Flying Colours: Growth Without Sacrificing Quality

 - October 2, 2011, 12:05 AM
Green Challenger 850s are a familiar sight in the Flying Colours hangar. The Peterborough, Ontario completion and refurbishment center has delivered a total of seven 850s since the first one in 2009 and has four more under way.

While much of the completion and refurbishment industry was battling to remain afloat during the recession, Flying Colours in the quiet Canadian city of Peterborough, Ontario, discovered a niche market in converting retired Canadair Regional Jets (CRJs) to executive use, and more recently, abundant work outfitting green Challenger 850s from Bombardier.

In the past five years, the family-owned company has delivered nine converted CRJs and a tenth is scheduled for delivery this fall. Three more are in the pipeline–two to be outfitted at Flying Colours and the third at JetCorp, the company’s St. Louis-based subsidiary. “This demonstrates the continued demand for conversions as the market recognizes the economic and practical value of converted aircraft,” explained director of sales and completions Sean Gillespie.

That demand has spanned the globe, with orders for the ExecLiners coming from customers in Lebanon, Macau, Malaysia, Russia and the U.S. Flying Colours has participated in virtually every phase of those orders, from aircraft acquisition to final delivery.

The cost of a low-time, used CRJ airframe ranges from $5 million to $7 million and, depending on the demands of the customer, the interior outfitting (including inspection and removal of the old airliner interior, avionics update, maintenance and exterior paint) costs from $5 million to $6 million. What the customer is getting is a large-cabin executive jet at less than half the cost of new, Gillespie added.

OEM Partnership

While CRJ conversions, he explained, have been “key to our growth,” a partnership with Bombardier as a preferred completion center for the Canadian OEM’s green Challenger 850 line since 2008 has helped considerably. It is a logic that stems from the fact that the 850 is a direct descendant of the CRJ200 regional jet in terms of its airframe and much of the engineering. In fact, an auxiliary fuel system that extends the range to approximately 3,000 nm was developed and certified by Flying Colours and is installed as standard in both the CRJ conversions and the 850s.

Flying Colours has delivered seven 850s since the first in 2009. The most recent were to Middle East and Russian buyers. Four more are in various stages of outfitting–three in Peterborough and one in St. Louis. Perhaps more telling in terms of market demand is that four of the first seven deliveries were to customers in Asia over the last 12 months. A total of six will have been delivered in Asia by the end of 2012.

As for the delivery to aircraft charter and management provider ExecuJet Middle East, this particular 850 is just a bit beyond the standard three-zone cabin. It also showcases Flying Colours’ ability to handle more highly customized interiors. The ExecuJet airplane features walnut (European) burl veneer, customized gold inlays and an in-flight connectivity package, including the TrueNorth Avionics Simphonē broadband with Wi-Fi capability and iPad functionality.

Understandably, Flying Colours is hiring. And to further ensure a pipeline of skilled workers, the company has launched a specialized training program with nearby Fleming College. Students who complete the training go on to a three-month trial period at Flying Colours before being offered full-time positions. According to Gillespie, the company hires 70 percent of the 15 to 20 individuals who advance to the trial period after training.

Flying Colours employs 180 at its Peterborough facility and 120 at JetCorp.

Along with the growing demand comes expansion, and the company is in the early planning stage for a new hangar that would add 60,000 sq ft to the existing 110,000 sq ft. The new hangar will be sufficient, said Gillespie, to accommodate single-aisle airliner conversions as large as an Airbus Corporate Jetliner or Boeing Business Jet, “if we chose to go that route.” Construction is expected to start next year. There are also plans for expansion outside the U.S., he added, with a formal announcement expected at the NBAA Convention this month.

Currently, Flying Colours has Transport Canada and EASA equivalents of FAA Part 145 repair center certification. Flying Colours is a Bombardier-approved service center and can handle airframe modifications, avionics upgrades and exterior paint, in addition to cabin completion and refurbishment.

JetCorpProjects

While the center in Peterborough occupies itself primarily with the CRJ conversions and 850 green completion work, JetCorp in St. Louis handles a variety of business aircraft interior refurbishment, and the occasional 850. JetCorp also recently received a contract from a fractional operator to install Wi-Fi on 40 of its aircraft.

Approximately 70 percent of the work at Flying Colours is from completion and refurbishment and 30 percent from maintenance contracts. At JetCorp, it is a 60/40 split.

In business for 22 years, Flying Colours is looking forward to another 22, with a growing worldwide market share. Founder John Gillespie purchased the company in 1989 when it was a small paint shop. The acquisition was meant to serve the family’s Rapid Aircraft Repair shop and the entire business became Flying Colours. John remains president and CEO and is still active in its operation.

Twin sons Sean and Eric are directors of sales and completions and ofcompletion sales and management, respectively, and their sister, Kate Aherns, is director of interior design.

Based on a steady growth in orders since the beginning of the first quarter 2010, the company anticipates growing demand for midsize business jet refurbishments in the coming years. “We have seen a big increase in midsize refurbishments from both corporate and private owners who are looking to re-enter the aviation market,” said Sean Gillespie. In the meantime, the CRJ conversion and Challenger 850 business is doing quite nicely.