History of Eclipse Aviation - Significance

Significance

Aviation analysts are still tallying the impact that the company will have on 21st Century aviation.

J. Mac McClellan, Editor in Chief of Flying Magazine, in February 2009 summarized the significance of Eclipse:

... investors, suppliers, Eclipse 500 owners and order holders lost well over $1 billion. There has never been a financial failure of this scale in the entire history of general aviation. Eclipse investors have lost hundreds of millions, but individuals are also big losers. Anybody who had a deposit for an airplane lost the money. And anybody who took delivery of the 260 or so airplanes to leave the factory has lost all warranties and the promises to modify the airplane to a final and usable status ...The Eclipse episode is the biggest disaster in memory for GA because it took more than a billion dollars that could have been used to create new and viable airplanes and wasted it. And the trauma will linger for years as investors, rightly terrified by the Eclipse disaster, refuse to put money into new airplane programs that can really work.

Richard Aboulafia, Vice President, Analysis, Teal Group in his consultant's report on Eclipse of October 2008 said:

The Eclipse program was designed from the outset to be revolutionary and unique. In Teal Group’s estimation, the people behind Eclipse have attained this objective. This program is the single worst aviation program Teal Group has ever covered.

It isn’t the aircraft itself. Rather, it was a business plan that makes no sense, except to attract investors who don’t know much about the aviation business. The plan called for 1,000 deliveries per year. As a reference point, in 2007 the world’s manufacturers delivered a total of about 4,000 turbine-powered aircraft of all types and models. This one company, an unknown start-up, proposed to grow that global figure by 25%, admitting that it couldn’t survive if it merely built 450 planes per year (100 aircraft more than any other turbine-powered aircraft model).

The formula was remarkably simple. A completely unrealistic production rate was predicated on an unrealistically low price (less than $800,000, at first). That impossibly low price was predicated on the unrealistically high production numbers. This formula (promoted as a revolutionary paradigm) worked, as long as people gave Eclipse money. As soon as they stopped (which has been happening for the past 12 months), reality caught up to Eclipse ...

AVweb Editor-in-Chief Russ Niles stated:

Raburn and then Roel Pieper, who toppled him in a palace coup worthy of the finest Flashman novel, have spent the last six years explaining, apologizing, maneuvering and, ultimately, cutting and running on buyers, investors and employees who believed an impossible dream.

The failure of Eclipse has even changed the language of aviation. By late 2009 the term Very Light Jet had become so tainted by Eclipse's "billion-dollar debacle" who trumpeted that term widely, that most manufacturers were avoiding use of the term to describe their products. The NBAA's Brian Foley explained "The term VLJ was at times tainted by ... unrealistic expectations and even failure. The industry would do well to drop hyped words in order to improve credibility with users." Cessna never used the term to describe its Mustang, Embraer labels its Phenom 100 an "entry-level jet" and Stratos has described its jet as "not a VLJ ... but a very light personal jet." In December 2010 AVweb's Paul Bertorelli added, "personal jet is the description du jour. You don't hear the term VLJ—very light jet--much anymore and some people in the industry tell me they think it's because that term was too tightly coupled to Eclipse, a failure that the remaining players want to, understandably, distance themselves from."