Saturday, March 31, 2007

Three More

Eclipse Aviation Delivers Three Eclipse 500 VLJs to DayJet

New era in aviation kicks off with arrival of first VLJs for use in commercial fleet operations

ALBUQUERQUE, NM — March 31, 2007 —

Eclipse Aviation, manufacturer of the world’s first very light jet (VLJ), today announced the delivery of three Eclipse 500 aircraft to DayJet at the Eclipse headquarters in Albuquerque, New Mexico. DayJet is Eclipse Aviation’s largest customer with firm orders for 239 Eclipse 500s and options for an additional 70 aircraft over the next two years. The company, which is the first commercial jet service to take delivery of a VLJ, will offer point-to-point “Per-Seat, On-Demand” services to regional communities.

“As our population and business centers become more and more dispersed, air travel is more critical than ever to the health and growth of our regional communities and businesses,” said Vern Raburn, president and CEO of Eclipse Aviation. “We are proud to be playing a role in expanding the future of air transportation by delivering the Eclipse 500, the first of a new generation of VLJs that can quickly move people from point to point across our nation. It is exciting to be a partner with DayJet as they take the next step in this journey.

”The aircraft delivered today will be used to train pilots at Eclipse’s facilities in Albuquerque. DayJet will put its fleet of Eclipse 500s into commercial operation in the second quarter of this year.

“Today is a major milestone for DayJet, as we begin to take delivery of our Eclipse 500 jets,” said Ed Iacobucci, president and CEO of DayJet. “Like many great innovations in history, there is a confluence of hardware and software advances that together, promise radical change and benefit to thousands of regional business travelers.”

Thanks to hotdog for the late breaking news from ABQ!

Thursday, March 29, 2007

From the E5C

Here's the report of the Eclipse 500 Owner's Group this morning:

Things Are Looking Good at Eclipse!

The E5C had a very upbeat phone conference with Ken Mac on 3/26. Lots of good news to report.

The new Vice President for Manufacturing (Todd Fiero, former Ford Motor Company Manufacturing Executive and Plant Manager) has completed his third week on board and is already making an impact. Communications have improved markedly on the floor and we’re told there is an upbeat spirit of accountability and can do spirit. Seems like a great new addition to the leadership team.

Eclipse has concluded a working agreement with the FAA concerning C of A and PC. The process embraces an agreed to methodology for the inspection and acceptance of aircraft by the FAA to issue a Certificate of Airworthiness on a plane by plane basis. The agreement with the FAA also clears the way for an issuance of a production certificate when Eclipse delivers four aircraft using the newly agreed to and adopted process. The milestone date for the issuing of the PC is projected to be April 24, 2007. We’re told this was a great effort on the part of the entire operations team and Peg Billson.

April production goal is forecast to be 15 aircraft, with 22 aircraft projected for May and June. The schedule will be recalibrated in May as more is understood on lessons learned and the impact of the new production processes is better understood.

The aeromod (extended tip tanks) is in full swing. Every available space in the factory is dedicated to modifying airplanes to meet the delivery goal. Aircraft 106 which is fully modified continues to fly beautifully. Operations is working diligently to achieve a production cut in at approximately aircraft # 39.

Development work on Avio NG is progressing on schedule and we’re told the performance results to date are outstanding. The plan is to introduce the system in production around aircraft # 100. Of course that could move either way but the team is focused on that goal.

Other excellent news is that Eclipse has been advised that a TSO has been issued for the Avio NG system. This is another major milestone for Eclipse.

The weather has not always worked with Eclipse this past week but even given mother natures mood three Day Jet Aircraft will be deliver this week. The leadership of Day Jet is on the property and the mood is very up beat. It is reported that the airplanes are beautiful.

Training is in full swing. There have been some changes in Training. Bob Wright is taking on full time responsibility for coordinating the regulatory issues with regard to training internationally. Tom Norton has been named the new Director of Training. Paul Burns was named the Manager for Pilot Training.

Six instructors are now type rated. 13 pilots, some customers and some company pilots begin aircraft training this Thursday. The ABQ service center is up and running, the Gainesville center will be functional by end of May, and Albany, New York and California by late summer or early Fall.

Serial 106 (the aerodynamic mod aircraft) is flying off to Europe in mid April to do a sales tour for 90 days.

Simulators (FTD's) are on track for delivery in May, second in July, with early 2008 for the other two (possibly sooner).

Jet Complete is in the process of being completely restructured. We can expect some price increase but also some cool stuff like (hopefully) substantial (20%+) discount on fuel at 300 locations!

E5C should have its very own very robust Owners Web site courtesy of Eclipse (thank you very much), and it should cut in after some of the bugs are worked out in the not too distant future.

We also heard a great comment from the pilot who came to pick up serial number 3 aircraft after his intro flight "This was the greatest day of my life!"

A sincere expression of appreciation goes to Eclipse for hanging in there, fighting the good fight, and never giving up! A lesson for all of us to learn!

David Green
Dan McElroy
Ken Wolf


And thanks to Ken Meyer for sharing this update with his fellow bloggers.

Tuesday, March 27, 2007

Weights - From the King Himself


The performance modification certification program has moved into the final stage this week and is on schedule for completion by mid-April. In addition, the Avio NG development program is making great progress and moving toward the scheduled completion this summer.

Many of you have speculated about the impact of the performance modifications and Avio NG on aircraft weight. While these enhancements have increased weight in the aircraft, the only weight numbers that truly matter, full fuel payload and useful load, remain unchanged. That is simply because in addition to the weight increases from product improvements, we have made significant progress on weight REDUCTIONS throughout the aircraft. From the moment we received our Provisional Type Certification at AirVenture last summer we have had a corporate commitment to constantly improve the Eclipse 500, and one significant area of improvement has been weight reduction.

I want to make sure that you understand that the weights listed below are for the final Eclipse 500 configuration with the complete performance modifications (extended tip tanks and drag reduction modifications) and the complete Avio NG installed. Once again I want to re-emphasize that in spite of continued speculation about the existence of a "B" model Eclipse 500, this data represents the final configuration and weight that all aircraft will have both in new production and once all the existing aircraft have been retrofitted at Eclipse Aviation's expense.

Eclipse 500 Weights

The chart below defines the final Eclipse 500 configuration with the performance modifications and Avio NG installed. It is true that the weight has increased due to these changes, but our continuous improvement in both engineering and manufacturing engineering helped us to offset the impact. The final Eclipse 500 will meet the guaranteed useful load of 2,400 pounds and the full fuel payload also remains unchanged.

Weight...... Previous....... Final

Ramp.......... 5,950.......... 6,029

Max T.O..... 5,920.......... 5,995

Empty........ 3,550........... 3,629

Fuel............ 1,686............ 1,686

ZFW........... 4,876............ 4,992

Payload......... 714................ 714
w./full fuel

Useful........ 2,400............ 2,400
Load

(NOTE: The format of the chart was changed to accomodate blogspot & time. The numbers reflect the original chart.)

In an effort to keep you informed about Eclipse 500 developments, I want you to be aware of the weight changes, but please understand that these weight increases will not affect your operations. I can make that statement since the performance improvements have actually resulted in improvements in virtually all areas of performance, not just in the area of speed and range. As promised, we will release the draft AFM section 5 by the end of this month. This draft section 5 will show all of the operating performance of the Eclipse 500 in the final configuration and is based on a combination of analytics and actual flight testing.

Once again as I have committed to you in the past, ALL customer aircraft will be retrofitted at Eclipse expense to reflect these performance numbers. We are working every day to not only deliver your Eclipse 500, but also to make the Eclipse 500 a top-performing aircraft.

Sincerely,
Vern Raburn
President & CEO

Monday, March 26, 2007



DayJet, the on-demand charter operator that is Eclipse’s biggest customer, hopes to get its first Eclipse 500 in April and start training its pilots.
According to CharterX, a charter industry trade journal, the start-up has received FAA approval for its pilot-training program and just needs airplanes to train them on. Co-founder Ed Iacobucci told CharterX the first four of its 239 Eclipses will be used to get pilots type rated. "After that, as more aircraft are delivered, we'll use those for our customers." Iacobucci said delays in getting the Eclipse to market haven’t shaken his confidence in the airplane. “If we don't get our first couple of aircraft from Eclipse soon, I'll have to change our launch date, again,” he said. “But believe me, I don't think I've been sold down the river. Eclipse has had problems but I know they are being fixed and the aircraft is a good plane. I have every confidence in the product and that it will meet our customer's needs."
CharterX reported this on the 23rd and AVweb re-reported the story today and added the photograph of Ed Iacobucci. The story is in the photograph.
Notice Ed demonstrating the lack of headroom in this tiny jet, plus even big guys with ample girth can be shoe horned into a front seat. When traveling this large, a solo flight by a big guy may also eliminate the need for other ballast. He is also showing the lack of a third AHRS which the airplane will need for Part 135 operation.
Inside sources report the third AHRS to be a real headache for the company. The first panel location failed to provide adequate visibility so a re-design was required.

Friday, March 23, 2007

Psych Testing

Perhaps those with more knowledge of psychiatry and psych testing can fill us in with details regarding of the purpose of the test being proposed for all Eclipse pilots.

According to reports, it will be the same as administered to United Airline Pilots.

A test like this makes sense for United pilots. The company is looking for homogeneity so that any line captain can fly with any first officer on any day of the week. Each will know their duty; none will have an excess of testosterone that would lead to tension in the cockpit, especially on a dark stormy night when the airport is just above minimums and the instrument panel TV displays are showing more flags then what can be seen at a parade on Independence Day.

But alas, owner/pilots don't fit this mold. If a person has $10-15 million of loose change jingling in their pocket and wants to purchase a little jet, it is not likely these individuals are going to fit the mold of homogeneity. Assuming most are guys (apologies to the gal exceptions), I would expect test results would show them to be true alpha-males, the leaders of their packs.


If one flunks the psych test, does a personality re-adjustment program become mandatory?

Or what about this scenario where readers of the blog can complete the ending of the following for themselves:

An owner/pilot is taking his psych test in Denver. He comes to this question, "You are in a not so crowded elevator when another male brushes up against you, how do you feel?

Owner/pilot alpha-male grabs his cell phone and calls ABQ, "Hey Vern, let me tell you how I feel, _ _ _ _ _ _ _ _ _ ."
Testimony in Washington this week:

This time it was FAA Administrator Marion Blakey and her boss, Department of Transportation Secretary Mary Peters, making the arguments at the FAA Forecast Conference on March 15 and 16.

"Manufacturers like Cessna and Eclipse are preparing delivery of thousands of new very light jets, with the potential to usher in the largest increase in air traffic since the 1960s," said Peters.

The Eclipse message is ringing in the halls of congress.

Thanks to JetProp Jockey for this important bit of news.

Wednesday, March 21, 2007

From the EOB

The Eclipse Owners Board will not be outdone by humor on the blog.

Quote.

OK, here is a quick quiz. What airplane has the following characteristics?

Cruises at 275 KIAS.

Carries three passengers in addition to the pilot(s).

Features a Chelton Flight Systems FMS.

Has an operational ceiling of FL270 (non RVSM limited).

Is not certified for operation into known icing.

Cannot be used for Part 135 operations.

Could this plane be:

A) My 12 year old Lancair IV-P?

OR

B) The brand new ($1.5M) Eclipse 500 (EA-500) ?

OR

C) Either???

The answer is C. The March 19/26 Aviation Week (p.109) announces that Avidyne (and presumably Crossbow) is out and CFS is in. Of course, if you really want the EA-500 you also get:

No credit towards type rating for jet time in any other aircraft.

Recurrent training required every 12 months as part of the type rating.

A personality test and psych evaluation a prerequisite of the type rating.

Jet upset training required in a L-39.

And last but most interestingly (per Eclipse):

"It is recommended that examiners not pull ECBs during the administration of a practical test since pulling certain ECBs on the EA-500 may induce the unwanted loss of other equipment due to the complexity of systems integration on the EA-500" .

I'll stick with my IV-P.

End Quote.

Comedy on the EOB...comedy on the blog...one might conclude this program is a joke!!!

Tuesday, March 20, 2007



Whac-A-Problem

Remember the stupid arcade game from the 70's, the one with critters popping up at random, only for the gamer to "Whac" it back in the hole with a paddle. The faster you "Whac", the faster the next one pops up.

The Eclipse program mimics the Whac-A-Mole game except the billion dollar fiasco for this troubled little airplane has lots more "Moles" rearing their ugly heads.

Eclipse can hardly swing their PR paddle fast enough:

Empty Weight Growth -- "Whac"

Failed Delivery Forecasts -- "Whac"

Maintenance Training -- "Whac"

Employee Retention -- "Whac"

Psych Testing -- "Whac"

Vendor Turnover -- "Whac"

Windshield Cracks -- "Whac"

Production Certificate -- "Whac"

NBAA Range Figures -- "Whac"

Undersized Batteries -- "Whac"

Absentee BOD -- "Whac"

Escalating Maintenance Costs -- "Whac"

Employee Recruitment -- "Whac"

Mentoring -- "Whac"

Whistle Blowers -- "Whac"

Flight Into Known Icing -- "Whac"

Andrew Broom -- "Whac"

Financial Survival -- "Whac"

Part 135 Capability -- "Whac"

Service Centers Start Up -- "Whac"

Speculators -- "Whac"

Avidyne/IS&S -- "Whac"

FAA Foot Dragging -- "Whac"

Wing Bushings -- "Whac"

Dwindling Backlog of Orders -- "Whac"

Fatigue Testing -- "Whac"

Vendor Unrest -- "Whac"

"A" Mod Retrofits -- "Whac"

United Training Replacement -- "Whac"

Twisted Wings -- "Whac"

Certification for all Mods -- "Whac"

Collecting Progress Payments -- "Whac"

Fuel Discounts -- "Whac"

Limited CG Travel -- "Whac"

No Employee Raises -- "Whac"

Non-Conforming Parts -- "Whac"

"B" Mod Retrofits -- "Whac"

Escalating Operating Costs -- "Whac"

Field Service Support -- "Whac"

Cheap Shots From the Critics -- "Whac"

Functioning Flight Simulator -- "Whac"

Tugs Running Into Airplanes -- "Whac"

Free Sodas -- "Whac"

FSW Shortcomings -- "Whac"

Customer Unrest -- "Whac"

Tire & Brake Failures -- "Whac"

Vern Raburn -- "Whac Whac Whac"

And just like the arcade game, these pesky issues are going to keep popping up over and over again until Eclipse runs out of quarters.

Sunday, March 18, 2007

A Lament from the EOB

A position holder recently posted the following on the Eclipse Owner's Board.

Quote.

Thank you Vern,

For talking to us again. I understand your need to keep some tight lips on inside technology development. I also believe that your drive and ambition has pushed this dream to where it is today. I've been with you since the EAA article on march 12, 2000 (yes I remember the date). I also was 12th in line in may 2000 to buy the gold position.

If you could provide some information to the customers on how you plan to fund the ramp up, and provide the customers an alternative to the unsecured $700k loan to the company it would go a long way to raising values and confidence which is at an all time low as discussed by Mike Press.

When you tell us nothing, we can only assume your only plan is to use the 60% deposits for current Eclipse carry costs and we all know this money is not then available to pay for airplane engines, wings, and tails. There has been some discussion that the Eclipse cashflow will be solved if we can just get the production to ramp up. Those of us that have invested in, or been involved in senior management (I am a CPA, investor in manufacturing, and run my own company with over $100m in debt.) I and some of the customers know that in fact Eclipse will need a huge revolving line of credit to ramp up production. Some of us know that Prat, Fugi and others will not ship or even make parts unless they know they will get paid. If you are using our deposits to pay current expenses, which I hope you will tell me I'm wrong, then you can not use your receivables from us for collatoral to get the line of credit. I have heard the hedge fund loan already has the other assets pledged, I hope I heard wrong from an Eclipse investor, so please tell us your plan. We are only customers but we have a huge stake with you in this company.

Another alternative, and you have been great at being creative with alternatives, would be to show customers that you do not need our deposits now to pay current expenses. A short reprieve with discounts to pay the deposit just doesn't do it. Yes, our deposit agreement gives Eclipse the right to 6 months of free money and I think we are all OK with that. We also all knew our initial deposit was at risk at some point. What we did not bargain for is that our $700k deposit would be called on a projected delivery schedule that most of us do not believe is realistic, and that this $700 k additional deposit is an unsecured loan and appears that it is being used not to build airplanes but as risk capital to cover costs during delays. This, if true, is not right. Please tell us you have received additional capital investments and that our additional deposits are in cash and available to pay for airplane parts.

This alternative to build confidence is as follows:
1) Eclipse uses a realistic track record of deliveries to project future deliveries.
2) As an alternative to the 60% $700k deposit 6 months before delivery, the customer can post an irrevocable bank letter of credit in the same amount which is called when the customer can take title and have a real asset.
3)Eclipse is then entitled to a 10% increase in the contract purchase price.10% x $1500000 = $150,000 / $700,000 = 20% for 6 months, and is a 40% annual return for Eclipse and it's investors.
4)Eclipse can use the letters of credit as collatoral for borrowing against.The banks have access to Eclipse financial information and should be funding this capital-not the outside customer.

In the interest of full disclosure, I have been a customer since day 1 2000. My original position of 277 gold (even though I was the 12th buyer, I was given a later position because of escrow to certification). In january 2007, when deposits were being called on what I thought was an unrealistic delivery, I traded my delivery position to 716. THIS MEANS I AM SUGGESTING ECLIPSE INCREASE MY PRICE 10% in return for lower risk on my deposit. I know at least one other customer who had this same idea.

I love Vern and I love the Eclipse. Let's rebuild the confidence for Vern's dream.

End Quote.

Friday, March 16, 2007

Free Drinks Continue But No Raises!

March 14, 2007

All Eclipse Enterprise,

We are writing you today to ask you for your help in controlling spending. As Vern & Peg have said, we need to start living within our means. And for us to do that effectively, we need everyone's help. As stock-holders of this company we have a responsibility to ourselves and to this enterprise.

We need to manage our cash just as we do at home. This is the beginning of an initiative to reduce spending, conserve cash and build a positive and disciplined attitude towards managing our expenses. This is our company and we have the opportunity to make a difference now - for our future.

Call to Action:
You know how to do your job in the most efficient manner, how things work and how to make them work better. In the past you may have felt that your opinion has not been heard or accepted. We will listen, that is a commitment to you. We need your ideas and your participation in saving money through productivity, identifying waste, recommending process improvements, and any other creative ways that will help us conserve cash and make us leaner and more productive. Your ideas should be communicated to your supervisor. Supervisors, please escalate these ideas immediately through your Leadership team.

As we gather ideas and suggestions from you, we have decided to implement the following cost control measures immediately.

Immediate Cash Conservation Initiatives:

- INVENTORY CONTROL: An inventory control plan is being implemented to consolidate tools & parts (including free stock & consumables) to prevent waste and loss of inventory. Please watch for a communication from Todd Fierro, VP Production.

- OVERTIME: All overtime must be scheduled and pre-approved by your organization's plant manager or director prior to work being performed.


- MERIT INCREASES: Unfortunately, merit increases for 2007 will not be awarded this year. Individual performance reviews will be postponed until July 2007 to maintain focus on the current task at hand. The payment of merit awards will be reviewed and reinstituted when the company meets its financial goals.

- HIRING: We will only be hiring new employees for aircraft production, engineering support for production, aircraft modifications and post delivery support. All other hiring is suspended until further notice.

-TEMPORARY LABOR/CONSULTING CONTRACTS: Temporary labor will only be utilized in support of line production, post delivery/aircraft modification and engineering operations in support of production.

- PRINTING & COPIES: Please reduce the amount of copies and printed materials - double sided print jobs will help. Today, stop producing color presentations and color copies. They look great but they cost 8.5 cents per copy vs less than 1 cent for black and white. Paper is very expensive; you can make an immediate impact here.

- FOOD: Catered lunches should only be used in support of business discussions which are best served by having lunch served while working. The number of lunches ordered should serve the guests and immediate company participants and not the department.

- BEVERAGES: Eclipse has been very generous and thoughtful in supplying free beverages to all employees. This will continue, however, we ask you to please not misuse this benefit. We are spending $50,000 per month right now on beverages alone!

- TRAVEL: Effective immediately, all company travel requires an approval of your organization's VP and Andrew Kamm, Acting CFO.

- FEDERAL EXPRESS/SHIPPING: FedEx will only be used to support transactions which generate immediate revenue and for critical documents, drawings etc. When FedEx is used it needs to be at the least expensive rate. When not using FedEx, use the US Mail. All departments will be asked to keep a log of their FedEx use. Prior planning when shipping can save money.

Team, we ask again for your help and support. Talk to one another and your supervisors, and bring forward any ideas you have on how we can be more efficient and save costs. We all will have to be self-disciplined in controlling spending. Hopefully these initiatives will make an immediate difference so further measures will not have to be taken.

If we work together and support one another, we will solve this problem

Andrew Kamm
Acting Chief Financial Officer

Ken McNamara
Vice President, Product Support

Thursday, March 15, 2007

Did Vern Provoke the General Aviation User Fee Discussion?

Many in aviation believe he did. Today's release of the FAA Aerospace Forecast Fiscal Years 2007-2020 provides some support for that belief. Here are some excerpts from that report;

"At the October 2006 TRB/FAA workshop, industry experts suggested the market for the new microjets could add 500 aircraft a year to the active fleet by 2010. The relative inexpensive twin-engine microjets (priced between $1.5 and $2 million) are believed by many to have the potential to redefine the business jet segment by expanding business jet flying and offering performance that could support a true on-demand air-taxi business service. This year's forecast assumes that microjets will begin to enter the active fleet in 2007 (350 aircraft) and grow by 400 to 500 aircraft a year after that, reaching 6,300 aircraft by 2020.

Utilization rates for VLJ's will vary by mission. VLJ air-taxis are expected to average approximately 1,500 hours per year, fractionals 1,200 and private use 350. This results in an expected utilization rate for all VLJs in 2020 of 1,067 hours per year. Traditional (non-VLJ's) turbojets are expected to average approximately 407 hours per year by 2020, since VLJ's are expected to have a greater share of their use in on-demand air-taxi than the traditional turbojets."

So now the FAA has been drinking the Kool-Aid. Not only are we going to have swarms of these critters darkening our skies, but they are going to have a utilization rate three times that of our conventional dinosaur fleet, plus they are going to be a Major League pain-in-the-ass for ATC since they fly so slow. But as Vern once testified to a congressional sub-committee, the Eclipse is more than capable of getting out of the way of faster airplanes.

Little wonder the FAA is wondering how they are going to handle the increase in General Aviation traffic that Vern assures them is coming because he has the orders and he is going to deliver!

Wednesday, March 14, 2007

Buyin One Anyway

The blog be dammed, I'm buyin one anyway!

Actually, bet I can steal a Platinum Position this week for a big zero premium from one of those weak kneed speculators. Did my homework a couple of weeks ago to see what might be available for financing; thought I would be real clever and start with Cessna to see what kind of deal they would make.

For a Mustang, Textron Turbine Finance had numbers close at hand:

- 10% down
- 20 year loan
- 7 year note
- 6.8% fixed interest

That was clean, easy and reasonable. Since Eclipse has yet to develop a captive financing arm, I called one of the biggest banks in the country that has been financing business jets for over 30 years.

Here are their terms:

For starters, the bank would only recognize the platinum price plus options. They were not interested in funding the premium which I don't expect to be a problem since I am betting I can find a nervous nellie who will be just damn glad to get their initial deposit back this week. For example, I know of an offer made this week on a Platinum Position of $1.3m WITH options!

Now, so long as I agree to no prepayment before a 60 month term, the bank will finance two-thirds of the 60% progress payment, but only based on the Platinum Position price of $950k. So the amount they will front is $342k plus options, if the options are $140k, then the max that they will loan is $482K. The bank made it clear that they are not providing bridge financing. They want the term loan, early cancellation terms are very onerous. So, if I can get a Platinum Position for $1.3m with options, then the bank will finance $428k, this is equivalent to 37% vs 90% from Textron. Now let's say the market is not as scared as I am thinking it is, and sellers are standing by their numbers, I know that I can buy a Platinum Position for $1.6m. This now represents a different scenario with the bank though, as they will still only finance $428k, now we are down to 30% financing.

The bank is not interested in a security interest in the airplane. They want my personal financials to show a $10-15m net worth and my pledge of something valuable and reasonably liquid. I'll have to think of something here.

The interest is 1.75% over libor or prime plus 1%.

A 15 year term and a 5 year note.

The final kicker is that they are only going to take 30 of these sweetheart deals. May be an indication of the banking communities confidence in this program.

Think I'll study these numbers a bit more and maybe call Kenny. Perhaps he knows where I can get a better deal.

(moderators note - numbers are real the narration is fiction)

Monday, March 12, 2007

Eclipse DME - From the King Himself

There is a lot of confusion about the DME function on the Eclipse 500. I want to give you the facts. First and foremost there was never intended and has never been a DME receiver installed on the Eclipse 500. This is simply due to the fact the FAA made a very enlightened and informed decision several years ago that the expensive and unreliable DME system could be easily replaced by the GPS system. So when we received FAA Type Certification in September, 2006 that included operations up to 41,000 feet with "synthetic DME". The FAA approved the Distance Function that uses two GPS signals to give distance information to a fix in place of a conventional DME system. This Distance Function will accurately display to the pilot the distance between the aircraft and a navigation station tuned on the NAV receiver. This system avoids the DME slant-range error that is most prevalent at higher altitudes and gives the pilot a more accurate distance from aircraft position to the fix. Crossing directly over a nav fix at FL410 and having your distance indication show 8 miles to go to the fix is always somewhat amusing. The distance is calculated from the position of the navigation station, as retrieved from a navigation database. Therefore the currency of the database MUST be verified prior to using the Distance Function to ensure safe operations.

When we received the type certificate, the navigation database was up to date and allowed the synthetic DME Distance Function to be used. As you all know from IFR flying, the navigation database needs to be updated every 28 days, but the current version of Avidyne hardware installed in Eclipse 500s does not allow for cyclical updates.As a result the Eclipse 500 fleet has been limited to flying below FL240 due to the lack of current navigation database. The simple reason that the database could not be updated is due to the fact that Avidyne could not make the UBS interface port work correctly. Avidyne has now solved that problem and is working on new hardware to be installed that will allow us to update the navigation database. This new hardware is supposed to be approved and available to us any day now. As soon as the new hardware is approved, we will install the new hardware and navigation database and the "DME inoperative" restriction will be removed.

For those of you who simply can't stand to be without a DME receiver you can always order the International Operations Package and have a single DME receiver, in addition to an ADF receiver installed in your Eclipse 500. We have created this option for those that will be basing their aircraft in nations that have not taken the progressives steps that the FAA to start the modernization of their airtraffic control systems.

Vern Raburn President & CEO
Eclipse Aviation

Sunday, March 11, 2007

News Update from ABQ – Part 3

Important Milestone - Delivery number 2

By Bob McKlain (Jim’s brother) Journal Staff Writer

ALBUQUERQUE, NM – Sunday March 11, 2007

Vern Raburn Eclipse President and CEO announced today that despite rumors that Eclipse could not deliver airplanes, Eclipse second certified aircraft was delivered today. Well almost.

Under a veil of secrecy, the ceremony that was to take place at the factory was postponed. Perhaps indefinitely. Initially, Mr. Raburn was supposed to hand over the keys to the as-yet-to-be-disclosed-buyer, but the buyer did not make it to the ceremony.

Bob McKlain received the invitation to the ceremony which promised a personal appearance of position-holder-number-3 who was gong to step in to receive the aircraft in place of DJ, the designated position-holder number-2, who apparently did not want or could not afford to take the plane, despite arranging $50,000,000 in financing the week before.

A letter to invitees from Mr. Raburn explained the following:

Dear ceremonial Eclipse keys handing over attendees,

Unfortunately, we had arranged for position-holder number 3 to take DJ’s airplane in a grand ceremony today, since it’s been so long since our first delivery, despite promises of many deliveries so far. This second delivery is perhaps our greatest accomplishment to date, as it replaces about 50 aircraft we promised to deliver by now – so, the celebration we planned was indeed grand. Probably befitting 50 airplane deliveries! It would have been terrific.

We decided just now to put off the delivery, not because the plane did not receive a C of A, and not because the plane really does not meet guarantees, and not because the plane has very limited utility due to cracking and inspection intervals – we leased back the plane so the owner will make money with this plane, not matter what.

Also, we offered to upgrade whatever needs to be working properly in order for him to have a functioning airplane, not a mock up. Upon receiving such assurances, and stipulation the retrofits, upgrades and fixes would be at our cost, he assured Eclipse Aviation Corporation that he was satisfied, in writing. Well, he did not object in writing, so we made him take the plane.

In sum, the blame goes squarely on the customer. YES, it’s HIS FAULT. For the first time (another first, I might add) Eclipse is NOT blaming a supplier. This time it’s the customer who is to blame.

We now understand that somehow the customer refused to make a public appearance to accept his plane. We offered, and he did not reject the following customer-focused solution in order to arrange a proud key-handing-over experience.

Let's reflect on history for some context: does anyone remember “the unknown comic”? He wore a paper bag over his head while on stage so that no one could ever recognize him? We offer this as a solution for customer-number-3 who was taking customer-number-2’s (DJ's) position, and we thought he was completely OK with it.

Unfortunately for all you dedicated employees, suppliers and customers, he did not show. As I said before, It is his fault.

Available for comment was CEO of Avidyne Corporation Dan Schwinn and VP of training for United Airlines, who somehow both removed their paper bags from their heads and simultaneously said: we’re not surprised customer-number-3 did not want to be associated with this program at this point...we spent $300,000 on legal fees just to get Vern off our back and get out of this program. As part of the legal settlement Vern made us agree to be on hand for delivery ceremonies like this, but we were promised hors d’oeuvres and cocktails.

The customer was supposed to show, and you’d think that if ex-suppliers could come, take off their bags and show their faces, the customer would be here to take the keys?

In a wild twist, Andrew Broom was seen being duct-taped to the main gear of the deliverable aircraft by Mr. Raburn who was shouting “ you can’t quit, you are in it for the long haul – they are your customers and from now on, they WILL show up to take their planes when I say they will. NO refunds… and no more paper bags. They will show their faces - it's in the contract"

Thanks again to airtaximan for sharing this important story.

Saturday, March 10, 2007

News Update from ABQ – Part 2

The Upgraded VLJ

By Jim McKlain Journal Staff Writer

ALBUQUERQUE, NM - Eclipse Aviation president and CEO Vern Raburn announced this past Tuesday a major effort to improve various aspects of the Eclipse 500, the company’s flagship Very Light Jet (VLJ).

In a press conference, held at Double Eagle Airport, dozens of Eclipse employees gathered around a sandy vacant lot, scheduled to become the first facility establishing a permanent presence at the blossoming air facility.

“We are pleased to announce a complete and comprehensive upgrade program to our already overwhelmingly popular Eclipse 500 VLJ”, boasted a gleaming Raburn. “We have listened to feedback from our customers and are determined to make our loyal customer base a satisfied bunch indeed.”

The improvements are significant and wide ranging, and include such highlights as additional paint trim colors, an increased selection of interior color options, a dual-redundant computerized auto-deploy air freshener canister (free with the sixth seat toilet conversion kit), interior “mood” lighting, spinner hubcaps, and the ever popular “Under Aircraft LED Light Kit” (available in “Razor Red”, “NG Prism Blue” and “Glam Green”).

“We feel that our customers have clearly spoken and demand such improvements - we are confident that on close inspection, all of the Nay-Sayers of the industry will realize that we are making significant upgrades on these significant upgrades. We are working diligently to have all of these available by mid summer, with the exception of the Next Generation “Prism Blue” kit, which seems to be somewhat more challenging. We are working with our key vendors on targeting that specific upgrade for early next year, but are sure the pilot community will understand and find it well worth the wait. In the mean time, we will be supplying “Razor Red” kits in lieu of “NG Prism Blue”, but will update all affected aircraft at no cost to the consumer.” Raburn followed up energetically with “This is an excellent deal for everyone and represents significant progress on our side!”

When asked about recent developments, such as major vendors, once again, backing out of key supplier positions, Raburn quoted “It’s a hard fact - the MTBF of the LED option alone increases from the HVGH from under 50 to well over 200. This is a substantial improvement we feel is key – there is no way the prehistoric dinosaurs of our industry would dare push the edge this far. This is clearly why we will succeed where so many others have failed.”

As the presentation went on, several employees seemed to wander off, apparently in search of old bottle caps littering the adjacent field. “They make good wind chimes, and Ned is trying to collect them for his cub-scout pack”, stated one, somewhat weary Eclipse employee.

Appearing irritated by his own employee’s irrational lack of interest, Raburn, with folded arms and making subtle clicking noises into microphone, patiently waited while Andrew Broom, Eclipse spokesman, dashed from the podium and attempted to round up the straying employees. In confronting one intently focused group apparently attempting to teach each other to “snap” bottle caps to make them fly like little Frisbees, Broom was unsuccessful in getting their attention, even while flailing his arms frantically and hissing something about “The boss man”. However, he had better luck with several stray loners that were eventually herded back to the podium.

Resuming, apparently un-phased, Raburn continued with his speech for another two and a half hours, going into detail as to the importance of each upgrade. At one point, he extensively detailed one of their concerns about a major decision they were currently negotiating with the FAA involving which side of the cockpit they should install the independent third cup-holder. “It’s surprising the amount of analysis required of the regulatory basis for seemingly simple decisions like this. It’s not just a quick “right or left” call. Important factors such as open platform compatibility and expandability need to be addressed. It’s actually a lot harder than anyone could have possibly foreseen.”

As the day wore on and on, the small group of employees, standing in the hot Albuquerque sun, got more and more agitated. At one point, one frail female employee, later identified as 87 year old “Ruby”, muttered “bite me Raburn” and walked over to an adjacent hanger and sat down in the shade, clearly unimpressed.

From that point on, the tension seemed to rise, reaching a crescendo when Raburn was hit forcefully on his left temple with a high speed bottle cap. Quickly limping to his vehicle he was heard muttering “But I just give and give, no one appreciates me.”. As he sped off, the sound of hundreds of whizzing bottle caps could be heard ricocheting off the back of his car.

Mr. Broom was found several hours later wrapped in duct-tape and hung out on the water tower just outside the main hanger facilities

Thanks again to metal guy for sharing this very important report.

Friday, March 09, 2007

Vern Speaks With an Owner's Group

As posted to the Eclipse Owners Board:

Yesterday the leadership of the E5C had the opportunity to speak directly with Vern Raburn for about 60 minutes on a wide variety of issues. Vern was very upbeat, candid, and open with us. While many of this comments were given confidentially, we felt it important to give you all a sense of the meeting.

First and foremost, Vern is very optimistic that the delivery schedule published last week will be met. The FAA is on premise and well into the inspection process for COA on three to five aircraft in the next few days, and on schedule for 10 in March and then about 1 every two days in April.

Eclipse is continuing to work towards a PC. The PC audit is complete and the FAA has responded with a list of issues that need to be addressed before the PC is issued. Eclipse feels that they are in very good shape to meet these issues and that the list is actually not as big as others have faced in the same situation and time frame.

Vern candidly admits that going for PC right from the first airplane was not wise, and now has split the effort. While getting the PC is very important, receiving it will not really affect production until later this spring, and Eclipse can meet the current schedule for a few months with the FAA signing off each individual airplane. Actually as the FAA signs off more planes, typically the process gets easier and more efficient. (This is the process for example that Mooney used on all their aircraft for many years.)

Vern repeated Eclipse's commitment to retrofitting all aircraft for both the wingtip/speed mod and the AVIO NG mod. Right now, as only an estimate, the wingtip/speed mod should be in place somewhere in the 40 to 50's serial number, and the AVIO NG mod available in the low to mid 100's, but this is certainly subject to change given unforeseen challenges.

Everyone at Eclipse is very confident about the wingtip/speed mod, and we get the impression that it will meet or exceed the expected numbers and maybe even shave a few pounds off the empty weight of the aircraft.

The AVIO NG mod also seems to be a very positive change. IS&S has a great deal of experience in customizing software and hardware to existing high level commercial aircraft systems. They have done it for many other commercial aircraft manufacturers, and have a great deal of experience writing the "bullet-proof" software interfaces that are required on a platform like Eclipse.

On a related subject, the "synthetic DME" that is required to fly Eclipse above FL240 was not functioning because of the inability to update the database. This is being addressed and all aircraft delivered before the AVIO NG changeover will have it operational, and of course after the changeover the FMS system in AVIO NG will meet all FAA requirements for high level flights.

Vern also believes that the weight increase of the AVIO NG system will be optimized in development to bring it in at the smallest number possible. With each pound equal to about 1NM in distance; an extra 30 pounds should have a marginal affect on range.

We brought up the idea of re-looking at the LX option to cut out some weight to make a "LX light" option. And Vern said he will investigate it, but reiterated how difficult it was to change specs, even on the interior, since the interior is part of the total certification process. He expressed his desire to use continuous improvement techniques to eliminate weight when ever possible.

Vern also told us that the windshield issues that have been reported are all but completely fixed and should be no issue going forward.

Finally, we all walked away from the call with a positive feeling about Eclipse. All of us have the same skin in the game that many of you do, as three of us have our 60% deposits at Eclipse and the fourth owns the first aircraft. So our concerns mimic yours. But Vern seems very connected to the critical issues facing Eclipse, and has a short term as well as long term strategy to meet them all head on including production, training, finance, and support.

We still believe communication is an unresolved issue, and pushed hard for an increased effort in this area. Vern believes that he cannot satisfy every customer, but he sincerely wants to make as many customers happy as possible because they own an outstanding, innovative, value rich aircraft with outstanding support. An example of this effort is his decision to retrofit all aircraft with both mods, something we think is costing Eclipse north of $10 million.

Candidly Vern does read the website (note: this probably refers to the Eclipse Owners Board, not this blog) and like any normal person gets a bit disappointed about some of the personal remarks made about him. (While criticism on any topic is certainly open game on the website, we don't think personal remarks aimed at an individual are productive.)

Many times Eclipse cannot respond directly to an issue because of confidentiality agreements or sometimes there is no answer yet formulated. But in the last few weeks, Vern has begun to answer more and more issues, and has asked his staff to get information out to the customer base as quickly as possible, even when the "perfect" answer is not readily available.

We, the leadership of the E5C recognize that our role is not to repeat the "company" line, but to continue to push for relevant, hard information and facts that will help inform and support the Eclipse customer community.

We think we can do it in a non-adversarial, non-combative manner, but still ask and get answers to the hard questions. We did so on this phone call and came away feeling that the next few weeks and month or two will bring much better news and communication to Eclipse customers.

We have asked Vern to continue to meet with us periodically so we can press those issues that have not been resolved by others in the organization. And we look forward to hearing from you and reading about your concerns, issues, criticism and comments so we can continue to make the E5C a responsive, sharing owner's organization.

Wednesday, March 07, 2007

IS&S

Unless I am missing something, Eclipse has basically exchanged Innovative Solutions and Support for Avidyne to integrate the Avio package.

While they claim to be partnering with Honeywell, Chelton, Garmin and others, my read is these companies have been selected as equipment suppliers. And while they would likely supply technical support for their equipment, it is not likely they will be investing much time or money to ensure the success of Avio.

It will be up to Eclipse and IS&S to integrate the systems to achieve the Avio expectations and pursue certification compliance with the FAA.

IS&S is a listed company and their financials are available on the web:

http://finance.yahoo.com/q/is?s=issc


Here is a quick summary:

GROSS SALES:

FY Ending

09-04 $46,100m
09-05 $63,264m
09-06 $16,722m

1Q Ending

12-06 $3,429m

OPERATING INCOME

FY Ending

09-04 $18,058m
09-05 $27,419m
09-06 ($8,523m) LOSS

1Q Ending

12-06 ($2,989m) LOSS

Draw your own conclusions!



Monday, March 05, 2007

Avio NG


Eclipse Aviation Partners with World-Class Suppliers to Deliver Next-Generation Avio Total Aircraft Integration System.

VLJ leader and established avionics suppliers team up to advance the revolutionary Eclipse 500.

ALBUQUERQUE, NM — March 5, 2007 — Eclipse Aviation, manufacturer of the world’s first very light jet (VLJ), and leading avionics suppliers Innovative Solutions & Support, Inc. (IS&S), Chelton Flight Systems, Garmin International, Honeywell, PS Engineering, Inc., today announced a partnership to produce “Avio NG,” the next-generation Avio system for the Eclipse 500.

Avio NG, an improved version of the Eclipse 500’s Avio Total Aircraft Integration system, has been in development for many months and is scheduled for production and delivery this summer. In keeping with a customer-centric focus, Eclipse will retrofit all Eclipse 500 aircraft with Avio NG by the end of 2007, ensuring a homogeneous Eclipse 500 fleet.

Avio NG delivers significant enhancements providing next generation digital avionics with demonstrated airline reliability and systems capability unparalleled in the very light jet segment. These enhancements include:

- Improved reliability achieved through:

- EFIS software that has been similarly deployed as level A software

- Higher Mean Time Between Failure (MTBF) rates for Primary Flight Display (PFD) and Multi-function Display (MFD) hardware

- Use of hardware systems that have been used primarily in Part 25 airplanes

- Improved systems architecture and design

- 768 x 1024 resolution PFD displays and 1440 x 900 resolution MFD display

- Enhanced digital audio and Communication Navigation System (CNS) functionality

- Improved growth capability for future “next generation” avionics functionality

We are excited to partner with such highly-reputable avionics companies by our side,” said Vern Raburn, president and CEO of Eclipse Aviation. “These suppliers have proven to be great partners to premier companies in almost every segment of aviation. Their established track records and superior capabilities will allow us to provide our customers with the Avio we always promised. We are looking forward to a long and successful relationship with each company.”

The proven, air transport-quality components provided by these suppliers will enable Eclipse Aviation to deliver on its promise to provide unmatched avionics functionality that significantly reduces pilot workload by simplifying tasks, generating useful information, managing systems and assisting with troubleshooting. Changes to the Avio user interface will be minimal, providing customers, pilots and mechanics with a seamless transition that will require little to no new training.

Eclipse Aviation will continue to serve as the systems integrator for the overall Avio NG system, but has employed a best-of-breed strategy for the Avio NG partners. Each supplier has deep expertise in the specific Eclipse 500 component they will provide.

Replacing the Avidyne displays, IS&S will provide hardware and select software for the Eclipse 500 PFDs and MFD for Avio NG.

IS&S is a high-performance international avionics supplier to civil, military, business and commercial markets. Prior major contracts awarded to IS&S have included the flat panel display systems for the Boeing B737, B757, B747 and B767; legacy Cessna Citation aircraft; and the Pilatus PC-12.

IS&S chairman and CEO Geoffrey Hedrick stated “IS&S is honored to be part of the revolutionary Eclipse 500 program. We look forward to delivering reliable and cost effective displays to Eclipse Aviation, allowing the Avio Total Aircraft Integration concept to become a reality on the Eclipse 500.”

Additional new suppliers for Avio NG are:

Chelton Flight Systems – Avio NG will also include a flight management system (FMS) provided by Chelton Flight Systems. This FMS has been proven in multiple aircraft installations starting more than 6 years ago and now has flight guidance algorithms for all of the ARINC 424 published path segments. The core of the FMS has been written and certified to level A standards in prior releases. The guidance functionality provided includes GPS-based lateral aircraft control, along with vertical navigation (VNAV). The Chelton FMS will be integrated into Avio NG, presenting the pilot with a consistent user interface. This full-featured RTCA/DO-229C capable flight management system includes capability to create, save, store, recall, reverse, and edit flight plans by waypoint or airway, the user will be able to create custom waypoints, add or delete waypoints from an active route, specify parallel track operation, and more.

Garmin International – Dual remote mounted Mode S Enhanced Surveillance transponders are provided by Garmin’s GTX 33 and GTX 33D. These IFR-certified, Level 2, solid-state Mode S transponders offer expanded capability including optional diversity capability.

Honeywell – Avio NG uses the new Honeywell Primus Apex KTR 2280 Multi Mode Digital Radios (MMDR), consisting of digital VHF Navigation receivers (VOR, LOC, GS), and an optional ADF receiver. Each MMDR includes one transmitter and six receivers, capable of 8.33/25 kHz channel spacing operation and simultaneous monitoring of two VHF communication frequencies. The KTR 2280 is seamlessly integrated into Avio NG, providing users with radio management capability through the PFDs and MFD. Honeywell also provides safety sensors for Avio NG including the industry standard RDR 2000 Weather Radar System and the optional KGP 560 Terrain Awareness System (TAWS).

PS Engineering – The digitally controlled audio system for Avio NG is provided using PS Engineering’s PMA500 remote audio control system. The PMA500 interfaces with Avio NG for radio and navigation audio selection, intercom and mode control, and has an integrated marker beacon receiver. The audio control panel includes split transmit capability, hi-fi stereo in-flight entertainment inputs, and IntelliVOX®, a patented squelch protocol that completely eliminates manual intercom squelch, adjusting dynamically to cockpit sound conditions.

About Avio NG

Designed by Eclipse Aviation exclusively for the Eclipse 500, Avio NG provides Total Aircraft Integration through integral, redundant computer systems and advanced data and power distribution systems. Avio NG applies integration technology to the entire aircraft, including avionics, engine operation, fuel system, flaps, landing gear, cabin pressure and temperature. The cockpit features two PFDs and one MFD, which are controlled by selection keys and knobs on the displays or by a keyboard at the pilot position. The PFD and MFD provide the pilot with high-resolution display of all flight parameters, engine and system performance data, and total system control.

Thanks to hotdog for alerting us to what is probably the most important announcement by Eclipse since the engine change.

FSBR

The FAA has issued their Flight Standardization Board Report for the Eclipse. A copy of the report is on the web:

http://www.opspecs.com/AFSData/FSBRs/Draft/EA-500%20FSB%20draft/

Here are some of the noteworthy aspects:

1. Not Part 135 Certified.

2. No single pilot ops with auto pilot inop, mic inop or remote ID inop.

3. Plane has no functioning DME, therefore no RVSM. This limitation was first reported on this blog and disputed by some.

4. No credit for any other jet time as it applies to the training.

5. Feds have mandated 12 month recurrent training, this is normally a function of the underwriter.

6. SRM and Flight Skills Assessment has to be done by United and MAY be conducted by EAC in the future. What happens with the United fall out??

7. United Airlines "Shrinks" have to evaluate all the applicants after completion of a pysco ( Myers-Briggs Type Indicator Test) test!! Again, now that United has gone, what now??

8. The SRM test MUST include a Boeing Simulator test, again, what now with United gone?

9. Training in the L-39 is no longer optional!!

10. All enrollees must have a twin rating.

11. ALL Pilots will be subject to the mentoring program, this is MANDATORY!

12. The FSB went out to EAC in September but"due to aircraft problems" they adjourned until Oct. This with the high utilization jet that will run with the Boeings?? The problems caused the FSB to adjourn for 2 months!!

13. The FSB was only completed on Jan 26th.

14. Cockpit and systems training was completed in an aircraft because there is no CPT!! This after years of waiting.

15. This is part of the AFM " EAC has included a limitation in Section 2 of the EA-500 AFM and on the type certificate data sheet which states, "All pilots operating the Eclipse EA-500 must be trained and qualified in accordance with the FAA Accepted/Approved Eclipse Aviation training program or equivalent FAA Approved training program". Meaning that training is required to fly the plane, not a bad idea, but never seen before in an AFM.

16. The FAA have recommended a minimum of 16 hours in aircraft training. This conclusion was based on the training of the FSB instructors, all of whom were experienced jet pilots with ATP's.

17. The FSB noted that altitude loss if the stick pusher activates can be significant.

18. In a descent they noted that airspeed cannot be maintained unless partial power is applied.

19. If a no flap landing is attempted during the training the FAA inspector or instructor "must be attentive to airspeed and the remaining runway" sounds like it might be a bit of a ground runner?

20. They do not recommend the pulling of any of the ECB's (circuit breakers) because of the integration of the electronics, this might result in the unwanted loss of other systems.

21. There can be no operation of the emergency gear activation, because this necessitates a maintenance event. Probably a nitrogen.

22. The FSB did an evaluation of SN-002, N126DJ and it was found that there are operational restrictions under 14CFR Part 91. It appears that these restrictions are a rate of turn indicator that needs to be added to the panel, the DME.

23. No TCAS in the plane yet!

24. No TAWS in the plane yet!

25. No FIKI.

26. Autopilot has limited functionality.

27. No Standby Attitude Instrument! They have spent $700m and think they are ready for prime time!

28. No functioning radar!

For those of you into comparisons, the Mustang FSBR is also on the web:

http://www.opspecs.com/AFSData/FSBRs/Draft/Mustang%20FSB/

Friday, March 02, 2007

The King Has Spoken, Two Letters From Vern Plus The One He Should Have Sent

To the postion holders:

It is natural for a new airplane company to experience growing pains as it transitions from development to a predictable production rate. However, our journey has introduced far more challenges than we anticipated. As a result, the 2007 Eclipse 500 production schedule has slipped. This is very disappointing to us, as I know it is to you.

Our sole focus is on delivering a safe, reliable, high-performance aircraft to you in the most expedient manner possible.

While there are challenges, which I have outlined below, we have taken aggressive action to eliminate the problems and are making excellent progress. The purpose of this letter is to fill you in on the specific obstacles we have encountered, and let you know what we are doing to remove them.

At a high level, our production issues relate to the manufacturing process, and are not founded in Eclipse 500 design flaws. At their core, these are issues with internal processes and staffing, although parts shortages and quality problems have absolutely contributed to the delay.

Following is a detailed summary of the issues, and the actions we have taken to resolve them.

Summary of Production Issues & Corrective Action

Resolution Functional Test Procedures

The initial Functional Test Procedures documentation used to verify the accurate function of airplane systems was not sufficient.

These documents have been completely re-written and approved by the FAA. They will be re-written once again to eliminate system testing duplication, which will dramatically reduce manufacturing cycle time.

Aft Wing Attach Fitting

A loose bushing was found inside the rear wing attach point. The design has been corrected to ensure stable bushing placement, and early aircraft have been reworked.

Manufacturing Workforce

Although we have been hiring many talented people in all areas of the company, we are still short staffed in manufacturing.

We have been aggressively hiring contract workers, most of whom want to become full-time employees. Tomorrow we will make an exciting announcement introducing our new vice president of manufacturing, who brings us extensive high-volume manufacturing expertise.

Parts Shortages

A number of suppliers experienced parts shortages as we kicked off production in 2006.When original suppliers fell short, we moved quickly to find new component sources.

Although our new suppliers had some start-up delays, these issues are now behind us.

Supplier Quality

Two suppliers have experienced significant quality issues that have caused production line rework and delays. Both of these suppliers are working through the root cause of these issues and taking corrective action. We have worked extensively with the suppliers and seen improvements.

Structural Requirements

Friction Stir Weld and thin skin construction of the Eclipse 500 fuselage requires different handling, assembly and repair than conventional structures.

Every situation requires engineering analysis and DER approval.We now have a deeper understanding of these structural requirements, and have developed a standard repair document that is significantly reducing the amountof time it takes to disposition manufacturing errors.

Component Failure Rates

We are seeing a higher failure rate on some components than anticipated. We have been evaluating the root cause of the failures and are making progress to quickly resolve the issues, but in the short term we have an adequate replacement stock for all of these components.

Production Rate

Achieving our target production rates requires innovation within every facet of the traditional aircraft manufacturing process.

We are employing four strategies to achieve high-rate production, which are:
1)bring in experienced automotive production leaders;
2) build-in-position through quality inspection buy-off;
3) leverage robotics in primary assembly to eliminate human error and reduce cycle time; and
4) conduct automated system testing early in the build process.

I would like to offer my overriding view of this situation.

We have had a series of unrelated problems ranging from supplier delays, to design glitches, to leadership oversights that have created something of a perfect storm in terms the start up of the production line. Collectively, these issues have significantly impacted our schedule, and challenged us more than ever before.

Of course, our critics are eager to triumphantly say "I told you so!" And perhaps they are right - for the near term. I have often told you that although Eclipse is not yet as good I believe we will eventually be at avoiding problems, I'll put our ability to solve tough problems up against that of any other individual or company.

Pundits have predicted our demise an almost incalculable number of times. Even in extreme situations such as the Williams International engine failure, we have prevailed. There is zero doubt in my mind that our current challenges will produce a stronger company, and a better product. We've done it before, and we will do it again.

One over arching commitment we have not, and will not, waver from is to provide you with the very best and the very safest aircraft possible.

Although the delay in deliveries is very frustrating to you (and to the entire team at Eclipse), I simply will not allow anything to compromise the quality of this jet or the safety of our customers.

Our focus now is on catching up, and proving to the FAA that we are ready to take the next step. While it is impossible to predict the exact timing for the receipt of our Production Certificate (PC), we will keep you informed of our progress.

It is very important to note that we are working a parallel path with the FAA to produce aircraft under the type certificate while simultaneously working toward PC. Prior to receiving PC, we can and will continue to deliver aircraft by working with theFAA to issue Eclipse 500 Certificate of Airworthiness.

As issues arise, we will continue to move as swiftly as possible to drive to solutions that serve your best interests. In the past, I have been unwilling to discuss problems until I could also provide you with solutions. While we will always strive for this ideal communication, I have come to realize that there simply will not always be an immediate resolution to every issue. Thus, I intend to share updates with you as often as possible, whether they highlight our successes or our challenges.

As always, I thank you for your patience, encouragement and belief in Eclipse.

Sincerely,

Vern Raburn
President & CEO
Eclipse Aviation


And some incentives to cough up that last 60% progress payment:


Over the past months, we have worked to overcome numerous challenges that have delayed the Eclipse 500 delivery schedule. Unanticipated obstacles are always frustrating, but these challenges are being resolved. The specific production issues we have encountered and the corrective actions we have taken to resolve them were detailed in our most recent customer communication, which I hope you have had time to review.

As we remove these hurdles and move forward, our team is aggressively working to meet or exceed our delivery schedule for customer aircraft. Below is the updated aircraft delivery schedule for 2007:

Q1 12
Q2 59
Q3 120
Q4 211

TOTAL 402

It is understandable that some customers have become concerned about our production delays. However, we remain highly confident that the structure is in place (manpower, machinery and methods) to effectively finalize our customer delivery schedule and make the following commitments to you:

Interest on your deposit

If Eclipse is late in delivering your aircraft by thirty (30) days or more, we will pay you 0.5% per month simple interest on your sixty percent (60%) deposit with interest commencing on the 31st day after the end of your scheduled delivery month as defined in your Purchase Agreement (Exhibit 2).

Additionally, we will waive any further CPI-W price adjustment that would have normally accrued from the scheduled delivery date as defined in Exhibit 2 of your Purchase Agreement to the ultimate delivery date.

Additional compensation

In addition to the 0.5% monthly simple interest payment, you may also choose one of the following additional compensations to be activated if we are late in delivering your aircraft by the number of days indicated below, after the end of your scheduled delivery month as defined in your Purchase Agreement (Exhibit 2):

1. A discount of fifteen (15) percent against your pre-paid JetComplete subscription if the delivery is late by 45 days or more. This is only available if you pre-pay for JetComplete and is not applicable to Pratt & Whitney Canada supplied services; or
2. Eclipse will pay the cost of the jet fuel consumed by your aircraft during Eclipse provided pilot training if the delivery is late by 45 days or more; or
3. One free additional pilot type rating (involving an Eclipse simulator, not in an aircraft) for a 2nd pilot if the delivery is late by 90 days or more.

To qualify for any of the compensation described above, you simply need to finalize your Purchase Agreement, including options and color selections, and bring your pre-delivery deposit to sixty percent (60%) as described in the Deposit Agreement and Purchase Agreement.

We know you are looking forward to receiving your Eclipse 500, and we are equally eager to deliver your aircraft. We hope these commitments communicate our deep dedication to move beyond our recent challenges, and continue to build a productive, long-term relationship with you. I am confident you will be exceptionally pleased when you take delivery of your Eclipse 500, and especially proud to own and fly it.

Sincerely,

Vern Raburn

And a special thanks to Bambazonke for sharing this information.


ColdWetMackarelofReality drafted the letter Vern should have sent...

To all Eclipse Stakeholders (employees, depositors, vendors, Directors)

Effective today, March 1, 2007 I am resigning my position as President and CEO of Eclipse Aviation. As with my previous endeavors such as Slate and Lotus Development, the near collapse of this venture indicates that it is once again time for me to take my substantial ego and grand vision and to relinquish the daily control to someone who has the ability to execute.

I leave behind a team of mostly fantastic individuals who I have repeatedly blamed for failures that honestly originated from my own corner office overlooking the flight line.

As President and CEO, the responsibility for these problems ultimately resides with me. I would like to take this opportunity to apologize to all of the employees current and former, to whom I was disrespectful. I mistook my bully leadership style as being effective, because after a while I no longer heard all the concerns you were all trying to share.

I would also like to apologize to our many former vendors such as DeVore, BAe, Williams, Avidyne, and more. It was not right of me to condemn you in public for our lack of specification requirements, and our continually changing design requirements.

I personally grossly misunderestimated the difficulty in building a new company, raising capital, designing and certifying an aircraft, and managing this effort in a way that would create a company culture we could all be proud of.

I alone created a culture of blamestorming that led to the loss of some truly talented individuals, and the departure of some dedicated and capable vendors. Hopefully, the new CEO will be someone who can foster a culture of open exchange and respect that can focus on safety first rather than paying lipservice to it.

I have learned that the old axiom is indeed true - to make a small fortune in aviation, start with a big one.

My last act as President and CEO will be to order that we will not request nor will we accept any new order deposit or progress payment.

Knowing we are a minimum of 12 months away from being able to deliver an aircraft that even approaches the capabilities we promised so many years ago, we simply cannot in good conscience accept your money and then use it to pay our bloated executive staff or the currently unnecessary mass of manufacturing personnel we needlessly added for the purpose of keeping the illusion going.

Day to day operation of the company will fall to Peg Bilson, our COO until such time as the Board of Directors can identify and hire as person with the skills and experience to lead the tru, final phase of development of this project.

Along with myself, I have a few other staffing changes to announce: Ken Harness will leave his position as VP Engineering to lead the development and productization of our Phostrex fire extinguishing product. Senior VP and Fellow Don Burtis is announcing he will leave Eclipse to pursue other interests. VP of HR Tina Rulo will also be leaving to manage her own consulting firm.

We will also be replacing our incoming VP of Manufacturing from Ford, because we finally realized we need someone with a verifiable aerospace pedigree to help us to achieve our Production Certificate while building conforming and well finished airplanes.

Don't cry for me Albuquerque.

Vern Raburn
Guy-who-believed-his-own-rhetoric and refused-to-listen-to-people-who-actually-knew-what-they-were-doing.