By Graham Warwick in Washington DC
Diamond Aircraft’s Canadian subsidiary has received a C$10 million ($8.9 million) repayable loan from the Ontario provincial government to support development of the D-Jet very light jet. Development and manufacture of the D-Jet, which made its first flight from Diamond’s London, Ontario plant in May, has been relocated from Austria to be closer to the main US market.
Advanced Aero, meanwhile, has received a C$2.8 million loan guarantee from the Quebec government to certificate and produce the Seawind general-aviation amphibian in the province. But Symphony Aircraft Industries, which began producing the Symphony 160 two-seater in Quebec last year, has been forced to seek protection from its creditors after failing to raise sufficient capital.
The money for Diamond comes from the Ontario government’s Advanced Manufacturing Investment Strategy programme, a new C$500 million fund that provides repayable loans that are interest free for up to five years. Messier-Dowty has received loans of more than C$5 million to create a landing gear systems centre of excellence in Ajax, Ontario.
Assistance for Advanced Aero has been granted under the SMB financial programme administered by Investissement Québec, and covers part of the C$6 million required to complete certification of the Seawind piston single and gear up for assembly of the four-seater at Saint-Jean-sur-Richelieu. The first production aircraft has rolled out and is ready to fly.
Symphony president Paul Costanzo says the company has been forced to seek protection from its creditors in part because of the cost and complexity of starting production at Trois Rivières, Quebec after the project was acquired from bankrupt OMF Aircraft. The cost of developing a glass cockpit was also higher than expected, he says, and Symphony is still awaiting Canadian certification.
A major problem for Symphony has been the steep rise in the value of the Canadian dollar. A favourable exchange rate against the US dollar, and the existence of a factory at Trois Rivières that was built for OMF, were among reasons for locating production in Canada, says Costanzo. “But the real factor is that the venture capital market in Canada is dead, despite our orders and outlook,” he says.
Seeking protection is “a last call for Canadian investors”, Costanzo says. The second option is to involve non-Canadian investors in the existing Canadian operation, and the third “is to pick up a move to the US, where there is more indication of interest in investing”. Symphony has delivered 15 aircraft, has firm orders for 20 more and a 35-aircraft fleet replacement agreement with US flying school Spartan.
Ontario press reports say Diamond has received offers to relocate elsewhere in Canada and the USA in return for financial incentives, and suggest the new loan may not be the end of the story, quoting president Peter Maurer as saying the D-Jet project needs “municipal, provincial and federal” government support.
Source: Flight International
