Gulfstream Prepares to Open First Factory-Owned Business Jet Service Center in China

 - March 26, 2012, 4:00 AM
Gulfstream Beijing–the U.S. aircraft maker’s new maintenance center in China–is based in a hangar at Beijing Capital International Airport that previously was operated by Grand China Aviation Technik.

Gulfstream is on track to open its new service center in Beijing Capital International Airport by the end of this year. The facility, which will be the first manufactured-owned business aircraft service center in China, will be run by Gulfstream Beijing–a joint venture between the U.S. jet maker and Hainan Airlines Group subsidiaries Beijing Capital Airlines (also known as Deer Jet) and Grand China Aviation Technik (GCAT).

The Civil Aviation Administration of China (CAAC) is expected to issue Part 145 approval for the new maintenance, repair and overhaul (MRO) center during the third quarter of 2012. Gulfstream is preparing to ramp up staffing levels so as to be able to be fully operational during the fourth quarter.

Deer Jet’s involvement in the partnership is critical since the company already operates 26 Gulfstream aircraft and lays claim to being China’s largest executive charter operator. GCAT has been involved in airliner MRO for some time and is well established at the main Beijing airport and is providing the main hangar for the new venture.

Gulfstream Beijing will consist of an 82,000-sq-ft (7,618-sq-m) hangar and 22,000 sq ft (2,044 sq m) of offices and back shops. Gulfstream product support executive Kay Ardalan, the site’s general manager, will oversee it. Both Gulfstream and Deer Jet employees will staff the facility.

In support of Deer Jet’s fleet of aircraft, Gulfstream has had a maintenance team based in Beijing since May 2010. The new full-service facility there will form a triangle of support for Gulfstream operators in the Asia Pacific region that already encompasses authorized service centers run by Metrojet in Hong Kong and Jet Aviation in Singapore–with all three sites holding significant spare part inventories. Also available to help operators is warranty-approved line-service center Jamco Corp. in Sendai, Japan.

“We have been working on this plan [for Gulfstream Beijing] for over a year and we’ve seen the need for it for quite some time as the fleet and the customer base have been growing in China,” Gulfstream product support president Mark Burns told AIN. “Our primary objective is to ensure maximum availability of our airplanes every day. The [fleet] growth in Asia has been tremendous and the other facilities [Hong Kong and Singapore] just don’t have enough capacity for all this.” In some cases, Chinese clients have been flying their aircraft all the way to the U.S. to get service work done.

Efforts by other Western business aviation service companies to get established in mainland China have not always gone smoothly. But, for Burns, the critical difference for Gulfstream is that its main partner in the new venture is also its biggest customer in the local market. He expects the approval process and start-up phase for the new MRO center to go much more smoothly because Deer Jet is so well known to Chinese authorities and has such an established track record of supporting their own Gulfstream jets (managing a total of 40 aircraft, including its own fleet).

Having had the structure of the joint venture approved by Chinese authorities, Gulfstream is carefully working its way through the CAAC licensing process. “There are a number of CAAC hurdles that need to be cleared but they are not that difficult as we are making sure we do things the right way,” said Burns. “Having a joint venture partner who understands all the key elements is essential.” Gulfstream has operational control of the new company, with Deer Jet having equal board control.

Initially, Gulfstream Beijing will support the G450 and G550 models, which currently constitute the largest part of the manufacturer’s Chinese fleet, but eventually capability will extend to all of its models, including the new G280 and G650. The facility will serve both operators based in China and transient operators temporarily in the country.

As part of the start-up phases, Gulfstream has had seven U.S. staff in China for the past 10 months working alongside their new Deer Jet colleagues in support of transient operators. This has provided a valuable training opportunity and Burns said that he has had no trouble finding U.S. volunteers to relocate to Beijing.

By the time Gulfstream Beijing is open for business, there will be around 16 to 20 Gulfstream-trained technicians in the facility and this number is set to grow to 40 or 50 by the end of 2013. All of the local technical staff speak English, having had English-language tuition at FlightSafety International. Gulfstream is hiring some additional bilingual staff to assist colleagues.

Over the coming months, Gulfstream will continue to expand its inventory of parts held in Beijing. The importation task is made easier by the fact that the “freeport” trade zone at Beijing Capital International Airport is immediately adjacent to its hangar.

“We have a global parts inventory worth $1.2 billion and a significant part of this is already in Asia,” explained Burns. “We see this as a differentiator. We’ve been growing the inventory in Hong Kong for some time and it now has one of the largest inventories outside Savannah [the manufacturer’s U.S. headquarters]. Singapore is growing too and this [Beijing] will be the third leg. Hong Kong could become a distribution center for the region.”

Meanwhile, Gulfstream also is working with CAAC officials to try to streamline the process for importing aircraft into China. The manufacturer now has about 80 aircraft in the whole of Greater China and 175 in the whole of Asia, with the region now accounting for 27 percent of its total backlog. Nearly half of all new Gulfstream orders placed in the third quarter of 2011 alone were from the Asia Pacific region, including a contract signed with Minsheng Financial Leasing in October 2011 for 20 more aircraft.

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