Friday, October 26, 2007

Marvellous?

Responding to a comment from the one of the "Faithful" that perhaps the plane and the company is so "marvellous" that the blog has to resort to baloney to try to knock it?

ColdWetMackarelofReality in turn asked:

What specifically marvellous about demanding 60% "6-month" progress payments from hundreds of depositors last fall, raising over $100M then announcing weeks later that Avio was FUBAR and Avio NfG was underway BEFORE they demanded the progress payments?

What specifically is marvellous about the VP Engineering bailing out?

What specifically is marvellous about laying off 10% of the workforce? Sorry, 9.2% of the workforce.

What specifically is marvellous about FAILING to deliver on a single promise to date?

What specifically is marvellous about delivering about a crippled partially functioning preemie-jet?

What specifically is marvellous about Eclipse failing to sell enough airplanes in any given year, by any measure, to even approach the sales volume needed to break even?

What specifically is marvellous about burning through $1.X B to deliver 4 dozen partially completed abortions of an airplane?

What specifically is marvellous delivering an aircraft, knowingly, that had NO MECHANISM to update the GPS database, rendering the aircraft unusable in RVSM airspace for MONTHS?

What specifically is marvellous about the jet costing 2X the original price?

What specifically is marvellous about the jet weighing half-a-ton more than originally projected?

What specifically is marvellous about the DOC's being 2 to 3 times more than projected?

What specifically is marvellous about anything in this tale of ridiculous failure on a scale previously unknown to aviation?

107 comments:

ExEclipser said...

From CWMOR: AIN and ANN both reporting today that Ken Harness has been hired at Diamond.

My next prediction - Diamond sees defections from the D-Jet to surer bets (Epic, Cirrus, Cessna, etc.) - as I said before, stranger things have happened but this does not speak well of Diamond in my mind.

Glad to see him out of Eclipse, but really very sorry he landed at Diamond - D-Jet is now out of contention in my book.


Maybe that's where Gunner is - at Diamond, looking to be their Chief Information Officer.

That makes me wonder... Whatever happened to Baghdad Bob? Eclipse could sure use him right now...

Troglodyte said...

Regarding Mr. van Kesteren:

I had the pleasure perhaps 10-12 years ago of being a guest of Van for a flight in his experimental turbine converted Piper Malibu which was the original test bed, built by Piper, for a turbine version of the aircraft which many years later became the Meridian, as well as to hear his many and incredibly interesting aviation stories. He is a professional aviator in every sense of the word. He has developed, test flown, and owns several STCs, including for an engine change and increased fuel in the Piper Malibu and Mirage. I believe he is a former military pilot, although my recollection is a bit vague for the specifics. I do not know whether he flew for an airline but it’s irrelevant, as he is every bit as proficient as a good airline captain (I’ve flown with many).

Ken -- this was an unfortunate example for you to choose. Do you have any examples of aviators of more modest experience who have successfully completed the Eclipse training?

--Trog

Stan Blankenship said...

Marvellous?

Reminds me of the old joke where the young Southern girl is sent to Charm School where she learns to say, "Marvellous" rather than "Bullshit!"

Ken Meyer said...

coldwet wrote,

"He said he would not fly any plane that took him more than 2-3 weeks to master and you twist that into a petty dig suggesting he feels he is somehow not 'up to the task'"

Sounds like you don't think he's capable of speaking for himself either.

I've flown the Eclipse--it is actually very easy to fly. The training program has been successfully completed by over a hundred guys from a range of backgrounds, but it is by most reports harder today than it should be and will be in a few months when there are more sims and the new avionics package is available. The old avionics package does little to help a pilot through the checkride; that's one of the main problems.

BTW, you might find these words about the Mustang training program interesting:

I am just in the door from 2 weeks in Wichita. A friend of mine several years ago ordered a Mustang (had a G1000 plane already so it was a natural fit).

I wanted to report, that they are seeing a very similar failure rate as Eclipse is seeing. Mostly pilots coming out of small / light / medium size twins—with no jet time. Many pilots have showed up having not studied at all for the rating.

Cessna is using a proficiency index to rate whether you can go for single pilot (CE-510S) or two crew (CE-510) but even that has had its faults. Several pilots, one out of a Beech Duke another out of a Conquest, have had tons of twin time, and IFR time, but once in the single pilot type rating process, at day 4 or 5 were taken out and placed into the 2-crew program.

Several pilots have even been pulled from two crew and placed into SIC only.

There have been several pilots who have demanded they do the entire Single Pilot course whether they pass or not—due to political pressure from the BRASS above at Cessna have been allowed to go all the way through—only to BUST the single-pilot checkride."


In your zeal to attack my comment, you missed the point: every jet type rating requires flying to a higher level of precision than many GA pilots currently flying pistons and turboprops are accustomed to. And that is something to think about before buying a jet, whether it's a Mustang, Eclipse, D-jet, Cirrus Jet or something else.

Ken

Shane Price said...

Ken,

As you point out, the issues with training makes the whole 'VLJ Revolution' thing a bit uncertain, don't you think?

Care to add training to the Risks Analysis you avoid providing us with?

No?

Didn't think so...


Maybe, just maybe, Eclipse have the right aircraft for the 'pilot stepping up' AND the right price point to attract the majority of same.

Do you think that there are 500 people per annum who a) want a jet, b) can afford the E499.5 and c) can stick the training program?

And can you please avoid a remark about '2,700 orders'. More than half of them are from commercial operations, not the GA market. And more than half of those are options.

Shane

airtaximan said...

DEFINITION OF "marvellous" - too improbable to admit of belief; "a tall story"

airtaximan said...

FROM LAST NIGHT'S MAIL:

"The failure rate for non-professional pilots once they do make it to the checkride is terrible: 50% have at least one do-over and many flunk outright."

So, they guy seems to say non-pro pilots can/have passed...

I think the point was the whole training program is a disaster, unless you are a former airline pilot or similar experience, it is going to be very tough.

PLUS, if they are trying to make private pilots into airline quality professional pilots, is this a bad thing?

Does not say much for how easy the plane is to fly, though.

ExEclipser said...

I'd like to take this opportunity to address each of CMWOR's Marvelousnesses:

CWMOR:What specifically marvellous about demanding 60% "6-month" progress payments from hundreds of depositors last fall, raising over $100M then announcing weeks later that Avio was FUBAR and Avio NfG was underway BEFORE they demanded the progress payments?

Me: OK, hate to start off the first one with an agreement, but it's true - Eclipse has ruthlessly treated their bread and butter like crap. Unless, of course, their bread and butter is really the investors. They treat them OK.

CWMOR: What specifically is marvellous about the VP Engineering bailing out?

Me: This is a blessing. It is, indeed, marvelous. Hope more seek his path of wisdom.

CWMOR: What specifically is marvellous about laying off 10% of the workforce? Sorry, 9.2% of the workforce.

Me: It's an annual adjustment to make the investors feel happy. You can likely expect this every October. Very common in many aircraft companies.

CWMOR: What specifically is marvellous about FAILING to deliver on a single promise to date?

Me: They are meeting all guarantees - maybe the revised guarantees, maybe the lowest possible interpretation of the +/- tolerance, but they are delivering on their performance promise. Not everything, but that's one.

CWMOR: What specifically is marvellous about delivering about a crippled partially functioning preemie-jet?

Me: It's a fully functioning twinjet. It may not have all the capabilities at this moment in time to be utilized in every condition, but it is fully capable of delivering people from point A to point B. Jetliners don't particularly like to fly through a tornado. Does that make them not fully functional?

CWMOR: What specifically is marvellous about Eclipse failing to sell enough airplanes in any given year, by any measure, to even approach the sales volume needed to break even?

Me: You're right. They have their plan in place, but they're not there yet. (OK - How many bloggers can actually use all three homonyms of 'there' correctly and in the same sentence?)

CWMOR: What specifically is marvellous about burning through $1.X B to deliver 4 dozen partially completed abortions of an airplane?

Me: Heckuva lot less than Sino. And much of that has been to relieve debt.

CWMOR: What specifically is marvellous delivering an aircraft, knowingly, that had NO MECHANISM to update the GPS database, rendering the aircraft unusable in RVSM airspace for MONTHS?

Me: If that were true, why are all planes flying in RVSM space today? Database has to be updated every 28 days. Every 28 days, I still see airplanes flying in RVSM space.

CWMOR: What specifically is marvellous about the jet costing 2X the original price?

Me: Still the cheapest bizjet on the market. Still the most marvelous value out there.

CWMOR: What specifically is marvellous about the jet weighing half-a-ton more than originally projected?

Me: Hmmm, about 900 lbs more than the 2001 pre-first engine, first prototype prediction? Still the lightest commercially available, certified twinjet on the market.

CWMOR: What specifically is marvellous about the DOC's being 2 to 3 times more than projected?

Me: Katrina, PW&C, etc. Everyone's DOC went up. EA500's doubled because it was so low to begin with. Since fuel is the majority of that factor, and since it alone about quadrupled from the orignal estimates, I think they're doing OK in that arena. Still the best value in a commercially available, certified twinjet.

CWMOR: What specifically is marvellous about anything in this tale of ridiculous failure on a scale previously unknown to aviation?

Me: Beechcraft's Starship, Adam, Safire, FoxJet, Avocet all pretty much seem to be worse failures.

Hey, so you're upset with them. I think everyone with a fidiciary interest in the company should be upset with them. They are a lying bunch of bafoons, but like that irritating commercial, I hate their people skills, but I love their product.

airsafetyman said...

"It's a fully functioning twinjet."

Nope. It's a day, VFR, dry-runway, stay away from visible moisture at icing altitudes, "thing".

"It's an annual adjustment to make the investors feel happy. You can likely expect this every October. Very common in many aircraft companies."

Whaaaaat? Where? In Dafur? Most companies with real orders and real backlogs seem to hire folks!

Niner Zulu said...

You're right, Ken, as always. I just "don't feel up to the task" of flying a jet. A guy like me had better stick with props.

You've described yourself as "rich" and "gutsy" on several occasions. I guess "smart", "handsome" and of course "modest" go without saying, right? I hope I can find someone just like you to help me fly a jet someday, IF I can afford it!

You da man!!

Redtail said...

ExE said... (OK - How many bloggers can actually use all three homonyms of 'there' correctly and in the same sentence?)

Finally, thank you.

Redtail said...

ExE said... CWMOR: What specifically is marvellous about the jet costing 2X the original price? Me: Still the cheapest bizjet on the market. Still the most marvelous value out there

The real reason the DOCs went up is that fuel has increased "slightly" from the original $2/gallon back in 2000 when the DOCs were originally stated. Also, the Williams engines were supposed to burn a total of 45 gal/per, while the Pratts now burn about 50% more. Fuel is 60% of the DOC, so going from $2 to $5 should have some effect, even to the blind critics.

WhyTech said...

9Z said:

"You da man!!"

Ken will be "da man" in my book only when he has an Eclips type rating and owns an Eclips acft. Until then, so much hot air.

WT

airtaximan said...

redtail:

in case you didn't notice, its not the critics who care - "even to the blind critics." talking about the dramatic increase in opcosts... the reason this is relevant is the"value proposition" and the ability for more folks to own these toys.

YA THINK there's a reason there have been hundreds of sales in the secondary market before even 100 planes have been delivered?

There are economic realities associated with "marginal" customers looking to trade from a prop to a jet - and IF the cost has gone way up - the economics no longer make sense for a large segment of the potential customer base. In fact, you are seeing this is the pre-production and post-delivery trading that's fgoing on.

Buyer's remorse.

And, yes, there is always another fleet buyer or sucker customer who has not yet had the pleasure... but there are MORE, not less planes listed on OCntroller today...plus 100 sold already per Mike Press... pretty strong statement regarding the "value" and the market.

airtaximan said...

execlipser:

Me: You're right. They have their plan in place, but they're not there yet. (OK - How many bloggers can actually use all three homonyms of 'there' correctly and in the same sentence?)

Me: NOW, them their's there a funny statement there!!

Thanks, this was funny. AMusing in fact - 'cause I don't have a dog in that there fight!!!

airtaximan said...

Me: Beechcraft's Starship, Adam, Safire, FoxJet, Avocet all pretty much seem to be worse failures.

QUESTION: any one lose a deposit or $900,000 payment on one of these and get ZERO in return? Anyone pony up such a payment and get jumped in priority by other customers?

Please let me, and Elliott Spitzer
know... thanks.

gadfly said...

“Beechcraft's Starship, Adam, Safire, FoxJet, Avocet all pretty much seem to be worse failures”
‘Worse than what (failure)?

‘Reminds me of the answer on a death certificate . . . “Cause of death: Flu . . . but nothing serious.”

gadfly

ExEclipser said...

I'm not 100% certain, but I believe that MANY Safire and Avocet depositors were completely screwed.

Only reason Starship owners made out OK was because Raytheon had the money to buy them all back.

Best argument to your statement, though, is that no one is getting nothing for their $900,000 or $1.6 Mil. If you're talking about prepayments, shucks. You got me there. Keep in mind lots of OEMs take all your cash when they get your order. Of course, they've all been around a heckuva lot longer.

Niner Zulu said...

"....those of us that were gutsy enough to take a chance on the new upstart are getting a jet that costs what a piston plane should." - posted by Ken Meyers, 8:16 PM, October 08, 2007

As for the "rich", I'm not going to waste my time digging through your old posts because they are so damn boring. But you have mentioned, on several occasions, how you have 2 Eclipses on order and are considering a 2nd jet for your wife as well. This would imply you are "rich". On other occasions, you have been very condescending towards others' finances, ridiculing them about being able to afford to buy any jet. This would also imply you consider yourself "rich", or at least "richer" than others.

Satisfied?

hummer said...
This comment has been removed by the author.
anonymous avionics engineer said...

Yeah, I double dog dare you niner zulu ;-)

Now THAT is mature.

Ken Meyer said...

niner zulu wrote,

"Satisfied?"

Not at all, but neither do I think it is worth pursuing.

Ken

jet_fumes said...

Execlipser, out of the 700+ deposit holders at Safire, not a single one got screwed. The escrow accounts were managed by a separate entity (a bank) and when Safire went belly up, everybody was able to claim their deposit back. With interest.
The way it should be.

AlexA said...

Ex,

You left out the Visionaire Vantage;-)

John said...

DayJet utilization.....
71.8 hours for flights with a different city destination than departure
1.2 flight hours per plane per weekday (12 planes/5 day week).
Lucky 13, New Jet DJS141 joined fleet

Hourly use is up from last two weeks, but below week of 9/24 and 10/1

12 of 13 planes flew during week (DJS109 still grounded). 9 planes had flights on Friday for 15.5 hours, 8 planes on Wednesday for 24 hours.

gadfly said...

It would be difficult just now for me to write a check to purchase a “Mustang” or even an “Eclipse”, but I think I’m richer than ninety percent of you. And I’m not talking about money. But having said that, I wouldn’t trade what I have for all of you put together. But so what!

The discussion is best when the subject is kept to the little jet . . . and stay on subject, rather than ‘who has insulted whom’, and all this silly nonsense, among men(?) who claim to have status in the adult professional world.

The little jet “seems” to be in trouble . . . and maybe not! Stay on target, and you might fool others into thinking you actually know something, about aerodynamics, . . . manufacturing, . . . life-cycle testing, . . . machining, . . . welding, . . . assembly, . . . quality control, . . . electronics, . . . avionics, . . . aeronautical meteorology, . . . metallurgy, . . . polymers, . . . communication, . . . navigation, . . . safety, . . . aircraft ownership and maintenance. See? . . . I even know how to spell! But aside from all that, let’s “grow up” and at least “pretend” to be professional people, who have stayed awake in college, or trade schools . . . and speak intelligently about the issues that will either make or break this enterprise.

There are countless issues affecting the “little jet” . . . yet the “faithful” attempt (successfully, I might add) to get the “nay-sayers” (their term) off track, bickering over non-issues. If I’m up five-six miles above rocks and trees, I’m much more concerned about how to get down safely, than silly insults passed from one blogger to another. And if I were an investor, I want to know if I’ll receive a return on my investment in five-ten years, and if the “company” that made the thing will even, then, exist.

By the way, having had the privilege (!?) of knowing the “truly rich”, that think nothing of jumping in the family “jet”, and going out for Pizza . . . none of them would give a moment to the level of discussion that pretends to be serious discussion and criticism in this blog . . . nor would they ever consider actually riding in this thing they call a “toy”. They simply watch from “afar”, with amusement, considering it a joke. To me, it’s not a joke, but a concern . . . whether for better or worse.

And speaking of “trade schools”, it is not the so-called designers/administrators at the top, but the folks that work at the manufacturing level, that will either “make or break” this endeavor, to revolutionize the general aviation industry. If they quietly go about their business like “slaves” or “robots”, the little jet is sure to end in disaster. If they speak up, and “take the risk”, to get things corrected, then there is yet hope. (Unfortunately, most “worker bees” simply put in their time, hoping against hope, that they’ll have a job next week, next year, etc., . . . simply following the herd . . . or is it, the “hive”.)

The little jet flies, and that’s good. But there are issues being “built in” that anyone who has a knowledge of the basics can see that will assure its demise . . . in time.

Now, is it possible to keep on subject? . . . to avoid/ignore the nonsense of personal insults, etc., and discuss pertinent subjects? Are the contributors to this blog “big
enough” to ignore the silly criticisms, and get on to “real issues”?

“Fat Chance!” . . . right?

gadfly

(‘Play in the sand-box with the other little kiddies, and you may find that the kitties have been there, earlier.)

ColdWetMackarelofReality said...

Brownie (Fishie) points to ATM for getting the gag, you da man!

ColdWetMackarelofReality said...

Redtail said something to the effect that increased fuel flow and fuel costs account for the 2.3-3X increase in DOC's.

Hogwash.

C&dD $1.72 divided by $.56 = 3X

B&CA $1.63 divided by $.56 = 2.91X

Eclipse $1.29 divided by $.56 = 2.3X

There is a $.43 (33%) split from the Eclipse number to the C&dD number - 33% - not insignificant.

Fuel typically amounts to around 50% of DOC - and the Eclipse DOC is up by 130-200% depending on who’s numbers you use (EAC – B&CA, C&dD).

The jump literally would require a 3-4X increase in fuel costs, using the Eclipse definition of fuel cost as a portion of DOC, to result in the change seen – it is actually up 2X.

Original projections were at $2/gal, earlier this week we paid around $4/gal for Jet-A in the northwest. Jet-A would need to cost over $6/gal to even approach explaining the change seen (e.g., a 3X increase in fuel costs).

We know that the JetInComplete price went up by 30% IIRC, and engine reserves (which are NOT included in JetInComplete) are also up from the original workup.

Since there was not a 4X increase in fuel costs, even after Katrina, the only conclusion is that the real costs of operating the Eclipse are not well established yet.

Using Eclipse's numbers. Eclipse's numbers have gone up to 2.3X from their original $.56 per mile.

The C&dD and B&CA numbers are LESS beneficial in this discussion than the basic Eclipse numbers which CJ3 uses in his critiques, which I have used in my critiques, which Eclipse itself uses in its own presentations, which C&dD and B&CA use within their calculations, and which the Faithful dutifully regurgitate like Pavlov's dog anytime anyone makes a cogent criticism of any of the many issues still facing Eclipse, after 10 years and $1.X Beeeeeeeeeelion dolllllllllllars.

The point is that just like purchase price, just like weight, just like capital requirements - the cost of operations is escalating out of control.

Ken Meyer said...

The Eclipse direct operating expense, according to the Eclipse website, is $1.01 per mile today ($1.16 per nautical mile).

Way back in 2000 they estimated that the direct costs would come out $0.56 per mile. It doesn't look to me like Eclipse included engine reserves in today's numbers or in the numbers back in 2000.

Therefore, today, the direct operating costs are not quite double what they estimated 7 years ago, using the exact same methodology.

Has Jet-A doubled in the last 7 years? Beats me. But if it hasn't, it's been mighty close to that. I think execlipser was right. Most of the increase in operating expense is from the rise in fuel price.

That being the case, do you have a point other than illustrating that the Eclipse is amazingly cost-effective to operate?

Ken

airtaximan said...

Execlipser:

"I'm not 100% certain, but I believe that MANY Safire and Avocet depositors were completely screwed."

Really?...I'm intersted to know how you developed this "belief", enough to post such a BOLD statement here of something you are not 100% sure of.

Many have been chastised here for stating "I do not know... but I think... followed by an intuition that was 100% correct regarding e-clips..."

If its your intuition, that's just a thought, probably not strong enough to state "I believe that MANY Safire and Avocet depositors were completely screwed."

How would some and not all get screwed?

airtaximan said...

"The Eclipse direct operating expense, according to the Eclipse website, is $1.01 per mile today ($1.16 per nautical mile)."

I believe them, now - you?

airtaximan said...

John,

"1.2 flight hours per plane per weekday"

can you please find me aircraft financing which can be ammortised by weekday...

let me know, OK?

Thanks.

airtaximan said...

Ken:

you say: "Therefore, today, the direct operating costs are not quite double what they estimated 7 years ago, using the exact same methodology." BUT, I think you means:

"Therefore, today, the direct operating costs are not quite double what they advertised they were going to cost today (when they delivered planes) - 7 years ago, using the exact same methodology."

I know you do not care, really, because you are just trying to mask the reality as much as possible so someone might actually place some deposit money with e-clips so you might one day get some metal for your squandered progress/deposit money - but this is the reality.

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

FWIW...
I'd say the Starship is the biggest debacle in general aviation for the past couple of decades.

I'd say the Safire was the only VLJ I thought technically superior (on paper anyway, since that's as far as it got) to the E-500.

What makes Eclipse such a lightning rod are the Verntastic claims* about the product, the company, and the competition.

I think THOSE are unrivaled in recent aviation history, at least:
1) on this scale
2) of this duration

(*Ummm, and price, and schedule...and orders, and equipment, and..., well, you get the picture :).
--------------------------

I'm glad to see the E-500 succeeding (and I do think it is succeeding, if slower than expected. Ah, make that perennially slower than expected).

What I'm less than enthused about is what is increasing looking like a pyramid scheme in running the company.

But the E-500 is a technical success (of sorts) notably because it doesn't defy the laws of physics or aerodynamics.

The Eclipse business model does defy the empirical laws of finance; specifically, return on investment.

airtaximan said...

does anyone have the 6 seat e-500? anyone know the range with 6 occupants and bags?

bill e. goat said...

ATM,
???
How far it can taxi, or how far it can fly ???

airtaximan said...

...the Safire was the only VLJ I thought technically superior (on paper anyway, since that's as far as it got) to the E-500.

what happened? why did they have to give 700 people their money back?

airtaximan said...

bille,
c'mon

airtaximan said...

Linear Air will charge about $3,000 for a same-day round-trip flight of about 300 miles in each direction.

bill e. goat said...

ATM,
I don't know the specifics of the Safire case, but there were a number of promising programs cancelled/shelved by a number of manufacturers in that time frame.
Ones I thought held special merit:

Gulfstream G6
Safire
Raytheon 425
Dornier 728

The post dot.com/post911 era was a BAD time for aviation. It seemed like back then, nothing was going right, no matter how good the design.

Now, it seems like nothing is going wrong, no matter how bad the management.
----------------------
As a generalization, I'd say Safire folded because they didn't have the deep-pocket friends to pull it through.

In general, I'd say Eclipse survived ONLY because they had the deep-pocket friends to pull it through (at least, so far).
-----------------------
Anyway, ATM, you appear to be teasing us? I'd like to know more about Safire if you have specifics. (I'm glad the depositors got their money back. Pretty ethical managment, it would seem).

ColdWetMackarelofReality said...

Safire folded, in part, because Eclipse actively and aggressively poached their (Safire's) customers - I have that from someone who had a deposit on the Safire.

I agree with BEG BTW, the Safire was my favorite VLJ entry too.

airtaximan said...

bill-e,

I'm not teasing. I know a few stories about safire. Mostly from a friend who had 2 positions in the 900's, and he assured me there was a deposit for every position - he made his deposit around 2002 - he says everyone got their money back when the company failed

I cannot find much on the design of the plane or the program online or anywhere else...

airtaximan said...

"because Eclipse actively and aggressively poached their (Safire's) customers"

this seems a little crazy - how can a company do this, and it looks as if E-clips had all the oney/investors, media attention and customers, anyway.

the only thing I can imagine is they lowballed the price and increased their performnce numbers to "impress" neophyte jet buyers into thinking e-clips was better... but that's Microsoft for ya!

bill e. goat said...

This isn't of too much help, but it is the only thing I could find online now.

(Perhaps some of our fellow bloggers might be able to kindly contribute some details).

Safire

ColdWetMackarelofReality said...

ATM - you are correct from what I understand - Eclipse provided lowball 'trade-in' credit for Safire depositors - Eclipse was much better marketed, far better funded, and Safire had already stumbled once when Eclipse went after their customers.

jet_fumes said...

Safire went bust because the management was incompetent, it is as simple as that. When the principal investor came to that conclusion he bailed out and there was so much infighting that other potential investors were scared away.
It was more than a paper airplane, the fuselage and wing for the first prototype were already assembled and the aircraft was maybe six months away from first flight when the company folded.

Redtail said...

ColdWetMackarelofReality said...
Redtail said something to the effect that increased fuel flow and fuel costs account for the 2.3-3X increase in DOC's. - Hogwash.

Fish of Unreality. The $0.56/mile was quoted in 2000 when expected fuel burn was to be 45 gallons per hour total, fuel cost was $2.00 per gallon, and JetComplete costs were under $100 per hour. Today fuel is now $5 per gallon, fuel burn is about 65 gallons per hour, and JetComplete is $149 per hour. Therefore increase in DOCs for fuel alone is an increase of 150%, thanks to $92 per barrel of crude, times the increase in fuel burn of 44%, thanks to Pratt, which yields a DOC factor for fuel only of $0.92 per mile, an increase of 268% from the original $0.25 per mile.

ColdWetMackarelofReality said...

Redtail,

You just keep making the point I am trying to make every time you try and argue.

EVEN if you move to post P&WC engine change, EAC stated DOC would be $.69/mi, that incorporated increased fuel burn from the bigger engines, and was calculated as I recall using the same economics.

IOW, Eclipse expected the increased fuel burn to cost $.13/mi more, representing about a 50% increase in fuel flow using the same $2/gal figure.

Yet even using the higher 2004 number of $.69 that reflected the increased fuel flow, C&dD says the DOC's are now up to $1.72, $1.03/mi or 149% more expensive.

I already covered that fuel cost (burn x cost) would need to go up nearly 4X by itself. You admitted yourself that JetInComplete has gone up about 50% as well.

You do understand that makes it worse, not better right? Comparing the $.69 fuel flow to a $1.72 fuel flow indicates other costs are escalating as much or more than fuel.

So, FUEL ALONE is not responsible for the death spiral increase in operating costs now is it?

BTW, where is Jet-A averaging $5/gal? We saw that in touristy places lately but not everywhere.

Try AirNav.com or one of the other fuel stop planners if fuel cost is an issue for you. But if fuel costs are an issue, turbine equipment is probably not the right choice - come to think of it, Greyhound or American will almost always make more cents. ;^)

Shane Price said...

Lads, lads,

(and Ken)

The difference in DoC's between 'then' and 'now' should not be of any real concern.

A jet costs more to run that other GA aircraft, period.

You only have to worry about the cost of running the damm thing...

... when you HAVE the damm thing.

So far, we (on this blog) have only seen esteemed members flip positions for a profit. No one has used one for any length of time.

For all practical purposes, no one person on the planet has owned a completed aircraft for long enough to have valid data on the costs in the real world.

Focus on the reality. The E499.5 is cheap, but Eclipse have failed to make enough up on the volume to cover the losses to date...

Shane

gadfly said...

“. . . no one person on the planet has owned a completed aircraft for long enough to . . .”

Shane, No one person on the planet has owned a “completed (E500) aircraft” . . . Period!

gadfly

FlightCenter said...

Ken,

It is quite interesting that you are now quoting DOC numbers quite a bit lower than the ones you posted a few days ago. Here is your post from a few days ago.

"Conklin and deDecker say the Eclipse costs $1.72 per nautical mile in direct operating costs based on $4/gal fuel and including engine reserves." Ken 8:51AM Oct 18, 2007

"They are not MY numbers. They are the carefully-considered opinion of the nation's expert in this matter."

You also said that you thought that the original 56 cents per mile didn't include engine reserves.

The original Eclipse provided DOC number of 56 cents per mile and $204.52 per hour did in fact include engine reserves.

Here is how all the numbers were calculated.

The original DOC:

Fuel - $89.21
Maintenence Labor - $15.79
Maintenance Parts - $63.52
Engine Reserves - $36.00

DOC per hour - $204.52
DOC per statute mile - 56 cents
Note: 56 cents based on Eclipse assumption of 365 statute miles per operating hour or 318 nm per operating hour.

The Eclipse provided DOC number was raised in January 2003 as follows:

Fuel - $126.33
Maintenance Labor - $15.79
Maintenance Parts - $60.35
Engine Reserves - $60.14

DOC per hour - $262.61
DOC per statute mile - 69 cents
Note: 69 cents per operating hour based on Eclipse's assumption of 381 statute miles per operating hour or 331 nm per operating hour.

According to Eclipse this was a 22.6% increase due to the Williams / Pratt engine switch.

(Source: Vern's presentation at Customer and Investor Infosession January 2003, slide #19)

You'll notice that the DOC numbers promised by Eclipse used an assumption that the Eclipse 500 would fly 331 nm / operating hour.

That assumption is quite optimistic. Based on all the recent data available, from 31 flights over 1 hour and based on Eclipse 500 aircraft of serial #39 and higher, the Eclipse 500 flies an average of 271 nm per operating hour.

The three fastest flights (out of 31) were 338 nm/hour, 333 nm / hour and 331 nm/hour and 2 of those flights were eastbound out of ABQ.

The Eclipse website today shows operating costs of:

JetComplete - $149
includes avionics, airframe and engine maintenance
Fuel - $211.75
Fixed Costs - $64.00

For a total of $424.75 cost per hour.

I had previously assumed that Jet Complete included engine reserve. But Ken's post today seems to indicate that Jet Complete does not include engine reserve.

Which is the correct assumption?

Eclipse 500 Operating Costs

expilot said...

Ken, The only chance you have of receiving 2 Jets from Vern "Ponzi" Raburns in return for your "Gutsy" deposits is if they file chapter 11 and are purchased by a "real" manufacturer. Of course then why would you wan't the wee jet if you could purchase a larger more capable Jet for the same money? I agree that to receive a type rating requires a reasonable amount of experience and effort to obtain. Which only indicates how limited the market is for owner flown Jets. Back away from the Kool-Aid Ken before you throw away more money on a product "possibly" produced by the biggest cluster in aviation.

FlightCenter said...

ANN interviews Ed Iacobucci - Podcast

How's DayJet Doing? With Ed Iacobucci


A couple comments from Ed -

"We're ratcheting up slowly"

"We've had a few surprises - mostly internally"

"we're working on communicating to customers only after things have firmed up instead of when they are more fluid"

"not prepared to discuss trends yet"

"we've had less response than we anticipated, but not lower than our lowest projections"

"we've had almost no enroute ATC delays"

"we've had some weather, we've been able to fly around the weather, we're looking forward to some tools from Eclipse to help us navigate around the weather."

Surprisingly the interview includes a commercial from Diamond Aircraft.

"nothing matters if we can't deliver the service in a model that the customers understand and accept"


"about 290 companies signed on"


"more like 100% of our business is on a per-seat basis"

"5,000 quotes already"

"Very, very few takers on full plane quotes"

"we're going to be expanding service but we're going to limit our expansion based on our ability to provide a safe, reliable, and high quality service."

"adding 2 dayports almost doubles the number of network connections"

ColdWetMackarelofReality said...

We're ratcheting up slowly"

"We've had a few surprises - mostly internally"

"not prepared to discuss trends yet"

"we've had less response than we anticipated, but not lower than our lowest projections"

Who has a quick figure on number of 'quotes' to actual flights for Daydream?

I am betting that ratio is rather low, as in less than 2%.

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

CWMOR
Try this.
While car pooling is a great idea on paper, it seldoms works out that way.
Sure, money can be saved by multiple people riding together, but over a few times the little things build up and before too long the savings are not worth the hassle.
I believe the same thing to be true for Ed's service.
Getting intial business is relatively simple; keeping customers coming back over and over is where the revenues are. And without this repeat business, the model breaks down.
Customers will come the first or second time simply for the novelty. People are curious and the idea may initally make sense.
But without a way to travel that
"catches on", forget it.
This is Ed's challenge.

airtaximan said...

Hummer, why are you telling CWM this? I think he fully expects Dayjet to be a bust.

Perhaps you should be trying to explain this to your investors? Or perhaps, enlighten us as to WHAT service will you be offering that will in fact keep travelers interested and coming back?

The strangest thing about the whole VLJ revolution is the lack of a revolution. The pricing, inconvenience associated with the Dayjet model and the hours of shifting your plans, or the little plane that is probably more trouble than its worth, is crystal.

I am all for waiting to see the results, BUT I also do not see anything new here, that will attract customers. The inconvenience factor and price are so high, that anyone who says you could not do this with existing, larger, equipment, at least as a test, is on Planet Claire. Smaller or similar sized prop planes at a fraction of the cost and most of the convenience, if not more (doorstep to destination), presents a real opportunity to grow the market for “taxi” service.

If the plane is SUCH a revolution, why are the charter prices the same as larger jet planes? How is this going to result in any influx of customers and higher utilization and load factors, per seat?

There’s no novelty in car pooling… and corporate shuttle have been around for a long time. Taxi, buses, etc… even car-share programs in larger cities… nothing has taken off, because the “value” is not there. You CAN inconvenience passengers, but they must save a lot of money or gain a lot of value. Guess what? It’s probably not there in Dayjet, or the others at such high prices. Why pay restaurant prices to eat fast food at the McDonalds drive through? There’s no reason, unless you can somehow convince folks it’s “worth it”. One taste, ad the hype is…well…crystal.

I agree, Hummer, the novelty, and even the "early adopter" and "Ed Club" factor in the tech industry can drive some $99 club memberships and initial flights. BUT, the cost, the lack of many destinations as "dayports" and declining sell-through seem ominous. The service is really a bad service compared with everything that already exists, all things considered.

I'd give them credit for doing the best that anyone could expect with the e-500... the DAYJET service might in fact be the best any giant brain could come up with as far as air taxi service goes....

But, heck, that does not mean much at 1 hour of flying per plane per day. It does not seem like a popular revolution, maybe a quiet one?

Let’s wait and see...soon, someone will begin calculating the burn rate at Dayjet, and we can all estimate the loss/burn per week numbers....unless of course traffic picks up.

Ken Meyer said...

It was pretty interesting to see how the interview was portrayed here...

...and then actually listen to the interview. For instance:

As reported on this blog, Ed said: "we've had less response than we anticipated, but not lower than our lowest projections"

What he really said: "The trends are positive, not below our lowest expectations nor above our highest. We are comfortably in the middle..."

"The response is increasing significantly week to week"

"the per-seat aggregated services are doing much better than we thought they would do at this stage and that’s very encouraging."

And my favorite:

"It’s a little bit of a race—can Vern produce airplanes faster than we can build operations?"

I suppose it is inevitable that the Eclipse Aviation Critic blog would focus on the negative in every piece of news, but why is it always necessary for you naysayers to misrepresent things, too??

Ken

Shane Price said...

Gad,

That is why I always refer to the current offering as the E499.5.

Not the full fat, available on Tuesday, E500.

My reference stands. No one has driven an E499.5 for long enough to provide any real DoC data.

When (on Tuesday) ABQ ship a couple of E500's, Ken (and the rest of the Faithful) will trumpet the new dawn and say that all previous bets are off.

In the meantime, DoC discussions are pointless, for a couple of reasons I can think of.

1. Not enough data.

2. Will not affect the fall of Eclipse as a company.

As I said before, at the current rate of 'production', Eclipse cannot generate enough cash from deliveries to cover the losses.

Simple. Anyone with half a business brain can see it. Let's do a little maths. Shipping 3 aircraft a week, at an average of US$1.5 million each, generates less than $19 million a month.

1,500 employees, at an average of $6,000 each (I know, poverty wages, but it is New Mexico) comes in at $9 million a month. 12 aircraft kits at $900,000 each (2xP&W engines from Canada, glass cockpits from somewhere, wings from Japan, tails from England, must be at least that..) just under $11 million a month.

The way that works out is that shipping 12 aircraft a month, they lose money. Even if they get $1.5 millon for each one. Which is an issue, in that the early planes are not carrying that price tag, and DayJet are not at that stupid either.

Anyone else see the problem here?

Shane

Shane Price said...

Did anyone notice oil was $92 a barrel?

Or that the Canadian dollar was worth more than an American one?

What about the Euro? $1.50, anyone?

Fuji must be delighted to be supplying wings to Vern.

Likewise P&W for the engines.

Hope The Great Raburn did the contracts in US$.

Otherwise, it can't last much longer, down New Mexico way...

Shane

bill e. goat said...

More math;
If Avidyne is making 134 shipsets available, and there have been around ?50? airplanes delivered, and Avio-NextScam won't be available until the end of 2008Q1 (oh, let's just make that April 1st, hmmmm),

Then, with 9+13 weeks to go, Eclipse can't deliver more than (134-50)/(9+13) = 4-ish airplanes per week.

Still, dang good, by anyone's standards...but only (well, "only" is a misnomer here) 200 per year, that falls far short of Vern's financial pontification.

...Who knows- maybe NS will be ready sooner. But 15 months for a new avionics system is pretty quick, I don't put too much faith in the claims that they started it "months before" the start of this year. Then again, some of it has been recycled...
---------------------
For Gadfly,

If you can't stand the heat...Don't eat this one!

Bring on the Heat

gadfly said...

Goat

My days of hot chili’s are “history”, but there was a time . . .

NM Weather Forecast: Chili today, hot tamale!

Shane

There you go again . . . using logic! . . . and actual numbers! After that half-hour interview with “Ed”, using generalities, approximations, and vague percentages, logic was in a spin. That’s probably why they call some computer programs “Al Gore Rhythms”.

“Come Tuesday”, who will pull the “full fat” (E500) out of the fire?

gadfly

airtaximan said...

Brother Ken said:
"why is it always necessary for you naysayers to misrepresent things, too??"

Misrepresent? Misrepresent?

"Founder quits troubled Citrix
By Joey Gardiner
Published: Monday 26 June 2000
Ed Iacobucci, chairman and founder of Citrix Systems, has resigned following a turbulent few weeks in which Citrix shares have fallen to a third of their former value.
Iacobucci is to be replaced by Roger Roberts, current chief executive at Citrix, who will take on the role of chairman and interim chief executive.
The management shake-up comes despite the fact Citrix has gone a long way towards rebranding itself as a technology provider for the nascent ASP market.
On 12 June Citrix issued a profit warning saying it would not meet earnings estimates, and on 15 June a securities class action lawsuit was filed against the Citrix board for making false and misleading statements. Citrix has said it intends to vigorously fight these allegations."

hummer said...

ATM
The business model for DayJet, is of course, different than regular airtaxi. Florida is now in financial squeeze, preceived or otherwise, due to the housing bubble. Ed's model is for the business car driver at a very costly rate. I see many trying the service but it is difficult to see high volume, high return traffic at this point. Then there is Satair to pick up the slack. Just doesn't make sense.
Is it time for plan B?

FlightCenter said...

Ken said,

"And my favorite:

"It’s a little bit of a race—can Vern produce airplanes faster than we can build operations?"

I suppose it is inevitable that the Eclipse Aviation Critic blog would focus on the negative in every piece of news, but why is it always necessary for you naysayers to misrepresent things, too??"

Ken, Ken, Ken,
Talk about misrepresentation...

The quote you say was your favorite wasn't from Ed at all, but from the ANN interviewer, who thought he was serving one up that Ed could hit out of the park.

"You must be making Vern really happy. It’s a little bit of a race—can Vern produce airplanes faster than you can build operations?"


It was very interesting that Ed chose not to answer the question, but said something like

"let me answer that in a backwards way"

he rambled a bit and then closed his answer with

"we're going to be expanding service but we're going to limit our expansion based on our ability to provide a safe, reliable, and high quality service."

FlightCenter said...

Safire skinny

All depositers on the Safire aircraft were made whole with interest.

Safire's failure was completely the result of the CEO's inability to raise the funding.

The rest of the management team, especially the engineering team, were doing an excellent and conservative job of building a fabulous aircraft.

Eclipse's trade in program had nothing to do with Safire's failure.

I guess you could say that Eclipse had a hand in Safire's failure, if you say that Vern took his unfair share of the available investment money, leaving none for Safire.

The only ones who suffered were a couple suppliers who were owed money at the end and the employees who lost their jobs and who had been working without pay for a few weeks at the end.

FlightCenter said...

Avocet never got far enough to screw anyone.

There were just a few finance guys from Westport, CT who were trying to raise the money required to start an aircraft company, that never got going.

The money was going to go to IAI in Israel who had a bunch of engineers that were looking for work.

Their highpoint was a press conference at NBAA.

Niner Zulu said...

There is a huge difference in focusing on the negative, and being realistic.

Being realistic means you 1) identify the potential risks and 2) develop a plan to manage those risks. Pilots, of all people, are no stranger to identifying risk.

Nothing I say or write is going to cast a shadow on what Dayjet's success. I'm not going to jinx them by saying they will be BK by Friday, any more than I'm going to guarantee their profitability by patronizing those that think they are going to revolutionalize personal travel.

Here are the facts:
1. Dayjet's debut has been lackluster, at best. Dayjet is operating at a loss.
2. The jet that Dayjet has chosen to use is forcing Dayjet to avoid weather, increasing their operating costs and lowering their profit. Ed has said as much.
3. Does Ed have a plan to bolster Dayjet's acceptance and revenue? I don't know. He has had a lot of publicity, but it is not yet paying off.
4. Why would Dayjet want to purchase more Eclipse jets until such time as Dayjet is utilizing all of their current jets rather than letting them sit idle?
5. Since Dayjet's orders account for around 1,400 of Eclipse's total order book, doesn't it seem pretty likely by now that not only is Dayjet NOT going to take delivery of those jets?
6. Isn't it pretty clear by now that there is no way Eclipse is going to be able to deliver 300 jets to Dayjet over the next two years, even if Dayjet does see an increase in business?

If you are jumping in to bed with Eclipse and Dayjet, you need to do so with your eyes wide open. These companies have no money and no track record. They are high risk personified.

Ken Meyer said...

Flightcenter wrote,

"Ken, Ken, Ken,
Talk about misrepresentation...

The quote you say was your favorite wasn't from Ed at all, but from the ANN interviewer, who thought he was serving one up that Ed could hit out of the park."


Really??

I want everybody to go listen to that interview and hear it out to the end, where the quote occurs, so you can verify for yourself from whose voice these words come from:

"It’s a little bit of a race—can Vern produce airplanes faster than we can build operations?"


I want you all to do that because when you do, you'll know what kind of gross misrepresentation (lying??) actually goes on here.

Ken

Black Dog said...

Ken Meyer said...
Flightcenter wrote,

"Ken, Ken, Ken,
Talk about misrepresentation...



"It’s a little bit of a race—can Vern produce airplanes faster than we can build operations?"

ED said it and not the interviewer but that is realy not important Ken, as things are if Vern wins the race Dayjet has even more jets sat in the hanger and if ED wins the cost of each plane for Vern to make goes up hence bigger losses for Eclipse.

ColdWetMackarelofReality said...

Sorry FC, Ken is right that the 'race' quote was from Iacobucci.

That said, what a dry interview. Ed only got excited talking about the IT side. Seemed overly cautious to me, but maybe we are getting too accustomed to Vern's bombastic prognostications.

Ed is a sharp guy and he does have case money in this - that is, he is playing with some of his own money.

Sounded to me like they don't yet know whether things are going how they want or not - and that is fair with less than a month experience.

The idea of vague arrival/departure windows, weather diverts and then still needing to rent a car seems counterintuitive to me.

At the quoted rates, I am not surprised there is little interest in the more conventional charter 'whole plane' mode.

Now Ken, you best be careful with the liar title, some might think that the pot calling the kettle black.

That FC thought he heard Paul ask that rather than Ed saying it COULD be an honest mistake.

That is not the same as deliberately misrepresenting something someone wrote - I'll bet we could find some easy examples of that involving certain folks if need be.

FlightCenter said...

Ken,

Anyone who has read my posts, know that my posts stick to the facts. I have no intention of misrepresentation.

I put the link to the podcast in my original post, so I encourage anyone who wants to listen to the podcast and compare that to my original post. The intent was to provide a few teasers to encourage folks to listen to the podcast. I stand by all the quotes in the first post. No misrepresentations there.

Regarding my second post and your favorite quote...

In your favorite quote, Ed really was restating a question from ANN about whether he was making Vern a happy guy. Ed choose not to answer the question about whether he was making Vern a happy guy and choose to reframe the question.

My second post was made from memory and while I was watching the World Series and a college football game, so I apologize for getting the two quotes out of order.

I listened again this morning. For the record here is an exact quote.

The question from ANN was -

"You must be making Vern Raburn a happy guy. Are you going to be able to hire enough pilots and other people to keep the model expanding at the rate the market wants it?"

Ed's response -

"Well let me answer that in a kind of backwards way. We're going to be expanding our service so that we can always provide a safe and reliable and a high quality service. We'll limit our expansion by our ability to limit / to grow the operations. We've taken a very cautious and careful approach to selecting only the best crews, providing the best training that we can deliver and at whatever rate that goes, is the rate we're going to grow. That's a little bit of a race. Can Vern produce airplanes faster than we can build operations? I don't know where that is going to play out over time."

My conclusion from listening to this exchange is that the reason Ed didn't answer the question about whether he was making Vern a happy guy is because he isn't making Vern a happy guy.

And he isn't sure at what rate Vern can produce airplanes. And he isn't sure at what rate he can expand operations.

But neither is Vern making Ed a happy guy. That is the reason Ed mentioned that he'll only expand operations at the rate he can provide high quality training.

Implied in his response is a poke at Vern regarding Eclipse's delivery of training services and the fact that Ed doesn't need a bunch of airplanes to fly if he can't train enough pilots to fly them.

FlightCenter said...

CWMR,

Thanks. I appreciate the comments.

It was honestly how I remembered the quote...

airtaximan said...

OH Brother, Ken:

"I want you all to do that because when you do, you'll know what kind of gross misrepresentation (lying??) actually goes on here."

At least these "MISREPRESENTATIONS and LIES" are not costing anyone $900,000 in deposits/progress payments, or a lot of money bilking investors...

Its easy to understand why many folks end up calling you names and describing you in dreadful terms on this blog, Ken. You are nasty and accusatory regarding the posts here, but when it comes to the company which is holding your deposit and progress payment ransom, and the companies their success depends upon like Dayjet, you appear to allow them a ton of leeway. I wonder why? Could it be becasue you have 2 e-clips deposits to lose?

If this guys mistaken post is a misrepresentation and lie... you must already be thinking e-clips is the king of misrepresentations and lies... and they use it for financial gain. I guess the guy on this blog had a lot to gain?

Pathetic.

airsafetyman said...

"We're going to be expanding our service so that we can always provide a safe and reliable and a high quality service."

And we are going to do it by operating airplanes without weather radars, anti-ice, de-ice, anti-skid systems, ground spoilers, ground flaps, or functioning autopilots. But we do have these cutting-edge electronic circuit-breakers!

Excuse me while I go look for my chest waders; the BS is too deep for mere hip-boots.

airtaximan said...

I wonder if Mallya knows $200 million is only a drop in the bucket... then again, if you look at Cirrus, instead of E-clips... it might just do the trick. This article has a lot of details, and the plan to use the world's resources for manufacturing (they are not shy about saying this) is probably a big step in the right direction. IN two years, Epic has designed a small stable of planes. I guess Vern did not want to look completely incompetant, so he came up with the "outsourced" Con-jet.

"Lofty visions
Epic poised to expand with major investment
By Anna Sowa / The Bulletin
Published: October 28. 2007 5:00AM PST
On a blustery day two weeks ago, Rick Schrameck stood outside his two-year-old Bend airplane manufacturing plant and put on an Epic Aircraft hat to protect against the wind. Downwind of his facility, he could see Columbia Aircraft Manufacturing Corp., which declared Chapter 11 bankruptcy Sept. 24 and will auction itself off next month. North, to Redmond, the head of Lancair International, which makes airplane kits for home assembly, has acknowledged entertaining other states’ offers to move, citing high land and labor costs in Central Oregon, but has not indicated any intention to move.

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

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

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

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

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

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

About the craft
Epic Aircraft planes are made of composite materials and cost $1 million to $3 million to buy. The company currently has no FAA-certified models, but certifications are expected from 2009 to 2011.
• LT – six-seat turboprop
• Victory – single-engine jet that can hold up to five seats
• Escape – five-seat turboprop
• Elite – twin-engine jet that can hold up to eight seats
• Dynasty – certified version of the LT
• Victory – certified version of the experimental plane
• Elite – certified version of the experimental plane

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

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

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

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

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

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

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

Two minds thinking alike


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

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

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

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

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

Mutual friends finally set Schrameck and Mallya up in July.

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

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

The planes


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

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

The planes inspired Schrameck to build his own composite aircraft.

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

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

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

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

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

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

Experimental planes are:

•LT, a six-seat turboprop;

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

•Escape, a five-seat turboprop; and

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

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

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

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

•Dynasty, a certified version of the LT;

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

•Elite, a certified version of the experimental plane.

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

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

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

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

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

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

From Columbia on


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

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

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

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

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

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

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

Do these guys have "the perfect air taxi" plane?

rcflyer said...

Good to know that Mallya and Schrameck are BFF, especially given the history of foreign investments in Bend, OR aircraft companies. :)

R.C.

FlightCenter said...

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

The short summary is that the FAA currently shows that 4 Eclipse 500 aircraft were registered last week, (3 to DayJet) for a total of 54 Eclipse 500s. There have been 10 aircraft delivered so far in October.

The FAA "in process" website shows an additional 4 aircraft for which Eclipse has submitted paperwork to transfer the registration.

There were no notifications to the FAA of additional Eclipse 500 aircraft production starts last week.

There has been a number of folks wondering when serial #71 was started using data from Vern, this blog and other sources. According to the FAA registry database, Eclipse submitted paperwork that serial #71 was started on 9/28/2007.

For some reason, Eclipse delivered serial #54, 55, & 57 to DayJet, but skipped delivery of serial #56 (also scheduled to be delivered to DayJet).

And once again, there was no change in the Certificate of Airworthiness database. Only Eclipse 500 aircraft with serial #38 and below are listed as having a CofA in the FAA registry database.

FlightCenter said...

DayJet turned their trend around and posted some pretty positive results for last week. It was their best week so far.

Between 10/22/2007 and 10/26/2007 they had 117 flights and 91 flight hours. The average flight for the first three weeks was a little less than an hour. The average flight last week was shorter, running about 3/4 of an hour.

There are now 15 aircraft in their fleet.

3 aircraft averaged more than 3 flights a day.

10 aircraft averaged less than 2 flights a day.


N109DJ didn't fly last week or the week before, but is flying again this morning. It will be interesting to see if it now has the aero mod improvements completed.

Shane Price said...

Flightcenter,

This must be a mistake.

Serial Number 71 was started, according to Vern himself, on the 13th of August.

How come the Eclipse paperwork says it was started on the 28th of September, almost 7 WEEKS later?

Two possible answers.

1. Vern is a liar, and his company is telling the truth.

2. His company are liars, and Vern is telling the truth.

Answer 1 is what the FAA have been told. Answer 2 is what Vern told his old pal Dan Bricklin, on the 13th of August, 2007. Watch it again on www.youtube.com/watch?v=nynZ3mIzkEM

Which answer makes the most sense?

Shane

airtaximan said...

Shane:

Vern probably made an honest mistake...

;)

FlightCenter said...

Shane,

There are a few other possiblities...

What is the definition of "started"?

1) We sent a PO to our suppliers to buy product needed for serial #71.

2) One (or more) of our suppliers started building the parts required to build serial #71.

3) We received (some or all) the product from our suppliers necessary to build serial #71.

4) We started building some of the assemblies that are required at position #1.

5) Aircraft serial #71 was indeed at position #1.

6) Started = 6 months after the date that the depositor was told that he needed to provide his deposit.

7) We submitted paperwork to the FAA letting them know that serial #71 was started.


By the way, in interest of 100% accuracy...

I just rechecked the first date on record with the FAA for #71. It turns out, I had a typo on the date. It was 9/27/2007, not 9/28/2007 as previously reported.

airtaximan said...

Consistent:

No real definition of "started" or "finished"...

** can anyone explaine the lack of CofA for all planes since #38?

airtaximan said...

Wasn't there a promise of e-clips paying the depositors interest if they went beyond 30 days after the scheduled delivery date given to extract a 60% progress payment?

- Does anyone know what the interest rate is?
- Is it being paid?

Old Troll said...

airtaximan said...
** can anyone explaine the lack of CofA for all planes since #38?


Maybe they all have "provisional" CofA's... just like the provisional TC. In reality, I'll bet it's only a paperwork issue. Dayjet is in a lot of trouble if it isn't. Surely they're not that stupid.

I think the late delivery interest applies to the final payment. It's just another hit to the cashflow situation.

I'd like to know how many people cancelled when the FIKI timeframe expired. I'm sure Reverend Ken will be by shortly with information from "those in a position to know" assuring us that there were no cancellations.

ColdWetMackarelofReality said...

I am providing a link to Capt. Zoom's rag for those interested - it would seem that we have at least one datapoint for how much a TC and PC are worth (actually several of each) - Cessna's offer for Columbia apparently only allows $1.5M for the tooling and certificates, the other $23M is for risk exposure on warranty, de-ice, partial payment to Garmin for delivered systems, etc.

The above intended for 'fair use' and has no direct quotations - Stan can remove if need be.

You can read the article at http://www.aero-news.net/

Tooling and TC/PC for several aircraft models with hundreds delivered and in the field, ~$1.5M - wow.

EclipseOwner387 said...

ATMAN,

Interest is applied as a credit on final invoice.

Shane Price said...

Flightcentre,

I'm not sure what the FAA regard as 'started'.

My point is that Eclipse has submitted paperwork saying that on the 27th (corrected by your goodself) of September serial number 71 began.

Linked to that was Vern, who was quite specific in pointing to a 'hull' on the floor of the assembly hall and stating that it was "started this morning" and was "71". This was on the 13th of August.

Almost 7 weeks earlier....

Someone is lying here.

Coldwet,

Liked the 'honest mistake' remark. Classic oxymoron, especialy if matched to 'Vern Raburn' or 'Eclipse Concept Jet'

Cessna have an excellent reason to purchase Colombia Aircraft. Its called Cirrus. And to a lessor extent the expertise in composite production in Bend. That's what makes it viable for them to take on the inevitable hassel of sorting out the mess...

You think that $1.5 million is low for two TC/PC's. With Cessna's successful track record of managing the certification process, I think that $1.5 million is high!

Shane
PS Sorry about the 'lag' in my responses. Time zone(s) between us...

bill e. goat said...

Food for thought...
Regarding Big Ed's Aerocab service, and others, waiting for training slots:

If there is a "Huge", "Stupdenous", "Vertastic", ahem, well, pretty big, pool of pilots waiting for training, might not Flight Safety just go ahead and cook up a training program of their own?

I know the manufacturers have always collaborated with the training companies before, but that was given the relatively low volumes of pilots (eg, maybe dozens, or perhaps a couple hundred, per year, I should think, for a typical new biz jet).

But -if- there is the potential for hundreds of E-500's to be delivered, it would seem a lucrative target for FSI, or some perhaps shawdowy affiliate (owned by FSI, but operated under a different name to provide "brand differentiation"- and price differentiation- between full-cost traditional (high-profit) training, and Eclipse training (high-volume).

There would still have to be cooperation from Eclipse to provide technical data, but it sure seems it would be expeditious to "out source" this one, given the ongoing debacle of most things Eclipse, training in particular here.

WhyTech said...

beg said:

"But -if- there is the potential for hundreds of E-500's to be delivered, it would seem a lucrative target for FSI"

BIG if, Billy! FSI recently told me that it cost them about $12mm to develop a Level D sim. They'd have to be really convinced that the business will be there (or be well subsidized by E-clips) to commit to this, plus the additional program development costs.

WT

JetProp Jockey said...

goat

I thought I remembered from soething said in the past that DayJet was doing their own training - maybe it is only recurrent and the type rating must come from Eclipse.

airtaximan said...

If Dayjet opened up their booking engine to anyone who provides contact information (not just the "members", its no wonder they are seeing an increase in travel inquiries... and a decrease in the ratio between inquiries and flights. Just a thought.

Good news on the increased number of flights last week. This is a good sign...

JetProp Jockey said...

ATM

Just a small correction. DayJet now allows you to get a quotation on line without a membership, but you are instructed to call to actually book the flight. I don't know if they require a membership to book a flight - I would guess not at this point.

I tried the quote system. It works pretty well. It asks you what time you will arrive at the departure point and what is the latest time you can arrive at the destination.

Also an option to quote a charter.

airtaximan said...

JPJ, yup, that's why I said "open up their booking engine"...

I did not know anyone could actually call to book. So, you mean you do not have to be a member to book a seat or rent a plane at dayjet?

EclipseOwner387 said...

Eclipse SN67 delivered Oct 25th as reported on eclipse500club by the owner. The owner had a very pleasant delivery experience which was contrary to their expectations.

mirage00 said...

As this blog continues its downward trend, something to pass the time.

‘SUVs of the sky’ spreading their wings


I remain amused!

double 00

Jim Howard said...

I thought this job listing was interesting:

==================
Louisiana based corporation is accepting resumes for a Chief Pilot to fly their Eclipse to be delivered in February 2008. Qualified candidates must have:

* a current 1st or 2nd class medical,
* ATP rating,
* Pro Card,
* 5000 Total Time,
* 1000 turbojet,
* 500 turbojet PIC,
* minimum of two turbojet type ratings, and
* no accidents or violations.

Recent experience should include a minimum of 100 hours in the last year with 25 hours in the past 90 days operating a turbine-powered aircraft as a single pilot with at least a FMS or GPS moving map navigator. Plane to be based in southwest Louisiana. Benefits and type rating provided. Qualified applicants click here to apply online.

http://www.avcrew.com/jobs/pilots/jobs.htm
====================

The interesting thing about this job is that the requirements exclude all the current Part 135 EA-500 operators that fly with two pilots, which is all of them I think.

It also could exclude a current Part 91 EA-500 pilot who flies solo on the grounds that existing EA-500s do not yet have a GPS or FMS, unless a 496 counts.

planet-ex said...

Bill E. Goat said: But -if- there is the potential for hundreds of E-500's to be delivered, it would seem a lucrative target for FSI, or some perhaps shawdowy affiliate (owned by FSI, but operated under a different name to provide "brand differentiation"- and price differentiation- between full-cost traditional (high-profit) training, and Eclipse training (high-volume).

Neither FSI or CAE (SimuFlite) are that dumb. At one time SimuFlite would not start a training program for a jet until there were at least 250 aircraft in operation or they had an exclusive agreement with the OEM.

On average, the training program has a $1 million development cost plus another $10 million for a simulator. Level C and D simulators are not cheap.

BTW, FSI has an exclusive agreement with Honda for training.

John said...

Day Jet changes operating strategy?

This weeks flights are going out to non-Dayport fields: Venice, Daytona, Valdosta, Alabama.

Some of these may be test flights (loops outs of Valdosta).

DayJet may be moving to a charter, custom model.

FlightCenter said...

EO387,

The FAA "in process" website reports that Eclipse filed paperwork to register serial #67 on 10/25/2007, the same date that you report the owner took delivery.

So both sources tell the same story.

Some folks might believe that since Eclipse has delivered serial #67, that Eclipse has delivered 67 aircraft. However, that wouldn't be a valid assumption.

The FAA registry database and the "in process" website have no records of Eclipse delivering serial # 53, 56, 58, 59, 61, 62, 63, 65 or 66.


It is an interesting question why serial #67 was delivered ahead of all those other aircraft.

ColdWetMackarelofReality said...

Related question from my perspective FC is when the S/N is applied to the aircraft?

If it is during final assembly then the issue of compression might be worse than originally anticipated.

If it is early on, then the question becomes one of understanding at what point customers are declining their aircraft - causing ripples in the delivery schedule.

Interesting wither way.

Another question, when did Eclipse notify FAA that S/N 67 began work?

FlightCenter said...

Serial #67 had the same notice date to the FAA as serial #71.

9/27/2007.


I don't know when Eclipse associates a serial # with a particular airframe.


However, serial numbers can be associated with registration numbers far in advance of "starting" the aircraft.

For example, according to the FAA, serial # 88, 89 and 90 have registration numbers assigned and this has been the case since February.

Shane Price said...

Double Zero,

I liked your little link above. The quote (from an existing GA pilot) that struck me most was the following:-

"If I had an extra million and a half on hand, sure, I'd buy one. I'd have to win the lottery first," said Lars Margolies of Gardiner, New York, eyeing one of the jets at Hartford's Brainard Airport with New York City resident Rob Boettcher.

Remember, thats at the 'bottom' end of the price range for the E499.5

When they realise that a 'proper' one costs closer to $2 million they might need to win the lottery twice...

Shane

JetProp Jockey said...

Once again the Networks show their lack of basic knowledge.

If there is anything that does not describe a VLJ, it is an SUV.

A SUV is large, carries a lot of weight and burns alot of fuel.

If anything, a VLJ should be compared to a sprots car.

Black Tulip said...

“And the days dwindle down
To a precious few
September, November...”

From the outside things appear quiet at Eclipse. The public relations machine is on mute and a few airplanes are rolling out to the ramp. On the inside I envision a futuristic scene. Remember the James Bond movie in which the hero defuses the hydrogen bomb with 007 seconds left to go?

The threat to Eclipse is a different nuclear device. The neutron bomb was developed during the Cold War to minimize damage to property but maximize destruction of people. During a previous recession certain real estate investments were known as neutron bombs because they destroyed investors but left buildings standing.

If there is a neutron bomb at Eclipse, it is probably connected to the balance sheet and the bank account. It is counting down in dollars, not seconds. The hangars, unfinished aircraft, airframe components, engines and friction stir welding jig are not in jeopardy. Employees and their families, investors, depositors, vendors, trade creditors and government officials could be.

I see this infernal engine ticking away in an Eclipse laboratory. The big red display is clicking off dollars at a furious rate. The instructions on the device read, “This neutron bomb can only be deactivated by connection to a fully functioning Avio NG system via the USB port below. Begin functional test by pressing red button.”

Shane Price said...

Jetprop,

Check out the Pilatus web site and look at their Size Illustrator

The very first vehicle they offer for you to click on is...

... an SUV.

Oh, and while you're at it, play the 'I wonder which VLJ outline they used' game.

No prizes for the right answer.

And while you might prefer to call the E499.5 a sports car, I suggest that Edsel might be a more appropriate name.

Shane