Eclipse Addresses Delays And Performance Guarantees

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With complications pushing back its delivery schedule, Eclipse Aviation in two announcements Monday disclosed plans to modify its design and offer certain customers payment reductions. To address concerns that the company's production schedule will not be met and that terms for additional payment due may in that be case be premature, Eclipse is offering the following adjustment. For customers with scheduled delivery dates on or before Sept. 30, 2007, the company will "reduce your final payment due at delivery by 0.5 percent per month (6 percent annual interest rate) of the additional payment we are asking you to pay now." Plus, the company says that because the Eclipse 500 has "fallen short of our guaranteed performance numbers" Eclipse Aviation developed a "Performance Improvement Program." According to a second announcement, Monday, the promised goal of 370 knots (TAS) and 1,125-nm range has been met through that program. Eclipse expects "to have this configuration certified sometime between mid-March and mid-April 2007."

Eclipse's newly adopted financial arrangement for customers affected by delivery delays includes an Aircraft Purchase Agreement Addendum and notes that Eclipse has a one-month grace period before the interest calculation takes effect. For clarity, Eclipse offers this example: "If the Scheduled Delivery Month is April 2007 and the actual date of delivery is June 3, 2007, the Buyer will be entitled to one month of a 0.5% offset of the Additional Deposit amount which will be deducted from the final payment amount."

Eclipse's newly adjusted performance improvement program now vows to retrofit all aircraft with modifications "ensuring that there is a singular aircraft fleet with the above mentioned performance numbers." The changes include modification to tip tanks, a horizontal/vertical "bullet" fairing, covers for control surface hinges, extended rudder and elevator surfaces, modified engine pylons and nacelles, improved aerodynamic wheel covers and gear fairings, and a FADEC adjustment to allow more thrust at typical cruise altitudes. Eclipse will perform the modifications and absorb costs associated with parts and labor expected to require three weeks of aircraft downtime.