Diamond Aircraft Industries is a rising star of light aircraft manufacture - and is determined to claim the top spot from its US rivals
Austria's Diamond Aircraft Industries has risen through the ranks of general aviation manufacturing to become the largest builder of light aircraft in Europe and the third largest in North America. Yet the success of this extraordinary company is surprisingly understated.
Its humble beginnings in 1981 as Hoffmann Flugzeugbau spawned the H36 Dimona motorglider, the first of a family of light composite aircraft that would eventually raise the bar in quality, performance and price within this traditional market sector.
"We always knew there was a market for a range of modern light aircraft," says Diamond Aircraft managing director Michael Feinig, who has been with the company from the start. "The world's huge general aviation fleet had been dominated for too long by the old designs of Cessna and Piper. But as new technologies were developed in manufacturing and avionics, we saw a way to shake up this market and boost its appeal."
Diamond's current president and chief executive Christian Dries snapped up the company in 1989 in a management buyout, and set about revamping and expanding its product line. Four versions of the Rotax 912/914-powered Dimona - now known as the HK36 Super Dimona or Xtreme - are now available and the aircraft has become the biggest-selling motor glider in Europe, with nearly 1,000 aircraft produced to date. The success of the Dimona spawned the DV20 Katana, a two-seat training aircraft based on its stablemate's platform, with shortened wings, flaps and tricycle landing gear.
Diamond's prominence in the European general aviation market was assured, so the company sought to mirror this success in North America. A facility was opened in Canadian province of Ontario in 1992 to develop, certificate and manufacture a revamped DV20, in which about 40 improvements were incorporated, and to help the Austrian airframer become accepted in the vast, neighbouring US market. The DV20 was branded the DA20 A1 for the North American market.
Diamond's expansion, coupled with the introduction of the DA20, came at a time when training schools and private flyers were looking for newer, safer, more efficient aircraft. In addition, Diamond had shrewdly produced the only two-seat composite trainer on the market that incorporated the latest technologies and offered low purchase and operating costs.
Finding a niche
The introduction of the DA20 left traditional players reeling, because the two-seat aircraft secured a succession of new contracts and confirmed Diamond as a serious contender for the light aircraft crown. These included an order from Daytona Beach, Florida-based Embry-Riddle Aeronautical University for 35 two-seat DA20-C1 trainers to use as flight screeners for the US Air Force Academy.
The key to Diamond's success, says Feinig, is its ability to spot niche markets and avoid competing head-on with successful manufacturers. "We have made a concerted effort, for example, to avoid the four-seat, high-performance single market occupied by Cirrus Design," he admits.
This philosophy has translated across Diamond's product line, where it has tried to push the parameters of design, cost and acceptance.
Testament to this is the introduction of the DA40-180 Diamond Star in 1997. This four-seat 180hp (135kW) Lycoming IO-360-powered aircraft broke the mould by outperforming similar aircraft that carried much higher price tags than the Diamond Star's basic instrument flight rules price of $195,000. Four years later and with Dries now sole owner of the company, the DA40TDI was launched as the first production-built diesel-cycle piston single.
"With the cost of aviation fuel rising in Europe, we identified a niche for an aircraft that will burn both Jet A-1 and diesel fuel," says Feinig.
The 135hp Thielert Centurion 1.7 engine adds a single-lever power control and is an economical alternative to older-technology Lycoming and Continental piston engines, Diamond says. The TDI was certificated in 2002, coinciding with launch of the DA42 Twin Star - the first certificated twin diesel. The aircraft was certificated in May and first deliveries are imminent.
The DA42 Twin Star orderbook is already substantial, says Feinig, and the aircraft is being earmarked as an unmanned air vehicle platform.
Having taken on the established general aviation giants with its composite light-aircraft line, Diamond last year turned its attention to the very light jet market, launching the five-seat single-engine D-Jet.
This diversification into the jet market does not faze Feinig, who is confident the niche product will be well received, particularly among the owner/flyer community, with which it has established a strong and loyal customer base. Feinig predicts about 15% of D-Jet sales will come from existing customers. To overcome the insurance concerns that are dogging the very light jet market, Diamond has set the maximum certificated altitude for the Williams FJ33-4-powered D-Jet at 25,000ft (17,600m). Feinig says this will lower the qualification barrier for pilots. "We are producing an aircraft for under $1 million, which pilots with around 300h instrument flight rules experience will be able to fly."
Diamond plans to incorporate, as an option, a high-speed recovery parachute system, which could also lower insurance costs. The company aims to get the first D-Jet airborne early next year andhas earmarked certification for the first quarter of 2006.
Diamond's strategy is to bring a product to market within three years of its launch, says Feinig, which gives the company significant lead time over rival products and a dominant share of each identified sector.
This tactic has paid off. Diamond is now producing and developing at least 13 composite aircraft and derivatives and the manufacturer has delivered around 3,000 to date. Aircraft deliveries have risen from 176 in 2001 to 263 last year. By the end of 2004, shipments are expected to reach about 420 aircraft, climbing to more than 850 in 2008.
To support this anticipated demand, Diamond has built a 10,900m2 (117,000ft2) composites facility at its Wiener Neustadt headquarters near Vienna, which was opened earlier this year after a seven-month building programme.
The factory will house production of wings and fuselages for the four-seat diesel-engine Twin Star and the D-Jet and is designed to boost annual production capacity to 600 aircraft, around half of which will be shipped to Canada for final assembly. The 2,000m2 facility at London, Ontario is home to engineering production and customer support for the DA20C1 and DA40, of which deliveries this year are expected to exceed 220.
The continuing strength of the euro against the US dollar led Diamond to form a supply company in Croatia, where the cheaper labour market should drive down company overheads. Diamond Aircraft Croatia will house the manufacture of labour-intensive composite parts at a factory in Varazdin, now under construction. The parts will be shipped to the production lines at Wiener Neustadt and London, where the production processes are under scrutiny. "We are looking to reduce production costs," Feinig admits.
"Improvements will include the introduction of a five-axis machine and automatic paint machine which will speed up this process and reduce man hours significantly," he adds.
The demand for such automated production techniques will intensify as the inventory grows and Diamond is again in search of new products. Although Feinig remains tight-lipped about the company's next choice of aircraft type, he points to a gaping hole in the six-seat single-engine market. "Our focus for the time being is to bring the D-Jet to market and to evolve and improve our product line," he says.
In April, Diamond introduced a fixed-pitch version of the DA40 Diamond Star powered by a carburetted Lycoming O-360. This is expected to slash engine overhaul costs by about $5,000 compared with its fuel-injected IO-360-powered stablemate, says Diamond. Certification is planned for the fourth quarter. Also under development is a Lycoming-powered version of the Twin Star targeted at the North American market. This aircraft is scheduled to enter service early next year.
"We will continue to work hard to increase our market penetration, particularly with our new products," says Feinig. He suggests the company has made great strides in the past two decades to secure the requisite brand recognition for its products. "When we initially started producing the Katana, people hadn't heard of the brand and turned up their noses," he says. Now the challenge is to convince operators of old piston singles, particularly flying schools, to upgrade to a Diamond.
The company is in third position in the light aircraft delivery table behind Cirrus and Cessna, but is eager to claim the top prize. "Our vision is to be number one manufacturer of propeller-driven single and twins," says Feinig, "and we aim to hold that position within five years."
KATE SARSFIELD / WIENER NEUSTADT
Source: Flight International