Flight Design insolvency

[ralarcon]

Question, I recently put a down payment on a new CTLSi about a month ago with someone who sells them out of Florida. Really nice people and very helpful, however I am concerned this may have not only an effect for my expected delivery of May, but a refund if a plane can't be delivered. Any advice here from the group on how to approach this properly ?

 

I loved the plane when I did a test flight back in January. I live in the Atlanta area. Thanks, Jim

Since my brother took delivery of his aircraft in November, I have no reason to believe that yours will be delayed or in anyway deficient.  He had a bit of a problem with engine cooling, and that was taken care of very swiftly. His aircraft is based out of Miami KTMB, very warm weather. Mine is getting an annual now, and had the BRS hatch repair. All materials were received on time from FDUSA, and it should be back in my hangar, from Wild Air, this afternoon. We are not experiencing any problems , from FDUSA or any of its Service Centers.

 

Cheers

[Flight Design USA]

I have been reading the comments on the blog about the insolvency of Flight Design.  I don’t usually write much here as it is an owner’s blog and not a business sponsored blog as was stated earlier (or on the other similar subject string).  I meant to write before, but the discussion moved on so much I started again, then again.  Now we are up to page 7.

  

First of all, no one could be more disappointed than we are with the decline then declaration of insolvency of Flight Design GmbH. We have been working with the company for 14 years and have gone through very good times and some bad ones before as well.    

 

I agree with almost all of what has been said but I think it is only right that I answer a few questions that have been put forward here about myself and our company.  

 

Is Flight Design USA a part of Flight Design GmbH?  No, we are an independent company.  An importer and managers for the brand in the United States only.  We own no part of Flight Design GmbH. and along with our Independent Distributors are now significant creditors of Flight Design GmbH.  

 

I personally have been associated with the Flight Design brand for several reasons.  One is that I can write and speak well in the English language, which has put me in front of the camera and had me contribute to much of the marketing materials that many of you have read.  I am not a director of Flight Design GmbH. and have never been paid by Flight Design for that work that I’ve done. 

 

The USA is a major market for the planes and through a cooperative agreement with our distributors we’ve imported nearly 400 to date.  They don’t all come through Connecticut and mostly go direct to the distributors who have their own territory and purchase their own inventory.  Our primary job is to manage COSM, support and the airworthiness end for the distributors and their customers.  We are not some goliath company.

   

Did we know ahead of the filing for insolvency?  We learned of the decision Friday the 12th, just a couple of days before it became public here on CTFlier.  Did we see it coming? Yes, as we’ve been working with the company for a long time we witnessed the slow decline and tried to help raise investment capital for more than two years.    

 

How did we deliver airplanes in the USA?  The airplanes we brought here in 2015 were ordered with deposits and some with full payments in 2013, the airframe parts were manufactured in 2014 and were stored in Kamenz for a year. We learned how bad things were at Flight Design only when we went ourselves to participate in the FAA audit last Fall.  That’s when we began to scramble to get as many of our planes we could shipped partially finished, including planes that were completely paid (by a distributor).  You might have seen pictures of a whole bunch of airframes sitting in Kamenz? We owned 6 of them.  We did not buy “other peoples” airplanes for cash as has been suggested.  Our cash was already there.

 

We paid for the labor to finish them in the U.S. and bought many of the parts. We bought engines directly from the German Rotax distributor and engine control parts from Dynon had them shipped to Kamenz, where they were test flown using a test screens, a hand held radio and a flight test parachute. We had the planes shipped to our business in Connecticut and working under what’s called a Workshare Agreement completed the installation of the rest of the avionics bought by either us or our distributors to finish the planes to deliver to their customers.  We finished the conformity paperwork and did the weight and balance, sent the paperwork to Germany/Ukraine for inspection, FAA 8130-15 paperwork was issued, the planes were inspected, test flown at length again and delivered.  We too had customers that waited nearly three years for their planes.

 

We are now working with AeroJones who are supporting the engineering side of the company to keep the support and continuous operational monitoring system (COSM) functioning which keeps our planes legal in the U.S. and elsewhere in the world where ASTM standards apply.  AeroJones will also make any parts we don’t already have in stock here.  We are getting our first shipment of engine mounts (3) this week.   I’m going to go over to inspect the first AJA CTLS and CTLSi airplanes for the U.S. at the end of the month.

                    

I am very sorry for the customers in Europe and elsewhere and nothing I can say won’t sound like complete BS to them and I can’t blame them.  Again, we and our distributors are actually their creditors in this situation too.  I hope that the administrator in Berlin will follow through on his pledge to take care of the retail customers first (before other creditors) and get them their planes.  Tom Peghiny

[Doug G.]

Thank you, Tom, for the clarification and all you have done.

[FastEddieB]

Tom,

 

Very informative read - thanks, and good luck.

 

There are similar threads on SportPilotTalk and Pilots of America that you might consider cross-posting to as well.

[Duane Jefts]

Thanks Tom.  We needed to hear that.

[FlyingMonkey]

Thanks Tom!

[deckofficer]

Tom, how about using your considerable talents and create a US market for Pipistrel like you did for FD? I think Coates is spread thin between the Australian and USA markets. I know you want to rep the best.

[FlyingMonkey]

Tom, how about using your considerable talents and create a US market for Pipistrel like you did for FD? I think Coates is spread thin between the Australian and USA markets. I know you want to rep the best.

 

I think he might have his hands full at the moment...  

[deckofficer]

I think he might have his hands full at the moment...  

Or he could wash his hands.

[FlyingMonkey]

Or he could wash his hands.

 

So your suggestion on the CTFLIER forum is for the US Distributor to drop all his current customers like bad baggage, to support your pet airplane type?  

 

Thanks for that odd suggestion, but I don't think that's Tom's style. 

[deckofficer]

So your suggestion on the CTFLIER forum is for the US Distributor to drop all his current customers like bad baggage, to support your pet airplane type?  

 

Thanks for that odd suggestion, but I don't think that's Tom's style. 

I'll admit it was a selfish suggestion on my part but also tongue in cheek. I don't use Emojis or "LOL" to convey my underlying meaning in a post. However I've been upfront on this forum as to my reason for participating, and that is because the used market of FD in the US exists whereas my choice doesn't. For me it is better to have a used FD than waiting for as you put it my "pet" to appear on the used market. Just being honest on where I stand, and if the market stays the same I'll be a proud FD owner on a previously owned FD. 

[Anticept]

Welcome Tom P, and thanks for sharing .

 

Everyone else: During our conversation, I was extremely stressed. I use three FD CTLS for flight training and rental. He took the time out of his busy day to let me vent and calm down, and even later sent me a first draft to ask what I think. As I said, Tom listens and does right by people, and that's why I was getting a little ticked off when people were attacking him.

 

As for the pipestral comment: usually distributors are exlusively locked by contract. i doubt he could do that without dropping FD.

[Cluemeister]

Make note that he mentioned he is a creditor as well.  So that means they are still holding money of his for undelivered product.  For a small business that sells an expensive product, that can be crushing.

 

Thanks for the update Tom.

[gunther]

Thank you, Al! You are MY champion!

Tim, before you posted (post 70), did you not read the previous post?

 

Your comment is astonishingly insensitive and inconsiderate to the plight of the previous poster.

 

"HOORAY, NO DOOM AND GLOOM - WE'VE GOT A NEW CTLSi COMING FOR 2020!!"

 

I invite you to just read his post again, put yourself in his shoes, and then read your comment.

 

I get the feeling that you guys would keep on talking things up even if FD started WW3!

[gunther]

YES! And unfortunately also a bit too much to the south...

FD-USA go further!

We have been of the wrong side of Atlantic

[gunther]

Thank you Mike, not only for your kind words, but for changing your mind!

DECZR, Gunther, Gryphon, Ramses, and others apparently mistreated by Flight Design,
I am very sorry to hear of your of your plight... and I am sorry that my comments made matters worse.
The policy you describe - telling you that your plane is ready for delivery pending final payment, taking your money, then delivering nothing - is despicable.
Adam's conjecture as to the financial logic of preferential deliveries to U.S. customers - you have just completed the manufacture of another plane, you have one customer who has already paid you for it and another who has not, so you give the plane to the customer who hasn't yet paid so you can collect additional money - is equally disheartening.
The argument that they were just trying to keep the lights on, can never justify such fraudulent business practices.
I appreciate your stepping forward to describe your experiences. I also appreciate your need to seek a legal remedy. I hope you are successful in recovering whatever is owed to you.
Mike Koerner

[deckofficer]

Welcome Tom P, and thanks for sharing .

 

Everyone else: yes that is Tom P. During our conversation, I was extremely stressed. I use three FD CTLS for flight training and rental. He took the time out of his busy day to let me vent and calm down, and even later sent me a first draft to ask what I think. As I said, Tom listens and does right by people, and that's why I was getting a little ticked off when people were attacking him.

 

As for the pipestral comment: usually distributors are exlusively locked by contract. i doubt he could do that without dropping FD.

 

Corey,

 

  I'm sure your correct about being locked in a contract with FD. FD's success in the US market is due to the hard work and long time commitment of Tom, and now like so many of FD's customers he is left holding the bag. Tom's lifelong effort in aviation deserves better, and had Pipistrel not been in a country that didn't have reciprocal agreements with the US and could have entered the LSA market here when FD did, my hunch would be Tom would have gone with Pipistrel. Well, Pipistrel now has a facility in Italy which does have those US agreements, so the roadblock has been removed and can at this late date move into the US LSA market. I've known about Tom since my hang gliding days in the early 80's and besides him being a top level competitor he is also a forward thinking aviation innovator with his double wing surface Kestrel setting new standards for the industry.

 

 In life when the chit hits the fan, some are able to regroup and turn those lemons into lemon aide. I don't know how Tom's working relationship with FD was, but maybe there is a better fit for his talents.

 

  Pipistrel has a trainer called the Alpha that has a 108 kt cruise at less than 3 gph for $76K. The Alpha also comes in an electric version that could cut training costs by 2/3's.

 

  IMHO, Tom wants to grow grassroots aviation here in the States, what better way than to align himself with a company that thinks like him? The Pipistrel main factory in Slovenia is also the largest solar energy producer in the country and they sell excess energy to the grid. The planes are the most efficient and have a smaller carbon footprint both during manufacture and end use.  

[gunther]

Thank you Tom! Can't you include Mexico into your "territory"? I know Arturo and myself would be a lot happier.

 

I have been reading the comments on the blog about the insolvency of Flight Design.  I don’t usually write much here as it is an owner’s blog and not a business sponsored blog as was stated earlier (or on the other similar subject string).  I meant to write before, but the discussion moved on so much I started again, then again.  Now we are up to page 7.

  

First of all, no one could be more disappointed than we are with the decline then declaration of insolvency of Flight Design GmbH. We have been working with the company for 14 years and have gone through very good times and some bad ones before as well.    

 

I agree with almost all of what has been said but I think it is only right that I answer a few questions that have been put forward here about myself and our company.  

 

Is Flight Design USA a part of Flight Design GmbH?  No, we are an independent company.  An importer and managers for the brand in the United States only.  We own no part of Flight Design GmbH. and along with our Independent Distributors are now significant creditors of Flight Design GmbH.  

 

I personally have been associated with the Flight Design brand for several reasons.  One is that I can write and speak well in the English language, which has put me in front of the camera and had me contribute to much of the marketing materials that many of you have read.  I am not a director of Flight Design GmbH. and have never been paid by Flight Design for that work that I’ve done. 

 

The USA is a major market for the planes and through a cooperative agreement with our distributors we’ve imported nearly 400 to date.  They don’t all come through Connecticut and mostly go direct to the distributors who have their own territory and purchase their own inventory.  Our primary job is to manage COSM, support and the airworthiness end for the distributors and their customers.  We are not some goliath company.

   

Did we know ahead of the filing for insolvency?  We learned of the decision Friday the 12th, just a couple of days before it became public here on CTFlier.  Did we see it coming? Yes, as we’ve been working with the company for a long time we witnessed the slow decline and tried to help raise investment capital for more than two years.    

 

How did we deliver airplanes in the USA?  The airplanes we brought here in 2015 were ordered with deposits and some with full payments in 2013, the airframe parts were manufactured in 2014 and were stored in Kamenz for a year. We learned how bad things were at Flight Design only when we went ourselves to participate in the FAA audit last Fall.  That’s when we began to scramble to get as many of our planes we could shipped partially finished, including planes that were completely paid (by a distributor).  You might have seen pictures of a whole bunch of airframes sitting in Kamenz? We owned 6 of them.  We did not buy “other peoples” airplanes for cash as has been suggested.  Our cash was already there.

 

We paid for the labor to finish them in the U.S. and bought many of the parts. We bought engines directly from the German Rotax distributor and engine control parts from Dynon had them shipped to Kamenz, where they were test flown using a test screens, a hand held radio and a flight test parachute. We had the planes shipped to our business in Connecticut and working under what’s called a Workshare Agreement completed the installation of the rest of the avionics bought by either us or our distributors to finish the planes to deliver to their customers.  We finished the conformity paperwork and did the weight and balance, sent the paperwork to Germany/Ukraine for inspection, FAA 8130-15 paperwork was issued, the planes were inspected, test flown at length again and delivered.  We too had customers that waited nearly three years for their planes.

 

We are now working with AeroJones who are supporting the engineering side of the company to keep the support and continuous operational monitoring system (COSM) functioning which keeps our planes legal in the U.S. and elsewhere in the world where ASTM standards apply.  AeroJones will also make any parts we don’t already have in stock here.  We are getting our first shipment of engine mounts (3) this week.   I’m going to go over to inspect the first AJA CTLS and CTLSi airplanes for the U.S. at the end of the month.

                    

I am very sorry for the customers in Europe and elsewhere and nothing I can say won’t sound like complete BS to them and I can’t blame them.  Again, we and our distributors are actually their creditors in this situation too.  I hope that the administrator in Berlin will follow through on his pledge to take care of the retail customers first (before other creditors) and get them their planes.  Tom Peghiny

[FlyingMonkey]

Bob, sounds like a great business opportunity for you!  

[Anticept]

The FAA is extremely hostile towards electrics right now, and since we operate within a city, it would be very high risk to get one.

 

And as for costs: no it wouldn't cut it significantly. Fuel is a small portion of our CTLS costs. What is really the cost is the mortgages, airworthiness compliance (maintenance), insurance, and overhead.

 

I imagine Tom would have difficult switching as well. I can't imagine the number of current obligations outstanding. Someone would have to basically take over FD USA. Not impossible, but definately an uphill slope.

 

I need to look at a POH for pipistrel. FD chose their wing shape for versatility over speed, and a wide cockpit for comfort. I am curious as to how pipistrel stacks up in areas other than the main marketing points.

[jcbrzusek]

First of all thanks to all the kind replies welcoming me to this forum.  Second, the advice was very helpful.  I did reach out to the company who accepted my deposit, and they informed me about the plane and that it is on time for delivery in May, and the commitment of FD-USA to parts, servicing, focus, and many other reasons I had read about the distribution and service here in the US. 

I do believe they will be honorable, as the person I put the down payment with has been extremely good about communication, and he got back to me today within 15 minutes and went thru everything with me.  Most people would duck when things are tough, he did not blink.

Anyone who owns a CTLS in Georiga, I would love to make personal contact and know the best service operators in the area and just get to know you as well as a fellow neighbor.  I fly out of Gainesville, GA airport.

Thanks to all for being so kind to me.

Jim

 

[FlyingMonkey]

Jim, I have a CTSW but I'm only a stone's throw from you in Winder (KWDR).

[deckofficer]

Bob, sounds like a great business opportunity for you!  

 

I don't have the name recognition, aviation history, talents, contacts, or resume that Mr Peghiny has to pull it off.

[Anticept]

I think the requirements are money, more money, youth, and a strong heart. It's probably as stressful as the presidency!

[deckofficer]

The FAA is extremely hostile towards electrics right now, and since we operate within a city, it would be very high risk to get one.

 

And as for costs: no it wouldn't cut it significantly. Fuel is a small portion of our CTLS costs. What is really the cost is the mortgages, airworthiness compliance (maintenance), insurance, and overhead.

 

I imagine Tom would have difficult switching as well. I can't imagine the number of current obligations outstanding. Someone would have to basically take over FD USA. Not impossible, but definately an uphill slope.

 

I need to look at a POH for pipistrel. FD chose their wing shape for versatility over speed, and a wide cockpit for comfort. I am curious as to how pipistrel stacks up in areas other than the main marketing points.

 

Enjoy your research into Pipistrel, you might be pleasantly surprised. Besides, on a visual cue both FD and Pipistrel share a lot except for the high sailplane type elevator. On the Virus SW with the 35' wingspan, it does include as an option, the standard lift spoilers found on their 40' and 50' wing span models.

 

After your research would you mind commenting back here? I respect your opinion and background.