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General Aviation, Other Aviation Issues, UPDATES

UPDATE: of June 8, 2015 article – Evektor s.r.o. the Czech design office that is behind the Evektor EV-55 Outback, a 10-14 seat twin PT6A-21 powered un-pressurized STOL utility aircraft with so much sales potential, is struggling to make headway after the takeover of the company by Malaysian investors who are very new to the aviation industry. The market for a twin engine competitor to the Textron Aviation Grand Caravan is out there, but certification is going to be a major challenge for the inexperienced Czech/Malaysian company. The company has been hit by several major lawsuits for several accidents with its small LSA (light sport aircraft) 2 seat SportStar aircraft (produced by its 66% directly and 34% “indirectly” owned Evektor-Aerotechnik a.s.) and by a lawsuit from its ex-USA dealer, which has resulted in the Czech court freezing the bank accounts of Evektor-Aerotechnik a.s. in regard to a $3.2 million judgement against the company in a Florida court, forcing the company to file for “reorganization” (+/- US Chapter 11 bankruptcy), which is presently in insolvency. The Malaysians and Czechs are way over their heads with this program, and with no sign of the MSN 002 prototype (the first production standard unit) flying any time soon, certification is 3+ years away at best and it starts when MSN002 starts flying (1Q/2016 ?) and in no way will it deliver the first certified aircraft in 2017 as promised to its Malaysian launch customers, in fact, the program has a low probability of ever making it through certification, production and commercialization as it stands now. All indications point to a possible sale of the program to a ‘foreign’ OEM (e.g. China) as EASA certification will take much longer than they planned, and apparently there are no plans to sell the aircraft in the US market, meaning no FAA certification, which reduces the market potential of the aircraft by 70% at least, so where is this going ? and what about the $50+/- million the Czech Government invested in the program ? the aircraft is only possible thanks to the tax payers of the Czech Republic and the shareholders of Evektor s.r.o. should not be profiting from its sale if the EV-55 is not going to be certified and built in the Czech Republic, time for the Police to investigate the whole thing.

On June 8, 2015, I published an article on the Evektor EV-55 Outback, twin engine turboprop utility designed and built in the Czech Republic, and now going through EASA certification under its “de facto” new owner after a hostile takeover in what was originally only an investment by Malaysian investment group Apirasi Pertiwi Sdh. Bhd. (hereon referred to as Apirasi), run by former Malaysian P.M. Dr. Mahatir Bin Mohamad.

There are several companies involved, so I apologize for the complexity, the Czechs are infamous for setting up many different companies with same names (eg. Evektor s.r.o., Evektor-Aerotechnik a.s., Aerotechnik s.r.o., etc.) to hide ‘things’ and confuse outsiders during financial chaos with shell companies. For instance Evektor s.r.o. owns 66% of Evektor-Aerotechnik a.s. with the other 34% owned by Aerotechnik CZ a.s which itself is 100% owner by Evektor s.r.o., yes typical Czech BS, used often in Eastern Europe during the privatisation days (when state property was returned to private hands) to steal and hide illicit money and property, I was an investment banker in the Czech Republic in the early 1990’s during its privatisation drive and I saw it ALL, can write novels about the corruption then, always confusing.

ALSO READ: March 24, 2015 article on 2014 General Aviation turboprop market article for a description of this market segment.

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EV-55-12ev-outback-poleti-do-malajsie-588340758

The PT6A-21 powered Evektor EV-55 program started in 2004 with my Marketing Study of the GA market, to find a niche that was within the capabilities of the Czech industry, niche big enough for growth and one offering little competition (niche), and from that the EV-55 Outback (from my Subaru Outback) was born with lots of R&D money (up to $US 50 million) from the Czech Ministry of Trade and Industry, and up to $US 25 million from 16 Czech aerospace firms that participated in this government supported program.

Does the Czech Government not care about its investment in the EV-55 program ? that was to create Czech jobs and help the Czech aerospace industry find a niche in the global aviation market. It is time for the Czech Police (PCR) to investigate what is happening with the program, something is not right about the new owners and their intent as the shareholders of Evektor s.r.o. should not profit from this aircraft’s sale if it is not going to be certified and built in the Czech Republic.

The aircraft has great performance, cabin size, payload/range and economics:

The aircraft has a MTOW of 10,141 lbs, 220 kts max. cruise, seats 9 to 14 passengers, cabin volume 334 ft3.

Takeoff distance over 50 feet at ISA is 1,378 feet, landing distance ISA over 50 feet is 1,124 feet.

Max. Rate of climb is 1,673 fpm, single engine rate of climb is 453 fpm.

Max range is 1,390 nm while max range with max. payload of 3,915 lbs is 210 nm.

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The aircraft has a great deal of potential, as the only new 10-14 seat unpressurized twin turboprop to emerge in almost 50 years, to replace the 2,000+ cabin class piston twins still in global service (commercial and private). I predicted years ago a market for around 800 units over 20 years, and that I believe still today, as there is no competition in this segment right now, except the possible “revival” of the Continental Motors F406 (ex-Reims F406 Caravan II), bought by the Chinese owned company in March, 2014, but it was never a true success for several reasons, and roughly100 units over 25+ years were built.

As I have previously said, this program is now highly risky, as the Malaysians are new to this certification, production and commercialization of a commercial aircraft (Part 135 air taxi category), and I do not believe this aircraft as good as it is, will ever be certified under the existing Malaysian ownership and leadership by David Chew (see previous article). The once face of the company and its visionary was CEO Jaroslav Ruzicka, but he is no longer in any management function and nowhere to be seen, he was one of the 3 partners that owned Evektor s.r.o. but was ousted in a backroom ‘coup’ that saw the 2 other partners joining forces with David Chew, and while leadership was always an issue within the company, now it truly is a ship without a rudder, a sad ending to a once good company.

Last month, Evektor-Aerotechnik a.s. (LSA OEM) and 66% owned by Evektor s.r.o. had its bank accounts frozen by the Czech court due to a court ruling in Florida, USA in regard to an accident with one of Evektor’s 2 seat LSA Sport Star aircraft, where a pilot was badly injured, who then sued in and won a $US 3.2 million judgment and somehow was able to get the Czech court to accept the decision of the Florida court. In fact, Evektor s.r.o. which has an aircraft division (EV-55) and a engineering services division is not even an aircraft manufacturer at all, just a design office, as the production certificate (PC) holder is Evektor-Aerotechnik a.s. and that is for small LSA/ultralights, and if it does not emerge from insolvency the PC is gone, and Evektor s.r.o. would have to obtain one anyway if it really plans to produce the EV-55 in the Czech Republic.

As well, Evektor s.r.o. (design office with no production certificate of its own) has also had to deal with a lawsuit from its ex-USA dealer, Jeff Conrad and several other LSA SportStar accident lawsuits, and it’s LSA subsidiary Evekor-Aerotechnik a.s. has filed for a reorganization (similar to Chapter 11 bankruptcy in the US) so the future of Evektor s.r.o. is very questionable at this point. The speculation is this program is headed for China anyway after certification (a good replacement for the Chinese Y-5/AN-2), but it could go at anytime, as there are no plans for building any production and assembly facilities at this time, and with its majority owned (66%)  Evektor-Aerotechnik a.s. (LSA manufacturer) and holder of the all important production certificate (PC) now in insolvency, things do not look good for an eventual production of the aircraft in the Czech Republic.

It has already been sated by David Chew of Evektor a.s. that the company has no plans for the US market, which I believe is a signal that they do not plan to have FAA certification, possibly not even EASA as not selling to the US market and obtaining FAA certification means its market potential is probably reduced from the forecast 800 units over 20 years to at best 250, as North America and South American markets are big markets for this aircraft. If the plan is to pack up the program and ship it to China, and obtain an easier Chinese Type Certificate, they can do it, but that Chinese manufacturer would have to obtain a production certificate (PC) for the aircraft from the Chinese to manufacturer duplicate production aircraft and that will take sometime, moving the program to another country and building it there is a major and long undertaking, again assuring that no new EV-55’s will be delivered to a commercial customer before 2020.

An unnamed “third” party has stepped in to pay Evektor-Aerotechnik a.s. bills for now (rumored to be Evektor s.r.o.), but one has to be worried about where this is all going ? There is no way in hell that Evektor can meet its planned late 2017 delivery schedule for the 4 aircraft ordered by 2 Malaysian operators (Senai Airport Terminal Services and APFT Services) earlier this year, the flying testing done till now on MSN001 is pretty much trivial as it requires a production standard aircraft, and MSN002 is nowhere near ready-yet so when it starts then certification is on, but till now there has surely not been very much progress towards certification, other than keeping EASA informed and handing out business cards.

So far the only flying prototype MSN 001 has accumulated 220+ hours but it is not a production standard aircraft and MSN002 the first production standard aircraft was to be ready in April, 2015, but so far no sign of this aircraft being ready to fly, which begs the question how serious is the EASA CS-23 certification proceeding ? most likely very slow or not at all, as they must have MSN002 to really move certification forward, and right now they are at best 4 years away from EASA certification and that starts when MSN002 starts to fly, so most likely certification by late 2019 or early 2020, don’t believe anything otherwise. My money is on this aircraft going to China, they give it there Chinese type certificate, will sell many in China and to the few  poor third world countries that today accept Chinese aircraft type certificates, like the MA60 (Nepal, Kampuchea, Tonga, North Korea, Congo, Eritrea, Zimbabwe, etc.) not a huge market.

Again I apologize for all the many company names, it gets very confusing when several entities share the Evektor name, I have in the past seen up to 12 shell companies with the same name where just a minor change or addition distinguished it from the others. When this is done, it surely raised red flags, and I think it is time for the Czech Police (PCR) to investigate, as in the end the EV-55 is only possible because of direct state aid, and the shareholders should not profit from what the tax payers paid for.

During my years working as the external Director for Marketing/Business Development at Evektor, I saw a lot of change, and lots of good ideas, and it is sad to see the project I was once so close to, dying a slow death due to total mismanagement of something that had so much promise.

Stay tuned to these events, it will be interesting, but it is sad indeed, I had high hopes for the EV-55 Outback.

Till next time, cheers.

 

 

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About Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow

I am a Canadian and EU national with an MBA and 33+ years experience in aviation business development with 20 years overseas and work in 25+ countries. A former investment/merchant banker (mergers and acquisitions to corporate turnarounds). airline and OEM senior executive and past owner of 6 successful aviation companies in 3 countries (executive jet charter/management companies, aircraft sales, aircraft broker, airline/aerospace consulting to aircraft insurance). I have a very diverse aviation background with 75+ aviation companies (45+ airlines of all sizes, OEM's, airports, lessors, MRO to service providers) as consultant, executive management, business analyst and business development adviser. Excellent success track record in International Business Development. Most work with airlines is with new start-ups and restructuring of troubled carriers. I sold new business jets, turboprops and helicopters for Cessna, Raytheon, Gulfstream to Eurocopter as an ASR as well as undertaking sales and marketing of commercial aircraft for Boeing, de Havilland, Dornier, Saab and Beechcraft. Brokered everything from LET-410's to B747's and from piston PA31 to G550 business jets. I look beyond the headlines of the aviation news and analyze what the meaning and consequences of the new information really means. There is a story behind each headline that few go beyond. Picked the name Aviation Doctor, as much of my work has been with troubled companies or those that want and need to grow profitably. I fix problems be in the business, and help with restructuring for a better tomorrow. You can reach me with comments or suggestions at: Tomas.Aviation@gmail.com and I comment a lot on Google+, my Facebook and LinkedIN.

Discussion

One thought on “UPDATE: of June 8, 2015 article – Evektor s.r.o. the Czech design office that is behind the Evektor EV-55 Outback, a 10-14 seat twin PT6A-21 powered un-pressurized STOL utility aircraft with so much sales potential, is struggling to make headway after the takeover of the company by Malaysian investors who are very new to the aviation industry. The market for a twin engine competitor to the Textron Aviation Grand Caravan is out there, but certification is going to be a major challenge for the inexperienced Czech/Malaysian company. The company has been hit by several major lawsuits for several accidents with its small LSA (light sport aircraft) 2 seat SportStar aircraft (produced by its 66% directly and 34% “indirectly” owned Evektor-Aerotechnik a.s.) and by a lawsuit from its ex-USA dealer, which has resulted in the Czech court freezing the bank accounts of Evektor-Aerotechnik a.s. in regard to a $3.2 million judgement against the company in a Florida court, forcing the company to file for “reorganization” (+/- US Chapter 11 bankruptcy), which is presently in insolvency. The Malaysians and Czechs are way over their heads with this program, and with no sign of the MSN 002 prototype (the first production standard unit) flying any time soon, certification is 3+ years away at best and it starts when MSN002 starts flying (1Q/2016 ?) and in no way will it deliver the first certified aircraft in 2017 as promised to its Malaysian launch customers, in fact, the program has a low probability of ever making it through certification, production and commercialization as it stands now. All indications point to a possible sale of the program to a ‘foreign’ OEM (e.g. China) as EASA certification will take much longer than they planned, and apparently there are no plans to sell the aircraft in the US market, meaning no FAA certification, which reduces the market potential of the aircraft by 70% at least, so where is this going ? and what about the $50+/- million the Czech Government invested in the program ? the aircraft is only possible thanks to the tax payers of the Czech Republic and the shareholders of Evektor s.r.o. should not be profiting from its sale if the EV-55 is not going to be certified and built in the Czech Republic, time for the Police to investigate the whole thing.

  1. MSN002 and MSN001 looks same, but are different. MSN002 is still waiting for deliveries of subcontracted parts.

    Like

    Posted by Kakashane | September 11, 2015, 1:15 pm
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