GippsAero

Mahindra will invest $20 million in the company through a series of tranches, and has already noted that it plans to grow the business and use its existing global networks to expand its market further.

The new investment is a welcome relief for GippsAero, which has struggled in recent years. Despite the export sales success of its GA8 Airvan, the company experienced some difficulty during 2009 as a result of the global financial crisis. That saw it suspend production for some weeks and cut some staff as some customers for Airvans deferred delivery of their aircraft.

As with most other GA manufacturers around the world, the tightening of finance for aircraft put a major dent in some operator’s ability to finance new aircraft. Despite the crisis now having passed, GippsAero co-founder and director George Morgan told Australian Aviation that the company is still feeling the affects of this.

“We have plenty of customers who want Airvans from all around the world,” he said. “The biggest problem at the moment is that the banks and finance institutions have clammed up, so customers can’t get finance. That’s the biggest showstopper we have by a huge margin.”

But the manufacturer is now moving towards setting up its own financing arrangements with Mahindra, which it hopes will allow it to be able to offer finance on new Airvans for customers who have had difficulty obtaining other forms of financing. In this way, it hopes to be more competitive against other manufacturers such as Cessna which have used their in-house financing operations to boost sales in recent years.

Despite the difficulties which have been experienced in recent years, the global Airvan fleet continues to grow with 160 aircraft have now been delivered to operators across the world, operating in roles including search and rescue, sightseeing and parachuting.

GippsAero co-founder and director George Morgan told Australian Aviation that the aircraft has been successful at gaining new and old customers alike. “There’s more new operators than there are repeat customers, but there are a fair few repeat customers as well,” he said.
Last year saw a major milestone achieved for the company with the certification and delivery of its long awaited turbocharged Airvan.

Powered by a Lycoming TIO-540-AH1A turbocharged piston engine driving a turning a three-bladed, scimitar shaped 2032mm Hartzell constant speed propeller. The package has delivered significantly increased performance for the Airvan, something which is particularly useful given the environments the aircraft operate in.

“The primary advantage of the turbocharged version is that it maintains power at altitude,” GippsAero director George Morgan told Australian Aviation. “Particularly in the outback of Australia or up in the mountains of Papua New Guinea you’ve got maximum rate of climb still at initially over 1000ft a minute. You can climb up to 9-10,000 ft and cruise up there in relative cool, true air speed comes towards you and then as you come down as required to your destination.”

The TC-320 received its CASA certification in February 2009, with the first delivery of one of the aircraft made soon after to Mission Aviation Fellowship, which flies up in the highlands of Papua New Guinea. It has since been certified in Europe and the US, and aircraft have started operating there.

Currently, demand for the turbocharged Airvan has been running hot, with the company reporting that it is delivering one normally aspirated aircraft for every 10 TC-320s. Indeed, during late 2009, the company offered a number of the normally aspirated Lycoming I0-540-K1A5 engines for sale on its website.

“The current surge on turbocharged Airvans we expect will reduce a bit once the people who have been waiting have got what they’re after,” said Morgan.

The Airvan has also completed a major milestone in early July, with the arrival back in Bendigo of the Millions Against Malaria flight. Flown by pilots Tim Pryse and Ken Evers, the aircraft left Bendigo on a round the world flight on May 8, with the aim of raising funds and awareness of Malaria throughout the Asia Pacific region and support the work of Mission Aviation Fellowship and the Australian Foundation for the Peoples of Asia and the Pacific.

The arrival of the aircraft back to Bendigo on July 8 after completing a 26,740nm route which took it across the Pacific to the US and through part of South America before crossing the Atlantic into Africa and back to Australia through Asia.

Morgan said that the flight has been a. “It’s the first time that an Australian designed, certified and manufactured aircraft has circumnavigated the globe.”

The aircraft itself was provided by GippsAero while Mahindra provided a great deal of support for the flight. As well as the important role of raising funds and awareness of malaria, GippsAero is hoping that it will attract more demand for the aircraft from prospective customers around the world.

With the interest in the turbocharged Airvan running strong, the company is also looking towards new technology engines to further broaden the appeal of the aircraft. Morgan says that the manufacturer is excited at the prospects of mating the new Lycoming iE2 integrated electronic propulsion system to the GA8. The soon to be certified engine will be able to use high octane motor fuels in place of Avgas, which can be in short supply in some of the areas that Airvans operate in.

“That’s something that we’d like to develop as soon as we can get a hold of the engine,” said Morgan. “There are a lot of countries that have got problems with the supply of Avgas, and that stifles our sales somewhat.”

As well as the larger changes, GippsAero has a pipeline of other improvements for the GA8, including an increase in the aircraft’s maximum takeoff weight, while work has just started on a possible float-equipped version of the Airvan. This year, it also began offering a retrofit of the three bladed Hartzell propeller used on the TC-320 for existing normally aspirated Airvans, which increases the ground clearance and reduces aircraft noise.

As well as those improvements to the GA8, the company has started work on a prototype stretched version of the aircraft, which is expected to go to market in 2012. Designated the GA10, the aircraft will be a stretched version of the GA8, and will be powered by a Rolls-Royce B-17F2 turboprop engine.

Although the aircraft will be designed to seat 10, Morgan says that GippsAero is not planning to stretch the Airvan any further to take it into the larger market, which is dominated by the likes of the 13 seat Cessna Grand Caravan. “We don’t see any sense at all in going head to head with the Caravan. Our market niche is between the Cessna 206 and the Caravan and there’s a gap in there, and we want to stay in that gap,” he said.

The company also has firm plans to return the former GAF N24 Nomad to production after it acquired the type certificate and intellectual property from Boeing Australia in 2008. Now redesignated as the GA18, the aircraft is expected to start initial production next year, and will see it receive new generation engines and avionics, while it will be certified to current standards.

Importantly, even with the investment from Mahindra, there are no plans to move the company away from its existing facilities at the Latrobe Regional Airport. “The operation here will grow,” said Morgan. “They (Mahindra) are investing in the operation here to develop these further models.”

However, the company is planning to establish other assembly centres around the world which will allow GippsAero better access into some major prospective markets. “The aim will be to set up assembly centres in strategic places around the world, and there will be increased marketing activity,” said Morgan.

In particular, it has highlighted India as a major market which could be accessed through local assembly, while Mahindra’s presence there will also help to build the market for GippsAero’s growing line of products. Other assembly centres could be established in Asia, the US and South America to help build up sales in those important markets.

Overall, with a strong background, a new global partner and an exciting range of new aircraft under development, GippsAero appears to be well placed to increase its presence in the GA market around the world.