But Still Encourages Austro, Lycoming Engine Upgrades For Existing Owners

Diamond Aircraft president Peter Maurer wants owners of DA42 Twin Star aircraft to know there's a light at the end of the tunnel... and it doesn't appear to be an oncoming train. In a letter sent to customers December 8, Maurer assured there's been "significant activity, effort and resources expended by Diamond" in creating a workable plan to assist owners affected by this year's troubles and subsequent insolvency at Thielert Aircraft Engines GmbH.

While Diamond still encourages owners to upgrade their Thielert-equipped Twin Stars to one of two engine options -- Lycoming IO-360 avgas-fueled powerplants, or sticking with diesel power by retrofitting the Austro AE300 engine still in development -- Maurer said things aren't as dire for owners of planes equipped with Thielert diesels as they were this summer.

"In our view, the overall situation has improved and is continuing to improve significantly from rock bottom in May / June of this year, when there was only extreme uncertainty regarding the future of TAE," Maurer (below) writes. "Despite the difficult limitations imposed by the insolvency, TAE is genuinely working on improving their support, reducing the operating cost, and increasing the reliability of both the 1.7 and 2.0 liter engines.

"The insolvency administrator also has stated that potential investors / purchasers of TAE will need to demonstrate a continued dedication to the civilian market so this, too, is encouraging for the long term future of TAE and the support of the existing fleet."

Noting there's been "much confusion and ambiguity" about operating cost increases following the Thielert insolvency, Maurer says "in general, costs have come down considerably from those anticipated and discussed immediately after the insolvency.

"With the anticipated 1,200 hour inspection approval for the 2.0 liter engine, the additional cost to operate the 2.0 liter engine will be only $9.82 more per hour than before the insolvency," he adds. "To put this into perspective, for an aircraft in a flight training operation at a rental rate of $300/hour, this would amount to a rental rate increase of just 6% to cover the additional cost, making the TAE 2.0 liter aircraft a viable proposition again."

Owners of Twin Stars equipped with the earlier 1.7 liter engines, however, aren't necessarily as fortunate. "The loss of warranty has had a potentially significant financial impact only on those customers who experience serious service difficulties, such as broken piston cooling nozzles or cracked cylinder heads, on the 1.7 liter engines," Maurer writes, but adds "...[I]n summary a customer who was potentially facing replacement of both engines with factory new 2.0 liter engines because of a single broken cooling nozzles, now has other options available to return their aircraft to service for a fraction of the originally anticipated cost" -- largely through increased availability of needed parts that preclude outright replacement of the engines.

Maurer adds Diamond has also resumed deliveries of new Thielert 2.0 liter-equipped planes to "specific" customers, though all future Twin Stars will be equipped with either Austro or Lycoming power. That said, Diamond encourages owners who wish to stick with Thielert power to upgrade to the newer, more reliable 2.0 liter powerplants -- and is offering owners free airframe parts to accommodate the overhaul.

"It is clear that there isn't a single solution that will work for everyone and that each owner's situation is different, depending on how the aircraft is used, whether it has 1.7 liter or 2.0 liter engines, how many hours are on it and if it is AOG and for what reason," Maurer said. "Accordingly, we will call every individual owner in North America starting this week, focusing initially on the known AOG cases, to discuss with you the best short term actions and our recommendations to minimize your expense and inconvenience."

It's also clear the 34-page customer message was intended to, above all, placate existing DA42 owners who fear their planes may soon become AOG -- if they haven't already -- by reassuring them service options still exist for their Thielert-powered Twin Stars... but Diamond clearly still hopes existing Twin Star owners will invest in either the Austro Engines or Lycoming upgrades.

"Customers who invest in [a]... retrofit should expect instant equity in their planes, along with a better airplane," Maurer says. "A new DA42 L360 is priced at USD 599,500. A new DA42 NG with AE 300 engines is priced at EUR 488,000 (USD 619,760 at current exchange rate)," Maurer notes. "Both of these values are higher than that for a DA42 TDI."

FMI: www.diamondaircraft.com