And the winner is?

Wouldn't we all like to know the answer to that question! Clearly there are those amongst us who think that any such 'winner' is really a short to medium term loser, but for owners, suppliers and whatever limited number of staff get rehired, right now they need SOMEONE to step up to the plate. The trouble is, almost three whole weeks after the Chapter 7 ruling, nobody actually has. I therefore feel compelled to ask the obvious question.

Why?

It's interesting that a company which raised (and spent) a BILLION dollars before earning a cent, and then blew another billion (or more) in a few years of 'producing' the FPJ cannot now find a willing buyer. Clearly there are offers, but the value being placed on the assets (in the $10 million range) is below what the 'senior note holders' feel they'd get in a simple break up of the the facilities. This means they think that the existing owners are prepared to pay significant sums for maintenance, upgrades and repairs in the future OR that the tools, facilities and odds and ends will sell at a 'court steps' auction for more than what they've been offered for the entire thing.

Here we get to one of the key difficulties any prospect buyer of the entire faces. There are several conflicting sets of interests that need, somehow, to be reconciled for a 'Version 2' company to have half a chance. Existing owners want cheap (by jet standards) upgrades, maintenance and repair in 'local' facilities. Suppliers want some payback for the pain they've been through with EAC and (at a minimum) a premium price for the parts they hold currently. The various other creditors (landlords, government and state institutions etc) will need a plausible business plan showing a something back on a) what's owed already and b) a return on the money they will have to forgo while Version 2 gets up and running.

And then there is the FAA and EASA. The Production Certificate has lapsed and will clearly have to be re applied for. In the meantime there will be considerable cost in doing any upgrade work (aeromods, FIKI, AvioNG 1.5 etc) or getting the aircraft on sale outside North America. Training, both for Type Rating and recurring (to keep insurers happy) is a big question mark. The simulators were excluded from the original Chapter 11 proceedings, as the supplier proved to the Court they had not been paid for in the first place. I'm not even sure if they remain in ABQ...

These are significant hurdles for any purchaser but there is another, much more serious one which any attempt to restart will have to overcome.

Staff.

I'm aware that most of the original 'executive team' have aligned themselves with one or the other of the prospective bidders, but these people were part of the problem and are unlikely to prove adept at providing a solution. All they really offer is knowledge of the 'grunts' who actually did the real work. The A&P's who wielded tools to keep the birds flying, the software 'propellor heads' (a term of endearment between programmers, btw) that provide the glue between the various bits of Avio. The line works who are needed to finish the 28 or so unfinished hulls that represent the easiest way to generate revenue for Version 2. Even the sales and marketing people who did the deals and know who's most committed to this bird. Where are they now, and will they come back to ABQ?

I don't know the answers to these questions. I can make an informed guess about critical staff who've taken other work, many of whom were lured to ABQ in the first place by the higher benefits (stock options, pay etc) and are now very skeptical of this whole program. The good guys will have found work with the 'branded' companies and will probably keep their heads down for a while, for sure.

So now we move to consider the owners and depositors. I'm sad to say that I detect signs of a civil war between factions which have supported one or the other of the prospective purchasers. I'm sure that a contributing cause was the re emergence of people like Roel Peiper and Mike McConnell, whom many hold directly responsible for the demise of EAC in the first place. It's also clear that anyone who mentions realistic service and support costs gets dismissed by some of the owners, who are still holding onto their dream of an inexpensive twin jet. Sadly, it's abundantly clear to the entire world that there's no such thing. Depositors, who represent the best short term hope for new sales have been ignored by everyone, and that seems plain stupid to me.

But what would I know? I'm only a verbose Irish businessman, who saw EAC as a scam and said so. Not many believed me when I did, but few would argue with me now. And that's another, possibly fatal, anchor which attempts to revive this company faces. The name 'Eclipse' is now associated with the smell of something rotten, which will persist for a considerable time and require plenty of hard work and more than a share of good luck to negate.

Enough with the negative vibes, I have some good news for you all. The blooming month of April approaches when I'm sure you will see 'interesting' headline posts, from some of our favorite contributors. Prepare to be surprised, amused and possibly even informed. Consider yourselves warned!

Shane