As anticipated, no last-minute bids emerged for the assets of Eclipse Aviation and yesterday a federal bankruptcy judge in Albuquerque approved the $40 million offer from Eclipse Aerospace for the former builder of Eclipse 500 very light jets. Eclipse had entered Chapter 11 bankruptcy proceedings in November last year and Chapter 7 in February.
Eclipse Aerospace has already hired about 15 engineers, managers and other staff, said Mason Holland, president and CEO of Eclipse Aerospace, and expects to hire more almost daily. The new company was established on May 9 and began to offer service and modifications on Eclipse 500s on June 1 at its service center in the North American Jet facility at Chicago Executive Airport in Palwaukee, Ill. According to Holland, two aircraft have been completed and three more are scheduled. Operations in Albuquerque will begin next month.
The company’s first order of business is to get parts flowing to owners, followed by performing modifications and upgrades to existing airplanes, said Holland. Some of the existing 259 Eclipse 500s built are grounded for parts and all need upgrades, which the owners will have to pay for.
Next on the business plan is buying airplanes to refurbish and resell “like new and with a limited warranty.” And finally, Holland hopes to bring the 500 back into production in about six to 18 months. “We can control reestablishing contact with parts suppliers and reprising parts, but we can’t control what happens in the market,” he said, adding that he expects the company to be well positioned for a rebound in the market for light jets when it occurs in the next year or so. He said the company is well funded and that he expects it to turn a profit within 90 days. “We’re focusing on profitability first and growth second.”
A pilot and current owner of a Citation CJ2, Holland said he and Mike Press, cofounder of Eclipse Aerospace, visited 300 Eclipse owners in 27 cities in 15 days in April to assess the acceptance of the aircraft before making their bid for Eclipse Aviation. “They all believed in the product,” he said.
Holland, who owns Benefitfocus, which provides software to the health-care industry, and other business concerns in South Carolina, plans to concentrate his activities on Eclipse for the next few months and is searching for a chief executive with experience in running an aircraft manufacturing company.