Icon Aircraft, the US-based manufacturer of the A5 amphibious light-sport aircraft, has filed for bankruptcy protection in US court and is seeking a buyer as part of a broad restructuring.
The Vacaville, California company attributes the move to supply chain issues, type-certification delays and costly lawsuits.
Icon is “continuing to support its customers and operations during the Chapter 11 process”, the manufacturer said on 4 April, the day it filed with US Bankruptcy Court for the District of Delaware.
“We plan to continue to produce and sell aircraft, and provide first-rate service, training and support to our customers,” says Icon chief executive Jerry Meyer. “We believe this process will enable the business to address its current challenges and emerge with new ownership, stronger than ever.”
Icon came on the scene in 2006 with plans to develop the A5, two-seat amphibious aircraft in the light-sport category powered by a single 100hp (75kW) Rotax 912 piston engine with a rear-facing propeller. Icon pitched the A5, initially priced at $139,000, to adventure-seeking urbanites.
The company completed the A5’s first flight in July 2008, though a lengthy certification process followed amid redesigns and financial pressure.
It delivered the first A5 in 2015, and in 2023 said it had sold 210 of the aircraft. Also last year the Federal Aviation Administration granted the A5 a type certificate in the primary category. Because many countries, including Canada, lack a light-sport aircraft-certification category, the FAA’s approval opened Icon to more international sales.
“The company expects to continue operations during the Chapter 11 process and seeks to complete an expedited sale process with bankruptcy court approval,” Icon says, adding it intends to honour “commitments to customers and vendors”.
China’s Shanghai Pudong Science and Technology Investment owns about 50% of Icon, court papers say.
Icon employs 55 people has production facilities in Vacaville – home to its aircraft completion centre – Tampa, and Tijuana in Mexico. Bankruptcy papers list its debts as $170 million, plus $3.3 million in unpaid bills.
“The company has faced manufacturing and supply chain challenges since it began constructing the A5. Internal tooling bottlenecks prevented the company from producing the eight to ten aircraft per month that it needed to reach a break-even,” court papers say. “Delays in receiving type certification in the primary category for the A5 from the FAA and transitory supply chain disruptions driven by the Covid-19 pandemic contributed to the growing cash crunch.”
Court papers also attribute the bankruptcy filing to “two costly lawsuits filed by certain shareholders, directors and former officers of the company”. The lawsuits accused Icon’s management of breaching fiduciary duties and of self-enrichment, and sought to prohibit Icon from allegedly transferring technology to China.
Also, in 2021, the US Treasury Department began reviewing Shanghai Pudong’s investment. The agency eventually cleared the arrangement but the inquiry was costly for Icon, court papers say.
