Ed Guthrie
Cleared for Takeoff
Way back when, back when Eclipse was promising a $900k VLJ, I looked at their non-refundable deposit contract. IIRC, the promised $900k purchase price was to be locked in 2000 $$, to be indexed via the CPI to future date $$$.
For those that don't keep track of such things, the compounded CPI is projected up ~<20% 2000-2006. Eclipse just announced that those folks with a firm order backed by such a non-refundable deposit can expect to pay $1.43 million in today's $$ (not 2006), still to be indexed to whenever. I wasn't a math major, but that doesn't look like a ~<20% increase to me. No, that looks like a ~50% increase to me. Eclipse's CEO claims that without the latest (this isn't the first) price increase the company simply can't financially fly.
When I read the contract, IIRC, one item that struck me as very ridiculous was that the purchase was to be payable in large part (full?) when the aircraft received FAA type certification. Please note, I did not write "production certification", I wrote "type certification"--two different birds, often greatly separated in time, and all too frequently the production certificate never happens as previous start-up aircraft companies have been known to run out of funds well before that point. Often after taking numerous deposits, only to declare bankruptcy and leave those deposit owners holding an empty bag.
Oh, what a shock this is. What's the Cessna Mustang projected base price? Anyone care to speculate if Eclipse will come in with an actual price above or below that mark? For that matter, anyone care to bet that Eclipse will deliver to the full deposit holders' list?
Yo, Rev. Jim (Bede), are you by any chance hiding in the Eclipse tent?
For those that don't keep track of such things, the compounded CPI is projected up ~<20% 2000-2006. Eclipse just announced that those folks with a firm order backed by such a non-refundable deposit can expect to pay $1.43 million in today's $$ (not 2006), still to be indexed to whenever. I wasn't a math major, but that doesn't look like a ~<20% increase to me. No, that looks like a ~50% increase to me. Eclipse's CEO claims that without the latest (this isn't the first) price increase the company simply can't financially fly.
When I read the contract, IIRC, one item that struck me as very ridiculous was that the purchase was to be payable in large part (full?) when the aircraft received FAA type certification. Please note, I did not write "production certification", I wrote "type certification"--two different birds, often greatly separated in time, and all too frequently the production certificate never happens as previous start-up aircraft companies have been known to run out of funds well before that point. Often after taking numerous deposits, only to declare bankruptcy and leave those deposit owners holding an empty bag.
Oh, what a shock this is. What's the Cessna Mustang projected base price? Anyone care to speculate if Eclipse will come in with an actual price above or below that mark? For that matter, anyone care to bet that Eclipse will deliver to the full deposit holders' list?
Yo, Rev. Jim (Bede), are you by any chance hiding in the Eclipse tent?