Tuesday, October 09, 2007

Future Values

cj3driver 's prediction for the future re-sale value of the Eclipse:

There are many reasons why I think the Eclipse will continue to depreciate in a big way.

1. It was a huge mistake to pre-sell Eclipse’s at way, way below factory pricing, way too far out in the future.

The appeal of a sub-one million dollar jet, produced unheard of orders when re-announced, fueled by the dot-com boom and potential air-taxi operators. Eclipse committed to build hundred(s) of planes fixed at $995K. and many hundreds (thousands) more, at slightly higher price. Eclipse still to this day has a long way to go just to fill these orders. Even the most faithful of the faithful diehards would agree that Eclipse is losing money on these aircraft. Eclipse must make up this shortfall eventually, if it is to remain a viable business.

2. Production rates far exceed new orders.

It is usual and ordinary for new aircraft (similar to new cars) to pre-sell a number of units to purchasers anxious to get a new product. The problem with Eclipse, is that the number of units pre-sold far exceeds the normal market by more than ten fold. This is why there are a magnitude of position re-sales compared to new company orders. The company is competing for new orders with a very fierce competitor, …. their own customers. At the current rate of resale’s, and the number of slots available, this phenomenon will continue well into the future, and probably extend past the point of profitability for the company.

Contrast this with the Mustang. Since the ramp-up of production, Cessna has been selling realistic delivery slots FASTER than the scheduled production rate for the next 3 years. Since Cessna sold very few positions to “speculators” they do not have to compete with but a few slots which resell very quickly at a premium.

3. The owner-flown market at over $2 million is not even close to Eclipse’s proposed production rates.

Since the ramp-up of production at Eclipse, there have been 4 major aviation trade shows. EBACE, Oshkosh, NBAA and AOPA. If the market for Eclipse’s was 500 per year, … or even half that at 250, certainly there would have been hundreds of buyers making deposits prior the announced base price increase at Oshkosh. Given the fact Eclipse has a history of announcing sales achievements (ala Ken 2,700 orders) where are the new order announcements? There aren’t many (if any at all) because of the reasons above. Too much competition from their own customers, and does anyone think there would be an Eclipse “speculator” at this point? …. At least not a speculator of factory positions. The owner flown market has to many choices in the $350K per year arena.

4. Used Eclipses will be plentiful upon the demise of DayJet ETAL.

If DayJet fails, there will be dozens if not hundreds of used Eclipses on the market. These aircraft have a very low cost basis and can be dumped on the market by a lender, or by DayJet themselves at a price way below factory. These planes will compete with other used “owner planes” and unfilled factory positions.

5. New Eclipses positions will be plentiful as orders are cancelled.

Anyone who bought an Eclipse at $1,295,000 (00 dollars) would be better off to write off the original deposit and purchase a resale today. Same goes for the $1,520K slots. Even with complete loss of the original deposit, you can have an Eclipse sooner for less money (from a resale position) than risking any more money and taking delivery year(s) later.

6. In the next several months, the true cost of ownership will be realized and there will be many used planes up for sale.

7. The shaky financials will cause existing position holders to continue to drop the premiums.

8. Due to increased costs the price of the E500 will continue to force the price higher, further reducing demand, and accelerating the demise of the company due to competition.

9. The weak dollar may further hurt Eclipse as may of the components are outsourced to foreign companies.

FlightCenter added a tenth point:

10. The problem for Eclipse is going to come when Cirrus and Diamond start delivering their jet products at lower price points than Eclipse, then they will be the ones to capture the lions share of the folks stepping up from the piston world.

Eclipse is the middle of a sandwich, getting squeezed from above and squeezed from below.

190 comments:

Stan Blankenship said...

One can't lose sight of the fact, the Eclipse business plan was drafted at the height of the dotcom boom and was structured to produce a google sized IPO.

A huge order book, disruptive technology, creating new markets and all the other hype was just part of the plan to cash out the investors and make the Eclipse management and employees all rich enough so that they too, could buy their own private jet.

airtaximan said...

The plane is not a great private pilot plane, and not a taxi plane - its in the :sour" spot. easily competed with by singles for less money, and real taxi planes can carry more passengers further.

Of course, Ken Meyer's wife found a new market for this plane which no one has heard of yet - perhaps its perfect for THAT market?

Nice summary of the problems with the way the plane was pre-sold and how the market will likely develop in the future.

... there's always the Con-jet...

ExEclipser said...

Stan, I don't disagree with your dot.com analogy. When I interviewed with the Tech Recruiter and Ken Harness, they never talked about the airplane, just how rich I was going to be when they got IPO.

ATM: Look outside of the box. The jet was really intended to create a market, not necesarily steal from other markets, though of course they are counting on some of that.

Ken Meyer said...

AT wrote,

"The plane is not a great private pilot plane"

Uh-huh. In a pig's eye.

The Eclipse is a spectacularly good owner/pilot plane. It offers jet performance that rivals that of of planes costing 3 times its price, yet can be operated for the price of piston twin.

That's the breakthrough that's got the haters so upset. And why there are 2700 orders.

Ken

Black Tulip said...

This is an excellent summary including, “…the true cost of ownership will be realized.” The Faithful may disagree on the prospects for the company because that remains in the future. But they could find someone who owns a twin-engine jet today.

Those expecting to operate the aircraft at a modest premium over a single turboprop or piston twin will be disappointed. I would expect an owner with average utilization to pay $1,000 per hour without depreciation - $500 in direct operating costs and $500 in amortized fixed costs. This could be light for those held at low altitudes in urban areas and if too many things break. Depreciation could swamp all these costs and be a killer.

Black Tulip

Stan Blankenship said...

tpp,

Sorry, blog rules, no name calling!

hummer said...

Believe the folks in Washington state would have wanted another engine?
Tell those relatives how safe a single engine turboprop is and how infrequently the fail.
If you're not on it, it's a statistic.
Oh,. and BTW. . it carries more
passengers for less money.

Black Tulip said...

Hummer,

It'll be interesting to see if another engine would have averted disaster. Not in case the pilot was scud running through a mountain pass at night. It's too early to speculate but CFIT has claimed so many victims.

Black Tulip

hummer said...

The true value of something (E500) is the amount of money someone is prepared to pay for it at a certain time.
The last auction provides the most recent "true value".
The other speculation is defecation of a male cow. (stan: for your benefit on blog rules {smiley face}.

paul said...

Hummer:

Shame on you using a crash that there is no information about to try to make a point.
Now you're starting to sound like the "experts" that spout thier mis information on TV whenever a plane goes down.

JetProp Jockey said...

Hummer - The auction determined what one person considered the value of the aircraft and a second individual considered too high a price.

If 10 more E-500 were offered via auction and the price maintained at 1.8MM I would agree that a market value had been established.

I doubt that there are 10 more potential buyers with the profile of the guy who won the auction world wild - according to T&T, he was prepared to go higher - to replace his SR22 in Europe.

ExEclipser said...

As we sit and bash each other over the heads with 2x4s, I just want to point out Angel Flight NGF4RL.

I'm glad to see someone using this aircraft for good work.

This hits very close to me, as a colleague of mine recently had to use Angel Flight for his daughter to seek what looks to be promising hope for a brain stem tumor.

God bless Angel Flight and their network (and all the other similar programs, too).

cj3driver said...

JPJ said;

“… If 10 more E-500 were offered via auction and the price maintained at 1.8MM I would agree that a market value had been established…”

In addition, I would bet the other bidders had upwards of $80,000 in “eclipse dollars” as a discount.

That being said, If, at the same time as the auction last month, there was a two year old Eclipse with 450 hours on it, what do you think the value of this used aircraft would be? The new one auctioned at 1.85, I would estimate a two year old used one would be $1.5-1.6 million. A two hundred thousand dollar hit. And 500K less than placing an order at the factory.

cj3driver said...

Hummer,

Eclipse promised to auction off 40 of the first 200 planes to "club members" at 95% of current list. Only one was auctioned before the recent price increase.

The bidders club members may be better off throwing away the Eclipse dollars and buying a position on the secondary market for way less than 95% of current list.

hummer said...

cj3driver
Again, speculation. Have Vern establish a future's market with real money and you'll be able to play and know the value. Otherwise, my guess (or anyone elses) is as good as yours. Anyone care for a game of monopoly?

bill e. goat said...

Despite my reservations about orders and production rates, and exasperation over Vernian marketing hype and anxiety over “pre-release” deliveries...

I have to agree with Ken:
The Eclipse is (/will be) a spectacularly good owner/pilot plane.

(What we don't hear much about are it's flying qualities- I think this will be a HUGE factor if they are as favorable as rumored- I am continually puzzled why Eclipse is keeping the press away...maybe it is more of a huge factor, in a different way, than I thought???).

I also agree with JPJ:
If 10 more E-500 were offered via auction and the price maintained at 1.8MM I would agree that a market value had been established.
-----------------------------
Observations:
I think the E-500 will also have very good operating expense numbers. And:

1) If oil does go to $100+/barrel next year, and

2)If the economy does not tank as a result,

Then I think the E-500 will be all the more attractive.

Regarding appreciation, lower/more conservative production volumes would favor appreciation. When Dayjet goes belly up, I suspect it’s inventory will be acquired about equally by private owners and wanta-be air taxi startups.

(BTW: I don’t expect Dayjet’s inventory to ever exceed 50 to 60 airplanes).

cj3driver said...

Hummer said,

"... Again, speculation. Have Vern establish a future's market with real money and you'll be able to play and know the value. Otherwise, my guess (or anyone elses) is as good as yours..."

Hummer,

My guess is based on some pretty strong arguments. But so was the OJ murder trial.

I’d like to hear some arguments/reasons why you think I am in error.

“Specualtion” drives markets in every sector … yes it’s usually a guess, but an educated one, backed by data.

I guess the sun will shine tomorrow … it did today and yesterday. “My guess as good as yours?” or is the “guess” of the National Weather Service a little better. Arguments can be made both ways.

As to the fate of Eclipse, I hope Vern isn’t using your logic “my guess (or anyone else’s) is as good as yours.

hummer said...

cj3driver
You think I'll fall into the same trap that Ken has. By providing facts, you manipulate them, twist them and others validate them. Not me.
See "Critic" is a negative apprasial of a condition. It is not fought with facts. Facts have nothing to do with criticism. Otherwise, it becomes "constructive" criticism.
The elements of critism are:
Creation of Doubt
Challenge
Insult.
So to servive in the game of critism, it is the three elements listed above.
What's your choice?

airtaximan said...

Ken:

Save more money and buy a single engine. Apparently, you are patient as hell...but want the lowest price possible - go with the single engine Currus or d-jet and you'll be 85% happy with 40% less cost.

These are your bragging rights at stake, right? You don't really care about performance or payload -because everyone here knows you can afford BOTH Mustang and an e-clips... so, why not save MORE money, and brag on, and buy a single engine jet for much less?

Heck, I'd even suggest a prop, but somehow, you are fixated on a cheap jet.

PS. MANY people here are curious about your consistent thumping about 2,700 orders for e-clips. I will remind you, that e-clips NEVER wanted anyone to know that Dayjet had 1430 of their "orders" and most were "options". Only you are left promoting e-clips as having 2,700 "orders". Please explain to the class, how you can possible come to this conclusion, when everyone knows:
1- Dayjet has half the orderbook as "options".
2- Dayjets options are three years away from delivery.
3- there are other fleet orders that are really "orders and options".

Go on... make my day!

airtaximan said...

Hummer,

sorry... to tell you two FACT in Dayjets operations of e-500s are not my fault:

1- they set aside two spare planes for every 10 they buy..why? Ask yourself - but remember, the planes are operating/holding up better than expected!

2- they do not operate their e-500 for revenue.... on weekends - this time has been set aside. Mouse claims Dayjet may have re-slold their planes to "investor/owners" and are leasing them back. I doubt it, but its possible. Sounds like your plane...sorta. Anyhow, the air taxi business at Dayjet is reserved for 5 days per week.

So.... if you are using them as an indication of what's reasonable for duty and maintenance, and reliability. 12 planes bought = 10 planes in service, 5 out of 7 days per week.

This is not ME saying this - this is the worlds most preferred customer, with the greatest manufacturer/operator relationship (lasting over 4 years while burning overhead cash just waiting for equipment to finally show up) on earth... jumping ahead of deliveries, and having preferential pricing at 40% off the going rate for their planes, and getting 1,100 options for next to nothing, plus having other owners finance their progress payments/aircraft construction...so I guess, they KNOW what it takes!

Don;t shoot the messanger. Reality bites.

cj3driver said...

Hummer said;

“… The elements of critism are:
1. Creation of Doubt
2. Challenge
3. Insult.
So to servive in the game of critism, it is the three elements listed above…”

Hummer, I’m Not sure I agree with you, but;


I suppose your criticism of my post meets those elements. However, it’s a little weak on the first two of the three. …. My guess is as good as yours, though.

hummer said...

ATM
Wow.
That is profound!
And there can only be one
possible conclusion.
Don't do what Ed is doing?

hummer said...

execlipser
thanks for bringing the angel flight to our attention. That is really what it is all about. Sometimes in our day to day battles simply to survive, we don't focus on those things that make this existence all worthwhile.
Thanks again and may God bless all of those involved.

airtaximan said...

Hummer,

Of course you are right - there could be a better answer for a business model... but one would/could/should ask - Why is 20% of Dayjet's fleet set aside for spare planes? Why are they setting aside 2 days a week for downtime?

Hummer, you might THINK there's "no reason" for Dayjet to do this - and I might agree with you, but there's one important CAVEAT:

Dayjet knows MORE than you about the E-clips 500. Ed is not stupid, and he probably doing the best he can (my opinion) to make th e-500 work as an air taxi, all things considered.

- the range
- the payload
- the duty cycle
- the downtime required
- spares
- pricing

I hope for your investors' sake you are a lot smarter than Ed, and you know a lot more about the operating requirements for the e-500 as a taxi.

hummer said...

ATM
Thanks
Ed is a lot, lot smarter than I.
By now, Ed has forgotten more than
I know about the little jet.
Ed & Vern waste more money than I will ever have.
There could be more than one
CAVEAT?
The prudent way is to proceed with
caution and prayer.
I'll embrace the prudent way.

airtaximan said...

Man, you are the greatest....

Bonanza Pilot said...

One thing that might actually help Eclipse is the decline of the US dollar..was thinking about that in terms of the auction buyer. If you are looking at the price of the Eclipse in Euros it has been falling....and if interest rates are cut further, there could be another discount as the dollar continues to tank. Perhaps Eclipse will find an active market in Europe and Asia...those are the growing economies of the world.

Unfortunately for Eclipse I don't think they are going to have much time to get that done...the more days that click on by without Avio being fixed and large scale deliveries happening, the more likely we will see bankruptcy. I have always figured a major shakeup before Oshkosh next year..and perhaps even by the end of this year.

FlightCenter said...

The Eclipse 500 Delivery Data has been updated to reflect the current FAA registry database.

The executive summary:

A total of 48 Eclipse 500 aircraft have been delivered. Of those, 15 were delivered in Q2 and 28 were delivered in Q3 and 4 aircraft have been delivered so far in October.

The FAA database still shows no certificates of airworthiness issued for any serial # above serial #38.

The records confirm that Constellation Productions, Inc. (John Travolta's company) has taken delivery of N218JT, serial #47.

In addition, Eclipse has submitted paperwork last week to transfer registration for 2 additional aircraft, serial #46 and #52.

FlightCenter said...

The FAA records show that Cessna has delivered 23 Mustang aircraft and received certificates of airworthiness for 32 Mustang aircraft.

airtaximan said...

FC,

Sounds like someone forgot to take their One-A-Day vitamins...

Perhaps they are going to switch to One-A-Day plus iron, soon.

- there were 54 planes in production last year, and noted as such in Q-1 of this year... it will be interesting to log "born on dates" and track the gestation period. So far, its taking a long, long time to make a plane.

Sustainable 1 per day means they need a lot of planes in work... a lot!

Thanks

jetaburner said...

Definition from Dictionary.com of Critic:
–noun

1. a person who judges, evaluates, or criticizes: a poor critic of men.

2. a person who judges, evaluates, or analyzes literary or artistic works, dramatic or musical performances, or the like, esp. for a newspaper or magazine.

3. a person who tends too readily to make captious, trivial, or harsh judgments; faultfinder.

I think #1 applies to most of the critics on this website. The faithful refuse to judge, evaluate, or be critical of anything Vern of Eclipse says. I just don't see how they can keep doing that based on all of the broken promises made by Vern and his company. Simply amazing!! But I guess that's the definition of faith:
2. belief that is not based on proof - also from Dictionary.com

jetaburner said...

Does anyone know why I can't find N218JT on FlightAware? Did John Trovalta block it? Or is it not flying yet?

jetaburner said...

Flightcenter-

You said:
"There have been a lot of posts from TBM drivers, PC12 Drivers and numerous CJ drivers saying that they (and their buddies) can't see any reason to buy an Eclipse."

Absolutely agree. The e-clips and other VLJs are really marketed to the piston drivers who don't have any turbine experience and haven't been able to afford to upgrade until now. That is one of the fundemental problems with their model and is a considerable risk to the future of Eclipse (the company) and the value of the aircraft. Clearly this segment of consumer is very price sensitive to both the purchase and running costs. I don't think they really understand, nor do I think e-clips is being realistic, about what it will cost to own and operate the airplane. Add to the fact that the company's volume production model will drastically hurt re-sale ofthe airplne and these price sensitive consumers, their only customers, will re-calculate their cost of ownership. Couple this with all of the other excellent reasons CJ3 Driver has presented and you have a really ugly resale market for the e-clips. My prediction is that if, and that's a big if, e-clips is succesful in becoming a sustainable, profitable company, you will be able to buy a used e-clips in 3 years for $750K. If e-clips fails you won't be able to sell your e-clips. Sounds like a risk profile I want to buy into.

I spoke with the Cessna rep who handles the Mustang, CJ1,2,3, and 4 for Colorado. Nice guy. Spoke to him about the Mustang training requirements that have recently been published and he explained that they were taken out of context. Basically, they were discussing how a pilot with no turbine time and limited twin time can transition to the Mustang. If you have a significant (probably 500hrs) of previous turbine time (even in a single) then they will let get your crew type immediately and after 50 to 100hrs you can go for your SP.

CJ3Driver-

Question for you on the SP type rating for the CJ3:
I have the CE-525S type for the CJ2 whichi I believe is the same for the CJ3? Do you have to re-type every year because the TO weight of the CJ3 is above 12,500lbs? I believe this is true if you have a SP type for a Bravo and I originally thought it was b/c of the TO weight but now I'm told it is because of the way the plane is certified. Can you clarify?

bill e. goat said...

FC,
Thanks (once again) for the informative, and uncontroversially useful resource.

It looks like we're not far away from

402 this ye-

oops, I mean 1 per mon-

oops, I mean...

Bankruptcy?- naw, just take another hit on the Koolaid and have a brownie or two- and lower the bucket down into the well again- it never seems to run dry...

FlightCenter said...

JetA,

You get a different message when you try to track Travolta's aircraft on flightaware than the message you get if you try to track Mike Press's aircraft.

If you try to track Mike's aircraft, Flight Aware tells you that it is blocked.

Flightaware just doesn't seem to be aware of John Travolta's Eclipse airplane yet. They do track at least one of Travolta's other aircraft, so I would guess he doesn't have tracking blocked. You can see one of his aircraft landed in Orlando yesterday.

Give it a few days.

jetaburner said...

Simple exercise of how the Critics see the plane and how the Faithful see the plane:
Critics:
- No anti-lock brakes.
- No ground flaps.
- No thrust neutralizers or reversers.
- Not acceptable range/payload: 1000nm IFR w/ a full fuel payload of about 620-650lbs (depending on options)
- Tiny cabin.
- Poor climb performance above FL350 compared to other VLJs and LJs.
- Questionable quality due to "value engineering", reputation, and track record of the company. This gives the critics major concern about maintenance, reliability, safety, and resale value.
- Not acceptable that the company is delivering the plane despite no FIKI certification and not completed avionics. This gives the critics even more concern regarding the quality of the product and company that is producing it.

How the faithful view the plane:
- 2 engine jet!!
- Inexpensive. They assume this is because of Eclipse's superior ability to control costs and produce at unprecedented volumes compared to the Dinosaurs and therefore has nothing to do with quality.
- It flies really high compared to their current planes which gets them above most of the weather.
- It goes really fast.
- It is really efficient.
- Payload and range is acceptable because it is still better than their Cirrus or Cessna 340.

I think both sides are accurate but look at the performance and value of the airplane from different sides of the coin. What will be interesting over the next couple of years will be to see how the market responds now that the plane is priced at $2M and there is real performance data. Recent data suggest that the market isn't responding favorably (shrinking order book, low asking price on Controller).

Black Dog said...

can anyone explain in laymans terms how a Aircraft can be delivered but have no C of A?

I may be wrong but it would appear wise to have a C of A before delivery.

FlightCenter said...

ATM,

Very good on suggesting one a day vitamins.

As for born on dates, it looks like you can track when Eclipse tells the FAA that they have started aircraft.

It appears that Eclipse has submitted paperwork to the FAA that they have started production on 4 aircraft last week and 4 aircraft the week before.

They submitted paperwork to the FAA on serial # 67, 69, 70 and 71 on 9/27 and submitted paperwork on serial #72, 73, 74 and 75 on 10/3.

So they seem to be starting 4 a week.

hummer said...

jetaburner
"faith - belief not based on proof"
Dictionary.com
I prefer the earlier definition:
Hebrews 11:1

jetaburner said...

Hummer-

That's great but I wasn't referring to the religious meeting of faith. I've copied the full entry from Dictionary.com for faith:

–noun

1. confidence or trust in a person or thing: faith in another's ability.

2. belief that is not based on proof: He had faith that the hypothesis would be substantiated by fact.

3. belief in God or in the doctrines or teachings of religion: the firm faith of the Pilgrims.

4. belief in anything, as a code of ethics, standards of merit, etc.: to be of the same faith with someone concerning honesty.

5. a system of religious belief: the Christian faith; the Jewish faith.

6. the obligation of loyalty or fidelity to a person, promise, engagement, etc.: Failure to appear would be breaking faith.

7. the observance of this obligation; fidelity to one's promise, oath, allegiance, etc.: He was the only one who proved his faith during our recent troubles.

8. Christian Theology. the trust in God and in His promises as made through Christ and the Scriptures by which humans are justified or saved.
—Idiom9. in faith, in truth; indeed: In faith, he is a fine lad.

I find #s 1 and 2 more relevant to this blog than 3 through 8 or Hebrews 11:1

hummer said...

Jetaburner
Then what does "kool aid" mean?

jetaburner said...

I have no idea. I didn't use that term. Goat did.

hummer said...

JetaBurner
Maybe it is a derogatory term used by the critics (your side) to degrade the faithful (there side) when they could handle an arguement made by either side?
Something about Jim Jones?
No religious implications, I presume?

jetaburner said...

Only one e-clips active on FlightAware currently. Its DJS123. Its currently 39 minutes into its 1hr 8min flight at 11,000 feet doing 295kts. That sounds like jet performance to me!!

cj3driver said...

JAB said;

“… Question for you on the SP type rating for the CJ3:
I have the CE-525S type for the CJ2 whichi I believe is the same for the CJ3? Do you have to re-type every year because the TO weight of the CJ3 is above 12,500lbs? I believe this is true if you have a SP type for a Bravo and I originally thought it was b/c of the TO weight but now I'm told it is because of the way the plane is certified. Can you clarify? …”

I carry two type ratings, CE525 and CE525S. The first is 525 series aircraft as crew (PIC or SIC) the second is to operate single pilot. These type ratings cover the models CJ, CJ1, CJ1+ , CJ2, CJ2+, and CJ3. There is no requirement to “re-type” every year. In fact, according to flight safety the “crew” rating requires a review and sign-off every year, and single pilot type just requires a biannual (every two years) … same as private pilot. Most insurance companies require at least annual sim training, so this is the norm.

As far as Bravo – Encore, I believe those aircraft do not have an “S” type rating. In order to fly single pilot, an annual sign-off is required, and granted through a “single pilot waiver” under the original type rating. This may be the “retype” you have heard of.

I am not aware of any other limitation regarding the 12,500 lb TO weight. I seem to recall there are some manufactures certification issues, and I believe there is a requirement that all aircraft over this weight require a type rating. All TurboJets fall into this category anyway. Single engine turbojets also fall into this category.

FWIW – this is what I have been told by FlightSafety.

Cj3

jetaburner said...

Hummer-

Didn't get it at first probably b/c of my younger age. Sound like sarcasm to me. However, I don't think Goat meant it as a reference to religion or religious behavior rather as to a cult behavior (although it was a religious cult).

I prefer not to use sarcasm or personal attacks in discussing the e-clips. I find it distracting and does not offer any benefit to the blog. I have a deep interest in aviation which is what brings me here to discuss it.

cj3driver said...

JAB,

I just remembered one of the requirements for planes over 12,500lbs.

The exit doors must be delineated with a 2" band (paint) in a contrasting color... I guess they figure with so many windows, its hard to find the door!

FlightCenter said...

Black Dog,

You can't legally fly an aircraft without of certificate of airworthiness, so no one would take delivery of an aircraft they intended to fly without a certificate of airworthiness.

There are a number of possibilities of what could be happening.

1) The people who are taking delivery of their aircraft, actually don't intend to fly the aircraft as they are leasing them back to Eclipse until the aircraft is completed.

Serial # 44 might be in this category. Since "delivery" it has been flying back and forth between Double Eagle and ABQ.

Serial #42 might be in this category as well. It left ABQ on 9/19 and went on what looks like a demo tour with stops at prominent airports across the country and has now returned to ABQ this weekend.

2) Another possibility is that the folks who are taking delivery are taking delivery with some sort of "provisional" certificate of airworthiness that has a number of limitations that are expected to be removed after some IOUs are delivered. My theory is that the FAA doesn't want to record the temporary certificate of airworthiness in their database and are waiting for the IOUs to be delivered before recording the final certificate of airworthiness issue date.

In this case, the owner wants his aircraft so much that he accepts delivery with the temporary or provisional certificate of airworthiness.


Serial #41 might be in this category. It flew to St Louis in early September, but has had no IFR flights since that time.

I'm open to other explanations.

jetaburner said...

CJ3-

Than you for your clarification. You said:
"As far as Bravo – Encore, I believe those aircraft do not have an “S” type rating. In order to fly single pilot, an annual sign-off is required, and granted through a “single pilot waiver” under the original type rating. This may be the “retype” you have heard of.

This now makes sense to me. I also have a CE 525 and a CE 525S so I am familiar with the crew requirement. Just wasn't sure if the > 12,500 TO weight meant you had to have a single pilot waiver. When I got my CE-525 type in 2002, the CJ3 wasn't out yet and I remember being told that the plane couldn't have a TO weight greater than 12,500 and be flown single pilot unless there was a single pilot waiver (as in the Bravo's case). Clearly, either I misunderstood or they were mistaken. Thanks for the clarification!!

jetaburner said...

CJ3-

I love flying the CJ2. I recently flew it from Colorado to South Florida (1650NM) at FL450 non-stop in 4hrs 10min. What a great bird!! The CJ3 is even better! Talk to Cessna today and the CJ4 is going to be single pilot certified. Very nice... We are very lucky to be flying such magnificant machines.

Black Dog said...

Thanks FC

bill e. goat said...

Hummer,
I imagine you already inferred the reference to "kool aid"- I didn't discover the blog until earlier this year, and it took me a while to catch on, but as I understand it- a reference to the sad spectacle at Jonestown* , as interpreted per JetAburner's enumerated examples:

"6. the obligation of loyalty or fidelity to a person, promise, engagement, etc.: Failure to appear would be breaking faith.

7. the observance of this obligation; fidelity to one's promise, oath, allegiance, etc.: He was the only one who proved his faith during our recent troubles".
-------------------------
*Doesn't seem like that long ago...I imagine the linkage is well lost on younger bloggers here. A good thing, indeed, I think.

http://en.wikipedia.org/wiki/Jonestown

airtaximan said...

So they seem to be starting 4 a week.


This might be good news... since they are starting 4 per week, and we know the numbers, we can see how long it takes to "non-manufacture".


BTW, is this "started as in "really started" or is this as in "started on the assembly line"?

- My understanding is, they e-clips part of the "non-manufacturing" process begins with them taking some parts and welding them together... this occurs prior to the plane making it to the "assembly line"... I am just trying to be clear on what "started" means.

If we know when the begin... really... we can guage how long it takes them to make a plane.

Finally, they are almost through the 54 planes started early 2006... so there's a fresh batch in work since a few weeks.

ATMan says - the few planes delivered a week is about to grind to a hault.... for a long time. Just a hunch.

airtaximan said...

FC,

"Flightaware just doesn't seem to be aware of John Travolta's Eclipse airplane yet. They do track at least one of Travolta's other aircraft, so I would guess he doesn't have tracking blocked. You can see one of his aircraft landed in Orlando yesterday."

Silly boy - that's the beauty of the e-500... Travolta is flying it - but flightaware cannot see it - it's inside his other plane.

;)

gadfly said...

Hummer . . . and your dis-tractors

Like it or not, the author of the Book of Hebrews has the more accurate definition of "faith" . . . it's not a "religious" thing at all, but simply a clear definition of the word, "Faith". You can "take that definition to the bank" . . . and it predates anything in the English dictionary, and is worth a careful look by all of us who contribute to this blogsite:

"Now faith is assurance of things hoped for, a conviction of things not seen."

Some of us (myself included) have not the slightest conviction that the promises of Eclipse will ever take place. Others claim to have an "assurance" that the things for which they "hope" (look forward to, with conviction, and "anticipation") will actually "take place".

In this discussion, the reference to Hebrews 11:1 is excellent . . . and even though it is found in the Bible, is an excellent clarification of the meaning of certain words which seem to be the heart of this discussion.

Should you read before or after the reference, you will, indeed, find yourself in firm elements of the Christian faith, and narrow teaching on that subject.

But the single verse is a clear and concise definition of "Faith", which may certainly be applied to the discussion of the promises of "Vern" and the "Eclipse". It is clear that the author of Hebrews had an excellent education in the Greek language and was no slouch in the meaning of words.

Certain bloggers have stated that they have complete assurance that the things they "hope for" will surely take place. Others have no conviction that the little jet will ever fulfill the promises made . . . so many years ago.

Look carefully at the definition and consider the following: "Assurance" . . . based on what? . . . promises made by "Vern", et al. "things hoped for" . . . a little jet that can fly at a given altitude, at a given speed, and a given distance . . . all yet to be consistently proven (in “real life”, and every day experiences) . . . a conviction of things not seen (a human promise by a human company that has yet to demonstrate a complete aircraft). 'Seems that "hummer" has used an excellent reference to what this blog is all about . . . although, I suspect that wasn't his intent. But I find much in common with his approach.

"Truth" is where you find it . . . or rather, where it finds you. This blogsite continues to be an education in things aeronautical, reliable, financially sound, and functional in everyday constant use . . . no matter on which side of the issues you may find yourself. To make the most of it, it is good to keep an open mind, and use common sense . . . and avoid "name calling". All of us bring complex issues to the table . . . and life is never simple. Consider that, if nothing else, this open discussion by a large group of people from . . . who knows what backgrounds, are privileged to discuss openly our opinions concerning a little aircraft, and the people behind it, that are dead set on changing the ways we look at our chosen professions, and life-styles.

That's all for tonight!

gadfly

(Black Dog: You “Brits” just don’t get it. In the US of A, we have a “Sam Walton” mentality . . . as long as it’s “cheap”, we don’t care where it’s made . . . China, Albuquerque, whatever! . . . we’ll buy the thing . . . ! Oh yeh, ‘heard that the virus has even infected the “Continent” . . . ‘can’t even buy things in Germany, without a label “Made in China” . . . welcome to the club.)

Old Troll said...

Hummer,
It's disgusting to use the death of ten people to try and score points for Vern.

FlightCenter said...

ATM,

Of course, why didn't I think of that?

That's really good.

Also explains why JT didn't need a CofA.

planet-ex said...

According to Cessna:

"Single pilot operation has been a characteristic of Citations that has distinguished them from their competitors. In 1977, Cessna’s Citation I S/P was the first business jet in the world to receive single pilot certification. Since that time, the list of other Citations that can be flown single pilot has grown and include: Citation II, II S/P, S/II, CitationJet, Citation CJ1, Citation CJ2, Citation V, Ultra, Encore, and Bravo."

As for Travolta and his Eclipse, maybe it's not flying because he doesn't have a type rating for the beast.

Ringtail said...

"Hummers a really good guy".

Yep Taxi, he is. Hummer gets a special thanks from Ringtail for holding down the fort for the last couple of days.

Ringtail said...

Where's Alexa, Ken and Mirage...we need to give Hummer some support...although he doing a dern good job. Some of the critics are still thinking about some of his posts.

Ringtail said...

Oh, and one more. Anybody seen Gunner? I have a feeling he is in the woods this time of year.

Stan Blankenship said...

Anybody seen EO387? I have a feeling he is out doin another deal.

mirage00 said...

Where's Alexa, Ken and Mirage...we need to give Hummer some support...although he doing a dern good job. Some of the critics are still thinking about some of his posts.

I'm here... yes a special thanks to Hummer for keeping it real!

I've been sitting back, just watching the blog spiral downward... Oh and waiting for Stan's report on the AFM and the "dangerous" CG issues the E500 may have.

I remain amused

double 00

Ken Meyer said...

...and as for me: I don't see the point any more. Honestly, it's hard to get very interested in the blog these days. Now that the plane is rolling off the line in large numbers and it has many times demonstrated that it meets promised performance, all that's left is for a few hardcore haters to keep patting themselves on the back about how great it is they didn't buy one.

OK, for them it's great they didn't buy one.

For others, the plane's a good plane.

Ho hum. What a surprise. The haters' blog has a few hardcore haters.

There is nothing new here any more. Even Rich Lucibella got bored and left.

Ken

airtaximan said...

Some interesting tidbits from POGO:

1- "While we have negotiated the principal terms of an aircraft purchase agreement with Eclipse Aviation, we may be unable to finalize this agreement and we may not be able to enter into acceptable support services agreements with Eclipse Aviation or Pratt & Whitney Canada."

Also, Hummer, better take note: they plan to have spare aircraft on-hand... just in case... AND all planes return to base every night for MAINTENANCE. Each and every night.

... and this my friend, is their going-in plan!

*** its good bedtime reading material - everyone should read it - Ken will especially key into the rosey picture the e-500 enables as a competitive solution for air travel to major cities.

From other sources, published pricing (per plane, not per seat) is higher than light jet charter... one might as "why"?

http://www.sec.gov/Archives/
edgar/data/1412199/
000119312507200579/
ds1.htm#toc29144_1

PS. they are planning 2,000 hrs per year operations and load factor of 1 or 2... up to 500nm stage length... no real mention of car trips.

Anyone have insight into the direct IPO system? Is it a last resort?

(I hope the wall street kid from a few weeks ago is listening...he ran off pretty quick when he tried to compete with Billboard Ken, and we suspected he was promoting the stock!)

airtaximan said...

Sooo, Ken: if you are so disinterested and bored, why are you still here? I was beginning to think you ran out and actually PURCHASED an e-500 this week, and that's where you were. Oh well.

I know you love to jump to conclusions, but I would wait around a bit (we really love you here Ken) for the fun to begin... see, when the planes "rolling off the line" as you put it, reach the end of last years starts, there's probably going to be a little lull.

A 50% improvement in production this year, will result in around 6 months for more planes to consistently roll off the line....past number 55 or so. When was number 71 started, again? Maybe they started some planes in Q-2 so things will take a few more weeks to slow down...

Maybe I'm wrong - but heck, even when I've been dead nuts RIGHT, to YOU I've been wrong.

We'll see...

Glad to have you back. Post the revised performance numbers for us again... we're forgetting them already.

EclipseOwner387 said...

FC and Black Dog,

Airplanes are not being delivered without C of A. Registration paperwork and C of A paperwork are sent seperately. The FAA is just slow in updating. SN41 is absolultely certified and has been flying with a mentor pilot until the scheduled training. Which may be happening right now actually. No games being played.


Stan,

I did just do a deal. Bought another Mirage today. Low time and clean as a whistle. Let's see how long it takes for the FAA to pick up the sale.

I am still looking at Eclipse positions but waiting for just that perfect blend of price and timing. I almost bought position SN154.

Cheers

PS: I got to see where Thurman Munson crashed today. Sad. A guy who was there told me his first hand accounting of the incident. Awful. What a waste.

planet-ex said...

Rolling off the line in large numbers?

The last time that happened is when Ford was building B-24's at the rate of 21 a day.

bill e. goat said...

Planet-ex,
21 per day !?!
Y-I-K-E-S
18,482 built!

http://en.wikipedia.org/wiki/B-24_Liberator

mouse said...

Airtaxi,

I did NOT say DayJet sold their plans to owners, I said they may have left themselves this option...

Troglodyte said...

JetABurner & CJ3:

After the previous discussion regarding CE-525 and 525S type ratings I checked with the FAA pilot examiner who issues the majority of the Citation 500 and CitationJet type ratings in a busy training area in the southwest, who confirmed my understanding.

Please forgive the length of the discussion, and please ignore if this is beating a dead horse...

A CE 525S type rating covers all single pilot and crew operations. The crew may decided prior to the flight how the flight is to be conducted and logged. In other words, if two pilots are flying together they could decide to conduct a single pilot operation, where the second pilot would not log time (except under special circumstances such as acting as a safety pilot, if appropriately rated etc.). They could also elect to conduct a crew flight with a PIC and an SIC. Whether or not a 61.58 check ride is required within the past 12 calendar months appears to be subject to FSDO interpretation in the CitationJet series, but not in the Citation 500 series (see below). The FARs (61.58) seem pretty clear to me on this point, though. Some folks have ended up with both CE-525 and CE525S type ratings because they took two check rides for various reasons. It may not have been as clearly understood or well defined in the earlier days of CJ flying that the CE-525S rating was intended to cover both types of operation (with the addition of demonstration of crew coordination skills via a 61.58 ride, see above). It also appears that FlightSafety was able to charge more for giving the ratings separately, and did so for a long time. A CJ pilot I have spoken with was furious about this, and claims that he was able to get a refund from FlightSafety for the additional check ride, but not the additional training. I understand they no longer do this per a call to FlightSafety in Witchita as recommended, I believe, by JAB. They do recommend but do not absolutely require that lower time pilots or pilots without prior jet experience do obtain the CE-525 rating, fly the airplane for a while as part of a crew, and then come back for the CE-525S rating.

The Citation 500 series is subtly and confusingly different, which Cessna tried to fix when they certificated the CJ series. In part, this comes from the differences between a Part 23 and a Part 25 airplane. The original Citation 500 was a Part 25 aircraft. There is no such thing as a single-pilot Part 25 aircraft in the regulations. Therefore, a waiver of the requirement for a SIC was available for those whose aircraft had the necessary equipment (I think this included an IDENT switch on the yolk, a boom mike, and a couple of other things). The Citation 501 came off the same line as the 500, but was certificated as a Part 23 aircraft, able to be flown by a singe pilot. In fact, it was arguable for a long time (and still is FSDO dependent) whether you can perform and log time in a 501 as a crew (PIC and SIC). Same thing for the Citation 550 and 551, which are Part 25 and Part 23 aircraft respectively. By paying Cessna a relatively obscene amount of money you can convert the a 550 to a 551, or vice versa. This is paperwork only. Note that it is clear in the Citation 500 series that you must meet the requirements of 61.58 if you wish to operate as a crew. The situation got even more confused when there were 3 ways to get a waiver, each with different requirements: waiver from Cessna, waiver from Sierra Industries, and a third (I’m not sure, perhaps Branson). A few years ago they were harmonized, and all the waivers now follow the same rules. The waiver MUST be renewed every year. The original issuance of the waiver must also be obtained the first time in the specific aircraft for which it is granted -- as far as I know there is no waiver that will allow you to, for example, fly all Citation II aircraft (CE-550) as a single pilot. They are good for one N-number only.

No Citation after the IISP (551) was certificated under Part 23, and the remaining aircraft in that product line require a waiver to operate single pilot, including the SII, Bravo, Citation V, Encore etc. They are all over 12,500 which is the cutoff for normal Part 23 certification.

There is a way to certify aircraft over 12,500 lb. under Part 23 using the Commuter Category rules. I believe that aircraft such as the SJ-30 and CJ3 are certificated using this approach. CJ3 Driver: Is your CJ3 Part 23 Commuter Category or Part 25? I’d be very interested to know. Anyway, I’m unaware that a waiver is required to operate any Part 23 airplane, Commuter Category or not, single pilot.

Let me know if you disagree with any of the above. Always interested in learning more, and there’s a lot more to learn!!

--Trog


P.S. Given the above rambling it seems pertinent to include my “qualifications” such as they are:

ATP. Typed in Citation 500 and CJ (CE-525S).
CFII/MEI
Private Helicopter
Regularly fly (when time and my family permit) Commander 1000, Citation I-SP, R44

FlightCenter said...

EO387,

I have no doubt that the aircraft are being delivered with some sort of CofA.

The interesting issue is why has the FAA stopped recording CofAs since serial #39?

The normal course of events for most aircraft manufacturers is that the aircraft receives its CofA prior to being handed off to the customer delivery team. Delivery usually takes place a few days after receipt of CofA.

This was what used to happen with Eclipse deliveries prior to serial #39 and it is what happens with Mustang deliveries. At Eclipse the records show that for serial #2 through serial #38, the time between CofA and delivery ranged between 3 to 8 weeks.

As mentioned earlier, the FAA reports that 23 aircraft have been delivered, while 32 Mustangs have received CofAs.

Let's look at Eclipse history.

Mar -- 1 aircraft delivered, 5 with CofA
Apr -- 2 aircraft delivered, 11 with CofA
May -- 10 aircraft delivered, 21 with CofA
Jun -- 16 aircraft delivered, 31 with CofA
Jul -- 26 aircraft delivered, 38 with CofA
Aug -- 33 aircraft delivered, 38 with CofA
Sep -- 44 aircraft delivered, 38 with CofA
Oct -- 48 aircraft delivered, 38 with CofA

Obviously something changed at serial #39. The question is why?

jetaburner said...

Trog-

Excellent post. Thank you for the clarification and it seems to fit what I've heard and experienced.

thebigriper said...

A little concerning that mister gunner just up and disappeared on the group. Hope he's just on a good hunting trip.
It is very obvious that this crowd will quite happily go on for ages arguing about performance of the maybe jet and a bunch of other jets and turboprops. I think it is time that the followers and main players on this blog start to put an eye to how well the eclipse is flying out. by that I mean how reliably is the eclipse taking off when someone wants to take off in it. Is it as reliable as it is supposed to be since it has been designed for the air taxi business? There are rumors that they are having problems with a lot of failures of different systems. No wonder there. This is one complex little bird for the size and mission.
Has anyone else heard these rumors?

jetaburner said...

thebigriper-

Yes I have heard about rumors of major problems although it has been only by second hand. One specific was of an e-clips in pieces based in St. George Utah. Don't really know any details other than the owner was fustrated and I didn't bring it up previously as it was second hand knowledge.

cj3driver said...

Trog,
Thanks for the info.

The CJ3 is certified:

14 CFR Part 23 Commuter Catagory.

I believe your conclusion is correct.

Cj3

airsafetyman said...

Miscellaneous ramblings:

Grumman was cranking out 27 Hellcats a day out on Long Island during WWII. As far as I know, none had to be returned from the Pacific war zone to the factory for completion updates.

The Piaggio Avanti II with the bigger PT-6s is truing out over 400 kts in cruise.

bill e. goat said...

ASM,
Thanks for the note on the Hellcats. Man, the volume production days of WW2, and the fast paced breakthroughs of the 1950's, makes everything after 1970 seem a little pedestrian.
---------------------------
Ken, EO, other proponents,
I'm puzzled why Eclipse has not had more aviation writers fly the E-500, especially now that the aero mods are completed.

Since this blog is mostly about informed (ah, or occasionally otherwise) speculation, any idea why AvWeek or FI hasn't done a complete story? (Or maybe they have and I missed it- ballpark time and I'll dig up the back issue).

Thanks.

(p.s.- and even if the blog has become a bit dry for some, I hope we don't lose any of the proponent's contributions!! I think they are very interesting, and balancing).

ExEclipser said...

Some observations for ATM:

I don't think that DayJet will be holding 2 or 5 spare jets for every 10 on order. Maybe that will be their reserve through 50 or 100 aircraft. At least they are trying to put customer service first and they are able to provide a spare aircraft in the event of a system failure of another aircraft.

It would be interesting to see the dispatch reliability figures from DayJet.

DayJet activity seems kind of slow. Now that the flood gates are open, I'm not seeing much of a flood. They are on track to have about $2 Mil in revenue in the first 12 months - mainly in membership fees and the requisite 4 trips per member.

Since DayJet is still training pilots, it's difficult to know for sure which of the DJS aircraft on FlightAware are familiarization trips and training vs revenue flights.

Some interesting FWIW:
All 12 DayJet planes have flown in the past 6 days. In the last 30 days, cycles on the aircraft have ranged from 12 being the fewest to 36 the most. Hours have ranged from 10.75 (.3 hours per day) to 31.75 (1 hour per day). That includes weekends when the planes aren't flying, so the actual usage really averages about .5 - 1.4 hours per aircraft per business day. I'll try to remember to do this again on 11/3, after one month of revenue flights.

FlightCenter said...

Two companies have recently announced their plans to manage your VLJ.

JetAVIVA Launches VLJ Management Services

JetAVIVA was founded by ex-Eclipse employees and have been mentioned on this blog several times as doing a good job assisting with acceptance of several aircraft. They are now expanding their offering to management services and have several Eclipse owners signed up.

Waypoint VLJ Management

Waypoint is based in Columbus and was started by some ex-NetJets folks, including Steven P. Brechter who was previously COO at NetJets.

They are combining VLJ management with charter and are offering -"Guaranteed charter income to substantially offset ownership costs*"

The asterisk says "*For a limited time only, we will guarantee you 300 air taxi revenue hours in your first year. Some restrictions apply."

JetAviva seems to be focused on Eclipse VLJs, while Waypoint mentions Eclipse, Mustang, and Phenom management on their home page.

FlightCenter said...

Another guest author on Mike Press's journal

Mike Press Journal #9

He writes about a flight from Peachtree to BWI after NBAA.

He says they left with 1500 lbs. of fuel and 670 lbs. for the 3 people on the flight and luggage.

They filed for FL350, but were held low for 20 minutes, then incrementally given higher altitudes.

"We expected 330kt at FL350; we got 334kt true airspeed at FL350, burning approximately 210lb per hour on each engine, with engines running at 97.3% N1 and ITT of about 680. We burned roughly 600lb of fuel from engine start to level-off at cruise altitude, leaving 900lb for the remainder of the trip." They landed with 500lbs of fuel.

There have been some questions on this blog regarding resealing access panels.

The author discusses this - "On the exterior, I noticed a gap in the joint between the front accessory compartment cover and the airframe. The compartment holds equipment including the air conditioning system, and is not meant to be opened on a regular basis. Press tells me that every time the cover is removed, the gap must be filled with caulking. In this case, he had gone flying before the caulking was dry. The airflow had pulled the material out of the joint in places, leaving a small gap."

airtaximan said...

Mouse, apologies for the "sold their planes to owners"... yup, they have this options...they could do the "guaranteed return on managed aircraft" NEW business model! What a joke. I guess timing is everything...someone should look at old PR from Jets.com offering to manage your VLJ and promising a return -in 2001?

Anyhow, Dayjet Leasing is probably a depreciation play - blended return based on depreciating the plane and some reduced interest rate of 5% or 6%... just a hunch.

Every penny counts when you are flying a VLJ!

Niner Zulu said...

Unfortunately, Mike Press's Journal #9 doesn't say a whole lot.

A few comments about the fit and finish, or lack of it. Mike's comment to the writer was that the finish is better on later models. Must be MUCH later models, because I saw #38 at OSH and wasn't impressed by either the interior or exterior finish.

As for that gap between the front accessory cover and the airframe that has to be sealed with caulk each time it is opened - the picture says it all. It's NASTY! Right out there on the front of your jet where it's really visible. Jetaburner, ever see anything like this on your TBM? I think not. Eclipse needs to rethink this.

jetaburner said...

9Z-

I have not seen anything like this on my dinosaur, err, TBM. You know what I love about my TBM, is it runs great!! I only have 400hrs on it but I've never had an AOG and my squawks have been minor. My only squawk currently is one of the cabin lights is out.

FlightCenter said...

The key takeaway from the Mike Press journal article #9 was that they left with full fuel for a 486 nm flight and landed with 500 lbs of fuel.

jetaburner said...

flightcenter-

I was just working up an analysis myself on the 500nm flight. I've flown from PDK to KOQN (West Chester, PA near Philadelphia) in my Meridian about 5 years ago. I remember a long ground delay at PDK (45 minutes) and it wasn't NBAA so this is probably more the norm.

500lbs would be my minimum flying into the Northeast in the e-clips. If the weather is VFR you might be able to get away with 400lbs but definitely nothing less. So, with an aero-mod plane (1686lbs of fuel) you would have 186 more lbs up high to burn. At HSC, ISA, at FL350 you get .80nm/lb of fuel which means your range is 149nm extra. At HSC, ISA, at FL410 you get 1.017nm/lb of fuel which means 189nm extra.

So for an aero-mod e-clips operating in the East coast that is held down (normal) and gets a STAR (normal) that range should be:
500lb reserve: 649NM to 689NM (FL410 if you can get it or climb there)

400lb reserve: 729nm to 791NM (FL410).

This is pretty close (actually a little worse) to what I predicted:
- a 800nm IFR plane in congested airspace that can carry 3 people and light luggage.

Reminds of the story of a guy who flew Miami to NYC regularly in his TBM. He sold the TBM and bought a CJ and could no longer make the trip non-stop despite the fact that the aircraft have the same range. He went back to the TBM. The moral of the story is that the range in Jets are a lot more effected than turboprops in congested airspace. I live in Aspen and it is not uncommon after a long ground delay (b/c of arriving and departing traffic) to hear even the big boys returning to the FBO for more fuel!!

cj3driver said...

The news at NBAA that Eclipse had reached 1 per day deliveries was encouraging. Especially since I predicted 130 aircraft this year.

However, since October 1st, only two (unblocked) Eclipse’s have flown away from ABQ. Serial #19 (N519EJ probably in for aero-mods) and Serial #46 (N6100).

cj3driver said...

Make that "flown away IFR"!

cj3driver said...

Regarding Mr. Press’s PDK-BWI trip. The CJ3 would have used 30%-35% more fuel for this trip, but the fuel price at BWI (airnav) is $7.01 per gallon. I could have made this leg 3 times without refueling. The ability to tanker fuel can reduce annual fuel cost significantly. In the case of BWI … by half.

Here are the revised annual costs based on average fuel cost with ability to ferry fuel (adjusted for respective models) and referenced off the E500 at 200 hrs per year, 500 block miles, and adjusted for fuel/time/maintenance costs accordingly,

new Eclipse - $366K w/ $75K depr. (4.75 fuel avg.) $2mil value

new Mustang - $375K w/ no depr. (4.25 fuel avg.) $3mil value

new TBM 850 - $362K w/ $50K depr. (3.85 fuel avg.) $2.8mil value

new Pilatus - 370K w/ 50K appr. (3.50 fuel avg.) $3.6mil value

used CJ1 - 378K w/ no depr. (3.85 fuel avg.) $3mil value

used CJ3 - 351K w/ 260K appr. (3.25 fuel avg.) $6.8mil value

used Citation I - $376 w/ 25K depr. (3.85 fuel avg.) $850K value


The reason this is important, is that in the long run, when estimating resale value and total cost of ownership (charter, airtaxi or private), these numbers will eventually impact the popularity of a particular model.

Given the fact that under this analysis these aircraft are all very close to the same annual costs, its hard to believe that Eclipse will be able to sell 500-600 planes per, when the average in this bunch is 75-100 per year.

JetProp Jockey said...

JetABurner

I agree with your comments about fuel burn on a turbojet compared to a turboprop. Can you imagine the shock for those going from 100LL burners directly to a Jet.

I have a place in Southern Florida and am based in PA near Harrisbug.

I ALWAYS am brought down from FL270 to about 14,000 starting 100nm south of Washington and am given a routing either east or west of the Washington/Baltimore airspace. I only wish I burned the fuel promised by planning the flight with a direct climb to altitude and an optimum descent.

Noone who has only flown piston aircraft understand the reality of JetA burning at lower altitudes.

jetaburner said...

jetprop jockey

I agree with what you said especially:
"Noone who has only flown piston aircraft understand the reality of JetA burning at lower altitudes"

I fly a TBM and a CJ2 and I'm always suprised how much the CJ2 burn down low or for short flights. That's why the jets don't always make sense for the shorter trips. The problem with e-clips is that with its short range, lack of payload, and small cabin it doesn't make sense for any trips!!

jetaburner said...

Jetprop-

I'm seriously considering a TBM850 so I ran the numbers including the 1hr taxi time for PDK to BWI.
1hr41min at FL260 and 900lbs or 1hr44min at FL310 and 830lbs. So with 500lbs of reserve I could still carry 1490lbs!! Or... I could do what CJ3 driver does and ferry fuel in so I wouldn't have to spend $7.01 per gallon!! If that's the case, I still can carry 865lbs with full fuel from PDK and land with 1126lbs.

JetProp Jockey said...

JetABurner

Don't forget that Signature at BWI has those special handling fees. An uncoverted PA46 gets charged about $50, while my PT6 up front increases the cost to escort me into the FBO and back out to about $100. my guess is that the minimum charge for a fanjet starts at about $200.

I argue with them all the time, but usually don't win. Several times a year I get the other guy who is approved to fly my plane to ferry my to BWI (20 minute flight) and do the Southwest non-stop to PBI.

Signature at PBI is actually a little easier to deal with, but they have competition there.

Shane Price said...
This comment has been removed by the author.
Shane Price said...

Met a man yesterday.

He had listen to some of the DayJet advertising and seemed impressed with the idea of a 'taxi in the air'.

It became clear that it was not his intention of using the service, but I asked him what he thought the cost was. He said it was in the 'range of an average airline ticket'

You lot must have really expensive airlines!

The only reason I mention the conversation at all is that it took place in Vienna, Austria.

Which is, the last time I looked, a long way from Florida.

Ken's new prayer:-

O Lordy, please let there be 2,700 orders,
PLEASE let there be 2,700
"Orders" not "options and/or orders"
PLEASE PLEASE PLEASE....


to a good 'ol Southern Baptist Choir backing track.

Ken, forget numbers as defence. You just give accounting a bad name.

Oh, I forgot, you're a doctor.

Shane

ColdWetMackarelofReality said...

I find it interesting that as of yet the Faithful have refused to take up the issue of Eclipse's failure to sell 30-50% of their needed volume in any one year.

Since there are approximately 1400 'real' orders, sold over nearly 8 years - simple math says we are looking at about 180 sales per year on average.

Consider too that the vast majority of the reported sales, literally all but about 200, were reported by 2005, that leaves a scant 200 or so sold in the last two years.

And that is with special introductory low pricing, special clubs, auctions, and a sweetheart deal for approximately 300 planes with a closely related 'sister' company.

During the same time frame (2005 to now), Cessna, and Embraer, and Diamond, and Cirrus have racked up hundreds of orders each for their own competitive designs.

Eclipse, in the persona of none other than its' bombastic CEO and chief prophet of the Church of Flyantology L Vern Raburn, has admitted it requires 500 to 600 sales per year to break even.

They have missed the mark by 300 to 400 aircraft, each and every year. Almost as bad as their production schedule prognostications.

Where is the revolution? The price has gone from the ridiculous, unachievably low to finally approaching reality. Production schedules have gone from the ridiulous, unattainbly high to finally approaching reality.

Imagine if the adults had been in charge 4 or 5 years ago.

cj3driver said...

FWIW

The only "blocked" Mustang is currently flying from STS (Sonoma, CA)-STP (St Paul, MN)1380 NM. It is visable as a blocked tail on flight explorer. Currently at FL410 making 346 kts GS.

gadfly said...

Cold Fish

There is no reality here. If the “adults” had been in charge 4 or 5 years ago, nothing could have changed. There is that old saying, “You can’t make a silk purse out of a sow’s ear!”

To begin the building without a firm foundation, there is not going to be a good result.

This building, from the very start, was built on “sand”. Sooner or later (probably “sooner” than later), it will fail.

Anyone can “dream” . . . anyone can “promise” great things, but reality requires much more than “wishful thinking” and a massive ego.

gadfly

(It would appear that not a single fully functional E500 will be delivered in the year 2007 . . . and probably not ever!)

bill e. goat said...

FC:
Mar -- 1 aircraft delivered, 5 with CofA
Apr -- 2 aircraft delivered, 11 with CofA
May -- 10 aircraft delivered, 21 with CofA
Jun -- 16 aircraft delivered, 31 with CofA
Jul -- 26 aircraft delivered, 38 with CofA
Aug -- 33 aircraft delivered, 38 with CofA
Sep -- 44 aircraft delivered, 38 with CofA
Oct -- 48 aircraft delivered, 38 with CofA

Obviously something changed at serial #39. The question is why?"

Goat:
I suspect the plunge was due to the "completion" of the articles pushed into the dark corners over the past 18 months. These had been started, then put on hold for parts or rework.

Finishing x per month was presented as "building" x per month, with a majority of the delivered articles having been in work for many months.

Once the glut of partially finished ones was worked off, they are down to "fresh start" articles. These seem to be going more slowly.

(Odd, because the processes and revisions should be ironed out by now- I would expect later ones to be much more expeditiously than old rework-prone articles).

My take on it, anyway. Now we have to carefully examine the definitions of:
"Start"
"Delivered"
"Built"
"Certified"
"Orders"
mean, amongst other rather misleadingly common words in the language of Eclipse.
---------------------
Exe:
"All 12 DayJet planes have flown in the past 6 days. In the last 30 days, cycles on the aircraft have ranged from 12 being the fewest to 36 the most".

Goat:
ATM raises reasonable questions about dispatch rates, seems the airplane is reasonably reliable.

But Goat asks the question:
How many revenue flights has DayJet flown???

I think the airplane is good, and I think individuals will be quite pleased with it (ah, eventually).

But I think the volume deliveries are fantasy and the business model predicated on air taxis is wildly speculative, and from decades of experience, not going to "explode" and those who expect it to are somewhat arrogantly dismissive of history.

airtaximan said...

GOAT: two words...

Spares and Repairs.

Dayjet's going in plan:
** 2 jets per 10 for spares
** 2 days per week for repairs

Pogo's going in plan:
** we'll have spare planes
** we'll do nightly repairs

Spares and repairs...

PS. for the persnickety Reapirs refers to maintenance and/or repairs - I like the rhyme. Also, I agree with execlipser, its a GOOD idea to plan for this with a new plane by a new company (especially with THIS track record) BUT, this was supposedly an airline type design for high cycle use and high dispatch reliability out of the box. Seems like the insiders/fleeet owners know something about the plane we don't want to see - then again private pilots like Ken will only fly a few hours a week, so time for MRO is no biggie.

Seriously, once you are not operating for 25% of the week, and you have 20% spare planes on hand... why not spend more upfront and buy a fleet of Phenoms?

The advert:

"It takes 2 e-clips planes to operate like Embraer Phenom - but with the Phenom you get a 4th passenger seat for free!"

Kidding.... everything in aviation is a trade, no fooling Mother nature... you get what you pay for... and

I'm sure Dayjets fleet will get MORE reliable when the cycles and time mount, and the warrantee is expired!

mirage00 said...

Seems like the "Naysayers" are all in a circle... something about a circle _____. Have fun boys.

I remain amused

double 00

jetaburner said...

mirage00-

Is that the best you can come up with? Are you ever going to add something with substance? I'm amused.

mouse said...

Jetburner... He's give'n it all he's got!

He is amusing...

gadfly said...

Mouse and Burner

We should congratulate the neurosurgeon . . . the lobotomy was a success. The patient remains amused . . . and is somewhat harmless.

gadfly

Niner Zulu said...

CJ3driver & Jetaburner. Great comments about ferrying fuel. One of the worst parts about flying cross country is having to land at an unfamiliar airport where you haven't had the benefit of checking the fuel price beforehand. I usually print out a list of FBO's and fuel prices for my route from airnav.com before setting off across the U.S., but if you travel long enough there comes a time or two when you just have to take a chance. That's when you get hit with the HUGE fuel bill and ramp fee.

This really makes a strong case for the PC12, the TBM. They both have huge range compared to the real world perfomance we're going to see in VLJ's. I hold a little hope out for Epic, but that's still a longshot.

M00, glad to see you back with your usual mood-lifting posts! ;-)

airtaximan said...

for the big brains...

any idea why e-clips might have been investigating inspection technologies for FSW, earlier this year?

just a question.

hummer said...
This comment has been removed by the author.
jetaburner said...

9Z-

I ferry fuel all the time in the TBM b/c my usual flight is only about 700nm so I have plenty to spare. There were a couple of times in the Meridian where I had to stop short of my planned fuel stop due to stronger headwinds than forecasted. One in particular was a fuel stop outside of Pittsburgh in heavy snow when I couldn't make it to Ohio from NYC due to outrageous headwinds winds and NY center keeping me low. I've never had this problem in the TBM b/c it has so much fuel.

jetaburner said...

Correction for last post: It was New Bedford, MA (EWB)to Allegany (sp?) (AGC).

WhyTech said...

9Z said:

"Great comments about ferrying fuel."

In general I am in complete agreement. However, always one to introduce controversy, I must say that the notion of flying via the "cheapest" fuel stops seems odd given the overall cost of operating a turbine acft. Do I want to spend more than necessary? Of course not. But, I am not going to go hunting for cheap fuel once underway. Fuel prices, from lowest to highest, are pretty much in the range of $3.25 to $6.00 for Jet A, excluding the the extremes, which involve airports that most of us dont go to anyway. I select in advance three airports for each possible fuel stop. These are along my intended route of flight, one for an early stop, one for a late stop, an one as the intended stop. These are selected according to several factors: precision approaches, control tower, services, food, ease of fueling and price of fuel, etc. If none of these works, fuel price goes to the bottom of the priority list and I go where it seems otherwise best to go under the circumstances, and pay whatever the price is for fuel. The occasional need to divert to an airport with "expensive" fuel comes with the territory of owning an airplane, and happens so rarely as to make no detectable difference in operating costs overall.

I hope that this is not taken as an attack by anyone. I have learned quite a bit about alternative operating practices just by lurking on the blog. I believe that airplanes, especially turbine acft, are operated mostly for the convenience of the owners/pax, and this has a higher priority than minimizing fuel cost.

Rant off.

WT

WhyTech said...

"are operated mostly for the convenience of the owners/pax, and this has a higher priority than minimizing fuel cost. "

I should have also said that too many people have died trying to save money on fuel. "I'll add just enough to get me to the airport where I can save a buck a gallon." One of my SOP's is to add as much fuel at EVERY stop as I can and still be in W&B limits. I dont ever want to be in the situation of wishing that I had added more fuel than I did. Makes life much easier (and possibly longer).

WT

rcflyer said...

Whytech,

All good points, but there is a cost you haven't mentioned -- the price you pay for tankering around extra fuel.

On light airplanes, the performance difference between half-full and full fuel tanks is barely noticeable. On most turbines, there is a significant change in cruise airspeed with changes in gross weight. Not to mention lower climb rates and higher landing speeds, leading to increased tire, and possibly brake wear.

I know that these are all small factors, and may be outweighed by convenience and peace of mind, but small factors add up, and need to be part of your flight and fuel planning calculus.

R.C.

WhyTech said...

rcf said:

"I know that these are all small factors, and may be outweighed by convenience and peace of mind"

Yes and yes.

WT

airsafetyman said...

"One of my SOP's is to add as much fuel at EVERY stop as I can and still be in W&B limits."

Not always a good idea. Departing from a short field surrounded by hills and losing an engine-the extra fuel weight may be the difference in not clearing the ridges. Or of not stopping on the remaining runway if you lose an engine on the take-off roll.

WhyTech said...

ASM said:

"Departing from a short field surrounded by hills and losing an engine-the extra fuel weight may be the difference in not clearing the ridges. Or of not stopping on the remaining runway if you lose an engine on the take-off roll."

I was thinking in the context of my current acft and current SOP's. I have only one engine to lose, so this is not so much an issue. Accelerate/stop distance for the PC-12 at SL, 40 deg C, TO flaps, and max weight is 3100 ft. SOP's require minimum of 4000 ft runway. So far, this hasnt been limiting. Would have to take this into consideration at higher elevations (uncommon for me) and then a lighter fuel load would be appropriate. In aviation, as in life, there are always exceptions to the rule; the rule is to make you stop and think before making the exception.

WT

airsafetyman said...

WT,

You are generally right, I was just bringing up a contrarian view for the sake of discussion. Topping off frequently also allows fuel burn calculations to start from scratch; I don't really trust the gages all that much.

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

9Z said:

"However, if it's CAVU"

I didnt consider this as it is not nearly as common in NH as in CA.

WT

WhyTech said...

ASM & 9Z,

I wasnt in any way trying to start an argument. Its a slow day on the blog, so I thought a bit of controversy might spice things up and lead to a valuable discussion. As I indicated earlier, I have learned a lot from some of the spirited discussions which take place here, not all of which are E-clips specific.

WT

Black Dog said...

Its a slow day on the blog, so I thought a bit of revolutionary technology might interest someone.
"A new fibre-metal laminate material is being promoted as an anti-fatigue technology for aircraft wings by its creators, the Netherlands' Delft University of Technology"
http://www.flightglobal.com/articles/2007/10/03/217688/dutch-team-unveils-fatigue-immune-fibre-metal-laminate-for.html

I've seen this stuff and it could be fantastic,early days for the product yet but it might just be the next big thing after the er er VLJ............

gadfly said...

Black Dog

In the interest of a "slow day", I offer the following:

The following monologue is simply a non-scientific impression, based on certain personal experiences. Nothing here is worth much, but maybe you or someone in the crowd might benefit . . . I am willing to share what I have learned.

That website (from the land of tulips, black and any other color) shows a realistic attempt to bring together the benefits of carbon fiber and aluminum, without the problems associated with each.

Many years ago, I had a problem with small molded epoxy parts that, like carbon filaments, had great strength, but would fail “suddenly” (elongation prior to failure was single digit percentage). So to avoid catastrophic failure, I introduced braided Nylon “fishing line” in the critical areas. That solved the problem, and although the epoxy could crack, the Nylon gave that extra “stretch” necessary to avoid catastrophic failure. The parts were for missiles (“40" and “100" gold on silver “slip-rings” with platinum brushes . . . the parts were the brush assemblies . . . a “nightmare” to wire, assemble, and mold) that would go into the extremely low temperatures of space. I suspect that the same failures of carbon fibers, with an elongation of less than 2% are behind some of the problems related to failures, such as the loss of the vertical fin on the Airbus in Boston. Understand, that that’s simply my own suspicion, from the small amount of information available to me.

While working at United Airlines (“ramp service”, loading DC-8's, etc., etc., at O’Hare), the corners of the eleven fiberglass containers would often “break out”. I suggested through the employee’s suggestion system, that the “repairs” should include a Nylon (with an elongation of maybe “50 %”) woven matrix. The answer, by the “experts”, was that it couldn’t be done. In the years since, I have developed machines to bond carbon filaments with Nylon powder, in a continuous process. It was for certain dental applications, but the principles still apply. (And I have worked with massive structures of glass-filled polyester, up to 137 feet in diameter . . . but that’s another story.)

Some on this blogsite have discussed the advantages of carbon wound components against aluminum (with an elongation before failure of maybe 12%) and rivet construction. Frankly, each side has excellent arguments, both “for” and “against”. ‘Like many things, an understanding of each, and sometimes a “blend” is necessary. The final result is often a compromise between the extremes. I am told by an ex-employee, a close friend, and Aeronautical Engineer (with a "PhD") of Boeing that the “Dreamliner” has all this under control . . . but like Stan, I am not convinced that the carbon filament wound aircraft has all bases covered. It will happen . . . as is already obvious. But somehow I think that not all issues are yet covered . . . such as the extreme “Delta-T” (Delta stands for "change" and T stands for "temperature" . . . there are some that may not understand such abreviation, and this is no insult) that any aircraft must endure, going from takeoff to cruise altitude (and temperature) and back down to landing. For instance, a tail that “hangs on at 60% strength” is the difference between life and death for everyone aboard.

Now, if the little jet had addressed this type of issue, they would have the aviation world by the tail. But, again, that opportunity is long past.

gadfly

(What in the world could a "fly" contribute to the discussion . . . so take it for what it's worth. And "hummer", Thanks! . . . I read you loud and clear.)

gadfly said...

Here's a "Post Script" to the earlier monologue:

"Hemp" line was the original line (rope) used to tie up a submarine (or ship) to the "dock". It was bulky and difficult to manage. And, in time, had a tendency to "rot".

Then "Nylon" was introduced. A one-inch diameter Nylon line could hold a two-thousand ton submarine along side a dock (or "finger pier", for you submariners out there). The line could stretch to almost double its normal length, without failure. (And we were warned to never "straddle" the line, but step on it, when going from one side to the other . . . or risk having a "split personality" . . . or worse). The Nylon line was not affected by sunlight (fat chance), creatures of the deep, or being submerged for two or three months at a time in sea water.

What has that got to do with an aircraft? It is one of the greatest inventions of the twentieth century. A German scientist, in his effort to keep a clean laboratory, flushed his discovery down the drain. Later, a scientist at Dupont re-discovered the polymer . . . saved the girls of the 1940's from a lack of silk stockings with "nylon stockings" (producing some parachutes in the mean time) and may have saved future generations of us "aeronauts" in the construction of our flying machines. Whether parachutes, or introduced along with carbon fibers, "Nylon" may prove to be the miracle fiber of the 21st century . . . along with "aramid".

'Ain't history great? . . . and you thought the little "paper clips" was "fun"!

gadfly

(Are you having fun? . . . I'm having a ball! Come on, guys, you can smile . . . it won't hurt!)

cj3driver said...

:)

gadfly said...

cj3driver:

"Hardee Har Har!"

gadfly

(Now can I go home?)

Black Dog said...

Gad

Interesting story

Its late over here so I will be brief.

I'm not a great believer in carbon fiber, OK its light but you need so much more of it to make the strength.
Airbus where looking to use Carbon Stringers on the wing panels on the A380, now the biggest passenger aircraft :-) ,but they lost wing volume hence less fuel and less range so our wonderful friends at Alcoa gave us samples of Al-lithium alloy, we formed them and tested them and we lost massive amounts of weight from the wing build success.

Another major issue with Carbon (as Boeing and Airbus are finding out) is its reluctance to be bolted together in the traditional way, its a nightmare to drill and washers have to placed under the heads to spread the load.
Delaminating,water ingestion I hate it!

I like the idea of weaving Nylon in but how does that affect the weight?

The Dutch could be onto something and in Germany a stainless steel with a steel honeycomb core has been produced (same strength half the weight)

Ain't innovation great!

gadfly said...

Black Dog

Pick me up on "cec at swcp dot com" (make the corrections) and we will discuss this in depth.

Don't rule out carbon . . . but recognize certain limitations. There's many other possibilities . . . like "saphire whisker fibers", etc., that for whatever reason seem to have slipped by under the radar, because of assumed limitations.

Go get some sleep and pick this up later . . . it is either midnight, or "past", wherever you are.

gadfly

(You "young folks" need your sleep.)

Troglodyte said...

I, for one, find the discussion of materials very interesting. Unfortunately I can’t meaningfully participate except to absorb and learn. Don't know how others feel, but would like to see more along these lines, and other interesting aeronautically related topics while we allow the Eclipse story to develop...

--Trog

Shane Price said...

Trog,

Agreed. One of the many reasons why this blog will outlast the Disaster from the Desert, a.k.a. the E499.5 (with apologies to Gad and other honorable residents of ABQ) is that it provides a real and vibrant window into private flight.

I am interested in the absence of any spin from Eclipse on the C of A issue. Lots of metal being 'delivered' but not a word on the matter from the Capital of Confusion in New Mexico.

Again, with apologies to Gadfly etc etc...

Great pun in the name, BTW.

An underground flyer. Nice.

Shane

gadfly said...

Trog

Most of us (probably "all") are in the learner stage. And many of us want to see improvements in aerospace development. None of us have "arrived", . . . any and all suggestions are welcome. To think that, like Job in the Bible once said to his three friends, "No doubt but ye are the people, and wisdom shall die with you . . . But I have understanding as well as you" . . . many of us may contribute to this discussion.

Please feel free to enter into the discussion . . . and maybe something worthwhile will result.

And to be careful to not crowd this blogsite, enter in by the "side door" as suggested above.

gadfly

(And let's stay focused on the purpose for which this blogsite was conceived. Personally, "me-thinks" that it's too late to be much help to the "little jet" that wants so badly to be a permanent fixture in general aviation . . . but that's just my opinion.)

ColdWetMackarelofReality said...

Fear not Gadfly about the future history of the wee jet and the Church of Flyantology - the BD-5 remains a stalwart piece of aviation nearly 40 years after first flight and the sales of 5000 kits, and nigh on 35 years after the total collapse of the program leaving THOUSANDS with nothing more to show for their investment than a collection of parts scattered about in garages, hangars and storage sheds across the globe.

The real question is what will remain that is good when Vern replaces Jim Bede as the man everyone loves to hate?

At least Jim gave us bonded light plane construction, riblet wing designs, tubular spars, practical pusher propellor installations, and some damn sexy jet designs.

When the dust settles what will Vern Raburn have actually given us of any real value?

Ringtail said...

Mirage,

I think this blog is just about done. Even Gunner quit showing up. You agree?

Ringtail said...

I would suggest starting another blog for say Diamond or Cirrus, but I really don't like criticizing any plane.

ColdWetMackarelofReality said...

165 posts and over 14,000 comments, with nearly every major program SNAFU predicted here days if not weeks prior to the inevitable coming clean from the house of cards in the 505.

Yeah, stick a fork in the blog, it is done.

You guys are very funny, in a sad and pathetic cult kind of way.

You have no appreciation for aviation or business history, no comprehension of the difficulty in designing, certification and production of an airplane, you give credit for good intentions and ignore outright bald faced lies from the chief prophet of the Church of Flyantology, and you have predicted the demise of this blog every week, for what, 9 months now?

Are you sure you don't work at Eclipse? They have those same problems too.

Now I am amused.

cj3driver said...

Gad said;

“… Personally, "me-thinks" that it's too late to be much help to the "little jet" that wants so badly to be a permanent fixture in general aviation . . . but that's just my opinion.)

Gadfly,

I don’t think its too late. Eclipse (and mostly Mr. Press lately) have shown that there is a market for the little jet. Ken, EXE and EO are buyers. Maybe Hummer too. The problem with the company is the volume business model.

For the reasons stated in the opening post, (among others) the company as it is structured, appears to be doomed to failure. However, there is a niche market for this plane, at a certain price, with a potentially sustainable, reasonable, market based production run, with a fully completed product. TBM, Pilatus, Piper and Cessna (along with many other upstarts) prove this.

We critics just believe that there is not a 500-600 plane (at $2mil) per year demand at this point. The question is, … What amount would the company need to raise the price in order to be a viable business with a production of 150-200 planes per year?

Based on the competition, my guess would be $2.3 to $2.6 million in today’s dollars. If Eclipse were acquired after a BK, … this is probably where the pricing would be.

If Eclipse bit the bullet and announced pricing that would insure profitability at market demand, there may be a chance of success.

The existing position holders deposits are at risk, and, as evident by prices on controller, the later positions have even more risk. It may be a bittersweet pill, but if Eclipse raised the price across the board (all undelivered aircraft) it may prop-up the market and reduce risk for all customers… even speculators. If the price increase was “across the board, it would elevate all values. Those with aircraft already delivered, those with positions, and those under construction.

In order for Eclipse to survive, it has to eliminate the competition from its own customers. There is way more supply than demand, and its only going to get worse as more and more 60% deposits become due. Especially for those who have no equity or negative equity.

Eclipse could offer refunds (with interest) to those who “speculated”, or just re-acquire the positions … Most premiums average about $100K. some later positions much less or zero. Eclipse could also offer to sell “discounted” planes to early depositors at a later time in the future (after profitability).

If Eclipse goes under, it has the potential to be a major disaster for hundreds and hundreds of unsecured 60% depositors. And hundreds, possibly thousands of 100K depositors. The consequences will have an adverse effect on the industry as a whole, and even worse for the other start-up companies.

The positive, under this scenario, will be that people like Ken, may actually get something for their money, and it will protect the resale value far into the future.

I fear Vern would have to eat too much “crow” for this to happen with the current management.

My advice if you MUST have an Eclipse, … buy one that is already flying. If you have a deposit on an Eclipse, consider it lost, and buy one that is already flying, or at least one that is realistically delivered this year. If I’m wrong, and Eclipse survives, … and air-taxi’s are a hit, and owner-pilots start buying in volume, then the later positions will have some value, and you can still recover your investment.

I do not think the demise of the current Eclipse Aviation, will mean the end of the airframe (like the starship). But it will be the end of the low price/high volume business model. You just don’t want to be the one without a seat when the music stops. And it may be difficult to maintain, service and repair (parts) in the interim.

Judging from the 3 year back-log at Cessna, I have a hunch there will be increase on the Mustang base price again, … soon. … If history is any indication.

Eclipse should do the same. … across the board, and soon.

Troglodyte said...

cj3

If Eclipse goes bankrupt someone else will surely come in to buy the assets of the company at a substantial discount. The new entity would have essentially no or minimal development costs to amortize. My personal opinion is that the price point you mentioned of $2.3 to $2.6 million (current dollars) is frighteningly close to the Mustang and Phenom 100. Seems to me that they would need to keep under $2 million which, without the development costs to worry about, should be reasonably easy, no?

--Trog

Troglodyte said...

Shane

Regarding the name -- thank you. It has yet another little pun which fits me nicely with respect to sticking with proven and reliable technology when my butt is several miles above Mother Earth.

--Trog Luddite

rcflyer said...

cj3driver said,

"If Eclipse goes under, it has the potential to be a major disaster for hundreds and hundreds of unsecured 60% depositors. And hundreds, possibly thousands of 100K depositors."

Are you saying that Eclipse has at least 2,000 orders with deposits of 100k? If so, it's good to hear confirmation from an unbiased source.

R.C.

cj3driver said...

Trog said;

“…the price point you mentioned of $2.3 to $2.6 million (current dollars) is frighteningly close to the Mustang and Phenom 100. Seems to me that they would need to keep under $2 million which, without the development costs to worry about, should be reasonably easy, no? …”

Trog,

Good point. But, Piper built 49 Meridians at $2 million, Socata delivered 42 TBM850’s at $2.6. The Epic’s are scheduled to be sub $2 million. And, in ’06 Cessna delivered 24 CJ1+’s at 3.95 million.

Mustangs are trading for 3 million plus, and the Phenom (when delivered in ’10 will be $3.4-3.8 million, Honda’s over $4.0 million. Both models are estimated by the manufacturers at 50-100 per year. Mustangs at 150 per year.

… so in the $2.0 to $3 million price range, Assuming Eclipse works out the bugs and gets Aviong and FIKI ect. I think they could do 150 twin-jets per year at $2.45 M each. I don’t think they would sell that many more if they lowered the price any further.

I doubt Socata would sell that many more TBM850’s if they dropped the price 10%. They are better off adding features (like glass panel) and raising the price. The market is just too small. Same for Eclipse.

In such a small market, strong resale value helps the manufacures way more than a few more sales with lower profit margins.

IMO … of course.

cj3driver said...

RC said;

“… Are you saying that Eclipse has at least 2,000 orders with deposits of 100k? If so, it's good to hear confirmation from an unbiased source….”

R.C.,

Is that really all you got out of that post?

I agree with FC. I don’t think Eclipse really has 2700 firm orders. Also, I really hope that there aren’t 1,400 fellow pilots out there with 10% deposits either. I can tell you that if you look on controller, you can get a pretty good idea of how much the average deposit with Eclipse is. It is startling how many people have already sent in the 60% deposits already.


I can also tell you, when I looked at Eclipse a few years ago, the deposit was 10% of the purchase price. It was really tempting …. The lure of a $1.2 million dollar twin-jet. I just did'nt want to wait … even though they promised it in ’05… “06 ... at the latest. Also, I needed more seats (with luggage).

Its interesting that you think my post would be unbiased if I agree there are 2,000 (100K) deposits though…. Ya think?

Niner Zulu said...
This comment has been removed by the author.
bill e. goat said...

Don't recall who posted it (quoting a quote):
"If Eclipse goes under, it has the potential to be a major disaster for ... possibly thousands of 100K depositors."

Goat:
HA HA HA
(In Vern's dreams).
------------------------
CJ3:
If you must buy an Eclipse, buy one that is already flying.

Goat:
Well, hmmm, nice to have one with the newest revisions. But also nice to have one instead of an IOU. Good point.
----------------------------
CJ3:
"What amount would the company need to raise the price in order to be a viable business with a production of 150-200 planes per year?"

Goat:
I think you've nailed the most likely sustained production rate. I think it might be higher for a couple of years or so, to work off a "real" backlog of ?800+? jets, but the rate of incoming orders = approx. 175 per year or so, if I recall other's postings lately.

CJ3:
"I don’t think they would sell that many more if they lowered the price any further".

Goat:
I agree- point of diminisihing returns (in more ways than one- ah, rather novel how that one worked out...).
-----------------------
"I think this blog is just about done".

Goat:
Fine. See 'ya. Don't make the goodbye's anymore painful. I just can't take it any more.

:)
(I got overloaded was gettig "blogged out" this summer- took a few weeks "off", came back- refreshed and re-interested. It IS taxing to keep up with all the commnetaries. Seriously- take a few weeks off and come back- not all that much changes in a few weeks...Just ask Vern :)
------------------------
Trog:
"My personal opinion is that the price point you mentioned of $2.3 to $2.6 million (current dollars) is frighteningly close to the Mustang and Phenom 100".

Goat:
Yes, but operating expenses are NOT. One BIG advantage the E-500 has.

(BTW, I find it interesting Ken's analysis of operating expenses was dismissed as unduly frugal, while others talk about diverting to airports with lower cost fuel.

Ken's analysis was most valid, as is diverting for cheaper gas. But to criticize operating expense numbers smacks of our friend Franks cleaver witicism:

Pot: Hey Kettle, you're black!

:)
----------------------------

Gadfly,
Thanks for another fascinating expose on materials and aviation !!

ExEclipser said...

Ringtail - check out vljforums.com. It's my forum that I've had up for a couple of years, but absolutely no traffic. I have provisions to talk about every single VLJ and then communities to talk about all of em. Hummer joined (thanks, bro!). But the only activity has been me posting press releases.

It's not a critic blog, it's not aircraft specific, and it's open to everyone and its free. But still no traffic. I guess there are very few people anywhere that want to just have open chats about everything to do with vljs - good and bad.

Yeah, aesthetically it could use a facelift, but I'm going to put as much money into it as Stan has here unless it becomes something.

And it's not like folks are talking elsewhere. There really aren't forums about this sort of stuff.

Black Tulip said...

“Boeing Delays 787 by Six Months As Suppliers in New Role Fall Behind” was a headline in yesterday’s Wall Street Journal. “One problem… is heavy reliance on suppliers in the Dreamliner program. The wing sections are made in Japan, while factories in Italy, South Carolina and Wichita assemble the bulk of the fuselage.”

Too bad the boys at Boeing didn’t take a lesson from Eclipse Aviation. They could be shipping product now. Eclipse found a way around supply chain problems and still deliver aircraft to customers. Millions of airline passengers should not be denied an opportunity to ride the Dreamliner.

The following exchange would be heard as a 787 airliner shuts down at the gate.

First Officer: “That was a smooth ride and we’re here on time.”

Captain: “We lucked out with the weather. I’d sure feel better if all those icing breakers weren’t pulled and tie-wrapped.”

First Officer: “Yeah and the wing leveler autopilot sure kept us busy didn’t it?”

Captain: “Well we’re here… Before we open the cockpit door and greet the passengers, let me suggest you stow the Garmin 496 in your flight bag.”

First Officer: “Yeah sure, good idea.”

Black Tulip

ExEclipser said...

I don't care who you are. That thar's funny.

airsafetyman said...

Another problem with the carbon fiber construction is that the inner layers can be damaged while the outer layers are OK. If a servicing truck slides into a cabin door opening, for example, the airplane's outer skin may look fine, but the inside layers are cracked. The only way to find the damage is to do a "Tap" test with a coin (good luck with that on a busy ramp) or to take the airplane to a hangar and use some very sophisticated equipment that is really not much better than the coin tap test. One wag suggested equiping all the servicing trucks with sharp spears, so that if they do contact the airplane it will leave a nice round, obvious, hole.

Turboprop_pilot said...

I spoke with a friend last night who flies a turbine out of BCA. He told me that Dayjets are "everywhere" on the ramp and that the pilots do not like the planes, the interiors and fittings are flimsy but they are flying passengers. It was a short conversation so that is all I heard.

TP

airtaximan said...

Interested in buying the e-500....Maybe Hummer too.

No way - this guys is managing others (who buy) e-500 planes.

Classic aircraft management pitch... I'll get customers for you, I promise charter revenue for your wonderful plane - except I do not want to own it myself.

- Its a good deal for you to buy one, and it makes economic sense for YOU to buy one - and trust ME, I know how to make YOU money with one... except, I won't buy one.

PS. with the recent TAG part 135 and managed aircraft debacle, one should worry about this sort of plan.

PS. 85% of the current part 135 fleet is under management - what's new here...the plane?

airtaximan said...

Hummer,

I think I figeered out what's new here...

and, perhaps, also why you are here...

you might be onto something special in this VLJ market.

Buyers who really cannot afford their planes, and who relly do not understand what it is going to cost to operate/own/maintain them.

You will have a fresh crop of unsophisticated buyers, who might actually eventually put you in charge of their planes and obtaining revenue for them to offset the unexpected costs.

PS. don't forget to explain the depreciation to them. If you get them, say 300 hours a year... while the avergae owner-flown e-clips racks up 150 hours a year, their planes will have Zero residual value or resale avalue in the market - if there still is one.

Hard lesson learned by some unsuspecting owners with their planes flown 300 hours a year plus 150 hours part 91.

- its a very difficult balance... but I'm sure you'll explain all of this to your new jet owners/investors.

hummer said...

ATM
Most of the cost on the Eclipse is known.
The future value, however is not.
Could I hire you to project the
future value, and if so, what is
your going rate?

FlightCenter said...

ATM,

I'm not sure that I understood the point you were trying to make.

You said "If you get them, say 300 hours a year... while the avergae owner-flown e-clips racks up 150 hours a year, their planes will have Zero residual value or resale avalue in the market - if there still is one."

Can you elaborate? Are you saying an owner flown Eclipse would have zero residual value? or are you saying that an Eclipse flying 300 hours under management would have zero residual value?

Why would any Eclipse (whether owner flown or under management) have zero residual value? or zero resale value?

airtaximan said...

If you have to ask, I guess you know nothing about managing aircraft.

You sound like a non-business type (doctor, engineer)

Offering to manage planes for others and provide ROI based on cycling their planes, yet neglecting to calculate the depreciation on an owners plane, is...amateur hour.

I am not available for hire. But, if you are selling a business opportunity based on using a capital asset... you need to provide estimates of the residual market value after depreciation. Your offer of a ROI on someone elses plane needs to consider this.

airtaximan said...

FC, zero is wrong - bad wording for a comparison.

Imagine you have an e-clip flown for 5 years, one has 500 hours, the other has 2,000 hours.

Most management companies try to encourage a person to place their planes under management with them, by promising "a return". All things considered, a managed plane with a few hundred more 135 hours on it, depreciates much faster than an owner used plane.

The depreciation is higher than the cash received from 135.

Zero, too strong. "Worth less than the owner used plane, by a margin sufficient to usually offset any monetary gain from 135"

Thanks.

PS. hummer offered me a job - imagine what he knows!

hummer said...

ATM
Based on your words, you appear to be an expert. You are able to look two, three, four and five years from now and accurately predict the fair market value of the Eclipse. But see, you are giving your knowledge away.
I thought I would offer you something for expertise.
I remember a lady once telling me something along the lines, "if you can't give it away, you can't sell it"

airtaximan said...

Hummer, in case you failed to recognize it - I gave nothing away. You still offered to hire me.

How will you manage airplanes and provide a return to the investors/owners?

PS. what did you have to pay the lady?

hummer said...

ATM
No what I wanted to do is take you with us on the presenation to the passive investor group. We want you of course to be in a suit (you have one. . right) and you do clean up real well? Ok at the end of the presentation where we have described the tax advantages, how they can enjoy the benefits of private jet travel at $600/hr, receive a ROI on a limited "club membership usage" and you tell them that the residual value is zero and that based upon that sum. . .
I personally have the exclusive right to purchase the subject at that amount.
Further, I want you to add your many years of experience and expertise in the area of accurately predicting the future.
Aircraft value would be nice, but certainly don't limit it to that.
World events, value of oil, inflation, value of the dollar could also be included for entertainment.
Are we on?

Shane Price said...

Hummer,

The most successful man in European aviation, Michael O'Leary of Ryanair, has only worn a suit once.

When he got married....

And, when the Disaster from the Desert finally closes its doors, there is an EXCELLENT chance that ATM will be proved correct. You will have to pay someone to haul away the hulks.

Go back to the start of this blog. Stan's first posting in April '06 predicted a series of events, the vast majority of which have come to pass. Stan is not blessed with second sight, just a healthy dose of common sense and a nose for the suspect deal.

Finally, you are mistaken if you think you can go on the road to 'out Vern' Mr Raburn.

He, and he alone, can swindle, sorry, raise, large sums for the E499.5

Shane

hummer said...

Share
I was being nice to ATM.
He pulled my chain and pulled it hard.
I was simply responding.
Over here we have a saying,
"Let a sleeping dog sleep"

mirage00 said...

But.. but... but... it's "paper"!

AOPA DayJet blurb


The first passenger was Howard Gruverman, CEO of Edify USA. "The service exceeded my expectations. The plane was roomy and comfortable, the pilots had impressive experience and the whole service model worked exactly as promised," he was quoted in a news release.

He must be on Verns payroll. Stan, please check into this character.

I remain amused

double 00

cj3driver said...

Hummer,
RE: shared ownership programs.

The benefits to your program seem to be nothing new or revolutionary. It relies on the charter customers "acceptance" of the tiny jet at similar rates to legacy aircraft in order to offset costs to the fractional owner. The business model, "shared aircraft" apply to EVERY other production aircraft built today, and are successfully being marketed.

I would think residual value would be of utmost importance to these customers, since they are giving up cabin size, comfort, speed and range, … for an "all-in" hourly cost of …?

IMO the difference between your program with the Eclipse and others using legacy aircraft will ultimately come down to residual value for the reasons outlined in the opening post and outlined in my post regarding annual overall ownership costs.

In the long run, cabin size, comfort, speed, range, reliability and value retention will offset marginally different “all-in” hourly cost savings over the competition.

hummer said...

cj3driver
Agreed
So what is your estimate of the
residual value of an aircraft
that has no history?

hummer said...

ATM is zero

Shane is less than zero because
you have to pay to haul them away.

hummer said...

In fact, tell that to the tax man.
cj3driver doesn't know
ATM is zero
Shane less than zero
Forget sum of years digits, straight line and double declining balance?
They said so it's right.

airtaximan said...

Miargage:

roomy...becasue I was alone.

Mirage: how much did he pay? Does he know? He paid for the trip right? WHy the $155-1700 number?

Weird story, and NOT really a good sign.

The guy basically said - I'll wait to see IF the price comes down to fly them again.

Nice to know they are friendly, though! Its very important when you have a load of 1 passenger, and you are flying 1 revenue hour per day... BE NICE to anyone you come in contact with. They are ALL potential upside!

Amused?

airtaximan said...

Hummer, I cannot believe you have a plane to provide ROI on a plane to owners, and you have NO clue about depreciation, and you think its a onl;y tax issue.

Common sense. The plane will be worth a lot less, the more it is used. Period.

The incremental revenue you promise as ROI based on a lot of air taxi hours, is going to fight the residual value or re-sale avalue of the plane. Look at the recent cases being brough by fractional owners (OWNERS, sound familiar?) against the managent companies using their planes for part 135, and the impact on residual value.

I submit, the planes you will cycle will enjoy increased MRO adding to cost substantially, and the owners will aslo enjoy a plane worth next to nothing , compared to pristine 150 hour privately flown planes.

Common sense, not "tell me what the tax man says...." especially for someone trying to be in the air taxi business, promoting VLJs as a viable solution, and understanding all aspects of operating planes.

- you are not a pilot?
- you do not own planes?

You are a shamless promoter of VLJs, as taxis...with little operating experience, right?

airtaximan said...

I just read your obvious clueless reply, including the suit...

Guaranteed residual value of their planes (passive investors) is a function of private airplanes and lots of them (due to overproduction) in the market. do the math, its really simple.

Say a nicely kept private plane is worth $800,000 after 5-8 years on the market. The precise number matters little. YOUR manged plane with 5-10x the hours on it, will be worth 50% less, 75% less?

Chances are, given the MRO, wear and tear,new interior required, and other bumps and bruises, YOUR managed part 135 revenue generator will be a money loser, over all.

Yup, you can pump all you want, but there's really no evidence that aircraft under management have any real ROI.

Be honest, and promise the owner a way to defray some costs, and limit the revenue hours to 100 per year or so...and maybe yu arebeing honest.

Pumping this plan is as bad as E-clips pumping their plane at 1,000 per year.

PS. your reference to dogs is curious - dogs are loyal - who are yu loyal to? Not the owners/investors, I'm sure.... tell them $1million in equity/asset value is evaporating while you cycle his plane!

cj3driver said...

Sorry for the delay Hummer … I’m multi-tasking …

Hummer said;

“ … So what is your estimate of the residual value of an aircraft that has no history? … “

Hummer,

Please read the opening post again.

…..

Therefore, if there was a two year old fully functioning Eclipse 500 on the market today, with 1,000 hours on it, my guess the current value would be $1.5 million. Conservatively.

That equals $75,000 per year, plus $500 per hour for each hour over 250 per year.

The depreciation number would increase dramatically if Eclipse files for bankruptcy protection, or is unable to finish the airplane (FIKI, Aviong ect).

hummer said...

ATM
You have absolutely no idea of our business model. I haven't described it on this blog or to you. It will stay that way since I'm not interested in your approval or of competition. That explanation may or may not satisfy you; it does me.
As per your idea of what we are doing, you are entitled to that,
you have no clue whatsoever.
My statements still stand.
Give me a residual value of the aircraft in two years, three years, four years and five years
hence?
Further, as to our business practices and our way of doing business, your statements are way out of line and as
ludicrous a you are. They are based on ignorance.
Give it a break.

Niner Zulu said...

One big downside to putting your aircraft on charter is that a lot of the people who are going to be flying in it are just not going to treat it as nice as you would. They don't care how they leave it when they're done with it. Example: a friend of mine was pilot for a company who bought a brand new Legacy - it was beautiful until they put it on charter, after which the interior really started to look beat up. People spilled food, cocktails. Put their shoes on the new leather seats.

No, thanks!

Still, the tax writeoff of depreciation is very alluring. If you can find a business purpose for flying your aircraft, you can depreciate the aircraft using 5 year straight line depreciation. That means you get a $600,000 tax deduction every year for 5 years if your jet costs $3 million.

You will have to worry about recapture depreciation if you sell the aircraft, but if you keep moving up as most pilots do you can roll the depreciation with a 1031 exchange and put off the recapture until such time as you can structure the gain to offset another loss (like a loss on real estate - not too hard to find big losses there these days...).

M00 - the Dayjet article was yet another press release. It wasn't news at all - it was made up by the Dayjet people. Will you never learn?

Ringtail said...

Hummer,

Don't get too worked up over Airtaximan... He probably has all of his eggs tied up in a couple of old unpressurized Navajos (AKA big-time maintenance pigs). Those things are not a threat in this day and time...at least, not in the lower 48.

cj3driver said...

Moo, I agree with NZ

“nothing of substance” in the AOPA DayJet article.

What were the city pairs? How long was the flight? Was he the lone traveler in the aircraft? Was the flight non-stop? What was the flight time/distance? Was the plane waiting there for him when he got to the airport? Were there already passenger(s) on the aircraft? When he booked the flight, what was his travel window? Did he get the time(s) requested? What was the cost? How about the return flight? … same questions.

Sounds like a PR piece by DayJet … that’s all.

I’m anxiously awaiting a “real” report …. With substance.

cj3driver said...

NZ - your post is right-on regarding charter. If you need the charter revenue for cash flow, be prepared to update the interior every two years. Couple that with increased actual depreciation, and in may not make sense for someone who plans on upgrading aircraft every few years.

That being said, it may make sense for a buyer who does not have a business need for the aircraft. As you point out, favorable tax benefits are available to aircraft owners who place their planes on 135 tickets. I believe it must be 51% charter usage. I would certainly limit to this amount.

airtaximan said...

Hummer,

really?

You claim you do not need to consider depreciating the plane, and the negative affect ycles and time have on the owner's/investors aircraft... becasue you admit, you have not considered this.

curious - and I'm a whacko...

Again, consider in your plan that the ROI from part 135 will be net X, and the depreciation will be X+Y...

Its a nice sell job (story), unless you explain this to owners.

Period. Sorry if you do not like the truth.

PS. it's YOUR plan, what numbers are yu using for depreciation (residual value) at the end of every year, so you can calculate the ROI for you beloved investors?

FlightCenter said...

ATM,

Thanks for the clarification. I do agree that an aircraft flying Part 135 is going to depreciate faster than an aircraft flying Part 91.

I also agree that the incremental depreciation from having someone else fly your aircraft under Part 135 could easily be larger than the income received if you aren't careful.

I've heard plenty of horror stories from pilots who put their aircraft under management. Of course, the way the world works, bad news travels fast, you always hear far more horror stories than positive stories.

How about a poll?

Has anyone on the blog had a positive and profitable experience resulting from putting their aircraft under management?

How about folks who've had the opposite experience?

Would you put your aircraft under management like that proposed by the AVIVA guys? (Management only, no charter)

Or would you put your aircraft under management like that proposed by Waypoint where they manage and charter your aircraft for you? (The website says they guarantee 300 hours the first year.)

hummer said...

ATM
To start:

http://www.advocatetax.com/images/
userfiles/eclipseJuly2006.pdf

outlines so unimportant tax
considerations.

airtaximan said...

FC,

the management team at waypoint include the guy at Netjets, who came under scrutiny for using "owners" planes in Part 135 (Marquis jets) and provide no return to the fractional owners. They are also being pursued for mis characterizing the depreciation/residual of the fractinal aircraft, when they sell the fractions... in order to make the sale. Finally, the cycles and time due to providing service under part 135 has further negatively impacted the value.

You have my answer...

hummer said...

ATM
So tax consequences like size matters.

hummer said...

ATM & 9Z

Club membership for Part 135
This can be limited to 4 - 6
professional local businesses
for which they pay dearly for
the privilege.

It will not be an open airtaxi.

Rules state if a business abuses
the priviliges of membership,
they are out. . . period.

hummer said...

cj3drive
Thanks for the input.
I believe this is the big unknown
at this time and it is prudent to set aside high reserve (in accordance with IRS guidelines)rather than a low one.
A pleasant surprise at resale is much better than alternative.

hummer said...

ATM

Yep, I'm a pilot.
Yep, I've owned and operated aircraft.
Yep, I've owned and operated
a Part 135 Op.
Yep, I've got enough in the
piggy jar to afford an Eclipse.
How bout you, big guy?

Niner Zulu said...
This comment has been removed by the author.
bill e. goat said...

M00 (re: DayFret's pax):
"He must be on Verns payroll. Stan, please check into this character".

I think he is Vern's Evil Brother (make that, Eviler Brother :).
--------------------------
I've enjoyed reading and being educated by Hummer's and ATM's "lively" discussion of late.

But,
"your statements are way out of line and...ludicrous"

Hummer may be sporting some innovative, (?"disruptive?" :) business plan, but it sounds like ATM has seen it all...

Good luck to Hummer though- please keep us posted.

Shane Price said...

Hummer,

Not my plan to yank your chain.

Simply put, if Eclipse Aviation go under, anything they produced will devalue.

Its all about support. If a market thinks that a product is limited in any way, that market reacts by reducing the price.

I have, to my considerable regret, supplied high tech kit which turned overnight into large door stoppers. Once the OEM keels over, the customers are left high and dry.

Or, in the case of Eclipse, on the ground.

Now, you ask ATM what the value of an E499.5 is in the future. I respond by saying that the market will decide, based mostly on how long Vern keeps going. If the company continues, the market will be good. Yes, hard worn taxis will sell for less (think Crown Vic in your terms) and private, pampered toys with all the options will sell for more.

What you choose to omit is the RISK, which no amount of tax breaks will void.

Many times Ken was asked to list the risk factors in the program. He refused to do so, because one stood out.

Vern.

Mr. Raburn is the wrong figurehead for this company. He is incapable of setting realistic goals and getting a team together to meet them. Without going over old ground, he fails the leadership test.

So, my friend (I hope you see me as such) I think you are wrong to base a business on this aircraft.

Others disagree. Such is life.

Best wishes in your efforts. I believe that you will do your utmost to make a success. However, I honestly believe you could have made a better choice...

Shane

mouse said...

SOURCE:Flight International
Business jet start-ups face production challenges
By Graham Warwick


Successful start-ups are rare in aircraft manufacturing. Most fail to reach certi­fication, but even if they get that far these newcomers face steep hurdles acquiring the resources and expertise to move into volume production and profitability.

"It's turned out to be really hard," says Eclipse Aviation's chief executive Vern Raburn. The company secured type certification of its Eclipse 500 very light jet in September 2006, and production certification in April, but has struggled to ramp up to the high production rate planned. "We grossly underestimated the job," he says.

Eclipse is not alone. Sino Swearingen Aircraft (SSAC) certificated the SJ30 light jet in December 2005, but delivered only its second customer aircraft in September. Adam Aircraft received initial approval for its A500 piston twin in May 2005, but has not finished certification and has delivered only a few aircraft.

The issues all start-ups face are similar: raising the financing to transition from type certification to rate production and setting up from scratch the production and quality systems essential for aircraft manufacture. For Adam and SSAC the hurdle has been financing: for Eclipse it has been building the infrastructure of a major manufacturer.

"Where are we? Nowhere near where we wanted to be," says Raburn. The company continues to work through the vendor issues that dogged certification, but its biggest challenge has been putting in place a high-rate production system. "We are not out of the woods yet, but we are seeing nothing that says we can't build at volume," he says.

Cirrus's success

The most successful recent start-up has been US light-aircraft manufacturer Cirrus Design. Certificating its all-composite SR20 in 1998, Cirrus delivered its 1,000th aircraft within four years and is coming up on its 4,000th. Contrast this with Columbia Aircraft, which like Cirrus grew out of the kitplane industry. Columbia also certificated its first piston single in 1998, but struggled to ramp up production, only delivering its 500th aircraft in 2006. It then hit a series of problems that led to the company filing for Chapter 11 bankruptcy protection in September.

The difference between the companies has been the resources available to ramp up production. Cirrus in 2001 sold a controlling stake to a Bahrain-backed investment firm for $100 million. A controlling interest in Columbia was sold in 2003 to government-backed Composite Technology Research Malaysia for $50 million, but by 2006 CTRM was looking to sell its stake. In September Cessna entered discussions to acquire the assets of the bankrupt manufacturer.

Similar stories can be found across the industry, and the founders of Adam and SSAC have both had to relinquish control of their companies to attract the additional investment required to ramp up production.

Rejigging production

After investing more than $700 million in SSAC, the company's Taiwanese backers have agreed to sell a controlling stake to a joint venture between US investment firm ACQ Capital and SJ30 distributor Action Aviation of the UK. A priority for the new owners is to rejig a manufacturing line that is producing only a trickle of aircraft.

New Adam president Duncan Koerbel says the Colorado-based company has secured $200 million in equity and debt financing in the last nine months and is revamping its manufacturing system with the goal of producing 150-240 A500s and A700 VLJs a year and delivering 1,000 of the all-composite aircraft within seven to 10 years.

But this ambition is eclipsed by Eclipse, which has set it sights on building at least two aircraft a day. When it handed over the first customer Eclipse 500 in December 2006, the New Mexico-based company predicted it would deliver more than 500 in 2007: so far just over 50 have entered service.

Raburn blames two problems: vendor issues carried over from certification and the challenge of setting up a high-rate production system. Both are tied to the VLJ pioneer's avowed goal of changing not only how people travel, but how aircraft are built.

"We have had significant problems with several vendors," he says. "Some we induced ourselves. We had an immature engineering organisation with a not very disciplined approach to design changes. We clearly caused problems for vendors - we still are today, but we are trying to clean up our side."

But there are stark differences in how the vendors handled the problems, says Raburn, a former Microsoft executive. "I made some bad choices of vendors and I'm still paying the price. Some say I'm enraptured with technology and do not evaluate the risks enough. But it is compounded by vendors who do not stand by their promises."

Raburn admits many established vendors no-bid when Eclipse was looking for suppliers because they did not believe the company could produce the aircraft at its price point, originally under $1 million and predicated on unheard-of production rates. "They did not believe in our business plan, so we paid hundreds of millions of dollars in non-recurring expenses to take the risk out of our different business model."

Eclipse's search for innovative and low-cost suppliers has had mixed results. "There are places where aggressiveness with technology has worked, such as the electrical power system, which has never had a failure." He also cites Pratt & Whitney Canada: "They developed a new centreline engine and it has never had an inflight failure."

Raburn says 80% of failures in the fleet are in three areas: displays, autopilot and actuators. The orginal Avidyne displays will be replaced when the new Avio NG flightdeck is introduced in November, and Meggitt "is doing everything it can with the autopilot and we are seeing reliability improve", he says

The company's problems in ramping up production are "more deeply a culture issue", says Raburn. Eclipse deliberately hired experienced aviation-industry veterans to set up its manufacturing system, "but they came out of very established companies into a start-up - a baby that had lots to learn, like, who empties the trash? They were incapable of starting with a clean sheet."

Eclipse has "learned a hell of a lot" about high-rate production, he says. "Manufacturing at rate is like squeezing a balloon - something pops out somewhere." The company has learned tolerance build-up is more important than accuracy in high-rate manufacture. "A lot of the parts are machined. We thought that was all we needed for it to go together the same every time. It turns out that tolerancing and holding the part accurately is important."

After rebuilding its production staff, and bringing in automotive industry experience, Eclipse has moved to parallel production lines. "It's no longer single-piece flow," says Raburn. There are now three independent aft/forward-fuselage mate positions to avoid bottlenecks. "By later August we were starting to see the benefits."

Raburn defiant

Eclipse has proved that every position on the production line can run at a rate of at least one aircraft a day. "Have we got all of them to run at that rate at the same time? Not yet," Raburn says. "But our analysis shows we can get to one-and-a-half to two a day."

Inevitably, Eclipse's failure to deliver on its aggressive promises has drawn a backlash of criticism from Raburn's detractors, but he remains defiant. "It turned out to be really hard, but nothing has proven to be impossible. There is nothing we set out to do that we have not finally done," he says. "We have created a product that delivers on the promise to change the way we travel, and built a company with lasting value."

hummer said...

Shane
Thanks for the kind comments.
The business plan is based on
VLJ and could be one of several
aircraft.
While Eclipse is an option, it is
not the only option.
The aircraft 9Z had listed, for
example, I would not give $900K
for it. Simply too many things
to be done to it. While the owner
stated a medical condition (not a loss of license due to medical conditions) I would be "sick" to
to get an aircraft in that condition. No Thanks
But what was ommitted was training and type rating.
Nothing in the listing about it.

hummer said...

Bill-e-goat
Will keep you posted
and I'm confident ATM
has seen it all.

Niner Zulu said...

Here's a possible tax deduction for Eclipse deposit holders - perhaps they will be able to write off their 60% non-refundable deposit as a "charitable contribution".

Eclipse is, after all, a non-profit corporation.

Maybe the Church of Flyantology isn't such a bad idea.

;-)

airtaximan said...

Hummer,

look at ourplane.com for your "businesses will share the plane" concept - only there's no reference to them paying dearly, as you put it... why would they?

are you planning a core fleet? if so, who pays for it? if not, how can you have satisfied owners? I know the argument - the plane is only in use by the owners X hours... the rest of the time (80% or more) it available. Funny thing is, everyone wants the plane at 9am on Monday....

hummer said...
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hummer said...
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hummer said...
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