Eclipse lands Russian jet deal

Eclipse Aviation, the troubled US maker of four-seat very light private jets, said it had reached an agreement to begin assembly of the aircraft in Russia from 2010.

The group said the supervisory board of the Russian state bank Vnesheconombank (VEB), chaired by the Russian prime minister Vladimir Putin, had approved construction of a plant in Ulyanovsk to assemble the Eclipse 500.

Eclipse said on Tuesday that VEB had announced it expected to finance the $205m project in full. VEB and the Ulyanovsk regional administration would be among the shareholders, and the plant was planned to have a capacity to produce 800 jets a year.

Eclipse said it had confirmed that the export of jet components to Russia complied with US and Canadian export regulations.

Production at the group's US plant in Albuquerque, New Mexico, would continue after the start of the Russian facility.

By mid-September this year, just over 150 jets had been delivered, fewer than planned.

Eclipse has been dogged by production and technology problems since it finally began deliveries at the end of 2006, and the aircraft certification has been under review by a US congressional committee.

The group was forced to cut its employee numbers by 38 per cent last month with the loss of 650 jobs, leaving a workforce of 1,100. It said the cutback was aimed at achieving "financial stability as soon as possible".

Eclipse's development generated enormous publicity for the launch of very light jets, which some analysts believe will transform the bottom end of the business aviation market.

The new ranges of VLJs, which started coming on to the market in the past two years, are being used to create new business models for so-called air taxi operators, but the sector was hit last weekend by the demise of DayJet in the US, previously the biggest customer of Eclipse.

DayJet, the world's first operator of a "per-seat, on-demand" private jet service, said it had ceased operations until further notice and had cut most of its jobs after failing to secure critical refinancing. It had taken delivery of 28 Eclipse jets.

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