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February/March 2010 – Web Exclusive

Air Tractor Plows Into Global Markets

“Today, 90 Air Tractor employees owe their jobs to exports.”

– David Ickhert,
Vice President of Finance
Air Tractor

Profiling a Trailblazer in  International Trade

by David Bloom

Texas is a leading exporter and a major hub for global trade. But it’s not all about giant multinationals.

Glance up in the rural Texas skies on a spring day, and you just may see one of the thousands of crop-dusting aircraft that Air Tractor Inc. has built since the early 1970s. But today, Air Tractor has its eyes on horizons beyond the Texas plains. The company is bucking the headwinds of a turbulent economy to bring jobs and opportunity to the small town of Olney, Texas.

Aircraft have been built in Olney since the late 1950s, when aviation pioneer Leland Snow chose the town as the production site for his first company, Snow Aeronautics. This company eventually was sold to Rockwell-Standard, which soon moved its facilities to Georgia. Snow opted to stay in Texas and went on to found Air Tractor.

An ever-advancing line of Air Tractors – from 1973’s AT-300 single-seat plane, with a radial piston engine, to today’s popular turboprop AT-802 – have been rolling off the Olney assembly line ever since.

As its aircraft have evolved, so too has Air Tractor’s customer base. In addition to its agricultural uses, the AT-802 is an effective firefighting plane and drug eradication tool, used by agencies and governments around the world.

David Ickert, vice president of Finance for Air Tractor, says the company turned to the U.S. Export-Import Bank to provide its international customers with medium-term financing that wasn’t available in their countries. Often, he notes, U.S.-based financial institutions are reluctant to lend to small businesses against foreign sales. The Export-Import Bank, however, provides credit insurance on financing provided to international customers, an advantage that has helped Air Tractor steadily increase its global reach.

Going Global

Do you know of a smaller Texas company that is making strides in cultivating international sales? Let us know and we might profile it in an upcoming issue.

In 1995, Air Tractor employed 100 people and relied on international sales for 10 to 15 percent of its business. By 2009, its work force had doubled and nearly half of its customers were outside the U.S.

“Today, 90 Air Tractor employees owe their jobs to exports,” says Ickert. And an export-related job at Air Tractor has a ripple effect in job creation, he notes.

“The airframe of an Air Tractor assembled in Olney is made with 100 percent U.S. parts,” Ickert says, “and we purchase aluminum, steel, brakes and various other components from suppliers throughout the Dallas-Fort Worth Metroplex and all over the United States.”

Those export-related job numbers may grow soon. In May 2009, Air Tractor debuted an armored and weaponized version of the AT-802 – the AT-802U – at the Paris (France) Air Show. This new plane can provide the U.S. military and other national air forces with a low-cost counterinsurgency, surveillance and reconnaissance option.

Like the much more expensive and complex drones or UAVs (unmanned aerial vehicles), the Air Tractor can provide serious “hang time” over targets, increasing mission capabilities and success rates. In an AT-802U, its pilot can remain in a target area for as long as 10 hours.

Lee Jackson, design engineer at Air Tractor, says “The AT-802U offers ruggedness, simplicity and performance. It’s amazingly resilient and offers twice the capability at half the cost.”

Jackson also notes that current U.S. fighter aircraft are expending their service lives quickly in the tough desert environments of Iraq and Afghanistan, while performing missions that less expensive aircraft could handle. The simple but sturdy Air Tractor could be both an effective trainer and a “leave behind” for our allies who will continue the battle after anticipated U.S. troop withdrawals.

The exposure the prototype plane gained at the Paris Air Show has provided Air Tractor with new international dealers interested in selling its planes, and a significant increase in inquiries from potential customers.

Air Tractor is currently working with consultants to continue developing the AT-802U for military applications and to devise marketing plans for the product. “We’re really still in the early stages, but we believe there is a good market there, and we’re excited about the possibilities,” Ickert says. FN

Photos courtesy of Air Tractor

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