On the Record with
VERN RABURN, PRESIDENT & CEO, ECLIPSE AVIATION

Order For 1,000 Won't Speed Certification

An Eclipse 500 development schedule designed to stretch development money over the longest possible period of time remains in place now that Eclipse Aviation has notched a single order, worth nearly $1 billion, for 1,000 of its new light jets.

The company still sees July 2002 for the first flight of the Eclipse 500, with certification in December 2003.

"They haven't paid us for the airplanes yet," Eclipse president and CEO Vern Raburn says of the order by perfume and Internet entrepreneur Ilia Lekach and his nascent Nimbus air taxi operation.

"It's still the most prudent approach," Raburn says of the current Eclipse development sche-dule, which replaces an earlier plan that would have seen production of eight aircraft in the six months after initial rollout.

He is sanguine about headlines that predict hard times ahead, believing that there will always be a market for the right product.

Almost more important than the money, Raburn says, is that the Nimbus air taxi order is "validation of a market segment that we have been predicting."

Even before the order was revealed, Raburn said there was enough financial support in place to complete development of the Eclipse 500, which is still being priced at $837,500--shockingly low for a twin-engine jet.

"When we started out we were very honest with people and we said we cannot build a new aircraft for $30 million like all the other start-ups say they can. You can't do this for an investment of less than a couple of hundred million dollars, and to date we have been able to raise $120 million in cash. The rest is secure and I have absolutely no worries about our financial future.

"I am not staying awake at night wondering if we can afford to keep the doors open.

"Our original intention was to do everything in parallel," Ray-burn says. "Now we are going to put all our efforts into flying the first aircraft, with the second example following six months later. By doing that, we push a lot of spending to the right. We knew that raising cash at the rate we needed was going to prove difficult. We will be spending more over the next 12 months than we have in the last 24.

"We need to 'flatten' our spending for the time being, but the financial market has told us that 'We will see you in a completely different light once you go and get an aircraft flying,' so that's what we're going to do."

Despite perceptions of a downturn in the market, Raburn says Eclipse has not lost a single customer, and is taking in new orders on a weekly--almost daily--basis, though he declines to give any detailed figures.

"We are not playing that orders game," Raburn says. "None of it matters if we don't get the aircraft certified and ready for service," he says. "What I can say is that we did sell every one of our early-offer Platinum Deposit special delivery positions in a single day-and we had 160 of those. So far, I think one customer has called and asked if he can defer his delivery position, but we won't be delivering aircraft until 2004, 2005 and 2006, so it's not a big concern for people.

"In times like these it is the products that offer significant value that survive and prosper. That is what the Eclipse 500 represents--a fundamental value change in the aircraft market. If anyone is betting that we're not going to be here in a few years' time then they are going to lose their money."

-Robert Hewson