Friday, January 11, 2008

FIKI Certification - A Recap

The blog's resident statistician and historian, FlightCenter compiled the following background on the dates Eclipse had scheduled for certification to provide for Flight Into Known Icing conditions:


There have been a number of discussions regarding the expectations Eclipse set for itself in terms of delivering FIKI.

Here is a recap of their FIKI commitments.

In May of 2000, when Eclipse accepted deposits for the first 160 aircraft, FIKI was expected to be included upon initial TC of the aircraft, which at that time was scheduled for Q2 2004.

In February 2003, Eclipse sent a letter resetting expectations after the Williams engine change. The aircraft specifications as detailed in that letter included: 375 kts, 1,280nm range, 2,250 lb. useful load, 26 cubic ft baggage space, full IFR, FMS, Dual GPS, IFR enroute and approach certified, FIKI, 3 axis autopilot and autothrottle. Certification now expected Q2 2006.

In June of 2006, customers received another letter. At that time, Vern promised that Type Certification was only a few weeks away and FIKI was promised by the end of 2006. At that time, expectations were set that the only change required for FIKI would be a delta to the AFM.

That letter included an Eclipse 500 Equipment Availability addendum that set expectations that aircraft delivered after Nov 2006 would be certified with full IFR, FMS, Dual GPS, IFR enroute and approach certified, FIKI, 3 axis autopilot, color radar, and Part 135 Package. Expectations were set that autothrottle, Int’l package, Stormscope, Skywatch, TAWS Class B and radar altimeter would all be retrofittable and available starting March of 2007.

In June of 2007, Eclipse modified the FIKI certification expectations to Dec 2007.

In Sep of 2007, Eclipse modified the FIKI certification expectations to early 2008 and informed customers that FIKI would require aircraft level retrofits for aircraft in the field.

The current commitment from Eclipse is that FIKI will be certified in a few months and that retrofits will be completed within the next twelve months.

FIKI Commit -- Delay

Q2 2004 -- 4 Years for cert + 1 year for retrofit
Q2 2006 -- 2 Years for cert + 1 year for retrofit
Dec 2006 -- 1 ¼ Years for cert + 1 year for retrofit
Dec 2007 -- ¼ Year for cert + 1 year for retrofit
Early 2008 -- TBD

Flightcenter added - The reason this blog exists is because Eclipse has historically set high expectations for themselves, but continues to miss the expectations they've set for themselves by wide margins.

255 comments:

1 – 200 of 255   Newer›   Newest»
Stan Blankenship said...

bob said...

The incoming cash that EAC is announcing on Monday is not investor money and is not from a company looking to buy them. Any guesses on this one?

ColdWetMackarelofReality said...

Euro PayDay Loan, at some astronomical interest rate?

Money laundering scheme for Russian mafia?

Since Vern seems to be an afficianado of 70's and 80's trivia (e.g., stealing Tony Fox's FoxJet business plan) he may think he has figured out how to get the money and skip the DeLorean indictment.

Could be some grandiose euro-dealership scheme, prepaying for a series of jets at today's prices, with the ability to sell at a profit some day in the future. Makes as much sense as anything else in regards to this CF.

JetProp Jockey said...

That leaves depositors by upping their deposit or taxpayers.

Can't think of any other sources unless you are not considering debt of some sort (possibly taxpayer backed) as an investment.

flyger said...

bob said...

The incoming cash that EAC is announcing on Monday is not investor money and is not from a company looking to buy them. Any guesses on this one?

I know you said no company, but the timing of this article is suggestive:

http://www.aero-news.net/news/commair.cfm?ContentBlockID=0bdda2d8-9e6c-4f4a-a7ea-f477e578053c

Kind of fits if you think about the TBM line EADS builds already.

bill e. goat said...

Bob,
I'm not sure if you mean no NEW investors. I'd bet the money behind it is Al Mann, that's my theory on why they've stayed in business. Somebody sold Al on VLJ's being to aviation what microprocessors were to electronics, or what the combination of PC's and Microsoft were to the IT industry (hence the decision to build both hardware- airframes- and software -AvioNG in house).

Other than that, the only thing I could think of is a foreign goverment that similarly wants to "buy in" to aerospace, regardless of the operating losses.

airtaximan said...

1- sold/licensed the manufacturing rights or distribution rights for some country or region, like China

2- partnered to provide the plane as equipment within a structured new business plan or model

3- partnered with an "airline"

4- received money as part of aircraft financing deals to owners - access fee

5- government/military contract

there are all kinds of whacky possibilities

bill e. goat said...

ATM,
Training aircraft would be a good spinoff- I think someone posted the wing is good for 11-12 G's. Put a slim tandem cockpit on it, and you have a nice subsonic trainer.

I think Vern has ranted about not taking government money (ahem, never mind NASA's questionable involvement- after their demonstrated ineptitude in managing the GAPS program, I can see why).

Seems a little contradictory, but I think it would make a nice airplane (and a better project than the ECJ, IMHO).

I think EADS would rather use the 10 foot pole to beat Vern, rather than touch Eclipse with it.

CWMOR,
Maybe- Euro PayDay ! :)

airtaximan said...

Bill-e:

I went back and read some posts... and something about an "aviation related" company might provide funds...

EADS is getting in bed with Epic, I thought.

There are many possibilities... including Hampson - as part of the settlement??? Kidding, sorta.

Aviation-related company? could be many types of companies. Insurance, finance... airline, FBO, supplier -

Maybe someone bought a fleet "sold" for the same scheme as the midnight special.

Someon bought 100 planes @$1.25"guaranteed" because they ponied up $650,000 per plane... and since its a European company, this might explain the recent "promise" to give european planes 50% of the retrofit attention.

I can almost see Vern: "we made you all the same offer - some took it, others did not take it.. it was a fair deal for everyone".

Could be for training, rent a plane... airline type operations, new air taxi service... lots of "whacky" possibilities.

The there planes are CHEAP in Euros nowadays.

Rampant speculation. Whatever it is, its a $100M rabbit...

Applause for Vern (as he steps aside)...

ColdWetMackarelofReality said...

It does beg a question or two.

Supposedly there are only 12 European destined planes right now yet John R. sez he will dedicate 50% of service bay mod capacity to those 12 planes because "the Europeans can't use the planes with the mods".

Hey John, newsflash - NOBODY CAN REALLY USE THE PLANES UNTIL THEY ARE FINISHED, NOBODY. Not the 12 Euro-buyers, nor the 80 or 90 Domestic customers.

ETIRC would be about $100-120M if they went all in on their fleet, maybe more if Eclipse had any parts and logistics provisioning ideas (all the cool OEM's are doing it).

But pre-selling 100 or even 300 planes does not give Eclipse the ability to make those planes AND pocket any money.

Long term financing sounds like debt to me, how could you argue there is any equity with a previous $1.2-1.5B gone and nothing of significance to show for it?

With yet another vaporware delivery schedule and the history of press releases announcing the record breaking 'certification' of 104 planes in 'just a year' (plus two) Vern could surely spin a yarn good enough to con another person or group out of another couple hundred million - at least assuming that person or group was sequestered away from this site.

If significant changes in leadership are not among the costs of this new money it will simply be more good money after bad.

Euro PayDay Loan, at 20% APR (or worse), with a mandatory change in leadership and control - anything else just prolongs the inevitable.

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

OK, I think I KNOW what's really going on regarding this financing scheme.

I think its a win-win-win...

Diamond placed the "non-refundable" deposit money out of escrow for 150 Eclipse 500's.

Stick with me, here...

Their customers will not get eclipse 500s instead of Djets, for $1.35 million a pop.

The Diamond schedule is no longer an issue for anyone.

Diamond makes $100k/plane or so.

Eclipse gets to live another few months.

takers?

Plumer said...

Guys I enjoy your discussion. Here is one topic I want to bring to your experience: Flying Overloaded. As we all know (I am flying 07 Meridian overloaded all the time) to get the mission I need. What about flying an overloaded jet like Eclipse? Can you still get the low altitude performance you get with TP? And get the same distances? Stall speeds overloaded etc.?

On the other had, I am really disappointed with ALL of the available VL jets. (or future available) With a range of 1000nm, In the place I am flying that is not really a solution I cannot get from Vilnius to Milan without an fuel stop. My fiends are operating Beach Premier1, can never go to London w/o fuel stop. Now try to explain that to a customer, “we kind of need to make a stop, from FL 410 in Germany some place, to buy expensive fuel 2Euro, a Liter, to continue, cause there is 70kts north head wind.. Before departure you get a slot, on some small airfield. That sucks. It takes 2hrs to get back to FL 410 if all goes smoothly. Now this rich guy is pist of , and asking questions. We learn to smile, I guess in US the distances are much bigger.

bob said...

Airtaximan suggested:

1- sold/licensed the manufacturing rights or distribution rights for some country or region, like China

Airtaximan an nailed it based on my latest digging ewfforts.

sparky said...

The incoming cash that EAC is announcing on Monday is not investor money and is not from a company looking to buy them. Any guesses on this one?

2700 confirmed orders and options on the conjet?

baron95 said...

From Flightglobal article... "Aircraft number 28, which was sold on the secondary market to Evgeniy Chervonenko, governor of the Zaporozhiy region state administration in the Ukraine, is scheduled to be completed around 8 February, 28 days after the work started. The aircraft is taking on the role as the validation and verification ship for a service bulletin covering the work".

Just for fun, me thinks that Vern did not dare to mess up with the Russian/Ukranian boys/mafia and is rushing to get this guy's plane pronto.

And just for fun, me thinks that the same Russian/Ukranian boys have some spare bucks that they need to park somewhere outside Russia/Ukraine.

Could those be the investors? Vern, you get my plane done and I'll put the money up for you. You get to keep your kneecaps and a piece of your company. I get to dryclean a few rubbles.

On a more serious note, it would be *GREAT* if it were EADS oe even BAE. The GA marketplace, which has been totally dominated by semi-dead american companies, needs a firm dose of well funded European competition.

baron95 said...

Plumer said ... As we all know (I am flying 07 Meridian overloaded all the time)

First of all, I didn't know that. Second, I am not sure I want to know that. Why would you come on a public forum and declare that you violate aviation regulations "all the time"?

Unless you operate in Alaska (where the FAA allows operation up to 10% above MTOW under certain circumstances) or another like localle, you are showing complete disregard for aviation rules and aviation safety.

You are a test pilot. And if you *NEED* to ask the effects of overload operation on an aircraft, you are obviously dangerously missinformed.

I don't mean to be disrespectufl or to get on your case, but for crying out loud mate. Stop the practice or do some research. Do you really expect to get technical answers here? Do you want validation for your practices?

I sincerely hope you don't end up in a *Plume* of smoke somewhere in Europe.

I'll just mention one thing to you that may make you reconsider. If you operate your Meridian overloaded, you are introducing bending moments on the wings and wing/fuselage attach points that exceed the design/test points. Every time you hit a gust, turbulence, pull any meaningful Gs, etc, you are risking overstressing the airframe. The Malibu/Meridian is not known for wing and wing/airframe attach strenght. Note that the Meridian has the slowest Vmo of *ANY* pressurized turboprop - what is it 176 KTS?

What happens if you hit CAT while overloaded? What happens if you hit turbulence between layers right after takeoff? What happens if fly through a building embeded cumulus cloud and get a shear jolt.

Have you also been operating the Meridian faster than Vmo?

I know you will argue that there are margins. To that I say, and planes (including the Malibu/Meridian airframe) have used all those margins and broken up in flight without being overloaded.

Don't shrink your margins even further. Put your passengers on a diet, pack light, remove 2 unused seats, leave some fuel behind.

*end of unsolicited advice*

Have safe travels.

ColdWetMackarelofReality said...

The letter Bonder from Eclipse should have sent:

Dear Eclipse Supplier,

Over the past few months, Eclipse has demonstrated measured failures and sustained inconsistencies in regards to achieving our delivery ramp, due in large part to the implementation of the Eclipse Production System. In 2007, Eclipse certified and delivered the first Avio-NG jet (but not really delivered, as the customer has not taken receipt of this jet as EXPLICITLY stated elsewhere). A total of 104 E500s were pencil-whipped of which 98 were forced onto long suffering customers.

Currently, AC-142 has started the incompletion process.

Unfortunately, recent developments have made it obvious that risk exists to the delivery plan issued September, 2007. While externally some vendors have made significant progress, and a vast majority of our Suppliers have delivered as agreed, we have not performed to your expectations in terms of production rate and product quality. This has directly affected the planned airworthiness certificates in December and through the first quarter of 2008. Eclipse has no choice but to adjust the 2008 production ramp and plan to align with this our own expected performance.

We know you are extremely disappointed that we must take this action. Rest assured that we are attempting to work directly to blame at least one Supplier rather than to assure delivery and improve our ability to deliver. We have wasted every possible resource at our disposal and are confident that the widen the tolerance approach that we successfully deployed with our partners at Fuji Heavy Industry can be deployed with equal success elsewhere. That collaboration between Eclipse and Fuji teams yielded reduced quality requirements that are a testament to the collective frustration of Eclipse and Fuji and to the ineffectiveness of Integrated Team approach.

In light of the foregoing, production ramp for 2008-2009 has been revised and loaded into MRP with updated Schedule Agreements to start being issued today. This revised ramp has 2008 certifications at 455 and 2009 at 810 certifications (we cannot assure there will be enough customers for these planes so we are no longer focusing on then word 'delivery' except in relation to pizza, which the company will no longer be buying for lunch meetings). In 2008 we are targeting achieving a 1.0/day delivery rate in April (just like we had previously projected would occur in June of last year, then August of last year, the this month) and growing to 2.0/day by December insterad of our previous WAG's of Dec 2006, the September of '07, then April of '08.

As always, please review the SA's, and communicate any issues within (5) days. If any issues or concerns develop (other than how you will ever stand a snowball's chance in hell of ever recovering your NRE and tooling investments to meet our vaporware predictions), please contact your respective Buyer so we can mutually resolve any concerns or you can take us to court, I mean come on, what will you win.

We are grateful for the strong support and performance that our Suppliers have demonstrated in the past and are counting on your continued support (and patience) to meet and exceed these adjusted (revised, refired, reworked, replanned, modified) projections with the same success we have demonstrated for the last 10 years.

Thank you for your continued support of the Eclipse 500 program.

Sincerely,

Bill Bonder
Vice President, Supply Chain

Dated: January 4, 2008

gadfly said...

Once in a while, something happens on this website to make it all “worth while”.

“Plumer” shows real intelligence, looking for a balance in “what a plane can do” and the bottom line . . . actual accomplishments. Considering the time from “Point A to Z”, there are the real-world needs of a 300 ml bladder, (in this regard, we’re all created equal) and all that goes with human comfort. Now, “Plumer” spoke of flying “overloaded”, and I’m sure he had something else in mind, but until “Depends” is FAA certified, I’m sure that this item cannot be totally ignored.

And now, according the “baron95", we have the added concern of having our “landing gear” rearranged by the Russian Mafia.

Hey, folks . . . it don’t get no better than this!

gadfly

(Ah . . . come Monday! What in the world can “Vern” say, to top all that has gone before? . . . We await with acute anticipation . . . or did I forget “Preparation H”?)

ColdWetMackarelofReality said...

Eclipsiya Organizatsiya - kinda has a ring to it.

Russkaya Mafiya Eclipsiya.

Eclipse could be the modern incarnation of Brighton Beach's Potato Bag Gang.

gadfly said...

Yes, Cold Fish,

The “Russian Brotherhood” and/or the “Brighton Beach’s Potato Bag Gang” may “Eclipse” more than your landing gear . . . they’ll include your tail feathers, should you cross their flight-path.

gadfly

(And you will do well to save a few sacks of ‘taters, . . . minus a few “Ruples”.)

Black Dog said...

guys guys the cold wars over unless your flying an Eclipse 500!

gadfly said...

Dark Dog

What happens if you have a case of the “Russian Flu” halfway to “Stalling-grad” in your Eclipse . . . and have an urgent attack of the “Trotsky’s”?

Now I know the meaning of “Aeroflot”! . . . and “holding pattern”.

gadfly

(Ain’t edumacation wonderful?!)

airtaximan said...

A comment and a question

1- IF Vern pulled off some sort of $100M license deal with someone for this plane... my hats off to him. THIS will be a very wise move, especially if its China or Eastern Europe. I'm not sure its a first, but it takes a lot of talent to arrange such a deal. Quality and Branding, as well as safety become "transferred" to the licensor... almost no moatter what. They will need incredible oversight and QC (not their forte so far) in order to avoid najor problems, not the least of which is liability. Forget indemnification. So, I would commend this creative move, and HOPE it is enough money, and HOPE it works out well.
- it is in effect a transfer of IP, Jobs and dilutes the brand. But at this point, probably the right decision. Brings me to question....

2- is there some control over dissemination of technology related to small turbine engines, to countries like China? Does this apply to Pratt Canada?

- these are exciting times.
** right about Dayjets orders
** right about conjet
** right about the 105 planes delivered in 2007 (OK, only 104 claimed by Vern - good enough for us, right?
- maybe right about licensing deal
- maybe right about furniture moving around Monday

Man these haters really suck.

PS. I really hope they licensed the design/plane... this would be really cool.

Black Tulip said...

Plumer,

You may be operating your turboprop overweight but I would be very conscious of obeying maximum gross weight in flying a turbofan. You will find that second-stage climb performance and ceiling suffer dramatically with increased weight, especially on a hot day.

Regarding a fuel stop in North Central Europe, I recommend Luxembourg (ELLX) for good Jet-A pricing and a reasonable turnaround time. My wife and I stopped there this summer (in a turboprop). From memory, the price of fuel was less than half the price in Germany.

gadfly said...

airtaximan

On a serious note: There are only two things lacking . . . “design” and “plane”. Other than those two minor things, nothing else is lacking.

gadfly

(And, quite frankly, that’s about as serious as it gets!)

baron95 said...

AT Said... is there some control over dissemination of technology related to small turbine engines, to countries like China? Does this apply to Pratt Canada?


You are aware that PWC is a division of the American P&W, itself a division of United Technologies. So, if any technology transfer restrictions existed under US law they automatically apply to PWC engines.

There used to be a restriction on small turbofan export that used to apply to Williams for example, as they can be used to power cruise missiles. I don not know if this restriction is still in place, however, it would be trivial to get a waiver for most countries in Europe.

flyger said...

baron95 said...

The GA marketplace, which has been totally dominated by semi-dead american companies, needs a firm dose of well funded European competition.

I guess someone should tell Cessna they are half dead. They deliver more business jets to the GA market than all foreign manufacturers combined all over the world! How is it you think American companies are totally dominating and half dead at the same time?

baron95 said...

AT, I'm sorry I missed that you mentioned China in your post. That is a different matter. As of 2002, missile component technology was restricted to the following countries, under sections 742.5 and 744.3 of the US export control act: Bahrain, China (PRC), Egypt, India, Iran, Iraq, Israel, Jordan, North Korea, Kuwait, Lebanon, Libya, Macau, Oman, Pakistan, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and Yemen.

Missile Component Technology has been defined as including small turbofan engines, and interpreted to apply to:

(1) Lightweight turbojet engines that are small and fuel efficient;

(2) Lightweight turbofan engines that are small and fuel efficient;

(3) Lightweight turbocompound engines that are small and fuel efficient;

(4) Ramjet engines;

(5) Scramjet engines;

(6) Pulse jet engines;

(7) Combined cycle engines;

Now, I don't know to what extent these would be enforced. I guess it would change with the political winds.

gadfly said...

Where this if going I haven’t a clue . . . but a case in point. A few years back, Toshiba of Japan shared technology/machine code for 7-axis machining of submarine screws (propellers) with the Russians or Chinese . . . and Toshiba was “banned” from selling certain machines in the US for a time (they simply transferred/sold their machines under the “Mitsubishi” label, and continued “business as usual”). The method of machining silent “screws” for US submarines was lost, forever . . . but money trumps all. So, the threat of losing P&W technology to the Chinese probably has little threat of consequences . . . or Wal-Mart and Target would have gone out of business years ago.

gadfly

(On another subject, I sent an "e-mail" to Andrew Webb of the Albuquerque Journal, challenging him to be present at the Eclipse news conference, and ask some tough questions. We'll see . . . !)

airtaximan said...

gad,

Hence the BRILLIANCE of the license agreement.

man, gatta admit - it figgers, if its true!

amazing

baron95 said...

Flyger said... I guess someone should tell Cessna they are half dead.

I didn't say "is" I said have been. I should have further qualified my statements to restrict it to the subject being discussed, "Personal and light duty GA Aircraft". (my appologies).

To wit, Cessna, like all other personal/light duty US GA mannufacturer has been in limbo since the late the early 80s, including, multiple changes of ownership, production stoppage, etc.

Cessna, for example, stopped mannufacturing personal/light duty GA airplanes from 1985 to 1997. It was baught and sold by General Dynamics in 1985 because it was about to go bankrupt. It was again sold in 1992 to Textron.

So, even the best and most prolific personal/light duty US GA mannufacturer, has been on the brink, and had to basically abandon that market. It abandoned Piston production. It abandoned turboprop production. At one point it had only the Citation I and II ander production, almost went bankrupt and was bought/sold a few times. Nice, huh?

We don't need to talk about the convoluted stories of Beech, Piper, Mooney, Columbia, do we?

It is clear that the European companies like TBM, Pilatus, Diamond are making significant inroads in the personal/light duty GA market at the expense of Cessna, Piper, Beech, Mooney.

Now, lets bring the competition to light duty/personal jets with D-Jet (if that contraption ever gets redesigned correctly), TBM/Eclipse or BAE/Eclipse.

Competition is good.

gadfly said...

baron95, you said “. . . Now, I don't know to what extent these would be enforced. I guess it would change with the political winds.”
In today’s political climate, there will probably be a rush to hand over the technology, with a formal apology for not having it done sooner . . . and federal funding to make the transfer of technology faster in the future.
gadfly

bill e. goat said...

The US aviation industry was hurting during the 1980's, for sure.

But it was still kicking the world's butt by comparison.

Then, and now.

(Superior technology and craftsmanship? Well, a little maybe. Also some technolgy transfer from cutting-edge military programs, and common manufacturing lessons learned. Plus a US regulatory, tax, and business climate that was aviation-friendly, and lack of high speed rail alternatives. Plus, lots of GA airports).

So, although the relative merits of US aircraft are debatable, there really is no sound debate about marketplace power- the US companies have been the powerhouses since WW2.
--------------------------
And Gadfly,
You hit it the nail right on the head. I would rather see every single Eclipse employee out of a job tomorrow, than see anything sent to China. In the long run (uh, like about two months), it would be a better thing for the unemployed workers, and the US national interest (and I would add, the world's best interest).

Callous? No Way. Better to absorb 1500 unemployed workers today during an aviation boom, than 50,000 in five years when the business climate cools and Chinese production ramps up.
----------------------------
There isn't competition when Chinese manufacturers:

1) Have designs given to them
2) Have manufacturing technology given to them
3) Pay workers $1.00 per hour or less
4) Do not comply with environmental regulations
5) Do not comply with OSHA-equivilent regulations

It's a race to the bottom for the US workers, and a disgraceful, recreant sell-out of US technology.

Remember that old thing about capitalist selling the commies rope to be hung with? Well, even if they get a good price for the rope, it's still suicide.

bill e. goat said...

(And believe me, I'm plenty pissed about Cessna building the 162 in China. I know the small towns that built GA during the boom years. And how there are good workers and facilities available in the US, right now. I simply don't know how the people and the government are allowing this. At least it's not jet technology, but still it makes me sad and angry).

bill e. goat said...

And furthermore!

Want to talk about "competition"?
The Euros that are selling in the USA, are foreign manufacturers, taking advantage of a US business/tax/regulatory climate that the US taxpayer subsidizes (GA airports, ATC, tax breaks, etc).

"Competition"? Fine: Let's see how many European aircraft are sold in Europe, versus how many US aircraft are sold in the US.

Arrogant- I don't think so: I'm cognizant of, and very proud of, the substantial investment in aviation the US has made, directly and indirectly, over the DECADES.

And I'm plenty mad to see it eroded for short term profit, by business hacks and politicians.

Beedriver said...

I would be very careful about overloading the Meridan. the manuvering speed is 127 knots and it appears that a very high number of the Malibu family of airplane accidents involve inflight breakups. I lost a good friend's father when he hit turblence 20 miles from a thunderstorm. The TBM 700 and the PC 12 are designed to be much stronger and have not had a history of inflight breakups.

airtaximan said...

baron,

i guess th e dinos just know there are 200,000 planes in GA hangars and being flow, and not many more pilots. Obsolescence on such expensive (non commodity) items is a tough one. With the mods, and airworthiness regs... Yes, Cirrus has done a great job, but a drop in the bucket compared to the fleet of planes already in existence.

You better believe any decision to make a new inexpensive GA plane is a hard decision to make.

The results are probably going to be piss-poor, unless you find a real "value proposition", or you are a short-timer with a promoter's attitude.

Anyhow, you can buy a used POS GA prop plane, that will probably do you just fine... see Ken Meyer's "pimp my ride" crashed Cessna for example.

The planes are basically too GOOD to be easily and cost effectively replaced.

China, has a huge demand nowadays... no roads, no trains, a lot of factories in outlying areas... a landing strip is cheap compared with the alternatives.

I happen to agree with Gad and Bille, yet the rest of industry has gone to outsourcing - -the theory is the profits will be patiated to the US... and this is a rationale for "good".

I personally think its a shame... but this is the way the world is moving...and aerosapce is one of the last industries to catch on.

*** one day, we will read the ABQ plant is closed. Either soon due to bad business and no more investoment cash to keep the lights on... or one day a little later, when the demand for eclipse is able to be met by the Chinese factory, at 1/2 the price.

inevitable

flyger said...

baron95 said...

To wit, Cessna, like all other personal/light duty US GA mannufacturer has been in limbo since the late the early 80s,

Get real. Cessna hasn't been in "limbo" all these years. This weakness you are describing is a fabrication.

It was baught and sold by General Dynamics in 1985 because it was about to go bankrupt. It was again sold in 1992 to Textron.

Wow, such revisionist history. The joke around Cessna is that Cessna owns Textron, not the other way around, given Cessna's contribution to the corporate bottom line. You got any evidence for the "bankrupt" statement?

At one point it had only the Citation I and II ander production,

Which was the most successful business jet in history at the time. Cessna concentrated on the product that was making them money (which is quite unlike Eclipse!). None of the other US piston makers had the foresight and the courage to do that. This is why Cessna dominates the market, better product, at the right price, at the right time.

It is clear that the European companies like TBM, Pilatus, Diamond are making significant inroads in the personal/light duty GA market at the expense of Cessna, Piper, Beech, Mooney.

Do you know how few airplanes those guys sell? Are you delusional? "Significant inroads"? With $4M and higher single engine turboprops? These are "personal light airplanes" that cost more than a jet? Get real! What a fantasy!

Also, who has produced more single engine turboprops than anyone? Yup, Cessna!

baron95 said...

airtaximan said...
baron,

i guess th e dinos just know there are 200,000 planes in GA hangars and being flow, and not many more pilots.


I agree to an extent. But you can't deny the fact that Cirrus and Diamond alone sold more composite prop planes than Cessna, Beech, Piper, Mooney combined in 2007.

So, there is a merket IF you innovate.

Almost all the action on Light Sport Aircraft is from European designs.

The amount of disposable income in the US today is staggering compared to the 70s the heyday of GA. Why aren't Cessna, Beech, Piper, Mooney caputuring their fair share of that disposable income?

Even if you talk about the used GA fleet, when was the last time Lycoming or Continental certified a clean sheet engine design? We now have Pipers and Cessnas being re-engined with FADEC-controlled European Turbodiesels, and they are not even that good. There is a hunger for innovation.

Remember the days when every desirable plane in Trade-a-Plane had the tag line "Full King Silver Crown Stack"? Well, a little boating GPS company came along and completely displaced Honeywell/Bendix-King - that being Garmin. People are putting $50K Garmin stacks on $45K piper and skyhawk airframes.

If you innovate there is a market. Innovation comes from competition.

That is the only reason that I can pinch my nose from the Vern antics and wish that Eclipse and the ECJ succeed.

The best thing that Vern did with his $1.5B inverstors money was to give us the Mustang, the PWC610/615/617 series and the soon to be born Phenom 100 jungle VLJ.

Jake Pliskin said...

quote..."I agree to an extent. But you can't deny the fact that Cirrus and Diamond alone sold more composite prop planes than Cessna, Beech, Piper, Mooney combined in 2007"

Obviously cessnabeechpipermooney dont sell composite aircraft (and to my knowledge not all of these manufacturers publish sales and deliveries) so I assume you are stating cirrus and diamond outright outdelivered the competition. Actually through the first 3 quarters of 2007 (are 4th quarter #'s due soon?):
Cessna, Beech, Piper, Mooney = 833 (including Caravan)
Cirrus, Diamond = 817

you could move numbers around slightly by excluding the Caravans (54) or by including Columbia, Adam, and Maule. But there is not a huge disparity as you imply.

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

b95 said:

"Why aren't Cessna, Beech, Piper, Mooney caputuring their fair share of that disposable income?"

As a participant/observer in the GA market for more than 40 years, and marketing executive for much of my career, I believe that innovation is at the core of this issue, but not so much in the way that you suggest. The number of aircraft registered in the U.S. and the number of student starts have been in a slow decline for some time, even while disposable income has apparently increased sharply over the same period. The problem for light acft manufacturers is that the utility of light airplanes has not made much progress over three decades. The single engine Cessnas, Mooneys, Cirrus, etc. are basically expensive toys which do not offer safe, effective, easy travel for their owners. In other words, these airplanes are too difficult to fly safely in all but relatively benign weather conditions for all but those really dedicated to acquiring and maintaining the requiste knowledge, judgement, and skills. The vast majority of those that can afford to buy these products simply will not make the commitment required to use these airplanes safely. Until innovation results in an order of magnitude of dumbing down of essential pilot capability and a corresponding increase in utility, light GA aircraft will never see a sustainable market of more than a few thousand units per year. Flying an airplane will have to become mkuch closer to being as easy/safe as driving a car to stimulate anything like a "mass market." (About 20 million cars produced annually.)

WT

airtaximan said...

"People are putting $50K Garmin stacks on $45K piper and skyhawk airframes"

my point, illustrated better than me -thanks.

How much is a new airframe worth to the customer, in this market?

Spend $50k on avionics for your old prop plane, and voila - a modern GA prop plane.

Of course this is an "over simplification"... but not by that much.

Your comments regarding there being a market is true... but its a small in which developing and certifying a new plane is very expensive and takes a long time. Also, to make it truly innovative, and to push the "value" from a customer's perspective way beyound the upgraded avionics example, you have to take on some hefty technology and development risk.

The only ones who would do this, simly misunderstand the risk.

I am glad you are happy Vern could arrange to burn $2B or so... in order to take a stab at this risk.

Most of the innovation is gone, and the area he is left with delivers WHAT exactly to the customer - "all glass" cockpit? Who cares, really? No independent back ups? A system that says the door is closed when it is half open? A hard to learn new inteface?

FSW = bag of rivets... 5 lbs, perhaps?

Sorry... I don't see the value proposition. Maybe some awareness and hype.

It's kinda funny that the majors are not going head to head with him on all this innovation, and taking on the wider market for 2700planes (right!!!).

Know why? It depends on thouands of planes to get the cost down... which is nonesense. Without the rate, there's no cheap jet - and therefore the establishment was right - price the plane for the conventional market... its nothing new except it a little smaller and a little less expensive - REALLY.

Great disussion - thanks.

PS. a few months ago, I asked Ken to attack the issue of VALUE, with regards to AVIONG... real value delivered to the customer. I got a snarky reply with a "promise" to deliver a real answer soon... it never came. I would have thought that such a wonderful technological advancement, that took so much money and time to develop... would be VERY easy to describe from a value point of view. It's not.
-this plane is NOT easier to fly. Its not easier to learn to fly in it. Its not cheaper to learn to fly in it. Its not better in any way REALLY... especially not from a risk point of view, cost point of view or safety point of view.

Reminds me of the story of SLATE.

twospool said...

Airtaximan: "this plane is NOT easier to fly. Its not easier to learn to fly in it. Its not cheaper to learn to fly in it. Its not better in any way REALLY"

Do you have any basis to make ANY of those statements?

Have you flown the plane?

Have you learned to fly the plane?

I've flown it and found it much easier to fly than the turbine plane I'm flying now. You don't set 3 different altimeters every time the local setting changes. You don't worry about remembering altitudes and speeds (they're bugged for you including an automatically updated Vyse that adjusts for present configuration). You don't worry about forgetting to set something right for takeoff (the plane tells you if all is not right). You don't worry about overboosting the engines (the plane won't let you). There are a hundred little things that add up to ease of flying.

Don't you ever feel foolish telling everybody stuff that you know nothing about?

mouse said...

TwoSpool,

You better know how to do all of those things (in case the airplane systems fail) or you are dead.

All of those nice "Automatic" functions are awesome when they work, but the pilot has to know how to doit all without those "things" working. No wtry and manually work everything, virtually not possible from a workload/brainpower standpoint.

No room for complacency in aviation... yet.

Any plane is fun and easy to steer... ANY Plane... Now "piloting" the thing with confidence and knowlege is a whole different story.

Think DC-10 in Sioux City accident. A pilot without a true knowlege of his plane and flying skills would have crashed in seconds... the deeper knowlege and basic airmanship (not learned in 3 weeks) is what let a lot of people live, and got the plane to crash on the airport instead of in some farmers field in the middle of nowhere...

twospool said...

Mouse, the type rating course is rigorous; the checkride is rigorous. You can fly this plane after the first 20 minutes of training, but nobody gets their signoff after 20 minutes. The rest of the 2-/1/2 weeks is to learn the details and intricasies you're talking about. The pilots who pass the checkride know their plane very intimately.

airtaximan said...

"Don't you ever feel foolish telling everybody stuff that you know nothing about?"

I am glad you like those "hundreds of little things"... sort of makes my point.

Please explain the high failure rate of the Dayjet professional pilots?

Please explain the failures of the numerous world-class training partners?

Please explain the comments here regarding how tough it is to pass the check ride?

Twinspool, something tells me your comment about the "little things" is REALITY. Who cares, really? All the cost and wasted time, resulted in little things you like to call improvements. Some would say a system that does not know the bottom half of the door is open and says "OK Fly!" has issues that some "little things" which you like maek seem a little silly.

Easier to fly, for all this risk, time and development cost should mean visible tremendous improvements - probably not 100 little things.

IMHO

BTW, how many things have I gotten wrong for you to claim I know nothing? Your compadres say I have a direct line inside the company!

Enjoy your hundres of little things.

airtaximan said...

2spool,

so a rigorous "conventional" training program... for a much easier to fly plane.

still a high failure rate for an easier to fly plane.

What is your definition of "easier"? "same as" or "harder"?

Beedriver said...

My two bits,

I am a small businessmann that uses an airplane for business and pleasure. I have 3000 hrs total, 1500 twin time, I probably could afford a jet or TBM or epic if I wished.

I find that everytime I look at reducing my costs I come back to the super 700 aerostar. 250 knots, great single engine performance, flys like an expensive BMW Drives etc. It and its cousins 414 340 etc, are the lowest cost solutions that will get me there reliably.

Cirrus, Columbia, Mooney, Beach singles, piper singles are nice and cheap but do not have the dispatch relability. to reliably get where you need to go for business. you need at least 95% chance of being able to make every trip to qualify as business transportation. the singles with out pressurization,capability to climb to at least 20,000 ft twin relibality, and especially FIKI just do not do it for an on time traveling machine.

I feel that all the small singles are really only useful ( you can afford to be a day or two late 30% of the time)when you are retired or for weekend and recreational flying.

that seems that in this environment either you buy a used twin or jet or you must pay close to $2,000,000 with a much increased operating cost to achieve this mission.

This is what made me interested in the Eclipse. however after watching the dot com management philosophies of this company I dispair that the orrigional promises will ever be realized by this company.

Now, if I could only get 300 Hp continuous at 20,000 ft, diesels in the AEST (1 hr more range, 20 knots more speed) I would be very happy

airtaximan said...

Slate:
COMPUTE! ISSUE 139 / APRIL 1992 / PAGE 76

The return of the pen. (pen-based computers)(includes related articles and product listing)
by Scott Leibs, Robert Bixby


"You might wonder why a special pen operating system is necessary in light of the fact that GRiD and others have already demonstrated models that are DOS compatible. The new operating systems tap the power of the pen. Vern Raburn, chairman of Slate (a small Scottsdale, Arizona, startup that's focusing exclusively on pen-based software), says the major benefit of the new machines is their "pencentricity." He says Slate's litmus test for new software is simple: Is it as good as paper and pencil?...

... The main advantage of pen-based computers over other portables is their ability to recognize handwriting. Today's machines only read printed text, but the ability to read script is only a few years away. Observers say that it's vital if the machines are to fulfill their promise of feeling as natural to users as pen and paper...

Users of pen-based machines that employ the PenPoint operating system from GO spend about an hour to 90 minutes in training mode, during which the machine essentially gets to know the handwriting of its user. As Raburn says, "It becomes the most personal of computers." Experts predict that in a few years this process will happen online and will be invisible to the user."

There's a lot more on how "easy" this computer is to use... from a technical perspective and developer persoective, and also, how much the public wants it.

Problem is, no one bought them - there was a small niche market instead of a mass market, and the rest is history...

"...Raburn says that while the near-term market for pen-based portables is the business world, a much bigger market is just around the corner.... "This technology will refuel the industry with a whole set of new users."

EclipseOwner387 said...

beedriver,

I have been very pleased with the dispatch reliability of the Malibu/Mirage platform. 9Z - Don't you agree? With my 1985 Malibu I was flying all the time when the guy next door was fixing an engine issue on his piston twin. I like the platform so much I upgraded to a JetProp and it has been just great. Obviously not as stout as the TBM but if you slow down in turbulence and practice good airmanship it does the job quite nicely.

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

“It is clear that the European companies like TBM, Pilatus, Diamond are making significant inroads in the personal/light duty GA market at the expense of Cessna, Piper, Beech, Mooney”.

Well, after some research, I conclude that the Baron's assertion should be more correctly put as two issues:

a) European companies like TBM and Pilatus are making significant inroads in the light duty GA market at the expense of Cessna, Piper, Beech, Mooney.

b) “New” companies Diamond (and Columbia and Cirrus) are making significant inroads in the personal GA market at the expense of Cessna, Piper, Beech, Mooney”.

(Using GAMA 2007Q1-Q3 numbers for the following discussion)
GAMA Delivery Info

Part a) Shall we call it Light Duty GA, as a convenient delineation:

TBM: 29 units
Pilatus: 68 units
-vs-
Caravan 54 units
Meridian 34 units

Totals, “Euro's” = 97, “Dinosaurs” = 88. As Baron states, that's big-time market penetration.

And, I would suggest, this is the category Eclipse, Mustang, and Beech C90GT belongs:
Mustang 25 units
Eclipse 48 units
C90GT 13 units

Oops- that's an additional 86 units. Considering the Eclipse, Mustang, and C90GT are all just now “ramping up”, and will probably be FOUR to FIVE times these numbers in 2008, I'd say the European challenge is being addressed- big time. On the other hand, if it proposition is “disruptive” companies are challenging “dinosaurs”, well, I don't consider the TBM or Pilatus (or C90GT) very “disruptive”, and this race is sole between Eclipse and Cessna (and in a few years some others, but mostly US companies). I don't intend to be boorish about the American thing, and think Socata and Pilatus both make airplanes that are as good as US turboprops.

Part b) Personal GA
The three most “disruptive” (ahem) GA introductions have probably been the following:

“New” companies:
Cirrus (461 units)
Columbia (131 units)
Diamond (356 units)

“Dinosaurs”:
Cessna 172 (251 units)
Cessna 182 (174 units)
Cessna 206 ( 82 units)
Beech Bonanza (54 units)
Beech Baron (27 units)
Mooney (59 units)
Champion (50 units)
Maule (50 units)
Piper (132 units) (without Meridian)

The “old boys” are still making a good showing. These totals add up to “disruptive” = 948, “dinosaur”=819. I confess, I was a bit surprised by these totals. (These are slightly different than Jakes, probably we used a different sample period, but the ratios are about the same).

I do agree with Baron95's lament about innovation lagging, although I wouldn't put the “blame” on US GA manufacturers. They are in business to make a profit.

If one considers revenue,
Columbia $66M
Cirrus $214M
Diamond $139M

Cessna $2,699M (including jets)
HawkerBeech $1,390M (including jets)

So, it's sort of obvious why the “dinosaurs” don't worry about putting a lot of innovation into the lighter airplanes: there's not enough profit in it. Considering that Columbia recently went bust, Cirrus is rumored to have never made a profit, and Diamond is probably getting some Canadian subsidies, well, the point is, the real money is in the upper market- and the further up, the better.

It seems the single engine turboprops, and Eclipse, fit nicely into the gap between upper-end piston airplanes, and light jets. I'm just not sure how large that market is. Cessna has a really good marketing department, not just to defend existing products, but also to exploit new product opportunities. It is worth noting that perhaps their slowness in responding to Cirrus, Columbia, and Diamond, is essentially, they've “been there, done that”, several decades ago. And have literally tens of thousands of fielded products to show for it. New designs, okay: 162 on the low end, pretty exciting NGP coming out on the higher end. (But still, they've already got beaucoup 152/172/182/210's out there).

So, the "new kids" have nice ideas, and the Euros are stylish (nice shoes, too). But the "Dino's" have pretty much already been where the new players are trying to go. About 30 years ago. And have moved on to corporate jets.

bill e. goat said...

(And, revenues that are x10 to x20 higher)

WhyTech said...

b.e.g. said:

"So, it's sort of obvious why the “dinosaurs” don't worry about putting a lot of innovation into the lighter airplanes:"

It perhaps a chicken and egg situation. Lots more innovation of the right kind will drive a larger market, which should drive greater profitability. The problem is that what is needed is radical innovation to increase the utility of these acft, and right now, no one knows how to innovate in this way. The E-clips Virtual Copilot is, IMO, in a broad sense, an important, innovative half step forward, at least in concept. Unfortunately, they cant ecxcute worth a crap.

WT

Gunner said...

WT-
I'd agree regarding the usefulness of the virtual copilot concept. But only to a point.

Ultimately a single pilot aircraft has to be fairly manageable even when systems like autopilots fail. Certainly the Moller promise of automated invisible highways in the sky may someday render personal air travel safe for the masses. But I doubt many of us will be around that long.

In the meantime, the limiting factor to mass production (and the innovation investments necessary) will continue to be the number of people willing to invest the time resources into becoming competent and current pilots.

You make great points regarding the "utility" aspect of personal aircraft. But the fact of the matter is that not enough of the public is willing to put in the time required to access that utility, even if it existed today. And, when personal air travel becomes as mundane as an automobile commute, I suspect most of us bloggers will find another outlet for our passions.

Let's face it: few of us own planes because of the strict "utility".
Gunner

baron95 said...

Bill.e.Goat said... I do agree with Baron95's lament about innovation lagging, although I wouldn't put the “blame” on US GA manufacturers. They are in business to make a profit.

I agree. It is not a matter of putting blame on them. It is a business decision (retrenching to the high end), that is, at least, understandable.

Cessna knows full well how hard it is for a new design to succeed. They can sit on the sidelines, see Columbia develop the composite technology, spend the $$$ certifying the planes and then failing to produce them profitably. Then they move in, scoop them up, produce and support the product at a profit, because of experience and leveraging all their infrastructure.

I believe that will be the ultimate fate of Eclipse - be scooped up by an EADS or BAE, etc. Unless they can continue to raise capital for 2-3 more years while they learn to produce and support planes profitably.

But there is a risk to just sit there and watch like Cessna and Beech are doing. Every now and then, some one makes it (like perhaps Cirrus or Diamond) and they take 50% of the market overnight (10 years in avaition time). Or take 100% of the market, as is the case of Garmin.

wytech said... The E-clips Virtual Copilot is, IMO, in a broad sense, an important, innovative half step forward, at least in concept. Unfortunately, they cant ecxcute worth a crap.


Exactly right. The guys that know how to execute (Cessna, Beech), don't take the risk. The guys that take the risk (Eclipse, Columbia, Adams) don't know how to execute.

It is possible that if Eclipse had executed correctly, they'd done serious demage to the Beech (Baron, C90GTI), Cessna (mustang, CJ1+), Piper (Meridian, Malibu), etc...

In the end, competition is great. Amazon did not put B&N out of business, but it shook up B&N into significantly improving their stores.

John said...

Dayjet Week 15 utilization

Total flights are about 152 for 104 hours. Training loops -- Gainesville to Gainesville were 19 flights for 12 hours of the previous total.

Flight tally may indicate 9 active flight crews, with 4 or 5 additional in training.

CRAFT … HOURS … Flights
DJS150 … 13.6 … 16
DJS141 … 11.0 … 15
DJS145 … 8.3 … 12
DJS152 … 7.4 … 7
DJS146 … 7.2 … 11
DJS115 … 7.0 … 10
DJS153 … 7.0 … 11
DJS147 … 6.4 … 11
DJS142 … 6.4 … 10
DJS148 … 5.9 … 8
DJS156 … 4.1 … 5
DJS139 … 3.6 … 5
DJS109 … 2.8 … 6
DJS110 … 2.6 … 5
DJS119 … 2.2 … 3
DJS126 … 2.0 … 4
DJS132 … 1.9 … 3
DJS134 … 1.9 … 3
DJS130 … 1.7 … 3
DJS158 … 1.7 … 3
DJS131 … 0.0 … 1
Total … 104.5 … 152

airtaximan said...
This comment has been removed by the author.
Black Tulip said...

Eclipse is officially an underdog now and should be poised for greatness on Monday.

This month’s FLYING magazine has a dour piece on Eclipse Aviation under the heading ‘Very Late Jets’ and bestows a 2007 Editor’s Choice Award on the Cessna Mustang.

Let us anticipate:

The Faithful may argue the dinosaur press pays homage to a dinosaur company.

WhyTech said...

Gunner said:

"Let's face it: few of us own planes because of the strict "utility"."

Thats exactly my point: until the utility is there, it will be a few of us who own planes.


WT

airtaximan said...

the eclipse business model was:

1-get money based on selling technology

2-get the price down based on volume

Neither really came through.

They now have an under priced plane with low volume compared to the orders they need for volume production costs. This is because the value is not there.

There IS a huge market for this plane - but GUESS at what price? Its way below $1.5M...

In order to have demand such that you could produce a $1.5M jet, you need say 1,000 order per year or more - hence their plan of 3 per day for 10 years.

What price does THIS plane need to be in order to have this level of demand? This IS the value of the plane. Pick the price - that is what the market would bear in significant quantites for the rate to be commensurate with the cost/price.

Perhaps $1M?

What does this tell you about the value of the hundred little things AVIONG delivers?

Precisely.

I do not think any major aircraft manufacturer would buy Eclipse. Its a huge problem for anyone, and not one that can be fixed with experience. The plane cannot be sold for much more, that's for sure... or its a very limited niche, that has already been tapped with low low low introductory offers and discounts to pony up cash. Or fleet order pricing, IF you believe.

bill e. goat said...

Baron95,
"In the end, competition is great. Amazon did not put B&N out of business, but it shook up B&N into significantly improving their stores".

Indeed, B&N did improve, and BestBuy cleaned Circuit City's clock.

But...My favorite bookstore was Borders. Amazon bought them; I would argue this represents an anti-competitive "trust" situation. Competition is good, anti-competitive trust is bad.

An outstanding used book cooperative was bibliofind.com. Individual mom and pop bookstores listed inventory of used books- some truly killer deals there, for a few bucks. Good for buyers- great deals; good for mom and pop- moved inventory. Then, Amazon bought them- prices went up literally 10 fold, or more. Bad bad bad.

Regarding anti-competitive trusts, as well as outsourcing, I would argue these are NOT inevitable, but are (sadly typical) cases of corporate profiters manipulating public policy, and apathy of the public.

("Give'm a circus and bread"; well, we've had more than our share of Bozo's and clowns running things, and the bread's starting to run out).

Black Tulip said...

Bill E. Goat,

Excellent perspective on Bibliofind.com. I bought some of the great aviation books, first editions… WW I, the great inter-war classics, WW II, from them before they were swallowed by Amazon. As you suggested, “Buy It With One Click” made it simple but much more expensive.

airsafetyman said...

Wytech nailed it: "The single engine Cessnas, Mooneys, Cirrus, etc. are basically expensive toys which do not offer safe, effective, easy travel for their owners. In other words, these airplanes are too difficult to fly safely in all but relatively benign weather conditions for all but those really dedicated to acquiring and maintaining the requiste knowledge, judgement, and skills. The vast majority of those that can afford to buy these products simply will not make the commitment required to use these airplanes safely."

The Eclipse proposition promoted a senario where a rich owner/pilot could fly these things single- pilot under almost all conditions safely because of all the Pac-Man hocus-pocus avionics features. It was a lie from the beginning.

ColdWetMackarelofReality said...

Anyone who thinks that Hawker-Beechcraft and Cessna are just 'sitting around' is very sadly mistaken.

These companies have taken action based on their measurement of the threat and their own business plans. Unlike Eclipse, they are meeting their business plans, providing shareholder value and just as important, they are doing this profitably.

HBC specifically has come off of no less than 3 resource heavy 'from scratch' certifications, and has made marked improvements across its' entire product line in the same time it has taken Eclipse to partially develop one incomplete preemie jet - and all for less money combined than that spent on the Eclipse.

As for Cessna, they OWN the light jet market, and have also brought several new planes as well as a number of improvements to market during this same time.

Companies like Hawker-Beechcraft and Cessna have product roadmaps that are developed and prepared that stretch out into decades, that is why they are still around 90 years after they began, and after hundreds of thousands of deliveries of complete, functional aircraft.

Those roadmaps are based on intimately understanding the market that THEY created over the past 90 years. No smoke and mirror BS about instantly 'creating' markets like the high-tech rejects running Eclipse and DayJet - these companies understand what it takes, what the challenges are, what the requirements are, and they move intelligently. Name planes from these companies in the last 30 years that were commercial flops - you can't because they don't exist. Failures don't exist precisely because of the approach to new product development these companies practice.

Eclipse is an amateur surrounded by professionals and it shows with every press release, every petty attack on the 'dinosaurs' and every AD issued against the Eclipse.

Were Eclipse still a start-up some of the newbie mistakes might be forgiven, even the hubris of its' serial-failure CEO.

But Eclipse is not a start-up anymore - it is 10 years old and has taken twice as long and 4 times as much money as it should have taken to get to a complete aircraft, only Eclipse is not delivering complete functioning airaft, they are struggling to produce and force on their customers an incomplete preemie jet lacking basic functionality with a stack of IOU's and INOP placards.

The legacy of Eclipse remains nothing more than the disappointing effect of redefining a once proud industry with the stench of lowered expectations thar result from repeated failure.

mouse said...

And let us not forget that there is a dinosaur egg beginning to hatch, and they are taking aim on Cessna...

EMBRAER is putting a lot of very ggod talent, marketing and proven design and reliability into their business jet division.

Cessna's entry into the Chinese market may end up being they're saving grace into the future. The US does not need the 162, but the emerging asian markets sure do.

Look at the Airbus and Boeing aircraft construction and see who orders the new planes, and who is building the parts and pieces. They are virtually in exact/direct proportions...

Any aircraft below the $3M price tag is basically a "Hobby" aircraft. In the real working world of flying the cost of the airplane is a very small detail. The reality is the cost of operation and maintenance still is the determining factor. The price of jet fuel only affects the "Hobby" jets... the cost of fuel is simply passed along.

Dispatch reliability and support is everything.

Beedriver said...

I agree with the economic analysis for airplanes used a lot 500 hrs/yr or more.

However,

when you get to my level, airplanes used 100 to 200 hrs per year the initial cost becomes a big factor compared to operating/maintenance costs. This applies both to the personal use airplane and the small business, pressurized, FIKI, etc, transport.

that is also why companies that have airplanes not used very much like some charter companies flying 727s, etc will buy older technology as even though the operating cost is high, the total cost is lower because of low initial purchase cost.

Another observation,

The radical change required for light GA to become a major transportation technology is:

For small airplanes to be useful there needs to be a radical change in instrument flying to the point where the pilot programs in the route, and the airplane does it without any human manipulating the controls. in effect the only time the pilot may touch the controls is during take off and the last 100 ft before landing. That is the action most humans can do without extensive training.

If there is a true emergency, the computer will either be able to handle it or the parachute will be deployed together with the emergency locator beacon.

Future modern aircraft must progress to the point where the pilot never touches anything during the trip in order for the average person to utilize the technology.

Unfortunately this will take much of the fun out of flying for me.

eclipso said...

Just had a conversation with an "insider" in ABQ. Rumor has it the name Toyota is floating around out there. Could this be a Monday announcement?

ColdWetMackarelofReality said...

I am still betting Eastern European money, think Roel Pieper of ETIRC or similar. Reports were that Pieper was involved as the European 'dealer' in discussions between Eclipse and several Russian interests several years ago - you may recall translated headlines in foreign papers about the Eclipse being manufactured in Eastern Europe which were never effectively denied/countered by Eclipse.

Roel flies in the same circles that Vern and Iacobucci did in the tech world, he even heads an investment company that specializes in expansion, spinout and venture buyout financing in the tech field - he is the best candidate in my opinion. Favonius Investments.

As for the Japanese, odds are that Fuji already has the technology license for friction stir welding as part of the cost for their 'participation'. If it was not part of the actual contract you can bet a dollar to a doughnut that it has already been reverse engineered by FHI for use in other products - say Subaru cars or to be shared with other airframer clients.

All my opinion, your mileage may vary.

bob said...

Monday's word of the day may be "Russia".

eclipso said...

Just a guesstimate from my point from the floor people. Not anything to support it. I was just thinking...if enough people say I'm growing a tail, I HAVE to take a look

EclipseOwner387 said...

According to one of the aviation news sources - I am assuming they have been already briefed - Monday's announcement will be surprising and will assure Eclipse's viability. But that is all they would say (paraphrasing.)

I wil have to say the suspense is killing me!

;-)

ColdWetMackarelofReality said...

Eclipso, I have no inside info to go on, just a review of the past and the kind of behavior Eclipse repeatedly demonstrates.

With Pieper they can take Russian money, through his Dutch investment company, still say it is European (not Russian), continue on the dead horse of the tech play vs. manufacturing, and I could see maybe $200M that will not float them through the remainder of the learning curve, plus all the retrofits, plus achieving profitability - $200M is no more than a 6 month extenstion, assuming they can deliver at least another 100 planes and collect full payment for incomplete aircraft.

The rob Peter to pay Paul cashflow games will only last so long though, Chapter 11 is their best out, and they already have to know that - if they take in investment cash knowing they will be defaulting it is called fraud. All of the financial machinations MUST take place before they become a publicly traded company and subject to Sarbanes-Oxley or people go to prison.

ColdWetMackarelofReality said...

EO, what would you estimate to be necessary to 'assure' viability at Eclipse?

I believe money alone will not do it unless it is on the order of another half-billion dollars - unless there is a real change in leadership and responsibility at Eclipse.

Sounds too like it is debt not equity investment, they keep saying 'financing' IOW, loans. Could it be that the plan is to encumber the company to a favored lender, default, and then transform under that leadership?

It is a shame that their performance and behavior to-date leads to such prognostication - but I cannot comprehend any other possibilities at this point (10 years and $1.5B down the road).

bill e. goat said...

I'd go with Toyota tomorrow, based upon thinking about Honda vs Toyota rivalry. Toyota seems to be more market-oriented, whereas Honda does a LOT of pure R&D. The E-500 is already done with R&D (well, sort of), and it would serve as a marketplace "catch up" for Toyota (indeed, leap-frogging Honda).

Toyota has been doing some product development on their own twin-jet, but it would seem the E-500's FAA certification paperwork might be driving the switch. However, they're no slouches; from the pictures, it looks like they're already into canards, Ballistic Recovery Chutes, and a more robust version of Avio.
Toyota Twin Jet

eclipso said...

I agree. No matter how much money they get, until the upper management and arrogant engineers are replaced, the results will be the same. Once they get the Dell computers and F-100s flying, I will be first in line to pony up some cash. As long as they stay as they are, I'd stay far,far away. I just hate for the owners and the aviation folks on the floor

baron95 said...

I kept repeating that there is some real value at Eclipse.

1 - TC/PC (value $200M)
2 - 1,500 trained employees (value $30M)
3 - All the tax incentives from NM (value $20M)
4 - 100 planes that can only be serviced supported by Eclipse (value $25M over 10 years)
5 - Production Facilities and Tooling (Values $50M).
6 - Supplier contracts in place with term that are apparently very friendly to Eclipse (Value $10M).
7 - Hundreds of purchasing contracts with unilateral terms offering all the protections to Eclipse and none to the buyers (Value $100M).

On the other hand, Eclipse got funded primarily with Equity or convertible debt, so there may be very little if any straight debt in the company and not much liability.

So, my guess is that on Monday Eclipse will announce a partnership, where new money will be pumped in, most likely as convertible debt, in tranches based on achieving milestones.

The partner maybe an industrial concern (BAE, EADS) or a customer (European charter company), etc.

Either way, it appears that Eclipse will soldier on for at least another couple of years. Enough for them to finish the EA50 technology, upgrade the fleet and establish their achievable production and new sales number.

At the end of that period, all would be known about Eclipse:
A - Did they manage to finish the EA50 (and perhaps start on the ECJ)?
B - How many of the things are they producing every quarter?
C - How many of the things are they selling (new) every quarter.
D - What is their gross margin on the things (selling price minus COGS)?

With that info, anyone investor can make a firm determination if the business is sustainable or not.

The key milestones for any new business is:
1 - To sell, produce and ship the first product to first major customer. (in this case first EA50 to Day Jet).
2 - Sell, produce and ship the first product profitably to other customers.
3 - Design, sell, produce follow on products or services (in this case the ECJ).

Do all three and make a prifit and you have a company.

Eclipse clearly can't do 2 or 3 without more external $$$. So, if they get it on Monday and it is enough to do 2 and get them on the way to 3, it is big news. If it is just a little bit that doesn't even let them finish the plane it is just more agony.

mouse said...

The ConJet is a go, and has been a go for some time now. I recent departures are attributed to those who were left behind on this program...

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

EclipseOwner387 said...

According to one of the aviation news sources - I am assuming they have been already briefed - Monday's announcement will be surprising and will assure Eclipse's viability.

There is nothing that can be said Monday that will 100% assure Eclipse survives.

What news source said this? And why would Eclipse clue them in prematurely?

I wil have to say the suspense is killing me!

Is that the same as saying you don't believe it either?

bill e. goat said...

“At this press conference, Eclipse will update attendees on an important financing development, and discuss an exciting new opportunity to grow the Eclipse 500 market”.

Well, it's almost here, so speculation is more for fun rather than enlightenment. It seems Eclipse is a “deposit raking machine” more than an aircraft manufacturer. With this defacto business plan in place, it would seem a logical extension to both “financial development” and “growing the market” (in this case, the market of deposit raking), would be factory sanctioned fractionals. Figure they've already shaken down all the mulitple order buyers, and single order buyers. Now it's time to target the fraction-of-an-order buyers.

I don't see the BoD wanting to dilute their investments any more. I don't see any sane business wanting to buy Eclipse (except as a write-off expense for "buying in" to the market). I don't see Vern wanting to split “profits” (ahem) with the Chinese or anybody else. So, that leaves shaking down the guys who could buy a whole Columbia/Cessna, or Bonanza, or half or a third or quarter of an E-500. Some fancy geographic compatibility scheme (E-Harmony with 29 dimensions of blissful co-ownership), using supercomputers and ants and Russian new-age mathematicians or some such. Heck, if there are 2700 orders for single airplanes, there must be over 10K orders for quarter-shares! Think of all the deposits that can be scammed with this one!

(Believe it or not, I think this would have a better shot at success than “whole airplanes”; going quarters to eights or so might make this attractive).

baron95 said...

It is totally irrelevant if Eclipse can survive on their own.

After all, Mooney, Piper, Beech, Cessna, Lear, could not survive on their own - none of them could. All of them have been acquired multiple times and some have been in bankruptcy.

Do you guys forgot that even the mighty Cessna was aquired on the brink of Bankruptcy by GD in 1985 and then divested as underpoerforming to Textron in 1992?

Beech alone has had more names in the past decade than I can remember. Beech, Raytheon, Hawker Beechcraft.

Piper, Mooney, between them how many times in bankruptcy? I lost count.

Are there any Cessna, Piper, Mooney or Beech planes that has not been supported because of that?

No.

There are enough Eclipse EA50 in the field to insure a viable business just supporting them, making parts, upgrading, etc.

So, it is the natural state of affairs in GA - you certify your plane, strugle to be profitable producing it and get bought out. Happened to Lear. Happened to Columbia. Will likely happen to Eclipse.

I only hedge a bit because there seem to be a lot of investors ready to send truckloads of money to Vern - so there is tiny little chance he may keep his company a bit longer than Bill Lear or Lance Nighbouer (sp) did.

Lets see what Monday brings other than a major snowstorm to New England.

FreedomsJamtarts said...

Baron 95's take, with my rebuttal:

1 - TC/PC (value $200M)
Normally, a TC has significant value, but please expand on your reasoning to arrive at $200M for the EA50 TC/PC?

2 - 1,500 trained employees (value $30M)
This has value if you assume the product and order book has value. This is not something many critic take for granted. Many of these 1500 people are the managers who couldn't even plan the 2007 production as well as all of our WAG's.

3 - All the tax incentives from NM (value $20M)
I am not qualified to comment on this area.

4 - 100 planes that can only be serviced supported by Eclipse (value $25M over 10 years)
Against this protential cash flow, you have 104 sets of IOU's which are worth something like $400-600K each. If EA goes TU, the Pheonix would have to decide whether to honor those IOU's. If they do, they have $50M liability, if they won't they have any customers.

5 - Production Facilities and Tooling (Values $50M).
Anyone taking Eclipse out of Chapter 11 would have bigger issues (like the mountain of debt). I feel they'll go to liquidation. Have you ever been to a tooling auction? Good luck getting penny on the dollar for the that tooling in a liquidation.

6 - Supplier contracts in place with terms that are apparently very friendly to Eclipse (Value $10M).
What? Like the guaranteed minimum shipsets for Hampson. When does Hampson get to bill the $25M for the not ordered tailsets for 2007? Sounds like there are significant liablities/penalty clauses for Eclipse in those contracts.

7 - Hundreds of purchasing contracts with unilateral terms offering all the protections to Eclipse and none to the buyers (Value $100M).
A license to screw you customers - Could have been some value in that:), if only you hadn't promised to sell them Porches at Pontiac prices.

As ATM, ColdWet, ASM FC have consistantly pointed out, none of this is relevant to the big picture. Eclipse needed 750 plane per year production to be Profitable (Verns number) , but only made 750 sales in a year when they were offering the plane for 995K. Since the plane costs them more than 995K to build and market, they have to charge more. Unfortunatly, the VLJ market appears to have already been extremely price sensitive before the economy tanked. If they raise the price to cover costs, the sales tank. Unfortunatly Eclipse bet their shirt on volume production, so they don't have the option of scalling back to be a successful niche manufacturer. In the current economic conditions they seems to be able to move about 50 $1.8M a year.

Eclipse has proven there are plenty of dumb rich people. Although it goes against economic common sense to pump more money into Eclipse in the hope that selling at a loss will somehow work if you do it often enough, there seems to plenty of loaded people with no sense (or some other agenda) willing to try.

Remember just about every version of communism has been tried and proven to fail miserably, but there are still idiots trying to give it one last go, and if they can make their "dream" sound plausible to those to lazy to think critically, , people will even vote for them (Hugo Chavez).

All logic tells me that the Apoclipse should have already happened, but I also can understand how people willing to write off huge sums may prolong the agony almost indefinatly. I guess this business model has worked for Vegas for decades.

Black Tulip said...

Dawn Breaks in Albuquerque

It is like the opening scene from ‘2001 – A Space Odyssey’. First light illuminates the top of Sandia Peak with a deep orange glow. On the valley floor below sits Vern Raburn, surrounded by primitive tools, staring up at the great obelisk.

Shane Price said...

BT started it, so I'll continue...

Smoke covers the open fields in front of the Union center at Gettysburg, as Longstreet nods assent to Picketts' question

"Shall I go in, sir?"

Longstreet as the investor, and Vern as Pickett.

Who would Ken play in the new version?

Braxton Bragg?

Kirby Smith?

It should make for an interesting day....

Shane

mirage00 said...

Well said Baron95!

Ba-da ba-da-da-da
Ba-da ba-da-da-da
Ba-da ba-da-da-da

Monday, monday (ba-da ba-da-da-da)
So good to me (ba-da ba-da-da-da)
Monday mornin, it was all I hoped it would be
Oh monday mornin, monday mornin couldnt guarantee (ba-da ba-da-da-da)
That monday evenin you would still be here with me



I remain amused!

double 00

flyger said...

baron95 said...

Do you guys forgot that even the mighty Cessna was aquired on the brink of Bankruptcy by GD in 1985 and then divested as underpoerforming to Textron in 1992?

People "forgot" this because it never happened like this. GD sold Cessna because they were hurting and Cessna was a piece they could get real money for and survive. In 1992, Cessna wasn't hurting at all, it was a period of great expansion in their jet business. If anything GD was holding them back not propping them up.

I guess I am confused about your point. Is it that all GA manufacturers must go through bankruptcy to be successful? Well, Cessna hasn't been through that and is the most successful GA manufacturer there ever was.

FreedomsJamtarts said...

Tight and concise prose Mirage.

One you you more informative contributions.

I remain confused.

ColdWetMackarelofReality said...

Have to go with Flyger on that one - not all acquisitions have occurred due to poor financial situations, Beech was almost always a cash cow for Raytheon, same holds true for Cessna under GD and Textron - these companies were bought because they were attractive, strong developed product lines, proud histories at that point of more than 60 years each, loyal customers, and tens if not hundreds of thousands of planes in the field.

Eclipse is dsitressed, and we saw what the market values TC's and PC's at when Cessna bought Columbia for about $20M including unfunded liability exposure, vendor debts, etc. - it was less than $2M for two of the more advanced glass panel single engine piston planes on the market today.

Eclipse defies logic that is for sure but sooner or later the adults need to hold sway and make decisions grounded in reality.

We will all know more in about 5 or 6 hours anyway.

bill e. goat said...

Mouse,
Thanks for the news on ConJet- you mention it "has been a go" for some time- how far has it gone? I think they had 25-ish flight hours at OshKosh- was that just a kludged prototype for show and tell, or has it been racking up real test points that count towards certification? Thanks.

Baron95,
I agree without about the relative importance of who runs the company or what it's called. That changes a lot in aerospace. I do not know the details of the Lear to Gates change in the 1960's, but Wiki says Bill Lear owned 60% of the company back then. Otherwise, I would observe that indeed ownership has changed a lot with the larger GA players, but usually not under duress if it was an upmarket. Columbia is a recent exception to that; it would be interesting to know (I don't) the circumstances of Columbia, to compare with Eclipse. Both seem like technological leaders in their niche.

M00,
Took me a minute to figure out the lyrics- good funny! It will be interesting to see who's left standing in ABQ as the sun sets. (Me thinks you suggest not such a "disruptive" press conference? I tend to agree)

Stan Blankenship said...

coldfish,

Gotta disagree with you on the Beech/Raytheon marriage.

Raytheon bought into Beech thinking they were buying into a new era of composite airplanes.

Instead they took a billion dollar bath with the Starship.

Launched the Premier which was way late, way over budget and has an unimpresive sales record.

Launched the Horizon which was way late, way over budget and...

Raytheon tried to dump the company years ago but was forced to hold it until the Horizon received final certification.

Copernicus said...

Cessna, a Cash-cow established company vs. Eclipse, a cash-starved startup perpetually teetering on the brink:

Think about this. Here we have a functioning oligopoly where there are ENORMOUS barriers to entry. So the established companies (Beech, Cessna ) have no incentive to innovate. They just keep doing the same thing forever while their prices are perfectly apparent to each other so they can be kept at a level to produce moderate order numbers and a plentiful margin. Why would Cessna not be a cash cow in the circumstances? Why are the Bonanza and the Baron still in production after 50 (going on 60) years. Airlines had DC-3s when the Bonanza was introduced. Ditto this for the two piston engine manufacturers whose products are the technological equivalent of a 1935 Indian motorcycle engine.

Look what it takes to break into this oligopoly: a great little jet, certification, setting up a complicated factory, establishing training, setting up a support system and enduring supercilious treatment by FLYING magazine. If you are Cessna, would you be worried every time someone talks about breaking in? Hardly. It's so difficult that you can be almost sure nobody will make it and thus diminish your margins. If they do, or appear a real threat then you can wait for their inevitable financial trouble and buy them, probably cheaply (Cessna acquires Columbia).

Eclipse built its business plan around low production costs, low prices (relative to current offerings) with volume production being a part of the low production costs. Either Eclipse will achieve this in its present form or in some recast form OR one of the established companies will buy Eclipse, sell at higher prices, accept lower volume, create typical industry margins for the Eclipse jet and protect margins on their present business.

General Aviation will be well served by the success of Eclipse, but with this painfully transparent example of the difficulties of a new competitor establishing itself, I fear that NOBODY will try it again any time soon, however meritorious their technological advance might be. The 300 or so people who bought Eclipse jets at introductary prices have experienced the kind of deal one might expect in a freely competitive industry with low barriers to entry. I fear that when the dust settles, Eclipse will have been swallowed up into the oligopoly in one way or another and the pricing will be a "cause minimal waves" $2.2 million.

airsafetyman said...

Well, Fiat recently bought Piaggio,
so there is hope there. Eleven occupants going 400 knots with a unique design and turboprop engines - that's disruptive technology! Eclipse came up with a boring "me too" design and left out all the real features that make an airplane useful white tossing in "virtual" circuit breakers and other nonsense that have absolutely no benefit at all.

baron95 said...

Flyger said ... I guess I am confused about your point. Is it that all GA manufacturers must go through bankruptcy to be successful? Well, Cessna hasn't been through that and is the most successful GA manufacturer there ever was.

Not at all. My point is that when there is a good GA design, that gets certified and sold, even if incomplete, it is a pretty normal state of affairs for the company/tooling/TC/etc behind it to go through hard times, be bought, solt, go into Ch11 or even liquidated.

Despite all this, the TC and the airplanes in the field have such great value that they always get supported.

There are dozens of examples. Ted Smith, designed the Aerostar line, that company was bought sold, bought back, failed, moved to different locations, multiple times, all the while the planes were being designed/redesigned/recertified. In 1984 all production stopped and it all closed down. Still today, a company that used to do mods for Aerostar bought the tooling and TC and provides outstanding support and even total refurbshiments of Aerostars and the owners are supper happy.

Same story at Mooney. Same at Piper.

Bill Lear lost control of Learjet. Cessna eventually had to sell and give up control to GD (despite what you may think it was a distressed sale - among other things there had just been a $455M judgement against Cessna for seat track acceidents). Beech had to give up control also under distress. Ditto for Piper. Ditto for Lance Neighbouer and Columbia. Adam had to give up control before even getting the TC.

But the TC for a good design and the business of supporting planes in the field is such a valuable asset that it never dies.

If Eclipse gets another infusion or gets re-incarnated in the future after a distresssed sale or BK, the planes will be supported, the TC will continue to be valuable, people will step in to finish update the plane.

I guess the people that ponied up the $625K to Eclipse in December, that I so criticized back then, are going to look like the smartest people on earth after today. I was wrong, they were right. Or at least their gamble worked when I thought it was a less than smart move to fork more money to Eclipse.

Lets just wait and see how Eclipse will get the new lease on life and how much of a life extention it is.

Of course, knowing Vern, it could be another one of the smoke and mirrrs thing - sounds good, but when you look under the covers it is ugly and stinks.

Shane Price said...

Airsafetyman,

The Agnelli family got out of Piaggio when the aircraft end of the scooter business was split off in 1966.

The P180 II (certified in 2005) is really the result of Ferrari money (and interest...) which in turn is the result of the purchase by FIAT of the remaining Ferrari family shares in 1998. Piaggio had been through rough times in the '80s and '90s and the development costs of the original P180 were huge.

As with many things in Italy, the Ferrari name opened many doors that had heretofore been firmly shut. The P180 II is doing gangbusters business as a charter aircraft, which is understandable given the size/speed balance it offers.

Likewise, there are many Tifosi who were introduced to the company by Ferrari.

Check out the Piaggio web site, and note the F1 links.

Hang on, I forgot that you lot don't appreciate the pinnacle of motorsport on that side of the pond.....

Shane

ColdWetMackarelofReality said...

Stan,

Agree Raytheon bought into a dream, also agree they took a billion dollar bath delivering 53 aircraft. But Beech was not in distress at that time, they needed more resources to innovate and to expand the base - which runs counter to the non-innovative oligopoly party line. Raytheon saw an attractive purchase, and although the Starship failed Beech served as a cash cow for Raytheon for more than a decade after that.

Raytheon had a hard time unloading the aircraft unit because they wanted $4B for a unit that had revenues of $4B and profits in the 4-7% range as I recall. That is a hard sell as witnessed by the unit being available for over 5 years.

Kinda makes you wonder who is up for a billion dollar bath in Albuquerque though, we shall see in a couple hours.

flyger said...

airsafetyman said...

Eclipse came up with a boring "me too" design and left out all the real features that make an airplane useful white tossing in "virtual" circuit breakers and other nonsense that have absolutely no benefit at all.

That's right, the worst of both worlds. A simple design, that could have been straightforward and cheap, but Eclipse managed to add too much complexity without any real benefit. So you ended up with a long, complex development providing you an ordinary, even under performing, product.

flyger said...

If you want to see the "show", Eclipse is web casting it today at 1pm MST (which is 3pm EST in my time zone). There is a link on their home page for it. It will be interesting to see how amused or confused this is. Vern should get into show biz, he turns everything into high drama.

bill e. goat said...

Re: Raytheon Starship.

The story I get from cronies regarding Starship was; it was a research program, Rutan built a scale prototype, but the Beechcrafter guys said it couldn't be certified.

Raytheon managment team insisted on something new, progressive, disruptive, etc., to go with the Raytheon image, and also to exploit the market niche between KingAirs and Citations, so the Starship was rammed down the old Beechcraft staff's throats.

I have to admit, Beech had been pretty stagnant. The Premier and Horizon programs have been unabashed debacles as well, and except for the hoopla, rival Eclipse for the ineptitude. But Raytheon had deep pockets, and was moving KingAir and Hawker profits over to cover development costs.

Besides Horizon (4000 now) certification, I also heard Raytheon had to address Beech 1900 liability and support issues before anyone would buy RAC- I don't know the details of that arrangement.

Interestingly, about the same time as Starship development, Learjet was talking with Piaggio about the Avanti, and formed a joint venture for a few years, but either the market downturn in the mid 1980's (actually, ALL of the 1980's) or feasibility studies made Lear pull out. It too was a long, painful development process- Piaggio had wisely wanted Learjet's development and certification expertise and experience to help mitigate the risk- maybe Stan can provide some insights).

ColdWetMackarelofReality said...

The scene about to occur in ABQ:

Fade from black -

The ECJ taxies in as wave after wave of undelivered DayJet planes roars overhead, similar to a Leni Riefenstahl propoganda piece:

Andrew Broom: Da plane. Da plane.

Vern: Smiles, everyone... smiles!

Vern: My dear guests! I am Mr. Raburn, your host. Welcome... to Fantasy Island!

---------------------------
Good luck Vern, break a leg.

Gunner said...

On the road and the video stream keeps cutting out.
From what I hear, though, ColdWet was spot on.

Again.
Gunner

WhyTech said...
This comment has been removed by the author.
bob said...

****PRESS RELEASE****



Eclipse Aviation Secures Long-Term Financing Through Agreement with ETIRC Aviation in Europe and Russia



Expanded partnership targets Eclipse 500 as the global standard for very light jets



ALBUQUERQUE, NM — January 14, 2008 — Eclipse Aviation, manufacturer of the world’s first very light jet (VLJ), today announced it will expand its partnership with European Technology and Investment Research Center (ETIRC) Aviation. The agreement between the two companies includes an equity investment by ETIRC in Eclipse that is substantially in excess of $100 million. The agreement also provides for significant additional financial benefits to Eclipse as agreed commercial objectives are realized. Upon completion of the equity investment ETIRC will be the single largest shareholder of Eclipse Aviation. ETIRC CEO Roel Pieper has been elected non-executive Chairman of Eclipse Aviation.



ETIRC is currently the exclusive provider of sales, customer service, maintenance support and flight training for the Eclipse 500 in the countries of Eastern Europe, the Russian Federation, the Commonwealth of Independent States and the Republic of Turkey. Under the new arrangement, ETIRC will add Western Europe and the United Kingdom to its distribution and services area. As a result ETIRC will be the exclusive partner for Eclipse in more than 60 countries.



As part of its expanded partnership with Eclipse, ETIRC has the right to establish local assembly of the Eclipse 500 within its expanded region, helping Eclipse Aviation reach its global volume production goals. ETIRC is in advanced stages of discussions for the location of the assembly facility. The City of Ulyanovsk in Russia is the leading candidate at the moment. Further announcements will be made in the next few months.



“Entrusting the expanded region of Europe to ETIRC in this manner represents a significant acceleration of our business plan,” said Vern Raburn, Eclipse Aviation president and CEO. “Expanding our relationship with ETIRC will rapidly increase the impact of the Eclipse 500 in this region and position us to meet the needs of our growing number of customers outside of North America.”



“The Eclipse 500 is by far the best value proposition for jet ownership anywhere in the world,” said Roel Pieper, CEO of ETIRC. “We are pleased to expand our partnership with Eclipse Aviation to further support the volume growth of this intriguing and innovative aircraft. We believe that a close cooperation between our companies will make the Eclipse 500 the global standard for very light jets.”



About ETIRC Aviation

ETIRC Aviation S.a.r.l. is a principal driver of the VLJ industry, creating virtual jet networks for airlines and aviation entrepreneurs. This will provide business communities with affordable, on-demand, point-to-point jet travel that drives productivity. ETIRC Aviation will offer a full range of white-label VLJ services to virtual jet network and jet taxi operators, including a real-time operations system, fleet financing, VLJ leasing, business consultancy, pilots, training programmes and VLJ maintenance centres. ETIRC Aviation is headquartered in Luxembourg and has offices in Moscow, Istanbul and Cyprus. The company was founded by Roel Pieper, a former top-level executive at Tandem Computers, Compaq Computer, and Philips Electronics. ETIRC Aviation S.a.r.l. has its principal place of business at 16 Rue Jean-Pierre Brasseur, L-1258 Luxembourg. ETIRC Aviation is registered under R.C. Luxembourg B 95 627. Contact ETIRC at www.etirc.com.



About Eclipse Aviation

Eclipse Aviation is the world’s leading very light jet (VLJ) manufacturer, producing innovative, affordable jets that are revolutionizing air transportation. The company created the VLJ category with the design, certification and delivery of the Eclipse 500 – the industry's first VLJ. Eclipse applies advanced technologies, manufacturing processes and business practices to create high-performance aircraft that cost a fraction of other jets, and provide the lowest cost of jet ownership ever achieved. By changing the value proposition for private jet travel, Eclipse is allowing more pilots to enter the world of jet-powered aviation and enabling a new generation of entrepreneurs to help business travelers move between cities on a quick, affordable and convenient basis. Contact Eclipse at

bill e. goat said...

A "Verntastic" amount of "fundamental" and "phenominal" stuff going on there...
(beats "revolutionary" and disruptive" though).

WhyTech said...

My impression of the webcast:

What are these guys smoking!?

Anyone count the numbers of times the words "fundamental" and "phenomenal" were used in the presentations?

WT

ColdWetMackarelofReality said...

You may all proclaim your amazement at any time.

My prognostication was made without reference to any friends, acqaintenances, or clients with any involvement at Eclipse.

Unfortunately, I am not so good at football, so don't ask me who will win the Superbowl.

Sometimes I even amaze myself.

Although more than $100M it sounds like less than $200M, smart on Roel's part - I will bet he negotiated some outstanding prime creditor/investor terms.

Regardless, good for Vern and Eclipse, another 3-6 months to try to get it right.

They will be in a cash crunch again before year's end, and Vern will resign as CEO but remain on the BoD within weeks (if Roel is open to any suggestion as to how to ensure he ever sees a dime of return).

WhyTech said...

Anyone think that "substantially more than $100mm" will be enough?

WT

ColdWetMackarelofReality said...

Notice also the "right to establish local assembly of the Eclipse 500 within its expanded region, helping Eclipse Aviation reach its global volume production goals. ETIRC is in advanced stages of discussions for the location of the assembly facility. The City of Ulyanovsk in Russia is the leading candidate at the moment. Further announcements will be made in the next few months".

They cannot sell enough planes to handle the production of one facility falling 70% short of its annual production goals, so hey, let's build another plant, in Russia.

Being right never gets old, but sometimes it is scary.

WhyTech said...

ColdWet said:

"Unfortunately, I am not so good at football, so don't ask me who will win the Superbowl."

Any ordinary mortal can get this right: the New England Patriots by 23 points!

WT

Black Tulip said...

This fixes everything. The only issue now is to get the INOP stickers printed in the Cyrillic alphabet.

FlightCenter said...

Eclipse Chairman of the Board, Roel Pieper said, "We like Eclipse's fighting spirit, which is required to counter the naysayers."

Vern said, "Volume is the key to Eclipse's success."

FlightCenter said...

Ok Whytech,

Tell us how ETIRC can become the largest equity investor in Eclipse, but not gain control of the company.

Does that mean the stock they bought is non-voting? or has fewer votes / share than previously issued stock? or...

Vern says, "No changes in the leadership team."

Black Tulip said...

What we have here is the two stone theory of aircraft manufacture. If one stone will not float; tie another stone to it. See if two stones will float.

Black Tulip said...

Well, there's technical control at 51% and there is effective control at a much, much lower percentage.

ColdWetMackarelofReality said...

Interesting, say $150M and becoming largest shareholder, after $1.2-1.5B in already.

Now that is some negotation - look for massive changes if Roel is that smart.

10 to 1 this deal is worse than the one Vern turned down in August in terms of terms, AND it is for a $100M less to play with.

Somebody get Bob Dylan on the phone, I want to request a song.

"The times they are a changin'"

FlightCenter said...

N522DK, aka Serial #105 with Avio NG appears to be at Waterbury/Oxford, CT, since Saturday.

Interesting track on the flight into KOXC. There must have been some ice along the way.

http://flightaware.com/live/flight/N522DK

WhyTech said...

"Tell us how ETIRC can become the largest equity investor in Eclipse, but not gain control of the company."

Well, it depends ... on what the meaning of "largest" is. Maybe Bill Clinton can help us on that.

If the largest dollar investment, then there have been many other investors, no one of which has put in "substantially more than $100mm."

If the largest % ownership, easy enough if others have been diluted significantly in the process.

Probably though, it means that Roel is the largest physically of anyone who has invested - he towers over Vern, and clearly is well endowed otherwise to make such an investment.

WT

ColdWetMackarelofReality said...

Now we have a legitimate data point for a comparison -

Reol Pieper comes to the rescue with 'more than $100M', my put is probably $120-150M which is the approximate value of ETIRC's airplane order. He is now the largest shareholder in the company and took the Chairmanship.

Vijay Mallya invested $200M in AIR Inc., the developers of the Epic line of kit and soon-to-be-certified turboprop and turbofan aircraft.

$200M for a 50/50 split, with seven or eight different planes in development and/or production - all doing what they said they would. This essentially sets the value of what had been done to-date and the near-term future of Epic as about $400M, not bad for a company that is half as old as Eclipse.

Pieper is a wealthy and intelligent man. Mallya is a billionaire and an intelligent man.

I report, you decide.

FlightCenter said...

That's good.

I'm guessing that the answer is both B & C.

I was under the impression that Al Mann had invested more than $150M.

By the way, I take that bet on the Patriots by 23.

They'll win, but by less than a touchdown.

flyger said...

It's like being a political cartoonist. Vern just provided us with material that will last months! It is comical to the extreme.

8 years ago, when people placed their orders, what would they have said if you told them what you just heard?

Vern has watched "The Aviator" too many times and has become a modern day Howard Hughes.

FlightCenter said...

Did Mallya get any exclusive rights to sell and service Epic aircraft in any territory around the world as part of his deal?

421Jockey said...

Flyger,

On this one, I have to agree with you.

Vern really jumped the shark when he went on about working with our enemies and this is the first time they built a western aircraft design without stealing it. Those weren't the words, but that's what I heard.

ex-421

ColdWetMackarelofReality said...

No FC, from what I understand Mallya was a strict equity shot as well as bringing Airbus in to assist with certification development for the Dynasty and jet programs in Canada.

flyger said...

421Jockey said...

Vern really jumped the shark when he went on about working with our enemies and this is the first time they built a western aircraft design without stealing it. Those weren't the words, but that's what I heard.

Yeah, I heard that too, and the implied dig against American workers that they can build a Camry as god as the Japanese. What was that all about?

I tell you the guy looked nervous and scared to me, hence the weird stuff he talked about. I think he knows the end is near. He just made it much harder for him to do business in the US with US vendors. They don't want their stuff being shipped over to Russia to be copied (yeah, like Whittle's engine all over again!).

If I heard this right, Eclipse just sold more than half of itself for "more than $100M". That means the are worth $200M? The first investors are willing to take 20 cents on the dollar?

Oh, this is going to get ugly real quick. The clock is ticking fast.

Copernicus said...

So now Eclipse has a contract with ETIRC giving ETIRC some exclusive rights within Europe, for manufacturing, selling and servicing Eclipse airplanes. If Eclipse runs out of money in a year, will this be helpful or harmful when more money is sought or EADS, Cessna, Mitsubishi, et al take a look at the company? Russians can build airplanes for sure, so maybe this would be a real positive for some prospective owners/investors of Eclipse or for an IPO; less so for Cessna and probably a negative for EADS.

According to Vern, the order book now stands at 2650 and if you order today, delivery is in early 2010. Some of the 2650 must be "fleet orders" with delivery beyond 2010. I don't think they have ever mentioned making 2650 airplanes in the next 2 years. Vern lamented not being able to produce faster because it forces potential customers to turn to a secondary market instead of getting an airplane from the factory order list. Eclipse brokerage on the Eclipse web site lists early 2008 positions where one can still specify the options for less than the factory price. This is not a case of new airplanes and positions going for way over sticker. Maybe with FIKI and the next Avio NG release, this will change.

All in all, another $100 million is a good thing for the deposit holders and everyone else. I believe it is equity on a pari passu basis with the current shareholders. It could have come from a more "AAA-like" source; it could have come without an entanglement with a mysterious eastern European; but at least it is not $20 of DIP financing while a buyer is being sought.

This will clearly tide Eclipse over until the day when the number delivered (106 today) plus 50% of the Eclipse-generated annual production forecast reaches a number beyond the latest 6 month deposit call. Then the 6 month deposit calls will resume (maybe someone knows if they have already) and more cash will flow in.

Did you hear the one about the window washer who fell off the platform on the 101st story of the Empire State Building? As he passed the 50th floor on the way down, some called out to him, "How are you doing?" Answer: "Okay, so far."

Maybe Eclipse won't fall. Maybe they are already falling (okay, so far, however) and a safety net will be brought in. Maybe they will smack hard on the pavement. For those who thought a weekend of suspense might be rewarded with a clear answer today: stay in suspense mode and come back on Columbus Day.

Stan Blankenship said...

The city of Ulyanovsk is the administrative center of the Ulyanovsk region, and is located on the Volga River, just east from the capital of Moscow.

Today, the population of Ulyanovsk is approximately 635 thousand and the city has become a popular tourist attraction because of its magnificent lakes, forests, mountains and breathtaking landscapes. As an industry leader, the city produces glass products, mineral water, oil shale and clay aggregate. It is also home to Avistar-SP airplane plant that builds aircraft and airplanes, such as the An-124 Ruslan, and the UAZ automobile manufacturing plant. The 31st Airborne Brigade of the Russian Air Force is located here and the city has two airports, namely the Ulyanovsk Baratayevka Airport and the Ulyanovsk Vostochny Airport.

The railway bridge that was constructed between the years 1912 to 1916, which now has two lanes for road traffic, connects the two sides of the city across the Volga River. A second bridge has been under construction for years to relieve this bridge of traffic, as it is the only bridge over the river that exists at this time. At night, visitors to the city can either relax in the local nightclubs or grab a bite to eat in one of the restaurants, of which Café Pyramida has been said to be the best in the city. Ulyanovsk is a magnificent city and a beautiful region.

baron95 said...

$100M+ (say $150M) is underwhelming - better than nothing, but given the way Eclipse burns through cash it is probably not sufficient.

I don't know why people are assuing ETIRC is getting more than 50% of the company. "Becoming the largest share holder" does not mean being over 50%. The largest shareholder of GM owns 9% of the company. My guess is that they'd own in the order of 25%-30%, but that is a pure guess.

If that were so, that would put the pre-money valuation of Eclipse at around $500M-$600M, which is aobut 50% of the $1-1.2B previously invested. Pretty typical haircut, basically means Eclipse pissed off 50% of the money and created value with the other 50%.

If I add all the items in my previous Eclipse value post, I come up with virtuall ythe same amount.

So the deal makes sense financially.

BUT, it gives me little comfort about Eclipse's future. $150M may not be enough to finish Avio NG, cover the costs to retrofit 100+ planes, ramp up production, make profit, etc.

Life extention into YE/2008. Then they better be hitting on all cylinders.

baron95 said...

Forgot to say...

The Russians are coming!!!!

flyger said...

baron95 said...

I don't know why people are assuing ETIRC is getting more than 50% of the company. "Becoming the largest share holder" does not mean being over 50%.

You're right, that was jumping too far.

My guess is that they'd own in the order of 25%-30%, but that is a pure guess.

Seems okay as a guess.

Life extention into YE/2008. Then they better be hitting on all cylinders.

Spinning on all rotors?

It doesn't sound like enough money to me. So much for "assuring Eclipse's viability" as eo387 said. I wonder how he feels now.

flyger said...

baron95 said...

Pretty typical haircut, basically means Eclipse pissed off 50% of the money and created value with the other 50%.

That is what happens when you do everything twice because you didn't know what you were doing the first time.

ColdWetMackarelofReality said...

Anyone remember what city the 'first' Eclipse 'European' customer was from?

Could it be Ulyanovsk?

I honestly don't recall and could not find it easily on the Eclipse website but there is a Russian customer, a governor as I recall.

EclipseOwner387 said...

Flyger,

This deal is much better than a poke in the eye with a stick for position holders and Eclipse but in no way does this deal assure long-term viability in my opinion. Based on the hype I would be a little disappointed if I was a position holder, especially SN 400 or higher.

Just my opinion. I hope Eclipse and deposit holders the best. At least some more time has been bought to prove the plane and the company.

baron95 said...

FLyger said... It doesn't sound like enough money to me. So much for "assuring Eclipse's viability" as eo387 said. I wonder how he feels now.

I agree. Obviously ETIRC is positioning to win either way.

If Eclipse gets FIKI, Avio NG, retrofit, and production volumes up and makes it, ETIRC gets to assemble, build, train, service these jets in a huge territory.

If Elipse doesn't make it, ETIRC just buys the remaining pieces of Eclipse (distress sale or BK) and continues production in Russia.

To me, this investment, just give ETIRC partial control at a good distressed price and a head start in moving the production over to Russia.

gadfly said...

“The city of Ulyanovsk is the administrative center of the Ulyanovsk region, and is located on the Volga River, just east from the capital of Moscow.”
Well, the “Atchison Topeka and Santa Fe” had a certain ring to it, but maybe the “Atchison Topeka and Ulyanovsk” will catch on, in time.
And for all those “1,500 employees” . . . “Hasta la bye, bye!” . . . pretend the “Volga” is a blue version of the “Rio Grande” . . . “It’s been real . . . !” You move real soon and you’ll think you are still back in Albuquerque . . . the temperature is not much different these days. And hope that “Al Gore” got it right, about “global warming”, that is. And working for the Russians, you’ll think you’re back home.

gadfly

(Who said that Monday would bring bad news?! Oh, and by the way, what’s the exchange rate to pay back the taxpayers of New Mexico $20,000,000 in “Ruples”.)

airsafetyman said...

"this is the first time they built a western aircraft design without stealing it."

Like the MiG 21? Consider several more very high performance fighters that are equal to US fighters, if not better?

Black Tulip said...

A couple of observations…

Vern said that most of Eclipse’s costs were material not labor. If so, why does it make sense to assemble the product in Russia? Shipping costs, customs processing and import tariffs will make the jet more expensive to build there. The transfer of engineering and direct labor expertise from New Mexico to Russia will be a massive undertaking.

The company’s legal obligations for export controls - not shipping to so-called ‘denied parties’ could be a problem. The State Department will be interested in the customers as air data computers can be employed in military aircraft and missile guidance systems.

Albuquerque should prepare itself for an influx of ‘war brides’… beautiful Russian women.

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

Gadfly,

Al would need to be WRONG for the temperature in ABQ to get even close to the midwinter mean on the stepps of Russia.

And the REAL currency these days in Russia is a heady mix of Dollars, Euros and Roubles.

Wonder how your very own political types will square the transfer of production to the East with their long term career plans? Must be plenty of votes for that move in your part of the world...

ATman,

Think of the shock the B29 crews got in Korea when the first Mig 15's started shooting them out of the skies.

BUT....

Never forget that the Russians are very clear about the benefits of quantity over quality.

Expect loads of Eclipski's coming off the lines in Russia, real soon.

Shane

airtaximan said...

OK, so:
1- Vern has a new boss
2- there's some more cash
3- the money could be called "good money after bad", considering this FOV is holding the bag sorta speak for the Eastern European success of Eclipse.

Ecclipse gets to live another day, a FOV erns title of biggest egomaniac now non-exec chairman in charge of Vern... and "there's a large (RIIIGGGHHHTTT) bright NEW (riiigghhht) market for eclipse.

I suspect:
1- only opportunity for new money
2- sadly, another non-aviation minf buys in further to Vern's shennanigans
3- why not Ed...OK, Euro-Ed.
4- this is a non event stunt - probably the worst BS move, albeit WITH Cash! COngrats VErn, for setting the BS meter higher, taking a back seat to some little guy with some cash, AND making it look/read like SOMETHING POSTIVE.

Anyone know the Per capita GDP in the region? I guess eclipse had NOW become a richman/poorman's very expensive toy?

READ THE BLOG, IT ALWAYS WAS!

Jim Howard said...

"this is the first time they built a western aircraft design without stealing it."

Actually the Russians built DC-3s under license during and after WWII
( http://tinyurl.com/2y2ce4 ) .

I'm not sure if they actually paid any license fees, but they did get a license, they didn't steal the design.

Unless there is some massive show stopper with FIKI, I think this pretty ensures that Eclipse will continue as going concern for the foreseeable future.

bill e. goat said...

"The agreement also provides for significant additional financial benefits to Eclipse as agreed commercial objectives are realized. Upon completion of the equity investment ETIRC will be the single largest shareholder of Eclipse Aviation".

(Well, I’d guess that means they plan on sinking around $350M+ to one-up Al Mann? But then I think by the time “agreed commercial objectives are realized” are reached, things would have just plain sunk anyway).

"ETIRC CEO Roel Pieper has been elected non-executive Chairman of Eclipse Aviation".

(??? non-executive CEO ??? Honorary Mayor of Albuquerque would be nice too...or maybe Provisional Assistant Deputy CEO).

"ETIRC is currently the exclusive provider of sales, customer service, maintenance support and flight training for the Eclipse 500 in the countries of Eastern Europe, the Russian Federation, the Commonwealth of Independent States and the Republic of Turkey".

(So in other words, they are the “exclusive provider” of exactly zip right now??)

"Under the new arrangement, ETIRC will add Western Europe and the United Kingdom to its distribution and services area. As a result ETIRC will be the exclusive partner for Eclipse in more than 60 countries".

(Oh, I see. After EASA certification. Maybe they’ll be able to get a “provisional” EASA cert? R-i-g-h-t...)

"As part of its expanded partnership with Eclipse, ETIRC has the right to establish local assembly of the Eclipse 500 within its expanded region, helping Eclipse Aviation reach its global volume production goals".

(Well, I thought the idea was to use FSW and robots and Ford assembly line methods to go volume production with minimal resources. Seems like this is not particularly efficient, but then, labor is probably a LOT cheaper, so it will be cost effective I suppose).

"'“Entrusting the expanded region of Europe to ETIRC in this manner represents a significant acceleration of our business plan,' said Vern Raburn..."

(Ah, seems like it “represents a significant” indication of having your behind in a sling to me).

"The company (ETIRC) was founded by Roel Pieper, a former top-level executive at Tandem Computers, Compaq Computer, and Philips Electronics".

(Ah, yes. Computer geeks. Well, I guess they might as well build on the success of Vern and Ed...)

WT,
“Anyone think that "substantially more than $100mm" will be enough”?

Goat:
Stop it- I’m die’n !!!
(If the past indicates the future, I’d say $350-450M total will be needed this year).

Stan Blankenship said...

During the Q & A, Vern answered, "By the end of the second-quarter."

The question, not audible on the podcast, "When do you expect FIKI and EASA Certification?"

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

Shane,

For your own amusement and education, the “Russians” have had some excellent aircraft, and were represented in Albuquerque long before the “present” discussion:

http://snaproll-sukhoi.com/default.htm
www.abqjournal.com/history/th.htm

But there is no connection of the “former” with the “latter”.

gadfly

airsafetyman said...

"Under the new arrangement, ETIRC will add Western Europe and the United Kingdom to its distribution and services area.

"As part of its expanded partnership with Eclipse, ETIRC has the right to establish local assembly of the Eclipse 500 within its expanded region...."

E who? You could not make this stuff up. Why not partner with Antonov, MiG, Ilyushinov, Sukhoi, or Yakovlev? Not for trying on Eclipse's part, I'm sure. They probably laughed the Vernster out into the nearest snowbank. At least FIKI is a dead issue in Russia for most of the winter....it's too cold for ice to form!

ColdWetMackarelofReality said...

So now that the glow has faded, where are the faithful here to spin the tale that a tech venture investor has bailed out Eclipse for maybe 6 months with Russian money and the possibility of sending assembly overseas?

Where is the surprise in this 'surprising' announcement? A customer/dealer/friend-of-Vern ponied up more than $100M, took the Chairmanship.

How does 'more than $100M' assure viability for Eclipse? Unlimited budgets can be exceeded, see Starship or Eclipse Parts 1 through 6.

The liability for the aero and Avio NfG mods on more than 100 planes, plus FIKI changes cannot realistically be less than $20M, could be twice that.

Last time they went to the well, you know, way back in August (5 months ago), Eclipse took in $230M and was out of cash in less than 6 months even while, presumably, taking the final 40% payment on 100 ships (~$40M), even while taking in an additional $30M with the save Vern telethon.

No matter how you slice it, it still does not make any sense.

Not enough sales to justify what is already shown to be excess capacity.

No profitability at the volume they are able to produce at the price they can get.

Huge unfunded warranty and rework liabilities.

And yet, once again Vern delays the Epocalypse, not by turning to conventional lenders or normal financing methods, not by turning to experienced airframers, but by going back to the well and CONvincing more of his high-tech buddies cum-customers to pony up for the cause.

Remarkable, if only they could demonstrate a similar competency at design, production and sales as they do at raising money - the plane would be done and they would actually be delivering complete and fully functioning aircraft, on schedule, and maybe even for a profit.

airtaximan said...

I can't imagine there's no SCAB issues with the recent PR and the Hollywood writiers srike.

I can't imagine anyone take this seriously.

Once again, a neophyte comes to the rescue, with money and no plan. Why did they enter into a lawsuit with AVIACE?

Nimbus?

Anyhow, this is all a sad commentary... but NOT for Vern. He's made more progress digging a BIG hole... more owed, more dilution, more resting on his ability to deliver a new vast market for a silly little plane.

Ode to Vern:

Now look at them yo-yos thats the way you do it
You fly the vlj on your PC
That aint workin thats the way you do it
Money for nothin and positions for free
Now that aint workin thats the way you do it
Lemme tell ya them guys aint dumb
Maybe write $900K checks from your bank account
Maybe get a position or you’re just plane dumb

We gotta install new avionics
Upgrade aero and FIKI
We gotta move these pitot tubes
We gotta remove these placards too

See the little faggot with the earring and the checkbook
Yeah buddy that’s his hangar
That little faggot got his own jet airplane
That little faggot hes a millionaire

We gotta install newer avionics
Start making some deliveries
We gotta remove these de-ice boots
We gotta remove Avidyne too

I shoulda learned to fly a real jet
I shoulda learned to understand risk
Look at that mama, I got a virtual co-pilot
Man we could have some fun!
And Vern’s up there, whats that? Conjet trails???
Bangin on the stick like a Kamakze in the sun
That aint workin thats the way you do it
Vern gets your money for nothin, while promising you jets for free

We gotta install new avionics
Upgrade aero and FIKI
We gotta move these pitot tubes
We gotta remove these placards too

See the little faggot with the earphones and the checkbook
Yeah buddy that’s his own jet
That little faggot got his own jet airplane
That little faggot hes a millionaire


sorry about the faggot, but I couldn;t replace Dire Straits words regarding this... by the way, Dire Straits... pun intended!

ColdWetMackarelofReality said...

ATM, that was funny!

airtaximan said...

CW, in all seriousness, if I was half as smart as you, I would have jsut written what you wrote.

But thanks. It was in jets.

BTYM, the recent announcment basically seals the deal for me.

Step 1- over-hype the announcement as "game-changing"
Step 2 - your buddy shows up with $100M and you give him some rights.

There's a stratup in florida call earthjet.com that sold rights two years ago to an airline guy in Canada - and they have nothing except a business plan... guess what - Vern has nothing!

Bottom line, Dire Straits after 10 years, $2B (yup...probably $2B) and a bunch on no-minds inside the industry called it.

Sorry, folks, but Vern now subsidized another 100 deliveries. That's all he did - unless he had to pay some old invoices - than perhaps 50-75 planes subsidized.

This is the worst result short of doors closed.

FlightCenter said...

This announcement didn't do anything for ISSC's stock either.

Their stock closed at $9.40, 40 cents higher than their 52 week low.

It seems that the market didn't think that the investment meant that there would be any material change for ISSC.

bill e. goat said...

Copernicus,
“According to Vern, the order book now stands at 2650”

Hmmm. I think the Texas state legislature was going to legally define Pi to be 3. Maybe NM should legally define the Eclipse order book to be 2700.

“For those who thought a weekend of suspense might be rewarded with a clear answer today: stay in suspense mode and come back on Columbus Day”.

Right-o bub! This is one of the longest running soap operas in aviation history! Makes the Spruce Goose controversy look like a flash in the pan. (Flyger: “Vern has watched "The Aviator" too many times”).
-----------------------------
Shane,
“Wonder how your very own political types will square the transfer of production to the East with their long term career plans? Must be plenty of votes for that move in your part of the world... “

Nobody gives a hoot, unless it interferes with their cable TV, or usurps coverage of Britney Spears latest antics.

(The real “watcher” for aerospace types here is the next generation of Air Force tankers KC-X, the B-767 vs Airbus A-330. Oddly, the Air Force keeps sliding the decision date. I would have expected them to get moving with it and pick Boeing; the fact it keeps sliding makes me think they are leaning towards Airbus, or maybe just pretending to seriously evaluate it to avoid lawsuits).

“Never forget that the Russians are very clear about the benefits of quantity over quality”.

Interesting observation. I heard the Mig-25 toasted engines during M3.2 runs. Western powers poopoo'd it, until they found out how many spare engines were available, and how quickly they could be changed. Sort of makes one think of the original Williams engines...

“Expect loads of Eclipski's coming off the lines in Russia, real soon”.

Ah, ???
----------------------------
ATM,
Weird Al Yankovic did a “cover” of the Dire Straits tune too:
Eclipse Anthem Melody
----------------------------
CWMOR,

Somebody get Bob Dylan on the phone, I want to request a song: "The times they are a changin'"

Au contraire, oh Cold and Wet one!!

“World’s first very light jet (VLJ)”

“Jets that are revolutionizing air transportation”

“According to Vern, the order book now stands at 2650”

“Vern answered, "By the end of the second-quarter”

...The more things change, the more they stay the same... :)

baron95 said...

Bill.e.Goat said ... The real “watcher” for aerospace types here is the next generation of Air Force tankers KC-X, the B-767 vs Airbus A-330. Oddly, the Air Force keeps sliding the decision date. I would have expected them to get moving with it and pick Boeing; the fact it keeps sliding makes me think they are leaning towards Airbus,

There is a very simple explanation for this. After their last try to give the business to Boeing was challenged on all the ethics violations, the Airforce is trying to challenge-proof this decision. They are simply waiting for Boeing to FINALY deliver to Japan and Italy a KC-767 that works per spec, so they can say they selected the lowest risk proposal. As it stands now, Boeing's argument that they are the safe bet is on shaky ground as they are 2 years late in delivering a KC-767 that works to Japan and Italy. (not that that is the configuration the Airforce in buying anyway - the airforce is buying a a frankenstein plane - B767-200 body, 767-300ER landing gear, 767-400ER wings). At least the boom will be proven if they deliver a working model to Japan/Italy.

baron95 said...

Bill.e.Goat said... Sort of makes one think of the original Williams engines...


The FJ-22s could work. You just had to make the EA50 a quad-engine plane a la Jetstar. And you make the mandatory engine replacement coincide with the mandatory 100 cycle window replacement of the EA50.

It is a beutiful solution. And to save weight, Vern would have a single starter/generator/FADEC per side shared between two engines this way the plane would have only two power levers to keep workload low. Also, the left engine two-pack would run landing gear hydraulic pack and AC. right engine two-pack would run presurization.

A trully disposable plane.

I'm sure flyger would appreciate the redundancy of 4 engines. Lose the right two-pack and you "only" lose presurization, but you still should be happy that you can lower the gear and will have A/C when you taxi out after your emergency descent.

Of course those nasty SW bugs on the displays could be a bitch. Imagine if it were to comand the left two pack to full power and the right two pack to idle wile comanding full right rudder trim.

What fun the instructors could have on the sim.

And of course the ECJ would have a three-pack of 100-cycle FJ-22s. Awesome - Like a mini-Falcon.

Imagine the possibilities.

Black Tulip said...

Darkness has settled across the land.

The Faithful pull the covers up to their chins, warm and comfortable - confident that their little jet is going to get delivered.

The Critics smile as they drift off to sleep , knowing that there will be many more episodes in this miniseries.

bill e. goat said...

Baron95,
After reading this blog for over a year now, few things leave me speechless.

But your through analysis of the VLJ propulsion solution has left me, ah, Vernasticized*!!

You are truly guilty of "disruptive" thinking!
:)
-----------------------------
*Appropriately enough, spellchecking Vernasticized (in OpenOffice 2.0) brought up alternatives of “Elasticized” and “Romanticized”. Really! :)

flyger said...

I think Vern is out in the very near future.

What was the one thing that Vern did for the company? He raised money. This last round shows his well is dry. The money comes with too many strings attached. There are no more rabbits to pull from the hat.

If Vern no longer has the ability to raise money, he has no purpose at Eclipse.

Couple that with the fact the chairman of the board just changed. The board has the power to fire Vern whenever it wants.

Couple that with the fact that Eclipse has a new lead shareholder that controls the chairman. Even though it is not majority share, it doesn't take much of a coalition to get a control bloc with other investors.

Vern is now a liability to Eclipse. His off target visionary style, his weird statements, his lack of focus on getting the job done are serious problems.

I expect Vern to be out within 2 months, 6 at the latest since there is no more money at that point. It wouldn't surprise me if he was out next week. What do they need him for now? Can you think of anything?

This change may be more helpful to Eclipse long term than the $100M.

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

OK, let's make two imminently reasonable assumptions:
1) Pieper ain't stoopid
2) Vern IS desparate

What's this latest turn of events tell us?

- Al Mann has passed as permanent Sugar Daddy. (Sorry, Bill E....several of us have been telling you that Fabulous Wealth does not equate to Terminal Gullibility)

- The traditional investment/credit markets have passed on the same deal that Pieper accepted (Vern would not be dumb enough to take on an Eastern Bloc controlling interest in a US aircraft manufacturer if he had real alternatives)

- The original investors have just received their FIRST haircut. "Largest single investor"?- ; controlling interest? Who cares about reading between those lines and extrapolating when you have FACTS like "Chairmen of the Board"....'nuff said.

- Eclipse is no longer banking on American depositors. Their focus is now on Europe (witness the priority schedule for retrofits)

_______________

Now onto the assumptions:
- The Can of Beans has just gone overseas on consignment. Probably a few pennies down on the deal; but hardly at market price. I'm certain Ponzi would explain that the key is a large enough "market" of, ummmmm, "speculators".

- I don't believe for a second that Pieper has invested north of $100 Million into the company. I believe he may have "committed" to that amount. But, being a sharp guy and all, he certainly would have tied that to Eclipse's ability to sell into the European market and deliver. In other words, he would have limited his risk. In a zero sum gain, the excess risk has been laid off elsewhere.....any specific group(s) come to mind?

- The downside of failure to meet objectives is unknown, but probably not stacked in Eclipse's favor.

- Those of us who predicted Eclipse would be out of money in Oct '07 were spot on. They were. The $30 million they bilked from Depositors probably went out the door as soon as it came in....and not to pay for previous production; those planes are STILL not finished.

- The noted absence of comments from Alexa, Ken/TP, Mirage, RedTail and others is most telling.

In short, Welcome to the Revolution. The best Value Proposition in aviation will be planes manufactured in Russia....so long as the Europeans will buy into what the Americans have clearly no (the REAL order book is clearly about 700).

It must really suck to be Ken just about now. Hope the waters around Capetown provide solace.
Gunner

Shane Price said...

Gadfly,

Thanks for that!

I note from their web site that the M14PF has

Probably the best engine sound in aviation.

However, they also say that the latest flanges will take 'western' props. Could this mean that the lifetime of the 'eastern' originals is less than optimal?

Goat,

Not only were the Mig 25 engines toast after high speed runs, but the thing became a glider. The combat radius (186 miles!!) was, basically, straight up and then, straight back down again. Oh, and the entire avionics were valve based.

I can see it now. The Eclipski 500R (for Russia) with cruise missile (one way) engines and a good strong set of 'steam' gauges in the cockpit.

Should sell loads of them for a million or so. Not sure what currency, though. Could be in Roubles, might be in Dollars....

Shane

Plastic_Planes said...

OK, I've tried as hard as I could, but I can't take it any longer...

If Vern and Peg head up the Albuquerque Operation, will the team in Russia be Boris Badinov and Natascha?

"Do you know where is moose and flying squirrel?"

Maybe Rocky will come to the rescue..

This stuff is just too good for words...

ColdWetMackarelofReality said...

A Russian made Eclipski might be a step up for fit and finish based on early reports.

Earth to Comrade Vernski - YOU ARE NOT SELLING ENOUGH PLANES TO KEEP ONE PLANT BUSY AT 500 PER YEAR - YOU DO NOT NEED ANOTHER ONE.

The EA-500 and even the ECJ are not going to sell in Europe like they, ahem, have 'sold' here - for all the reasons our European bloggers have clearly stated before.

They have perhaps 1100-1200 'orders' that need to be filled - if they hit their projected production rates this year and next they will be out of real orders to make.

DayJet is floundering, there is no reason to believe they will need the other 1300 jets they have on 'order' any time soon, IF EVER.

Al and Kent appear, finally, to have closed the magic checkbook, look for their quiet disappearance from the board like the last voice of dissent, Brian Barents. No announcement, just a new photo and bio section.

First real change should be replacement of FOV (Friend of Vern) with FOR (Friend of Roel) - probably VP Engineering first, maybe even a European or Eastern European.

If Pieper is serious there should be real changes and within the month - if no big changes within two months, his money will go down to the same fate as before, color copies, free soda, big tents at airshows and a Beach Boys concert - oh and maybe another concept jet that the BoD didn't know about - I am thinking an 8 seat 3-holer, like the Tupolev Tu-154.

Black Tulip said...

New names may be needed...

Eclipski is good.

How does CzarJet sound?

Does it come with tundra tires?

airtaximan said...

I think the ETIRC (pronouce E-trick from now on)is a wonderful deal.

1- this guy has one of the largest "orders" of e-clips (only fair to revert back to the e-clips, now) - second only to ed, who probably was Vern's first choice - but ed knows something about operating these planes as taxis,now.

2- so, e-clips aviation has orders from itself, now... sorta.

Its a stretch, I know, but not that big a stretch.

I think the biggest stretch is to call them "orders". I forget, was it 100 or 200 planes ordered by E-trick? for Eastern Europe...

Its going to be a lot easier to "grow" the "order book" from now on... they should keep placing orders with themself...

Man, OH man...

mouse said...

Anyone considering the cake walk (not) from the EASA certification team?

FlightCenter said...

Conversation between Vern and Al Mann shortly after the unveiling of the EconJet at Oshkosh.

Al: I invested over $100M (fill in the appropriate number) in Eclipse and you choose not to mention to me that you are developing and announcing another jet at Oshkosh!

Vern: Well, um, ah... We're not really developing another jet and were not really announcing another jet. You see it's just a concept, it's just part of the show to help us raise the next round of financing.

Al: What were you thinking?

Conversation between Vern and Al Mann in the fall while Vern is looking for the next round of financing.

Vern: We've had our problems, but we are actually having the best year ever in the history of aviation. No company has ever done what we've managed to do this year...

Al: You mean burning through close to 400 million dollars while missing your production target by 400 aircraft?

Vern: We're so close to the success you dreamed of, we just need a bit of cash to tide us over. You see we've shipped more turbofan aircraft in our first year than any other company in the history of aviation...

Al: What aren't you telling me this time? I have a concept. You're on your own.

Vern: Well, I'll have to put a new structure for the board in place if that is the case.

Al: Have fun with that.

Shane Price said...

Stan,

It's official. ColdFish and Dark Flower agree.

Can you please rename the blog:-

Eclipski Aviation Critic

Shane

ColdWetMackarelofReality said...

WHERE ARE THE OPTIONS?

Other than the Part 135 Option (including the scabbed on mechanical 3rd AI), can any of the supporters (not Faithful) tell us whether or not ANY of the other options are certified and available yet?

The listings at Controller and elsewhere seem to show nearly all the options NOT installed and therefore I presume NOT AVAILABLE at this time? IOW, more IOU's.

While on the subject, perhaps one of the supporters (not Faithful) can explain why they are accepting an incomplete, partially functional, marginally useful plane that cannot currently be legally flown in a significant part of the country due to near-constant Icing NOTAMs?

Are they issuing final and full payment at time of delivery (all indications are that they are but I would prefer to get it straight from the horses mouth rather than the other end, i.e., the Faithful).

WhyTech said...

"Man, OH man..."

Dont you mean "Mann, OH Mann ...?"

WT

ColdWetMackarelofReality said...

Same as above:

What is the status on the transparency inspection and replacement intervals?

Has that improved from where it was announced to be after being denied hither and yon for weeks on end?

How are actuator MTBF and failure rates? Vern said they were unexpectedly high only a few months ago - any noted improvements here? Replacement parts identified and available via Service Bulletin or similar mechanism?

Similarly, which systems that were INOP before Avio NfG are now fully operational beyond perhaps weather radar? Not will be, but ARE, right now, today.

As for FIKI and EASA cert., did Vern say 2nd quarter of what year?

gadfly said...

Shane

You’re on to something. With all the avionics on board, the Russians will use “valves”* instead of “solid state”. They can mount all that stuff in the wings . . . the filaments will keep them “ice free” . . . clever, clever, clever! Nyehtt?

gadfly

(*valve . . . British term for “vacuum tube”.)

Shane Price said...

Gadfly,

We are on the same wavelength....

Geddit??!!

As it happens, I have an attic full of 50MW (hint, not milli Watt) WWII vintage radar spec valves. They were intended to be part of the NORAD early warning stations along our north and west coast, but got 'lost' somewhere along the line.

We (no names and don't ask) used them in the '80s to build AM radio transmitters, for people who were not in possession of the appropriate licenses.

Pirates, in other words.

One of those monsters in each wing of a B52 (never mind an Eclipski) would keep any amount of ice at bay.

The only problem would be the associated power supply....

Sooo...

If your local talk radio annoys you enough, give Uncle Shane the nod and I can have you jamming the sods with 10MW of noise in no time.

Note that I derate from 50MW, in the interests of a longer life. And within about a 75 mile radius, 10MW will drown out almost ANYTHING.

I know. Did it a couple of times, just for fun you understand.....

Shane

Shane Price said...

Oooops!

KiloWatts, not MegaWatts...

MegaWatts would blank out most of North America....

Sorry.

Shane

Stan Blankenship said...

Subject: Leaving Eclipse

I wanted to let you know that I have made the extremely difficult decision to leave Eclipse to pursue another opportunity within General aviation. While I am excited about my new position, I am also very sad to leave Eclipse.

Over the last five years, I have had the rare opportunity to work with an incredibly talented team to bring an innovative new category of aircraft to market. From the challenges we faced as we changed engine and avionics suppliers, to the highs we celebrated as we were awarded the Collier trophy, received our FAA certifications and delivered the Eclipse 500 to customers – the Eclipse team has been through it all and has become stronger and more accomplished with each step.

I am proud to have experienced these events firsthand and feel privileged to have worked at such a dynamic company. I believe strongly in Eclipse’s vision, and will be watching with pride as the company continues to transform the face of aviation.

It is inevitable that some people will jump to false assumptions about why I am leaving Eclipse. For this reason I want to say in advance that I am not leaving Eclipse for any other reason other than career advancement. I still completely believe in Eclipse, and in the team of extremely hard-working professionals that have made this one of the world’s most exciting aviation companies.

My last day at Eclipse will be tomorrow (January 16th). You can contact me at abroom72@hotmail.com until I have my new email address on January 28th.

Best regards,

Andrew H. Broom
Director, Public Relations

airtaximan said...

Andrew,
Best of luck in your new position.

How many real Eclipse 500 orders are there?

;)

flyger said...

Hmm, this news report doesn't quite align with what Vern told us:

http://www.ft.com/cms/s/0/186b0766-c381-11dc-b083-0000779fd2ac.html

Eclipse Aviation, the pioneer US maker of four-seat very light jets, has been rescued by a Luxembourg-registered investment fund Etirc led by Roel Pieper, a Dutch, former IT industry executive.

Not the verb "rescued". Not what Vern said "accelerating our business plan".

Mr Pieper said that Etirc had invested a “first instalment of close to $100m,” which would rise ”probably to $150m-$200m.”

If I read that right, Etirc became the largest shareholder for *less* than $100M. If they pump in another $100M, one expects they will not only be the largest, but a majority.

Mr Raburn said the group had a backlog of 1,950 firm orders including 160 jets previously ordered by Etirc, which also had options to buy a further 60.

What happened to 2,650?

Vern Raburn, Eclipse chief executive, said on Tuesday that Etirc had already paid in “almost $100m.” The source of the funding was “between Etirc and the Russian government,” he said. “They (the Russian government) want to get airplanes built and that is the source of the funds.”

So even Vern now admits is was less than $100M even though he said it was more? Seems clear the Russian government is the driving force here.

It seems that Roel has a slightly different perspective than Vern, thus the differences.

One wonders about the Taiwanese government and Sino-Swearingen. The Taiwanese could have spent so much less to go bankrupt with Eclipse! And they didn't even get the right to manufacture the plane! Those Ruskies sure know how to cut a deal!

ColdWetMackarelofReality said...

Hmmmmm, the plot thickens.

ColdWetMackarelofReality said...

Hey! Where did the other 600+ 'orders' go?

1950 + 104 = 2054, a far cry from almost 2700.

And we know from the public admission by Ed last year that at least 1100 were 'options' not 'firm orders', from DayJet.

1950 - 1100 = 850 which is the close to the average of what we critics have suggested the 'real' 'order' book always was (700 - 1000).

Or are we to now believe the order book is magically 3000+?

We need a cheat sheet and Cliff's Notes to the latest incarnation of the 'business plan'.

REGARDLESS, ECLIPSE HAS NOT, AND IS NOT SELLING ENOUGH PLANES TO ACHIEVE ITS' STATED BREAKEVEN REQUIREMENTS - all else is meaningless fluff, except for certification, options, IOU's, retrofits, and the unknown burden of warranty and support.

airtaximan said...

guys...

2650 Eclipse 500's in calandar year 2000 USD adjusted for inflation and currency fluctuation = 1950 Eclipse 500 in Jan 2008 euros...

c'mon!

Well, I asked Broom for the 'real" order count, and THIS pops up. Hmm...

flyger said...

Check out this video interview here:

http://kob.com/article/stories/S313164.shtml?cat=520

Best sound bite from Vern:

"Whatever rumors, correct or incorrect there may be out there about Eclipse's financial health, they're all gone away now."

Poof. He even makes the hand motion like a magician.

He's doing a sales job on himself. This tells me Eclipse was never a con job, it is worse. Vern actually believes what he is saying.

The body language of Roel seems to indicate he's not all that happy to be seen with Vern. The "arms crossed, waiting for Vern to shut up" look.

Did you notice the factory guys using an angle grinder to assemble the airplane? I thought they said their design required no rework, ever, to be built!

Anyway, Vern said they have 1600 people now and will hire another 700 this year in ABQ. 2300 people is about $300M per year in payroll. You need to bring in at least $600M in revenue to cover that and the cost of goods. Not to mention the retrofits. Even if they ship *all* they promise this year, it isn't enough revenue!

Does not compute!

FlightCenter said...

The backlog numbers seem consistent with previous data from Eclipse.

2,650 orders - 715 DayJet options = ~1,950 firm orders....

Using that math, the 1,950 number would still include about 690 "orders" from DayJet. That would be the original 715 "firm" orders minus the ~25 that have been delivered to date.

However, Ed Iacobucci has publicly said that the number of firm orders is 239. If you adjust the backlog by 476 to account for that difference, then the firm backlog including DayJet would be 1,474.

That puts the non-DayJet orders at around 1,260. There are another 50 options for Our Plane, Linear Air and Jet Set Air. Then another 60 options for ETIRC.

That brings the firm order book down to 1,150. And that would include the fleet order from Dubai for 12 E500s announced at the show last year plus about 38 new orders from individual owners since the last announcement on orders at EBACE in May.

ColdWetMackarelofReality said...

FC, I thought DayJet is on the hook for a total of 1400 planes, but Ed said only 239 'orders' and the remainder as 'options' unless my memory is off. If that is the case, then the order book appears to make even less sense (cents) than before.

The recent blurb mentioned the Russian Government so the question becomes do they want planes to be built for them (e.g., 65 piloted cruise missiles in exchange for their investment of $100M) or are they trying to keep people employed by building jets?

FlightCenter said...

ColdWet,

Back when Eclipse was in the shadow of the Nimbus fiasco, they signed a deal with Jetson for 715 orders and 715 options.

That was the magic rabbit that Vern pulled out of his hat to make up for the 1,000 aircraft order that disappeared when Nimbus went south. (and as it turns out when he needed to close another financing round.)

Vern's been counting those 1,430 orders/options as orders ever since, or at least until today.

The latest comments finally seem to acknowledge that half of those 1,430 orders/options are in fact only options.

That still leaves the disparity between the 715 orders that Vern is counting and the 239 orders that Ed is willing to stand behind.

Now on to some math that just doesn't add up. From the video link provided by flyger - Vern says,

"I want to be extraordinarily explicit here. There is not going to be one job... This is not an outsourcing strategy. This is not a transfer strategy. This is nothing more than an expansion strategy."

The comment implies that building planes in Russia will not impact jobs in ABQ. For this to be true, the Russian plant would be restricted from making aircraft for any of the existing backlog. They would only be allowed to build aircraft for new orders secured by ETIRC.

If I was an Eclipse depositor, I would be asking for a guarantee that my aircraft will be built in ABQ. If Eclipse believes Vern's rhetoric, then there should be no problem giving their depositors that assurance.

It looks like Ken's aircraft will be built in ABQ, but one wonders where Shari's aircraft will be built.

airtaximan said...

"If I was an Eclipse depositor, I would be asking for a guarantee that my aircraft will be built in ABQ."

exactly the misdirection they are seking - this would mean you actually THINK your plane will be built...

If it comes down to it, and there's only 1 factory... these depositors would be begging for their planes - made in China, Russia, anywhere.

Look what they've already acquiessed to.

Also, the thing about the "65 piloted cruise missiles" - remember the "virtual co-pilot" ... under some circumstances, I am sure this would suffice as PIC!

FlightCenter said...

ATM,

Good point! ;->

But I'm not so sure I would be begging for one of those Russian or Chinese built planes.

By the way, I think you are on to something.

The next round of financing will come from China and include an exclusive marketing and production deal for the Chinese.

Then there is still India left if they still need more money. You heard it here first!


The Indians are making cars for $2,500! Now that's a disruptive notion on so many levels.

gadfly said...

Read the two following articles . . . and be “enlightened” . . . maybe:

http://www.abqjournal.com/news/state/apvern01-14-08.htm

http://www.abqjournal.com/biz/277298metro01-15-08.htm

Between the KOB report, and the two above, the “Wizard of Oz” seems like a “History Channel” documentary in comparison. If you can sort out the various versions of “Oz” (1908, 1910, 1914, 1921, 1925 . . . with Oliver Hardy as the “Tin Man”, and the 1939 version in color), you will still not be able to understand the “Wizard of ABQ”.

And how come no-one is talking about the “Nederlands’”? Who better than the Dutch to know how to “bale out” a business, using “propellers”! Oh that’s right, this is a “jet”! (Anthony Fokker would have known how to design this thing.)

gadfly

(And “Shane”, my first training in electronics as a kid was by “Martians”, otherwise known as “ham operators” . . . and my grades were not “B+”, if you get the “drift”.)

airtaximan said...

Does anyone have a 6-place Eclipse 500?

airtaximan said...

from the ABQ article:

"Eclipse now has 1,600 employees, including workers rehired after being laid off last October."

Really?

I thought these were no longer needed...

"- October 19, 2007

ALBUQUERQUE (AP) — Eclipse Aviation has laid off about 10 percent of its workforce, most of them temporary workers.

The workers were needed to begin production of the company's Eclipse 500 very light jet airplane, but they are no longer needed, said Andrew Bloom, a spokesman for the Albuquerque-based aircraft manufacturer."

THOSE LYEN BASTADS.

airtaximan said...

Same Article:
"The planes assembled overseas will be sold in ETIRC Aviation's territory, but the quality of the Eclipse 500 will be maintained because the parts will come through Albuquerque, he said."

reeaalllyy?

Quality will be "maintained" - I guess he didn't say it would be "good".

How does "parts coming through ABQ help all this? It would have been better BS had he said, "we have quality systems that can be applied overseas, including onsite quality inspection processes and personnel at our suppliers. We intend to ensure the highest assembly quality by have our personell overseas, as well".

BUT, he did not say this.
GAD, how high on the BS meter? 1-10

gadfly said...

With the screen writers still out on strike, the following is offered as a public service for your continuing entertainment:

It would have been an easy thing to copy the entire “Associated Press” article, but there are copyright restrictions. However, the following “excerpt” is legal, and should “scare the willies” (whatever they are) out of any present or potential owner of the little jet. If you don’t see it in the “text”, try just a little bit, to read between the lines.

By “Heather Clark/Associated Press”:

“The investment also moves Eclipse closer to going public, although Raburn said in an interview after the news conference that neither Eclipse nor the market is ready yet.

The planes assembled overseas will be sold in ETIRC Aviation's territory, but the quality of the Eclipse 500 will be maintained because the parts will come through Albuquerque, he said.

"We're very confident that we'll be able to build an aircraft that will be indiscernible between an aircraft built in Russia and aircraft built in the United States,'' Raburn said.
Should the Russian plant become reality, Raburn said he thinks it would be the first time a U.S. aircraft would be legally produced in Russia.”
End quote.

We once had a Dutchman in our employ, spoke seven languages fluently . . . he recalled flying in an “Aeroflot” aircraft on business . . . smelled smoke, went to the back of the plane to discover some passengers, cooking their supper on an “hibachi” (small stove with open coals) . . . a normal occurrence for the “locals”.

gadfly

(Who knows . . . “stir fried welding” . . . “hibachi on board aircraft” . . . must be a connection there, somewhere!)

gadfly said...

Taximan

It's scary that we're coming up with the same message . . . great minds, etc., . . . but in answer to your question, "the needle wrapped itself around the peg".

In all fairness, a lot of excellent quality stuff is manufactured here in ABQ . . . hence the reliability and safety (?) of most high-tech weapons that keep our country secure. But there is little "cross-over" between the "R&D" for which Sandia and Los Alamos, et al, is known,. . . and the things manufactured over a couple miles to the southwest of here.

For the past sixty years, the local shops have grown up to know quality when they see it . . . having grown up in the center of the nuclear weapons' birth place. So the "local shops" know quality when they see it . . . and this "ain't it".

gadfly

A long time ago, you could see "Live Rattlesnakes" and get your "water bag" at the top of "Nine Mile Hill" on US66 before you crossed the Arizona Desert on your way to California. Today, you don't have to leave the city limits . . . except for the "water bag".

airtaximan said...

from AIN:

DayJet Marks First 100 Days of VLJ Air-taxi Service
On Saturday, Boca Raton, Fla.-based DayJet reached its 100th day since starting per-seat on-demand service in the Southeast with its fleet of 28 Eclipse 500 very light jets. Company president and CEO Ed Iacobucci told AIN that DayJet is still “just getting booted up” and that he remains cautiously optimistic. “We’re seeing some encouraging trends; half of our more than 1,000 members are quoting flights,” he said, “and more than one-third of customers who have booked and flown flights said they definitely will be repeat customers.” DayJet’s top customer, who works in the finance industry, has so far made 14 bookings and flown 22 legs with the VLJ air-taxi firm. According to Iacobucci, DayJet’s computerized reservation system has generated more than 12,000 quotes for customers, while quotes so far this month have tripled from last month. “We’re gathering lots of good data from customers to see where they want to fly and how much they’re willing to pay,” he added. Iacobucci said the Eclipse 500s have demonstrated about 95-percent dispatch reliability while the fleet has accumulated more than 4,000 flight hours. DayJet expects to have approximately 100 Eclipse 500s in service by year-end.

how many flights resulted from 12,000 quotes? these are members? I thought Ed said he needed to fulfill a large percentage of requests? Like 85%...

Hmm...

PS 95% dispatch reliability is not good in commercial aviation.

airsafetyman said...

"The planes assembled overseas will be sold in ETIRC Aviation's territory, but the quality of the Eclipse 500 will be maintained because the parts will come through Albuquerque..."

Words fail.

baron95 said...

AT said... “and more than one-third of customers who have booked and flown flights said they definitely will be repeat customers.”

And he thinks that is a good thing? 33% customer satisfaction?!?!? Duh! That means that 2/3 of the customers did not like the experience/value enough to be repeat customers. I don't know of any business that would surviver with this level of customer sat. Even proctologists must have a better rate of repeat customers.

AT said... Iacobucci said the Eclipse 500s have demonstrated about 95-percent dispatch reliability

And he thinks that is a good thing???!!! About 95% means that one in 20 fights gets cancelled due to Eclipse 500 technical problems. That is just plain awful. One of the planes I regularly fly is a 1966 C55 Baron and I have much better dispatch reliability than that. And given that Ed is a friend and cheerleader of Vern, "about 95%" is probably closer to 90%, which means almost 1 flight in 10 gets cancelled because of A/C probs. This is just a disgrace. Even for a new type.

Only Ed (err Verns wip boy) can think the two figures above are good.

What would he do if only 3 in 10 Citrix customers would repeat business and Citrix SW only worked 90-95% of the time? Would he be happy?

Talk about low standards and low expectations.

baron95 said...

Flyger said... Couple that with the fact the chairman of the board just changed. The board has the power to fire Vern whenever it wants.

I completely agree. Vern is a huge liability.

I could not believe how condescending and disrespctful he was to Pieper (his new boss). During Q&A, Vern grabbed the podium and sent Pieper to the side and back to his seat. Every time a question was directed to Pieper, he had to get up and coyly approach the podium to answer and then Vern would forcefully control the podium so Piepr had to move away again. It was painful and embarrassing to watch.

Also, Vern's remarks about the Russians as "enemies" which he took several seconds to correct as "past enemies" and his references to Russians "stealing American designs" are outright insulting.

The above two facts are reason enough to have fired him on the spot. Pieper should just let a month go by then replace Vern.

Vern kept on trying too hard to "show" that he was the big dog, and in control and that nothing had changed. What an arrogant baffoon.

If you are on top of your game and have all the cards you should still not be arrogant. If you are a screwup and are walking around with hat in hand, you look ridiculous trying to play top dog.

What an embarrassment for the people at Eclipse and every american CEO. Thank god there were only very few people in attendance.

ColdWetMackarelofReality said...

Don't miss the interesting VERNacular going on - cuz the Russians won't.

Vern - It's the first Western plane they didn't steal.

Vern - The Russian's won't build planes for the West.

Vern - But quality will be the same.

Vern - Substantially more than $100M.

Vern - Almost $100M.

The guy cannot help himself but speak out of both sides of his mouth, full speed ahead and damn the inconsistencies.

How do you s'pose that makes the Russians feel?

How 'bout Roel who was instrumental in prying a significant amount of capital from the hands of the Russian 'government' - that's gotta make him feel good to be associated with such a statesman.

Roel and our comrades from Russia, welcome to the Eclipse experience (Epocalypse), don't mind the bus, it's just backing up to get a good running start.

flyger said...

Flightcenter can add to this list:

FIKI Commit -- Delay

Q2 2004 -- 4 Years for cert + 1 year for retrofit
Q2 2006 -- 2 Years for cert + 1 year for retrofit
Dec 2006 -- 1 ¼ Years for cert + 1 year for retrofit
Dec 2007 -- ¼ Year for cert + 1 year for retrofit
Early 2008 -- TBD


Vern said "first half of 2008" in the press event. So we can add:

Jan 2008 -- 1/2 year for cert + 1 year for retrofit

Not so good, in one month, we lost 3 months of deadline! At this rate, they will never be done!

gadfly said...

Once upon a time, a long, long time ago,

There was a thing called a “Cold War” . . . the “good guys” were battling against the “bad guys”. Each side considered the other side “very smart” . . . and so, things called submarines sneaked across great oceans . . . going to places with strange names like, “Vladivostok” and “Petropavlovsk” . . . cold places that gave new meaning to “Cold War”. Then one day, the war was over . . . one side “gave up” . . . too expensive. And one day, I saw the “enemy” . . . a tourist attraction in Stockholm, a “Whiskey Class” submarine. I had heard them on Sonar many years ago, going out overhead every morning, coming back every evening . . . a “squeaky shaft” on one . . . fearing the worst, we remained submerged . . . listening, observing, recording radar signals, making records of their “war games” . . . and here was one of them, reduced to few “Kronor” for a tour . . . and I didn’t even bother . . . Sweden in early October was too beautiful to waste my time on this piece of Russian hardware. But there it was . . . a little thing built of steel, empty of crew, something of which circus side shows are made.

And now, living as far from those cold ports as is possible, the “Russians have landed”. Let us hope for the sake of “Eclipse”, the Russians, and “General Aviation”, that the “Russians will soon “take off”. Except for “Sukhoi” (whose American distributor happens to be in Albuquerque), we may soon see the marriage of technology of “east and west” . . . talk about a circus sideshow!

These are, indeed, strange times! And if the Russians help produce a product on a par with the “Whiskey Class” submarine of old, please do not invite me to come aboard!

gadfly

(Recently, those “top secret” patrols were “de-classified” . . . and are now in the public domain . . . . for a price.)

Gunner said...

Am I missing something or has the latest, greatest Eclipse event in Modern History disappeared from their web site less than 24 hours after posting?

Dunno why they would have done that; such great news and all.

Does anyone have a link? Alexa? Ken?
Gunner

Shane Price said...

Gunner,

The only link that SHOULD be missing is the one to Vern Raburn.

Shane

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