Van’s Aircraft stated and RV builders are reporting that the company has begun emailing existing customers notifying them of the changes in their purchase agreements. According to the company, “Today we will begin sending emails to those customers with open airframe kits (tail/emp, wing, fuselage, and finish kits) on order. These emails will each contain a link to a website that will allow the customer to review their original order as well as the new, modified order offer from Van’s Aircraft. Those emails will be sent in multiple waves over the next couple days.”
As predicted last week, prices have gone up, with some builders reporting increases beyond the expected 35%. In some cases, Van’s is adding sales tax to orders for builders who are subject to it in their home states. Builders can choose to accept the new prices or can decline and have any previous deposits become part of the pool of unsecured creditors.
The company also said that “Customers who have open orders for engines, avionics kits, powerplant kits, and certain backorders will not be included in this week’s wave of emails. The Van’s management team is working with the vendors that supply those parts. Once a specific plan has been determined for each class of order, we will communicate directly with those customers, as well.”
In other news, Van’s representatives are expected back in court tomorrow morning in Oregon to hear the judge’s decision on two items, the company’s ability to use cash collateral and to obtain credit. Van’s needs both to be able to function while the Chapter 11 reorganization.
Finally, Van’s is expected to release its final engineering review of the laser-cut parts (LCP) issues, one that included extensive fatigue testing of the affected parts to determine if they are any more prone to fatigue-related cracking than punched parts. The review follows more than a year of intensive testing of LCP with physical metal “coupons” as well as a significant amount of finite-element analysis (FEA).
For the big ticket items like engines, props, and avionics packages, that should be setup to pay the manufacturers direct, rather than having to funnel the money through the kit vendor. The kit vendor could approve the sale based on the customers kit # and forward the info to the manufacturer, such as Lycoming. And if they withhold a % of the price for their profit, that could be billed to the customer separately. This kind of thing has happened too many times to have to trust kit vendors with that much cash, which they find irresistible to use for other purposes. If they won’t do that I’d just buy the parts on the open market, and avoid the risk. Still much cheaper than having to pay for an item twice.