With two groups of bidders now vying for the assets of bankrupt Eclipse Aviation, it appears that whomever wins, owners of the very light jet will be able to get their planes serviced and upgraded. As before, the big question is how much it will cost owners, the St. Louis Business Journal reported. Eclipse’s Chapter 7 liquidation auction is set to happen later this month. A pair of companies backed partially by former Eclipse CEO Roel Pieper would restart the company’s production lines and create a chain of regional service centers across the nation at existing fixed-base operators. The other contender in the bidding, organized by a group of current owners, is hoping to partner with Hawker Beechcraft to handle maintenance and upgrades. Owners are worried that Eclipse Jet LP, of which Pieper is an investor, would charge owners too much to add the features their planes were once promised to have: certification for flight into known icing and the fully integrated Avio flight deck, among other things. The owners group says it would operate as a cooperative to keep costs down, performing the upgrades with minimal markups. Neither side, however, has said exactly how much they would charge.

While Eclipse Aviation’s future remains as uncertain as ever, two groups of the very light jet’s owners have said they want to reopen the support network for the Eclipse 500 again. Under one plan, a new company known as Eclipse Jet would also eventually restart projection, the company said in a news release. That company, led by two owners with experience in aviation management and raising private equity, says its main goal is to restore trust in the Eclipse brand. It has released few specifics of its plan but says its upgrades for the existing Eclipse fleet would be priced reasonably. That’s important because many owners have blasted the plans of another company, known as New Eclipse Acquisition, that has proposed a more costly upgrade option and which would raise the price of new planes to $2.4 million. The Eclipse Owners Group is pitching a co-op plan that would hinge on opening support centers and providing upgrades, but not restarting production lines, the Associated Press reported. So far, no one has said exactly how much each plan would cost owners in need of avionics and de-icing upgrades.

A federal bankruptcy judge sided with several creditors last week in verbally approving the liquidation of Eclipse Aviation. With the company’s employees laid off and its production facility closed, owners of the Eclipse 500 will likely find it impossible to get their planes repaired unless a buyer emerges to pick up the company’s assets, the Associated Press reported. One investor with plans to buy Eclipse’s assets and charge current owners for upgrades their planes need has been rebuffed by an owners’ group that says the upgrades would be too costly. In the coming month, Eclipse must lay out all its outstanding debts. A buyer could sweep up the company’s assets, including its production facility, without having to take on the debt as well, which stands at about $1 billion. The move for liquidation marks the end of the road for Eclipse Aviation in its current form, the brainchild of Vern Raburn, who envisioned thousands of very light jets plying the skies. One analyst called Raburn’s plan a “high wire act” that stayed up longer than many other similar companies.

The future of bankrupt Eclipse Aviation is now even more uncertain after a Russian bank pulled out of a $28 million deal for EclipseJet, a unit of ETIRC, to buy the very light jet maker. When that happened last week, four U.S. investment banks that had stakes in Eclipse moved to have the company liquidated, the Associated Press reported. Now a new investor, Phil Friedman, has said he plans to buy Eclipse’s assets and rebuild the company. His first step would be upgrading and certifying the existing 260 aircraft already flying so that they have the most current avionics and deicing capabilities, a process he expects would take two years, according to a news release. The company, staffed with about 400 people, would charge customers for the upgrades, arranging sales for those who couldn’t to afford the retrofits. Starting in 2011, Friedman envisions restarting the company’s production lines and making about 100 planes per year priced at $2.4 million, slightly higher than the plane’s price tag before Eclipse ceased production last month. Eclipse’s case will go before a bankruptcy judge again on Wednesday.

Following a weeklong delay, a federal judge on Tuesday OK’d the sale of bankrupt Eclipse Aviation to one of its shareholders, even though the buyer has not said whether it will support planes that have already been ordered and delivered. A subsidiary of ETIRC Aviation will buy Eclipse for $28 million and keep its Albuquerque, N.M. manufacturing facility open, the Associated Press reported. A new factory to be completed in Russia next year would build planes for European buyers. But it’s unclear what will happen to customers who have put down deposits and are waiting for their airplanes. Many suppliers and customers owed refunds and payments from Eclipse objected to the sale, worried they would see little of the money they are owed. ETIRC has said it would pay 15 cents on the dollar for secured creditors, though that may leave smaller suppliers and many customers out in the cold. The alternative, ETIRC said, would have been worse, since Eclipse would have been forced to liquidate its facilities and lay off several hundred employees.

Economy hurts general aviation makers; very light jets take blows

The deep recession was bad news for every general aviation manufacturer as orders dried up and potential customers found they were unable to get loans for new planes. While manufacturers tried to downplay their problems, nearly every piston plane maker had to either lay off workers or reduce production schedules by this fall. Piston plane makers weren’t the only ones suffering, either. Much of Cessna’s business jet base dried up as well as corporations scaled back expansion plans and looked for ways to save as fuel hit record highs over the summer, a pattern that repeated itself at companies like Hawker Beechcraft and Bombardier.

2008 was a year of truth for the fledgling very light jet industry. While Cessna pushed steadily forward with deliveries of its Mustang VLJ and Embraer started shipping the Phenom 100 to customers earlier this month, other manufacturers didn’t do so well. Adam Aircraft went bankrupt in February; its new owners hope to certify the A700 jet by 2010 but have abandoned the centerline-thrust A500 turboprop. In September, air taxi company DayJet went belly up, foreshadowing Eclipse’s bankruptcy just before Thanksgiving. Eclipse’s assets are set to go on the auction block in early January, leaving the fate of the pioneering VLJ unclear for now.

Small planes offer promise in fold-up models

The bright spot for general aviation this year was in the progress made on small planes. Cessna’s light sport aircraft, the Model 162 SkyCatcher, began flight tests. One test plane was destroyed in a crash during spin testing (the pilot parachuted and landed unhurt), and Cessna said in response it was making minor design changes to improve the 162’s aerodynamics. Cessna plans to start delivering the planes in late 2009 or early 2010. Another segment that had the public’s attention this year: light sport planes that could fit in a driveway. Icon Aircraft began flight tests of its A5, an amphibious model with fold-up wings that will allow the plane to be transported on a small trailer. The company aims to have the A5 in production by late 2010. If being able to drive your plane into your driveway is more appealing, Terragufia hopes to have an answer. The company is in the early phases of testing a plane that could convert into a small car after it lands at an airport. Its makers call the plane a “roadable aircraft” to separate it from the ill-fated “flying cars” that have failed to take off in the past. The Terrafugia would be certified as a light sport aircraft with a 460-mile range in the air. Motors would fold the wings after landing and it would fit in a standard automobile garage.

FAA, Air Force find themselves in hot water

StudentPilot.com readers agreed that the scandal involving Southwest Airlines and the FAA was one of the most newsworthy government-related aviation stories in 2008. Mid-level managers at the FAA tacitly let Southwest skip mandatory fuselage inspections that would have checked for fatigue cracks, and the airline flew dozens of flights on planes that weren’t airworthy as a result. When the news broke, the scandal quickly broadened. Whistleblowers throughout the FAA said they had been pressured to turn a blind eye on maintenance lapses. As a result, American, Delta and United all grounded planes for various reasons, resulting in thousands of flight cancellations last spring. The FAA fined Southwest more than $10 million for its inspection lapses and pledged internal reforms, including new systems that would let employees report incidents without being intimidated by their bosses.

Other government agencies had their share of trouble in 2008, too. The U.S. Air Force struggled, and failed, to seal the deal on a $35-billion contract to replace its fleet of aging KC-135 midair refueling tankers. The two bidders were Boeing, which proposed a modified 767, and Airbus, which would have used a variant of the larger A330. When the Air Force awarded the contract to Airbus, Boeing cried foul, arguing that the Pentagon had changed the rules in the middle of the bidding process and had given Airbus more credit for its larger airframe. The Air Force initially said it would reevaluate both planes, but then scrapped the entire contract when Boeing said it would need more time to tweak the 777 for the tanker program. With all efforts stalled for several months, it will be up to Barack Obama’s administration to pick up the pieces.

Boeing struggles through challenges

If the tanker contract put Boeing in the defensive for the first part of the year, a crippling two-month strike left it in that position for the rest of the year. Its Machinists union, which includes many assembly line workers, hit the picket line in early September. Concerns over how Boeing would outsource future aircraft manufacturing work were among the top concerns for the union. In early November, Machinists voted overwhelmingly in favor of a four-year contract — one year longer than usual — that assures substantial pay raises but does not give workers much protection from outsourcing. The two-month strike meant Boeing’s production lines were idle for that time, setting the company behind in orders it had booked and giving Airbus a chance to pull ahead in deliveries for the year. The strike also meant another delay for the 787 Dreamliner, now expected to fly for the first time in mid-2009.

A Chinese manufacturer could be a future competitor for the likes of Bombardier when it comes to regional jets. The Commercial Aircraft Corporation of China announced in November that the nation’s first regional jet had completed its maiden flight. The ARJ21 will seat up to 90 passengers with a range of about 2,000 nautical miles. So far, the ARJ21 has booked more than 200 orders, mainly from Chinese airlines. If it looks like an MD-90, that’s because it uses much of the same fuselage tooling, though the ARJ21 has a completely new wing design. Expect the plane to take to the skies with passengers aboard in the next year.

2009: The year of green aviation?

When Jet-A prices spiked in the summer of 2008, airlines responded by raising fares, tacking on fuel surcharges, and making customers pay for checked luggage. But industry executives also acknowledged that they needed to start looking for ways to save fuel in the long term. Different fuels could be one solution. Early in 2008, Virgin Atlantic successfully tested a 20-percent biofuel mix in one of the engines of a 747 on a flight from London to Amsterdam. Sometime in early 2009, Continental, Air New Zealand and Japan Air Lines are all expected to make test flights using biofuel mixtures. The promise of using a blend of biolfuel and Jet-A is that it would save money without requiring substantial alterations to jet engines. The tests in the coming year could provide an indication of how realistic those hopes are. Simpler changes could save airlines money, too. Air New Zealand showed off how an optimized descent at the end of a long-haul flight could save thousands of pounds of fuel. The test required hefty coordination with air traffic controllers beforehand, though. Making the practice widespread would require that controllers move away from issuing step-down descents, which use more fuel because jet engines must spool up each time a plane levels off at a lower altitude.

For more year-in-review recaps, take a look at the FAA’s Air Traffic Organization, which highlighted some of its successes in 2008. The Aircraft Owners and Pilots Association took at look at many of the low points in general aviation in the past year and also reviewed some of the pilots who made the news.

A new coalition of Eclipse jet owners and customers has formed to give the group a unified voice during the very light jet maker’s bankruptcy proceedings. Collectively, the more than 200 owners and 1,000 people who have put down about $300 million in deposits represent the largest slice of the $1 billion in debt Eclipse currently has, the Albany Business Review reported. Current owners want to make sure that whatever the outcome of a Jan. 7 auction for Eclipse’s assets, they’ll still be able to get warranty service, parts, maintenance and aircraft upgrades from the new company. And existing customers want to ensure they can still get a plane in the future or get their deposits refunded. So far the group is small, but it is quickly gaining steam as it tries to get as many current owners and customers as possible to join its ranks. The group would then be able to intervene in the Eclipse bankruptcy case as a representative of the company’s customers. Eclipse filed for Chapter 11 bankruptcy on Nov. 25 after missing payroll and being unable to get the $300 million in financing it said it needed to keep building new planes.

Following months of concern over future financing and after being unable to make payroll two weeks ago, Eclipse Aviation on Tuesday filed for Chapter 11 bankruptcy protection. The very light jet maker had run out of cash and was unable to secure the $300 million it needed to meet its production goals, the Albany Business Review reported. In bankruptcy court documents, Eclipse said it currently owes $1 billion, which includes millions of dollars to many of its parts suppliers and unpaid rent on some of its hangar facilities. At least a dozen people have sued Eclipse seeking $7 million worth of refunds for the deposits they had made on undelivered jets. Eclipse said it has gotten enough money to pay wages, service aircraft and keep production lines open at least until January, when the sale of the company in bankruptcy court is likely to happen. The company plans to sell itself it ETIRC Aviation, a Luxembourg firm that is already a large shareholder in Eclipse, unless another company outbids it in the bankruptcy auction. Chapter 11 would allow Eclipse to escape paying most of its debts for the time being, though whichever company wins the bankruptcy sale would likely take over many of those IOUs.

The very light jet maker’s bankruptcy filing has many parallels to the demise of Columbia Aircraft Manufacturing, which filed for Chapter 11 in September 2007 and was bought by Cessna two months later. Prior to the sale, Columbia had gone through several rounds of workforce furloughs and at the time of its bankruptcy sale, the company revealed that it had not paid many of its parts suppliers in months. While Cessna retained Columbia’s product lines and most of its employees after the sale, earlier this month it announced layoffs at the former Columbia plant amid sagging aircraft sales.

In a rare positive note for beleaguered very light jet maker Eclipse Aviation, the European Aviation Safety Agency gave the nod Friday for the plane to fly in 37 EU countries, meaning that owners can register the planes in those countries. One crucial piece that’s missing: Eclipse needs to get a second certification from the EASA before those jets can be used in air taxi operations, Business Week reported. In the wake of that news, Eclipse added 300 aircraft orders from European buyers to its book, bringing the company’s total order book to 1,100 planes. That number is significantly lower than the 2,400 planes Eclipse had lined up before air taxi operator DayJet shut down its operations in September. Another piece of good news for Eclipse came Friday with the FAA and the EASA approving changes to the plane’s avionics. A pair of Garmin 400W GPS units will provide navigation guidance, replacing the Avio system’s proprietary keyboard entry system with the standard Garmin buttons and knobs with which many pilots are already familiar. While Eclipse delivered paychecks to its workers on Tuesday as promised and its production lines have remained open this week, there has been no indication yet that the company has come any closer to getting the $300 million it says it needs to continue operating in the long term. Eclipse executives said they expect to have more news on future financing in the coming weeks. Revised production estimates call for the company to make up to 200 jets in 2009.

Eclipse Aviation sent the following press release to reporters moments ago:

ALBUQUERQUE, NM -November 14, 2008 - Today, Eclipse Aviation confirmed it was unable to meet its payroll obligations due on Thursday, November 13, 2008. Employees will receive their pay no later than Tuesday, November 18, 2008.  Contrary to media reports, there were no layoffs involved in this unfortunate situation.  While the company resolved the issue, employees were given the choice to continue working or go home.  The company expects to have its full workforce in place on Monday, November 17, 2008.

The Board of Directors and executive management of the company continue to work diligently on a long-term financial solution for its business. Eclipse will not be releasing any further information at this time, and will not be conducting interviews surrounding this media alert.

StudentPilot reported yesterday, as several media outlets did, that Eclipse was unable to make its payroll this week because of difficulties securing financing from a European investor.