Can Diamond shine again?
The past decade has seen its rise from an obscure developer of light training aircraft to Europe's pre-eminent name in general aviation, but 2008 was the year the shine came off Diamond Aircraft's success. "It was a disaster, a horror," admits Christian Dries, owner and chief executive of the Austrian airframer, which was hit by at least a triple-whammy of events.
Blow one was the bankruptcy in May of Thielert, the German supplier of the Centurion 2.0 diesel engine that powered the twinprop Diamond DA42 and diesel versions of the DA40 piston single. Although Thielert quickly resumed production under an insolvency administrator, a failure to agree terms with its only original equipment customer meant output of Diamond's main two types slowed considerably in the second half of the year. (Some production continued of Lycoming-powered versions of the DA40 and engine-less DA42 "whitetails", several dozen of which languish outside Diamond's Wiener Neustadt factory.)
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© Diamond Aircraft |
Anticipating the risks of relying on an innovative piece of technology that was plagued by reliability problems, Diamond had since 2007 its own Mercedes Benz-derived diesel engine in the works - having set up a neighbouring sister company Austro Engine for the purpose. However, what Dries calls "heavy burdens" placed by the European Aviation Safety Agency meant a hoped-for certification for the 170hp (125kW) Austro AE300 in the final quarter of the year did not happen until the first quarter of 2009.
Meanwhile, Diamond's other big project - the single-engined D-Jet "personal light jet", for which Diamond has more than 600 orders and will be built in Canada at its London, Ontario factory - again saw its certification move to the right. A decision to swap the existing Williams FJ33-15 engine for the uprated -5A version selected by rival Cirrus for its Vision SJ50 and changes to the de-icing system have pushed the likely start of production to the first half of next year.
In addition, a joint venture in China to assemble DA40s for local flying schools has stalled because of what Dries describes as a lack of enthusiasm from the newly installed provincial government, its majority partner. "It has become a small headache," he complains.
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© Diamond Aircraft |
DOWNTURN WOES
To top it all, Diamond, like its counterparts, has been clobbered by the downturn in the industry, particularly in private aviation. Deliveries of the DA42 fell from 98 in 2007 to 69 last year, and the DA40 from 80 to 33, although much of that was due to the lack of engines. Diamond, which had become a major employer in the town 50km (30 miles) south of Vienna, was forced to lay off around 320 of its 800 employees at the end of the year, as well as 150 of a similarly sized workforce in Canada.
But, as he prepares for Aero 09 in Friedrichshafen and the Paris air show, Dries is upbeat about Diamond's long-term prospects. One of the bright spots amid the gloom has been a burgeoning security and surveillance market for its €3 million ($4.08 million) spyplane - the DA42-derived MPP (multipurpose platform). Diamond handed over 17 of the types last year to customers as diverse as the UK Royal Air Force (thought to be operating them in Iraq), Austrian firefighters and the Niger government - which uses two MPPs to track smugglers across its vast territory. Diamond expects to deliver between 50 and 60 MPPs this year.
The aircraft - marketed by Diamond's Airborne Sensing division - is essentially a standard DA42 offered with optional aerial sensors in bolt-on pods on the nose, roof and belly. They include Cineflex high-definition cameras, Riegl laser scanners and Scotty satellite communication systems. A bubble canopy for a better downward view and an outboard exhaust muffler are the main airframe changes from the conventional DA42.
Its resulting bulbous profile may not look pretty, but the aircraft is securing a reputation, says Dries, because it offers a solution to so many missions, particularly for customers "without deep pockets". As a result, Diamond is targeting local law enforcement and security agencies in Europe as well as governments in Africa and Latin America for which the products of the big defence manufacturers are out of reach. The MPP is much more affordable and quieter than a helicopter, easier to operate than an unmanned air vehicle and capable of staying in the air for 13h with two crew, maintains Dries. In addition, because it sits in ready-fitted pods, the customer can choose the equipment it wants.
"The MPP is now our biggest and most important business," says Dries, who will unveil at Paris an upgraded version of the aircraft, with a more effective engine muffler. "If it is 200m [650ft] above your head, you won't hear it," he says. "The silence of the aircraft will be a huge marketing advantage."
The market for Diamond's $1.4 million D-Jet looks less promising than it did when the programme was launched in 2003 amid much publicity about the prospects for very light jets and the on-demand air taxi market. Since then, a number of air taxi start-ups have foundered, including US D-Jet customer Point2Point, along with VLJ pioneers Eclipse Aviation and Adam Aircraft. However, even when the hype was at its highest two years ago, Dries was careful not to get carried away, stressing the D-Jet's appeal to owner-flyers rather than as a charter aircraft.
Having said that, commercial operators remain on its orderbook. They include Luxembourg's Smart Air, which has launched a D-Jet fractional ownership programme and expects to receive the first of eight aircraft on firm order in the second half of next year. With the first two models undergoing flight testing in Texas, Dries is convinced the D-Jet will be attractive in an economic slowdown to owner-flyers looking to "step down from bigger aircraft".
The European approval of the Austro engine has come as a relief to Diamond, which will - after a hiatus of almost a year - begin deliveries of diesel-powered aircraft again, firstly equipping the whitetails at its factory. "It is six months too late, but at least it has happened," sighs Dries. After the Thielert crisis, he did consider launching a rescue bid for his supplier, but fell out with the administrator. Instead, production is ramping up at the new Austro factory immediately behind the Diamond works, where Dries expects between 500 and 700 engines will be delivered this year, although it has a capacity for 3,000. So far, Diamond is its sister company's only client, but Dries says there has been "a lot of interest from other manufacturers".
Dries expects much of the business to come from Diamond owners swapping their Thielert engines once they reach their warranty limit. "As time goes on, we expect most of the fleet to be replaced after 1,000 hours," he says. Although more expensive and heavier than its Thielert counterpart, Dries says the Austro engine is "more robust" thanks to cast iron cylinder blocks instead of aluminium, as well offering 20% better fuel economy.
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© Diamond Aircraft |
With Diamond hoping for a quarter one 2010 certification for its single AE300-powered DA50 Magnum - a longer, roomier version of its DA40 to rival the Cirrus SR22 - the company is set to emerge from the downturn with a strong product line up. However, a powered-up version of the DA50, with pressurised cabin, is on hold because Dries believes economy will be the main factor driving customer choice, in the short term at least.
"I cannot do everything I want to do," admits one of aviation's most energetic and colourful entrepreneurs - who is actively involved in the design of each Diamond model and a passionate private flyer. "A lot will depend on what happens in the next year."
