Icon Throws Out Controversial Purchase Agreement

Reacting to a public backlash that erupted after Icon Aircraft began circulating a 40-page purchase agreement that the company asked buyers of the A5 light sport amphibian to sign before they took delivery of their new airplanes, the California manufacturer has replaced the contract with a far simpler document that removes nearly all of the most onerous requirements contained in the original. Icon also announced a major reduction in production for 2016, from 175 airplanes originally scheduled to roll out of the factory to 20.

The new contract, running to just 11 pages, eliminates language that some buyers viewed as potential deal-breakers. Gone is a 30-year life limit on the A5’s airframe, as well as mandatory cockpit audio and video recorders, transfer fees Icon sought to charge for selling the airplane on the used market, the right of Icon to repurchase an airplane if an owner tried to resell it within 12 months of initial purchase, and a “responsible flyer clause” that asked the owner to fly “responsibly and professionally,” a provision many saw as subjective and difficult to enforce.

Plenty of the original contract language remains, however. Icon will still require buyers to agree not to sue the company after a crash in which the company isn’t found liable by the National Transportation Safety Board; maintenance and repairs still must be performed by factory-approved shops; flight data recorders will still be installed in all A5s (but with an expanded privacy policy); and customers agree to require that anyone they sell the airplane to undergo Icon factory training or pay Icon a $5,000 fee (money the company says it never hopes to collect).

Icon is also setting a cap on the first required 10-year airframe overhaul of $15,000. After that, airframes must still be overhauled every 10 years, with no cap on cost and no limit on the number of overhauls. As long as an Icon-approved mechanic deems an A5 airworthy, it can continue to fly.

As for the production slowdown, Hawkins described it as a "one-year delay," saying that the company would also reduce its cost structure and workforce, even as it secures new capital for manufacturing improvements.

“The unfortunate fact of the matter is that Icon had an overly aggressive production schedule for 2016,” said Hawkins. “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.”