11 December 2023
Van’s Aircraft is raising the price of its aircraft kits by 32%, the US kitplane company has announced. Prices of individual parts and components will also be increasing, “some more than 32%, and others less”, said the company.
The price increases had been expected and are part of the recovery plan for Van’s, which filed for Chapter 11 bankruptcy last week.
“Over the past few years, the cost of producing airplane kits has soared substantially.” said Van’s at the weekend.
“Candidly, due to a number of factors we found ourselves operating the business at a loss. Thus, to continue providing the best possible airplane designs and kits, we must increase our prices.”
The Oregon-based company, the biggest kitplane manufacturer in the world with more than 11,000 aircraft flying, also said it was changing its policy of allowing kit customers to spec a ‘bespoke’ package of parts.
“Historically, Van’s allowed customers to make numerous additions, deletions, modifications, and customizations to each kit order (whether a standard or quick build kit),” said Van’s statement.
“This led to a substantial variance in the number of kits that could be picked, crated, and shipped per day, which ultimately impacted our purchasing, planning, costs, and revenue. Thus, we can no longer continue these practices.”
Van’s is also insisting on a deposit of 35% of the order must be received to complete any kit, engine or propeller order, and sign a purchase contract.
“Customers who purchase parts or kits from Van’s will need to review, sign, and return our current purchase contract and waiver and release of liability agreements,” said Van’s.
Van’s kit parts waiting for shipment to builders
The news has had a mixed reception from Van’s builders, owners and pilots. However, many welcome the more business-like approach, summed by one writer on the Van’s Airforce forum:
“I’m honestly quite happy to see these changes. Everything laid out in their announcement makes a lot of sense and points to a much more organized and sustainable business model. Sure, the kit price jump seems large, but based on the prices of other kits out there, it still seems reasonable to me. We’ve gotten used to Van’s being ‘cheap’. Now it may not be cheap, but I’d still call it a good value relative to what else is out there.
“Just for kicks I took a look at the price of parts that I have ordered in the last few years to fix my mistakes. Most of them were aluminum parts made in-house. A lot of them went up significantly, some almost double in price. At first that’s jolting, but when you think about it, $34 to replace a tank rib that I buggered up (vs the $17 I actually paid) is really still pretty reasonable and still makes the cost of Van’s laughably cheap compared to dealing with part costs for the old Cessna sitting on the ramp.
“The prices are going to sting a little bit more for sure, but I’m still glad they’re taking a critical look and fixing their mistakes. The company is full of amazing staff, but their business processes just didn’t keep up with the changing business. Hopefully this is a corner they turn with these changes, making Van’s viable for decades to come. Short term irritation and pain for long term viability.”
The parts shop on the Van’s website is closed for now
Van’s representatives including founder Dick Van Grunsven appeared in bankruptcy court in Oregon on Thursday 7 December. Van’s have filed under Subchapter V of Chapter 11. A Subchapter V bankruptcy is a streamlined version of Chapter 11 for small businesses that was created by the Small Business Reorganization Act of 2020.
Lawyers for Van’s disclosed that they expect around 70% of customers with pending orders will agree to higher pricing to move forward, as well as identifying that there are $22m in pre-petition customer deposits for orders which are identified as not segregated. Van’s began a segregation process around 6 October, and around $500k is held there for 14 customers with 28 orders.
Perhaps the most notable soundbite from the hearing was from Clyde Hamstreet, head of the turnaround company employed by Van’s, who when questioned about certain financial details remarked, “The company’s accounting system leaves a lot to be desired.”
The judge set 19 December as the date for the second hearing.
