Five months after Thielert entered administration, the future of the world's only manufacturer of a certificated kerosene piston engine remains uncertain. At the same time, Diamond Aircraft - the sole general aviation airframer to offer Thielert's Centurion 2.0 as original equipment - continues to build engine-less DA40s and DA42s, while dozens of operators, faced with the cancellation of engine warranties and a hike in spare parts prices, have had to ground aircraft.
At a press conference last week, Thielert's insolvency administrator Bruno Kübler and his caretaker manager of the business, Dr Günter Kappler, remained upbeat about sale prospects insisting, as they have for weeks, that they are considering "several purchase offers from well-known investors" with some offers "exceeding initial expectations" and they hope to conclude the process by year-end.
"We can offer investors an intact company that is not making losses," says Kübler [under German law a company in insolvency protection must break even], adding: "Even if plans are to quickly find an investor, we are not under pressure to sell at an inadequate price."
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But time could be running out for the pioneering engine maker, founded by Frank Thielert nine years ago. Although its factory, in Lichtenstein, eastern Germany, has resumed two-shift production, delivering an unspecified number of engines to Diamond and General Atomics (which uses the Centurion on its Sky Warrior unmanned air vehicle), as well as for the US retrofit market, any investor faces three challenges which threaten the business's value as a going concern.
First is Diamond. The airframer has built some 400 Thielert-powered DA40 piston singles and 500 DA42 twins and before the insolvency was receiving 16 Centurions a week. Now, it hopes to begin shipping aircraft fitted with its own Austro AE 300 powerplant by the end of the year, assuming certification targets are hit. "We will begin production in the next few weeks," says the Austrian airframer's chief executive Christian Dries. "We have a huge amount of half-finished and finished aircraft at the factory waiting for an engine." Crucially, Diamond also plans to offer an Austro retrofit for Thielert-equipped aircraft.
NOT RULED OUT
Since April, Diamond has taken delivery of only 25 Centurions. However, Dries does not rule out offering Thielert engines in future, alongside products powered by its AE 300. "I can imagine cooperation, but things just now are extremely difficult," he says. "It depends on who becomes the new owner and when. All potential buyers have been in discussions with us. I have told them it depends on pricing and extending the lifetime of the engine."
This is the root of the second challenge for a suitor. Thielert's success was largely down to its warranty and aftercare package, despite the engine requiring inspection and possible replacement of its gearbox every 300h. It was a strategy that helped Thielert and Diamond win market share, but contributed to its cash crisis. Kübler's decision in May to cancel warranty agreements and treble the price of spare parts helped balance the books, but it infuriated Thielert operators.
The Thielert Engine Owners Group (THENOG) wants a new owner to "honour commitments to aircraft operators who bought into Thielert's vision of a dependable, efficient, turbo-diesel engine". If not, it threatens legal action. "We certainly don't expect to have to go down that road," says Villis Ositis, a THENOG founder. "But any investor that ignores Thielert's customer commitments will face a very unhospitable business environment."
Efforts to improve the Centurion 2.0's reliability is taking up much of Kappler's time, even as suitors run the rule over the business. "One of our priorities is stretching the service intervals to a 360h inspection," he says.
All is not lost for Thielert. It has talented engineers and the backing of politicians in a job-starved region. Plans for a larger 4.0 version of the Centurion are in the works and an agreement with Cessna to offer a Thielert-powered version of its 172 Skyhawk is on ice pending a resolution to the insolvency.
But whoever buys Thielert will have much rebuilding to do - in terms of both hard engineering and customer goodwill.
Source: Flight International
