Oshkosh 2015

[carym]

DAI-Canada is broke and doesn't receive the support it needs from Austria, and I believe that DAI-Austria is not really interested in the North American market. I don't see this situation significantly turning around in the near future

[rwtucker]

I agree with the points made here. I was excited and impressed as a new Diamond owner. Gradually, I have come to feel ignored by Diamond (G1000, ADS-B, Mogas, lacking presence at events, etc.).

In choosing not to invest in the US market, Diamond has chosen to lower the value our of US based Diamond aircraft. In turn, this will have a dampening effect on our future purchases, which will further lower the value of our aircraft. As much as I like my DA40, I'm already looking elsewhere for my next purchase. I will not purchase another Diamond product unless they begin to invest in the US market, including being first rather than last with G1000 ADS-B solutions, and showing up at OSH, APOA events, etc.

Everyone I take flying can't say enough positive about the aircraft's handling and features. They aren't interested in a purchase because -- right or wrong -- they see it as a "foreign" aircraft lacking US support.

[Gearle]

I agree with the points made here. I was excited and impressed as a new Diamond owner. Gradually, I have come to feel ignored by Diamond (G1000, ADS-B, Mogas, lacking presence at events, etc.).

In choosing not to invest in the US market, Diamond has chosen to lower the value our of US based Diamond aircraft. In turn, this will have a dampening effect on our future purchases, which will further lower the value of our aircraft. As much as I like my DA40, I'm already looking elsewhere for my next purchase. I will not purchase another Diamond product unless they begin to invest in the US market, including being first rather than last with G1000 ADS-B solutions, and showing up at OSH, APOA events, etc.

Everyone I take flying can't say enough positive about the aircraft's handling and features. They aren't interested in a purchase because -- right or wrong -- they see it as a "foreign" aircraft lacking US support.

It took me 7 years to make a decision and I finally bought a 2003 to avoid G1000 costs (but get the 2003 improvements). So far diamond support and garmin support have been available and answered all my questions perfectly. I can't speak for marketing but support is excellent.

[CFIDave]

Diamond faces some significant challenges with North America -- in particular the US.

On the one hand, Diamond has historically been quite successful in selling DA40/DA42/DA20s in North America. The Dries family (that owns Diamond) was willing to invest over $100M in D-Jet development that took place at the Diamond factory in London, Ontario (prior to pulling the plug on D-Jet development for lack of additional investors and changing market conditions). And Christian Dries has recently gone on record saying that the primary market for the new 7-seater DA62 is North America; they're actively working on FAA certification for the DA62 in anticipation of selling the plane in the US.

But Diamond probably has lost money overall in North America, primarily due to lawsuits brought by litigious Americans. For example, Diamond was forced to pay many $millions in a DA20 crash lawsuit where the Continental engine quit and Diamond was named as a co-defendant. You have to build an awful lot of DA40s to make up for such a loss.

To make matters worse, DA42 Thielert engine lawsuits continue to dog Diamond, with more than a dozen lawsuits filed by mostly US 2006-2008 DA42 TDI owners who are upset that Diamond did not provide compensation related to the Thielert bankruptcy. Aircraft engines, including Thielert engines, are almost always warrantied separately from the airframe. But some early DA42 owners feel that Diamond stuck them with huge financial losses because Diamond didn't honor Thielert's warranties and instead invested in a separate competing Austro Engines company. Lawsuits against Diamond occurred despite the company's attempt to placate owners with discounted but expensive Austro and Lycoming engine installation programs.

Meanwhile, Diamond continues to successfully sell its mostly diesel-engined aircraft to the rest of the world, with the Wiener Neustadt, Austria factory operating at close to full capacity. The diesel-engined DA42-VI is now the world's best-selling piston twin.

IMHO, Diamond Canada continues to provide good service and support for North American Diamond aircraft owners. But if you were running Diamond, would you want to spend significant marketing dollars in North America at shows like AirVenture/Oshkosh? Or invest that money elsewhere where greater opportunities exist in a global market?

[rwtucker]

Diamond faces some significant challenges with North America -- in particular the US.

(1) But Diamond probably has lost money overall in North America, primarily due to lawsuits brought by litigious Americans. For example, Diamond was forced to pay many $millions in a DA20 crash lawsuit where the Continental engine quit and Diamond was named as a co-defendant. You have to build an awful lot of DA40s to make up for such a loss.

(2) To make matters worse, DA42 Thielert engine lawsuits continue to dog Diamond, with more than a dozen lawsuits filed by mostly US 2006-2008 DA42 TDI owners who are upset that Diamond did not provide compensation related to the Thielert bankruptcy.

(3) (W)ould you want to spend significant marketing dollars in North America at shows like AirVenture/Oshkosh? Or invest that money elsewhere where greater opportunities exist in a global market?

You raise some great issues Dave. They prompt a few thoughts.

(1) I was not aware that the lawsuit component of cost of business was excessive for Diamond. I thought we had brought these issues into line leading to a rebuilding of the industry in the 1990's. This said, litigation is a variable COB. Given Diamond's comparative lack of presence in the market (cf. Cirrus, etc.), this COB will be larger as a percentage. Additionally, how does Diamond's litigation line item compare with that of Cirrus, Cessna, etc.? Higher, lower? If I had to guess, it would be the lowest in the mainstream product line, especially in total dollars.

(2) My view is that Diamond was willing to share in the financial fruits of the Thielert partnership. It follows that they created a burden to share in the costs. I was not affected by this because I made a last minute decision to go with the DA40 even though I had signed preliminary paperwork for the DA42. However, I think Diamond's decision led to deserved consequences. Had they made an effort to negotiate reasonable compromise on compensation, it could have been less expensive -- not to mention more ethical -- than being tied up in litigation.

(3) I think we differ on this point. Showing up at OSH, etc. to support the customer base, show you have skin in the game, and attract new customers is comparatively inexpensive. Second, why does it have to be an either or? If Diamond chooses to be in the US market, as you say they intend to with the DA62, they owe it to their customers and future customers to support the market with more than their latest product.

One other point. There are considerable data in medical practice suggesting that patient lawsuits correlate most highly with the degree to which the practitioner is genuine and is involved with the patient. Practitioners who convey an impression that the patient is a financial number and little more get sued for small mistakes (or alleged mistakes). Practitioners who enjoy a personal relationship with their patients tend to be immune from lawsuits, even when they make significant mistakes and own up to them. My impression is that Diamond falls into the first category of this analogy. The market might look different today had Diamond they sat down with Thielert owners and had a genuine discussion with them. The market might look different had Diamond shown up at the nation's main events with tips and goodies for existing owners and good deals for prospective owners.

Yes, their support is reasonably good but it is good only when it is in their financial interest to be good. Support that would be respectful to legacy customers to whom they owe their current success is not good if if does not represent a significant new financial contribution (e.g., getting ADS-B software out quickly, etc.)

Looking at the market from the outside in, it seems to me that Cirrus is making all of the right decisions and Diamond is in the other corner.

[CFIDave]

Looking at the market from the outside in, it seems to me that Cirrus is making all of the right decisions and Diamond is in the other corner.

Cirrus is a US vendor (although now Chinese-owned) that targets avgas-engined aircraft to mostly US customers where avgas is still available. In contrast, Diamond is a European vendor targeting mostly Jet-A aircraft to a global market. Thus it's not too surprising that those of us who live in the US see a much stronger Cirrus marketing and sales presence.

As for "making all the right decisions," I believe Cirrus may be in for a rude shock after they fill their backlog of Vision jet orders to mostly SR22 customers who suffer from "shiny jet syndrome."

[rwtucker]

Looking at the market from the outside in, it seems to me that Cirrus is making all of the right decisions and Diamond is in the other corner.

Cirrus is a US vendor (although now Chinese-owned) that targets avgas-engined aircraft to mostly US customers where avgas is still available. In contrast, Diamond is a European vendor targeting mostly Jet-A aircraft to a global market. Thus it's not too surprising that those of us who live in the US see a much stronger Cirrus marketing and sales presence.
As for "making all the right decisions," I believe Cirrus may be in for a rude shock after they fill their backlog of Vision jet orders to mostly SR22 customers who suffer from "shiny jet syndrome."

I agree with the Shiny Jet Syndrome. I have had an opportunity to fly and see into the costs of a fleet of three Eclipse 500. In addition to being cool, these aircraft are very cost effective for the upper end of small corporations that have executives who have to travel a lot and are headquartered in the Dakotas or Dog Leg, Montana. However, the hidden operations costs are much higher than the would-be entry market understands. As a go-fast toy, they are only attractive to the very wealthy or those who choose to open their entire pocketbook to feed the turbines.

To my third point, however, you said it. Diamond is a European vendor (that chooses not to invest in the US market to any degree). Had I known that, I would not have purchased my first Diamond. I think the US market is realizing that which is why the next aircraft of current US Diamond owners may be ABD.