Things do not look good at Eclipse Aviation, which makes the innovative Eclipse 500 very light jet. Eclipse said today that it was "unable to meet its payroll obligations" that were due yesterday. Eclipse said there have been no layoffs and that the company is working on a "long term financial solution" to keep operating.
Employees will be paid next week, Eclipse said. The company is based in Albuquerque.
The respected aviation analysis company Forecast International said it will soon issue a new report predicting the end of production for the Eclipse 500 line. Forecast International said it believes that Eclpise Aviation "will not attract new investment necessary to allow it to continue making the aircraft beyond the first quarter of 2009."
Forecast International analyst Douglas Royce said that Exlipse is making the planes "at a low rate as it seeks to preserve cash" and predicts that total production of the jets will be 162 for this year.
Eclipse aggressively marketed its little jet, but the main customer, the air taxi service DayJet, ceased operations in late summer, a victim of the credit crunch. DayJet had 28 Eclipse 500s in its fleet, and about 1,400 more on order.
Forecast International said part of Eclipse's current dilemma is that the manufacturer accepted a large number of orders for the plane at a unit price of $1.5 million. The price rose to $2.15 million in May, but Eclipse still "is required to deliver aircraft at the earlier, lower price."
"Every aircraft delivered under the old price is delivered at a loss," Forecast said, noting that Eclipse has said publicly that it needs between $200 and $300 million in new equity investment.
Eclipse said in June that it had orders for 2,600 aircraft.
Competitors in the very-light jet market include the Cessna Mustang, the Embraer Phenom 100 and HondaJet.
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By JOE SHARKEY
Selling aircraft at a loss may sound like a bad idea however aircraft parts are very expensive. In the long run placing these units in service can prove to be very profitable. Aircraft parts have time limited lives and there is usually no competive source for them. Eclipse can prove to be a very solvent if you can get an investor thinking in a longer term than next quarter.
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