Eclipse Aviation's assets are finally in the hands of new owners, ending a long period of uncertainty for the bankrupt manufacturer and the Eclipse 500 very light jet programme.
A US bankruptcy court approved on 20 August the $40 million sale of Eclipse Aviation to Eclipse Aerospace, a new company founded by pilot-entrepreneurs Michael Press and Mason Holland. Press says Eclipse Aerospace is re-opening at the beginning of September at the manufacturer's main facility in Albuquerque, which will initially be used to offer upgrades and maintenance but eventually may be used to restart production (see related story). Eclipse Aerospace has already begun offering upgrades and maintenance at a facility outside Chicago which it has acquired from North American Jet.
Press says North American Jet, located at Palwaukee Airport, quietly began working on Eclipse 500 upgrades in May to give Eclipse Aerospace a head start. He says North American Jet's maintenance business, which is being renamed Eclipse Aerospace Chicago, has already upgraded two aircraft to support flight into known icing (FIKI) and is now working on upgrading three additional aircraft. Other upgrades, including installation of a new Avio avionics suite and tip tanks, will be offered starting in September at both Chicago and Albuquerque.
The new company's initial focus will be the upgrade business as nearly all of the 259 aircraft delivered by Eclipse Aviation prior to ceasing production last October need at least one of the three upgrades. Eclipse Aerospace has not yet decided how much to charge for the upgrades or how many modification lines to open but it will take at least several months for the entire fleet to be upgraded. "We don't know the throughput or our capacity until we hire people," Press says.
He adds so far 15 employees have been hired in Albuquerque and a decision will be made by the end of September on how many additional employees will be required. At its peak Eclipse Aviation had over 2,000 workers.
In a separate deal Eclipse Aerospace also has acquired the 29 Eclipse 500s formerly operated by DayJet, which was by far the largest Eclipse operator until it suspended its air taxi operation last September. Press says these aircraft as well as a few other Eclipse 500s already acquired by Eclipse Aerospace from individual owners will be upgraded and re-sold over the next year.
Press says he also is talking to several third-party companies interested in buying aircraft from owners, upgrading them and leasing them back. He says despite the upheaval over the last year less than 10% of the entire fleet is now for sale and "there's a lot of demand out there" for second-hand aircraft, including from some of the deposit holders who lost their deposits as a result of Eclipse's bankruptcy.
Eclipse Aerospace was one of several groups that initially expressed interest in acquiring Eclipse Aviation's assets in February, when the manufacturer's bankruptcy case, which began last November with a chapter 11 filing, was converted to chapter 7 liquidation. While several US and foreign groups made initial bids, including a $25 million bid from the Eclipse Owners Group (EOG), Eclipse Aerospace's $40 million proposal was the only offer submitted during the final bidding process.
"We felt it would be unwise to get into a bidding war as it would have just ratcheted up the cost that in the end would have to be covered by owners and future owners," says EOG member and chairman of Eclipse 500 operator Jet-Alliance Randall Sanada.
Sanada adds EOG, which had an arrangement with Hawker Beechcraft to provide upgrades and maintenance if it prevailed in acquiring Eclipse Aviation, supports Eclipse Aerospace because its business plan is not based on charging owners exorbitant prices for upgrades. "The concern we had in the owners group was with the buyers with predatory intent to overcharge for maintenance and upgrades. We're very comfortable with [Eclipse Aerospace]," Sanada says.
He says the biggest near-term priority for Eclipse owners is spare parts, which the new company plans to resume selling in September initially using the inventory it acquired as part of the asset purchase. Press says while a few suppliers have gone out of business most suppliers have expressed a desire to resume producing parts.
Press was also initially involved in the EOG bid but pulled out to put together a separate proposal with Holland, an Eclipse 500 deposit holder who owns healthcare benefits software provider Benefitfocus. Press says the two have secured a "number of investors" and will both be on Eclipse Aerospace's board, with Holland as chairman, but are recruiting for an executive to be in charge of day-to-day management.
Press is no stranger to the Eclipse programme and is already known by almost all of the aircraft's owners. Press owns and flies the fourth production Eclipse 500 and his company, Missouri-based Single-Pilot Jet Management, specialises in the second-hand Eclipse market. Press now intends to "turn over" this company, which has assited in the sale of over 200 Eclipse 500s to date but also works with other VLJ models, to focus on Eclipse Aerospace.
He says Eclipse Aerospace is also splitting North American Jet into two, with the charter division, which operates a wide mix of aircraft including seven Eclipse 500s, becoming a separate entity. The maintenance business, to be known as Eclipse Aerospace Chicago, will continue providing maintenance services on a wide mix of piston, turbine and jet aircraft "but will concentrate on Eclipses".
While Eclipse Aerospace plans to work with several third-party maintenance providers Press does not expect competition in the upgrade business. "The upgrades really have to be done by the factory because of product support," he says.
Source: Flight International
