ICON: The People's Plane

A small Southern California startup is betting that ultralight recreational aircraft like its sleek A5 will revolutionize private aviation

Even as commercial aviation groans under the weight of multiplying woes—rocketing fuel costs, grumpy passengers, and shrinking profit margins—a handful of airplane manufacturers are gearing up to exploit Federal Aviation Administration regulations that carve out a niche for small, ultralight recreational aircraft.

On June 12, ICON Aircraft, a privately held startup based in Los Angeles, took the wraps off a sleek new plane its designers say could make aviation as common a hobby as water skiing or motorcycling. Dubbed the A5, the small, futuristic aircraft, which features folding wings that tuck neatly under a slim rear tail, looks like a cross between a Lamborghini and the very light jets popular with globe-trotting executives. The plane is about as long as two compact cars parked back-to-back, with a wing span of 34 feet. When it finally rolls onto runways sometime in 2010, the A5 will cost about $139,000.

The lilliputian airplane is the brainchild of Kirk Hawkins, ICON's founder and CEO. A former U.S. Air Force pilot, Hawkins began working on his idea in 2004 as a student at the Stanford Graduate School of Business. He envisioned a new kind of aircraft company that would "merge airplane design with consumer products to create great experiences, like BMW (BMW) or Apple (AAPL)." The product of that vision, the A5, is Hawkins' bid to transform an industry dominated by vastly complex commercial aircraft designed specifically for transportation.

Pared-Down Piloting

In 2005, he recruited fellow graduate student and serial entrepreneur Steen Strand, a former IDEO design engineer and now the company's chief operating officer, to come up with the product itself. Backed by a board that includes IDEO founder David Kelley, Vern Raburn, the CEO and founder of very light jetmaker Eclipse Aviation, and Stanford lecturer Jim Ellis, they staffed up, and with a team of 15 have been working on the A5 ever since. (The company won't disclose how much financing it has raised.)

To make the aircraft broadly appealing, Hawkins and Strand pared down the piloting experience to its essentials. The A5 eschews the complex cockpit controls common to commercial planes. Instead, a simple rack of analog gauges lines the cockpit's center console. The company is clearly following Apple's playbook: Like early computers, suggests Hawkins, contemporary aviation is alienating to average consumers. "There's a lot of Tandy out there, but no one looks like Apple," jokes Hawkins, referring to the crop of planes that will compete with the A5. Most are stripped-down versions of more complicated craft or so-called kit planes that buyers must assemble themselves.

In contrast, the A5 is all about simplicity. "We also bucked the industry trend of cramming all the controls onto one digital screen," says Strand. "We wanted to give a sense of accessibility and, above all, reliability."

20 hours of training

The A5 is one of the first planes explicitly designed to cater to a freshly minted market that experts estimate could be worth as much as $2 billion annually. It stems from a 2004 FAA ruling that established a new Light Sport Aircraft category. This new class, as well as an easier-to-obtain Sport Pilot License, simplifies access to the skies for private individuals. The certification requires just 20 hours of flight training and costs between $3,000 and $4,500, about half the time and cost of the previous, easiest-to-obtain license. (Planes in the new category are strictly restricted to two occupants, must weigh less than about 1,300 pounds, must fly below 10,000 feet, and cannot fly faster than 120 knots, or approximately 140 miles per hour.)

"This is still a relatively young category," says Chris Dancy, a spokesperson for the Frederick (Md.)-based nonprofit pilot advocacy group, Aircraft Owners & Pilots Assn. "It was developed to create a new entry point into aviation," he adds, noting that well-known manufacturers like Cessna and Cirrus are also gearing up their offerings in this area, in the hopes of luring former pilots back into the air and attracting new enthusiasts previously discouraged by cost and time commitments.

Certainly, the category has drawn a record number of new pilots in the past three years—even as the overall number of those taking to the skies is in sharp decline. According to the FAA, the total number of pilots dropped from a 1980 high of 827,071 to 624,007 last year. During the same period, the number of private pilots shrunk from 357,479 to 228,475. In contrast, the number of pilots earning the new Sport Pilot License rose from 134 in 2005, the first year it was available, to more than 2,000 last year. A previous attempt at a relaxed set of rules in 1990, which did not go nearly as far as the new regulations, never attracted more than about 350 pilots a year.

Of course, the challenges to ICON's success are significant. The downturn in the economy has dampened discretionary spending, creating greater competition for consumers' leisure dollars. The A5 will be pitched as a luxury product at a time when consumers are sharply cutting back. Steadily rising fuel prices aren't likely to help, either. The A5's engine, which burns either jet fuel or regular gasoline, earns about 18 miles to the gallon and has a range of about 300 miles. "The timing [of the launch]," admits Hawkins, "is less than optimal."

Still, with its relatively affordable price tag and sports car looks, the A5 is likely to turn heads. And modeling itself after successful, design-savvy heavy hitters such as Apple or BMW could prove a smart strategy. Hawkins says companies like boat manufacturer Mastercraft and automaker Porsche (PSEPF.PK) have found the right balance between engineering and consumer-oriented design. "In the end," says Hawkins, "we just want to make the coolest consumer airplane in the world."

Click here to view a slide show of the ICON Aircraft A5 airplane.

Business Exchange related topics:Airline IndustryBusiness InnovationOil and Gas

Before it's here, it's on the Bloomberg Terminal.