July 2008 Issue

First Word: 07/08

Like most aircraft manufacturers trying to build a community of customers, Eclipse Aviation sponsored an open house/homecoming event for Eclipse owners in May. The company used the event—cleverly called E-rrival—as a backdrop to announce that it’s officially taking orders for the Eclipse 400 single-engine concept jet that made for some interesting buzz at Oshkosh in 2007. At the same time, Eclipse CEO Vern Raburn wrote position holders still awaiting their Eclipse 500 twinjets that the company was again raising the price of the airplane. And the escalation was hardly nickels and dimes. Raburn told buyers-in-waiting that the 500’s new price would be $2.15 million, up a whopping $450,000 or 25 percent over the last quoted price. Hard to believe that when this airplane was announced, it carried a price tag of $837,000—less than the cost of a Piper Mirage at the time. Of course, everyone knows how the game is played. Prospective owners buy early positions, help fund the development of the airplane and even if they don’t accept it in so many words, they assume substantial risk. Buyers also know—or at least should know—that come-on prices will escalate. The risk is how much.

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