On Wednesday afternoon, ICON Aircraft announced it was scaling back its aircraft production plans for 2016 and seeking additional ways to rejuvenate its effort to create an amphibious light-sport aircraft that reaches beyond the traditional aviation marketplace.
“The unfortunate fact of the matter is that ICON had an overly aggressive production schedule for 2016,” ICON CEO Kirk Hawkins said in a conference call with aviation media on Wednesday afternoon. “We are working hard to find the balance between high-rate production and our exacting standards for quality, performance, and affordability. While the A5 is extremely well-engineered and an amazing aircraft to fly, frankly we need to improve its manufacturability. We’ll have to slow down and walk before we run.”
The company also announced the following:
A significant reduction in 2016 aircraft production from 175 to 20 (one-year delay).
Shifting early production aircraft to ICON flight centers in California, Texas, and Florida.
A reduction in cost structure and workforce while improving manufacturing.
Major revisions to ICON’s aircraft purchase agreement in response to customer feedback.
A significant infusion of new capital to support the manufacturing improvements.
ICON officials declined to specify the amount of new investment or its source, but remained confident that they would return to more substantial production in 2017. About 30 current employees and 60 contractors were laid off, according to figures supplied by ICON.
“We opened the production line at our new factory in January with ambitious plans to produce 175 aircraft this year,” ICON Vice President of Manufacturing Thomas Wieners said in a news release. “After completing seven aircraft with 11 more in production and having received a total of 30 composite airframe sets, we’ve learned that our production process and parts of our supply chain are not yet ready for high-rate production.”
Hawkins notes that most customers can expect a delay of approximately one year from their previous estimated delivery dates, although there was no exact timeline released.
2016 deliveries will be split between limited customer deliveries and ICON Flight Centers (IFCs), the first of which will be at ICON’s existing facility in Northern California. The company plans to open additional IFCs in Florida and Texas over the next year to expand customer training and support infrastructure. IFCs will also support training for ICON-authorized flight instructors to expand the regional training network for customers.
“If there is any silver lining to this news,” Hawkins added, “it’s that we are taking this opportunity to accelerate the introduction of ICON flight centers. This will give ICON a regional presence that allows deposit holders to get earlier access to an A5 for demonstration flights and training without having to come out to California.”
ICON will continue to take orders for the A5 and will resume sending production notices later this year. The new aircraft purchase agreement will be released in the coming weeks.
“I realize this news will be as big a disappointment for many of our customers as it is for us,” said Hawkins. “I wish there were a better answer. For those who continue to be patient with us, not only will you get special access to fly the A5 at ICON flight centers, you’ll own one of the world’s most amazing aircraft.”