Friday, November 30, 2007

Eclipse Offers Discount to Customers for Cash Up Front

In a letter to position-holders this week, Eclipse Aviation CEO Vern Raburn asked customers to send money now, and he will in return give them a discount on the final delivery cost when their jet is ready. Raburn said he hopes to raise $30 million in the next few weeks with the offer, which will go to finance operations while the company finalizes a new round of capital raising. The offer would give customers a locked-in base price of $1.25 million in return for an up-front payment by Dec. 14 of $625,000. The deal can save owners up to a half-million dollars on the final cost. Some customers already have shown interest in the program, Eclipse spokesman Andrew Broom told AVweb on Wednesday. "We're not trying to raise all of our money via customers, but we are raising more money and thought we would ask our customers to participate," he said. If not enough customers come forward to raise at least $30 million, then Eclipse will refund the money, he added.

Raburn said the money would "help meet our need for short-term funds while our production capability matures and we put in place additional long-term financing.... The financing we are seeking is relatively small as a percentage of the total capital we have raised to date. We have been successful in the past in our ability to raise capital and believe we will be able to close this financing within 120 days. In the meantime, we are looking to raise funds now so that we can complete our financing in an orderly fashion." Raburn also said acknowledged in the letter that Eclipse has not met demand for pilot training, but three full-motion simulators will be operational by March, which should allow training to catch up with deliveries.

Saturday, November 24, 2007

FAA Confirrms VLJ Commercial Regs

Saying it would like to see new regulations governing commercial very light jet operations in place by 2008, FAA’s Acting Manager of AFS-250 Harlan Sparrow indicated the work is part of the agency’s re-write of its Part 135 rules as recommended by the Aviation Rulemaking Committee in 2003.
Sparrow’s three-year-old division handles Part 135 on-demand services as well as Part 142 training centers. Sparrow hopes to have the proposed rule out of the FAA by January when it will have to undergo scrutiny by the Department of Transportation and the Office of Management and Budget.
The agency is in the process of writing a draft rule allowing Part 23 jets to operate in commuter service under Part 135. Currently, the rules preclude turbojets from being used in scheduled operations unless they operate under Part 121. Sparrow would not say whether these commercial operations would have to meet all requirements of the single-level-of-safety standards imposed in 1997 which dramatically increased the cost of operations and led to the wholesale abandonment of many communities, including those that were not subsidized.
”There are a number of items operators are required to meet in order to operate in commuter service,” he said. “It’s still being decided about the single level of safety [requiring commercial to follow Part 121 regulations] but there will be no degradation of safety.” In addition, Sparrow said that it remains undecided as to whether or not to include jets certificated under Part 25. (A complete analysis on the impact of the single-level-of-safety rule was covered in a five-part series in Regional Aviation News)
The ARC recommendations sought to resolve current issues affecting this part of the industry and enable new aircraft types, size and design and new technologies in air transportation operations. Its recommendations also covered the provision of safety and applicability standards that reflect the current industry, industry trends and emerging technologies and operations, as well as addressed international harmonization and ICAO standards. It could potentially rescind part 125 from 14 Code of Federal Regulations.
Sparrow indicated that small commuter air services are certainly up to operating small jets and the new regulations are simply a part of the agency’s continuing effort to promote growth in aviation. “We are actively working on the rule because of the number of new very light jets on the market,” he said. “Cessna and Eclipse have already been certificated and there are a number in the process of certification. Sparrow was part of the flight standardization board for the Cessna Mustang.
He does not expect VLJs to “flood the skies” but noted that because of new technology and the use of composites and improved engines and avionics systems, they have changed the economics of operating the aircraft. “They allow operations at a lower cost compared to classically built aircraft,” he said. “We anticipate the use of them to provide additional service to the public. That is why we are taking a hard look at allowing them to operate in commuter service under Part 135. Part 25 jets are just not cost effective for some services.”
DOT has been working on new and creative ways to provide small community air service and has pointed to VLJs as a potential solution. Sparrow said that both FAA and DOT are looking for ways to provide opportunities for business to capitalize on new aircraft and “the spinoff would be improved air service to small communities.” However, the GAO and industry analysts doubt VLJs will be used in such service because essential air service points are just too small. However, allowing their use in commercial operations could produce other opportunities. Even so, most doubt their use in filling the void in small community air service.

On-Demand Services
The advent of VLJs and on-demand, air taxi service offer exciting prospects but this technology and business model remains unproven. The concern is that, knowing the DOT would be receptive to creative ways to address community air service, they would apply for subsidies for serving small communities that have been dropped from the national air transportation system in order to bolster their balance sheets as they develop. The government has often been a patron of such emerging services but it would likely come at the expense of such programs as essential air service and would be unlikely to achieve regular community air service.
There is certainly no dearth of proposed air taxi services in the offing including charters and fractional ownership business models that are already well established and growing. Related Story
But many on-demand air taxis, proposed in the last several years have not lasted illustrating how competitive this business is. There are other hurdles to overcome for on-demand services and that is traveler behavior. Michel Merluzeau, principal with the aerospace consultancy G2 Solutions, said in a recent AviationToday.com webinar that travel rules at businesses, including restrictions against top executives flying on the same plane, could preclude their success. The question is whether corporate travel departments change their rules, especially with respect to what they will pay for short-haul travel. To listen to the webinar click here.
Still, the concept is intriguing, especially in the face of a demand for about six million passenger trips per year in a mature air taxi system, according to an independent analysis by the Velocity Group. Velocity’s assessment of U.S. air taxi opportunities included an analysis of demographics and current services levels.
“We developed a ‘you-can’t-get-there-from-here’ index,” said Velocity Partner Gerald Bernstein. “We evaluated the connectivity between all commercial airports 300 to 600 miles from one-another. The greatest number without direct or non-stop service was in the southeast – particularly Georgia and contiguous states. The next [most populous] cluster was a band of states from New York, through Pennsylvania, Ohio, Indiana and Michigan. West of the Mississippi, except for Texas and California, few states have sufficient population centers within close proximity to one another for economic VLJ-type service. The 300-600 mile range exceeds the distance business travelers are willing to drive, is less than a two-hour VLJ flight and it is the range targeted by current developers.
“About 40 million domestic passenger trips a year cost $0.25 to $0.35 per passenger mile for full-fare coach, business class or first class service,” Bernstein continued. “Approximately 13 million trips are made annually on corporate jets and turboprops with costs ranging from $2 per passenger mile to over $30 per passenger mile, depending on aircraft type and passenger loads. Air taxis will provide a new option for $1 to $3 per passenger mile. We anticipate a good market for Very Light Jet sales with market demand by all users to be in the 600-700 aircraft per year range.”
But Velocity, in a separate report, indicated the share of full-fare traffic is constantly diminishing, dropping 11 percent since 1998 to nine percent of major-carrier traffic, further widening the gap between the cost of scheduled service and very light jets. The demand calls for about 2,500 VLJs over the next decade, said Bernstein.
DayJet, which launched its per-seat, on-demand service this month, is focusing its opening volley on the southeast, specifically Florida, promising to bring millions of dollars in new economic activity to Boca Raton, Gainesville, Lakeland, and Pensacola named last year as DayPorts. Tallahassee, which was previously named its first Center of Excellence, is the fifth DayPort. Calling its service the "next major advance in regional business travel," the company, which will operate under Part 135, is seeking partners with regional economic authorities, airports and FBOs that want DayJet as part of their business structure.
“This is a model still to be validated,” said G2’s Merluzeau. “The issue for VLJs is going to be training. The coming avionics, including ADS-B, will be critical components that will take them to the next level in terms of situational awareness. The big question is will they be able to operate safely and ADS-B will be a key enabler for places not equipped with radar capability.” He predicted that more and more avionics systems will be very intuitive and will emphasize anything to do with easing the pilot workload. However, he cautioned that some avionics cost $400,000, an enormous number for a $1.3 million aircraft. Still, to gain the credibility of the rest of the industry and assure high safety levels such avionics may be necessary, if not mandated.
Predicting travel managers will insist on a certain type of aircraft with a good safety record, Merluzeau and Richard Aboulafia, vice president-analysis, The Teal Group, indicated that Embraer and Cessna would have an advantage because of their reputations. Others, however, are unknown quantities which may forestall recommendations from travel managers. “If the Sino Swearingen and Eclipse do succeed, it will be the first in a long time,” concluded Aboulafia. Related Story: Webinar: Coming

Friday, November 23, 2007

TAG, A Giant Among VLJ Programs

November 20, 2007
By Glenn Pew, Contributing Editor

Early next year, TAG Aviation (which has traditionally specialized in management of mid-size to VIP airliner business aircraft), plans to begin pushing its light jet management program as an alternative for customers currently flying anything up to the size of a Cessna Citation CJ3. The company plans next year to formally launch its "VLJ Flying Club" ownership program -- a venture with aviation investor Rolf Ilsley. In the managed VLJ market, TAG hopes its move will place it as an established giant with pre-existing clout amongst a field of start-ups with little track record. "We realized while working on the VLJ fractional program that there is much interest from owners of small jets for a professional management company that can leverage all the benefits of a large organization." ... "We're not a start-up company for a start-up category," TAG light jet program manager Matthew Sheble told Flightglobal.com.

Monday, November 5, 2007

HondaJet Europe

Honda, which plans to begin mass production of the HondaJet in 2010 has announced it plans to start taking European orders for its HondaJet in 2008, according to Nikkei. Current production targets for the jet have jumped to 100 units per year and Honda has applied for EASA certification. Over 100 orders for the jet have been place in the U.S. since Honda began accepting orders in October of 2006. The company expects its engine-over-wing design and GE/Honda engine to allow for a better than 30 percent fuel efficiency increase over competing aircraft. Honda expects its jet program to become profitable sometime in its fourth year of production (circa 2014).

Thursday, November 1, 2007

OurPLANE Delivers First Eclipse 500 VLJ For Fractional Use

Thu, 01 Nov '07
"Let The VLJ Revolution Begin!"

Light aircraft fractional ownership company OurPLANE recently delivered the first Eclipse 500 very light to operate under Part 91 fractional ownership.

OurPLANE delivered its first Eclipse 500, S/N 66, to SheltAir at Jacksonville, FL for a corporate customer -- launching the company's new nationwide fractional VLJ aircraft service.

The company says the Eclipse complements its current, piston offerings. OurPLANE started operations in 1998 with new Cirrus and Cessna aircraft.

"OurPLANE pioneered fractional light aircraft eight years ago and today, this historic day for OurPLANE, we again solidify our leadership with the launch of the OurPLANE fractional Eclipse 500 VLJ," said company president and CEO Graham Casson. "Let the VLJ revolution begin!"

OurPLANE has a fleet order of Eclipse 500s worth $40 million... and plans to add additional VLJs to give their customers additional freedom to choose the right aircraft for their needs.

"OurPLANE customers are pilots and non pilots, executives and businesses... everyone looking for their own, new aircraft at a fraction of the cost. Our business model is low cost with great customer service so that business travelers can avoid the hell of commercial travel," Casson added.

The company says the Eclipse is geared towards executives of small- to- medium-sized businesses, who may now own a fraction of their own private jet for as little as $759 per hour... less than the cost to charter an aircraft, or flying commercially (nevermind owning their own large corporate jet.)

"OurPLANE customers can own their own private Eclipse 500 share for as little as $521,000 with fixed costs of $3,999 for 150 hours of annual flying time," Casson added.

"We are excited to start delivering OurPLANE's fleet of Eclipse 500 very light jets," said Eclipse Aviation CEO Vern Raburn. "The fractional aircraft market provides a valuable opportunity for more people to experience and own an Eclipse 500."

OurPLANE offers a nationwide network of factory new aircraft at several locations. In addition to Jacksonville, the company also has operations in Los Angeles, San Francisco, Houston, Dallas, Salt Lake City, St. Paul, Orlando, White Plains, and Toronto.

Eclipse Will Monitor Performance Database on Jets

Eclipse has received FAA approval of its Flight Operational Quality Assurance (FOQA) program, the company said on Wednesday. The system is similar to those used by airlines, in which onboard software records the aircraft performance data, and it is then downloaded into a central database for analysis. "FOQA is a perfect addition to our progressive safety management system, which gives us the tools to proactively ensure the highest level of safety across all Eclipse 500 operations," said Vern Raburn, president and CEO of Eclipse Aviation. The information gathered by the system is used to identify, assess and correct high-risk operating conditions before they cause an accident, according to Eclipse's news release.

Instead of waiting for hazards to be identified through accidents, Eclipse says its system will identify risks so they can be managed in advance of an incident or accident. FOQA is central to this process, allowing Eclipse to understand what is actually happening with the Eclipse 500 fleet in the field. More about FOQA can be found at the FAA's web site.

Friday, October 26, 2007

Eclipse 500 Breaks VLJ Speed Record Using Far Less Fuel

Eclipse Aviation’s very light jet beat the current NAA speed record by 20 percent while burning 25 percent less fuel.

ALBUQUERQUE, NM . — Eclipse Aviation, manufacturer of the world’s first very light jet (VLJ), today announced that it has set a National Aeronautic Association (NAA) performance record that distinguishes the Eclipse 500 as the industry’s fastest jet aircraft weighing 10,000 pounds or less. This milestone was achieved in early October when the Eclipse 500 set a new U.S. national speed record in the NAA record category of Class C, Aeroplanes, Very Light Jets.

The Eclipse 500 beat the existing NAA record on October 7, 2007 on a flight from New York (Westchester) to Atlanta (Peachtree-Dekalb), with a new record time of one hour, 55 minutes, and eight seconds (1:55:08), averaging 393.32 miles per hour (341.79 knots). The previous record holder, a Cessna Citation Mustang set the record on September 22, 2007, flying the same route in two hours, 23 minutes, and 44 seconds (2:23:44), averaging 318.87 miles per hour (277.09 knots). The NAA requires the record to be broken by at least one percent to qualify. The Eclipse 500, flown by Don Taylor, Senior Fellow at Eclipse Aviation, exceeded the previous record time by 20 percent, while using approximately 25 percent less fuel. Using actual aircraft data as well as data obtained from the Citation Mustang’s flight planning guide, the Mustang used 1,330 lb (198.5 gal) cruising at FL400 while the Eclipse 500 used 987 lb (147 gal) cruising at FL320.

"Upon reviewing the previous record, I was extremely confident that the Eclipse 500 could defeat the speed, but more importantly, we could use significantly less fuel while going faster. So two weeks later we flew the same route with the Eclipse 500 using at least 50 gallons less fuel than the Mustang and beating the time by about 27 minutes" said Vern Raburn, president and CEO of Eclipse Aviation. "With oil prices climbing, we are proud to offer the Eclipse 500 as the most efficient VLJ to move travelers from Point A to Point B on a quick, affordable and convenient basis"

The NAA announced a new record class exclusively for VLJs in the summer of 2007. A VLJ is defined as a jet-powered airplane with a maximum gross takeoff weight of 10,000 pounds or less, holding a standard airworthiness certificate, and capable of carrying four or more passengers. Each year NAA tracks dozens of new world and national aviation record attempts from numerous companies, certifying new records as the official record keeper for United States aviation and ratifying them with the Federation Aeronautique Internationale (FAI), the world air sports federation.

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