Eclipse Aviation, start to finish.

backseatpilot — Fri, 14 Nov 2008 06:58:51 -0800

Eclipse Aviation yesterday told all of its employees to go home and that they would not be paid for their past two weeks of work. Eclipse has been seen since its inception as a revolutionary company, pioneering the development of the world's first very light jets - defined as a jet aircraft weighing less than 10,000 pounds gross and costing less than $4 million. Philip Greenspun (of photo.net fame) has reviewed many of these VLJs, including the Eclipse 500. The concept was simple: build a fast, cheap twin-engine aircraft for the growing market of private owners and air taxi services. The company won the prestigious Collier Trophy in 2005 (a list of all winners up to 2006 here) before the Eclipse 500 had even been certified. Controversy quickly set in about the company's practices. A blog was established to criticize just about every aspect of the company, from its business model to the design of the aircraft. After Eclipse Aviation Critic shut down, Eclipse Critic NG (named after the airplane's second avionics suite, the Avio NG - the original Avio was replaced after Eclipse dropped Avidyne as a contractor) stepped up to continue the discussion. Eclipse subpoenaed Google to obtain the IP addresses of several of the contributors to that site. After replacing virtually all of their contractors, increasing the base price of the airplane from $800,000 to $1.5 million, and delaying deliveries, Dayjet - an air taxi service and Eclipse's biggest customer - shuttered its doors in September. Last month, Eclipse halted production of its aircraft, leading to yesterday's announcement that its employees would not be paid. Unfortunately, Eclipse's business model is predicated on a rather "optimistic" assumption - 1,000 aircraft sales per year at an original cost of $800,000 per unit. The Teal Group (pdf) has rather a lot to say about the company, most of it negative: The Eclipse program was designed from the outset to be revolutionary and unique. In Teal Group’s estimation, the people behind Eclipse have attained this objective. This program is the single worst aviation program Teal Group has ever covered. It isn’t the aircraft itself. Rather, it was a business plan that makes no sense, except to attract investors who don’t know much about the aviation business. The plan called for 1,000 deliveries per year. As a reference point, in 2007 the world’s manufacturers delivered a total of about 4,000 turbine-powered aircraft of all types and models. This one company, an unknown start-up, proposed to grow that global figure by 25%, admitting that it couldn’t survive if it merely built 450 planes per year (100 aircraft more than any other turbine-powered aircraft model).

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Eclipse Aviation, start to finish.