Warning about Sport Copter, Inc. from Aero-News Network 05-01-24

[Kevin_Richey]

"We are documenting reported issues with Sport Copter International, an Oregon gyroplane manufacturer, and will have an extensive report shortly...but the news is undoubtedly troublesome, complex, and substantial. We are unable to recommend this company for the moment."

Unfortunate... ANN/SportPlane Resource Guide Adds To Cautionary Advisories | Aero-News Network

The Industry Continues to be Rocked By Some Questionable Operations Recent investigations and a great deal of data has resulted in ANN’s | Published: Wed, May 01, 2024 | Aero-News Network

www.aero-news.net

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"A real MAN honors his contracts he enters into w/ his fellow man, no matter how painful or difficult it may be!"

 

[Doug Riley]

Jeez.. SportCopter, (formerly Vancraft) is a 2-generation family business that's been around since the 60's.

 

[Kevin_Richey]

Just so folks don't get all excited thinking that Aero-News Network & others have an agenda against Sport Copter, Inc., below in the 4th paragraph, is this report re: the Rotorway kit helicopter business (now named RotorX).

Aero-News Network has reported extensively on the RotorX saga numerous times since last October. Utilize ANN's search feature for "RotorX" to read the many details of ANN asking Don Snow, the CEO of RotorX, for his side of RotorX's troubles. Fair reporting is plainly evident.

From that exact same announcement quoted in Post #1:

"We continue to see no progress with the despicable Rotor X debacle and despite promises that things will get better... nothing has happened... as usual... This program carries a “Not Recommended” Rating and we see little possibility of a resolution at this point, and recommend all affected parties reach out to law enforcement ASAP."

RotorX is looking like it is failing under a combination of lack of money, lack of integrity of it's CEO, the ongoing bleating of new investor money coming in "any day now" & outright lies being told to customers (by that same CEO), who have huge sums of money paid to RotorX & are likely to never get their kit nor their money back, being defrauded.

Sport Copter & RotorX aren't the only two aviation-related companies that are in deep, serious trouble. A.N.N. also portrays other sport aviation companies, both in the US, as well as in other countries, that have either gone out of business or are about to.

ANN reports on the same recurring theme, which is summed up:
1. Take customer's money in exchange for promise of giving them the aircraft they desire. Millions of dollars pass into the company's pockets.

2. Years pass, while the manufacturer neither delivers the promised aircraft (or kit) nor do they return their customer's funds when they ask/demand it.

3. Blatant, outright lying from company head is noticed by SOME of said customers, besides the general public. Other customers continue to defend the company head, claiming they have faith that they'll eventually produce what they were paid to do & that the product is "the best in the world".

Meanwhile, they are out all their money for that faith. And, they do not have that "best in the world" aircraft, too.

4. Numerous & often-repeated statements that new investor money is imminently arriving in order to "Save The Day!"

5. CEO/head of company keeps protesting that all their troubles are NOT THEIR FAULT! It's everyone's else's fault why they have stepped over the line separating the honest business from a business that is committing FRAUD. Virtually all civilized countries still have laws in effect that punish theft & fraudulent activities of taking money from victims.

Aero-News Network is probably the most-comprehensive media reporting on all things flying. They've been around for over three decades.
They cover all aspects of aviation: business, military, general aviation, sport, aerospace, airline, you name it.







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"A real MAN honors his contracts he enters into w/ his fellow man, no matter how painful or difficult it may be!"

 

[Abid]

Jeez.. SportCopter, (formerly Vancraft) is a 2-generation family business that's been around since the 60's.

I do not understand the hesitation to declare re-org bankruptcy. AutoGyro Gmbh, once the largest gyroplane manufacturer in the world declared bankruptcy in 2021. Van's Aircraft, arguably the largest kit plane company in the world just declared bankruptcy because they were $21+ million in the hole with technical mistakes in production that threatened to completely take them out. Bankruptcy is there for a reason. Re-org allows the company to right size and try again. Yes it does hurt some people in the process but stuff just does not workout sometime

 

[j4flyer]

I heard that Jim and his wife have both suffered major medical issues. The issues continue with Jim’s wife. (From what I’ve heard) Unfortunately a lot of family owned businesses suffer when one or two of the main producers and innovators are out of action. The money they have is used to live. Sometimes/ a lot of times this money is that of the customer waiting for orders. This is why I believe all major orders should be done via escrow. Smaller orders should be done on a credit card with a set time for delivery. At least you have a company behind you in a case of non delivery. I learned this while dealing with Jerrie Barnett. He was a nice guy but ran his business like a Ponzi scheme. I know of a lot of guys fighting the battle with Mustang Aeronautics right now as well.
I had an issue with confronting the problem. I had an incomplete kit. If I pushed my kit could be orphaned. It’s a real dilemma. I think the EAA and Sun in Fun should not allow these problem vendors to peddle their kits at their fly ins. However, in spite of the reports they (the EAA and Sun in Fun) allow the companies to sell dreams to unsuspecting members at these events. Enough of a rant.
Note: This entire paragraph is my opinion.

 

[Abid]

I heard that Jim and his wife have both suffered major medical issues. The issues continue with Jim’s wife. (From what I’ve heard) Unfortunately a lot of family owned businesses suffer when one or two of the main producers and innovators are out of action. The money they have is used to live. Sometimes/ a lot of times this money is that of the customer waiting for orders. This is why I believe all major orders should be done via escrow. Smaller orders should be done on a credit card with a set time for delivery. At least you have a company behind you in a case of non delivery. I learned this while dealing with Jerrie Barnett. He was a nice guy but ran his business like a Ponzi scheme. I know of a lot of guys fighting the battle with Mustang Aeronautics right now as well.
I had an issue with confronting the problem. I had an incomplete kit. If I pushed my kit could be orphaned. It’s a real dilemma. I think the EAA and Sun in Fun should not allow these problem vendors to peddle their kits at their fly ins. However, in spite of the reports they (the EAA and Sun in Fun) allow the companies to sell dreams to unsuspecting members at these events. Enough of a rant.
Note: This entire paragraph is my opinion.

There really are hardly ever any direct sales that come from airshows like Sun N Fun and Oshkosh. The only people who think there are orders coming from these shows are people who have no experience as vendors at these shows. These shows are simply exposure and nothing more, part and parcel of overall marketing.
The escrow thing will never work. Imagine a vendor getting 20 aircraft orders a year. Lets say each aircraft is $120k. Lets say at any one time the vendor is working on 5 machines. That means at a minimum $600k of the vendor are stuck loaning money to finish orders for his customers. That is a horrendous situation for a small business for cashflow. Factoring is not a feasible option from banks for light aircraft manufacturing. Customers do all kinds of stuff. Cancel orders midway. I have partially finished 2 kits sitting around. I spent the money making a kit. The customer paid half and then decided not to go for it for instance. One customer (real situation) cancelled order because he shut down his flight school after placing the order so that order is stuck halfway painted. He wants me to sell it for him. Whoever buys it needs to select the exact same panel, the same color, the same engine because wiring and panel is all done. If this was an order with a deposit in escrow there would be a lot of headaches for me to deal with.
The bottom line is no one in the industry does escrow. You decide to cancel your order midway, you are on the hook because it's your money now stuck, not the vendor's. It still costs the vendor because storing full airframes and composite bodies takes up space and costs $$.
If you don't like it wait and buy finished aircraft. Maybe slightly used aircraft. maybe vendor's demonstrator.

 

[MikeBoyette]

This is exactly why my old man did business the way he did. He resisted taking excessive investor money. Getting too big too quick. He always made sure he had inventory to be purchased and shipped once full payment was received. He may not have had the reputation of being the nicest person to deal with but, you always got the truth, the product you paid for, and in a timely manner. To my knowledge he is the only US manufacturer to make his entire living from gyros for over 30 years and walked away owing nothing to anyone on his own terms.

He did require a non refundable deposit to begin a project. Payment in full was required before anything left the shop. He never took a single credit card. It was cash or check. He stayed humble, despite the many customers who were almost cult followers. This is something very hard to resist. Others in this industry have let this go to their head and believed their own hype. I love when they give themselves false titles even using military rank. I wish they understood how ridiculous it makes them look.

If anything my pops was/is too humble. In my opinion he changed and influenced so many minds around the world. Who can say that? Not very many. I try to tell him on occasion his response is “yeah that’s past”.

 

[j4flyer]

This is exactly why my old man did business the way he did. He resisted taking excessive investor money. Getting too big too quick. He always made sure he had inventory to be purchased and shipped once full payment was received. He may not have had the reputation of being the nicest person to deal with but, you always got the truth, the product you paid for, and in a timely manner. To my knowledge he is the only US manufacturer to make his entire living from gyros for over 30 years and walked away owing nothing to anyone on his own terms.

Yes, your Dad had the reputation of always delivering on what was ordered. One of the few in the business at that time. Kudos for that, for sure.

 

[j4flyer]

There really are hardly ever any direct sales that come from airshows like Sun N Fun and Oshkosh. The only people who think there are orders coming from these shows are people who have no experience as vendors at these shows. These shows are simply exposure and nothing more, part and parcel of overall marketing.
The escrow thing will never work. Imagine a vendor getting 20 aircraft orders a year. Lets say each aircraft is $120k. Lets say at any one time the vendor is working on 5 machines. That means at a minimum $600k of the vendor are stuck loaning money to finish orders for his customers. That is a horrendous situation for a small business for cashflow. Factoring is not a feasible option from banks for light aircraft manufacturing. Customers do all kinds of stuff. Cancel orders midway. I have partially finished 2 kits sitting around. I spent the money making a kit. The customer paid half and then decided not to go for it for instance. One customer (real situation) cancelled order because he shut down his flight school after placing the order so that order is stuck halfway painted. He wants me to sell it for him. Whoever buys it needs to select the exact same panel, 8:the same color, the same engine because wiring and panel is all done. If this was an order with a deposit in escrow there would be a lot of headaches for me to deal with.
The bottom line is no one in the industry does escrow. You decide to cancel your order midway, you are on the hook because it's your money now stuck, not the vendor's. It still costs the vendor because storing full airframes and composite bodies takes up space and costs $$.
If you don't like it wait and buy finished aircraft. Maybe slightly used aircraft. maybe vendor's demonstrator.

Abid the way escrow works is the customer places his 120k into an escrow account. As you complete phases you draw the money from the account to pay for your expenses. The parts suppliers can see the accounts and in most cases will supply the materials until you get paid. A lot of suppliers use a 90 day revolving account. If you fail to pay your suppliers you are out of business. If interest is charged for supplies you pull that from escrow as well. If the buyer backs out that provision should be covered in the contract as well as your performance requirements. Documented shipping delay issues are spelled out contractually as well. It is up to you to determine how many Gyros you can actually build given your staffing etc. if you have 20 people who want Gyros but you can only build ten a year, don’t accept the additional orders or get escrow deposits. Personally after being in aviation for many years now I wouldn’t hand any manufacturer money without a performance contract and an escrow account. It protects everyone.

 

[Abid]

Abid the way escrow works is the customer places his 120k into an escrow account. As you complete phases you draw the money from the account to pay for your expenses. The parts suppliers can see the accounts and in most cases will supply the materials until you get paid. A lot of suppliers use a 90 day revolving account. If you fail to pay your suppliers you are out of business. If interest is charged for supplies you pull that from escrow as well. If the buyer backs out that provision should be covered in the contract as well as your performance requirements. Documented shipping delay issues are spelled out contractually as well. It is up to you to determine how many Gyros you can actually build given your staffing etc. if you have 20 people who want Gyros but you can only build ten a year, don’t accept the additional orders or get escrow deposits. Personally after being in aviation for many years now I wouldn’t hand any manufacturer money without a performance contract and an escrow account. It protects everyone.

And then you won’t buy from any manufacturer because none use escrow. You can’t pull money as you complete phases. It is too complicated to define phases and their completion. It becomes a very messy affair. There are companies who will take a non-refundable deposit for the order which may equate to 15 to 25% and then finish the order before asking for the rest. If customer cancels it they completely lose that deposit. But no one deals with escrow. In light aviation part suppliers get paid before they ship parts to you. This isn’t like manufacturing sofas or cars. You can think of it like build to order almost. In the whole world Rotax sells a total of 3500 engines a year and it is over 80% of the market for light aircraft. That should give you the scale of the industry.
I tried escrow once. I ended up eating the order and having to sell it later and yes making 20% profit in it but my cash flow was stuck for months. It a fools mistake to think you are buying from a big company. There is no big company in light aviation. I lost a potential order once because the gentleman thought our operation was not big enough so he was going to order from AutoGyro and then in 6 months AutoGyro was declaring bankruptcy. What people didn’t know is AutoGyro was bailed out by investors a couple of times before while everyone thought they were a huge operation.

Anyway my experience with that escrow, it was a mess and the guy involved lawyers and just wanted to cancel the order mainly for the real reason that his training was not going according to his expected schedule. I could have fought it and won but what would that cost me and was the headache worth it. No. So no, it isn't worth the hassle doing escrow. In that case, just wait for a used machine to come online and buy it. Even car companies in the last few years have a wait time for any new car that you want.

Usual time for delivery is 4 to 6 months in LSA. Always has been. Right now many airplane companies are asking for 1 year for delivery. Some have wait times up to 2 years (KitFox and RANS).

 

[DavePA11]

I found when buying my used SC M912 calling past owners/buyers that there were many buyers impacted with no delivery from SC for the M912, and I was completely surprised people continued to put down deposits on another new SC (M2) when history showed they were unlikely to deliver... I liked my SC M912 and they were good at supporting it, but would never put a deposit down on a new one. I suspect those who put down deposits on the M2 will not see their money again. American Ranger and Magni have always delivered so less risk in them not delivering. Good to research and call past customers to get their honest feedback on the purchase experience. Amazingly different than what you may find on the public forum.

 

[Andino]

"We are documenting reported issues with Sport Copter International, an Oregon gyroplane manufacturer, and will have an extensive report shortly...but the news is undoubtedly troublesome, complex, and substantial. We are unable to recommend this company for the moment."

Unfortunate... ANN/SportPlane Resource Guide Adds To Cautionary Advisories | Aero-News Network

The Industry Continues to be Rocked By Some Questionable Operations Recent investigations and a great deal of data has resulted in ANN’s | Published: Wed, May 01, 2024 | Aero-News Network

www.aero-news.net

I see I'm no longer the sole Cassandra here.

The escrow thing will never work. ...It a fools mistake to think you are buying from a big company.

It seems to me that the fools' mistake is thinking they're buying from an ethical company.

I'd be wary of putting down more than 10% deposit on the full price with nebulous claims of delivery. Buying the kit in stages would seem to protect the interests of both the customer and kit mfg. Frame, gear, engine, cabin, avionics, tail, rotor system...in roughly that sequence. This would have an escrow-esque effect.

I do not understand the hesitation to declare re-org bankruptcy. ...Bankruptcy is there for a reason. Re-org allows the company to right size and try again. Yes it does hurt some people in the process but stuff just does not workout sometime

Re-org is like defib of a patient. It can work if the subject is not too far gone.

I found when buying my used SC M912 calling past owners/buyers that there were many buyers impacted with no delivery from SC for the M912, and I was completely surprised people continued to put down deposits on another new SC (M2) when history showed they were unlikely to deliver... I liked my SC M912 and they were good at supporting it, but would never put a deposit down on a new one. I suspect those who put down deposits on the M2 will not see their money again. American Ranger and Magni have always delivered so less risk in them not delivering. Good to research and call past customers to get their honest feedback on the purchase experience. Amazingly different than what you may find on the public forum.

SC has a history of nondelivery going back to the M912? I thought this was an M2-era thing, allegedly stemming from health issues, COVID-19 supply chain disruptions, a disappointing Rotax 915 thrust, etc. Why hadn't bilked M912 people spoken up long ago? (Or had they, but were shouted down?)

The map is not the territory. When I read hotel or product reviews, I look at the recent negative ones first, then the positive ones. Then I compare the weight of both sides. It's saved me considerable grief.

I hope there will be M2 production or customer restitution.

 

[Abid]

It seems to me that the fools' mistake is thinking they're buying from an ethical company.

I'd be wary of putting down more than 10% deposit on the full price with nebulous claims of delivery. Buying the kit in stages would seem to protect the interests of both the customer and kit mfg. Frame, gear, engine, cabin, avionics, tail, rotor system...in roughly that sequence. This would have an escrow-esque effect.

Hi
Ethical company in light aviation means simply dealing with an ethical leader. You simply need to check with existing customers. It isn't uncommon to be late on delivery. We certainly have been specially when I could not get even avionics without a 6 month delay or could not buy Plexiglass to make canopies for almost a full year during Covid but we delivered everything that was paid in full. Currently have 2 orders that were paid in half waiting in about half way and then requested to be cancelled for new people to take on with the way they are.
I have no right or business to comment specifically on SC's internal situation but I can say in general that we engineers and techies do not make the best sales people or businessmen. Sometimes we are after too much perfection in a product which is unattainable. Usually nothing can do it all. There are always compromises in one machine so it is better to select your poison and stick to it. Second, we are usually too honest to be good salesmen but I for one would rather stick to that. I see a lot of BS marketing in aircraft out there and just roll my eyes.

After my experience with escrow, I at least will never do it. I have also taken out clause allowing cancellation from sales contract unless you get a terminal illness. People do this a lot more than I had experienced before in trikes and airplanes. Not sure why that is. Training may have something to do with it.

About the Bankruptcy Re-org being a solution if the company is not too far gone
Well, Vans Aircraft as best as I know is over $25 million in debt. Is that too far gone. Seems not. They did a Re-org, raised their prices big time and are back and people are ordering. Given that Vans is the largest piston aircraft kit company in the world and their aircraft designs are definitely very much loved. The point is though that anyone thinking being big in this aviation is a guarantee of something, it absolutely not. Usually the larger they are, the harder they fall holds more true here than other way around.
Icon Aircraft having being given over $110 million investment, one would think they had a long staying power but as we see that isn't the case. I will just comment on how freaking technically stupid Icon engineering and business leadership was to fail even after that level of investment and having what they called "not designed for production". I mean how do you take $110 million and supposedly hire the most expensive large engineering team and then come up with a design in 10 years that is not designed for production. Embarrassing.

 

[Aerofoam]

After my experience with escrow, I at least will never do it. I have also taken out clause allowing cancellation from sales contract unless you get a terminal illness. People do this a lot more than I had experienced before in trikes and airplanes. Not sure why that is. Training may have something to do with it.

Many companies charge a percentage of the deposit for cancellation.

I bet you are right about the training, it's a PIA if you don't happen to live near an instructor....

 

[Vance]

What is "a PIA"?

I didn't live near a gyroplane flight instructor.

It made learning to fly a gyroplane take more of a commitment,

I probably drove 8,000 miles total to learn to fly.

 

[Aerofoam]

What is "a PIA"?

I didn't live near a gyroplane flight instructor.

It made learning to fly a gyroplane take more of a commitment,

I probably drove 8,000 miles total to learn to fly.

Pain In the @$$ !

I have already driven about 14000 miles and I only have about 10 hours!

 

[Sv.grainne]

I racked up more than 9000 getting SPY Cert

 

[bell206]

SC has a history of nondelivery going back to the M912? I thought this was an M2-era thing, stemming from health issues, COVID-19 supply chain disruptions, a disappointing Rotax 915 thrust, etc. Why hadn't bilked M912 people spoken up long ago? (Or had they, but were shouted down?)
The map is not the territory. When I read hotel or product reviews, I look at the recent negative ones first, then the positive ones. Then I compare the weight of both sides. It's saved me considerable grief.
I hope there will be M2 production or customer restitution."

Magni delivering 1500 units, I would give them a deposit if I wanted one of their machines.

I would wire Neil Sheather ,Titanium Auto Gyro in Australia, a deposit and did and received my machine as agreed in a container in the USA 120 days later. No excuses of can't get this or that.

 

[Eric S]

My personal experiences with Sport Copter have all been positive.

I purchased a 2nd hand SC Vortex way back in 2012 and have been well supported with parts or answers to any questions all along the way.

I later bought a RAF Sparrowhawk which I upgraded to SC rotorhead, rotors and trim system. It wasn’t a cheap upgrade and took 6 mths. to get the parts, both of which I knew about before ordering. Once again, I was well supported with any addl. parts needs and questions answered.

My latest dealing w/SC was to buy their one and only tandem trainer that needed an engine overhaul. Same experience all around even though I bugged Jim and Evan often by phone during the refurbish process. Several gyro pilots who had trained in that gyro told me about their experiences and how much they wished they could have bought it.

I now have around 750 gyro flying hours and have flown several other manufacturers gyros, mostly during training. I like the SC flying characteristics the best, most especially the lighter stick forces. I also appreciate how tough they’re built.

Eric

 

[vkmaynard]

Continued positive support from Sportcopter as early as today. Not sure why the "Moderator" is not sticking to "Moderating".

Victor