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Aviation History
2003
2003 - 0859.PDF
Cover story ex-Diamond engineers who chose Schon- hagen airport as a base as it is just outside non-subsidised Berlin, in grant-qualifying Brandenburg state. High Performance Aircraft, in the north-eastern town of Ros tock, has also taken advantage. Even Dia mond is benefiting, with HK36 Super Dim- ona production set to shift from Wiener Neustadt outside Vienna to Mecklenburg- Vorpommem in east Germany. High labour costs Despite federal funding, labour costs are higher in eastern Germany than countries further east. OMF has 65 employees in Neubrandenburg working on steel cages, composite half shells and final assembly, but was unable to find a cheaper alternative to shipping in aluminium flying surfaces from a subcontractor in the Czech Republic. Diamond's DA40 has 138 small compo nents from Slovakia and other former com munist central European states, where labour costs are around €10/h, which when combined with Austrian labour at around three times that, produces a mean labour cost of around €20/h, which is around half the cost of US assembly, says Feinig. Low manufacturing costs, through a mix of new techniques and outsourced workers, should enable all these new companies to offer their new products in the ultimate market: the USA. OMF is to open a produc tion facility in Trois-Rivieres in Canada, and Diamond is expanding its own Canadian plant. Both companies also qualify for financial assistance from the Quebec and Ontario governments, respectively, which offsets the additional costs associated with entering the US market through a third country, albeit one part of a free-trade pact. In retrospect, Dries says, Diamond should have gone direct to a site in the USA, not least since without a well-known brand name finding a partner to arrange customer financing was more difficult. "Now that we have 10 years history in the USA, our resid ual values are high and our accident rate is so low that finance is no longer a problem," says Dries. The Austrian company plans to assemble over 600 aircraft at its London, Ontario, facility by 2005 and Diamond esti mates at least 60% of orders for its €830,000 D-Jet personal jet will come from the USA. "The single-engined D-Jet will be the plat form from which we launch a whole family of aircraft," says Dries, predicting that Diamond will overtake Cessna and Piper in their home market to become the largest GA manufacturer. OMF, too, sees the USA as the key market, and arms its workers with US tools rather than use potentially incom patible metric nuts and bolts. Asian potential Diamond sees Asia as an unexploited mar ket, with China particularly promising. The company already supplies aircraft for the Indian air cadet programme and Feinig points to a Chinese government study showing a requirement for around 5,000 aircraft under 2,000kg. Diamond, which has just completed a 55-aircraft deal with an airline-affiliated training school in China, is making the country a strategic priority, with a possible site for a third pro duction facility. "GA regulation is soon to be passed over to civilian hands, which could set off a boom and we aim to sell at least 100 aircraft there per year," says Dries. In the home market, too, there is hope for growth. Europe accounts for only 20% of the world's piston fleet, but sales have been steady for around 15 years. With the arrival of diesel engines, the continent has suddenly re-awoken, says Feinig. "As pilots begin to see that they can concentrate on flying and not have to worry about in-flight engine management, this should encourage more people to return to flying," says TAE's Czyrnik, as he performs the single-button shutdown procedure on the diesel 172. • TAE sees huge potential in the retrofit market for its diesel- cycle engines j w m ¥ ^^JH _**^tfp ^riflflN ** &M. L 1\-'-- /' 1 • v* —** ' 2P * ^PB jk r it tk 1 32 22-28 APRIL 2003 PLIGHT INTERNATIONAL www.fliqhtinternational.com
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