DANIEL TAUB

Staff Reporter

Inside a cavernous complex at Long Beach Airport, workers are testing the electronics systems of a small jet unlike any other one with four wings rather than two.

The second, smaller set of wings on the nose of the Jetcruzer 500 is designed to improve stability by lessening the chance that the plane would go into a spin if it stalls.

It is that feature and, perhaps more importantly, a price tag of $1.4 million that undercuts the competition that could make the six-seat, Jetcruzer 500 a formidable challenger within the corporate aircraft sector.

Advanced Aerodynamics & Structures Inc., a Long Beach-based development-stage company, plans on shipping the first Jetcruzer 500 in the fourth quarter of this year. More than 170 customers have placed orders, giving AASI a billing backlog of more than $200 million.

Once AASI goes into full production on the Jetcruzer later this year, the company will be going head-to-head with the likes of Raytheon Co., maker of the Beech King Air, and Bombardier Inc., maker of the Learjet.

“Maybe we are a bit crazy,” laughs Carl Leei Chen, the company’s president and chief executive. “I don’t know.”

Analysts say AASI is shrewd, not crazy.

For one thing, the market for corporate jets is growing. Last year, there were 12,425 aircraft being used by businesses nationwide, according to the National Business Aviation Association Inc., a 10 percent increase from a year earlier. In addition, about 1,100 companies are sharing ownership of corporate planes up nearly 50 percent from a year earlier.

“This market has a lot of niche opportunities in it because it is an industry that has been dominated by old aircraft design,” said Jon Kutler, president of Quarterdeck Investment Partners Inc., an L.A.-based aerospace investment firm. “By using new technologies, there’s an opportunity to fill a big market niche.”

The Jetcruzer 500 is full of new technologies chief among them the stabilizing canard wings. That technology, initially developed by flying pioneers Orville and Wilbur Wright but rarely used since, has brought the plane spin-resistance certification, an FAA first.

The Jetcruzer also is unusual in that its fuselage is made of graphite composite like Northrop Grumman Corp.’s B-2 bomber rather than sheets of aluminum.

“Most fuselages are labor-intensive, with riveting,” said David M. Turner, AASI’s chief financial officer. “You won’t see much riveting here.”

Chen said that while composite materials are more expensive, the difference is more than made up by a manufacturing process that requires fewer workers. As for the benefits to the buyer, composite fuselages are less noisy during flight and easier to repair, because they can be patched rather than requiring entire pieces to be replaced.

Most components will be made at the company’s newly built facility in Long Beach. The only major parts made by outside firms are the Pratt & Whitney Canada Inc. propjet engine, its avionics and its windshield.

The Jetcruzer 500 can fly at speeds of up to 360 mph and altitudes up to 30,000 feet, and it can travel nonstop for 1,600 miles. As a result, it can go from L.A. to New York with just one stop for refueling.

While Beeches and Learjets fly a bit faster at speeds around 400 mph they also sell for around the $6 million range, and even used ones can cost up to $2.6 million.

“You can see how attractive the market has become for this airplane,” said Gene Comfort, AASI’s executive vice president.

Chen said that because his company’s long-term debt is relatively low $8.5 million as of the third quarter ended Sept. 30, the latest period for which figures are available the company will start making a profit after 20 Jetcruzers are sold. That would provide considerable financial comfort to a company that has been routinely in the red.

Last week, the company’s stock was trading at about $3.19 a share on the Nasdaq down from its high last spring of $7 a share but above the 52-week low of $2.31.

“There’s a long way from design to successful operational use, and that’s the next hurdle for the company,” Kutler said. “But that’s a less daunting hurdle than the ones they’ve already overcome.”