Eclipse Pricing Bombshell

Eclipse mixed two slices of good news in with a heaping portion of bad news earlier this month. The company announced it was increasing the price of its Eclipse 500 twinjet by $550,000 to $2.15 million-a jump of 35 percent-effective immediately, and based on June 2008 economics. The good news came in the form of the confirmed launch of Eclipse's single-engine model 400 jet, priced at $1.35 million (see below); and the delivery of the 200th Eclipse 500. Eclipse's original business plan called for delivering up to 2,000 Eclipse 500s annually at a selling price below $1 million. The latest price increase is blamed on "higher manufacturing costs and a slower than anticipated production ramp rate." Eclipse still claims its 500 is the lowest priced very light jet on the market (the Cessna Citation Mustang costs $2.77 million). The company has also been plagued by delays in European certification, with EASA citing concerns over the twinjet's ability to descend rapidly in the case of a rapid decompression; and doubts about the airplane's deicing capability.