Time Running Out for Beleaguered Diamond Aircraft

Woes go beyond funding for D-Jet.

A skeleton crew manned Diamond Aircraft's exhibit at Sun 'n Fun after the company on Monday announced the layoffs of 213 workers involved in the D-Jet program. The company has been awaiting word on a $35 million loan from the Canadian government that it says it needs to finish development of the D-Jet, a single engine very light jet intended to complement the Austrian manufacturer's family of piston airplanes (for more about the D-Jet, click here to read J. Mac McClellan's article, "Flying Diamond's D-Jet"). Diamond founder and CEO Christian Dries has lined up about $15 million in investor funding, but the loan request with the Ontario government has been held up under review for months. Certification work on the D-Jet has proceeded slowly as Diamond awaits a government decision, with the company finally deciding it can no longer afford to pay D-Jet workers, who will now be eligible for unemployment handouts from the Canadian government.

A D-Jet test pilot at Diamond's Sun 'n Fun exhibit said he was among the employees who received layoff notices, but decided to stay at the show through the week before starting his search for a new job. "I don't blame the company," he said. "They tried to do everything they could to keep the D-Jet program going, including paying money out of their own pocket to the employees. This is purely political gamesmanship. If the Canadian government doesn't want to give Diamond a loan, they should just say that and then everybody can move on." If the D-Jet program is indeed canceled, Diamond would owe deposit holders an estimated $20 million, which could jeopardize not only the fate of Diamond's very light jet but also the company itself.