Completions, Fuel Tanks Drive Pats

 - August 3, 2013, 2:10 AM

Pats Aircraft in Georgetown, Del., has rationalized its workflow to build on the record performance it achieved last year.

Once part of DeCrane Aerospace, Pats was spun off as an independent company in 2010 when Goodrich acquired DeCrane. (United Technologies subsequently acquired Goodrich.) In late 2011 Pats was restructured in a debt for equity swap and today it is majority-owned by Minnesota-based Wayzata Capital Partners.

Pats specializes in auxiliary fuel systems, integrated avionics racking systems, support structures, electrical interface systems, aircraft service and modifications, and executive completions of aircraft such as the Boeing Business Jet (BBJ), the Embraer Lineage and the Bombardier CRJ.

Under DeCrane, Pats expanded rapidly and aggressively signed completion projects that stretched its capabilities and, sometimes, the patience of its customers. “In 2008 we had ten completions in work, and that was too many. Our resources were stressed. It was chaos. Now we have seven bays: two for auxiliary fuel installations, two to three for completions, and two to three for maintenance and mods. That’s our ideal footprint capacity,” said Matthew Hill, Pats vice president of business development.

Rationalizing production has paid off, Hill said. “Last year was our most successful year financially and our reputation within the industry has dramatically improved.” Last month the company was completing three BBJs–a 1, a 2 and a 3, the latter two head-of-state aircraft. The completions are staggered to maximize efficiency. To date, the company has had 16 “BBJ [completion] projects.” All BBJs come to Pats from Boeing for their auxiliary fuel systems. After that they either remain at Pats for completion or are flown to a competing center.

Market for Auxiliary Fuel Systems

Pats is also seeing a resurgence in interest for CRJ auxiliary fuel systems, particularly as the hull values of -100 and -200 models drop concurrent with the need for major engine overhauls. Meanwhile, used market interest in the aircraft has accelerated, particularly in China, Russia and Eastern Europe. A Pats auxiliary fuel system can extend the range of those aircraft to 3,000 nm. “When you add the cost of acquiring the aircraft, the fuel system, a new interior and new paint, you are looking at eight to nine million dollars all up,” said John Eichten, Pats senior vice president of sales and marketing. “It’s a nice, nice airplane.” Pats has done three CRJ recompletions to date.

“You can get a [CRJ] hull for two to three million dollars now,” said Hill.

Eichten said that PATS may look at CRJ-700s and -900s for recompletion as those aircraft become available.

Pats has completed the FAA-mandated Sfar (Special Federal Aviation Regulation 88) modification on all its belly tank auxiliary fuel systems installed in BBJs. The regulation was issued in 2008 in the wake of the 1996 explosion of a TWA 747 off Long Island that killed all 230 aboard. The investigation of that accident found that a spark of unknown origin ignited fuel vapor in a belly tank in that aircraft. The SFAR required Pats and all auxiliary fuel system manufacturers to demonstrate that the fuel tank has protections against inadvertent combustion and/or modify their auxiliary fuel systems to prevent ignition of fuel tanks. Customers either have the modification done in the field or at Pats.

Pats will continue to provide service and refurbs for all BBJs, CRJs and Lineages and is also looking at Boeing 757s as more of those aircraft are converted to private use. The company recently completed an extensive interior refurbishment of an early Lineage and completed the first four delivered by Embraer. The recent refurbishment involved changing out the veneer and the fabric.

Like the rest of the completion industry, Pats has adapted to the growing trend of customers bringing their own designers to projects, Hill said. “Customers used to say, ‘Here is the concept I have and here is what I want the airplane to do, and this is kind of what I want it to look like.’ And they relied on us to bring the designer to spec the systems. Now our customer spec already has systems identified by brand, make and model when they come to us. The customer knows what he wants. He knows the designers. Some customers are now contracting with designers directly.” Hill said about 50 percent of Pats’s customers bring their own designers and their own completion managers to projects. “I think it is a smart thing to do. They’ve had experience in the industry. They know what they are doing. They understand things clearly and they avoid change orders.”

With more BBJs coming up against their 12-year major inspection requirement and an increasing number changing hands, Hill said the company expects to see more BBJ refurbishment work. “Two or three years ago, you couldn’t get a BBJ. Now there are ten for sale on the aftermarket. People used to buy new ones on spec and sell the green [unfinished] positions. That’s not the case any more.”

However, so far, customers have been tepid to the opportunities opened by the 12-year inspection. “The interior has to come out during the 12-year inspection, so it is the perfect time to rerag [recover the interior surfaces] it,” Eichten said. So far, however, modifications ordered during 12-year inspections have been less than what Pats initially expected, Eichten said, from customers who intend to keep their airplanes. “If the principal doesn’t like one thing, he’ll change that one thing. It might be the CMS [cabin management system], which would be a very big program, but it may be that he just wants a fresh look with a few new seats, new leather, carpet and headliner.”

Nevertheless, even these minor changes can carry a price tag in the millions of dollars with an aircraft the size of a BBJ, Hill said.