Going Up!

With three FAA-conforming Eclipse 500 test aircraft in the air and less than a year to certification and first customer deliveries, Eclipse Aviation announced Monday that it's increasing the price of the Eclipse 500 to $1,295,000 for all new orders.

Eclipse is developing the lowest-cost, highest-performance VLJ on the market. To meet its low-cost commitment, Eclipse sets its aircraft price based on projected costs. This contrasts with the traditional aviation practice of pricing based on what the market will bear. Eclipse's pricing philosophy benefits customers by preventing any extra "fat" from being built into the price. While this cost-driven model has been critical to Eclipse's ability to set a new standard for jet price/performance it also requires Eclipse to re-examine its pricing if actual costs change significantly from projections, the company said in a statement to ANN.

Since Eclipse set the aircraft price in January 2003, Eclipse 500 production costs have increased in two key areas, according to the statement: 1) The rising price of energy-based raw materials, with the cost of aluminum alloys alone have gone up 50-75 percent since January 2003; 2) Increased supplier costs triggered by the engine-driven Eclipse 500 design improvements, which impacted more of the aircraft than Eclipse initially anticipated, as well as replacement of under-performing suppliers, which opened up contract negotiations with new suppliers.

W ith this price adjustment, the Eclipse 500 is still priced 70-percent below other entry-level jets now on the market. The company also claims direct operating costs that are half that of those same aircraft. Eclipse told ANN that prices are 40-percent lower than the projected purchase price of any competing VLJ, and direct operating costs that are 30 percent lower.

The new Eclipse 500 price of $1,295,000 is effective immediately. All prices are set in June 2000 economics.

FMI: www.eclipseaviation.com