When the economy gets a cold the aviation industry gets pneumonia. Here are a couple of news stories…
Cirrus is slowing down production until January 2009, furloughing many production workers (story). This follows layoffs of 205 people earlier this year. After Cessna, Cirrus should be the strongest piston airplane manufacturer. They make the world’s best selling piston-engine airplane, the SR22. Following their acquisition in 2001 by First Islamic Investment Bank they’ve had ample access to capital from the Arab Gulf states.
Eclipse is demonstrating the worst that can happen when you buy an aircraft from a new company. They have filed for Chapter 11 reorganization, but only plan to operate in Chapter 11 for a couple of months until all of their assets can be sold to an affiliated European/Russian company. People who paid $1.5 million for jets that never quite worked now have no warranty. If they want to get the planes certified for flight into known icing, they’ll have to pay for the work themselves. Folks who put down deposits of $100,000 and more have lost everything. (full story) What about investors? According to a February 18, 2008 article in the Albuquerque Journal, the company had raised more than $1 billion in capital. The stockholders presumably have suffered a 100% loss.
2008 has not been kind to new airplane companies. Adam Aircraft, founded in 1998, went bankrupt (Chapter 7 liquidation) in April. They had a weird-looking piston twin featured in the movie Miami Vice and also a jet for which they had made a lot of claims. (wikipedia) Customers who were unfortunate enough to take delivery of the $1.25M piston twin are grounded due to lack of support (story).
I only hope that Icon Aircraft (WSJ story; company Web site requires somewhat destructive Flash upgrade) survives long enough that we can fly their little amphibian.