Monday, August 25, 2008

A short history of EAC, and Vern Raburn's future?


VERN RABURN JOINS OBAMA PRESIDENTIAL CAMPAIGN

August 23, 2008 – Denver, Colorado – The Democratic National Committee announced today Vern Raburn has joined Barack Obama’s campaign team as a key adviser. Raburn, chief executive officer of Eclipse Aviation until earlier this month, was asked for comment, “I wasn’t surprised to get the call from Mr. Obama and I was pleased to accept his offer. Barack mentioned that the Republicans had brought influential business leaders into their campaign and thought he should seek high level advice too. Carly Fiorina, the highly successful CEO of Hewlett- Packard is now on the John McCain campaign team.”

Barack Obama, with his arm around Mr. Raburn in the aisle of the campaign aircraft, offered the following, “Vern started telling me about the wonderful little jet he invented. There’s never been a plane so capable and I had to get more advice from the man who made it possible. I am all about ‘green’ and this little baby seems like the most efficient airplane possible. Vern tells me that the fleet of 250 Eclipse 500 jets has the lowest kerosene consumption and smallest carbon footprint of any comparable aircraft. The statistics show that as a group they are hardly burning any jet fuel at all. This has to be a compelling and disruptive technology.”

Raburn followed up, “I couldn’t have said it better than soon-to-be President Obama, but I would like to comment on Eclipse Aviation. I’ve read that the company just had a big layoff, affecting employees worldwide. I don’t’ understand this as I left only a few weeks ago and everything was going fine. I am shocked that the new management could have destroyed the company so quickly. And all those layoffs… the toll on my friends, their families, the mortgage payments and good jobs left behind… it’s just too much. It was a heartless act that only someone of the Republican persuasion could have done. I’ll bet the new management of Eclipse supports John McCain – it is a disgrace.”

“Well, I’m going to do the best I can for my main man – Barack Obama. I’ve been consulting with the business heroes I’ve admired during my career. I’ve put together a business affairs advisory team consisting of Bernie Ebbers, Jeff Skilling, Andrew Fastow, Richard Scrushy, John Rigas and Dennis Kozlowski. We haven’t been able to schedule face-to-face meetings yet so we hold telephone conference calls.”

Raburn leaned over to this reporter and whispered, “After a winning business career I’ve got my eye on a Cabinet post. I’d make a real good Secretary of Transportation… don’t you think?”

Thanks Black Tulip, I think that's cracking! The timing is perfect, as Vern is 'gone' but not forgotten. As usual, I'll remind our readers that the tulip mania peaked in the Netherlands during the 1630s. The black tulip was the most sought after, until found to be biologically impossible.

Some of our newer readers may not be familiar with our extended history. FlightCentre, our 'statistician in residence' posted this. It clearly deserves greater visibility, so here it is in full.

When the blog was asked in June 2007 to predict the number of aircraft Eclipse would deliver in 2007 and 2008, the answer came back exactly correct for 2007.


For those who may not have been around last year, the average of all the projections from naysayers to die hard supporters and the prediction of Black Tulip both came to the same answer, 99 aircraft.

After all the dust settled, this turned out to be exactly the number of aircraft that Eclipse delivered in 2007.

A lot fewer people participated in predicting E500 deliveries for 2008, but it looks like the blog is again going to be substantially more accurate than any prognosticator from Eclipse and will probably get the answer correct within 10% or so.

Meanwhile the official Eclipse plan in June of 2007 was for 216 deliveries for 2007 and 747 deliveries for 2008. Off by approximately a factor of two for 2007 and a factor of 5 for 2008.

Of course, there was at least one member of the blog who asserted that Eclipse would deliver exactly zero complete aircraft in 2007 and 2008 that met the original specifications. That position also turned out to have been exactly right.

Who would you trust when making a bet on the future of Eclipse?

Meanwhile back in Q2 2007, the blog suggested that Eclipse’s long term success was totally dependent on DayJet’s success and that DayJet’s business model was fundamentally flawed and doomed to failure. No DayJet, no Eclipse. It was the blog that noticed that the DayJet aircraft were flying less than 1 hour per day per aircraft on average.

At the same time, the blog suggested that Eclipse would launch a new airplane to distract depositors, investors and the media from the issues associated with the E500.

There were those on the blog that suggested that perhaps the Avio NG FMS wasn’t “complete” as originally announced and that it might be some time before it was certified. It was the blog that was first with the news that Eclipse would abandon their commitment to Avio NG’s GPS and FMS and switch to Garmin 400Ws.

It was the blog that noticed that aircraft retrofits were taking weeks longer to complete than what was promised by Eclipse.

As for sources of collective wisdom, you will find blog posts from aerospace and mechanical engineers, avionics software developers, DERs, QA and reliability engineers, and production line staff, many of whom have worked on the E500. You will find experts in aircraft production techniques from welding to riveting to composite technology. You will find posts from flight test pilots, Eclipse 500 pilots and owners, aircraft pilots of many levels of experience from single engine piston pilots to ATPs and military pilots with tens of thousands of hours. You will find posts from people who work for companies conducting Eclipse training and Eclipse aircraft management. You will find posts from people who seem to have read and understood every line of the FARs including the latest interpretation of A/C 23.1309 1c.

Of course, some of the most colorful posts have come from the ex-customers and ex-depositors. There are posts from lawyers who understand how the court system works. There are posts from HR folks who understand employee rights. There are posts from people who have known Vern, Roel, and Ed for years. You’ll find CEOs of many successful companies, investors, and board members. You will find posts from air charter operators, FAA certification personnel, A/P mechanics, Eclipse vendors and Eclipse investors. There are people who remember why Eclipse made the design tradeoffs as far back as 1999. There are regular international reports from at least Germany, France and Russia. I’m sure I’ve left out many, many folks.

Of course, there are occasional posts from an itinerant, pub crawling, Irish ex-journalist who has a nose for a story.

Then there was Stan, who called it right from the beginning.

Thanks FlightCentre, that's a superb summary of where we have 'been' and how we got 'here' as is possible in so few words. But for the record, I've never been a journalist. Not good enough...

Many, many emails to get through. I've tried to reply to all of them, as fast as I can. Apologies if you have not had a reply, but trust me, it's not for want of effort. I'm working to 'digest' all of the news from last week, and will update you all as soon as I've got my thoughts in order.

In the meantime, anyone with information on the changes at EAC can contact me at the usual address:-

eclipsecriticng@gmail.com

Shane

215 comments:

1 – 200 of 215   Newer›   Newest»
Ceri said...

I have a question which hopefully someone here can give an authoritative answer to:

We know Eclipse pilots are required to hold ATP; what is it that has prompted the FAA to make this necessary?

- Complexity of systems? RVSM? Speed? Jet rather than turboprop?

- What I'm getting at is: where do the forthcoming SEJ's stand? Are their pilots likely to need ATP, too?

- And: at what point in the future might this requirement be relaxed, if ever?

No, I'm not hoping to buy an SEJ. Just curious.

Moses said...

Perhaps we'll see 250 or so "Mini-Muffins" plying the waterways in the future? Just need to replace the aviation database with a marine database in those Garmins.

http://www.bornrich.org/entry/cosmin-muffin-boeing-307-stratoliner-converted-into-luxury-yacht/

TBMs_R_Us said...

Ceri,

It's not a requirement to hold ATP, but to obtain a type rating (true for all jets). The type rating requires passing with ATP level performance.

SEJs are likely to require a type rating.

In contrast, GA turbo-props do not require a type rating.

Ceri said...

tbms_r_us: "It's not a requirement to hold ATP, but to obtain a type rating (true for all jets). The type rating requires passing with ATP level performance.

SEJs are likely to require a type rating
"

Gotcha, thanks. I'd misunderstood the distinction between the ATP level performance, and actually holding an ATP.

That prompts the questions:
- Why are SEJs 'likely' to require a type rating (is it just because they're jets?)?
- Why do jets require type ratings, when similarly complex turboprops don't?

TBMs_R_Us said...

Ceri,

Yes, CEJs are jets, hence a type rating.

Type ratings are required because, as a general statement, jets have more demanding requirements for pilots than other aircraft. These include more complex systems, higher landing speeds, etc.

It is the case that turbo-props are pretty much as complex as newer jets, say a Mustang. The insurance companies end up requiring training for turbo-prop pilots that is more or less equivalent to a type rating. There are differences, such as no requirement for a check-ride. But from a training perspective they have more in common than not.

Maybe someone else can chime in with a better history of the regulatory distinction between jets and turbo-props. When jets first came on the scene, they were considered radical enough compared to other aircraft to require special training and certification for the pilots -- hence the type rating.

WhyTech said...

Turboprops in excess of 12,500 lbs do require a type rating. King Air 350, for example, which I am told is a relatively challenging type rating to obtain. Systems are essentially the same as a B200 King Air, which requires no type rating. Asking "why?" of the FAA may not be productive!

baron95 said...

Ceri said ... - Why are SEJs 'likely' to require a type rating (is it just because they're jets?)?
- Why do jets require type ratings, when similarly complex turboprops don't?


Why???!!!!???? Must you ask?

OF COURSE it is sooooo much more incredibly demanding to fly say a 5,000 lbs 5-seats Diamond D-Jet with a 60KTS stall speed, a 25Kft ceiling a 250KTS Vmo, set and forget FADEC single engine and an avionics suite just like a DA40 or C172 than flying say a BE200 King Air with a 35Kft ceiling, 10seats, 12,500lbs MTOW an 85KTS stall speed, mannually set twin 850HP turboprop engines and the two propellers.

Can't you see why ANY moron with a PPL can safelly fly the BE200 King Air, and ONLY instrument rated pilots that can fly approaches with +1 1 dot and +50ft/-0 precision can even dream of flying the D-jet?

Can't you see the wisdom of the FAA, and most (if not all) the old timers on this blog that insist on maintaining the ATP-level type rating to fly even the tiniest jets at 25Kft, while they defend flying 400KTS Piagios and 12,500 lbs King Airs with a PPL license.

It just makes sooooo much sense doesn't it?

It is like requiring a commercial drivers license to drive a Tesla electric car, but a leaners permit to rive an 80,000lbs semi-truck.

Lets keep our industry EXACTLY like it has been for decades. Lets not change a thing.

Lets continue to require dual ADFs to fly in EU-control, lets continue to require ATP-level type ratings to fly 5,000lbs automated planes.

It will surelly make the old timers and beroucrats happy and it is sure to kill the industry for personal transportation in the long run.

TBMs_R_Us said...

Come on Baron, that's BS.

Unless someone is self-insured, a pilot flying a King Air is going to have as much transition and recurrent training as someone flying a Citation.

As you have pointed out before, it isn't really the FAA regs that matter here. It's the training that matters. I suppose some idiots will think they can fly a SEJ or a King Air without that level of training, but Darwin awards will take care of that population.

Regulations requiring pilot training are not holding back GA. Things like lots of fatal accidents in Cirrus' are more likely what's ultimately holding back growth in GA. If people entering GA keep getting killed in small light aircraft, they won't ever progress to TBMs and Mustangs.

baron95 said...

TBM R US said... Regulations requiring pilot training are not holding back GA.

Yes they are. I have personally heard from a handful of pilots that they'd buy a $3M turpoprob, even though they wanted a VLJ, exclusivelly because they didn't want to go through the type rating BS. TBM, these are type A individuals, that have been flying for a while or are on a fast track. They TOTALLY resent (rightly or wrongly) the type rating BS, the mentoring BS, etc. Not because they are stupid or hot dogs. But because it is imposed. These guys want to choose their right seat pilots from friends and trusted instructors, not some mannufacturer imposed dude. They want to get their new plane and fly it ONLY VFR on perfect days for a long, long time to get comfortable. Then they want to fly a bunch of practice approaches, then build up to the flight levels, then to IFR.

The type rating is a HORRIBLE forced aberration on these pilots. They are required to learn it all in a sim. They need to go from zero to ATP-level IFR procedures with failed systems in a few days.

Did you learn how to fly like this?

I guarantee you that if your primary instructor had tried to make you learn IFR approaches with failed systems in one week you'd likely have quit flying all together.

I speak out of first hand knowledge from advising friends making these decisions and being candid.

The type rating may be a thril for professional pilots, but it is a deterrent for busy, non-professional pilots that want to work up to proficiency on their personal pace.

The FAA is pushing these pilots into fying potentially less safe Meridians and King Air 90s instead of the D-jets they want.

TBM R US said... Things like lots of fatal accidents in Cirrus' are more likely what's ultimately holding back growth in GA.

No it is not. That is why Cirrus, despite its safety reccord is the best selling GA plane in the world.

You are defending a brain dead FAR by saying, oh the insurance companies are regulating the market. Well, then lets abolish the ATP requirement and let them regulate it completely.

Again, talk to personal transportation pilots mulling the decision. Ask them what they think about the type rating, forced 1-week compressed sim-only training to ATP IFR failed systems performance.

You will change your mind, as I know you are an extremely sensible and well informed pilot.

baron95 said...

Just one thing before I shut up. My position on type ratings is a progressive aircraft dependent system.

For a D-jet a special FAR, a la MU-2 SFAR, should say something like that:

1 - Mannufacturer approved training program or endorsement and 10 hours instruction from a qualified CFI prior to operating as PIC.

2 - Operation restricted to VFR only until 50 hrs in type and IPC withing the past 6 months in the type.

3 - 1 hr ground, 2 hr air, IPC with an instructor every 6 months ongoing.

A D-jet should not need more than this.

A BE200, otoh needs a lot more than that.

But, hey, what do I know? What do the AA/WN mechanics and IAs know? The FAA knows best.

TBMs_R_Us said...

They want to get their new plane and fly it ONLY VFR on perfect days for a long, long time to get comfortable. Then they want to fly a bunch of practice approaches, then build up to the flight levels, then to IFR.

Frankly, that's a recipe for disaster. That is not training, that's avoiding training. You won't find any underwriter that is going to go along with that as an alternative to real training, for good reason.

then build up to the flight levels, then to IFR

Excuse me, but flight levels require an IFR flight plan. In and of itself, flying in the flight levels is no different than any other altitude. The only thing that changes are the emergency procedures, which you have to train for. So your buddies who want to work up to them don't understand what's really going on. Once you fly in the flight levels (which fuel economy will mandate for turbine powered aircraft), you will find yourself on SIDs and STARs, mixing with the big boys. You don't have any choice about this. Hence, your IFR skills have to be top notch from the get-go.

Perhaps the specifics of the type-rating training programs leave a lot to be desired. But there is no substitute for real training in these aircraft. I know that from having been through intensive transition training for the TBM, both in the aircraft and in the simulator, and from annual recurrent training.

Pilots who lack good IFR skills have no business piloting these types of aircraft. It isn't any harder to fly a good hand-flown ILS in a TBM than it is in a Cirrus -- in fact it's easier. But, just as in the Cirrus, fail some of the equipment and things quickly get more difficult. Ok, I have had the experience of losing my flight director, and with that the autopilot, on an ILS to low minimums. Good thing I had trained for that exact possibility!

As for sims vs. flying in the aircraft itself: Good sims are usually just a bit harder to fly well than the real aircraft, and the training in them can be excellent. That depends more on the instructor than the sim.

Mentor pilots are an insurance company or manufacturer requirement, not something inherent in a type-rating. When you boil it down you end up with a mandated check ride as the major difference between a type rating and not a type rating. The other differences are specific to the training programs provided by the manufacturer, and the requirements of the insurers.

If you don't like Cessna's training program for the Mustang, don't buy a Mustang. But don't blame the fact that it is a difficult and demanding program on the fact that a Mustang requires a type-rating. The Mustang requires that level of training, just like a TBM, just like a King Air, just like a Piaggio....

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

"Frankly, that's a recipe for disaster. That is not training, that's avoiding training."

Bravo! Bravo! Very well said. I have done several type rating or type rating equivalents in airplanes and helicopters and regard these as the most complete and productive training experiences in a 40+ year flying "career.". Look a the guys who are killing themselves in Cirrus's. It the type A's who are on a fast track as described by B95. Read the accident reports - the consistency is amazing - not 100% but a high per centage. Get these guys on the ground and keep them there if they cant commit the time to a structured, well proven, training approach. I have no sympathy with the attitude "I dont have time."

Ceri said...

Thanks for the discussion, guys - very interesting. To me, anyway.

Whytech/TBMS - I guess you're saying that if anything, the current type rating requirements are not restrictive enough - you'd put the King Airs in there, too?

And Baron, you'd take everything out, under some weight limit?

WhyTech said...

"They are required to learn it all in a sim. They need to go from zero to ATP-level IFR procedures with failed systems in a few days."

Most type rating courses state very clearly but in more politically correct language," Dont come here to learn how to fly IFR - you are wasting your time and ours." Type rating courses are focused on type issues, not on remedial IFR training. However, I could perhaps be persuaded that an ATP skill level is more than is absolutely necessary for a light turbine acft of six seats or less. Commercial standards should suffice.

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

Whytech/TBMS - I guess you're saying that if anything, the current type rating requirements are not restrictive enough - you'd put the King Airs in there, too?

Ceri,

No, I'm not saying that type rating requirements are not restrictive enough. I'm saying that for the most part a type-rating isn't what's relevant. What is important is the level and quality of the training.

I think I agree with whytech that performing to ATP standards in the type-rating check ride is perhaps overkill for the type of aircraft he mentions (6 seat, light turbine). Having said that, I would not be deterred if I were required to fly to that standard (my training organization requires that I perform to the commercial standard). Ok, more training required, I'm fine with that. I know first hand the relationship between training and safety, and I for one like being really safe when I fly.

The old line goes like this: Getting a pilot's certificate is really just getting a license to go on learning. Flying safely requires constant learning, through recurrent training, new ratings, new aircraft types, upset training, etc, etc. This is one reason that the airline and corporate transportation safety records are so good. Too many GA pilots view training as something to get done with and out of the way. That's one reason the GA accident record is so bad.

WhyTech said...

"you'd put the King Airs in there, too?"

I recently did the Flight Safety B200 King Air Intial course. IMO, this is a more demanding acft to fly under most conditions than, say, a CJ. Auto feather system, rudder bias system, prop controls, relatively complex fuel system, greatly reduced OEI performance, etc. IMO, a very poor judgment call not to do such a course even though it not mandated by the FAA. Most insurers wont let you near the airplane single pilot without it. Probably a good thing, since the FAA says you can do your multienginge rating in 10 hours in a 1950's vintage Apache, and step immediately into a King Air (with a high altitude endorsement, which doesnt require any King Air specific training) and fly away.

airtaximan said...

(brought forward from last string - justaposition, for effect!!) - a lot of new folks posting, though this was timely...

Posted by No Mas:

Extending the premise that Vern-ier dispensed Kool-Aid to a willing throng of quasi-competent yuppies (yup Vern, yup, yup) … and since folks are in a speculative mood, what is the prevailing wind on the following big paychecks at SunPort:

Peg Bilson – Can't Operate Officer and all around Yes Girl, Never met a schedule she didn’t like … or was that Never met a schedule, period?
No Mas says “retained for now, replaced by the new investors, or asked to tidy up the place after the repo man comes.”

Jack Harrington – Business Affairs – No one ever saw him around SP except on pay day, no one will miss him when gone.
No Mas says “Since the business is in the dumper, so is he”

Patrick Duffy – Product Development – Came in late, run away while you can.
No Mas says “He stays on, lives on his USAF retirement pay, flys the only airplane not AOG ... no real responsibility for the debacle. Previous Cheef Injuneer, now COO at Diamond, Ken Harness gets his well deserved smack down by the FAA, Congress, or the creditors.”

Don Burtis – Senior Veep and Senior Good Fella – Father of the Avio concept, responsible for brokering bad deals with Avidyne, IS&S, and Chelton.
No Mas says “Hate to see bad things happen to a nice guy, but how many bad deals can one guy make. Gone”

Oliver Masefield – also a Senior VP and Good Fella – Poor execution kills a great concept every time. The devil is in the details … unless he is in the CEO’s suite.
No Mas says “The only real asset Roel has. Asked to stay, but will likely walk away.”

Mike McConnell – VP Propaganda – Cant stand on convictions you don’t have. Did Vern’s bidding too often.
No Mas says “Stays a short while. Decides to leave 30 days after his telephone and email are cut-off. Still hangs around parking lot until new tenants call the police”

Rest of the crew … who cares?

What say the blog?

airtaximan said...

psst: if you look at the profile of Gooood Girl...(OK, I admit, I looked).. you'll get connected to William Hill, a BETTING SITE - I wonder if they are providing odds on a BK date?

hee hee

Shane Price said...

ATman,

Sorry about that. I've taken the necessary action.

First time I've seen that approach. I didn't check it out, but I would be very surprised if that was a 'real' betting site. I suspect that you would be required to provide credit card details, and then get a nasty surprise in your next statement....

If anyone else spots something similar, let me know.

Thanks

Shane

julius said...

airtaximan,
>>>
What say the blog?
<<<

these persons could help VR in Obama's team and produce something - a sticker like VR is carrying - for the presidential campaign 200... no... 2012 with suppliers for colours, aluminum and PC and TC ...ten years .. no it will take too long, forget it - sorry!

As they enjoy the show because of money or having no better (paid) jobs leave it up to RP to clean the shop.

ABQ is gambling site ...

julius

Shane Price said...

I hearing some strange stuff.

From more that one source, it appears that mathematics is another area where EAC management are showing less than stellar ability.

As in '650' staff laid off, with '1,100' continuing.

Several people tell me the real numbers are 800 laid off, and 900 remaining.

Can anyone help?

eclipsecriticng@gmail.com

Shane

Dave said...

DayJet trying to cover their tracks:
On a motion by Krug and seconded by Mispagel, TACA approved the minutes on vote of 8-0 with amendments to the minutes. The minutes regarding the Alliance for Sustainable Air Transportation topic was clarified to indicate that Mr. Traver Gruen-Kennedy of DayJet was speaking in his capacity as Chairman of the NextGen Alliance and that Mr. David Hayzlett of General Dynamics was speaking in his capacity as President of the NextGen Alliance.
http://www.catc.ca.gov/TACA/June_18_08_TACAmeetingmin.pdf

If you read the rest of the minutes, you'll see that the State of California is now pursuing federal funding to be part of the NextGen project. Not that I have anything against that, just I think DayJet is trying to keep their failed business model going by doing extensive lobbying to get money.

Now something that I've found that really shows the true state of DayJet comes from no other place but Eclipse Aviation! In Eclipse's "Economic Impact of VLJs" report they estimated that by 2017 there would be 676 airports that had some degree of VLJ air taxi involvement:
http://www.armstrongconsultants.com/planning/documents/EconomicImpactOfVLJs.pdf
That means that as of today DayJet already has 10% of those airports covered on a per-seat basis and almost 33% covered on a per-plane basis. That is of course being generous as not all airports were expect to generate the same activity and DayJet's current service area is supposed to be in the prime service area for their service. Eclipse was probably right on the total airports that would be served by VLJ air taxis, just the touted employment levels and economic benefits should move the decimal places to the left...and it isn't going to be DayJet alone who would get that.

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

90 lay offs at Hampsons in the UK today I'm told by an e mail contact.

gadfly said...

Yeh . . . local gossip would verify that 800 have been “let go”, but that is only gossip which cannot be confirmed at this time. But at this point in time, what does it matter?

A company that would bring together this many workers, and then get rid of them in such short manner, shows an inexcusable attitude toward employees that may rightfully be applied to their underlying attitude toward customers, and business ethics in general.

It really doesn’t matter, whether it was 650 . . . 800 . . . or a single employee, morals are morals . . . ethics are ethics. A person who steals at the lowest level, will steal at the highest. A liar is a liar . . . it matters not the value of the intent . . . the basic character remains what it is.

Beyond that, we are being told that the product of such people, of such “morals”, have produced the safest little jet. Hello?

Fill in the blanks on your own.

gadfly

(The most likely person to believe a lie, is a liar.)

gadfly said...

"This is not a safety problem" . . . FAA seems to be having a problem (at this minute) somewhat like the little ABQ bird said can never happen.

gadfly

("But who needs old fashioned steam gages with all this hi-tech stuff! Trust us . . . we're the folks that brought new industry and good future employment to Albuquerque, using taxpayer's money for your training. You can depend on us.")

Just zis guy, you know? said...
This comment has been removed by the author.
Just zis guy, you know? said...

For those who missed my post on the previous thread, someone decided to flatter me and copy my screen name (complete with typo). I guess I should be flattered, but it creates some confusion. It started with the post berating 20yearmechanic. You should be able to tell us apart by clicking on our profiles. Hopefully he will decide to post under a different screen name.

For the Douglas Adams references, Vell, Zaphod's jist zis guy, you know, and he's also my Siamese cat -- like the original, a very cool cat.

Just zis guy, you know? said...

Continuing with the Doug Adams theme:

Methinks maybe certain things at ABQ have been painted pink. Where have the SEP fields been present?

Discuss...

Shane Price said...

Not 100% with numbers here yet, but I'm beginning to see a 'median'.

Seems like something in the nature of 750 were let go, and just over 1,000 remain.

However...

One of the key meetings I mentioned last week was with 130 'leaders' who have been made an offer many seem inclined to 'pass' on. Come on Peg, offering a bonus if the company is 'cash flow positive' in the near future is a bit of an ask. These people are adults and don't believe in fairy tales anymore. The headhunters must be having a field day.

Or is that all part of the plan?

The suppliers are being wined and dined (well, the few who bothered to turn up) as I write. I expect I'll have a full report tomorrow, and not just from the supplier side either.

The customers are a pretty unhappy lot. The range of emotions reaching the inbox goes from the outraged to the resigned. I'm hearing stories about multiple deposits, on FPJ's AND ConJets, from the same people.

Maybe that's where the inflated order book really came from. In any population, there will be a small number of people who will make the same mistake twice.

Or three, four or even five times.

Lets say there were 400 people who ordered one FPJ. All of them then repeat their original mistake, intending to sell the position on. Half of them make it twice.

Bingo, there is your 1,000 'orders'.

Since there is no way one person can fly two FPJ's at the same time, it logically follows that there are 400 speculators with 600 positions to sell.

Or something like that.

I wonder if that's part of what really happened? A small number of people got carried away with themselves and Vern believed he really did have a huge order book.

Shane

Ceri said...

I wonder if that's part of what really happened? A small number of people got carried away with themselves and Vern believed he really did have a huge order book.

Given the original price, it must have seemed like a no-brainer (once you were enthused about the whole project) that anyone who put down a deposit would make a killing selling on the position or the jet. (Given the very good spec compared with other alternatives at that price point). I wonder if speculative purchasers were specifically targeted by Eclipse?

20yearmechanic said...

If there is 1000 employees still at ECLIPSE ABQ, I will kiss you’re a**. There where only about 1400 there at best when I was there and that was before there they laid off 275 contractors. They let another 250 go Friday and about 350 on Sunday. That would leave about 500 to 600 there. Check the parking lots and see, and keep in mind, NO SECOND SHIFT.

Dave said...

Maybe that's where the inflated order book really came from. In any population, there will be a small number of people who will make the same mistake twice.

The order book has stayed relatively stagnant over the years with the year book primarilly inflated by the likes of ETIRC and DayJet. I think many people went with the assumption that what Eclipse said was true and Eclipse had a valid plan with legit sales and they accepted Vern's demonizing of the industry and any critics...and on paper Eclipse does sound good. I do think speculators did do OK for a time and Mike Press certainly appears to have been willing to sell-out. Many things were pointed out on the critics blogs, but first of all potential customers have to visit the blogs and second of all they have to take what is said by anonymous online bloggers over what is said by a high profile Collier Award winning CEO. Now of course the halo has come off Eclipse, but what happened a few years ago was a different situation. Hopefully this will prove to be a education for people who get burned for $150K+ that it really pays to do due dilligence and analyze a company's underlying statements...as usually when companies sound too good to be true, there are signs that it isn't true.

Dave said...

If there is 1000 employees still at ECLIPSE ABQ, I will kiss you’re a**. There where only about 1400 there at best when I was there and that was before there they laid off 275 contractors.

I think I might know the reason for the discrepancy. One is total Eclipse positions (whether filled or not) and the other is actual bodies. I've thought for awhile that Eclipse has been talking about total positions when discussing the size of Eclipse rather than the number of actual filled positions. So Eclipse could now have 1100 positions but of that less than a thousand bodies because there are open positions.

20yearmechanic said...

The only thing ECLIPSE will need in a few months is a small janitorial crew to clean up the mess that is left. I bet they shut down by X-mas if not sooner.

20YM

baron95 said...

TBM said ... Excuse me, but flight levels require an IFR flight plan.

Where I said VFR and IFR, I menat VMC and IMC. Sorry for the confusion.

So your buddies who want to work up to them don't understand what's really going on.

Quite the contrary, TBM. One flies a Jetprop Malibu conversion, one flies a pBaron and one fies a Conquest II with our master-instructor and occasionally yours trully on the right seat.

ALL fly routinelly in the low flight levels.

All make many VFR runs at low altitudes to MVY, Montauk, etc.

These guys KNOW their limits. They know when they are current enough to fly low IMC or when they're are rusty and limit themselves to VMC.

I'm sorry but your points are completely off the mark. Private/Pleasure/Business flyers are NOT and WILL NEVER be professional pilots. The training has to be completely different.

Sure, I could make the SR20, SR22 safer by requiring an ATP type rating and mentoring before PIC. I could do the same for a 172. For a Mooney. But that would KILL the market.

My comments on jet type rating were limited exclusively at the D-Jet/5pax/25Kft/60KTS stall speed/STANDARD (now) Avionics. That plane does not need an ATP-standard type rating to be as save as a Malibu or a Bonanza or a Jetprop - all planes routinelly flown by pilots that don't even have an instrument ticket.

It just needs a trianing program and IOE like I outlined.

Look at the Eclipse accident. It has NOTHING to do with IFR proficiency. It was caused by an ATP-rated pilot that simply did not have enough experience landing the plane.

Now, ask yourself. What if instead of (or in addition to) all that failed systems simulator training, we put him with an experience instructor to do aa bunch of short VFR trips into all sorts of airports, wind conditions, runway surfaces, high/low, hot, wet? Unlikely he would have overrun the runway by such a wide margin.

Think about it. I am talking about the training for a non-professional pilot, fying a D-Jet.

Heck, pushing the envelope, why can't a non-instrument rated pilot fly a D-Jet? They can and do fly Malibus, SR22 turbos, Mooney Bravos, pBarons, etc.

Don't kill personal flying just because not every pilot can train and operate as a professional pilot. Simply put limitations on the types of operation to match the experience.

Mentor pilots are an insurance company or manufacturer requirement, not something inherent in a type-rating.

On the contrary. The FAA, for the first type rating, REQUIRES the pilot to gain initial operating experience before they can fly PIC single-pilot. The OEMs are simply institutinga program to satisfy the FARs.

TBMs_R_Us said...

These guys KNOW their limits. They know when they are current enough to fly low IMC or when they're are rusty and limit themselves to VMC.

Problem is, it's pilots such as these who bust their own limits and get killed. Read the NTSB accident reports, and this is who you find there.

Private/Pleasure/Business flyers are NOT and WILL NEVER be professional pilots.

Wrong again. Any pilot can train like a professional and fly like a professional. That's how you stay safe in an aircraft that weighs 7400 pounds and goes 320 KTAS (or pick your numbers). If you don't want to train to that level, don't fly that class of aircraft. Incidentally, the vast majority of TBM pilots are trained to that level and very few of them are professional pilots.

Now, ask yourself. What if instead of (or in addition to) all that failed systems simulator training, we put him with an experience instructor to do aa bunch of short VFR trips into all sorts of airports, wind conditions, runway surfaces, high/low, hot, wet? Unlikely he would have overrun the runway by such a wide margin.

Now, ask yourself. What if instead of just doing one or the other, you do all of the applicable training. You train how to be an excellent stick and rudder pilot in the aircraft you are going to fly. You train how to deal with every failure that you can possibly manage in the aircraft you are going to fly. And you train for every flight condition you're likely to encounter in the aircraft you are going to fly. That's professional level training, and that is available to every pilot in every aircraft. If you fly a simple aircraft, there aren't many systems that can fail that you need to train on. If you fly a complex aircraft with a lot of systems that can fail, you better train on those failures.

If you don't want to train to that level, then don't fly aircraft that require that level of training.

Someone wanting to step into a Mustang, or a TBM, or a PC12, or a King Air, or an Eclipse needs to be trained to fly those aircraft as if they were professionals. Anything short of that is just plain dumb.

Shane Price said...

TBM,

Someone wanting to step into a Mustang, or a TBM, or a PC12, or a King Air, or an Eclipse needs to be trained to fly those aircraft as if they were professionals. Anything short of that is just plain dumb.

I'm going to include that in my next headline. It's a sound reminder, as Brandywine was, that you can't invest enough of your own time and effort in getting trained properly.

Shane

WhyTech said...

"If you don't want to train to that level, then don't fly aircraft that require that level of training. "

Right on again. There are many acft better suited to pilots who want to to train to less than a professional level which are somewhat less likely to kill them. LSA, 172's, 182,s etc, and these will get you to MVY from many east coast departure points.

A safety mindset and rigorous, frequent training do seem to pay off big time in terms of improved safety. The most recent accident data I have seen show that corporate aviation has an accident rate that is about 1/50 that of GA overall, and even better than the airlines. This is the level of proficiency/safety we should have in mind, not the regulatory minimum.

WhyTech said...

"But that would KILL the market."

So, apparently it's better to kill the pilot (and his pax)?

smartmoves said...

I think we know what Baron means...heck - I know a guy who is a CP and he thinks all PPs should be banned...but he wont get an ATP himself, yet wants to fly up in RVSM - and he is waiting for his deposit from Roel so he can buy a Mustang..go figure.

Point is if you know your limitations you are not as dangerous as someone who has too much experience and becomes complacent - Brandywine perhaps?

Shane Price said...

One of our 'working pilots' has been reading the blog.

Tell Baron 95, that if it whistles or is greater than 12,500 pounds, it needs a type rating. A private pilot can get a type rating. The practical test standards are equal to ATP standards, which are the same as Instrument Rating practical test standards.

Initial operating experience is primarily used by air carriers. Not required for part 91 operations. On the ground, the FPJ has a turning radius that is much like a homesick turd. Another fine offering from the gang that can't shoot straight.

Type ratings are necessary to help keep God's creation green. This helps to prevent the spreading of Gas, Guts, and Gaskets all over the place.

Because pilots tend to spread the three G's, the insurance companies want to hedge their bets, by requiring that training and experience requirements, be satisfied.


I've heard about the fixed nose wheel prior to this, but it's never been expressed in quite this way before...

Lots happening down ABQ way. Regular reports from the various meetings are reaching the inbox, so I'll be posting a 'composite' headline later in the week.

What's clear already is that each 'group' is being spun a slightly different story, so I'm working hard to clarify the central issues.

Shane

airtaximan said...

Shane,

if you have a chance, remind the suppliers/cusomers/employees that they all have a vested interst in the company, and need to know how many "real" orders there are.

Specifically:

orders with deposits
refunds demanded
european orders
e400 orders
Dayjet orders
ETRICK orders..

etc...

Orville said...

Our own Shane is famous! Listen to the interview. Well done Shane!

Dave said...

What's clear already is that each 'group' is being spun a slightly different story, so I'm working hard to clarify the central issues.

Actually I say the different stories themselves are one of the issues. If suppliers are being told Story A, customers being told Story B and Employees Story C that itself matters.

Dave said...

Our own Shane is famous! Listen to the interview. Well done Shane!

Great interview!

smartmoves said...

Yes - good interview Shane!

Shane Price said...

I did ask a few of our longer term 'crew' to do it but everyone seemed keen for yours truly to represent the blog.

For the record, they approached me and asked (very politely) for an brief explanation of the story so far.

As most of you are aware by now, I'm sympathetic to journalists trying to meet a deadline.

Shane

Shane Price said...

FYI

The podcast has already (>24 hours) been downloaded on all the continents except Africa and Antarctica.

I can understand the South Pole, what with the FPJ not having FIKI at present, but I would have thought there was at least one South AfriKen who would be interested.

Maybe, just maybe, he wasn't from there at all....

OK, that might be a bit to deep for our newer readers, but most of our veterans will get the joke.

Shane

Jeff said...

Shane said...

"One of our 'working pilots' has been reading the blog.

'Initial operating experience is primarily used by air carriers. Not required for part 91 operations.'"

The 'working pilot incorrect. Baron was right on that. If it's your FIRST type rating and you don't have a logbook full of turbine time, your type rating says something like...

"THIS CERTIFICATE IS SUBJECT TO PILOT-IN-COMMAND LIMITATION FOR ______" In my case, it was for the CE-525S. What it means is that until that limitation is removed by the FAA, there needs to be another Captain qualified crewmember. After flying left seat for 25 hours (have the Captain qualified right seat crewmember endorse the remarks part of each flight with their ATP # and "SOE") you take your logbook, your license, and an 8710 to the local FSDO. They will issue a temporary that does not include the Pilot-In-Command limitation.

A more knowledgeable contributor might know the exact amount of turbine time required to eliminate the need for the limitation.

Jeff

Jeff said...

Top drawer interview Shane. Good work.

Jeff

Orville said...

I've been reading for several months - and have seen several references to the "South AfriKen". Perhaps someone could provide a brief background to bring us newbies up to speed, and what his viewpoint was...?

Dave said...

I've been reading for several months - and have seen several references to the "South AfriKen". Perhaps someone could provide a brief background to bring us newbies up to speed, and what his viewpoint was...?

He was probably the most vocal member of the Faithful prior to delivery. Now he's selling his wife's FPJ.

ColdWetMackarelofReality said...

Orville, South AfriKen is my creation.

Back when there was still a snowballs chance in hades of Eclipse maybe making it, we had much more involvement from the diehard supporters of Eclipse, and the chief cheerleader was one two-time gambler named Ken Meyers.

Ken towed the party line strenuously, and in doing so developed a particular style, a particular phraseology.

Ken has since taken delivery of one Preemie Jet, and is now trying desparately to unload his 2nd position.

Over the course of many months Ken would threaten to take his ball and go home, sometimes even doing so in terms of outward appearances.

And when that happened we would have new posters come in and one of those represented himself in his blog profile to be a working pilot from South Africa.

The only problem was that the phrases and tactics used by this self-identified South African 'working pilot' matched exactly that of one Ken Meyers.

So I named him South AfriKen, something he never denied.

We could probably write a whole book of Eclipse Sniglets, like Floptions (options for fleet orders which are knowingly vaporware), the Vernperor, etc.

Hope that helps.

gadfly said...

Minor point . . . Ken Meyer? (no "s" ?)

Jeff said...

gadfly said...

Minor point . . . Ken Meyer? (no "s" ?)


Minor point?

Dave said...

This probably explains why DayJet ended up where it did:
Jim Herriott and Bruce Sawhill, computer scientists in their 40s, are the "ant farmers"...Their job has been to determine exactly how many people might pay to use an air taxi, and where they would want to go...For instance, to predict how many Floridians would pay to fly from Pensacola to Naples, they start not by gathering gross-travel or population figures but by trying to simulate the decisions that hundreds of thousands of individual travelers will make. Their computer models resemble a much more complex version of an “artificial life” computerized game like SimCity or SimLife—or, to explain the nickname they gave themselves, programs that simulate the paths a colony of ants will take across a floor as they discover and retrieve pieces of food. This process is also known as “agent-based modeling.” The ants, or agents, in DayJet’s model are the 500,000 people per day in the seven southeastern states who take business trips of 100 miles or more. Some 80 percent of these trips are now made by car. Commercial airlines account for most of the rest, with trains, buses, charter flights, etc. making up the remainder.
http://www.intelligentcommunity.org/index.php?src=blog&submenu=News&pos=15,5,28

DayJet saying they're going to get 1% of those 500,000 daily trips of 100 miles or more based on this being something totally new was ridiculous. DayJet went into a very old market offering a product similar to existing products. Those 80% by car are probably there for a good reason as far as their employers are concerned. Of the 20% remaining commercial air travel is for the bulk and then there's public transportation and charter. It is a market that has been around a for a long time with all the different travel options...businesses en masse aren't just going to switch their policies because a new charter business opens up and when other options might be considered better for the business for whatever reason. DayJet I believe had further said their target market was employees making between $90K and $300K (top brass and small business owners), which of the 500,000 daily business travelers, I'd bet only a small percentage make in that salary range.

flyger said...

ColdWetMackarelofReality said...

Ken has since taken delivery of one Preemie Jet, and is now trying desparately to unload his 2nd position.

It is his 3rd position, or so he claimed. He described it recently as being "unsellable".

Note that Eclipse has listed a number of airplanes for sale as well. Why sell one to a depositor for 40% of a low price when you can sell it to a new customer for 100% of a higher price? Might as well keep the 60% the depositor paid and collect the 100% from the new customer. Build one airplane, sell it twice! Or more accurately, 1.6 times!

Of course, no one is buying, so the scheme seems to be broken. Yet another way to screw depositors.

Orville said...

Thanks for indulging me with the "South AfriKen" explanation - most helpful!

Now, back to our regularly scheduled program...

Dave said...

DayJet is pretty much tossing out their business plan of having a huge fleet to serve business travelers. Take a look at this survey:
http://newsletter.dayjet.com/Sidebars.9.26.lasso
DayJet is doing a survey of using DayJet to go see NFL/college football games! Also in the survey DayJet asks about a preference for renting the whole plane. Now about all that is missing is for Ed to announce that he's dumping the Eclipse and switching to the Mustang and/or prop aircraft.

I believe of DayJet and Eclipse that DayJet has the best likelyhood of surviving, but DayJet would have to dump its business plan. DayJet might survive, but it wont be in the form that it touted itself as for years, but instead will be charter taking all customers and it will be orders of magnitude smaller in size than as it had been promoted.

ColdWetMackarelofReality said...

Thanks Gad for the correction on Ken and Shari's last name, I was going from memory.

Had not heard tha Ken and Shari had 3 positions, only knew about 2.

Unsellable, hmmmm. Now that is a surprise - not.

Wonder if the Kenster has a deposit in on a Mustang for Shari like he previously suggested he might do?

baron95 said...

WhyTech said...
"But that would KILL the market."

So, apparently it's better to kill the pilot (and his pax)?


Absolutely. If you don't understand cost-bennefit analysis, you are leaving in alice in wonderland.

Want to make GA safer? Require an ATP-type rating for ALL planes, require mentor/IOE co-pilots on all planes. Make commercial/Instrument the minimum pilot qualification (get rid of sport, recreational, private), make sure ALL planes are certified to part 25 standards, make sure that every pilot has sim training every 6 months, forbid experimental planes, etc, etc, etc.

Do that and you will achieve NBAA and airline safety. But you will also have Airline and NBAA costs and numbers.

That mean that there will be 5,000 planes instead o 300,000 planes on the FAA registry.

It is complete idiocy.

Training costs for airlines is 1-2% of budget and it is 1% of a pilot's total flying time.

Whatevel solution you come up for non-professional pilots, make sure it is in the same range. Most non professional pilots fly less than 150 hrs/year (actually more like 50 now), and train 1.5hrs/year.

Not because they don't want to do more, but because they CAN'T (time and cost) do more.

In any event, this conversation is not going anywhere.

My whole point was simply to compare the FAR requirements for a D-jet vs a BE200. If you believe the FAR make sense, so be it. I believe it is evidence of idiocy.

eclipso said...

The governor also called Eclipse one of the main economic development success stories of his administration, and characterized the layoffs as part of a company trying to get healthy.
“It's basically a restructuring of jobs,” he said during a Friday news conference. “It's not a termination of jobs. I think they're going through a phase of needing to reduce the work force so that they can come back stronger.”


If it's not a termination of jobs, why do the fired employees have to re-apply?

Dave said...

The governor also called Eclipse one of the main economic development success stories of his administration

That's why Richardson didn't get anywhere when he ran for President. Richardson has the best resume around, but his candidacy didn't go anywhere and he didn't get the VP nod either because of stupid stuff like this.

eclipso said...

Chávez reiterated his earlier statement that the layoffs are temporary while Eclipse retools its assembly line for more efficient production of the 500 jet. But the state's Workforce Solutions Department is treating them as permanent. Eclipse Aviation did not say whether they were temporary or permanent.

eclipso said...
This comment has been removed by the author.
Dave said...

Following up on Richardson and Chavez here's an article and a video on that:
http://www.koat.com/news/17270495/detail.html

baron95 said...
This comment has been removed by the author.
baron95 said...

Jeff said ... The 'working pilot incorrect. Baron was right on that. If it's your FIRST type rating...

A more knowledgeable contributor might know the exact amount of turbine time required to eliminate the need for the limitation.

Thanks Jeff, maybe Shane's professional pilot has forgotten about the FARs or his first type rating, or (more likely) has no concept of the route personal flyers take.

It is all spelled out in FAR61.63. You need the IOE unless you have:

"(C) Have at least 2,000 hours of flight time , of which 500 hours is in turbine-powered airplanes of the same class of airplane for which the type rating is sought.

(D) Have at least 500 hours of flight time in the same type airplane as the airplane for which the rating is sought.

(E) Have at least 1,000 hours of flight time in at least two different airplanes requiring a type rating .

Dave said...

Here's Mike Press saying that sales are down:
http://www.abqjournal.com/biz/23921231680biz08-23-08.htm
Reading this is just sickening:
Richardson said he's contacted Rep. James Oberstar, D-Minn., the chairman of the House Transportation and Infrastructure Committee, and said he plans to meet with Oberstar in Washington, D.C., in early September to discuss the inquiry.
“My objective in seeing him is to explain the strength of Eclipse,” Richardson said. “I'm not going to try to change the nature of their investigation.”
“In my view, Eclipse has followed proper procedures,” Richardson added.
Fred Mondragon, the state's economic development secretary, said there are reasons to believe Eclipse will remain profitable.
“They still have a huge backlog,” Mondragon said, citing a figure of 2,300 to 2,400 already ordered jets.

http://www.abqjournal.com/biz/23922301700biz08-23-08.htm

Niner Zulu said...

Anyone see the advertisement for the E400 at aero-news.net's website?

What caught my attention is the "Own One Today".

Who is Eclipse trying to kid? You can't own one today. You may never be able to own one. I doubt they will disclose the financial condition they are in prior to taking your money.

More fraud & misrepresentation. This company still stinks from the head down.

Deep Blue said...

Shane: your interview was mature, fair minded and balanced. You represented your blog well.

Your comments about the size/attractiveness of a single engine jet market were interesting.

Lastly, the discussion concerning EAC's potential going forward was intruiging.

A E500 at +2MM with the Mustang at apprx 2.7MM is a real dilemma; the pilots might say that Eclipse is in the "coffin corner" on this issue.

I don't know how the E500 (and EAC) compete with Mustang/Textron at such a small differentiual. Yet b/e pricing at sub-300 E500 units per year is likely +3.5MM, now competing with Honda and Embraer.

With no air taxi market (in the short term) to drive volume, the calculus seems unsolvable.

Regards.

Gunner said...

Agree with previous comments:
Great interview, Shane.
Gunner

gadfly said...

With the New Mexico State Fair coming up shortly, it might be worth the $20 million taxpayers put out to have Governor Bill Richardson do a "fly by" in the Eclipse E500, each day of the "fair". And, no, flying by in the Cessna Citation that he had purchased (at taxpayers' expense, of course) does not qualify.

Then, for an encore, he could repeat the act during the International Balloon Festival.

gadfly

(That is, if the little bird could get off the ground with such a . . . load!)

Black Tulip said...

There's no going back...

The Cessna 340 that Ken and Shari Meyer owned was sold and now based at Nashua, New Hampshire. I understand it is in pretty good shape and having new radios installed.

gadfly said...

For the record, Ken and Shari deserve our heartfelt sympathy and thanks. Ken provided much in the discussion . . . and it cost them far more than many of us.

Maybe when the dust and feathers have settled, Ken can give advice, and a summary of events from the viewpoint of a true believer.

And, no, I'm not being sarcastic . . . this time. Ken learned some lessons the hard way, and he can share his new found knowledge with others, that this might never happen again.

A long time ago, I told Ken to stick with what he knows . . . and he'll do just fine. And now he simply knows more than he knew "back then".

gadfly

(Hang in there, Ken, . . . you have friends among us. Many of us have "been there/done that" in other great things . . . and we all need to learn.)

Black Tulip said...

Shane, your interview was interesting and well done. Let me be first to say you've become a legend in your own mind and a rumor in your own time.

FlightCenter, let me add mine to the long list of compliments regarding your excellent summary.

airtaximan said...

Dayjey survey:

1- amazing after all the money spent on ant farming/modeling... NOW they are doing a survey... hmm... I think they said they did one before - how did THAT work out?

I'll tell you all something special about this Dayjet survey - it has ERO PRICING information. That's right - price is not an issue in this survey. Want to know WHY none of what they did makes any sense? I think you have your answer.

I look at this survey, and ask myself: How can they be serious? There is NO indication of what it would cost to fly Dayjet to a game.

Tell ya what: if anyone has a PC12 in the area, you could sell seats for 50% less than Dayjet and IF anyone chooses to Dayjet - they would likely move over to your PC12 and saev alot of money.

Joke.

gadfly said...

Wasn't there a "45" back when I was a teenager . . . "Ain't that a Shane, my tears fell like rain, . . . You're the one to blame . . . " by Skinny Dynamo" . . . yeh, something like that.

gadfly

(Don't complain. The alternative is "elevator music" while we await the latest news from the meetings out at the west end of the airport. OK?)

Dave said...

1- amazing after all the money spent on ant farming/modeling... NOW they are doing a survey... hmm... I think they said they did one before - how did THAT work out?

They supposedly actually did multiple types of surveys...focus groups, telephone surveys, etc. where they touted that as proof they'd be huge in business air travel.

Want to know WHY none of what they did makes any sense? I think you have your answer.

I see it as fundamentally flawed because they are basically using existing business customers to give their survey for personal air travel. They should be asking this of potential *new* non-business customers. That being said, I'd still take the results with a rather large grain of salt even if they did do a survey asking the right people.

I look at this survey, and ask myself: How can they be serious? There is NO indication of what it would cost to fly Dayjet to a game.

I think that DayJet isn't sure themselves what they'd charge. I think first DayJet wants to know if anyone will buy and then once that is established then find out what they'd pay.

TBMs_R_Us said...

Whatevel solution you come up for non-professional pilots, make sure it is in the same range. Most non professional pilots fly less than 150 hrs/year (actually more like 50 now), and train 1.5hrs/year.

Not because they don't want to do more, but because they CAN'T (time and cost) do more.

In any event, this conversation is not going anywhere.

My whole point was simply to compare the FAR requirements for a D-jet vs a BE200. If you believe the FAR make sense, so be it. I believe it is evidence of idiocy.


Baron,

Pilots who are flying less than 150 hours a year, or as you say, 50 hours, due to time and cost constraints, are hardly prime candidates to be purchasing aircraft costing $2M to $3M. Total operating costs for these aircraft are going to run upwards of $365,000 per year for a TBM 850 (250 hours operation), and approach $490,000 per year for a Mustang (same hours). These numbers include cost of capital and DOC, exclude engine reserves, and are owner flown (no pilot expense). I would guess that an Eclipse would be a bit less, but still a very significant chunk of change. These aircraft are not for those who are worried about cost.

Expecting a non-professional pilot to only spend 1% to 1.5% of their flying time training for an aircraft such as a Mustang, TBM, or Eclipse is unrealistic.

Transition training for a TBM typically involves 30 to 40 hours of flight training in the aircraft (comprising VFR work, IFR work, and emergencies), 10 to 15 hours of ground school, and 10 hours of sim flight. That would be for a pilot moving up from a piston single such as a Cirrus or Malibu, having more than 500 hours TT and an instrument rating. For a seasoned professional turbine pilot transitioning to the TBM, transition will still involve the sim time, much of the ground school, and a few hours of flight training in the aircraft (insurance requirements).

Annual recurrent training entails about 6 hours of flight training (sim or in the aircraft) and perhaps 3 hours of ground school. These numbers align with underwriter expectations and requirements, and work out to be about what is necessary to be proficient, speaking as a pilot who's done it. This is more like 4% of flight time (200 hours per year).

As for the FAR being idiocy for a D-Jet, you're probably right. Also, I agree with you about the sentiment of not wanting to put up with a mentor pilot unnecessarily. A better approach would be as in other aspects of training, getting an endorsement when the pilot is proficient, and not mindlessly requiring hours due to some regulation.

Orville said...

The EA50 that Vern took to Driggs, Idaho after leaving Oshkosh (N528EA) is on its way from ABQ to Big Timber, MT. Another fishing trip?

gadfly said...

It would seem that he has about a mile in which to land, at about the same altitude as ABQ. But if it were me, I'd feel a whole lot more secure, taking a little extra time, but traveling in a Cessna 205/206/207 . . . and knowing I would get back safe and secure.

gadfly

(But as a submariner and pilot, I always was afraid of taking unnecessary risks.)

Dave said...

This is only tangentially related to Eclipse (it has to do with Russia), but to me this seems backwards:
Russia's agriculture minister said Moscow could cut poultry and pork import quotas by hundreds of thousands of tons, hitting American producers hard and thereby raising prices for American shoppers.
http://news.yahoo.com/s/ap/20080827/ap_on_re_eu/georgia
Wouldn't reducing demand from Russia result in lower prices in the US but higher prices in Russia? It would seem flooding the non-Russian markets would lower the prices while Russians would be the ones to pay by the loss of cheaper foreign exports. I like chicken, just I don't see the logic in how this raises prices in the US...

airtaximan said...

"I think that DayJet isn't sure themselves what they'd charge. I think first DayJet wants to know if anyone will buy and then once that is established then find out what they'd pay."

OH, now I get it... its a completely NEW concept, to fly somewhere...OK. Especially for these higher brow types, who can afford to fly - they've NEVER considered it before.

Gimme a break.

OK, I'll bite. I would definately buy one of those ferraris. OH, its $275,000 - opps!

Get serious.

Its about price, AND the props win in this mission...

WhyTech said...

"Not because they don't want to do more, but because they CAN'T (time and cost) do more."


IMO, 50 hours per year and 1.5 hrs/year training is not sufficient to be safe and proficient except perhaps in the simplest acft, and maybe not even then for inexperienced pilots. Certainly not adequate for high performance piston acft and up, and certainly insufficient for IFR operations. No person is guaranteed to be able to afford to fly. There comes a point at which fishing is a wiser and more responsible alternative.

airtaximan said...

Baron,

most of the planes you refer to... the 300,000... are piper cubs... seriosuly, most of them pretty much don't fly.

Its a popular misconception of GA aircraft numbers, really. Often used by some new-to-the-market startups to justify a larger than life demand number for their plane.

gadfly said...

Dave

“Logic” has taken a holiday. Russia never stopped being “our enemy”. Anything and everything they do is “suspect”.

Your logic (and mine) has nothing to do with what’s happening. The struggle for power will take on any and every form. The marriage of Eclipse and the Russians has nothing to do with good business, on the part of American investment. Anything and everything that sucks investors into sending money, and control into the hands of the Russians (and China) is part of a greater strategy. We haven’t seen the last of Russia’s grand plans by a long stretch. Only a fool would trust their word. Eclipse is just a minor “pimple” in the grand scheme . . . but never-the-less, it’s part of the whole.

Well, you like chicken . . . and so do I. ‘Just be careful from whom you buy it. And the best price is not necessarily the “cheapest per pound”.

gadfly

(Many who will read these comments won’t “get it” . . . to their detriment.)

easybakeplane said...

You can't make these (distressed a/c) things up:

1. E400 ad seen in this week's 'Flight International' magazine, I won't give the ugly details in case anyone with a weak stomach or high blood pressure is reading

2. In same magazine, interview with Grob SPn test pilot talking about how much he enjoyed his job.

3. Story about screwed Adams A500 owners who can't get parts/service for their brand new a/c. (Including the NM state police!)

---------

History (almost) repeating itself...any old timers (besides Stan) remember what saved Learjet from going the way of the dodo (Grob/EAC/Adams) during the certification of the Lear 23?

WhyTech said...

"most of the planes you refer to... the 300,000... are piper cubs... seriosuly, most of them pretty much don't fly."

The total number is much closer to 200,000 and this includes turboprops, jets, rotorcraft, etc. See numbers below from AOPA website for 2007:

Piston Single: 145,036
Piston Multi-Engine: 18,708
Piston Other : 0
Total Piston: 163.743
Turbo-prop: 8,063
Turbo-jet: 10,379
Rotor-craft: 9,159
Experimental: 23,047
Other: 7,551
TOTAL: 221,943

And, ATM, I think that you are right on in suggesting that a significant % of the single engine fleet is relatively inactive.

WhyTech said...

"1. E400 ad seen in this week's 'Flight International' magazine,"

Also a full page EA400 ad in the AOPA Pilot which arrived yesterday. Copy reads in part,
" yours for the taking."

Ceri said...

Regarding E400 ads: have you considered what the print/ad deadlines might be for these publications?

I suspect current Eclipse management cringe when they see these adverts, and would much rather they hadn't appeared.

Vern was probably still running the show when the advertising copy was finalized.

...but Shane or Gunner will be better informed on this ...

WhyTech said...

"Regarding E400 ads: have you considered what the print/ad deadlines might be for these publications? "

Wildly premature no matter on whose watch they were done.

Ceri said...

Wildly premature no matter on whose watch they were done.

Well, yes...but I don't see what point you're making. Vern's a useless (lying) dick and should be fired, maybe?

I guess my point is that the reflexive ridicule of all things Eclipse gets a bit ...wearing... when it's stuff that's beyond the control of the current management.
The blog always seems to me to be teetering on the brink of bashing for the sake of it, which seems to me dull and poor sport.

And let me pre-empt the obvious reply: yes, I know I have the option to stop reading.

WhyTech said...

"The blog always seems to me to be teetering on the brink of bashing for the sake of it, which seems to me dull and poor sport."

Well, I guess. Vern's been gone for only 3 weeks, the new management has not shown their hand in a meaningful way, the the pent up outrage re the behavior of Vern and Eclipse over the last 10 years will take quite a bit longer to subside. I have found that tuning in and out of the blog periodically helps with the problem you describe. Kind of like the soaps - you can miss a months worth of shows and not really miss anything!

easybakeplane said...

Ceri,

I understand your feelings, and notice that only about 1/4 of my post concerned EAC.

However, the part that struck me as strange was that all of the advertising we have been seeing is for the E400, not the E500, which is the only product they are delivering.

Of course, the only product they are making $$$ on is the E400 deposits so I guess it makes sense in a sick sort of way....

Dave said...

I guess my point is that the reflexive ridicule of all things Eclipse gets a bit ...wearing... when it's stuff that's beyond the control of the current management.

The new management is the old management. The only thing "new" is they are one less.

Shadow said...

My bet is that AOPA and Flight don't ever get a penny from Eclipse for running the ad. Advertising is invoiced after the ad runs, and if Eclipse isn't paying suppliers or refunding customer deposits, then they won't be paying for these ads, at least anytime this century.

baron95 said...

TBM,

Again, I am talking about the planes in the D-jet class. You keep on talking about TBM, etc. I understand that is the plane you fly, and it is a good point of reference....but....

TBM costs 2.5 times more than a D-Jett.

TBM MTOW is 50% greater than the D-Jetc.

TBM max operating altitude is 6,000 ft higher than the D-Jet.

TBM has a higher stall/approach speed.

TBM does NOT have FADEC and requires the pilot to manage the engine to a much greater extent.

TBM has 100% more fuel.

TBM has 20% more seats.

It is a completely different class of airplanes.

The D-Jet is much closer to Malibu Mirage than a TBM. In fact it should be significantly easier to fly than a Mirage. Much easier engine management, much better avionics, simiar MTOW, Max Operating Altitude, stall speed, fuel load, similar climb/approach speeds, etc.

There is absolutely no reason to treat it any differently than a Mirage from an FAR point of view.

And YES, I'd support the requirement for a tpe rating for the TBM, PC-12, BE90, BE200, even the Baron, before I'd support a type rating requirement for the D-Jet.

There is absolutely no reason why the prupulsion choice determines if a type rating is required. None.

But, I am not trying to convince anyone, I was just answering Ceri's question. I believe there are MANY silent and occasional readers of this blog that may get discouraged from flying or aiming to own a jet because of some of the statments made here.

Also, let me point out to you that LOTS and LOTS and LOTS of SR22 pilots fly fractional ownership planes or club planes, etc. That is a growing percentage.

ANOTHER thing that elitist (not saying you) "professional pilots" don't get. All the costs that you talked about, get spreadout over 16-32 pilots each flying 50 hrs/year.

I am convinced that the future of high-end personal aviation is a SEJ or very light (<6,000lbs) twin jet, with fractional ownership of 8-32 pilots. Run the numbers for a D-jet and 32 owners and you will see the light (maybe). And 10 years from now, these planes will be in the secondary market for 50% of original price.

All we need is for the mannufacturers t oget there (another 5-10 years) and for the FAA to end the type-rating idiocy.

I don't have much hope of these things happening too fast, but I can do my part and point it out to those that may be reading the blog.

My message to pilots and aspiring piots is - YES, you can AIM to fly a jet. If we work at it, we can change the industry.

Would you have believed 20 years ago that you could be PIC of a certified plane without a medical and only 25hrs of training? Well, now you can.

Maybe 20 years from now, if TBM, ATM, Wytech and the FAA let you, you can pilot your D-Jet without an ATP-standard type rating, but you may need one to fly the BE200 and MU-2. And that would be GREAT for GA.

No Mas said...

The E400 ads predominate for several reasons.

Remember that E500 sales copy was replaced with "feel good" ads in May (+/-) and discussed at the E-rival. We don't make promises, we make airplanes ... blah, blah, blah ...

Even if they could deliver, when new position dates became 3+ years away, sales quickly dried up. The current monied masses dont have the patientience of the early adopters. This was aided of course by the secondary market on speculative positions.

So, the seemed to focus on the only possible upside ... the E400 ... and hope to get sufficient orders to make it work.

That was until Olly-Roely stated at AirVenture "we will build the 400 -IF- we ger sufficient orders.

Result, sales vanished until late in the week when clueless fresh meat arrived.

Logic seems that E400 deposits will not convert to firm comitments with the current IS&S + GPS400 panel ... why but a sporster with a golf-cart panel. So no matter how you slice it, Eclipse needs a brand new cockpit by 2009 for both airplanes.

My bet is following bankruptcy to clear the bilges, they emerge producing 100-200 E400s and 100-200 E500s per year.

No Mas said...

Eclipse training has shown that a new owner’s avionics/cockpit management skills substantially lag their stick and throttle skills … although many were pretty lacking there as well. Kind of scary that those folks are slashing piston-powered holes in the mid-altitude skies right now.

Now that Garmin has delivered 5000+ permutations of the G1000 (and their G300 stands ready to be THE panel of choice in LSA market) and Avidyne is approaching 5000 units, by 2020 we should enjoy a more reasonable approach to jet endorsements.

DeeJet is poised at the top end of the DA-40, DA-50, and DA-42 stack … learn the avionics up front, advance through more complex airframes, establish broad proficiency through line-oriented training.

Cessna is in the same position, especially now that they expect Garmin to compete with Rockwell Collins and Honeywell up into the Part 25 Citation models. Their continuum is of course legendary … 172 – 182 – 206 – Mustang …

In 10 years many of the “not on my watch” Luddites at the FAA will be gone, and the core pilot population will be 100% more tech savvy than we are today.

Folks probably will still need to be typed as a right-of-passage, but attaining one shouldn’t be the trauma it is today. It will soon be a brave new world … and I will have a few years until forced retirement.

Black Tulip said...

"My bet is following bankruptcy to clear the bilges, they emerge producing 100-200 E400s and 100-200 E500s per year."

No way. The single engine jet market will go to others.

As did the dinosaurs, the Eclipse twin jet will go extinct... too small, won't carry enough, won't go very far and costs too much to operate.

AvidPilot said...

Hold on to your money - good deals are coming.

30 Cessna Mustangs on the market.
21 Embraer Phenom 100's " "
6 Djets " "
2 Hondas " "
2 Piper jets " "
80 Eclipse E500's (gag)

Nothing is moving - it's a Mexican standoff. No one is buying, and because no one is buying the seller's don't realize that prices have dropped. Sellers are not only NOT going to get their premiums, they may likely have to discount the aircraft just to move them. Too much product, too few buyers.

Our friend Mike keeps trying to prop up the market with his pep talks, but the reality is that this market is falling and no one knows where the bottom is. When the fat lady sings, my guess is that we'll all be surprised just how far prices ended up dropping. How far? Further than we think!

Wait and be rewarded. Cash is king.

forward-observer said...

It's not the 300,000 airplanes that are registered that you should watch, if you want to know GA activity levels.

Instead- watch the number of gallons of 100LL produced.

That is a far better indicator of trends in aviation. They only produce what is burned- so when aviation fuel is way down, you know it's because of the fewer number of flight hours. Much more accurate than FAA registry estimates of flying aircraft.

Try this link:
Aviation Gasoline.

Production today is half of what is was in 2002.

airtaximan said...

whytech,

to be clear, the 300,000 number is worldwide... 2/3 are in the US... and I am quite certain about the limited lfying of most of the US fleet. More than 2/3 of the piston fleet hardly flies at all. n fact, the value of many of these planes is less than $20,000 (no error in the number of zeros). Most are less than $70,000.

The market for aircraft is very small, indeed. Making money at the low end, is tough. With the cert cost, and the profit percentage and actual dollar profit per plane for a $1M or less plane, comapred to a $10M-$20M plane... its no wonder the Bombardiers, Gulfstreams etc... stay far away from this segment.

And new pilots are not a growing breed, either.

- the comment about the 100ll is very insightful, as well.

airtaximan said...

Whytech:

thanks for the inventory numbers.

Now, take a stab at the "trade ups" for a jet...

Anyone care to estimate the number of these planes (owners) with a value of say $750,000 or more, who could actually (maybe) think of purchasing a $1.X million plane?

This is a fun challeng, and will illuminate the central myth - the market size.

Yes, some operators of jets would consider buying a smaller, less expensive jet - yes... but I think we know the BULK of the orders are from "trade ups" not trade downs... unless its a new comapny like Linear or Dayjet - forget them...

Dave said...

Eclipse could be nearing EASA certification, but might require more than cosmetic changes:
http://www.flightglobal.com/articles/2008/08/28/315059/eclipse-confident-of-passing-faa-and-congressional-scrutiny.html

Here's confirmation that 90 lost their jobs at Hampsons due to Eclipse:
http://www.wigantoday.net/wigannews/Jobs-blow-at-engineering-plant.4435642.jp
The article also says there might be more jobs lost at Hampsons due to Eclipse.

Just zis guy, you know? said...

avidpilot wrote:

Hold on to your money - good deals are coming.

30 Cessna Mustangs on the market.
21 Embraer Phenom 100's " "
6 Djets " "
2 Hondas " "
2 Piper jets " "

80 Eclipse E500's (gag)

Nothing is moving - it's a Mexican standoff. No one is buying, and because no one is buying the seller's don't realize that prices have dropped. Sellers are not only NOT going to get their premiums, they may likely have to discount the aircraft just to move them. Too much product, too few buyers.

Our friend Mike keeps trying to prop up the market with his pep talks, but the reality is that this market is falling and no one knows where the bottom is. When the fat lady sings, my guess is that we'll all be surprised just how far prices ended up dropping. How far? Further than we think!

Wait and be rewarded. Cash is king.


Can you add to this analysis? Those in bold are obviously positions. How many of the 30 Mustangs are people trying to flip positions? How many of the FPJ's?

Dave said...

Can you add to this analysis? Those in bold are obviously positions. How many of the 30 Mustangs are people trying to flip positions? How many of the FPJ's?

Purely as a gedanken experiment, I think it could also be argued that prices would be going up. Pratt forecast significant VLJ engine sales and with the VLJ market not panning out as it was forecast, the volume wont be there. This will increase prices on parts. Many of the VLJ manufacturers use the PW600 series and the sales on that could be far less than forecast by Pratt, which could drive up prices.

((Arguing against my own statement above, a decrease in sales of VLJs would mean that there's less demand anyway and higher prices would drive away demand even more. I expect the repercussions of Eclipse potentially going under - or even just drastically reducing volume - will have complex effects on the marketplace.))

FreedomsJamtarts said...

Fred Mondragon, the state's economic development secretary, said there are reasons to believe Eclipse will remain profitable.

Remain profitable (TM New Mexico Government)
Delivery (TM Eclipse)
Completed (TM Eclipse)

I did not have sex with that woman. (TM Bill)

No, the dress doen't need dry cleaning, it's just a litle stain. (TM Monica)

Hey Gadfly, with economic brilliance like Fred Mondragon shows - how do you feel about your tax dollar?

TBMs_R_Us said...

Baron,

Focusing just on the D-Jet type rating issue:

I'm not following why you find the type rating so problematic. It basically boils down to whatever training is required to be proficient in the aircraft (which I assume you're fine with), and a practical test that is effectively the same as an instrument rating practical test.

The issues raised about "(C) at least 2,000 hours..., (D) At least 500 hours..., and (E) at least 1000 hours..." only apply in the case of the type rating being done in a simulator, and don't apply if it's done in the real aircraft. For a Gulfstream costs drive the training to a sim, but for a D-Jet, why bother?

Unless I'm misreading the FAR, it seems that the only thing required for a D-Jet type-rating is an instrument rating, training, and a check ride. Is that really so onerous? How is that requirement going to kill demand? The only thing I can think of is your idea of VFR-only not being available due to the requirement for an instrument rating.

gadfly said...

FreeJamTarts

Even the gadfly is at a loss for words, to describe his thoughts about the handling of bribe . . . er, tax money in the "Land of Enchantment".

gadfly

(Stir fried? . . . He thought they said "re-fried", as in "beans".)

gadfly said...

By the way, one of the little birds passed over the shop awhile ago . . . climbing out to the northwest.

gadfly

(Maybe it's part of the dog and pony show in the home nest . . . or someone just escaped.)

flyger said...

AvidPilot said...

Hold on to your money - good deals are coming.

30 Cessna Mustangs on the market.
21 Embraer Phenom 100's " "
6 Djets " "
2 Hondas " "
2 Piper jets " "
80 Eclipse E500's (gag)


Well, let's go to controller.com and see what is what.

There are 78 EA500s listed, 24 of them are known to exist. Some of the others might be real planes, can't tell from the ad, but let's assume that there are 24 really for sale. This does not include the 16 from DayJet. So 40 EA500s for sale, not a single one listed over the new price of $2.15M. That's 16% of the market.

There are 30 Mustangs listed, 7 of which are real. That's 7% of the market. Not a single real Mustang is listed for less than the new price.

Everything else on your list is paper.

When you compare the two real airplanes, there is quite a difference in the market in terms of the number listed and the premium or discount offered. It's common sense, one is done and backed by a stable company, the other is not and the company is at risk.

If you are waiting to pick up Mustangs on the cheap, you might have to wait a while. EA500s, on the other hand, seem to be readily available at a discount.

Note that the factory is trying to sell EA500s with supposed near term deliveries in 2008 for well under list price. A late comer can snatch up a plane for less than a depositor who has been waiting years. Or, better yet, the company can leave the 60% depositor hanging while selling an airplane to someone else. I bet they feel good about that.

Just zis guy, you know? said...

Regarding price increases:

1) Personally I give more credit to P&WC regarding their ability to understand the realities of the Eclipse program. Embraer and Cessna are very real, and have very real backlogs.

2) There's about a 0% chance that P&WC will increase prices outside the terms of their LTA with Cessna or Embraer. There's a 0% chance that their LTA doesn't cover this in detail. There's a very, very low probability that either of these companies have stepladder pricing. That's not really how most systems/avionics/propulsion pricing with OEMs works in this industry.

3) Eclipse ASKED for stepladder pricing so that they could get their suppliers to commit to low prices when they built 1500/year. This means that their pricing ABSOLUTELY increases and QTY's go down.

Dave said...

1) Personally I give more credit to P&WC regarding their ability to understand the realities of the Eclipse program.

Given what has happened to other publicly traded suppliers as well as what we've heard about the other businesses who are Eclipse suppliers, I wouldn't give PW too much credit just yet. Beside I'm talking about the impact on the marketplace as a whole as a result of Eclipse shutting down or producing very few.

2) There's about a 0% chance that P&WC will increase prices outside the terms of their LTA with Cessna or Embraer. There's a 0% chance that their LTA doesn't cover this in detail. There's a very, very low probability that either of these companies have stepladder pricing. That's not really how most systems/avionics/propulsion pricing with OEMs works in this industry.

I agree, however, people still have to buy parts and if there's less parts being made, the price goes up. Also the existing lower prices wont apply if some new entrant is considering entering. The parts would cost less if there was a 1000 made per year rather than 100 per year.

3) Eclipse ASKED for stepladder pricing so that they could get their suppliers to commit to low prices when they built 1500/year. This means that their pricing ABSOLUTELY increases and QTY's go down.

Whether Eclipse asked for it or not, it is a reality that the more something is mass produced, the cheaper it is and the lower the volume, the more it costs to produce per unit.

You're comments are actually contradictory in addressing the issue. You on one hand say PW has things covered, but on the other you say Cessna and Embraer have themselves covered against PW raising prices due to changes in the marketplace. So who is going to end up paying the increased per unit manufacturing cost due to a decrease in manufacturing volume?

Shane Price said...

If Frank Castle is still reading the blog, I'd appreciate a little help with a specific question.

eclipsecriticng@gmail.com

Shane

Shadow said...

AIN article on P&WC from May 2007 addresses adjusting PW600 production. It never seems that P&WC believed Eclipse's wild projections. Excerpt follows:

All told, P&WC delivered 2,400 engines last year, and it plans to deliver more than 3,000 this year. Of course, that could change, depending on airframers’ demands.
Very light jets (VLJs) in particular are difficult to track, according to P&WC president Alain Bellemare. The company produces the PW600 line, chosen to power the Eclipse 500, Cessna Mustang and Embraer Phenom 100. “If Eclipse keeps on having technical issues, we will adjust the schedule,” he told AIN.

According to Bellemare, the company is prepared to deliver up to 1,000 PW600 variants this year if demand warrants, though the expected number quoted usually hovers around 700. More than 100 engines have gone out the door thus far this year. The ability to boost or shrink production has been easier with the PW600, according to Bellemare, because of the engineers’ ability to greatly reduce assembly time. Whereas previous engines took approximately eight days to go from beginning to ready-to-ship, P&WC has reduced the time on the PW600 to 10 hours, including test. “Eight is the target,” said Bellemare.

Dave said...

According to Bellemare, the company is prepared to deliver up to 1,000 PW600 variants this year if demand warrants, though the expected number quoted usually hovers around 700. More than 100 engines have gone out the door thus far this year. The ability to boost or shrink production has been easier with the PW600, according to Bellemare, because of the engineers’ ability to greatly reduce assembly time. Whereas previous engines took approximately eight days to go from beginning to ready-to-ship, P&WC has reduced the time on the PW600 to 10 hours, including test. “Eight is the target,” said Bellemare.

Reading the various items on Pratt's production process it sounds like they achieved what Eclipse was trying to achieve, however, I still think 700 units per year of the PW600 class is widely optimistic. Presumably who would pay the price for decrease in demand is the staffing, where they'd thin out their workforce?

Just zis guy, you know? said...

"You're comments are actually contradictory in addressing the issue. You on one hand say PW has things covered, but on the other you say Cessna and Embraer have themselves covered against PW raising prices due to changes in the marketplace. So who is going to end up paying the increased per unit manufacturing cost due to a decrease in manufacturing volume?"

I thought I was pretty clear: P&WC. Their price to Cessna and Embraer is negotiated for the life of the aircraft. It will not change except by escalation formula (based on data from the US Bureau of Labor Statistics).

Also the 610/615/617 don't likely share that many parts. Look at the engine designs, they are not that common, they are scale models of each other...

Just zis guy, you know? said...

I would wager on them manufacturing 68/month by the middle of next year.

Dave said...

I would wager on them manufacturing 68/month by the middle of next year.

Pratt? I think I just realized I made a mistake on Pratt's production numbers. I was looking at 1 unit equal to one jet. Given the number of twin jets, I see 700 as reasonable now.

Orville said...

Also the 610/615/617 don't likely share that many parts.

But, the cool thing is - you can control all 3 with the same FADEC. All you have to do is 'fool' (read, 'insert life-threatening bugs into') the software.

Turn-and-Burn said...

Shane Price said...
If Frank Castle is still reading the blog, I'd appreciate a little help with a specific question.

Gee Shane, great to see your going to such reliable sources for your information.

gadfly said...

As I recall “reading” the history, back in the 1930's, Fairbanks-Morse and GM recognized the need to develop large diesel engines for diesel-electric train engines. Money was “tight”. US Navy Submarine Service to the rescue. Submarines then were “diesel-electric”. The Navy ordered some diesel engines . . . and even GE got into the act with their generators. F-M and GM didn’t make much, if any, profit on the deal, but the Navy ended up paying for the R&D on the new family of engines for the railroad. Needless to say, the “Silent Service” got their engines, and even today we enjoy the benefits of diesel-electric locomotives.

(Yes, I’ve slept many hundreds . . . actually, a couple thousand hours, just fifteen feet forward of a couple of those 1,650 hp F-M engines . . . like a baby.)

Me thinks that P&WC is playing the same game . . . Eclipse put up some money . . . P&WC probably never expected to make money on the deal, but Eclipse ends up paying for “R&D” on a small engine, and even did much of the testing (although obviously not on purpose).

Even in our little company, we’ve taken in jobs that were questionable at best, and recognized to probably be “losers”. But it gave opportunity to try out some new ideas . . . and go on to use these ideas with new customers. In each case, we did the best we could, and gave more than value to the first customer. The second and third crop produced a harvest with profit.

gadfly

(A fly has to keep it simple . . . ‘not much room for error!)

Just zis guy, you know? said...

Yes, 2 per airplane with 2 real customers who have real backlogs building real airplanes.

Just zis guy, you know? said...

Gad:

Note that Cessna selected P&WC well before Eclipse fired Williams.

uglytruth said...

This got me to thinkin.....order book stays high......so PFJ can get the best pricing on stuff as possible. If every componet adjusted for current usage....it's just another big nail in the coffin.

Newslink said...

Hi

Just found a newslink that you might find interesting from the largest newspaper in the netherlands:

http://www.telegraaf.nl/dft/nieuws_dft/1786501/__Pieper_bezig_met_collecte_voor_zijn_zakenjetfabriek__.html

Link can be found searching for eclipse on the website of www.detelegraaf.nl

The newspaper claims to have a copy of the presentation that is used to try to get new investors. Some highlights of the article:

-Pieper states that half of the current 2000 staff left at Eclipse will be made redundant
-Production will be lowered from a strategic point of view
-Cost of the company will be lowered by 30%
-This together with the price increase should mean profitability in 2010
-Expected losses this year USD $300 million
-Expected losses 2009 USD $ 200 Million
-IPO planned for late 2009
-Working hard on a factory in Europe which should be opened this year
-New investment needed of USD $300 Million
-Pieper rejects through his spokeperson the claims that his Russain partner should have left the program
-His spoke person claims that this year alone 270 aircraft have been delivered

Dave said...

Just found a newslink that you might find interesting from the largest newspaper in the netherlands

No wonder Eclipse has been keeping a media blackout. They don't want people to find out that Eclipse has a massive amount of red ink. Also what wasn't said was what volume and price Eclipse expected to make a profit of in 2010...are they still touting the 800 units per year coming out of Russia? What about the 500+ here? Methinks that Roel's claims to profitability in the future are just a repeat of Vern, just with a different face.

Niner Zulu said...

Let's see...

According to Roel, Eclipse will lose $300,000,000 this year.

In 2009, Eclipse will lose $200,000,000.

Wow - those are a lot of zeroes! Even so, bear in mind that these figures don't even include OVER ONE BILLION DOLLARS lost already.

In 2010, Eclipse will "Make a Profit" (TM Eclipse). Note: he didn't say how much profit.

To see if Roel is right, someone is going to have to gamble $300 million dollars.

Sounds like a good deal to me! Where do I sign up??!!

Orville said...

So let me see if I have this right - someone has to pony up $300 million in order to watch them lose $500 million over the next 2 years?

Any takers??

Orville said...

And - we all know that number of '270 delivered this year' is BS! Actually, given production - it's impossible! Why would anyone make a statement so easily proven false?

TBMs_R_Us said...

What a hoot!!

There must be hundreds of folks calling EAC to place orders for that great deal of $2.15M. Oh, and DayJet is just about to close their financing to allow them to resume their deliveries of 1400 E500s (or was it 1500???). Anyway, you know, that $300M loss for next year is only happening because of the development costs for the E400 (there are already hundreds of E400 orders and they just keep on rolling in the door!).

Man, are we going to look like a bunch of idiots!

gadfly said...

J Z Guy

'Pardon the lapse of time, but even old guys have to work some times.

Whether or not Cessna chose "P&WC" or not, or the smaller engine . . . it still makes my case. Any inventor or innovator wants to spread out the cost of new development as much as possible. It is only an educated guess, but I still believe that P&WC was smart enough to recognize an opportunity, and it didn't take them all day to look at that horseshoe.

gadfly

Dave said...

Where is Eclipse getting the $300 million to lose this year? Presuming Roel caughed up $200 million in January and onward, who is putting in the other $100 million...are the depositors being turned into involuntary venture capitalists with their deposits being forcefully held to fund Eclipse's massive losses?

Dave said...

Reading the dutch-language papers Roel sounds just like Vern. Vern says that orders are up - not down - at Eclipse and that demand is so great, that's why the Russian factory is being built:
http://translate.google.com/translate?hl=en&langpair=nl|en&u=http://www.quotenet.nl/biz/wereldrecord_jets_bouwen_roel_pieper.php&prev=/translate_s%3Fhl%3Den%26q%3D%2522roel%2Bpieper%2522%2Band%2B650%2Band%2Beclipse%26sl%3Den%26tl%3Dnl

gadfly said...

This dead horse has been dissected every which way from Sunday, since the little bird fluttered around over ABQ in the original Williams engines. Eclipse claimed possession of the funds in escrow on that far-off day in history . . . and then, in essence, admitted to the world their lying scheme. And hardly anyone believed the “second” lie.

That being the case, what is it that anyone does not understand about an “out right bald faced lie” and downright theft of funds?

From that moment on, there has been nothing left for serious discussion.

gadfly

(Here we are . . . years later . . . discussing the magnitude of the earlier lies. I hate liars.)

Dave said...

Here we are . . . years later . . . discussing the magnitude of the earlier lies. I hate liars.

Actually we are discussing Roel rather than Vern now. I don't think Roel was even involved at the time of Williams test flight for depositor money.

airtaximan said...

if ETRICK is touting EAC in europe for investment... perhaps we need to translate this blog?

if the content of his presentations is what we're being told here, I sincerely hope there are regulators somewhere taking notice

TBMs_R_Us said...

In the January article in the same Dutch newspaper, Roel says there are "3000 orders". Maybe he spends too much time in Amsterdam.

Dave said...

In the January article in the same Dutch newspaper, Roel says there are "3000 orders". Maybe he spends too much time in Amsterdam.

Roel can do those kinds of tricks easier than Vern could do with DayJet. Roel could say there was 30,000 orders as all he has to do as CEO of ETIRC is to send a letter to the CEO of Eclipse, which just happens to be himself. The order book will be whatever size Roel wants it to be.

One thing I'm clear on what I've read so far...is Roel seeking $300 million for Eclipse directly or $300 million for ETIRC to be used on Eclipse?

TBMs_R_Us said...

Evidently, Roel also has a bankrupt newspaper, lost a long tax dispute over claiming his personal residence was a conference center, and then moved to the Riviera after his wife was stabbed.

Who's going to write the movie script???

airtaximan said...

please call the ETRICK from now on... its only fair

Dave said...

Who's going to write the movie script???

Well, Vern has a lot of time on his hands. He could probably get the film funded, but once he did, he'd make a dog's breakfast of it.

gadfly said...

Dave

When someone buys a company they are essentially buying whatever was promised to the previous customers, suppliers, and employees, and taking on responsibility for whatever transpired previously.

It is therefore the responsibility to “make right” the promises made by the company that is now under the control of the “new owner”. It doesn’t fly that the company no longer must abide by the earlier promises . . . otherwise the new owner is doubly responsible/guilty for earlier commitments un-fulfilled . . . or adequate compensation must be given to those who “believed” the first claims, and placed deposits.

This thing wasn’t done in a corner . . . it was open to the entire world. Roel has taken upon himself responsibility for that which was promised before him, whether stated or not. Play all the legal games that lawyers play . . . “machs nichs” ("makes nothing"). . . doing the right thing remains with the same requirements . . . and liars will remain consistent with their nature.

Roel has an opportunity to prove himself a hero . . . an honest man . . . ready to do whatever is humanly possible to correct the mistakes of the company that he has chosen to lead. No one forced his arm . . . he walked in with better knowledge than anyone on the blog. Now it’s up to him to prove his “mettle”.

The time for excuses is long past. It’s time to either make things right, or pay the price.

gadfly

airtaximan said...

gad:

You seem like a nice and spritual (almost said religeous) man.

There gotta be a story in the bible somewhere, which describes how a complete liar criminal behaves, and he eventually gets whats coming to him.

This provides a reference point for what appears to be going on.

I sincerely think Pieper has one big advantage over Vern - he knows how completely gullible the international markets can be, and how in the dark the really are regarding the situation at EAC.

It looks to me like he's banking on the same sort of ignorance Vern did.... only much later and far away.

Otherwise, why would he continue the BS stry about the orders?

BTW, did you see my posts for the last week, stating "somone needs to ask the hard concrete questions about the orders?"

I kinda knew it would come down to this BS all over again.

Niner Zulu said...

Throwing more money at Eclipse amounts to nothing more than it always has, i.e. subsidizing the wannabe jet owners who want to buy a cheap jet.

The Eclipse really never did cost $995,000, or $1.3 million, or $1.5 million for that matter. They've always been well over $2 million since day one. The only difference is, part of the purchase price was subsidized by previous ignorant investors.

The problem with the FPJ it that it's not a good deal at ANY price. It's half-a-jet at best. A toy for perfect VFR conditions, full of glitches, a high-workload aircraft in IFR with very little support nationwide, and virtually no support in Europe. (Think about it: what are European owners going to do if their aircraft is AOG? Fly it back to Albuquerque? Not an option.)

No, the kindest thing Eclipse could do for aviation and the industry is go BK and be bought out by honest people who will build an honest jet. Roel appears to have no more scruples than Vern, and the company still sucks.

gadfly said...

airtaximan

You know more than you say.

My flight and A&P training was at Moody ("MBI", Chicago . . . look it up), when they had their flight school in Wood Dale, Illinois . . . two miles due west of ORD . . . a long time ago.

Your questions about the true order book have never been answered . . . a reputible business would have been open about such details early on.

'Got a date with a blond for supper, a little RN that I met at Moody, four kids and eighteen point seven grandkids ago . . . gotta' leave . . . more later!

gadfly

(Ain't young love grand? . . . it just gets better and better!)

eclipso said...

Where is our dear Karen D.?

We need a screenplay writer and I nominate her..(maybe playing favorites here).

Perhaps Vern could get John Travolta.

BricklinNG said...

According to RP today, the slowdown in deliveries is temporary and the way forward will be 2 jet deliveries per day with a demand for thousands, largely from Europe. A round of financing is around the corner and that will clear deposits, provide upgrades, deliver unprofitable current orders and see EAC through to proftitably delivering the above mentioned 2 per day at $2.5 million.

So there, blog readers, is the plan.

CW, how about referring to the financial salvation as the round around (as in around the corner)? With all those floptions, what's the chance of the round around?

Niner Zulu said...

Here are some comments I heard from an owner regarding the Eclipse conference call this morning:

- UBS is assisting Eclipse in seeking investors. No firm commitments from anyone yet, but hope to have them by October
- Eclipse expects to be profitable by 2nd quarter 2009
- Eclipse has enough money on hand to carry them through end of October
- Roel & Al Mann are doing "bridge" financing until they secure an investor
- Roel says they have a very strong order book, with "years of future production". So many orders, in fact, that they need to build a new factory.

uglytruth said...

Bla Bla Bla

IPO

Bla Bla Bla

forward-observer said...

If they try to move the factory, it's all over. Period.

They can't go to Europe, or Russia, or anywhere outside the U.S., and try to set up all over again. It won't work.

If they stay where they are, downsize appropriately, and then hubly begin to build conforming airplanes, they have a shot at survival. A long shot, true, but a shot nonetheless.

Any produciton move would be absolutely impossible, given the current state of conformity (or lack thereof), and production system design.

It's that simple.

airsafetyman said...

"UBS is assisting Eclipse.."

So UBS is the "bank" mentioned in an earlier thread. UBS was practically driven out of the US earlier this year for instructing their customers in tax-evasion schemes. Why am I not surprised they are in league with the Roelster?

WhyTech said...

"Roel & Al Mann are doing "bridge" financing until they secure an investor"

These are sometimes called "bridges to nowhere." It is often a sign of a very difficult financing, which often is not completed. It is common to set a closing date ("November") to give an indication of confidence on the part of the Company that the financing will actually happen. But, come November, it wont be a great surprise if the closing date is extended, or the financing effort terminates.

Dave said...

So UBS is the "bank" mentioned in an earlier thread. UBS was practically driven out of the US earlier this year for instructing their customers in tax-evasion schemes. Why am I not surprised they are in league with the Roelster?

Maybe they advised Roel on his tax evasion scheme calling his home a conference room.

flyger said...

Niner Zulu said...

- UBS is assisting Eclipse in seeking investors.

Like they "assisted" Enron?

Quote from a NY Times piece on UBS and Enron:

"UBS was one of several financial institutions accused of helping Enron create financial structures that hid the company’s true financial condition."

Well, at least they have experience that applies to the situation...

Dave said...

I wonder if Roel is saying this to his potential european funding sources now:
I ask Roel if he thinks that the VC community, facing new challenges in form of new complex technology has the competence to judge the merits of e.g. a nanotech case. Roel responds:”Venture capitalists all over Europe lack two things; they lack the operational and marketing experience and they lack understanding of technology.” Roel says that one of the reasons for this is that in many cases venture capital companies were sprung out of investment banks and financial institutions. “So in their organisations they lack partners who have run companies or major economic processes. They also lack people who know how systems work, so in their due diligence they do not have a partner at the technical level.”
http://www.nanonordic.com/extra/news/?module_instance=2&id=186
Then again he might still be saying that with the strong hint that ETIRC is who they should use for technical advice (no self-interest there!).

baron95 said...

TBM said ... I'm not following why you find the type rating so problematic.

It is not problematic for me. I'd be looking forwart for a week of intensive training culminating with another type rating.

It is problematic for non-trivial slice of the potential personal-mission pilots.

Do you believe that if we required a type rating of a DA42 pilot, it would severelly impact demand? How about a DA40? How about if we required type rating of 172s?

I'm prety sure you'd agree that it would have a non-trivial adverse affect for those planes/pilots, right?

On the other hand, I agree that requiring or not a type rating to operate a G550 has little to no impact.
So the ONLY question is, at what aircraft price point/complexiy/capability does the type rating has a net benefit (substantially increases safety without severely damping demand?

Is it at the SR22 level? No way. Is it at the Mirage level? Nope. Is it at a D-jet level? Doubtful.

I believe it is around the CJ1+ BE200 level that a type rating makes sense. Perhaps at the Mustang, BE90, TBM, PC12 IF flown to IFR private standards.

Either way it should be pilot and airplane dependent.

Ask yourself, why does a pilot need an endorsement to go from a 180HP 172 to a 230HP 182, but does not need an endorsement to go IFR from steam gages to a G1000? It is ridiculous. Why do you need a type rating for D-jet even if you 2,000 hrs in a TBM850-Garmin, but you don't need it if you are going from a Seneca to a BE200? idiocy.

Requirements should be progressively relaxed requirements based on experience and instructor endorsements. It works for tail wheel endorsements, it works for high performance endorcements, it works for presurized endorsements, it should work for light (<6,000 lbs) turbine (turboprop or tubofan) endorsements.

Type ratings should be for planes with trully unusual features.

My 2 - we need to just let this debate lie and get back to the business at hand: Eclipse.

baron95 said...

Dave said ... I still think 700 units per year of the PW600 class is widely optimistic.

Really???!!!!??? You don't think that between the Mustang, Phenom and Eclipse (500) they will ship 350 planes/year?!!!???

You better tell that to Cessna and Embraer, since just the two of them are gearing up to those volumes.

baron95 said...

My apologies dave - you have already clarified the 700 PWC numbers. I posted before reading the blog to the end.

baron95 said...

$500M loss in 2 years. what are these guys smoking. This is way more than I thought they'd need.

It is crazy. $500B!!!!

you can buy 200 Mustangs or Phenoms put an Eclipse badge on them and resell as OEM for less money.

Dave said...

you can buy 200 Mustangs or Phenoms put an Eclipse badge on them and resell as OEM for less money.

Don't be giving Roel ideas.

I recently found out that my boss drives a BMota. What a BMota is a Toyota where you remove everything that says Toyota and replace it with BMW including having BMW rugs. He did it as a joke since all his peers drive BMWs, but he's got six kids. I could just see Eclipse doing the same thing and removing all Cessna markings and replacing them with Eclipse markings.

Dave said...

- Roel & Al Mann are doing "bridge" financing until they secure an investor

But I thought that's what Eclipse depositors were doing at 6% per anum even if they didn't want to be depositors any more.

- Roel says they have a very strong order book, with "years of future production". So many orders, in fact, that they need to build a new factory.

Vern 2.0 - The more Eclipse continues to tout its increasingly fictional order book, the more it looks like Eclipse simply can't survive because it is denying a central reality. Eclipse can only survive in the world of fiction...at least that is how it appears when Eclipse continues to carry on fiction.

airsafetyman said...

"So many orders, in fact, that they need to build a new factory."

But wait! Didn't the Roelster make an announcement a few days ago that Eclipse had no plans for another factory? That was Roel speaking English in New Mexico, not in Dutch in the Netherlands. Note to Roel: some people in the US speak Dutch. Hard to believe, but true!

eclipse_deep_throat said...

flyger said:

**There are 78 EA500s listed, 24 of them are known to exist. Some of the others might be real planes, can't tell from the ad, but let's assume that there are 24 really for sale. This does not include the 16 from DayJet. So 40 EA500s for sale, not a single one listed over the new price of $2.15M.**

Forgive my ignorance ....but did everyone read Flyger's post??! Isn't the $2.15 mil price what the economists would consider a "price ceiling", even for the secondary markets??!

I'm thinking that the analogy mite be like that with the new Dodge Challenger: it is extremely rare for a USED car to sell more than a new one. So buyers are going to have to pay a premium to get this model right now to show off to all their friends...

But I remember a Boeing executive commenting something to the effect that 'the worst thing for our sales are used (Boeing) jets.' So used Boeing 737s for sale will affect sales of new 737's, ahem, by reducing the sale of new 737s. Do we all agree on that premise?? LOL, probably not, but I would find it hard to understand the logic if the market would allow used jets to appreciate in value...

This translates to EAC and the Eclipse 500 too, I think. We aren't talking about a rare Ferrari or smokin' hot Dodge Challenger. The secondary market has got to put some downward-pricing pressure on EAC in regards to the 500 AND the 400, right?! And from what I have read, the general consensus is that no one in their right mind would buy an EA500 for the same price as a Cessna Mustang. But then think of the secondary market in terms of all the half completed planes (with all the inop stickers, no AvioNG, no FIKI) offered for sale versus a NEW ea500 that also has a lot of inop stickers and IOUs.

So ...I'm trying to picture the "calculus" here, a sweet-spot of between $1 mil to no more than $1.5 mil for a used EA500 competing agsinst a new EA500 for $2.15mil. Pieper has no choice BUT to slow the factory down in order to limit the number of free retrofits necessary and to also limit the number of used planes for sale in the secondary markets competing for FINITE customers; and we all know that those customers "at the margins" would be just as happy with a used plane for $1.5 mil versus new at $2.15 mil, ceterus paribus. Customers have to perceive a real difference between the used versus new planes. I don't see how Roel can pull it off by 2010 without the company going into bankruptcy...

E.D.T.

Dave Ivedorne said...

E_D_T spoke of used cars:
I'm thinking that the analogy mite be like that with the new Dodge Challenger: it is extremely rare for a USED car to sell more than a new one. So buyers are going to have to pay a premium to get this model right now to show off to all their friends.

But alas for Mike Press and the SudAfrikaan dentist, they threw their darts at "Dodge Challenger", and instead they landed on "Fiat without a country"

Tell the tow truck driver to pull around to the second window,
IANATTD

TBMs_R_Us said...

So ...I'm trying to picture the "calculus" here, a sweet-spot of between $1 mil to no more than $1.5 mil for a used EA500 competing agsinst a new EA500 for $2.15mil. Pieper has no choice BUT to slow the factory down in order to limit the number of free retrofits necessary and to also limit the number of used planes for sale in the secondary markets competing for FINITE customers; and we all know that those customers "at the margins" would be just as happy with a used plane for $1.5 mil versus new at $2.15 mil, ceterus paribus. Customers have to perceive a real difference between the used versus new planes. I don't see how Roel can pull it off by 2010 without the company going into bankruptcy...

EDT, you hit the nail on the head! It's much like the housing market. There will continue to be downward price pressure until all of the 'bad' inventory is moved out of the market. New inventory just makes things worse.

They must figure that by slowing things down they accomplish two things. First, they reduce the inventory pressure, and second, it gives them the time to get new production finally around to complete aircraft, with AvioNg and FIKI and no IOUs. Their theory has to be that a complete aircraft is actually worth $2.15M (debatable), and that all of the older aircraft will sell at some considerable discount. Once the discounted aircraft are sold, then the true demand for E500 will present itself --- all 2400 orders worth (oh yeah).

Funny thing is, none of the 'bad' inventory is moving. Hmmm, wonder what that means. Maybe it means that everyone who took delivery of an incomplete FPJ is going to be stuck with it. Can't imagine a post BK company doing free upgrades, and as you say, they can't get there from here without BK.

AvidPilot said...

One wonders just how much "stupid" money is out there.

When the next investor, if there is one, loses his/her $300 million (...and is there anyone who believes they won't?), can there possibly be yet another investor waiting to carry the torch?

My predictions:

1. there is no way that Eclipse is going to show a profit by 2nd qtr 2009 as Roel says. In fact, 2009 will be a huge loss just like every other year
2. this last round of financing, if it happens, will likely be the last. It will postpone BK by a few months, at best.

Dave said...

1. there is no way that Eclipse is going to show a profit by 2nd qtr 2009 as Roel says. In fact, 2009 will be a huge loss just like every other year

As I understand it, it wouldn't be until 2010 that Eclipse turns a profit. It is the second half of 2009 that Eclipse would resume full production.

Dave said...

I'm trying to figure out the economics of how Eclipse will lose $300 million this year, $200 million next year and make a profit a year after that.

I understand Eclipse losing about $1 million per unit prior to the price increase, which I believe that would mean that at their existing production rate the manufacturing cost of the FPJ is equal to or exceeds the retail price of the Mustang. That would explain the $300 million the first year based on fullbore production for 3/4 of the year.

However, for that same reason, I don't understand how Roel ends up with a projected loss of $200 million based on fullbore production for only 1/2 year...is there a point where Eclipse loses more per unit at a certain level above one per day than they lose at only one per day? Is it the costs for building the 2nd factory? The Frankenjet?

It seems very strange building the Russian factory...a complete cash burn that means that Eclipse has to have even more demand than if they just had one factory. If both factories produce 2 per day, that would mean they'd have to have buyers for over 1400 units per year at $2M+ each. It is crazy enough saying there's a sustainable demand for 700 per year, but 1400 units per year is insane.

TBMs_R_Us said...

It is crazy enough saying there's a sustainable demand for 700 per year, but 1400 units per year is insane.

Dave,

To put an exclamation point on that: In 2007 there were a total of 2,675 piston aircraft shipped worldwide (source: GAMA). There were a total of 459 turboprops and 1,138 business jets shipped worldwide (same source). So Eclipse is single handedly going to more than double worldwide production of business jets? Right.

Dave said...

Pervez Musharraf moving to NM?:
http://newmexicomatters.blogs.com/newmexicomatters/did_you_know/
Perhaps he'll buy a FPJ.

Dave said...

Eclipse is objecting to producing documents in the Asher case and Ken Ross has shown up now:

08/18/2008 ENTRY OF APPEARANCE
FILING ENTRY OF APPEARANCE BY DOUGLAS A BAKER FOR KENNETH D
ROSS
08/18/2008 REQUEST FOR HEARING/SETTING
FILING REQUEST FOR HEARING ON OBJECTIONS TO AND MOTION TO
QUASH SUBPOENA FOR PRODUCTION OR INSPECTION (PL)
08/18/2008 OBJECTION/OPPOSITION
FILING OBJECTIONS TO AND MOTION TO QUASH SUBPOENA FOR
PRODUCTION OR INSPECTION
08/01/2008 SUBPOENA RETURNED
FILING SUBPOENA FOR PRODUCTION OR INSPECTION RETURNED
SERVED BRUCE CASTLE ON 08/01/08 (PL)
07/29/2008 CLS: ORD PETITION/MTN GRANTED
FILING ORDER GRANTING PETITION AS TO SUBPOENAS FOR THE
DEPOSITION AND REQUEST FOR PRODUCTION WILL BE ISSUED
FORTHWITH
07/29/2008 CRT: COMPLAINT DISPOSED
07/28/2008 OPN: PETITION
FILING PETITION TO ISSUE SUBPOENA FOR TAKING OF DEPOSITION
WITHIN NEW MEXICO IN AN ACTION PENDING OUTSIDE OF NEW
MEXICO

Dave said...

This is something that should be standard equipment on the FPJ:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/07-11-2007/0004623309&EDATE=
That way the next time you're flying in an FPJ and the engines lock in at full speed, you'll be prepared to administer medical aid to those passengers who get a heart attack. What's not clear to me though is if NAJT will have their co-pilots also be trained paramedics to treat passengers who get freaked out by the FPJ.

AvidPilot said...

Dave,

You nailed it.

When Eclipse talks about building even 500 planes a year, I don't think people fully understand just how absurd this is. The bit about "needing 2 factories" is just as rediculous.

There is NO huge demand for the Eclipse, especially at $2.15 million, otherwise the ones listed on Controller would be moving - and they aren't.

I am amazed that there is anyone left in the aviation world that still takes this company seriously.

Dave said...

I am amazed that there is anyone left in the aviation world that still takes this company seriously.

This might as well be Roel - just replace "houses" with "jets":
http://www.youtube.com/watch?v=sXQqI9xGzvc

Here's a video from a previous job of the head of manufacturing at Eclipse, so you can understand why the FPJ has all sorts of problems:
http://www.youtube.com/watch?v=o7Ixe95CZOE&feature=related

Dave said...

Investors are fleeing Russia right when Roel is trying to convince people that Eclipse needs to build a new plant in Russia:
http://ap.google.com/article/ALeqM5gru1vf4bW6h69Upxv5R9YAd-MwFQD92S4NPG3
I don't expect the Russia situation would explain why Eclipse wouldn't get funding as it is ridiculous building a second plant anywhere, but Roel "we need a second plant" Pieper is making something that was very risky to begin with (Eclipse as it is with one plant) into something not just extremely risky (two plants) but straitjacket crazy (two plants including one in Russia).

I expect there's a whole lot more that we don't know. There must be a very strong reason for Roel wanting a second plant (perhaps that was the terms of the hundreds of millions of dollars he got from the Russian investor in ETIRC) just as there being a very strong reason why Eclipse keeps up the obvious fiction of Eclipse having a 2400+ order book despite it looking completely crazy given DayJet's situation.

WhyTech said...

"the obvious fiction of Eclipse having a 2400+ order book despite it looking completely crazy given DayJet's situation."

You think its fiction and I think its fiction, as do most others who post here. One mandatory piece of due dilligence on the part of a new investor(s) or lender(s)will be scrubbing the order book to determine what is real, possibly real, and outright fabrication. If many of us are wrong and there really are in the neighborhood of 2000-3000 "firm" orders, Eclipse could be successful in raising a substantial new round of financing. If the order book wont stand up to close scrutiny, the chances of a meaningful financing are vanishingly small.

Dave said...

If many of us are wrong and there really are in the neighborhood of 2000-3000 "firm" orders, Eclipse could be successful in raising a substantial new round of financing. If the order book wont stand up to close scrutiny, the chances of a meaningful financing are vanishingly small.

Eclipse has already publicly stated that they're keeping DayJet's 1400 orders on Eclipse's books. I believe both Vern previously and Roel currently have re-affirmed the DayJet order.

By the way, here's DayJet making a fool of the ATXA General Counsel:
http://www.airtaxilaw.com/2008/01/more-insight-on-dayjet.html

baron95 said...

Avidpilot said... The bit about "needing 2 factories" is just as rediculous.


Why? Embraer has only a couple hundred orders for the Phenoms and they are opening a second assembly plant in the US. If it were true that Eclipse had a few hundred firm orders from EU/Russia, it might make sense to open a plant there, particularly if it were heavily subsidized and/or was a condition for sale in Russia (just like china did with Airbus).

Dave said...

Why? Embraer has only a couple hundred orders for the Phenoms and they are opening a second assembly plant in the US. If it were true that Eclipse had a few hundred firm orders from EU/Russia, it might make sense to open a plant there, particularly if it were heavily subsidized and/or was a condition for sale in Russia (just like china did with Airbus).

Baron, yes, in context a 2nd factory for a company might be sound, but also in context a 2nd factory for a business can be very unsound. With the stated volumes of production a second factory makes no sense. Up above I speculated that it might have been a requirement for funding, but that also puts Eclipse in a permanent hole where Eclipse would not be able to be saved with $300 million, $600 million or whatever amount because there isn't a sustainable demand for 1000-1400+ units per year. Eclipse is supposed to make 800 units per year in Russia so even if there were a few hundred firm orders in the region, that wouldn't even cover a year's worth of volume. The only way the Russian plant makes sense is if Eclipse has a sustainable order book greater than 700 units per year or otherwise it means that the Russian plant is making the ABQ plant inefficient and it would have to be such a volume that the Russian employees weren't idle either (the plant is supposed to be a carbon copy of ABQ, not some small plant doing comparatively low volumes)...so figure Eclipse needs a sustainable 1000 units per year in orders to justify having both plants and breaking even.

WhyTech said...

"Embraer has only a couple hundred orders for the Phenoms and they are opening a second assembly plant in the US."

Embraer is opening an ASSEMBLY plant in the largest market for the Phenom - makes lots of sense. Ever consider that with their broad product line, they might wish to free up capacity in other plants for other models? Elcipse, with a single acft model in production, doesnt have this high class issue.

baron95 said...

Wytech said... If many of us are wrong and there really are in the neighborhood of 2000-3000 "firm" orders, Eclipse could be successful in raising a substantial new round of financing.

I just don't see it. 2000 orders at $2.15M is $4.3B in potential revenue. Since they already have 60% progress payments on a few hundred jets and initial deposits on several hundred more, lets say the revenue potential is $4B over 10 years (200 planes/year).

Even if they achieved a Boeing-like profit margin of 7%, that would be $280M in potential profits from the booked orders.

True they can get more ordes during the 10 year period, but they'd only get significantly more revenue during the period if they were able to increase production, which would only make sense if they were getting substantially more than 200 new orders/year to replace the backlog - which I find hard to believe.

So an investor faces the prospect of investing $500M to cover losses for the next two years, only to own a company that will make an average profit of $28M/year over the next 10 years.

So it would be a bad deal to hold on to Eclipse for the dividend income of 6% (28/500).

If we value Eclipse at 15x earnings (generous for aerospace), Elcipse market value for an IPO would be about $400M.

Again, a bad deal float say 80% of Eclipse's shares for $320M from an original investment of $500M - a capital gains loss of $180M.

For it to make sense to invest another $500M into Eclipse, they'd have to reach revenues of over 15x or $7.5B or higher over 10 years.

I just don't see it.

Gulfstream is projecting a $750M investment on the G650 (development, certification, new plant). That is for a plane that will sell for $75M with about a $10M gross margin, so it will break even at 75 airplanes (ignoring cost of money for a second).

Similarly, Cessna reportedly spent $200M (I also heard $250M) on the Mustang. That is for a plane that sells for about $3M with about a $350K margin. So break even should be around 600 planes.

If Eclipse can't get to break even with another $100M or so investment, it would be madness to invest in it.

Remember, things will ONLY GET WORSE for Eclipse.

Mustang production slots will start to open up.

Phenom production slots will start to open up.

D-jet production slots will start to open up.

At least one of PiperJet, CirrusJet, HondaJet is also likely to make it and slots will open up.

By the time Eclise gets its act together in 2010 or beyond, there will also be a vibrant used market for VLJs (typically used market sales tend to approach 4x the sales columes of new planes.

If they can't make it now, with the market pretty much to themselves, they will NEVER make it.

Their window is closing very fast.

baron95 said...

Wytech said ... Elcipse, with a single acft model in production, doesnt have this high class issue.

No disagreements there. I thought some people were making a general statement that it does not make sense to have a second plant with a volume of couple of hundred planes/year.

And Dave, I think we are in the same page. A new $500M investment in Eclipse would only be justifiable if they were either making a rdiculously high num ber of planes/year (like 800+) or they were making a much more expensive plane. For a couple of hundred planes at a couple of million each, the max reasonably justifiable investment is $100M for virtually 100% of the company.

gadfly said...

If you are tempted to take anything seriously about Eclipse . . . 500, 400 . . . whatever . . . put a “Post-a-Note” on your computer monitor that reminds you that the EA500 is 1,200 pounds overweight and Eclipse has not yet produced a single complete aircraft . . . No, Not One!

gadfly

Dave said...

And Dave, I think we are in the same page.

Yes, we are. When I saw your other post that went into a lot of detail, that's basically what I was thinking, but I hadn't even done the other number-crunching you had put in your post.

WhyTech said...

"lets say the revenue potential is $4B over 10 years (200 planes/year)."

The assumption of 10 years to deliver 2000 acft is critical to your conclusions re profitability, financing success, etc. I cant imagine that there would not be an enormous effort to do this in much less than 10 years, say 3-5 years. Allowing this to drag out for 10 yeras introduces all kinds of new risks, especially re competition, market acceptance of a 5-10 year wait for an acft, etc. If they really do have 2000 orders, they wont have them for long with deliveries this far out.

flyger said...

Dave said...

I expect there's a whole lot more that we don't know. There must be a very strong reason for Roel wanting a second plant

Potential plan:

Pieper wants to get Russia into biz jet market. He secures Eclipse distribution rights. Later, he gets equity stake, right to manufacture in Russia, and enlarged territory.

He needs complete aircraft to build, so his goal is to complete the engineering in the US. Production is loosing money, so shut it down for the most part. Pissed off vendors no matter, new ones in Russia anyway.

Now get another investor in Eclipse in the US. Use their money to finish engineering and to setup Russian factory, hence talk of second plant while shutting first one down. Also he needs EASA certification, something that won't help Eclipse one iota right now since they already have enough customers.

Eclipse US fails/folds as we all know it will, but Russian factory, *owned* by ETIRC and thus not part of the Eclipse bankruptcy, has engineering data and right to manufacture, so they can build the plane without having spent a dime on development. US investors screwed.

So the whole plan is to end up with a plant in Russia and let Eclipse fail here in the US after exhausting the investment on development. ETIRC goes on to sell the EA500 in the world, and starts its own product line from that.

If I was an investor, I'd look real careful into what ETIRC owns and what Eclipse owns and see if this pattern exists. Pieper is walking a fine line with potential for conflicts of interest in these deals.

Just a thought...

eclipse_deep_throat said...

Baron95, you are awesome!!

But let's consider that everything Roel says in public is just pure disinformation. What are the numbers like with just ONE factory in Russia making both the EA400 and EA500 at between 1000-1400 units per year? Yes, let us consider that our poor plant in Abq is closed for the 'cheaper' labor in Russia.

I sent Shane a spreadsheet with 2 scenarios for EAC: #1 being a 'typical' retirement of legacy/RnD costs via production. That didn't work. Scenario 2 made sense assuming that each plane would cover only 25% of RnD costs, which I guestimated at $600k per plane.

Essentially, I made several assumptions, giving Roel the benefit of the doubt; say he gets 270 planes delivered by 12-31-08. So with 270 done for 2008, and say a *mandatory* 365 for 2009, you don't start making a profit until a/c 505 (with labor costs @ $180k per day per plane, and materials cost @ $1mil per plane, including cost of scrap materials).

Its still pretty lousy, in my opinion. By the time you get to a/c 635, I only showed a $75k profit per plane. The IPO would need to be at approx $19.79 over 100 million shares to pay all the RnD. Could Wall Street really vaule EAC's earnings based on their public statements of 2400 orders?? Won't EAC have to go thru an eval from the Securities and Exch Commish ...and/or an independent Big 5 accounting audit??!

That may be another big milestone for EAC bankruptcy, when the SEC and external auditors (read: forensic accountants) get a hold of their books!!

E.D.T.

airtaximan said...

Anyone who believes EAC has 2000 orders for their planes, please contact Shane... Shane, please sned me their email addresses...

I can make a lot of money with these folks.

WhyTech said...

" The IPO would need to be at approx $19.79 over 100 million shares to pay all the RnD."

I understand your arithmetic, but it doesnt quite work this way if I understand your logic. The R&D money is gone. An IPO is primarily a way to initially raise capital, and (usually) later to provide liquidity for investors. The valuation at an IPO will be what the market will accept, and may or may not have anything to do with what has been invested to date, but is driven more by what IPO investors think might happen in the future. History shows that valuation in an IPO and the stock performance in a short time following the IPO doesnt follow usual earnings mulitple rules of thumb, and may better be modeled as a multiple of sales. THis is how unprofitable companies go public with enormous multiples. This takes a company with a good story (not necessarily a good company) and a market climate that will support irrational valuations. Not logical but it happens all the time.

Dave said...

History shows that valuation in an IPO and the stock performance in a short time following the IPO doesnt follow usual earnings mulitple rules of thumb, and may better be modeled as a multiple of sales. THis is how unprofitable companies go public with enormous multiples. This takes a company with a good story (not necessarily a good company) and a market climate that will support irrational valuations. Not logical but it happens all the time.

I think for Roel that is the big hook because he is explicitly going for an IPO before the company turns a profit. I think whoever bought into Eclipse for $300 million basing it on the Greater Fool Theory that in a year from now with Eclipse losing $200 million an IPO will find a new set of suckers who believe Eclipse is just this close to being profitable...actually I think it is just a modification of Vern's original plan to cash out with an IPO with a company that wont be ever profitable as it is configured now.

WhyTech said...

"I think for Roel that is the big hook because he is explicitly going for an IPO before the company turns a profit."

In order to do this he will need a brilliant story that can to some degree be supported via due diligence, typically performed by the IPO underwriters. The underwriters, especialliy if they are well regarded, will do a fairly thorough job on this since they will have some liability exposure if found negligent. I doubt that Eclipse will be able to craft a believable story of sufficient strength within the next 2 years or so, and I doubt that the market will be receptive to highly speculative situations in this same time frame. So, with the Eclipse history, which will come out in due diligence, unless the order book is large and clean, an IPO of the kind Vern and Roel may have in mind doesnt seem to be in the cards. I am not saying that an IPO cant be done, but that its not likely to be led by a name underwriter, and with a valuation that will make hearts beat faster.

WhyTech said...

"since they will have some liability exposure if found negligent. "

Furthermore, underwriters typically sell these offerings primarily to their institutional investor clients, who are their repeat customers, not to individual investors (although some shares are typically available to individuals). The underwriters sell shares to these same clients year in and year out, and feel some obligation to offer "quality" investments to these customers. If their clients do not make money on the deals they are offered, at least in aggregate, they wont be buying from the underwriers in the future. This may be the greatest motivation for the underwriters to perform well on due diligence.

baron95 said...

Wytech said.... In order to do this he will need a brilliant story that can to some degree be supported via due diligence, typically performed by the IPO underwriters.

That is right, and brilliant stories are always derived from being in a unique position. Eclipse has LOST ALL ITS PLAUSIBLE CLAIMS OF UNIQUENESS.

They are no longer the lightest jet - that goes to D-jet (soon anyway).

They are no longer the mannufacturer of the lowest cost proposed (and with a reasoble chance to succeed) jet - that is now D-Jet and cirrus.

They can no longer claim most integrated avionices (quite the oposit in fact) - that goes to Mustang, D-Jet, Phenom with the G-1000 suite.

They can no longer claim highest production rate - at 50/year they are way behind. Cessna should be running at 3x that next year, Embraer and Diamond the year after next.

They are no longer feeding the per-seat AirTaxi market - there is no cuch market.

What briiant story can they tell? NOTHING.

Eclipse only leads the VLJ market in two categories:

1 - Never before in the history of light GA have so few, extracted so much money from so many (investors/depositors).

2 - Never before in the history of light GA have so few, burned so much money from so many, to accomplish so little.

I doubt that investors want to hear that brilliance.

Dave said...

That is right, and brilliant stories are always derived from being in a unique position. Eclipse has LOST ALL ITS PLAUSIBLE CLAIMS OF UNIQUENESS.

Eclipse at one time had it, but then screwed it up. All the "dinosaurs" are running circles around Eclipse. Eclipse had the lead at first, but then lost it. Look at how Cessna beat Eclipse with EASA. Whatever problems the Mustang has, the problems are fewer than with the Eclipse and Cessna is much more nimble. Then there's all these other companies providing other niches. Whatever first-mover advantage Eclipse had, it has continued to blow it over and over again. Eclipse after years of taking depositors money still hasn't delivered an aircraft that honors the contract and it has countless millions in IOUs outstanding plus who knows what EASA and others will require. If nobody else in the marketplace had a fully delivered VLJ, Eclipse might be able to make a case, but instead they'd just be seen as underperforming lagards who continually squander opportunities that "dinosaurs" seize.

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