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Wed, Dec 06, 2023

Van's Clarifies Process for Backordered Kits

Customers to See Replacement Parts, Price Changes as Company Reorganizes and Reorients

Van's Aircraft has announced the first bevy of changes to impact customers at their firm, clarifying that those with deposits on kits, engines, props, and avionics will see rolling updates to their order process as procedures fall into place.

First off, Van's spoke to the customer block who were sent the later-model, apparently inadequate "laser-cut parts" in place of older-spec punched parts. The issue has been one of the driving causes of the firm's fall into Chapter 11, requiring the mass replacement of pricey aircraft parts without any compensation. The company's investigations pointed to a fairly safe arrangement even with the laser-cut parts, but customer sentiment has largely driven Van's to replace them out of customer goodwill and some good ol' caution. After the undoubtedly grinding work of reviewing all customer orders since the parts change, Van's has a pretty good handle on which laser-cut parts are held by which customer. Once the court approves, Van's will contact customers regarding which ones they might have in their individual kits with guidance on how the parts replacement program will work. Customers will be able to cross-reference the list of possibly affected parts to determine just how many replacements they require.

"Our goal is to start the process of shipping replacement parts to customers this month, and to complete the delivery of replacement parts to all impacted customers before the end of 2024," said Van's. "More than 1,800 customers are affected by this issue, some of whom have more than one affected kit. The cost to manufacture and ship replacement parts to customers will be very significant. It will take time to provide replacement parts to all affected customers."

Van's will begin contacting customers who placed deposits on kits placed prior to the Chapter 11 filing date within "the next 7 to 10 days" with an offer to apply the "full amount of their existing deposits toward the purchase of the same kit, under new terms and conditions including a price increase." Price increases are rumored to be in the range of 30%.

The link sent will direct them to an overview of what they've paid along with Van's proposed order modifications. (There does not appear to be any mention of refunds at this stage of the process. If customers accept the modified order, they can see their in-stock kits shipped within the next 7 to 10 days. Van's is clear that those who have been waiting the longest will be prioritized in the shipping queue, but remind customers that "our kit fulfillment schedule must be financially acceptable to the court". That means that the court may impose upon them to prioritize fresh cash flow instead of a "first paid, first shipped" method as is the norm.

"We will be constrained by – and will make prioritization decisions based on – the rate and timing of order renewal, availability of in-stock parts, and our need to ship kits that generate positive cash flow," continues the announcement. "Where we are able to do so, we will also consider the age of the original customer order."

FMI: www.vansaircraft.com

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