AVwebBiz Complete Issue: Volume 6, Number 48

November 26, 2008

By The AVweb Editorial Staff
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More Gloom Leads Into U.S. Holiday Weekend ... back to top 

Cirrus Furloughs Production Workers Until January

About 500 production employees at Cirrus Design will be furloughed for about a month each as the company cuts production to clear out built up inventory. Bill King, Cirrus's VP of Business Administration told AVweb in a telephone interview staff were told of the move on Tuesday. Only production employees are affected and not all them will be off at the same time. Those at the beginning of the build cycle will be off first and will return first on Jan. 5. As the airplanes on the floor progress through completion, those farther down the line will be furloughed as they complete their part of the process. Last to be furloughed will be the painters. Each worker will be off for about 30 days. "We don't want to add to the bad economic news but we just think this is the prudent thing to do so we can hit 2009 hard," he said. King said the company is retaining all the workers and will be topping up their unemployment insurance and paying medical and other benefits during the shutdown. King said the company is strong and its financial backers, Arcapita, are solidly behind Cirrus. "We're very well positioned and the truth is that if we weren't well positioned we wouldn't be able to pay these benefits," he said.

Cirrus has trimmed its workforce twice in the last three months as sales have slowed. Company President Brent Wouters said the company is confident sales will rebound. "We are working diligently - and making good progress - on rationalizing inventory levels, re-tooling the production line for greater product flexibility, and introducing new products - such as the new SR20 with Perspective, new options and features to stimulate demand," he said. " Even so, we must make the sometimes difficult tactical decisions to match our overall production to the realities of the current market place." The Vision SJ50 program is unaffected by layoffs and sales, customer service and other non-production departments will remain at work.

Eclipse Files For Bankruptcy Protection

Eclipse Aviation filed for Chapter 11 bankruptcy protection today and it appears ETIRC, the company controlled by current CEO Roel Pieper, is moving to consolidate its hold on the troubled planemaker. According to a news release from Eclipse, the company is "seeking court approval for debtor-in-possession (DIP) financing and procedures for the sale of substantially all of its assets under Section 363 of the U.S. Bankruptcy Code." At the same time, it announced it has a buyer for the assets, described as "an affiliate of ETIRC Aviation S.a.r.l., Luxembourg" and that the deal is subject to "higher offers." According to court documents filed by Eclipse in support of the petition, the company owes investors about $577 million and has racked up about $135 million in debt to vendors and suppliers.

"In the face of unprecedented economic challenges, it is clear that the sale of the Eclipse business through the Chapter 11 process is the right course of action to maximize the value of the business, secure its future and protect the best interests of Eclipse's stakeholders, including customers, suppliers, employees and creditors," Pieper is quoted as saying in a release. "The successful sale will position the business for aggressive global expansion, allowing the company to fulfill its promise and solidify its position as the world's leading manufacturer of VLJs."

And to address the current cash crunch, Pieper has cut a deal with existing shareholders and lenders to keep the company alive in the interim. The company is asking the Delaware court, where the petition was filed, to approve the interim financing package quickly so Eclipse can honor its commitments. Once approved, this financing, along with other relief requested from the court, will position Eclipse to pay wages and salaries, honor employee benefits, service customer aircraft and continue manufacturing operations throughout the sale period.

The company also announced that Peg Billson, president and manager of the company, has resigned "to pursue other career opportunities."

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Quotes reprinted with permission: Professional Pilot, 2007 Headset Preference Survey, 12/07; Aviation Consumer, 8/07.
Diamond, Exxon Not in Sync on Diesel Dilemma back to top 

Diamond Says Keep Using Jet Fuel In Diesels

Diamond Aircraft is advising its customers to continue fueling their diesel-powered aircraft with jet fuel in spite of a recommendation from ExxonMobil to dealers to stop selling jet fuel to diesel aircraft owners. Diamond CEO Peter Maurer told AVweb he's unaware of any service issues that might have led the oil giant to issue the letter sent to dealers last week. "It looks like they've come up with a solution to a problem that isn't there," Maurer said. He said he's in the process of arranging a conference call with ExxonMobil officials to discuss the decision, which he said caught his company by surprise. "We're frankly a little perplexed," he said. Diamond is also sending a letter to customers outlining the company's position. In the letter to fuel dealers, Martin Tippl, ExxonMobil's U.S. General Aviation Operations Manager, says the company has determined that jet fuel may not meet the technical requirements for safe operation in piston engines and the company "does not support or endorse the supply of jet fuel to aircraft powered by diesel engines." The letter is posted on the Thielert Owners Group Web site. Dealers are asked to sign an agreement not to pump jet fuel into diesels. There is a provision for diesel owners who insist on fueling with jet fuel, however. There's a waiver they can sign indemnifying ExxonMobil from liability if something goes wrong. "We're recommending [diesel aircraft owners] sign the waiver and continue using jet fuel," Diamond's Maurer said.

ExxonMobil technical folks have determined that jet fuel and its processing misses the mark as a diesel fuel on three counts. Jet fuels are not tested for cetane, which is the determining factor in the fuel's ability to ignite. There's also a fear that in extreme conditions jet fuel can cool to the point of becoming viscous and cause fuel-system problems. According to ExxonMobil, jet aircraft fly fast enough that air friction over the wings warms the fuel enough to prevent those problems. ExxonMobil also claims that jet fuel might not have enough lubricating qualities to protect fuel-system components. It also says the FAA is working with the fuel industry to determine if further certification action on diesel aircraft engines is required. Maurer noted that the Thielert engines in his company's aircraft are specifically certified to use jet fuel only so he said he's not sure where that statement came from or why, in general, ExxonMobil has taken the action. "We don't know what was driving this at ExxonMobil," he said. ExxonMobil did not immediately respond to AVweb's request for an interview.

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Fly Smarter, Not Harder? back to top 

"Investigations" Probe Bizjet Use

Last week's controversy about the convoy of business jets that carried the CEOs of the Big Three automakers to Washington to ask for a bailout was bound to get tongues wagging on the nightly news elsewhere. It prompted an "investigation" by "Chief Investigator" Darcy Spears at KTNV in Las Vegas. Spears combed public records and discovered 80 percent of the state's Citation's flights are between Vegas and Reno (closest IFR airport to the capital of Carson City) and that the average cost per passenger, round trip, on those flights was $760. Well, those who know something about bizjet costs might remark that the figure represents pretty efficient utilization of the aircraft, which obviously flies fairly full most of the time. But Spears suggested her viewers would consider it "crazy" to spend that much when Southwest goes there a dozen times a day for $300 or less. Robert Chisel, of Nevada's Department of Transportation, was patient and unapologetic about the Citation and the state's only other airplane, a Turbo Commander used for mapping and photography.

He noted the time and peripheral expenses saved when the state plane is used and also noted that it's an essential tool for serving far-flung areas of the sparsely populated state. "You know, everybody's opinion of waste is different. A state the size of Nevada with 110,000 square miles, I cannot imagine us not having aircraft available to move people and goods around at a moment's notice. It is very important for the citizens of the state," said Chisel. Meanwhile, in Florida, the state made a very public display of the disposal of a surplus King Air, getting $1.35 million for the 23-year-old aircraft. Florida is keeping its Citation Bravo and an eight-year-old King Air 350, however.

Conference Looks At Aviation Efficiency

Oil prices have dropped but who knows where they'll be in four months and aviation representatives will have a meeting of the minds in London in February to compare notes on squeezing the most from each drop of kerosene. The Efficiency In Aviation conference (PDF brochure) will be held Feb. 3-4 and proposes to bring together business and airline execs aimed at "developing and implementing [a] proactive cost and fuel efficient strategy."

Among the topics to be covered are cost controls, the best techniques to save fuel in the air and on the ground, the future of fuel prices, the effect of air traffic control improvements on efficiency and the pros and cons of fleet replacement. Manufacturers will also discuss the technology that's emerging to make flying more efficient.

Cessna Aircraft Company, the World's Largest General Aviation Manufacturer
Based on unit sales, Cessna Aircraft Company is the world's largest manufacturer of general aviation airplanes. In 2007, Cessna delivered 1,272 aircraft, including 387 Citation business jets, and reported revenues of about $5 billion. Cessna has a current backlog of $15.6 billion. The global fleet of more than 5,400 Citations is the largest fleet of business jets in the world. More information about Cessna Aircraft Company is available at Cessna.com.
Meanwhile, in Washington ... back to top 

FAA Accelerates NextGen Implementation

FAA Acting Administrator Robert Sturgell said this week the agency will move forward rapidly to implement nationwide deployment of the Automatic Dependent Surveillance–Broadcast (ADS-B) system. ADS-B, which will replace radar-based services with data disseminated via satellite, will reduce the risk of midair collisions and weather-related accidents, provide more efficient routes in adverse weather, and improve situational awareness for pilots, the agency said in a news release on Monday. "ADS-B is the backbone of the future of air traffic control," Sturgell said. "NextGen is real and, as of today, NextGen is now. President Bush just last week stated that modernizing our aviation system is an urgent challenge, and today's announcement demonstrates that the Department of Transportation and the FAA are taking concrete steps to do just that." The ADS-B system is now being installed in Florida. By 2013, it will be deployed nationwide, with 794 ground stations, the FAA said. ADS-B will provide services everywhere there is radar coverage today, and will also cover areas that currently lack radar service, including the Gulf of Mexico and Alaska.

Work at the sites of the next key milestones for ADS-B services — Juneau, Alaska; Louisville, Ky.; the Gulf of Mexico, and Philadelphia — is scheduled for completion by the end of 2010, the FAA said.

AOPA's Fuller Meets With Obama Transition Team

With a new administration preparing to take over in Washington next January, AOPA's incoming president, Craig Fuller, met with members of the Department of Transportation transition team on Monday to press the case for GA. Fuller, along with AOPA Executive Vice President of Government Affairs Andy Cebula, met with Mortimer Downey, head of the DOT transition team; Duane Woerth, former president of the Air Line Pilots Association (and touted as the next FAA administrator); and Jane Garvey, former FAA administrator (and maybe the next Secretary of Transportation). Fuller told the team that priorities for general aviation pilots include quickly naming a well-qualified FAA administrator; investing in aviation infrastructure; addressing proposed regulations that target aviation gasoline, emissions, and noise; modernizing the Air Traffic Control system without placing undue burdens on GA aircraft owners; and ensuring that aviation taxes (not user fees) pay for the FAA.

Fuller also suggested that GA should be included in the new administration's economic stimulus package. Many airport projects could be ready to go as soon as funding was received, he said. Fuller also recommended that the administration should delay the implementation of ADS-B until the aviation industry can develop an implementation plan that would benefit all users. He will take over Phil Boyer's job at AOPA on Jan. 1.

Business Executives! Mark Your Calendars for February 3 & 4, 2009 in London, England
Active Communications' Efficiency in Aviation forum will provide a unique platform for senior aviation executives to discover, consider and discuss innovative management, operational and technical strategies to achieve greater cost and fuel efficiency. AVweb is a media partner for this forum. As an AVweb subscriber, sign up by December 12, 2008 and receive a special 15% discount. Call Melanie Mulazzi at +44 (20) 7981-2504, or click here to contact her via e-mail.

Details online.
Opinion & Commentary back to top 

AVweb Insider Blog: Should Pieper Retain Eclipse?

As Eclipse Aviation's biggest investor, CEO Roel Pieper has the most to lose in the company's collapse. Does that mean he's the right person to try and save it? AVweb's Russ Niles still has high hopes for Eclipse's future, but in the latest installment of the AVweb Insider blog, he tries to wrap his head around the restructuring plan.

Read more.

Escape the Storm ... Invest in Diamonds
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Who's Where back to top 

Dias New Exec At Angel Flight West

Alan Dias

Angel Flight West has named Alan M. Dias as its Executive Director. Dias has been flying missions since 1993 and was previously vice chair of the board of directors.

Who's Where? You Tell Us

Get a promotion or a new job? Your colleagues want to know about it, and AVwebBiz can get the word out. Drop us a line about the staff appointment, with a nice recent photo, and we'll do our best to include it in our new section, "Who's Where." The items will be permanently archived on AVweb for future reference, too.

Look Around Your Hangar and Office!
Build A Plane needs items for their annual eBay auction. Avionics, parts, electronics, headsets, books, videos/CDs, software, leather jackets, even special airplane rides — well, you get the idea. Anything Build A Plane can sell will benefit school-building projects offering students an exciting way to learn science, engineering, and math and building a new generation of aviation enthusiasts. For complete information, contact Katrina Bradshaw at (804) 843-3321, or go online.
The Top Reporter on Our Crack Staff ... Is You! back to top 

AVweb's Newstips Address ...

Our best stories start with you. If you've heard something 200,000 pilots might want to know about, tell us. Submit news tips via email to newstips@avweb.com. You're a part of our team ... often, the best part.

How's Your Turbo-Normalized Cirrus SR22 Working Out?

Our sister publication, Aviation Consumer, would like to know. The magazine is conducting a survey of owners on their experiences running the SR22's engine lean of peak.

If you'd like to participate, contact the editor directly at avconsumer@comcast.net.

(The results will appear in a future issue of Aviation Consumer. For subscription information, click here.)

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AVweb Media: Look, Listen, Laugh and Learn back to top 

AVweb's AOPA Expo 2008 Video Round-Up

Original, Exclusive Videos from AVweb | Reader-Submitted & Viral Videos

At the 2008 AOPA Expo, our video team brought you exclusive interviews with outgoing AOPA president Phil Boyer and the incoming president, Craig Fuller — plus a demo flight with Cirrus Design's new EVS system and an in-depth profile of Garmin's hot GPSMap 696. If you missed any of those, you can watch all eight of our show videos right here. Just use the arrows at the right and left sides of the player to choose your video.

Video coverage of AOPA Expo 2008 has been brought to you by Lightspeed Aviation, WxWorx XM WX Satellite Weather, and Bose Corporation. (Videos by Glenn Pew.)

Don't see a video screen?
Try disabling ad blockers and refreshing this page.
If that doesn't work, click here to download the video directly.

More AVweb exclusive videos can be found at http://www.avweb.com/video.

Related Content:
Want more AVweb media from the show?
Click here for podcasts from AOPA Expo 2008.

You Pay More for the Unbiased Truth — To Ultimately Save More
Yes, Aviation Consumer costs more than other aviation magazines. Aviation Consumer is supported by you, the subscribing consumer, not by advertising. So the editors can be completely truthful to help you make the right decision on products and services. Order online and receive unlimited use of Aviation Consumer's ratings-packed web information database!
Names Behind the News back to top 

Meet the AVwebBiz Team

AVwebBiz is a weekly summary of the latest business aviation news, articles, products, features, and events featured on AVweb, the internet's aviation magazine and news service.

The AVwebBiz team is:

Timothy Cole

Editorial Director, Aviation Publications
Paul Bertorelli

Russ Niles

Contributing Editors
Mary Grady
Glenn Pew

Features Editor
Kevin Lane-Cummings

Scott Simmons

Jeff van West

Click here to send a letter to the editor. (Please let us know if your letter is not intended for publication.)

Comments or questions about the news should be sent here.

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