Wednesday, November 21, 2007

Dear Customer,

As we near this week’s Thanksgiving holiday, it’s a good time to step back, and reflect on several recent experiences. Even though we are not where I had hoped to be in terms of aircraft production, I am incredibly proud of what the entire Eclipse team has accomplished over the past 11 months, and 2007 is not even over! In the next six weeks, Eclipse will complete another series of important milestones that I am eagerly anticipating sharing with you. Until then, I want to share some personal reflections and highlight a few recent events.

Avio NG

This last weekend, I flew flight test aircraft N506EA, which is equipped with Avio NG, including functional ADF, DME, SkyWatch™ HP, Class B TAWS, and weather radar capability. In short, it was an amazing experience. The Avio NG aircraft is a significantly measurable improvement over Avidyne equipment, resulting in massive improvements to functionality, usability, and hardware reliability. The display readability, responsiveness, audio quality and clarity are all massively improved over the Avidyne based Avio. I can guarantee you will be thoroughly impressed with Avio NG, as it is a remarkable system that delivers the operating experience we had always planned and expected.

This flight was particularly memorable to me as I felt it marked the realization of our original vision to design an unforgettable operating experience for our customers. It is easy to be pulled down into the daily ups and downs of building a business, but this was one of those “wow” moments that showed me just how far we have come.

This flight also made it clear to me that parting ways with Avidyne was one of the best decisions we’ve ever made. Besides an inability to deliver on promised functionality, initial in-service reliability data shows that Avidyne hardware is consistently at the top of the charts for failures for systems on the airplane. As we experienced in 2002 with Williams International, Avidyne was a vendor that simply failed to deliver as they had contractually committed to do. These were both extremely difficult decisions involving strategic partners, and we knew the impact would carry a high cost in terms of both delays and capital. But in both instances, first with Pratt & Whitney Canada and now with the Avio NG team of ISSC, Garmin, Honeywell and PS Engineering, we have ended up with a much better product that more than delivers on the original promises we made to each of you.

I am happy to report that certification of Avio NG should take place next month and production aircraft 105, the first aircraft with Avio NG installed, is steadily moving through primary assembly on the production line.

I am also pleased to report that we have added another member to the Avio NG team, Spectralux Avionics which will now provide GPS hardware. Their new system is certified to TSO-C146b which now enables us to deliver all WAAS-based LPV capability in a future release of Avio NG.

Dubai Airshow

Early in the year, we made a decision to introduce the Eclipse 500 to other parts of the world. Building on our successful European journey this past spring, I am proud to let you know that on November 8, 2007 aircraft 51 left for Dubai, UAE and arrived at the Dubai Airshow a mere four days later. Leaving with less than 10 hours on the airframe, our pilot, Kent Ewing, remarked that the plane performed flawlessly in all sorts of weather conditions. It flew the North Atlantic crossing route stopping in Canada, Greenland, Iceland, Scotland, Italy, Crete, Egypt, Saudi Arabia and finally, Dubai, with minimal weather diversions. Most importantly, the flight logged just over 25 flight hours with zero squawks! That is over 8,000 miles in four days. This airplane is simply performing exactly as we expected it to.

In preparation for the trip, we installed two Garmin 430 receivers and modified the VHF COM / NAV. This equipped AC 51 with displayable GPS information and provided basic Area Navigation Capabilities (BRNAV), which are required for overseas operations. The modifications were necessary because Avidyne could never deliver this capability. Avio NG version 1.5, which is on schedule for certification in March 2008, will provide the BRNAV ability required for oceanic and European operations.

Hampson Aerospace

You may have heard that a supplier of ours, Hampson Aerospace, has filed a lawsuit against Eclipse Aviation. Hampson manufactures the Eclipse 500’s tail section, including the vertical and horizontal, rudder and elevators. I want to assure you that aircraft production has not stopped, and Hampson remains a supplier. Our number one priority continues to be delivering outstanding aircraft to you. While I cannot go into too much detail on pending litigation, I will say that as in most production situations, occasionally we get into a dispute with a vendor. However, we almost always work the differences out and very few disagreements end up in the public domain as legal action. Prior to Hampson’s filing, we sent them a notice outlining a number of recurring quality issues. These concerns have led to a discrepancy on what parts should be paid for, and which should not. Contrary to wishful speculation by our competitors and critics, this issue has absolutely nothing to do with the financial health of Eclipse Aviation. In short, it is about our refusal to accept and pay for sub-standard material. I am very hopeful that we will be able to work through our differences, and that our partnership with Hampson will continue.

Eclipse Aviation is at an exciting moment in its history. Avio NG is living up to all expectations, and we are building one hell of an aircraft and proving it in daily operations around the world. As always, we remain thankful for your continuing belief and commitment to Eclipse Aviation. Have a wonderful and safe holiday season.

Sincerely,

Vern Raburn
President and CEO

Thanks to redtail for keeping the blog informed.

283 comments:

1 – 200 of 283   Newer›   Newest»
baron95 said...

Wow. If I understand correctly (and I think I do), Vern is saying that Avio NG that cuts in ship 105 will still have NO GPS/RNAV capability.

He goes on to say that he has only now selected a new supplier to deliver the GPS and that will only cut in in a later release of Avio NG.

My god. Some people would be operating this jet for over a year with no GPS/RNAV even if he makes the schedule.

It gives me little confidence in Avio NG being fully functional any time soon as in the next 12 months.

flightguy said...

Vern was proud to highlight that they modified the panel to get gps and fly to Dubai for show and tell.

He expects the owners to take their Garmin handheld and be happy.

Redtail said...

Baron95 said... It gives me little confidence in Avio NG being fully functional any time soon as in the next 12 months.

So, don't buy one.

bob said...

EAC still continues to not pay suppliers and Vern still says they are not in financial trouble. I guess as long as they keep advertising and offering free cokes they should be considered financially viable:)

Redtail said...

Bob, who hasn't been paid, as you claim?

ColdWetMackarelofReality said...

'bout this time last year this is what L Vern Raburn had to say - see if you pick up on any patterns here:

"Dear Customers,

For the past several weeks, many of you have been waiting for the news that Eclipse Aviation has delivered the first production aircraft (AC1) after being awarded a Certificate of Airworthiness (C of A). That important milestone event has not yet taken place and in turn, this may be impacting your confidence that Eclipse can perform, and more importantly meet the schedules we have projected for delivering your aircraft. Some of you have specifically asked whether it will still be appropriate for us to invoice for the upcoming 60% progress payment due for aircraft scheduled to be delivered through June 30, 2007. The following letter addresses this question and other issues surrounding our transformation from a development company to a production company.

AC1 Delivery Delays

The following are the facts and circumstances which have caused the delay in the C of A for AC1 and subsequent customer delivery.

Prior to entering the process for conformity to the FAA Type Design, AC1 was flown by Flight Operations, checked by Flight Test, and was submitted for the inspection process discrepancy free. Additionally Flight Test, Production and Quality Assurance found AC1 to be safe, met all of our quality standards, and ensured that the aircraft was ready to submit to the FAA. There is no issue with the airplane. However, through the process of working with the FAA, we did find that there is an issue with our internal conformity process.

The process required for awarding of a C of A and eventually our Production Certificate (PC) is both an inspection and testing process. Most importantly, it is an administrative review by the FAA of Eclipse's compliance to our processes and procedures used to build and test the aircraft. This process and review is designed to show that the accuracy and repeatability of the production process demonstrates that the type design that the FAA certified is indeed the airplane that is being built. This administrative review process is very well defined, detailed and unforgiving. It is what will give the FAA and every customer confidence that all Eclipse 500s are safe and meet the same TC conformity as any aircraft on the line.

In high-tech product development and aircraft manufacturing, the Quality organization is the guardian and the mentor for excellence in manufacturing. The reason that the delivery of AC1 is late is due to the fact that the Quality process designed for achieving aircraft C of A was not sufficiently designed and tested resulting in administrative quality escapes. The quality escapes we have experienced are characterized in two content areas including conformity to the aircraft build instructions and the clarity of the functional test procedures. With the problems identified, we elected to completely stop the process, evaluate the circumstances, develop a corrective action plan, and only then, restart the FAA inspection. We did not want to restart the process with the FAA until we were confident that the result will be an awarding of C of A for AC1. After meeting with the FAA in Fort Worth last week, the action plan has been written and coordinated with them. The Eclipse internal resources are in place and we are focused on completing the conformity process. We will work our way through this issue.

This learning experience has given us the following immediate actions to refocus and strengthen the quality oversight and process routine.

Manufacturing will re-conduct the conformity checks on AC1 before we invite the FAA back. All activity the week of November 27th will be focused on process correction and preparation to restart the C of A process. This correction process is being conducted in cooperation with the FAA. The FAA team will return to Eclipse during the week of December 4th to begin the formal certification process.
Conforming audits and inspections will be increased on the production line prior to starting the formal C of A inspections.
Please note that none of these internal delays are related to the recent communication of wing attach issues on the test fleet or window issues we disclosed to you.

Aircraft Delivery Schedule

Eclipse fully intends to meet its obligation for the delivery schedule. We are positioned with an achievable plan to deliver approximately 10 aircraft in 2006 and 515 aircraft in 2007. It is important to note that the delay caused by AC1 is not a day for day delay. We have parts and components coming in from suppliers and are hiring manufacturing personnel consistent with this production and delivery schedule. We have over 30 aircraft in various stages of assembly (pictures below) per our schedule and are actually ahead of schedule in primary assembly. Aircraft 3 and 4 have been through their engine runs and are scheduled to fly in the coming week. Additionally, there have been positive results in production rate attainment and significant reductions in instances of non-conformance throughout the production line.


Sunport 11 Initial Assembly


Sunport 2 Final Assembly - all of these aircraft will be delivered this year!

The receipt of the six month progress payments is connected to the continued flow of parts to build your aircraft. This payment schedule is tied directly to the production schedule, and is an integral part of the acquisition process for your Eclipse 500. Our Customer Care organization is the primary point of contact to help you complete any optional equipment selections, the aircraft purchase agreement, and submit the required progress payment. If you have questions or issues regarding this process, please let us know how we can to make the experience and our delivery processes as thorough and efficient as possible.

We are asking that all of our customers work with us and support us during this transition from a development company to a production company. Now is the time for shared communication and mutual support. We will continue to give you the information you need to prepare for your Eclipse 500 delivery. As our production process moves up the learning curve, we will project more specific aircraft delivery dates. Eclipse is focused and committed to complete this production certification process and deliver your aircraft.

Thank you for your continued support.

Best regards,

Vern Raburn
CEO and President
Eclipse Aviation"

cj3driver said...

Redtail said;

“… Also take into account the lack of participants here. All counted there are only about 10-20 regular posters…”

RT,

There were 30 different posters in the last thread which lasted only 2 days and contained 175 posts. Over 50 posters and 310 comments on the previous.

This blog continues to comes up number two or three when “google-ing” the words “Eclipse Aviation”.

My guess, … there are hundreds of readers, and a least a hundred active posters. If I were an Eclipse position holder (or owner) I would read this blog just to keep informed. You can bet anyone interested in purchasing an Eclipse, or position, will take some time here also.

There is way more information, Pro and Con, regarding the little E500 … here … than anywhere else on the web, … Including Eclipse’s own website and the Eclipse owners website combined.

In fact, you can’t even read the articles on the Owners website anymore.

Sad, and counterproductive.

Dave said...

Wow. If I understand correctly (and I think I do), Vern is saying that Avio NG that cuts in ship 105 will still have NO GPS/RNAV capability.

Didn't Eclipse just say a little while ago that Avio NG was "future proof"? They're already working on 1.5 and what does that mean for 2.0? Is everyone who has Avio NG 1.0 going to just download software or do they need hardware as well to become Avio NG 1.5? Any idea what Avio NG 2.0 will be?

bob said...

Redtail said...
Bob, who hasn't been paid, as you claim?

As of last week, there are 25 suppliers that are showing past due from EAC.

Redtail said...

I just ran a D&B report. it shows a current Paydex index of 68, meaning an average of 17 days past terms. If there are vendors crying about not being paid, they're not crying very loudly.

ColdWetMackarelofReality said...

In the letter from November of 2006 that I posted above Vern said:

"Eclipse fully intends to meet its obligation for the delivery schedule. We are positioned with an achievable plan to deliver approximately 10 aircraft in 2006 and 515 aircraft in 2007. It is important to note that the delay caused by AC1 is not a day for day delay. We have parts and components coming in from suppliers and are hiring manufacturing personnel consistent with this production and delivery schedule. We have over 30 aircraft in various stages of assembly (pictures below) per our schedule and are actually ahead of schedule in primary assembly. Aircraft 3 and 4 have been through their engine runs and are scheduled to fly in the coming week. Additionally, there have been positive results in production rate attainment and significant reductions in instances of non-conformance throughout the production line."

It is not often than anyonce can be off, BY AN ORDER OF MAGNITUDE and still have ANY CREDIBILITY.

So Vern's most recent letter should be taken in context of the real big picture.

Similarly, consider the accuracy of blogger predictions re: production, vendor issues, the e-CONjet, needs for additional funcing etc.

Morale is very low, experienced skillful personnel who have suffered through no less than three dilutions of their promised stock-option riches have had enough - resumes are no longer just being updated, they are being actively circulated and submitted to REAL airplane companies.

Internally, Eclipse says they will need more money NLT February - I am betting that day already came, within the last month.

PhostrEx continues to languish, reportedly mired in litigation over chemical formulation - this after finalizing litigation with the inventor.

The history of this company is one of missed promises, missed guarantees, missed schedules, missed budgets, and suit after suit after suit.

Friends and acquaintences who have been at Eclipse tell stories reminiscent of the two best days a boat owner has, the day they bought the boat (joined Eclipse) and the day the sold it (left Eclipse).

Nothing that Vern Raburn has said should have any credibility IMO given his PERFORMANCE to date.

What grade is lower than F-?

gadfly said...

Let’s see if I get this business model correct:

First, you greet the customers (a.k.a. “business associates” who are holding money that you desperately need) with some polite words, appropriate for the season . . . especially near the end of the fiscal year.

Second, you “trash” the former vendors (a.k.a. “business associates” to whom YOU owe money) . . . especially, if the word “legal action” has been mentioned in passing.

Third, you emphasize how much better you are than the “trash” in the “second column”, revealing your superior position to “trash”.

OK . . . I think I’ve got it. Now why didn’t I think of that thirty some years ago, when we were attempting to “make it” in business? . . . Life would have been so much simpler . . . and we could have avoided three decades of doing business the “hard way”.

gadfly

(All this time, we complemented the “competition”, considering the privilege of working to achieve a higher goal . . . we wasted all those years. And now it’s “too late”.)

(Cold Fish: You ask what is lower than “F-” . . . can’t help you on that one. But I tell people that I qualified for the submarine service, because all my grades were below “C” level.” It’s great to be “dumb”, because the only direction left is “up”.)

Redtail said...

ColdWetMackarelofReality said... nothing new

Still cutting and pasting old stuff that's been around the block. Can't come up with anything new and pertinent?

fred said...
This comment has been removed by the author.
fred said...

gadfly ...

i see ,with a smile , that you ubderstood the bizz plan in Vern's talmud ...!!

did you do an M.B.A. (Mockery Build on Absurdity) with him ??

coldwetfish
(i'm too lazy to type all ..)

i just found a Video of Vern after a meeting with the B.O.D. meeting and before cert. for AvioNJ .


http://www.youtube.com/watch?v=pCWw6W5NEa8

have a good laugh , it's only humor ;-)) but you can see Brother Ken at the front ... ;-))

ColdWetMackarelofReality said...

retail,

The same stuff keeps coming up because the same problems continue to exist.

Vern claims they will fit it 'Tuesday', then a year later sends out the same basic message saying they will fix it NEXT 'Tuesday'.

That you elect not to comprehend this most basic concept is very telling, the psychological term is cognitive dissonance - and it is typically a defensive mechanism to protect the ego when faced with facts that do not fit your world view.

Did or did not Vern say they would deliver 565 aircraft by the end of 2007?

To date how many hundreds have they delivered? Oh that's right, about 60 planes.

So what is an order of magnitude greater than 60? - Why, it is about 600. SO I am pointing out that Vern was wrong, by 90% a year ago.

I on the other hand, have only been wrong about the e-Con-jet this year - thinking not even Vern was stupid enough to do something like that - turns out I gave him far too much credit - ATM was right on that one.

Vern said plainly that they had over 30 aircraft in production, in November, of LAST YEAR - those planes were not delivered until a couple months ago - another longstanding issue for Eclipse that we bloggers have accurately pointed out - it takes WAY TOO LONG to build these jets, especially for a company that consistently claims it is a high-rate production high-tech company.

You are the one who is saying the same thing over and over and NOT adding any value to the discussion.

Your continued failed attempts to make this about the critics instead of the criticism is 'amusing' to borrow from another of the Faithful who also has yet to make any real contribution to the discussion.

You are the one proudly proclaiming that Eclipse is REPORTED as being ONLY 17 days late on bills to their vendors.

You do know that D&B only takes reports from companies which are subscribers right?

You do know that Eclipse has selected a number of smaller vendors that may or may not be D&B subscribers right?

You do know that in business you work with slow pay customers in good faith right?

That the companies which DO report to D&B are reporting Eclipse as 3 weeks late, on average, IS NOTHING TO BE PROUD OF for anyone but the blidnest of the Faithful.

Just keep up with the Mantra for the Church of Flyantology 'please don't let the critics be right, please don't let the critics be right'.

The simple fact of the matter is that we critics have been demonstrably, statistically, far more accurate in our predictions and criticisms than has his Vernness, or any of you, his faithful minions and apologists.

bob said...

Redtail said...
I just ran a D&B report. it shows a current Paydex index of 68, meaning an average of 17 days past terms. If there are vendors crying about not being paid, they're not crying very loudly.

It means that suppliers are not reporting them and yes, they need to do more crying to get their cash.

Redtail said...
This comment has been removed by the author.
Redtail said...

ColdWet said... You do know that Eclipse has selected a number of smaller vendors that may or may not be D&B subscribers right?

And, do you know of a single one that is not being paid? Thought so.
Oh, I forgot, Bob says it's so.

ColdWetMackarelofReality said...

Since I did not say anything about which specific vendor is or is not being paid, I have no reason to answer your question retail.

That being said, I know of several smaller vendors who are not being paid or not being paid on time - given that I do not want to incur negative consequences on them I will not name them - suffice it to say they are a couple systems type vendors and threatening to withhold product seems to be the only thing that gets the checkbook out.

Even if I did name them you would either suggest that I was lying or that someone was violating an NDA and deserves to not be paid. The Faithful playbook is surprisingly unimaginative.

So retail, was Vern off by 90% with his predictions last year or not?

Did Vern demand 60% progress payments last fall from approximately 300 position holders just weeks before canning Avidyne and THEN announcing that Avio NfG was started months prior?

Come on, just answer the questions and let the truth set you free. You can do it.

rcflyer said...

cj3driver said,

"In fact, you can’t even read the articles on the Owners website anymore.

Sad, and counterproductive."

Why is it sad that non-owners can't read the articles on the Owners web site? It is being paid for by owners' dues. It's no more sad than non-owners not getting to fly owners' jets :)

R.C.

gadfly said...

Stan

This is not aimed at “Eclipse”, but if you should have some time on Maui, take a look at the telescope array up on the mountain. My friend, Ray Richmond, who died just two weeks ago, is the designer, and was in charge of building the 92 foot diameter aluminum dome, that retracts vertically, to allow a telescope to track satellites and missiles, from horizon to horizon, while enveloped in a column of cold air, from a “heat sink” (a giant ice cube, if you will) buried in the ground. He was also an excellent pilot, and a member of what used to be called the “Confederate Air Force” . . . even flying over ABQ in a WWII B-17. Most recently, he was working on a “third” dome, for Boeing . . . who bought out Rockwell . . . and I will miss this wonderful friend.

If the morning sun, or evening sunset is “just right”, you can see the shiny aluminum dome high above the island. Along with his smaller dome, in the “Manzano Mountains, near the “home” of the Eclipse, it is a monument of excellent engineering . . . based on getting a job done, without all the egotistical nonsense that seems to dominate the discussion of a certain little jet. Some folks simply get the job done, without the bragging . . . a refreshing thing in today’s economy.

gadfly

(“Here today, Gone to Maui!” . . . and I hope you got a look at the submarine base, not far from the “Arizona” . . . my home for some time!)

rcflyer said...

baron95 said,

"My god. Some people would be operating this jet for over a year with no GPS/RNAV even if he makes the schedule."

I agree that it sure would be nice to have RNAV in the first release of AvioNG. However, it's not a tragedy. If you look a few years back in aviation history, you'll see that it was possible to fly without a moving map. Surely, we sophisticated jet owners can do for a few months what aviators used to have to do for their entire careers.

Avio has been equipped with two GPS receivers from the first plane shipped. In fact, it's used to provide a pseudo-DME, which shows the distance to the nearest VOR whose frequency has been selected. The lack of a moving map and RNAV capability is a software issue, not a hardware issue.

The FMS component provided by Chelton is strictly software. There is no additional hardware involved. It would work with the current GPS receivers.

The new GPS announced by Vern is a TSO'd WAAS-capable unit. WAAS capability is the reason for changing GPS vendors.

Getting AvioNG certified is a big deal, because they will then have a platform (and a partner) that will allow them to do what they've promised.

R.C.

sparky said...

RC said:

"If you look a few years back in aviation history, you'll see that it was possible to fly without a moving map. Surely, we sophisticated jet owners can do for a few months what aviators used to have to do for their entire careers."

RC, On a delivered aircraft, you shouldn't have to. This is the single biggest issue eclipse has with regards to being treated as a real aircraft company.

There isn't a company in existence that would produce aircraft in this way, none.

To all: I hope this thanksgiving finds you all well. Time for friends and family to focus on what's important and where we're at in life. Gadfly, I'm sorry to hear about your friends passing, you have my condolences.

And finally, a good natured shot at the supporters. If, when you sit down to that dinner tomorrow afternoon, you find a turkey missing one wing, no stuffing, and half as much giblet gravy as is called for, you can take solace in the fact that the incomplete bird on your table cost you a lot less than the one your waiting for.

May God bless all of you this Holiday.

Redtail said...

ColdWetMackarelofReality said...
Since I did not say anything about which specific vendor is or is not being paid, I have no reason to answer your question retail.

In other words according to you Dunn&Bradstreet, as relyed on by corporate America for credit reporting services, is totally unreliable. You seem to prefer to believe "Bob" over a corporate icon. Typical critic.

As far as Vern being wrong. Yep. Are you so lame that you even have to ask?

ColdWetMackarelofReality said...

retail, quote for me, specifically, where I said D&B was 'totally unreliable'.

Until then, keep your LIES to yourself.

I only pointed out what any B school gradiate should know, that D&B ratings are only as good as the input, and that D&B limits input to subscribers.

That means that smaller firms which do not subscirbe to D&B might have issues not reflected in the average 17 days LATE figure YOU PROVIDED PROUDLY as evidence that Eclipse is not paying slow.

So retail, was Vern off by 90% with his predictions last year or not?

Did Vern demand 60% progress payments last fall from approximately 300 position holders just weeks before canning Avidyne and THEN announcing that Avio NfG was started months prior?

I know it is painful but the truth will set you free.

gadfly said...

“ . . . it's not a tragedy. If you look a few years back in aviation history, you'll see that it was possible to fly without a moving map. Surely, we sophisticated jet owners can do for a few months what aviators used to have to do for their entire careers.”

Fantastic . . . I love it!

“Light blue is UP”, . . . “Green and shades of brown is DOWN” . . . and the cold side of your wet finger is the direction of the wind.

Folks . . . we have come “full circle”.

Speaking of “turkeys”, a long time ago, Colombo was looking for India . . . and mistakenly called the aborigines, “Indians”. I once heard the comment of an American Indian (pardon me, “Native American”) comedian that said, “I’m glad that Colombo wasn’t looking for ‘Turkey’!”

Well, enjoy a day of being stuffed, with turkey, dressing, pumpkin pie, and hopefully all the kids, and grand-kids . . . I have seventeen of the little olive eaters . . . and come back in a few days, ready to discuss the merits, and de-merits, of the little jet that wants so bad to be taken seriously.

gadfly

(And don’t get your giblets all in a dither!)

(Oh man . . . I love it!)

(One last comment: The thanksgiving by the Pilgrims was to God, for His providence, in keeping half of them alive through a most difficult year. And I, too, am grateful, as a “great-umpteenth grand mother” was one of those few people that survived that first winter. The “umpteenth grand father” came over the following year. Just think, I almost didn’t make it to this “critic’s website”. Now, how do you thank God?)

Enjoy the Turkey!

aerostructures said...

I'm with a former Eclipse machined parts supplier (made many parts for the empennage actually). We mutually parted ways years ago. Very difficult program with part features and assemblies that tested our 40 year history of making complex details/assemblies. Add price points that are beyond low to slow pay (net-90 + to "net-never") and you have no value.
When you are in deep with a customer or a supplier in this busy it is almost counterproductive and frowned upon to report to D & B indecently
We are sticking to known programs and getting paid real money on time. In the airframe world there is all the work any one can handle from all over the world. Why work for peanuts. There is no value in contracts that will never make you money.
Very happy for anyone who can make money on this program and I do wish Eclipse luck, "aircraft ain't easy".
So glad we moved on though! Things are good

ColdWetMackarelofReality said...

Anyone notice a lack of order announcements from OSH, NBAA and AOPA from Eclipse?

The only new order announced recently was the Dubai one which was itself previously identified.

And the total number seems to be shrinking some, from near 2800 to about 2600.

There are of course several possible explanations:

1 - As the time has come and gone and Eclipse FAILED to certify FIKI, more than a few may have exercsied their refund option. This of course is GOOD NEWS for Eclipse as it allows these planes to be sold at $1.8M instead of ~$1M meaning they lose less money with each delivery.

2 - the e-CONjet may have killed sales of the 500, people preferring to wait for the plane that more closely matches the original promised jet, in a new promised jet.

3 - the numbers suggesting close to 2800 may have been smoke and mirrors not grounded in reality.

Regardless, for a company that makes announcements such as that it is 'NOT buying Columbia', and that Dubai whatever bought 12, the silence re: orders following the 3 major US shows could be very telling (and not particular good).

baron95 said...

RC FLyer said...
If you look a few years back in aviation history, you'll see that it was possible to fly without a moving map. Surely, we sophisticated jet owners can do for a few months what aviators used to have to do for their entire careers.


RC Flyer, you do realize that even the Cessna 172 is now being delivered standard with Garmin G1000s, right. It is 2007.

Here is the problem with not delivering Avio NG. Owners are getting tained and type rated using one avionics suite and soon will have that yanked out and a new one put in. Then they have to be re-trained, and, IMHO, they should be required to go through differences training to revalidate their type rating. So when Avio NG 1.0 comes out you need to be trained again. When Avio NG1.5 (this one with RNAV) whou need to be trained again. Ans so on with Avio NG 2.0.

That is expensive and that is no as safe as owners being trained, type-rated and go through their mentorship phase with a single avionics suite.

What happens when you are issued a last minute STAR change on arrival, given a bunch of crossing altitudes to comply with, while descending in IMC? Is the new owner that just got old Avio replaced with AvioNG1.5 (perhaps with no SIM and no mentor time) going to be up so speed? Maybe. Maybe he/she will struggle. Maybe the autopilot will go off-line at the same time and consequences will get a bit more serious.

Contrast that with the Mustang driver. That got to play with a G1000 PC simulator for months, got to fly some G1000 182s some, went through training/SIM/typerating on a fully functional Mustang SIM/plane with G1000. Whent through 100 hrs of mentorship on a fully functioning Mustang with G1000, got recurring training on a G1000 Mustang.

Who is safer?

Second minor issue - with Fuel at $7/gal, if you don't have GPS/RNAV you get sent all over the place, perhaps increasing your fuel bill by 10 or 15%. Who pays for that?

gadfly said...

Sparky

'Comments fully noted! Thank you!

gadfly

gadfly said...

aerostructures

‘Couple of comments:

First, “luck” has nothing to do with anything. A solid design is “just that”, and never relies on “luck”. If luck were real, it could go either way . . . depending on what? . . . the direction of the prevailing wind? Luck is a myth . . . and not the thing on which to depend on things of time and eternity. Don’t ever fly anything, based on “luck”.

Second, your reference to D&B . . . a company of no substance, regardless of the “hype”, who rarely double-checks their “facts”, which are based on nothing more than the answers given by the investigated companies, and rarely backed up by their own investigation . . . in other words, a “phoney” organization, who over time, have convinced the public that they “know” things, of which they have never bothered to back up with investigation. In three . . . almost four decades of business, and “questioning”, not once have they ever investigated their evaluation of our business, and a former business that I managed . . . and have given to others a false evaluation. Never, ever, believe anything given out by “D&B”. There . . . I said it, and have evidence to back my accusations.

gadfly

(Use the brain that God gave you . . . and pay close attention to the things that you know, first hand.)

FlightCenter said...

Brought forward from the last post...

In the most recent letter from Vern, he promises certification of Avio NG 1.5 in March, just three months after he promises certification of the first release of Avio NG.

It is incredibly optimistic to project delivering any major release (such as NG 1.5) of an integrated flight deck only three months after the initial release.

Adding significant new functionality makes NG 1.5 a major release by the FAA's standards. This means that the new release is going to require flight test and FAA approval cycles.

That leaves about 6 weeks of time to develop all that new functionality from the release date of Avio NG 1.0 till the time they they must have hardware, software and aircraft ready for TIA & flight test.

It would be incredibly optimistic if only one vendor were responsible for delivering the new release, not 13.

Getting all 13 highly interdependent vendors, who all have other programs and opportunity costs to consider, to complete a simultaneous major release within 3 months would be a miracle.

airtaximan said...

the comment about the Thanksgiving Turkey that's missing so much stuff was hysterical... BUT, a truer anaolgy would be a BIRD paid for over a year ago, and it didn't even show up - you are at the table, all dressed up, (wife and kids - small, no more than two for sure) and ready to eat, and NO TURKEY. Wife says: "Honey, we paid for the Tiurkey over a year ago, right? It's a special Turkey - so special we've listened to you talk about it for 10 years... we're hungry - where's the Turkey? Are we going to have to sit here and wait for what? another year?

_CWMR, the faithful have criticised me for posting the barometer that would be COntroller... so I nincluded the statement "indicative not definative" so as to relieve their sophomorish anxiety.

The mention of D+B as some indication of financial health of E-clips has been tried and proven wrong here, already. Tailboy tries again... he's already been told, but I'll say it again.

Anyone who thnks D+B is some indication of financial health for a private company obviously knows NOTHING about business. Disregard any of his silly comments regarding the realities (fiscal) of e-clips.

BTW: 54 e-clips listings on OCntroller right now - up three already this week... an all time high - indicative and not definative... but it definately reflects the market.

MANY folks who have already ot are just ready to take delivery are SELLING.

Reality bites.

gadfly said...

Before I forget:

Our “computer geek” just left the shop, having fixed a simple thing having to do with a video driver . . . that is, the “software”. . . a three-year-old video driver, during a software upgrade, reverted back a generation or two, to an earlier version of the software. And I asked the man if this is a concern at Sandia National Labs, where he heads a group . . . as related to many systems that are separate, yet share a common program/algorithm. Can a single bit, out of place, destroy a complete system . . . and the answer was “Yes”, most certainly.

They spend in the billions of dollars, attempting to prevent a single event, such as an electromagnetic pulse . . . lightning or something from “the bad guy”, that will upset separate systems, from that single event. In other words, separate and isolated systems can be easily rendered useless, with a “single pulse”. So the so-called redundancy of two, or three separate avionic’s systems is a “myth”. A single event, at the wrong time, can render all systems inoperative, regardless . . . and the “steam gages” suddenly take on a new value in this modern age.

Go figure . . . !

gadfly

(Enjoy the turkey! . . . all the bits and bytes!)

Redtail said...

ColdWetMackarelofReality said...
Anyone notice a lack of order announcements from OSH, NBAA and AOPA from Eclipse? And the total number seems to be shrinking some, from near 2800 to about 2600.

Yes, 70 delivered.

gadfly said...

That's strange! . . . last count I saw was "zero", as in "zero" complete aircraft.

gadfly

Dave said...

And the total number seems to be shrinking some, from near 2800 to about 2600.

Yes, 70 delivered.


I'm glad to see Redtail acknowledge that Eclipse has lost 130 orders, so over time Eclipse has been losing net orders rather than gaining.

cj3driver said...

Dave said;

“… I'm glad to see Redtail acknowledge that Eclipse has lost 130 orders, so over time Eclipse has been losing net orders rather than gaining…”

Dave,

Keep in mind, Eclipse needs a net “gain” of forty units per month in order to break even. They appear to be loosing the same (net) number per month. Not a good sign.

There is a one month supply of Eclipses for sale … on Controller alone… and they are certainly not selling at one per day. Not by a long shot. Most of these have been advertised for some time now, many with price reductions. Of the first 90 aircraft, 30 are DayJets, 60 to others, … and 15 of those for sale. 25% of the fleet. And, at prices BELOW new factory orders. Eclipse must have sold the 12 units in Dubai at a major discount.

Even with Eclipse's lackluster current production rate, they are still producing planes at a much faster rate than the "Dealers" can sell them.

In contrast, I have seen three “flying” mustangs resale. All were advertised on Controller for a week or so, and sold. All at numbers substantially higher than ordering a new one from Cessna.

The disruptive marketing plan at Eclipse (actively selling to investors) is proving to be a huge mistake, (along with many others) and will ultimately destroy the resale value of this aircraft. WAY too much supply, at a WAY too small price, for relatively small demand.

Troglodyte said...

AvioNG being future-proof: This month’s issue of Flying starts with the usual editorial by J. Mac McClellan, which focuses advanced PFDs and Synthetic Vision. He states “Synthetic vision is coming on fast and will soon be available in most any airplane with a glass cockpit.” Let’s look at some of the systems he
might be referring to:

Garmin G1000: Yes.

Honeywell APEX: Yes.

L3 -- SmartDeck -- Yes.

Avidyne Entegra II: Yes.

Chelton: Yes (already certificated)

Lots of other bigger-iron systems (Universal, Honeywell, Collins): Yes


Eclipse Avio: NO.

Future-Proof. Hardly.

(BTW, before anyone starts screaming, this is directly from Matt Brown at NBAA (and reported by me previously on this blog) who said that there were no plans for synthetic or enhanced vision, and that while this might be technically possible, it was not on the road map as there were many more important things to concentrate on for the time being -- and I agree with him).


Well, after they have it caught up to ca. 1990 then, perhaps, discussion of any future-proofing might seem less ludicrous.

Redtail: There are many more readers than there are posters. I, like many others, recognize that there are many others here who have more to contribute than I (and they type faster, too).

--Trog

airtaximan said...

trog:

thanks for the post...

prodding Ken for Avionics comparisons was designed for this exact purpose. Honeywell Apex already has HUD/Synthetic/enhanced vision capabilites.

They avionics packages are in the 200k range - hardly an amount to lok to save a few bucks - especially given the support and integration realities.

My belief is that Vern was trying to develop something proprietary and sold it as a "Standard platform" which could be leveraged - sound familiar? Hardware (PC) needing Operating System (OS) whch couls for the basis from which to launch proprietary (to become standard based on scale, not quality) programs.

OH well... so much for that idea.

- they will be playing catch up to the rest of the industry for a long time... AND, they have no competitive advantages left, except perhaps their relationship with Dayjet. RRrriiiggghhtt.

** anyoe think thanksgiving week will be a BOOM week for Dayjet, like the airlines? I think this week should tell us a lot. Everyone wants to be home for Thanksgiving... so this should be a HUGE week for Dayjet - let's see how they do...

Trog - I type fast, but poorly. There are thousands of people looking at this blog... new postsers every week. Thanks for the post regarding HUD/Synthetic vision. VERY TELLING.

airtaximan said...

GREAT NEWS!
(someone better tell these folks, the way it is supposed to work is, you put up your non-refundable deposit and prgress payment,and YOU get YOUR plane AFTER the 300 folks who already did this get their's. Ken speak up -this is your plane they are obtaining )

"Club One Air to set up light jet repair centre

Anirban Chowdhury / New Delhi November 22, 2007



Air charter operator Club One Air is in talks with US-based business aircraft manufacturer Eclipse and another American aircraft manufacturer to establish a maintenance, repair and overhaul (MRO) services centre for very light jets (VLJs) in India.

“We are in advanced talks with Eclipse Aviation to bring the very first VLJ, the Eclipse 500 to India soon. We plan to tie-up with them to put up an MRO service centre in India. While Eclipse will provide the aircraft and maintenance technology, we will fund the entire project and provide the crew and charter services for the aircraft,” said Manav Singh, promoter and managing director, Club One Air.

Singh had held talks with Eclipse and other manufacturers at the Dubai Air Show last week. Eclipse Aviation has Microsoft chairman Bill Gates as one of the key shareholders in the company.

For the MRO centre, which would incur an investment of below Rs 500 crore, Club One Air is in talks with state governments in Punjab, Haryana and Madhya Pradesh for land for the project.

The first VLJ will be inducted into Club One’s charter services by March next year. The carrier plans to add at least 10 aircraft between March 2008 and March 2009.

“We expect to start with one aircraft in March next year. We will enhance our operations as we will get two aircraft every two months after this. We are expecting certification from the US Federal Aviation Administration (FAA) and the Directorate General of Civil Aviation,” said Ashok Pratap Rai, director, Club One Air.

Apart from the ten aircraft, the company also has plans to lease out aircraft either through fractional ownership, where the aircraft is owned by different owners, or the full ownership model, wherein services and the crew are provided by Club One Air.

“Several real estate and oil companies are interested in acquiring VLJs. Apart from that, several small and medium enterprises (SMEs) have also shown interest in the aircraft because of the low capital and maintenance costs,” said Singh.

A VLJ is priced at around $1.5-3 million whereas a turboprop or a jet aircraft would cost twice as much. The direct operating costs, which includes fuel and maintenance among other factors, is also 20-50 per cent lower at Rs 30,000/hour.

However, using a turboprop or jet aircraft, which is currently used for charter operations, would take operational costs to Rs 50,000-Rs 1 lakh/hour. Also, a VLJ is faster than a turboprop and takes almost the same amount of time for a short haul destination as an A320.

Club One Air is going to launch its domestic low-cost operations next year at prices that are 50 per cent below those currently charged by charters firms.

A low-cost or no-frills charter will be on the same lines as a low-cost scheduled carrier. For instance, a low-cost charter passenger will get basic facilities such as snacks on board rather than elaborate meals."


*** WE PLACE A DEPOSIT IN DECEMBER 1007 AND GET A PLANE 3 MONTHS LATER -WHILE FOLKS HAVE BEEN WAITING 8 YEARS? 300 FOLKS HAVE PAID $900K NON-REFUNDABLE, AND THEY GET TO WAIT TWO YEARS...THEY GET SHAFTED?

Man, it's gotta suck.

Dave said...

*** WE PLACE A DEPOSIT IN DECEMBER 1007 AND GET A PLANE 3 MONTHS LATER -WHILE FOLKS HAVE BEEN WAITING 8 YEARS? 300 FOLKS HAVE PAID $900K NON-REFUNDABLE, AND THEY GET TO WAIT TWO YEARS...THEY GET SHAFTED?

Man, it's gotta suck.


I believe the Dubai deal also arrives at that same time. The more Eclipse shafts the people who have been behind Eclipse for years, the more their net order will shrink as the market will see Eclipse as someone who sells existing customers down the river and the existing customers not wanting to get sold down the river will go elsewhere.

gadfly said...

Shucks . . . they’ll be so close to the “call in service center”, they’ll be able to “call in” without using a phone.

gadfly

fred said...

dave ...

i am vey suspicious of any plot-theory and the like ...

but i think (or i should use feel ??) the dubaï need to be "Hard-proofed" by time before drawing any conclusions ...

Dubaï has been extremely profitable for some manufacturers and money was flowing a river after a storm ... (a guy even bought a Airbus A380 to be used as "personal private jet " , crazy arabs ... i used to work for one of them ...!;-) )

so Vern couldn't come back with the tail between the legs and say "all of that for no result ..."

before soem starts screaming or give names , it's only an opinion ... a logical opinion and it wouldn't a first timer ...!!

exactly the same reason , i wrote about the danish guy : "that guy is the dumbest of the dumb " i don't think he got his plane (??) so what the point to buy an unfinished , uncertitfied plane he is not going to be able to use easilly into his own coutry for factory price ... since he could buy a plane already delivered , still unfinished , bla bla with a much greater discount on the "used" market ...!

it doesn't make sens for the guy as well as for the ethics of the company (EA Corp.) if any still believe they could have anything as such ...

300 personns waiting anxoiusly to get something they are not at all sure to get , while a shmuck from the other side can come and say " i am before everybody else even if i didn't wait and didn't risk any money thru waiting so long ..."

it's only a feeling ... i admit , but when you read the reason WHY the school would buy planes , i cannot help it but to laugh ....!!

airtaximan said...

Thanksgiving message:

Stan, thanks for setting up this blog - its a terrific resource and a great source of insight and entertainment.

Thanks to all the contributors - everyone is passionate, involved, opinionated and clever about backing up their positions. Its a real pleasure to come to this place, read and learn.

Thanks to the die-hards, because without them, there is no Eclipse. Without their contribution here, there is no debate, no insight into the mind of the eclipse customer. Basically without them, this blog would be very boring.

Thanks to all the critics for their insight, data gathering, ears to the ground for scoop, creative writing...

The bottom line is, we should all be thankful that we have the time, energy, freedom and passion to be able to be involved here. Its a priviledge and an honor to be involvded in this industry. Many folks are not this fortunate.

For myself, thanks to all for being patient with my comments and my poor typing.

HAVE A TERRIFIC THANKSGIVING

fred said...

i forgot ...

happy feasting day for all ...!!
(it is a normal day here)

even redtail , if you understand my english off-course ... ! ;-))

yes Stan definetely deserve something special for this so informative and entertaining place ...!

thanks Mr Stan !

Ken Meyer said...

I guess John Travolta wanted to be home for Thanksgiving:

John Travolta Eclipse Flies California to Florida

He did it with one stop in Witchita (an out of the way stop where I'm guessing perhaps he had business). Despite the detour to Witchita, the total flight time? Just 6 hours.

It's certainly true that he could have made the trip to Florida non-stop in his 707. But that plane burns something in the ballpark of 12,000 lbs per hour. The Eclipse at FL410 burns just 345 lbs per hour. That's very nearly a whopping 8 statute MPG!

And that's an Eclipse Happy Thanksgiving Story :)

Ken

mouse said...

Dave,

AVIO 2.0 will be what GA had for avionics about 10 years ago... Maybe even LORAN.

The fact that they have already started spewing out versions shows you that it does not work now, won't work soon, and may never work...

That's the whole point.

Stop and deliver on the 1st promise, then move on and improve. Delivering a peice of IOU shit and then bragging about how it will work someday is ludicious.

mouse said...

Mackeral,

E is lower than F- as in E-Clips!

mouse said...

Redtail,

You point at others for what they say, however since you have been on this site you have never said anything.

Eclipse owes everyone, as in everyone. Vendors, all of them... He is not delivering what he committed to!

Depositors... Not delivering...

Tax payers... no return on investment...

Employees... not delivering the stock value...

Investors... Not delivering anything...

They owe everyone; Time, Money, Airplanes, Value, Stock, The Truth, and on and on...

P&WC has put Eclipse on hold more times than your lips move when you read... In fact it's cash upfront before the next set gets crated...

planet-ex said...

I guess John Travolta wanted to be home for Thanksgiving:

John Travolta Eclipse Flies California to Florida

He did it with one stop in Witchita (an out of the way stop where I'm guessing perhaps he had business). Despite the detour to Witchita, the total flight time? Just 6 hours.

It's certainly true that he could have made the trip to Florida non-stop in his 707. But that plane burns something in the ballpark of 12,000 lbs per hour. The Eclipse at FL410 burns just 345 lbs per hour. That's very nearly a whopping 8 statute MPG!


I wouldn't call it a six hour flight if you arrive on one day and leave two days later. Flightaware shows the aircraft arriving on the 19th and leaving on the 21st. Probably in ICT to sign the paperwork on his Mustang.

JetProp Jockey said...

Bob and Redtail ie D & B

There was a time that D & B was a valuable tool for determining credit worthieness. Now it is almost worthless.

I have had customers that I have struggled to get paid in 90 days with a paydex that said they pay within 10 days of terms.

mouse said...

There is a bigger crime going on here too...

The fact that the FAA allows this aircraft to be built and delivered in this condition is criminal.

In written statements from Eclipse itself, it discloses how bad their product is... The fact that most systems do not work or are not operational...

The quality of it's prime vendors is crap...

And our NTSB and FAA sit and watch from the sidelines like deaf mutes is incredible.

It's like this is covered up or kept in the closet either! It's being played on the screen of the drive-in theatre on mainstreet.

I'm embarrassed for our friends from across the pond that watch this play out...

Simply amazing.

Done again for awhile... Trying to share information with morons is just too big of a waste of time. I can be reached via email if anyone has a question or discussion of value. Thank you Stan. You to will someday be recognized and studied in schools... I think the name of the book was "The Emperor Has No Clothes"... Thanks for not just watching from the sidelines...

mouse said...

Thanks Ken, if there is one bird you understand, it's the Turkey!

Redtail said...

D&B may not be the perfect tool, but it does indeed show that there are, and have been, substantial payments made on time to slightly late. It certainly does show that Eclipse is paying at least those listed on the report. Many of the payments have been made in the last few months so the information is current and relevant. It does refute the claims here that no one is being paid. Those statements made on this blog are just plain wrong, and made without any knowledge of Eclipse's or the vendors' finances, terms, or payments.

Redtail said...

mouse said...
There is a bigger crime going on here too... The fact that the FAA allows this aircraft to be built and delivered in this condition is criminal... The quality of it's prime vendors is crap... And our NTSB and FAA sit and watch from the sidelines like deaf mutes is incredible.

The FAA and NTSB sit by because there's nothing of value in your statements, and nothing you claim is true. The crime is that you should be allowed to make such lame statements. Who here said that any of the "crap" coming into the manufacturing line was being used as is. The "crap" get reworked and corrected. That which is not reworkable is sent back. The same thing happens at aircraft companies and manufacturing aound the world. Sorry if you don't like it.

Redtail said...

mouse cried... Done again for awhile... Trying to share information with morons is just too big of a waste of time.

Adios, muchacho.

ColdWetMackarelofReality said...

retail,

We are trying to help you but you just keep digging yourself deeper.

D&B only reports based on what subscriber companies report. Subscriber companies only report when they believe they are not going to continue the relationship.

The fact that experienced business owners and managers who actually use D&B as a tool to evaluate potential customers are telling what use is it is and is not good for seems to fall on deaf ears with you.

The D&B report that YOU quoted says clearly that, ON AVERAGE, ECLIPSE PAYS 3 WEEKS PAST TERMS. Eclipse probably has 90 terms with most vendors (it does with the companies I know of), meaning it is making vendors wait 30% PAST DUE on already extended terms, just to get paid.

That 'performance' is nothing to be proud of, it is pathetic.

Suppose you are a small vendor and have payroll and material expenses that you have to make for a big run of Eclipse parts you did 3 months prior, say they are your only aerospace customer, do you scrape by and hope for the best while trying to gain more aerospace business? Do you sue them or go into mediation? DO you call D&B if you are a subscriber?

As a subscriber to D&B, you can find out who, specifically, said what about you - given Eclipse's historical pattern of petty and retributive behavior, who would intentionally open themselves up for that - only vendors for whom Eclipse does NOT represent a significant portion of their work.

But by all means, keep reminding us that Eclipse is only 17 days late on average - rather like the plane itself, also short, late, and embarassing.

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

Ken,

Happy Thanksgiving.

You know I have been asking some simple questions of you and you just seem to maybe miss them, time and time again, of course, someone backed up with all the facts and talking points sush as yourself would have no reason to be afraid of answering the questions so I am putting them up again just in case you simply missed them the previous dozen times I asked.

Are you suggesting that Cessna could not produce as many Mustangs as they want?

Are you calling the handheld Garmin 496 more technically advanced than the integrated G1000 suite in the Mustang?

Are you honestly suggesting that Cessna, who builds more planes in a year than any other company, could not build more Mustangs if they wanted?

Do you believe that requiring two-pilots due to INOP equipment and having to file VOR to VOR is comparable to a single-pilot capable, funtioning FMS, fully functioning GPS, FIKI certified aircraft?

In fact, perhaps you would be so good as to share with the class exactly how many fully functioning EA-500's have been delivered?

Remember, FULLY FUNCTIONING.

How many partially completed, INOP equipment laden Mustangs have been delivered in the same time frame?

Thats's what I thought.

If you decide to actually answer some simple questions you could also answer ATM's question from your bragadocious post a few weeks ago - what SPECIFICALLY do you see as the features that Avio NfG OFFERS NOW that are superior to the G100. If that is too hard, you could even include future Avio NfG as defined by Eclipse at 1.5 and 2.0.

In the mean time, the Faithful can always take solace in the fact that an Eclipse can cross the continent (well 2/3 of it anyway) in only two legs, over a couple days. That is a real accomplishment.

Dave said...

Stop and deliver on the 1st promise, then move on and improve. Delivering a peice of IOU shit and then bragging about how it will work someday is ludicious.

I think this is what Vern learned at Microsoft - or maybe he was even the one who started it at Microsoft. Have your customers be your beta testers and having them keep on buying new versions of stuff you promised them in their earlier versions along with lots of vaporware. However, having a monopoly on OSes is completely different than being a puny player in aircraft.

Ken Meyer said...

Cold Fish wrote,

"Ken,

Happy Thanksgiving."


And a Happy Thanksgiving to you, Cold Fish.

Now, then...since we're being so charitable with each other, I will attempt to answer your questions:

"Are you suggesting that Cessna could not produce as many Mustangs as they want?"
No; I'm suggesting Cessna, its parent company, and their shareholders all benefit from the company policy of producing below demand. It is good for everybody except those who want to buy the plane. They pay the price, quite literally.

"Are you calling the handheld Garmin 496 more technically advanced than the integrated G1000 suite in the Mustang?"
No, although it is an amazing piece of technology. I was referring to the systems integration and monitoring capability built into Avio, not the capabilities of the 496. Even today's Avio can do a number of things that a G1000 cannot. It is regrettable that certain important functions like FMS and moving map are not among them, but those features and more are coming soon enough.

"Are you honestly suggesting that Cessna, who builds more planes in a year than any other company, could not build more Mustangs if they wanted?"
Didn't I already answer that one?

"Do you believe that requiring two-pilots due to INOP equipment and having to file VOR to VOR is comparable to a single-pilot capable, funtioning FMS, fully functioning GPS, FIKI certified aircraft?"
The premise is false. It is untrue that the Eclipse requires two pilots due to INOP equipment. Also it is not that the Eclipse is limited to flying VOR to VOR.

"In fact, perhaps you would be so good as to share with the class exactly how many fully functioning EA-500's have been delivered?"
In aviation, we judge aircraft according to whether they are airworthy and conform to their type certificate--I'll bet you knew that :) . Eclipse Aviation, Inc has delivered something around 80 fully airworthy aircraft that comply fully with their type certificate. The number should rise to over 100 in the next 2-3 weeks.

"How many partially completed, INOP equipment laden Mustangs have been delivered in the same time frame?"
I believe Cessna has delivered fewer than half as many Mustangs as Eclipse has delivered 500's.

"what SPECIFICALLY do you see as the features that Avio NfG OFFERS NOW that are superior to the G100."

There are many features available through Avio that are not in the G1000 feature set. That is why Business and Commercial Aviation said that the Eclipse offers the best virtual co-pilot capability of any single-pilot aircraft, bar none. Sometime when the mood strikes, I'll make a whole listing for you. Now isn't a really good time.

Ken

ColdWetMackarelofReality said...

Ken, your avoidance exceeded my expectations - please continue to carry the torch for Eclipse, nobody does as good a job at accurately representing the Eclipse 'value proposition' as you do - and I mean that sincerely.

I hope you and Shari have a great Turkeyday.

Ken Meyer said...

Cold Fish wrote,

"nobody does as good a job at accurately representing the Eclipse 'value proposition' as you do - and I mean that sincerely.

I hope you and Shari have a great Turkeyday."


Thanks, Fish; that's a nice compliment.

Look, it's Thanksgiving--let's talk turkey. The company isn't perfect; everybody that deals with them knows that. I myself have had serious disagreements with them in the past. They've made a number of mis-steps, and they've certainly managed to piss off an awful lot of people (including me from time to time).

However, I have believed for a couple of years that the plane is a very good one for its particular niche, and I believe that more so today than ever before as I talk to those who are regularly flying it and as I begin my detailed study of its systems in preparation for the type rating training. I'm very happy with the purchase.

Of course I'll be even happier when they provide the FMS functionality, moving map, FIKI and XM weather, all items which I will concede the company should have provided from the start. I suspect temporarily delivering planes without those items was a necessary evil (in what was a bit of a Hobson's choice) if they were to succeed. I can accept that sleight of hand because, in the end, the plane will be well worth the travails along the route to getting it.

Happy Thanksgiving.

Ken

Shane Price said...

So now it's Friday.

Reality check from over the pond.

Ken says:-
I can accept that sleight of hand because...

????

For once, Ken approaches a confession. Eclipse are shysters, but it's ok, he's getting a value which he believes will compensate him for being a mug.

A double negative does not make a positive, Ken.

The company you have put your Faith (and dollars) into cannot deliver what they promised. Events move too rapidly now, beyond the control of the The Great Raburn.

I wish you well, and hope for a happy outcome.

BUT...

I just cannot see a way out.

Shane

mirage00 said...

Done again for awhile... Trying to share information with morons is just too big of a waste of time. I can be reached via email if anyone has a question or discussion of value. Thank you Stan. You to will someday be recognized and studied in schools... I think the name of the book was "The Emperor Has No Clothes"... Thanks for not just watching from the sidelines...

I think I'm going to throw up my turkey.

I remain amused

double 00

airtaximan said...

Ken:

Hobson's choice?

"Hobson's choice is a free choice in which only one option is offered. The choice is therefore between taking the option or not taking it. The phrase is said to originate from Thomas Hobson (1544–1630), a livery stable owner at Cambridge, England who, in order to rotate the use of his horses, offered customers the choice of either taking the horse in the stall nearest the door—or taking none at all.

The first known written usage of this phrase is in Joseph Addison's paper The Spectator (October 14, 1712), though it also appears in Thomas Ward's 1688 poem "England's Reformation", not published until after Ward's death. Ward wrote, "Where to elect there is but one, / 'Tis Hobson's choice—take that, or none." Charlotte Perkins Gilman uses the phrase in her novel "Herland".

Hobson's choice is different from:

a true choice between two (or more) options
blackmail (do something, or have some unpleasant fact about your past revealed)
extortion (do something or suffer unpleasant consequences of some other sort)
a Catch-22 situation, where both (or all) choices available actually cancel each other out."

So, you are saying you really had no other option?

Thought so.

From my perspective, you have outline perfectly why e-clips aviation bother so many folks - no one in aviation should be in a position to have to accept a sub-standard plane, just because they alredy committed to it. If your excuse is, you cannot afford any other plane, so this was the only real option - you are in for a huge surprise. The paper promise is only paper, from a cost perspective. You are probably SOL if you ever obtain anything for your deposit.

Hobson's choice means someone made you make a decision you probably did not bargain for... aviation is supposed to be above this, Ken. I guess we can thank you and e-clips for lowering the bar once again?

Mirage: don't bother throwing up the Turkey - no one cares, unless YOU find it amusing, of course.

rcflyer said...

Airtaximan,

Ken didn't say HE had a Hobson's choice, he said Eclipse did.

The choice Eclipse had to make was between delivering planes without some of the promised features, or going out of business.

R.C.

ColdWetMackarelofReality said...

RCF said:

"Ken didn't say HE had a Hobson's choice, he said Eclipse did.

The choice Eclipse had to make was between delivering planes without some of the promised features, or going out of business.
"


Fish sez: that is a distinction with no difference - ATM's point stands, that should not be the case in aerospace - it might be OK when the major impact of the blue screen of death results in a loss of data, it is unconsionable when the result may be loss of life.

Airplanes and flying can be dangerous and must be treated with the appropriate level of respect and understanding - the Microsoft mentality has no place in aerospace.

Jim Howard said...

Here is an interesting review of the Cessna Mustang:

http://tinyurl.com/2wo4pe

I found it fascinating that Cessna did a demo flight including stalls with five people aboard into icing conditions. Note also the high degree of integration between the airplane, FADEC, autopilot, and the G1000.

The Mustang has independent backup steam gages and anti-lock brakes. The Mustang's range is reported to be a little more than I thought.

Warning: Ken, don't blow a gasket about the once sentance mention of the EA-500. The author is wrong about RSVM, and I don't think the Mustang exceeds the Eclipse's range by very much.

fred said...

ken ...

when you write about cessna , are you trying to portray yourself as even more naïve than you really are ???

i'll try to explain my view ...

if surgeons would be able to put "plastic boobs" to any US women looking for it at any corners of any streets ... do you think you would be able to make a check to offer yourself such a nice toy as a jet plane ??? answer = NO , you would have to work for the same price than in the streets or go out of buisness , then bye-bye jet plane !

(Rememeber : don't be as dumb as G.W.B. and A.Greenspan : whatever is rare is expensive , whatever is too common is worthless ...)

fred said...

mouse ....


when you write "I'm embarrassed for our friends from across the pond that watch this play out..."

don't be too upset ...!

i have shown the blog to my friend (by the way , he's in the top 20 of EASA officials)

after a look he commented by :

"this seems to be one of the most funny thing since the first plane took off ..."

Redtail said...

Mackerel said... The D&B report that YOU quoted says clearly that, ON AVERAGE, ECLIPSE PAYS 3 WEEKS PAST TERMS. Eclipse probably has 90 terms with most vendors (it does with the companies I know of), meaning it is making vendors wait 30% PAST DUE on already extended terms, just to get paid.

As usual, your math sucks, and you have mis-quoted and mis-stated. The Paydex says 17 days late, not three weeks. That would be 18% past terms, not 30% as you calculate. In today's economy, I don't know of too many vendors that would have a problem with GETTING PAID in those terms. And they are getting paid, not being hung out to dry as you have claimed.

JetProp Jockey said...

Jim - you indicated suprise that the Mustang demo included stalls into icing conditions. The article actually says:

In the clear air over CON at 15,000' we got a block of airspace for airwork. Steep turns were simple - a couple more and I could master them to Commercial standards. It was tempting to overbank as the plane felt so balanced and controllable.
We then powered back and did a full stall in a clean configuration at around 85 kts. There is no stick shaker, since it isn't necessary. Recovery, without power, took only 500'. We did another for good measure. There was a bit of roll, never beyond rudder authority and recovery in only 200-300' with a bit of power. This 8,000 pound jet with three adults in back stalls as gently as a DA40. Amazing.

fred said...

jetprop ...


it is not amazing ...

it's the difference between :

a 2.8 Millions $ jet from a RELIABLE firm

and

a 1.8 million fantasy !

fred said...
This comment has been removed by the author.
fred said...

redtail ...

you are playing with words ...!

i don't know about you , but for this side 17 days is actually IN the THIRD week ...! (and if it's bizz day it is even closer ...!)

could you give me a bit of light ? do they have an agreement on 90 days term ? in they 17 days late , it is ,then things are paid at 107 days ??!!

from a firm that can go out of buisness any day , for a vendor 107 days or 1 , 2 or 17 days is like sitting on the top of a volcanoe waititng on it to explode , No?

fred said...

i've just been called by my friend in EASA (i asked him if an eclipse at the present time could easily fly in danemark ...))

he told me a very interresting answer ...

WHY DID the auction was won by a danish guy ??

very simple to understand :

the FIRST EASA CERTIFIED MUSTANG has been delivered to a Danish entrepreneur named Jorge anderssen !

what a wonderfull happening (strange , i thought it could happen only in fairy tales) the first "european owned" mustang is DELIVERED FULLY FUNCTIONING AND CERTIFIED BY EASA

while EA Corp. just made an auction where an unfinised , unbuilt and uncertified E500 ,has been won extraordinarly by an another danish .... how convenient ...!!

really , is that the magic of the story ...

if vern wants it , then it happens ?

airtaximan said...

RCF,

thanks for the clarification, BTY&M, It does not matter, what Ken wrote about Hobson's choice, here's why...

In any event, there is a buyer and seller in the example. The buyer if making offers that are not really offers, and the seller is making choices when there is no choice. This is the point.

Eclipse(sp) = Seller
Ken = Buyer

.. in the Hobson's example.

I agree with him, this was the situation. However e-clips internally felt about shafting the customers is irrelevant. If it was a Hobson's choice to them, it was always providng a choice where there is none to the customer... going out of business means you lose your deposits. How much of a choice is this?

Die-hard is what Vern call the position-holders... now we know why.

Once again, not appropriate for aviation.

Thanks

Ken Meyer said...

Jim Howard wrote,

"Ken, don't blow a gasket about the once sentance mention of the EA-500. The author is wrong about RSVM, and I don't think the Mustang exceeds the Eclipse's range by very much."

Right; the Eclipse has RVSM, and the NBAA IFR ranges for the two aircraft are 1125 nm and 1150 nm respectively. That said, I think the real-world IFR range of the Eclipse is probably 50-100 nm less than the Mustang.

There was one interesting tidbit in that report:

"The Mustang leveled off at 336 TAS, FL350, ISA+9, 8000 lbs, burning 280/290 lbs/hr L/R respectively"

Under similar conditions, the Eclipse gets 351 KTAS on 211 lbs per side. That's 6.5 statute MPG. The Mustang was burning 41% more fuel per mile than the Eclipse under similar circumstances. That fits in with what I've said all along: Mustang seems to burn 35-40% more fuel in every flight regime.

I thought his conclusion that the Mustang is a nice plane was right on the mark; it is. But it is also a lot more money up front and every mile you fly. It's about 70% more upfront and 35-40% more fuel for every mile you fly. Those willing to spend that kind of money might consider spending a little more and getting the faster and roomier CJ1+.

Ken

fred said...

no Ken ..

others have to decide :

to spend a lot of money for nothing yet ...

or to spend even more money to get something ...

throw it to the bin or buy the bin !

this is a question ...:-))

Shane Price said...

Fred,

Save your efforts. It's too late for Ken, he's a Bishop in the Church of the Faithful.

AND

He has not one but TWO Eclipse positions for which he has parted with his very own hard earned cash.

Mind you, your idea of the bins amuses me.

Would Vern be small enough to fit in an average office wastebasket?

His ego is (for sure) too big...

Shane

ColdWetMackarelofReality said...

retail, once again you prefer to hone in on meaningless fluff and miss the fact that YOU proclaimed ECLIPSE PAYS 17 DAYS LATE, ON AVERAGE, according to those companies that have been P.O.'d enough about it to bother to report it to D&B.

The actual math rounds to 19% BTW, not 18% unless you were taught to round down from .88888888889 at whatever school you went to. I am sure I was thinking about calendar vs biz days or something but I can accept that without a calculator I made a math error - can you accept that you made a judegement error and are proudly proclaiming your company pays 3-4 weeks late, on average?

Care to address the real issue - that Eclipse IS PAYING LATE?

Care to address the real issue - Avio NfG is LATE?

Care to address the real issue - FIKI is LATE?

Care to address the real issue - they have yet to sell enough aircraft in any given year to support the reported breakeven requirement?

Care to address the real issue - Eclipse will have to go back to the well again, within the next month or two by my reckoning - after Vern said in October of '06 "We are out of the fund raising business"?

Care to address the real issue - the order book appears to be shrinking faster than deliveries are being made?

Care to address the real issue - Eclipse now has to resort to non-standard markets (Middle East) for money and customers?

Or would you prefer to focus on meaningless minutia?

Either way, please keep posting, you make my point every time your fingers hit the keyboard.

Redtail said...

ColdWetMackarelofReality said...
retail, once again you prefer to hone in on meaningless fluff and miss the fact that YOU proclaimed ECLIPSE PAYS 17 DAYS LATE, ON AVERAGE, according to those companies that have been P.O.'d enough about it to bother to report it to D&B.... I am sure I was thinking about calendar vs biz days

Paying 17 days late is still paying. The premise by the Critics was that Eclipse was not paying at all, and in finalcial ruin. That was just wrong.

If you knew anything about the credit reporting, you would know that it uses calendar days, and not business days. Again your information continues to start from incorrect assumptions and interpretations, yielding flawed conclusions.

Redtail said...

ColdAndUseless said... Care to address the real issue - that Eclipse IS PAYING LATE?

Answered above

ColdAndUseless said... Care to address the real issue - Avio NfG is LATE?

AVIO NG is late, but coming along. We'll talk more in late December after the first release, or not.

ColdAndUseless said... Care to address the real issue - FIKI is LATE?

FIKI is late, but is coming along as well.

ColdAndUseless said... Care to address the real issue - they have yet to sell enough aircraft in any given year to support the reported breakeven requirement?

I'd characterize the current market as a "wait-and-see". Once the IOU's have been completed and production is moving, the orders will come in. You yourself have said that you don't understand why so much effort in sales is being put forth since they have more than enough on orders to fill production for some time.

ColdAndUseless said... Care to address the real issue - Eclipse will have to go back to the well again, within the next month or two by my reckoning - after Vern said in October of '06 "We are out of the fund raising business"?

I suspect it is true that more money will be needed. I don't agree with your timing, but since neither of us have the financial numbers to make any kind of valid statement, my guess would be as meaningless as yours. Production delays are hurting cash flow. Boost production, and cashflow increases.

ColdAndUseless said... Care to address the real issue - the order book appears to be shrinking faster than deliveries are being made?

One reporter makes a comment that Eclipse had 2800 orders, and another says they now have 2600 orders, and you pick it up and say "where did the 200 orders go?" Again, your information and assumptions come from any source you can find whether it be reliable or not. You'll pick up one anything as long as you can find something to be critical of in it.

ColdAndUseless said... Care to address the real issue - Eclipse now has to resort to non-standard markets (Middle East) for money and customers?

Gee, how out of touch can you be!!! I think all manufacturers would love to get into these new markets. How many manufacturers showed up in Dubai? All existing manufactures are competing for these markets. A sale, is a sale. How out of touch can you be? That really place a perspective on your comments.

ColdAndUseless said... Or would you prefer to focus on meaningless minutia?

The meaningless minutia begins with your posts. You continue to rant about all of the same issues as if you expect them to get cleared up in a matter of days. They won't, so live with it. I know you'll be posting these same questions next week, and the week after, so bookmark these answers and save us all some time.

fred said...

hi shane ...

how things going in your green ??

yes , kenny amaze me ... !

real naïve or good actor ??

remind me of a professor when i was doing my economics ...he kept on saying :
"fears never take the place of risks ,but ignoring the risks is a very good start for fears"

thanks ken , now i know what he meant ...! ;-))

BTW , tonight 1 Euro= 1.4829 US$ and a barrel of Wti = 97.91 US$ (expectations of expert at 1 year range = 136/143 US$/barrel )

slowly but surely , we go where we are supposed to go ...!!!

fred said...

coldwet ....

if vern try to go on "Non-standarts" market for dosh ...

we can wave him good luck ...!

after i have been working for a "someone" from the golf (he was worth ONLY 14 B. US$) i can tell you vern is going to find himself pretty much in the deep-shit ...!! ;-))

i dont want to recall how many arguments i had with my then boss , because i used to round financials calculations to the 4th decimal ...
and sometimes he was complaining about works being delivered one hour after schedule ...

with vern practices , i suppose the princes are going to take hit-and-run contracts ... :-)))

airtaximan said...

Ken, just so we are a little more clear... can you elaborate on the cost of e-clips vs. mustang a little?

Somehow, I think the cash required to purchase a jet is what's really at the heart of the matter here, not the value or the cost.

Cessna will enjoy real cost advantages in:
- financing cost (interest rate)
- residual value (big difference)
- MRO (real life, big driver)

The initial cash required might be less for the E-clips, and if this is the major consideration for you, I think you might be in for a big surprise at the next "re-set" for the cost driving ecoomics and real world economic performance over time.

ColdWetMackarelofReality said...

Keep 'em coming retail, you prove my points every time and show yourself to be a petty whiner at the same time.

Fred - I agree, Vern can not hang with the folks from the Gulf, they always get THEIR way in my experience - he is ill prepared to deal with that and none of the individuals there would own something as small as the EA-500 - to them, anything smaller than a GV is slumming - something our friend retail apparently knows nothing about (like his/her lack of knowledge about, say, business and aerospace).

airtaximan said...

cw,

I can see it now:

"Look Muhammed, I bought an e-clips"

"Oh you mean the one the flying school is using as a trainer?"

Ken Meyer said...

AT asked,

"can you elaborate on the cost of e-clips vs. mustang a little?"

Sure. Next Mustang delivery runs just over $3.0 million. You can buy an Eclipse this year for about $1.7 million with essential options.

Mustang runs about 75% higher upfront.

What about ongoing expenses? Mustang burns, on average, 35-40% more fuel or about $140 more an hour for a typical 500 nm trip at FL310. Mustang maintenance is quoted at $107.20 per hour by Conklin and deDecker vs $93 for the Eclipse, but most people take the respective company's maintenance plan.

JetComplete costs $149 and includes parts, labor, XM & Jepp subscriptions and recurrent training (as well as fuel and insurance discounts that I'll ignore for the moment). Mustang's similar programs, assuming 150 hours per year operation and adding in the cost of Jepp, XM and training, come out to $268 per hour (ignoring the fuel and insurance discounts JetComplete includes).

If you finance these planes, you'll pay approximately $520 an hour more to support the capital cost of the Mustang (based on 150 hrs annual flying).

The hull value is higher, and you'll pay about $108 per hour more for insurance (based again on 150 hrs annual flight time).

If you take the maintenance plans and fly 150 hours per year, the items I just quoted add up to almost $900 more an hour to operate the Mustang.

Ken

airtaximan said...

what assumptions are you using for interest rates, and residual values for the two planes?

I guess I wasn't specific enough...

Redtail said...

ColdWetMackarelofReality said...
Keep 'em coming retail, you prove my points every time and show yourself to be a petty whiner at the same time.

Great rebuttal. You really don't have anything worthwhile to say if you quip about old news.

ColdWetMackarelofReality said...

retail, there is nothing to rebut with you as you contribute nothing to the discussion.

I brought up a series of significant issues, and you agree they are issues.

You might WISH that the failures of Eclipse don't really matter, you might WISH that people will give credit for trying, but in business trying means nothing, RESULTS matter and your company has poor results.

I said FIKI is late, you agreed.

I said Avio NfG is late, you agreed.

I said they have FAILED to sell enough planes to break even in any year so far, you agree then go on to say wait til Tuesday.

I said they pay late, and you agreed.

I said they will need to raise even more money, you agreed.

Seems to me your problem is with the facts, not with me, as much as you wish it was just me.

Redtail said...

Maybe you should repeat your list for those who might have missed it.

Shane Price said...

Red,

No need.

You do it for him.

Fred,

Property market has stalled. Stock market has tanked. Employment has peaked.

Other than that we're fine!

It's Friday night, must go to the pub. A real Irish pub, with real Irish people, having real Irish craic.

No, not cocaine. Craic, as in meeting up with friends and talking about the week, planning what we will do for the weekend, giving out about the property market, the stock market, and staff...

Have a good one.

Shane

cj3driver said...

Every time Ken makes an analysis of Mustang to Eclipse, he misses an important factor when estimating overall cost.

Expected depreciation.

IMO, The Eclipse has and will continue to suffer huge actual depreciation costs over the coming years.

Why?

With 25% of the flying (thru s/n 90) up for sale, prices will continue to decline as supply increases.

Close to 50% of the new deliveries (other than DayJet) have been put up for resale. Only about 30 are in use by the original purchaser (at time of delivery). Based on this, it appears there are only about 10 new Eclipse buyers in the market each month.

For these reasons, I believe the NEW market entrants for this product will be about 120 units per year, once the pent-up demand is filled.

Even at Eclipse’s “slow” production rate, used Eclipses are selling at a rate SLOWER than current production. This over supply will cause a downward pricing pressure on the used market. One only needs to look at Piper Meridian as a good example. Piper continues to sell 40-50 new Meridians every year, but used birds depreciate 15% the first year and about 10% thereafter. New Meridians, Mirages, Saratoga’s, even Cirrus, all fall into this category.

Since Eclipse is planning for huge production numbers, the used market for E500’s will continue to decline as more and more new product becomes available.

For this reason, I would estimate at least a 15% for first year depreciation expense for the Eclipse aircraft.

Factoring in depreciation, this will place the Eclipse at an annual cost of ownership of over $350,000 per year. At this price, there are many other options for the new private jet buyer, including but not limited to, the Mustang.

airtaximan said...

CJ3,

I wanted Ken to explain...

I personally agree with what you worte, I also think there's a bump comng in support costs (again), and calculating the inconvenience factor into having to fly a long way to have a mod, fix whatever, is a cost. Finally, I have heard recently that there a premium to be paid for financing an e-500 compared to a Cessna...

One more thing - engine degredation - I think the e-500 SFC will suffer as the engine ages. This moreso than the more robust PW615. Just my opinion.

The lower fuel price promised bu e-clips is not magic, either - if cessna did a fuel program, with their fllet and Citationshares, it would be much cheaper. HAS e-clips returned one dollar on the fuel program, yet? This has been asked, and neglected before.

Anyhow, the e-clips will be worth $500k to the mustangs $1.5M when all is said and done.

The real only reason to choose an e-clip, is if you do not have the CASH needed to buy a Mustang.

This is just my opinion, and YMMV.

I just don't buy billboard Ken's rationale. I fear the reality of what it costs to operate the e-500 will probably make keeping his plane a Hobson's choice!!!

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

CJ3 wrote,

"For this reason, I would estimate at least a 15% for first year depreciation expense for the Eclipse aircraft."

Take it to its logical extreme...

Even if the Eclipse is worth NOTHING in 12 years, it would still be less expensive to operate than the Mustang. It is so cost-effective to operate, that you can treat it as a disposable asset. You don't have to get a nickel back when you sell it! Pretty unlikely scenario, but it makes the point crystal clear, doesn't it?

I think your depreciation estimate is wrong. My guess is that the price of a new Eclipse will RISE unless the company hits high volume production pretty soon, which you've told us isn't going to happen. I think you'll see that the planes already out there today will enjoy APPRECIATION, not depreciation for that reason. Heck, they already are--Mike Press tells us that actual delivered 500's are selling at a premium to delivered price. They're APPRECIATING, not depreciating.

BTW, where did you get the 25% figure? I found 9 Eclipse 500's with S/N 90 or less for sale on Controller (and several of those were actually old ads indicating they were for undelivered positions, not actual aircraft). That's 10%, which is not at all unusual in the used market.

Ken

Lloyd said...

I've been reading this blog for awhile and contributing when I think I have something to add. I had a epiphany today, and that is without Ken to defend the Eclipse, point out it's strong points and sometimes it's weaknesses you guys would have not a lot to discuss here. Give Ken some credit for making this blog what it is, and you guys something to bitch about.

Most of what you guys have said would never come to pass going back several years in this blog have happened. Eclipse is producing airplanes, problems are being addressed, functionality is being improved, and yes they have stumbled, sometimes when they should not have as it could be forseen. All new companies especially in this business have had difficulties starting. But on the other side Eclipse has accomplished a lot. If they can survive the next several months, which I think they will, Eclipse will become a permanent fixture in airplane manufacturing.

I appreciate this blog for pointing out the things that others are not willing to admit, but I find them to be shortsided most of the time.

Lloyd said...

Taxi guy said

One more thing - engine degredation - I think the e-500 SFC will suffer as the engine ages. This moreso than the more robust PW615. Just my opinion.

What makes you think that this engine is more robust? Same basic core, producing more power, higher temps, and they went with a composite shell to keep the weight down. Same TBO, similiar life limited times, but while in the Pratt factory several months ago, I saw LOTS of 615's in for repair, and very few 610's. From what I saw at the factory and learned in their maintenance class, I believe that the 610 will prove to be the more robust engine of the two.

airtaximan said...

Lloyd:

Nice epiphany - I wrote it in the thanksgiving day wish I posted.

I sincerely wonder why anyone would ever consider buying this plane... but that's just me. The risks (unless they all get worked out magicaly) are way too high for anyone to sanely consider E-clips as a viable platform for air taxi, or to place a family in for a ride.

The company may very well one day be a fixture in aviation, producing completed planes and supportuing them.

Today, they are just a few hundred million dollars in further investment away from there next missed milestones and supplier changes.

In reality, most programs have to make it on lower investment budgets, greater talent and succees, and a much shorter development cycle...unless there is a major company behind them. Even at that, they usually get sold off, reorganized and all that.

E-clips is unique in that somehow, they have been able to raise $1.x billions - everyone should respect this. Its truly a remarkable feat.

especially for this plane, which is small, payload range limited, suffers from lack of avionics functionality, and was built to be as light and cheap as possible instead of as robust and durable as possible. The company has been the marx brothers of aviation... switching from one major system supplier to another, becasue they cannot identify and qualify systems and suppliers properly.

Not a lot of confidence there...

But as I have always said, with enough time and money, barring any major "event"... they should be able to reorganize, be bought out, or just keep delivering planes - unless Dayjet does TU.

I forgot, without their sister-company, they have a meagre orderbook, which does not even come close to justifying lower cost due to higher rate.

See the Hampson case for what happens when you promise to buy X number of parts... and you only take 20% of X...

Thanks for the post - you seem like a nice guy.

airtaximan said...

LLoyd,

Interesting comment on the 615 vs the 610.

Do you work at e-clips?

Something tells me that a scaled DOWN version of the larger engine (615 comes from the 617) which is larger (better clearance tolerances) and has more weight... should be more robust.

I'd be curious if you say the opposite is true.

Please, enlighten the class how this happens?

Thanks

airtaximan said...

Ken:

"It is so cost-effective to operate, that you can treat it as a disposable asset. You don't have to get a nickel back when you sell it!"

Like I said beofre, you can pontificate all you want... please provide the basis for your calculations... interest rates and residual values for BOTH planes.

They should not be the same -understood.

BTW, I cannot ever see anyone jsutifying buying an e-clips with zero value after 12 years.. compared to a realistic residual value for the Mustang.

This would pure foolishness.

But, I can see why you "say" it makes your point - its just impossible to end up with a BIG number for Mustang, and Zero for e-clips and still tell yourself you want one of thse.

...unless you already made this mistake - then, its a matter of Hobson. A choice that is really no choice at all.

Lloyd said...

Taxi guy:

No, I do not work at Eclipse.

But from what I leaned at Pratt, the 610 operating in the 500 is operating way below it's capability. This engine is capable of 50 lbs additional thrust and still be within operating limitations as evidenced by the automatic power reserve with Eclipse. 615 on the other hand does not have this capability and is operating at it's designed max. Due to Eclipse's data acquisition, escalations to TBO may be available to operators at a later date. I believe that Eclipse will see an increased TBO as operational data is recieved. The 615 may have a more difficult time in achieving this.

Ken Meyer said...

AT asked,

"Like I said beofre, you can pontificate all you want... please provide the basis for your calculations... interest rates and residual values for BOTH planes."

Be nice. "Pontificate" means you can't make your point without resorting to a personal attack. It's a mark against you.

Even if the Eclipse is worth ZERO, NADA, NOTHING at the end of twelve years, it would mean that it lost about $142K per year in value in overstated depreciation. It can absorb that big a loss in value and still come out more cost effective than any other certified jet!

Now that's cost effective. A plane that doesn't have to retain ANY value at the end of the typical ownership period in order to be less expensive than its competition.

As to what residual value it will actually have, I haven't a clue. You don't either. But I have just proven that it doesn't really matter. Any residual value it has merely serves to further reduce the operating cost of the plane.

That is why there are 2700 orders for Eclipse and a fraction of that number for Mustang. You don't seem to want to give much credit to Eclipse buyers for being able to spot the cost effectiveness of the jet. I think you're wrong, and the numbers certainly argue against your point of view.

Ken

Shane Price said...

Ken,

There are NOT 2700 orders for Eclipse product.

DayJet have half that number as OPTIONS.

Ed had already told anyone who is prepared to listen that he is looking at alternatives.

Are YOU listening?

After DayJet fold, the 'order' book vanishes and your options are worth nothing.

The jet you aspire to is worth less. Before you even pay for it.

How about negative equity Ken? Do you understand that concept?

The value you are sold on, is not worth the paper the options you hold is written on....

Shane

airtaximan said...

Ken:

trying to use the 2,700 number shows who is not basing their position in reality - and the continued attempt to use it is dogmatic - sorry if you don't liek the word pontificate, but its a description, and it fits what you do here...

especially since you express no interest in dialogue, just posting "billboards" for people to see.

You state your opinion as fact, and when asked to back it up - you resort to silence or repetition of your position, not HOW you arrived at it. This demonstrates that you cannot back up your position - makes you look like you are just pontificating. Don;t like it? Change 2 years of behavior, and answer some simple questions after someone questions your emphatic statements.

2,700 - must make you feel real good - except everyone know this is pure BS.

Back to the ranch - dollars to donuts... if as you say e-clips has zero resid, and Mustang has $1.5M, plus your interest rate on the Mustang was 15%-20% less than what you could receive on e-clips, why would anyone buy an e-clips?

Also, there have been some bold statements made by you, and some folks asked questions, including me, which went unanswered...care to be a person with a real defensible position?

PS. many folks have thanksd you for your participation - it IS true, this blog would be less entertainig without your participation. Thanks. I fully expect you to take yourself out of the dogma/pontification realm, and provide some good answers - as any good die-hard e-clips customer would be able to do...or not.

We'll see.

airtaximan said...

Lloyd:

thanks for the insight. I had no idea. I am under the impression that the 610 is maxed out, and the 615 is not... but if you know better, I'll defer.

This is remarkable, considering Cessna's attention to this fact, and their ability to anticipate this sort of thing. Also, they did not baloon in weight. I would think there would be margin in the 615, and since its a bigger, heavier engine, I would think as well it would prove more robust, less susceptable to degredation.

Any more insight?

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

Taxi Guy,

No more insight I can think of off hand, but I will do my best to answer and questions you might have regarding the 610 I was trained in.

My reason for the post on the 615 engine was I thought it unusual to have that many engines in for repair on a new model with so few in the field. I believe there were only ~20 in the field, and I saw 6 engines on the repair bench undergoing overhaul. Eclipse had more than double that amount in the field and only two on their bench. I cannot tell you why there was such a difference.

ColdWetMackarelofReality said...

The smaller the engine core, the more important tight clearances become - the WeeJet engine is the smallest version and therfore is the most susceptible to scaling effects, the most effected by metalurgical limits - in essence, the same issues faced by the even more diminutive EJ-22.

Perhaps Ken would be so kind as to compare the original announced and final TO weights of the Eclipse to those of the Mustang and the Phenom - especially as a percentage of MTOW. If not, I am sure one of we critics can do it.

Lloyd said...
This comment has been removed by the author.
Lloyd said...

Taxi guy,

The Eclipse concept jet is listed as a 615F engine producing 1100lbf. I was told while at Pratt school emphatically that this was in fact a "modified" 610 engine!

cj3driver said...

Ken said;

“… BTW, where did you get the 25% figure? I found 9 Eclipse 500's with S/N 90 or less for sale on Controller (and several of those were actually old ads indicating they were for undelivered positions, not actual aircraft). That's 10%, which is not at all unusual in the used market….”

Ken,

I believe my post said “flying” aircraft, delivered to end users,… not including DayJet. That puts the number to 40 or so. … 25%.... or close enough. (controller isn’t the only place). In reality this is quite a large number, especially given your claim of a 2,700 backorder. One would think these would be gobbled up by the market given this popularity.

The point was, the current owner flown market absorption (new entrants) is less than 10 per month…. Much slower than the production rate, and certainly slower than the resales. The number of resales will only grow as production is increased given the trend. Low relative demand and high supply equals downward pressure on pricing.

Regarding 10% being “usual” in the market, …. Keep in mind, there are over 50 listings on Controller, and Mike press has over 30 on his website (not all on Controller). If Eclipse had met its revised, revised, revised promise of 200 planes this year, this would still be 25%.

As far as your estimate for Appreciation on the E500, we will soon see. I would tell you now, however, there are dozens of positions for sale at hundreds of thousands LESS than factory pricing. That sounds like MAJOR depreciation to me.

The open Market will soon tell the value of a new Eclipse. The auction will be over is 5 days. The Eclipse club members (some with $75K or more in credit) will set the new price. If Eclipse continues to auction planes in this method, this will further hold down the resale prices. If Eclipse had kept its promise and had delivered planes a year ago, and If there were one of these older E500’s on the market now, with 250 hours on it, how much would it be selling for today, given the current listings? I think it would need to be priced at LESS than $1.5 to get any action. S/N 17 is still showing available at $1.675 with only 40 hrs on it, only a few months old.

I believe you are right on one point. If Eclipse continues at its current production rate, and NEVER gets to 1 per day (or more), it may be beneficial to the market as far as resales. The negative however, is that without the volume, Eclipse (at its current pricing) will fail. So either way, depreciation is eminent without a substantial price increase (and lower volume) from the factory.

As for your comparison to the Mustang, Cessna has actually GROWN its order book for the Mustang by over 30% this year. They are sold out for nearly 3 years production, and positions trade for HIGHER than current factory pricing. Flying Mustangs are on the market for very short periods of time and sell for numbers substantially higher than factory. Not so with Eclipse.

Also, with respect to operating cost, fuel is a relatively small number when comparing the overall VLJ budget. I get only about $15,000 per year differance on Eclipse vs. Mustang. Very small number when considering $350K per year.

Finally, on depreciation percentages. 10%-15% of the remaining value never really takes you to zero, … although zero is a possibility if Eclipse fails altogether.

airtaximan said...

LLoyd,

there could be a few explanations for this, one being the Mustang engine (615) has a Pratt supplied FADEC which does not work with AVIONG (or whatever) and Vern needs the commonality of Avionics...

The mod might be just the FADEC. Calling it the 610 might just be "convenience" or as it relates to the FADEC, or some silly requirement from Vern for PR.

Just a thought. I'd love to hear more, if you have more details. This is contrary to what I've been told regardng the engines... and in fact it makes more sense to me that the 615 turbomachinery is being used on the CON-jet. The design for the 610 was 1,000 lbs of thrust and below...and E-clips initially wanted 900 lbs and its been moved up.

Thanks

airtaximan said...

CW,

funny how some things get more complex and difficult when they get smaller, beyond a "certain" size. Turbines are like this. Funnier, the engine companies want to charge LESS for these very difficult to build, design and mantain engines.

Maybe the right decision is larger and de-rated? A bigger plane produced at MUCH higher rates could be less expensive... not the smallest plane possible? Could also attract a larger market.

Hmmm...

airtaximan said...

come to think about it, the additional material cost would be negligible, and making smaller more intricate could drive much higher costs, reliability and maintenance issues/cost.

PErhaps has an engine manufacturer just said: "we buy into the high rate low cost, try an FJ33 for X not Y"..."

Oh, I think this was offered and refused by "someone"...

Ken Meyer said...

AT wrote,

"the Mustang engine (615) has a Pratt supplied FADEC"

I believe that's incorrect. Both the 610 and the 615 have FADECs produced by Hispano-Suiza.

Ken

flyforfun said...

Ken, when you go through training for your plane do you expect that they will type rate you and not require any mentor pilot training time. Was that part of the move to get the type rating in the CJ. Do you expect to have the training completed and be typed prior to delivery. I know a gentleman that is taking his ride next week and took delivery back almost three months ago. Have you encountered anyone who has had experience with the mentor program.

Ken Meyer said...

AT wrote,

"As for your comparison to the Mustang, Cessna has actually GROWN its order book for the Mustang by over 30% this year. They are sold out for nearly 3 years production, and positions trade for HIGHER than current factory pricing"

You've just outlined for us why every single potential customer should resent Cessna's pricing policy. The pricing is held aritificially high. It's good for the company, but it means buyers have to pay too much for the product.

But there are a fair number of savvy buyers who see through this. Some of the 2700 Eclipse orders are going to those savvy buyers.

You think Mustang production is impressive? I don't. I think that in the next 12 months, Eclipse will produce about ten times the entire 2007 Mustang production! That's impressive.

Ken

Ken Meyer said...

flyforfun asked,

"do you expect that they will type rate you and not require any mentor pilot training time"

I wouldn't expect so. The Eclipse training program has some mentoring exemptions, but they're tough ones to meet. On the other hand, I won't have any FAA-mandated supervised operating experience (FAR 61.63 and FAR 61.157), so mentoring will be to proficiency (rather than a mandated 25 hours). I know some pilots that have knocked off the mentoring in just a couple of flights.

The company says that the training delay (i.e. time between delivery and start of training), at one point about a month long, is now almost down to nothing.

The company still requires that you take delivery before you begin training, so you really cannot train ahead of time unless you do it in somebody else's plane. That may change as the full-motion sims come on line--at that point, theoretically, training and delivery will be entirely separate.

Ken

FlightCenter said...

Linear Air has flown their Eclipse 500 6 times in the last two weeks for a total of 6.6 flight hours.

Shane Price said...

Ken says:-

The pricing is held aritificially high.

He is referring to the Mustang.

Now, my friend, I could say that the E500 was being priced 'low', but I won't, since I think the price will actually be even lower after Eclipse close down.

The definition of price, as used by most mature adults, is:-

That which a vendor and a buyer agree in an open market

So, it would appear that, despite plenty of choice, ordinary rich folks will pay almost twice as much for an aircraft which, per your view, is not any faster, longer range or generally 'better'.

Is it not possible that the E500 is viewed by the market as worth less than 50% of a Mustang?

Would your hard earned cash not be safer in a Mustang, even if it 'costs' twice what an E500 does?

In short, are you prepared to buck the market, with your own money, just to prove you are the most Faithful?

If you are, go an buy an E500 right NOW. There are plenty available, you could be trained up right away and flying the plane you love. The two postions you hold can only devalue IF the company manage to build '10 times' as many E500's next year as Cessna will build Mustangs.

Go on, you know its the right thing to do....

Shane

Ken Meyer said...

Shane wrote,

"So, it would appear that, despite plenty of choice, ordinary rich folks will pay almost twice as much for an aircraft which, per your view, is not any faster, longer range or generally 'better'."

Well, it's a fact that that the Mustang isn't any faster. But I don't think I ever said it doesn't have longer range or isn't in some ways better than the Eclipse. You're putting words in my mouth, and that's always a bad idea.

Free market? I don't think so. I pay what the government charges me in property tax, but it is not because I believe I am a willing buyer going to a willing seller and setting the price according to the market demand. It is because the government has a monopoly on taxing authority, and I have no choice but to pay what they want in order to keep my property. Cessna has a temporary monopoly, too, but that is changing.

I think Cessna is about to get some very stiff competition from the likes of Embraer and Honda (and later Grob, Spectrum, Epic and others) precisely because people believe there is better value in the competing products. So the fact that Cessna sells products today is more a reflection on its (temporary) monopoly than it is on a fair price set in the open market.

I find it interesting to see how often the naysayers compare, side by side, the Eclipse with a plane that costs 75% more than it does. And interesting to see how close the comparison comes out. You are really calling attention to the terrific value the Eclipse offers when you compare it side by side with the Mustang.

Ken

Old Troll said...

Two hallmarks of a cult are:

-The belief that you are privy to a great secret.
-Seeing enemies everywhere.

The "savvy" Eclipse depositors/investors have discovered the secret of the E500. No one else has the special insight that they do. Eclipse is also battling the evil dinosaurs and critics with the noble intention of bringing jet ownership to the masses. The dinosaurs have been keeping prices artificially high to squeeze the common man. We will enjoy a glorious Pax Eclipsa once the dinos are vanquished.

Old Troll said...

All of this talk about artificially high prices is ridiculous. Jet ownership is a luxury, pure and simple. No one needs their own private jet. They might want one but they certainly don't need it. You won't starve without one. You won't freeze either. There is no Hobson's choice with buying a jet (to use the phrase of the day). If you had the money for a deposit in the first place, I'm sure you can manage to get by even if you lost every penny. The bottom line is that the value is whatever people will pay for it. If lots of people are paying then that's what it's worth.

The comparison to paying taxes is so laughable I don't think I even need to say anything about it.

FlightCenter said...

DayJet flight summary

During the week of 11/12 - 11/16 DayJet flew 91 flights with 84 flight hours. This worked out to an average of .9 flights per day per aircraft or .8 flight hours per day per aircraft.

3 aircraft did most of the heavy lifting, flying 41 of those flights. 5 aircraft didn't fly at all during the week.

During Thanksgiving week, 11/19 - 11/23, DayJet flew 47 flights and 41 flight hours, averaging .5 flights per aircraft per day.

fred said...

ken ...

you're absolutely amazing ...!

the simple fact that you have 2 positions say a lot about you ...!

i wrote it down before , you do it for money reasons ! (in itself it's not bad ..but it can be seen bad if you try to lure others into your religion to sell them your position and make a benefit ....)

i wrote before that i've been working for the son of a ruuling familly of the gulf ...
but i didn't tell why i was hired by his father ...
i have a very simple disease = i am not at all impressed by peoples with money ( i know so many personn rich of money and still their personnal worth is less than a piece of shit ..)

why do i write that ...

you sound more and more to me ,like someone whom is trying to have an overhelming success to using HIS personnal OWN way ...

if you have 2 positions , even if you bought the plane when it was 900 K US$ , it's 1.8 ...

your plan sounds like :

E500 is a great sucess , you can resale your position for 1.8 M US$

at that point , you would have a plane that you didn't pay for ...

and would even have made some profit on the deal ...

definitely clever , but there is a flake ...

E500 COULD be a good plane , ONLY if FINISHED !

otherwise you just loose the whole lot ...!!

so from a clever personn , you would become a stupid dumb not able to forecast the very near future ...

don't take that personnaly , i have seen this very often in USA and in London , when some where so proud to talk in the pub about allllll the moneyyyy they were making because they are soooo clever .....!!!! (especially one , next to me that was proclaming how much money he was going to make on a flat he bought without seing it and was going to sale back without having been once into it ...) i said to one of those " wake-up , if you do it = fine , but are you able to sustain a potential lost of everything both financely and emotionaly ?" the guy answered by a "what do you mean?" i said "are you aware it is called the hot-potato-game ? it work ONLY if someone more stupid , but thinking he is more clever than you are , decide to buy what you sell ...!!" the guy was very upest ...! and the only thing he probably did not understand = it's fine if you do it at 2 condition :

1° never take yourself seriously , it's not because you think you're gonna make some cash that it's going to work automaticaly and then that you are a pure genius ...

2° if you do it , NEVER forget this = a good drug-dealer NEVER take the stuff he's selling ...
It is not because you do it that it is an exemple or plainly it's a good thing to do for human value !
(in other word : don't be an archbishop of the new church , it will fool ONLY yourself )


sorry ken but i can't help it to see you in any other way than the tradional "victim of the american dream that became a nightmare ..."

i wrote it before , only the one whom can accept to be wrong sometimes can remain successfull , the other had the "balls" to keep their faith , could they afford it ??? that's another question ...

fred said...

ken ...

REMEMBER :

money IS a tool ...

never a goal ...

and MONEY IS A TERRIBLE MASTER !

you have money to buy a E500 ...

fine just do it ! but NEVER try to convince YOURSELF by wrting to others you made the best decision buying this , if you are too cheap to buy the other one ...!

Shane Price said...

Fred,

Sorry to repeat myself, but your appeals to Ken's common sense are a lost cause.

He has a deficit in that department almost as big as the US has in overall debt....

He chooses to extend the definition of a free market to include Government taxation.

I am amused. I must try offering my tax inspector a deal the next time he calls. I'll try getting him to pay me.

Not going to happen.

Just like an E500 getting more valuable over time.

Or Ken buying one now.

Eclipse lasting beyond the New Year.

Microsoft building a stable, bug free and secure OS.

Feel free to add your own comments here...

Shane

Turboprop_pilot said...

Eclipse AvioNG

I continue to be astounded by Ken’s insistence on the superiority of undeveloped, uncertified and undelivered capabilities of AvioNG compared to Garmin’s fully completed, certified and delivered G1000. The software industry has forever made so many claims of “unprecedented capabilities” that the term Vaporware was invented to describe these claims.

Vern came from this very industry and is an experienced practitioner who has cast vaporware into aviation markets freely and frequently. Microsoft’s next gen operating system was named Longhorn during development and claimed to offer huge advances over Windows NT. Its biggest improvement was to the file system which would allow “unprecedented searching” of the files. The original release date was November 2002. Longhorn was released this fall as Vista and most of the upgrades were dropped, including the file system. It is a big, bloated, slow loading operating system that has been a disappointment.

So, we have AvioNG- promising many innovative features that will only be delivered over many releases at some uncertain future date. To say it beats the proven G1000 is loony- many of the features will be dropped and the delivery date will continue to slide. I’ll bet the virtual copilot will never see the light of day.

So Ken: please do not compare vaporware with real delivered systems, it just makes anyone with any computer experience wince- critic or believer.

The other annoying comparison is to disparage the G1000. Holy sh*t- the revolution in aviation electronics is astounding to me. My Dad and I flew from Texas to Maine and back in a Cessna 175 with the “new” VOR radios in the mid 50s when I was a kid and I still remember his amazement at the ease of navigation. Let’s look at what the Garmin has in my order of importance:

WAAS GPS: free of ground stations, accurate to 2 meters, able to make near ILS approaches to nearly any airport
Moving map: The improvement in spatial awareness is a huge safety improvement
Terrain maps: Showing obstacles and terrain in an easy to read presentation. I have read that no commercial airliner with terrain equipment has had EGPWS has had CFIT accident.
Traffic awareness: TCAS, TCAD or the Mode C information greatly improves awareness of other aircraft.
Integrated, modern autopilot that has full functionality

Coming improvements:
Synthetic Vision, with a computer generated view of the world, including airport runways. AvioNG is not contemplating offering this. The major vendors are developing and have many moiré resources and experience than little Eclipse.
ADS-B: Coming and required in the future. Again, a struggling non-avionics manufacturer will have a harder time implementing and certifying that the real participants in the industry.

These capabilities make me real comfortable flying in a modern glass cockpit. The promised future capabilities of AvioNG do not add as much benefit as the above features, IMHO.

So, to close the Microsoft/Eclipse comparison- both over promised and missed all delivery schedules. Microsoft delivered an inferior product. Eclipse has not delivered much of anything. And… key point- Microsoft did not have the FAA certifying their product, which could add years to the delivery schedule.

And..,. The BLUE SCREEN OF DEATH takes on an entirely new meaning when you’re IMC, in icing with an engine out, making an instrument approach to minimums and NO BACKUP INSTRUMENTS!

TP

airtaximan said...

Ken says:
"the Mustang engine (615) has a Pratt supplied FADEC"

I believe that's incorrect. Both the 610 and the 615 have FADECs produced by Hispano-Suiza."

Now this is funny!

Maybe I am wrong, but I seem to remember Eclipse was running the FADEC program, and Cessna does not do this - it's normally the engine company that deals with the FADEC.

I guess this whole supplier/integrator/system issue has you confused?

- Eclipse hired HS to do a FADEC
- PW hired HS to do a FADEC for the 615

Clearer now Ken? Wait until there's an engine/FADEC/AVIO/actuator problem.. Who ya gonna call HS?

airtaximan said...

Ken
"I find it interesting to see how often the naysayers compare, side by side, the Eclipse with a plane that costs 75% more than it does"

Ken I think the planes cost about the same - what they are being sold for, is another question.

In fact, I'd say the Mustang probably costs less than the e-clips right now, finished plane to finshed plane comparison.

I also think the e-clips is WORTH close to $1.3 million (sales price) and the mustang is WORTH $2.8 million or so... this is a BIG deal in the market, and for the business plans of the companies. There does not seem to be a sustainable market for a $1.8 million e-clips, not even close...

airtaximan said...

KEn - I never said this...
"AT wrote,
As for your comparison to the Mustang, Cessna has actually GROWN its order book for the Mustang by over 30% this year. They are sold out for nearly 3 years production, and positions trade for HIGHER than current factory pricing"

Your reply that Cessna somehow artificially inflates pricing is rediculous.

Your contention that other companies are providng competition is right on - and the CEssna volume pricing/manufacturing/planning should be of interest to you... there's no good reason to think a market for a few hundred planes a year justified very high volume production and supplier pricing - see the Hampson lawsuit for this...

- you keep dreaming about 2,700 orders. Everyone has already admitted this is bogus - even Dayjet said they don't kow ehn of IF they will ever take planes beyond the first 229 (plus perhaps 70 options) - thats half the "orders" yu are counting on. There are many other such "options" in the book. Only you and Vern are calling them orders.

Know what happens when you play with this fire? You end up over stating yourproduction needs, and you end up in court, and paying for parts ordered but not needed or received.

Black Dog said...

Another Eclipse on E Bay serial 69

http://cgi.ebay.com/ebaymotors/ECLIPSE-500-LX-EDITION_W0QQcmdZViewItemQQcategoryZ63678QQihZ015QQitemZ250188809809QQrdZ1QQsspagenameZWDVW

He wants almost 2 million for it!!!!!

I can't get my head round this cutting edge Aviation products being sold on E Bay by used car salesmen.

Ken Meyer said...

AT wrote,

"KEn - I never said this..."

Nope; it was CJ3.

You guys ought to get married; you sound alike so much it's hard to tell you apart :)

Ken

airtaximan said...

Ken:

there a world of folks that sound just like us...

there's a bunch of folks that sound just like you here to...

BTW, any clue as to why the ebay auction is offering a plane with

"Premium Entertainment Upgrade (To be installed at later date)
Lavatory Package (To be installed at later date)
Refreshment Center (To be installed at later date"

Why are these not installed?

ColdWetMackarelofReality said...
This comment has been removed by the author.
ColdWetMackarelofReality said...

Since Brother Ken hasn’t done the research and math for us re: his claims about MTOW growth, I did it for him.

Eclipse MTOW when announced 4700 lbs – now – 5995 lbs = growth of 1295 lbs or 28%
Source http://web.archive.org/web/20001019081038
/www.eclipseaviation.com/500jet/specs.htm

Mustang MTOW when announced ‘around’ 8000 lbs – now – 8645 lbs = growth of ‘around’ 645 lbs or 8%
Source http://www.aviationweek.com/shownews
/02nbaa/topsto2_20.htm

Fascinating quote from Eclipse back when Safire appeared to be winning the VLJ order book battle:

“We do not plan to publish our order bookings. The policy of announcing orders based on insignificant, fully-refundable deposits is not beneficial to either our customers or the industry.”

When does it become 10 years for Eclipse – in 6 months
“May, 1998 - engine and airframe development contracts signed with Williams International.”
Source http://web.archive.org/web/
20001019094841
/www.eclipseaviation.com/500
jet/comparisons.htm

Ken Meyer said...

AT asked,

"Premium Entertainment Upgrade (To be installed at later date)
Lavatory Package (To be installed at later date)
Refreshment Center (To be installed at later date"

Why are these not installed?"


Vern doesn't believe in entertainment.

He never has to pee.

And he doesn't want us tempted to drink refreshments in the plane while the carpet is still under warranty.

Ken

ColdWetMackarelofReality said...

To put the 28% MTOW growth for the Eclipse into perspective, had Airbus missed the MTOW on the 1,235,000 lb A-380 by the same margin, it would have increased by over 345,000lbs, or roughly the equivalent of TWO fully loaded 737-800's.

Similarly, to compare the original estimates of $350M to design, certify and produce the EA-500 to the $8.8B budget for the A-380, had Airbus missed by a factor of 4 as Eclipse did, the A-380 would have cost over $35B to develop.

And lastly, had Airbus had to increase fuel capacity to almost match the original range estimates like Eclipse did (26% more fuel), they would have needed to add nearly 22,000 gallons, or almost 150,000 lbs of fuel.

ColdWetMackarelofReality said...

Continuing the Airbus A380 comparison, with 193 firm orders and an average list price of $310M, Airbus has sales of $60B to offset the $11B development cost. $57M of every sale is needed to offset development costs, or 18%.

Eclipse has, generously, 1400 firm orders, at an even more generous average price $1.6M, they get $2.24B in sales to offset $1.6B in development costs (I am including the next round of financing which will need to be no-less-than $200M). $1.1M of EVERY SALE is needed to offset development costs, or over 71%.

I keep telling ya, it just don't add up. Reduce everything above by a factor of two in Eclipse's favor if you think I am all wet and it still requires an unheard of margin on the aircraft - and we know for a FACT that the fleet operator types are getting much better pricing than the $1.6M (almost 25% better).

Even giving Eclipse credit for 2700 firm 'orders', they still need to contribute over 37% of EVERY SALE to offset development costs - MORE THAN TWICE THAT OF AIRBUS.

It just don't add up.

Dave said...

Even giving Eclipse credit for 2700 firm 'orders', they still need to contribute over 37% of EVERY SALE to offset development costs - MORE THAN TWICE THAT OF AIRBUS.

It just don't add up.


It's because they were supposed to be making 1500 jets a year.

airtaximan said...

Ken:
Great laugh.. and

We all understand the design criteria:

Vern Raburn's personal need, idea of what is the right plane, not a market. Hence the practicality for one person and a friend with no kids....

Still begs the question why re-sales are occuring with promised accoutrements, and functionality, with only a few hours on the planes?

Why are all the options to be installed at a later date?

Have they been certified?

Why were they not already installed? They were paid for, right?

I guess the AVIONG and Aero mods were paid for too? WHy are they missing... waiting for development and cert? IS this the same with the 3 options sold on the Ebay auction?

Strainght answer, please

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

and for more entertainment value...

e-clips thought revolutionary accounting practices would save them in this industry as well...

capitalize the NRE...

cash flow is king, but this joke will bite them more than any other element of their farce...

enjoy the show - its almost over

airtaximan said...

Dec-87-105


go! E-clips! GO!

gadfly said...

Let’s see if I got this right!

A customer that orders, say, $100,000 of proprietary parts from a small manufacturer (who operates on a ten to twenty percent gross profit margin, before taxes), expects that vendor to buy the material, pay for the tooling, pay the salary and benefits of his small crew, pay the IRS the “guesstimate” of the next quarter’s income tax (or suffer penalties), delivers “on time” the required parts, sends the invoice, offering a discount for early payment . . . say, 1% 15, net thirty . . . waits, and waits to be paid . . . finally a phone call to ask why the payment has not been received . . . get’s an answer . . . “something about how all our accounts are paid in 90 days” (What?) . . . and then past 90 days, maybe, a check arrives . . . with early discount deducted from that amount. And that is considered the “norm”?

So, in the mean time, to pay the overhead, the material/tool suppliers, taxes, health insurance, rent, etc., etc., without the “clout” of being among the “big boys”, and running scared 24/7, money is borrowed on “LOC” at 9%, just to survive . . . and a “big shot”, such as a Jack Welch, sends out a memo to all vendors, to drop prices by 5% . . . “or else”.

For a fact, I know of a shop in California (“small crew” of 160 employees), that makes the customer purchase the material, and have it delivered. Parts are manufactured . . . aerospace stuff . . . payment on time is demanded. Entire profit is the value of the “scrap material” sold to the scrap dealers. That is not a joke, but a fact.

In our case, we have refused to go along with the “crowd” . . . if our product is of high quality (and it is) and a unique product necessary for the production of . . . say, “jet engines” (which it is), we cannot accept late payment. And if the customer decides to “cut us off”, no doubt he’ll find, in time, someone else to replace us. But in the mean time, we have “served our time” being jerked around by the chain . . . and I suspect that certain vendors to the “little bird that wants so bad to be taken seriously”, are not going to treat the little bird seriously, but will simply walk away.

gadfly

(OK, What’s the big deal with our example of $100,000 paid, say, 60 days late . . . or even a “day” late? Let’s do a little simple math. Interest is about $25 per day "late". No big deal to people that buy “$1.6 million” jets. But to a small shop owner, it’s a half-hour’s pay. Sixty days? . . . no big deal . . . just 15 to 30 hours pay(depending on the "imaginary" amounts a shop owner pays himself). . . that would be a nice short vacation (if he were so privileged to even get a vacation . . . one of those rare things that some of us read about . . . a short hop on SouthWorst Airlines to Phoenix). Take it to the next level of say . . . $1 million, a five man shop (if that is a year’s work). Now, to the vendor, the “shop owner”, you’re beginning to get his attention . . . and the attention of his wife. You see, it’s easy to pass this all off as “the norm”, but some of us take a man at his word . . . the first time. After that, it’s “money up front for all material” and COD.)

gadfly said...

‘Just a little “side note” on the costs related to various sized jet engines. And, in this case, both sides of the discussion seem to be “out of line”. ‘Best to leave alone what you don’t understand.

It is true that it costs more to produce a fine watch, than say, a pendulum clock. And it would seem that such comparisons should carry over into the world of jet engines. However, there are numerous things which “don’t compute” in the analogy. Since we are deeply involved in some of those differences . . . relating to the truly “big engines”, I’ll touch on just a couple items. What do we do? . . . we make certain “perishable tooling” . . . tooling that wears down as it is used, and must be constantly replaced, due to a process called “EDM” (Electric Discharge Machining). And, on occasion, we design and make the “tooling fixtures” for the process, precision grinding holding fixtures, and inspection holding devices . . . and in the “early days”, certain “investment casting” molds.

It is much easier to produce fixtures, and to machine the precision tolerances on a small engine. The amount of refractory materials involved in investment casting and/or machined parts is an exponential value. Also, the “expansion/contraction”, due to size/heat are greatly magnified, the larger the engine. Parts that could be a single piece in a small engine, must be manufactured in many individual parts on a large engine . . . with extremely complicated “sealing” systems, to seal between the parts, as in a “stator ring” . . . compared to the expansion joints in a concrete highway. A small engine has little or no commonality in this respect. So, the attempt to compare the extremely complex assembly of a large engine, for a 747 and larger, to an engine for a small corporate jet, really has little or no place in the discussion.

In fact, I’ll make a prediction that in the not too distant future, someone is going to design and build a small and completely disposable engine . . . use it for a set amount of hours, and “pitch it”. Rebuilding engines, at least for small jets, will be long gone . . . on a par with a DVD player . . . no more viable than getting someone to update your Windows 3.1 computer, or restoring your seven inch “reel-to-reel” tape recorder.

gadfly

(Thirty seven days left in 2007 to produce a single complete E500. Sure, it’s a “no-brainer”, but I predicted it about a year ago. Somehow, I think that “come January”, I could make the same prediction about 2009-01-01. Of course, that’s based upon the standard in our business, that a “delivery” is not counted until we produce and deliver the complete product that we promised. And, by the way, we don’t get paid until the product is “complete”. I know . . . it’s an old-fashioned thing, but the “book-keeping” is far less confusing. It’s sort of like the expression, “Put up or Shut up!”)

Jim Howard said...

Can someone with insight into the Eclipse ordering process help me understand something.

The order books is said to be something on the order 2500 with around 100 planes delivered in 2007.

Production rate for 2008 is projected at 550 planes.

It would seem to follow that the wait for a delivery of a new order would be on the order of 3 or 4 years.

How then does a flight school order 12 airplanes in November 2007 for delivery in 2008?

Are not there 12 deposit holders who would have a prior claim on those airplanes?

gadfly said...

A shadow of thought passed over my little brain just now . . . “Jim Howard has a brilliant question!”

Among other things the man asked: “Are not there 12 deposit holders who would have a prior claim on those airplanes?”

So I says to myself, “Myself,” I says, “What if no-one is in line between now and . . . the ‘Faithful One’ (What? . . . about position #150? . . . whatever . . . doctor or something!)”

Now, having thunk it over, I have come up with the answer . . . and the answer is: “I haven’t a clue!”

Unless the entire lawyer population has been suddenly abducted by “aliens” (a wish beyond imagination), it would seem that there is a “gap” in the line of about 70 positions, and the “King has no clothes” . . . or rather, “The Queue has no Clue!”.

Is that possible?

My brain has exceeded its capacity for reason . . . and must leave it to you, dear readers, to finger it all out.

gadfly

ColdWetMackarelofReality said...

Jim,

The Faithful have previously suggested that Eclipse 'planned for these eventualities' by 'programming' extra slots into the production plan so that they could 'leapfrog' deserving patrons over less deserving patrons - see John Travolta or the Dubai school, or Linear Air (I think) or some other smaller air taxi operators.

gadfly said...

Inscrutable

The “prize” goes to “Cold Fish” who has unscruted the unscrutable. And all this time, most people were none the wiser.

gadfly

(Fact: When Disneyland first opened in Orange County, California, the lines were “snaked” back and forth, to give the “Illusion” of moving twice as fast . . . and guess what! In a half century, it still works. Or “Allusion” or “Delusion”, if you wish. But if you have placed your “deposit”, “Elusion” is no longer an option. And that’s my “Conclusion” on the matter, in the midst of this “Confusion”.)

fred said...

jim ...

did you never think the Dubaï order could be as fake as the 2700 firm orders? !

i wrote it before :

if you go to sale something where obviously money is flowing like river , interested and interesting (financely) personns are on spot , can you come back saying "it's a no-shot , none have been sold" meanning = soon it's game over ! same player WON'T play again ...

shane ...

sorry to have yourself felling obliged to repeat ..... ;-))

ken is really over the top ...! sometimes i feel he has been hired by stan to keep the show going on ... ! ;-))

but i know such peoples exist ... in french where is a saying for thoses it is :

peoples not able to shoot an elephant blocked in a door ...!

i found as ultra-funny when he describe the "free-market" and the US"democracy" , it's so brilliant ...! i allmost pee on myself of laughing ...!!

does he remember just too many soldiers are loosing theirs lifes trying to promote this way of things on foreign soil ??


kenny , if you want to live your life in a giant lie suit to your needs , it is your problem ...!

but don't try to demonstrate to others you are right ...

in fact just no one should care , just do your stuff , at the end we will see who was right ....!

Ken Meyer said...

Jim Howard wrote,

"The order books is said to be something on the order 2500 with around 100 planes delivered in 2007.

Production rate for 2008 is projected at 550 planes.

It would seem to follow that the wait for a delivery of a new order would be on the order of 3 or 4 years."


It turns out that's not so, Jim, although it is true that the company is quoting the first available delivery slot as being in early 2010, 2+ years from now.

The answer lies in these three facts:

1. New operators do not want to take delivery of all their jets initially. All the large orders I know of have staggered delivery dates stretching out in some cases for years.

2. The 2700 order figure includes firm orders and options that have deposits on them (one would not fall in line behind an option for a 2011 delivery, for instance).

3. Eclipse is ramping up production and will undoubtedly deliver more jets in 2008 than 2007, and more jets in 2009 than in 2008.

As for the Dubai order, most customers were aware of the existence of "Strategic Delivery Slots"--unassigned positions built into the delivery schedule for just such an eventuality. No existing order gets pushed back when a strategic delivery slot is filled (but neither do they jump forward as they would if the strategic slots collapsed).

Ken

fred said...

ken ...

i just love you ...!

btu i wonder what shari is going to think when you will have to tell her :

"sorry honey , we lost every single pennies we had on E500..."

fred said...

jim ...

why do i write "Dubaï order is fake..."

very simple , if you would need something like a E500 ...

would book an order with a firm notorious for its under-achievements , over-promises and under-deliveries ?

or

would you go to the "second hand" market ??

unless you have a really very nice finance deal on each plane you buy , It IS NOT WORKING ...!

(what for ? would you be stupid enough to pay more for something you can get for less ???)

BUT wait a second ..


if you have a "sweet deal" it's meanning the selling firm is going to loose EVEN MORE on each item ...

and it's going to be seen by potential customers as a rebuttal ...

(would put a deposit if you know the firm can accept your cash , promise to deliver in X months and then decide on its OWN : sorry your waiting time is multiplied by 2 ,3 , 4 ,etc... just to suit THEIRS NEEDS and therefor not to care anymore about you as a customer ??)

No , definitely , Dubaï order sounds like a fantasy for getting a new round of financing ...

may be there is someone with some cash , vern is trying to catch into his net ...saying something like " E500 IS A GREAT SUCCESS , we went to dubaï for only a day and we sold 12 ... if we could have been there for a month , we would have sold thousands ...."

mirage00 said...

btu i wonder what shari is going to think when you will have to tell her :

"sorry honey , we lost every single pennies we had on E500..."


Sorry, won't happen. This company is here to stay. It's amusing how this blog has evolved... First the airplane was an engineering hoax and could never be certified let alone, produced... now we are arguing over what? Oh yeah, paying vendors in a timely manner. 30, 60, 90 days...whatever

Stan, how about bringing your blog back to it's "engineering" roots... Nevermind, that argument was lost long ago...

I remain amused

double oo

fred said...

mirage ...

i can see you typing your message ...

once you're done , you dance in roung praying : "are krishna ...are krishna ...are krishna ...are vernA"

suddenly i understand why you remain "amused" ...

fred said...
This comment has been removed by the author.
fred said...

and stan won't take the blog back to its roots ...

you would have to acknoledge E500 has NOTHING NEW to offer ...!

apart , may be , the "nice" way it's marketed ??

airtaximan said...

"1. New operators do not want to take delivery of all their jets initially. All the large orders I know of have staggered delivery dates stretching out in some cases for years."

think hard about this... its perhaps the biggest problem regarding the production rate.

**there is no evidence there is a need for a plane a day, let alone 2 or 3 a day, given the FACT that of 2,700 orders/options/whaever... most of these cannot be delivered any time soon.

Dayjet has already said they will not take any more than 229 (plus perhaps 70 options) in the first few years... there are some 50 plane orders/options in the same boat, plus the 100 here and there that evaporated, etc...

As CWMR keep reminding us, they are not boooking orders at any rate that would make a sane person think they should be producing a plane a day.

As for Mirage00... no reason to clump all the bloggers in one basket - some folks doubted the performance/cert time table, everyone said with enough time and money...why not?

The die-hards differ on some issues as well, like you are simply amused, while Ken is defending his 2 positions, and some folks are trying to keep their paychecks or options...

The blog lives becasue of the diversity of opinions, on both sides...

airtaximan said...

aother issue:

I believe the holes in the order book are mostly leftovers from the failed bidders club.

I wonder if you add up all the positions given out, how many there really are, and high high the number really goes?

Does someone have position number 3200?

ColdWetMackarelofReality said...

Where did it all go wrong?

This is the question I ponder as I sit in 22D, .76M at FL270 on an east bound AA flight this morning, returning to my current client’s company after a great Thanksgiving holiday with family. I hope all my fellow bloggers, regardless of which side of this discussion they come down on, had an equally fantastic holiday, and had the opportunity to give thanks for the blessing we each certainly enjoy.

Thinking back, Eclipse truly had it all, an A-List executive team, a great and talented design team, a clever little jet design, a truly innovative engine and avionics concept. All the benefit that experience, gathered from the best aviation companies around the world, could offer. An opportunity to build a true, best-of-breed, not only the design, but the processes, the procedures, the methods, the tools, the culture, in short, not just an opportunity to build a great plane but to build a great company.

And yet here we are, nearly ten years and well over a billion dollars later, no best of breed, just a small plane, half finished – a company that boasts ‘me too’ like the youngest child in a family of achievers around the Thanksgiving Day table – embarrassed and even angry about the successes of its siblings, muttering under its’ breath about ‘coulda’, ‘woulda’ and ‘shoulda’ – ‘if only’, and the ever present lament of the self-afflicted, ‘why me’.

Now, vendors languish, paid weeks later than agreed to, occasionally having to resort to withholding product or threatening mediation or litigation to get what they are owed.

Employees leave, having given up on the promise of stock-option riches, a dot-com era fairy tale, spun one too many times, diluted to the point of valuelessness by three, soon to be four unplanned additional rounds of financing.

Investors have nowhere to go, they did their part when they signed the paperwork – their promised ROI more diluted than the mixed drinks at a New Mexico casino.

But the bitterest pill to swallow comes for the customers – employees look around now to a revitalized and energetic industry with more work than bodies – investors will simply move on – even the State of New Mexico and its’ taxpayers.

No, the loyal customers are the ones who will ultimately feel the most pain. Originally promising near 700 deliveries in 2007, Eclipse will probably eek out around 80 or 90 this year, and not one will be the airplane promised. Not one will be fully functional. Not one will be fully usable, especially as we are now fully into icing season for much of the nation.

300 of these loyal customers were told, more than a year ago now, that they would have their jets in a matter of months, that their 60% progress payments were due, their jets imminent. Exactly how many paid about a half million dollars each is unknown as the Faithful will no doubt point out, but the issue is more the demand than the exact number effected. Only a month or two after demanding contractual progress payments for aircraft ‘soon to be delivered’, Eclipse announced that not only had they decided to end the relationship with Avio prime partner Avidyne (2nd prime partner, having already parted ways with ACS maker BAe Systems), that the decision had been made MONTHS prior, prior to the announcement, prior to the demand for progress payments. Eclipse reported it had in fact been quietly working on an Avio replacement for several months.

Grandiose promises about improved functionality were made, blame was assigned, and as with Williams and BAe Systems before it, once ‘world-class’ partner Avidyne was tossed under the bus by a guy who previously sat on its’ BoD. A pattern was emerging, each time the wunderjet approached the only significant milestone in any program – certification and delivery, Eclipse pulled the rug out from under itself, and blamed the rug.

Come now the present, and a major structural supplier has had to sue Eclipse for missing payments, this after renegotiating the previous volume pricing and working to freeze the design and make improvements for manufacturability. Dunn and Bradstreet shows Eclipse to be over 3 weeks late, on average, for vendors that report to D&B. Current and former vendors tell tales of engineering that has no tolerance for assembly resulting in massive scrap rates. Current and former employees tell tales of poor morale, poor to nonexistent leadership, and a singular lack of appreciation for the task of designing, certifying and delivering aircraft.

Preston Tucker boasted that his car company had the largest manufacturing facility on planet Earth, and it was true – Tucker had negotiated with the US government to give him a former war material plant, the single largest building on the planet at that time. Tucker used this massive building, flashy advertising, and his own ebullient character to raise a significant sum of money at that time, over $15M – to build the car of the future.

Tucker would later stand trial for fraud, having built only 50 cars after several years and many millions of dollars. Eventually acquitted, the similarities to Eclipse and Raburn are astonishing. Another comparison made more than once here is to that of Jim Bede and his diminutive BD5, the elusive ‘everyman’ plane. Here too we have an interesting idea, a very interesting character, thousands sold, hundreds delivered, and one of the greatest black eyes in aviation history – all for the want of an engine.

The difference for Eclipse lies only in the ability to continue to raise capital, and in the number of people around the world who will be adversely affected when this house of cards crumbles.

So where did it all go wrong? Did it start out as a scheme – I think not. I have made no secret about my early exposure to Eclipse, and that I have friends and acquaintances both within and without Eclipse. I heard the early stories, predictions of 1500 planes per year rolling out of Albuquerque, a sub-million dollar selling price – the predicted death of half-million dollar prop planes such as the Bonanza, the Cirrus, the Columbia, the Malibu and the Mooney. I heard tales of wonderment about a level of systems integration unseen on planes smaller than the 777.

It did not start out as a scheme I am sure, but each time the reality of the situation might have set in, Eclipse leadership chose to applaud the Emperor’s new clothes rather than point out he was, in fact, naked. The result is vendor after vendor failing for Eclipse where they each had track records of success for other larger and more successful customers dating back years, even decades. Of special importance here is the failure of key vendors, the chief enablers of the wunderjet if you believe the marketing hype, that is Williams International, manufacturer of the EJ-22 engine, and BAe Systems, architect of the computer system enabling Avio.

The real issue at the end of the day is that much like the dot com bubble from which Eclipse leadership hails, there is a sense that the rules don’t apply, that Eclipse is a special case, the ‘new economy’ version of aircraft. The new economy however was a bust, rules after all are rules. There is a reason that planes are designed and built they way they are and it has nothing to do with screwing the customer, creating artificially high pricing to dissuade customers from actually buying them, or just being monolithic dinosaurs mired by the inertia of their great size. No, when hundreds of millions or even billions of dollars, and hundreds if not thousands of jobs are on the line, a company owes its’ employees, its’ shareholders and its’ customers a certain amount of respect and the decisions must be taken seriously with an eye towards safety, reliability, and eventually ROI.

There was no new economy, only people who believed the rules did not apply to them – and for a while they were able to find enough unsophisticated marks who believed what they said – irrational exuberance ruled the market. A similar effort is just now completing in the real estate market – as some places see soft landings (a fitting euphemism for our discussion today), other have seen the bubble burst, and crashed and burned.

So we are left with one pivotal question – is Eclipse right and the rest of the world just doesn’t get it? This is surely the position of the Faithful. They suggest that Eclipse changes the rules, creates a whole new value-proposition.

Or is Eclipse and the business model that it and its’ major customer represent stillborn – e.g., are they dead and just don’t know it yet? This is the position of the critic, with some even allowing for a chance of success given a wholesale reorganization of the BoD, the executive team, another $300M and 18 months.

Occam’s razor suggests we get the best result when we use the least number of assumptions, and it is here that I believe Eclipse simply fails the smell test.

In order to accept the Eclipse explanation as to why five or six dozen partially completed planes are all they have to show after almost ten years, well over one billion dollars, and all the other pro’s I mentioned above, you have to believe the following:

A leading world-class avionics and vendor (BAe Systems) did not know what it was doing and is a failure
Another leading avionics vendor (Avidyne) did not know what it was doing and is a failure
A leading business jet engine maker (Williams International) did not know what it was doing and is a failure
A leading systems and lighting vendor (deVore) did not know what it was doing and is a failure
Boeing does not know what it is doing
Cessna does not know what it is doing
Hawker-Beechcraft does not know what it is doing
Traditional methods of setting price are wrong
Traditional margins for aircraft OEM’s are low by a factor of 3 or 4
Or you can observe that it is in fact Eclipse that did not know what it was doing, evidenced not by crazy conspiracy theories (like OEM’s consciously NOT meeting demand to keep prices ‘artificially high’), but by facts such as Eclipse needing to select a new engine; Eclipse needing to redesign the avionics suite, twice; Eclipse failing to hit a single schedule; Eclipse missing the mark on MTOW by 28%; Eclipse missing the mark on needed fuel by 26%; Eclipse missing the mark on development costs by a factor of 4; Eclipse missing the time to develop by a factor of 2.

So I ask each of you, critic and Faithful alike to consider this – is Eclipse right and the rest of the world wrong, or is there a reason that planes are designed and built the way that they are designed and built? Is there a reason why we see evolution more than revolution in aerospace? Is there a reason that Raburn has failed, like Bede, and Moller and Tucker before him?

In a well managed program, risk is supposed to go down as time goes on – the further along you get the safer you are supposed to be – as you, supposedly, check off item after item on a well-planned effort – making progress towards the ultimate goal. This should not result in being almost bankrupt when a finance round takes a few days or weeks longer than anticipated. This should not result in establishing a new low-water benchmark of delivering partially completed aircraft with significant but commonly expected functionality delivered in the form of an I.O.U.

Incremental development and delivery might work for operating systems, it is nothing short of criminal to do it with a million dollar aircraft.

There are no free rides, there is no such thing as a free lunch, and if it sounds too good to be true, it probably is. These clichés ring truer today than ever.

ItsJustSad said...

CWMOR, posts like yours are the reason I check this blog on a regular basis. VERY well-reasoned, sir.

FlightCenter said...

CWMR,

That was an outstanding summary.

You ask "Where did it all go wrong?"

One might suggest that it all started with the original assumption that with high enough volume, Eclipse could profitably deliver a twin-jet aircraft for $837,500. In order to do that, you need lots and lots of customers. More than 500 a year.

However the need for customers started to look shaky as Safire took the lead in the marketplace, securing over 500 deposits for their twin-jet product.

One might suggest that the skies started to darken the day that Vern felt compelled to create the illusion of a 1,000 aircraft order backlog with Nimbus in order to compete with Safire’s backlog of over 500 deposits. Eclipse announced plans to deliver 1,000 aircraft to Nimbus over the course of five years, starting in 2004. Nimbus promised to charter Eclipse 500s at $500 an hour.

Eclipse closed a $38M round of financing a few months later, due in large part to the fantastic news of the Nimbus commitment.

A few months after the financing, the skies darkened again, when it became clear that Nimbus had made false statements about their ability to finance the aircraft and defaulted on their agreement with Eclipse because they didn’t have the money to make their initial financial obligations to Eclipse.

A few months later, Vern announced that the air taxi market was alive and well, even if Nimbus wasn’t, and that Eclipse had closed an even bigger order with Ed’s company, Jetson (later to become DayJet). No worries, mate. We won’t miss a beat. And there are more of those types of orders where that one came from. After all, Jetson is only focused on the Southeast.

The real mistake was when Eclipse started to believe their hyped up order book and their marketing campaign and started building a company based on the assumptions that they could generate sustained demand for 1,500 Eclipse 500s per year.

Dave said...

Dayjet has already said they will not take any more than 229 (plus perhaps 70 options) in the first few years...

DayJet hasn't even shown that they have the finances to actually afford just the 229 jets, so I wouldn't even call those orders set. Eclipse might get the deposits, but it can't force DayJet to pay out almost 1/4 billion dollars.

airtaximan said...

FC,

amazing, if true.

Question, if Safire could attract 500 orders, why could't e-clips?

Also, how did Safire fail? They never even flew a plan, right?

I guess Ken looked at Safire, as well, as an option for his needs...Ken did you see the plane, plan...whatever? what's your take on Safire.

Perhaps this isight into what made someone chose E-clips over Safire or vice versa can illuminate on the subject.

Thanks CW and FC for the great insight. Everyone should track the story.

airtaximan said...

Naples as a new Daybase strikes me as a departure from the "business plan"... not a lot of buiness there, but many high end vacationers... just a little comment on how this "utilitarian" service seems to be moving in the direction of competing with full blown charter... this will be telling, as I expect no real charter customer would trade doen to the mini jet service, with tremendous inconvenient windows of service for the same price as a lear charter, for this trips... better yet $250/hour in a barpon... or $500/hour in Satsair...

Should be fun trying this in such an affluent market - away from the utilitarian model of business travleres seeking alternatives to overnight stays and long car trips.

Ken Meyer said...

Cold Fish, that's sure a lot of words trying to knock the plane. If you need to use that many words, I'm thinking maybe you haven't got much of a case.

I met with the pilot/owner of one of the ETT Eclipse aircraft this afternoon. He was flying his plane from Missouri to California and stopped for fuel and lunch enroute. He loves the plane; I can easily see why. I can't wait to get mine.

Ken

ColdWetMackarelofReality said...

Ken, that was an awful short message to try and rebut ten years of failures, but given the amount of failure Eclipse has demonstrated I suppose you could write the equivalent of War and Peace and still end up a day late and a dollar short, sorry, plane short.

You will notice my post does not actually knock the plane other than to call it little, which it is.

The real criticism is of the company, the leadership, and the FRAUD they are perpetrating on you, and with your help, anyone who buys in after you.

But nice try.

FWIW - it actually takes a lot of words to even begin to describe the varied failures and frauds we have witnessed after a billion plus dollars and nearly a decade - using that logic, Herodutus would have needed to keep the history of the Battle of Thermopylae to 300 words to make you guys happy.

a37pilot said...

CWMOR:

One of the best posts on this blog in a long long time, congratulations. I am particularly interested when you wrote

"300 of these loyal customers were told, more than a year ago now, that they would have their jets in a matter of months, that their 60% progress payments were due, their jets imminent. Exactly how many paid about a half million dollars each is unknown "

IMO I feel that either the number of 60% deposits collected was far less than 300 or Eclipse has somehow managed to find the worlds most patient group of customers. If they really collected the 60% payment from 300 people and only 10% of these became upset after waiting almost a year, that's still thirty people and you would think that at least a few of those would have gone public with their story by now. When this story finally plays out I think you will find all the order numbers to be far smaller than ever imagined. Just MHO.

Ken Meyer said...

Cold Fish wrote,

"that was an awful short message to try and rebut ten years of failures"

I don't have to waste much time rebutting you.

You're a guy sitting in row 22D of an airliner dreaming up stuff to attack a plane that you have no hope of ever flying.

I'm sorry if that sounds nasty; it's not intended to. But it's a fact. You're knocking the plane when, in the end, you're a guy who flies coach seats on an airliner.

Flying the Eclipse means I get to fly the very best seat in the plane wherever and whenever I want for not much more than buying an airline ticket.

In the end, that's why people are buying this plane. And that's why you'll never succed in knocking it down. For those of us who don't like sitting in Row 22D, the Eclipse offers a very attractive alternative, whether you're a pilot or a passenger.

Ken

ColdWetMackarelofReality said...

Ken, thanks for showing the true color of an Eclipse diehard, I knew you had in it you and it only took you two posts to drop trou for everybody on the world wide web.

Of course, I actually flew in the seat I paid for today, did you?

Thought so.

By all means, please keep it up Ken - you continue to represent Eclipse, and very accurately at that - petty, smug, and wrong.

ColdWetMackarelofReality said...

Because I don't want buyers remorse to rob us of this little nugget of joy Ken in case you decide to delete it as you sometimes do, I have quoted your message to ensure the context of my reply is not lost.

Ken said:
"You're a guy sitting in row 22D of an airliner dreaming up stuff to attack a plane that you have no hope of ever flying.

I'm sorry if that sounds nasty; it's not intended to. But it's a fact. You're knocking the plane when, in the end, you're a guy who flies coach seats on an airliner.

Flying the Eclipse means I get to fly the very best seat in the plane wherever and whenever I want for not much more than buying an airline ticket.

In the end, that's why people are buying this plane. And that's why you'll never succed in knocking it down. For those of us who don't like sitting in Row 22D, the Eclipse offers a very attractive alternative, whether you're a pilot or a passenger.

Ken"


Ken, I understand the anger you feel but remember, I am not the one who conned you out of 2 or 3 million dollars, I am not the one who has broken every promise, missed every schedule, used your good faith deposit to pay for free cokes and big tents at OSH instead of for parts on your plane, or planes, and I am not the one who has caused you to put your ego and identity on the line.

To quote an old commercial, don't hate me because I am beautiful (or in this case, right).

Look on the bright side, if you buy Shari a Mustang she can fly you around in 'her' jet. Odds are that you would accept the keys to a fully functioning Mustang before you would have a fully functioning Eclipse, either both of them.

For the REAL cost of owning an Eclipse, which is an unknown at this time but I submit will be significantly more than you are budgeting, I could fly a whole lot of JET charter in larger more comforable planes, or I could fly around the world several times on a mix of coach and first class flights as I presently travel - and have enough left over for classic V-tail Bonanza - a REAL airplane.

The real difference between you and me Ken is my ego is not tied to being a junior jet jockey - I am more interested in effective use of my time and my money to create more time and more money - owning a vaporware jet that has yet to be delivered in fully functioning form to anyone, anywhere simply does not make sense to me.

I moved beyond tying my identity to the toys I own (boats, motorcycles, cars, homes, etc.) a couple years ago. I have toys, a nice home and a lifestyle better than 95% of the people in the US - that is just the circumstances of my life though, it does not define me.

As much as I hope Ken that one day you actually get the plane you think you bought (or planes), I pray you can learn the same lessons that I have, I believe you will be far happier and more satisfied - I know I am.

Ken Meyer said...

Cold Fish wrote,

"I actually flew in the seat I paid for today, did you?"

You bet. I flew to Sedona to meet the Eclipse and flew back from Sedona after a nice lunch with the Eclipse owner.

I really like flying my own plane. And the Eclipse offers some substantial capabilities that I don't have with the plane I'm flying right now.

Honestly, I can't remember the last time I flew in an airliner. I don't like doing it, and if it were entirely up to me, I'd probably never do it again.

There are a lot of folks who feel the way I do. Some of them will be buying an Eclipse. Others will be buying a seat on one at DayJet or one of the other carriers.

I don't fault you for flying commercial and sitting in Seat 22D, after standing in that long security line, removing your shoes and the like. And I truly hope your luggage was waiting for you when you got there, even if you had to wait 20 or 30 minutes to pick it up.

But the next time you do all that, remember that we Eclipse pilots don't have to stand in line, we don't have to remove our shoes, we don't get stuck in coach, we don't go when the airline tells us, we don't get our luggage lost and we don't suffer a hundred other insults and injuries that have become the routine with airline travel.

We fly an Eclipse.

Ken

Dave said...

If they really collected the 60% payment from 300 people and only 10% of these became upset after waiting almost a year, that's still thirty people and you would think that at least a few of those would have gone public with their story by now.

Eclipse does enjoy having people sign NDAs despite receiving taxpayer funds.

ColdWetMackarelofReality said...

You flew in your Eclipse Ken?

When did you take delivery?

Is it fully functioning?

Oh, silly me, you flew your 340 - almost got me there funny guy.

210 kts is a good speed - 'bout the same as a turbo Bonanza - at FL210, also 'bout the same as a turbo Bonanza.

Insert jet-sound here.

Dave said...

But the next time you do all that, remember that we Eclipse pilots don't have to stand in line, we don't have to remove our shoes, we don't get stuck in coach, we don't go when the airline tells us, we don't get our luggage lost and we don't suffer a hundred other insults and injuries that have become the routine with airline travel.

We fly an Eclipse.


That's nothing unique to Eclipse or even to jets. That can be accomplished by being an owner of any prop or jet plane or alternatively booking a charter flight of those aircraft. Air charter has been around for decades along with private ownership of aircraft.

Redtail said...

ColdWetMackarelofReality said...
Where did it all go wrong?

You truly have too much time on your hands. Are you sure you are employed?

ColdWetMackarelofReality said...

retail, I appreciate your concern for my financial well being but fear not.

I am gainfully employed as an engineering consultant, in aerospace, enjoying a nice six figure income around a quarter million a year, you? I know it is small potatoes compared to some who participate here but it suits me just fine and allows my family and I a lifestyle we gratefully enjoy.

As for time on my hands, perhaps you missed the part where I wrote I was flying commercial from point A to point B and had time to ponder what went wrong.

That's the beauty of flying commercial for a guy like me or like most of the real rich guys I know who fly as passenger - not being PIC gives time to be creative, to capture thoughts, to develop business concepts, etc.

Contrary to what some would believe, I harbor no jealousy or ill will for guys like Ken or Gunner who have successfully created businesses/practices and found buyers for them - far from it in fact, I am very happy life has worked out for them as it has - as I am glad how my own life has worked out to-date.

That the two of them choose to fly themselves much of the time in their own aircraft is great for them. Were my circumstances more like those they enjoy I might well make the same choices - I know how much I enjoy hanging with my uber-rich family members and friends.

Had I found my true calling and true worth in the workforce earlier (read that before family) my choice in toys would have been different than it was for sure.

That said, I am considering having my business purchase a plane within the next year or two if I continue to do as well as I am now. Will it be a jet, no - but I don't yet need a jet and I fail to see the logic in stretching one's self dangerously just to purchase an entry-level jet.

Again, that there are folks who can do it is great, it is good for my business for one - but what happens if you are stretched to make the purchase and then the product costs more to operate than you are prepared, or worse yet, able to pay?

This is the ocnundrum that I fear many individual Eclipse owners will discover themselves in - D-Jet and The Jet owners as well possibly, just not to the same extent. Having a jet they cannot afford to operate - essentially a $2M, 3 ton paperweight.

Redtail said...
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Redtail said...

Way too much information for a rhetorical question. You obviously have a need to justify your life, and find it difficult to do so.

ColdWetMackarelofReality said...

retail, I am not justifying anything - what you see is what you get with me - sorry if you seem to find honesty confusing - just trying to answer your question.

Jim Howard said...

CWMR, your posts are usually insightful, but I think its a bit over the top to compare Eclipse to Moller.

As far as I know Moller has never delivered a flying craft to a customer. On the other hand there are Eclipse aircraft flying every day. I think the best analog to Eclipse is Columbia.

My opinion is that Eclipse will probably have a significant reorganization during 2008. After the reset EA500B aircraft using Garmin avionics will pick up where the EA500A left off.

I expect current EA-500s will be offered dual G430 installs to finish their airplanes, similar to those done for the recent Dubai trip.

ColdWetMackarelofReality said...

Jim,

Fair enough about Moller, my point is only that like Moller, hyperbolic claims are made which are simply not supportable based on actual performance.

Of course, Moller is burning his own money and is nowhere near a billion dollars.

You do know that Garmin no-bid Eclipse in the past right? Do you think a re-org would be enough for them to jump in?

How much time and money would it cost to scrap Avio, again? How much to develop a G1000 suite for the EA-500B?

Would the Faithful wait another 18 months and pay $500-700K more?

Gunner said...

Ken said:
"And I truly hope your luggage was waiting for you when you got there."

Eclispe passengers don't need to worry about that. I'll say no more.


Jim-
Why isn't the Moller comparison valid? Because they haven't delivered an aircraft? Eclipse hasn't delivered to HUNDREDS of Depositors who were supposed to have their plane by now. Eclipse hasn't delivered ONE SINGLE completed aircraft and continues to insult the aviation community by sending over shills who tout the same vaporware with the same lack of present tense and common sense they touted last year.

By those standards, Moller should be insulted by the comparison.

I do agree a reorg is in the cards. What you'll never convince The Faithful of is this: Eclipse's "Dirty Little Secret" is the fact that existing contracts won't possibly survive that reorg. Ken's contract (and all like it) are LIABILITIES to the company's survival.

The Order Book has been unmasked; there's no longer any percentage in Eclipse using Loss Leaders to hype sales, because there aren't any. Just a bunch of cheap orders defended by those who hope against hope that the company really IS redefining Dinosaur Rules like Profit & Loss, ROI, and CGS.

Might as well believe that Santa Claus has an ill temper, a fould mouth and a Napoleonic Complex.
Gunner

fred said...

ken ...

i know your brother ! ( it is NOT an insult and by brother i mean : somebody exactly like you ...)

so i wrote before here , i work mostly in Russia ...

i , very often, work with others foreigners on topic of devellopment or restructurating ...

not a long time ago , i met a guy (he told me he was from one of the central US state , i don't remember which one ...!)

he was in his 50's , just the average joe doe (nothing special about him , like 99.99% of world's population ...)

once , we saw a group of young women in the Moscow subway ...
one of them was really woooaw ! (my tongue is on the floor just thinking of her ...)

the guy (if i remember well : rob.) was completely crazy about having a try for her ...

few of us tried to explain him details like "she's at most 25" i told him : "it's VERY dangerous to play that game with such chick , you can try ...but never loose sight of a single fact = you have to get as much as possible from her whitout giving her as much as she want from you ...!"

the guy treated us of fools , old dirty guys and lots of other friendly names ...

he became a puppet in the hands of a would-be-star ...

a kind of "paris hilton" the only difference = she didn't have any problem to spell her own name right ...!

the guy decided to marry her , we laughed ...

and to take her to his country , we laughed even more ...

after 1 month in USA , she filled a "domestic violence report" ...

now she live in L.A. with all documents to live there legally , whitout having to sleep with him but at his expenses ...!
(she is reported to have a very expensive life style ...!)

comparaison with you and EA Corp. fits quite well ...

allmost as he would be a next of kin ....

some peoples CANNOT learn from theirs OWN mistake ...

it's called = TOO MUCH MISPLACED PRIDE !

fred said...

coldwet...

only one word for your post :

WONDERFULL ! BRILLIANT ! ...

wait a sec. , it's more than a word ...

did i get something wrong ?? ;-))

fred said...

jim ...

yes i agree , if EA Corp. is to survive , a big retructurating move is absolutely required ...

but there is an other aspect of the problem :

it's the side effect of image !

after so many broken promises , lies , broken schedule , scam , untrue statements , etc ...

no one can guarantee firms like Garmin and the like are not going to think twice BEFORE their names can be associated with such brand as EA Corp. ...!

so yes , changes are needed , but i am not sure EA Corp. has got after the NO RETURN POINT yet ...!

you when you take off , after a certain speed , even if you know everything is wrong , you have to take off ...! no choice at this precise second ! then may be you'll have enough time and luck to land...

fred said...

redtail ...

i think you have too much time to read what others have too much time to write ...

freedom and time to spare are items of luxury in today world ...

can you afford it ??

Shane Price said...

Fred,

Education for Americans in the ways of 'old Europe'.

You should be charging them for this kind of info.

Similar experience with an ex collegue. 'Mail order' Russian blond. She looked great in the email, he flies to Moscow for face time.

To cut a longer story short, the deal was done.

His bride arrives in the Emearld Isle, with a surprise in tow.

A young daughter.

It gets better.

The new mother-in-law came as well....

They all lived happily ever after.

Coldwet,

Must have been a long flight! Excellent work and provides an accurate summary of the challanges facing the Faithful as another year passes, along with more missed milestones and broken promises.

Shane

WhyTech said...
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WhyTech said...

Cold Fish said:

"I moved beyond tying my identity to the toys I own ... "

Beautifully stated! This bit of insight is alone worth all the time I have spent on this blog.

WT

fred said...

shane ...

no i won't charge ...!! ;-))

it infuriate me when i see some personn whom could be nice "buddies" are refusing to use what sit in between their two ears ...!

don't get me wrong about russians ..
i have a very good friend from belgium married with an amazing russian wife ...
he runed for her something like 2 years , she was not interrested ...
at some point , he had the inspiration , gutts or whatever to tell her "i don't care about my job , i don't care about my social class , i don't care about my or your wealth ...i just want to be with you , if it has to be in a hut in siberia without electricity and water , no problem as long as it is with you ...."

they got married after (i was one witness for him )

i asked myfriend's wife "why did you make him go totally insane for you ?"

answer : "i didn't want to be bought ..."

WhyTech said...

Fred said:
"tell her "i don't care about my job , i don't care about my social class , i don't care about my or your wealth ...i just want to be with you ,"

This kind of infatuation is almost as debilitating as that exhibited by the Failkhful re the Eclips!

WT

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