Tuesday, April 21, 2009
They’re Here, Now What?
|Eclipse. Cessna. Embraer. Three different companies with three different certified very light jets (VLJs). The latter, with its newly certified Phenom 100, currently holds the crown as the biggest, fastest and most expensive of the certified VLJs to date. Cessna’s Mustang holds the distinguished position of the tried and tested “sure thing” built by a company that understands owner-pilots better than anyone. |
As the company gets a financial and operational makeover through the bankruptcy process, one thing’s for sure: You’ll likely never see another new Eclipse 500 sold from the factory. If anyone does restart production, let’s assume for argument’s sake that the price for a factory-new Eclipse 500 will be $2.5 million (up from the original $837,500 price). The $2.5 million price tag isn’t a world of difference from the roughly $2.9 million it costs to buy a 2009 Mustang, a significantly bigger aircraft with more capable systems and a publicly traded company behind it. The market for a $2.5 million Eclipse 500 is going to be limited with the current alternatives.
Herein lies one of the greatest future challenges for Eclipse Aviation’s new owners. For Eclipse to survive, even after restructuring, it will have to make a profit on every plane it sells. Eclipse will also have to design, test and certify a follow-on product quickly, or it will lose its repeat customers to Cessna or Embraer as they outgrow their Eclipse 500s. The company also must make every effort to make good by the current owners and depositors who were financially and emotionally damaged by Eclipse’s bankruptcy. If Eclipse doesn’t launch a massive goodwill effort on its customer base, it will have a difficult time selling any new aircraft in the future.
Where does that leave Eclipse? It’s possible that the company may become the next Mitsubishi. In 1983, Mitsubishi halted production of its twin-engine MU-2, the sporty, relatively inexpensive turboprop with a poor safety record. Though the Eclipse 500 has had a very good safety record, the aircraft’s reputation has been tarnished by the company’s missteps. Today, several hundred MU-2s still fly, well supported by the company that stood up to support MU-2 owners, but there will probably never be a new MU-2 built ever again.
Cyrus Sigari is the president of jetAVIVA, a light-jet sales, factory acceptance and training firm based in Los Angeles. An ATP-rated pilot with multiple type ratings, Cyrus holds a degree in aerospace engineering from Purdue University. Visit www.jetaviva.com
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