AVwebBiz - Volume 7, Number 8

February 25, 2009

By The AVweb Editorial Staff
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Top News: Eclipse Drama Reaches the Last Act back to top 
Sponsor Announcement

Eclipse Finally Fails, Fails Finally

Eclipse Aviation sent an email to staff late Tuesday that signals the end of a 10 year odyssey that started with the promise of a made-in-America everyman's jet that would revolutionize aviation and ended with a messy bankruptcy that involved the likes of Russian Prime Minister Vladimir Putin. The email says the board of directors will support a move by creditors to convert the current Chapter 11 bankruptcy into a Chapter 7 liquidation. "All of the executive management team at Eclipse gives you our most sincere and heartfelt thanks for your tenacity and perseverance in trying to deliver this dream we know as the Eclipse 500," the email reads."We gave it one heck of a try. We are sorry that it came to this today." The email is signed by executives Mark Borseth and Michael McConnell. Notably absent is the signature of CEO and Chairman of the Board Roel Pieper, the architect of the failed deal that led to the collapse.

Pieper's company had approval to buy the company under the Chapter 11 filing but couldn't raise the money. The funding was supposed to come from a Russian bank, purportedly at the urging of Putin, but never materialized. Borseth and McConnell effectively confirmed that in the email. "Despite the efforts of many people at EclipseJet Aviation and ETIRC to obtain necessary funding to close the purchase of the assets of Eclipse Aviation, the closing of the sale transaction has stalled and our company is out of time and money," the email reads. As for the 850 employees that remained, the furlough that began Feb. 18 became a layoff on Feb. 19 and they won't be getting their next pay check. Their company benefits run out Feb. 28.

Eclipse Creditors Want Chapter 7

A group of creditors involved in the Eclipse Aviation bankruptcy have asked the courts (read the motion in this PDF file) to liquidate the company as quickly as possible. The Ad Hoc Committee of Secured Noteholders has applied to the Delaware Court that approved the Chapter 11 filing and subsequent sale of Eclipse to a subsidiary of ETIRC Aviation to convert the proceedings to a Chapter 7 liquidation. The noteholders claim that the financing for ETIRC's purchase of the assets has fallen through and that every day that goes by reduces the asset pool that will be available for them. "The debtors are administratively insolvent and expenses continue to accrue, thus eroding the limited values that are available for distribution to creditors," the application reads.

The court approved the sale of Eclipse Aviation's assets to EclipseJet, the ETIRC subsidiary, on Jan. 23. The noteholders' application claims that ETIRC President Roel Pieper promised that the purchase, to be financed through a Russian bank, would be complete by Jan. 30. The bank became insolvent but the Russian government promised to bail it out. However, after the bailout, the money for the Eclipse purchase still wasn't forthcoming. On Feb. 18, Eclipse indefinitely furloughed its employees and the creditors claim that Pieper's further assurances that the promised money was on the way did not materialize. Discussions continued until Monday and the creditors decided to pull the pin on Tuesday. "It seems to the Ad Hoc Committee that there is no longer any probability that the financing will occur," the application reads.

Related Content:
PDF of the Motion to Convert
PDF of the Motion to Shorten Proceedings

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Deadline Daze back to top 

LASP Comment Deadline Is Friday

The Transportation Security Administration's proposed Large Aircraft Security Program is causing quite a high level of concern among the GA alphabet groups, and this Friday marks the end of the comment period on the proposal. The aviation advocacy groups are asking their members to write in and protest this plan, which they say would impose crushing burdens on GA airports and operators. The program would apply only to aircraft of 12,500 pounds and up, but it would mark the first time for TSA to gain access to purely private flight operations. "It would, in effect, require governmental review and authority before you could operate your own personal vehicle," says EAA. "The TSA's proposal raises serious constitutional questions about personal liberty, privacy, and freedom of movement." The plan would also impact sport aviation, such as skydiving and historic aircraft flights, and EAA says it would be especially onerous in the Alaska aviation community. "What the TSA calls an 'all-encompassing solution' is a legal death sentence to the functional present-day means that provide essential services to most of rural Alaska," one commenter wrote last week.

"I believe that if one segment of general aviation can be unjustly regulated, then any segment can face the imposition of unfair regulatory burdens," said AOPA President Craig Fuller. "So, this fight is one we all have a stake in, regardless of what type of aircraft we fly." Click here to learn more and send your comments. Click here to listen to AVweb's recent interview with EAA's Doug Macnair, vice president of government relations, on this topic.

Weather Reorganization Comment Period Extended

The FAA has extended by 30 days the comment period for a proposal to consolidate its in-house meteorological staff in to centers in Kansas City, Mo. and College Park, Md. The 84 weather folks are now spread across 21 facilities coast to coast and they're hoping the 30-day extension will lead to a change of heart. Essentially, the meteorologists are saying that no amount of technology can replace local knowledge in forecasting weather. "The people in Kansas City would be forecasting from the Virgin Islands to the Ohio Valley and out to Honolulu," Dan Sobien, president of the National Weather Service Employees Organization told the Associated Press. "There's no way to have that kind of expertise. They could be dealing with a blizzard and a hurricane at the same time." FAA spokeswoman Kathleen Bergen told AP that no formal proposal has been formulated and, whatever results, safety will not be compromised. "No matter what plan is ultimately put in place, the FAA would never adopt an initiative that would affect safety or reduce the amount of weather information that's going to our controllers," Bergen said.

But Bergen also said the FAA is looking at cutting costs and the proposed realignment is not a safety issue. "We're considering ways to reduce costs while ensuring the FAA air traffic controllers receive appropriate and timely weather reports," said Bergen. "This isn't a safety issue. We're just trying to find ways to spend tax dollars more wisely and use the best technology available." The National Air Traffic Controllers Association is firmly on the side of the meteorologists."I worry whether or not the meteorologists there, not familiar with the local weather nuances in our airspace, will be able to act on our local behalf to the best advantage of the flying public," said Craig Boehne, a NATCA rep in Minneapolis.

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Miracle on the Hudon, Aftermath on the Hill back to top 

Congress Hears From Hudson Controller, Captain, And Crew

On Capitol Hill on Tuesday, Patrick Harten, the air traffic controller who was on duty the day US Airways Flight 1549 ditched in the Hudson, spoke about the event publicly for the first time. He told members of the House Subcommittee on Aviation that when he heard Capt. Chesley "Sully" Sullenberger tell him, "We're gonna be in the Hudson," he asked him to repeat himself, even though he heard him just fine. "I simply could not wrap my mind around those words," Harten said calmly. "People don't survive landings on the Hudson River, and I thought this was a death sentence. I believed at that moment, I was going to be the last person to talk to anyone on that plane alive." Harten said that during the emergency itself, he was hyper-focused. "I had no choice but to think and act quickly, and remain calm. But when it was over, it hit me hard. It felt like hours before I learned about the heroic water landing that Captain Sullenberger and his crew had managed. Even after I learned the truth, I could not shake the image of tragedy in my mind. ... I felt like I had been hit by a bus." Harten will return to work later this week for the first time since the ditching. The panel also heard from Capt. Sullenberger, who warned that airlines of the future may not be as safe as airlines today. "I am worried that the airline-piloting profession will not be able to continue to attract the best and the brightest," Sullenberger said. "The current experience and skills of our country's professional airline pilots come from investments made years ago when we were able to attract the ambitious, talented people who now frequently seek lucrative professional careers elsewhere," he said. "I do not know a single professional airline pilot who wants his or her children to follow in their footsteps."

His pay has been cut by 40 percent in recent years and his pension has been downgraded, he said. This may not be news to those of us in the aviation world, but it will be interesting to see if America's favorite pilot can get the attention of the public and Congress by making clear that the economic changes that have made airline pilots' careers less appealing may ultimately affect safety. "Americans have experienced huge economic difficulties in recent months, but airline employees have been experiencing those challenges and more for eight years," Sullenberger said. "We've been hit by an economic tsunami, September 11, bankruptcies, fluctuating fuel prices, mergers, loss of pensions and revolving-door management teams who have used airline employees as an ATM.... The single most important piece of safety equipment is an experienced, well-trained pilot." The panel, whose purpose was to examine what safety issues may have been revealed by the ditching, also heard from the rest of the US Airways crew and several officials from the aviation industry and regulatory agencies. During discussions, the panel suggested they might review rules regarding what airplanes must be equipped with life rafts, whether passengers should be instructed to stay away from the rear exits in the event of a water landing, and if the labor laws that govern the airlines should be separated from those that govern the railroads. In response to questions about the birds, Sullenberger said he believed the collision that shut down both engines was likely a "fluke," and it would be difficult in any case to reduce or control bird populations. He did say that it would be worthwhile to review engine certification standards in regard to bird strikes. Robert Sumwalt, of the NTSB, said those standards will be reviewed as part of the board's ongoing investigation into the accident. Video of the hearing is posted online.

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On the Economic Front Lines back to top 

Piper Adds Two More Weeks Of Shutdown

In an effort to remain viable and avoid further layoffs, Piper Aircraft has announced that it will close for a week in May and another week in June, in addition to two weeks announced previously. "These shutdowns will be without pay and will affect all employees in the company, from executive management to hourly manufacturing employees," Piper spokesman Mark Miller said in a statement released Monday. "We realize and regret the impact that this has on our employees and are doing everything possible to preserve the 650 jobs Piper continues to provide. Piper is focused on taking all necessary actions to weather the current downturn in such a way that we will be positioned for growth when the economy improves," he said. The two-week shutdown will reduce inventory as well as curtail expenses. Miller said the company is pleased that the new federal stimulus package includes a provision for bonus depreciation and believes that it will help facilitate a market recovery. "We are, however, still deeply concerned about high inventory levels of new and used aircraft, lack of available credit and the overall continued decline in consumer confidence," he said.

In data released last week by the General Aviation Manufacturers Association, Piper was the only one of the main piston manufacturers whose deliveries were higher last year than the year before, growing from 221 in 2007 to 268 in 2008, driven by the popularity of the Matrix six-seat piston single. Miller spoke recently with a local radio station about the company's situation, you can listen to that two-part interview online at Piper's Web site.

Aircraft Sellers Gather

A group representing the people who buy and sell used turbine aircraft is meeting this week in Dallas and there's bound to be some lively discussion. "These are extraordinary times for the industry," said Susan Sheets, president of the National Aircraft Resale Association. ""We have met economic downturns in the past and prevailed, but we now face uncharted waters. NARA is well positioned to bring the experts together to discuss a new paradigm for conducting business in this difficult environment." The title of the conference is Challenges and Opportunities Ahead: The Aircraft Sales Industry in the Next Six Months.

About 80 companies and a total of 180 people representing finance, dealers and management companies will attend the gathering in Dallas Feb. 25-26. Among the topics under discussion is the availability of credit and how the criteria for lending money have changed. There will also be discussions on cost-cutting.

Sun 'n Fun — It's Like Spring Break for Pilots
Scheduled for April 21-26 in Lakeland, Florida. Featuring the U.S. Army Parachute Team "Golden Knights." This annual event includes more than 4,500 airplanes, 500 commercial exhibitors, over 400 educational forums, seminars, and hands-on workshops for virtually every aviation interest. Plus a spectacular daily air show. All included in your ticket price. Special online-only discounts. Get your tickets online now at Sun-N-Fun.org.
News Briefs back to top 

Heli-Expo Sets Attendance Record

Helicopter Association International says its annual Heli-Expo trade show will almost certainly set an attendance record despite the economic downturn. With one day still to go in the three-day event, held this year in Anaheim, this year's attendance total was just 52 people short of last year's record of 17,373. "Exhibitors reported high activity at their booths and vendors were able to interact with thousands of attendees on the floor," HAI said on its Web site.

Organizers said there were 585 exhibitors and a total of 65 helicopters on display on the showroom floor. The show covered a total of 259,400 square feet. HAI also elected three new members to the board of directors. They are David Chevalier, CEO of Blue Hawaiian Helicopters; Mark Gibson, vice president of Timberland Logging; and Torbjorn Corell, chief pilot of Southern California Edison.

Canada Marks 100 Years Of Powered Flight

There's some irony that the re-enactment of the 100th anniversary of the flight of the first powered heavier-than-air vehicle in Canada was scrubbed by cold, snow and wind. As organizers planned the re-enactment, the overriding fear was that Baddeck Bay on a lake on windswept Cape Breton Island in Nova Scotia wouldn't be frozen over as it was on Feb. 23, 1909 when J.A. Douglas McCurdy lifted off smoothly from the ice in the bamboo-and-wire Silver Dart. The bay hasn't frozen in the last six years. But Cape Breton has been pummeled by an old fashioned Canadian winter this year and, quite literally in the calm before the storm, flying conditions were perfect Sunday for a number of "test flights" in which Canadian astronaut Bjarni Tryggvason flew the replica aircraft in front of about 1,000 people.

McCurdy, a 22-year-old mechanical engineer who was bankrolled by Alexander Graham Bell's wife Mabel to design and build the aircraft. It was built and first flew in Hammondsport, N.Y. and that community's most famous son Glenn Curtiss took part and built the engine. The current replica was built by a group of volunteers that included McCurdy's grandson in Welland, Ont. An earlier one was built by the Royal Canadian Air Force in 1959 to mark the 50th anniversary and it now hangs in the Canada Aviation Museum. The modern replica will be housed in an addition to the Bell Museum in Baddeck, where the inventor of the telephone, and keen aviation buff, spent his summers.

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New on AVweb back to top 

AVweb Insider Blog: Looking Past Eclipse

AVweb Editor-in-Chief Russ Niles has had a long, sometimes strange relationship with Eclipse. In the latest installment of our AVweb Insider blog, he muses on failure of Eclipse and the long shadow it will cast over general aviation.

Read more.

AVweb Insider Blog: While We're Handing Out Stimulus Money, How About We Save Our XM Weather?

It's the question asked by IFR magazine editor-in-chief Jeff Van West in the latest installment of our AVweb Insider blog. Rather than spending money to make a free weather service that plays on the ADS-B system, he argues, the FAA should just buy into troubled Sirius XM.

Read more.

AVweb Insider Blog: ADM, Chaos Theory, and Why There Will Always Be Crashes

IFR magazine editor-in-chief Jeff Van West joins the AVweb Insider blog with some thoughts on the Colgan crash. While the reasons for are still being sorted out, but crashes like this will continue to happen from time to time, and Jeff speculates that this one may have been a case of doing the wrong thing for the right reasons.

Read more.

AERO Friedrichshafen — The Best Place for Your Business
AERO Friedrichshafen is the premier European trade show for the General Aviation industry. Starting in 2009, AERO will take place annually. Situated in Central Europe, within the border—triangle of Switzerland, Austria, and Germany, AERO is the ideal platform for the European General Aviation market. In addition, Messe Friedrichshafen is one of the most modern fairgrounds in Europe. If you want to do business in Europe, you have to be there! Go online for complete information.
AVweb Media: Look, Listen, Laugh and Learn back to top 

IFR Magazine Brings You Garmin G1000 Tips & Tricks

File Size 10.1 MB / Running Time 11:05

Podcast Index | How to Listen | Subscribe Via RSS

IFR magazine editor Jeff Van West gets the skinny on Garmin G1000 tricks and traps from glass cockpit expert Max Trescott. Find out what the most common errors are in flying this avionics suite and how you can avoid them.

To read the full article — and others like it — subscribe to IFR magazine.

Click here to listen. (10.1 MB, 11:05)

Exclusive Video Demo: Why Cirrus's New Flight Into Known Icing Package Is the Best of Its Kind

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

Cirrus's Matt Bergwall recently checked out AVweb on the company's new approved flight into known icing package. When you see this video, you'll understand why this system is not just another version of TKS. The airplane is exceptionally well-protected, and the de-icing is cleverly integrated into the avionics suite. This demo is definitely worth the watching.

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Accolades back to top 

Avemco Honored By A.M. Best

A.M. Best Company has recognized Avemco in the Anniversary BestMark Program. The new award recognizes companies that have at least 25 years of being rated A or higher by the insurance rating company. In fact, Avemco has maintained an A+ rating ... .

Aircraft Spruce Buys Skysports

Aircraft Spruce and Specialty has purchased Skysports, of Linden, Minn. Skysports produces single and dual fuel systems, fuel probes and a full line of aviation supplies. Their products are now available through Spruce.

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.

Economic Challenges Call for Proven Advertising Results — AVweb Delivers Results
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The Top Reporter on Our Crack Staff ... Is You! back to top 

Attention, Aircraft Owners/Operators: 'Aviation Consumer' Wants to Hear About Your Experiences with Engine Warranties

Our sister publication, Aviation Consumer magazine, wants to hear about your experiences with engine warranties. We'd like to know about warranties of new or remanufactured engines from the factory, field overhauls and "boutique" engine shops. In your opinion, was the warranty sufficient? Did you encounter problems after installation, and were they resolved to your satisfaction? Did any factory, overhauler or installer go beyond their warranty to address any problems?

Please send a note to aviation_safety@hotmail.com and let us know your experiences, including the factory or shop doing the work, the aircraft type and the nature of any problems.

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

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.

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.

Have a product or service to advertise on AVweb? A question on marketing? Send it to AVweb's sales team.

If you're having trouble reading this newsletter in its HTML-rich format (or if you'd prefer a lighter, simpler format for your PDA or handheld device), there's also a text-only version of AVwebBiz. For complete instructions on making the switch, click here.

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