The history of Eclipse Aviation is the story of the largest financial failure in the history of general aviation, one that experts have predicted will leave a lasting impact on the aerospace industry.
It runs from the company's startup in 1998 to the design and testing of the Eclipse 500 very light jet (VLJ) through 2006, to the production of 260 examples from 2006–2008, development of the Eclipse 400 single-engined jet from 2007–2008, the most deliveries of a VLJ in a single year to date with over 150 Eclipse 500s sold in the first three quarters of 2008, and ultimately to the company's downfall in the latter part of 2008 and dissolution in bankruptcy in 2009, referred to by many in the media at the time as the "billion-dollar debacle". The story also involves shorter-lived ventures following its 2009 bankruptcy, as well as the introduction of the Eclipse 550 VLJ in 2014.
Significance
Aviation analysts are still tallying the impact that the company will have on 21st Century aviation.
J. Mac McClellan, Editor in Chief of Flying Magazine, in February 2009 summarized the significance of Eclipse:
Richard Aboulafia, Vice President, Analysis, Teal Group in his consultant's report on Eclipse of October 2008 said:
AVweb Editor-in-Chief Russ Niles stated:
The failure of Eclipse has even changed the language of aviation. By late 2009 the term Very Light Jet had become so tainted by Eclipse's "billion-dollar debacle" who trumpeted that term widely, that most manufacturers were avoiding use of the term to describe their products. The NBAA's Brian Foley explained "The term VLJ was at times tainted by ... unrealistic expectations and even failure. The industry would do well to drop hyped words in order to improve credibility with users." Cessna never used the term to describe its Mustang, Embraer labels its Phenom 100 an "entry-level jet" and Stratos has described its jet as "not a VLJ ... but a very light personal jet." In December 2010 AVweb's Paul Bertorelli added, "personal jet is the description du jour. You don't hear the term VLJ—very light jet--much anymore and some people in the industry tell me they think it's because that term was too tightly coupled to Eclipse, a failure that the remaining players want to, understandably, distance themselves from."
Timeline 1998–2002 Eclipse Aviation Corporation was founded in 1998 by Microsoft employee #18 Vern Raburn. Due to Raburn's relationship with Microsoft, Bill Gates became a major stakeholder early in the Eclipse project. Raburn and his team initially based the company in Scottsdale, Arizona, formed a board of directors in 1999 and started design work on the first aircraft. Due to investments made by the State of New Mexico and incentives and concessions from the City of Albuquerque, the company decided to set up its production facilities in Albuquerque, and also moved its headquarters there in 2000.
In addition to its factory in Albuquerque, Eclipse established three service centers, at Albuquerque, at Gainesville Regional Airport in Florida, and at Albany International Airport in New York.
Preliminary design work on the Eclipse 500 was completed in 2000. The design was finalized in 2001 and construction of the first prototype commenced that year. The prototype first flew on 26 August 2002, powered by two Williams International EJ22 turbofans.
November 2002 The Eclipse 500 had been designed around the Williams International EJ22 turbofan engine and the aircraft's selling price and operating economics hinged on the use of that engine. The prototype Eclipse 500 only flew once with the EJ22s installed. Eclipse CEO Vern Raburn said that the engines never delivered the rated thrust and that the problems were not just developmental in nature. Williams International responded by stating that the engines met all the contractual obligations and that Eclipse simply demanded more thrust than the engine was capable of providing.
December 2004 As a replacement powerplant Eclipse selected the Pratt & Whitney Canada PW610F-A turbofan. This change required significant airframe redesign and introduced integration challenges. The prototype equipped with the PW610F engines first flew on 31 December 2004. The engine change caused a thirty-month delay in the Eclipse program and the forecast first customer deliveries.
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:
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 at with an IFR range of . The aircraft was intended to have a gross weight, empty weight, useful load and a fuel capacity of .
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:
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.Walrath, Mary F.: Order (A) Authorizing The Debtors to Sell Substantially All Of Their Assets Free and Clear etc. United States Bankruptcy Court for the District of Delaware, 23 January 2009, Case Number 08-13031 (MFW)
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:
Pieper also said of the company in July 2008:
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."