Efforts Underway To Certify DA42s With Lycoming IO-360s

There's more news to report... alas, little of it good... regarding the cringe-inducing case of Thielert Aircraft Engines. In its latest update to customers, Diamond Aircraft -- Thielert's largest customer -- said Monday it expects the troubled enginemaker to declare full insolvency in a German court within weeks.

"Per information received from TAE, it is expected that the preliminary insolvency will end late June and that insolvency will be declared July 1st," Diamond -- TAE's largest customer -- said. "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."

As ANN reported, Thielert's board of directors voted to remove company founder Frank Thielert from his CEO position in April, due to evidence of shady financial reporting that led a German court to invalidate three years of earnings statements. Thielert continues as General Manager of TAE, under the financial stewardship of Kuebler, the insolvency administrator.

Diamond notes with the end to preliminary insolvency, government wage subsidies for Thielert will end... pushing the company further towards the brink. A recent EASA Emergency Airworthiness Directive concerning clutch replacements to TAE-125 (Centurion 2.0) powerplants won't help matters at all, nor will a rumored AD involving faulty propeller regulating valves.

"TAE will need significant revenue or bridge financing to continue operation in insolvency pending securing of additional investment," Diamond says. "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."

Though stopping short of saying customers shouldn't send money to Thielert for parts, Diamond adds "[w]e 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."

Meanwhile, Diamond says efforts to establish third-party parts and service support networks for existing TAE-powered aircraft continue, as does the program to approve the Austro Engine diesel powerplant for retrofit to existing Thielert-powered DA40 tdi and DA42 aircraft. Diamond also hopes to offer the Austro engine on new "NG"-branded Diamonds.

"Diamond intends to offer Austro Engine upgrades to existing DA40-tdi and DA42 customers under very favorable conditions," the planemaker stated. "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."

A familiar name has also surfaced in the quest to get grounded TAE-powered DA42s back in the air. Diamond says due to the time expected to earn certification for the AEG powerplant, the planemaker will pursue Transport Canada and FAA certification to power DA42s with the Lycoming IO-360 avgas-fueled engine.

The Lycoming engine was initially offered upon the DA42's introduction to the North American market four years ago, primarily to address concerns about availability of the TAE engines. As more Thielert engines became available, however, the Lycoming option (shown below) largely disappeared.

"We will be advising customers of the project plan shortly," Diamond says. "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."

FMI: www.diamondaircraft.com, www.thielert.com