2007 Completion and Refurbishment

 - July 3, 2007, 7:06 AM

At the European Business Aviation Convention & Exhibition (EBACE) in late May, a representative of Airbus expressed frustration at the difficulty in finding sufficient slots at independent completion and refurbishment centers to do executive cabin work at the same pace the company is producing airplanes.

The remark should have come as no surprise. Manufacturers such as Airbus and Boeing, and more recently Embraer, rely on independent completion centers to build and install interiors in aircraft selected from their production lines for executive configuration.

In the past, the arrangement has worked well. The number of new bizliners being sold was about equal to the capacity of the independent centers. And if it were only new bizliners queuing up, the capacity might still be there, even with the heavier demand. But production slot availability of new bizliners is now stretching well into the next decade, and buyers are dipping deeply into the inventory of used airliners to be reconfigured for private use while they wait for delivery of the new airplane.

The crunch is compounded further by large numbers of widebody airplanes being sold for executive use. They require a large hangar and eat up a larger portion of a completion center’s resources and, once the airplane has been rolled in, the cycle time can be as long as two years.

All of this is leaving OEMs and used aircraft brokers scrambling for early completion center slots and looking for solutions to the problem.

At EBACE, Airbus announced that it has appointed Fokker Services of The Netherlands as an additional completion center and is also reviving the defunct, company-owned Sogerma completion center. The resurrected facility on the Airbus premises in Toulouse, France, has been renamed Airbus Corporate Jet Center and will be managed independently. Initial plans by the new center call for the completion of three Airbus executive airplanes a year.

Airbus had already authorized two U.S. independent completion centers to do aircraft from the ACJ line–Associated Air Center in Dallas and Gore Design Completions in San Antonio.

Airbus has firm orders for 14 aircraft in the ACJ series (the A318 Elite, A319CJ and A320 Prestige), and has received firm orders for three executive versions of the A340 since the first of this year. That is three orders fewer than the company took in all of 2006, suggesting that Fokker Services and the Airbus Corporate Jet Center, as well as Associated and Gore, are likely to be busy for some time to come.

Boeing Avoids the Crunch
Boeing Business Jets reports similar activity, having taken orders for seven Boeing Business Jets (BBJs) and two executive 787s since January. In all, Boeing has taken orders for 29 airplanes in the past year, including four 747-8s.

According to Boeing Business Jets president Steven Hill, the next available slot for a new BBJ of any sort is 2011, the first slot for an executive 747-8 is 2012, and the 787 is already being sold into 2015.

Boeing offers its BBJ customers a choice of six U.S. completion centers for interior work.

According to a spokesman, Boeing Business Jets has yet to lose a customer due to difficulties in finding slots at a completion center that meets customer expectations.
“We’re confident that by encouraging customers to plan ahead and work with the completion centers well in advance of aircraft delivery, there’ll be sufficient interior finish capacity,” said Hill.

The question of whether there are sufficient completion slots in the near term to meet demand can be debated, but there is no doubt that many, if not all, the independent shops are already working at capacity.

Gore Design Completions is not quite at full capacity, said president and CEO Jerry Gore, who noted that the San Antonio-based center has two green BBJs in the hangar. A Boeing 767 is scheduled to arrive next month, along with an A320, “and we’re already building cabin components for both of them,” he said. More indicative of completion crunch, added Gore, is that “We’ve got people looking to lock in slots for BBJ interiors as far out as 2011, and they’re willing to put down substantial, non-refundable deposits to hold them.”

Lufthansa Technik in Hamburg, Germany has just delivered its first Challenger 850 as part of a 17-aircraft contract with Bombardier. The company has five 850s in the completion process on three parallel interior assembly lines.

Lufthansa Technik delivered its first Airbus A318 Elite earlier this year to European charter operator Comlux and will take in another Elite later this year, followed by a third next year.

According to LHT senior v-p of marketing and sales Walter Heerdt, the company plans to add a second Elite completion assembly line, with the goal of turning out as many as six a year. “We are full for the next year,” said Heerdt, “and the next widebody slot is a little more than a year out.”

Jet Aviation in Basel, Switzerland, is Lufthansa Technik’s fierce competitor, and according to a spokesman Jet Aviation is “almost at capacity for 2007.” The company delivered an executive 747-400 to a Middle East customer earlier this year, is working on an A330-200, and was planning to take in a 757-200, a 747-400 and an A340-600 this summer.

Associated Air Center, a Landmark Aviation independent completion center in Dallas, has been in the bizliner business for some 30 years and, according to president Jeff Bosque, “We’re full for 2007 and well into 2008.” As of early May, the company had three ACJs, two BBJs and a Boeing 767 in its hangars, and Bosque said another ACJ and another BBJ were ready to roll in as soon as there was room.

While the larger, and perhaps better known, independent completion centers capable of handling bizliner interiors are working on a backlog, executives at lesser known centers are wondering, “How about us?”

Indianapolis Jet Center president Randy Keeker had a response to Airbus concerns about bizliner completion slots. “Maybe they just haven’t looked far enough.” Keeker’s hangars are currently packed with seven Challengers, a CRJ200 being converted to executive service for a Chinese customer and six Learjets. He expects to take in an ACJ for a major cabin refurbishment later this year and added, “We have the capacity for more.” The company also has the experience, having done major executive refurbishments on a 767, two 737s and two 727s in the past several years.

Flying Colours in Peterboro, Ontario, is converting a CRJ200 to a private jet for an Indian customer, and according to Sean Gillespie, director of sales and marketing, “We’re finalizing contracts for several more.” He added, “We do have the capacity and the skills to handle an ACJ or BBJ.”

Also in Canada, Goderich Aircraft of Huron Park, Ontario, has the capacity to handle the smaller bizliners. The company had an MD-87 executive conversion scheduled for delivery at the end of last month. Another MD-87 is scheduled to arrive before the end of the year, and the schedule is being adjusted to accommodate a 727 executive conversion.

Phazar Aerocorp of Fort Worth, Texas also has the capacity to handle bizliners the size of the ACJ. The company recently delivered two MD-87s, one of which was converted to executive use for Russian customer Sistema; Phazar is at work on a third MD-87. The company did a major executive refurbishment of a BBJ in 2005 and is working on a second one scheduled for delivery later this year.

Airbus found a possible solution to a perceived completion slot shortage in its alliance with Fokker Services and in its new Airbus Corporate Jet Center, and Jet Aviation is expanding its capacity. But for the most part, independent completion and refurbishment centers are remaining cautious on the subject of major expansion, recalling the layoffs and empty hangars that accompanied the last economic downturn.

There Is Only One Direction, and It’s Up
If the bizliner side of completion and refurbishment is being challenged, it is no less so on that side of the industry dedicated to smaller business jets, from the Global Express and Gulfstream down to the very light jets and turboprops.

The General Aviation Manufacturers Association (GAMA) described last year as “a banner year” for general aviation. Total deliveries for business jets increased from 750 in 2005 to 885 in 2006, up a healthy 18 percent.

In May, GAMA released its first-quarter 2007 delivery numbers, which showed a continuing upward trend. Deliveries for business jets increased 12.2 percent, from 188 aircraft in the first quarter 2006 to 211 for the same period this year.
If deliveries in the first quarter of this year were not much to dance about, reported sales to date have been little short of spectacular and are a better indicator of what completion and refurbishment centers can expect.

At EBACE Hawker Beechcraft announced it had reached an agreement with fractional operator NetJets Europe for the purchase of 32 Hawker 4000s, a deal valued at more than $700 million, with deliveries to begin next year and continue through 2016.

Bombardier celebrated orders taken at EBACE from three customers for four aircraft valued at about $101.4 million, and in a separate announcement revealed an order for two more Learjet 40XRs and a Global Express XRS from Swiss charter operator VistaJet. In fact, the company’s sales figures for its first quarter (February 1 to April 30) showed 83 aircraft sold, compared with 33 for the same period last year.

Also at EBACE, JetAlliance of Oberwaltersdorf, Austria, ordered 25 more Cessna Citations valued at $280 million. The company already has orders for 22 Citations due for delivery this year and 25 more next year.

Gulfstream launched its EBACE presence by announcing a contract for 20 G450s from National Air Services of Saudi Arabia, which placed a firm order for three and took options on 17 more. The agreement is potentially worth more than $650 million if all the options are exercised. It calls for deliveries to begin in the third quarter of 2009 and continue into 2014. In terms of growth, the Savannah, Ga.-based OEM saw total production increase from 89 aircraft in 2005 to 113 last year to an anticipated 139 this year.

Hot Used Market adds to Refurbishment Crunch
With OEM production slots for new business aircraft sold out well beyond 2010, and in some cases as far out as 2015, the rush is on for used airplanes as well. A year ago buyers were already “cherry picking” among the low-time and most desirable used jets–Falcon 900s, Global Expresses, Gulfstreams. Now the market is even tighter. The used business jet inventory in June last year was 1,723 aircraft. Last month that number was 1,643.

What’s more, said one broker, “I’d swear there are people putting their airplanes on the market for absurd prices, just to see if anyone is willing to pay that much.”
By “that much,” he is talking about asking prices of as much as $55 million for a used Gulfstream G550, “which is a tidy profit for an airplane that originally cost maybe $43 million.” In fact, it is about $9 million more than the current list price for a G550.

While long lead times in new business jet deliveries are in part driving the market for used aircraft as interim transport, other factors include the relatively reasonable cost of borrowing money and market confidence in the residual value of used aircraft.
“You get a sense of what’s happening when the escrow companies are not as quick to call you back as they were,” said Bryan Comstock, president of Long Beach, Calif.-based broker Jeteffect.

According to Comstock, “It’s a seller’s market.” Virtually the entire inventory of Gulfstream G450s has dried up at about $37.5 million each, Global Expresses and Gulfstream G550s “are selling in a heartbeat, and the Falcon 900 inventory is disappearing fast.”

Asked if he would describe the used aircraft market as “volatile,” he explained that this would suggest an unstable market, which is not the case. “It’s only going up, and the going price is being tested with every new sale.”

All this, as might be expected, is benefiting the refurbishment centers as used aircraft buyers invariably come in for minor and major interior work and exterior paint.

Some Doing Very Well, Others Doing Very, Very Well
Some refurbishment centers are doing very well, and some are doing very, very well. An executive at one large facility has become selective about which refurbishment jobs he takes on. “We’ve had to turn some refurb business away,” he said, but added, “At the same time, we don’t want to lose the refurbishment business that helped us get this started.”

Landmark Aviation president Shawn Vick said the company’s large Springfield, Ill. completion and refurbishment center did 91 full interior completions last year, and all indications are that this year will be even better. The company had focused on Falcon refurbishment work and, with the help of a new Falcon 50 cabin mockup, has reduced major cabin refurbishment time to 12 weeks. “Over the last year,” he said, “we’ve moved consciously into refurbishment work on Bombardier’s Challenger and Global Express line, and we’re finding as much demand in the large-cabin market as we are in the midsize-cabin and small-cabin segment.”

Bob Candler, v-p and general manager of Landmark’s Springfield center, believes cabin electronics is a powerful persuader in the decision to refurbish an interior. Any airplane more than a few years old is carrying old technology, and everybody wants the latest and the best, he explained. “We’re seeing interiors with some very complex cabin management systems, and almost every customer is asking for total system integration.”

The Springfield facility recently underwent a major expansion that included a paint shop capable of accommodating aircraft as large as the Gulfstream G550. The facility is currently doing about 60 full exterior paint jobs a year. But despite all the expansion, said Vick, “If the current trend continues, we envision making a decision in mid-2008 on additional growth, but it would have to be a prudent business decision.”    

Vick said a number of OEMs have approached him about the possibility of Landmark taking on green completion work. While Landmark is interested, he said, “There’s so much demand here for refurbishments and retrofits, we’re not prepared to make any more than short-term commitments to doing green airplanes.”

Robert Roth, president of Global Aircraft Interiors, described last year as “fantastic” in terms of refurbishment work, with about a 35-percent increase in revenue, “and 2007 so far is looking just as good or better.”

The Ronkonkoma, N.Y. center is focused on midsize and large business jet interiors. In past years, Roth said, most interiors were “fairly basic,” for customers concerned about resale value and charter.

At Savannah Air Center, a new 101,500-sq-ft completion and maintenance hangar is going up that will hold up to six large-cabin aircraft. “And there will still be room for some smaller aircraft,” said CEO Jeffrey Zacharius.

“Business was better in 2006 than in 2005, and 2007 is going to be even better,” he said. “The company is scheduling refurbishment work as far out as 2009. I feel very good about this industry for at least the next half-dozen years,” he added.
Gulfstream is in the process of doubling the size of its Savannah Service Center and is aggressively soliciting refurbishment projects. “We continue to seek out refurb business, not only from existing Gulfstream operators but also from competitor aircraft operators,” said a spokesman.

Regional Airliners Getting Executive Facelifts
One of the more unconventional boosts to the refurbishment side of the business has been the recent run on regional airliners for conversion to executive and corporate shuttle configuration. The Canadair CRJ200, a 50-passenger twinjet, is particularly popular.

As of last month, Midcoast Aviation had done four Canadair CRJ200 conversions and was expecting more. At Flying Colours in Peterborough, Ontario, the finishing touches are now being put on an executive CRJ200 for an Indian customer and, added director of sales and marketing Sean Gillespie, “We’re finalizing contracts on a bunch more.”

PATS in Wilmington, Del., might be the biggest beneficiary of the run on CRJ200s. The DeCrane Aerospace company has just signed a contract to do five in executive configuration for “a major U.S.-based company” and is in discussions with four other customers, each of whom wants one.

“If you’re looking for a large-cabin aircraft and don’t need the 6,000-nm range of a Global or Gulfstream and aren’t going to pile a lot of weight into the interior, it’s a great choice,” said Mark Anderson, director of sales at PATS. Another advantage, he added, is that there are a lot of pilots who are type-rated in the CRJ200.

Sources in the industry say a used CRJ200 will cost in the $7 million to $9 million range. Add to that another $3 million for the interior and about $1.3 million or so for auxiliary fuel tanks to bring the range up to about 3,000 nm, “and you’ve got a pretty nifty airplane for about half the cost of a new Challenger 850 and about a third the cost of a Global or Gulfstream G550.”

In the European market, BAe Systems is marketing executive versions of its BAE 146 and Avro RJ, which in regional airline configuration carry 70 and 100 passengers, respectively.

“It’s a niche product,” said a BAE Systems spokesman in Prestwick, Scotland. “It’s not the fastest airplane [about 400 knots], nor does it have the longest legs [1,500 nm], but it has extremely good short-field and hot-and-high performance characteristics and it’s the largest jet certified for operations at London City Airport. For the money, it’s a considerable piece of real estate into which you can put some very nice options.”

A used BAe 146 regional airliner sells for about $2.5 million. An executive interior would run another $3 million or so, although some might overrun that figure somewhat. Amiri Flight of Abu Dhabi in the United Arab Emirates recently put about $6 million into an executive version of the RJ70 variant completed by Jet Aviation in Basel, Switzerland.

Oberpfaffenhofen, Germany-based 328 Support Services sees a bright future for the Fairchild Dornier 328Jet in its Envoy guise as a corporate shuttle and as a private executive transport. The company recently delivered a third executive version to Mikado Capital in late May, and the 14-passenger twinjet has already been sold. Two executive 328Jets delivered earlier to Mikado are now in service with its Icelandic charter operator and subsidiary, IceAir of Reykavik, Iceland. “We’re getting an increasing number of requests for the 328Jet in an executive role, especially when fitted with long-range tanks,” said 328 Support Services CEO Dave Jackson. “We’re currently responding to requests for interior conversions from a number of new customers for up to 10 more aircraft.”

Also in that niche market between the larger ACJs and BBJ bizliners and the smaller large-cabin Globals and Gulfstreams is Bombardier’s Challenger 850. The Canadian OEM has contracted with Lufthansa Technik in Europe and Midcoast Aviation in the U.S. to do the interior completion work on the standard-cabin 850 line.

The A318 Elite is priced at about $47 million, the Lineage 1000 at about $40.95 million and the Challenger 850 at $25.5 million. All prices are for a finished airplane with typically equipped standard cabin.

New Niche-market Business Jets Gaining Favor
Niche-market business jets at more reasonable prices have found much favor in the past couple of years, and they are providing more than a little work for independent completion centers.

One of the best known is the A318 Elite from Airbus. The first, configured for 18 passengers, was delivered this year by Lufthansa Technik to Comlux. A second Comlux Elite is scheduled for delivery this year and three more are on order. At EBACE, Airbus announced a firm order for five more Elites, and an optional sixth airplane, from U.S. launch customer Petters Group Worldwide.

Lufthansa Technik has taken in its second A318 and a third is due into the Hamburg completion center next year. The company plans to expand its A318 completion process to two interior assembly lines capable of turning out six aircraft a year. In the U.S., Associated Air Center and Gore Design Completions have received Airbus approval for A318 interior completions.

Embraer last year announced the launch of the executive Lineage 1000, based on its E190 one-hundred-passenger airliner. The order book is approaching 10 aircraft, and PATS expects to begin work on the first interior next month. To date, PATS has the exclusive contract for Lineage interiors. The twinjets will be flown green to the facility in Wilmington, Del., for installation of the interior, then returned to Brazil for exterior paint and installation of auxiliary fuel tanks.

The OEMs Are Busier than Ever
Few OEM completion centers are working harder than Bombardier to keep up with the delivery schedule. “We’re extremely busy now,” said Eric Martel, general manager for Bombardier’s Challenger and Global lines.

Martel said that despite late deliveries last year, the completion process is “catching up very nicely.”

The Global 5000 cycle time is about 28 weeks, he said, and “heading down toward 24 weeks by the end of this year.” Introduced last year, the Global Express XRS has a cycle time of 34 weeks, longer than desired, but Martel said the company expects that to be down to 28 weeks by the end of the year. Martel said the company also has a team working full time on how to reduce the Global cycle times even more.

To help move aircraft through the completion process, Bombardier has also contracted with independent completion specialists Midcoast Aviation and Savannah Air Center. Midcoast is doing both Global variants as well as the Challenger 605 and the Challenger 850. Savannah is providing completion work on both Global models, having delivered its first Global 5000 last October and its first Global XRS in May this year.

On the other side of Montreal’s Dorval Airport, Innotech Aviation is gearing up to begin doing Global 5000s and Global XRSes by this fall.

Challenger 300 interiors are being built at a C&D Aerospace facility near the airport and taken as shipsets to the nearby Bombardier facilities for installation.

As for the 605, Bombardier has created a “lean line” approach, borrowing from Japanese auto manufacturer techniques. A U-shaped interior assembly line holds five different stations, and each aircraft progresses clockwise through the line at the rate of about 10 days per station.

According to 605 program director Stephan LeBlanc, the first five Challengers are already moving through the completion line. “We’re committed at this point to cycle times of 26 to 30 weeks, but we expect over the next two years to get it down to 22 weeks (including paint, flight test and delivery).

Cessna Avoids the ‘Me Too’ Cabin
At Cessna Aircraft in Wichita, the cabin completion process is more than ever one of “a fully equipped approach,” said Cindy Halsey, v-p of interior design engineering and development. “Most items are standard rather than optional [and] if we don’t have it, we’ve pre-wired to install it. Even the entertainment package and the moving map are standard.”

The CJ4, said Halsey, will be the company’s first fully integrated cabin, from front to back, so the customer has more rather than less flexibility.

According to Halsey, Cessna saw this tremendous ramp-up long before it started and “we began preparing ourselves and our partners, thinking of the interior as part of the entire airplane’s lifecycle. We have designers involved at every step, from the earliest stage of planning an airplane.”

A major goal at Cessna in the coming years will be to identify and adapt to “disruptive technology.”

Disruptive technology, explained Halsey, is technology that changes the entire game–for example, when automobile manufacturer Lexus focused on eliminating the need for transmission-fluid changes, while other manufacturers were continuing simply to make them easier.

After listening to customers who had just gotten out of their new Lexus or similar upscale automobile ask why they couldn’t get the same kind of comfort and convenience in their new airplane, Halsey and her team took a close look at what the automotive industry was doing right and adapted it to their own use. “We have a new generation of first-time owners who are not inclined to accept ‘no’ for an answer. These people didn’t get where they are because they’re stupid. They’re technologically savvy, and we’ve discovered that simply doing it their way is far easier than doing it our way and then trying to convince them that it’s their way.”

Cessna is now developing what it is calling its “Large Cabin Concept” (LCC) jet, unveiled at last year’s NBAA Convention. It is a concept that began to move in 1995, and Cessna design and completions teams were involved from the beginning, “flirting with a wider cabin.”

Halsey said the airplane’s cabin will most definitely not be a “me too” area. The team wanted a cabin with its own personality. “We have a lot of tricks up our sleeves that we will unveil as we go forward that will differentiate it from the ‘me too’ cabin.”

One of the most important facets of the cabin is comfort, and a key element, if not the key element, is seats. “One of the metrics we were given is that people need to walk into this product, sit down in the chair and say, ‘Ah, they get it. They get it!’”

In doing the mockup, Cessna took to heart criticism from European customers who felt U.S. interior designs were too bland. European tastes are different, said Halsey; “they lean toward a more robust palette of colors, a richer environment–lime greens, bright rust–the same European couture we’re now seeing spill into the U.S. market.”
Halsey feels the design of the new LCC cabin has gone in the right direction. After looking at the mockup, said Halsey, “Two of the staunchest critics I have ever worked with said, ‘This is just fabulous…very chic. This is so not Cessna.’” Among the improvements in the LCC cabin are:

• a more spacious foyer type entrance at the cabin door;

• a large galley;

• larger windows more ergonomically placed;

• a new lavatory design with storage that doesn’t look like storage, and additional divider storage for small items.

Dassault Falcon is moving into a new era at its Little Rock, Ark. completion center. The ultimate goal is 120 aircraft completions a year, of which Jet Aviation in Basel, Switzerland, is expected to do about 20. New Falcon 7Xs are arriving at Little Rock and entering the completion process.

As of mid-May, the Little Rock facility was working on its seventh 7X and was
expecting to deliver 10 aircraft by the end of the year. Once the entire completion process has matured, said Robert Smith, senior v-p of operations at Little Rock, Dassault expects to be capable of delivering 20 airplanes a month, including Falcon 900EXs, 900DXs and Falcon 2000EXs. (See Falcon completion ramp up story on facing page.)

Eclipse Works To Reduce Cabin Completion Time
After receiving both the type certificate and production certificate for its Eclipse 500 light jet, Albuquerque, N.M.-based Eclipse Aviation is working to catch up on promised delivery dates. “We’re behind, but we’re catching up fast,” said Matt Brown, director of product marketing. C&D Aerospace in California is building the interiors and shipping them in kit form (including carpet, sidewalls, panels, fittings, hardware, bracketry and trim) for installation by Eclipse. The seats come from Northstar Aerospace in Duluth, Minn.

According to Brown, “The install times have gone from three days to 55 hours, and the most recent was 30 hours.”

Until a couple of years ago Embraer could offer business aviation only the Legacy 600, an executive version of its ERJ 135 regional airliner. Today, however, the Brazilian aircraft manufacturer has broadened its business jet offerings significantly. The first flight of the Phenom 100 very light jet is imminent, and the Phenom 300 light jet will fly next year. The order book for its Lineage 1000, an executive derivative of the E190 regional jet, is approaching 10 airplanes.

A 128,800-sq-ft facility at Gaviao Peixoto will house the completion facility for the Phenom lines, and a new paint shop is to be completed by the end of the year.
The company expects to be able to install Phenom 100 interiors in a single day. Including modifications, exterior paint and flight test, the completion cycle is expected to take no more than nine days.

Few OEMs have had to ramp up production more quickly than Gulfstream, going from 89 airplanes in 2005 to 139 this year. But the company has apparently done it successfully and credits much of its achievement to a policy of total control. “Gulfstream performs its own completion/final phase manufacturing work, ensuring that it can control its own destiny and not be dependent on outside sources,” said a spokesman.

It is a widespread operation. Green airplane interiors are completed in Savannah; Long Beach; Brunswick, Maine; Appleton Wis.; and Dallas. Refurbishment work is done at the six Gulfstream and six General Dynamics Aviation Services centers.
If the completion and refurbishment industry is singing today, the song is probably the joyous music of Irving Berlin’s “Blue Skies.”

“We have a backlog through 2007, and we’re now working into the first two quarters of 2008,” said Landmark Aviation’s Vick. Part of the company’s strategy has been to present itself to customers as a fleet planning partner for everything from avionics upgrades to cabin interior refurbishment, establishing a timeline for those processes as far out as 36 months. “If the trend continues–based on record delivery forecasts through 2010 by the OEMs–we envision making a decision on expansion sometime in mid-2008.”

“Last year was a great year,” said Eric Roth, president of International Jet Interiors in Ronkonkoma, N.Y. “We were up 14 percent over 2005, and based on the first quarter of this year we don’t foresee any change.”

Savannah Air Center, which does medium- and large-cabin business jet interiors, and bizliner cabin specialist Associated Air Center are seeing more European buyers.

“We’re seeing a lot of European influence on interiors,” said Associated’s Bosque, agreeing with Cessna’s Halsey. “One customer specifically asked for some Versace.” And he added with a chuckle, “It doesn’t matter whether they’re European, Middle Eastern or American, everybody seems to want a bidet in the lavatory.”

Burnet Interiors, like other independent refurbishment centers in Europe, is working at near-capacity. “Last June,” said Burnet manager Franck Burnet, “we delivered a BAC-111 major refurbishment and we doubled the size of the facility, from 2,624 square feet to 5,249 square feet.”

Burnet said the Genvea, Switzerland-based facility saw an increase in business of 25 to 30 percent in 2006, and that the growth was continuing into 2007. “We can see that the market is growing, and capacity is shrinking. And we are starting to see a shortage of skilled technicians, and we are hearing of delays in the receipt of materials.”

Meanwhile, Burnet said he is seeing some of the same expansion of a global market. “Today we work with companies in Africa, Romania, Cuba; we’ve had Russian customers, and we are in discussions with a Chinese customer now.”

Bosque also noted that there seems to be a growing number of aircraft being purchased for private use, and in many cases family use. The result is more interest in special playroom compartments for children.

“About 70 percent of our business now is from outside the U.S.,” said Zacharius of Savannah Jet. “The weaker dollar brings work to the U.S. because it’s cheaper.” He also noted that money is being freed up in Asia and India for private aircraft, “and Russia is a marvelous market.”

Midcoast Aviation’s Roger Renaud, senior v-p of completion and modifications, said the Cahokia, Ill. center’s green interior completion business was up about 80 percent last year, and refurbishment remains relatively steady at about 15-percent growth. So far this year, said Renaud, “Let’s just say the increase in green completion business is extreme.”

At EBACE, Gore Design’s Jerry Gore recalls “solid meetings throughout the entire show with at least a half-dozen widebody customers” and said his best estimate is that the completion industry for heavy bizliners is going to be “pretty solid over the next five years.”

In addition to sending a major exhibit to the European show, Cessna Aircraft also sent along four interior designers. Said Halsey, “We were spec’ing more than a dozen aircraft at the show.”

At Syncro Aircraft Interiors in Van Nuys, president Barbara Cesar described activity at her shop as “as much as we can handle” and added, “we’re hiring.”

Finding Good People and Keeping Them
While no one admits to being negatively affected by a building shortage of skilled technicians–upholsterers, design engineers, installers–everyone is hiring.
“We’re hiring,” said Zacharius in Savannah. “We’ve teamed with the state and are supporting the Quick Start program to move people into the airframe and powerplant pipeline. When you find good people, you hire them, and you do your best to keep them.”

In Europe, shops are also hiring. A Jet Aviation spokesman in Basel said the completion and refurbishment giant is “looking for 20 to 30 skilled technicians and craftsmen a month.” But he noted as well that “while there is a shortage of experienced engineers and licensed mechanics, it has not affected the company’s performance.”

At Lufthansa Technik, a spokesman said the German market to date has been an adequate source of good, skilled labor. Nonetheless, he added that the company would benefit if Airbus laid off some of its employees.

Also to be considered is the balance of capacity and human resources. “It’s easy to build a simple hangar in about nine months,” said Lufthansa Technik’s Heerdt. “But you can’t fill it with people so quickly.” And he pointed out that people are more than a resource; they are a responsibility, and when times are not so good, “We don’t have the luxury of simply saying, ‘We don’t have any more work for you; please go home.’”

The question is whether all this activity in the completion and refurbishment industry is an indicator of the future. Despite the demand for aircraft that promises to keep manufacturers busy well into the next decade, many completion and refurbishment facilities are taking a somewhat cautious approach when it comes to expanding facilities and hiring.

If there is an unflinchingly optimistic outlook, it comes from Dassault Falcon president and CEO John Rosanvallon. In a recent interview, he identified two long-term trends that will serve to limit the impact of a regional economic recession, such as that experienced by the U.S. from 2001 to 2004.

First, there is a broader geographical market spread. He noted that while Western Europe has become Dassault Falcon’s number-two market, there is also growth in Eastern Europe and Russia. He commented that the company was fortunate that when perestroika came in the old Soviet Union in 1991, there was no real competition in terms of business aviation. Now, nearly two decades later, amid an emerging oligarchy with a taste for private aircraft, Western business aircraft manufacturers are happy to fill the orders. In fact, he added, “two or three” of the recent orders for executive versions of Boeing’s 787 are from Russia.

He also pointed out that in 2005, for the first time, Dassault sales were divided about evenly between the U.S. and the rest of the world. Last year that percentage jumped to 40/60. The first four or five months of this year appear to confirm that trend, said Rosanvallon, and he added, “I am convinced that it is a long-term trend.”
Rosanvallon’s contention would appear to be backed up by Boeing Business Jet orders. According to a spokesman, “The BBJ order base four years ago was 35 percent U.S., and today that number is down to 29 percent.”

As further evidence of a greater market spread, virtually every aircraft manufacturer (Dassault among them) is identifying Asia as another emerging market. However, said Rosanvallon, the French manufacturer sees Asia in terms of “macro-markets,” such as Hong Kong and Macao. As for Asia as a whole, “It remains as yet an unfilled promise.”

The second factor that will serve as a buffer against another recession, or a recession in some other major region, said Rosanvallon, is a new customer profile made up primarily of successful mid-level businesses that are creating a new market for business aircraft.

There was a time when the only business jet orders from the Middle East came from members of the royal families, he pointed out. Now there is a growing market of second-tier businessmen who are buying business aircraft.

“All this does not make the market ‘recession-proof,’” warned Rosanvallon, but, he added, “it does make it more stable.”

'2007 Completion and Refurbishment' PDF