VLJ'S and their problems (financially)


#1

Many vlj’s companies are struggling or are dead.

First, the fallen companies.

List of fallen VLJ companies planes
Safire Jet
Adam A700
Vantage Jet
Avocet Projet
Century Jet
Javelin Jet
Grob Aerospace Jet
aero-news.net/index.cfm?Cont … 19e98f000&

I see these companies also failing
Epic
Spectrum
Excel-jet
TamJet
Jetpod
Stratos 714

I see these companies making it
Cirrus: Vision SJ50
Diamond: Diamond D-jet
Cessna: Mustang
Honda: Jet
Piper: Jet
Embraer: its vlj line

Maybe
Eclipse: two planes (maybe?)

Also, Eclipse is reducing production of the jet, has many refunds (which last time I heard were not returned), and is dealing with the certification of another jet.
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Now maybe we can blame all these faliures and eminent faliures on the rigors of certification, the lack of funding, the jumble of too many companies, the lack of experience or the unrealistic plans set forth by companies. But clearly, business’s are failing.

Thoughts?


#2

Too many people who scrape up just enough to build the damn thing and don’t think about how to separate the thing from the rest of the competition… Some privileges should be left to the rich… that way you know quality is there… if one of these companies have to bring the price up 700k to improve it… chances are they wont, lest they fail to get orders. On the other hand, if, say, the G650 went up a mill and a half for improvement, who cares, were dealing with rich people and large companies… it all looks the same within 5 mil :stuck_out_tongue:


#3

Add to that list the fact that most insurance companies are still on the fence about whether or not to permit VLJs to be flown single-pilot by owner/operators. While VLJs were designed with single-pilot operations in mind, many insurance underwriters are still requiring a 2-person crew for these aircraft under Part 91 operations. So an owner/operator who wants to step up to a VLJ from a single-engine turboprop like a TBM700 or a Meridian may be disappointed to learn that they can’t without hiring another pilot.


#4

Garp, from the insurance angle, you can’t step up to a TBM700 or a Meridian withough hiring another pilot.


#5

I am still amazed at the welcoming of these jets. A turboprop will get you there the same time or faster, with more range, and more baggage capacity. Maybe it is the stigma of the jets but I am sure the TBM guys are kicking themselves thinking “How come we can’t get that many orders.” Even the cost advantage of the VLJ’s (purchase price) doesn’t seem to be there with Eclipse raising their price, and most companies selling their jets for 2 million +.


#6

There was a great article in Flying a month or two ago. A doctor had a MU-2 for 10-15 years. While waiting for his Eclipse through all the delays he realized his MU-2 had the comfort, range and economy he needed where the Eclipse lacked in those areas. Sold his Eclipse position and put the state sales tax savings into his panel and interior.


#7

Not sure I’m following you here, wazzu90. Plenty of single-engine turboprops are operated single-pilot under Part 91. The insurance premiums are about twice as expensive as those for crew-flown aircraft, but it’s still possible to get coverage.


#8

I loved your comments nano. I picked the ones that succeded because of experience, and the capital they had on hand.

I think wazzu may mean that many turboprops have the same insurance to similar insurance costs as vlj’s.


#9

Keep getting debug mode trying to reply with quote. :imp:

In addition to higher premiums, insurance may require something like 50 hours dual after the company training program.


#10

Ah, okay…gotcha.


#11

From Flying e-newsletter:

Eclipse Addresses Layoffs and Refund Strategy
Eclipse says it will pay back deposits with interest, and the 190 temporary employees let go last week were part of the production rampup, and such workforce reductions are “not uncommon.” Since announcing a new round of initial financing at EAA AirVenture last month, the new management at Eclipse has been in cash-conservancy mode. It has since been revealed that the full amount of the financing arrangement will not be available until year end. With an unnamed number of position holders seeking refunds after the most recent price increase, some of the customers had begun to express concern over receiving their refunds, especially when they heard that new funding had been secured (with the removal of founder Vern Raburn as a contingency). As part of its effort to husband its cash, new Eclipse management has held off on supplying refunds, but last week announced it planned to pay back customers, with interest, when the next round of financing is received.


#12

I was reading in some article at Airventure that the 400 project wasn’t even a for sure. It seems almost like a catch-22. To certify another plane could kill the company (and doesn’t seem logical when they are struggling financially), but not having those extra orders (and giving the single engine market to Cirrus and Diamond) from the 400, could also kill the company.


#13

They’re as good as dead anyway, the 400 is just a ploy to bring in some extra investment cash until the inevitable.


#14

One thing that I find funny is that whoever gave the extra money required that Raburn step down in order for Eclipse secure extra capital.

I was just thinking about the turn dial throttle for the Eclipse 400. If they build this plane, and if they move away from a traditional throttle, that new thing seems like a disaster waiting to happen. I mean, what if that light that shows the amount of power fails, or what if you twist it too far; what if it jams?

see picture: i153.photobucket.com/albums/s233 … /blog6.jpg


#15

Turn dial throttle? Jayzus! Too much futuristic movies…


#16

Don’t understand all the fuss, that’s standard equipment on all our Starships!

We are not amused…

http://upload.wikimedia.org/wikipedia/en/6/6d/JeanLucPicard.jpg


#17

News from Albuquerque (ann news): Eclipse lays off 650 workers.

Confirming numerous reports that have surfaced from suppliers in recent days, on Friday Eclipse Aviation announced it will cut back production of the Eclipse 500 very-light jet, cutting about 650 jobs at the planemaker’s facilities nationwide.

Eclipse says the workforce reduction is the result of an “operational excellence strategy,” introduced by Acting CEO Roel Pieper at AirVenture in Oshkosh last month. The cuts amount to a 38 percent reduction in the company’s total employment ranks, and includes temporary workers and people employed less than six months.

“The reduction is an effort to achieve financial stability as soon as possible,” the company said in a brief statement.

Eclipse is laying off approximately 650 employees affecting all departments and facilities, including its production facilities in Albuquerque, NM; and service centers in Gainesville, FL; and Albany, NY.

“In my effort to take Eclipse Aviation to the next level of growth and sustainability, I am 100 percent focused on operational excellence and a plan to achieve it,” said Pieper. “Financial stability is critical for this company and unfortunately, a reduction in workforce was necessary to achieve it. I am confident this action will set the company on the path to profitability so that we can continue to lead the very light jet category.”

A direct result of the job cuts will be a slowdown in the production of Eclipse 500s through 2008, though the company did not give exact numbers on how production levels will be affected. The company adds it intends to increase production back to previous levels, “and higher,” in 2009.

Continuing its newfound hardline with the media, Eclipse pointedly added it will not release any further information, or conduct any interviews, at this time


#18

Another interesting article from Eclipse.

aero-news.net/index.cfm?Cont … 3c32b7906&

Looks like they are pressed for money.