Jet Aviation Revamps Completions Center, Delivers Aircraft

 - May 15, 2012, 1:15 PM

Jet Aviation has restructured operations at its Basel, Switzerland completions facility after contract losses and a decline in completions orders led to financial charges. “Those issues are behind us now,” said Daniel Clare, Jet Aviation president in an interview with AIN.

“We’re making milestones, we’re hitting delivery dates,” he added. “We’ve taken a lot of corrective actions at the Basel business to turn that around.” Clare said the Basel facility has delivered three aircraft so far this year and two more aircraft should be delivered by the end of the second quarter.

Jay Johnson, chairman and CEO of Jet Aviation’s parent company, General Dynamics, highlighted the completions business in January during GD’s fourth-quarter 2011 earnings call. “Charges taken by Jet Aviation’s completion business blemished an otherwise solid quarter and year,” Johnson told analysts. He said $78 million in contract losses resulted from “cost growth caused by increased labor hours and late penalties on three narrowbody/widebody aircraft.” Another $111 million was an impairment charge attributed to fewer-than-projected business jet and larger aircraft completions.

“These charges are very disappointing and clearly not in keeping with General Dynamics’ operational track record,” Johnson said. He added that Jet Aviation’s other portfolio businesses–including FBOs, MROs and aircraft services–performed well, with revenue from aircraft services increasing by double digits in 2011.

Clare, who was appointed Jet Aviation president in July 2011, said improving the Basel operation was among his top priorities. This was done by “getting control of materials, doing a better job of planning, [reorganizing] our back shops–furniture, upholstery, metal parts–through to the installation piece of the business,” he said. New processes and procedures were put in place “to get these airplanes delivered in a timely manner. On some of these projects we had fallen behind, but we’ve gotten back on schedule.”

Jet Aviation (Stand 7040) operates 14 FBOs worldwide and owns maintenance organizations in Europe, North America, the Middle East and Asia. It recently received approval from the Thai Department of Civil Aviation to maintain Thailand-registered aircraft. The company manages more than 150 aircraft, and offers services, such as a European emissions trading scheme management service, to other aircraft operators.

The Swiss-based group’s Jet Professionals subsidiary assists flight departments in staffing for flight crews, flight attendants and technicians. Jet Professionals has opened new offices in St. Louis and Houston, and will open a regional office in Hong Kong this year.

“The portfolio products we have serve a number of an aircraft operator’s needs,” Clare said. “We have aircraft management, we have the FBOs, we have Jet Professionals. Jet Aviation really supports a number of aspects of an aircraft owner’s operations.”