“"Many years ago, our company founder, Al Conklin, sold a new twin-engine business aircraft to a very successful entrepreneur. He had established a bit of a rapport with the individual and, after the sale, asked him straight out, 'How can you justify the cost of this airplane?' His reply? 'What is the cost of a divorce?'"–David Wyndham, president, Conklin & de Decker”
Piaggio America's John Bingham
"When I was telling people that I joined Piaggio," said John Bingham, "they would say, 'I didn't realize that you had gone to work in motor scooters.' I quickly understood that we needed to do something about the name of the company. So that is why we branded it 'Piaggio Aero.'"
Bingham, an auto-industry veteran who started at the Italian company last year, was named president and CEO of the Piaggio America division in February. The firm completes, delivers and supports the P.180 Avanti and Avanti II turboprop aircraft in the North American and Latin American markets.
The Avanti II is the world's fastest business turboprop, cruising at 402 knots, and is a staple of U.S.-based fractional provider Avantair, which operates more than 50 of the airplanes. The model is the sole survivor of a trio of fast pusher turboprops developed in response to the energy crisis of the 1970s.
Over the last several years, Piaggio has been buoyed by major international investments and production has increased at stable rates. The manufacturer, which first delivered the Avanti to customers in 1990, updated it in 2005 as the Avanti II with glass-panel avionics and slightly more powerful Pratt & Whitney engines. The aircraft has speed comparable to that of a light jet, interior dimensions nearly equal to those of a midsize Hawker jet and better fuel efficiency than a King Air 350 turboprop.
Piaggio manufactures the Avanti II at its venerable Finale Ligouri plant in Genoa, Italy, and then flies it to the U.S., where updated executive interiors are installed. The company-which is also developing a new jet-sells 70 percent of its Avantis in North America.
Bingham talked to BJT about the latest developments at Piaggio Aero and his take on the overall business jet market.
You spent a lot of time last year rebranding the company. How important is branding to sustaining sales over time?
You've got to gain an identity. I think the image we have now is far more modern and we are hearing from people that we've never heard from before. The reason is that we're actively pursuing print, digital and social media to make sure that the brand is understood and that we show our aircraft in as many places as possible.
What lessons did you learn at Bentley and Rolls-Royce that you can apply to the corporate aircraft market?
Before I worked there, I worked at Renault, the French car company, where I gained a volume perspective on cars, and then I went to high luxury and Rolls-Royce, and there is a clear differentiation.
Then I went to work for Cirrus and now Piaggio and there again we are talking volume against more of a luxury product.
People understand the touch and feel of quality. At Piaggio we understand the human factors beyond the basics of how an aircraft works and its ability to go from Point A to Point B. We appreciate the customer's desires and motivation.
How do you get around the perception in some quarters-especially with customers who have owned exotic Italian sports cars-that while Italians build beautiful vehicles, they are difficult to maintain?
[Laughs] You know, the Avanti is called the Ferrari of the skies. And I think Ferraris are very reliable. [The Ferrari family owns a stake in Piaggio Aero.--Ed.] But in all seriousness, we try to be competitive in every aspect of customer support. Our plane is remarkably well put together but it is a mechanical object and things will break. When they do, our aim is to support it properly. Our engines are Pratt & Whitneys that are fantastically supported throughout the world.
You have greatly expanded your number of service centers recently. How many do you have in North America now?
We started last year with only five service centers and we ended with 11, and we have another three or four we are working with for appointment. Our objective is clear: None of our owners will have to fly more than about an hour to get to a service center. The 11 centers are in Scottsdale [Ariz.], Sacramento [Calif.], Boise [Idaho], Denver, Denton [Texas], St. Louis, Moline [Ill.], Groton [Conn.], Greensboro [N.C.], Fort Lauderdale [Fla.] and Calgary [Canada].
We are looking to improve our customer support. It's an area where we had to catch up and we have caught up well. We are available through the customer-service line at the factory in Italy and directly through the service centers all the time. We can get customers parts seven days a week.
How do you sell a turboprop that costs nearly $8 million when buyers can purchase a faster jet that costs less?
When we show the Avanti to people they are amazed. Look at Avantair and why they are the only fractional operator to have grown throughout the recession. It comes down to the equipment they use-our airplane. It is 33 percent more economical than a midsize jet. The cabin is the biggest in its class-way bigger than any midsize jet. It's a full stand-up cabin. It is much quieter [inside] than a midsize jet because the wings and engines are behind the passenger compartment. It has lower operating costs and is fast-468 miles per hour. It has a range just under 1,500 nautical miles.
Your main customer in the U.S. is Avantair. Given that it can be dangerous for manufacturers to rely heavily on fractional companies for sales in a down market, what is Piaggio Aero doing to diversify its client base?
We are looking for new markets such as Brazil and other countries in South America. We just got the aircraft certified for Brazil and we are starting to open our businesses down there and choose our partner there. Brazil is a massive aviation market. As for our domestic market, we've doubled the size of our sales force in the U.S. so we are talking to a lot more people than we have in the past. We are confident that we will be increasing the level of private deals we do versus fractional so that ratio will change as we go forward into 2011.
Other than Avantair, who is the typical Avanti II customer in the U.S.?
There are two types-private individuals and small companies that are not located near commercial hub airports. The plane works well for them. One key feature of the Avanti II is the narrow track of the wheels. They're less than 10 feet apart, while a King Air's are 17 feet. So the Avanti can go on much narrower taxiways. It also has great short-runway performance, so it can access a lot of places that other airplanes can't.
What kind of year did Piaggio Aero have in 2009?
We suffered like everyone else. We are fortunate that we have a solid backlog of orders and were able to build on that as well, but it wasn't a brilliant year. We think 2010 will get progressively better. Certainly there are already a lot more [sales] conversations occurring.
How is the Piaggio Jet progressing?
As the market slowed it would have been folly for us to be charging full speed ahead, so we slowed the pace of that. Development of that [aircraft] is in line for when we want to bring the plane to market. While a lot of people have shut down their new developments, we are in the fortunate position where we didn't have to.
Résumé: John Bingham
Position: President and CEO, Piaggio America (since February 2010)
Previous Positions: Joined Piaggio America in 2009 as executive vice president and chief marketing officer. Previously vice president, Rolls-Royce & Bentley Motor Cars; executive vice president, Cirrus Design; and managing director, Cirrus International.
Personal: Passionate soccer and Rugby Union fan. Loves high-performance British cars and rides a Harley-Davidson.