history of Eclipse Aviation

February 2006

In February 2006 the National Aeronautic Association named Eclipse Aviation as the winner of the prestigious Collier Trophy for 2005. Specifically the award was for:

... applying innovations created in the technology industry to drive down cost, increase performance, improve safety, and spur a new type of air travel -- the air taxi.

... the selection committee's criteria included recognition of the rich heritage of the Collier Trophy, and 'the spirit of entrepreneurship, technical innovation, and the impact on American aviation,' exemplified by the Eclipse 500.

The award was controversial, as the NAA states that the prize is awarded "for the greatest achievement in aeronautics or astronautics in America, with respect to improving the performance, efficiency, and safety of air or space vehicles, the value of which has been thoroughly demonstrated by actual use during the preceding year." At the time of the award, prototype EA500s were flying but certification by the FAA was still 9 months away. The aircraft was not fully certified until 30 September 2006 and the first customer aircraft was not delivered until 2007. Critics indicated that the EA500 did not meet the stated criteria, although Eclipse Aircraft defended the award as justified. Richard Aboulafia termed it "a highly suspect award decision that managed to demean all the other worthy recipients and the Collier itself."

September 2006

The Eclipse 500 was FAA certified on 30 September 2006 under the official designation Eclipse Aviation EA500.

January 2007

The first customer EA500 was delivered in early January 2007.

July 2007

On 23 July 2007 at AirVenture in Oshkosh, Wisconsin Eclipse unveiled the already flying prototype of a second company design initially called the Eclipse Concept Jet. The four-seat aircraft was powered by a single Pratt & Whitney Canada PW610F turbofan and was built in secrecy at NASA's Wallops Flight Facility in Virginia by Swift Engineering and Basis.

The ECJ had first flown on 2 July 2007. At the time of its announcement the aircraft was expected to have a cruise speed of 345 kn (639 km/h) at 41,000 ft (12,497 m) with an IFR range of 1,250 nmi (2,315 km). The aircraft was intended to have a 4,800 lb (2,177 kg) gross weight, 2,480 lb (1,125 kg) empty weight, 2,000 lb (907 kg) useful load and a fuel capacity of 1,261 lb (572 kg).

At the time of its announcement the company said that it did not intend to produce the aircraft. Eclipse CEO Vern Raburn said "The Eclipse Jet will allow us to obtain real, quantifiable data that looks at this developing category. While today we have no production plans for the ECJ, we are constantly evaluating markets for future Eclipse products... we are anxious to reveal the potential of this emerging category, and our opportunity to add real value to it."

October 2007

In October 2007 the company furloughed some 100-150 contract workers and employees, about 10% of its workforce.

November 2007

In November 2007 Eclipse subcontractor Hampson Aerospace, which built the tail assembly, including the fin, horizontal stabilizers, rudder and elevators for the Eclipse 500, filed suit against Eclipse alleging that Eclipse had not paid for parts which had been delivered to Eclipse.

At the time Eclipse CEO Vern Raburn said of the issue:

You may have heard that a supplier of ours, Hampson Aerospace, has filed a lawsuit against Eclipse Aviation. Hampson manufactures the Eclipse 500's tail section, including the vertical and horizontal, rudder and elevators. I want to assure you that aircraft production has not stopped, and Hampson remains a supplier. Our number one priority continues to be delivering outstanding aircraft to you. While I cannot go into too much detail on pending litigation, I will say that as in most production situations, occasionally we get into a dispute with a vendor. However, we almost always work the differences out and very few disagreements end up in the public domain as legal action. Prior to Hampson's filing, we sent them a notice outlining a number of recurring quality issues. These concerns have led to a discrepancy on what parts should be paid for, and which should not. Contrary to wishful speculation by our competitors and critics, this issue has absolutely nothing to do with the financial health of Eclipse Aviation. In short, it is about our refusal to accept and pay for sub-standard material. I am very hopeful that we will be able to work through our differences, and that our partnership with Hampson will continue.

The suit was resolved in February 2008 in a confidential agreement.

December 2007

During 2007 Eclipse produced 104 aircraft and proclaimed a record for building its "first 100 airplanes faster than any GA jet aircraft manufacturer in history." CEO Vern Raburn described the accomplishment as "audacious" and added "We're transforming how jets are built, and how people travel. It's an audacious goal, and one that stretches us every day to go beyond what seems possible. Day-to-day setbacks are inevitable, but the reality is that we have created a new aircraft category and are bringing a new breed of jet to market at a rate never before seen in general aviation."

February 2008

In February 2008 the company purchased a 2005 model Cirrus SR20 light single-engined piston aircraft to be used as a company employee flying club aircraft.

April 2008

In April 2008 Eclipse obtained a court order in California ordering Google to provide the IP addresses of 29 anonymous contributors to the Eclipse Aviation Critic NG blog, which is hosted on Google's Blogger service. The blog, run by Shane Price of Dublin, Ireland is a forum for those who are critical of the company and its treatment of employees, customers and suppliers. Eclipse CEO Vern Raburn said that the pursuit of blog contributors was not to suppress criticism, stating: "We're not trying to suppress dissension or criticism. We're just trying to find out where it's coming from." Raburn stated that since Eclipse employees and suppliers are bound by non-disclosure agreements he wanted to ensure that these are not being broken.

Price indicated that some of the identities named in the court subpoena had not posted on the blog and that these names may have come from a previous blog that was critical of Eclipse and was no longer active. The subpoena was opposed by several people in court on the basis that, since they have no connection to the company, the disclosure of their identities would violate their First Amendment rights.

One contributor to the blog, Rich Lucibella, told CharterX Industry Headline News that he found Eclipse's actions "outrageous." Lucibella said: "What Eclipse is attempting to do is just wrong, they want to take advantage of people's rights; I can't stand by and let them do that... Eclipse doesn't have the right to access other people's private information. For example, if three bloggers are or were employed by Eclipse but others aren't, then the rest of the people's privacy rights are violated under the First Amendment. Eclipse hasn't appeared to invoke the rule of reason."

Lucibella retained attorney Norman Malinski and filed a motion in the Superior Court of California to prevent Google from releasing contributors' private information.

May 2008

Despite earlier claims that the company would not produce the aircraft, on 30 May 2008 Eclipse Aviation began taking orders for a production version of the Eclipse Concept Jet, now designated the Eclipse 400. The 400 was at that time priced at $1.35 million and deliveries were expected to begin by the fourth quarter of 2011.

July 2008

Founding President and CEO Vern Raburn resigned as a condition of a financing package by European Technology and Investment Research Center (ETIRC) Aviation, the company that had invested more than US$100 million in Eclipse in 2008. Raburn announced his resignation in an unexpected public event at AirVenture on Monday 28 July 2008. In departing Raburn stated that he believed Eclipse fundamentally changed aviation but he did acknowledge that events did not occur as quickly or as smoothly as he had planned.

Raburn was replaced as CEO by Roel Pieper, the chairman of the board of directors and president of ETIRC. Raburn was initially offered an executive position at ETIRC; he turned it down, thus ending his relationship with Eclipse.

At the time of Raburn's departure, Pieper paid tribute to Raburn saying:

He has built up the company. Now you have to move to a different stage in the business where it's about operations, it's about quality, it's about efficiency. The board, the investors, the note holders, everybody has agreed that this is the moment to do that.

Pieper also said of the company in July 2008:

The entire layout of the factory was built to get to 2.0 [aircraft per day production] without problems. I think the whole goal of getting to 1.7, 1.8 is a reasonable goal. It doesn't say 2 and a half. I don't want to overstress it, but that will give us an opportunity to get to profitability in Q1, March of next year.

August 2008

On August 3, 2008, after Vern Raburn's removal from the company, the new management at Eclipse dropped the non-disclosure legal actions against Google and the bloggers, under terms set by defending attorney Malinski. "If Eclipse ever goes after these 29 bloggers again, Eclipse could face financial penalties in advance of proceedings," Malinski said. He also stated: "Freedom of speech rights includes being able to keep your identity anonymous, to be able to express freedom of speech, to have the freedom to disagree with someone else's opinion without being harassed."

In response to frequent rumors in the summer of the 2008 that the company would close its Albuquerque plant and relocate the operation, Eclipse issued the following statement on 14 August 2008:

Today, Eclipse Aviation confirmed that the executive management team is working diligently to develop a plan to achieve operational excellence. We are evaluating every aspect of the company and we will announce a plan to profitability by the end of the month. Eclipse also confirms it has no intention to move its production facilities outside of the United States in contrast to some current media speculation. Eclipse will not be releasing any further information or conducting interviews surrounding this media alert at this time.

On 19 August 2008 Albany International, an Eclipse supplier, announced that production of the Eclipse would soon be dropping significantly.

On Wednesday 20 August 2008 Hampson Aerospace closed its Grand Prairie production plant, leaving Eclipse without a supplier of tail sections. In late September Hampson revised its webpage to remove details of its relationship with Eclipse.

On 22 August 2008, Eclipse announced that it would be laying off 650 of its workforce of 1800 people (38% of its work force).

Company President and CEO, Roel Pieper, said: "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."

Albuquerque Mayor Martin Chavez reacted to the layoff notice saying: "This is quite serious news from Eclipse that 600 jobs will be lost. The city of Albuquerque and the state of New Mexico intend to work together to try and place those impacted by those decisions. It is our hope that in the near future, Eclipse becomes a community leader once again in Albuquerque." Chavez expressed confidence in the new company management and that the company will be turned around by the end of 2008. Chavez stated: "In the end, if everything goes right, it will lead to even more jobs in Albuquerque. We'll see how it works out." The city previously provided a number of incentives to convince Eclipse to locate in Albuquerque, including $45 million in industrial revenue bonds issued in 2004 and $770,000 in property tax abatements. The city's Economic Development Department said that Eclipse, and not the city, was responsible for the industrial revenue bonds.

New Mexico had invested US$19 million in Eclipse as part of a package to get the company to locate in the state. Governor Bill Richardson indicated on 22 August 2008 that he didn't believe the situation was hopeless, stating: "I've been assured by the president of Eclipse that these jobs will eventually come back... But I am concerned about the viability, in the future, of Eclipse... I will try to help them seek additional funding and investors, but I like their long-term game plan and their short-term game plan."

In late August the company held a meeting for 90 of its suppliers. The meeting was intended to gather support for the company following the removal of Raburn and the layoff of the 650 employees. However by this time the majority of suppliers had already put the company on credit watch for non-payment of invoices and required cash-in-advance payments for all parts to be delivered. Ironically at his departure Raburn had laid the blame for much of the company's failures on its suppliers.

On 29 August 2008 Pratt & Whitney Canada repossessed 24 engines sold to Eclipse, valued at $5,165,744.

In August 2008, in a communication to position holders, the company indicated that development of the Eclipse 400 was on hold.

In August 2008 Eclipse was sued for failing to provide a refund on a cancelled order by its due date of 1 August 2008. Ice Blue Air, of London, had ordered an Eclipse 500 in 2006 and indicated that, due to the price increases, they were entitled to a refund as stipulated in the purchase agreement. The purchase agreement permitted cancellation and a full refund if the aircraft's price was raised. Eclipse disagreed and responded that no refunds would be possible until further financing was in place, anticipated at that time for the end of 2008. Eclipse was the subject of several similar delivery-related lawsuits and as many as 300 customer orders were cancelled and awaiting refunds.

September 2008

On 25 September 2008 Robert Bigler of Cupertino, California filed suit against Eclipse for not returning his deposit of US$182,000. Eclipse filed a motion in response indicating that the "Plaintiff did not comply with the contract requirements for obtaining a refund, and therefore has not yet given the required 'effective notice' under the contract at issue. Plaintiff's claims therefore are premature."

In September and again in October 2008, Eclipse indicated that unless it received "funding in October or November," it would not have the ability to refund customer deposits.

On 19 September 2008, during the 2008 financial crisis, Eclipse's largest customer, DayJet, representing 1430 orders for the Eclipse 500, ceased flying operations for financial reasons and indicated that a return to flying was "unlikely". The company's operations also suffered as a result of Eclipse Aviation's alleged failure to install missing equipment or functionality or repair agreed technical discrepancies in accordance with the terms of DayJet's aircraft purchase contract.

In October 2008, Airport Journals reported more detail on the DayJet order for 1400 aircraft:

On May 2, 2007, for the first time, Traver-Gruen-Kennedy, vice president of strategic operations at DayJet, confirmed to this journalist that in 2002, under the name of Jetson Systems, not DayJet, 1,400 EA-500 orders were placed. During that time, Gruen-Kennedy said that although the colossal order was placed, the company would first operate 300 VLJs within a two-year period. But because the 1,400 orders existed, at least on paper, they were used during a 2005 New Mexico State Investment Council meeting, which prompted the state's private equity program to purchase more than $3 million of Eclipse Series F preferred stock. Since that funding, the state invested much more into Eclipse.

For years, aviation analysts have said they doubted there was any substance behind the 1,400 orders. To this day, Eclipse has refused to make its order book available, for verification of orders and cancellations. With the Eclipse 500's price now reaching $2.5 million, and with the 1,400 orders gone, aerospace analysts are skeptical about the company's likelihood of survival. Eclipse's marketing plan was based on mass production with a VLJ in the $1 million range.

Eclipse Aviation announced in October 2008 that it was acting as "the exclusive broker" and was advertising the entire DayJet fleet of 28 aircraft for sale.

Canadian light aircraft fractional aircraft company OurPlane bid on the entire DayJet fleet of aircraft, offering more than "$500,000 each but less than $1.5 million" each. OurPlane operates a fleet of Cirrus SR22 aircraft and one current Eclipse 500. OurPlane planned to offer its customers one-quarter shares in the Eclipse 500s for less than US$449,000. The sale was never completed and OurPlane went into Chapter 7 liquidation in October 2010 after selling all its customer's "fractional ownership" aircraft.

Eclipse Aviation announced on 23 September 2008 that it planned to establish a factory in Ulyanovsk, Russia to assemble the Eclipse 500. The Russian State Bank Vnesheconombank agreed to finance 100% of the project, providing US$205 million and would be a part-owner of the operation. The Russian State Bank supervisory board is chaired by Russian Prime Minister Vladimir Putin. The Russian-based operation was intended to be jointly operated by the European Technology and Investment Research Center (ETIRC) Aviation, the Russian Federation, the Commonwealth of Independent States and the Republic of Turkey.

October 2008