Signs of troubles with ICON Aircraft proved telling, as the Vacaville, California-based company announced on Wednesday that it would delay the program by about a year. ICON president Kirk Hawkins said the issues were due to “manufacturability” problems with the design. He said the delay would allow the company to solve those manufacturing issues and get production on track.
The company’s original goal of 175 airplanes produced in 2016 has been reduced to 20. ICON says that it has completed 7 aircraft and has another 30 in some level of completion.
The company will ship completed aircraft to ICON Flight Centers, standing up those training centers. Hawkins said the change would be, in part, to accelerate the establishment of the company’s training infrastructure, while giving customers limited access to an aircraft in the short term, as part of the training process.
Hawkins said the company had gotten some additional financing to underwrite the delay, but declined to give further details.
As part of the schedule change, ICON is also laying off employees at its Vacaville facility. Hawkins told Plane & Pilot that the layoffs will involve around 150 personnel. Hawkins declined to give details on a timetable for rehiring the workers.
In news that took a back seat to the bombshell program delay announcement, ICON also said that it was throwing out its controversial purchase agreement, which included a number of clauses that generated a firestorm of controversy at this year’s Sun ‘n Fun fly-in when the details of the agreement came to light.
The new agreement is just 11 pages in length, down from the 40 pages of the original document. Hawkins said that ICON made “a mistake” in issuing the original purchase agreement in the manner it did in April. “We are listening, and we are trying,” he said.
Many customers saw sections of that original purchase agreement as onerous and many of the stipulations as being one-sided. Sections that seemed to cause the most rancor included those that defined short life limits, restrictions on who owners could sell their airplanes to and how the airplanes would be operated. It also stipulated that owners would train and maintain their ICON A5s at ICON training and maintenance centers.
While not a wholesale change, Icon seems to have addressed the concerns over which customers voiced the most displeasure. Owners still will be required to have a flight recorder in the airplane, though ICON said the requirement for a cockpit voice/video recorder, once that technology becomes available, has been dropped. Owners still will be required to agree not to sue ICON in the event of an accident.
ICON also deleted the 30-year life limit. An overhaul at 10 years is still required, but ICON will cap that cost at $15,000. Subsequent 10-year overhauls will not be cost-controlled. ICON will no longer insist on a first right of refusal clause to discourage customers from buying and flipping airplanes.
Hawkins said that Icon would release more details on the changes to its business plan soon.