Tuesday, April 11, 2006

Eclipse - Four Topics for Discussion

This is a four part critical analysis of the Eclipse Aviation program. The First Part will discuss aircraft weight, believed to be the Achilles heel for this program. The Second Part, the fallacy of friction stir welding. Third, the business plan, and finally, Vern Raburn's penchant for publicity and his on going promotion and self-promotion.

One can not fault Vern for trying to breathe new life into business aviation, but I do fault his attitude. He claims the industry is fossilized and he is going to show the world how it should be done.

In 1963, we brought to life the Lear Jet Model 23. At certification, $13 million was invested, the aircraft sold for less than a half-million and cruised 100 mph faster than the Eclipse. climbed to 41,000 feet in 13 minutes (19 minutes to 35,000 feet for the Eclipse) and out performed the commercial airliners of the day! The airplane was certified 10 months after first flight. We had no CAD systems, no Blackberrys, no e-mails, no FAX machines, no cell phones, the company's first computer did not arrive on the scene until just before certification. The handful of engineers (30) was managed by a chief engineer...the company managed by one President (Bill Lear) and one VicePresident.

So Vern, where is the progress? The Eclipse bloated organization consisting of a CEO, a COO, a CFO, a Senior Fellow, and 12 Vice-Presidents???


Part 1.

Airplanes are designed around their engines. Each pound of thrust will support between 2.5 to 3.0 pounds of aircraft weight. If the number is down in the 2.5 region, the airplane will be a real hot-rod. Three and above, the performance might better be described as limp for a jet.

The Eclipse was designed around two Williams 770 lb thrust EJ-22 engines. Eclipse designers went to the upper limit (3.05) and established a takeoff weight of 4,700 lbs.

Empty weights for a twin engine executive jet should be about 60% of the takeoff weight. If the design team is really good, they might achieve a lower number. The Eclipse engineers (or Vern) thought they were really good and set the target at 57% and 2,700 lbs became the weight bogie. It was a tough assignment to stay within 2,700 lbs ...in my opinion, impossible.

Never-the-less, they built a Williams powered prototype. It flew once, barely. We have no idea what it weighed, it was not a complete airplane. The shortcomings of the Williams engine have been well reported and no need to re-plow that ground. It was not viable for the program and a search for a suitable engine began. Pratt & Whitney agreed to develop a new engine that would produce 900 lbs of thrust.

Eclipse had to revise the design. I suspect the engineers looked at how much both the empty and gross weight would have to grow to accomodate the bigger, more fuel thirsty engines and added these weights to the original numbers. The new takeoff weight became 5,640 lbs. Weight to thrust went to 3.13 (a bit worse than the original 3.05). For this round, empty weight was established at a more realistic level of 60% (3,390 lbs) but still a huge reach for a 6-place pressurized business jet.

Cessna has delivered over 170,000 airplanes. They have a reputation for building light weight designs. When they decided to compete in the Very Light Jet market with a 6-place entry, the lightest jet they could conceive will gross 8,000 lbs. That is 40% heavier than the Eclipse. There is not that much difference in cabin size...not that much difference in performance. Is Vern Raburn 40% smarter than Cessna?

What Vern does not realize is that it is tougher to build a small airplane than a larger one. Some things just do not scale down. The engine Pratt is developing for the Eclipse is one inch smaller in diameter than the version being developed for the Cessna Mustang, The Mustang engine produces 50% more thrust and will have better fuel specifics. The accessory gear boxes will be nearly the same size. People and baggage do not scale down. Seats, systems, interiors will all be nearly the same size and weight. How do you build a comparable airplane 40% lighter?

If it were a horse race, I would bet on the Mustang.

Here is why empty weight is important. Vern claims the Eclipse will have the ability to fly Phoenix to Chicago with 4 occupants and a tailwind. In the first place, his 4 occupants are based on a 170 pilot with 30 lbs of baggage and three 170 lb passengers (no baggage).

In 1964 when I started Lear Jet's Sales Engineering Department, all of our flight profiles were based on 170 lb occupants each with 30 lbs of baggage. Forty years later, we are now in the Big Mac era. The FAA says the average occupant weighs 184 lbs plus their lap tops and baggage.

Even if Raburn can hit his 3,390 lb bogie, an honest range, with four 184 lb occupants each with 30 lbs of baggage, will be closer to Phoenx-Peoria with a tailwind which is fine if they want to visit the Peoria based Caterpillar Tractor Company.

For every 100 lb of weight growth over 3,390 lbs, the range will drop by about 120 miles. My guess is the airplane will weigh empty more than 3,700 lbs resulting in range closer to 800 nm with four occupants and reserves.

One would think this would be a real issue at Eclipse. But in spite of the fact they have five prototypes flying, none are fully equipped with upholstered fully certified seats, sound proofing, de-ice and anti-ice equipment, so no one can be sure what the final weight will be.

Nearly all new airplanes miss their empty weights. The F-35 Joint Strike Fighter, the Airbus 380 and even Boeing's 787 Dreamliner are all reported to have weight problems (in the case of the 787, some report a 3% or 7,176 lb overweight problem).

In the early 80's, Learjet was developing the Model 60. Thanks to a strong order book, the next available delivery position was serial 186. By the time the aircraft was certified and a fully equipped aircraft put on the scales, the empty weight had ballooned causing a loss of range/payload . The result, over half the prospects canceled their purchase orders.

One final amusing (at least to me) note. The Eclipse website profiles three prospective owners...all skinny guys. Could all of Vern's 2,000+ prospects be skinny guys and gals?


Part 2.

At every opportunity, Vern Raburn likes to highlight his use of Friction Stir Welding to speed assembly and cut costs. In an article in Business & Commercial Aviation, Dr. Oliver Masefield, a Senior Fellow at Eclipse, stated FSW eliminated 7,400 rivets and 1,000 hours of assembly time and that an Eclipse airframe could be built in 600 hours.

Talk about your smoke and mirrors! Looking at the green airplane on display at Oshkosh 2004, I would guess that 80% of the assembly is still riveted together. And Senior Fellow Oliver failed to mention that the equipment to do FSW is very expensive as is the tooling. As far as his assembly in 600 hours, that does not include assembly hours incurred at suppliers!

Even that is not a new idea. In the late 70's, Learjet's Board of Directors ordered the Tucson Production Manager Don Howard to reduce assembly hours for the Model 55. Don promptly farmed out all the small assemblies reducing direct man-hours but nearly doubling manufacturing costs.

I had not heard of FSW until Vern started talking about it. I put in a call to Cessna's head of manufacturing research and development and said, "tell me about FSW". He said Cessna had been looking at it for a number of years and continued to evaluate the process. Their issue was the probability of long term corrosion associated with the weld. This concern was validated in an article in the 2003 issue of Forming and Fabrication which consisted of a Q&A with John J. Tracy, PhD, VP Structural Technologies and Raj Talwas, Manager-Unitized Metallic Processes; both with Boeing St. Louis (formerly McDonnell Douglas).

Here are a couple of excerpts:

F&F: Is this effort (reducing costs) progressing smoothly?

Raj: There are still many technical concerns. We are interested in friction stir welding commercial fuselages, wing structures, and wing torque boxes. We want to do that in the next two to three years. We are moving slowly, one thing at a time. There are still a lot of technical hurdles to overcome.

John: One of the two main technical concerns is the tooling required. Because this method applies a downward force, unless the geometry is just right, providing proper backup, clamping to the tooling can be difficult. Backup tooling resists the force of the upper tool. For complex shapes, which is really where we want to go, backup tooling is difficult.

F&F: What is the other issue?

John: The other significant issue in commercial aircraft is corrosion. There is concern about corrosion in certain joints that needs to be walked through.

Raj: When we friction stir join two plates, the tool comes in from above. Sometimes it leaves a defect on the under-side, called a root defect. This defect is so tight, we can't see it with ultrasonic, x-ray, or even dye penetrant inspections. It is not a big concern on a rocket that has a very short lifetime. But it is a big concern in commercial aircraft.


The Eclipse position on the process is that FSW is FAA certified. While I have not seen the documentation, I would guess the certification only applies to structural integrity. I don't believe there is any FAA requirement to address corrosion until it shows up in the field.

In September 2005, the Society of Automotive Engineers held a forum on friction stir welding in Albuquerque. The fee was $600 and I was not that interested in the technology so I did not attend figuring there would be reports of technical breakthroughs or what ever. But I have not heard even one peep out of Vern Raburn after the forum.

Had there been good new out of the event, me thinks Vern would have been on his half-billion dollar soap box crowing about his leadership in FSW technology.


Part 3.

The genius of Vern Raburn can be found in some parts of his business plan. Use sombody else's money and shift as much risk and development costs as possible to the supplier base. The investor is reported to be Bill Gates. He is a big boy and can take care of himself.

The suppliers? Well there has been a huge turnover rate. In my opinion, the lucky ones are out of the program. I know one in particular, Chuck Taylor, the owner of Metal Craft in Cedar City, Utah. Metal Craft is a respected and capable supplier of aircraft structural components. They built a lot of parts that went into the Eclipse prototype. Not anymore, won't go into details, but let's just say it was a messy divorce! Vern calls companies like Metal Craft non-performers, but there are two sides to every issue.

Several years ago, we built tools for the Eclipse as a second tier supplier. Enough to get an up close and personal look at a lot of unrealistic engineering. In the past year, I have no-bid over $300,000 in Eclipse tooling and hope that whoever took on the tooling realize what they were getting into.

I would like to see the purchase agreement between Eclipse and Pratt & Whitney. If the contract reflects a mid-2006 certification date that Vern claims and a fast ramp rate to 1,000 units (2,000 engines plus spares), P&W would need to get cracking...bricks and mortar, production machinery, trained people, scarce and exotic metals. There is not much doubt that P&W can produce at high rates provided they are given sufficient lead time. But if Vern's program stalls or even goes belly up, who is going to be there to pay for those engines? And Pratt will be in a pickle because nobody else is using that engine.

Many have suggested Vern can not build the Eclipse for the $1.2 million price tag. In fact, Cessna President Jack Pelton made that same statement to me two years ago in a private conversation. His comment was based on an internal Cessna study.

Another question is, how does Vern hope to recover his development costs?

With his drunken sailor spending habits, and what has been reported in the press, development costs may approach a half-billion by the time the first production unit will deliver.

Let's run some amortization numbers for these costs not including cost of capital:

Deliver 10,000 units add $ 50,000 per unit to cover development costs
Deliver 5,000 units add $100,000 per unit to cover development costs
Deliver 2,500 units add $200,000 per unit to cover development costs
Deliver 1,667 units add $300,000 per unit to cover development costs
Deliver 1,125 units add $400,000 per unit to cover development costs
Deliver 1,000 units add $500,000 per unit to cover development costs


The obvious conclusion is that this program can only pay off with delivery rates unprecedented in the industry.

I have one other question for God's gift to aviation. What in the hell were you doing during the two years when Pratt was developing a new engine? Probably 40-50% of the certification items could have been cleared during this time. As of the posting of this blog, your seats are not even certified. You did not need a engine hanging on the airplane to qualify the seats or do fuel slosh tests on the wing or dozens of other tests required for certification.

I suspect the certification process was not understood at Eclipse. That was evident when the FAA Type Inspection Aurthorization was scheduled at the front end of the certification program. The FAA will not issue a TIA until the company completely tests the airplane and proves it safe for FAA personnel to board and begin flight testing. The FAA is not in the business of going where no one has gone before. The airplane has to be pretty well wrung out by flight and ground tests before the the TIA is issued.

But I like the weasel words on the Eclipse web site justifying rescheduling the TIA to the end of the program:

"After discussions with the FAA, it was determined that a more appropriate means to accomplish this would be to allow development flight tests to be used for compliance testing as long as we have an appropriately conformed test article and approved Test Plans."

What you should have said is, "now we understand what we have to do to get a TIA!"

But other things have annoyed me as well.

In the fall of 2004, Vern addressed a CEO forum at the Forbes Magazine's New York headquarters. Bloin and goin, he tells them he is using high-end technology like Ungraphics, a full 3-D CAD and CAM system that had been previously limited to use by only the largest of the aerospace companies. I had to burst his bubble and send him pictures of our high-end Unigraphics full 3-D CAD and CAM system Tom Prescott and myself purchased in 1983 (with the help of second mortgages on our respective houses). The system was used to design the Prescott Pusher, which for the record, was the first ever airplane fully designed in a computer. I am still running Unigraphics today in my tooling business.

Then somebody wound his spring again. Off he goes spouting off about his FARO Laser Tracker, being on the leading edge to utilize this new technology that can ensure component accuracy to .0001. There you go again Vern, you have exaggerated the accuracy by a factor of 10, it's .001. The device while very expensive ($120,000), is common in the industry. We have had ours for several years.

So last summer, I'm flying United Air Lines to attend the Oshkosh show. I thumb through United's in-flight magazine and there is an article by Patrick Heck, Manager of Flight Training for United. He announces the United tie in with Eclipse and proclaims this is the first time a major airline will provide training for a business jet manufacturer.

Partick, you have been hanging out too long with Vern, and his BS is infectious. So I had to send you a letter with a copy of an article from the 60's showing a picture of United's Learjet and their plan to train Learjet pilots. For the record, the United training program did not work out so LJ went to Flight Safety and asked them to manage an in-house training program which became the standard for nearly every major general aviation manufacturer today.


Part 4.

Vern claims to have over 2,000 orders which means his production line is sold out for the next 3-4 years. Why then, all the promotion and self-promotion?

Air shows, city marketing tours, advertising and other promotions are all a drain on company resources. If I were running the program ( and I am glad I am not) I would husband all of my resources and concentrate 120% on certification and getting a firm grip on empty weight.

It is almost certain the airplane will come out heavy. If the weight issue is as bad as I think, then you don't have much of an airplane and deliveries will never reach the levels required to be profitable and enable Eclipse to recover development costs. Better you cut your losses and fold your tent.

Williams did not do the company any favors when it failed to deliver as promised. So Raburn played the hand he was dealt and tried to recover by using a different engine. But airplanes are point designs and through the re-design it is compromised. For instance, the tip tanks. No self-respecting aircraft engineer would design an airplane in the 21st century with tip tanks. It takes the fuel in one tank just to offset the weight and drag penalty for both tanks.

Raburn has several strikes against him. He is trying to build a cabin-class business jet lighter than what may be physically possible plus he has some real cost recovery issues to deal with. Any added expenditures to try and fix his technical problems will only add to the costs and the difficulty of getting out of his sea of red ink.

It is premature for Vern to be taking bows, but perhaps this is as good as it is going to get.

As for the Collier Trophy, let's just say I am embarrassed for the National Aeronautic Association which selects the winner.

14 comments:

flyerave said...

Stan,

I must say that after reading your entire blog that you have written things that are not true. I am not an investor nor owner of Eclipse positions, but I have been following the VLJ market for years. I feel that if you really look at why you have gone to such great lengths to criticize Eclipse, more specifically, Vern Rayburn, that maybe you should spend a little time telling all the bloggers why you do not supply parts to Eclipse Aviation anymore. You, and your company, were unable to keep up with the demand that you contracturally said you could. You failed. Your education is impressive, but your character I question.

Stan Blankenship said...

flyerave,

Feel free to itemize the points that are not true and we will discuss them one-by-one.

The objective of this blog is to provide some balance to the absolute untruths coming out of Albuquerque.

My company does not build parts, only tooling for other companies to use to build parts. I have never had a contract direct with Eclipse. Several years ago we built Eclipse tooling for Southern Stretch Forming Corp. in Denton, Texas.

I have talked with other companies who have more recently danced with Eclipse and no longer do, it is a company as a supplier, I would steer clear of!

If you visit my company in Wichita, we have recent performance awards displayed in our lobby from two of the three largest general aviation companies in the world.

As for character, that is for others to judge, but I play the game straight up.

Flyerave said...

1.)”I believe the underlying motive for the program was to use the airplane as an opportunity vehicle to launch a large IPO so that he and the investors could cash in big, just as so many of his fellow pioneering computer and dot.com associates did in the 1990's... companies that promised the moon and never made a penny.”

Please explain why you “believe” this is true. Most investors stand to lose a lot of money if this aircraft doesn’t see its full potential. Check me if I am wrong but, Eclipse is not profitable as of this date.

2)”Speculators have "visions of sugar plums dancing in their heads." They are betting they can re-sell the positions at a premium. Their bet is on an airplane they believed would fly 375 kts at 41,000 ft and have 1,280 nm range. As the previous post suggests, the airplane Vern will deliver may only fly 330 kts at 30,000 ft. A lower cruise altitude means higher fuel flows: range may be reduced to under 900 nm.

With reduced performance, the premium value and the odds of selling the aircraft change dramatically. Even legitimate buyers who intend to utilize the airplane for their own purposes may have second thoughts. This could result in a flood of cancellations.

As of today “speculators” ARE getting approximately $655K per aircraft premium. This value is and will hold for the Platinum position holders. Why? Because with the CPI-W index in place on the later positions (Gold, Sterling, etc), it inherently raises the price and marketability of those early positions. Now POTENTIAL buyers that would not expect delivery until 2008-2009 simply have to pay the premium and get it in January 2007. Considering the current economic climate, this $655K premium is not that much to a buyer that will have to wait 2-3 years for one to come off the manufacturing line. This is true of EVERY aircraft I know of, if CPI-W is not included in the original purchase agreement.
Secondly, the performance issues have not “stopped” but I agree have had a few setbacks on the second-hand or “position swapping”! We live in an on-demand world, and customers/clients/buyers want it NOW, and most people are willing to write the check. This is a social issue, not an Eclipse Aviation problem.

3)”A Tale of Two Airplanes”

“Aircraft owners can opt out of the system and block all reports for their aircraft which Eclipse has obviously done. But six of their flights since the First of July have passed through the filters and the data is on the web (at least until Eclipse reads this post):”

What are you really trying to say with this post? To my knowledge, these are all certification flights. Do you know something that leads you to believe that you “caught” Eclipse Aviation in the act (i.e.not meeting performance numbers)? In my opinion, this is a CHEAP shot at Eclipse, and is unwarranted. There is some underlying issue here that is not exposed in your post.


4)”Once this poor bird gets above FL 250, it is about out of climb. Compare the operational numbers with the Eclipse published numbers:

"A 41,000 ft ceiling avoids most severe weather"
Time to climb to 35,000 ft - 19 min
Cruise speed - 370 kts

Excuse me Vern, are you building one airplane and selling another?”

I believe that if you listen to the conference call (posted on this blog), that you will hear that Vern says (paraphrased, b/c I am too lazy to listen to it again) “ I flew a CJ2 for years, and this airplane outperforms the CJ2 in the high altitude environment”.My point is, the CJ2 is 2x the money, 2x as expensive to operate, and the market is saturated with CJ2. Do you not consider the CJ2 a successful airplane? The Eclipse 500 is providing an aircraft to a market that has been under-served in the past. All aircraft manufacturers have setbacks. How many wing configurations were on the Lear 24/25? Mark i,Mark ii,Mark iii,etc. I flew it, and honestly its TOO many! Lets not even mention the A/D’s on the aircraft! But the Lear 24 is still a viable aircraft. The market continues to exist for the Lear 24, even though it will bankrupt an owner in gas!

Here is a few to chew on. Chat with you soon.

-FlyerAve

Flyerave said...

Stan,

Are you still there? I am waiting for your response to my posts. I hope that we can continue the debate. I hope to chat with you soon.

-FlyerAve

Stan Blankenship said...

flyerave,

Am on the road...visiting another start-up company that I will write about later in the week.

Will respond to your posts in a couple of days.

Stan Blankenship said...

flyerave,

Am not ducking any part of your September 26 comment but after you read the lawsuit post today and twinpilot's 10-03 comment to the "TC Update Post", and you still have comments, please state them and I will respond.

But I would ask you if you know of specific transactions where buyers have actually paid a $625,000 premium or whether that is just the asking price?

As far as high altitude performance, the Eclipse was sold as a 41,000 ft airplane. As late as June of this year, the Eclipse website portrayed a full gross weight airplane climbing to FL 410 and cruising at 375 kts.

After the late June reduced performance announcement, Eclipse maintained the 41,000 ft claim but never said at what weight.

The profiles on www.flightaware.com provided some window into the aircraft's performance or lack thereof. In all cases, the airplane took more than 19 minutes to get to FL 350 (as advertised) and we don't know if the airplane was at full gross weight at takeoff since most flights were around 2.5 hours in duration.

One of the F&R flights did amuse me however. The September 28th flight from Boise to Albuquerque. The flight log showed them smokin, 350 kts at FL 410. I thought maybe I underestimated Vern's little pocket rocket so I checked the winds at altitude and guess what? The jet steam flowed in nearly a direct line from BOI to ABQ at 50 kts.

As far as the conference call, I have never been able to get my computer speakers to work so I have not heard the "word".

The 64a109 airfoil (9% thick) on the Lear's was the best available at the time. I suspect today, a designer could pick a 12% thick natural laminar flow section that would provide more lift, lower drag, provide room for more fuel with a deeper cross-section for a stronger, lighter weight wing box.

One of the interesting mod's was Dee Howard's who reduced wing drag by thickening the trailing edge of the flaps and ailerons. It worked.

But the 24 is still viable today because it has performance that is tough to beat but I suspect most are parked after the engines are out of time.

Flyerave said...

Stan,

Thank you for the reply. When I hadn't seen a response for a few days I figured you were busy.

I searched for the twinpilots comments and could not locate them. I will have to get back to you on that.

1)Your question:"But I would ask you if you know of specific transactions where buyers have actually paid a $625,000 premium or whether that is just the asking price?"

A1)Yes. I could not possibly disclose names, but I know of at least 15, maybe more, transactions that are generating the premium of $625K. This is simple mathmatics, not Eclipse 500 specific. The fact that "platinium" position holders (locked in at $995K) were NOT subject to CPI-W. The current price for a 2009 position BEGIN at or around $1.56M, but those individuals have to adjust with the CPI-W index
(approx. 3.1 to 3.25%).It is this reason that the premiums are being paid.

2) The flightaware.com data is subjective. Why subjective? Because your interpretion of the data is different then my interpretation of the data. My point is, you have no idea what tests were being completed when the flightaware. com was relaying the information. Do you know that Eclipse was testing actual climb rate to 41,000 feet? You have stated yourself that you did not know all of the test parameters. YOUR QUOTE: "The profiles on www.flightaware.com provided some window into the aircraft's performance or lack thereof. In all cases, the airplane took more than 19 minutes to get to FL 350 (as advertised) and we don't know if the airplane was at full gross weight at takeoff since most flights were around 2.5 hours in duration."

I believe that this data set would have to be discarded. Why? Because of too many varibles are not known!

3)"One of the F&R flights did amuse me however. The September 28th flight from Boise to Albuquerque. The flight log showed them smokin, 350 kts at FL 410. I thought maybe I underestimated Vern's little pocket rocket so I checked the winds at altitude and guess what? The jet steam flowed in nearly a direct line from BOI to ABQ at 50 kts."

3A) Once again, we do not have enough information to induce a theory or hypothesis.

I simply believe that you have rushed to judgement. Unless you are actively involved with the certification and flight testing you could not possibly know the facts. I believe firmly that common sense dictates in this position. To clarify, WE DON'T KNOW.

I look at the developmental progress of the Eclipse 500 and I know that owners are not "running on the bank" to get their deposits back. The majority of position holders cannot wait for the delivery of their aircraft. You pessimistic stance does no good. You have doubts, I have doubts, but I would never run out and start a blog. I return to my orginal position, There is something deeper involved that is not being expressed in your various posts.

The lawsuit that was filed has absolutely nothing to do with performance issues. I will not discuss what the lawsuit is about on this forum, but I suggest that you re-read the filing.


Thank you. I look forward to your response.

Stan Blankenship said...

flyerave,

You realize we are off the radar screen down here but that is OK.

twinpilot's comment was on my Sept 25 post. Also some really strongly worded comments from others appeared this afternoon on the Oct 4 post. Some of the comments relate to the spec orders as well.

I understand the mathematics of the premium but it will come down to supply and demand. If there are more sellers than buyers, the premium price will go down...more buyers than sellers, the price will go up.

I happen to believe and as bambazonke commented today, many of the air taxi operators will opt for selling their positions rather than trying to eke out a profit in the difficult charter business.

I agree that few will cancel because of the reduced range situation. Most people will only want the airplane for 400-500 mile trips anyway. As you well know, most business jet flights are three pax and under 600 miles.

However, the reduced performance gives the buyers an excuse to bail out and I don't think we are done with performance reductions.

Does flightaware reflect a true rate? Other than noise abatement, there is not much justification for climbing at partial power and F & R flights are supposed to be by definition, true operational flights.

IMO the flightaware profiles probably reflect two pilots on board, mission fuel plus VFR reserves.

Don't you find it curious that of all the aviation writers who have flown the airplane, none have been above FL 320? There was always some ATC limitation or some nonsense excuse.

This blog was started because in April, Vern was still talking about charter rates approaching full airline coach fare. Empty weights and performance numbers that I knew would not hold up. Claims for friction stir welding that were not true. Claims that the industry was "fossilized".

I have been working with business jets now for 44 years, probably longer than anyone else in the world and have paid my dues. Frankly, I resent his past arrogance and think today he might have a better understanding of how difficult it is to develop new aircraft. His next lesson will how difficult it is ramp up production.

When the blog started, I only planned one post. Then I recognized the need for the second one and they just kept coming. There are drafts for four more and then there will need to respond to what is said at NBAA.

With regards to the lawsuit, the plaintiff alleges Eclipse wants to cancel the orders so that they can resell the positions at higher prices.

This allegation is consistent with the blog that has maintained the company is probably upside down with the first several hundred units.

As I have told others, when you type in the web address, you type the word "critic" and "blog", it is not Vern's fan club site.

Stan Blankenship said...

flyerave,

When you ask why I write this blog I often wonder myself? But tonight's introspection reminded me of an another incident where I was the only one speaking out.

After the Payne Stewart Lear crashed up North, the first media speculation was some kind of structural failure.

I managed the test program on the Lear 23 and we pressurized the fuselage (with water) to 21.5 psi. The structure was so strong it failed my test rigs several times. We broke the airplane only once. A structural failure? No way!

So I called NBC news in New York and they gave me a number for a news producer in Washington. I told him my background and gave him my opinion. He took my phone number and 10 minutes later Bob Hagger called me from the crash site.

We spent a lot of time on the phone that day and by the time he went on camera live for the 5:30 broadcast he had a diagram of how the pressurization system worked and his script was information that I had provided.

We talked everyday for the rest of the week and my words in the afternoon were on the TV that night.

Neither he nor I ever drew any conclusions, just discussed possible causes; structural failure was never one of those causes.

Why did Hagger talk to me, because in these situations, the companies will not provide any information and as it turned out, mine was pretty accurate.

Why did I raise my hand to speak? Well, somebody had to!

Flyerave said...

Stan,
Thank you for the quick response. I wanted to address a few items in your last post.
Your Quote:” I understand the mathematics of the premium but it will come down to supply and demand. If there are more sellers than buyers, the premium price will go down...more buyers than sellers, the price will go up.”
A) This is not currently happening in the “second-hand” or “position swapping” marketplace. Your response is a simple theory of macro-economics. You are correct in saying Supply up, price down. In my experience this is not currently happening in the second hand marketplace for the Eclipse.
Your Quote: “ I happen to believe and as bambazonke commented today, many of the air taxi operators will opt for selling their positions rather than trying to eke out a profit in the difficult charter business.”
A) I am only aware of two big players in the air-taxi model to date: 1. DayJet. They have not mentioned anything that would suggest that they will sell there positions in the ‘second-hand” market. 2. OurPlane. I have not seen or heard anything that would suggest that they are going to put their aircraft back on the market.
I do know that when any fleet purchase was made through Eclipse Aviation that there were stipulations associated with a fleet agreement. Without re-typing the agreement, it said (paraphrased: “ buyers involved with fleet purchases cannot re-sell those aircraft for a period of two (2) years.” Eclipse insisted on this clause because fleet buyers were given priority delivery dates.
Your Quote: “ However, the reduced performance gives the buyers an excuse to bail out and I don't think we are done with performance reductions.”
A) This is 100% False. Buyers that signed a purchase agreement were not allowed to bail out after the 1st delay in certification. Eclipse offered to those buyers a one time chance to have their deposits returned. After that time, the purchase agreement stated (paraphrased “Eclipse Aviation must terminate the program in order for buyers to get a full -refund”) This is not going to happen. I agree that some of the initial buyers changed their mind after this point and put their aircraft (delivery position) on the second-hand market, but most did not. Hence, those buyers were committed.
There is some more to be written here. Those buyers that did place their position back on the market ( and charged a premium of 625K-655K) Eclipse noticed and changed the policy for position holders. This policy change would charge a fee to be paid to Eclipse for transferring the ownership IF it was within 6 months of delivery. I have seen some buyers pay it, other would not.
Your Quote: “ Does flightaware reflect a true rate? Other than noise abatement, there is not much justification for climbing at partial power and F & R flights are supposed to be by definition, true operational flights.”
A) Your correct about the power during climb. I agree and concede that portion of my response. But, www.flightaware.com is not informative enough to draw any conclusions.
Your Quote: “ This blog was started because in April, Vern was still talking about charter rates approaching full airline coach fare. Empty weights and performance numbers that I knew would not hold up. Claims for friction stir welding that were not true. Claims that the industry was "fossilized".”
A) Vern did take a pretty stern position during that time. I don’t know for sure but, I am sure that he was extremely disappointed in the fact that he would not make his original certification date. Can’t fault the guy for trying! HaHa.

My main objective with responding to your post was to find out a little more about the Lear 35 accident with Payne Stewart.
My knowledge of Lears is obviously less than yours but, I was under the impression that they didn’t turn the bleed “on” (In front of co-pilots yoke) coupled with the fact that the O2 bottle was probably turned “off”. I distinctly remember that our operating specifications required us to turn the O2 “off”on a post flight, because the system leaked. Along with this, I remember an issue with the indication marks on the bottle itself( arrow actually pointed to the “off” position?) Even further, the gauge (located on the pilots side) indicated “line” pressure.
I have not read the NTSB report,but that was my recollection of the accident. Along with a 500 hr. Captain (low for Lear pilots) and a FO that was brand new?
I have over 1000 hours in various Lears (24/25/35/36) and this is what I remember about those “fantastic” aircrafts.
Are you going to be at NBAA?

Stan Blankenship said...

flyerave,

A) If there are things written in this blog that are not true then they should be corrected.

I am not the only one who suspects the air taxi operators will dump their positions for a quick and certain profit, so if you would, I would like you to explain the fleet contract stipulations up at the other end of this blog where everyone else is reading.

B) I think it was flight guy who first reported the revised agreement that would allow Eclipse to further reduce performance and the buyers would have no recourse. It sounded so audacious, I did not believe it.

Did the buyers also sign away their right to back out if the airplane is 36 months late and the CPI has sky-rocketed with doubled fuel prices?

Also if you would, mention the revised contract that said the only way a buyer could cancel the contract is if Eclipse terminates the program (which would only happen if they run out of money and would not be able to refund the deposits anyway).

There are few purchase contracts that can't be broken one way or another.

C) You are correct on the suspected cause of the PS accident.

My college room-mate was working at Boeing-Vertol as a flight test engineer when Lear needed the same for the Model 24 program. So I arranged an interview and he was hired. After 15 or so years in flight test he became our accident investigator and later head of certification...a credible fellow.

After he retired, I asked him about the accident and it boiled down to pretty much as you described except no one can figure out how they could ignore the aural warning which they would have to mute on a regular basis. The other revelation was the fact there had been 3 or 4 other similar Lear accidents with the same suspected cause.

By the way, as the Learjet accident investigator, he was a very busy guy!

D) I used to attend the NBAA on a regular basis to see people I knew in the industry...but I could walk the aisles for three days and not see anyone I know.

E) The upcoming Cirrus announcement for a single engine jet will be another issue for Eclipse. I would expect similar performance with lower initial cost and lower operating costs.

Flyerave said...

Stan,

Again thank you for your quick response. I appreciate your feedback on the PS accident. I believe that the Aural alert does have to be answered. If I remember correctly, that alarm went off at 8900 ft.?

I do want to discuss the purchase agreement that fleet purchasers had with Eclipse but, I am not comfortable putting that information on the blog. Sorry. I just have too much on the line to make a "post" on this blog.

I can mention that the current legal battle is with a foriegn company that purchased 100 aircraft from Eclipse. This lawsuit discusses some minor performance issues, but primarily it has to do with this company putting their 100 aircraft back on the "second-hand" market.

Both the planiff and Eclipse have valid arguements and ultimately it will take a judge to decide. Beyond that I simply do not want to discuss any thing else regarding the case.

Original purchasers of the Eclipse, were given a one time chance to receive a "refund", beyond that Eclipse has some pretty significant terms that would not allow "buyers" to terminate their contracts.

I apoligize that I am not willing to discuss this is greater detail. I have enjoyed the debate between us, and appreciated the ability to discuss these issues on your blog. I simply can not go into greater detail! I hope you can respect my position.

Stan Blankenship said...

flyerave,

Feel free to comment any time you like but I would not want you or any one else to compromise their position over this blog.

The Eclipse pages are turning one-by-one with or without this blog. The airplane is not going to go away tomorrow or ten years from now. We can't predict the future, but I am pretty certain the story is not going to read like Vern has predicted.

Anonymous said...

11/14/2006 04:45:15 PM EST
Albuquerque Journal (NM) (KRT)

Nov. 14--A Swiss startup company that alleged Eclipse Aviation illegally canceled delivery of its planes has dropped its lawsuit against the Albuquerque jet maker.

Aviace, one of Eclipse's first big customers, sued the jet developer in late September, alleging Eclipse bumped its first order further down the production line, then later canceled it for fees Aviace claimed it did not owe.

Aviace requested Eclipse either reinstate its delivery schedule, or pay unspecified compensatory and punitive damages. It also sought a preliminary injunction barring Eclipse from reassigning any of its preordered jets to other customers.

Aviace, through its local attorneys, filed a motion to dismiss the suit Monday.

In denying Aviace's application for the injunction last week, U.S. District Court Judge Christina Armijo wrote that Aviace, not Eclipse, had incorrectly interpreted the terms of a 2002 agreement between the companies.

Aviace did, in fact, owe the disputed $634,000 deposit under the terms of the contract, she wrote.

Additionally, Armijo wrote that Aviace had changed its business plan from a charter and fractional jet program to one that called for selling the earliest-delivered planes to other customers for higher prices -- which was not part of its original contract with Eclipse.

"Aviace has not shown a substantial likelihood of prevailing on the merits of any of its claims," Armijo wrote.