Mon, May 09, 2005
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.
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