Club 328 charts future course

 - October 9, 2006, 12:45 PM

Southampton, England-based business jet operator Club 328 has had to revise its plans in the past few months, particularly since its only source of Dornier 328Jets entered interim bankruptcy administration in March.

“At one stage we had eight of them on order from AvCraft Aerospace,” explained new Club 328 CEO Mike Farge, “but problems arose there before most of them could be delivered. The Dornier remains our ideal airplane, however; it’s a lovely aircraft, easy to maintain, has a stand-up cabin and half the operating costs of a GV. Our 328Jet hasn’t missed a beat in 500 hours.”

Assembly is said to be progressing slowly on airframes still on the AvCraft 328 line at Oberpfaffenhofen, Germany, and Club 328 is in negotiations with administrator Martin Prager over two 15-seat Envoy variants to have first refusal once the initial administration period ends (scheduled for late last month). It has separately traced two suitable airframes in China. “If we get those, we will have three 328Jets and be in good shape,” said Farge.

An Alternative to Charter

Club 328 has five aircraft in its fleet– one ex-Austrian 328Jet (currently undergoing British CAA certification checks), three Hawker 700/800s and a Citation V–and Farge plans to double the fleet size by year-end. He admits that sounds like a tall order, especially after the company’s earlier ambitious plans failed to materialize, but he has four clients who are interested in management and lease-back deals. “If we can structure them right, that’s a good way forward,” he said. “We are targeting corporations and wealthy individuals, and we cannot provide the service they expect with our current fleet.

“There are plenty of businesses in the Southampton area–Philips, for example– that make regular day trips to the European mainland. We can show that the cost of chartering an aircraft and filling it with 15 employees compares favorably with that of 15 business class tickets. And chartering gives the company the flexibility to determine the departure time, use the most convenient airfield and not be tied to a scheduled return time.”

Farge, a 40-year veteran engineer with employers such as Westland, BAE Systems and FLS Aerospace, acknowledges that Club 328 has made mistakes in executing its business plan.

“We considered buying out Club Airways (a members-only business jet service based in Switzerland) but that was a step too far, and ‘The Club’ (a subscription-based service for our customers to make use of a range of luxury transport items) just didn’t work. We now want to concentrate on our core business of jet charter– both one-off and regular flights, and block bookings–but further down the road there may be room for a frequent-flier program, say,” he said.

“If we fail to get the AvCraft Dorniers, we will bring in more Hawkers or entry-level jets such as the Premier I. We flew that last week and were very impressed. Some of the smaller Embraers look good, too. But we want to stay within the 19-seat category.”

Maintenance Operations

Farge is also managing director of Jet Engineering Technical Support (Jets), a third-party maintenance firm that occupies the same buildings as Club 328 and has just been awarded EASA Part 145 certification. Maintenance manager Peter Hall, formerly with German 328 operator Cirrus Airways and one of three 328-rated engineers on the team, is spearheading a drive to win more maintenance contracts. [Engineer is a British term for maintenance technician.]

“We offer an extremely competitive man-hour rate here,” he said, “further improved by our introduction of smart-card technology to track exactly how long each engineer spends on each aircraft. Our engineers are also contracted to annual hours–exactly 1,962 a year–and are paid the same rate if they need to work in the evening or on weekends. As a result, customer invoices are much more predictable.”

Farge said the engineers like the flexibility the system offers; they can also schedule longer leave periods and make up the difference later on. For example, one of them takes time off in the summer to design a ‘flying’ machine for the annual ‘Birdman’ competition off a South Coast pier (and invariably straight into the English Channel–Ed.).

“If they fulfill their contracted time early and we need them to work extra hours, they revert to an hourly rate that can mean a handy bonus, often just in time for Christmas. The format is growing in popularity in organizations serving the large-aircraft market, but I believe we’re the first to adopt it in the executive charter sector.

“We are recruiting engineers now; we currently have 16 and would like 50 by year-end. We have applied for Do-328 approvals and are ready to welcome CAA inspectors.”

Farge told AIN that, in addition to contracts for external maintenance within the air charter market, Jets would like a slice of the COMR (civil-owned, military-registered) market, in which the military contracts out second-line services to civil contractors. “The maintenance contract for the Royal Flight at RAF Northolt would be a prime target for us,” he said.

Now that Farge is running the businesses, one thing that isn’t about to change is the Club 328 name, regardless of whether 328Jets arrive. It has changed five times in the last six years, “and that is plenty,” said Farge.