Friday, June 01, 2007


Where’s the Beef?


As one examines the details of the Eclipse program, it becomes increasingly apparent that there is little remaining that differentiates the acft from any other light jet except for the price point and physical size, and many believe that the price is not sustainable.
Lets take a look:
1. Engine: Pratt & Whitney – any competitor can purchase substantially the same engine.
2. Avio NG: COTS technology – any competitor can purchase substantially the same equipment.
3. Airframe: designed by EAC, but manufactured by Fuji and various other suppliers who can supply substantially the same functionality to others; there is nothing in the design that would indicate a significant, defendable cost advantage.
4. FSW: used on a limited basis, and expected overall cost savings is small as a % of total cost. EAC may have gained some specialized know how in FSW but as others have suggested this is not central to success.
5. Training: apparently qualified vendors, but likely higher cost than FSI due apparently lower volume.
6. Service centers: no apparent meaningful competitive advantage here; will have a higher cost position than Cessna unless comparable service center volumes are achieved.
7. Deice system: any competitor can purchase substantially the same parts from the same vendors..
8. Other systems: perhaps some innovation, but not clear that there is a meaningful life cycle cost advantage.
What I am looking for are large hunks of innovative, defendable technology which drive substantial, sustainable competitive advantage, especially lower costs and/or outstanding performance. So far, this advantage is not apparent.
Contributed by whytech who later added:
Now, I'll praise Elcipse to bring some balance to all this.
I do believe that the concept of the EA500 as advanced in 1998 was only microinches short of brilliant, but not particularly defendable. Where Eclipse could have gained some real competitive advantage would have been to take a stealth approach to this program, and execute flawlessly on development and production, getting to market in 2003 with a fully functioning airplane.
Instead, they spent a disproportionate amount of time trumpeting their cleverness to the world and collecting awards, and have shot themselves in virtually every part of their anatomy in executing the development and manufacturing program. As a result, they have compromised away most, if not all, of the competitive advantage they were clever enought to dream up. As is often the case where technologies are widely "shared," competitive advantage oftens comes from superior execution, rather than brilliant innovation.

70 comments:

Lloyd said...

1. Engine: Pratt & Whitney – any competitor can purchase substantially the same engine.

Not True: I believe that Eclipse has has the exclusive on the 610 for at lease three years




2. Avio NG: COTS technology – any competitor can purchase substantially the same equipment.

Partially true, but you have not seen all that AVIO can do yet.




3. Airframe: designed by EAC, but manufactured by Fuji and various other suppliers who can supply substantially the same functionality to others; there is nothing in the design that would indicate a significant, defendable cost advantage.

Partially true, Eclipse provided Fuji with the FSW technology and equipment. I believe that there are some limitations to what they can do for other vendors.




4. FSW: used on a limited basis, and expected overall cost savings is small as a % of total cost. EAC may have gained some specialized know how in FSW but as others have suggested this is not central to success.

True




5. Training: apparently qualified vendors, but likely higher cost than FSI due apparently lower volume.

Possibly, we will see......, but volume will definately not be lower.




6. Service centers: no apparent meaningful competitive advantage here; will have a higher cost position than Cessna unless comparable service center volumes are achieved.

Eclipse is trying to capture all of the maintenance revenue as well. If JetComplete sells as they want, they will have an advantage here. Many Cessna owners service their aircraft at non-Cessna maintenance facilities.




7. Deice system: any competitor can purchase substantially the same parts from the same vendors..

True




8. Other systems: perhaps some innovation, but not clear that there is a meaningful life cycle cost advantage.

Time will tell here... but they have made the parts to be easily replacable. LRU's. Time in service will determine if this is true.




What I am looking for are large hunks of innovative, defendable technology which drive substantial, sustainable competitive advantage, especially lower costs and/or outstanding performance. So far, this advantage is not apparent.


Again,, Time will tell.

Lloyd

gadfly said...

Where’s the beef? Appears to me that the “ABQ” crew is bustin’ their buns for nuthin! And they’ll never “ketchup”!

gadfly

Ken Meyer said...

Oh man, what would you guys call innovative, a plane that used levitation?

I think Vern Raburn summed up the goals of the program very nicely in today's Podcast:

Speed, safety, ease of operation, low cost of acquisition, low cost of operation.

How well they met those goals will not be determined by a bunch of unhappy guys on the Hater's blog. It will be determined in the marketplace. And guess what? They've sold a lot of these planes. And not just to air taxi operators. They've sold 3 times as many of these planes to ordinary owner/operators as the grand total of Mustangs on order.

Now some here may think they know more than the buying public. And maybe you do. But the buying public has an amazing ability to decide what is and is not working for them. They vote with their wallets.

Ken

gadfly said...

Levitation . . . as in taking off in any location at the wishes of the customer.

Safety . . . as in flying in all normal conditions, with instruments and “backups” that “work”.

Low Cost of Acquisition . . . as in walking in, paying for the aircraft, and flying away with a fully operational jet.

Low Cost of Operation . . . flying an aircraft, now, tomorrow, next year . . . with the assurance of always being able to be up and running . . . er, flying, without delay.

Gotcha!

gadfly

ColdWetMackarelofReality said...

Ken,

62% of the 'buying public' you refer to, is ONE CUSTOMER, who has put down an undisclosed amount against a vaporware $2B order. 62% Ken. The same 62% you insisted was not the case, only 239 or some other such nonsense number.

The total 'air taxi' order book, all smoke and mirrors such that it is, accounts for about 70% of the order book.

Get down to the meat and potato individual owner\operator orders and the numbers while good, are not outside of the realm of possibility for Cessna or Embraer or Diamond, or Piper.

Worse yet, the meat and potato numbers will result in a jet that costs about the same as the Mustang, but which will not have anti-skid brakes, will only have half the cabin volume, will only have a fraction of the support capacity, and will come from a company that has yet to deliver anything it promised.

Speed, safety, ease of operation, low cost of acquisition, low cost of operation.

Speed compared to what, Bonanza's?

Safety? I know things that would turn your hair white. Safety is first and foremost a CULTURE, and the culture radiates from the top. This is a company that has pulled publicity stunt flights at great risk and repeatedly demonstrated it was not ready for prime time re: paperwork, procedure and other BASIC quality and safety measures.

Other than the low cost of acquisition for initial deliveries which we all, even you, agree is ARTIFICIAL at present and DEPENDENT in the long run on the as yet unproven 'air-taxi' business model, NONE of these promises have yet to be borne out.

Mike Press his ownself complained about the DIFFICULTY of flying non-coupled VOR approaches and the lack of moving map or FMS functions for situational awareness not two weeks ago.

Cost of operation is so much more than fuel cost (typically equal to fuel cost if not, significantly greater), that your constant harping on fuel flow is beginning to grate my nerves. Yugo's did not burn much fuel, instead, they burned clutches, wheel bearings, light bulbs, control cables, and suffered from atrocious corrosion problems. Sure, it did the same thing a Ford Escort did at half the acquisition price and slightly better fuel mileage, but how many Yugo's do you see on the road today? Or in salvage yards. Here is a hint, there's nothing left, they rusted away.

One of my vendors has a great sign in his office that says something to the effect that 'there is nothing that a man cannot make a little cheaper, men only concerned about price are his lawful prey'.

With late '07 Eclipse 'positions' running $1.8M, and a Mustang running about $2.6M, the price gap is ever shrinking, while the credibility gap continues to widen, as Mustangs leave the nest, at FL410 for parts unknown, FULLY functioning, including FIKI, and with EASA cert in hand.

In business accounting there is a term for the value you place on something real (asset) and that you place on an intangible (goodwill). An asset is say a building you own, or a piece of equipment. Goodwill is less definite, say the 'value' of your customer base, or IOU's.

Seems to me the Eclipse is dependent on a significant amount of goodwill from its customer base.

How are all those Eclipse IOU's working out?

PubGrubber said...

lloyd,

Want to chime in on FSW. I think it saves more than is being given credit for. 7 of the 8 fuse panels has some form of it (some more than others). After watching people drill, deburr, countersink, and mechanically fasten a skin panel. The savings beyond just a time saving are very apparent.

Black Tulip said...

June 1, 2007

ALBUQUERQUE, NM (EAC) -- Eclipse Aviation announced today a new aircraft, the second in its family of Very Light Jets (VLJs). The company’s first offering, the Eclipse 500, has been renamed the Partial Eclipse. Vern Raeburn, President and CEO, commented, “I want all of our depositors and shareholders to know that this was a carefully laid out plan. We knew the pilots most attracted to this little jet would be stepping up from their Skyhawks. We purposely gave the Partial Eclipse limited capability because we didn’t want our customers to get hurt flying too high or up into a cloud, especially a frozen one. Remember Icarus who flew too close to the sun? Well, we know how that turned out. Also we didn’t want our customers going too fast and getting scared, carrying too much weight or being confused by new-fangled avionics. When you think of the Partial Eclipse, think training wheels.”

Mr. Raeburn continued, “Now our next model is going to be the answer to a maiden’s prayer - a wonder to behold and a joy forever. It is naturally called the Total Eclipse. This airplane has everything, and we are comfortable with our customers migrating from their Skyhawk through the Partial Eclipse to the big burrito… the Total Eclipse. This airplane is going to be as revolutionary as the heliocentric theory. I’m a modest man but I am waiting to hear the names Copernicus and Raeburn in the same sentence. The saints were venerated; maybe I could be vernerated.

Lordy, this little jet is gonna go. Just do a quick preflight, load you family, close the door and tell the lineman to light the fuse. The Total Eclipse will have all the features we knowingly left out of the Eclipse 500, er Partial Eclipse. It’ll go way up high where the clouds are frozen and where you can’t keep the windows open. A whole new air taxi industry could spring up and these little jets could be as common as VWs in Rio.”

Vern shifted in his chair and continued, “Some have been concerned over the cost of this program and our delivery schedule. I want everyone to know that not only have our dreams been fulfilled but the technology spinouts from this project are second only to the Apollo program. Now we have found a way to combine these technologies in the tradition of an Asian Fusion Restaurant. For instance, we’ve combined Friction Stir Welding with the Phostrex fire inhibitor. Should a fire break out on the factory floor in the course of welding an assembly, it is put out using Phostrex.”

“I could continue but I gotta go. Next week has a Tuesday in it and Serial Number 39 is moving down the line. We’re going to cut in the Total Eclipse,” closed Mr. Raeburn. “Keep those cards, letters and deposits coming”

For questions contact:

Mr. Vern Raeburn
Eclipse Aviation

gadfly said...

Black Tulip

"Clap, clap, clap" . . . read: Thunderous
Applause!

gadfly

FlightCenter said...

Apologies to Wendy’s

The commercial opens with three industry grey beards standing together at Oshkosh in front of the Eclipse booth. They are looking at the huge pavilion and a banner that says CERTIFIED!!!

“It certainly is a big marketing budget,” says the grey beard on the left.

“A very big marketing budget,” echoes the one in the center.

“A very big extravagant marketing budget,” says the first.

“Never seen one bigger,” says the one in the center.

There’s a pause as the grey beard in the middle pulls back the flaps on the tent to reveal a small, friction stir welded, twin turbofan aircraft with a provisional certificate. The airplane is dwarfed by the size of the booth.

For the first time we hear from the grey beard on the right who squints through her glasses into the booth and says cantankerously, “Where’s the plane?”

The announcer says, “Some airplane manufacturers give you a lot less airplane with a big extravagant marketing campaign…”

“Where’s the plane?” says the grey beard on the right.

Announcer: “Cessna’s Mustang has more {cabin space, baggage capacity, thrust, service centers, reliable avionics, etc…} than the Eclipse 500. At Cessna you get more plane and less marketing.”

“Hey! Where’s the plane?” She peers into the booth. “I don’t think there’s anybody back there.”

Lloyd said...

Black 2 lips:

Yawn..... no comment.

Lloyd

Lloyd said...

Grubber,

I would tend to agree re: FSW. Apparently Airbus thought it worthwhile enough to incorporate into the 380 design. I read about this in it's initial design, but don't know if it is used in production.

Lloyd

WhyTech said...

lloyd said:

"1. Engine: Pratt & Whitney – any competitor can purchase substantially the same engine.

Not True: I believe that Eclipse has has the exclusive on the 610 for at lease three years"

lloyd,

How about the PW 611? You are missing my point on most of these issues. What dont you understand about "SUBSTANTIALLY" the same as? This means not identical, but so close that the differences dont matter in a competitive sense.

Most of your responses fail to get this point, however I wont take the time to explore each one unless you insist.

Now, I'll praise Elcipse to bring some balance to all this. I do believe that the concept of the EA500 as advanced in 1998 was only microinches short of brilliant, but not particularly defendable. Where Eclipse could have gained some real competitive advantage would have been to take a stealth approach to this program, and execute flawlessly on development and production, getting to market in 2003 with a fully functioning airplane. Instead, they spent a disproportionate amount of time trumpeting their cleverness to the world and collecting awards, and have shot themselves in virtually every part of their anatomy in executing the development and manufacturing program. As a result, they have compromised away most, if not all, of the competitive advantage they were clever enought to dream up. As is often the case where technologies are widely "shared," competitive advantage oftens comes from superior execution, rather than brilliant innovation.

WT

Black Tulip said...

Whytech,

Good analysis...

And now, who would want the PW610F engine for another airframe unless it was a tiny single or two seater? How many have really examined the Eclipse versus Mustang comparison by Cessna, published here May 5th? Those who missed should look at the Time to Climb Comparison, page 6. If Cessna's graph is correct, these engines are not flat-rated, they are flat-pooped. FL410 sure doesn't look like a usable flight level, especially on a hot day. According to the table, the PW615F has 62% more thrust and the Mustang performance shows it.

I guess now is about the time that the Eclipse faithful will point out that 62% more thrust means the Mustang will burn too much Jet-A to meet their needs as an aircraft. But again, what good is the 'intellectual property' tied up in the Eclipse engine.

Finally regarding the headstart you discuss for Eclipse in 1998. They could have done what Bob Northrup promised with the Century Jet and been miles and years ahead of the pack.

Black Tulip

ColdWetMackarelofReality said...

Lloyd,

Eclipse also had an exclusive on the EJ-22. Williams introduced an FJ-22. It was 'substantially' the same engine, but different enough not to violate the exclusivity arrangement.

BTW, the EJ-22 really was a tremendous piece of engineering, far more innovative in fact than any single aspect of the Eclipse program.

Google Rolls Royce RB-211, see what the most distinctive design element of that engine was, and imagine that design with a bypass section the size of a coffee can.

Absolutely amazing - and kudo's to Williams for having the juevos to even attempt such an outrageous powerplant.

WhyTech said...

coldfish said:

"the size of a coffee can.

Absolutely amazing - and kudo's to Williams for having the juevos to even attempt such an outrageous powerplant. "

I dont know enought about the Williams design to praise or criticize, but when I first saw the prototye on the EA500 at OSH, I said to myself, "that looks just like a coffee can; this is never going to work."

WT

mirage00 said...

As one examines the details of the Eclipse program, it becomes increasingly apparent that there is little remaining that differentiates the acft from any other light jet except for the price point and physical size, and many believe that the price is not sustainable.

Yawn... Let me know when you find another $1.5 million jet that performs the same as the Eclipse. Let it go Stan... Let it go...

Black Tulip said...

Why Mack,

I remember first seeing the Williams rotating components too in the Eclipse booth... Oshkosh or NBAA. I didn't think coffee can, I thought porcupine.

Related to this, look at the pictures of the Eclipse. The exhaust ducts are tiny. We all know that the engines of efficient aircraft move large volumes of relatively cool air through large 'exhausts' - turboprop or turbofan. The bigger the 'rear-end' the more efficient. Don't the tails of the Eclipse engines look like a Lear 20 series?

Black Tulip

ColdWetMackarelofReality said...

Mirage,

When somebody actually delivers a jet with the performance and capabilities Eclipse promises, for the price Eclipse promises, at the time of delivery, THEN and only then we can have this discussion.

Until then, it is all just wishful thinking on your part.

In the meantime, I hear Cessna is actually delivering the jet they promised, at the price they promised, on the schedule they promised, and it actually does everything they said it would do.

How revolutionary.

Ken Meyer said...

black tulip wrote,

"these engines are not flat-rated, they are flat-pooped. FL410 sure doesn't look like a usable flight level, especially on a hot day. According to the table, the PW615F has 62% more thrust and the Mustang performance shows it."

Interesting point. But according to the Mustang demo pilot who flew with me Tuesday, the Mustang "is a 35,000 foot airplane." He told me it suffers the same sort of performance degradation with temperature and altitude that the PW610F does.

I think you're trying to create a distinction where one does not naturally exist.

My impression after the test flight is that the Mustang is a great airplane--it looks great, flies great, and has very nice features. But the fact is that it is hampered by an initial acquisition cost that is 80 or 90% more than the Eclipse, and direct operating expenses that are about 50% more. Yet, it offers performance figures that are very similar--some are a hair better (climbrate for instance), but others are just not as good (cruise speed for one).

Ken

mirage00 said...

When somebody actually delivers a jet with the performance and capabilities Eclipse promises, for the price Eclipse promises, at the time of delivery, THEN and only then we can have this discussion.

Yawn...

Gunner said...

A footnote about tactics of The Truly Faithful:
At 7:53 AM, Vern's Podcast was announced here. In it he states:

"We wanted to set a new benchmark and fundamentally change the value proposition [yada, yada, yada)."

Lo and behold, it took less than 90 minutes for one of The Truly Faithful to come up with this little gem of personal insight:

"I think it dilutes the value proposition. Eclipse is a much better value proposition; there is no getting around that."

First time the term "Value Proposition" has been mentioned here, and it just happens to follow Vern's use in a Mea Non Culpa speech by a matter of minutes.

I have never seen The Faithful Style more perfectly represented than in that vignette. Cudos to Vern; he truly is a Master of the Cult. The ventriloquist talent is absolutely breathtaking.
Gunner

Gunner said...

Ken said:
"But the fact is that it is hampered by an initial acquisition cost that is 80 or 90% more than the Eclipse"

Interesting personal fantasy; especially for a man who is so loose with terms like "prevarication" when confronting others from behind a terminal.

Do carry on.
Gunner

Ken Meyer said...

gunner wrote,
"especially for a man who is so loose with terms like "prevarication" when confronting others from behind a terminal."

Too big for you? Sorry. A prevarication is a statement that is deliberately misleading, inaccurate or misleading.

I think the blog would be best served by full and open factual disclosure. Don't you?

The Mustang does indeed cost 80 or 90% more than the Eclipse. You disagree with that?

Ken

Gunner said...

Yep.

ColdWetMackarelofReality said...

What kind of math has $2.6M equalling 80 or 90% more than $1.8M? Seems to be closer to 44% higher.

Direct operating costs that are PREDICTED to be 50% more Ken.

Operating Cost Predictions for Cessna are based on 40 years of experience across nearly a dozen models and thousands of airframes and operators in all kinds of operations.

Operating Cost Predictions for Eclipse are based on what - their amazing track record such as Williams, Avidyne, BAe, DeVore, NO FMS, NO GPS-Nav, NO Moving Map, NO FIKI, NO IMC, questionable RVSM, and the hits just keep on coming.

To put this in perspective, Cessna has delivered more turbine powered aircraft, than Eclipse has TOTAL Fleet Hours.

Think about that one.

flyger said...

Ken Meyer said...

Don't forget, everybody in the world knows that the Eclipse is underpriced today.


Now why didn't Eclipse know that when they started? Everybody said they couldn't build it for what they said and now, hmm, *everybody* knows that to be true!

Ken Meyer said...

coldwet wrote,

"What kind of math has $2.6M equalling 80 or 90% more than $1.8M?"

The Mustang is $2,395,000 in August 2002 dollars and the company is raising the price to $2,495,000 in August 2002 dollars, adjusted according to the CPI-W index.

The Eclipse is $1,520,000 in July, 2006 dollars.

Do the math yourself. It shows the Mustang costs 185% of the price of the Eclipse. I'm not making this stuff up; you guys need to do your own homework.

Ken

Ken Meyer said...

flyger wrote,

"Don't forget, everybody in the world knows that the Eclipse is underpriced today....
Now why didn't Eclipse know that when they started?"


What makes you think they didn't? It is underpriced relative to the competition; that is unquestioned.

Cessna likes to price its product to the highest dollar it can receive. Eclipse has taken the more buyer-oriented approach of pricing their airplane marginally above what it costs them to produce the product.

The end result is that the Eclipse is priced a lot more reasonably than the Mustang.

Hey, Mustang is nice. I just flew it. Flies beautifully. I love it. But I'm not so sure that I love it 85% more than the Eclipse.

If Cessna priced the Mustang as competitively as the Eclipse, I'd probably buy from them. Remember, I've had a Cessna product for almost two decades. As it is, I'm searching and searching for reasons why the Mustang is that much better than the Eclipse, and I keep coming up empty.

Ken

Gunner said...

CWMoR-
It's the New Math. Goes hand in hand with dropping Brave "New" Terms like "LRU", "Value Proposition", "The Beauty Of" and "Disruptive Technology".

Vern say it's a better "Value Proposition", hoping that some who like catchy, yet meaningless, terms will go slack jawed in wonder. Some do. Then Ken attempts to emulate The Master with "Mustang costs 80-90% more than Le Petit", hoping that some don't have their abacus; and not really understanding that few need one to do the math.

Of course he'll compare Today's Eclipse price with Tomorrow's Mustang price to avoid admitting his lie. So be it. The current price of the HondaJet is far lower than what the Eclipse would be selling for 30 years from now (if it were still around). Ipso facto, the HondaJet is cheaper.

This is the kind of silly stuff that renders intelligent exchange with The Truly Faithful and oxymoron.

I may have missed it, but did anyone explain why Le Petit doesn't fly RVSM? Also, with 13 or 15 of them "delivered" anybody got any direct owner intel on the actual weights and CG?

No, huh?
Gunner

ColdWetMackarelofReality said...

Ken please try to follow along, carefully.

There are speculators in the Eclipse market, I specifically mentioned in a previous post the 'late 2007 'position'' listed at $1.8M, and the agreed to cost adjusted price of the Mustang at about $2.6M.

This would not be so difficult if Eclipse numbers (and word-usage\definitions) were not so, how shall we say, fluid - but I think we have just about figured out the VERNacualr needed to have a reasonable conversation.

I am talking about what 'is', not allowing for what we want to see.

You should try it sometime.

Ken Meyer said...

coldwet wrote,

"There are speculators in the Eclipse market, I specifically mentioned in a previous post the 'late 2007 'position'' listed at $1.8M, and the agreed to cost adjusted price of the Mustang at about $2.6M."

You're not paying attention. You and gunner are living in a fantasy world where 2 + 2 = 178.

The Eclipse is factory-priced at $1.52 million in July 2006 dollars. It's a fixed price. If you find one that's available sooner for more, I say "Great, somebody is willing to pay a stiff premium for early delivery; good for them."

I thought you knew something about the aircraft business. I think perhaps I was wrong. Those who know anything about it know that airplanes are priced in CPI-adjusted dollars and you compare one airplane to another by working the appropriate CPI formula. Is this a revelation to you?

Ken

flyger said...

Ken Meyer said...

But according to the Mustang demo pilot who flew with me Tuesday, the Mustang "is a 35,000 foot airplane." He told me it suffers the same sort of performance degradation with temperature and altitude that the PW610F does.


The PW615 is significantly more derated in the Mustang than the PW610 is in the Eclipse. This is easily seen in the ISA+10 and ISA+20 performance sags the Eclipse has. The Mustang can, in fact, make it to FL410 at ISA+20, the Eclipse cannot. The Cessna test pilots are used to flying bigger airplanes, so to them the Mustang seems wimpy. Compared to an Eclipse, it is definitively more performance. If the Mustang is a "FL350" airplane, the Eclipse is a "FL280" airplane, ironically, where most of them have been flying.

Yet, it offers performance figures that are very similar--some are a hair better (climbrate for instance), but others are just not as good (cruise speed for one).

Every delivered Mustang is faster than every delivered Eclipse. I expect this to continue to be true even when the supposed speed mods are introduced. If you do the same mission (weight, distance, temps, winds) in an Eclipse and Mustang, the Mustang is as fast or faster than the Eclipse. Someday, maybe, there will actually be one of these mythically "done" Eclipse airplanes that can be flown in actual operation to see.

Metal Guy said...

I would be interested to get opinions on exactly why the Eclipse is claimed to be vastly more efficient than the Mustang. The basic size of the two are not that different and they certainly use the same engine technology. So the weight seems to be the primary driving factor?

If so, what tradeoffs has Eclipse made in drastically reducing the weight they way they have? We all know that this is a game of tradeoffs – Eclipse owners will not getting something for free here.

ColdWetMackarelofReality said...

Ken, your once again pathetic attempts at personalizing the issue aside, it is you who is, still, not getting it.

The Eclipse cost is much closer to the Mustang than you are letting on.

First off, as has been previously pointed out to you very clearly, you have to add all of the options to the Eclipse that it can carry simultaneously to approach the level of fit and finish on the Mustang to begin with.

Once done with that you still will not have anti-skid braking, REAL backup instruments, usable baggage space, and a company backing the plane that actually knows what they are doing - OH and you will have NO FMS, limited auto-pilot, questionable RVSM, NO FIKI, NO IMC, NO GPS-Nav, No Moving Map, and the other favorites from the age-old hit parade.

Second, the Eclipse price is currently being driven by speculators as evidenced by the $1.8M for a 2XX position for 'late '07'.

Third, the price is artificially low as you yourself have previously agreed, and that the continued low price is DEPENDENT on the as yet unproven 'air-taxi' business model - a fact you danced around from my previous post.

But nice try.

Maybe next time you can throw in some good VERNacular like LRU, high-cycle, whitepaper, reliability, and value proposition.

This message brought to you by the J. Wellington Wimpy Aircraft Company where the motto is "We'll gladly deliver someday the plane you pay for today."

Ken Meyer said...

coldwet wrote,
"the Eclipse price is currently being driven by speculators as evidenced by the $1.8M for a 2XX position for 'late '07.'"

My goodness, I hope that is the price :)

You found an Eclipse selling for more than list. That's good. Sounds like the prices are going up--I guess the public likes this plane a lot and is driving the price of it up. Thanks for that; that's good news!

But it doesn't change the fact that you can go to Eclipse and buy the plane for $1.52 million in 2006 dollars just like you can buy a Mustang for $2.495 million in 2002 dollars. What folks do to those prices on the secondary market in order to get earlier positions is certainly interesting, but only you could pick a single example on the high side of the range and say "see, I told you; it costs more than you said!"

It is fascinating to watch you at work, though.

Ken

WhyTech said...

Ken,

A Gulfstream G550 is around 30 TIMES the price of an Eclispe. Do you understand why? Now, apply that concept to the price difference between the Eclipse and Mustang. Light bulb go on?

WT

Shane Price said...

A bit of a rant

The 'Vern-acular' bit in the recent AvWeb podcast that caught my attention was his put down of printers in general.

Before he said that, I was prepared to give him some leeway as a guy who was trying to make a difference in an established and mature industry by developing new, or adapting existing, key processes.

Bit like Henry Ford did with the Model T.

But going after the only business group that supports your First Amendment rights every day of their working lives, he has lost any remaining shred of my goodwill.

He reminds me of other failing business people, whose only means of defence during the terminal phase is attack. The closer the end, the more manic and mis directed the venom.

Everyone else is to blame. The staff don't put in enough hours, the suppliers are useless, the weather (for an AIRcraft company) wouldn't cooperate by being bad enough and, while there is more than enough money, it STILL wasn't enough.

Which is more or less what he said.

Oh, and there is no chance whatsoever of major growth in private aircraft ownership in Europe. Population density is much too high here to allow increases of the sort the Eclipse business model requires. Land close to popluation centres is simply too valuable to 'waste' on airports. The decline of North American GA fields, so wonderfully related in Brian Terwilliger's excellent film "One Six Right" has not happended here for the simple reason that there were far fewer of them to start with.

Our trains run on time, faster than most light aircraft, with no weight limits, direct into the town or city centre you want to go to.

For most of us in Europe, its either a low cost airline or a low cost train for those distances we can't cover in our cars.

I would remind my North American friends that we can legally drive at 130Kmph (84mph) on an extensive motorway network across the entire EU. Last year, I drove across Portugal, Spain and France in 15 hours at an average of more than 100Kph covering 1000 miles and used 90 liters (25.3 US gal) of low cost diesel. I did the trip in one day, mostly in daylight, with two other adults and two children, carrying all the baggage and shopping we needed or wanted.

On the way, we stopped when we wanted for breaks or meals, drove as slow or as fast as we felt like (within reason) and telephoned ahead to make (and change) hotel bookings as we realised we could go on for longer than we had intended.

Bit difficult to do that sort of trip in any aircraft, no matter how its made, what avionics it has (or hasn't) or even when its available.

And nothing I've found so far in this size of plane (other than the SJ30) has trans atlantic range. Which is really the only reason to buy a small jet in Europe anyway.

To get out of the place!

Sorry for the long post, but I was really pissed that Vern is now down on printers as well.

Shane

WhyTech said...

Ken said:

"Speed, safety, ease of operation, low cost of acquisition, low cost of operation. "

Ken, these are all good things to be sure, and every civilian acft manufacturer is striving to achieve these things. However, they are relevant only within a specific time and competitive context. The problem with Eclipse is that they have missed the market window due to repeated blunders in their development and manufacturing programs.

WT

FlightCenter said...

Ken,

How many depositors are buying their aircraft at the price they originally contracted to buy it from Eclipse?

Certainly not those folks who thought they were going to pay $837,500.

I'm not sure anyone can count on Eclipse actually selling the base aircraft at $1.52M in 2006 dollars by the time they are actually able to take delivery.

Eclipse has a history of raising the price after signing a deposit agreement. What percentage of the depositors have gotten a letter (or more than one letter) telling them that the price has increased but Eclipse will be happy to return their deposit if they are not happy with the changed price (or performance, or delivery date)?

I'd say that the vast majority of all owner / pilots have gotten a letter changing price, performance or delivery date.


Until Eclipse starts delivering aircraft at the price they have committed in their original agreement with the depositor, you can't count on the fact that you'll actually get a baseline aircraft for $1.52M in 2006 dollars. You have to apply a factor based on experience.

Your mileage may vary.

Ken Meyer said...

whytech wrote,

"A Gulfstream G550 is around 30 TIMES the price of an Eclispe. Do you understand why?"

Sure. Because it got the Collier award and the Eclipse didn't, right?

Oops. Can't be that :)

Maybe 'cause it's 15 times as big as an Eclipse?

Or is it because it carries six times the passengers?

It's a bad comparison. But here's one that works:

I could have bought a Mercedes R63 SUV for about $90,000. Instead, I got a nice, if more mundane, Acura MDX for about half that. Both do pretty much the same job. Same speed and similar hauling capacity, but one comes from a little better company and has a couple of additional features. Some will buy it because of those things, but others will see the better value in the Acura.

Sound familiar?

Ken

Black Tulip said...

There has been a great deal of discussion here on mathematics, even very simple math such as computing the ratio of two prices. We have this misunderstanding because many of us are hampered in utilizing Old Math.

One reason that Eclipse has achieved the current degree of success is that the company has developed its own mathematical tools. So far two new theorems have been proven:

Eclipse Rule One - One Is Approximately Equal To Two for Large Values Of One.

Eclipse Rule Two - Pi Is Equal to Exactly Three For Very Very Small Circles.

Expect Raeburn to enter the pantheon of mathematical greats - Pythagoras, Euclid and Napier.

Ken Meyer said...

flightcenter wrote,

"Eclipse has a history of raising the price after signing a deposit agreement."

Mixed emotions. They did indeed have one across-the-board price increase that affected existing depositors. But the circumstances were understandable--the plane had been dramatically redesigned around new engines that cost a lot more.

Don't forget that Cessna has twice now raised the price of the Mustang. Embraer has raised the price of their VLJ (and it hasn't even flown yet). I think perhaps your criticism is overstated, even if it is strictly accurate.

Ken

EclipseOwner387 said...

Flight Center,

I think you make a fair point. A reduction in the performance guarantees is in essence a price increase (less airplane for the same amount of money.) Ken and I though feel that overall value is still solid even with the slip. But I agree that we don't know the true price of an Eclipse until Eclipse can prove they can deliver a COMPLETE airplane and be a viable enterprise at the set price points.

I would like to point out that Eclipse did pay interest (5%) to those who asked for their deposit back. I took advantage of it when I let a position in the 1400's go.

WhyTech said...

Ken said:

"Sound familiar?"

Yes very familiar. My father was a depression era young adult, and always bought the cheapest new car he could get - no radio, no heater, cloth seats, etc. This is some peoples idea of "value."

In my family, we have a Range Rover and an Accura MDX. The RR is worth every penny of the additional $35,000. With your logic, you should be driving a Kia Spectra.

WT

airtaximan said...

with all this talk of "value proposition" and "competitive advantage" I figure I'd throw in another one... "core competency" -

What allows the plane to be so light, besides its small size. Is this anything new? Look at similar size planes, even props... how much of a weight advantage does e-clips have over these planes, and what did they do to achieve this advantage? What does it translate into as far as "value" for the customer?

What allows the plane to be so inexpensive? Besides front-loading a low price to attract some volume, what advancement allows for the low cost?

-remember, BE is pegged at 500 units per year at this price...so leave advantages for volume aside, becasue they don't exist, except in fantasy-land.

Perhaps if we can come to terms with this... we can have a better dialogue about the business and the plane.

Gunner said...

AT-
BE is most certainly NOT pegged at 500 units. It's projected at that level, by a company with a rich and consistent history of over-projecting sales and under-projecting costs.
Gunner

ExEclipser said...

Ed Iacobucci's interview with AvWeb discussing some of the problems:
http://tinyurl.com/3chfyz

Cameron Burr's interview with AvWeb discussing why they chose Eclipse:
http://tinyurl.com/38ux8h

And finally Vern Rayburn's interview with AvWeb discussing some of the problems. My favorite comment regards delivery numbers by the end of the year - some number that won't make the cheerleaders OR the skeptics happy:
http://tinyurl.com/2m7q63

Bonanza Pilot said...

"I could have bought a Mercedes R63 SUV for about $90,000. Instead, I got a nice, if more mundane, Acura MDX for about half that. Both do pretty much the same job. Same speed and similar hauling capacity, but one comes from a little better company and has a couple of additional features. Some will buy it because of those things, but others will see the better value in the Acura."


Actually Ken I would argue that Acura is a much better car company than either Range Rover or Mercedes. The cars have way fewer problems (I have had bad luck with range rover in the past) and offer electronic features not found in the other cars...superior navigation systems etc...so you really are getting a way better value. Now if Eclipse were building a car like Acura/Honda I would have a lot more confidence in them! I think many are concerned that it is more like a Yugo. I still want to understand how they were able to achieve such a low empty weight. I still want to know when they will make their first real delivery. Will any owner be able to fly his Eclipse to Oshkosh this year without being accompanied by an Eclipse instructor pilot?

flyger said...

Ken Meyer said...

The end result is that the Eclipse is priced a lot more reasonably than the Mustang.


No, the end result is that when everyone outside of Eclipse scoffed at their initial pricing, they were right. Yet Eclipse said they could do it. They couldn't despite their stupid buttons. Those buttons were not showing off their capability, it showed their ignorance.

There is ample evidence that they still can't make money at the new price. The numbers don't add up. If Eclipse somehow manages to make it through to a stable, finished product, something still in considerable doubt, they still won't succeed long term because their pricing has inadequate profit to make the business viable.

You complain a lot about how much the Mustang costs to buy and fly. If your Eclipse gets orphaned and you only got 1,000 hours out of it before it became scrap (which will happen since no one but the factory can support it, and even that's debatable), then you lost not only all your capital investment but that amortized to $1,500 an hour for the use.

A Mustang owner can very, very likely sell his airplane for more than he paid for it after 1,000 hours. Now who really had the lower cost of ownership?

WhyTech said...

BP said:

"(I have had bad luck with range rover in the past) "

A brief digression into the auto world with apologies to all who dont give a rip: I have been a car guy all my life and have mostly owned German cars: Porsche, Mercedes, and Audi. I have been aware of the Rover reputation for poor reliability for decades. My last veheicle was a MB ML55 AMG which was by very far the most troublesome vehicle of the 30 or so I have owned. I decided it was time for a change and asked some pople who had Range Rovers designed and built under the BMW regime. All said no unusual problems. This has been my experience as well, with the only unscheduled maintenence being replacing a headlamp bulb at 29K miles. Gas, oil, and one set of brake pads is to total to date. I will not tolerate a problematic car, so it it acts up, its history.

WT

airtaximan said...

Gunna,

let's give them the benefit of the doubt on the BE at 500/yr.. Its academic at this point, really.

the real issue is "what is their competency that allows the differentiation, beyond just a "promised" low acquasition price.

I personally see nothing, but I am willing to listen.

- anyone can do a better job at building a "small" jet
- the weight for this small plane is, well, nothing to write home about, and I fear will prove to be "flimsy".
- the AVIO computer system may fall into the category of "competency" and may provide some "value". Once again, I do not see it - the wizbang computer stuff might be "coo-el" but as VErn said "a less integrated system, a la NG will be easier to maintain, and less expensive as well" (paraphrased from the interview). IMHO THIS goes for the whole plane, too - which means the central computer system could be more trouble than its worth.

- is the plane safer? - NO, how is it safer?
- is the plane easier to fly? NO see the training and mentoring program
- is there a technology that makes the plane less expensive... nope. pound for pound its "conventionally" priced -
- supplier management.. nope
-"custmer experience" - -remains to be seen, but to date, this seems like a relatively conventional approach (a few company owned MRO centers), except the customer comes last, not first.

- marketing? maybe "sales", but as far as marketing goes, these guys did not do the work up front to determine the viability of the product at the required price to result in a high volume low cost plane. This was the entire marketing function of the business plan - amateur hour.

The die-hards are a testament to the sales process, and they get an "A".

So, I do not see what e-clips has from a value perspective, and from a competency perspective.

Gunner said...

If the Accura represents a good "value proposition", this MIGHT speak well for the HondaJet. But it says about as much in regards to the EA-50X as it does about the "value proposition" of a new Chrysler; or a used Pinto.

Let's all wait to hear what Vern has to say about the comparison before voicing his, errrrr, our opinion.
Gunner

WhyTech said...

Consumer buying behavior


There has been much talk here about which airplane is “better,” a “better value,” etc. We need to recognize that we are dealing with a consumer type mind in making such judgments. The mind of the consumer does not work in mostly rational ways in making decision about what car to buy, what airplane to buy, what house to buy, what partner to take as a husband or wife, etc. It s more about wants than needs. Who needs a Mercedes, or Ferrari, or even an Acura? There are many other vehicles which will provide more than adequate transportation at significantly lower acquisition and ownership costs. Who needs a 7000 sq ft house? Who needs to be married to Paris Hilton? Lets face it: no one needs an airplane (no individual, that is). This is 100% “want.” There are many alternatives that provide the tangible utility an airplane provides, all at much lower cost. Once this is acknowledged, then intangibles come to dominate the decision, and everyone is right and no one is wrong in their choice.

In Ken’s case, if value is really the driver, his current Cessna can be shown to be a far better rational value than any jet as far as needs are concerned. But Ken wants as jet and he is attempting to rationalize his choice of an Eclipse with a walk through the numbers, with emphasis on the “cheap” aspects of the Eclipse.

WT

Gunner said...

WT-
Well said, as always.

Ultimately, I think it comes down to simple cognitive dissonance. Experience tells us over and over again that you can have cheap or you can have First Class. But you can't have both.

Yes, there are exceptions, when revolutionary new products, processes or breakthroughs become reality. But, as AirTaximan points out, Eclipse has demonstrated nothing of that nature to anybody who looks at the program rationally. For those who "want", it's difficult for them to admit they're buying cheap AND getting a product that is less than First Class. And, so, the Cognitive Dissonance comes into play.

In the instant case, the rationalization goes like this:
"I'm getting First Class on the cheap because I'm paying less than cost for a Mustang equivalent. The guys buying after me will pay the price for the subsidy I enjoy."

That is, of course, a Ponzi Mentality.
Gunner

Black Tulip said...

June 2, 2007

ECLIPSE AVIATION SHIPS FIRST VIRTUAL REALITY SYSTEM

Albuquerque, NM – Today marked the first shipment of Eclipse Aviation’s widely anticipated virtual reality system. This complex product offering consists of a powerful personal computer, wide-angle high-resolution LCD goggles, tactile body suit and gloves and a six-axis motion seat. The Virtual Eclipse Reality Navigator (VERN) system was received and set up by the first customer, ‘Ralph’. Ralph is not his real name for reasons that may become evident.

“My familiarization flights in the virtual Eclipse 500 were great,” enthused Ralph. “But it got tougher on the virtual type rating. I got the steep turns down okay but had trouble with the vee one cuts, even though it’s a centerline thrust aircraft. I felt bad about the runway lights, taxiway lights, not to mention the two people in the T-6, until I got up and took the goggles off. I also learned not to turn the gain up too high on the tactile suit and motion seat – boy, it was a rough ride.”

Ralph continued, “The avionics suite works really well including the auto throttles. I learned the hard way you should engage them on descent. I was watching ‘Fargo’ on the DVD player and not paying attention. I guess they established the maximum operating mach number for good reason. The ailerons set up a helluva buzz… that is until they departed. No problem, just a simple reboot.”

“I like the flexibility of the system because it probably won’t be found in the actual aircraft. I didn’t like my time of useful consciousness at forty-one thousand feet – fifteen seconds – so I dialed it up to five minutes”

“I’ve ordered goggles, suit and seat for my girlfriend, ‘Marge’,” stated Ralph. “There ain’t no tellin’ what two consenting adults might do in that little virtual ship at FL410 after hearing, …hold northwest of Duluth , as published, twenty mile legs, expect further clearance on the hour.” I’ve also ordered the Havana, Cuba module with the olfactory and gustatory add-ons. I want to have dinner and a cigar with Fidel before he reaches his expiration date… and with no hassles from Customs and Immigration.”

“I’ll tell ya, with Jet-A going up, I’m getting more attached to virtual reality. In fact,” concluded Ralph, “I’ve just run a blind ad offering my delivery position. Know anybody that might be interested?”

WhyTech said...

gunner said:

"In the instant case, the rationalization goes like this:
"I'm getting First Class on the cheap "

Gunner, your are too hard on the faithful. Most of them have been around the track a time or two and are not as naive as you imply.

I think whats going on is thet they want a jet and the Eclispe is the jet they can afford, so they will accept the tradeoffs involved, as ugly as they may be.

WT

Gunner said...

WT-
If you're referring to EO, I hope by now I've posted enough disclaimers regarding my perception of his reasons for being in the game. This guy already owns several aircraft with more on order (including at least two admitted Jet orders). They're high-dollar toys that he's earned and, to some extent, market plays almost like a portfolio play. In any case, he's obviously having fun with it and I don't include him in The Faithful.

No, I'm referring to the Depositors who continue to insist that Eclipse has developed some revolutionary new product or process (usually by parroting the latest Vern-acular).

As each new "breakthru" is debunked as Eclipse Mythology, they seize onto the next as the explanation for the "value proposition". Yet thru it all, they'll insist that they can "afford" far more; sometimes two jets, even. But they'll never self-admit that the EA-50X is simply not in the same class as the Cessna 510.

That's what makes The Faithful, well, "Faithful". ;-)
Gunner

mouse said...

Lloyd, sorry but you are wrong. The PW610 was offered to another OEM which I negotiated, although an order has not been placed yet.

AVIO NfG, nobody has seen all it can do... Not even Eclipse.

I can assure you Fuji, nor any customer wants FSW.

FSI trains more pilots, and will then anything that even Vern can dream up.

Unless Eclipse has 75+ retail customers for each of their planned centers, it's a losing proposition. And until the planes are out of warranty, no retail. The air taxi people don't count as retail either... They don't pay what a retail customer might. Now when you put the pencil to paper and see what was spent (tax payers money) you will see the centers are over-inflated in cost by a factor of 3.

Easily replaceable parts? That's a good one. Have you tried to access anything in the tail, under the floor, or in the cockpit/instrument panel area? Go Fish!

mouse said...

PubGrubber,

Better add up all the prep time and work required before the Stir Frying ever begins...

mouse said...

Mirage, perfect name for you. Just like Eclipse.

Mirage is a false vision, and Eclipse is an occluding of another object.

mouse said...

Ken, if you ever put your money where your mouth is and buy a jet, I hope it's the EA-500. Cannot wait for you to see how much it costs to operate when your straining-for-every-ounce-of-power remaining after leaving no margin due to the engine running at nearly full rated power with so little reserve. First time your engine is opened up for not making power you'll find several pounds of used up metal. Better pay up you JetInComplete, and be sure to take out the engine maintenance package, and loaner engine package.

Most engines operate with a 10-25% power reserve, and not a 10-25 Lbs of thrust power reserve.

Try flying you CE-340 at 95% power and see how far you get before the interanl parts come flying out the tail pipe.

mouse said...

Mirage's brain must be starved for oxygen.. Lot's of yawns..

mouse said...

How can anyone talk about value propositions on the Eclipse? Until they deliver a comparable airplane (same or better equipment that is certificated, installed, and working) the value of an EA-500 is nothing. IOU's are not a value, but I'll give you that they are a proposition. Just like a prostitute, they're great at propositions. Ken, have you sent in your progress/propsition check yet? Maybe Mirage will loan you the money.

Six Coconuts said...

Been lurking for a while, now just cannot resist.

Wish my wife loved me as much as you guys love Avidyne.

Somebody should ask Cirrus about their PFD/MFD failure rates on the production line and in service. Numbers in excess of 25% were/are not uncommon.

How many Entegra equipped DA-40's did Diamond sell after announcing the G1000? One!

How many Entegra equipped 350's and 400's did Lancair sell after announcing the G1000? A small handfull.

They got booted from Javelin (for OP Technologies ... yikes), are likely to get booted from Piper, receive lukewarm support from Spectrum, and on and on.

Avidyne makes a nice looking piece of gear, just wish mine would last more than a few hundred hours at a pop. I am getting my money out of the Warranty ... for a few more months.

The last system that Avidyne certified was their PFD in 2003. Four years with nothing new, lots of angry OEMs ... now that shows the ability to get new technology to market.

Remember that Garmin's best customers are former Avidyne owners.

Charles Tym said...

As a former purchaser of a new Cessna SE A/C, I can not believe what a bunch of wankers post to this site - apart from Ken Meyer and a few others realists.

My new Cessna SE had loads of ADs and it took Cessna nearly 12 months to get the production process any where near right. I still love my Cessna though. In the first few hundred units produced in 97/98 Cessna could not even get the rivets in the right places.

EA are bringing a great new product to the market and I am truly amazed that any one is suprised they are experiencing teething problems big or small.

I doubt most of the subsrcibers to his site even fly an aircraft esp the likes of ATM, Gunner, ColdWetWanker.

I say good on Eclipse for having a go. I also say the naysayers have too much time on their hands.

First and last post.

Go Eclipse !!!

Pain Stewart said...

Dear Mr Flogginship,

Interesting that someone that claims they are a proponent of free speech deletes my posts when I question your intellectual honesty.

Your sensorship shows typical arrogrance I have observed at Lear Jet. I would suggest that Mr Lear would be very dissappointed in the current crop of Engineers at Lear Jet for their lack of innovation.

Could Mr Flogginship be envious of Eclipse Aviaiton?

Pain Stewart said...

From the NAHF, the first certification test was a toal failure for Lear Jet...

"In June 1964, after 164 test flights, the first Lear Jet was ready for certification. But with a Federal Aviation Administration pilot at the controls, it crashed at takeoff when he forgot to retract the lift spoilers. This was a hard blow, but Lear pushed ahead and two months later the FAA certified a second prototype."

Stan Blankenship said...

pain,

Can't explain why your original comment disappeared.

When you add comments to these older posts, they don't get read by most.

I happen to know when you add a comment since I get an e-mail copy which tells me there is a comment. BTW, it does not provide your address, all comments come from an anonymous source.

I encourage debate and moved both yours and the comment by charles tym up to where everybody else was reading. In fact, tempo responded to your comment.

Check my 3:18 am, June 19th comment against the No News is Good News post.

FYI, I have not worked at LJ since 1983. Have no idea what they are doing nor do I even know a single soul that is working out there.

Stan Blankenship said...

pain,

Should have mentioned, this blog does not work like a forum.

There are no subject topics, individuals say whatever they like but always add their comments against the latest post.

Pain Stewart said...

Flogginship,

It just pains me to hear your tripe about Eclipse - any startup aircraft has start up delays (ref Lear Jet), engage is self promotion (ref Bill Lear), and I know Vern, never met Bill Lear, but I believe they are a lot alike.