Little Jets, Big Problems

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I have a piece in the September issue of Conde Nast Portfolio that takes an inside look at Eclipse Aviation, the start-up aircraft manufacturer founded by former Microsoft executive Vern Raburn. The Eclipse 500 can fly at 400MPH and costs just $1.5 million, but Raburn has faced a slate of production setbacks, safety concerns and financing shortfalls that threaten to ground his company. Many pieces and books have championed Eclipse’s innovative design, and yet Raburn risks blowing nearly $1 billion of investors’ money on his venture.

An excerpt:

Since forming Eclipse Aviation in 1998, Raburn has raised close to $1 billion in private financing from investors, including Bill Gates, biotech billionaire Alfred Mann, and UBS, the Swiss investment bank. His utopian vision of affordable jet travel has inspired nearly a dozen companies—including industry giant Cessna, Brazilian aircraft maker Embraer, and even Honda—to develop models of their own, creating an entirely new category of plane known as very light jets, or V.L.J.’s. Raburn’s acolytes see him as an aviation pioneer equal to Howard Hughes.

But Hughes’ most ambitious design ultimately flopped, and Raburn risks a similar fate. The Eclipse 500 is three years behind schedule, and it will be several years before the assembly line churns out the three planes a day that Raburn has predicted. In June, he skirted financial ruin when a deal for $200 million in financing imploded the night before it was to close, forcing him to scramble to secure new funds. “The company was nearly destroyed,” he says wanly.

Raburn’s critics—and he has many—say he is a dilettante, a pariah, a Silicon Valley refugee who naively believes airplanes can be snapped together like computers. His detractors also lampoon his public pronouncements about the Eclipse’s revolutionary potential, and they snipe over the investment bubble in mini-jets that has gripped the aviation industry. Foes derisively refer to the Eclipse as a “dotcom with wings.”

Raburn—who, at 57 years old, has a boyish face, a stocky frame, and a short temper—clearly enjoys a dogfight. Back on the ground, he says, “This industry has been screwing customers for decades, and I’ve been very disdainful of that.” He wears a golf shirt and charcoal slacks and sips coffee from a mug ringed with block letters: I LOVE THE SMELL OF JET FUEL IN THE MORNING. He offers another explanation for his legion of enemies. “I guess I’m the world’s biggest asshole.”

Read the rest HERE

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