By Karen Di Piazza
Vern Raburn has been described as a tsunami; he can’t be controlled or stopped.
“The Eclipse 500 jet is going to happen, and anybody who thinks it isn’t, or says it isn’t, better sit down!” said the CEO and founder of Eclipse Aviation Corporation.
Eclipse Aviation has created a luxurious, six-place, twin-turbofan aircraft bizjet that costs less than most used turboprops. Raburn said the 500 is more economical to own and operate than most of today’s single engine pistons and all multi-engine pistons and turboprops.
Raburn, a self-proclaimed “aviation nut,” was one of Bill Gates’ first executives at Microsoft. He went on to run Symantec as its CEO and chair, and to oversee high-technology investments as president for Microsoft cofounder Paul Allen.
He talks candidly about his “jealous” competition and running a company where the phrase “good enough,” isn’t used, as well as describing why his new technology is worth taking the risk and why the Williams International engine was a fiasco.
Raburn has logged more than 6,000 hours of flight time and has earned his multiengine, instrument, commercial and rotary ratings. He holds a low-altitude aerobatic certificate, and is type rated in more than 15 aircraft types, from World War II bombers to piston airliners to modern corporate jets. He’s on the board of directors of the Experimental Aircraft Association and owns vintage aircraft including a Lockheed Constellation, which he fully restored, a North American SNJ-5 and a Douglas A-26 Invader.
Jumping Into The Bizjet Arena
While working for Allen, Raburn served on numerous boards and piloted a Cessna Citation jet to participate in directors meetings across the country. After doing that for several years, he concluded there needed to be a more economical alternative.
“When I left Paul in 1977, it was at the height of the dot-com world,” said Raburn from his Albuquerque, N.M. plant. “All the guys I knew that had started companies, including Amazon, were off doing that; two things transpired simultaneously that caused me to make a change at 47. I had been in the PC business for 25 years—and I was bored.”
Raburn shaped the course of the information technology revolution. He opened one of the nation’s first computer stores, the Byte Shop of Westminster, Calif. He served as executive vice president to the Lotus Development Corp., where he played an integral role in the successful launch of Lotus 1-2-3. Additionally, he was CEO and chair of the Slate Corp. During his career stint in high technology, Raburn consistently led companies to the highest levels of success, and by the time he left Gates, he was executive vice president.
“I never bought into the hype that the Internet would actually close down shopping malls, like Amazon believed it would,” he laughed. “So, in 1997, while I was having my mid-life crisis, asking myself, ‘What do I want to do when I grow up?’ Eclipse sounded like a good idea.”
Raburn created the Eclipse 500 twin-engine jet with the idea that point-to-point, on-demand air travel should be affordable to a higher percentage of the population—especially executives who needed to get somewhere fast.
“I think part of what the Eclipse 500 is today is a direct, absolute reflection of my knowledge and my experience from the computer business,” Raburn said. “I think there are things in this airplane today that aren’t in any other airplanes, because of my experience.”
Raburn says he’s keenly aware of “how business is done and how risk is taken.” He said be became a “zealous believer” that he could raise money to produce the Eclipse 500 jet. He did exactly that. He raised $325 million in private equity capital. Now, his luxury jet, which has an all-leather interior, sells for $950,000. Certification on the bizjet is set for early 2006.
“I knew we were at the right point from a technology standpoint to create an airplane that offered a significantly better value proposition,” he says. “All 260 of us here have poured our hearts into this aircraft. The Eclipse is a highly digital aircraft and all of the would-be competitors for us are very traditional in their power systems and power controls.
Raburn says that as far as price is concerned, they have no competition. However, in the small business jet group, the Adam 700, Aerostar FJ-100, ATG Javelin, Avocet ProJet, Chichester-Miles Leopard Six, Cessna Citation Mustang, Diamond D-Jet, Eclipse 500, HondaJet, Maverick Jet and Safire Jet are considered contenders.
Recently, Airport Journals quoted Rick Adam as saying that although a handful of companies have proclaimed themselves “manufacturers of personal jets,” only Colorado-based Adam Aircraft is flying a light jet today—the A700 that is flying is a “near-production jet.” He added that Eclipse flew for a while, but had been “decommissioned.”
Raburn, who said that the Eclipse 500 underwent its first scheduled flight test last October, using Teledyne Continental Motors engines, disputed that remark.
“No one decommissioned us,” he said. “We flew the Eclipse for 55 hours, during which period we extensively tested the aircraft. The test flights were scheduled to last 60 hours, but because we finished five hours early, we ‘retired’ the aircraft in late October 2003—because we were finished. We validated its handling and performance characteristics. We have real data acquisition, and a data collection system that captures on average about six gigabytes of data per hour of flight.”
Raburn said that using state-of-the-art acquisition technology, the Eclipse’s 55-hour testing period was equivalent to 150 hours of traditional testing. The Eclipse isn’t flying right now, but it’s scheduled to fly again “sometime this year,” using Pratt & Whitney Canada engines.
Raburn also said that Adam is flying a “one-off, hand-built prototype,” referring to the A700.
“So, yeah, he’s kind of flying right now,” he quipped.
He added that Adam Aircraft has missed every stated certification date on the A500, the company’s carbon-fiber composite, pressurized, twin-engine aircraft with centerline thrust.
“He’s missed four of them now,” he said.
Out With The Old, In With The New
Raburn said his company has been “open and honest about everything.”
“Our previous engine manufacturer, Williams International, was going to build us a breakthrough, wondrous engine, which we were paying them millions of dollars to develop,” he said. “Turned out, they didn’t know what they were talking about. Therefore, we cancelled the contract with them, which is a pretty serious step to take when you’re building a brand new airplane.”
Raburn said Williams’ engine flat “didn’t work.”
“We never got more than two hours of running time on any one engine before it would break,” he says. “Williams likes to hide these facts; they never got the engine to any level of reliability in terms of performance, thrust, fuel consumption or in terms of weight. Across the board, it was a massive failure on Williams’ part.”
Raburn said the matter was settled out of court; they separated in November 2002. Now, Pratt & Whitney is Eclipse’s engine supplier.
“This is aviation history because Pratt has never developed a new engine for a new airplane, for a new company,” he said.
Raburn said Pratt paid for the development of the engine.
“Pratt is also developing the engine for the Cessna Mustang, and the Mustang’s engine is very similar to ours—just a bigger version of it,” he explained. “That engine has about 35 hours of run time with full thrust of 15 plus hours; it’s hitting every number and every schedule they set out to do.”
Raburn says Safire Aircraft in Florida is also making progress.
“I think they have some very experienced people working for them now—they’ve been around almost as long as we have,” he says. “However, they’ve gone through three major designs and they haven’t been able to raise much money; but I think, today, they’re designing a practical and rational airplane.”
Raburn added that he doesn’t believe Safire will be able to sell their jet for $1.395 million as they forecast.
When asked why the Eclipse 500 went up from its original price of $837,500, Raburn explained that the increase was due to the engine change. He expressed distain over stories reported in the media in which competitors said that he would never get the Eclipse 500 off the ground.
“I think all of the naysayers are jealous,” he laughed. “I think there are a lot of people who are justifiably threatened by us, so the easiest thing in the world to say when you’re scared of someone who is doing something that hasn’t been done before, is to say that it can’t be done. I was there when the president of Digital Equipment Corp. said, ‘Microprocessors will never amount to anything because they’re just toys.’ Of course, 10 years after he said that, Compaq Computer bought out DEC!”
Changing The Status Quo
Raburn said that general aviation has been dead for about 40 years, with few exceptions.
“That’s the bad news; it’s worse for consumers of aircraft because it’s resulted in companies like Cessna, Raytheon and Piper building one more of the same thing and charging more money for it,” he said.
He said that although the GA industry has fewer customers, manufacturers still charge more money for aircraft because they’re making a profit selling fewer planes. He also said manufacturers have “no incentive” to take any risk.
“Developing new aircraft isn’t easy; it’s full of risk,” he explains. “The GA crowd has the attitude that there’s no new market—everything has been done that can ever be done. They believe to take any risk—do anything new, innovative, different or better—is just stupid. That’s really the attitude you find within existing companies today.”
Raburn explains there are two basic reasons for this.
“You have to acknowledge that in 1978, the industry built almost 18,000 airplanes, but by 1992, we built only about 600 airplanes in that year,” he explains. “What you have is several generations of management in these companies where their job hasn’t been to innovate, to take risk or to do something new; their jobs have been to survive in a collapsing industry.
“It collapsed because airlines deregulated, and it was easier to get on a Southwest, United or American airplane because it was faster, more comfortable, safer and it was cheaper. These combining forces have driven the GA industry into a pure head-down, hunker-down, hide-in-your-hole survival type mode.”
Raburn said that attitude changed when he appeared on the scene.
“All of the sudden I’m telling the GA industry, ‘Hey, I come from a world where taking risk is fun, where taking risk results in rewards, where taking risk results in whole new businesses and markets, so let’s do that with airplanes!” he said. “Let’s find new ways of manufacturing aircraft, new ways of doing control systems and new ways of assembling aircraft. If we can do that, then we can change the status quo—change the price performance ratio of the airplane and have whole new markets.”
The truth is that Raburn can’t help himself when it comes to change.
“I’d get bored without it,” he says.
As change goes, Raburn doesn’t favor all-carbon fiber composite aircraft yet.
“I think composites are sort of a bad idea in general,” he says. “Composites are a material that’s good for low-volume production where you’re building 25, 50 to 100 airplanes a year—or building really simple airplanes. There are a couple of big lies in aviation that are up there with ‘the check is in the mail.’ One of those lies is that composites are lighter than aluminum. They’re not, they’re heavier; every airplane that’s been built of composite proves that over and over.”
However, Raburn said if you were talking about a large aircraft such as Boeing, that truism is actually applicable because in big parts, such as a rudder on a Boeing 777, which is made of composite material, that one part is lighter.
“But when you’re talking about the whole airplane, it doesn’t scale,” he said. “There are issues of being able to get out in the field and fix a composite plane—you can’t. The best way to characterize this is to say that we’re at the point that we use material systems. For example, when you’re building an aluminum aircraft you might use a dozen types of aluminum; this is true of composites. We’re at the stage of knowledge and experience with composites that we were at with aluminum right after WWII.”
Raburn says you only need to look back at history when the all-aluminum Comet airliner first came out, which crashed and killed more than a hundred people; the crash was due to metal fatigue.
“In 1946, when the Comet was designed, aluminum wasn’t a well-understood phenomenon,” he says. “Because of that, the airplane was built with a defect in it. We had only built airplanes using aluminum in 1946 for about 15 years. We learned unfortunately with the very high cost of personal life, about an attribute of aluminum. In other words, aluminum is an extraordinary well-understood material today.”
Raburn believes composites are an unknown, un-quantified risk. Nevertheless, the Eclipse 500 does have some composite material.
“Not on any of the aircraft’s structural parts though,” he said. “We wouldn’t build the fuselage out of composite material.”
Air Taxi Revolution
Raburn said that point-to-point air taxi service is the future of GA.
“If you flew our airplane from Los Angeles to New York though, you’d be crazy,” he laughed. “You couldn’t, not without refueling; you have to think of this jet as a kind of air taxi for flights of 400 or 500 miles.”
Raburn said the future of GA travel would consist of thousands of small jets that get you from point A to point B within a radius of 500 miles from some 10,000 small airports in the United States. Out of 10,000 or more airstrips in the U.S., only about 550 have any kind of scheduled airline service; it’s clear to Raburn there’s a huge market.
“In other words, 95 percent of the airports in the U.S. have absolutely no form of scheduled or unscheduled airline service,” he said. “More than 130 cities have lost air service since 1999; a mere 29 hubs handle more than two-thirds of all airline passenger traffic in the U.S.”
When asked why it takes so long to build a new airplane, Raburn laughed and said his board of directors ask that same question all of the time.
“In comparison to pharmaceuticals, it takes between seven to 15 years to develop a new drug,” he explains. “A typical airplane takes between four and five years to develop from scratch. Cars also take about four to five years. Not a new spin-off design; I’m talking about a new engine and new chassis, etc. General Motors for example, has about 5,000 engineers working on that, but with an airplane, you’ll have about 300 to 400 engineers, counting everyone else such as vendors, etc.”
He says automobile manufacturers don’t have to deal with the same scrutinizing regulatory oversight that an airplane company does with the Federal Aviation Administration.
“There’s not a lot of government oversight on the design of cars; there’s some crashworthiness, fuel consumptions and ignition testing, but not much more than that,” he said. “When you’re finished with the design process of an airplane, it then becomes a huge undertaking dealing with the FAA. The regulatory process itself takes tens of thousands of man-hours, which leads to a better airplane.”
When asked how big he’d like to see his company grow, that question took him back to the time when he said he learned a lesson.
“That’s an excellent question; it reminds me of when Bill asked me to make some projections during my early days with him at Microsoft,” he said. “I remember giving him the cost, and told him how much we’d make on various production levels; I projected selling 5,000 piece units. Bill, in his typical fashion, circled the 5,000-unit price in red and said, ‘Are you out of your mind! This will never happen.’ I ended up selling 75,000 units.”
Because of that, Raburn is hesitant to say and he doesn’t want to brag.
“Our plant is capable of building 1,500 jets a year; we’ve never said we’d do that, but right now we think we probably will build 1,500 jets a year,” he said, based on the fact that they’ve sold 2,100 jets so early in the game. If orders continue as they have, they plan on going to full production capacity.
“We think that’s a pretty strong validation,” he said
Raburn reveled they’ve taken in $75 million in deposits, and delivery positions on the 500 is $97,000—which is a nonrefundable deposit against guarantees.
“We know our buyers are serious this way; we know we can count on that sale,” he said.
When asked how he’d like to go down in history, he said that being “the one that brought an alternative way to travel” in GA, wouldn’t be bad.
“Executives really don’t have a point-to-point transportation alternative, and I feel very strongly that there’s a massive opportunity to provide a new type of transportation alternative to people who are driving or who are flying on airlines,” he says. “Right now, there’s no in-between; if you’re a GA pilot and you’ve got a Cessna 172 or a Baron or something like that, it’s really a recreation plane, not a business aircraft.”
Raburn says anyone who claims otherwise is “kidding himself or herself.”
“I know many pilots who tell their wives, ‘Oh don’t worry dear, this is for transportation,’ but it’s really about going out and getting that $500 hamburger on Sunday afternoon!” he laughed. “There’s nothing wrong with that. We’re a nation who spends a couple trillion dollars a year on recreational things.
“By creating a jet that has the safety, comfort and the performance of a big business jet or an airliner that can be operated at a price that’s a whole lot closer to what you’d find with a smaller GA plane, then that in turn will cause people to use my jet for transportation, not recreation.”
Raburn’s wife, Dottie Hall, Eclipse’s vice president of marketing, said the initial interest in the Eclipse 500 came from “the Verns of the world”—aircraft owner-operators, including entrepreneurs who fly their own planes for business and pleasure. She said Eclipse’s first wave of orders, more than 500 came from exactly that niche.
However, many executives still like their flashy, expensive luxury jets.
“But it’s becoming increasingly difficult to defend the high-end aircraft,” Hall says.
Raburn agrees with his wife, and adds that it’s great to own a $40 million Gulfstream, and there’s a market for that.
“It’s pure power and sex appeal, but most stockholders today aren’t buying it,” he said. “They want accountability for every dollar spent.”
Collaborating With Partners Creates Success
Raburn says there’s a gold standard known in the aviation industry about small turbofan engines.
“It’s not Williams, not Garret or Honeywell; It’s Pratt & Whitney,” he said. “I had got to know those guys up in Canada, even when we were working with Williams. Through acquaintances, I had reached out to them back in 2000.
“I like the new specifications with the Pratt PW610F engines; they allow the use of shorter runways. We traded off 40 knots of high-end speed to ensure we could go to 2,000-foot runways.”
The maximum cruise speed on the Eclipse is 375 knots. Raburn also signed a 10-year agreement with Hampson Industries, the British firm that is a supplier to Rolls-Royce, Boeing, Airbus and Short Brothers.
“We signed a $380 million contract with Hampson to make our tails and component parts,” he said.
The contract with Hampson’s Aerospace Fabrications & Assemblies division is the largest single contract ever awarded to the company.
Fuji Heavy Industries and Raburn signed an agreement, where the Japanese firm will manufacture the Eclipse wing assemblies and license Eclipse’s “friction stir welding process,” which was pioneered by Eclipse.
“These contracts demonstrate Eclipse’s commitment to search globally to find the most qualified partners, who share our vision to change the way people travel,” Raburn said.
Eclipse recently signed other long-term contracts with six other suppliers for their Avio computerized control system, which previously was only available in advanced military and commercial aircraft.
The system includes two on-board computers that will send and receive information to and from a power distribution unit on the 500; it will coordinate everything from lighting to cabin pressure to avionics controls. The system will warn the pilot of an unsafe operation and try to figure ways out of problems.
Getting What Raburn Wants
Raburn says getting what he wants is easy. Why? Because he wants so little: just to invent, be happy and be in the company of smart people.
He’s a man living for today, absent of regrets, and places a high value on contributing to the world and having fun at the same time.
“I was always labeled as the guy who couldn’t keep a job,” he laughed. “When I’d get bored, I’d go to something else. In the cafeteria of life, I have at least another 10 years at Eclipse.
“I like toys too though, so you never know what industry I’ll be in next! I was the college student who made As or Fs. If I liked the class, there wasn’t enough time in the day; if I thought the professor was a jerk, I’d make that F—it drove my poor dad crazy.”
Raburn made a substantial amount of money in the computer industry. He could have retired, but at 53, he says, “That’s not in the cards.”
“I love working; I don’t see myself retiring,” he smiles. “This isn’t work, I’m having immense fun. Most people would love to combine their occupation with their avocation, and I’ve done it. I know how lucky I am.”
For more information, visit www.eclipseaviation.com or call 877-375-7978.