Samantha Gabrial of Arena Group talks to Eric Gillespie Executive VP of Flying Colours Corp. about the benefits of investing in a pre-owned aircraft and refurbishing it. As well as delivering a cost-effective option for new owners to enter the market, it supports immediate fleet growth and owner upgrades.
Why buy a pre-owned aircraft and refurbish it, rather than purchasing a new aircraft?
Buying a new executive aircraft represents a significant investment in a sizeable asset and can be a valuable business tool. For owners with an immediate need it is often quicker to buy pre-owned and refurbish than wait for new aircraft delivery. It’s also a great option for those new to the market who want to experience the benefits but are not ready to commit to the budget required for a brand-new aircraft. In fact, a well-planned refurbishment and modification project can deliver an as-new aircraft, with an interior tailored to every specific need, within a lower specified budget and faster timeframe.
Who should explore the concept?
Savvy purchasers recognise the value of pre-owned aircraft as a cost-effective, customizable option. For those seeking the benefits of private aviation – the reduction in travel times, the point-to-point travel, the flexible scheduling, the reduced exposure to busy terminals, the list goes on – a pre-owned aircraft is a valuable solution. It is also appealing for existing owners who wish to upgrade/downgrade to a different size cabin without waiting for a new model to come off the line. For corporates looking to quickly expand the company fleet, and new entrants who want to dip their toe into the market, pre-owned aircraft are also a great choice.
How has the pandemic stimulated interest in pre-owned aircraft?
We have noticed demand from corporations seeking to transport a wider range of employees onboard their own jets, not just C-suite executives, as a way of increasing health safety and minimizing contact related to travel. With the reduction in commercial airline networks, which is expected to take years to return, business aviation fills the gaps by providing direct access between key locations. Many of the hub and spoke routes have disappeared and many more direct routes are not expected to be replaced. This combined with the fact that a number of customers just don’t want to risk travelling commercially for health reasons, is stimulating demand.
What type of refurbishment requests do you receive?
As a result of the pandemic we are seeing an increase in requests from corporations exploring the options of converting regional airliners into corporate shuttle configurations so they can efficiently move their workers, as well as executives around. We are also receiving requests from those that have traditionally either chartered or flown first class but now want the security of their own flying environment so are buying aircraft. We have conducted a number of pre-purchase inspections on their behalf. The requests are normally for a VIP interior that creates an environment supporting productivity, relaxation and leisure in equal measure. Interestingly we’re also seeing existing jet owners wanting to incorporate medevac options into their existing aircraft. In the pandemic many jets were used as temporary medevac models and this has also created interest. This requires special knowledge, but we have completed many medevac conversions so have the skillsets in-house and relationships with specialist suppliers to make these a reality.
What are some of the benefits of refurbishing?
With a pre-owned model, owners have the ability to customize every detail of their aircraft. Our team of designers can replicate the owner’s personal or corporate brand and emulate lifestyle preferences while including very unique elements, such as safes, showers, and fold-out beds, to name a few. Integrating and updating new and innovative connectivity and entertainment is a trending feature in refurbishments as connectivity offerings continue expanding. Smart lighting that emulates circadian rhythms, mood lighting and the ability to install cabin air purification products are all popular now and can be included in most interiors. Investing in a refurbished aircraft provides an owner the unique opportunity to fulfill their vision for specific designs and transform a dated interior design into contemporary style, where function and form meet. The ability to have an environment customised to individual preferences is very attractive.
How much budget does a refurbishment require and what affects the amount?
Each project is unique, that’s what makes them so interesting. Fees affecting the project relate to complexity of design, materials – their availability, level of quality requested, and aviation certification – the need for any re-engineering work if we have to dramatically modify the interior, the sophistication of the connectivity, inflight entertainment and cabin management systems, the intricacy of the paint work, and the condition of the aircraft when it arrives. An older aircraft that has maybe sat in a corrosive environment such as a high, hot area, or a damp, salty, coastal region will likely require more maintenance work than an aircraft that has been hangered for example. All these factors will influence the budget but a real benefit for refurbishments is that to an extent they allow customers to set budgets. Our extensive experience and strong relationships with suppliers means we can get creative with even the most stringent budgets. Our priority is to always maintain the perfect balance between aviation regulatory requirements, budget and client satisfaction.
What is the timeframe of a refurbishment project?
Timeframes vary based on the project scope. Typically, refurbishments take between one and ten months. Some modifications can be quite small, such as changing out a connectivity router or installing new galley equipment, while other modifications are significant, like adding extended range fuel tanks or completely re-inventing the interior. While the maintenance team works on managing overhaul and modifications, the design and installation team work in parallel, with clients, to ensure design and functionality blend to meet the expectations. Having the ability to work on two time-consuming components simultaneously reduces down time of the aircraft.
Who should undertake the work?
Working with a professional, experienced, and validated completions and refurbishments centre providing a full spectrum of services, from MRO to paint and interiors will benefit owners and is worth the investment. We work with customers to provide aircraft sourcing services to identify potential aircraft candidates; we dispatch technicians to evaluate the merits of each model; once the selection is made, we work as a liaison between relevant parties to finalize the pre-purchase inspection and sale. Once the transaction is finalised, we work closely with the customers, their flight department and/or design team to specify and plan out the project. With the entire process managed at a single source, from facilitating the purchase to completing the conversion and re-delivering the aircraft, the turn-around time is streamlined.
Why should a buyer consider refurbishment now?
There is currently a great inventory of pre-owned aircraft available globally and for potential owners seeking value, now is a good time to acquire. A number of airlines are divesting their regional jets, and we have a unique program that provides conversion from commercial airline configuration to VIP format which makes for a great ROI for an aircraft purchase. As the uncertainty around the global pandemic continues for those wanting to mitigate risk of commercial travel, a pre-owned aircraft makes for a solid stepping-stone into the private aviation sector and provides a secure means of travel. To be honest any time is a good time to buy a pre-owned aircraft, as long as you are aware of the steps involved, can source a good MRO and completion centre and have the budget, it will always be a good investment.