Time will tell whether Broom is correct about the fallout from the 10 percent price increase but Eclipse CEO Vern Raburn said in an email to customers that without the extra money the company simply can’t fly. Raburn said the cost assumptions that were valid in 2003 (when the price was raised to $1.175 million) are no longer accurate and the company has no choice but to raise the price. He said the price of aluminum alloys has jumped (in some cases by 75 percent) and costs associated with design changes necessitated by the switch to Pratt and Whitney Canada engines were greater than anticipated. But Raburn maintains the 500 remains the groundbreaking bargain the company always envisioned it would be. He pointed out the little jet is still 70 percent less expensive than current entry level jets and 40 percent less than other very light jets (VLJs) under development. “While we regret having to raise the aircraft price, the Eclipse 500 still offers the lowest cost of ownership for a twin turbo fan aircraft ever achieved in aviation,” he assured his customers.
…Materials Costs, Design Changes
Key Takeaways:
- Eclipse CEO Vern Raburn announced a 10 percent price increase for the Eclipse 500, stating it was essential for the company's survival due to outdated 2003 cost assumptions.
- The price hike is primarily attributed to a significant increase in aluminum alloy prices (up to 75%) and greater-than-anticipated costs for design changes necessitated by the switch to Pratt and Whitney Canada engines.
- Despite the increase, Raburn maintains the Eclipse 500 remains a "groundbreaking bargain," asserting it's still considerably less expensive than other entry-level and very light jets and offers the lowest cost of ownership for a twin turbofan aircraft.
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