Analysts Grim On Eclipse Future
Two recent reports by analysts in the aviation industry conclude that Eclipse Aviation may not be able to survive, and both predict an end to production by sometime next year. "With numerous lawsuits from suppliers and customers, Eclipse faces the prospect of involuntary or voluntary bankruptcy," says Teal Group analyst Richard Aboulafia in a recent report (PDF) on the company's prospects. "Our forecast calls for production to end in 2009." This week, a study by Forecast International reached a similar conclusion. "We believe that the company will be able to push production out into early 2009 but will be forced to cease production within the first quarter of 2009," said analyst Douglas Royce. The report estimates that only about 12 Eclipse 500s will be produced in early 2009, and "even this forecast may prove too optimistic," said Royce. The Forecast International report, which will be issued in December, cites the current crisis in the credit markets as a factor. Eclipse has said that it needs to find $200 million to $300 million in new equity investment. "Under the circumstances, Forecast International believes that securing new funding, while still possible, is unlikely," said Royce. "Forecast International has cut its forecast for the Eclipse 500 accordingly." Eclipse did not respond to AVweb's requests for comment on the reports.
Aboulafia said the Eclipse jet stands a chance in the marketplace if new owners take over the company and revamp the business plan. He also noted that the Russian government has promised funding for an Eclipse production line in Russia, but there is no way of knowing whether that funding will materialize.