THE real WORLD; Eclipse 500 jets head into a big test as DayJet air taxis

July 6, 2007
VLJ operator preparing for start-up

This month could be the moment of truth for one of Eclipse Aviation's biggest customers.

Delray Beach, Fla.-based air taxi company DayJet plans to start service in late July or August between its first socalled "DayPorts," in the Florida cities of Boca Raton, Lakeland, Tallahassee, Pensacola and Gainesville, where Eclipse last month opened an aircraft service center.

By its launch date, DayJet expects to have 10 of its expected fleet of more than 300 Eclipse 500 jets. It now has seven.

DayJet, which originally planned to launch in 2006, has a simple goal - to offer a faster, and, to some extent, costcompetitive alternative to cars and hub-and-spoke airline service.

Its prices are based on a labrynthine system involving memberships and flight reservation dates, which the company says will average out to between $1 and $4 per mile - a premium they say businesses and private fliers will pay to avoid long drives and increasing security madness at major airports and for the convenience of same-day return flights.


By the end of 2008, DayJet plans to serve 40 destinations in Alabama, Florida, Georgia, Mississippi, North and South Carolina and Tennessee.

In June, DayJet took a few reporters from Florida and the New York Times for quick jaunts in the minivan-size jets as it headed toward its initial service rollout.

The New York Times' Joe Sharkey noted the 500's smooth ride and cabin insulation. "It was quiet enough for the three passengers to engage in conversation," he wrote.

But none could avoid mentioning the widespread speculation about the nascent "per seat, on demand" air taxi industry, which some industry analysts predict will never get far off the ground.

Eclipse Aviation CEO Vern Raburn has said the company will still be profitable without an air taxi industry. But it is believed such customers would be pivotal to Eclipse's planned production rate of 1,000 planes per year.

High-volume production is the cornerstone of Eclipse's pricing. It's jets are now priced at $1.5 million - at least half the price of the nearest comparable jets.

DayJet says more than 800 people and companies have signed up for memberships, which require an upfront fee and a pledge to take a certain number of flights per year.

Richard Aboulafia, president of the Virginiabased industry analysis firm Teal Group and longtime skeptic of the air taxi concept, told the Orlando Sentinel that DayJet's first flights will portend the industry's future.

"If you can't make it work in Florida, you can't make it work anywhere," he told the paper, citing the state's "miserable" air-travel infrastructure, abundance of rich people and flight-friendly weather.

Meanwhile, as it wrestles through first modelyear hiccups and bugs, Eclipse Aviation is looking for a little more help to carry it through to an expected initial public offering.

Though he declined to specify the amount, Raburn confirmed last week his company is seeking another round of funding from investors, including the state of New Mexico.

"We thought we had enough, but with the delays, we've hit more of our reserves than we thought we would," Raburn said during a brief interview at a Downtown business luncheon.

Since its founding in 1998, Eclipse has raised about $600 million from private investors, institutional investors such as Swiss investment and banking giant UBS, and the State Investment Council, which has invested $20 million in the company from state permanent funds.

Charles Wollmann, a spokesman for the council, said Eclipse has approached the state about participating in a new funding round, but declined to talk about fund-raising goals or speculate on whether the state would take additional equity in the firm.

Watched closely

Eclipse is widely considered one of the frontrunners in the race to replace propeller-driven aircraft with a new breed of tiny, light jets priced at a fraction of the cost of current business jets.

The company has been watched closely by the local economic development community, as it currently employs 1,250 and plans to eventually build three planes per day here.

And prognosticators nationwide have long suspected the company was on track to eventually seek funding from public markets.

Raburn said an IPO is coming but declined to set a time frame.

"In the future," he said.

The recent, new funding search has been "very well received," he said.

The Eclipse 500, currently priced at $1.5 million, began deliveries to customers in earnest this year.

Progress, however, has been plagued by supplier delays, manufacturing problems found in some early aircraft, and 11th-hour reworkings of key components, such as avionics systems and wingtip fuel tanks. The company also has repeatedly reduced its delivery forecasts.

As of this publication, 31 planes have been delivered, including seven to DayJet.

Eclipse spokesman Andrew Broom said more than 60 pilots have now completed training, and several aircraft are in service with their owners.

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