Bargain Basement Jets?
Imagine a world where grabbing a flight is as easy as hailing a cab. One entrepreneur says he can deliver. But will his dream fly?
From the Print Edition:
Cuban Models, May/June 03
Vern Raburn swears up and down he'll sell you a new jet for $950,000.
The dream is a good one. Close your eyes and see a future where closer-to-ordinary citizens can buy private jets at a quarter the cost of what they'd pay today, a perfect world where taking a flight would mean showing up at the airport and grabbing an air taxi that drops you right where you're going, bypassing hubs. It's been the stuff of Popular Science dreams for decades, and Raburn says it's right around the corner.
That is, once he gets an engine that will start consistently and if he can overcome an atmosphere of aviation regulation that makes the business plan of his Albuquerque-based Eclipse Aviation just a pipe dream, according to some aircraft industry observers.
Raburn's Eclipse 500 is a sharp airplane; nobody's disputing that point. He's essentially created an affordable, aluminum-skin throwback for dreamers, a six-passenger twin jet long on swagger, loaded with retro charisma. It's the kind of plane you could see Sean Connery as James Bond in, nipping out of somewhere inside Uzbekistan.
And it does exist in some form.
John Travolta expressed interest in buying one. Raburn says Eclipse Aviation holds deposits from more than 2,100 other true believers -- for the most part private pilots who've passed on the $3 million to $4 million price tag for comparable models by other builders. They find the bargain price of Eclipse most seductive, and Raburn appreciates their confidence. But even so, weekend fliers aren't his primary target. Raburn envisions a new market as yet untapped. He sees air-taxi operators and large corporations as fleet purchasers of the Eclipse 500, five years out. In Raburn's scenario, business commuters of the future will look beyond the 600 or so airports offering scheduled airline flights. Instead, they'll be slipping through the 9,400 smaller municipal airfields that dot the country -- preferably in an Eclipse.
Raburn wants business fliers to use the country's network of sleepy regional airports. Skip the Dulles security hassles, all the stewing in multiple lines clogged with nattering tourists.
Just raise your right arm and flag down the closest air taxi.
"I use Torrance [California] to Bakersfield as a typical air-taxi flight that people might appreciate," Raburn conjectures. "That's a seven-hour drive in heavy freeway traffic, but 20 minutes by Eclipse. It's a short trip -- and that's my point. Most business trips are short trips. About 44 percent of all airline passengers travel less than 400 miles."
So leave when you like and make better use of your company's time by traveling through the local airport. No sitting around for 90 minutes, waiting on the runway at O'Hare for clearance to take off for Omaha. The Eclipse air taxi pulling out of nearby Palwaukee Airport will let you sidestep security and scheduling snafus. On the other end you put in your face time and the Eclipse has you airborne again, whisking home by cocktail hour. In Raburn's perfect world, air-taxi operators will pop up across the country with fleets of Eclipse 500 jets providing affordable short-hop service on demand.
Cincy to Pittsburgh…St. Louis to Houston…Milwaukee to Detroit.
Only Eclipse air-taxi fliers should, in theory, be smart enough to hop off in the suburbs and grab a limo into town, while all the poor saps who traveled via scheduled airliner are still sitting at the gate.
Raburn believes his Eclipse pocket jet is the ideal plane for such short runs, but not all are convinced of its viability. Robert Ditchey, founder of America West airlines and now an industry consultant, has specific misgivings. "I mean no disrespect for anyone who can build a new airplane and get it up in the air in this economic environment," he says, "but I guess I'm a little unclear as to what the Eclipse 500 is all about. I see terms thrown around loosely, without substance. Is this aircraft meant strictly as an air taxi? Or as a personal commuting vehicle or as a corporate jet? These are three distinctly different applications. It's like mixing pineapples and bananas and pears.
"If Mr. Raburn plans the Eclipse 500 as an air taxi, then it must qualify as a common carrier and that's a highly regulated classification. Unless I'm very wrong, I don't believe you'll see twin-jet common carriers flying out of, say, Santa Monica Airport. He might be able to make his premise work in the middle of the country, but not along the East and West coast flight corridors where communities actively fight against small jets flying into their municipal airports. Air-taxi companies aren't going to waltz into Santa Monica Airport and set up booths and start selling tickets. It doesn't work that way. There are city, county, state and federal regulations that won't permit it, not at this time."
Raburn, who is fond of demeaning the WCSYC attitude ("we couldn't so you can't," an acryonym his team invented) that pervades the industry, insists, "The Eclipse 500 used for air-taxi operations will be configured to meet current regulatory requirements. A Part 135 Option [for carriers making nonscheduled flights] will be made available to provide the additional equipment necessary for air-taxi operators to meet aircraft requirements associated with these types of operations.
"As far as utilizing municipal airports in areas such as the West Coast, no regulations are foreseen that would prohibit use of the Eclipse 500 in an air-taxi operation. Air-taxi operators would conduct flight and ground operations in much the same way charter operators do. Charter companies regularly use all types of airports."
Ditchey listens to Raburn's rationale, then remarks, "He's talking about equipment with Part 135. I'm talking about barriers to entry put up by local and federal authorities. I mean the ëNot in My Neighborhood People.' The California Coastal Commission, for one, is going to require an environmental impact study for Santa Monica Airport, and that'll take a year and then they'll say, ëNo!' You can work through that, but it's not easy. And then there's the FAA. I founded MGM Grand Air as a Part 121 carrier [a Federal Aviation Administrationñapproved plane for normal scheduled service] with proposed flights between LAX and JFK, and the FAA made life miserable for us. Suddenly they required a hangar for our plane. They wouldn't give us certification without a hangar, even though that wasn't specified in the regulations. We had to work a deal with Flying Tigers for one of their hangars. This is what air-taxi operators will be up against."
In all fairness, Raburn never said he intended to personally operate an air-taxi service -- anywhere, anytime. He simply likes the potential for his Eclipse aircraft in such an operation. Other than being a licensed pilot, restoring an antique aircraft and serving on the boards of several aviation companies, Raburn, in fact, had no hands-on aviation industry experience prior to his involvement with Eclipse Aviation. He began his business career in the information technology sector, where company press materials state he "held senior executive positions with Microsoft, Lotus Development, Symantec and Slate." Indeed, Bill Gates is one of Raburn's financial backers.
Sounds like a nice life. So why jump into building airplanes in middle age? When short-hop business travel is down nationwide, why would you consider marketing a new commuter jet? A report by the National Center for Policy Analysis claimed, as of August 2002, that short-haul business travel by United Airlines customers was off 32 percent from pre-9/11 levels. American Airlines was down 19 percent and Ditchey's old company, America West, had fallen 21 percent.
Where did all the business commuters go?
Their companies are renting cars for trips under 300 miles. The reason? Jammed-up metropolitan airports and flight delays have given the not always accurate perception of adding time to the business flier's commute. Bosses think, rightly or wrongly, that there is entirely too much heel-cooling going on in waiting areas, too much loafing on the company nickel.
So maybe private air-taxi services operating beyond tight restrictions are the answer to getting suits back in the sky?
According to Raburn, development of the Eclipse 500 began several years before the 9/11 terrorist attacks and resultant falloff in business travel. "At first we felt the Williams International EJ-22 engine was our enabler. NASA had entered into a cooperative R&D program with Williams to develop a new low-cost turbofan. I became convinced a huge business opportunity existed in aviation centered around an affordable business jet powered by the EJ-22." The EJ-22 is a lightweight jet engine, developed by Williams, a pioneer in power plants for light jets, and partially
funded by Eclipse.
Raburn made those comments several months before repeated difficulties with the EJ-22 engines prompted an internal review of the Eclipse 500 project. The sticky issue? Test pilot Bill Bubb had trouble starting his EJ-22 engines in the high density atmosphere of Albuquerque's summer. Time to head back to the drawing board.
"We hit a bump in the road," Raburn admits. "The development phase had gone so smoothly, but we needed to reassess the situation. Our board decided it's better to make an engine change early, before we go into production. We've heard from buyers who were horribly disappointed at the delay this move is causing. I've personally spoken to about 60 percent of the depositors so far, and once they hear the explanation they seem to understand."
In mid-February, the company reached an agreement with Pratt & Whitney Canada Corp. to supply the PW610F turbofan engine for the plane. The new engine is hoped to boost maximum cruising speed from 355 knots to 375.
"The new engine we've chosen to replace the EJ-22 is more powerful and will require adjustments in terms of using dead space we'd built into the design to accommodate additional fuel capacity. There will be no major changes to the Eclipse airframe itself. What we'll have is a jet with a longer range than we'd planned for originally and a faster cruising speed."
Eclipse originally was promoted as a $775,000 jet in the spring of 2000, but pricing has steadily been revised upward and approaches the seven-figure level Raburn has said it wouldn't cross. The plane has a 1,300-nautical-mile range and a 41,000-foot ceiling. Eclipse also comes with full instrument flight rules capabilities, including auto flight systems, so it has the ability to fly in bad weather.
But why go with aluminum? The answer is a welding process that wasn't available 40 years ago. Riveting sheets of aircraft aluminum was extremely labor intensive, and accounted for an incredible amount of extra work and scrappage. Today, a faster process known as friction stir welding replaces rivoting in 60 percent of an aircraft.
What about the weight differential between aluminum and composite materials?
Eclipse promotional literature discounts that concern, citing the use of a more modern, lightweight aluminum than, say, that of the old Cessna 172. The company also argues that aluminum is more economical to work with than composite materials in high-volume applications because composites must be cured at high temperatures and pressure -- a process that would have added significantly to the cost of each Eclipse 500. Affordable, relatively inexpensive to operate at a projected $0.69 per air mile, but don't call Eclipse 500 a "no-frills ride." That's the lone point where Raburn bristles: "No frills?! Would you call a Lexus a no-frills automobile? I think of Eclipse as being similarly appointed to a Lexus. It is a small, six-passenger jet, and no, you can't move about. But how often do you get up and walk around inside your Lexus?"
Eclipse will enter the market at a time when troubled operators are dumping or storing unnecessary aircraft. Robert Ditchey points to sweet deals on used 6-, 19- and 50-seat turboprops that he feels would serve equally well as air taxis. "I can name six-seater turboprops available on the used market that would work much better than the Eclipse in a six-seater marketplace," he says. "A six-seater is good for something like Los Angeles to Big Bear in the off-season. That might work. But if you tried to operate a 50-seat turboprop between L.A. and Big Bear, you'd go broke, even if you consider the high (sky) season.
"The airline or air-taxi business requires everything to be fine-tuned to the marketplace and there is very little room for sloppiness. Being able to come up with a ëgood deal' on an airplane is only the first step. A very good deal on an airplane quickly becomes a very bad deal if the airplane is ill-suited to the market. I personally believe there are precious few six-seater marketplaces that can make money. If there were, they'd be in business already. But they aren't because, again, our municipal airports do not permit and do not promote air-taxi operations. The very idea of a six-seater air taxi is fundamentally flawed."
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