certification. Final assembly of the first production model aircraft (Ser. No.001), initiation of limited production of the aircraft (Production Lot I - 48 aircraft) will also be completed during this phase and Capitalized by Production Progress Payments. In Phase II, the business plan also calls for production of the initial 48 aircraft during the second half of year 2 and throughout year 3 which, will be funded by customer production progress payments for their respective aircraft (this is a standard industry practice used by all of the major airframe manufacturers).
The Freight Feeder Market
The advantages of the FF4000/FF5000 aircraft, which include lower acquisition and operating costs and the ability to serve short haul routes and small airports, in the Company's opinion, will enable FFAC to garner a minimum of an 11.2% share of the freight feeder aircraft market within eight years of launching its product. The market niche for which FF4000/FF5000 is targeted is the immediate and future demands of the growing distribution requirement for more frequent shipments, faster speeds, in-transit tracking, and loss-control measures (such as sealed containers) as close as possible to its end destination. This market niche includes the freight feed operations of the overnight/two day express airlines, the airline freight feeder market, the world postal services, manufacturing just-in-time inventory and fulfillment, the combination passenger/cargo airlines, the international airlines and the fast-growing third-party logistics companies; all of which are currently being challenged in handling the growth of air-freight requirements. The world air freight market is projected to grow at 6.1% per year through 2025 (see Boeing Forecast).
The initial targeted client base consisted of international and domestic freight carriers seeking to expand their freight services and revenue bases. Initial, discussions have begun with several unsolicited international carriers based in every continent of the world.
The Competition
Other companies that build small and intermediate-sized aircraft such as Canada's DeHavilland, and the U.S.'s Beechcraft and Cessna currently have no products that Freight Feeder Aircraft Corporation is aware of with comparative features that would directly compete with the FF4000 or FF5000. Aerospace (France) and British Aerospace, which build larger jet aircraft, also manufacture intermediate-sized passenger aircraft that are often converted for freight, but the company believes such aircraft are too large to pose a threat to the targeted market segment.
Intermediate-sized aircraft such as the DeHavilland Dash 8, Aerospatiale ATR42 and ATR72, ATP, Saab 340, Embraer EM120, Dornier 328 and CASA 235 were specifically designed to haul passengers at high speeds to the major hub airports. Therefore, their designs cannot be modified to accommodate the features needed in a pure freighter aircraft, such as a larger forward side cargo door that can accept the air freight industries standard main deck containers, high point-load capable floors, cargo net attachments, container roller system, and as a result, they pose little competitive threat to this market segment.
With every passing year, fewer of these passenger-converted-to-cargo aircraft are available for the utility market due to the increasing fleet age and the difficulty of getting parts and other product support. Even when spare parts are available, the older designs of these aircraft make them unattractive freight haulers. They are heavy, fuel-intensive, and prone to breakdowns, grounding planes and stranding cargo. These pose little real threat to the FF4000/FF5000 purely from an economic standpoint, because they are too small and too expensive to operate with modern freight handling systems.
FFAC Intellectual Property
This industry is very dynamic and is expected to experience major changes over the next decade, especially in the areas of technology development and freight management and tracking systems. New technologies enable freight to move more efficiently, improve tacking and automatically update freight's movement.
These new patented systems (ETA Freight Tracking Patent and the AFRS Fuel Management System), will allow the industry to track freight through smaller cities and towns quickly and cost-effectively, thereby expanding shipment options, as well as reducing operational costs for the freight operator while helping the environment by using substantially less fuel per mission -- both technologies enhancing the overall airfreight industry service and performance.
Overview
Overview Video
