Thielert in serious trouble ?

[Life's a Beech]

With good currency, de-icing and an autopilot extended IMC en-route is not a problem, IO540. Can be a pain if speed or fuel is critical and icing persistent, but otherwise just a poor view!

Anyone know what's happening in the charter companies that use DA-42s?

[Fuji Abound]

One might add a storm scope or Nexrad is not a bad thing either for extended ops and maybe an extra engine with a low base.

I would guess there are some pretty annoyed 42 operators. A significant part of the costings must presumably be the belief that warranty will cover most issues in the early days - if that ceases to be so the maths changes, never mind the current uncertainty about continuity of engine parts supply which will eventually ground the fleet unless resolved.

[BartV]

We've run the numbers and the DA42 still makes sense.

Even if we lose all warranty support and have to pay full price for all spares and labour and even allowing for the payments on the loan for the aeroplane itself -THE DA 42 IS STILL CHEAPER PER HOUR THAN A SENECA 2!

Aopa today:

Diamond production falls as Thielert problem grows

By Alton K. Marsh
Things should improve for Diamond Aircraft once it receives certification of its own diesel engine later this year, but for now, the feud between Diamond and the Thielert Aircraft Engines (TAE) is escalating.

Diamond officials have customers with airplanes on the ground, waiting for Thielert parts or engines. They feel the court-appointed bankruptcy officials in Germany aren’t responsive to their efforts to find temporary customer support. The officials, in turn, have countered with complaints about Diamond. It’s war via press release.

In the meantime, more than 50 Thielert-powered Diamond aircraft are on the ground due to lack of support or parts. Diamond has stopped 60 percent of the company’s annual production of 500 aircraft (whether Thielert powered or not). The cost of operating a Thielert engine, based on a boost in parts costs by the bankruptcy administrators and the lack of supported warranty programs, has gone from $13 an hour to $85 an hour.

“This effectively makes the engine, and TAE-powered aircraft, commercially non-viable at the current point in time,” Diamond officials said in a press release.

[172driver]

CJ, you got a point. Would change the title to include Diamond if I knew how to do this. Guess there's not much sleep in the engine development department down in Wr. Neustadt at the moment

[IO540]

Can one convert a DA40TDi to a DA40-180?

The -180 goes a LOT faster.

[172driver]

Can one convert a DA40TDi to a DA40-180?

I'm not a mechanic, but I doubt this is in any way straightforward. Think weight, mounting points, cowling, air intakes.....

I guess it can be done but most likely at significant cost. If it was easy, Diamond would surely have trotted out that possibility already.

[IO540]

They sell a DA40-180 in the USA, and used to sell it in the UK in 2002 when I was looking around.

It must be a CAA (and thus EASA) and FAA certified configuration.

I know the Thielert engine is slightly more efficient (maybe 30% more MPG) and (obviously more importantly) avtur costs a lot less than avgas, but a Lyco -320 engine, in a slippery motor-glider-like airframe such as the DA40, is going to be pretty economical.

Especially if you are happy to fly very very slowly, which a TDi owner has to do anyway.....

I don't know the pricing but the Thielert engines were never cheaper than Lyco ones, so I bet you that if you were in a zero-warranty situation and facing a completely new motor, this may be worth looking at. The -180 engine can be bought mail order from the USA from some "cost plus" resellers and you would need a conversion parts kit.

Different on the DA42 of course - think of six levers!

Anyway, if I can think of it, I am sure that Diamond (who will go bust quick if they cannot sell new planes) are already working on it. And for them the process would be trivial. All the certification has been done.

[10069]

I think i read somewhere i think it was in loop that when a PA28 is converted to a diesel aircraft it cannot be converted back to Avgas (some rules and regs)so i dont know 100% but wouldnt the same be true for wanting to convert a DA40

[wsmempson]

This does seem to be a rather mysterious mess that Diamond and Thielert have got themselves into; I always understood that new products (such as aircraft engines) had to carry a guarantee, and a guarantee which amounted to a bit more than "my word is my bond" or such-like schtick; such a warrantee is usually backed by an insurance policy (provided by a 3rd party - once you get into the situation where companies are underwriting their own 'bottoms' you get a really sticky situation).

In that situation, Thielert would not be supplying a "free" engine in the event of a warrantee claim, but one that is paid for by their insurers - the same insurers that provide Professional indemnity?? Or is the truth here that neither of the companies have any form of insurance whatsoever, and have simply been hoping that everything will be ok?

Seems a damn shame the way things have worked out; the only recent credible effort to introduce some new technology into the stone-aged world of group-a aircraft founders in a legal mess.

[Domi]

Please be aware of issue of Emergency AD with regards to TAE 2.0 clutch replacement within 50 FH after last inspection : http://ad.easa.europa.eu/blob/easa_a..._2008-0106-E_1

Effective date: 03rd june.

[Fuji Abound]

IO540

There are many Lycoming fitted 40s in operation including more than a few in Europe. So far as I am aware only one Lycoming fitted 42 was ever produced - I would like to see that example because it would be interesting to work out how all six levers were accomodated on a narrow quadrant - but I guess it could have been made wider at the expense of the foot well.

I suspect retro fitting a Lycoming is equally as possible as retrofitting a diesel BUT I guess the cost is likely to be substantial - after all almost anything is possible.

However as you know there are significant differences to the fuel system which would doubtless require a significant rework of this aspect of the aircraft.

[BackPacker]

Especially if you are happy to fly very very slowly, which a TDi owner has to do anyway.....

Well, I guess it's a matter of what you compare it with. I flew our DA-40 TDI just yesterday and although it was smeared with bugs I got the book value of 115 knots IAS at 70%/5 USG/hr.

The other aircraft at our club, with the exception of the Robin Ecoflyer, all deliver slower speeds with a higher fuel consumption (PA28-161, C172, R2160, DR200-120 and -160).

[IO540]

Sure, very true but a DA40-180 flying at say 65% power (at which the Lyco engine will easily make TBO) should go a lot faster than a DA40-TDi flying at any power setting at which its engine will have a long life.

[Rod1]

“go a lot faster than a DA40-TDi flying at any power setting at which its engine will have a long life.”

I would have thought that the only way to keep a Thielert operational long term would be to wrap it in cotton wool and never start it up…

Rod1

[Brian Abraham]

From http://www.avweb.com/blogs/insider/A..._197998-1.html
Thielert's Flawed Economics (And Why the Company Knows It) Email this blog |Print this blog

By Paul Bertorelli

The war of words between Diamond Aircraft and Thielert Aircraft Engines continued this week, reaching a low arc at the Berlin Air Show. Bruno Kubler, who heads the firm overseeing Thielert's insolvency, used the forum to blast Diamond for what Kubler claimed was a disinformation campaign aimed at making Diamond customers "massively insecure." Why Diamond would want to do this is baffling, since it has on its hands some 800 distressed owners of airplanes equipped with Thielert diesel engines.

Diamond is engaging in a degree of brinksmanship, but given what appears to be Thielert's disastrous economics, who can blame them? The usual strategy in situations like this is for the companies involved to play footsy behind the scenes to work out a deal acceptable to all of the distressed parties. Unfortunately, Kubler's numbers appear to be so far off the mark that I don't see how this is possible.

This week, I took some time to put a sharp pencil on how Kubler's prices will reshape the economics of the Thielert Centurion line. I developed this data on my own from the Kubler-derived prices and my totals don't precisely agree with Diamond's, which it released in Wednesday. But my research does confirm that Kubler's prices raise the engine operating cost about six fold.

Further, the new prices raise the direct costs of operating the diesels to four or five times that of a gasoline engine. In fact, minus the fuel, Thielert diesel costs outstrip those of operating a turbine engine, such as Pratt & Whitney's PT6 or even a small jet engine. Why? Thielert still requires 300-hour removal and inspection of gearboxes, plus numerous other expensive parts. Furthermore, all these components have to be shipped back and forth to Germany for service and inspection. Shipping alone comes about $600 per inspection event.

This onerous maintenance load was one complaint owners had about the Thielert 1.7 Centurion. Thielert responded to this with the new-and-improved Centurion 2.0, which would double the gearbox inspection interval to 600 hours and increase the engine's time between replacement (TBR) to 2400 hours. But Diamond and owners complain that the documentation doesn't support this and they're still required to do the 300-hour gearbox removals. This is roughly the equivalent of yanking the transmission out of your car every 3000 miles and sending it back to the factory. Moreover, if the 2.0 really is a 2400-hour engine—and no one seems to know if it is or it isn't—the entire thing has to be shipped back to the factory for inspection at 1200 hours, costing $4000 in shipping alone. One flight school with three Twin Stars told me that it's probably more sensible to just replace the engine at 1200 hours rather than shipping it back to Germany.

As the late Everitt Dirksen famously said, you're talking about real money here. When you add everything up, Kubler's numbers just don't make sense. The rational way to examine this—if there's anything rational about any of this—is to compare the lifecycle costs of a Thielert 2.0 against a Lycoming at time of replacement. The numbers follow here. One point: On many Thielert parts, owners have the choice of new or inspected, which is basically a used component within service limits. The parts listed below aren't elective replacement—you have to replace them to keep the engine serviceable.

Cost of replacement engine: $51,150 Inspected gearboxes (3): $23,500 ($47,118 new) Shipping: $1800 High pressure pump: $1412 ($5550 new) Rail valve: $651 Feed pumps (3) $1255 Clutch (3) $1443 Clutch shaft (3) $1200 Alternator: $1426 ($2985 new) Scheduled labor $1800 Unscheduled labor $5000 Total: $90,637 Hourly engine (1200 basis): $75.53 Total hourly with fuel: $101.03

For unscheduled labor, I used 10 percent of the cost of the engine, based on owner surveys we've conducted. These numbers, by the way, represent the absolute best case and assume that no additional parts other than those scheduled will be required. Further, owners complain that the labor for gearbox changes is higher than Thielert said it would be, but I've used the lower number anyway to give Thielert the benefit of the doubt. But these numbers are almost certainly too low.

If new parts rather than inspected parts are used, the total comes to $119,952 or $99.96 for the hourly engine reserve or, when you add in fuel, $125.46. Oh, and double that for a DA42 Twin Star. This total may be sustainable in Europe and the U.K.—although I doubt it—but it's a non-starter in the U.S. But remember, the Centurion diesel is a world engine, not a U.S. engine.

Here's how a Lycoming IO-360 compares. It's apples to apples, because this is the engine Diamond uses in its DA40 Star, which also has a diesel option.

Lycoming IO-360 REM

Cost of replacement engine: $25,160 Top overhaul at mid-time: $8000 Unscheduled maintenance: $5000 Total: $38,160 Hourly engine (2000 hours basis) $19.08 Total hourly with fuel: $59.58

For the Lycoming comparison, I added a top overhaul that this engine is unlikely to need and I used unscheduled maintenance of 20 percent of engine cost, twice what I used for Thielert. Even with this lopsided comparison in favor of the Thielert, the Lycoming's costs are a little more than half of the Thielert's. They begin to break even at an avgas cost of around $9 a gallon. But, of course, if avgas costs that much, so does Jet A, so they never break even.

In some ways, the better comparison is between the Thielert Centurion and the Pratt & Whitney PT6, say the dash 114A used in the Caravan. It's a 675-HP free turbine engine with a 3500-hour TBO and overhaul costs in the $85,000 to $130,000 range. The Aircraft Bluebook Digest recommends a $37.14 per hour set aside for the PT6, or half what it takes to the fund the Thielert Centurion and without the onerous 300-hour inspections.

How could the industry have missed such breathtakingly screwed up economics? The companies involved missed it—Diamond and lately Cessna—missed it and we in the press (including me) absolutely glossed it over. In 2005, I visited Thielert's factory in Lichtenstein, in the former East Germany, and we went over the economics of this engine. I never got a clear explanation of how the power-per-hour pro-ration based on a 2400-hour engine was going to work. It seemed too expensive. How was Thielert going to make a go of it long term with all those built-in service costs? Persistent dumb ass questions led me to understand that the initial engine was a loss leader funded by investors who thought the model would turn the corner with sufficient volume and, once the engine had proved itself, the inspections would go away and TBO would increase.

They haven't. And that's what's killing this engine, more than anything else. Shipping perfectly good gearboxes back and forth to Germany is lunacy, as is removing them from the engines every 300 hours. Owners I've interviewed have told me there are problems with clutches, but the gearboxes themselves have proved durable. There's good evidence that this is true, because Thielert offers an "inspected" gearbox for half the price of a new one. But half price is still $7800, plus shipping, and you need to do that three times to get to the Centurion's tender 1200-hour TBO. Seventy-eight hundred bucks to inspect a gearbox? It's an aluminum case, some bearings and a couple of gears. How can that require $7800?

In my view, the inspections were probably built into the model not just as a prudent and admirable step toward proving durability, but also as a profit center to fund the rest of this engine's expensive recurrent maintenance needs. Logically, there's nothing wrong with that concept, as long as going forward, the customer benefits from the proven reliability and cost decrease.

Oddly, both Thielert and Kubler seem to be aware of this, but maintain that Germany's bankruptcy laws force them to run the company on a basis that shows no loss. This morning, Thielert spokesperson Christoph Moller e-mailed me this note:

"At the moment, due to German insolvency law, Mr. Kubler cannot produce any losses and must ask Thielert's clients for prices which meet the company's current expenses. We know, of course, that the new prices for replacement and inspection of parts are a burden for many of our and Diamond's clients. As you know, Mr. Kubler's aim is to find a long-term investor who will provide significant investments in order to push forward the Thielert engine technology which in fact is the future of the aircraft engine industry. To ensure long-lasting relations to his clients this investor will presumably establish a sustainable warranty and guarantee scheme which will improve the current situation significantly. There is a great possibility that this will include considerable efforts to advance Thielert engines especially in terms of prolonging the engines lifetime which in fact is not where it should be at the moment. This will reduce the inspection times and, by this, the costs for owners considerably then."

I take Moller's point, but it's difficult to see how this will make the business viable. In essence, the message to customers is this: pay us five to seven times what you expected to pay and, if we show no losses, we can turn this thing around and you'll maybe pay less later...if you don't mind buying expensive engines without warranties. To me, this looks like a negative feedback loop. The more you input rising prices, the less revenue you generate and the more you have to raise prices until a single customer pays $4 million for a gearbox and clutch. (Warranty extra.)

And if Thielert hopes to find investors to fund a business running on these rules, they'll need nerves of steel and be willing to pour in a pile of money for several years just to gain of glimpse whether it can be profitable. It seems unlikely that customers will stand by and fund what I view as a fiasco, nor should they be expected to. Thielert and Kubler can blame German bankruptcy laws if they wish, but the current strategy seems to serve no one—not creditors, not customers and not the industry.

On the other hand, maybe those of us who think that a Twin Star owner will balk at paying $180,000 to take a pair of diesel engines to 1200 hours are the delusional ones. Kubler tells us owners are "relieved" to know that parts are once again flowing. For some twisted reason, this reminds me of the old Woody Allen joke about the brother thinking he's a chicken. "Why don't you call him on that?" asks the shrink. "I would," says the straight man, "but I need the eggs."

Maybe those 1200 or so Centurion owners need the eggs, too.

[S-Works]

The Avgas DA40 is a dream to fly, very fast and as I recall delivers mid 30lph for over 130kts economy cruise.

I flew one from North Perry in Florida to Halifax NS and back a few years ago over a 2 week tour. Fantastic aircraft N219DS. I will post some pics later.

I never could understand why they ruined the DA40 with an underpowered smelly diesel!

[BartV]

Let's hope for the best!!

http://www.diamond-air.at/1846+M52087573ab0.html

Home
TAE - Customer Update
[Translate to Englisch:] Diamond Aircraft – TAE – Customer Update 16.06.2008
The TAE insolvency continues to present significant challenges to our customers, our business partners and Diamond Aircraft.

TAE

Per information received from TAE, it is expected that the preliminary insolvency will end late June and that insolvency will be declared July 1st. It is expected that Dr. Kuebler will continue as the insolvency administrator and as such we do not expect any change in the current business approach of TAE. In the short term, we expect that TAE will continue to operate in insolvency while they continue dialogues with and continue to search for investors.

Although Diamond, TAE’s largest customer, has formally registered as a potential investor, Diamond has not yet been invited for potential investment discussions with Dr. Kuebler. With the end of the preliminary insolvency, the government wage subsidy will end. TAE will need significant revenue or bridge financing to continue operation in insolvency pending securing of additional investment. Not knowing the current financial position of TAE, we do not have any reliable information as to how long TAE can continue to operate in insolvency.

The recent AD relating to the clutch inspections / replacement has exacerbated an already bad support situation.

It is rumored that an additional airworthiness action relating to the propeller regulating valve is coming, but we do not have any further detailed information.

Frank Thielert continues as General Manager of TAE under the financial stewardship of Dr. Kuebler, the insolvency administrator.

On a positive note, we have learned that Dr. Kuebler recognizes the need to apply resources to solve outstanding technical issues and to extend current maintenance intervals in order to have a viable product and company. Any such extension of inspection and maintenance intervals is of course in the interest of all concerned and most welcome.

Should customers be sending money to TAE for parts?

Many customers are asking Diamond for advice regarding sending advance payment to TAE for service parts. Diamond has no reason to believe that the insolvency administer will not meet his legal obligations in filling prepaid or credit card orders. We would however caution that customers receive confirmation that all necessary parts of an order are actually available for immediate shipment, or if they are not available, that TAE commit to firm delivery dates acceptable to the customer, prior to funding the purchase. We have suggested to TAE that in cases where parts are not available for immediate shipment, that TAE should adopt a policy of requiring a nominal deposit (10%) with order, with the balance due when the parts are actually confirmed to be ready for shipment. If TAE is unable to offer such reasonable terms due to cashflow limitations, then we would have most serious concerns regarding adequate financial liquidity to ensure filling of backorders.

What Diamond is doing

Diamond is primarily concerned with the support of the existing TAE powered fleet, followed by the need to resume production of the DA42. The actions of TAE to date, i.e. the extraordinary pricing for routine and mandatory support items for the TAE engine, do not give us an adequate level of comfort that a return to “normal” is likely under the current administration / management. Consequently we have decided that the best course of action is to develop independent support capability for the TAE engine, until such a time that long term support of the TAE engine is viable or an alternate engine solution is available.

1. Independent Support for TAE Engines

On March 30. 2008, Diamond senior executives met with EASA’s (European Aviation Safety Agency) specialists and top officials to discuss the TAE situation.

We expressed our concern, based on the questionable financial viability of the TAE powerplant with current maintenance costs, that TAE may not survive longterm and that ongoing technical support, regardless of cost, is not ensured. We impressed the need to develop independent technical support capability now, vs waiting for the situation to potentially deteriorate even further.

As disrupted and as expensive the current TAE support situation is, it would be even worse if there were no technical support at all.

Our approach was welcomed by EASA and their support of our approach was pledged. This is of course a familiar approach – OEM independent technical and parts support is available for many other general aviation powerplants, including Lycoming, TCM, Pratt & Whitney, and others.

Consequently, our approach is to establish independent technical and parts support, such that TAE engines could continue to be supported, regardless of the future of TAE.

STC for TAE PARTS

Diamond and Austro Engines are working to systematically pursue certification of alternate means of providing parts and support for the TAE engine, starting with simple maintenance items (e.g. filters, etc) and expanding this to component inspections and overhauls, potentially including complete component replacements. We have already made application for STC for the 100 hour inspection components and will expand this to progressively address 300 and 600 hr inspection and replacement items. We will be updating our customers as approvals are expected and achieved.

First, this will ensure continued support regardless of the future of TAE and second it will offer a lower cost alternative to the current high pricing for parts and services available only from TAE.

2. Austro Engines (AEG)

The Austro Engine program is progressing well and on schedule with engines flying in DA40, DA42 and DA50 airframes, as well as in the testcells. The factory, with full development, production and test facilities is completed. Initial airworthiness authority approvals of the facility are in place. AEG has 4 state of the art dyno test cells as well as a modern propeller teststand, such that development and testing of the AEG engines, as well as TAE support items, can proceed at a rapid pace.

Diamond intends to offer Austro Engine upgrades to existing DA40-tdi and DA42 customers under very favorable conditions. With increased aircraft performance coming from the higher horsepower and improved altitude performance of the AEG engine, upgraded aircraft will surely increase in value, considering that factory new DA42 NG’s (Next Generation) will be sold at a premium vs the current DA42.

We are currently working on the details of a customer program that will address TAE support as well as upgrades to Austro Engines when these are available. We expect to release the details of this program in the next few weeks.

3. DA42 Lycoming

Considering the time expected to achieve international AEG engine as well as DA42 NG certification and in response to specific fleet customer inquiries, Diamond has also made the decision to pursue Transport Canada and FAA certification of the DA42 with Lycoming IO-360 engines, primarily for the North American Flight Training market. We will be advising customers of the project plan shortly. The installation will be designed to permit retrofit of existing TAE powered aircraft with the Lycoming engines, future retrofit to AEG engines, as well as being offered in new production aircraft.

In Summary:

1. TAE is currently providing technical and parts support, albeit at a slow pace and at very high cost.

2. Diamond is taking aggressive action to ensure continued independent technical support of TAE engines, regardless of the future of TAE. Until this capacity is developed and approved, TAE remains the only source for technical support and parts.

3. Diamond is aggressively pursuing certification of the AEG engine for the DA40-tdi and the DA42 airframes, both for new production and for retrofit.

4. Diamond is aggressively pursuing certification of the Lycoming engine for the DA42 airframe, both for new production and for retrofit.

5. Diamond will be releasing details of a TAE support and AEG retrofit program within the next few weeks.

Again we sincerely appreciate the support and understanding we have received from our customers and assure all customers with TAE powered Diamond’s that we are doing our utmost, on all levels, to achieve the best possible and sensible long term solution to protect your investment in your Diamond airplane.

[Fuji Abound]

I would be interested to know where the levers for a Lycoming powered DA42 will go in a retrofit installation?

I can only imagine in might work with the two lever arrangement that Cirrus have but using a Continental engine.

I understand one 42 with Lycoming engines was produced as part of the test series and have always wondered how that was configured.

I would imagine a retrofit would be a vastly costly excercise (unless I am missing something) given that you are bining two engines, two sets of cowls, two or four tanks (unless these can be re-used for Avgas which I doubt) renewing the fuel pipes and pumps, significantly reworking the centre console, and reprogramming the G1000).

Anyone know?

[IO540]

There has got to be zero chance of an avgas DA42 retrofit, but an avgas DA40 retrofit would make sense as this is a good all around "plastic plane" which has been on sale for years and flies reportedly well on the 180HP.

Diamond need the cashflow right now.

[BartV]

I understand one 42 with Lycoming engines was produced as part of the test series and have always wondered how that was configured.

They actually made 6 of them