Sport Pilot Talk

This letter to an owner was recently posted to the CT forum. I think it's of general interest, and kosher to cross-post here for the benefit of those who might not be members of that forum:

Dear Partners,

as you know, the last 4 years have been very difficult for Flight Design. A combination of events including delays with the 912iS, the investment required for Production Organization approval and the Russian invasion close to our factory in Ukrainehave all worked against our company.

To account for this situation, Flight Design had broadened out into engineering services, primarily for a South Korean engineering firm and technology transfer for the CTLS series to AeroJones Aviation in Taiwan. The income from those projects, were used to greatly reduce our order backlog and AeroJones financed also separately the development of the C4.
Despite these efforts, we have had a few individuals that have threatened us if we didn’t follow their demands and have started also commercial court cases against us. This occurred during a very sensitive time when we were close to gaining the investment we needed. As we cannot deliver all of the airplanes or pay everyone at once we understood that we had to act immediately in the interest of our creditors, customers, partners and employees.

We are officially notifying you that we have applied for a planned receivership which allows for reorganization of the company. During the time of reorganization, the court has appointed Mr. Knut Rebholz from Mönning -Partnerhttp://www.moenning-partner.comto be in managing the affairs of the company.

Despite the receivership we are glad to be able to continue technical support for our customers and dealers at: [email protected] .We will soon be sending information to you to assist you in confirming your debt or claim as a creditor with the appointed receiver.

Sincerely,
Your Flight Design Team



Flight Design GmbH
Zum Tower 4
D-01917 Kamenz
Tel.: +49 (0)3578 / 37335 - 0
Fax: +49 (0)3578 / 37335 - 69
Web: www.flightdesign.com
Commercial Register: DresdenHRB 32961 VAT ID No.: DE 147857992
Board of Directors: Matthias Betsch(CEO)-Daniel Günther-Christian Wenger

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SportPilot wrote:"Despite these efforts, we have had a few individuals that have threatened us if we didn’t follow their demands and have started also commercial court cases against us."

Echoing my post on the CT Forum:

"Despite these efforts, we have had a few individuals that have threatened us if we didn’t follow their demands and have started also commercial court cases against us."

That speaks volumes as to part of the root cause of their problems.

Seeing your customers as the enemy is never a good sign.

Can you blame them? I feel bad for these customers, but who in their right mind would pay 100 percent, in advance, for an airplane?

That smacks of blaming the victim.

Remember, this reflects the FD Germany perspective. FD USA is just a distributor themselves, and are likely creditors too. FD USA worked hard and spent lots of money to make sure their units were delivered. They've weathered extremely bad times, a saturated market, and even a "Bernath Storm". The restructuring of finances will allow FD Germany to shift down a gear and get back in the game. Calling it quits would have been the easy way out.

BTW, not that the re-org isn't true, but there has been no official word from either FD, or anything in the press. The letter was posted by a third party, and any form of it has not appeared elsewhere on the Internet. (yet)

It's not like FD doesn't have a lot going for it... market-leading planes with new models, a new certified 4-place, a new factory and relationships in the expanding Asian market. They passed costly EASA, ISO and FAA scrutiny.

Amazing & sad. Flight Design was one of the first, survived the economy collapse, and produced big production numbers. Very surprising that they have trouble now.

Unfortunate. The Ukraine situation as I mentioned last year put a severe strain on FD. Other factors have put the future of FD in jeopardy. Hope they are able to survive.

There was a personal explanation included in the posting about receivership which Eddie quoted in the first post here. It comes from a person apparently based in Mexico City and seemed to be worth including:

"I AM one of those individuals who not only threatened but DID sue Flight Design, after my order was not fullfilled in 3 years, although I had paid 100% of the order in advance. I have just been informed by my German lawyers, that this could also turn into a criminal case, since they knew for some time that they lack liquidity (which is is punishable under German law).

I don't wish them any bad for their future, but I have had it with this company and just want my money back!"

designrs wrote:Amazing & sad. Flight Design was one of the first, survived the economy collapse, and produced big production numbers. Very surprising that they have trouble now.

I think their reach exceeded their grasp a bit. The C4 program has been costly and time-consuming, and the troubles in Ukraine where their production facility was located has caused problems as well. I think this will all be resolved in a good way, but there will be some pain first.

I never like hearing about a manufacturer of a quality line of AC having trouble. You never know what the ripples will do.

Seems like this is an opportunity for a former poster who was a very vocal (and ill-informed) proponent of FD to step in with his vast resources and put his money where his mouth is. Eh, maybe not. I'd like to see FD actually survive this.

Merlinspop wrote:I never like hearing about a manufacturer of a quality line of AC having trouble. You never know what the ripples will do.

Seems like this is an opportunity for a former poster who was a very vocal (and ill-informed) proponent of FD to step in with his vast resources and put his money where his mouth is. Eh, maybe not. I'd like to see FD actually survive this.

FD will survive, we just don't know what form it will take.

They have already entered a production licensing agreement with AeroJones in Taiwan, I think going forward all the airframes will be produced there with German oversight and QA. FD USA has already been doing a lot of finishing work on airplanes that used to be done at the factory, to make sure the US customers get their airplanes.

The people is worst shape are actually the European customers; there are several who have paid in full and been waiting for airplane deliveries for a couple of years now. It's unclear with the restructuring if they will ever get their airplanes or of those obligations will be discharged by the courts. Cross your fingers for those customers, they are in a really tough spot and deserve some relief.

MrMorden wrote:
The people is worst shape are actually the European customers; there are several who have paid in full and been waiting for airplane deliveries for a couple of years now.

And Australian, if my memory serves.

And possibly a couple others?

If there are 6 of these customers, that's about a million dollars Flight Design Germany burned through. Ouch.

This looks like a neutral summary without too much speculation: http://www.aero-news.net/index.cfm?do=m ... c764fdf59b

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Tom Peghiny just posted his side of the story over on CTFlier.com