Since the last ILA show Germany has lost two general aviation manufacturers , but composite technology could put the industry back on the map
While preparing for the last ILA Berlin air show, Walter Extra, founder of Extra Flugzeugbau, was flying the prototype six-seat EA-500 - the company's entry into the turboprop general aviation market after almost 20 years of manufacturing aerobatic aircraft - when the aircraft crashed.
Extra was unhurt, but the EA-500's landing gear and fuselage was damaged and the aircraft was not shown. Despite the setback, ILA 2002 looked like being a launch pad for a revitalised German GA sector - military trainer manufacturer Grob joined Extra in diversifying into GA, two new companies entered the market, and a new concept in need of financing was unveiled.
Today, however, there is only one German-owned manufacturer still producing GA aircraft in Germany: Aquila, which exhibited its A210 all-composite two-seat trainer for the first time at ILA 2002. Extra filed for bankruptcy in January last year, but was rescued in July by US investors that have focused the company on gaining certification of the EA-500, a derivative of the piston EA-400. Ostmecklenburgische Flugzeugbau (OMF) ceased production of the Symphony 150 two-seater when it entered receivership in December; its assets were recently acquired by German company SWF. Bids were submitted in April for its North American arm, Trois RiviŠres, Canada-based OMF Aircraft.
But there are bright spots on the horizon: Grob Aerospace has flown its six-seat single-engined turboprop business aircraft, the G160 Ranger. Similarly, tests continue of the High Performance Aircraft (HPA) TT62 pusher business aircraft.
It would be tempting to categorise the winners and losers into two camps: those offering new all-composite design and those pursuing derivative designs. But there are more basic problems of management and economy, says Dr Michael Erb, president of the German branch of the Aircraft Owners and Pilots Association (AOPA). There was never going to be room for many German manufacturers, least of all in bad times, he says.
"There is a deep economic crisis in Germany, and people unsure about their jobs tend to scratch luxury items," he says. AOPA Germany says sales of all GA types have "collapsed" to almost zero. For established manufacturers like Cessna, this downturn is a blip, but, for new entrants, it represents the worst possible time to launch new products, he says.
Champions
Erb expects one, or possibly two strong European GA champions to emerge, competing against a slimmed-down US field of manufacturers. "To reduce production costs we need fewer producers, rather than hundreds of companies each making tens of aircraft a year," he says. Germany is not the only European country with a troubled GA sector; there have been bankruptcies and restructurings throughout the region. In Austria, however, Diamond Aircraft is quickly establishing itself as a candidate to be the European GA leader and if other manufacturers hope to ride its ticket as running mate, they need to present their credentials soon, he adds.
Two GA newcomers think the economic crisis presents an opportunity. Aquila and Grob are making all-composite designs. "Financial concerns will push the few customers there are towards these cheaper, more reliable new types," says Siegfried Dörfler, Aquila sales director. The company, based in Sch"nhagen, 30km (21 miles) south of Berlin, has sold 63 A210s and delivered 21 since test flying in 2001. Production, now at 2.5 aircraft a month, could rise to four a month by year-end. If this happens, the company could make an operating profit this year, says Dörfler. But, with development costs so far at around €7 million ($8.3 million), the company will have to produce 500 aircraft to break even, which could take another seven years, he adds.
This long period before a return on investment scares bankers, making project finance difficult, says Dörfler. "In the 'Old Europe', businessmen had a relationship with their local bankers; that has been replaced by strict international credit rules," he says. Lenders are sceptical after the dotcom bubble, and Aquila's dreams of developing a four-seat variant have been shelved due to lack of capital, he says.
Based in the Bavarian village of Tussenhausen-Mattsies near Mindelheim, Grob has another answer to the project financing problem: it has a parent company with deep pockets. Grob Werke produces machine tools for much of the automotive industry and had a turnover of €400 million last year. Two years ago, the company took the strategic decision to diversify from aerobatic military trainers into the GA market. "The trainer business is highly cyclical," says Andreas Plesske, chief executive of the Grob Group. "GA does not suffer the same extreme swings as defence," he says.
Grob's fully aerobatic trainers are beyond the price range of all but the keenest private pilot, so the shift will require more than just a change in sales strategy. Instead, the company is launching a business aircraft family, starting with the G160 Ranger. Plesske says the aircraft's rapid design and development (Grob announced the six-seater in January last year and displayed a prototype at the Paris air show in June) was only possible by using carbonfibre, he says.
Germany leads the world in composite technology, says Plesske, and access to experienced engineers outweighs any higher labour costs associated with Germany. "Even where there are workers at half the price, you might need double the amount of people to do the work," says Plesske.
Aquila, too, credits its backlog to the fact that the A210 is not only versatile (it is used by flight schools and air clubs as well as owner-flyers) but also because, at €120,000, it is relatively cheap. Carbonfibre offers a way for German companies to compete in the global market, says Erb.
High costs
The viability of more traditional Designs, as OMF attempted to create, was more questionable, not least due to the labour-intensive process of working with mixed materials, says Dörfler. Plesske agrees: "You have to have an exciting, high-quality product to compete; you cannot sell 20-year-old designs."
OMF was persuaded to establish its facility in Neubrandenburg, 200km north of Berlin, by the Mecklenburg-West Pomerania state government, which provided grants under federal assistance plans for the former East Germany. For the A210, Aquila too received an eastern states allowance (around €750,000 in site development and start-up grants), but as production increases, the company is considering shifting some component production to Poland, where labour costs are lower than in Germany.
Erb says labour costs in Germany are lower than they once were but are still a barrier to GA aircraft production. The cost of establishing a company, and getting facilities certificated, also add disproportionately to costs, he adds. The country has many advantages, however, chiefly a large pool of highly trained engineers, says Dörfler. "Perhaps it is easier to develop an aircraft in Germany than to build it," he says. Erb cites the example of Christian Dries, Diamond Aircraft's German founder, who set up facilities in Vienna rather than battle through German tax laws.
Erb is calling for a GA revitalisation act, complete with tax breaks, to be put through parliament. He admits, however, that with only one pilot among the Bundestag's 603 members, his chances are slim.
There are other factors against GA too, not least the cost. Aviation gasoline is around €1.65/litre (52¢/USgal), and for this reason, one of Germany's other GA success stories is Thielert Aircraft Engines, which promises huge fuel efficiencies with its diesel cycle engines. Once landing fees and hangarage are taken into account, AOPA estimates the cost of operating a Cessna 172 to be around €170/h. These high costs push manufacturers towards the larger US market and Aquila and Grob both have expansion plans for the USA. Aquila received US Federal Aviation Administration certification in November for the A210 and the company is studying re-engining plans in a bid to make the product more attractive to the US GA community. Meanwhile, Grob is to establish a network of distributors centred on its Bluffton, Ohio base.
New products
The US market is also far from buoyant at the moment, admits Plesske, but he says the companies that will succeed in the future are those with new products ready for the economic recovery. German firms should stand a chance in grabbing a larger slice of the pie in the future. And no-one, least of all Walter Extra, is forecasting any crashes at this year's ILA show.
JUSTIN WASTNAGE / MINDELHEIM
Source: Flight International