Icon Aircraft is slashing its workforce by 40 percent as price increases for its A5 amphibious light sport aircraft have reduced demand.
Customers had placed deposits for about 1,800 aircraft two years ago, but multiple price increases drove up retail prices to $389,000, and the company has struggled to convert deposits to sales.
“Icon is currently structured for higher volume production,” said Thomas Wieners, Icon president. “We now have a very good understanding of costs. And while the Icon A5 is a truly exceptional plane, the necessary higher price lowers demand considerably and requires us to adjust the organization size as a result.”
Icon is cutting its workforce to 400 employees from 650, the company said. Icon is based in Vacaville, California, and has an assembly plant there. It also has a composite production facility in Tijuana, Mexico.
The A5 has received rave reviews from pilots who have flown the carbon-fiber, spin-resistant aircraft—but the company has been plagued by high-profile accidents, too. Designer Jon Karkow and a new Icon employee were killed in an A5 crash in May, 2017, and baseball great Roy Halladay lost his life in one six months later. Several more have been destroyed in nonfatal accidents.
None of the mishaps have been blamed on the aircraft’s design or construction.
Wieners said the company had been delivering about five airplanes per month recently but will cut back with the workforce reduction. He declined to give any future production targets.
“We’re confident in Icon’s future and continued growth,” he said. “This is a necessary step. As the company grows, we’ll scale production and staffing accordingly.”