Tuesday, May 15, 2007

Back into Focus

In the previous post, Boenning & Scattergood scaled back their expectations for Eclipse and IS&S. Whytech furthers the B & S position with two pointed questions and his answers:

Here are the big picture issues:

1. Can Eclipse continue to raise the capital necessary to buy the time necessary to get the airplane right, ramp production, and get the service centers stocked and staffed to a level to support the fleet?

My experience as a private equity investor says maybe, but probably not. Eclipse investors and Board are very near the limit of their patience with this project. Savvy new investors putting in substantial capital at this point are going to write the rules, and they won't be kind to current investors and management, IMHO.

My back of the envelope calculations indicate that another $500 million minimum will be required to see this through, allowing for the kind of uncertainties which have surfaced to date, especially delays, which are the primary driver of cash burn at this time. Capital (time) will solve the technical/certification issues eventually.

2. Is the market there to sustain the business model?

IMO, no, but I have been wrong on such issues as many at least as may time as I have been right.

When the owner/non-pilot comes to understand the limited utility of the EA500, and the time and dollar investment required to use a private aircraft as a routine traveling machine, this market will be gone. "Millionaires" will not want to ride around squeezed into this little airplane if they can afford anything more comfortable and status enhancing.

WT

88 comments:

flyger said...

Ken Meyer said...

You are revising history to suit your vision of the world.


Really? Your distortions are amazing.

"the problem was discovered shortly after the first delivery of a Mustang (a company demo plane) last November"

The word "shortly" was added by the reporter. No such word was uttered by Cessna. Also, "shortly" is not defined to be days, weeks, or even months. You seem to think it has a numerical meaning. What is the "number", Ken? What day did the glitch occur if you know so much?

That version jibes with the emails I myself received from Cessna saying they would deliver S/N 4 and S/N 5 in January.

There are no such emails. You do not have emails saying they would deliver airplanes in January. Please post them to prove me wrong.

As we all know, they did not do that, and now we know why.

No, your mind pieced together a dream about why.

Your version is that they developed a glitch in February and halted deliveries in January because of it.

There never were any deliveries scheduled for January. You made that up in your mind. The glitch happened on Feb 11th. This is well documented. The Garmin service letter was Feb 28th. This is well documented.

It seems to me that's an Alice-in-Wonderland mixed-up view of the world where cause follows effect, but if it makes you happy, that's fine by me.

Do you feel the need to put down others and make stuff up to make you feel less sorry about your situation? What you wrote above surely applies to you in spades!

In the end, it doesn't make any difference. The thrust of your argument is that Cessna has been around longer and has more experience developing jets.

Is that a revelation to you?


It is to Vern! It is amusing to see him piss on the industry and then fall flat on his smug little face.

I bet the Collier trophy committee is very embarassed now. It demeans all the other winners. Eclipse won on promises and PR, not what the trophy is supposed to stand for.

airtaximan said...

flightcenter:

from the FI article you posted:

"Around 1,300 of its orders are from six air taxi companies, some of which are scarcely more than paper companies"

- Hmm...6 air taxi companies have orderd around 1300 of Vern's planes...really?...Dayjet had ordered more than 1400 themselves... if we ADD the other 5 air taxi companies' planes perhaps the number will go down to 1300? I wonder what the real "orders and options" from the 6 taxi-wishfulls really are...

more from the article:
"Raburn is also quick to point out that almost half of Eclipse’s orders come from what might be called traditional customers"

- really? so half the order book (Dayjet plus 6 other air taxi companies have more than 1400 really - maybe 1600, 1700 ?) is from traditional customers - this would be another 1400-1700...that would be around 3300 orders, right? I think they were claiming around 2200 at the time. Vern being very conservative I guess..

plus from the article:
"750 orders are from owner-pilots, many of them owners of ageing piston aircraft"

Is this the THIRD half? OK, its part of the second half - or is it part of the total 2200 or so?

...and, where's Ken's new market he's been talking about lately - the surprise market his wife anticipated, when even HE did not think it would pan out? when pressed for some details to better understand this new market...he ran and hid... maybe he had to ask his wife what the market was? I wish he'd tell us - he brought it up...

** seems like a lot of BS to me...then account for 4 years later, the order book is only a few hundred more (by some mathematical cogetation, I guess) and you have your "recipe for disaster".

Whytech, what do you think?

They make it?
They are toast?

when?

FWIW, I think he can rasie more money! I love a track record... this guy's been phenominal (no offence embraer) at raising money.

airtaximan said...

x-eclipser,

"2500 Total=
1400 Dayjet
+750 Owner Operators
+ 30 Linear Air
+ 3 Dole Foods
leaves
+317 to Other Companies
That number has GOTTA include everyone's options."

- how many total do you think are options?
- what happened to the other 4 (Dayjet/Linear = 2) air taxi companies)


PS. Dayjet's number is 1440 (but hey, whose counting, right? 40 planes at roughly $1M - its in the noise level at this point!)

Ken Meyer said...

EO387 wrote,

"Didn't the limitation of the database put the ceiling at FL240? The DJ's are obviously above that right?"

Oh foul ball!!

You're throwing reality into this wet rag party.

But, yes; you are absolutely correct. FAR 91.205:

"Flight at and above 24,000 feet MSL (FL 240). If VOR navigational equipment is required under paragraph (d)(2) of this section, no person may operate a U.S.-registered civil aircraft within the 50 states and the District of Columbia at or above FL 240 unless that aircraft is equipped with approved distance measuring equipment (DME). When DME required by this paragraph fails at and above FL 240, the pilot in command of the aircraft shall notify ATC immediately, and then may continue operations at and above FL 240 to the next airport of intended landing at which repairs or replacement of the equipment can be made."

So, yes; obviously the DayJet aircraft have DME. The detractors are just reaching.

Incidentally, you do not actually have to have DME to fly in RVSM airspace anyway.

Ken

Ken Meyer said...

eric wrote,

"As I mentioned a few months back, it wouldn't be too fun sitting in that airplane with no APU to run the PACKs for air-conditioning."

Eric, don't you think DayJet will just pre-position APU's at each of their Dayports? The Eclipse has a really nice electric vapor cycle system that keeps the plane comfy cool with just ground electric power. And it works--even in really hot weather--unlike a lot of aviation air conditioners.

Take a look at this picture:

Eclipse with APU

When it's hot in Albuquerque, they just run a guy out with this thing to keep the AC running for the turnover. My guess is DayJet will do exactly the same thing. Odds are, they'll want to save the batteries by doing APU starts anyway, so why not use it to run the AC, too?

Ken

Gunner said...

Ken-
As so often happens in your haste to defend Le Petit Avion, you're mixing up your issues, resulting in a nonsensical reply.

The RVSM limitation was (as you so eagerly point out) not due to the DME problem. (The previous DME inop limited flight to FL240).

So, if we're talking 28K limits for non-RVSM, why would you possibly respond by explaining to us the limits for DME?
Gunner

sparky said...

Ken,

That's a great idea. All dayjet has to do is station one of these babies with personel to run it at each of the thousands of airports they plan to fly to.

Once again, common sense is thrown to the wayside in order to make the argument for both Eclipse and Dayjet.

what's with the pitot fix?

airtaximan said...

Kenny...

That'd be a GPU - APUs are normally installed in the tailcone, but whose counting.

and... what about all those "per-jet" flights to non-Dayports... are they going to position these around all the GA airports, so that when someone charters, or when someone goes to a Day-stop (as opposed to a Day-port) they can remain fresh and clean smelling, as well?

I think you are onto something here, thogh. Have you called Ed about this plan?

Ken Meyer said...

gunner wrote,

"why would you possibly respond by explaining to us the limits for DME?"

Because Coldwet and you have repeatedly told us the plane has no DME. Just this morning, I seem to recall you saying you still had lingering doubts because Eclipse had not made a public-enough announcement to you (which of course is silly).

EO387 correctly pointed out that there are many flight tracks above FL240 so the DME is obviously working.

That's it; that's the point. It works. You can all now stop saying it doesn't.

Ken

sparky said...

Ken,

One other major drawback to your plan for cooling...

It's not so much the heat, it's the humidity. You mentioned that when it gets a little hot in ABW they roll out the GPU and Presto!!!! nice cool airplane.

Works out great for the relatively low humidity found in desert climates, care to try it out in a swamp, AKA all of southern florida.

Ken Meyer said...

sparky wrote,

"That's a great idea. All dayjet has to do is station one of these babies with personel to run it at each of the thousands of airports they plan to fly to."

Sparky, there are just 5 Dayports right now. It's true that you can hire a whole DayJet aircraft to fly to one of many additional locations (known as Daystops), but they are unstaffed by DayJet personnel.

The routine flights will all be, for now, between the 5 Dayports, and presumably will represent the bulk of the DayJet activity. Each is staffed with personnel, and it makes perfect sense to me that they will supply each with GPU's as well (thanks, AT for the correction). As to the Daystops they may wind up going to, I imagine they'll do what everybody else does in the charter world--probably fly in, drop the passengers off and leave. So what?

"You mentioned that when it gets a little hot in ABW they roll out the GPU and Presto!!!! nice cool airplane...care to try it out in a swamp, AKA all of southern florida."

I did try it in the sweltering humidity of Oshkosh last year and the planes seemed very comfortable to me.

I was pointing out that with just 5 major cities initially that they will fly back and forth to, DayJet pilots are unlikely to have that big a problem with the Florida heat because they'll have A/C operating on the ground. And it doesn't seem to be a major concern for pilots--DayJet says they're having no problems finding good ones despite the locale. Those pilots who think it may be too hot for them should obviously look elsewhere. Ho hum.

Ken

airtaximan said...

Sparky,

all good things to consider when your dayjet is going to impose a stop along the way... to re-heat/re-humidify the cabin.

I wonder how long it takes to grab a line guy, get him to pull the GPU around to the plane, hook it up, and... are you even allowed to do it with passenges on board? Well, they'll be in the restroom, anyway, right? During refuling...nope...

Estimated turn time...what do you think 1/2 hour? 45 minutes? This should provide ample time to hook up the GPU to cool down the cabin
for a while...

hmm...

airtaximan said...

Ken:

Dayjet's revised their plan, to include charter...er, I mean per-jet, and they have Daystops, too...so this means they will fly to more than 5 airports.

They are going to need a lot of them their GPUs...

Gunner said...

Kenneth-
Kindly show me where I have argued that DME is Inop since they got it working. Of course it used to be Inop and I think it was a fair subject for discussion at the time. YMMV

In this case we're talking RVSM and you're talking DME. Why not just lecture us about oxygen requirements above 12,500 ft to make your point that "it's in there"? It would make as much sense as your current line of non-reason.
Gunner

Eric said...

Ken,

As ATMan pointed out, the GPU provides electric power to the aircraft through a generator driven by a gas/diesel engine. An APU is installed in the aircraft and runs on JetA and can provide Bleed Air, Electric Power, and sometimes Hydraulic (I think there's a couple of older airplanes that have a hydraulic pump on them... could be wrong).

So the Eclipse's A/C is all-electric? Is there no Air Cycle Machine like many other small jets? Most jets use bleed air for the ACM and then bring that air into the cabin for pressurization. However, if the A/C in the EA500 is electric and not receiving bleed air, where does the source of pressurization air come from? Is there a pump on the engines?

I'm not trying to attack you with questions, just curious about how the air conditioning, pneumatic, and pressurization systems are set up. Your extensive knowledge of the airplane is far better than my extremely limited knowledge.

ColdWetMackarelofReality said...

Ken,

I was going to let this slide but alas I cannot help myself, out of my desire to help you and others.

As 'delivered', and Eclipse has forced us to use that term loosely, as 'delivered', the airplane ceases to be legally equipped for synthetic DME (limiting to below FL240), GPS Nav (dead reckining, vectors, or VR\JR), and therefore RVSM (below FL290), when the initially installed GPS database expires.

Again, IF the modifications are not made BEFORE the installed GPS database expires, the plane still, cannot be flown above FL240, LET ALONE in RVSM airspace, without a special clearance.

This is Cert 101, and Part61\91\135 101 Ken. The equipment called out in the type design ceases to be legal for synthetic DME, GPS Nav and therefore RVSM when the original GPS database expires.

Now it could certainly be true that Eclipse is making those mods shortly after delivery, or at least hopefully before the original database expires, but without those mods (displays and USB dataloader), certainly even you have to agree the plane cannot be flown in airspace requiring a legal and functioning DME (above FL240 in general, or in RVSM airspace specifically), once the database expires right?

The FL270 tracks are likely because the flight crew is not RVSM qualified, REGARDLESS of the status of the plane - RVSM is a two-part certification, airplane (group or individually), AND Pilot.

airtaximan said...

eo24,

what's the eta on your plane?

Eric said...

ColdWet,

If DayJet's pilots are all experienced on jets how is it that they are NOT RVSM trained and qualified?

I might be remembering this wrong but RVSM training was mostly ground school on equipment requirements and tolerances and radio lingo.

Example, the two primary altimeters do not agree (yes, they are set to 29.92" Hg) and are off by X feet. It so happens that X is outside the tolerance envelope so you must inform ATC "unable RVSM due to ______."

It was that kind of stuff. Again, if these are retired airline guys or guys coming from charter, how are they not RVSM qualified?

Ken Meyer said...

"So the Eclipse's A/C is all-electric? Is there no Air Cycle Machine like many other small jets? Most jets use bleed air for the ACM and then bring that air into the cabin for pressurization. However, if the A/C in the EA500 is electric and not receiving bleed air, where does the source of pressurization air come from? Is there a pump on the engines?"

The Eclipse is designed to provide conditioned air to the cabin on the ground with just electrical power provided either by the starter/generators or a GPU. Cockpit and cabin air conditioning are provided for 2 separate zones despite the small size of the interior (that's a nice feature coming from a plane where the pilots are always hot and the passengers are always cold).

A vapor cycle system includes two compressor assemblies in the forward equipment bay. This system can be operated regardless of whether the engines are running or not. It provides ground and in-flight cooling as needed as well as dehumidification.

There is also a conventional bleed-air system for pressurization, heating and cooling. It includes two sources of bleed air: high pressure air (this is the source of cabin air) and fan bleed air (this is the source of cooling for the bleed air heat exchanger during ground ops with engines running; in flight cooling is via ram air).

The cabin air distribution system distributes air supplied by the bleed air system or the vapor cycle system according to temperature and mode.

The vapor cycle system also has a dehumidification mode that can be used in flight.

Ken

WhyTech said...

eric said" "I might be remembering this wrong but RVSM training was mostly ground school on equipment requirements and tolerances and radio lingo."

Right! RVSM pilot training can be done online at King Schools in 1 hour for $199. Just did it myself recently

WT

WhyTech said...

atm said
"Whytech, what do you think?

They make it?
They are toast?

when?

FWIW, I think he can rasie more money! I love a track record... this guy's been phenominal (no offence embraer) at raising money."


The Company as we know it today: 90% toast, 10% make it.

The airplane: 25% toast, 75% make it as part of another organization.

If the money is coming from Bill and friends of Bill, maybe he can do it. If it is coming from savvy private equity investors, they will need to do their own business case which shows the prospect of a 5X to 10X return to take on the risks involved. Possible from here? Yes. Likely? No.

If it seems that I am waffling, I have been at this long enough to have learned that no one has all the answers. If I got this right every time (or even most of the time) I'd be flying my own BBJ rather than a PC-12.

WT

airtaximan said...

whytech,

thanks...no waffle, just reality. Appreciated.

What do you think of dayjet? How much do you know about them?

Anything on any other air taxi companies that you see as interesting would be appreciated.

ATMan

WhyTech said...

atm said

"What do you think of dayjet? How much do you know about them?"

Most of what I "know" about DJ I "learned" from this blog. What I believe DJ will need to succeed:

1. Access to capital; it may be possible to make this idea work on a small scale, but it appears to me that scale economies are important.
2. Acceptable customer economics; if the models presented here are anywhere near close, customers wont pay these prices for the "customer experience"
3. Positive customer experience: seems unlikley based on my current understanding of the way DJ intends to operate. I know I wouldnt pay the fares projected to ride squeezed in with 2 strangers going places I dont want to go, and with no lav UNLESS this was the only way to get there.

WT

gadfly said...

From Albuquerque on Saturday:

Saturday, May 12, 2007

Airline Business Plan Flies on Thrift

By Andrew Webb
Journal Staff Writer
New Mexico Airlines president Greg Kahlstorf says his 33-year-old company aims to do what other airlines flying into small communities can't— turn a profit without government subsidies.
The new airline, which plans to begin service July 1 between Albuquerque, Carlsbad and Hobbs, is a subsidiary of Hawaii-based Pacific Wings Airlines. Pacific Wings is a 33-year-old company that originally got its start in Nevada before moving to the Aloha State.
After a decade of experimenting with new routes and a fleet of efficient Cessna turboprops, Pacific Wings last month began serving 10 cities on five Hawaiian islands without any federal Essential Air Service subsidies whatsoever.
The EAS program, which has a yearly budget exceeding $110 million, faces annual congressional attempts to slash its funding. The Bush administration has proposed halving it and asking local communities to contribute a percentage if they want air service.
Kahlstorf says the company realized in the 1990s that it would have to begin weaning itself off the EAS subsidies.
"The communities we serve in Hawaii, these are communities that have a hard time coming up with money to fix the streets," he said of a debate over funding matches of 10 percent to 15 percent. "We knew we had to find a business model that exists independent of the subsidies."
The company replaced its fleet of older twin-engine aircraft for the single-engine, nine-passenger Cessna Caravan, a well-tested, 20-year-old design used in freight and passenger services around the world.
With less expensive aircraft, the company was able to drastically reduce prices, which helped to mitigate low patronage that has plagued EAS-subsidized flights nationwide since the program was created in the late 1970s in response to impending airline deregulation.
Kahlstorf says the company chose New Mexico for expansion because of its similarities to Hawaii. "Here, these small communities are islands in the desert separated by these vast expanses of land," he said. "But people have the same need to participate in legislative processes, to travel to seats of commerce and culture. We have to create the incentive to get people out of their cars and into a plane. We've found that $50 is the right price point."
New Mexico Airlines outbid Mesa Air for the EAS contract to serve Hobbs and Carlsbad last month. But the company plans to expand the service based on customer feedback and utilization, Kahlstorf said.
New Mexico Airlines plans to have a fleet of three Caravans here, and slowly expand service to El Paso, Midland, Odessa and Lubbock, Texas, Portales, Clovis, Santa Fe, Silver City and Deming. It will employ about 25 to 40 at its Albuquerque headquarters and at regional airports.

Eric said...

Ken, thanks for that write-up... either you have great technical writing skills or that's lifted straight from the AFM. Exactly what I was looking for.

So the EA500 has a conventional air conditioner as well as the normal jet stuff. Is the bleed air run through an air cycle machine before being vented into the cabin? Or is it just cooled with the intercooler?

airtaximan said...

eric:

"So the EA500 has a conventional air conditioner as well as the normal jet stuff"

ask "why?"

gadfly said...

Everyone may wish to remember that there was an attempt earlier today to focus on the financial viability of Eclipse. Airconditioning on the ground, etc., is certainly part of the issue, but in the mean time (as demonstrated by the article in the Albuquerque Journal on Saturday), the competition seems to be focused on the "real" market . . . and Eclipse may soon be an "also ran" . . . or more correctly, a "wannabe also ran". And when the dust settles (as it soon must settle), there is going to be a cleanup of major proportions, with many unhappy people.

Unfortunately, many of those unhappy people will be paying the price of this interesting experiment, without even knowing "What is an Eclipse 500?"

'Just my thoughts as I observe from a distance.

gadfly

WhyTech said...

atm said "So the EA500 has a conventional air conditioner as well as the normal jet stuff"

ask "why?" "

Part of the "why" is that air cycle machines do a poor job of cooling on the ground, and require an engine (or APU) to be running to work. The VCCS works better on the ground and can be used to pre cool the acft if the VCCS is electrically powered. A fairly common arrangement on turbine powered acft and probably not something for which Eclipse can be taken to task, except perhaps for the weight penalty the VCCS imposes.

WT

Niner Zulu said...
This comment has been removed by the author.
gadfly said...

9Z

Your comments remind me of some of the first information given to us students in flight training . . . about the purpose of the "Pitot Tube" . . . as many new students had a wrong impression as to its true purpose.

'Sorry for the interruption . . . please continue!

gadfly

WhyTech said...

niner zulu said
"Dayjet is going to need one more thing to succeed - a cheap supply of Depends to pass out to the passengers, or vinyl seat covers ;-)"

Agree. I sort of lumped this and similar issues into "positive customer experience."

WT

gadfly said...

Sorry, Dayjet, but "The Gods Must Be Crazy" has already been done, and the Coke bottle routine is no longer environmentally acceptable . . . even though the need is still real.

gadfly

(Now 'how bout we get on with the financially viable issues?)

Stan Blankenship said...

Posted below the horizon, but deserves better visibility:

avtechpro said...
well, gentlemen. i can only say that as i work at eclipse i see first had all the problems. but as i recall most new aircraft development encountered quite a few years of getting it right. yes the avionics is a nightmare due to integreation. there is a lot of behind the scenes work going on to correct that. i am not going to bash the comapny for the vision, nor attack anyone here. i enjoy reading the blog here and while i see the problems everyday, IF it can be pulled off would be something special.

2:49 PM, May 15, 2007

Trust me avtech, apart from what you might think from reading the blog, everyone here is appreciates the hard work and dedication of those working on this project and wish nothing but the best.

gadfly said...

Dayjet

Your business will never work in New Mexico, at least not with the "500" . . . we love our "Hatch" green chili too much.

'Nuff sed!

gadfly

airtaximan said...

speaking of Dayjet..

Tangled web being weaved...

"Per-seat, on-demand start-up DayJet announced this morning it has hired former NASA chief strategist Dr. Bruce Holmes to be the company’s new director of air systems research. In the role, Holmes will work on expanding DayJet’s reach by dealing with various federal and state agencies. Previously, Holmes served in senior positions for both NGATS and Small Aircraft Transportation System at NASA."

If I remember correctly this is the key NASA guy who went to congress for funding for all this stuff...

nice career move.

sparky said...

Business plan? Dayjet doesn’t have a business plan, they have a business idea. Can you really have a business plan if you have no idea how much capitol it’s going to take to keep your aircraft in the air?

Jet complete is being re-worked, does anybody here think it’s going to be good news for the owners when the final figures are released? Maybe that’s why there’s been no set pricing for the Dayjet operations. We keep hearing anywhere from $1-4 per passenger mile.

If I take my car to the shop, I don't want to here it's going to cost between $500 and $2,000 to fix. This tells me the mechanic doesn't know what he's doing.

Personally, I’d like to know how he raised $50M. I want to know how you walk up to a group of investors with an unproven market, with an unproven aircraft, having no idea what the cost of operation is going to be and still walk out with a check for 50 mill.

Ken, You seem to be pretty good at cut-n-paste from the manual, what's the inspection interval for the windows? Or do we just display information here that supports your argument.

Gunner said...

Sparky-
You've not been following closely. Ken admits that he's not been allowed to peak at the actual AFM that is being released with the cert'd aircraft. (BTW, I give hime high marks for that admission.)

Anyway, he's only been allowed to see the PIM, which is a a Perfect World AFM. I think Ken has earned his place in The Inner Circle and should be allowed to see the actual AFM.
Gunner

Ken Meyer said...

sparky wrote,

"there’s been no set pricing for the Dayjet operations. We keep hearing anywhere from $1-4 per passenger mile."

I think you would benefit from reading about the DayJet pricing system as you apparently missed some important elements of it.

DayJet has been crystal clear that the pricing depends upon your flexibility when you schedule. If you have a very tight scheduling window, the price is higher than if you are flexible on the departure and arrival times.

That said, the company has also made it crystal clear that you will be quoted a definite price for a particular trip and they will honor that price regardless of whether or not they ultimately find anybody else to fly in the aircraft with you.

Ken

Niner Zulu said...
This comment has been removed by the author.
sparky said...

ok, so the information he released earlier either wasn't from the manual, or on one of his frequent calls to vern he was forbidden to release data deemed detrimental perpetuation of the Eclipse myth?

I like how he regurgitates reems of data to support his position, but when asked about anything that doesn't agree with his argument he goes mum.

Pitot fix?

windscreen inspection intervals?

Jet Complete pricing?

we keep hearing that this is the most efficient aircraft in the history of aviation and has the highest reliability of any aircraft in production today.

Well, the price keeps climbing,(both aquistion and operation) and if I recall correctly, the entire fleet was grounded for bent wings. How is this reliable again?

gadfly said...

Ken

For us dumkopfs, please refresh our memory as to the price range, from high to low, on a trip with DayJet . . . assuming just a single passenger. If it is destination dependent, give us an example of mileage . . . anything you like. Pick the best, and the worst.

Thank you.

gadfly

Gunner said...

"DayJet has been crystal clear that the pricing depends upon your flexibility when you schedule. If you have a very tight scheduling window, the price is higher than if you are flexible on the departure and arrival times."

Nothing revolutionary in that. The airlines price the same way. Only difference is they give you an ACTUAL DOLLAR AMOUNT for a flight from Boston to New York, First Class and Coach; same day and two week notice.

So, how much is the flight from Boca to Tallahassee again? They go operational in less than 45 days!
Gunner

Ken Meyer said...
This comment has been removed by the author.
Ken Meyer said...

gunner wrote,

"Ken admits that he's not been allowed to peak at the actual AFM that is being released with the cert'd aircraft."

Rich, you understand that there isn't a single document representing "the actual AFM that is being released with the cert'd aircraft," right? The difference between the "AFM" (technically PIM) released to customers via the Avio Flight Bag (and available for sale at the factory) and that distributed with individual aircraft is that the actual AFM is serial-numbered and specific to that particular aircraft, containing W&B information that will, of necessity, vary from aircraft to aircraft, and subjected to a formal update mechanism.

I don't think there is anything "perfect world" about the publicly-released AFM--it tells you straight out that a number of things are required to be labeled "inop." I suspect a cleaned-up, "perfect world" AFM would be, ahem, cleaned up and "perfect world."

Which makes me wonder if any of you who said you were buying the AFM ever actually did.

Ken

Ken Meyer said...

gunner wrote,"So, how much is the flight from Boca to Tallahassee again? They go operational in less than 45 days!"

Customers who wish to consider flying DayJet simply go online to find out and book their flights. The price depends upon the information you provide when you request a particular city pair and time window. That's the beauty of it. DayJet's computerized reservation system computes millions of possibilities to determine whether or not your request can even be honored, and if it can, the system then offers you a price at which the company is willing to commit no matter what happens after that.

Airlines lose money for many reasons; one of them is that they don't have the kind of pricing flexibility DayJet has.

Ken

airtaximan said...

Spark:

when you say:
"Personally, I’d like to know how he raised $50M. I want to know how you walk up to a group of investors with an unproven market, with an unproven aircraft, having no idea what the cost of operation is going to be and still walk out with a check for 50 mill."

Well, I don't think you know the whole story...

Remember, Vern and Ed go way back. They support eachother's "business plans". They show up at eachothers' meetings and tell all the BS in the world so they can both get funding.

Dayjet's support for E-clips:
- the perfect aircraft for our business, after all the any farming, NASA insider info, and Rusiian rocket science available to mankind...PERFECT IN EVERY WAY

E-clips support for Dayjet:
- we're guaranteeing the lowest cost for them. They are our preferred customer, with advantageous positions in our rubber orderbook. We'll get them planes as needed, don't worry. We're setting up service in THEIR market first..look, the service center in Gainsville is going up. We're upgrading their planes for free. They will have advantageous maintenance, well BELOW everyone else, because they are our largest fleet customer...

Investors like the FACT that Ed has sunk a lot of his own money into Dayjet - reportedly most of $20 million...other investors include his buddies who worked with him at Citrix. Yup, they got some additional capital, also some money was earmarked from PWCanada, because no one wanted to finance the e-clips planes for their fleet. This is a big deal.

So, one con man is a big deal, and those like Ken have bought VErns BS hook, line and stinker...

Put Ed into the mix, and you've got two con men backing each other.. working together...

ever see "The Sting"...

'splains a lot...

gadfly said...

My favorite “saying” is:

Ignorance can be fixed, but stupid is forever!

So, I asked the man a simple question (about an hour back) . . . he did not answer the question. For his benefit, I’ll assume “ignorance”.

He either doesn’t know, does not want to know, knows but refuses to share his knowledge, or has some psychological problem with communication skills . . . or some other difficulties . . . or will answer in due time, when he's good and ready. He is most willing to take the time to respond in an “illusive” manner, taking the time of serious folks who are seeking intelligent answers (the purpose of Stan’s blogsite), yet unwilling to share what he claims to know. I do not pretend to understand his motives, nor his behavior. (Or maybe I do know!)

Regardless, I will “write him off” as an authority on all future discussion of that particular subject.

The End!

gadfly

(A simple polite answer would be, “I don’t know” . . . and that would have been more than enough.)

ColdWetMackarelofReality said...

Somebody please tell me he did not just say that.

Airlines have COMPLETE pricing flexibility and to say the contrary is illogical.

Airlines lose money for a few reasons, not many. Cost of fuel, pax load, overhead (admin, support, training, insurance), cost of flight crew, cost structure of airplanes.

Do you think DayJet will not be subject to the same basic economic rules?

How a company deals with each of these individually as well as in the big picture, results in profit or loss.

For example, SWA hedges its fuel costs years in advance; picks its hubs, schedules and routes very carefully to maximize load; has a single type fleet for common training savings; has a good but not fantastic pay scale; and leases their planes. Oddly, they do better than others, hmmmm.


Do you think that even 1400 of the 'remarkably efficient' wonderjets will burn anywhere near what Delta's fleet does? They will probably pay less than you and me at the pump, but the DayJet's could fly all day every day and not rack up the fuel bill Delta or United or American sees - it will not even be a hiccup.

DayJet intends to employ MORE PILOTS THAN DELTA, but will have only a TINY fraction of the passenger carrying capacity (literally 3-5% at 2-3 POTENTIAL revenue seats).

People are not going to pay MORE for a no frills, bumpy ride in a plane the size of a Yugo.

Remember, the same travelling public thought the 19 seat Beech 1900 and the old 30-something seat Swearingen's and Embraer's were TOO SMALL, and they don't particularly care for the Turbo Taco (ERJ-135) the Turbo Burrito (ERJ-145), or the venerable CRJ - just wait 'till they get a load of this little thing up close and personal, as they walk out onto the ramp to strap it on.

Gunner said...

CWMoR-
If I hear, "That's the beauty of it.", when referring to an unproven business or product, just once more, I swear I will die of laughter.

"That was the beauty" of the 1920's stock market runup.

"That was the beauty" of the DotCom profits.

"That was the beauty" of the Moller, too.
Gunner

gadfly said...

Mr. Mackarel

Please keep your voice down during visiting hours. You should have left “reality” with the receptionist . . . our patients must not be disturbed. Actual facts cause our “family” to become disturbed . . . and we don’t want that, do we? Now I must ask you to keep your voice down . . . we’ll serve supper, soon, some Jello for dessert, with some nice warm milk and our medicine and we will all get a good night’s sleep.

Nurse Nora, RN (aka gadfly)

Stan Blankenship said...

Was rummaging thru my old e-mails and ran across one that when received in early March, was so unbelievable I refused to repeat the information on the blog.

Quote.

"Ed, who had put in the $11M, asked for his money back from Vern, who gave him most of it. He left something like $1,000,000
(perhaps a tad bit more) with Eclipse for the orders.

Now that I think of it, this may have happened later on in 03. The point was, and the amazing thing was that almost 1430 order/options (i did not remember exact numbers) were held by Jetson Systems with very little money down. (Even if he kept the $11M on a $750+M order that is a joke!)

Problem here is I am have a funny feeling Vern is still quoting those 500+ orders from Jetson Systems (plus the 715 options) which DayJet did not announce, as
part of his order book."

End quote.

The info is not such a great revelaton today.

BTW, I have seen other documents that support the 1,430 DayJet number...715 orders...715 options.

ColdWetMackarelofReality said...

Since I brought up DAL (Delta), let us take a closer comparative look at these two concepts.

DAL employs 6,500 pilots to fly approx 470 aircraft, on roughly 1600 flights per day. This equates to approximately 14 Capt\Co-Pilots per aircraft.

DAL flies 86,007,000 passengers annually, with an average load of 143 passengers per flight, on about 600,000 flights per year. Each plane basically flies 3.5 to 4 times per day

DAL employs over 8 additional people (dispatch, flight attendants, mechanics, engineers, etc.) for every pilot, taking total employment to over 60,000.

Average pilot pay at DAL is $157,000 (2006), leading to a burdened cost per pilot of appr. $235,000 per year. This is $1.527B JUST for pilot pay.

DAL had revenues in 2006 of $16.2B on roughly 600,000 flights (appr. $188 per pax, per flight), and they LOST MONEY.

DAL has about 80 aircraft on order, worth about $4.8B.

DAL currently has a market cap of $4.4B.

ON THE OTHER HAND

DayJet seeks to employ 7,000 pilots to fly approx 1400 aircraft, on an unknown number of flights per day. This equates to approximately 5 Capt\Co-Pilots per aircraft.

DayJet will fly an unknown number of passengers annually, with an unknown average load of passengers per flight - but not more than 3.

DayJet will employ an unknown number of additional people (dispatch, flight attendants, mechanics, engineers, etc.) for every pilot, taking total employment to an unknown number but estimated at near 30,000.

Average pilot pay at DayJet has been publicy stated to be about $50,000 starting, leading to a burdened cost per pilot of appr. $75,000 per year. This is $525M JUST for pilot pay.

DayJet will have unknown revenues on an unknown number of flights, (unknown $ per pax, per flight).

DayJet has about 1430 aircraft on order, worth about $1.4B.

DayJet currently has raised $50M.

I do not care how you add it up, I do not see how this can work.

At 3 times the cost of the average Delta fare ($564 vs $188), each Dayjet would have to carry at least two passengers, on 27 flights PER DAY, to have the same basic revenues - revenues at which DAL loses money.

27 flights per day means even with an optimistic 10 minute turn time, 100% dispatchability, 100% crew availability, and ZERO passenger delays, ZERO weather delays, ZERO ATC delays, oh, and NO DEADHEADS, the average flight MUST be less than 250 miles to work in the time allowed in a PERFECT WORLD.

Of course, this is all just supposition on my part, could be that Dayjet will only need to achieve half of the revenues of DAL to justify their fleet size, or maybe they will charge 6 times the average fare on DAL.

It's the new math, drives the kids crazy. With apologies to Billy Crystal's character in Running Scared.

WhyTech said...

Some additional RVSM info:

Each specific acft must have an FAA approved RVSM manual and MEL, and be issued an FAA Letter of Authorization to operate in RVSM airspace, and must complete an RVSM monitoring flight over one of six designated ground stations (or one of a few equivalent methods of verifying altimetry accuracy) within 6 months after issuance of the LOA. The MEL includes two altimetry systems which are certified to meet the RVSM "height keeping" requirements as installed in the specific aircraft.

The pilot must also have completed an FAA approved training program.

If all of these conditions are not met, operations are not generally permitted in RVSM airspace.

So if Eclipses are operating at or above FL290, it is likley that they have met these requirements.

WT

WhyTech said...

RVSM addendum: MEL also requires an operational autopilot system which is approved for RVSM operations.

WT

EclipseOwner387 said...

Gunner said,

In short, I accept the fact that Mike's jet has a current database and grant benefit of the doubt that this is a permanent fix. But there still IS some doubt.



This is what you said when I pointed out that Mike was RVSM at FL350. From this I could only conclude you confused the RVSM issue with the DME issue (which both are not issues now.)

Anyway, if I misunderstood your post I apologize. But it seems clear you felt Mike Press was able to go RVSM because he had an updated database. Maybe a poor choice of words?

BD5 Believer said...

FYI - and you can file this as un related social commentary, but Embraer announced today that they are raising the price of the Phenom 100 by about $100K.

And the reason for the price increase....please be seated...
market demand is such that they feel they can commmand a higher price for their product...over 400 orders to date, and months away from 1st deliveries.

Sounds to me like they have a compeling value proposition if they feel they can get price this early in the game.

Remember, this is not a price increase due to unplanned cert issues, production snags, the increases in raw materials or volume shortfalls or any of the many other reasons why OEM's raise prices...this is pure free market pricing! demand is up ergo price goes up!....makes this old capitalist smile :-)

Not trying to throw any of the current or future VLJ OEM's under the bus...I just found it interesting.

cj3driver said...

RE: Cessna 250 orders vs Eclipes 500, from owner operators and the “order of magnitude” which Ken claims.

I will bet of the 500 to 700 estimated owner/operator orders on eclipse books, over half will be traded. There must be over 50 resales alone currently on the market more than a hundered have changed hands (my est). Many are for deliveries over 2 years away or longer. My guess is many of the original depositors have hung in there because of the “equity” in their position and not for the merits of the jet.

Cessna, on the other hand, does not allow transfers on thier contract (although there may be ways around it). In fact, they dicourage speculators and screen each purchaser. At the time of IPO (Aug 02) Cessna began taking orders for the mustang at 2.3M, Eclipse was still offering planes for $837! At that price, the men were separated from the boys and I believe mostly “buyers” not “speculators” made deposits on the Mustang. This is probably true because there are very few Mustang positions on the market today. Most of the original buyers will take delivery.

Eclipse, on the other hand, made it clear from the get-go that they will allow transfers, in fact they encouraged investors, and I'll bet there were a lot of speculators that have hung in there since the $837,500 IPO. It would be interesting to find out, of the first 100 deliveries to owner-operators, how many were the original purchase holder. My guess.... less than half.

Bottom line, I, for one do not thing there will be that many more Eclipse 500’s in the hands of owner operators, after 5 years of production, than there will be in the Mustang. Certainly not an “order of magnitude”!

BTW - Cessna has firm orders for over 300 Mustangs sold out till 2010…. And I bet they meet deliveries (price and schedule) :)

EclipseOwner387 said...

9z,

Why would we fly below FL240 again for service? I guess I am confused again. Please explain the FL240 limit to me. It is getting soooo old but since you are obviously the expert I am interested.

Ken Meyer said...

CJ3 wrote,

"Cessna has firm orders for over 300 Mustangs sold out till 2010…. And I bet they meet deliveries (price and schedule)"

Okay, I'll take that bet.

Heck, they've already missed their delivery schedule! What is this baloney about how Cessna always delivers on time? They don't! They promised 2 Mustangs in January, and everybody in the world knows they didn't deliver those on time.

Eclipse delivered its first plane after Mustang, but already has about 4 times as many planes in the hands of customers as Mustang.

It doesn't look to me like Cessna is much more reliable on its delivery schedule than Eclipse, and it certainly hasn't delivered anywhere near as many aircraft. I think you may be living in a Cessna-fanatic fantasy world.

Ken

airtaximan said...

coldwetmack:

nice job on the Dayjet business model...

but try to figure out the required economics on a per aicraft basis, given what we know about Dayjet from PR, plus reality for some assumptions...

- payload/range limits
- pilot pay etc
- 5 pilots per plane
- fixed and variable cost
- 5 days per week, 6AM-9PM (?)
- load factor
- impute ticket price for profitabilty

Then figure overhead (big fat number, I'm sure...)

see what you come up with.

Lloyd said...

Sparky Said:

"You mentioned that when it gets a little hot in ABW they roll out the GPU and Presto!!!! nice cool airplane...care to try it out in a swamp, AKA all of southern florida."

I do this all the time with our Pilatus, LAS, and Florida, Mexico and works great! Takes about 1/2 hour to cool the airplane well if sitting in the hot sun, but not a problem. The Eclipse has a much smaller cabin. Also we can use the Electric heaters with GPU to pre-heat the cabin in the winter.

anonymous avionics engineer said...

gadfly:

I think Ken may need some more anti-reality pills over there. Notice how he's starting to gag and vomit, making more ludicrous wagers, but still not backing them?

I think its Deleriums Eclipsaurus setting in, a really bad case. Must have been talking to Vern on the phone again today.

flyger said...

Ken Meyer said...

Heck, they've already missed their delivery schedule! What is this baloney about how Cessna always delivers on time? They don't! They promised 2 Mustangs in January, and everybody in the world knows they didn't deliver those on time.


False. The delivery schedule was 2 Mustangs in Q12007. "January" is something you made up. They missed that due to the Garmin bug. They have caught up. They are on the schedule they announced with the airplane.

Eclipse is not on anything resembling a schedule. They are not making the schedule they released 3 months ago. They are 4 years behind where they predicted at announcement.

Eclipse delivered its first plane after Mustang, but already has about 4 times as many planes in the hands of customers as Mustang.

Mustang customers seem to be able to use their planes. Only recently have Eclipse been really "in the wild". And what customers have isn't an "Eclipse", at least not what was promised. All of them have to go back to the factory to be rebuilt at some point. They can't yet do IMC, they seem to mostly avoid RVSM, no FIKI, and many of the cockpit gadgets don't work. They are prototypes.

It doesn't look to me like Cessna is much more reliable on its delivery schedule than Eclipse,

That's because you are a biased observer. Eclipse is 4 years behind schedule and Cessna slightly delayed two airplanes but otherwise made every milestone for the program. Clearly one company is more reliable than the other and it starts with a "C".

I think you may be living in a Cessna-fanatic fantasy world.

It really is funny seeing you claim others are having fantasies.

Being an Eclipse believer is really a religion, isn't it? Damn the heathens for thy facts shall not shake my faith!

I can see it now, when Eclipse fails, the believers will blame the critics for it saying "they failed because you spread false information about the company or the airplane". It will never be the incompetence of Eclipse that was the root cause. Just you watch and see...

ColdWetMackarelofReality said...

Ken,

Cessna announced the Mustang at NBAA in Sept 2002, they said it would certify mid-2006, they said first delivery would be Q4 '06, and they projected price at $2.295M.

They said it would do 340 KTS, have a range of 1,150nm and have a ceiling of 41,000ft.

They said it would have FMS.

How did they do?

The Mustang was certifed in September of 2006 (2-3 months late).

1st delivery was November 2006 (on schedule).

Price is now $2.6M, 10% price growth, including inflation.

The plane does 340 kts (without any post delivery modifications).

The plane will cover 1150nm on the originally announced fuel capacity (without any post delivery modifications).

The plane can go to FL410 (without any post delivery modifications).

The plane has a fully functioning FMS (without any post delivery modifications).

By comparison,

Eclipse announced at OSH 1998, they said it would certify in 2004, they said first delivery would be 2004, and they projected price at $775,000.

They said it would do 375 KTS, have a range of 1,400nm and have a ceiling of 41,000ft.

They said it would have FMS.

How did they do?

The Eclipse was certifed in September of 2006 (over 2 years late).

1st delivery was December 2006 (2 years late).

Price is now $1.525M (100% price growth including inflation). There is your order of magnitude difference.

The plane as certified will not do 375 kts, and requires post delivery modifications to make revised guarantees.

The plane as certified will not cover 1400nm on the originally announced fuel capacity, and requires post delivery modifications to make revised guarantees.

The plane as certified can not go above FL240 (let alone 410) once the initial GPS database expires, without post delivery modifications.

The plane has no FMS, and will not have FMS until late this year (according to the same guys who gave us the schedules missed above) when the ENITRE avionics suite is retrofitted.

Additionally, the plane currently cannot be flown in IMC due to freezing pitot issues, cannot be flown in FIKI, and has the other issues we are all painfully aware of.

Considering that Eclipse had announced it's first delay 4 years after the program started, and the Mustang was CERTIFIED 4 years after the program started, I think it is pretty obvious where your money is best bet.

Simply put - 8 years and nearly $1B (twice as long and 3 times as much as budgeted), or 4 years and perhaps $200M (on schedule, on budget), I think it is pretty obvious where your money is best bet.

Lloyd said...

Cold Wet Fish

Nice analogy between Day Jet and DAL. I've run the numbers too, but not to the degree you have and come to the same conclusion. Running a 135 operation I know the costs, and the business is not that different! I hope it works for them, but I do not see how.

mouse said...

Ken,

Most FBO's have 1 or 2 GPU's if they are big enough. Guess who gets to use them? The guy who buys the most fuel. Let's see, another jet taking on 300, 400, 1200 gallons vs. your EA-500 taking on 60 gallons.

Of course don't forget about prime parking spaces too. Get used to parking with the Skyhawks and Cherokees...

Unless the planes have reflective shields in the windows, the cabon will be well over 115 degrees in less than 10 minutes in the FLorida sun.

And the humidity? The electrical system just adores moisture. All those connectors and terminals will be so happy to give up continuity for a little "sweat".

I'll bet your pilot, and your friends will love soaking to the bone when you give them all rides in your plane too. The success of DayJet will be in the hands of those sweaty, smelly pilots. The passengers put their lives in their hands, their trust in the professionalism, and their repeat business when they are treated politely. Wonder how sweet those hot pilots will be? When it's hot tempers flare.

mouse said...

Sparky,

$50M was from friends, follow the trail. Much of it came from board members.

You are correct, DayJet NOW says $1-4, but just a few weeks ago it was still saying $1-3 Maybe Vern gave them a hint on the JetinComplete program?

mouse said...

Ken, Don't confuse "deliver" with "paid for". If the planes were delivered they would not be on the factory floor still. They may have been "delivered" financially, but physically they are still under construction.

Niner Zulu said...
This comment has been removed by the author.
cj3driver said...

Ken said;

……”I think you may be living in a Cessna-fanatic fantasy world.”

Ken,
Cessna fanatic….. I guess I represent that statement….. but fantasy world?,.......
Lets see…. When I ordered the CJ3 close to 3 years before projected delivery, and before the aircraft was certified, and before they had made the first delivery of any CJ3, They promised me;
385 KTS at FL450 with 35 min climb, 1725 NM NBAA range, 3,350ft BFL , 1,000lbs payload , a fixed price plus options, and a delivery month and year.

What did I get? 408 KTS at FL450 with direct climb 27 min. at MGW, 1881 NM NBAA range (actually more), BFL 3,150ft, 1,150 lbs payload, not a dime more than promised, and guess what? I took delivery on the exact month and year they promised nearly three years before. By the way, I didn’t have to pay 95% of the purchase price until after the acceptance flight (which went without a hitch).

Another interesting point, When Cessna had a cancellation ahead of me, they offered me a move-up to an earlier position….. at a premium? No… actually at the previous year price. I didn’t take it because the plane was already spec’d, but the point is, they don’t stuff other “fleet orders” ahead of commitments.

The CJ1 I bought in 04 was no different. Dispatch reliability?… after 925 flights and over 1000 hours logged on my CJ’s 100%!!!! I have never canceled a trip due to an AOG issue.

Cessna is a first class operation. Sales, production, delivery, service. After 3 years of experience with the company, I have had only minor complaints (which were fixed pronto with a smile).

Cessna Fanatic…….. maybe, but I could have been an Eclipse fanatic too. I put my deposit on a Mustang in 02. Back then Cessna told me I would get my aircraft in Q1 09. Guess what?.... I just got a letter, The Mustang will be delivered in Q4 08 ahead of schedule and …..specifications and price as promised. Do I think they will deliver?….. based on past performance, …… yes, and with a smile.

cj3driver said...

Is the Eclipse simulator up and running?
I have personally seen the Mustang Level D full motion simulator at FlightSafety. (another first-class operation) Cessna says they would not deliver an aircraft without simulator training. Another reason for the "supposed delay" of the first few aircraft. FlightSafety was a little behind (I think)
For me, an owner/operator, the simulator training is an invaulable experience. The insructors can put you in situations that would be too dangerous in the real plane. I look foward to my recurrent training. My insurance requires sim based training. I'm not sure how the underwriters are treating Eclipse not having a sim up and running. I hope Eclipse gets thiers going soon.

Ken Meyer said...

coldwet wrote,

"The plane as certified can not go above FL240 (let alone 410) once the initial GPS database expires, without post delivery modifications."


[yawn]

Here we go again with the "DME doesn't work" argument. How many times do you have to see planes flying above FL240 before you give up on that one?

But let's switch gears...here's what the owner of S/N 4 wrote about the aesthetics of the flight from St. Louis to Camarillo we all saw on Flightaware:

"I asked my wife today how she liked the flight from St. Louis to Camarillo, Calif in the Eclipse yesterday. (It was the first time she actually got into one).

"She said it was GREAT! She sat in the back the whole trip with her dog "Bear" in the seat next to her. Both slept a lot--Bear slept almost the whole trip.

"Her comments: "It was really really quiet. The seats were very comfortable. The flight was smooth--especially with the yaw dampner (our Cessna 414 did not have yaw dampner). The air conditioner worked great! The cabin pressurization was great--ears did not pop going up or plug coming down. We closed the window sreens and Bear and I felt safe and quiet. It was a very comfortable flight!"

"So there you have it folks--it does not matter that it does not come with FMS, FIKI, Flight Director, GPS moving map etc, etc. As long as Bear is happy, the wife is happy and its worth the admission price.

"Airplane is back in ABQ to get a few things fixed but should be back in the air on Friday or Saturday and will try to go up higher on the return flight to take advantage of the jetstream going eastbound. I can't wait to get back into cockpit--its so much fun to fly this jet."


Ken

cj3driver said...

"So there you have it folks--it does not matter that it does not come with FMS, FIKI, Flight Director, GPS moving map etc, etc. As long as Bear is happy, the wife is happy and its worth the admission price.

Coulda had that 30 years ago,..... or last year in a citation 500 for 700K.... a million bucks less.... you can buy a lot of fuel for a million bucks! plus you get FMS FIKI and a potty

WhyTech said...

cj3driver said:

"Cessna, on the other hand, does not allow transfers on thier contract (although there may be ways around it)."

Yes, there are fairly easy ways around it. I looked at this carefully when considering the purchase of a CJ1+. I went to Wichita and met with the contracts manager, and had discussions with various other Cessna personnel and buyers. The common way around this is to purchase the aircraft through an LLC; the purchase contract then becomes an (the only) asset of the LLC, and the LLC can then be sold without violating the Cessna contract. While I agree that speculation in Cessna positions is far less prevalent than in Eclipse positions, it happens. Check the Controller listings on any given day and you will see 4-5 Mustang and CJ positions for sale.

WT

Metal Guy said...

So can anyone think of a higher risk environment for poor Bear?

- No traffic awareness
- No certified moving map awareness
- No certified terrain awareness
- No certified GPS
- No icing capability
- No flight director
- No IFR capability

I’m sure it’s a blast to fly, but until all of the above are finished, it’s like REALLY WAY behind the safety curve.

Have to wonder when will they will actually, really for real, all kidding aside, complete the airplane and stop re-designing what they have over and over again? Really.

No FIKI - Poor Bear.

EclipseOwner387 said...

9Z,

Don't you think you should know what you are talking about if you are making claims?

Black Tulip said...

In retrospect many of the problems at Eclipse Aviation are related to management style. Some of the catch phrases used by successful CEOs include:

“Praise in public, criticize in private.”

“You can accomplish a great deal as long as you don’t care who gets the credit.”

“Loyalty downward begets loyalty upward.”

With these in mind….

A CEO should be careful about blaming his problems on companies such as Williams and Avidyne. It is a small world and vendors see how others are treated. Fewer vendors mean less choices and higher prices.

A CEO should avoid calling his competitors ‘dinosaurs’ since he may need to team with them in trade groups to fight government regulation and fees.

A CEO should make careful decisions on risk in new product development. Too much risk and the ‘disruptive technology’ disrupts the company, not the market.

A CEO should be careful about written and verbal statements, otherwise he could develop a reputation of over-promising and under-delivering.

A CEO should be careful about accepting a prestigious award such as the Collier Trophy before anything has actually been produced.

A CEO should be cautious about publishing an exaggerated order book based on questionable customer business plans. It may draw difficult questions.

A CEO should be price his product carefully and avoid the trap, “We will lose money on each one but we’ll make it up in volume.”

A CEO should avoid launching an unfinished product lest it draw comparisons to finished products from competitors.

The CEO should be careful about attracting a prestigious board of directors as they are used to, and expect good performance.

The reader might ask, what are the risks of violating the rules? The CEO runs the risk that an informed observer might start an Internet website that runs an active dialog with many participants. He runs the risk that the word ‘Critic’ might appear in the website’s title. It could contain unflattering, sometimes humorous, comments that are critical of the company.

This requires that depositors, praying that the product will be completed, rise in the defense of the company. Now having questioned the CEO’s ability in other areas let me give praise where it is due. The CEO’s ability to suspend disbelief among the faithful is a marvel to behold.

Gunner said...

Regarding Mike's "aesthetics" report:
I own a '94 Land Cruiser. I put nearly sixty grand into that sucker: LT-1 Engine conversion, custom rear end, Old Man Emu suspension, ARB lockers, front and rear, lift kit, custom made bumpers and winch kit and 36" tires...just to name a few.

When I took delivery 3 years ago, man was I a proud Daddy. Sure, it was loud and had a few drawbacks, but I could overlook those easily knowing I could qualify anywhere in the world as a "Land Rover Recovery Vehicle".

Then I took my first 4 hour trip and blew the tranny; then summer came, and with it, about $2K worth of mods to keep it from overheating when the AC was on. In the remaining 3 years since I "knocked the new off of it", I have never been able to trust it for a long trip; have replaced radiators, rear ends, alternators, computers, throttle cables, speedo cables, and fuel systems; but I stuck with it, because I spec'd it and had pride of authorship around it.

Two weeks ago I finally realized I'd had enough. I went out and purchased a Lexus GX470. When it arrives, I'll have my driveway pressure washed (again) and have the Land Cruiser trailered out to Texas to become someone else's headache.

I note that Mike's jet, with less than 50 hours flown, is back in ABQ for "repairs" for the remainder of the week.

Beta models are fine for software; they never become acceptable for mission critical equipment.
Gunner

EclipseOwner387 said...

Gunner,

Eclipse, Cirrus, Cessna, Diamond - any new design will have problems. The Cirrus has been crazy with early repairs. Usually simple but some have been very frustrating. My Malibu's have been much much more reliable than the Cirrus. My 2003 Cirrus reliability is improving with "fixes" but the years of experience and fixes on the Malibus has made it even more reliable. My point is this. Expect a similar experience with your DJets. It is unfortunately a part of the program on any new design. Otherwise why are there so many SB's and AD's? My BMW 2002 7 series was a nightmare with the new I-drive system. But I would not claim BMW is a crappy company just because they had an issue with a new design. They stood behind the product and transitioned me fairly to a 2004 model. Let's keep it real. Minor glitches and "fixes" is going to be a reality and if you aren't willing to accept that then wait and buy used when all the squawks are worked out.

WhyTech said...

gunner said: "knowing I could qualify anywhere in the world as a "Land Rover Recovery Vehicle".

Gunner,

You should have bought a Range Rover. In 30K miles, all I have done is change the oil and replace one set of front brake pads. (Much to my surprise!)

WT

Gunner said...

EO-
First off, you couldn't give me a Cirrus as a gift. Largely for the reasons you describe.

But let's get clear on this:
What we see with the Eclipse are hardly "minor issues". Every plane delivered comes with an IOU for MAJOR modifications.

If Diamond offers me a similar experience, I will be as publicly critical of them as I am of Eclipse; in fact, I simply won't take delivery. But Diamond has a history of delivering certified models; and they have NEVER come close to the comedy we see playing out in ABQ.

Poor comparison.

WT-
I've looked at and drove the Beemer, Audi, Hummer, Land Rover and Mercedes (had one). Lexus is the maker I hate to love; let's face it, they're favored octogenarians the world over! (Sorry, Gad, don't mean to date you!)

But, when you do the comparisons of handling, comfort, customer satisfaction, dependability, performance, braking, range, mileage, safety, amenities, user interface, cargo capacity and off road capability, the Lexus always comes out in the top couple choices.
Gunner

FlightCenter said...

ATM,

In answer to your question about how Vern could make the claims that he had 1,300 fleet orders in Flight International on 28 Feb 2006.

Simple answer - I'm not sure.

Remember at the time they still had Aviace on the books.

Let's say Vern was counting orders only and not DayJet options, then of the 1,300 Fleet orders claimed, we know they had:

715 orders from DayJet
112 orders from Aviace
30 orders from Linear Air

(That leaves 443 fleet orders unaccounted for, split across three customers we haven't heard of yet.) I have to say it seems unlikely that Eclipse wouldn't have announced air taxi deals of this average size.

At the time I do believe a number of air taxi folks (including Pogo) were in serious negotiations with Eclipse to order hundreds of aircraft. Vern may have prematurely included their statement of intention to buy as "orders" prior to the actual close which he judged to be certain. The Pogo guys were certainly telling a lot of folks at the time that their business plan was based on buying Eclipse aircraft.

Another possibility is that Vern is counting both his orders and options, but discounting the numbers.

Then you would have:

715 orders from DayJet
715 options from DayJet
112 orders from Aviace
30 orders from Linear Air

That totals 1,572 not counting the other 3 air taxi providers that weren't named. There is a high probability that Vern already knew the Aviace orders were going away and that DayJet and others were not going to meet their commitments, so he might have discounted the number down to 1,300 for the purposes of the interview....

FlightCenter said...

Speaking of Pogo, they are in the news today.

Pogo Bounces Back

This report claims that Pogo's business model will be to sell $2K per hour charter service using the Eclipse 500.

What do you think of the economics of that business model?

FlightCenter said...

Coming back to the economics of producing an Eclipse and the targets that Eclipse needs to hit to achieve breakeven.

Plastic Planes said 10:48 PM, April 30, 2007 - "Early aircraft probably have around 4000 direct labor hours in them (from weld to flight). Our goal was to achieve 400 hours once we hit a steady three a day rate. That's a relly small number."

PP (or other execlipsers),
Do you have any estimates for how many indirect labor hours it takes to produce an Eclipse?

I'd also be interested in how many additional hours you estimate are required after manufacturing release to get through production flight test, achieve CofA and final prep for customer delivery.

Finally, there have been a number of folks saying that breakeven will occur between 500 aircraft per year and 750 aircraft per year. Those numbers come from interviews with Vern and from other sources on this blog.

Can you let us know if the breakeven numbers of 500 to 750 aircraft per year assume a direct labor content of 400 hours per airplane?

ColdWetMackarelofReality said...

Ken, you can yawn all you want - it does not change the FACTs.

Answer this question.

Without replacing the displays and adding a dataloader, POST DELIVERY, that is, MODDING the airplane AFTER it is 'delivered', can the plane fly GPS Nav, above FL240 with synthetic DME, or in RVSM airspace when the initial database expires?

I will help you, any answer other than NO is pure BS.

The plane requires post-delivery modification to be legal for those activities after the initial database expires. As manufactured and as 'delivered' it lacks the ability to update the GPS database.

You need to get it through your thick skull that this is simply not normal for an aircraft.

I have flown experimental aircraft that were better designed, had higher levels of fit and finish, and had avionics that actually worked - including the ability, from day 1, with no modification, to update the GPS database, among other things

But this is not an 'experimental' aircraft, it is supposedly 'fully certified', yet many systems which are common on aircraft of the reported capabilities this one boasts of, are not certified or worse, INOPERATIVE.

JetProp Jockey said...

To parpahrase a comment by an earlier poster who is familiar with venture capital projects:

"It seems to me that based on the delays and cost overruns to date it will require another $500 million to provide the necessary cash to get the project to the point it is self sustaining.

If this sort of capital is to be provided by the normal people who get involved in venture projects at this point, they will not be kind to the initial investors or management"

Does everyone realize the implications of this statement?

It means that if a group were assembled to provide the cash to take Eclipse from today to a self sustaining company, the group would require a special position in the feeding chain of future cash. This means that they could require that before any of the initial investors, Vern and Bill included, get a penny of return or are able to sell their shares, the new guys must get their investment back plus some big return - maybe up to 100%. In effect they would have the power to tell all of the initial investors to kiss their investment goodby.

They would also most likely require enough seats on the board to be able to restructure the company, ironically, probably bringing a known performer from a dinosour company to run the show. Possibly with the dirction to find the price/volume point that generates the most and quickest profit. Possibly tell those with early deposits for low price planes to accept a price increase or get their money back with interest.

It all comes down to how tight is the cash supply. If more capital in needed sooner, rather than later, things could get interesting.

sparky said...

Ken,

Let me get this straight. Cessna, who you've attacked as both dishonnest and unreliable, left you waiting on the tarmac and you don't mention it for what, 48 hours?

I'm sorry, but BS doesn't quite cover it.

"I donated $10k."

"I'm buying a mustang also."

"We're going to be a two plane family again."

Ken, you just might meet the requirements for pathological liar. You should talk to Vern about a job as the new PR guy.

Also, Lloyd replied to my post about the E-birds air conditioning with:

"I do this all the time with our Pilatus, LAS, and Florida, Mexico and works great! Takes about 1/2 hour to cool the airplane well if sitting in the hot sun, but not a problem."

If I recall, Eclipse stated that they were removing the soundproofing to save weight in order to off-set the weight penalties of the aero mods.

Care to guess how much harder the air conditioning has to work to make up for the loss of insulation/sound proofing?

And ken, I believe one of the largest selling points of Dayjets operation was "On Demand" air travel. Now it seems that "On Demand" means paying a premium.

So, lets look at Dayjets pricing. Oh, that's right, you can't even look at the pricing structure without fist signing up for the service.

So, when i fill out my expense report, I'm going to have to explain that I had to pay a service charge just to LOOK at their price.

And in order to get a good rate I have to rely on some random traveler, on any given day is going to be leaving from, and going to, the same place I am, at the same exact time, oh yeah, neither of us has anything larger than a laptop bag.

sparky said...

Order book, one last time.

everybody is now talking about the 1400 dayjet orders.

What was the name of the company that Ed started first? Jetson something or other?

anyway, they ordered 1,400 jets.

Dayjet is a completely different company.

they have 300+ orders.

doesn't this add up to 1,700+ orders?

I know, orders and options are two totally different things, or least they used to be.

I think if Vern even hears the word "eclipse" uttered in pubic, he counts it as an order.