Completions group Yankee Pacific Aerospace of Rye, N.H., is celebrating just its second anniversary, but that hasn’t stopped the company from contemplating further acquisitions to reach a non-U.S. base of customers or from taking on ever more complicated completions projects.
Shortly after it was formed in 2006 along with investment firm Hancock Park Associates, Yankee Pacific acquired Executive Aircraft Completions (EAC) of Tulsa, Okla., a highly regarded interior design and certification group, and Jormac Aerospace of Clearwater, Fla., whose specialty is primary and interior structure, “to build a family of smaller but high-potential products and services firms engaged in specialized engineering,” said company managing director Ken Goldsmith. Staff from all three firms are sharing space in Booth No. 2066 this week in Orlando.
Goldsmith said his “overarching strategy” is to be a low-cost but high-quality provider in the OEM community, with a continual goal of keeping costs in check. Employees, he said, are offered ownership stakes in the company, and retention of the original management team when divisions are acquired is a key aim.
The Yankee Pacific family of companies is “gaining traction,” he said. It announced that the Jormac shop in Louisville, Ky., recently moved from an 18,000- to a 48,000-sq-ft fabrication center.
Still, he said, “We’re a bit disappointed in how the market has been going this year. Spending [across the industry] is slow, and we’re going to have to weather that storm as is everyone else. Going back to the 1970s, when the economy slows down, people who were going to purchase new aircraft don’t go forward. Instead there is a tendency to look at the aircraft they have and make it fly on, instead of buying something else at a substantially higher price tag.”
Goldsmith said he thinks that Yankee Pacific’s Falcon 50Dash4 upgrade program for super-midsize types is that “something” to make bizjets fly on, and in test flights, he said, the upgrade is “functioning as advertised.
“We didn’t have a bone to pick with a particular OEM or a specific competitor in mind when offering the upgrade,” said Goldsmith, though he suggested that the increase in thrust and time to climb make the result comparable to its sibling, the Falcon 50EX.
The program involves 14 days of downtime over a span of about 45 days, if the customer uses a rental engine while Honeywell converts the TFE731-3/3D to the TFE731-4-1C, installs new exhaust nozzles and modifies the nacelles and engine instruments. “There’s a sophisticated algorithm at Honeywell to let you know what the engine conversion will cost,” said Goldsmith, though the target range, he noted, is generally $1.6 to $2.3 million.
Six STCs for the upgrade have been placed in service, yet Yankee Pacific has two aircraft modified as Falcon 50Dash4 that remain available for sale, at about $11 million and $12.95 million. “We admit that we have not done a good job of promoting this in the upgrade market,” said Goldsmith. He added that the company has launched a reinvigorated marketing campaign here at NBAA’08. “Once people know that the airplane is out there, they’ll put it on their list to consider.”
Goldsmith also said a retrofit program in concert with Safe Flight Instrument Corp. to bring autothrottles to the CitationJet series, may lag up to one year. He cited a recent meeting with Randy Greene, president of Safe Flight, who reported his company is strained to capacity by production commitments. Goldsmith said he is trying to “construct a workaround” in concert with Safe Flight, and underscored the personal value of such autothrottle retrofits.
Goldsmith spoke of synergies gained since forming Yankee Pacific Aerospace, though currently its main focus is interiors.
He presented an example of a liner system for a VIP completion of an Airbus A340, with services across all of Yankee Pacific wherein the Jormac company provides a liner system with integrated mechanical components. The EAC subsidiary, meanwhile, builds cabinets and delivers them fully plumbed for the airplane.
Suppliers on Goldsmith’s radar screen may include oxygen and environmental control systems makers, he said.
Goldsmith said that he’s cautiously optimistic about the health of the completions industry given the backlog for VIP completions to as late as 2012, but acknowledges that demand can be cyclical and that Yankee Pacific is as vulnerable as any player in the market since the segment often involves discretionary spending. “There’s a shift from ownership of VIP aircraft to areas other than in the U.S. such as Russia, the Middle East and the Pacific Rim. The oil wealth has driven the change in ratio to a large extent,” he said. “The number of aircraft being acquired by non-U.S. customers is truly amazing to me, so I guess the question you have to ask as a U.S. supplier about airplanes being bought by non-U.S. operators is, are we at risk if those operators are politically negative toward the U.S.?” he said.
Goldsmith looks years ahead to deliveries of the Boeing 787 Dreamliner, for which Jormac has launched an intensive research and development program aimed at offering VIP completions for the airplane. “Part of the challenge is developing an interface with Boeing to act as the focal point for that development effort for its liner system,” he said. “We’re aware of the slippages in that schedule so we don’t know when the VIP models will be available, and the technology is highly proprietary to Boeing,” making work on its composite structure more vexing.