Summary

  • Eclipse Aviation faced bankruptcy, layoffs, and supply chain issues like closures and repossessions.
  • Following liquidation, Eclipse Aerospace emerged but faced continued financial challenges and slow aircraft sales.
  • A series of mergers, legal issues, and restructuring attempts led to the eventual Chapter 7 liquidation under the name Eclipse Aerospace Inc.

Eclipse Aviation was the manufacturer of the Eclipse 500 very light jet and the newly proposed Eclipse 400 single-engine jet. Things seemed to be going well, but then it took a downturn. The company was hit by bankruptcy, changed its name and merged, but things still didn’t go to plan. Here we take a look at the journey of the downfall of Eclipse Aviation.

Background information

The company was founded in 1988 by Vern Raburn who had previously worked with Bill Gates who was a major stakeholder in Eclipse Aviation. The company was known for bringing in a new category of Very lLight Jets (VLJ) like the Eclipse 500, which was first delivered late in 2006.

Eclipse Aviation set up a production facility for the Eclipse 500 in Albuquerque with the help of local investment and incentives. In 2001, construction of the prototype started and it first flew in August 2002. The Eclipse 500 originally had Williams International EJ22 turbofan engines, but these were replaced by Pratt and Whitney Canada PW610F-A turbofans and the aircraft had to be redesigned.

This caused a delay to the program and the new Eclipse 500 prototype first flew in 2004. It was FAA-certified in July 2006 and entered service in January 2007. Also in 2007, another prototype was announced, the Eclipse Concept Jet, a four-seater, single-engine aircraft that would become the Eclipse 400.

Eclipse 500 prototype on the ground

Problems started to occur

Issues started to occur in October 2007. Eclipse Aviation laid off 10% of its workforce and Hampson Aerospace (builder of the Eclipse 500 tail assembly) filed a suit against them, saying they had not been paid for completed work. Ironically, Eclipse Aviation had built 104 of the Eclipse 500 that year.

By May 2008, Eclipse Aviation was taking orders for the Eclipse 400. The European Technology and Investment Research Center (ETIRC) Aviation invested over $100 million in the company and the original CEO of the company had to resign as part of the deal. The new CEO from ETIRC, Roel Pieper said they would be in profit in the spring.

Eclipse Aviation Headquarters and production facility

Further problems

Further woes continued:

  • In August 2008, Hampson Aerospace closed down leaving Eclipse Aviation with no tail supplier.
  • Eclipse Aviation laid off 650 of 1800 employees.
  • Pratt and Whitney Canada repossessed two of the engines they’d sold to them.
  • Lawsuits followed by customers who’d paid deposits for the Eclipse 400.
  • In September 2008, their largest customer, DayJet (1400 orders of Eclipse 500) ceased operations.
  • Eclipse started a new production facility in Russia, but it was closed down one month later.
  • In October 2008, production of the Eclipse 500 stopped due to a lack of funding and the Eclipse 400 was put on hold.
Eclipse_400_at_Oshkosh_Air_Show_2007

Deep in debt

By now, $702.6 million was owed by the company and had total liabilities of over $1 billion. Eclipse Aviation entered Chapter 11 bankruptcy proceedings but was unsuccessful. In November 2008, this was converted to Chapter 7 bankruptcy and liquidation procedures started in February 2009. In final procedures in August 2009, there was just one bidder for the company’s assets, that was EclipseJet Aviation International, an affiliate of ETIRC. A new company was formed, Eclipse Aerospace.

Eclipse Aerospace invested $20 million in cash and $20 million in promissory notes and restarted production at the original facility in Albuquerque in September 2009. They received FAA certification for the Eclipse 500 the same month. By December, they were completing upgrades on the ex-DayJet Eclipse 500s to put on sale in the spring.

Things looking up?

In March 2010, they introduced the refurbished aircraft as ‘Total Eclipse’. The following year, Sikorsky Aircraft bought an equity share in the company and Eclipse Aerospace announced a new, improved version of the Eclipse 500, the Eclipse 550. In April 2012, the CFO of United Technologies (who owned Sikorsky) said there would be no more investment in the company.

Eclipse Aerospace indicated that the first Eclipse 550 would be delivered in 2013, with 50 to 100 aircraft being produced every year. The first aircraft was delivered the following October 2013 and 32 jets were delivered in 2014. By August 2014, the company had laid off employees due to slow aircraft sales.

Eclipse 500 N503EA on ground

Two companies merge

In April 2015, Eclipse Aerospace merged with Kestrel Aviation and became One Aviation. They continued to produce the Eclipse 550 from 2015 and started to develop the Eclipse 700. They were also working on the Kestrel K-350, but this was suspended in 2017 due to financial and legal issues. They also announced the Eclipse 550 would be phased out to concentrate on the Eclipse 700.

Summary of aircraft produced by Eclipse Aerospace

Model name

First flight

Number built

Type

Comments

Eclipse 550

2012

14

Very Light Jet

New production model aircraft. Delivery started in October 2013

Total Eclipse

2009

24

Very Light Jet

Factory refurbished and upgraded Eclipse 500

Read more: The Operating Costs Of The Gulfstream G600

More issues

In October 2017, the State of Wisconsin said that they would start legal action against Kestrel Aviation for the failure to repay loans of $4 million for the K-350. One Aviation became bankrupt in October 2018 and restructured under Chapter 11. During 2018-2019 no aircraft were delivered and they had debts of $200 million.In February 2021, One Aviation entered the Chapter 7 liquidation process. Its assets were bought by AML Global Eclipse and its name was changed to Eclipse Aerospace Inc.

Related: Why Don’t More Companies Make Single Engine Jet Aircraft?

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