Aerospace selling jet

The University of North Dakota will soon be selling its Cessna Mustang in favor of a Beechcraft King Air. The plane was originally purchased with a donation from James Ray, one of UND's most generous donors. Both of the planes were intended to provide air transportation for university officials. The vision to provide this service was started by Ray, who has been a benefactor of the university, especially the School of Aviation, for the last decade.

"There's a fervor that's been going on with corporate jets at this moment, and [the jets were] primarily paid for by a benefactor with the intended use for the university to provide air service. There are times when you can't make a meeting without that kind of air service. If the president has a meeting in Minneapolis and an afternoon meeting in Bismarck, he's not going to get there commercially. You need that kind of transportation to conduct business. At the same time, [the Cessna] was pretty efficient, as opposed to bigger jets which need a lot more gas."

The School of Aviation had originally intended the jets they bought to be used in their training program as well as for transportation. However, they were unable to use the Mustang in the international program as they'd wanted, because of a higher weight requirement for the program's advanced course. To remedy this issue, they've purchased a King Air, a larger turbo-prop, which is bigger and more efficient than previous jets. Now, the hope is to sell the Mustang in order to afford another King Air, adding to the university's training and transportation capabilities.

Through the years, the University of North Dakota has gone through numerous shifts in the air transportation it provides its officials.

Originally, the Aerospace Foundation had made down payments on two Eclipse microjets. While waiting for production on the Eclipses to be completed, the school purchased a Cheyenne II which would be used for air transportation until the Eclipses were ready and then be sold to help pay off the Eclipses.

However, the Aerospace Foundation board of directors recommended to get rid of the slots for the Eclipses because of some engine changes that had been made. They ran the suggestion by Ray and he was supportive of it, so the slots were sold.

"Doing so at that time, they still had somewhat of an inflated value," says Bruce Smith, dean of Aerospace. "There was enough interest in them from a good business decision standpoint that the production price had gone up and therefore the sale price of the slots we had went up. At the same time, we did sell the Cheyenne, so we had some cash available. Remember the original goal was to get jet transportation and we didn't have any because we sold the Cheyenne."

This was an especially good decision, since Eclipse went out of business before really getting off the ground, so to speak, so the first jet was built, but the second was never finished.

Luckily, around this time the school was offered a refurbished prototype Mustang from Cessna, which was equipped with new engines and interior in addition to the UND themed exterior.

"Basically it was just leveraging the reduction in price that Cessna gave us because it was a refurbished prototype and the money that we had gained through the Cheyenne and the down payments and inflation on the Eclipses. We still had to borrow some money over and above that to meet the sale price; nevertheless it was a good purchase from the standpoint of value of the airplane and cost of what we had to pay for it."

At the moment, the university still has the Mustang and the King Air that were purchased in addition to another King Air being leased. Smith says they're still in need of another King Air so there has been some discussion about selling the Mustang. "Even if we do that, we still have more than ample air transportation for the university, which was the goal through this whole process. The nice thing about the King Airs is that we also get training utilization ... and that provides a cost efficiency we don't have with the Mustang ... The King Air's actually a little bit better than the Mustang. It's bigger, it's roomier, it actually has a private bathroom on the airplane, whereas the Mustang doesn't."

Smith continued, "I know there's some controversy as to whether we should be using a major portion of a benefactor's donation for this ... but we more than fill his original requirement, which was to provide the university with air transportation," and he says he and the board are in touch with Ray "all the time. If anything comes up that impacts his donations, the board of directors calls him before we make any changes. There have been times when he has told us something goes against his wishes, and so we continue to support his wishes."

Smith said that he believes Ray supports the practicality and the overall idea of the King Airs for UND and UND Aerospace. "Now that he's seen what's happened, the revenue that's been generated by the King Air and the overall feasibility, I think he's very pleased that we made that decision, and especially now because Eclipse went bankrupt," Smith said.

"If we had continued with the Eclipses, we would've had one airplane with no supplier and second airplane that we paid for that was never built ...We did that coincidentally at just the right time."

Ray donates to other areas of the university as well, namely the College of Business and Public Administration, the Alumni Foundation, and the building of the Hilton Garden Inn. "He has a passion for young people and a passion for aviation, and his entire career he's been a venture capitalist and an entrepreneur so he has a passion for people who are in the business and entrepreneurship."

According to Smith, Ray has become UND's most generous benefactor. "There's always the argument about Ralph Engelstad's building, but that's still being held by a board of directors and hasn't been donated to the University as of yet." "I think over time, Jim's donated roughly $2 million of his own personal wealth directly to those three entities, including a few very large endowments in the Alumni Foundation for scholarships."