Bizliner business sees slight dip in demand

 - December 28, 2009, 7:42 AM

In March last year, it appeared the bizliner completion centers were sailing through the recession with barely a ripple, working at capacity with slots filled well into  2012. Since many customers for such aircraft are wealthy individuals and governments, it appeared that order cancellations and deferrals would be minimal. And so they were.

Almost a year later, however, it seems the segment was not quite so immune to the recession as originally thought, and some in the green completion business are seeing a softening of the market.

An Airbus spokesman declined to provide specific numbers but reported some “uncertainty.” He added, “The market has been quiet for everyone during the past year [and] orders have not quite kept pace with deliveries.” However, he added that the company has nevertheless been delivering executive versions of its airliners at a rate of about one a month, “which is an all-time high.”

At Boeing Business Jets, marketing director Chuck Colburn said his company saw the backlog shrink slightly last year due to a few cancellations and a lack of significant new orders in recent months. However, he added that the company has seen “an increase in inquiries…and a sense of gradual turnaround in the market.” He continued, “We expect the backlog to stay steady in 2010 and start to grow again in 2011.”

According to Colburn, “Completion capacity is always a consideration as each customer has unique requirements. If anything, we see a greater need for interior completion capacity in the coming years.”

Also on the positive side of the ledger, orders continue to come from the Middle East, and a growing number of single-aisle aircraft are available there for charter. Al Jaber Aviation in Abu Dhabi has on order five Lineage 1000s and six Airbus ACJs. The first Lineage is due for delivery in September, and the charter operator is expected to take delivery of the first A318 Elite early next year.

A Lineage 1000, operated by Prestige Jet on behalf of Aamer Abdul Jalil al Fahim of Abu Dhabi, was prominently displayed at the Dubai Airshow in November. Emirates-based Falcon Aviation Services and Al Habtoor Group have also placed orders for the Lineage.

While Embraer acknowledges that demand for the Lineage has softened, the company claims its order book remains at more than 20 aircraft. Half of those are destined for Middle East customers. There have been “some requests for order cancellations and deferrals,” but a spokesman said Embraer is negotiating with these customers to find an alternate means to accommodate their needs.

Also on a positive note, Comlux says demand for its executive single-aisle aircraft for charter remains strong. The Swiss charter firm is operating two A318 Elites.
Comlux is also investing $3.4 million in expanding its Comlux America interior completion center in Indianapolis. The facility will receive its first Challenger 850 this month and take delivery of its first Airbus ACJ next month. According to company president Ettore Rodaro, the current staff is approaching 100 and that number is expected to reach about 250 by the end of 2012.

The only lull at Gore Design Completions in San Antonio is a few weeks over the holidays between jobs. According to owners Kathy and Jerry Gore, the independent completion center recently delivered an Airbus A340-500 and a BBJ2. The lull will come to an abrupt halt this month with arrival of another widebody project. It is just one of five widebodies and one single-aisle aircraft under contract through 2013.

Lufthansa Technik last month told AIN that the pace of completions work last year did not reach 2008 levels. However, a source at the Hamburg, Germany-based center, pointed out, “2008 was a record year.”

While most of the completion slots are sold out through the end of 2013, Lufthansa Technik doesn’t expect an increase in activity this year, partly because the Airbus A318 Elite completion work is being shifted to its Bizjet International facility in Tulsa, Okla.

Jet Aviation–which has its single-aisle and widebody completion facilities in Basel, Switzerland–reported a softening of demand for green completion work.

Last month the center laid off 94 permanent employees at the Basel facilities and announced that as many as 100 more positions would be vacated, including contract personnel whose contracts would not be renewed.

According to a spokesman, Jet Aviation had waited as long as possible to “right-size,” but it had to take into account projected demand through this year. Putting the layoffs in perhaps a more appropriate perspective, he also noted that Jet Aviation employs 1,600 people in Basel, including some 450 new hires taken on when activity was particularly high.

Jet Aviaion also has three letters of intent for green completion of three Boeing 787s and is in the final contract phase to do a Boeing 747-8 interior. The first 787 and the 747-8 are due to arrive in Basel in 2012.

If there is some softening of the single-aisle and widebody executive market, it appears to be minimal, based on reports from Airbus, Boeing and Embraer. Activity at the independent completion centers specializing in single-aisle and widebody interior finish work would seem to confirm that whatever drop in activity exists, it is minimal.