Icon to Customers: “We’ll Sell You Our Aircraft, But Only If You Promise Not To Sue Us!”

It’s a neat airplane.  It lands on water!  Its wings fold!  It’s composite! It even has a parachute!

The Icon A5 is advertised as being designed to “handle predictibly [and] like a well-mannered sports car.”

If you’ve seen the A5 at any of the industry shows at which it’s appeared, it is, undeniably, a cool airplane.  What you may know about, but probably haven’t seen, is the Aircraft Purchase Agreement and the Aircraft Operating Agreement, both of which A5 buyers are required to sign if they want to purchase the A5 [Link].

Among other provisions, the Agreements state:

  • the buyer cannot sue ICON or, alternatively, pay an extra $10,000 to buy the airplane
  • that the Agreements were “drafted jointly” to avoid any presumption that ambiguous provisions are interpreted against ICON, the actual drafter
  • creates a “Managing Pilot,” who may be the “Owner”, an “Affiliate” or a “non-affiliate of Owner”
  • obligates the “Managing Pilot” and the “Owner”, as a contractual matter, to undertake certain training and aircraft maintenance
  • obligates the “owner” to indemnify ICON if an accident occurs due to a breach of a provision of the Operating Agreement
  • mandates the aircraft will/may be equipped with a video and a data recorder, with the recorders owned by ICON and the data collected by/transmitted to ICON.

It’s pretty clear the owners of ICON are looking for a way to pro-actively avoid any liability exposure arising from the sale of their aircraft.  Reportedly, there has been something of a negative response from prospective purchasers to these terms and, once again, reportedly, the company is going back to re-visit the terms of these agreements.  The last chapter clearly isn’t written.

Decades ago, a well-known manufacturer decided to operate without products liability insurance.  The owner’s attitude was that if they had no insurance and an accident occurred, the plaintiff would sue others – avionics, engine or other manufacturers or maintenance facilities – and leave the air frame manufacturer alone.  That worked just fine until it didn’t, the result being a bankruptcy which lasted almost five years.

Plane-ly Spoken will watch the ICON “experiment” closely and keep you advised.