Last night’s winner of the Publisher’s Award in the Flight International Aviation Excellence Awards is a true aerospace pioneer. Vern Raburn explains why he has stuck with his dream of making business jet travel accessible to millions.
With the Eclipse 500 heading for certification in June, the first production aircraft rolling through the factory and 2,400 orders in the bag, Vern Raburn’s much-derided dream of building an affordable very light jet with the potential to revolutionise corporate aviation is about to be realised.
It has been a turbulent journey for the 6,500h private pilot and former IT high-flyer, who in the late 1990s persuaded investors to back to the tune of almost half a billion dollars his vision of a twin-engined, glass cockpit, single-pilot corporate jet, selling at the price of a single-piston.
Last night, Raburn celebrated his latest honour: the Publisher’s Award in the inaugural Flight International Aviation Excellence Awards in recognition of his contribution to aviation. It followed the announcement of the prestigious US industry’s Collier Trophy for the Eclipse 500 earlier this month. The company is this week exhibiting in Hall D of Asian Aerospace in the hope of adding to its orders from the region, which stand in the low double figures.
But three and a half years ago, the cynics who doubted Raburn’s maths and determination to volume-produce aircraft using methods unheard of in the general aviation sector – including massive outsourcing and automotive-style just-in-time production – were getting their “told you so” speeches ready.
Prototype
After flying a prototype in late 2002, Albuquerque-based Eclipse Aviation was forced to ditch the Williams EJ22 engines and go back to the drawing board. The sceptics smirked. This outsider had run up against the old industry realities; Raburn could talk about breaking the mould and creating a new market niche, but had not reckoned with handling awkward suppliers, the US Federal Aviation Administration and the hard economics of constructing aircraft.
Today, it is those doubters, particularly from established aviation manufacturers, that look worried. Eclipse has taken more than $3 billion worth of orders secured with non-refundable deposits. The first of the now-Pratt & Whitney Canada PW610F-powered aircraft flew on the last day of 2004 and there are now five Eclipses in flight test.
What is more, its Albuquerque plant is employing design, engineering and production techniques never before seen in general aviation. These include using friction stir welding rather than rivets to join panels and vastly reducing the parts count and assembly time in the factory by shipping in ready-built machined parts from suppliers.
This lean production system is essential to Eclipse meeting its unprecedented target of producing four aircraft a day after an initial ramp up period. Output is booked up to 2010, although there are some delivery slots for new orders from quarter three 2008. But it is a production philosophy that has its risks. “If a vendor doesn’t deliver a part, I can’t finish the airplane,” says Raburn, who worked for Microsoft and Lotus among others before turning aviation entrepreneur. These dangers were highlighted late last year when problems with one supplier caused certification to be delayed for three months from the end of March target, and it has prompted Eclipse to review its earlier policy of single-sourcing most of its key components.
Raburn is a man not afraid to take on the establishment. The whole Eclipse vision, he says, is a response to the general aviation’s industry’s refusal to move with the times and address customer needs. “The GA market has been stagnant for 25 years,” he says. “We’ve gone from 18,000 deliveries to 3,000 a year between 1978 and now. We’ve lost the whole relationship between customer satisfaction and price elasticity. I have a very simple definition of value: it’s more for less. Unlike cars, TVs, PCs or mobile phones, the industry has adopted a practice of simply making their products better by increments.”
The general aviation industry is one that has “become intellectually incestuous”, he maintains. “It’s a zero sum view of the world. I came from an industry that is exactly the opposite of that.”
Raburn coined the phrase very light jet (VLJ) to define the category the Eclipse 500 falls into and he is insistent larger so-called VLJs – such as the Cessna Citation Mustang – are not Eclipse’s competitors (something Cessna agrees with).
Competitors
Rather, he says, Eclipse’s competitors are cars. The Eclipse 500, in the hands of air taxi operators, small companies and private users, can change the way Americans travel on business, making day trips between cities poorly connected by scheduled airline services possible, and even reinvigorating dying communities in the rural USA.
Sceptics have claimed that Eclipse’s reliance on the nascent air taxi market makes it vulnerable. Around 1,300 of its orders are from six air taxi companies, most of which do not yet operate and some of which are scarcely more than paper companies. It is not something that worries Raburn, who admits he does not know how exactly the various air taxi business models will work, but is convinced the concept – given the right aircraft – will take off.
He believes also that to make an air taxi network viable, a company needs “scale and adequate capital. It won’t happen unless someone has the cojones to buy hundreds of aircraft. To get the coverage, you need the network effect, the tipping point,” he says...
Raburn is also quick to point out that almost half of Eclipse’s orders come from what might be called traditional customers – not so much large corporations, which he says have “thick hides” when it comes to innovation – but small businesses and the self-employed: 750 orders are from owner-pilots, many of them owners of ageing piston aircraft. “There are 125,000 companies in the USA that turn over $10 million plus. If you are a service company and we can improve your productivity by 10%, then suddenly a $1.5 million aircraft starts to sound like a great idea,” he says.
Comfortable
Eclipse will break even at 500 deliveries a year and will be “comfortable” at 750, he says. That boils down to as few as two aircraft a day, although Raburn’s target is four. He expects Eclipse Aviation to be profitable by 2007. The aircraft’s development has been funded almost entirely by the equity raised in the early years, with some additional cash being generated from deposits. Early adopters, who took the risk with $100,000 downpayments, will pick up their aircraft for $1 million.
As for the future, Raburn has always said Eclipse would end up as “family” of aircraft. Studies are believed to focus on a smaller aircraft, where Eclipse may be vulnerable to the likes of the HondaJet or a business jet from Cirrus. He does not believe any competition will come from larger competitors. “Cessna cannot come after us,” he says. Whether Raburn himself is around to see that new family is uncertain. He hopes to organise an IPO in the next few years to pay back his equity investors. “I need to be the guy who takes Eclipse public,” he says. “But whether I continue to be the CEO of a company employing three, four, five thousand people…probably not. It’s not my skillset.”
Source: Flight Daily News
