First Word: 06/08

Diamonds Double Down

If investment boldness were measured on a scale of one to 10, the Cirrus line would rate about a seven while Diamonds foray into the diesel market with the Thielert-powered Twin Star would inch out there toward the ledge at a solid 11. You have only to look at the particulars to understand why this is so. When


Diamond announced the Twin Star at the Berlin Airshow in 2002, it was proposing not only a new airframe, but one powered by a new technology engine adapted from an automotive design, a strategy that hasnt succeeded in the world of certified airplanes, although the idea has made inroads in the homebuilt segment.

As we go to press this month, the chickens have, to repurpose the phrase du jour, come home to roost. The Thielert Group is struggling to reorganize after a liquidity crisis and possibly criminal fraud related to the companys IPO in 2005 drove it into bankruptcy and Diamond is furiously working to keep 400-plus owners of Twin Stars and yet more DA40 TDI buyers from feeling beached. We doubt if Diamond could have reasonably prepared for this development in 2002 because it was, after all, boldly going where no manufacturer had dared to venture. Even six years after the fact, Cessna is the only major manufacturer to openly join the diesel revolution and it recently announced it will delay deliveries of the 172TD until 2009. Everyone else is sitting out on diesels. What Diamond was gambling on in 2002 was that the Thielert 1.7 Centurion line would prove technically and economically viable. Six years later, were still not certain of this because we don’t know the precise details of the Thielert insolvency. Was it due to fraudulent stock valuation? Out-of-control costs? An unsupportable product line? Or all of the above?

This may or may not matter to owners, but Diamond clearly isn’t getting bogged down in the details. While it works to mollify some angry owners-which it must do-the company has plans to essentially double down the diesel bet. In late May, again at the Berlin Airshow, it was expected to unveil its own diesel engine, the so-called Austro line, to replace the Thielert products in Diamond and presumably other airplanes. By modern aerospace standards, this is utterly Carnegiean in its vertical boldness. No one does this sort of thing anymore. They juggle cellphone calls to a dozen vendors and then get twisted off when the vendors don’t deliver.

This strategy owes to two things, I think. Diamond principal Christian Dries is fed up with engine makers who don’t service what they sell and develop new products and he has a crystal clear vision of a future that doesnt include avgas tankers. There’s simply no way around this so as we bump uncertainly into the future, Dries knows that Jet A will drive it and sooner or later, someone is going to succeed with these engines. There’s little choice, really. This is no time for Timid Timmy at the helm.

Further stacking the chips in Diamonds favor is that it alone has the most diesel experience and this momentum counts for more than anything else. Yes, there are competitors-SMA, DeltaHawk, Lycoming, Continental, Wilksch, Powerplant Developments-but with the exception of SMA, all of these are startups with field experience that doesnt approach the Diamond/Thielert venture, which has hundreds of airplanes and thousands of flying hours behind it. Through painful, expensive experience, Diamond has learned what breaks and what doesnt and what sort of field support these engines will need. Its competitors have no idea. I don’t know if this means Diamonds double-down gamble will work or not. But despite the stumbles, its still way ahead of everyone else and its going to be fascinating to watch as Diamond untangles itself from Thielert and pushes it up with Austro.

-Paul Bertorelli

Paul Bertorelli is Aviation Consumer’s Editor at Large. In addition to his valued contributions to Aviation Consumer, his in-depth video productions on sister publication AVweb cover a wide variety of topics that greatly contribute to safety, operation and aircraft ownership. When Paul isn’t writing or filming, he’s out flying his J3 Cub.