“Don’t play games that you don’t understand, even if you see lots of other people making money from them. ”
Editor's Desk: Will gain follow pain at Eclipse?
Eclipse Aviation is going through painful times. In March, the builder of the $1.6 million Eclipse 500 very light jet announced it had to change avionics suppliers. Separately, Eclipse Aviation and United Airlines "mutually agreed to terminate their pilot training program," according to the manager of training development for United's flight training division. Earlier in its development program, Eclipse switched its engine supplier. Though it loudly trumpeted the 500's receipt of provisional FAA certification last July, the company has so far delivered only one airplane and with the change in avionics, subsequent deliveries will be further delayed. Understandably, customers are not happy that the Eclipse "VLJ revolution" is in a holding pattern.
This situation reminds me of the bodybuilding motto, "no pain, no gain," which has been around long enough to become a cliché, the title of a 2005 movie and, about 10 years ago, the inspiration for the National Business Aviation Association's slogan, "no plane, no gain." The premise of the exercise motto is that a muscle has to be damaged slightly-thus the pain-so that it can repair itself to become stronger-providing the gain.
The point of NBAA's motto was that companies that don't use business aviation don't do as well financially as companies that do use it. To counter the prevailing viewpoint that companies become wealthy first and then begin using business aviation, NBAA commissioned Arthur Anderson & Co. to do a research study to prove the opposite premise, which it did. After Anderson was convicted of obstruction of justice in 2002 for shredding documents related to its Enron audit and surrendered to the SEC its licenses to practice, NBAA quietly stopped using the "no plane, no gain" slogan. This may be just a coincidence, but I digress.
Eclipse is down, but certainly not out, at least not yet, anyway. While I still believe that Vern Raburn, Eclipse's founder and CEO, will succeed, I hope he's learning from his problems.
When Raburn first pitched the Eclipse to the industry in early 2000, he said he'd bring a $775,000 twinjet to the market within three years (building 110 aircraft in 2003). At the same time, he wasn't shy about pointing out how badly he believed the established airplane manufacturers were mired in tradition and inefficiency. He would turn the industry on its head, he said, with innovative, high-tech, Silicon Valley thinking. Mind you, this was before the spectacular two-year dot-com meltdown. While the naysayers scoffed, Raburn figuratively thumbed his nose at them by raising huge amounts of investment capital and taking in an unprecedented number of orders for an unproven airplane. Now he's hurting and eating crow.
Aviation history is littered with failed aircraft programs and companies. To date, the only start-up company besides Eclipse to bring a business jet to full certification since Bill Lear did it with the original Lear Jet 23 in 1964 is Sino Swearingen, and it's hanging on by its fingernails. Neither start-up has yet to bring its aircraft into full production. Of course, it's not just the start-ups that feel the pain of aircraft development and certification problems. Even the established OEMs stub their toes, or worse, sometimes-even the certification machine that is Cessna (see New Jet Preview, page 16).
One hopes Raburn gains knowledge and strength-and maybe some humility-from his pain and that he, his company, his customers, his investors and his plane will eventually reap the gain.