Diamond's Commercial/Military Turn
Diamond Aircraft CEO Christian Dries is characteristically blunt and never more so when talking about the sorry state of the GA market. "If you told me five years ago that two thirds of Diamond's turn over [revenues] would be from military and government, I wouldn't have believed you."
But that's what it's come to for Diamond and it's probably a lucky thing. Recall that the sales of Diamond's flagship, the diesel-powered DA42, tanked in 2008 with the Thielert bankruptcy, months before the word economic downturn crumped the entire industry. In a wide ranging conversation at Diamond's Weiner Neudstadt factory Monday, Dries told Russ Niles and me that the company is still smarting from its sour relationship with Thielert and one result of it is a modern, state-of-the-art engine factory grafted onto to the side of the Diamond plant. That would be Austro engines, which is now the powerplant of choice for the DA42 twin. I'll have some comments on that later, but first, Diamond's market swing into the commercial segment.
One of Diamond's daughter companies is its Airborne Sensing division. Basically, Diamond got lucky with perfect timing on this. Seven years ago, the last time I toured the factory, UAVs were just coming out of the ground, but now, the market for these things is exploding, as we've reported many times. But Markus Fischer, who directs sales for the sensing division, points out that many agencies—and even countries—can't afford UAVs because although they're thought to be cheap to operate, they require a lot of expensive ground infrastructure which takes time to set up. Furthermore, many agencies are using what now might be considered legacy platforms: Helicopters. These are noisy and are expensive to buy and operate.
Enter the DA42 with high-efficiency diesel engines. Diamond simply certified this airplane to carry a number of platform enclosures for the nose, the belly and the spine of the airplane. Customers can take their pick of what they'd like on their spy plane: IR sensors, visual spectrum cameras, radar…you name it. And while these systems can cost north of $10 million all in, they're still cheaper and more flexible than UAVs in many applications because they can be launched quickly and easily directed from the ground. UAV launches are often delayed by the local authorities haggle over airspace access, something that's even worse in Europe than it is in the U.S.
They're fairly stealthy, too. Diamond paints the underside of the airplanes with a neutral gray paint that makes them hard to see from the ground. For some models, they route the exhaust over the top of the engine, reducing the noise and IR signature. At sporting events like golf matches, where this technology is used by media outlets, no one want to hear the drone of an airplane for minutes on end.
Compared to a helicopter or anything with a turbine engine, the DA42 is dirt cheap to operate, even with two crewmembers aboard. Throttled back to 60 percent power or even slower, say at 80 knots, the airplane sips 6 gallons total and can remain airborne and on target for hours. Diamond realized it could seize a nice little niche market in this field by offering a one-stop shop where other surveillance platforms consist of aircraft that are configured by third parties. "So you have a problem with your camera or your electrical bus. Who do you go to? You don't want to be told by someone that your problem should be fixed by someone else," says Fischer. So Diamond's approach is to deal directly with the end user, customize the platform to suit, then service the entire system from airplane to camera to sensors. You can see the appeal.
Diamond has about 90 such systems in the field and the MPP hangar we were shown seems to be chock-a-block with more being built. A few years ago, Diamond developed the "pilot-optional" version of the DA42, so it can be and has been flown in the UAV mode. As we mentioned in today's news story, one of Diamond's test articles was being equipped with a European-developed fly-by-wire system that looks interesting. We're looking forward to reporting more details later.