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When will a diesel be available for my aircraft? |
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News, facts, and comments on the coming revolution for piston-engine aircraft.In 1998, one diesel engine flew on a converted airplane for the first time since 1945. Today, close to 4,000 singles and twins are flying. This is the beginning of a worldwide trend which will eventually allow a rebirth of the piston-engined aircraft, around new specs and new missions. DieselAir Research, Inc., the publisher of The DieselAir Newsletter, offers strategic intelligence services to the aircraft industry, its suppliers and its customers who ambition to benefit from this global change of paradigm which will mean new markets, new concepts, new services, new materials and components… You may be interested in our services if your firm designs and/or manufactures aircraft and components, aero engines, avionics, propellers and engine components, fuel systems or additives, advanced materials, or industry specific machinery for manufacturing of these; or provides aviation services such as fuel production or distribution; flight training, aircraft chartering, maintenance and operations (FBO’s); or airport management and design, traffic control, hangar, materials handling and storage equipment; or consulting and financial services for these industries; or advertising, sales promotion, trade shows, specialized publications. To know more, send a confidential email inquiry to Dr. Eng. André Teissier-duCros at atc@geanoverseas.com News of January 07, 2011Latest news from Centurion/Thielert reflect that the aero diesel future is hazy in the short term but very solid in the long term.At a time when insolvency administrator publicly announces that he will now resume his search for an investor for Thielert Aircraft Engines GmbH (Thielert), I talked with Sebastian Wentzler to reassess Thielert’s and Centurion's exact position in the arena of General Aviation, and in its relations with OEM customers and with aircraft owners who own, or consider owning a Centurion-equipped airplane. Some background information: Thielert Aircraft Engines GmbH filed insolvency in April 2008. Basically, a lack of liquidity was the reason of the insolvency. Insolvency proceedings have been opened by the insolvency court of Chemnitz (Saxony, Germany) in July 2008. The court has appointed lawyer Dr. Bruno M. Kübler as insolvency administrator. Due to German law the given pro-rata-warranty had to be canceled in insolvency. A procedure similar to Chapter 11 in the U. S. Such a situation is not exceptional: The whole industry of General Aviation worldwide is in big trouble, due to the economy and financial crises. For piston-engined airplanes, the situation has been worsened by the cost and availability of 100LL Avgas, and the uncertainties regarding the future of this fuel. See our previous stories. Since then Dr. Kübler has run the company, and is now openly looking for new investors. The company was restructured and Thielert now claims it has a positive cash flow from the combined civil and defense (diesel for drones) business. Prices for spare parts have been on a constant level. Actually some prices have been lowered, e.g. for the gearbox. To be able to concentrate on customers’ satisfaction, Dr. Kübler founded Centurion Aircraft Engines AG & Co. KG (CAE) in April 2009: CAE is selling and distributing Centurion engines and parts, and can and does offer warranties because it is free of any insolvency effects. The engines still were developed, certified and produced by Thielert. Centurion also is the brand name of the engines. At this time, I estimate that there are 1,800 diesel-equipped airplanes which are truly airworthy worldwide. Taking into account the DA42 twins, which are mostly Thielert-equipped, this means that some 2,350 diesel engines are flying today, of which 97% are Thielert. So, at first glance, one might assume that Thielert is absolutely dominant on the market. So is Diamond, for the airplanes themselves. By the way, my count of diesel planes include: With Thielert, 750 DA40s, 550 DA42s, 280 Cessna 172s (conversions), 50 Piper PA28, 35-40 Finch/Robin Ecoflyer, some 50 various prototypes and demo planes of other models, plus an undisclosed number of drones for the defense market. With SMA: 46 Cessna 182 (conversions), 1 PA28, 1 Trinidad, around 10 prototypes. With Wilksch: About a dozen prototypes and experimentals. With Austro A300: half a dozen DA40-42s (but we never got any feedback from this manufacturer). With DeltaHawk: Two demo planes, and an unknown number of drones. Yet it is specious to talk about market dominance because in fact none of the diesel manufacturers ever compete head on: Wilksch offers a 100HP 2-stroke engine, not certified yet; Deltahawk makes a 160HP 2-stroke engine, again not certified, Thielert offers certified 135 and 155HP engines and has discontinued development of its V8 310HP engine, and SMA (and soon perhaps Continental, under SMA’s license) offers a certified 230 HP engine. No one yet has a comprehensive range of engines covering from 100 to 350-400HP. However, since it is under administrators' management, Thielert can claim several unique achievements. It is the sole aero engine manufacturer which combines: • Dominant market presence in numbers and geographic penetration in distribution and service, • A presence in the 130-160HP range which is the one needed first for flying academies, • Producing and selling engines and spares in an on-going process, actually ending up on airplanes which are actually sold and operated, • All this while generating a positive cash flow. This is the most important. DieselAir has received, during the months which followed Thielert’s declared insolvency, about half a dozen emails from Diamond owners expressing sometimes extreme dissatisfaction, each time because of one or two grounded airplanes. A general impression emerged that Thielert’s insolvency was due in fact to quality problems and even design defaults. But nevertheless the insolvency was caused by the excessive warranty policy reducing liquidity reserves more and more. Since November 2009 however this situation has calmed down. We will never find out now whether there were actually faulty engines, because sorting out arguments between Diamond, Thielert and the aircraft owner always requests a difficult investigation, but the fact is that the initial 1.7 liter engine has been replaced by a 2 liter of same 135HP power since 2007 The 1.7 liter never lost its certification, and many of them are still flying now. We know for sure that some planes were grounded for lack of spare parts, which lack of funds prevented Thielert to deliver. We also know that maintenance guidelines have been changed in insolvency, that some testing took place, and that TBRs have been set (now 1,200 hours) for feed pump, the entire engine (1,500 hrs) and life time extensions soon to come; which does impact on the engine’s maintenance costs. Today, Wentzler told us: “In fact, we have had a much lower in-flight shut down rate than other engines according to FAA reporting. Also, we have always been able to deliver parts and engines even if an alleged inability to deliver is a popular argument chosen to mask other problems. However, all warranty claims resulting from the cancellation of pro-rata in insolvency can be filed to the schedule of depts. Today, life time extension parts must be paid. At first glance that is a nuisance to customers but the reverse of the medal is, this makes Thielert a reliable supplier on the long run. And aircraft have a long life.” Also, one aspect of the obvious dispute between Diamond Aircraft Industries and Thielert is exposed by Wentzler in these terms: “…sometimes you could ask yourself: what is a real Thielert problem and what is Austro promotion. Anyway, irritated customers are not the intend of none of the parties. We are working on this issue to achieve customer satisfaction.” Behind this dispute on fact is obvious to DieselAir: Thielert has today a 2 liter engine which is now reliable if the owner complies with a strict preventive maintenance policy, which comes at a cost. A Thielert plane burns Jetfuel, is fuel efficient, but still seems expensive to maintain if one neglects the incidence of a lower fuel cost. We expect that all aircraft owners used to the good old Continental and Lycoming got used to an aftermarket offering low prices per HP for non-turbo, basic engines, and will discover that the price of any new engine, diesel or not diesel, will carry amortization of development and certification costs… But in countries where Avgas is gone, or costs an arm and a leg, such a plane is the only practical airplane, unless you upgrade to a turboprop costing 6 to 10 times more. The 135HP version is certified by FAA and worldwide. The 155HP is FAA-certified since March 2007. The first 155 hp STC came in summer 2010 for Cessna 172 and for Finch Robin Ecoflyer it is expected soon. So what is preventing Thielert from truly conquering the world market? Money. A firm which went through receivership, inherited heavy market liabilities besides the financial ones and manages to survive cannot undertake new developments without a serious equity injection. Such developments – this is my guess only – would consist in resuming and completing development of their V8, and their V6 project. Otherwise Thielert could concentrate on further developments of cash promising 155 hp installations. So, we cannot expect that Thielert would soon be able to cover powers from 135 to 400HP. The promising LSA-Trainer 100-120HP market could only be addressed through the acquisition of a 2-stroke manufacturer or design (I cannot imagine addressing the LSA market with a geared, liquid-cooled in-line engine…). But all of these thoughts depend on the strategy of a future investor. Also, a refinanced Thielert will need funds to get ready to address the Chinese market. China officially has 900 piston-engined planes on its register, and is now opening its low-altitude airspace (up to 12,500 ft) to General Aviation. China has no 100LL available and do not intend to authorize it. New planes to be introduced will burn 95UL, or Jetfuel. And China envisions granting permits for a few hundred new airfields operated by private parties, lodging first a flight academy where Chinese can learn to fly for any kind of reason. The few Chinese enterprises that seriously plan to address this market are all aware of the diesel opportunity and of all competitors. The Chinese market may become the fastest growing market for General Aviation at some time. My guess is: seriously beginning 5 years from now. Conclusion: Whoever invests in the emerging aero diesel industry must be prepared to invest further until he is credible on the OEM market with a complete range of powers, and present in China and several developing countries with a network of customer service. I have been analyzing the aviation industry since the sixties. This industry knows only two kind of strategic situations: Cash cows, and dancing girls. I have seen quite a few costly, ageing dancing girls suddenly becoming cash cows: The CFM turbojet joint venture; Airbus Industrie; the Arianespace satellite launchers; the Garrett family of turboprops… whether in the US or in Europe it has been quite some time we haven’t seen a new one, and none ever happened in piston-engines since the O-engines were developed after the war… Yet I remain more than ever convinced that the aero diesel engine will be one cash cow which, once established, will last for decades. In that context, who will invest in the Thielert opportunity… and in the others? Stay tuned… posted at 9:12 AM |
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