BeechTalk - BT

Username Protected · **Posted:** 27 Jul 2015, 21:10

$100m for an LSA?
Looks like a classic. Somebody will pick up the pieces cheap as usual.

Username Protected wrote:

Icon Aircraft was founded in 2006, 9 years ago.

What are they doing?

This feels like a classic "we can build a cool concept airplane" but not "we know how to run an aircraft manufacturing business". This usually does not end well.

Investments total around $100M so far, with 1400 orders, that's $70K per order just for investors to break even.

Claimed to have 75+ employees, ~$12M/year burn rate, which can be sustained for a bit.

What will kill them is production start up when they add a lot more people and now have to buy parts. That's huge negative cash flow for probably 2+ years at least, especially since first deliveries are at lower prices, probably losses on each one. The faster they make them, the more money they lose.

Mike C.

Username Protected · **Posted:** 27 Jul 2015, 21:14

One Aviation?

Username Protected · **Posted:** 27 Jul 2015, 23:26

Username Protected wrote:

Let's try be appreciative of any triers/doers that are trying to give GA a boost.

I'm not sure why people think burning up customer, vendor, and investor money is giving GA a "boost".

Mike C.

Username Protected · **Posted:** 28 Jul 2015, 00:27

Username Protected wrote:

Let's try be appreciative of any triers/doers that are trying to give GA a boost.

I'm not sure why people think burning up customer, vendor, and investor money is giving GA a "boost".

Mike C.

Username Protected · **Posted:** 28 Jul 2015, 07:29

Username Protected wrote:

Mike, when I invest I take a risk. So do the customers, the investors and the vendors. they made a choice. No money was forced from their hands.

Same could be said of people who invested with Bernie Madoff, they took a risk.

Just because folks made a choice doesn't alleviate an expectation of competence and reasonableness on the part of Icon.

The impact on GA is negative when projects like this fail. For example, a part of every PT6 overhaul goes to pay for the losses Pratt suffered when Eclipse failed. We pay for this eventually somewhere, somehow.

Quote:

Until we see their financials we have no idea about what's really going on. I'd prefer to give them the benefit of the doubt 'hoping' that they succeed rather than you stance which is they're spending too much money and they won't succeed.

Unfortunately, we've seen this particular movie a few times. A necessary component is those like you who believe in the dream enough to suspend fiscal sanity.

Let's hope Icon can pull it off, but right now, I think the odds are low. I predict production ramp up will kill them.

Mike C.

Username Protected · **Posted:** 28 Jul 2015, 08:07

Rapid growth and its voracious appetite for cash has sunk more than one "profitable" company. Bills come in faster and payments come in slower than even the "worst case" spreadsheets predicted.

Username Protected · **Posted:** 28 Jul 2015, 08:22

Some of these comments are interesting.

They already delivered the first Icon at OSH.

Username Protected · **Posted:** 28 Jul 2015, 08:32

Username Protected wrote:

They already delivered the first Icon at OSH.

They did not. They had a ceremony. The "customer" doesn't have true operational use of the aircraft. Indeed, a news article said: "Icon will retain the aircraft for several months".

http://aviationweek.com/oshkosh-2015/ic ... ung-eagles

We've seen this movie before, and the sham ceremonial first delivery is part of the script.

Mike C.

Username Protected · **Posted:** 28 Jul 2015, 08:45

Mike C., you gotta cut the thistles out of your diet.

:cheers:

Username Protected · **Posted:** 28 Jul 2015, 08:48

Did they not go and fly Young Eagles in two airplanes at OSH?

Username Protected · **Posted:** 28 Jul 2015, 09:21

Username Protected wrote:

They already delivered the first Icon at OSH.

They did not. They had a ceremony. The "customer" doesn't have true operational use of the aircraft. Indeed, a news article said: "Icon will retain the aircraft for several months".

http://aviationweek.com/oshkosh-2015/ic ... ung-eagles

We've seen this movie before, and the sham ceremonial first delivery is part of the script.

Mike C.

Username Protected · **Posted:** 28 Jul 2015, 09:29

Username Protected wrote:

$250k? No thanks. I can buy a POS SeaRey that will do everything the ICON will do and have enough money left over for a killer Baron. 1/4 Million for a toy like this is insane.

Or you could pay $489,000 for this Husky :scratch:

(price at OSH, per the salesman)

I understand "new" has a price, but come on, this is an overdone Super Cub at nearly a HALF-million dollars. It looks like they are pricing them to match their production rates. It's no longer a reasonable tool to buy, just a rich man's toy.

:btt:

I've always been of the opinion that Icon has been more hype than substance, but I hope they prove me wrong. They had a pretty lavish party going on (with two A5's) docked at TJ's Harbor Restaurant on Thursday night. Even had cool little red 3-blade propellers adorning the windows of the venue. They certainly know how to burn through money.

Username Protected · **Posted:** 28 Jul 2015, 11:59

Username Protected wrote:

It is hard not to agree with you about Icon. Look at the successful aviation startups in the the past 40 years....Is there anyone besides Cirrus?

There is a big scrap heap. Adam Aircraft, Eclipse Jet, OMF Symphony... whatever happened to the Liberty XL-2? The big winners out there seem to be Cirrus and Vans Aircraft. Even Cirrus with all their success had to sell out to the Chinese to survive... tough, tough business.

Username Protected · **Posted:** 28 Jul 2015, 12:15

A friend of mine told me yesterday that one of his friends has a position. He lives on a big lake and says it takes him at least thirty minutes to drive to the grocery store on the other side of the lake. He says he's buying groceries 2-3 times a week because he likes fresh milk and produce. He will use the A5 as a "grocery-getter" so there you go, a real world mission. :thumbup:

Username Protected · **Posted:** 28 Jul 2015, 12:16

Username Protected wrote:

A friend of mine told me yesterday that one of his friends has a position. He lives on a big lake and says it takes him at least thirty minutes to drive to the grocery store on the other side of the lake. He says he's buying groceries 2-3 times a week because he likes fresh milk and produce. He will use the A5 as a "grocery-getter" so there you go, a real world mission. :thumbup:

Is there much room for groceries?

Icon A5