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Kit manufacturer Vans Aircraft has filed for protection under Chapter 11 of the federal bankruptcy code, citing the move as ‘a key step in the reorganisation of [the] company’. Although it intends to ‘continue to source, produce and provide parts, service and support’ to customers, it also notes that prices will increase.
The move marks the latest stage in a series of what Vans describes as ‘a handful of complex issues’ experienced over the last few years. These included unprecedented Covid-induced supply chain challenges, ‘faulty primer that led to corrosion problems on quick build kits,’ and ongoing issues with laser-cut parts.
Although a ‘recovery plan’ was announced at the end of October, Vans describes the Chapter 11 filing as a ‘key step in the reorganization of [the company]’; noting that although ‘this situation creates a hardship for everyone involved,’ it is a vital part of enabling the company to continue.
Vans has been developing plans for each impacted group of customers, dependent on the approval of the court. Due to the ‘volume and nature’ of customers with deposits on engines, propellers and avionics, clarification should not be expected before mid-January. Additionally, it is Vans’ goal that all 1,800-plus customers affected by the issue of laser-cut parts should receive replacements before the end of 2024, although it is noted that this cost ‘will be very significant’.
Price increases will also be applied to customers with open parts orders and deposits on aircraft kits, the latter of whom will be contacted ‘within the next seven to ten days with an offer to apply the full amount of their existing deposits toward the purchase of the same kit, under new terms and conditions including a price increase’. It is unclear yet what these specific cost hikes will entail for the customer.
Although the shipping of in-stock kit orders are expected to commence within the next week or so, Vans highlights that the need to ‘ship kits that generate positive cash flow’ will play a definitive role in who receives their products first first. However, ‘where we are able to do so, we will also consider the age of the original customer order,’ concludes the manufacturer.
Vans will file its proposed reorganization plan within the next 90 days, detailing how it intends to operate in the future and how its existing financial obligations will be dealt with.
IMAGE: VANS AIRCRAFT