Struggling VLJ-Maker Bows Out Of Last Major Trade Event Of '08

As portents of the future go... this is a particularly ominous one from Eclipse Aviation. Aero-News has confirmed the struggling VLJ manufacturer has pulled its planned booth and static display from this week's AOPA Expo in San Jose, a sign the Albuquerque, NM-based company is circling the wagons as it continues to search for badly needed investment funding.

Representatives with Eclipse would not go on record to ANN about the reason behind the decision... but at this stage, it's not irresponsible to assume the company is having difficulties in securing the new round of financing originally bandied by Eclipse Chairman and Acting CEO Roel Pieper at AirVenture 2008, in his remarks following the very public ouster of Eclipse founder Vern Raburn from the company.

If that assumption is correct -- and, due to the company's possum-like stance with the media since Pieper took control of Eclipse, the company has provided little reason or information to dispute the assumption -- Eclipse is the latest struggling planemaker to have trouble in securing new capital in today's gloomy investment markets.

Last week alone saw new clouds on the horizons for two on-the-bubble VLJ manufacturers. As ANN reported, AAI Acquisition -- which purchased the assets of the former Adam Aircraft out of Chapter 7 liquidation earlier this year and, like Eclipse, is backed by Russian capital -- announced layoffs for most of its workforce due to difficulties in securing new funding... casting new doubt on whether the stillborn A700 will ever come to market.

Additionally, Grob Aerospace -- which took pains to note it filed only "preliminary" insolvency in August -- fell into the pit with both feet last week, announcing it would file full insolvency while also letting go much of its staff.

Despite the lack of information coming from the company, Eclipse's current woes are well-known within the aviation community. In August, Eclipse slashed its production rates, and let go somewhere between 650 and 900 workers. The company asserted those decisions were part of Pieper's "operational excellence strategy." Prior to that move, Eclipse had finally neared its vaunted one-plane-per-day production goal for its Eclipse 500... though each aircraft delivered at that rate was also a money-loser, selling far below the current $2.15 million pricetag.

Those layoffs came just before a hearing before the House Transportation and Infrastructure Committee, questioning the FAA's certification of the Eclipse 500 in light of its problematic service record to date. Adding to Eclipse's difficulties was the September 19 shutdown of Florida-based air taxi operator DayJet, Eclipse's largest customer. At one time, DayJet had roughly 1,400 orders against Eclipse's purported 2,600-strong order book. 

Last week, aerospace analysis company Forecast International predicted Eclipse's probable downfall sometime next year, joining storied Teal Group analyst Richard Aboulafia in openly stating Eclipse Aviation is likely not long for this world.

Having said that, Eclipse has a long record of defying the odds, and thumbing its nose at the predictions of naysayers... though one must wonder how many miracles Eclipse has left, particularly without Raburn at the helm.

FMI: www.aopa.org/expo, www.eclipseaviation.com