From: "Ed Iacobucci"
Date: May 6, 2008 10:52:06 AM PDT (CA)
To: Name Deleted by Shane to Protect Source
Subject: DayJet News
Given your longstanding interest in DayJet, I wanted to personally provide an update and some perspective on recent developments at the company.
Effective this week, we have made the difficult decision to scale back DayJet’s 2008 growth plan. Because of this change in strategy, the company has reduced its employee base across most areas of its business. As I will explain, these changes were caused by external economic factors and are not a reflection of a weakness in the underlying DayJet business model.
In fact, our first phase of operations, the "Proof of Concept" phase, has gone exceptionally well.
Response to our "Per-Seat, On-Demand" service during this first phase was very consistent with our expectations and we answered many nagging questions: Yes, customers will fly in a small jet; Yes, customers will embrace the per-seat model; Yes, customers will pay a premium for tangible value; Yes, the technology works as planned; and most importantly, Yes, we can find these customers. All in all, we have signed over 1,500 members, more than 550 of which are active travelers, and nearly 200 are frequent flyers.
Unfortunately, a proof of concept is only the first step to profitability. The next step is equally important -- growing the "Network" to a density that generates operating margin. Our projections have always indicated a network of 30-50 "line" aircraft serving 20-30 fully developed DayPort markets was needed to reach critical scale. More importantly, this required a $40M infusion of operating capital in the first quarter of 2008. I won't dwell on this point, but suffice it to say that given the current state of the U.S. capital markets, the timing of our planned financing could not have been worse.
Without the growth capital required to open new markets, the company must scale back to a size that is consistent with the demand of our existing customers and service region. DayJet’s business model is based on operating at a critical mass, requiring investment ahead of growth. We hired and trained a number of employees in anticipation of future growth and always planned for additional capital investment at this stage.
This restructuring will not reduce our existing service region. It will not impact our quality of service to our customers, and most importantly, it will not impact our commitment to safety, which is the heart of our service. We will continue to operate and expand our service (albeit at a slower rate) to communities across the Southeast in response to customer needs. And when the capital markets recover, then we would expect to resume the growth forecast in our original plan.
DayJet has been fortunate to receive so much support and excitement from the regions we serve, our investors and the aviation community at large. Developing new markets is never easy, and I think it is important to be as forthcoming about our challenges as we are about our successes.
If we can provide any further insight into this shift in strategy, please let me know.
Warmest regards,
Ed Iacobucci
DayJet President and CEO
176 comments:
Well done Ed, that cannot have been an easy one to write. I hope that you, and the staff who have been loyal to you but must now depart, find a way forward.
Would that Vern Raburn could be as open and honest during troubled times.
Shane
This is also up on CharterX:
http://www.charterx.com/resources/article.aspx?id=3311
This means Eclipse has a lot of explaining to do...along with the self-dealing NM SIC advisors and the bribed NM SIC fiduciaries. For Eclipse its all VOLUME VOLUME VOLUME and yet the taxpayers were left with fiduciaries who were asleep at the wheel or worse.
Dayjet utilization this week has been within the "envelope", early in the week numbers are typically down. A flight on Sunday was unusual, and a flight into a Louisiana field was a first.
Day : Hours
Sunday: 2:40
Monday: 12:32
Tuesday (partial): 10:16
This also goes back to the alleged Vern letter regarding Brian Skupa. I believe the key paragraph is here:
"Brian Skupa, a member of the Customer Care team, decided he needed to share company confidential information with one or more of his friends outside of Eclipse. This decision was made in spite of the numerous requests I and others have made of everyone in the company to respect the INDA (Invention and Non-Disclosure Agreement) that we each signed. Make no mistake, disclosure of confidential information no matter how it is done: via email (company or personal account), in other written forms, or verbally is considered a violation of the INDA. Eclipse, unlike many other companies tries to communicate openly and often with you on the assumption that the information shared with you will be kept confidential. Failure to do so not only hurts all of us at Eclipse, but also our business partners (suppliers and customers) and their employees. Unfortunately Mr. Skupa did not apparently care about hurting not only you but also our partner, DayJet. In the communication outside the company Mr. Skupa made claims (presented as facts) with respect to DayJet that were inaccurate and false. Even though the claims were inaccurate and false, the damage to our two companies has been done."
So did Skupa spill the beans on DayJet scaling back? If Skupa reported something that was "inaccurate and false," how then did he violate the NDA? How long has Eclipse known about DayJet scaling back?
Dave,
How long has Eclipse known about DayJet scaling back?
For longer than we think, that's for sure.
I've known about it for several weeks, but could not prove it. I got wind of a 'public statement' in the past 48 hours, but needed to second source it before my trailer on the last thread. That caused Ed's email to hit my inbox, less than 3 minutes after he sent it.
And don't tell Vern, but I pretty sure that it was 'one of his own' that has kept me in the loop all along.
Mind you, I could be wrong. The REAL question is, who is more wrong, more often.
The blog, or Vern?
Shane
Partial Week 32 usage by craft
. . Craft …. Hours
1 . 160 …. 6:49
2 . 156 …. 6:26
3 . 162 …. 4:07
4 . 161 …. 2:48
5 . 163 …. 1:55
6 . 146 …. 1:18 ??
7 . 148 …. 1:16
8 . 150 …. 0:49
S/N 146 is doubtful, may have been substituted with 148 on a Boca- Tallahassee one-way.
The use of 8 of the active fleet of 12-14 is within the envelope for early in the week, 4 tail #'s Monday, 5 #'s Tuesday (so far). Tail Numbers 139 and lower have not flown in weeks.
To Eclipse Aviation,
How many 'orders' are you claiming now?
Hello, anyone there?
Maybe everyone is too busy updating their CV's...
OK, as long as the last one to leave the plant tonight promises to turn out the lights, I'll be happy. We all have to be careful to conserve energy you know, as oil is now 'steady' at $120....
Shane
It would seem that James Fallows was taken for a ride.
Departure duration by hours
The much higher dispatch hours from Boca may indicate that operations will be concentrated in Boca, and KGNV will be deprecated.
Boca Raton (KBCT) .. 8:20
Gainesville Rgnl (KGNV) .. 2:47
Naples Muni (KAPF) .. 2:18
Pensacola Rgnl (KPNS) .. 2:10
Brunswick Golden Isles (KBQK) .. 2:01
Hilton Head (KHXD) .. 1:15
Savannah/Hilton Head Intl (KSAV) .. 1:13
Panama City-Bay Co Intl (KPFN) .. 1:05
St Augustine (KSGJ) .. 0:58
Sarasota/Bradenton Intl (KSRQ) .. 0:53
Opa-locka Executive (KOPF) .. 0:51
Daytona Beach Intl (KDAB) .. 0:47
Tallahassee Rgnl (KTLH) .. 0:43
Ocala Intl (KOCF) .. 0:07
Grand Total .. 25:28
Time to revist DayJet's prior plans as they reflect upon Eclipse's projections:
"The company, which is in an aggressive growth mode since its first flights in October, currently has 28 Eclipse 500 jets and has a goal of 100 jets by the end of the year. Harris said there is a five-year contract for 1,000 jets."
http://www.montgomeryadvertiser.com/apps/pbcs.dll/article?AID=/20080330/CABJ/80329019/1132/cabj
So what happens to those 70 Eclipse's that DayJet no longer needs this year? Even worse what about the 1000 Eclipse's for 5 years?
For Eclipse they still have to address the FAA forecast of a total VLJ market of 400-500 per year:
http://www.faa.gov/data_statistics/aviation/aerospace_forecasts/2008-2025/media/FAA%20Aerospace%20Forecasts%202008-2025.pdf
Then on top of that address the specific impact on their forecasts DayJet halting expansion plans has given that DayJet is their largest customer.
The NM SIC should be all over this if they are doing their job given what was reported previously about Eclipse in specific regard to DayJet:
"Mr. Birk stated that, of the 50 jets Eclipse has delivered, around 18 have gone to DayJet, a Florida based air taxi service. He said Sun Mountain has heard anecdotally that DayJet’s first two months of operation have been very successful and they have exceeded passenger load targets."
"He said Eclipse’s sweet spot is the air taxi service, with very low operating costs and very low capital acquisition costs, which gives much more compelling economics than a HondaJet."
So how is Eclipse going to get to breakeven now? When will new financing be needed? How much?
Also in regards to the 200/550/1500 customers, I believe that was explained recently...there's 550 unique customers who have actually flown and of that 550, 200+ have flown at least once more. Here it is from the Atlantic article:
"Of the 350 customers who had used its service within the first three months, 40 percent had booked a repeat flight."
http://www.theatlantic.com/doc/200805/dayjet
Look at how while in comparison look how well SATSAir is doing with props, which is also from the same reporter in The Atlantic:
"I've paid particular attention to SATSAir, which like DayJet is based in the Southeast. This week it announced that it had flown 16,000 such Cirrus trips in 2007, a 60% increase over the year before. Its press release made a point similar to what I heard at DayJet"
http://jamesfallows.theatlantic.com/archives/2008/05/airtaxi_update_propeller_plane.php
So it looks like if Eclipse wanted to dominate the air taxi aircraft market, it should developed a new prop aircraft.
First off, best of luck to those now displaced workers - fortunately for you Aerospace is going big guns, there is work all over, especially Savannah, Mobile, Melbourne and elsewhere.
That said, I hate to be THAT guy but I call BS on the whole 'splanation.
DayJet serves 4 states that combine for 10% of the population of the United States.
Ed just admitted that 30 jets, 50 odd locations and 500 people are TOO MUCH to effectively serve 31 million people and make any money - even including vacation hotspots like Hilton Head, Orlando, Panama City, Ft Lauderdale, etc.
They have 200 some 'frequent flyers'. What is the specific definition of a 'frequent flyer' for DJ?
500 some travellers, from 1500 registrations, from 31 million potential customers, 16 million in Florida alone which is the best served State by far and whose geography best justifies DJ (think Miami to P-cola).
Kudos to Ed for coming clean, but how clean has he really come?
Lack of growth capital means we have to shrink our staffing, but service level and safety will remain the same. Exactly how is that?
Sorry Vern, looks like we were right. Again.
And it had nothing to do with double-top-secret insider information and the secret handshake - it had to do with the ability to sort the wheat from the chaff and BS from reality.
Expect a new fire sale from the Eclipse Sales department....
"And if you order by midnight tonight we'll throw in the Part 135 kit absolutely free, operators are standing by."
ASPCNDA Disclaimer - No NDA's were harmed in the making of this opinion/satire. Any appearance of NDA's being in danger were simulated.
"Well done Ed ... Would that Vern Raburn could be as open and honest during troubled times."
Not as open and honest as you may think. Scratch teh surface and you'll find a load of dirt. No such thing as a hero here.
Shane, et al,
How is it possible that many folks (people only observing from afar) figured all this out a couple years (or more) ago before a “critics blogsite” was even known to exist?
“Back then”, there was no serious oil crisis, nor knowledge of the employee unrest at “ABQ”, etc., etc.
Somehow, the surprise is that it’s taken “this long” for it to become “public”.
Shortly, we’ll be bombarded with “figures” and all sorts of reasons for the failure of the “Nyet Jet”.
And notice that no attack is being made on “Dayjet”, which has the opportunity of excellent success, should they simply turn to a simpler form of aircraft, that better matches “real life conditions” . . . and “yes”, with one of those “twirly things out front”. OK, they’ll need to change the name, maybe, to “Day Spinner”, or “Checker(ed)-Past-Taxi” or “Yellow (striped) Cab” or “Marathon (running from creditors) Cab Co.” or . . . something”, but they can easily make it. And that is a no brainer.
If I want to be at point “B” on time, and I’m at point “A”, and the price is right, I’ll gladly climb aboard a plane with a “twirly”thingy up front . . . and arrive on time to make that contact/consultation meeting/sale/appointment . . . and be home tonight with the wife and kids . . . and be happy to pay the reasonable price . . . and fold it into my invoice with a clear conscience. After all, you can only look out a window at the passing landscape just so many times, paying to be above the clouds (but aren’t).
‘Maybe the “ant farmers” forgot to consider the “eyeball level” of the “business ant”. For thrills, go hire a “Lear Jet” for a day, and really do it right . . . get up there where the sky is indigo blue . . . get your fix, then return to the business world . . . and do your thing, and keep Dayjet in business, while you continue to make a profit.
But, like all flying, we come back down to earth and wonder, “What is the final outcome of the “Nyet Jet?”
gadfly
(This "Dayjet" thing is beginning to show signs of intelligent enlightenment. And they just might surprise us all . . . and make it work. I'm beginning to like them, a "whole lot". But the "Nyet Jet"? . . . hopeless!)
ECLIPSE IS ON THE RUN...
Eclipse didn't even have a prepared answer in response to DayJet's announcement!!!:
"DayJet is reported to be Eclipse's largest customer with orders for 1,400 of the estimated 2,500 aircraft on Eclipse's order book. Calls requesting comment from Eclipse were not immediately returned."
http://www.avweb.com/avwebbiz/news/BizAv_DayJet_Layoffs_197792-1.html
This DayJet announcement should really put the spotlight on how many "real" orders Eclipse actually has.
I wonder if DayJet did this to undermine Eclipse since I believe Eclipse has a multimillion dollar loan payment due next month. It might be to DayJet's advantage for Eclipse to go under if they assume no one else will take over the contract and that the BK will be an asset sale rather than a business sale. DayJet has already hinted they have a way out by using other aircraft besides Eclipse, but what is Vern's way out? Vern certainly can't sue DayJet since DayJet couldn't pay any judgment anyway. The clock is ticking...
Put another way, this puts about 270 aircraft that Vern expected to 'deliver' through 2009 as possible for sale on the secondary market.
If only there were a true-believer out there who specialized in selling pre-delivered aircraft and who had an air of respectability, oh yes there is Mike Press at SPJets - oh wait, Eclipse cut him of at the knees and stole his business model.
So, 55% of the claimed order book just vaporized, no less than $1.3B, as much as $2B.
That's gonna leave a mark.
Between this and the Motion to Quash, I think this is gonna be a bad week for the Vernperor. Look for some silly Eclipse good news story to pop up in the next couple days - hey wait a minute, didn't Eclipse just announce forced bilateral certifications a couple days before this bad news - I sense a pattern....
ASPCNDA Disclaimer - No NDA's were harmed in the making of this opinion/satire. Any appearance of NDA's being in danger were simulated.
How is it possible that many folks (people only observing from afar) figured all this out a couple years (or more) ago before a “critics blogsite” was even known to exist?
For the SCO veterans that are here, it's quite possible and some of us here actually have experience of being through it at least once before. Actually in many areas of society bloggers are frequently the ones to break the news and perform more accurate analysis. Despite all Vern's claims of being so high tech, Vern ultimately is just an old school business exec who doesn't know how to handle the internet (which also happened to be a Microsoft problem BTW). You have to take blogs and bloggers with a grain of salt, but people can establish their crediblity (or lackthereof). I think over time having journalistic credentials will mean less and less as blogs continue to rise as a source of news...newspapers are going out of business or scaling back while blogging is increasingly becoming a viable FT or PT profession.
Minority Report,
Welcome back. Not that I'm watching or anything...
John,
Thanks for keeping us all up to date with the DayJet hours. I guess it's pretty clear now that further short term growth is limited.
The earlier 'birds' represent a good question for the blog. Have they been sent off for any of the 'upgrades' that were promised? Have any been offered, on the quiet, to the market? Hey, has anyone bought one of them?
But now I must depart to sleep. It's been a pretty busy few hours and I've an early start tomorrow.
Shane
If only there were a true-believer out there who specialized in selling pre-delivered aircraft and who had an air of respectability, oh yes there is Mike Press at SPJets - oh wait, Eclipse cut him of at the knees and stole his business model.
Another bad trait Vern learned from Microsoft...screw your trusted partners out of business by stealing their successful businesses. Mike Press should have read up more on Microsoft's business tactics before he buddied up with Microsoft Employee #18.
Mel
You may be right . . . yet for the sake of the "worker ants", someone reading these comments may take the "mess" and run with it, bringing a good idea into the twenty-first century, and restoring some jobs and motivation, to bring American dollars back to America.
The fiasco in ABQ may be over, except for the "final rites", but there are a few hundred highly motivated people, that have gotten a "taste" of aircraft manufacturing (albeit not the best of introduction), that may yet be properly trained, and brought into a most honorable and worthy vocation.
'Nuf sed!
gadfly
(The optimistic insect, that doesn't how to give up.)
Aero-News Network gets a Vern quote
Despite the ominous tone of Tuesday's announcement, however, Eclipse CEO Vern Raburn told ANN he is not overly concerned about DayJet's future.
"The last company I'm losing any sleep over is DayJet," Raburn said.
VERN COMMENTS ON DAYJET...
Vern blows off the DayJet announcement:
"DayJet operates a fleet of 28 Eclipse 500 very light jets. The air taxi provider is by far that planemaker's largest customer, with reportedly some 1,400 planes on firm order or option. Despite the ominous tone of Tuesday's announcement, however, Eclipse CEO Vern Raburn told ANN he is not overly concerned about DayJet's future.
"The last company I'm losing any sleep over is DayJet," Raburn said."
http://www.aero-news.net/index.cfm?ContentBlockID=2ad08c0a-fce9-4a13-9c4f-d0efa41b17e1
Still no answer regarding Eclipse's future...
The reason Vern isn't losing sleep over DayJet is he is worried about Eclipse - or at least, he should be.
Ed has done an admirable job with the startup. Borrowing money for an air transportation business with $120 oil going to $150 shortly has got to be the hardest thing he has done so far.
Telling Vern "no" for additional aircraft should be easy. Another absolute requirement to be viable is a single pilot 135 operation. Without this FAA approval, it's all over but the shouting, especially with the Eclipse aircraft considering cost, weight, fuel etc. Without better and more complete avionics, the FAA will not approve anything. So the Mexican standoff. As Willie sings, "Turn Out the Lights, The Parties Over"
It aint going to be pretty.
Some one has to be the fall guy, I do believe that Mr. Skupa has been chosen to be that guy.
Vern wrote:
"Even though the claims were inaccurate and false, the damage to our two companies has been done."
That means that Vern's bungling, and DJ's bad luck to be the one of the marks; is all going to be placed on Mr. Skupa.
This sounds like a case for Sam Spade. In the movie version who gets to play Vern? I vote for Wile E. Coyote. He was always having trouble with his suppliers too.
AIN's Matt Thurber reports 100 laid off
One person close to the industry said that the DayJet layoffs totaled 100 people, although DayJet did not confirm this number. The news about the DayJet layoffs, a charter industry source told AIN, “was disappointing but not surprising.
If he were still alive, I think Mark Twain could sympothize with Ed right now: "The report of my death was an exaggeration."
Well done, Shane.
Based on this news, I have asked that the filing of our response to the Eclipse subpoena be held up for another day. No need to make small news in the wake of Big News!
Speaking of Big News, I expect GetReal, AfriKen or some other of the Fluffboy Posse to show up any minute heralding the "Good News" in Ed's announcement. Something along the lines of:
"This proves that the DayJet model works! Despite the bad luck of trying to raise money in the worst investor market since 2000, the company is still flying and hasn't announced the cancellation of even a single E-500!
You have no proof they've canceled 1400 orders. Where's your proof?"
Long live Eclipse.
Long reign the Shogun of Clark Carr Loop.
Gunner
So if Fallows info is correct that DayJet had 270 employees in February:
"By the time I visited, this February, it was operating 28 Eclipse airplanes, serving 45 cities in Florida and the Southeast, and employing 270 people."
http://www.theatlantic.com/doc/200805/dayjet
That means DayJet had a serious mass layoff of over 1/3 their staff.
‘Funny thing, here:
The “gadfly” has “scrubbed” a few times for neurosurgery . . . and learned enough to know the symptoms of “brain dead” ( . . . another subject, a certain invention, another story, for another time).
And the “patient” is right here in Albuquerque . . . most interesting, as I observe the monitor, the various displays . . . but the doctor is the final judge as to the meaning of the numbers. He, alone, can speak to “the nearest of kin”, the meaning of those numbers. The doctor is not smiling. The "patient" has not recently moved.
gadfly
(chickasaw, you and I and a few others are going to support "Skupa" . . . this guy has friends, and it ain't over yet!)
Gunner
"Fluffboy Posse"?
Please, man, I'm doing my best to keep this on a serious note! . . . my sides hurt!
gadfly
WHY FALLOWS GOT DUPED...
Poor Mr. Fallows got stuck writing up the last glowing review of DayJet before the news broke. Looking at his bio, it explains why he would be a good source to feed PR related to Eclipse and DayJet:
http://en.wikipedia.org/wiki/James_Fallows
Mr Fallows worked for Lotus and Microsoft, which are two companies associated with Vern Raburn. In addition he's written books with Bruce Holmes who now works for DayJet - which Holmes was his tour guide on his DayJet article.
Here's Fallows writing a blog post that is just about praising Holmes:
http://jamesfallows.theatlantic.com/archives/2007/07/free_flight_update_3_bruce_hol.php
Fun with Math
Ed claims that the DayJet 'Proof of Concept' phase was successful, so successful that he learned that 28 planes is too many to serve 31 million people in 4 states.
Seems to me that with a potential-customer-to-plane ratio of just over 1.1 million to 1, DayJet would need to serve 1.55 billion people to need the 1400 planes of their now 'proven' concept at their current level of utilization.
Seems to me that would be more than the 300 million in the US, or even Canada.
This Fun With Math Moment was brought to you by Eclipse Aviation, redefining aerospace terminology since 1999 and DayJet, shrinking our way to a growth market.
If this all seems like piling on please understand, the Mackarel is a voracious and opportunistic carnivore, whose prey depends on their size (and I am a very big fish).
CWM
This should dump 280 airplanes on the PRIMARY market, not the Secondary market. Dayjet will never take them. So the deposit holders desperately trying to unload their positions and recoup their $150K deposits getting notices to send their 6 month 60% deposit topups sooner than they expected, won't they? Number 700 will become number 500. Eclipse still needs cash. So it will be pay up or drop out. Don't like being an unsecured creditor for $150K? Well it's time to top that unsecured note up to $1 million. How many will be takers? How many will quietly walk? How many will sue?
"The last company I'm losing any sleep over is DayJet," Raburn said.
this is the most truthful thing Vern has admitted to as of yet...
..the last company I'm losing sleep over..
the thing he didn't tell you is, He's only losing sleep over ONE COMPANY! (that would be DAYJET)
- amidst the BS, you CAN find the turth!
In those Halcion days, while on my way to work, the “Stearman” would drop down parallel to Main Street through the early morning fog in Santa Ana, hit the valve, drop a cloud of insecticide over the tomato plants, pull up at the end of the field to clear the apartments and the Southern California Edison high tension “power lines” at the end of the field, "roll over" in the space of a basketball court, and come back in the opposite direction . . . laying another blanket of dust on the young plants. It was a thing of beauty. Yep, those were the days.
Another mile, and I would turn into the parking lot for another day at work (working on "re-entry heat shield material for space craft"), while the planes would come in for landing directly overhead at Orange County Airport . . . sometime later it would become “John Wayne Airport”.
Many years earlier, as a teenager in Burbank, “Santa Ana” was known as “The” drag strip, along with “Saugaus”.
Or working at O’Hare (ORD . . . for United) . . . or Long Beach (as an A&P). . . or as a kid, in the flight path of Burbank Airport(Lockheed) . . . there is so much that is almost “sacred” about aviation . . . for an “upstart” to make a mockery of all that has come before, it is no wonder that some of us show such emotion in our comments.
New technology is admired . . . breaking convention is applauded. But dishonest claims are something to be “abhorred”. And it is here where we meet.
gadfly
(We do our best to put this together with the "shell game" going on at ABQ, and we wonder at the outcome.)
welcome back Hummer... glad to see you.
You remember ALL the posts about Dayjet and Eclipse... welcome back.
CW, the MOST troubling aspect of the proof of concept is aside from your math...
How come, it does not appear as if Dayjet is growing their client base? The same numbers of clients, frequent fliers etc... coupled with the same range of utilization hours, despite growing the number of Ports, and the overall service area?
One would think that as they grow the number of markets, ports, etc... the customers should flock...more service, a better netwrok... more visibility and press...SHOULD result in MANY more clients and flights.
It does not appear to be the case.
This might be "proof" of something.
Dave,
since almost the beginning of the blog, a few points were made regarding EAC.
1- the plane competes with props.
2- there is no appreciable time savings using eclipse for short flights
3-it an expensive alternative to a prop, especially a single prop
4- the limited load makes a prop a beter choice for air taxi in many cases
5-e500 was not designed to withstand airline type use... despite the claim it was designed as a revolutionary air taxi jet
- you may find these statements prophetic... given what is now being reported
New listing on Controller
Does the status of this craft as described on a former leaseback to Eclipse itself mean that Eclipse has different needs today and is breaking off a lease.
========================
Condition USED
Serial Number 12
Registration Number N651FC
Total Time 180 Hours
This plane is flying today, no need to but now and wait until 2010 to fly in an Eclipse 500. This plane has been meticulously maintained on leaseback to Eclipse. Low Serial Number means super early upgrades and retrofit.
========================
Controller Detail
"But the trail will be cold before you get through Google!"
You give the Shogunate more credit that it is due...the part about getting thru Google is hardly a foregone conclusion. I believe that stunt started with Vern saying, "Hey guys. Hold my beer and watch this." ;-)
Such a sorry tool.
Gunner
One thing to consider:
Regardless of how many positions that DayJet skips, let's remember that those positions were sold for a price of well less than $1 Million. Now those positions can be replaced (Probably without a refund of the deposit) with current positions at $1.8 Million.
I know what you are thinking: That is fine in the short run, but where are the orders going to come from after #800 or so?
Answer: New customers. I know several people who would love to buy an Eclipse, but with 2700 oreder, what is the point? Now that the order backlog is realistic, there will be many buyers for the Eclipse @ $1.9+ million.
Owners of old Citations and other jets will more than make up for the difference, and it will be at a much better margin for Eclipse.
P.S.
That last post was definitely NOT Matt Brown.
Ex-421
421jockey said,
"I know several people who would love to buy an Eclipse..."
Why?
421,
I thought we were going to avoid satire?
your last post was one of the funniest yet! Thanks for the belly laugh.
Do you really think Dayjet made deposits for their planes? I have no clue, but I seem to think that they did not even raise enough in all their financings for half the normal deposit. Lets see: 700 REAL orders with deposits... lets have some fun with numbers...70% due at 6 months notice...
- price estimated by ATman: $1.1M
- 70% due at 6 month notice
- $269 Million for 350 planes
...plus all the other initial deposits, say $35M (100k x350 planes)
I'd say the other 700 options were "free"...
That's a BIG number.
*** any chance Ed knows eclipse Russian financing is not enough, and the pooch is screwed? If I thought eclipse was going TU... I'd bail too...not that he NEEDS any more planes.
- I know, he's waitng for the better, ceaper Russian-made eclipski airtaxiski
421 said:
"That last post was definitely NOT Matt Brown."
No kidding.
421-
Your spin on all of this is fine, but somewhat beneath the balanced positions you've been known for in past.
Let's face it....anybody who wanted to pay $1.8 for an EA-500 without stepping to the back of the line already has done so. They simply went to Controller and purchased a lower position; in some cases at a discount from factory pricing. It was a no-brainer. Yet, the positions don't seem to be moving, do they?
Somehow the news that Eclipse's single largest revenue source is in SERIOUS financial trouble doesn't strike me as the stuff which causes current Citation owners to say, "Oh goodie. Time to buy a Nyet-Jet."
The news out of Boca simply cannot be spun in any way that's beneficial to your outlook as a current EA-500 owner; any more than it can be spun as a plus for someone else's outlook as a future EA-500 owner.
Just how much bad news, back-peddling, scamming, spit-and-prayer fixing and attacking of messengers do you guys need before you recognize that this is a company in SERIOUS financial trouble? (And I ain't talking about DayJet.)
Gunner
Answer: New customers. I know several people who would love to buy an Eclipse, but with 2700 oreder, what is the point? Now that the order backlog is realistic, there will be many buyers for the Eclipse @ $1.9+ million.
Then why didn't they already buy from one of the existing positions for sale? If position in order backlog would be the basis for buying an Eclipse they already would have bought one as any new orders would be delivered only after the existing orders that are out there now, which defeats the whole purpose of placing a new order now based on DayJet.
When the first 1000 plane order was shown to be fake, Dayjet appeared. Now that Dayjet is faltering, out of the East will ride, DayJetski, a new airtaxi serving Siberia with a here-to-fore unheard of initial "order" of 2,500 Eclipse 500s! All of this financed with a 50 kopeck capitalization!
Turboprop_pilot
421jockey
Sounds good on paper.
But why wouldn't DayJet simply buy their positions at $900k and resell them for 1.8 mil if there is such a pentup demand?
Furthermore, with the intial deposit and the 60% progress payment already secured, there isn't going to be much
meaningful cash flow going to the company.
Then on the other hand, it is yet to be proven that the Eclipse is a viable part 135 aircraft. The weather and deicing were critical for upper midwest and the east coast operations. No deicing; no Part 135.
ATM. . .Good to be back.
hummer
BTW, If anyone is interested, I
have signed up at Eclipse website
for information on the Concept jet and can be contacted through that information.
Further, if anyone wishes to contact me directly for any reason, my email address is
hummer3@swbell.net and I have not signed any nondisclosure agreement.
Ok members of the flyboy posse,
You may decide to place the blame for this layoff solely on Vern and Ed, but the facts are that it just isn't a good time to be running a business selling seats on jet aircraft right about now.
It doesn't matter what high tech computer model you use, when fuel costs double, that has got to hurt the business plan.
Look what happened to:
Aloha
ATA
EOS
SkyBus
Frontier
All recently filed for bankruptcy protection.
Northwest and Delta think they have to merge to survive.
United and US Air think they have to merge to survive.
Both business and pleasure travel is down.
The capital markets are wary. Credit is tight. Why would investors want to put their money in another new airline / air-taxi company claiming to have found a new way to make money selling seats on jets?
Even if Vern and Ed had executed flawlessly the last 18 months, this would be a very difficult, some might say almost impossible, time for Ed to raise money for a startup business selling seats on jets.
Don't think I'm giving a free pass to Vern or Ed, they certainly have made some sub-optimal decisions and lack of progress on FIKI certainly hasn't helped.
But the overall market trends are dour. DayJet is swimming against a pretty strong tide right about now.
The boys at Southwest seem to be about the only ones able to keep their head above water.
Here's a 1 minute video from today's MarketWatch
Airline Shares Suffer from Oil Futures
minority report-
Now I'm really confused. I thought Eclipse's continued failures were the fault of their vendors. Then I thought those failures were the fault of the Employees. Then I learned those failures were the fault of the disloyal employees. Then I found out those failures were the fault of the Bloggers.
Am I now to understand that the continued failures of Eclipse Aviation are explained by [drum roll please]:
"It's the economy, stupid!"?
Sheesh, many of us own and run businesses in various stages of development just now. If they're product (vs service) oriented, you can pretty much bet oil is a major cost. We'll get over it.
Many of us are in startups that were planned to take advantage of the easier venture capital offered a short time ago. That's gone, but we'll get over it.
Eclipse was failing long before the financial markets dried up. DayJet's flat-lined demand is hardly the result of oil prices; their customers face those same oil costs, no matter what mode of transport they choose.
Time for everyone to man up and stop with the "If only...." BS.
The DayJet model is not sustainable on this farce of an aircraft. The Eclipse business model is not viable on this scam of a product.
Woulda, Shoulda, Coulda...it makes me ill. Get over it and Get on with it or Get out of it.
Gunner
Hi Vern,Expilot here,Posting from the public library. "ED"-Vern We don't need the other 1,372 we had on order. "Vern"-No problem Ed! The pent up demand is amazing!
This is not going to be pretty....I just hate it for the folks that REALLY believed...The Mechanics on the floor...
The customers knew the risks, the vendors knew the risks, the investors knew the risks. That's a part of thier business. BUT, the people that build it...the big part of THEIR business is to believe and make it happen. Too bad the arrogant, didn't have a clue, risk takers didn't care a damn bit about them....Like the old days of Eddie Chile....I'M MAD!!!!!
opps...Chiles
Gunner,
My post was intended to discuss DayJet's latest announcement, not the success or failure of Eclipse.
And I agree with you, Eclipse's ultimate success or failure will have very little to do with the economy, or the vendors, or the blog.
However, I was pointing out that it is close to a perfect storm out there for DayJet and anyone else trying to sell seats on jet aircraft. (No matter what the esteemed Dr. Holmes says to James Fallows.)
When everyone but Southwest is taking on water, the last thing Ed is losing sleep over are problems with the Eclipse 500.
Finding profitable customers.
Managing operating costs.
Finding capital.
Developing a business model that works.
All these are higher priority than any Eclipse 500 related problems.
eclipso
We need a gentle voice, like that of "Mad Eddie" to express our true emotions during this time of quiet resistence. Thank you for reminding us of how to make our feelings known, in a passive manner.
gadfly
(or as my recently departed friend often said, "Illegitimi non carborundum").
MR-
I do understand your point about DayJet. I have been a pretty vocal supporter of Ed here. And I give him high marks for his honesty in today's Press Release also. He need not commit public seppuku for me to give him a "well done" with today's news. He done OK.
He did sit by while Vern fleeced untold numbers of investors and depositors with the "1400 firm orders back by deposits" BS. Even there, however, I give him a pass. It's not his job to whisper "caveat emptor" into every ear on the planet.
Still, while you bemoan his company problems and point out everyone else in the same boat, I offer one word in rebuttal: SatSair.
Gunner
421,
I hate to pile on..but have you looked at any of the a/c seller sites recently?
Controller shows 65 EA500 listings, most of them added or updated in the last two weeks!
The really interesting part is looking at different delivery dates and how many '6 months till delivery' planes are coming due...
S/N -174 is new at the factory
-184 thru -223 deliver in the next two months
-339 delivers late summer?
and November is going to be a busy month (six months from now?) because S/N -343 to -499 will deliver!?!
Followed by S/N -878 in the 1st qtr of 2009! (no Xmas shutdown this year!)
These 'position holders' must be feeling like those retirees in Florida that bought a bunch of $1M condos and were trying to flip them when the bottom fell out and are now facing losing their deposits or ponying up the entire amount...ABANDON SHIP!
Disclaimer: This Blogger does not approve or endorse any of the previously mentioned delivery dates...
PS - In case I wasn't clear, the serial number vs delivery date information was taken from the Controller ads.
He did sit by while Vern fleeced untold numbers of investors and depositors with the "1400 firm orders back by deposits" BS. Even there, however, I give him a pass. It's not his job to whisper "caveat emptor" into every ear on the planet.
I consider him a co-conspirator for that reason.
Palm Beach Post Article
Palm Beach Post reports Dayjet will scale purchases to 20-25 in the current year.
Layoffs at 100 throughout the organization. Staffing == 160.
WELCOME TO THE SPIN ROOM...
Here's a blog article putting positive spin on DayJet having had only 500 customers (with 50 regular customers):
http://www.avweb.com/blogs/insider/AVwebInsiderBlog_DayJet_GlimmersOfHopeInThisAirTaxiThing_197808-1.html?show_comments=1#read
Having 500 customers isn't earth-shattering and 50 regular customers couldn't keep open a gas station.
Then here's Fallow's follow-up upon hearing the news:
http://jamesfallows.theatlantic.com/archives/2008/05/further_and_more_positive_on_t.php
I guess he has to do that to cover for himself rather than admit that he got caught completely flatfooted declaring DayJet's expansion plans.
The concept of air taxis might be good, but Fallow's own article pointed to props being way more successful in type of business that DayJet is in. Based on what Fallows reported it seems like SATSAir should be receiving the praise giving the volume of business they've had serving the same region as DayJet.
a thought...
How long has Dayjet been looking for this round of financing?
A week, a month, a year?
During the recent months, OXjet placed $Billion of orders for jets, new ventures were launched like the Hawker refurb program by Ken Rici, even Flight Options were bought at a big pricetag...
BIllions in aircraft financing has been arranged as well, from all manufacturers delivering record number of planes.
So, I ask... how is the proof-of-concept coming?
I'm not saying the capiatal markets are easy, BUT, aviation funding is not dormant. Just like a faithful once argued... the investors who invest in eclispe know more than us, here.
What do the investors know about Dayjet, that we don't?
"SATSAir should be receiving the praise giving the volume of business they've had serving the same region as DayJet."
did someone say Dayjet competes with props? Is way more expensive.. with no appreciable time savings?
has someone been saying this "common sense" statement... for years on this blog?
from avweb:
"There is a business there. Iacobucci signed up 1,500 members, more than 500 actually flew and 50 flew more than 10 times."
so, 30% of the people signed actually use the service, of them, 10% are repeat customers. and he calls that a proven concept.
Maybe he was talking about Satsair when he said the concept had been proven.
as far as i'm concerned, ed is as FOS as vern... two peas in a pod.
The whole concept is flawed. multi-hour windows.....why the hell would i even consider this as an option?
To make the system even remotely attractive, I would have to choose the 4-hour window in order to get the price point anywhere close to reasonable. I don't find out what the departure and return times are until the night before the trip....that's insane!!!!
I travel quite a bit for business and have to plan my schedule around the airlines. As it stands now, instead of planning on being in the air for 2-3 hours, i write off the entire day as an unknown because of delays and such.
If i'm paying to charter an aircraft, I shouldn't have to do the same. I pay, I get. That's what satsair offers and they're growing strong.
You're telling me that ed looks at the dismal utilization figures and calls it a success....Same as vern, smarter than the rest and yet too stupid to realize that he over-thought the damn thing.
As a follow-up to my previous post Fallows made multiple blog posts. In this one he says that he was at DayJet 3 1/2 months ago for the story, so his positive reporting from then wasn't based on something that just happened:
"When I was at the DayJet headquarters three and a half months ago, the company was hiring like crazy and talking about its month-by-month expansion plans in cities served, passengers carried, and aircraft in the fleet. At the time it had five (I think) "DayPort" centers -- bases from which flights go to a variety of smaller cities. Apparently it has now grown to 11 DayPort centers serving 60-plus cities. The plan that was laid out to me was to get to 30 DayPorts serving 100-plus cities by the end of the year.
Whether this is a "growth slowdown" or an actual cutback, and what it portends, I obviously don't know. For now just passing on the news."
http://jamesfallows.theatlantic.com/archives/2008/05/not_about_the_election_another.php
Also I don't know why DayJet is called the "marquee player" in the air taxi service? Their reported customer count versus others would seem to dispell that as just a marketing myth. You don't need a jet - let alone an Eclipse jet - to validate or invalidate the concept.
People go on about how smart Ed is or that people in his business know aviation, however, being hyper-intelligent or having broad industry knowledge doesn't make one a good business-person.
Also I'm confused about how the Palm Beach Post is reporting that DayJet still plans to buy 20-25 jets despite this news about the intended purpose of the $40 million needed:
"Dayjet would need $40 million to reach profitability and expand its operations to include 50 aircraft and 30 hubs. Currently Dayjet has 28 jets in 11 markets in Florida, Georgia, Mississippi, Alabama and South Carolina."
So none of that $40 million was for new jets? I guess the planes themselves could have been covered by the previous $140 million debt financing:
http://www.avweb.com/avwebbiz/news/dayjet_Eclipse_500_Air_Taxi_debt_195859-1.html
However, that still doesn't explain why DayJet would nearly double its fleet without the concurrent expansion plans also happening...are those planes just going to be mothballed? I don't see how DayJet - by its own admission - could afford to have all those new pilots, crew maintenance, etc.
did someone say Dayjet competes with props? Is way more expensive.. with no appreciable time savings?
has someone been saying this "common sense" statement... for years on this blog?
Many here have, just I'm saying that what is reported in the media is wrong. Like with the Palm Beach Post's article on the layoffs:
"That helped DayJet become the marquee player in the fledging air-taxi industry."
http://www.palmbeachpost.com/business/content/business/epaper/2008/05/06/0506dayjetweb.html
It sounds like the other players in the industry should be re-examined given the DayJet news. This isn't the Ed-and-Vern show and if either or both go under, it doesn't mean the concept of air taxis or VLJs is or isn't validated.
Dave, I totaly agree. The concept of air-taxi's has been validated. Satsair did it and so have a handfule of other charter operators.
dayjet, unless they completely change their way of business, won't.
"You're telling me that ed looks at the dismal utilization figures and calls it a success....Same as vern, smarter than the rest and yet too stupid to realize that he over-thought the damn thing."
Perfect. Did anyone ever actually ASK the customer what he wanted?
yeah....satsair
Estimating DayJet passenger load
Dayjet says it has 550 customers, and "nearly 200" frequent flyers. Later reporting cite 50 pax with >10 trips. I assume these are 1 way trips.
Roughly calculating pax x trips=use
350 x 1 = 350
150 x 5 = 750
50 x 20=1000
Total = 2100 paid trips
Average trip = 300 miles
high est average $4/mile
Total revenue est. = $2,520,000
Dayjet has reported an average return of 11 days for its frequent flyers. This doesn't calculate out very well, as 200*3 x Month x 7 months = >4000 flights. Perhaps they are referring to the 50 pax core flyers where: 50 x 3 x 7 = 1050, or about my estimate.
The total passengers roughly scale to the Fallows January numbers when total pax = 350 and 40% (140) are more than once. Dayjet has added 200 individual pax and about 60 "frequent" flyers since early January.
Data shows 3262 long, non-loop flights since Oct 1. Dayjet has said that passenger flights are running at 65%. This calcs to 2120 paid flights. Dayjet reports loading at 1.4, and this Calcs to 2968 pax. trips.
So the raw flight data x utilization calcs 800 trips higher than the passenger based back calculation. These are all 1 way trips, since they are individual flights. At $4/mile and 300 mile average trip, this is 2968 x 4 x 300 = $3.5 million total revenue since October. This is $1680/mile for airtime, about the Linear Air charter cost for the EA500.
The correlation of the pax revenue and Linear charter cost might argue that a stripped down DayJet could run the jets at breakeven if various sunken overhead costs were capitalized against a future IPO.
The proof-of-concept talk is an effort to keep the idea alive that Buffett or the like will snap up Dayjet and bail its original venture money out.
Gunner,
Satsair...
My point is that selling seats on jets is a tough business to be in right now.
Satsair isn't selling seats on jets.
Selling seats on a Cirrus has many substantial economic advantages over selling seats on an Eclipse.
Aircraft acquisition costs.
Fuel costs.
Crew training costs.
Maintenance costs.
All much lower.
Vern can't be blamed for that. Ed was the one who made the selection of the E500 as his launch aircraft.
He even selected a brand name that tied his hands, effectively prohibiting him from taking advantage of the superior economics of a prop for his launch aircraft.
Ed should have switched launch aircraft when the Williams shoe dropped.
But Ed had fallen into Vern's reality distortion field.
DaySpinner is probably sounding like a much better name to Ed's CFO right about now.
Vern's mindboggling comment that he's not losing any sleep over DayJet must still be reverberating through the halls at DayJet.
I'm guessing that Vern's Jedi mind tricks will no longer have any effect on Ed.
There is a natural cycle in business. When times are good, money flows and companies issue press releases like this:
“We are expanding into new areas to accelerate our growth, and become less dependent on one economic activity. Our singular expertise is readily applicable to other business lines as well as acquisitions.”
When times aren’t so good and money is tight, the following announcement can be expected:
“In these difficult times, we scaling back our business activity and returning to our core competency. We will maximize shareholder value by concentrating on what we know best, and have always done well.”
With this in mind, may we expect Dayjet to return to ant farming? In China, ants and ant farming have been promoted as a method of producing wine, tea, health supplements and medical elixirs. Reportedly bags of ants have been sold to investors for over $1,000 each. The climate in Florida should offer ideal conditions to exploit this opportunity and a return to ‘core competency’.
I'm disappointed in James Fallows. I nominate him for the FluffBoy award of the month.
When was it deemed acceptable to publish a major article on any company based 3 1/2 month old data?
One might reasonably believe, not since the invention of the telephone.
Would it have been too hard to call DayJet a week or two before publication and confirm that everything was still on track?
Would it have been too hard to do some research other than taking a ride with Dr. Holmes?
Boys and girls...
"Dave, I totaly agree. The concept of air-taxi's has been validated. Satsair did it and so have a handfule of other charter operators.
dayjet, unless they completely change their way of business, won't."
There are THOUSANDS of airplanes (jets and props) providing the same service as SATSair and the like, for 40 or more years...
Please explain how any of this "proves" the air taxi can work. I thought the new plan was the key? I thought the new taxi business was a revolution?
How can a single engine prop "prove" the air taxi model?
This was the point all along... what is new here? Except all the BS?
C'mon
Selling seats on a Cirrus has many substantial economic advantages over selling seats on an Eclipse.
Aircraft acquisition costs.
Fuel costs.
Crew training costs.
Maintenance costs.
All much lower.
Vern can't be blamed for that.
Actually he can because he opted to build a jet rather than a prop for the air taxi market, which both by Eclipse's own admission as well as third party research has shown that air taxis make or break Eclipse. I believe the last NM SIC said that the market would make up 75% of Eclipse's business.
The narrative has been Air Taxis=DayJet=VLJs=Eclipse. Props completely obliterate both how the air taxi market is defined as well as Eclipse's place in the aircraft industry. If VLJs are seen as some minor component to the air taxi market rather than the driving force as the market is being defined now, it will result in significant recalculations, but nonetheless it looks like it should be done and the Vern-and-Ed Show should exit Stage Right which will be very costly. That happening doesn't mean that VLJs are a failure as a concept nor that air taxis aren't viable, just Vern and Ed aren't the ones to do it.
With the millions of dollars that will be lost if this happens, hopefully this will result in some political fallout which I believe has been a significant driving force enabling this at the federal, state and local levels. Time and again influence peddling and special treatment has shown to be economically damaging in the end.
With this in mind, may we expect Dayjet to return to ant farming? In China, ants and ant farming have been promoted as a method of producing wine, tea, health supplements and medical elixirs. Reportedly bags of ants have been sold to investors for over $1,000 each. The climate in Florida should offer ideal conditions to exploit this opportunity and a return to ‘core competency’.
Ant farming was a billion dollar scam in China:
http://www.boingboing.net/2008/01/12/one-million-bilked-i.html
Net Revenue Calculations
Assume Dayjet has
500 paid hours/month
$4 pax mile
1.4 Pax per flight
320 Mile/hour
$896K revenue per month
Compare to a very rough cost calculation.
$500 hour DOC
70% Paid use
$357K DOC cost/Month
Net Revenue $538K month
Labor
160 employee
$4000 wages + benefits
$640K month labor cost
Net: ($101K) loss month exclusive of financing and capitalization costs.
Actual usage has been at about 325 paid hours which pushes the net loss using this calc to about -290K month.
Pushing utilization to 600 paid hours zero's the labor cost to break-even, exclusive of financing and other overhead.
Dayjet has about $140 million in senior debt financing for leasing aircraft from a shell. I assume this is calculated at about 85 craft x 1.6 million = 136Million. This corresponds to the original year one fleet estimate. Dayjet likely believed it could IPO at year one and retire the debt.
At 28 craft x 1.6, Dayjet has a senior debt of about 45 million. We don't know if this is being paid or simply accruing, to be canceled at IPO.
A cost of 1.6 financed for 5 years at 8%, with a 900K scrap value = $20K month finance. This is $565K for the 28 craft fleet, or $1.2M/ month for the reduced year one fleet or 60 craft.
Running the loan out to 10 years (dropping the scrap to 750) shows a 28 craft fleet as costing $428k/month and a 60 craft fleet at $918K/month. I would be surprised if DayJet has 8% money.
The west coast fractional operator "Jet Alliance" is using a figure near $800 for its DOC. This includes a 9% management fee and engine reserves, (and may include some pilot time as well). Jet Alliance includes pilot salary in its monthly lease calculation, but confusingly states the DOC includes use of pilots.
Given the reality that the only reason people were flying on Dayjet is because the flights were "subsidized" by the investors who were losing money with each flight, it would seem that the smartest (and kindest) action that Ed could have taken would be to shut down Dayjet completely and salvage what is left of the investors money before it is completely gone.
If I were a taxi company and I replaced all my cheap cabs with Rolls Royces and charged only double the normal fare (which wouldn't even begin to cover my costs), does that prove that my business concept is valid?
NO! What it proves is that people would rather pay more and ride around in a new Rolls versus a stinky old cab. That's it. It has nothing to do with whether the company will ever make a profit or not.
The same is happening with Eclipse. Each and every E500 buyer has had a portion of their jet paid for by some poor investor somewhere who has lost most, or all, of his investment, along with the taxpayers in New Mexico. The fact that there are so many orders for E500's does not validate Eclipse's flawed business plan. All it proves is that people will take advantage of what they consider to be a "good deal".
If I were a taxi company and I replaced all my cheap cabs with Rolls Royces and charged only double the normal fare (which wouldn't even begin to cover my costs), does that prove that my business concept is valid?
There seems to be serious issues with DayJet only having 500 fliers despite all the publicity DayJet has received and marketing dollars spent by DayJet. It seems like people are going "meh" to the idea by not even going on one flight and most of those who do go on one flight don't want to go on another to the point where DayJet's backbone is just 50 regular customers.
The same is happening with Eclipse. Each and every E500 buyer has had a portion of their jet paid for by some poor investor somewhere who has lost most, or all, of his investment, along with the taxpayers in New Mexico. The fact that there are so many orders for E500's does not validate Eclipse's flawed business plan. All it proves is that people will take advantage of what they consider to be a "good deal".
This is made worse by the low quality order book that Eclipse has...the count of "real" orders has been long-suspect. It seems that the Cessna Mustang is fast approaching Eclipse. I hope that there is a heck of a lot of fallout over this with a thorough investigation. Eclipse has known for years that things were rotten and they've used their political influence to cost investors millions/billions.
It will be interesting to see if any in the media ask Vern if his recent lawsuits have anything to do with DayJet.
Dave,
Do you, or does anyone else here, know what information was allegedly released on this blog that could even be considered remotely damaging to either Eclipse or it's "partners", one of whom I asssume is Dayjet?
Other than a few postings by people who claimed to be ex-employees and talked about the horrid conditions at the factory (and that is just opinion) I've never seen or read anything on this blog that wasn't information that anyone could glean on their own without access to Eclipse's inner circle.
As many have pointed out, Eclipse has done more damage to itself than this or any blogger ever could.
Russ Niles on AVWeb
"Dayjet has cut its fleet by more than half"
....
"the company is selling or leasing 16 of its 28 Eclipse 500s "to minimize the loss." (quoting Iacobucci directly)
....
Iacobucci said Dayjet has "made no changes to our order book" and the delay in its overall plan should have little impact on Eclipse in the short term. "Our orders were not cancelled, they were deferred,"
Do you, or does anyone else here, know what information was allegedly released on this blog that could even be considered remotely damaging to either Eclipse or it's "partners", one of whom I asssume is Dayjet?
Thank you for the lead in to my "mitigating damages" posting...
Eclipse Aviation has made extremely clear that they are not only aware of this blog but also of the contents of this blog. Eclipse has gone so far as to initiate litigation against it because Eclipse's CEO stated "lies and rumors" were the cause of the lawsuit.
The lawsuit was filed 3/18...nearly two months ago. Eclipse has yet to "mitigate damages" by making any official posts on this blog countering what is said here. This can only be drawn that "silence equals consent" and Eclipse cannot counter the accuracy of this blog.
Since Eclipse has continued to maintain silence only negative conclusions can be drawn about:
* Political donations to NM SIC fiduciaries by Eclipse/Vern
* The E-500's robustness for high utilization operations
* Self-dealing regarding NM's SIC advisor
* Eclipse personnel issues
* AvioNG
* Eclipse's continued funding needs
This list is far from complete, but Eclipse has plenty to answer for as right now their non-answers to what is posted here only re-enforce the poor state of Eclipse.
Could it be that Dayjet plans no change in their orders because their "orders" have been filled?
I'm sill MAD
"the company is selling or leasing 16 of its 28 Eclipse 500s "to minimize the loss." (quoting Iacobucci directly)
That's *HUGE* news! For a long time there were those on this blog who rejected that DayJet could sell its jets without violating the terms of the contract. Now we know DayJet can sell its jets...so theoretically DayJet could close up shop and resell their jets without ever putting them into service. However, this raises extremely troubling questions given how DayJet couldn't raise $40 million:
* With 1400 jets on order at a discount, why wasn't DayJet able to use the value being able to flip the jets as a means of raising funds?
* Does that mean that investors feel that Eclipse will go under before the value of getting Eclipse jets wholesale could be realized by DayJet?
* Does that mean that Eclipse jets aren't seen as holding even the discounted price DayJet paid for them?
Based on News from May 1958, neither Ed or Vern can take credit for air taxi business.
Page 21 of BCA, May 08:
Hertz was set to begin an aircraft rental - Fly-Yourself - and charter - Taxi Plane - business that it hoped would be operating through franchise dealers in 100 cities around the United States by year-end. "Business flying", Hertz said, "has great potential"
Russ Niles, on the record with Ed reports they will be selling or leasing 16 of the fleet.
16 of the 28 Ed has?
Pretty good idea that means a double whammy for Vern.
First, 1,372 'orders' gone in one fell swoop.
Second, 16 (slightly used) E500's in competition for customers, available right NOW, ex Boca Raton, FL.
And DayJet is the 'last company' Vern is worried about?
What planet is Vern living on these days?
Or else he is putting on a brave face before his Board meeting tomorrow.
Did I not tell you about the Board meeting? Sorry about that, I get so much stuff in the inbox it's hard to keep track.
Wonder what his fellow Directors will think is more worrying for Eclipse than the loss of so many orders or competition for new customers?
Maybe it's the price of oil, or the FIKI and EASA delays, or the inability to sustain deliveries or the failure of suppliers to deliver or staff talking to anyone who will listen or trying to bring the third level D sim on line or....
I'm sure Vern has lots of other things to worry about.
His own job, for one.
Shane
Dave:
safe to say... ANY business relationship, on ANY terms that helped Eclipse and Dayjet...were probably negotiated as part of their deal.
In other words... Vern to Ed: give me the biggest ass order you could ever imagin, then double it woith free options, and I'll play ball..." Ed to Vern: OK, Hows 700? With options lets make it $1400... what kind of deposit do we need to disclose?
Vern: How about $10 million... (you can pay it over time... any time... based on whatever you want.
Ed: OK, how abvout I can re-sell the planes?
Vern: no problem - if you CAN sell them...why do I care - I can't!!!
Ed: OK, say $10 million due whenever... based on say 300 planes, plus 70 options FIRM...again, deposit money is not an issue, right? I'll sign anything.
VErn, sounds good: so, 1400 planes, including all orders and options with firm deposits. I think we have this right.
Ed: perfect - I CAN raise money with that, how about you?
Vern: perfect: as long as no one really knows what we're up to.
Ed: PErhaps you want some Equity with that Deposit?
Vern: of course: Fries too. Can you cut my friend Bill Richardson in?
Ed: Why not - can we get some BAQ investment money?
Vern: indirectly, just call Jeb. We'll double up! Two states for the price of one. Throw in NASA for good measure.
Up ‘til now, there were plenty of suppliers to blame. And that supply is dwindling. So the next resource is the “customer” . . . and what bigger target . . . er, customer, than Dayjet. It’s all part of a beautiful plan.
gadfly
Despite my mastery of physics, I'm having trouble reconciling "We're actively trying to get rid of 57% of our fleet" with "Our orders were not canceled, they were deferred".
One would presume that at least *part* of Eclipse's production this year has been for DayJet.
I picture the ramps at KABQ lined wall-to-wall with NextTuesdayJets.
I see a promotion for "early availability slots - any color you want, as long as it's with blue & green stripes". I see dentists everywhere lining up for identical expressions of their individuality.
By providing Ed with product late, substantially incomplete & of limited utility, Vern hung DayJet & DJ's investors out to dry. Ed has no doubt responded by refusing delivery (and payment) on subsequent (late/incomplete/limited) production. I would too, if I was in his shoes...
Even the *pretense* of illusion surrounding Eclipse's fat order book has now unofficially evaporated.
Vern finally pissed off the guy who could most easily throw him under the bus.
"The last company I'm losing any sleep over is DayJet".
Yah. Right.
Would you like the combo?
IANAL
Despite my mastery of physics, I'm having trouble reconciling "We're actively trying to get rid of 57% of our fleet" with "Our orders were not canceled, they were deferred".
I've been trying to understand what's going on as DayJet's explanation seems full of contradictions.
Before the announcement they said they were going to receive 100 planes and after the announcement that remains unchanged...nothing is deferred - 100 by EOY then and 100 by EOY now.
Taking that a step further DayJet is going to be receive Eclipse planes *faster* after the announcement then before. Before the announcement they received 4 per month for a total of 32. Now to get to 100 (100-32=68) by 12/31/08 they have to receive at least 11 per month (nearly 3X!) their rate now.
Also DayJet says it needs to receive 30-50 jets, but it already had 30 jets and if it keeps on taking delivers, it will have even more than that "critical mass:"
* Is DayJet planning on putting dozens and dozens of jets on the open market that they paid a cut rate for?
* What would that do for the resale value for all the other owners/position holders?
* How would that impact Eclipse's own order book having to compete with DayJet for sales of new jets? * If Eclipse is operating at a loss combined with DayJet being an early huge customer, does that mean that DayJet can profitably sell dozens/hundreds/1000+ planes for less than the cost of production and less than what new customers are paying Eclipse now?
JetProp-
If I recall, wasn't Hertz "trying" that 40 or 50 years ago? There's no way that a high-perf single from that era could offer a favorable experience when compared with airline travel of the time. And small jets weren't available in numbers to provide a comparison either. Air taxi - the way we think of it - couldn't have worked at the time.
Fast-forward to today, and airline travel is a house of horrors. An SR22, while no comparison to even a NextTuesdayJet, is *a very nice ride* and affordable too. Over a 300 mile distance, it's probably quicker by far than airline travel (though that's admittedly not hard to do if you have to change planes in Atlanta, in which case a Prius is faster than the airlines). Perhaps a twenty minute penalty compared to DayJet over that distance at a fraction of the cost - and the operator even gets to make a little money while they're at it.
I kind of fall in with Minority Report on this - Satsair is the real proof-of-concept for air taxi (and a qualified success in the absence of dissenting data). DayJet is just a VERY expensive demonstration that a small jet doesn't offer the proper economies to succeed at it.
Would you like to super size it?
IANAL
Before the announcement they said they were going to receive 100 planes and after the announcement that remains unchanged...nothing is deferred - 100 by EOY then and 100 by EOY now.
Contradictions indeed...
It makes no sense that DJ would pay that many millions of perfectly good investor money for non-performing assets. Maybe they've got a Plan B that involves operating a Part 91/135 fractional program with their cornucopia of NextTuesdayJets.
In an alternate reality it might actually expand the number of prospective users than air taxi does - the average FBO is upscale enough to provide an outstanding experience without the overhead of staffing & maintaining a bunch of DayPorts & Stops. But I don't think so - I think that hiding behind Ed's announcement is a conspicuous non-announcement of something quite a bit more dire (for many)...
Can I interest you in dessert?
IANAL
minority report said:
:"My point is that selling seats on jets is a tough business to be in right now.
No kidding. But that very statement is an indictment AGAINST DayJet. For all their research and focus groups, they apparently don't understand the business they're in. The business they're in is safe efficient transport of customers from Point A to Point B.
If they wanted to be in the business of "selling seats on jets", they should have bought Mike Press' company...or Eclipse.
Gunner
The State of New Mexico is now throwing Eclipse under the bus:
PiperJet plant
It appears Piper Aircraft will stay in Florida.
According to published reports, Piper CEO Jim Bass, has recommended the company's board of directors accept a $32 million incentive package offered by the state and the Indian River County Commission to keep the aircraft manufacturer in its hometown of Vero Beach.
During a commission meeting, he said Piper would announce a final decision by June 30.
A year ago, Piper announced it was considering moving its headquarters to Albuquerque, Oklahoma City, Columbia, S.C. or other locations, because it faced rising insurance in the wake of hurricanes, and other difficulties doing business on Florida's east coast.
The list was eventually narrowed to include Albuquerque, Oklahoma City and Vero Beach.
The well-known builder of propeller-driven aircraft said then it planned to build a new, 1,500-employee plant to build the PiperJet, a single-engine, seven-passenger aircraft designed to compete with the Albuquerque-built Eclipse 500, the Cessna Citation Mustang and other so-called very light jets.
"It's a real thrill that New Mexico was considered and was one of the finalists," said New Mexico Cabinet Secretary for Economic Development Fred Mondragon. "I think we came off really well in terms of incentives we proposed and the quality of our work force, and our efforts to create an aviation industry cluster."
New Mexico and Albuquerque economic development officials have never specified incentives offered to Piper, but Florida newspapers quoted Indian River County commissioners as saying New Mexico pitched $70 million in various perks, including job training reimbursements and tax breaks, to lure the company.
According to Scripps Treasure Coast Newspapers, Indian River County will provide about $12 million to the company, in three installments between the signing of the contract and December 2009. The commission approved the proposal last week.
The state will kick in another $20 million from an investment fund run by Gov. Charlie Crist's office.
The incentive offer requires Piper to hire more than 400 new employees by 2012 to build the jet.
Mondragon said officials in Florida were very aggressive in their efforts to keep one of the Vero Beach area's largest employers from flying the coop.
"I do think there was strong political pressure to remain there," he said.
As part of efforts to build a cluster of aviation-related companies in New Mexico, state and local governments have given Eclipse Aviation millions in incentives, including nearly $20 million in direct equity investments, several tax-abating industrial revenue bonds, and improvements at Double Eagle II Airport on Albuquerque's West Side, where Eclipse expects to eventually relocate from the Albuquerque International Sunport.
http://www.abqjournal.com/biz/webb/304613business05-05-08.htm
So now the State of New Mexico is going all out to get a direct competitor to Eclipse - despite NM's $20 million investment in Eclipse. I guess the powers that be see that Eclipse is going down and is of the past, while the PiperJet represents the future. Given the size of the plant (1500) that will cover for any lost jobs from Eclipse.
Albuquerque Journal gets phone interview.
Iacobucci will "mothball" half its fleet and stop accepting new deliveries.
Iacobucci said he would explore other options, including licensing of proprietary software, to raise additional capital.
Eclipse CEO Vern Raburn said he would have no trouble shuffling would-be DayJet deliveries to other Eclipse customers
Dave
You have got to be kidding:
Fifteen hundred “slightly miss-used” workers, eager to work for a real airplane manufacturer . . . can be there next Monday! . . . or sooner!
But make sure that “Piper” gets everything in writing . . . every “dot”, every tee “crossed” . . . and Bring It On! Piper will not like the tax system . . . once they settle in, but let’s take it a step at a time. The people are already here, and the manufacturing base brought you all those big things that go “boom”, etc., . . . so for the right product, working with the right people . . . we’ll do you proud!
gadfly
(Who ever said God doesn’t answer prayers!)
"Iacobucci said he would explore other options, including licensing of proprietary software, to raise additional capital."
Ed...
NO!!!!!
It didn't go well the last time you tried that ... what makes you think it'll go any better this time?
Would you like a Unix license to go with that?
IANAL
Several VLJ and other piston companies have tried to relocate to NM over the last 3-4 years. The economic dev. folks would go through the motions but eventually politics would take hold and the deals would not complete as these companies would be seen as taking resources from Eclipse or possibly competing against them. In discussions/e-mails within the SIC it was mentioned that certain companies "would be in competition with Eclipse."
Behind the scenes the state of NM has been blocking other companies from relocating there (to protect their investment in EAC). Of course, in the media the politicians have touted that they want to become and aviation center to curry favor with voters. Politics as usual.
Maybe now the state is having a change of heart. Too late, of course.
The reason this blog exists is because you just don't get straight or truthful answers from Eclipse. Or Dayjet, for that matter.
Dayjet scaled back from 260 employees to 160. This is huge, but I believe it is not the last cutback. Their customer base is about 50 repeat customers - not enough to support even 1 jet. The rest have tried Dayjet once, and haven't come back (yet...to be fair). I wonder how many more one-timers really exist, now that the novelty has worn off.
Dayjet is now going into "sell" mode, and will be dumping their jets on the market. This is inconsistent with what is being said by Ed. If Ed really expects to go back into "agressive growth mode" in early 2009, why is he selling his jets now when 2009 is 7.5 months away? Like a lot of stuff we hear from DJ and EAC, this doesn't make sense. It could take months to sell these jets into this already-crowded resale market. In case no one noticed, the resales aren't exactly flying off the shelves.
So if Dayjet sells most of their jets, then what happens? 2009 comes, and they buy them all back? Huh?
Wasn't it just a few weeks ago that Dayjet started an agressive "expansion" into "new markets"? Adding Dayports or whatever they call them? I find it hard to believe they weren't seeing the writing on the wall back then.
Another thing - who out there has a crystal ball and knows that 2009 is going to be any better? Oil prices may fall back to $80. Then again, they may go to $150 and then to $200. It's not just about oil, either. The housing market hasn't bottomed yet, and that may not happen for a couple more years. People aren't feeling really flush with high fuel prices, high food prices, inflation and seeing their home prices continue to drop. Investors aren't exactly rushing to invest in startup companies, either.
Not trying to be gloomy, but the US consumer is in "contraction mode" right now, and the last thing they are thinking about is spending a lot of money to charter a private jet to save a couple of hours of drive time.
Vern's comment "This is just what happens to start-up companies growing rapidly in new markets" is disingenuous. This is what happens to start-up companies whose business plan wasn't sound to begin with - who choose to ignore the obvious realities of the market and forge ahead with an ill-conceived business plan despite all the obvious evidence that the huge market they thought existed, dosn't exist.
JMHO. I have no inside information. Just pointing out the obvious.
A long time ago (in “blog speak”) a certain person said that the train has left the station. And, indeed it has. Will Piper come to ABQ? . . . that’s a question we would like to know . . . and in due time, it will become known. But back on the platform at the “train station”, there’s a pile of baggage that remains unclaimed . . . lost . . . forwarding address unknown. In fact, it appears that the passenger to whom they were assigned has just denied ownership. Strange!
gadfly
(“I think I can, I think I can, I think I can” . . . aw nuts, I give up! . . . apologies to “Dumbo” and Disney.)
Straight answers are not forthcoming from DJ or EAC, therefore this blog exists. The industry knowledge here is incredible and smart folks can put the pieces together and provide a realistic assessment of EAC/DJ. Without access to "trade secrets."
-----
What this industry needs is a cross between the Wright brothers and Kelly Johnson; with a dash of Howard Hughes thrown in! It's about time for a true innovator to appear again.
Maybe now that the facade is falling from the promoters and marketeers, there will again be room for a true pioneer.
Probably just a dream, but who knows? Hope springs eternal.
I'm honored to be part of this group.
Just a side note: I am not the aviation buff that most of you are, but, I did see a G1000 system working in a different A/C today. To my untrained eye (and mind) the "real earth" display is pretty cool.
A word or two about New Mexico, and businesses that would like to make this their home:
This is a great state, from the stand point of anyone wishing to live in a wonderful environment . . . it is difficult to imagine a better place to live. ‘Even the main artery of commerce comes directly through this vast state . . . ask any truck-driver.
But . . . and here is the “rub”: This is a place that does not understand what it takes to be prosperous, in the “business sense” . . . everyone wants a “cut”. On the one hand, the atomic age began here, yet it came from outside, with government funds. It all happened backwards . . . with outside funds (NM gets back $2 for every $1 paid in federal taxes . . . and that’s a strong motivation to keep everything “status quo”).
Never-the-less, there are a few of us who will not “let go”. The outlying areas from ABQ are beginning to get the “big picture” . . . that it is not wise to kill the goose that lays golden eggs . . . and slowly, we may yet prevail in our efforts. And by default, even ABQ may soon “figure it out”. (They’re not quite there, yet, but having been recently burned by a certain “newcomer”, even they may get the message.)
Who in aviation could wish for a more ideal spot! . . . vast reaches of clean air at high altitude . . . beautiful sunrises and sunsets virtually fifty weeks every year . . . clean . . . what’s not to like? . . . except the politics . . . but there are ways to deal with them.
No, the “gadfly” is not on anyone’s payroll . . . nor do I have much to gain. But I “feel” for those who came here with big expectations, and see in you the potential for a great success in aviation . . . thinking back to those who worked so hard in Burbank, back when we had “other enemies”, during a great war.
Companies like Piper, and Cessna, and other reputable firms, would do well to consider more than the “superficial” politics of this place, and settle into one of the greatest “well kept secrets” and opportunities of the twenty first century.
gadfly
(Don’t worry . . . a gadfly has no sting . . . only “intimidation” and “sarcasm” . . . ‘nothing more.)
VERN RABURN CALLS FOR TRANSPARENCY; SAYS ECLIPSE HIDES NOTHING
Here are some choice quotes from Vern's past:
"Eclipse is saying 'we're putting all our cards on the table,' '' he said. "They have been very public from the get-go."
"Transparency is never more important than during the development phase of a new product or company," Raburn wrote on the Eclipse Web site, citing recent corporate scandals at Enron, Tyco and Italy's dairy giant, Parmalat. "Thus, it is the responsibility of the company that is making promises (i.e. claims, projections, etc.) to provide Transparency into its operations so that potential partners can judge for themselves the believability of the promise."
"We're just plain, flat tired of them making claims, and the press not even bothering to sort of say 'didn't you say that six or eight months ago?' '' he told the Journal.
"Look, if you're so confident in what you're telling people, share it," he said. "We're not saying 'we're good and you're not.' We're simply saying 'hey, we're prepared to show people what we're doing and be measured by how well we're doing. How about you do the exact same thing.' ''
"I can take you, on our site, to where we said 'oops, there's a big problem guys,' '' Raburn said. "We've never hidden anything. All along we've admitted our slip."
http://www.eclipseaviation.com/index.php?option=com_newsroom&task=viewarticle&id=553&Itemid=51
It seems rather strange for Vern to claim that Eclipse doesn't hide anything to now be ranting and raving about NDAs if there's nothing that Eclipse doesn't disclose. There are many previous citiations to Vern personally guaranteeing Eclipse's transparency and he himself should now be called out on numerous items - his own previous quotes say he should be called out to explain!
Also pulling up the past, here's a pretty accurate comment from 2005 by the Teal Group:
"I don't know which is more bloated, the production expectations or the demand expectations," says Aboulafia.
http://money.cnn.com/magazines/fortune/fortune_archive/2005/12/26/8364627/index.htm
Also as a bonus here's a video showing Vern narrating the Eclipse manufacturing process as of August 2007 and he even shows one of the jets that's being used for FIKI and the end:
http://danbricklin.com/log/2007_07_17.htm
Then there's this video of a DayJet commercial:
http://www.youtube.com/watch?v=jHwkhWK1cgE
And there's this video of DayJet on the Today Show:
http://www.youtube.com/watch?v=B150uxW7CRk
So giving this huge amount of marketing/PR, doesn't that raise questions about only getting 500 total customers?
This goes out to anyone listenin'
A quick review,
After nine months and estimated losses of perhaps $500-600K per month, Ed has successfully proven that 12 jets are apparently enough to serve 50 'frequent flyers'.
DayJet has laid off 38% of their staff and put almost 60% of their fleet in mothball or up for lease/sale (depending on which article you read).
They were able, over 9 months, to get 500 or so people to book flights, and 10% of those people have flown a few more times.
This with 2 of the 4 States served combining for over 24 million people - literally ranking 4th (FL) and 9th (GA) in population among the 50 States.
And Ed calls this a successful 'proof of concept'.
Can anyone imagine what a failure looks like to this guy?
"So giving this huge amount of marketing/PR, doesn't that raise questions about only getting 500 total customers?"
Try as they might, DayJet couldn't get any ad time on the Blackberry Channel. That would explain it. And not enough actual affluent-enough folks would ever leaf through the pages of Wealthy Wanker Magazine to even know that DJ exists...
"Based on the simple premise that your time is valuable, DayJet allows you to experience the freedom of regional business travel on your own terms ... Their proprietary, real-time reservation and optimization software and largest fleet of Eclipse 500™ jets let business travelers move fast and stay flexible. Every step of the DayJet Difference is taken in your shoes. You personalize your travel time and cost. You skip hassles and delays. You experience the thrill of business jet travel. And you restore your work/life balance. This is truly a product that was designed by you for people like you."
Creeping insolvency - the Real DayJet Difference...
Can I offer you a pedicure?
IANAL
Dave, quoting Vern,
"Transparency is never more important than during the development phase of a new product or company,"
This turned out to be true; especially the transparency in the front called the windshield. The pilots look out through this and it’s important. We hear that Eclipse got this sorted out, thanks to Vern’s preoccupation with transparency.
ECLIPSE AND DAYJETS TAXPAYER SUBSIDIES
It turns out that Vern wasn't the only one to raid the public kitty in cutting large deals with the government, but that Ed did too - though Ed didn't cash in those chips:
In 2006, DayJet made a deal to receive $1,000 per job for the 350 workers the company expected to hire over several years from Palm Beach County and another $5,000 per job in tax incentives in a performance based tax refund from the state.
Dayjet Vice President, Strategic Operations Traver Gruen-Kennedy said the company has not collected on those incentives, but that it did receive training grants from the Agency for Workforce Innovation. He said the grants were crucial to DayJet because otherwise the company would have had to send pilots to Albuquerque, N.M. for training.
Gruen-Kennedy said some of the pilots trained by the grants were let go, but that the company hopes to rehire them once it resumes expansion.
http://charlotte.bizjournals.com/southflorida/stories/2008/05/05/daily23.html
Though I think Eclipse is by far the bigger problem, giving away taxpayer funds should be done extremely carefully. It seems like Palm Beach could find a better use for the $350K and I think a lot more details are needed on why the state of Florida would hand DayJet $1.65M...what performance was/is required? Also why shouldn't DayJet send the pilots to NM for training - why should Floridians have to foot the bill for something that was going to be paid for no either way? Both companies are showing that they are heavilly reliant on the taxpayers.
Dave
This sounds like a broken record . . . my apologies!
A long, long time ago, it was reported in the public media that as soon as the little bird was successfully flown, the initial deposits in escrow would be “released” and Eclipse could use those funds.
The little bird “fluttered” around Albuquerque for an hour or so . . . returned to ABQ, claimed success, and took possession of the money in escrow, etc. After which, it was declared that the initial flight was not truly successful . . . the “Williams” engines were not adequate for the design (although some of us had already come to that conclusion, based not on “Williams”, but an inadequacy of the Eclipse design team . . . but what would we know?).
Anyway, since most “customers” are not “aeronautical types”, the claims probably went over the heads of most . . . but it all sounded “legal” . . . and many dollars found their way into the “coffers” of the little bird. It was all too pathetically obvious . . . but people fired with the desire to “own” their personal jet are not in position to listen to reason. And, today, we find ourselves in a mess . . . wondering what to do next.
Some of us were alerted, by simple observation of the design, and the announcements of Eclipse, concerning wind-tunnel tests, etc. ‘No big conspiracy, nor inside spies . . . ‘just the simple “2+2" observation of the announcements, coupled with the simplest of understanding of things like “lift, thrust, drag, weight & balance, CG, . . . etc.”.
In other words, right from the “get-go” things didn’t pass the simplest of “smell tests”.
And from then on, it’s been all “down hill”.
We could go “on and on” about the fertile soil of NM politics, to promote this sort of thing . . . not the first by any means. But maybe some of us were “too polite”, attempting to warn the would-be investors. And now the chickens are all coming home to roost.
The best we can do at this point is to “attempt” to salvage something from the ruins . . . even before the fires have cooled.
gadfly
(I hate liars almost more than anything else . . . and "half-truths" are the worst of all.)
See the May issue of Business & Commercial Aviation, page 108, 'Flawed Orphan' by Michael Hackett.
This sounds like a broken record . . . my apologies!
I know that. I've been following the Eclipse blogs for awhile, however, I feel it's very important to restate things that have been on the blogs before. In the past many of the comments and findings were done to a limit audience, but now thanks to Vern's lawsuit there's potentially an expanded audience who didn't catch many of the things that were said the first time around.
Business Week Interview
Business Week interview with DayJet CFO John Staten gives Operating Cost information.
Interestingly, this is one airline contraction in which the credit crunch – not jet fuel prices – is starring as the villain. Fuel accounts for less than one-fifth of DayJet’s operating costs, chief financial officer John Staten said in a telephone chat Wednesday afternoon.
Now, since GPH consumption of fuel is known and fuel can be priced, this gives DayJet operating costs by backcalculation.
Operating = (GPH*Cost)/ 0.20
GPH= 70 real world, low altitude shuttle
Cost= 4.25 retail, possibly 3.40 wholesale.
Operating cost = $1,250 to $1,500 per flight hour
Deadhead = 30% - 35% so:
Operating cost per revenue hour =$1,700 to >$2,100
Staten further says:
"DayJet’s average flight is one hour, with fares averaging $600-$700. Its load factor is 1.8 people."
Revenue = 1.8pax * 1hour * $700
Revenue = $1,260 hour
That would mean Dayjet is losing $450 to $900 per hour, each and every time it flies a passenger.
"I picture the ramps at KABQ lined wall-to-wall with NextTuesdayJets."
Right picture, wrong airport.
My home airport is KGNV, and I usually fly three times a week. Taxing to my hanger I pass the DayJet maintenance hangar each time. Here is a photo from today:
http://i282.photobucket.com/albums/kk244/marcusadolfsson/dayjet-1.jpg
I counted 16 planes on the tarmac today, and they haven't moved for the last few weeks....
Ouch!
I wonder if Ken Meyer got rid of his trusty 421 yet? Looks like he's gonna need it!
Gunner
($450) to ($900) over each of approximately 3000 'revenue' flights equals $1.5 to $3M in operating losses in 7 months, or about $200K-$400K/mo.
This sounds strangely familiar...
Now where have I heard this before...
We are losing money with each unit, but we'll make it up on volume...
All it takes is more investment monies...
Lemme see, where was that...
Also, the suspense is killing me re: our reply to the subpoena, Thursday should be a good day.
Marcus
'Great picture!
Now what to title it?
A bevy of quail
A bouquet of pheasants [when flushed]
A brood of hens
A building of rooks
A cast of hawks [or falcons]
A charm of finches
A colony of penguins
A company of parrots
A congregation of plovers
A cover of coots
A covey of partridges [or grouse or ptarmigans]
A deceit of lapwings
A descent of woodpeckers
A dissimulation of birds
A dole of doves
An exaltation of larks
A fall of woodcocks
A flight of swallows [or doves, goshawks, or cormorants]
A gaggle of geese [wild or domesticated]
A host of sparrows
A kettle of hawks [riding a thermal]
A murmuration of starlings
A murder of crows
A muster of storks
A nye of pheasants [on the ground]
An ostentation of peacocks
A paddling of ducks [on the water]
A parliament of owls
A party of jays
A peep of chickens
A pitying of turtledoves
A raft of ducks
A rafter of turkeys
A siege of herons
A skein of geese [in flight]
A sord of mallards
A spring of teal
A tidings of magpies
A trip of dotterel
An unkindness of ravens
A watch of nightingales
A wedge of swans [or geese, flying in a "V"]
A wisp of snipe
A ????? of Eclips'
(An irritation of gadfly)
Now what to title it?
Vern's Roadkill? Eclipse's Waterloo?
Thanks for the Photo Markus. Were would appreciate regular updates to that.
Those VLJ really are "darkening the skies". I didn't realise the whole whole "darkening the skies" concept was based on the point of view of being a worm or a rat.
Maybe either this Blog or FC's statistics page can host the ramp queens, or hangar pig, or christmas tree of the week.
I would love to see a photo of the most robbed christmas tree in the corner of the Dayjet hangar. I once worked for an outfit that needed to canabalise two A/C to support a fleet, and it is amazing how fast the parts get robbed once you decide to do this, and how hard it is to get back to serviceablity.
Once you declare a plane to an organ doner it is necessarily not the missing actuators, LRU etc which are the trouble, as these are mostly clearly identified. Tt is the missing clamp, prox sensor target attachment screw, actuator mounting hardware.
What gives with the photobucket web site? I get a message saying "This image or video has been moved or deleted"
Link to the Hanger Fowl
Thanks John! Now all they have to do is paint them green and let the weeds grow up and "out of sight, out of mind".
Correction(s), and for the record.
DayJet are NOT using any aircraft as a 'donor' for parts. As would be normal in any service situation, if you suspect some module but can't be certain, you swop it with another one, in the field. I can understand what DayJet ARE doing. We do it here often enough, especially with brand new technology that by definition does not have a long service history.
DayJet aircraft referred to here recently are currently being upgraded and/or having service performed. They have not 'gone away' to a new home or otherwise.
I also understand that Ed has been active with the press, so expect to see more on the usual sites soon.
Shane
Eclipse reliability discussed in FlightAware forum thread:
JHEM
PostPosted: Wed May 07, 2008 2:48 am
I have it on good authority that a user of some of the first of the Eclipses delivered is suffering with a 25% to 30% dispatch rate and none, or very few, of the ailments are being addressed under warranty.
The nym posting this information is a very active forum member (1,950 posts) and has a warm personal relationship with Linear Air personnel as detailed other posts he has made recently.
DayJet's funding issues don't make sense to me. DayJet is acting like they went to some banks and they said no, but DayJet's funding would be coming from venture capitalists and that wouldn't have much to do with the credit crunch. VCs have billions of dollars and it seems odd that given all Ed's connections that he could even get $40 million. It must be very bad if neither Bill Gates nor Paul Allen (amongst many others) wouldn't risk an extremely small percentage of their net worth to expand DayJet to match Ed (and Vern's) claims. Why wouldn't ETIRC pony up $40 million? All those in the know must know something bad...
Dave-
You're incorrect. Investment money is extremely tight just now; inclusive of VC dollars. However, this tends to affect the startup concept most; not an operating company that has "proven its concept".
Gunner
Dave,
You also miss the whole equity thing. Vulture, sorry, venture capital uses control of equity to ensure repayment of what is really a medium term loan.
Been there, done that, T shirt was the wrong colour/size/ etc.
So, Ed might not like the terms attached to the money on offer right now, especially with regard to control of things like the software built to enable the service.
You may recall the fuss Vern made over the VC'c who made some demands he could not contemplate last year.
Just before he sold out to the Russians....
Shane
Craft notes:
S/N 174, 21YP, is on a cross country flight today. This craft had been listed on Controller as "Sale, New at Factory".
S/N 183, 555EJ, was on a cross country flight yesterday. This is highest SN I have observed in flight.
S/N 10, 500VK, a Florida based charter craft with 285 TT, has just been listed for sale. It has an upgrade scheduled in September 08, and is listed at 1,575K
Housekeeping issue.
For a variety of reasons, I have been using two accounts to post here. One has, up till now, shown just my first name as it's ID.
Nothing sinister, just one account for managing the blog and another for eclipsecriticng@gmail.com.
As it took some time for me to notice the 'difference' there are 'shane price' as well as just plain old 'shane' posts. I have now corrected this. In future, all my posts will be from 'The Great Raburn'
Joke.
There, I'm glad I dealt with that. Before someone thought I was conspiring against, well, myself....
Shane
Shane/Gunner I'm not missing these things. I think there's something potential funding sources have seen that either scares them off completely or makes the deal too unpalateable for Ed to currently accept the terms. After Eclipse initially rejected such demands, it's had to take desperate measures and harsher funding terms to get new rounds. If his model was really working as well in practice as he claims it is, Ed would have his money easily.
Vern still isn't changing the size of the order book and continues to say Eclipse is unaffected:
http://kob.com/article/stories/S437793.shtml?cat=517
I seem to recall that Day-Jet had secured funding which would allow the purchase of lots of aircraft - I think it was $140 Million.
If this is the case, the $40 Million needed is to cover additional operating losses to reach "critial mass" otherwise known as break even.
It would be reasonable to assume that those considering an investment have read the perspectus and ended up with the same questions that always remain unanswered here - If you can't make it work on a scale that includes Florida and GA, how will an expanded footprint do anything other than expand the losses.
People with money either want to donate it to a good cause or invest in an opportunity. Evidently Day-Jet does not qualify as a charity and doesn't look like such a hot investment either.
"Eclipse CEO Vern Raburn says Eclipse has orders for about 2,500 twin-engine Eclipse 500 airplanes and has lots of customers who would like to get their planes earlier."
Dave,
I'm assuming that comment from Vern is current. If so, that means that Eclipse must have had approximately 3,900 orders as of last week, right?
(2500 orders now + 1400 orders just "cancelled" by Dayjet = 3900).
Or, maybe the orders haven't officially been cancelled and they are still counting them as valid.
Either way, it is clear that the message is intended to evade the truth, as usual.
On funding DayJet
VC funding is always looking for an exit. The collapse of the POGO IPO in mid-March means that an IPO for Dayjet is less plausible. The POGO and Dayjet business models were very similar, once the per-seat variable pricing hokum is removed. The VC "loan" would have been paid off by selling IPO shares.
If no DayJet IPO is possible then the investment is dead money at best, or a loss at worse, since the operating margin of Dayjet would not recover the sunk costs. The third round funding, $40M, would push the VC money above $100M, there is no way even "debt service interest" is being paid on that capital since another 45 million of senior debt has gone into the craft currently tied down in KGNV.
Selling shares to public investors was the only plausible way to recover the investment. The public needs the PR glitz of Dayjet to invest with confidence. The IPO buyers would buy and sell shares, meaning that only a small fraction of their buy is realistically at risk.
That said, it looks like the charter industry is balkanized, with a lot of little, very undercapitalized mom-and-pops. These little mom-and-pops are leasing planes from whomever, which means they are likely paying 15% or more "financing" charge on the use of the craft (the various remarketing overheads on the leasing deals). The little mom-and-pops all seem to have empty leg sales on crummy, half-functional websites. A marketing scheme that would combine all those empty leg offers would increase the economic efficiency of the industry, but the balkanized nature makes a comprehensive solution difficult to achieve.
NetJets, with access to massive capital for virtually free cost of borrowing, could roll up the industry, if it decided it was a good marginal return. NetJets branded itself and fielded a 570 craft fleet, this is scale that Dayjet was dreaming about.
Dayjet hobbled itself with an impossible to explain pricing system. This is an example of the software circumscribing the commodity, a classic engineering mistake.
Dayjet has said in public that they saw only two types of travellers: Ones for whom cost was no object, but wanted a time certain, and another group that was price sensitive. So virtually all the "software complexity" was discarded by the actual consumers. A simpler model would be to offer time-certain pickup for $1800 dollars/hour, as everyone else in the industry does, and collect the cheapskates at a "scheduled" time during the off-peak-essentially empty leg returns. I'm suggesting that offering time certain pickup for X dollars is a workable business model, as is evidenced by all the charters that are already using it.
The off-peak utilization, empty leg marketing, and all the other clean-up efficiency on utilization, is being done in the background by NetJets, Satsair and other operators that have scaled to a level that make the aggregate activity predictable. They don't scare off buyers with impossible to understand and predict pricing schemes that (supposedly) require mad Russian genius to understand completely. That is poor marketing from the get go, "we sell for a price that only victims of Aspberger's syndrome can understand". That will really get statehouse lobbyist packing their golf clubs.
If an IPO works, it represents a very low cost of capital to the company, especially now that the example of MSFT has made paying dividends unexpected.
I'm assuming that comment from Vern is current. If so, that means that Eclipse must have had approximately 3,900 orders as of last week, right?
(2500 orders now + 1400 orders just "cancelled" by Dayjet = 3900).
Or, maybe the orders haven't officially been cancelled and they are still counting them as valid.
Either way, it is clear that the message is intended to evade the truth, as usual.
It's brand new. DayJet hasn't officially cancelled any orders, however, you'd think given the news he'd at least talk about contingency planning. It just makes Eclipse looks foolish by looking like he's not doing anything about potentially losing over half their orders. Not only that, but the order book has been at best stagnant for ages. Where's the sustainable 500-600 orders per year?
daDave,
You shouldn't ask obvious questions like that...you'll end up on Eclipse's "blogger hit list" like the rest of us.
;-)
"Eclipse CEO Vern Raburn says Eclipse has orders for about 2,500 twin-engine Eclipse 500 airplanes and has lots of customers who would like to get their planes earlier."
"Earlier"? Now that's funny, although I suspect the position holders who have been waiting 3+ years beyond their promised date don't think so.
It just dawned on me that Vern can now say to many position holders "Your delivery has just moved up to be less than 6 months from now, pay up!". Suddenly, more revenue! What a windfall!
Now here's the question: what is the average delay between the "6 month payment" and the delivery of the airplane? I'd bet it is more like a year. There's no real incentive for Eclipse to be accurate here, the worse they are in over promising, the more money they get to keep unsecured and interest free. Indeed, when deliveries are late, they accrue more CPI-W adjustments!
Biz jet sales as a pyramid scheme. Someday, the money will run out...
"Eclipse CEO Vern Raburn says Eclipse has orders for about 2,500 twin-engine Eclipse 500 airplanes and has lots of customers who would like to get their planes earlier."
Let's see...
2500 divided by 3.8 per week (a provable production rate for Eclipse)...
WOW!
That's a 658 week backlog. Things are looking UP guys, Eclipse is sold out through 2021. No wonder folks are asking Vern if they can get their NextTuesdayJets sooner.
Pay at the first window,
IANAL
Don't forget the competition!
Vote 1 for "Barbie Doll Jet"
Vote 2 for "FIsher Price Jet"
Remember, the winner becomes the 'official' blog nickname for our very own VLJ. Send your entries, by close of business tomorrow to
eclipsecriticng@gmail.com
Shane,
I voted for the Fisher Price Jet. This vote is like this our Presidental Election this year; there is no really good choices.
Barbie had no private parts but EAC does, and Fisher Price toys' work and there is no waiting period.
The "Albu-Turkey"!?
Somehow, the "real name" (“Eclipse”) has already spelled out its future.
A search for the definition of “eclipse” yielded the following:
a. A fall into obscurity or disuse; a decline.
And
b. A disgraceful or humiliating end; a downfall: “Revelations of wrongdoing helped bring about the eclipse of the governor's career.” (Yep . . . that’s what it said! Would I kid you? . . . ‘don’t answer that!)
The possibilities of innuendo are so rich, I scarce can continue with the many possibilities.
gadfly
(Oh my! . . . this is called “serendipity” . . . or is that “serendipity doo-doo”. ‘Let’s leave it at “serendipity du-dah, du-dah”. How do you say that in “Gaelic” or “Gaeilge”?)
Anyone know what the weather was doing in AZ on Tuesday?
Our own South AfriKen Turbine Pilot apparently had to Getreal and diverted to Prescott rather than landing as planned at the home airport in Wickenburg some 60 miles away.
At least, his wife's plane did according to Flightaware. Maybe he was showing it off for someone, maybe it broke, maybe there were FIKI conditions.
On a more positive note, I see where there have been a flurry of filings on behalf of Google with the Santa Clara Superior Court - I am breathless with anticipation to see the actual filing.
In the spirit of keeping with the company name's astronomical roots (Eclipse), why not call it the Uranus Jet? Why, you might ask? Because if you're planning on flying in one, it might be a good idea to bend over and kiss Uranus goodbye first, just in case.
Shadow,
I think you should win just because Uranus just begs for cheap shots:
Vern: "where's my deposit"
Buyer: "I already put my money in Uranus"
or "Hey Vern how's Uranus"
ColdWet-
I suspect Ken has probably been flying pretty much constant to get the Mentoring requirements out of the way. That would explain the PRC divert on the 6th.
It wouldn't necessarily explain the fact that the plane has been invisible to FlightAware ever since. I also note that the MeyerJet is still registered to Eclipse Aviation. Nothing to conclude there, given the FAA lag on such items. But it does bear an occasional recheck of the database.
Gunner
In Ed's own words:
http://www.ainalerts.com/ainalerts/podcasts/DayJet_050808.mp3
It is never his fault, is it?
They never ask the hard questions, like "if you had $50M more, would that be enough to be profitable?" and "Well, why didn't you put in $50M of your own money to do that?".
I'm still left thinking that they have too much staff. 160 people for 12 airplanes is more than 13 people per airplane. What the heck are they all doing? One guy with a clip board can schedule them all, and you need maybe 4 pilots per plane, maximum. This should be a 60 person company. What are the other 100 doing?
Maybe this is a software company masquerading as an air taxi?
flyger,
The manufacturing of the 500 is very labor intensive. One of the production facilities installs over 16,000 rivets. Thats drilling a hole, drilling to size, (on close tolerance holes), reaming and countersinking, then shooting the rivet. I'm sorry to disagree but Eclipse does not have enough technicians as it is.
Then there are the support engineers, QA, MEs etc etc.
OK, time for the Blogger's Response to Mr. Vern's Attack update:
Our response was filed today in California. When Google failed to pay the necessary Court fees for response, we took it upon ourselves to pay it for them earlier this week....thus paving the way for us to publicly tell Mr. Raburn just what a tool he really is.
Our objections are basically on First Amendment grounds (that's the one that says PRIVATE opinions are healthy to a free society, Vern) and on the grounds of incompetence born of mental sloth (yes yours, Vern).
We've asked the CA Judge to review the facts and case law and then flush this "subpoena" for the bit of jurisprudential flotsam that it is. The judge has several reasonable courses of action in our opinion; none of which will place a certain Collier Trophy recipient in the best light.
The case may now disappear or be dragged out (in CA or NM). Were it not for our respect of the backlogs in the Courts for cases with REAL MERIT, we'd almost derive a perverse pleasure in seeing Eclipse take this all the way. Reminiscent of a very famous Monty Python battle.
Our full response would be a bit boring to most here, especially given the fact that the far more important story out of Boca Raton is still developing. However, Shane will be posting a link to the full text on the morrow.
For those 28 named, you few, you proud, you thorns in the side of disruption, email me if you simply can't wait to read the entire text.
I'd like to close by saying, with all due respect, "Bite Me, Vern, you cowardly hump".
Unprofessional? Perhaps. But I willingly paid the bill for the right to those words and there's plenty more where those came from. ;-)
Rich Lucibella
Our full response would be a bit boring to most here
I look forward to reading it and I expect many others here will too
flyger said... "Maybe this is a software company masquerading as an air taxi?"
A lot of the Eclipse mid level staff is ex-Intel. Intel downsized like 6000-7000 people. They worked at Eclipse like they never had a care in the world and everything would get done by magic, money would never run out and all is good in the world.
chickasaw said...
flyger,
The manufacturing of the 500 is very labor intensive.
Flying it is not.
You need to read more closely, the comment was about 160 people left at DayJet which is more than 13 people per each of the 12 remaining EA500s DayJet is using. So this had nothing to do with Eclipse manufacturing.
Got it?
Rich,
You are the type person that keeps this country strong. A heatfelt thanks for all you've done. As all of us, you surely had more to do with your time, but took the ball and ran with it. This blog has brought together some of the finest minds in the industry. Being from Florida, I have brothers in St Pete and owe you dinner next trip.
Shane,
We all owe you a toast of the finest ale made. I don't know how close to Shannon you are, but will contact you before my next visit there. Drinks and dinner all night on me.
THANKS to all here for being open and calling down the BS at the 505.
DayJet called a "debacle":
http://www.usnews.com/blogs/money-matters/2008/05/08/the-latest-in-the-airline-debacle.html
The Ed And Vern Show went out of their way to get international publicity, but the downside of that is when things head south...
I'm still perplexed that after all of DayJet's media saturation they only got 1500 people registered, 500 people who flew at least once and a backbone of only 50 people. Perhaps things look that bad at Eclipse too, just Vern can cover it up with phantom orders and wookies.
This may seem off track . . . but not really. Sixty three years ago, today, 8 May 1945, our fathers, grandfathers, and families found a certain sense of relief, as victory in Europe took place . . . “VE Day”. The war would go on for a few more months, as we looked to the “Western Pacific”. . . but victory was in sight. ‘Little did we know how that victory would change all war from that point on. (And the funny thing is that the “ignition” point was right here in New Mexico.)
Whether the battle is large, or small, it takes courage which is often lacking at all levels to do that which must be done.
One . . . yes, two (or more) stepped up to the plate on behalf of many, who may not be able to speak for themselves . . . for fear of intimidation, or suffering legal battles, etc., far beyond their resources.
We owe a debt of thanks, to those, who speak on behalf of the weaker members of the aviation community. Granted, some of us have little to risk. But others have put their money where their mouth is . . . and dare to carry on.
On behalf of us all,
Thank you!
flyger,
You are of course right, I apologize and can only blame my mistake on old age.
If you squeeze the sponge of truth hard enough, little by little, the facts begin to dribble out. In the "Business Week" article, we get just a "dribble" . . . "It flies tiny three-passenger Eclipse 500 jets" . . . whereas, most of what we had been led to believe was that the "Eclipse" was a "six place jet".
Oh my . . . sure, there was no deceit involved, but just a "half truth" . . . 'just a shade off target.
gadfly
(A dribble here, a dribble there . . . before you know it, it’s time to get the mop . . . and a big bucket.)
rich,
man, you are amazing!
A hearfelt thanks... especialy for the laugh
"For those 28 named, you few, you proud, you thorns in the side of disruption, email me if you simply can't wait to read the entire text."
As you know, I love the fact that:
1- we broke the Dayjet 1000 plus order BS story, with taking welcher-Ken up on his offer to bet - he did not go with the $10k wager, eventhough he was SOOOO sure I was wrong. A few weeks later, the story broke about Dayjet having even more order than I gonculated... imagine that?
2- how about CW and the grounding of the fleet?
3- how about your read on Mike Press, who basically told us Eclipse was almost BK last summer... and your insistance they were out of cash? A few weeks later, in Verns own words: "they almost put us in bankruptcy".
4- how about the not-so-revolutionary nature of the little plane that couldn't make it as a taxi? Te BS about how this contraption would revolutionize air taxi? C'mon.
... we can make a long thorny list of "intuition, smarts, opinions, and rumor, inuendo, thoughts and ideas..." none of which came as a breach of contract or trust - all of which are apparently poking one of the greatest aviation bullshit artists in the history of mankind (pun intended)...right between the eyes.
This guy had every chance to do it right. All the time, money and available talent in the world... and he screwed up so badly - sometimes, it surprises even me - one of the critics' critics.
A resonable judge should conclude that the blog has done a service - and more blogs like this need to be created. To protect the public, provide an open forum where ideas and opinions can flow.
I sincerely believe that there will be "new rules" set by a regulatory body regardng the collection and management of deposits on airplanes. The treatment of the customer's money is a complete travesty.
I would not be surprised if someone goes to jail... and certainly not surprised if the "deposit instruments" are regulated by the SEC - because of Vern and Eclipse.
Thanks Gunner.
Your friend and co-critic since a few years bac already,
ATman
ATM-
Funny you should mention regulation of deposits. Are you aware that in many states, you cannot sell someone a membership to a Health Club without posting a significant bond? Seriously, Gold's Gym in many states must post a bond to be able to sell future services at a discount today.
Yet someone like Vern Raburn can CONTINUE to take advance deposits and actually muscle existing Depositors for Progress Payments when even THEY know he can't deliver on time. And he can do that repeatedly and in the very wake of boasting about near insolvency.
Personally, I'm not in favor of .gov protecting Man from his own Folly, but just think about it....Gold's Gym can't take $99 from you for next year's Gym Workouts, but Vern can take tens of millions!
As to hero's in this struggle, other than Stan and Shane, there is one man here who deserves ENORMOUS credit for his willingness to publicly stand in front of the Response we filed, if that were necessary to give us "standing" with the Court. It has not been, but may yet be required.
Now THAT took guts and conviction. When the time comes it's going to be my distinct pleasure to reintroduce him to the Members of this little fraternity.
Gunner
Isn't a Critic lovefest just what the Dr. ordered on the eve of another life lesson for one Vern Raburn, late of Albuquerque New Mexico?
First off, major kudos and thanks to Gunner for taking up the challenge and to one of us for taking on the burden of being John Doe #1 for the purposes of our collective defense.
Second, no matter how this all plays out, I must say that I am proud to have been even a small part of this effort.
Third, I have seen an advance copy of the Motion to Quash and I want to issue kudo's to Norman and the legal team, nicely done.
Because it seems to have been lost on the Faithful and of course the subject of our criticism and satire, I want to say again what most of we critics have repeatedly said - we really wish that we were wrong and that there was no need for our critical eye.
Would that Vern had quietly led a revolution marked not by outrageous claims, unmet promises and resultant lowered expectation, but rather by successful execution after successful execution - resulting in the advanced and remarkable plane they promised, not the partially functional incomplete preemie jet they have rushed out the door in pursuit of 'unprecedented production'.
To my fellow critics, it has been, remains and will continue be a pleasure to serve with you.
To the employees of Eclipse and Dayjet - we have routinely tried to go out of our way to separate you from the 'leadership' you have suffered under but I will do so again. We have not, do not, and will not wish you any harm - we want you to find security, stability and respect from leadership.
To the Faithful Following of the Church of Flyantology, otherwise known as the 'diehard' (thanks for that one Vern), we still hope you get the plane you thought you were buying, and we forgive you for the most ridiculous of your apologist shenanigans for L. Vern Raburn, the galactic overlord Vernu.
And lastly to the reason for all this hubbub, Vern.
There are simply not enough words Vern to describe how we got here, but I will give it a shot in no particular order: Hubris, Arrogance, Dishonest, Misleading, Disengenuous, and Bully.
The higher the run, the harder the fall Vern - none of this was necessary had you simply done what you said you would do.
> Vote 1 for "Barbie Doll Jet"
Sorry - the Barbie Doll Jet already exists and is a 737 Classic. My baby sister had one back in the 70s and I used to help her tow it around the house. At that time Barbie was a flight attendent; today I think the set comes with both pilot and FA uniforms.
sPh
68 listings on controller....
an all time high
re-sale values must be skyrocketing!
Think anyones figger'n since Dayjet is not taking their planes any time soon - cannot say cancelled their order, right? - the end is very near...
I guess when you have a "2700 card" house of cards, and you yank out say 1400 of them... the whole house falls?
Dayjets the last company Vern's worried about.
This day is called the feast of Subpoena:
He that outlives this day, and comes safe home,
Will stand a tip-toe when the day is named,
And rouse him at the name of the Vernster.
He that shall live this day, and see old age,
Will yearly on the vigil feast his neighbours,
And say 'To-morrow is Subpoena Day:'
Then will he strip his sleeve and show his scars.
And say 'These wounds I had on Subpoena Day.'
Old men forget: yet all shall be forgot,
But he'll remember with advantages
What feats he did that day: then shall our names.
Familiar in his mouth as household words,
Gunner the Gladiator, Norman the Advocate,
Shane of Eire, Bloggers and Blogettes,
Be in their flowing cups freshly remember'd.
This story shall the good man teach his son;
And Subpoena Day shall ne'er go by,
From this day to the ending of the world,
But we in it shall be remember'd;
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne'er so vile,
This day shall gentle his condition:
And gentlemen in the land now a-bed
Shall think themselves accursed they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon Subpoena Day"
With apologies to William Shakespeare and Henry V.
StevenH-
Just 'cuz there's already a Barbie Jet, it doesn't disqualify either candidate. The Fisher Price Jet looks a lot like my beloved NextTuesdayJet, and the pilots head swivels back & forth with a complete lack of cognizance - just like they train dentists to do in South Africa...
When I worked for one of the major airlines, our company store sold Leggo (tm) planes with our logo, incluing the little marshallers and tug. (hardest dang plane I ever worked on). As my grandkids keep finding it, a piece goes here, one there. As I look here at it (what's left, I smile as I think of the little jet that could have been. (except for those darn missing pieces)
To the workers at EAC, (you guys know who I'm talking to), maybe things will lighten up now that this has all come to a head. WE know who needs to go and although Vern tops the list, there are more who enabled it. Yea Todd, you know who I'm talking about. And as far as the threatening email, whoever wrote it did not have the nads to reply and even got scared enough to delete the account. Nothing here to hide as I said in the reply. (Shane and Rich know) and are free to post it.
To everyone one here, it's been great being a part of this. Cold Wet and Gadfly need to be on stanby the next writer's strike.
You can't buy stuff like this....
Some comments:
1. None of the blog contributors have been subpoenaed. Yet.
2. Just because someone doesn't appear on the list, doesn't mean that they won't be named later in a related suit. For example, the identities of Stan B., Shane P., and Gunner are already known, so there is no need to subpoena Google to discover their identity.
3. Why would someone who has never signed an NDA be named? Could be because EAC wants to subpoena them to reveal a source who may have violated an NDA, even if the blogger himself was not subject to it. By the way, some of you may be thinking about journalists being able to protect their sources, but that applies only to bonafide journalists, most assuredly not to mere bloggers. Protection of journalistic sources is also a matter of state, not federal law.
4. Some of you are fantasizing that once a judge hears your version of the Eclipse story, he'll throw out the case because of Eclipse's behavior. Wrong. The behaviors you are alleging have nothing to do with an NDA violation tort.
And, some of you have tried to justify breaching an NDA because an employee disagrees with the way an employer is behaving. If anyone has ever been a business owner or manager, think back to how many times you've had employees that didn't like the way your company was being run. Now imagine that those employees took their opinion as license to reveal proprietary company information to the public. Is that really the way you want things to work?
5. Finally, I think that Vern Raburn would have ample grounds for a defamation lawsuit, if he could ever find out who some of the libelous bloggers were. Hey, wait a minute, he just might end up with some of that information.
Gunner, does your attorney know that you are defaming Vern Raburn? One doesn't have to look any further than this thread to find examples. You might ask your lawyer if you are opening yourself to any liability with your name-calling. And by the way, saying that it is just your opinion is NOT a defense.
G
Gorak,
Welcome.
First off, nobody has declared victory, you need to read more carefully before slandering/libeling we anonymous bloggers and accusing us of things we are not being accused of by the person or company in question.
Furthermore, I don't believe anyone was encouraging violation of NDAs - there were questions about the doctrine of unclean hands. NDA's by the way are notoriously difficult to enforce. I have had employees caught, redhanded, breaking NDA's and causing actual damages - still tough to prove/prosecute.
How familiar are you with the Eclipse project, the promises made, made again and then remade for good measure?
How about the performance of the company to those very public promises it has made?
Do you work for Vern?
Why not use your real name?
Did you know Gorak is a name appearing in both Star Trek and Star Wars stories?
Did you know Goraks are monsters from a video game?
Did you know that Gorak means 'bitter' in Croatian?
Does your wife own an Eclipse?
Given that there are significant rumors that Vern himself could well be accused of real world slander and libel in regards to former employees (not to mention the threatening letter sent out), I think a defamation suit should be the last thing on his agenda - the spotlight it would force would very likely backfire - kind of like picking on the 1st Amendment - but then again, he does seem to have a problem making those critical decisions.
You should try to learn about recent court decisions re: internet anonymity when considered against confidentiality/NDA and the high burden that the courts have been enforcing as necessary to pierce the veil so to speak.
The net Eclipse tried to cast is far too wide and burdensome when compared to the 1st Amendment rights IMO, but a Judge will decide that soon enough. I am honored to be considered worthy of a fishing trip by a billion dollar company, but I have absolutley nothing to do with the sealed case that the subpoena was issued for. Remember, in the US we are presumed innocent until proven guilty - that bar is rather high, by design.
Do you suppose Vern is drawing up papers for the Business Week article? The AIN Online headline? CharterX?
Richard Aboulafia at Teal has been a skeptic since day one. How about Mac at Flying? Clay Lacy?
When the book is written about this adventure, the only difference at the end of the day between we bloggers and the mainstream industry media will be we broke/predicted the stories earlier and with more flavor and a witty sense of humor.
Also, the blog is greater than the sum of its parts, we have each been both right and wrong with individual predictions, but the overal blog record is far better and more accurate than Eclipse has been.
In any case, welcome to our blog - we appreciate a good Eclipse apologist.
Nice to see Borat decided to add some comedy to the thread!
2. Just because someone doesn't appear on the list, doesn't mean that they won't be named later in a related suit.
You're right! Sometime later I'm waiting for the feds to put Vern in an orange jumpsuit. Just because it hasn't happened it, you're very correct that in the future it could happen.
3. Why would someone who has never signed an NDA be named? Could be because EAC wants to subpoena them to reveal a source who may have violated an NDA, even if the blogger himself was not subject to it. By the way, some of you may be thinking about journalists being able to protect their sources, but that applies only to bonafide journalists, most assuredly not to mere bloggers.
Now you're encouraging people to leak whatever Eclipse-related information they have to "bonafide journalists."
Protection of journalistic sources is also a matter of state, not federal law.
Eclipse didn't file a federal lawsuit. The subpoena is being done through the California State Court. Doh! Brilliant lawyering on Eclipse's part by the way taking so long to even get a valid subpoena to the California Courts.
And, some of you have tried to justify breaching an NDA because an employee disagrees with the way an employer is behaving. If anyone has ever been a business owner or manager, think back to how many times you've had employees that didn't like the way your company was being run. Now imagine that those employees took their opinion as license to reveal proprietary company information to the public. Is that really the way you want things to work?
5. Finally, I think that Vern Raburn would have ample grounds for a defamation lawsuit, if he could ever find out who some of the libelous bloggers were. Hey, wait a minute, he just might end up with some of that information.
So now you are claiming that Vern personally lied to the media by claiming the lawsuit was about "lies and rumors" by people who were speculating. You are trying a quite obviously comical janus-faced approach of on one hand saying this blog is too accurate while on the other hand this blog isn't accurate at all while further eroding Vern's credibility that what he says is the truth.
Gunner, does your attorney know that you are defaming Vern Raburn? One doesn't have to look any further than this thread to find examples. You might ask your lawyer if you are opening yourself to any liability with your name-calling. And by the way, saying that it is just your opinion is NOT a defense.
This is the funniest paragraph of all! Vern is crying his eyes out WAH WAH WAH because somebody called him a coward. Da poor lil baby! Trying to do the lawyer act that name-calling isn't allowed just shows how ridiculous your whole post is - name-calling (unless it's racial/sexist) isn't something compensable and it just make Vern and Eclipse look incredibly weak to consider that even an option.
It was also obvious that your post was a joke because of the ID you selected:
http://www.urbandictionary.com/define.php?term=gorak
And also if what you said was true, it would apply to you as well...if the bloggers here aren't protected and you blog here ergo you are not protected.
I hope that's not your last post since you sound funny attempting legalspeak with something anyone in 1L could see right through as hogwash. It would be great for Vern to be connected to some wannabe lawyer saying that people can't call Vern names or else he might sue them - that would be great for Eclipse PR!
Also in honor of Borat:
http://www.avweb.com/avwebflash/briefs/186918-1.html
http://www.abqjournal.com/biz/157783business04-04-04.htm
Vern by his own statements on transarency is forcing a comparison between Eclipse and Enron, Tyco and Parmalat. Vern by his own previous statements on transparency can lead one to believe that Eclipse is not confident in what it's been telling people and that by extension the lawsuit was a no confidence vote in Eclipse's credibility.
GAMA numbers for Q1 have been released. Total sales were $5.3B, yes, Beeeeeeeeeeeelllllllllioooooon, for 781 units.
Eclipse reported 52 deliveries for $64M in revenues - about $1.23M each. A far cry from the predicted 1 per day rate, made only in January.
This did amount to a respectable 6.6% of units, but only about 1% of billings, when there are only 24 reporting companies, with several like Maule, Gippsland, Piaggio that report no or almost no sales.
By comparison, Diamond delivered just over 100 planes for about $37M.
Falcon delivered 15 jets for $503M.
Gulfstream delivered 37 jets for $1.28B - yes, Beeeeeeeeeeeelllllllllioooooon.
Cessna delivered 226 aircraft for $955M - including 15 Mustangs, 38 CJ's of varying stripes, and 43 Citations - a total of 96 jets.
Hawker-Beech delivered 72 aircraft worth $331M, including 20 jets from Premier to Hawker 900XP.
That dinosaur Bombardier delivered 67 jets, worth $1.64B, yes, Beeeeeeeeeeeelllllllllioooooon.
So we see that other OEM's have no problem keeping up with the delivery rate at Eclipse.
The fundamental difference remains that where none of the aircraft delivered by the other companies were partially functional, none of the planes delivered by Eclipse were fully functioning, not one.
To CW and Dave,
Great response to "Gorak".
To "Gorak", Vern, or whoever you are, you are so far out of your league it isn't even funny.
If you're going play with the big boys, you need to bring your A game, if you have one.
Never the less, you are hysterical. Keep 'em coming!
Fondly,
Magicsky
Gorak-
What can I possibly say that hasn't been articulated to perfection already. Nada.
I do, however, reserve the right to respond where my name is invoked in vain. Specifically, "Gunner, does your attorney know that you are defaming Vern Raburn? One doesn't have to look any further than this thread to find examples. You might ask your lawyer if you are opening yourself to any liability with your name-calling. And by the way, saying that it is just your opinion is NOT a defense."
Oh, I think I've just wet my pants from fear.
Without further ado, I's like to publicly apologize to all the cowards, humps and tools of the world whom I've defamed by linking them to Vern Raburn. They probably deserved better from me and may, in fact, have a cause for action against me.
Now, you'll have to excuse me while I reset my Twit Filter. It's being continually tripped.
Gunner
WooHoo!
Karen Di Piazza, you are MY personal hero! A journalist who truly understands the Bill of Rights of The Constitution of the United States of America!
Read Karen's Sitrep Here
Ms. Di Piazza, wherever you are, we don't see thoughts like the following expressed by many of the talking heads who bring us the news these days:
"Legal documents aren't known for being a good read, however, the legal response is interesting; it might provoke thought and consideration of how important it is as an American to be able to practice expression of speech."
Good on ya, KDP!
Oh, and Mr. Gadfly. I have a strong suspicion you'll not be receiving an invite to Vern's Christmas Party this year.
Gunner
Gorak -
To start with, let me give you a couple of tissues - that was quite the ejaculation...
"1. None of the blog contributors have been subpoenaed. Yet."
Google has been subpoenaed - specifically for their identities. It would be a reasonable inference that the purpose of it is to subpoena the contributors so as to suppress public discourse on a matter of public interest.
"2. Just because someone doesn't appear on the list, doesn't mean that they won't be named later in a related suit."
I ... keep ... hoping.
"3. Why would someone who has never signed an NDA be named? Could be because EAC wants to subpoena them to reveal a source who may have violated an NDA, even if the blogger himself was not subject to it."
Bzzzzzt! Check your caselaw WRT Apple.
"some of you may be thinking about journalists being able to protect their sources, but that applies only to bonafide journalists, most assuredly not to mere bloggers."
Bzzzzzt! You haven't been keeping up on this stuff, have you? Bloggers ARE journalists, and caselaw has emerged which recognizes that.
"4. Some of you are fantasizing that once a judge hears your version of the Eclipse story, he'll throw out the case because of Eclipse's behavior."
Nope. (S)he'll throw it out because of protections afforded to anonymous speech by the First Amendment.
"The behaviors you are alleging have nothing to do with an NDA violation tort."
What are these "NDA violation torts" of which you speak? Though Vern made some public noise about such a thing, it sounded more like the cursing of a man experiencing a really bad bowel movement. Public posturing & court filings are frequently completely disconnected from each other. There is no public information available to suggest that anybody here, or anyplace else, has violated an NDA. Are you revealing non-public information? Are YOU violating a court order by revealing the terms of sealed court documents? Or are you just logging in and making scary faces at us?
Tell us more...
"some of you have tried to justify breaching an NDA because an employee disagrees with the way an employer is behaving"
Citation, please? I haven't seen that. And you may wish to review precedent regarding what need not be disclosed WRT to an NDA - sometimes the limitations presented are not deemed reasonable. And a prospective plaintiff has a lot of burdens to satisfy before that muscle may be successfully flexed. I'm not convinced that the Albuquerque Incomplete Aircraft Works has fulfilled those burdens.
And I'm still not sure why you keep prattling on about NDAs.
"If anyone has ever been a business owner or manager, think back to how many times you've had employees that didn't like the way your company was being run. Now imagine that those employees took their opinion as license to reveal proprietary company information to the public. Is that really the way you want things to work?"
I truly appreciate where you're coming from on this, as my stock-in-trade has been "trade secrets" that I developed. And I've taught those methods to hundreds - many who did not agree with me on how I was doing something. Sometimes it was a simple matter of hearing them out, realizing that their idea was valid, and giving them the authority to make it work. Sometimes it was a matter of letting them go into direct competition with me (although I could arrogantly say that I taught them everything they knew and be fundamentally right - I didn't teach them everything *I* know - heh, heh). I look around the region in which I work, and there are a DOZEN competitors started by people who got their start with me. I'm quite proud of that. And every one of them had a significant difference of opinion of how it should be done. We're all still friends - and furthermore, I'm kicking their asses in the market *I'm* interested in. Sometimes I'll see that they're still doing something I "invented" 15 years ago and berate them because I've since adopted something somebody else thought of that works better for less money. Who thought of it? Somebody else who disagreed with me.
Open exchange of techniques & ideas (including disagreements) has made ALL of us stronger - and best of all, customers like the results. This ain't a nuclear arms race - no need for Big Secrecy...
"5. Finally, I think that Vern Raburn would have ample grounds for a defamation lawsuit, if he could ever find out who some of the libelous bloggers were."
Vern Raburn is a limited-purpose public figure, who has solicited and spent upwards of a billion investor dollars on a project that by all appearances is an abject failure when compared to what he promised. And who has promoted that effort VERY publically. The threshold for defamation is quite high for somebody in his shoes. It would require actual malice - something that is not evident here. To a man, I believe that everybody here at one point or another has hoped for Vern to succeed at this. But the free pass long ago expired, and his actions have made him subject to public criticism commensurate with his actions, and with the incongruity between his words & those actions. Sometimes criticism does *not* take the form of polite disagreement.
When Vern's response to it is to attempt suing the critics rather than STANDING AND DELIVERING, the result can easily be predicted.
"Hey, wait a minute, he just might end up with some of that information."
On that notion, I will politely disagree with you.
"Gunner, does your attorney know that you are defaming Vern Raburn? One doesn't have to look any further than this thread to find examples. You might ask your lawyer if you are opening yourself to any liability with your name-calling."
Name-calling of a non-performing public figure is not defamation. It does not fulfill the definition of actual malice. It's name-calling. If Vern's tender sensibilities are wounded - tough titty. Send him home to mommy for some mother's milk.
"And by the way, saying that it is just your opinion is NOT a defense."
Check Norwood. The First Amendment affords more rights to ideological communication than to commercial speech.
HTH HAND
Would you like fries or pie with that?
IANAL
I know with all the new "news", the response was delayed a couple of days, but how ironic it would have been if it had been filed on a Tuesday....
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