Tamarack Obtains Financing During Bankruptcy Reorg

With customer aircraft flying once again and new installations underway, Tamarack Aerospace aims to finish 2019 on much stronger footing. That includes exiting Chapter 11 bankruptcy and exploring new applications for the company’s active load alleviation system (Atlas) winglet technology.

The year certainly began on a sour note for the Sandpoint, Idaho-based company, following implications of Atlas faults in several incidents that led to airworthiness directives from the European Union Aviation Safety Agency (EASA) and the FAA, and the months-long grounding of Textron Aviation Model 525, 525A and 525B CitationJets equipped with Tamarack’s winglets.

Company founder and CEO and Atlas inventor Nick Guida told AIN he felt like “a father seeing his kid thrown in jail over false accusations" when EASA issued its emergency AD in April. "Our team had spent many years and many millions of dollars to prove the design and safety of these winglets to certification authorities,” he added. “That work was now under attack, and we had to prove our innocence.”

Tamarack took particular exception to one pilot’s claim, cited in the EASA directive, of immediate loss of control following an Atlas malfunction, a scenario Guida said was later proven false. "It drives engineers crazy when confronted with a situation driven by inaccurate data," he added.

Service Bulletins Approved to Remedy ADs

The company had previously issued two service bulletins to address possible Tamarack Active Control Surfaces (TACS) asymmetry, including an April 2018 bulletin (SB1467) calling for mandatory replacement of a screw that could work free inside the actuator, bridge an electrical circuit and drive TACS movement. A second bulletin issued in early 2019 (SB1475) called for installation of aerodynamic centering strips to force those surfaces to a neutral position in the event of such uncommanded asymmetries.

Tamarack made both bulletins mandatory following the EASA AD and maintained the two SBs resolved concerns raised by regulators. The company also vehemently denied that Atlas asymmetry could lead to irrecoverable loss of control.

Regulators ultimately approved installation of those service bulletins to resolve the ADs and return Atlas-equipped aircraft to service. EASA lifted its emergency action July 7, and the FAA issued an alternate means of compliance (AMOC) shortly after to essentially the same effect.

While that returned its customers’ CJs to the skies, resolution of the ADs came after the groundings had already driven Tamarack into Chapter 11, halted sales of its winglets and forced several layoffs at the company. The situation also led Guida to return to the company he’d founded. “I’d been gone for a bit, but I came back as I felt we needed leadership in the world of ADs and certification,” he said.

"It's hard to ignore the timing [of the directives], which bordered on a kneejerk reaction in the [Boeing 737] Max aftermath," added chief engineer Jacob Klinginsmith, who was elevated to the role of Tamarack's president following the June bankruptcy filing. "However, we didn't panic. We faced the situation head-on and we maintained our business."

While the company is moving forward, one lingering question concerns the National Transportation Safety Board (NTSB) investigation into a fatal November 2018 crash of an Atlas-equipped CJ2+ shortly after takeoff from an Indiana airport. That aircraft had been fitted with Tamarack winglets shortly before the accident, including the revised TACs units under SB1467.

Unusually, the FAA directive specifically cited possible Atlas malfunction as a focus area in the NTSB investigation in addition to the incidents previously noted by EASA. "We have reached out to the Board and are now a party to that investigation," Klinginsmith said. "We're obviously troubled the [FAA] AD points to our winglets, and we feel it was inappropriate to make such a statement regarding an ongoing investigation."

"We're not in the know on where that investigation stands,” Guida added, referring to himself and Klinginsmith, “but I do believe it would have been hard to get these ADs lifted if investigators believed [Atlas] was complicit in it.”

Rebuilding and Looking to the Future

With the installed fleet back in the air, Tamarack is now looking to rebuild its business and ultimately expand its offerings. The company completed its first post-AD Atlas installation in late July, and Klinginsmith noted several others in the pipeline. Installations in Sandpoint currently take approximately two weeks to complete—roughly double the time frame versus when the company was fully staffed—and Tamarack hopes to complete the 100th Atlas installation before year-end.

Another part of Tamarack’s growth strategy is to expand its existing network of 16 U.S. and international service providers that sell, install and service Atlas winglets. Guida noted the company has also reached out to Textron Aviation, which opted last year to discontinue Atlas installations on new aircraft—a decision he emphasized was unrelated to the later ADs—and intends to reinvest in new platforms the company "put on the shelf to focus on the Citation.”

Tamarack will also exhibit at this year's NBAA convention (Booth C12744) with the company emphasizing its path ahead. "Our message is that we're still here," Klinginsmith said. "We're not out of business, despite the negative connotations of bankruptcy, and we're moving forward."

The company's own customers are driving that path forward, with a group of Atlas-equipped Citation owners fronting part of the $1.95 million in debtor-in-possession financing the company secured in early August. "Our customers remain our biggest fans," Klinginsmith said. "They love our winglets, and it's really gratifying to see our products provide so much satisfaction to them."

Guida also remains grateful for customers' support. “Many of our operators fly Part 91 and are entrepreneurs, themselves, who've faced similar headaches in their own businesses," he said. "I’ve taken calls from many of them, and while they were obviously upset their planes were grounded, they'd call just to ask me, 'Nick, how are you doing through this?'"