Diamond Canada poised for growth

Diamond Aircraft Industries Inc. (Diamond Canada) is poised for growth following the Dec. 20 announcement that Wanfeng Aviation (Canada) Inc. has purchased a 60 per cent ownership stake in the all-composite light aircraft manufacturer headquartered in London, Ont., for an unspecified amount.

The new investment will help Diamond Canada capture a larger share of the worldwide light aircraft market. The deal will transition from Austria to Canada the design, development, production, certification and intellectual property rights for two popular Diamond models–the single-engine DA40 and new twin-engine DA62–to add to the two-seat DA20 and Lycoming-powered DA40 already built in London.

Diamond aircraft have been built at three sites–Wiener Neustadt Austria; London, Ont.; and Shandong province, China (where the DA40 is built under licence for the Chinese market). The Chinese licensed production of the DA40 is not included in the new Canadian transaction.

Diamond is consistently ranked in second or third place in annual piston aircraft production, competing against Cirrus, Cessna, Piper or Beechcraft for sales.

The Canadian factory has delivered 2,210 single- and twin-engine models since the very first DA20-A1 Katana was delivered to Central Missouri State University for flight training in January 1995.

“The leaders of Diamond and Wanfeng first met several years ago and this has been a long courtship,” said Peter Maurer, who will continue as CEO of Diamond Canada under new chairman Frank Chen (Chen Bin) from the Wanfeng Group.

“For many years prior, we had been actively seeking investment to support the D-Jet program, but have been doing reasonably well the past three years and were not actively seeking investors for the piston aircraft side of the business,” he continued.

“We now have a win-win that allows us (Diamond Canada) to acquire the DA40 and DA62 programs from Diamond Austria as well as an expanded mandate to sell these aircraft globally.”

He said the London factory expects to grow from 150 people to between 200 and 300 people in the next 12 to 18 months.

Forty per cent of Diamond Canada will remain privately held and the Canadian company will maintain an ongoing business relationship with Diamond Aircraft Industries GmbH of Austria and its sister company, Austro Engine.

Wanfeng Group

Wanfeng is a holding company based in Xinchang, Zhejiang Province, China whose transportation holdings includes the world’s largest producer of automotive and motorcycle aluminum wheel rims.

Three years ago, Wanfeng Auto Holding Group made a major investment in Ontario when it bought Meridian Lightweight Technologies of Strathroy (30 kilometres west of London), which is the world’s largest supplier of lightweight magnesium castings for luxury carmakers such as Tesla, Porsche and Mercedes Benz.

More recently, Wanfeng bought the Diamond Flight Centre London Inc., a professional flight training school at London Airport, and it plans to make additional investments in flight training schools, MROs and airports in China and abroad.

Humble beginnings

One year after the Dries family acquired 100 per cent control of HOAC AG (previously Hoffman Aircraft) in 1991, the Austrian aircraft manufacturer established Diamond Aircraft in London to capture North American market share with new carbon fibre aircraft.

Diamond Canada’s first product was the 80-horsepower Bombardier Rotax 912-powered DA20 Katana, which first flew in London on June 22, 1994.

The unconventional Rotax engine limited sales of the DA20 to owner-pilots and flying schools in the U.S. This prompted Diamond to select the 125-hp Continental IO240 to power the more capable DA20-C1 in 1997.

“Development of the four-seat DA40 (in Austria) took Diamond from a single product company with a narrow focus into a diversified business with a growing product line,” explained Maurer in an earlier interview.

Strategically, the combination of the DA20-C1 and DA40 Star provided Diamond with a new technology, low operating cost aircraft family that could replace older Cessna 152 and 172 training aircraft.

The first 19 Diamond Stars sold in North America were made in Austria, with the first seven delivered to U.S. customers at EAA AirVenture in the summer of 2001.

Canada became the sole supplier of the Lycoming IO-360-powered DA40-180, with the first Canadian-built example delivered in March 2002.

Diamond’s portfolio was further enhanced with the development of the four-seat twin-engine DA42 Twin Star, which first flew in December 2002 and was certified in Europe in 2004.

Aircraft family commonality is important, since it provides trade-up opportunities for owner-pilots, and provides large flying schools the ability to operate different kinds of aircraft with similar design, flying and maintenance characteristics.

Both the DA40 and DA42 were offered with the choice of avgas or jet fuel, but the Diamond Aircraft Group was forced to develop its own jet fuel engine–the Austro Engine AE300–when its original engine supplier, Thielert Aircraft Engines, went bankrupt. On Dec. 21, 2016, Austro Engine celebrated one million flight hours of the AE300 jet fuel engine.

In 2003, the Canadian factory took the lead developing the Diamond D-Jet, an innovative single-engine, five-seat pressurized jet, but development work was suspended with the program about 70 per cent complete. Maurer said it was too early to tell if the program would be revived.

All together, the Canadian factory has built 1,022 Diamond DA20s, 1,037 DA40 Stars, and assembled 151 DA42 TwinStars from Austria for North American customers.

Going forward

In 2008, light aircraft manufacturers delivered 2,700 piston aircraft before the recession, with sales stabilizing at about 1,000 aircraft a year.

Sales to the owner-pilot market can be stimulated by the introduction of new technology, but Maurer observes that the population of private pilots has been declining for some time.

On the other hand, Boeing and ICAO estimate that the commercial airline industry will require at least 500,000 new pilots over the next 20 years, which will require a lot more training aircraft.

“The year 2017 is going to be challenging as we transition the engineering, manufacturing, marketing, sales and support for the DA40 and DA62 from Europe to Canada,” Maurer told Skies, adding that Diamond has a lot of experience moving aircraft production from one facility to another.

“We are going to be working very closely with Transport Canada, which previously validated the EASA [European Aviation Safety Agency] type certification for the DA40, and will now become the certification authority for the DA40 and DA62, in addition to the DA20.”

The US$400,000 (approx. CAD$540,00) to $500,000 four-seat DA40 is Diamond’s most popular single-engine aircraft and is available with a conventional (avgas) or jet fuel (diesel) piston engine.

The luxurious US$1 (approx. CAD$1.4 million) to $1.3 million five- to seven-seat DA62 twin has the most spacious cabin of any piston aircraft, a high speed cruise of 192 KTAS, and efficient 180-hp Austro Engine AE330 jet fuel engines.

The DA62 is also available with a wide range of options including weather radar, electric air conditioning, oxygen and a TKS ice protection system that certifies the DA62 for flight into known icing (FIKI).

About 40 DA62 aircraft have been delivered since EASA certification in April 2015 and Federal Aviation Administration (FAA) certification in February 2016, with Transport Canada certification underway.

“On the production side we are going to send teams of employees from Canada to Austria for on-the-job training,” explained Maurer. “They will learn the deep details and specifications of each aircraft model we will put into production. For the DA62, we will move the tooling over to Canada in stages and start production at the final assembly stage.”

Diamond’s Canadian factory is vertically integrated and performs virtually all aspects of aircraft production in house. Capabilities include all composite work, sheet metal, metal work, electrical and avionics, welding, NDT, assembly, testing, tooling, engineering and planning.

Carbon and glass cloth come in the factory door as raw materials and are pre-impregnated on site with epoxy resin. Finished aircraft literally fly out the other end of the 220,000-square-foot building.

Since 2014, Northrop Grumman has contracted Diamond to do specialized development and production work and in early 2016 the Dornier Seawings Company contracted Diamond to produce the complete airframe of the Dornier Seastar amphibian.

Diamond Canada and Diamond Austria will continue to support each other’s products while sharing a common international sales, support and distribution network.

Much of the Austrian company’s business now comes from government and military contracts, with the DA42 TwinStar increasingly popular as a manned and unmanned surveillance platform. New product development is focused on the Diamond DA50 and DART 450 tandem two-seat, fully-aerobatic turboprop civil and military trainer.