It looks great, but are there strings attached?
ICON Aircraft has enjoyed almost uniformly positive press since it introduced its A5 amphibian to the world in 2008. From the beginning, the company has behaved very differently than typical general aviation manufacturers, with slick marketing programs and bold promises. Their self-proclaimed mission is to “create products that not only deliver great functional benefit but also deeply inspire us on an emotional level.”
But inspiration isn’t the word that comes to mind right now for many ICON position-holders, and the media coverage has suddenly turned sour. As the A5 finally gets close to being delivered to pilots, the company’s lengthy purchase agreement has raised a number of questions. Among the unique requirements of the contract are:
- Either agree not to sue ICON (exception for defects), or pay $10,000 to avoid this requirement
- ICON reserves the right to approve future sales of the airplane
- Owners agree to pay ICON $5,000 if future owners don’t agree to the contract
- All maintenance must be performed by ICON-approved shops
- All pilots must be complete ICON-approved training programs
- The airplane must be overhauled every 10 years or 2,000 hours
- The airplane is limited to a life of 30 years or 6,000 hours
- All A5s will include flight data recorders (and eventually cameras), which cannot be removed
As you might expect, some ICON position-holders are not happy with the extensive list of requirements, most of which seem very one-sided. To skeptics – and there have always been plenty – this is just the latest example of a company that is all hat and no cattle. Sure, their ads are sexy and their videos are gorgeous, but the airplane is years late and costs almost 100% more than its initial price. This contract is a last-ditch attempt to shift significant cost and responsibility from the manufacturer to the airplane owner.
It’s particularly galling to some that ICON is so concerned about potential accidents or negative press, since their marketing shows nothing but low flying airplanes and aggressive maneuvers. The suggestion is that you can do anything you want in the airplane, just don’t blame ICON if something goes wrong. And if you do, expect to hear about your flight data recorder.
What would an A5 overhaul entail?
Finally, the restrictive maintenance requirements and overhaul intervals would appear to dramatically reduce the value of the airplane. For an owner who only flies 50 hours a year (completely reasonable for a recreational airplane), 10 years will be just 500 hours. If the overhaul cost is $50,000, that equates to $100/hr in overhaul cost. So much for “democratizing aviation.”
There are some defenders of ICON, though. They argue that the company has always taken a different approach and has been unafraid of ruffling a few feathers along the way – that’s the price of dramatic change. It’s thus hardly surprising that their contract would be any different. One of the most significant costs for any airplane company is liability, and most of these lawsuits are frivolous. By forcing the owner to take more responsibility, and by using flight data recorders instead of “he said, she said” statements, ICON is simply being smart. You can’t expect cheaper airplanes if you don’t address the legal question.
Other pilots have pointed out parallels with Robinson Helicopter: they require their aircraft to be overhauled at regular intervals, demand type-specific training (with an FAR no less), put strict limitations on maintenance, and are notoriously tough on product liability claims. However, this hands-on approach has ensured that the Robinson safety record has improved significantly over the years while prices have stayed low. The company is now the largest helicopter manufacturer in the world, by a wide margin. The pain seems to be worth it for thousands of Robinson owners. Might the same be true for ICON?
What do you think? Is ICON being irresponsible or just adapting to the reality of selling airplanes in 2016? Control freaks or revolutionaries? Add a comment below.
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Well, John … if the point of Icon’s grossly over-restrictive and burdensome buyer agreements for their over-priced, under-capable air toy was to keep costs low … it obviously didn’t work. With bare bones birds now listed at $207K and fully equipped (as most buyers would want) being upwards of a quarter mil for a floating SLSA, that’s “cheap”?
This begs the question: What the heck would the price be if Icon DIDN’T impose their draconian purchase agreement on buyers?
We should all hope that Icon fails with their burdensome, one-sided buyer agreements, so that they don’t become industry standard.
The market for this luxo toy just shrank some more, perhaps dramatically. Even if I had the resources to buy one, there is no chance I would sign that purchase agreement. I predict that sales will be meager and the Icon’s day in the sun will be cloudy. As for legal issues, the contract could not protect Icon from lawsuits after crashes– there would be too many interested parties not bound by it. And won’t plaintiffs’ attorneys use Icon’s low-flying, yank-and-bank promotional videos in court?
There are some interesting ideas there. I would think the no-liability part of the contract might get a more favorable response if they offered to drop the price of the airplane by $10,000 if the customer signed a no-liability clause. The used airplane buyer would be a more difficult challenge.
The plan would certainly create a low price used airplane market. An Icon that was 29 years old should be real cheap. I guess one might also ask if the airplane, upon receiving its 29th annual by the Icon approved shop, was just barely going to make it through the next year or was it almost as good as it was when new? Answering either side of that question just raises more questions.
Having data recorders isn’t all that bad. It helps the liability problem by providing hard data to the jury and it might help with safety issues in the design. These have proven some value for the airlines and I believe Toyota was even able to use recorded data to refute some fabricated throttle stories.
If I were a potential second hand buyer I would gladly pay the $5000 to the seller and never sign this contract with Icon. 5k is a more than worthwhile investment to not be constrained by maintenance locations, time-based overhauls, factory approved training… (Which might be quite hard to find in reasonable proximity to where I would have the plane)
Chris, Icon might have the used-airplane buyer over a barrel– he might take the plane to a non-Icon shop for service, but perhaps Icon would not sell the shop parts or provide maintenance manuals. It will be interesting to see how the Agency reacts.
A $250,000, 2 person flying jetski is.. well… useless… I have no doubt that any good, smart people worked on this project, but for this to be massively adopted it needed to under $50,000, bundled with a free PPL certificate, and amazing financing so people can just pay the $250/m and forget about it… like a jet ski.
As a business owner, I don’t wish this on anyone, but I doubt they will still be in business in 10 years.. maybe 5.
Shocking! Who could have predicted that ICON wouldn’t deliver? Oh wait… everyone, including me.
ICON and a couple of other would-be aviation companies seem far more interested in being tech startups than aircraft manufacturers, and using strategies more akin to building an app than and airplane. But aircraft aren’t apps, nor are they iPhones or Teslas or anything else.
At the end of the day you’re selling a sophisticated piece of machinery to very demanding and discriminating customers who’ve spent a lot of time and money to be able to participate in aviation as pilots. You can’t expect to be successful by treating aircraft like any other high-end technology product. It’s just not going to work.
Lawyers, liability and profit margin is the ‘flight’ of the day. They have created the hype, shown its wares, and generated so much interest, they were able to escalate the cost, delay delivery, and bank on the willingness of buyers to step in line. Sounds like my prom date…
I digress. Most persons that can afford to buy a brand new plane, with that brand new smell, are in that position because they are smart enough to have that kind of wealth. They don’t part with that money when increasing restrictions are placed on them and the items they purchase.
Not to mention, the secondary market becomes nearly non-existent, Selling a plane is a way to recoup some costs of the new purchase and perhaps upgrading to Icon Version 2. Lets face it, most aircraft sales are in the secondary market keeping aircraft ‘affordable’. Also, part of what aids in new aircraft sales is based on planes we train in and come to appreciate. Icon, without a good secondary and used A5’s in the training market, can only hurt Icon. Cirrus does have some restrictions, but nothing as draconian as Icon. Cirrus is doing OK in new an used sales.
I’m all for making a buck, but not while removing freedoms from my customers.
Ok, good. Re-affirms my choice to pursue a SeaRey.
You can’t buy off negligent engineering and construction or incompetent design. The lawyers will have a field day with this contract, and obviously ICON have some concerns with their toy.
If you would have read the previous posts or the contract, it says you CAN sue for those 3 things. The contract is simply putting the responsibility for reckless endangerment in the hands of the operator vice the aircraft manufacturer. If the aircraft is faulty the company is not protected under the contract nor anything else they could come up with. But if a crash happens because of poor judgement by the pilot, it is the pilot who is held accountable. That is the way I read it…and quite frankly that is the way it should be. Place responsibility where it belongs and not have some ambulance chasing lawyer come out with a “shotgun blast” lawsuit to see what sticks. The aviation Tort Laws have been long overdue for fixing.
when is icon going to declare—is that bankrupvt in usa
when is
when is
I mentioned some of these concerns this past week at Sun N Fun the rep walked away from me without responding to my questions I suggested the 3 students I have that have delivery spots request full refund and go to vickers aircraft look it up folks much more bang for the buck. Them comparing a LSA aircraft to a helicopter does not make sense Helicopters have more parts that can break there for more maintance makes sense plus if you are buying a new R44 you have more disposable income then someone trying to buy a LSA look up vickers aircraft or the MVP aero this is too much now for me it moved icon to the bottom in my opinion.
The solution is the one that’s been the best all along: buy a Searey. It can do everything an Icon can do and more for a lot less money. Ex: If I was going to have an amphibian down here in Florida, I’d sure want to be able fly it with the canopy open. With the Searey you can have either or both canopy sections open in flight. And speaking of the canopy, if you should ever find yourself upside down in shallow water (which could happen in either of these planes if you land with the wheels down) you could easily get out of the Searey. In the Icon, well, I think you would die. But Icon won’t get sued for that little design choice will they? Kerry Rictor and Company don’t make big promises and then leave you hanging. They have quietly and consistently delivered proven and perfected kits and finished planes for many years by the hundreds. I have flown a Searey with Kerry on a demo. It’s a wonderful airplane that actually delivers on every promise that Icon makes. It may not have quite the sex appeal of Icon, but it’s still a beautiful airplane. And it’s time-honored conventional construction means no surprises. And as a big bonus you get to deal with down-to-earth great people instead of high-rolling hucksters. The antidote to Icon is spelled Searey!
If this is all true, it tarnishes the once promising bright spot in category and class. Kind of sad to read this.
Changing the delivery contract after taking a deposit is not a good idea, and may well result in cancellations, which may in turn be what ICON actually wants.
Following what is cynically called the “Saphire Model,” a lot of ICONs were “sold,” and if they are delivered, their costs will significantly exceed their selling price, driving the company out of business in a collapsing Ponzi scheme. (Eclipse was blamed for a similar set of circumstances — selling a $4 million airplane for an original asking price around $800k — but at least they delivered some 250 airplanes. Still, not good for the other 2000 or so place-holders or the companies that actually priced their airplanes at a realistic price but didn’t sell, due to the potential customers’ commitment to their Eclipse positions.)
Many potential maintenance nightmares involving annuals and throw-away provisions (What’s a “complete overhaul, and what will it cost?”) have already been mentioned; here’s another of a different genre: who will want to take his ICON cross-country to an ICON Repair Station to get new O-rings installed in the gear struts?
At any rate, ICON has engineered a covenanted community with its resale restrictions, and thus has ensured that its community will not grow.
Bottom line: ICON may be facing an impossible problem it it delivers airplanes; this may be the least-painful way out of the corner it has painted itself into. I sure hope that’s not the case.
As a former professional ATP rated pilot who gave 500 hours of instruction on the way to that rating and as a current licensed professional mariner with many years working on the water including seven years teaching sailing, I saw the promotional videos for Icon and wondered, are these people really pilots or are they jet ski yahoos trying to sell an unworkable concept. Fly a plane like you ride a jet ski? Who are you fooling? Only jet ski yahoos I’m afraid. Any pilot worth his salt recognized the rule breaking spirit of the videos. Revolutions are romantic in theory but are always deadly to someone. Cartwheel an Icon into the water and what will you get? Dead.
I love the whole concept of locking the trial lawyers in their box. I was sitting at a red light the other day when some dumb kid wasn’t paying attention and allowed her compact car to roll into the back of some hill billy’s pick-up (no damage to either car). On my way back from my errand here’s the ambulance, the stretcher and the driver of the pick-up on their way to a civil suit. I applaud ICON forcing much needed tort reform down the throat of our overly litigious society. Maybe not good business, but great principles!
It isn’t the lawyers they’re putting into a box; it’s the buyers. You can’t sign away someone else’s right to sue. So, you crash your Icon and your wife sues for loss of consortium. What’s more, if a passenger or nearby swimmer sues Icon, the buyer has agreed to pay Icon’s legal fees.
I’m not a lawyer and everything I’ve written is likely incorrect.
Education is real value and others opinions are education. Thanks for all your comments.
What a great debut for the mockup! Flash, dash, promises, and yes, it hit the emotional button square on the nose. Then came reality, can’t do both folding wings and retracts or we won’t make the weight goals. So, petitions and weight exemptions get granted. Then a year long program to meet hands-off stall resistant design. Nice idea but now they want pilots to have to complete ICON-approved training so why not just train them to push out and break the stall at onset? On and On with an end result of an over-weight, over-priced, very cute toy with very limited capabilities. It reminds me of the BD5, a great flying airplane but a lesson to be learned by designers, manufacturers, and buyers alike. Throw in the airframe limitations, overhauls, litigation constraints and you have a debacle Jim Bede never imagined. Fortunately, it continues to prove there is pent up demand for an affordable sport airplane if someone can every really figure out how to do it.
I’d bet $1000 Icon won’t be around in five years. Ten tops if they can keep fleecing deposits out of people. Aviation is littered with stories like this.
BLUESTAR,
“You can’t buy off negligent engineering and construction or incompetent design. The lawyers will have a field day with this contract, and obviously ICON have some concerns with their toy.”
If you would have read the previous posts or the contract, it says you CAN sue for those 3 things. The contract is simply putting the responsibility for reckless endangerment in the hands of the operator vice the aircraft manufacturer. If the aircraft is faulty the company is not protected under the contract nor anything else they could come up with. But if a crash happens because of poor judgement by the pilot, it is the pilot who is held accountable. That is the way I read it…and quite frankly that is the way it should be. Place responsibility where it belongs and not have some ambulance chasing lawyer come out with a “shotgun blast” lawsuit to see what sticks. The aviation Tort Laws have been long overdue for fixing.
That’s incorrect. Under the contract, the buyer releases ICON from all liability except for negligent design of the aircraft or instances where the NTSB determines that the aircraft was defective at the time of sale. The “time of sale” provision is key because there is virtually no way for the NTSB to make a determination of the condition of the aircraft at the time of sale, particularly when an accident occurs months or years later. At best it could only say that the aircraft was in a defective condition at the time of the accident. And even if NTSB felt strongly that there was a manufacturing issue, remember that ICON will be an invited member of the post-crash investigation team so it will have every incentive to push NTSB away from drawing that conclusion in its written report.
So if ICON manufactured an aircraft defectively, and the NTSB is unable or unwilling to draw this conclusion in an accident report, the company faces no liability. The net result is that there are dozens of ways ICON could act negligently in a manner that results in accidents/injuries/fatalities, but the pilot/owner will have no legal recourse. Hardly an incentive for the company to go the extra mile for safety, in my view. Don’t believe me? See the Aircraft Operating Agreement, Exhibit B, pages 5-9.
It’s easy to adopt a view that “only pilots with poor judgment get killed” or that litigation costs are driving up the cost of flying. But the reality is far more complex. For example, ICON can insure itself against liability from the so-called ambulance chasing lawyers for a few thousand dollars–hardly a make or break sum for a company producing a $250k product. Even your toothpaste manufacturer accepts that kind of risk.
The operative question for any potential buyer to ask is simply this: If I perish in a crash while flying this aircraft, and the accident results in whole or in part from ICON’s negligence, am I comfortable with the fact that my estate or surviving loved ones will have no legal recourse to punish the company for its negligence? And I comfortable with the fact that money will be taken from my estate to defend ICON in a lawsuit brought by my family?
And before you answer, be sure to talk it over with your spouse and kids tonight and see if they share your view. After all, they are the ones who will be bearing the consequences of this agreement.
Jim,
Virtually everyone in aviation understands that Icon has heavily marketed its aircraft as a wild, joy-filled toy, a flying jet ski, with marketing videos showing the aircraft zipping around recreational lakes, which are of course often filled with real jet skis and boaters, all operating in fairly close proximity to each other. The targeted customer is exactly the kind of person who is not averse to hot-dogging, buzzing, showing off, and so forth that is prototypical jet ski operator behavior (yes, the jet ski pilots will argue differently, but most other boaters see it this way). Inexperienced pilots in a fun toy are rather more likely than experienced private pilots to not appreciate the dangers they are exposing themselves and others to. It’s also quite likely that flying this aircraft in this environment is going to result in not only aircraft crashes, but collisions with boaters, skiers, swimmers, etc who are also going to be looking for compensation for their losses.
If I were a beneficiary of the estate of a dead Icon A5 pilot, or a survivor of someone not on board the aircraft injured or killed by that pilot, my lawyers would argue that you, Icon, made profit by purposely selling aircraft designed to appeal to reckless pilots. The very basis of your marketing was to attract new, previously unlicensed pilots with minimum sport pilot training and a desire to show off and hot dog down at the lake. The fact that our client’s dear departed was attracted to your product means YOU are liable for any unsafe behavior by precisely the kinds of customers you specifically targeted.
And something like that argument is almost certainly what any of the lawyers for the estates of their dead customers are likely to argue to overturn their agreement.
Icon would lose.
This really seems to show the untenable position that Icon put themselves into with their marketing program, much more so than with their actual product design. It’s otherwise probably a pretty safe airplane with its stall-resistant wing.
Sounds like a late project effort to make the company attractive to a buyer who can a actually produce the aircraft at a realistic price.
Icon’s attempts to control the use and ownership path of the product after the sale is a massive case ov overreach. The requirement for “owners” to be supportive of the company and “brand” is laughable. Anyone who agrees to this as a not-so-bad compromise is asking for trouble. What if the airplane doesn’t meet your needs? Will you get sued by Icon’s legal team for telling the truth? What will they do, take away your toy?
I look for Harley Davidson to come up with a similar purchase agreement and “owner” code of conduct regarding resale before too long.
So if this works, what is to stop every component maker (e.g. Lycoming engines or Cleveland Brakes or Goodyear tires) to have us sign a contract to replace at a short time limit, or require a transfer of sale fee, or who knows what else? If it works for ICON it may move into other areas of aviation. Not a good trend.
Looks like they’ve decided they want out of the market and this is part of their exit strategy.
I know there is already talk that they have gone back to contract holders and said they are going to probably agree to soften this but this is a blunder on their part and I think from my knowledge of contract law, there is an absolute burden on ICON when they take deposits for years in advance to have a contract that reflects market, and this does not. If they don’t agree to change it the contract holders no doubt have a class action lawsuit if they want, and should be able to get specific performance (force ICON’s hands) not just get their money back. I think ICON knows this and that’s why they are not giving people their money back without demanding another draconian document be signed that says they can’t be sued for this after they give the contract deposit back!
Gabriel .. interesting.
You’re right, if ICON took deposits without disclosing the horrific non-standard terms of purchase, then they are obligated to either just refund the deposit with no questions asked, or simply revert to a market-standard purchase contract.
It’s called “bait and switch”. Of course, if ICON had unveiled this contract 5 years ago we wouldn’t be talking about ICON now. They’d simply be another footnote in the long long list of failed aircraft companies.
The fat’s already in the fire – I am skeptical that ICON can ever recover from this self-inflicted fiasco.
You lost me at the 6th number.
There are much better more cost effective options available in the experimental fleet.
http://www.searey.com/
You are absolutely right. I never understood why Icon became such a darling of the press. With a tiny useful load and cruise speed well under 100, it is not a practical airplane for doing much of anything other than hanging a fishing rod out the cockpit. Such a cool looking design but it promised more than could be delivered – we have all heard that before!
It’s my understanding that a contract isn’t valid if it benefits only one side.
Lindsay,
You say, “It’s my understanding that a contract isn’t valid if it benefits only one side.”
Not so, as long as both parties sign it willingly. Ask the citizens of Hamilton County, Ohio about the Paul Brown Stadium contract. It’s ALL Cincinnati Bengals.
Ridiculous !!!
Go sell it in China !
The contract is a joke. No sane person could sign it. Leaving aside the (huge) issue of liability (why would I want to indemnify the manufacturer against a liability claim?), the inspection, training, overhaul and life-limits hugely increase the cost of flying this little toy, and assure that that the resale values will be severely depressed, declining to zero after 30 years. I fly a seaplane that is 33 years old, in pristine condition and is currently worth more than it sold for new. If it had been purchased under Icon”s contract, it would have been junked three years ago.
A terrible shame, because the airplane itself appears to be a gem. But between the constantly escalating cost to purchase, the now escalated cost to own, and this ridiculous contract, the manufacturers have really shot themselves in the heart.
I think a lot of folks miss the point here. To me, the key issue is Icon’s attitude toward the customers and the customer relationship. It’s abusive and self-interested, contrary to all aviation history. I’m not even relieved that they will change the contract (somewhat) to a more reasonable one – to me, the key is their attitude. And that means, even after they’ve improved the contract, they’ll do their best to achieve these same results through other means. They are not people who love flying – they are sales pros who see the customer as the enemy. And I’ve seen other companies like that – e.g., Computer Associates (now CA Technologies) – where sales was everything and the customer was just a source of revenue. So, now that Icon has revealed their true intentions toward the customer base, I would never go near them.
I agree with Richard Tamir. I met a lot of the designers and engineers at their reveal to the Young Eagles at OSH in 2015. None of them exude the sprirt of aviation. I wasn’t sure if they were presenting an airplane or a computer app.
I agree with Richard. I am an engineer that has worked directly with sales and been part of the sales process. In nearly every case I helped to design and implement a ‘solution’ for something marketing and sales promoted as a way to make life easier for the end user/customer. I didn’t have a vested interest in truly helping out the customer, nor did the sales rep. We just cared about getting a check and making the next sale. We made sure we were as protected as we could be and just saw customers as dollar signs and not people. As an engineer, it doesn’t feel good, but getting a nice paycheck is financial xanax. Thankfully, nothing I built or sold could result in death. If Icon believed in what they were selling, they would stand behind their product and not just next to it taking orders.
Too bad ICON has chosen this potentially self-destructive path. They’re in a unique position as a new manufacturer to change the course of aircraft-ownership in a positive way.
A respectful and considerate attitude is everything when winning and keeping customers.
First of all, combining a boat with a plane demands compromises. One of the biggest ones is you cannot make a flying boat go fast. At least not without a ridiculous amount of horsepower. My interest in this over hyped toy evaporated as soon as I realized that just myself and my wife put the airplane over gross as soon as you added fuel. Icon is just another bunch of guys trying to make airplanes just like computers, a commodity. Only the small airplane market is orders of magnitude smaller than the computer market. Who are the smart guys here?
Fair enough. They must feel confident with their strategy. The type of customer who has lined up to buy the A5 would have triggered the same concern for most. At the end of the day, supply and demand will prevail.
Was very hot to buy and IconA5. But because of the restrictive, somewhat abusive and self serving agreement, am totaling reconsidering whether Icon is the company I should conduct business.
Cirrus created a new model of
success for GA Mfr’s with a focus
on customer’s passion for flying, technology and safety.
Somehow Icon missed that message and confused their business with IT devices. Ouch.
I think it might be time for a management shakeup at Icon. With a fully loaded cost of nearly $250K, exclusive of a towing trailer, very limited useful load and range, and now this purchase contract debacle, misstep after misstep has been made by the current leadership group. My understanding is that CEO Kirk Hawkins was a pilot previously, and has no prior management experience. He is clearly over matched. I think the time has come for Kirk to step aside if Icon has any chance of survival.
Todd, a management change won’t make it lighter or sufficiently powerful. It is what it is.
A management change might make it a bit cheaper, but that’s surely something Kirk has kept his eyes on, all along.
When the math doesn’t add up, you need a new equation altogether. Eclipse had the same math problem (crudely stated, selling a $4 million jet for $1 million), which is masked until deposits have to turn into airplanes instead of exhibits. But Eclipse got a lot farther down the runway; ultimately, it was a nifty little jet.
Too many people from mass markets use the “M&M” model, where the first M&M candy cost a ton of money, but the follow-ons cost relatively… nothing. Or integrated circuits, in a more-modern context. That model works, when millions of well-designed identical items are produced. But only then. There is no mass market for airplanes, and less of one for LSA, and a smaller one yet for amphibs; less yet, for expensive LSA amphibians with a power deficit that have crazy maintenance requirements and covenanted ownership agreements.
I don’t get those attacking Kirk Hawkins, Icon’s marketing, or making comparisons to other aviation startup failures. There’s a valid argument in limiting a manufacturer’s liability. Most pilots can’t comprehend how insane aviation related litigation can be. A few years back a plaintiff lawyer was seeking to depose several of us who attended a recurrent flight training facility. A fellow attendee decided to skip the training and fly without a sign-off or instrument proficiency. This resulted in a crash that killed five. The families were suing the flight school and the manufacturers of the airframe, engines and instruments for negligence. The training facility was targeted for not emphasizing the importance of proficiency training. In any case, pilots should hope Icon succeeds. If not, other aviation related ventures will find it difficult to raise capital, as funding for aviation related ventures is tenuous in the best of markets.
Well Al, in that case should you take a gun and shoot yourself but live, then you have a lawsuit against Smith and Wesson.
Al is correct that product liability is a huge issue in aviation. Before the 1983 shutdown of the single-engine product line at Cessna, I read that close to $25,000 of a new Skyhawk’s sale price went to Cessna’s insurer. Anyone who knows for sure, please correct me if that’s wrong. In any case, product liability is a big problem in most industries, be it aircraft, autos, medicines, or toaster ovens. The big issue for Icon and the like is the size of possible judgments vs. their non-Ford/non-Pfizer assets. That said, other sport aviation companies have survived for many years without the kind of one-sided contracts Icon offers; think Van’s, SeaRey, Quad Cities, Kitfox. From everything I’ve read here and from parts of the contract I’ve seen, Icon’s approach seems unlikely to be acceptable to most possible buyers… and their attorneys. One of several show-stoppers for me would be the requirement of the buyer to indemnify Icon against all lawsuits– why would I sign such an open-ended contract that could lead to personally burdensome or ruinous litigation? It hasn’t yet been mentioned, but a possible outcome is Icon’s bankruptcy, with investors losing everything, and the company assets being sold for ten cents on the dollar. The buyer might be able to tweak the airplane, rename it, and put it on the market for less than $200K, putting it into contention with other luxe LSAs.
Bluestar, your comment makes little sense, but I assume you’re in favor of more product liability against aviation manufacturers. Maybe you’re a personal injury attorney – that would explain it. Hard to tell since it appears you’re also a coward hiding behind an alias. For the record, I’m an avid user of S&W products…
I cut Icon no breaks whatsoever. I hope they fail in a spectacular manner. Apparently they haven’t figured out customers have the choice to pick up their money and go elsewhere, somewhere where they don’t feel like they are being pushed around. Though I’m sure their spokespeople would say in Icon-speak something like “We don’t really want THOSE kinds as customers anyway…”
With the news that Icon is laying off a substantial part of its workforce and is in need of more cash I suspect the end may be near for this experiment in flashy marketing. Ultimately you need to deliver a product.
There are many lessons to be learned from Icon. Its probably now too overburdened with costs to make it economically viable. Maybe the DO 7 Searey with which it “shares” so many similarities. Maybe Dornier can pick up their manufacturing now ! Its a company with a well known name!
Kirk Hawkins is the Draconian overlord in the flesh. His huge ego is only eclipsed by his will to control everything, hence the ridiculously one sided contract. By the way, he stepped into this role only because he was let go simultaneously by the Air Force and American Airlines in 2004 for very bad conduct.
He once called the police on his neighbor in South Beach Fl. because his bicycle was not returned in a timely manner. How do I know all of this? I was the neighbor!
Sorry Kirk ole buddy – not the first time a giant ego will be the Achilles heel and downfall of a company. Did you not learn anything from watching Maverick screw up in Top Gun?
Beautiful, John … maybe you should do an expose’ on Hawkins. Maybe it is a ponzi scheme driven by ego … llke Madoff.
Just heard ICON is pushing Kirk out. It’s about time…. Now maybe they’ll get a manager in who know how to lead.
In reading this report we feel if Cessna couldn’t make the Skycatcher 162 sell, maybe Icon is doomed. With GA airfields closing all over the nation, maybe GA is doomed too.What do you think?
Anyone thinking of buying this should consider putting it into an LLC to protect themselves from liability and if it’s based out of a state like Montana there is no sales tax. I’ve been a client for years with a company called Action Services, LLC out of Missoula. actionservices-mt dot com
Not sure how a manufacturer can limit an aircraft’s lifetime to 30 years, but it would seem to kill the present value, which is based on what you could sell it for. Lots of 30-year old planes out there, and much older, doing fine. Who is going to buy a 29-year-old Icon? What about a 20-year old Icon? I had a creepy feeling about this project from the first time I read about it. It just had a certain “flavor” of a venture heading for ultimate bankruptcy. To much in the way of future promises, too little “now”. I would think they should have started out with an ultralight version or something. Now the designer has crashed and died, killing a new hire too, flying where the plane was supposed to excel: a small lake. The stall-resistant wing didn’t help. The amphibious capability was not utilized to simply land on the water. The ballistic rocket parachute was not quite deployed (seems like they tried it too late) AND we have not heard about any video from the supposedly mandatory onboard camera, which was said to be so important, so people could figure out the cause of any crash and learn from it. Nice – nobody even knows what caused this crash. The video would tell us everyting. But no video. Buyers will bring this up. My guess is this situation has reached a point of financial impossibility. Maybe the model itself will ultimately be rescued after the company goes bankrupt? Then again if the designer can’t fly it around a lake without killing himself, what chance do beginner pilots, just learning to fly using this aircraft, have?
What more can be said of ICON? We have seen this movie before! But I am impressed in the reading of the above comments. Articulate, informative, intelligent readers. I couldn’t stop reading these comments.