A long-expected announcement concerning builder deposits made on third-party items—engines, propellers, avionics—came this morning from Van’s Aircraft, which is navigating its way toward Chapter 11 reorganization in the wake of a severe cash crunch late last year.
Van’s says all customer deposits toward third-party items will be honored but with a catch: Those items will be priced higher than originally stated. While many builders feared their deposits would be wiped out, making this good news, they are still going to be footing part of the bill for Van’s blunders. The price increases range from 3% on Hartzell propellers to, potentially, 12% on Lycoming engines.
According to Van’s, “Over the past several weeks, we have been working through open customer orders and related deposits on hundreds of third-party items. In the next few days, we will begin sending official notices to customers with these open orders, informing them of the price changes that Van’s is making on each order. Customers who receive these notices will be given 14 days to decide whether to accept or reject these modified orders.”
“We realize that many customers with orders for Van’s airframe kits who are facing the January 31 deadline also have open orders for third-party items. Some of those customers have been waiting to see what their cost increases will be on these third-party items before deciding whether to modify or reject their airframe kit orders. If you receive an official notice to modify or reject a third-party item order and you have not yet decided to modify or reject your airframe kit order, your deadline to modify or reject your airframe kit order is extended to the same date by which you must decide to modify or reject your third-party item order,” the company said in a statement.
Specifically, the price increases will be:
- Hartzell propellers: 3% increase to the original order price. (Due to special accommodations made by Hartzell, Van’s was able to keep this increase to a minimum.)
- Sensenich propellers: 6% increase to the original order price.
- MT propellers: 6% increase to the original order price.
- RV-12/12iS Avionics Kits: 6% increase to the original order price.
- RV-12/12iS Powerplant Kits: 6% increase to the original order price.
- Lycoming: either a 12% increase to the original order price, or 2024 pricing, whichever is lower.
Price increases on the Lycoming engines come on top of the engine maker’s large year-to-year increases and would likely wipe out any special pricing Van’s offered through 2023 in light of these hikes. Van’s 2024 pricing starts at $39,420 for a 160-hp O-320, while the popular IO-360-M1B runs $42,367, the IO-390 costs $52,237 and the IO-540 for the RV-10 runs $68,407. Price jumps on third-party items comes on top of increases to kit prices of more than 30%. Even so, Van’s reports that a high percentage of builders have agreed to these new terms. The company is looking for a 70% re-up rate to bolster its viability going forward.
“We know these price increases create hardship for our customers,” Van’s said today. “However, without taking these steps and making these price changes, there simply is not a feasible path forward for Van’s Aircraft. Increasing these prices allows us to remain in business to provide parts, kits, and support for the thousands of builders and owners of Van’s products, and to be around to support each of you for years to come.”