I had the pleasure of speaking with Mr. Press at length at his
office and over lunch at the “Spirit of St. Louis Airport” in
Chesterfield, MO this past Friday, August 21st, 2009 when we
spoke for a few hours over the direction of the Eclipse 500 Jet,
pertaining to the short-term, and the long-term goals for the
future of the efficient Eclipse 500 Jet. It appears that the
goals could be summarized as follows:
Short-Term: (First 2 Years: Now – August, 2011):
Immediately work on getting all of the existing 259 Eclipse 500
Jets completely finished, completing upgrades, retrofits,
etc…would cost approximately $150k - $600k per owner, depending
on what is needed for completion. Some are as simple as
“software upgrades” while others need complete avionic upgrades,
software upgrades, interior refurbishment, and other important
hardware replacements. Work on getting all pilots “typed
certified” out of Albuquerque, NM at the Eclipse Headquarters,
using the flight simulators. Originally, there will be about
15-20 employees brought back, with the expectation that more
will be hired as the company gets settled, stabilized, and then
demand grows.
There could be “Buy Back Programs,” so that owners of the
Eclipse have the chance of selling their aircraft to Eclipse
Aerospace, or a subsidiary company if they do not wish to make
the investment mentioned above and continue owning an Eclipse
500 Jet. There also could be potential “Lease Programs” offered
through various companies throughout the United States and
possibly overseas. More details to follow as these are made
known. Also, for many hundreds of unfortunate Eclipse Aircraft
Position Holders, whom had lost their security deposits and
having made progress payments seeing those lost in the
bankruptcy, the new Eclipse Aerospace may issue possible
“Vouchers” where they can possibly purchase an Eclipse 500 Jet
directly from Eclipse Aerospace, subsidiary, or Authorized
Eclipse Aerospace Representative at a discounted rate. Again,
hopefully, more details are to follow…
Long-Term: (After 2 Years: Post 2011): While the goal
or course makes perfect sense to get all of the SN#’s: 1-259,
up to speed, much of the public is interested in what’s going to
happen after this and how other potential buyers can purchase an
Eclipse 500 Jet, post SN#259. It appears it will take awhile
for the production to start up on the assembly line, but again,
nothing is set in stone. Something we have stated,
www.MicroJetPositions.com , from the very beginning, is that
the Eclipse 500 Jet “practically pays for itself.” The more
hours you fly it, the more money you save… Burning only about
65-75 total gallons per hour, is a huge savings.
Money saved is money made. Thus, the reason Eclipse Aviation
originally received almost 2,000 orders in a relatively short
timeframe. I am suspect that Eclipse Aerospace will start up
production, but again, no new news on when this will begin. I
would think that as long as there are 259 Eclipse 500 Jets
successfully, consistently, happily and safely flying over the
next 2 years, that this alone would justify and prompt many
future Aircraft Owners sitting on the fence, to want to reserve
their own Eclipse 500 VLJ…
Micro Jet Positions, LLC continues to be very interested in
offering the Eclipse 500 Jet, Shared Ownership Models for the
Eclipse 500 Jet, and will continue to be in discussions with
Eclipse Aerospace to help serve the demand that continues to
thrive. So again, our congratulations go out wishing success to
the first VLJ, “The Eclipse 500 Jet” and to Eclipse Aerospace
for making this happen!
August 5th, 2009: Eclipse
Aerospace in Final Push for Eclipse Assets:
The trustee in the Chapter 7 bankruptcy proceedings for Eclipse
Aviation late last week asked the bankruptcy court to approve
the sale of the former very light jet manufacturer’s assets
essentially “free and clear of liens, claims, encumbrances and
other interests pursuant to the Agreement [with Eclipse
Aerospace].” If all goes smoothly and no other bidders emerge,
in a few weeks Eclipse Aerospace will close on a $40 million
deal to buy the assets of Eclipse. Eclipse Aerospace is headed
by president Mason Holland, an Eclipse 500 deposit-holder, and
Mike Press, owner of Eclipse 500 S/N 004 and president and CEO
of Single Pilot Jet Management. Mason signed the asset purchase
agreement on July 31. Eclipse Aerospace’s goals include resuming
parts supplies; offering modifications at Eclipse headquarters
in Albuquerque and at a new service center in Chicago; launching
a refurbishment and resale program for used Eclipse 500s; and
continuing “our study on the viability of restoring production
of the EA-500.” Another group–the Eclipse Owners Group–had
planned to bid on the Eclipse assets but decided that a bidding
contest would be counterproductive and plans to return funds to
members and dissolve once Eclipse Aerospace has successfully
concluded the purchase.
July 31st, 2009:
SOLD? Is The Eclipse Drama Over? Sale Agreement Reported For
Bankrupt Company:
ANN is looking over court documents now that detail a very
recent potential agreement to sell virtually all the primary
assets of Eclipse Aircraft to a group headed by Eclipse
customers Mike Press and Mason Holland.
The company, named Eclipse Aerospace, Inc., has apparently
agreed to pay some $40 million for the assets, reportedly half
of it in cash.
According to documents on hand, the "The Buyer and Seller agree
that the aggregate value of the Purchase Price is $40,000,000.
Upon the entry by the Bankruptcy Court of the Bidding Procedures
Order, Buyer shall deposit the amount of $5,000,000 of the Cash
Consideration pursuant to the Deposit Escrow Agreement."
Interestingly, the sale includes all of the former DayJet
aircraft, which represent a considerable asset... "Seller agrees
that upon the Closing, Buyer shall have acquired all of the
Seller's right, title and interest in the DayJet aircraft and
any and all obligations from DayJet Leasing LLC and or its
affiliates and no further or additional consideration shall be
due Seller on account of such interest."
To the best of our knowledge, the sale is expected to close in
August with a hearing ont he matter currently scheduled
for August 10th, the factory could reportedly reopen shortly
thereafter. ANN is examining over 140 pages of docs for
additional detail and conducting interviews... we will update
this story shortly.
June 10th, 2009: New Eclipse 500 Training Provider
Receives FAA Approval
Jet Elite Training, of Clearwater Florida, has received FAA
approval to provide Eclipse 500 training per the airplane's
flight manual operating limitations. J.E.T. will offer both
recurrent and initial type rating training with on demand
scheduling in their Florida facility or at the customers
location worldwide.
Recurrent training will consist of an at-home directed study
program plus two days of ground school and flight training in
the aircraft. Initial type rating training will include online
jet transition training, a flight skills assessment, upset
recovery training in the L-39, plus nine days of ground school
and flight training. If required, Mentor training will be
accomplished following the initial type rating. J.E.T. is now
scheduling Eclipse 500 recurrent training and will begin
scheduling initial type rating training shortly.
J.E.T. specializes in the Very Light Jet (VLJ) training market
to include the Eclipse 500, Cessna Mustang, Phenom 100, and
others as they are certificated. J.E.T. is owned and operated by
current VLJ Mentor pilots and instructors Tom Norton and Peter
Zaccagnino. Mr. Norton brings over 14 years in airline,
military, and general aviation pilot training experience and was
the former Director of Customer Training for Eclipse Aviation.
Mr. Zaccagnino brings over 20 years experience in high
performance aircraft training and flight testing, and has
extensive corporate flight operations worldwide.
April 8th, 2009: Interesting... Hawker
Beechcraft Extends Lifeline To Orphaned Eclipse Owners
Eclipse Jet Announces Formation Of US Service Network
Brigadoon Aircraft Maintenance First 'Platinum' Center
The battle to service the orphaned fleet of Eclipse 500 very
light jets ramped up significantly Tuesday. On the same day
Hawker Beechcraft announced a letter-of-intent
to discuss a servicing partnership with Eclipse owners, a bidder
for the defunct planemaker's assets also announced plans for a
nationwide -- and, possibly, worldwide -- network of service
centers to support the inaugural VLJ.
Eclipse Jet LP announced Tuesday it has
entered into an agreement with logistics and management
organization Eclipse Service Network, LLC (ESN) to form a
network of third-party Service Centers across the United States.
Eclipse Jet also says it is in discussions with third-party
service providers in Europe to start an ESN-Europe as soon as
possible.
Brigadoon Aircraft Maintenance, LLC, is the first Platinum Level
Service Center under the Eclipse Service Network. Located near
Chicago, IL, Brigadoon is staffed with a team of Eclipse trained
mechanics and recently started FIKI modifications for the
Eclipse 500 Jet.
"With the help of Mike Press and Mason Holland and the entire
Eclipse Jet team we have been able to identify and source all of
the parts necessary to begin FIKI modifications, we will begin
taking orders for service shortly," said Ken Ross, founder of
ESN and CEO of North American Jet Charter Group,
an early adopter of the Eclipse air taxi model.
"We have Eclipse trained mechanics and are now ready to
accelerate our Eclipse services.
"We have sourced all of the parts needed for the FIKI upgrade so
we are ready to start scheduling these, however, we are waiting
for Eclipse Jet to secure the assets of Old Eclipse so we can
finish the work needed to deliver ETT, Avio NG, and Garmin 1.5
upgrades at reasonable production levels," Ross added.
"When we looked at the body of work Brigadoon had already
accomplished to expedite the delivery of the modifications, we
quickly realized the level of expertise and dedication to the
Eclipse community was unparalleled. We looked at many options,
but we quickly came to the conclusion that the ESN model was the
only one with the ability to deliver FIKI to the fleet in the
few remaining months before icing season," said Press.
Organizers state further the number of ESN service facilities
will be determined by aircraft population and location.
Qualified independent repair facilities or fleet operators may
be eligible to join the Eclipse Service Network after completing
an application process and passing an audit to verify it can
meet the service level standards set forth by ESN.
The levels of ESN certified service facilities are Platinum,
Gold, Silver and Fleet Manager.
Incidentally, if the word "Brigadoon" sounds familiar... perhaps
that's because, in addition to being a suburb of Perth,
Australia... Brigadoon is also the name of
a Broadway musical based around the Scottish
legend of a mythical village.
A village that appears for one day in our realm, every 100
years. Reassuring?
David Green, Chairman of the Steering Committee for the Eclipse
Owners Group (EOG) has announced that the EOG has signed a
nonbinding Letter of Intent with Hawker Beechcraft Corporation (HBC).
The parties will now begin negotiations for a definitive binding
agreement under which HBC would provide maintenance upgrades and
other aircraft services to EOG members, consisting of individual
Eclipse 500 owners.
"Eclipse owners will benefit greatly by having Hawker Beechcraft
as our service provider," Green said. "HBC's reputation across
the industry and especially among its customers and suppliers is
unsurpassed. This relationship is sure to create tremendous
confidence in Eclipse owners that their planes will be flying
for many years to come."
News of the LOI marks the first significant progress in the sad
case for Eclipse 500 owners, since a flurry of activity weeks
ago.
As ANN reported, EAC entered Chapter 11
bankruptcy on November 24, 2008 and converted to Chapter 7 on
February 24 of this year. While at this time there is no formal
deadline for a bid on the EAC Assets, the Chapter 7 Trustee says
it intends to sell the EAC Assets as soon as possible.
Several parties came forward in the days afterward with
proposals to acquire the EAC assets... but
little has been reported about any of those plans since, as
everyone involved waits for word on whether any of the proposals
will be accepted by the trustee. Barring that, a liquidation
auction could occur 'on the courthouse steps,' as it were, to
sell off Eclipse assets.
In the search for a solution for Eclipse owners, the EOG will
negotiate with HBC to provide the needed maintenance and support
services to keep the Eclipse 500s flying in the event the EOG
purchases the assets of the Eclipse Aviation Corporation (EAC).
HBC will provide services to EOG members through its Global
Customer Service and Support operations.
"Hawker Beechcraft is pleased to offer Eclipse 500 owners the
highest quality service and support in general aviation," said
Bill Brown, HBC President, Global Customer Service and Support.
"We look forward to this new relationship and keeping the
Eclipse 500s in the air."
The EOG will own the Type Certificate and be responsible to the
FAA and other regulatory agencies for the reporting and
compliance required to maintain the Type Certificate. HBC will
provide services and support to the EOG so that the EOG can
perform its regulatory obligations and keep the Eclipse 500s
compliant with FAA and other regulatory rules. In order to
support service for the Eclipse 500s, HBC would provide service
in designated HBC service centers.
The EOG also hopes that at some future time it will be possible
to restart production of the Eclipse 500.
The EOG was formed to protect the assets of EAC necessary for
the support, upgrades, and continued airworthiness of the
Eclipse fleet on the best economic terms possible for current
owners of the Eclipse 500; to evaluate the possibility of, and
if appropriate implement, the purchase of EAC's assets by the
EOG or its designee; and to take actions necessary or
appropriate in connection with purchasing assets of Eclipse,
including forming an entity and negotiating with maintenance and
support providers.
The EOG was also formed to evaluate any proposals for the
purchase of EAC's assets by other parties and, if appropriate,
support such proposals if they are in the owner's interests. The
EOG will continue to evaluate proposals presented by third
parties for the purchase of the EAC assets. The EOG has entered
into negotiations with HBC in order to provide a viable and very
attractive alternative if the best purchaser for the EAC assets
is the EOG, itself.
April 6th, 2009: Hawker Beechcraft
Entering Eclipse Support
A group of Eclipse 500 owners and Hawker Beechcraft (HBC) today
announced the signing of a non-binding letter of intent under
which HBC’s service network would provide maintenance and
upgrades for Eclipse Owners Group (EOG) members. The two parties
are now negotiating a “definitive binding agreement,” according
to an EOG statement. The group added that it will “negotiate
with HBC to provide the needed maintenance and support services
to keep Eclipse 500s flying in the event the EOG purchases the
assets of Eclipse Aviation.” EOG is one of many entities
mounting an effort to bid on bankrupt Eclipse’s assets. Another
company vying to buy those assets is Eclipse Jet, founded by
Eclipse 500 owner Mike Press and deposit-holder Mason Holland,
and including minority partner Roel Pieper. Also today, Eclipse
Jet announced that it is forming a U.S. service network for
Eclipse 500s under an agreement with Eclipse Service Network (ESN).
Ken Ross is founder of ESN and president of Eclipse 500 operator
North American Jet in Chicago. ESN’s first platinum-level
service center is Brigadoon Aircraft Maintenance, part of a new
FBO complex planned by Ross at Chicago Executive Airport.
More Legal Actions Erupt in Eclipse Arena
Last month, the Alfred E. Mann Living Trust filed a
complaint against Etirc Aviation and Etirc chairman and CEO
Roel Pieper, seeking more than $10 million plus interest and
expenses. According to the complaint, Etirc and the Mann Living
Trust agreed last November “to each provide $10 million in
funding to…Eclipse Aviation” following Eclipse’s Chapter 11
bankruptcy filing. The $20 million was intended as
debtor-in-possession financing to keep Eclipse operating until
the company was sold to Etirc affiliate EclipseJet Aviation
International, a sale that never took place. The Mann complaint
notes that they “agreed that if Plaintiff provided Etirc’s $10
million share of the funding…Etirc would be obligated to pay
Plaintiff back pursuant to the terms of a $10 million promissory
note.” The Mann Trust did provide the entire $20 million, and
Etirc “executed a promissory note” but defaulted on the $10
million payment due February 28, according to the lawsuit.
Meanwhile, a
coalition of law firms is seeking Eclipse deposit-holders
for a possible lawsuit against officers and directors of Eclipse
Aviation. The firms are not asking for money from
deposit-holders: “We accept the risk of our investment in our
cases and thereby share your incentive to diligently pursue your
rights.”
March 26th,
2009: As the liquidation process for the assets of
bankrupt Eclipse Aviation drags on, four groups have
announced proposals to buy those assets and restart
product support and in some cases production for the
orphaned Eclipse 500 very light jet. There may be
Chinese interest in bidding on the Eclipse assets, too.
No date has been set for the asset auction by the
Delaware bankruptcy court. Eclipse Aviation was placed
into Chapter 7 (liquidation) bankruptcy on February 24,
and since then a variety of competing elements have come
forth, offering various ideas to help owners of the 259
Eclipse 500s produced keep their jets flying and buyers
who have placed deposits–some totaling hundreds of
thousands of dollars–recoup some part of their
investment. Under the Chapter 7 liquidation proceeding,
it’s unlikely that deposit holders will retrieve any
money from the sale of Eclipse Aviation’s assets.
Eclipse Aviation, of course, isn’t the first example of
an aircraft manufacturer going out of business or
dropping support of an out-of-production aircraft. What
happens with orphaned aircraft ranges from leaving
owners to fend for themselves to the consistent
aftermarket support provided by Mitsubishi for the MU-2
turboprops, which ended production in 1986. MU-2 parts,
training and upgrades remain readily available, and
Mitsubishi has promised to continue supporting the
marque until the last one stops flying. In other cases,
new companies have formed to support fleets like the
Twin Commander turboprops or Aerostar piston twins.
Gulfstream still provides support for all of the
aircraft it manufactured, including technical support
for the few remaining G-I turboprops, although
maintenance and parts are handled by separate companies.
Sabreliner still makes parts and provides complete
maintenance for all North American Aviation/Rockwell
International/Sabreliner 40- through 80-series jets.
In other cases, manufacturers have chosen to eliminate
the liability and expense of supporting older models by
removing them from the market and destroying the
remaining fleet. Cessna did this with the CH-1 Skyhook
helicopter, for example, and the 411 piston twin.
Raytheon Aircraft followed suit by buying back the
handful of Starship composite turboprops that were in
customers’ hands and dismantling most of them. Some were
given to museums.
The Eclipse situation is somewhat unusual. First, of the
259 Eclipse 500 twinjets delivered, not one that is in
customer control is fully functional. Eclipse took the
unusual step of certifying and beginning deliveries of
the jets before they were completely finished; some
early jets still need aerodynamic and engine upgrades
that help the jet meet performance guarantees, including
larger wing tip tanks. Many need the upgrade from the
original Avidyne avionics to the latest Innovative
Solutions & Support (IS&S) integrated glass panel
avionics. And none have received the final avionics
upgrade, dual Garmin 400W navigators that finally
provide GPS capability, nor have any of these jets been
upgraded with the flight-into-known-icing package.
There are other more pressing maintenance matters
requiring immediate attention, too, including
airworthiness directives on the
angle-of-attack/pitot probes,
throttle lever
and one limiting maximum altitude to 37,000 feet until
an
engine problem
causing excessive carbon build-up is fixed.
One element of this whole Eclipse situation is that it
is not normal for a new aircraft, especially a jet, to
be “orphaned” so soon after production begins.
The FAA has commented on the Eclipse situation, with a
special airworthiness information bulletin (SAIB
CE-09-14) outlining
what Eclipse 500 owners need to consider as they try to
continue flying while Eclipse Aviation’s assets are
liquidated.
The SAIB is not mandatory, and in it the FAA advises
Eclipse 500 owners that all Eclipse operations,
including certification, production, service centers and
training are closed. But Eclipse 500s can still be
flown, as long as they are airworthy. “Contrary to media
reports, the FAA has no plan to ground the EA500
airplanes,” the SAIB states, while also asking owners
and operators to report any “unsafe conditions” to FAA
program manager
Alma Ramirez.
The SAIB’s questions/answers section explains, “Parts,
including software upgrades, and proprietary information
are not available from Eclipse.” Another problem is that
while many vendors are sitting on piles of Eclipse
components, they most likely are not able to ship those
directly to an Eclipse owner or operator until obtaining
FAA-PMA (parts manufacturer approval) on each component.
Some components that have TSO approval can be sold and
shipped to end users, but otherwise all material has to
flow through Eclipse, which is the holder of the model
500’s type certificate. According to the SAIB, “several
Eclipse suppliers are currently approaching the FAA
about obtaining a Parts Manufacturer Approval on their
components.”
Those Eclipse 500s that have been modified with the IS&S
instrument panel are stuck without available navigation
databases, which were distributed by Eclipse. The SAIB
notes, “Since this update is not available from Eclipse,
the types of approaches that the pilots can make with
these airplanes may be limited. The airplanes with the
Avidyne displays may be updated through other sources.”
Although entities are vying to purchase the Eclipse type
certificate and other assets, the SAIB pointed out, “If
Eclipse surrenders the TC, the FAA becomes the
custodian. This allows for the continued support of
in-service aircraft.” That doesn’t mean that the FAA
would provide such support, only that it would
facilitate the standard supplemental type certificate
approval process for any modifications. Parts support
would still be dependent on suppliers getting their
materials PMA’d or TSO’d.
If Eclipse were sold to a non-U.S. company, the SAIB
said, the “FAA will work with appropriate government and
international authorities to assure that airworthiness
issues for U.S.-registered airplanes are addressed.”
Following are summaries of the current proposals for
disposition of the Eclipse Aviation assets. Apart from
these efforts, one company has launched and is offering
to assist Eclipse 500 owners and operators. Albuquerque,
N.M.-based Eclipse 500 Services says it is staffed by
people who built and maintained Eclipse 500s. And it
plans to offer maintenance and upgrades, including the
Garmin 400W navigator upgrade and possibly known-icing
“depending on customer interest.”
Eclipse Jet
Last July, Eclipse investor and chairman of the board
Roel Pieper took over leadership at the company after
founder and chief evangelist Vern Raburn was forced to
depart. After trying to raise money to buy Eclipse
Aviation for $28 million in cash plus $160 million in
promissory notes and 15 percent equity for senior
secured noteholders following Eclipse’s Chapter 11
bankruptcy, Pieper’s company Etirc Aviation was unable
to follow through and lost the $150 million it had
invested in Eclipse.
Now Pieper is back, having recently joined the team of
Eclipse Jet, one of the companies that plans to bid on
Eclipse’s assets. These assets may go for much less this
time, given that Eclipse’s senior noteholders asked the
court to place the company into Chapter 7 bankruptcy,
which means that its assets will be sold to the highest
bidder.
Eclipse Jet was founded by Mike Press, a long-time
Eclipse 500 aficionado and owner of S/N 4, and Mason
Holland, a so-called “60-percent deposit holder” who
paid the required 60 percent of the purchase price for
promised delivery that never occurred. Holland’s Eclipse
was supposed to be S/N 473. Press and Holland are also
members of the Ad Hoc Customer Committee and Steering
Committee, which has been trying to protect Eclipse
customer interests during the bankruptcy proceedings.
“Roel is a minority partner and has made a financial
investment [in Eclipse Jet],” said Holland. “We all have
a collective interest in doing the right thing for the
company.”
Other members of the Eclipse Jet team include Raul
Segredo and John Cracken. Segredo is president and CEO
of Avionica, which makes data recorders used in flight
operational quality assurance (FOQA) systems as well as
satellite communications equipment. Cracken is managing
director of Dallas-based private equity firm Cracken
Harkey.
Eclipse Jet has met with the owners’ group, according to
Holland. “We’re hoping we can work on something
collaboratively. The end-game is to embrace the owners.”
Eclipse Jet’s goals are to rebuild the Eclipse 500
service, support and training programs and eventually
restart production of the jet. Pieper would like to
license assembly of the Eclipse 500 overseas, according
to Holland, but core production would remain in the U.S.
Eclipse Aviation’s big mistake, Holland said, was to
focus first on growth instead of profits that could
support the company for the long-term. “We have put
together a solid business plan to reintroduce Eclipse as
a thriving profitable company that focuses on customers
first,” he said. “They’re the lifeblood of the
business.”
The first priority is to provide parts and training and
help existing Eclipse 500 owners modify their jets to
the latest configuration with the Garmin 400W navigators
and the known-icing upgrade. Some of the early Eclipse
500s still need the aerodynamic mods, too. Once that is
achieved, Holland said, “We’ll start reintroducing
production of aircraft.” And deposit-holders like
Holland, who are likely to get nothing as a result of
the bankruptcy, will be offered a discount on
new-production jets “so they can recoup some of their
investment.” He can’t quote a price for a new Eclipse
500, but added that it “will be very competitive.”
Eclipse Jet plans to help suppliers that are still owed
money with some financial support. In addition, keeping
the fleet serviced creates an outlet for Eclipse
inventory that otherwise might not be worth much.
Eclipse Jet has the necessary funding to make a solid
bid on Eclipse’s assets, according to Holland, although
in mid-March the company was still seeking working
capital that would be needed to finance the effort to
revive Eclipse. Former Eclipse employees are already
showing interest in joining Eclipse Jet, but, he added,
“100 percent of senior management will be from existing
customers and deposit holders.”
Although Eclipse Aviation burned through well over $1
billion developing the Eclipse 500, obtaining FAA type
and production certificates and delivering 259 jets,
Holland appreciates the effort that went into building a
new jet company from scratch. “That is a monumental
thing to pull off,” he said. “The vision was there and
was achieved, and this is a fantastic machine. We can’t
let this go to waste. They created a viable aircraft,
now we just need to put a viable company behind it. The
risk is mitigated to a large degree. We know the product
works.”
Press, who has sold many Eclipse 500s and logged
hundreds of hours in his own 500 via his company
Single-Pilot Jet Management, Chesterfield, Mo., sees
Eclipse Jet as an opportunity to help his customers.
“Many of the owners are my personal friends, whom I’ve
introduced to Eclipse and sold them their aircraft,” he
said. “I am responsible for them, and Mason and I have
organized an exceptional team to lead a bid to fulfill
my responsibility to current Eclipse owners and
depositors.”
New Eclipse Acquisition
Phil Friedman, CEO of Wichita-based Harlow
Aerostructures, was one of the early companies with an
Eclipse asset-buying proposal, announcing the formation
of New Eclipse Acquisition on February 27. Also on the
New Eclipse team is Peter Reed, who was CFO at Eclipse
Aviation for seven years. Friedman is proposing to
restart Eclipse 500 production by 2011, but doing so
will require a lot of manufacturing engineering work and
tooling design to lower the cost of producing the jet.
“It’s … a challenge,” Friedman said.
The first step would be to upgrade the entire fleet to
the latest configuration. “There’s not a single one of
the 259 airplanes that was delivered complete,” Friedman
said, “so we have to upgrade everybody to same latest
configuration.” He would also like to open multiple
smaller service centers around the U.S., closer to where
customers are located so they wouldn’t have to travel as
far as they did to the former Eclipse service centers in
Albuquerque; Gainesville, Fla.; and Albany, N.Y.
New Eclipse has contacted Eclipse vendors, and Friedman
is hoping that they won’t have to go to the trouble of
obtaining PMA approval for their parts but can wait for
the new company to buy Eclipse’s assets and restart the
flow of parts under the new banner. “We’re asking them
to hold off until we get back to the normal chain of
supply,” he said.
Friedman believes that the Eclipse 500 can be
competitive, but it would have to sell for a base price
of about $2.4 million. Eclipse not only didn’t charge
enough for the jet but mistakenly believed that there
was a large air-taxi market for the jet and “that high
volume would drive down manufacturing costs like it does
in other industries,” he said. “I just don’t
believe–having been in the industry–that economies of
scale and cost savings are as great as projected.”
According to Friedman, Eclipse projected a build time of
600 person-hours for the 500, but it really took about
7,000. The Cessna Mustang takes about 4,000, he said.
“That was a major error in cost analysis.” Add to that
problems with the Eclipse’s original Williams
International engines–which Raburn claims set the
company back $250 million–“and you’ve got millions of
dollars of losses,” Friedman said. If Eclipse is
operated like a normal company, he added, it should be
successful. And that includes fixing reliability
problems, providing better and more consistent service,
paying vendors on time and not focusing on a “grandiose
vision of a huge air-taxi market.”
New Eclipse may offer a small discount to
deposit-holders, but that hasn’t been decided yet.
Friedman’s business plan assumes that orders have
dropped to zero. Friedman and Reed have been talking to
key Eclipse engineers, former employees, model 500
owners and suppliers. “All constituencies want this to
work,” Friedman said. “I’m extremely excited. I’ve been
in this industry 28 years, and this is an opportunity to
build an entire jet. It’s the culmination of all the
effort I’ve made in my career, and I think it’s the only
plan that can work in this dire economic environment.”
China Plan?
AIN has been in contact with a person who said he
represents a Chinese company interested in bidding on
the Eclipse assets, but he would not reveal any details
by the time this article was published. He also would
not confirm if he represents China Commercial Aircraft,
which is interested in bidding on Eclipse’s assets,
according to a March 17 article in the Albuquerque
Journal.
Eclipse Services and Support
Bill Herp, CEO of charter operator Linear Air of
Concord, Mass., which has four Eclipse 500s in its
fleet, launched a co-operative organization made up of
Eclipse owners hoping to buy assets from the liquidation
sale to help keep Eclipse 500s in service. The co-op is
named Eclipse Services and Support, and if it can
purchase the right assets from Eclipse, such as the type
certificate and other intellectual property, it could
help owners obtain parts and upgrades at reasonable
prices.
The co-op would be structured so that Eclipse-owner
members would obtain support for their jets at the cost
of operating the co-op, thus keeping prices down. “I
think the fact that it is structured as a co-operative
gives it the potential to most efficiently offer to the
customer base the most cost-effective way to get their
aircraft upgraded,” Herp said. “The notion of creating a
co-operative funded by owners seems to resonate,” he
said.
Eclipse Owners Group
David Green, owner of Eclipse 500 S/N 1, is part of a
group proposing something similar to Linear Air’s co-op.
The Eclipse Owners Group is first evaluating other
bidders’ programs, and if those don’t offer the best
deal for owners, the group is proposing a non-profit
co-op to purchase Eclipse’s assets and serve owners’
needs, similar to the co-op proposed by Herp at Linear
Air. Other members of the group include Randall Sanada,
founder of very light jet charter/management firm Jet
Alliance of Westlake Village, Calif., as well as model
500 owners Ron Lebel and Ken Meyer and Single-Pilot Jet
Management’s Mike Press. The Eclipse Owners Group effort
was announced before Press and Mason Holland launched
Eclipse Jet.
“We as the owner group have a lot of motivation to band
together and be united,” said Sanada, “not only to
protect our interests and the interests of the
depositors but also to address the predatory practices
of those who might take advantage of the owner group by
capturing control of the assets.”
If the owners group co-op becomes necessary, Sanada
envisions it doing what all of the other efforts are
proposing: supporting the existing fleet, performing
upgrades, then possibly restarting production. In the
co-op’s case, however, production may have to be
licensed to an existing manufacturer.
The V-Jet II was an
all-composite structure with a forward-swept
wing, a V-tail, each fin of which was mounted on
the nacelle of one of the two engines. Williams
had not intended to produce the aircraft, but it
attracted a lot of attention, and
Eclipse Aviation was founded in
1998 to further develop and produce the
aircraft.
Founder and former Eclipse CEO
Vern Raburn was one of the first business
executives at
Microsoft. Subsequently,
Bill Gates became a major stake-holder in
the Eclipse project.[8]
The VLJ concept has been pursued by a number of
manufacturers, and because the V-Jet II had been
designed around one of the primary VLJ engines,
Eclipse believed it was an ideal design to
refine and market.
The airframe was significantly redesigned as
an all-metal structure with a T-tail and
straight wings. The main cabin shape is
essentially all that was retained from the V-Jet
II. It was recognized that for an aluminum
structure to be cost effective, new
manufacturing techniques would have to be
developed. One of the primary processes used was
friction stir welding, in which the skin and
underlying aluminum structure are welded
together rather than riveted, as traditional for
aluminum aircraft. Anti-corrosion bonding
techniques were also developed.[9]
Besides materials processes, the general
process of building the airframe was redesigned,
with techniques taken from the automotive
industry. Traditionally, aircraft structure is
mounted in a jig, and the skin is riveted on to
the outside of it. For the Eclipse 500, lessons
were taken from composite airframe
manufacturing, and the aluminum skin is first
laid in a mold, and then the structure is built
into it. The result is much more precise control
of the aircraft's final shape, resulting in a
cabin that is more robust and can be pressurized
to a higher differential. In addition, the
manufacturing techniques are designed so that
one crew can assemble an airframe in a single
shift. The complete interior is designed to be
installed on a moving assembly line in 45
minutes.
Originally Eclipse selected a pair of
Williams International EJ-2 engines (a
production variant of the FJ22/FJX-2) for the
Eclipse 500, but as the aircraft's weight
increased, performance was not satisfactory.
Pratt & Whitney Canada agreed to participate
in the project, and modified the design of their
PW615 engine, designating it the
Pratt & Whitney Canada PW610F. The prototype
Eclipse 500 first flew with the Williams engines
in
2002. [10] The
redesign to incorporate the new engines resulted
in a significant delay to the development
program. The first flight of the Eclipse 500
with the new engines occurred on December 31,
2004. [11]
An Eclipse press release says that its
aircraft is "the quietest jet aircraft" and that
it is "quieter than virtually all multi engine
turboprop and piston aircraft".[12]
The Eclipse 500 cockpit has
glass cockpit technology and an integrated
avionics package. Problems with the original
configuration have involved a re-design of the
system. The first aircraft have the original
system called Avio installed. Later
aircraft have the Avio NG system in place
of the original Avio. The new avionics package
was certified in December 2007 and it was
intended at that time that the older
Avio-equipped aircraft would be retrofitted to
the same standard by the end of 2008.[13]
The Eclipse 500 received provisional type
certification from the
FAA on 27 July 2006, shortly after the
aircraft's PW610F engine was certified by the
Canadian authorities. FAA Administrator
Marion Blakey presented Raburn with the
provisional certificate in a special ceremony at
the 2006 Oshkosh Airshow.
Full certification was not granted at that
time because the composite wing tip fuel tanks
did not meet FAA lightning strike criteria. As a
result, Eclipse started testing an improved
wingtip fuel tank made from
aluminium. Eclipse also started ramping up
production of the 500, so aircraft could be
released to customers once full certification
was achieved.
Full type certification was eventually
achieved on 30 September 2006. At that point, in
addition to the five flying prototypes, 23
aircraft were in production and two had already
been completed. The 500 type certificate allows
the aircraft to be flown under
IFR with a single pilot.[14]
Eclipse received its FAA production
certificate on 26 April 2007. Serial numbers
1-11 were produced prior to the production
certificate being granted. These aircraft were
subject to individual FAA inspection. 500 serial
number 12 and subsequent were built under
production certificate No. 500.[14][15]
The aircraft received its certification for
flight into "known icing conditions" on 25 June
2008, although this is yet to be added to the
current type certificate data sheet, which is
Revision 2, 15 January 2008.[14][16]
Investigation of certification issues
In June 2008 the
United States Congress tasked the
Office of Inspector General for the Department
of Transportation with the investigation of
claims by
Federal Aviation Administration employees
who have indicated that the certification
process of the Eclipse 500 was flawed. Members
of the
National Air Traffic Controllers Association,
which represents FAA Aircraft Certification
Engineers, have filed a grievance alleging that
the type certificate was improperly issued by
FAA managers over a weekend and that the
aircraft had outstanding safety issues at that
time. The FAA stated that it stands behind its
certification of the jet. Then Eclipse CEO, Vern
Raburn, stated the 500 was in "complete and
total conformity" and that he considered the
complaint an internal FAA issue between workers
and managers.[17][18]
The concerns expressed by the union
representing the certification engineers
included:[19]
that the FAA issued the 500 type
certificate "without allowing FAA aircraft
certification engineers and flight test
pilots to properly complete their assigned
certification and safety responsibilities"[19]
FADEC issues that indicated a loss of
control of engine thrust could occur[19]
Designated Engineering Representatives,
who reported to FAA program managers, were
being pressured by Eclipse[19]
Instead of taking action against the
aircraft manufacturer for pressuring the
DERs, the FAA management ignored complaints[19]
At the time of the issue of the type
certificate, the cockpit displays were not
in compliance with the FARs, suffered
repeated failures and displayed incorrect
data[19]
FAA special review
The
Federal Aviation Administration announced
that it commenced a 30-day special review of its
certification of Eclipse 500 on 11 August 2008.
The review was headed by Jerry Mack, a former
Boeing safety executive. The remainder of the
review team is composed of personnel who were
not involved in the original certification
effort. The certification review team was
mandated to examine aircraft safety,
certification of aircraft trim, flaps, display
screen blanking and stall speed issues.[18]
Eclipse Aviation CEO Roel Pieper issued the
following statement in response to the FAA
review:[20]
"Without a doubt, this special review
will uncover what we already know - that the
Eclipse 500 marks the safest new airplane
introduction into service in 20 years,
customer safety has always been a priority
at Eclipse, and we look forward to this
investigation dispelling any inaccuracies
about the certification of this airplane for
once and for all."[21]
The results of the certification review,
released on 12 September 2008, indicated that
the certification process was valid, but that
the FAA and Eclipse Aviation "should conduct a
root cause analysis" of the owner-reported
problems with the aircraft's trim, trim actuator
and fire-extinguisher systems. Further report
recommendations addressed internal FAA processes
that were not optimally handled.[22]
Acting FAA Administrator
Robert Sturgell responded to the review
report saying:
"This review tells us that while we made
the right call in certifying this aircraft,
the process we used could and should have
been better coordinated. These
recommendations will be invaluable as we
continue certifying these new types of
aircraft."[22]
The House Aviation Subcommittee heard
testimony from the inspector general for the
Transportation Department, Calvin Scovel, on 17
September 2008. He testified that FAA employees
were instructed by FAA management and that a
target date was set for the Eclipse 500's
certification, regardless of the test flying
results. "It was a calendar-driven process...
with a predetermined outcome," Scovelis said.[23]
Scovelis testified that FAA Administrator
Robert Sturgell recently stated that the FAA is
also reviewing the production certificate that
was awarded to Eclipse.[23]
US Representative
Robin Hayes, (Republican,
North Carolina) asked Scovel if the Eclipse
jet is a safe airplane to fly. Scovel stated,
"My office has no evidence that it is unsafe."
Scovel added later in the proceedings that given
the information that the FAA had on September
30, 2006, when the
type certificate was awarded, "a reasonable
decision would have been to defer the granting
of the type certificate."[23]
The house aviation committee also heard on 17
September 2008 from a panel of current and
former FAA employees. They stated that there was
consistent pressure from FAA management to meet
the stated timeline for the Eclipse 500
certification to be completed. They were told
not to look more than "an inch deep" during the
certification process. In the same hearings FAA
managers defended their certification practices
and denied many of the employees' allegations.[23]
European Aviation Safety Agency
certification for private use was achieved on 21
November 2008. It requires the aircraft to be
equipped differently than the FAA certification
does, including the Avio NG 1.5
avionics system, a third attitude indicator
and dual
Mode S transponders.[25]
In early December 2006 and in March 2007,
Eclipse announced, in letters to customers a
number of changes to the initial specifications,
including:
New
fairings for the landing gear, wheel
covers, and tail
Control surface hinge covers
Extended rudder and elevator, to
eliminate
gurney flaps
Improved lower engine nacelle panel
aerodynamics
Extended wingtip fuel tanks (+12 US gal.
on each side)
Changes to engine FADEC software, to
increase cruise thrust above 25000ft
altitude
Overall weight increase of 79 lbs with
no change to full fuel payload or max useful
load.
Together, these measures are expected to
increase the cruise speed from 360 to 370kts TAS
and increase NBAA IFR range from 1055 to
1125 nm. All aircraft, including the already
delivered initial deliveries, will be upgraded
to this new standard.[27]
The Eclipse 500 was given an initial airframe
life of 10,000 hours, 10,000 cycles or 10 years,
whichever comes first. It is anticipated that
this limit will be raised if the manufacturer
completes additional fatigue testing.[28]
The Eclipse concept was to bring a new
economy to small jet aircraft, and both cost of
acquisition and ongoing operational costs were
considered in the design of the plane. Eclipse
has been marketing the aircraft to general
aviation aircraft owners who have not previously
owned a jet, so it is directly competing with
high-end piston and turboprop aircraft.
Eclipse's marketing efforts have focussed on the
aircraft's projected low service costs and
comprehensive maintenance and support program
for customers. Being able to land at over 10,000
airports in the
United States, Eclipse and other VLJ
manufacturers hope that this would create an
air taxi role for their aircraft.
In June 2008, Eclipse claimed to have a
backlog of over 2,600 total orders for its
Eclipse 500.[29]
In May 2008, Eclipse announced that the price of
the Eclipse 500 would transition to $2,150,000
due to a lower than projected production volume
which resulted in expected efficiencies not
being realized and higher production costs.[30][31]
At one time Eclipse offered the Jet Complete
program, an aircraft management and support
program.[32].
It guaranteed private owners a fixed maintenance
cost of $209 per flight hour for three years, if
the aircraft was operated between 300 and 3,000
hours during that period. A similar Jet Complete
Business program covered charter operators.[citation
needed]
Although Raburn told customers in late
November 2006 that he anticipated delivering 10
aircraft before the end of the year, his company
was only able to get a single copy of its jet
delivered on December 31, 2006.[33]
The official delivery ceremony occurred on
January 4, 2007, when the keys were handed over
to its co-owners, David Crowe, an owner-pilot
and the shared-jet cooperative group, Jet
Alliance.[34]
At the time of bankruptcy filing on 25
November 2008 Eclipse had delivered 259 EA500s.
Serial number 260 had been paid for on the
morning of the filing and in advance of the
filing, but the company refused to release the
aircraft to its owner. The bankruptcy judge
noted the fate of this particular aircraft and
ordered that the company maintain it and insure
it until its final disposition is decided. In
the final judgment the aircraft was ordered
released within five days of the closing of the
sale of the company, but the sale was not
completed and the fate of 260 has not been
determined.[1][5]
Eclipse halted production of the E-500 in
October 2008 at serial number 267, although
serial number 266 was completed much earlier in
the year. The company indicated that it lacked
the funds to continue production or to refund
customer deposits for the EA500 and 400 that
were owed and are the subject of outstanding
lawsuits.[3]
On 20 November 2008 Eclipse announced a
reduction in company hours for maintenance
scheduling, technical services and customer
care.[35]
Aviation Week & Space Technology noted that
"regardless of technical support, several
critical spare parts are no longer in inventory
because many vendors have stopped shipping
spares to Eclipse until they receive payment for
past due bills. And they won't ship more spares
to Eclipse except on a COD basis. Notably, only
a few vendors will sell parts directly to
customers because of previous exclusive supply
contracts with Eclipse."[35]
In January 2009 all Eclipse factory support
facilities were closed. In response at least one
group of ex-employees set up a maintenance and
support facility to assist the owners of the 259
aircraft already delivered by that point.[36]
DayJet was the Eclipse 500's largest
customer, as at one time it had 1400 aircraft on
order for use in the
air taxi role.[37]
Aviation analysts were doubtful whether the
company's aggressive sales and production
targets were feasible.[38]
On 6 May 2008 DayJet announced that it had
scaled back its operations, laying off 100-160
employees in all segments of the company and
selling or leasing out 16 of its fleet of 28
Eclipse 500s. DayJet founder and CEO Ed
Iacobucci indicated at that time that the
company needed
USD$40M to reach profitability, but that the
current economic climate did not permit the
company to raise that amount. Iacobucci stated
that the company proved that the operational
concept is sound, but that the DayJet fleet of
28 Eclipse 500s needed to be quickly expanded to
50 aircraft to attain profitability.[37][39]
DayJet suspended all passenger operations on
September 19, 2008. They cited inability to
raise operating funds in the current market as
one factor and also stated:[40]
“
The company’s operations have also
suffered as a result of Eclipse
Aviation’s failure to install missing
equipment or functionality or repair
agreed technical discrepancies in
accordance with the terms of DayJet’s
aircraft purchase contract.[40]
”
With 1400 500s on order out of a claimed
order book of about 2500 aircraft DayJet
represented 58% of all Eclipses that had been
ordered.[37][39]
Eclipse Aviation announced in October 2008
that they are acting as "the exclusive broker"
in the sale of the DayJet aircraft and
advertised the entire fleet of 28 aircraft for
sale.[41][42]
Canadian light aircraft fractional aircraft
company OurPlane bid on the entire DayJet fleet
of aircraft, offering more than "$500,000 each
but less than $1.5 million" each. OurPlane
operates a fleet of
Cirrus SR22 aircraft and one current Eclipse
500.[43]
Customer reception of the aircraft has been
mixed.[44]
“
Despite some serious and expensive
teething problems with many of the
EA500s built so far, some pilots are
quite enthusiastic about its flying
characteristics and economical operating
costs (although many other pilots
consider it a dysfunctional mass of
parts flying in loose formation).
[44]
”
Some owner-pilots have been quite
enthusiastic about the aircraft. In a September
2008 article Eclipse 500 owner Ken Meyer wrote:
“
In a nutshell, while you can say any
number of things about Eclipse Aviation
and its many missteps, the plane is a
great plane. It is folks. And whether
you like the manufacturer or not, the
plane will be around for a very long
time to come because it’s a very good,
very efficient, very fast design.
You see, by the numbers alone, the
plane is everything it was advertised to
be...But what I didn’t anticipate was
how much raw fun the Eclipse would be to
fly. Sure, every airplane is fun to fly,
but the Eclipse makes you feel like a
fighter pilot. It handles like a Mooney
with jet engines. Tight and crisp, a
sports car of the air...
361 knots, cruising in jet comfort
above the weather at 37,000 feet while
burning just 209 pounds per hour per
side, a total of less than 62 gph. Fuel
efficiency: 6.7 statute MPG. Know any
other jets that can do that? That’s
better fuel efficiency than I was
getting in my old piston plane!...
...Reliability? I’ve got over 40,000
miles on my plane since taking delivery
in April. It’s had maintenance—there
were several delivery squawks that had
to be fixed—but not a single flight has
been cancelled due to a maintenance
issue. I flew to Mexico in July with an
author and photographer onboard. In my
previous plane, I’d have worried that
the story and photos would be about our
breakdown in a foreign country. In the
Eclipse, I had no doubt whatsoever the
flight would go well. And sure enough it
did.[45]
”
Some aircrew flying the aircraft have been
critical of the Eclipse 500, its systems and
frequent failures. One corporate pilot who is
captain type-rated in several
FAR 121 and 135 aircraft and who has
extensive flight hours on the Eclipse 500 said:
“
When I have to fly the Eclipse, I am on
the edge of my seat waiting for the next
disaster to take place. For instance,
I've been flying for over 30 years and
have never had to go on emergency
oxygen, except during routine training.
Since flying the Eclipse, I've had to go
on emergency oxygen twice now due to
fumes in the cockpit and in the cabin.
Eclipse seemingly has no idea how to fix
these aircraft problems. Flying at
41,000 feet, you don't have much time to
deal with these continuous, on-going,
very serious issues. All I know is that
every time I've had to fly the Eclipse,
I'm truly scared.[3]
On June 12, 2008, the
Federal Aviation Administration issued
Emergency
Airworthiness Directive AD 2008-13-51
grounding all Eclipse 500s, following an
incident at Chicago's
Midway Airport.[46]
According to a
National Transportation Safety Board
investigation, "the airplane was trying to land
at Midway when the crew encountered a sudden
shift in headwinds, which the pilot sought to
counter by increasing power, the standard
method. But when the pilot tried to cut power a
few seconds later, as the airplane touched down,
the engines began accelerating to maximum
power." The pilots overshot, gained altitude and
shut down one engine, eventually landing without
injury or damage except blown out tires.[47][48]
Reports published on June 16, 2008 indicated
that all 500s were compliant with the AD and
cleared to fly again within one day of the AD
being issued.[49]
The company indicated that the final solution
to this problem was a software change to
increase the throttle range and prevent an
out-of-range condition.[50]
The club was originally formed by Eclipse
Aviation in the summer of 2006 and funded by the
company until November 2007. The club is now an
independent body governed by a five member board
and has dues of
USD$125 per year. For people who are not
Eclipse owners or position holders the club has
an "enthusiast" membership level which is free
of charge, but provides only limited access to
the club forums.[54]
^
ab Walrath,
Mary F.: Order (A) Authorizing The
Debtors to Sell Substantially All Of
Their Assets Free and Clear etc.
United States Bankruptcy Court for the
District of Delaware, 23 January 2009,
Case Number 08-13031 (MFW)
^
The Ad Hoc Committee: Motion of the
Ad Hoc Committee of Secured Noteholders
for an Order Converting the Debtors'
Chapter 11 Bankruptcy Cases to cases
under Chapter 7 of the Bankruptcy Code,
United States Bankruptcy Court for the
District of Delaware, 24 February 2009,
Case Number 08-13031 (MFW)
^
The Ad Hoc Committee: Motion to
Shorten Notice of the Motion of the Ad
Hoc Committee of Secured Noteholders for
an Order Converting the Debtors' Chapter
11 Bankruptcy Cases to cases under
Chapter 7 of the Bankruptcy Code,
United States Bankruptcy Court for the
District of Delaware, 24 February 2009,
Case Number 08-13031 (MFW)
