Vacaville, California-based Icon Aircraft, manufacturer of the Icon A5 amphibious Light Sport aircraft, announced this morning (April 4) it has filed for Chapter 11 protection under the Bankruptcy Code. The filing is part of “a strategic restructuring process,” according to a statement.
As part of the announcement, Icon said its management team “remains committed to the Company’s mission of revolutionizing personal aviation and continuing to support owners and employees during this transition.” Icon CEO Jerry Meyer said, “We plan to continue to produce and sell aircraft and provide first-rate service, training, and support for our customers. We believe this process will enable the business to address its current challenges and emerge with new ownership – stronger than ever – and continue building amazing planes with a focus on innovation, safety, and incredible flying experiences.” A spokesman for Icon told AVweb there is no information available on who the new ownership might be. The announcement did include contact information on the company handling the sale, for “interested parties” who would like to reach out.
Icon said it will maintain open lines of communication with customers, suppliers, employees and other stakeholders “to ensure transparency and provide updates on critical developments.” The spokesperson told AVweb the stakeholders include investors, vendors and members of the board. “All have been notified and we will continue to keep them updated,” the spokesman said.
Icon said it wants an expedited sale process with approval from the Bankruptcy Court. The company has arranged debtor-in-possession financing to fund operations and costs. “To minimize the adverse effects on its business and the value of its estate,” the statement reads, “the company has filed customary motions with the Bankruptcy Court to get court approval to sustain its operations in the ordinary course, including honoring commitments to customers and vendors and fulfilling obligations to all employees.” Meyer added, “We understand that this situation creates a hardship for everyone involved. However, without taking these steps, there is not a viable path forward for the business to do what we do best – build incredible airplanes and support our aircraft owners.”
For more on the bankruptcy process, including claims information, Icon provided the following contact information: https://cases.stretto.com/iconaircraft, or call (866) 993-1870. International callers: (949) 892-1896.
Well, who could have seen this coming? Call the Chinese, we have a real deal for them. 😉
DEI? Well, I guess that if one were to interpret the mention of age and the interaction across generational lines within the pickleball context as touching upon inclusion, it would be in a very limited and indirect sense, focusing on age diversity and potentially the inclusion of older individuals in social activities and conversations about aviation safety and industry practices.
Uh . . . what?
Fat fingers, sorry!
I’m actually surprised it took this long. A jet ski with wings for 389K should sell like hotcakes!
Pilots like to at least pretend that personal aircraft are useful for transportation. (They were for me about a half dozen times.) The Icon’s sales pitch was all about how useless it was. Just a toy.
Some “jet skis” are faster.
It’s a hard sell; but with the purchase agreement and all they mandated, monitored, and life limited, it was way too onerous for a sport toy touting “freedom”. Far from it.
If someone can pick it up for cents on the dollar, it could be made work. Wonder what the total manufacturing costs per airplane are.
“Wonder what the total manufacturing costs per airplane are.”
$600,000.00
It is really sad news. It would have been an excellent $139,000 aircraft as originally proposed in 2008. Adjusting for inflation figure around 175,000. Add in some modest improvements since inception maybe $200,000 MAX.
$389,000 AND their business policies? Good riddance.
For half the money you can get a used 206 on floats that’ll be way more fun and also have a good resale value.
More practical, more useful, more economical – sure.
But “way more fun”? I suppose that depends upon what you consider to be ‘fun’ – but whatever flies your boat.
Having the ability to take friends/family/stuff to places accessible by floatplane and not having to worry about bashing the wings on docks or pilings as well as standard a/c handling…you know, add power and the nose goes up, not down etc.
For someone willing to forego sleek and sexy, the Searey has better performance at only slightly more than half the cost of an Icon.
Boeing should buy Icon. They’ll make them cheaper.
They went about everything they did in the STUPIDEST way possible ! I have always wondered where all their money came from. From the amount of money invested in the development of this LSA you could have produced a Space Shuttle ! Then they decide to put their training and delivery center in some unreachable corner of Northern California?? C’mon guys pull your head out !
Agree. I wondered from the start why they would build a business in the wanna be communist state of Kalifornia. Everything costs more and taxes are not business friendly.
It couldn’t be because California has the best weather and the most diverse terrain and many lakes and rivers and bays to train someone in an amphibian.
Yeah, maybe, how did that work out for them?
When they were bought out by the Chinese, and moved most of their manufacturing to Tijuana, Mexico, I said hasta la vista. Then they piled on with more unworkable stipulations.
I am surprised they lasted this long. The plane is basically a toy with no real practical qualities.
Well garsh, sha-zam, and goll-lee! No big surprise here. My son and I somehow landed two tickets to a swank ICON reception at OSH years ago, complete with a martini bar made from giant blocks of ice with scantily-clad young ladies serving. Standing at the bar waiting on a beer, a chatted with an older fellow who sat alone, drinking. He said “I am one of the investors in ICON. I will never get my money out of this.” In many states such as mine (NC) there are only a few bodies of water where a seaplane may legally land. The market for such aircraft is very, very small, at that price and also considering the high cost of insurance for seaplanes. Aircraft and glitzy marketing simply do not mix. Such efforts seem to end up the same – all owned by the communist Chinese, who are buying the proverbial cat in the sack. Anyone remember the Chinese-made Skycatcher or DC-9s?
I was there! LOL I remember thinking at the time the cost of the big bash was bound to impact the selling price of each unit. I’m fairly certain Icon threw more than just the one party, too.
I was at OSH in 2010, probably down the bar from you. I was thinking the exact same thing, also noting the amount of ‘fighter pilot testosterone’ in the executive team, and how little business sense there seemed to be. I’m amazed it took this long for the other shoe to drop. If the company gets sold at a fire-sale price, maybe the price of the plane will become more realistic, this is a 150k – 200k toy if at all. Next thing they need to do is to bring in a real aviation business person and then ditch the business policy manual that got them to this point. Beautiful plane, but whatever you are doing has to make business sense.
Another company that started off with too much OPM (other people’s money) and not a good plan on how to make a profit in a difficult business. I remember the large and lavish displays at Oshkosh when they still did not have anything to sell. Anybody know how many planes they have sold?
To answer my own question — somewhat in excess of 200 aircraft with a high point of 44 aircraft in 2018. They estimate that they need to sell 8 t0 10 per month to be sustainable. I would guess this is not likely at this point.
Flashy, unrealistic marketing videos wont get them out of this.
Maybe it was their business model that attracted Chinese investment. With all the stipulations and monitoring, it was like a A5 owner paid the sticker price but was just allowed by the company to use the airplane for a while, as directed by Icon, not exactly as an “owner.”
I was always suspicious of that “A5” model designation, too. Following Capt. James Kirk’s line of questioning, what happened to A’s 1 thru 4? Well, Dr Daystrom? We’re waiting.
Surely the current aircraft owners have the right to approve the proposed buyer.
1 in 20 have crashed as of 12/2023 and all 7 of the accidents where the NTSB report is finalized were blatant pilot error. It seems the A5 attracts people that are very prone to high risk behavior. I’ll admit I’m impressed with how minor the injuries are on some of the accidents which points to a reasonably well made aircraft. I just seems like an niche aircraft that appeals to a demographic that is prone to accidents– not a good combination.
Never understood why anyone would put good money behind a GA company. Perhaps if you just love aviation and want your money there. So many other better options for a return on investment.
How do you make a million dollars in aviation? Start with 10
+1 to the above comments and, the idea of non-pilot population all of a sudden putting their fears aside to dive into a cool airplane is a ludicrous idea of estimating your total addressable market – if financial plans were based on those projections, then this outcome is no surprise
Ya got to remember that the company was started by folks that worked at Scaled who were working in an environment that was rife with successes. So they ‘transferred’ that mind set over to the Icon idea. They were test flying the early airplanes on Lake Isabella in the southern Sierras not far from Mojave for that reason. How they wound up in Vacaville befuddles me other than there ARE a lot of lakes around northern California. Their early kiosks were borderline ridiculous; now hearing they had dancing girls hustling prospects comes as no surprise. It’s time for Icon to go the way of the Flycatcher. It’s an impractical idea that isn’t gonna be sustainable. I equate it a lot with that tiny airplane that flowed out of Mojave … the Quickie (aka dragonfly).
The Quickie, Q2 and Q200 were not Dragonflies nor were they referred to as such. I built a Q2.
I wonder if the Icon A5 accidents had anything to do with the bankruptcy.
This is a link to those reported accidents, 4 total fatalities.
https://aviation-safety.net/wikibase/type/A5
As stated above, most if not all were attributed to pilot error. If you market a product as a “jet ski with wings”, you’re going to get jet ski drivers who are learning to fly, with the associated accident rate.
Minority shareholders of ICON Aircraft, led by a former Boeing CEO and backed by private equity funds, have taken legal action against PDSTI, a Chinese firm that holds the majority stake in ICON. The shareholders accuse PDSTI of mismanaging ICON by shifting its valuable technology to China, aiming to profit at the company’s expense. Filed in June 2021, the lawsuit claims PDSTI exerts excessive control over ICON, including ousting board members who oppose its directives. The case is now advancing toward trial, spotlighting significant governance conflicts within ICON Aircraft. Good bye!
Like real estate and other speculative investments Icon will change hands multiple times until enough investors have lost the requisite amount of money to spread the damage among a group large enough to absorb the pain. Whoever owns it next should rent the type certificate out to some company that can manufacture an A5 for less than 200K. Wish Mooney would do this. Would love to have an M20 with a Johnson bar and minimal avionics at 250K with a cruise of 200+ knots. Until then there are enough bitcoin and tech millionaires to buy jets and pay 700K for a new C172. No-one, including AOPA cares about aviation “purists”, which now just means “broke folks”. The fall of Icon feels like some of the air is coming out of the GA world and maybe when it’s over one can buy a Cirrus SR22T G7 for less than a million. We will know soon.
Knew this was coming, just thought it would be sooner than this. From their first attendance at Oshkosh, I could see the overspending and under delivering from day one.
A used Rans S7 on floats for 1/4 the cost would run circles around this glass wonder and provide good times with fixability when you smuck a rock or dock. Yes, it will happen.
According to the petition (among several documents filed on the first day of the proceeding included in an online docket maintained on Icon’s behalf), Icon owes $68 million to the company’s 30 largest creditors, 95 percent of that total—$65 million—owed to East West Bank of El Monte, California. The company owes a much larger sum—$105.4 million—to three lenders who issued 21 unsecured notes in recent years. Of that total, $93 million, came from the entity based in China that also owns about half of the company’s equity, according to other documents in the case file.
The document lists the company’s total debt at $173.7 million, including $3.3 million owed to vendors and suppliers, and $170.4 million in unsecured notes issued since March 2020, 54.6 percent of which came from Pudong Science and Technology Investment (Cayman) Co. Ltd., which, according to the affidavit, also owns “approximately” 50 percent of Icon’s equity.
Icon is headquartered in California (with facilities in Florida and Tijuana, Mexico.
“The A5 is the only model Icon has produced. It earned a positive review from AOPA Pilot Editor at Large Dave Hirschman in 2015, among the first to fly the amphibious light sport aircraft. First announced in 2008, the company began collecting deposits years before the first airplane was delivered and employed an unusual purchase agreement for the two-seat airplane, including contract provisions that gave the company the power to approve or disapprove any future sale. The price, first projected to land around $139,000, had climbed to a base of $207,000 by the time those purchase agreements were employed. It has climbed higher since: According to the GAMA data, the 2022 billing divided by the number of aircraft delivered comes to $359,000, which increased to $381,818 in 2023 with fewer aircraft delivered. A5 deliveries peaked in 2018, at 44 aircraft shipped for the year.
While the company touted safety features including a “spin-resistant” design, standard angle of attack indicator, and ballistic airframe parachute, a series of incidents and accidents put a dent in the A5’s image, including the 2017 death of A5 designer Jon Karkow and his passenger when, according to the NTSB, the aircraft struck terrain while maneuvering at low altitude, likely after mistakenly entering a different canyon than intended.
That crash was followed five months later, in November 2017, by the death of legendary MLB pitcher Roy Halladay, who had taken the first delivery outside of the company’s training fleet and hit the water while flying low in Florida.
Other accidents followed, not always involving injuries, but each raising fresh questions about the safety of the A5 that Hirschman examined in a 2019 AOPA story.
“The reasons for this litany of horrors are varied, and few threads seem to tie them together,” Hirschman wrote.
“But having flown the A5 for about 40 flight hours—including a formal checkout and a transcontinental ferry flight—I suspect that pilot overconfidence is a factor. The airplane flies so obediently, and it has such benign handling characteristics, that it gives the false impression it can do anything.
Its spin-resistant design, however, doesn’t mean it won’t stall. It will. The airplane is easy to overload, and with a gross weight of 1,510 pounds and a mere 100-horsepower engine, the A5 has a meager power-to-weight ratio.”
Hirschman noted, however, that available data contradicted the notion that low-time sport pilots were flying themselves into trouble with the A5.
“In fact, low-time sport pilots are yet to be involved in a single Icon accident,” Hirschman wrote.
“Instead, it’s high-time, experienced pilots—many with advanced ratings—who are at fault. Not once has a mechanical problem contributed to an Icon crash. Every one of them has been pilot error, according to NTSB and FAA reports.”
Even if Icon can shed/restructure its debts, it seems the A5 is intrinsically not an economically viable aircraft at $400k/each.
If a new buyer were to buy the whole package, including debt, IP, certificate, tooling, factory and parts, could they build it cheap enough to make it a volume seller? (OK, maybe if some military company bought it to convert to some kind of unmanned amphibious scout/attack drone, but that’s a whole different set of economics.)
I guess now is the time for the Vickers Wave to swoop in and take the market… /s