On a blustery day two weeks ago, Rick Schrameck stood outside his two-year-old Bend airplane manufacturing plant and put on an Epic Aircraft hat to protect against the wind. Downwind of his facility, he could see Columbia Aircraft Manufacturing Corp., which declared Chapter 11 bankruptcy Sept. 24 and will auction itself off next month. North, to Redmond, the head of Lancair International, which makes airplane kits for home assembly, has acknowledged entertaining other states’ offers to move, citing high land and labor costs in Central Oregon, but has not indicated any intention to move.

In the swirling winds of Central Oregon’s aviation industry, Schrameck is riding an updraft.

Indian billionaire Vijay Mallya last month pledged about $200 million to Epic, the Bend division of a Las Vegas-based company called Aircraft Investor Resources LLC. Mallya’s investment earned him 50 percent ownership of Epic.

Schrameck, 62, who has declined to confirm the exact amount of Mallya’s investment, will remain Epic’s CEO for at least five more years. In the meantime, he and Mallya are developing a master plan that includes two phases of development in Bend and a total of 1,200 new jobs.

The first phase would add three buildings — up to 250,000 square feet — to the existing 100,000 square feet of building space on Epic’s 26-acre site at Bend Municipal Airport. Work on the buildings is expected to start next spring, Schrameck said, with completion in 2010.

The second phase would add another two buildings at some later date.

Mallya’s millions, though, aren’t reserved only for Bend. The money also will go to manufacturing facilities that are under construction in Calgary, Alberta, and that are planned for India, Schrameck said. How the money will be divided is still unclear.

In the future, it looks like Bend will remain the center of Epic’s research, development and manufacturing for some certified airplanes and all the experimental aircraft, which have not received Federal Aviation Administration certification, Schrameck said. Experimental planes are built by owners with educational instruction from Epic personnel. They may not be flown for hire: as air taxis or charter services.

Schrameck wants to build 400 to 450 planes per year by 2010, up from the 25 now produced annually by Bend’s 150 employees.

“That’s just not possible (to do all of those) in Bend,” Schrameck said of the production, citing limited space and a tight labor force. In three years, he expects to make approximately 200 planes in Central Oregon and the rest at facilities outside the country.

“If you look at the enormity of the project, you’ll freak out,” Schrameck said. “We have to make sure we look at it on a project basis — a global, strategic deal.”

The master plan for Epic’s growth should be finalized by the end of the year, Schrameck said.

Mallya, a famously flamboyant jet-setter, doesn’t have the celebrity attention in the United States that he enjoys in India, but Schrameck knew of him decades before the men met for the first time July 2 at Mallya’s Aspen, Colo., home. Now, Schrameck says the two are close friends and business partners.

“I believe Vijay and I will be friends for life,” he said. “That doesn’t mean we’ll be business partners for life.”

Two minds thinking alike

Schrameck says he and Mallya should have crossed paths in the 1970s, when both were involved with car racing as drivers and sponsors. The two raced in different classes — Mallya with Formula One cars and Schrameck with Ferraris.

Mallya owns Kingfisher Airlines in India, referring to himself as the King of Good Times, according to his chairman’s message on the Kingfisher Web site. The 51-year-old is known for his lavish parties and high-profile lifestyle complete with expensive toys including a 300-plus-foot yacht, 200 horses, a fleet of rare cars and a personal jet the size of a large commercial airliner.

Through his Kingfisher Airlines, Mallya has a longtime relationship with Airbus, the French aircraft maker that competes globally with Boeing for commercial jet business. Kingfisher was one of the first to order the new Airbus A380, the world’s largest passenger aircraft, which took its maiden flight Thursday for Singapore Airlines. It can be configured to seat 800 passengers.

Mallya, a member of the Indian Parliament, stepped into his late father’s business, United Breweries Group, in 1983 at the age of 28. Since then, he’s built it to a $2 billion organization with operations in various industries, including alcoholic beverages and pharmaceuticals. Forbes.com lists Mallya’s net worth at $1.5 billion.

Both Mallya and Schrameck enjoy fast vehicles, from cars to airplanes. Both have rubbed elbows with political figures, royalty and movie stars who love race cars. Schrameck says he’s socialized with fellow racing fans Paul Newman, Gene Hackman and Clint Eastwood.

Mutual friends finally set Schrameck and Mallya up in July.

“Vijay thought Epic’s ability to turn airplane designs in six months was impressive,” Schrameck said of his company’s speedy design development. “He liked the performance of our aircraft.”

Three weeks later, they shook hands on Mallya’s investment. The money is in the process of transferring between Mallya’s and Epic’s banks, Schrameck said.

The planes

Epic’s parent company in Las Vegas oversees divisions that include Epic, Aircraft Resources Canada and TAM, short for Tbilisi Aircraft Manufacturing, based in the Republic of Georgia. Aircraft Resources Canada is the Canadian extension of Epic that as early as next year will manufacture planes certified through Transport Canada, that country’s version of the FAA. TAM also is a manufacturer.

Schrameck had visited Central Oregon in 1999 when he built Lancair Co. planes for personal use. Lancair later changed its name to Columbia Aircraft, which makes single-engine piston aircraft.

The planes inspired Schrameck to build his own composite aircraft.

“Whatever I look at, I’d like to make better and faster,” Schrameck said. He went beyond the single-engine piston designs to twin engines, turboprops and jets, which led to the birth of Epic.

Soon after Schrameck expressed interest in building an aviation business in Bend, regional economic developers and officials swooped in to support him.

In 2004, the Oregon Economic and Community Development Department loaned Epic’s parent company a $130,000 forgivable loan to assist in the construction of its facility, said Clark Jackson, business development officer for the department in Bend. The loan is forgiven when the company retains its existing jobs and adds new jobs, he said. The loan came from the governor’s strategic reserve fund, Jackson said, adding that the state usually makes 100 percent to 200 percent of a loan back in income taxes alone.

In 2005, the state also awarded the city of Bend $1.2 million to finance buildings at Epic’s site: $500,000 in the form of a grant, with the city borrowing the remaining $747,000, said Mike Solt, regional coordinator for the state Economic and Community Development Department. That money came from a state special public works fund, Solt said.

Epic built its 100,000-square-foot facility in Bend on 26 acres in 2005. All Epic planes currently are manufactured there. The planes cost $1 million to $3 million each.

Epic has two groups of planes: experimental and certified, although no planes will receive certification until at least 2009, according to Epic representatives.

Experimental planes are:

•LT, a six-seat turboprop;

•Victory, a single-engine jet that can hold up to five seats;

•Escape, a five-seat turboprop; and

• Elite, a twin-engine jet that can hold up to eight seats.

The experimental group has not received FAA certification to fly, so Epic builds the plane parts and customers travel to Bend and do most of the assembly themselves, assisted by Epic.

Some certified planes will be built in Canada, where Schrameck says a larger labor pool exists.

The planes targeted to receive certification from Transport Canada will be:

•Dynasty, a certified version of the LT;

•Victory, a certified version of the experimental plane; and

•Elite, a certified version of the experimental plane.

Epic planes tap into a business trend that is growing rapidly, says Dawna Rhoades, associate dean of research and graduate studies at Embry-Riddle Aeronautical University in Daytona Beach, Fla.

“A lot who are looking at general aviation and business aviation are concerned about problems with commercial aviation,” Rhoades said. “Delays, security — just all the hassles you have to go through.”

Through general aviation, travelers can be in the air and to their destination in a fraction of the time that it takes through commercial airlines, she said.

“Depending on the business model, private businesses could give on-demand seat arrangements for what (a traveler) would pay for a business-class ticket,” she said. “If that’s true, then that could be attractive for some businesses.”

For a growing segment of the aviation industry, a company like Epic would be appealing to investors in India, Rhoades said, where the aviation industry is being deregulated.

“It was very regulated there with only two carriers: Air India and Indian Airlines,” she said. “Now, they are opening up the industry more, encouraging private investment in the industry.”

From Columbia on

For local economic development representatives, Epic’s deal with Mallya is welcome.

Columbia’s future is uncertain, with multiple bidders lining up for the company’s auction next month. Epic’s promise of more workers is encouraging amid questions surrounding Columbia’s sale.

“This is very exciting, from a state standpoint,” business development officer Jackson said. “Central Oregon is recognized by the state for having this aviation cluster and seeing it grow.”

Jackson says he believes that whichever company buys Columbia will keep it and its 400-odd workers in Bend. Still, the timing of Epic’s growth is a shot in the arm, he said.

Already, Epic is ramping up hiring in the wake of Mallya’s announcement, Schrameck said. While representatives from Mallya’s camp could not be reached for comment, Schrameck says Mallya did his homework on Schrameck and Epic before investing.

Even with millions of dollars to expand in an industry he’s known and loved for decades, Schrameck is calm about the forthcoming changes.

“Business may be about passion, but not emotion,” he said. “Passion and absolute, maniacal focus are what makes it work.”

About the craft

Epic Aircraft planes are made of composite materials and cost $1 million to $3 million to buy. The company currently has no FAA-certified models, but certifications are expected from 2009 to 2011.

• LT – six-seat turboprop

• Victory – single-engine jet that can hold up to five seats

• Escape – five-seat turboprop

• Elite – twin-engine jet that can hold up to eight seats

• Dynasty – certified version of the LT

• Victory – certified version of the experimental plane

• Elite – certified version of the experimental plane

Source: The company