Diamond Says Thielert Parts Prices Are "Abusive"

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The news went from bad to worse for owners of Thielert-diesel-powered Diamond aircraft Monday, many of whom are stuck with grounded airplanes following the German engine manufacturer's bankruptcy two weeks ago. In a lengthy bulletin to owners Monday, Diamond reported that a contentious negotiation with a German bankruptcy administrator has yielded no promise of relief for owners stranded with broken airplanes and without warranty support from Thielert. Moreover, said Diamond, the German bankruptcy firm overseeing Thielert seems more concerned with short-term cash flow than long-term survival of the company and support of customers. Diamond described prices that the administrator has set for replacement parts as "abusive." A new gearbox -- which each engine requires every 300 hours -- sells for $10,113 Euros or $15,700. Clutches and high-pressure pumps, also scheduled replacement items, are similarly high-priced.

To further raise the ire of owners, they have to pay for these parts up front and arrange their own shipping. One U.S. owner awaiting a clutch and gearbox contacted us Monday and said he wasn't about to wire money to Germany with no guarantee of every seeing the parts. He also complained about not having heard from Diamond on how -- or even if -- it intends to support owners. Worldwide, there are about 600 singles and twins powered by the Thielert Centurion 1.7.

Diamond had proposed to the bankruptcy administrator a deal that would allow it to buy a large supply of parts and engines with upfront payments in order to get AOG airplanes flying. "Unfortunately, the insolvency administration has not accepted any part of our proposal," Diamond told owners Monday. Instead, said Diamond, "we have gained the impression, based on several actions taken, that the goal of the administration is to maximize near-term cash flow from what they seem to view a 'captive' audience--operators of Diamond aircraft with TAE engines, whose only choice is to park an AOG aircraft or pay whatever price TAE may ask for parts."

Thielert did offer to provide Diamond with a batch of new engines; however, even these new powerplants have no warranty or support of any kind. Diamond says it "cannot responsibly pay funds into an insolvent entity, without guarantees of getting valuable parts in return, within reasonable times and at reasonable prices." Further, it's advising Diamond customers dealing directly with Thielert to get confirmation in writing on parts orders before wiring money.

We contacted Diamond on Monday to ask if it intends to offer any kind of support to owners, given Thielert's obvious dire straits. Diamond says its priority is to offer the best possible support to owners in the field, but the bulletin gave no specifics. Diamond's Heike Larson told us that a new diesel engine being developed by Austro Engines in conjunction with Diamond will be retrofittable to DA40 and DA42 aircraft, but the European certification of that engine won't be completed until at least this summer. She said production of these engine for the European market is planned for later this year.

The U.S. certification of the Austro engine may take another year beyond that, at best. Diamond says it will "make every effort to offer special price and schedule considerations" to AOG owners, but given the certification hurdles ahead, it's likely to be many months before such retrofits are available, at least in the U.S. Would Diamond consider buying Thielert's assets if the company goes to liquidation? Larson told us no decision has been made on such a proposal.