NEW YORK (TheStreet) -- If you are going to build a street-legal airplane, it pays to have good insurance.Insurance is Richard Gersh's thing. I met the 22-year veteran of the insurance business, an affable risk and policy wonk, on the floor at the New York International Auto Show on Wednesday. He was getting a kick out of the media horde tweeting, posting and shooting his latest exercise in risk management -- the Terrafugia Transition. A plane that's a car. And a car that's a plane.
|The first road-ready personal flying car, the Transition by Terrafugia, is shown off at the New York International Auto Show on Wednesday.|
It's all powered by a single engine -- a Rotax model that many planes use -- that drives both propeller and wheels. There is a cockpit with both a steering wheel and a stick shift. And then there is finessing the weight: The plane carries up to 470 pounds of passengers, gas and bags. "I tell people, you do the math," Gersh says. "It carries 23 gallons of unleaded premium gas, at 6 pounds a gallon. It's a weight-sensitive vehicle. But real adults can use it." There's one feature that lets this former insurance exec sleep soundly at night: a parachute. From under a hood upfront, a chute deploys in a worst-case scenario. I asked Gersh if this was meant to address the "John Denver Syndrome." The American folk singer and avid pilot died flying a similar aircraft in which he didn't have a backup chute. "You got it," Gersh nodded emphatically. He quickly added that this plane highlights the process of managing the problems that pure innovation creates. This cheaper road to the skies is opening flight to a new generation of amateurs. Terrafugia competes in the entry-level plane category with established plane makers such as Cessna and its Skycatcher, and smaller makers like the Airplane Factory based in Johannesburg, South Africa and Italian maker Tecnam. But only Terrafugia had the daring to mix the American love of the road with the dream of flight. 7 Companies That Keep on Growing Making the plane road-ready solves so many problems for the user, says Gersh. "This vehicle is re-energizing the aircraft and automotive industries." Not the Model-T Gersh told me flatly that this plane will "not be the Model-T." The Transition runs $279,000, which is in line with entry-level planes. The company has 100 orders, even though financing options are not yet available. Gersh sees it as the perfect club, school or co-op aircraft. Like all American dreams, the Transition needs capital. Terrafugia has just finished its latest round of test flights and the business has come to New York to capture some media love -- and investor interest. Gersh says the company needs some $5 million to get the Transition into mass production.
"More would be better, but we have a clear path to profitability," Gersh said. I asked him: Could his operation be the poster child for an American recovery? 9 Stocks That Prove Dividends Make All the Difference "It changes the equation of the personal flight," nodded Gersch. "It's exciting to watch a good idea become a good business."