ALBUQUERQUE — Eclipse Aviation chief executive Roel Pieper was upbeat about the future of the Eclipse 500 just hours after a federal judge granted the Albuquerque manufacturer's request to start restructuring under Chapter 11 bankruptcy protection.

U.S. Bankruptcy Judge Mary R. Walrath issued several orders Wednesday that would allow Eclipse to continue business operations and borrow up to $8 million in debtor-in-possession loans from Eclipse board member Alfred E. Mann and Luxembourg-based ETIRC Aviation until Dec. 15.

Pieper, who also is chairman of Eclipse's largest shareholder, ETIRC Aviation, was in Albuquerque on Wednesday for an all-hands meeting of the company's 945 employees.

He moved quickly to assure the work force and suppliers the company was stable and no changes were planned at the Albuquerque facilities.

Pieper said workers were "relieved and upbeat" after he explained the company's plan to restructure.

"You go from very uncertain to certain," Pieper said of the mood after company filed for Chapter 11 protection Tuesday. "I think we achieved our goal, right before Thanksgiving, to put some certainty back into the work force."

Eclipse Aviation plans to sell nearly all its assets — valued at between $100 million and $500 million — at a public auction that would be held in January. Though the auction would be open to any company, the restructuring plans call for an affiliate of ETIRC Aviation, called EclipseJet Aviation International Inc., to buy Eclipse.

Pieper also said he met with some suppliers while in Albuquerque.

"I'm quite bullish that we will come out of those discussions quite positively," he said. "We all want to make money. We all want to do business."

Despite the Chapter 11 filing, Pieper said plans are moving forward for a second plant in Ulyanovsk, Russia, which should be completed by mid-2010.

Despite a global economic crisis that has caused hundreds of layoffs at other aircraft makers like Cessna and Hawker Beechcraft Corp., Pieper said Eclipse has 1,100 orders on the books which will provide enough business for the company until the economy recovers, which he believes will happen by 2010.

"We have an order book that is still quite healthy," he said. "It's many years of production. I would expect that some part of that order book would not be financed because of the conditions of the market, but it is such a sizable number that I'm not worried for the first two years."

Should the restructuring succeed, Pieper said the company would expand into South America and Asia. He foresees the Albuquerque location serving China and India, as well as the United States, while the Russian assembly site would serve Europe.

Pieper's interest in obtaining Eclipse's assets is based on a belief that the very light jet remains competitive with Cessna's Citation Mustang and Emraer's Phenom 100.

The Eclipse is 40 percent more fuel efficient and, if the jet is part of an air-taxi service, it can fly more than twice as long as its competitors while keeping its maintenance costs low enough to be profitable, he said.

His optimism comes after a troubled year for Eclipse that saw layoffs of more than a third of its work force, an unplanned two days off for workers after the company was late making payroll, the exit of its founder and former chief executive Vern Raburn and lawsuits from nearly a dozen disgruntled customers.

And, on June 5, a throttle failed on an Eclipse approaching Chicago's Midway Airport, forcing the pilots to make an emergency landing. At the behest of the National Transportation Safety Board, the Federal Aviation Administration issued a safety directive related to the throttle. No one was injured.

But that is not the only issue with Eclipse 500s, according to a new FAA directive.

The FAA announced this week that it has received several reports of engine surges on the Eclipse's Pratt & Whitney engines that have required reduced power for the remainder of the flights, in some cases.

The FAA mandated an altitude limitation of 37,000 feet to go into effect on Dec. 4. The agency said the risk to the flying public justified waiving the usual comment period. The maximum altitude had been 41,000 feet.

Pieper said the problem with the engines — hard carbon buildup — already has been resolved, but that the FAA's altitude restriction was "not a real limitation" for pilots.

Doug Royce, an aerospace analyst for Connecticut-based Forecast International Inc., which forecast production of the Eclipse 500 would end in 2009, said ETIRC Aviation is thinking long-term and could acquire Eclipse's assets "at a fire sale price."

Royce said he's spoken with representatives from several air-taxi operators in Europe, who told him they hope to purchase Eclipse 500s.

Still, Royce said, the aviation industry is "a tough market to break into. The history of aviation is filled with guys with ideas that didn't turn out."




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