AvBuyer Magazine July 2022

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Volume 26 Issue 7 2022

Fli M pO RO ve In r to du R st ea ry d Gu ou id r e

ACTIONABLE INTELLIGENCE FOR BUSINESS AVIATION

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Fli M pO RO ve In r to du R st ea ry d Gu ou id r e

THIS MONTH

Pearl 10X

Jet Comparison: Gulfstream GIV-SP vs Dassault Falcon 900EX Bombardier Global 8000: Did the Market Need More Range? Carbon Offsetting: Who Does it Help?


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Contents JULY22.qxp 22/06/2022 14:25 Page 1

Vol.26 Issue 7

Contents

2022

Market Indicators 10

Trends and Observations from Leading Business Aviation Analysts

Editorial Contributor (USA Office) Dave Higdon dave@avbuyer.com

Market Insights 26

Bombardier Global 8000: Did the Market Need More Range?

30

Aircraft Values Climb Again, Despite Economic Jitters

Ownership 36

How Does Maintenance Status Impact Value? Part II

Sustainability 40

Carbon Offsetting: How Does it Work & Who Does it Help?

Jet Comparison 48

Gulfstream GIV-SP versus Dassault Falcon 900EX

Flight Department Management 58

Tips for Training and Retaining Your Flight Crews Today

64

How BizAv Can Plan for Long-Term Pilot Proficiency

70

Showcases

71

Marketplace

74

Advertisers’ Index

74

Aircraft for Sale Index

• Tip When Planning Asset-Based Loans for Jets • Moving from Charter to Full Ownership? What you Should Know…

ACTIONABLE INTELLIGENCE FOR BUSINESS AVIATION MRO

INDUSTRY GUIDE JULY 2022

4 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

Keep on Budget with Your Business Jet Upgrade Pratt & Whitney Enhances Service Offerings Engine Overhaul: Understanding the Costs & Processes Engine Overhaul: Tips to Avoid Unnecessary Disruption Hourly Maintenance Programs: Getting Value for Money Rolls-Royce: Striving for Engine Support Perfection Cabin Electronics: New Jet Functionality for Older Planes Measuring ‘Cost’ versus ‘Value’ of a Flight Panel Retrofit

Lise Margin Account Manager +1 703 818 1024 lise@avbuyer.com Maria Brabec Account Manager EMEA & APAC Aircraft & Services Sales +420 604 224 828 maria@avbuyer.com STUDIO/PRODUCTION Helen Cavalli Mark Williams +44 (0) 20 8939 7726 helen@avbuyer.com mark@avbuyer.com CIRCULATION Sue Brennan +44 (0) 20 8255 4000 Freephone from USA: +1 855 425 7638 sue@avbuyer.com

Emma Davey emma@avbuyer.com

• How to Plan Supplemental Lift into Your Operations

SPECIAL

ADVERTISING Steve Champness Publisher Americas +1 770 769 5872 steve@avbuyer.com

AVBUYER.COM Michas Rapf michas@avbuyer.com

Next Month

MRO

EDITORIAL Commissioning Editor Matthew Harris +44 (0) 20 8939 7722 editorial@avbuyer.com

Read our MRO Special Industry Guide starting from the back cover of this edition

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MARKET INDICATORS

Business Aviation Market Overview Favorable market conditions have come together to raise the probability of a phenomenon not seen in 15 years: Brian Foley assesses whether we’re about to see the return of speculative aircraft buying…

S

peculators are those who place orders for new business aircraft without any intent of ever actually taking delivery of them. Instead, they’ll buy as market demand and short supply push waiting times out to 2-3 years, or more, depending on the model (this compares to 12-18 months during normal times). These prospectors will later offer their earlier delivery positions for sale, pocketing a hefty premium from the impatient buyer who wants their airplane sooner, rather than later. In the 2007 timeframe when this behavior was last rampant, reports were

10 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

rife of multi-million dollar offers over list price being made to early position holders, particularly for the newest models with the longest waiting lists, such as the Gulfstream G650. What’s raising the probability of this happening again is simply the supply and demand environment today. A flood of new private aircraft flyers discovered Business Aviation as a way of avoiding crowds during the pandemic. This influx further dried up an already low supply of pre-owned aircraft for sale, eventually driving buyers into the more expensive new aircraft showrooms.

How are the OEMs Responding?

The sudden increase in new aircraft sales activity caught the manufacturers a little off-guard, having become accustomed to the so-so shipment levels that have defined the market for the past decade. Even as sales orders poured in and backlogs began swelling last year, OEMs were hesitant to increase production until several consecutive quarters of solid sales gains were seen. They will, of course, still harbor memories of being burned during the 2008 financial crisis, when production had been raised to historically high www.AVBUYER.com


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AVBUYER.com BRIAN FOLEY formed Brian Foley Associates (BRiFO) in 2006 to assist aerospace firms and investors with strategic research. In addition to his work as Market Intelligence Editor, AvBuyer, he is a regular contributor for Forbes.com and his views are published in the media worldwide. Brian serves the Transportation Research Board as a member of the Business Aviation, helicopter, commercial airline and UAV system subcommittees, and he previously served on the Board of a Wall Street financial firm. Before starting his consultancy business, Brian was marketing director at Dassault Falcon Jet for 20 years, and started his career at Boeing. He is an instrument-rated private pilot. https://www.linkedin.com/in/brifo/

“OEMs will, of course, still harbor memories of being burned during the 2008 financial crisis...”

levels just as the floor fell out and order books crumbled. It took them years to clear out unsold inventory and recover pricing power. Consequently, today manufacturers are being more measured in their approach to increasing production, preferring to decrease discounts and raise prices to improve margins initially. Some have already announced production increases to match the influx of orders. However, in 2022 Gulfstream only plans to roughly match last year’s shipment level due to a bottleneck brought on by bringing some wing production in-house. Similarly, Bombardier has decided not to take the plunge into more units just yet, but will still match last year’s levels even after having shuttered its Learjet division. www.AVBUYER.com

All of this demand and constrained supply combine to make for extended buyer delivery wait times. In general, the industry likes to have a 12-18 month timeframe between contract and delivery. Buyers have shown a willingness to wait this long as their aircraft is built and finished to their specifications, while, for the manufacturer, this lead time gives them confidence that they’re not overproducing and can sell what they build. To be stuck with unsold units known as ‘white tails’ carries punishing holding costs for manufacturers as each can be upwards of a US$75m asset sitting on the tarmac without a home.

Raising the Specter of Speculators

As waiting times extend beyond two years, buyers may look to another manufacturer with shorter delivery times. However, eventually the industry as a whole has long lead times, raising the specter of speculators coming in to do what is hopefully a quick flip. Speculators don’t even need to come up with the full cost of the airplane, since contracts stipulate that only a deposit plus progress payments

be made periodically. Final payment isn’t made until delivery of the aircraft. Having a backlog made up of an outsized number of speculators is not healthy for manufacturers, as during a downturn in the industry or economy these individuals cancel their contracts and run for the exits. Manufacturers have tried to make life more difficult for speculators with such stipulations as not making the new aircraft warranty transferable, should the position be sold before delivery, but many still find a way around these disincentives. Regardless, be ready for these opportunists to begin infiltrating order books once again. Doing so exacerbates the wait times of legitimate buyers while reducing the quality of backlogs. History shows that certain buyers are willing to pay what is essentially a scalper’s fee in exchange for an early delivery, and given that some waits now exceed three years, these types of transactions will start becoming more common until more teeth are put into contracts to discourage it. MI www.brifo.com

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AVBUYER MAGAZINE Vol 26 Issue 7 2022

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MARKET INDICATORS

AVBUYER.com

Global Flight Activity Update May 2022 was the strongest May of flight activity on record for the global Business Aviation market. Data from WingX shows that through May 30, there were 317,222 business jet sectors flown worldwide, 22% more than in May 2019… Corporate flight departments were 10% busier than three years ago, whilst Charter, Fractional and Private flight departments flew 30% more sectors than pre-pandemic May 2019. Unprecedented levels of business jet activity continued to correlate with under-par scheduled airline activity; with global scheduled airline sectors 22% below their May 2019 activity.

In Western Europe, the Monaco Grand Prix and the Champions League Final were two of the biggest draws for business jet flights in May. Arrivals into the Monaco GP airports were up 49% compared to the same event in 2019, whilst Champions’ League visitors to Paris airports exceeded inbound business jet arrivals to Spain (where the May 2019 Champions’ League Final was held), by 37%.

Rest of the World

The Memorial Day weekend at the end of May provided a useful calibration of leisure demand. Last year, the holiday period provided early evidence of the rebound in demand for Business Aviation travel, with the long weekend seeing 12% more sectors than in 2019. This year’s Memorial Day weekend saw 32,559 jet and turboprop sectors, only 1% more than last year, but 13% up on May 2019. Business jet activity in North America was still well ahead of pre-pandemic trends, with the overall month seeing 24% growth versus May 2019. The last week of May was up by 27% compared to the same week in 2019.

Outside Europe and the US, one-third of the business jet traffic came from Canada and Mexico, which were seeing more activity this May than in May 2021, but less than in May 2019. Other relatively busy markets like Brazil, India, and popular hubs such as Bahamas and Dominican Republic were seeing record levels of activity, although arrivals into Bermuda hadn’t yet recovered. Business jet movements in Singapore rebounded above prepandemic levels, but Business Aviation traffic in China was down by 66% in May 2022, compared to May 2021, with no obvious improvements since the lockdowns started to ease. Meanwhile, Hong Kong arrivals were up 10% on last year, but down 49% on May 2019.

Europe

In Summary…

North America

Europe had a stellar month in terms of business jet demand. Throughout May, activity was up by 20% compared with May 2019. Unsurprisingly, business jet connections between Europe and Russia remained at a standstill, although outbound flights from Russia to Turkey, Armenia, and Kazakhstan were all higher than in May 2019. Business jet flights within Russia in May 2022 were down 9% compared with May 2019, but down by 52% compared to May last year.

14 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

“The start of summer saw more record-breaking demand for business jet travel, although the peaks were only modestly higher than May 2021,” notes Richard Koe, Managing Director, WingX. “Widespread disruption and delay across the scheduled airline network should sustain the momentum in Business Aviation. “Aircraft owners are flying a lot more, and there are signs of strong corporate business jet usage.” page 18 MI www.wingx-advance.com

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MARKET INDICATORS

AVBUYER.com

Table A Fleet Maintenance Condition

In-Service Aircraft Maintenance Condition & Marketability

5.303

$1.52

5.10

$1.40 J

J

A

S

Quality Rating

O

N

D

J

Maintenance Exposure

F

M

A

M

Quality Rating Trendline

Table B G650ER Citation CJ3+ Citation CJ4 525C F2000LXS Legacy 500 F2000LX F900EX EASy Global 6000 Learjet 75 Legacy 650 Phenom 300 CL-605 G550 Caravan 208-675 G450 Citation CJ3 Pilatus PC-12 Hawker 900XP Hawker 400XP TBM 850 Global 5000 Piper Meridian Citation V Ultra Citation XLS Citation CJ2+ 525A CL-300 King Air 350 - Post-2000 King Air B200 - Post-2000 Phenom 100 Citation Sovereign 680 Citation CJ2 F50EX Global Express F900B G200 Citation Encore GV CL-604 Caravan Grand 208B Learjet 60XR Piaggio P-180 II Premier 1A Learjet 45 w/APU Citation Mustang 510 F2000 Global XRS

Inventory Fleet Maintenance Condition The Quality Rating and Maintenance Exposure value did not trend in the same direction during May. Specifically… Quality Rating: Following four consecutive monthly improvements, the listed fleet’s Quality Rating decreased slightly to 5.303, following April’s 12-month best 5.347, on Asset Insight’s scale of -2.5 (low) to 10 (high). That still left the fleet within the ‘Excellent’ range, but indicated more near-term maintenance events will be due. On a brighter note, the figure also represented a 1% improvement YoY. Maintenance Exposure: On the other hand, Maintenance Exposure (the cost of embedded/accrued maintenance), decreased in May, the first improvement over the past three months. While it was slightly higher YoY, the change signified that upcoming maintenance events would be 2.7% less expensive to complete.

18 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

$1.50

5.20

Aircraft Values Asset Insight’s tracked fleet’s average Ask Price increased 5.2% in May, following April’s 4.2% decrease, and is now up 39.8% YTD (10.6% Year-over-Year (YoY)). So called ‘off-market’ aircraft – mostly young, low-time units – continue transacting at higher prices without a formal listing, but their number will decrease as availability rises.

$1.60

5.30

For the second consecutive month, Asset Insight’s tracked fleet rose by 28 units during May, equivalent to 3.9%, with all four aircraft groups posting an availability expansion. Listings for the tracked business jet and turboprop models are still down 14.7% Year-to-Date (YTD), but increased to 754 aircraft in May. Though total inventory is still about 55% lower than the June 2020 peak, there are ample signs that traditional aircraft buyers are taking delivery of new-production units, thereby increasing the number of pre-owned aircraft listed for sale.

Maintenance Exposure to Ask Price (ETP) Ratio With the average Ask Price rising and Maintenance Exposure decreasing, the stage was set for the ETP Ratio to improve. It did so, dropping to 61.5%, a 12-month low (best) figure, positively affecting all four groups. For those not familiar with the figure, the ETP Ratio is a useful indicator of an aircraft’s marketability. It’s computed by dividing the asset's Maintenance Exposure (the financial liability accrued with respect to future scheduled maintenance events) by its Ask Price. ‘Days on Market’ (DoM) analysis has shown that when the ETP Ratio is greater than 40%, a listed aircraft’s time on the market increases, usually by more than 30%. During Q1, assets whose ETP Ratio was 40% or higher were listed for sale more than 62% longer (on average) than aircraft whose Ratio was below 40% (308 versus 500 Days on Market).

$ Mil

5.40

3.3% 4.5% 7.1% 7.4% 8.3% 9.8% 10.6% 11.0% 12.5% 12.7% 12.7% 13.0% 13.1% 13.2% 13.8% 14.0% 14.2% 16.2% 17.0% 17.3% 18.7% 19.4% 19.5% 20.1% 20.2% 21.3% 21.6% 22.1% 22.6% 23.5% 24.2% 24.5% 25.8% 26.4% 27.2% 27.4% 29.6% 30.2% 31.4% 31.6% 31.9% 32.8% 34.7% 35.1% 35.1% 37.4%

Learjet 40XR 40.1% Hawker 800XP 40.2% King Air 350 - Pre-2001 40.3% King Air B200 - Pre-200142.2% Citation Excel 560XL 42.9% King Air 300 44.5% Citation V 560 46.5% Citation CJ1 47.5% TBM 700A 50.4% Premier 1 51.0% Learjet 60 51.5% CL-601-3R 54.5% GIV 56.4% F50 64.7% Hawker Beechjet 400A 68.2% Piaggio P-180 78.4% GIV-SP (MSG3) 82.3% GIV-SP 84.7% Hawker Beechjet 400 86.1% Hawker 800A 93.0% Learjet 31A 99.4% Hawker 1000A 105.9% Citation Bravo 112.6% King Air C90 113.3% Citation II 115.5% Citation ISP 128.1% F20-5 128.7% Learjet 31 141.3% Learjet 55 153.2% Citation I 155.6% CL-601-3A 163.3% Learjet 35A 177.6% GIII 227.4% Citation III 286.2% Hawker 125-700A 375.6%

Maintenance Exposure to Ask Price Ratio (“ETP Ratio”) as of May 31 2022 page 20

Source: JETNET (www.jetnet.com) Asset Insight, LLC (www.assetinsight.com)

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MARKET INDICATORS

AVBUYER.com

Large Jets

Mid-Size Jets

Ask Price vs. Maintenance Exposure

Ask Price vs. Maintenance Exposure

$ Millions

$3.00

Apr-22

Jun-21

$1.20 May-22

$2.00 Feb-22

$2.80

$1.30

Mar-22

$2.50 Jan-22

$3.00 May-22

Apr-22

Mar-22

Jan-22

Feb-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

Jun-21

$9.0

$1.40

$3.50

Dec-21

$3.20

$3.20

$12.0

$1.41

$4.00

Oct-21

$15.0

$4.50

Nov-21

$3.40

$1.50

$4.52

Sep-21

$3.60

$18.0

$5.00

Aug-21

$3.80

$15.87

Jul-21

$21.0

$ Millions

Asset Quality Rating

Asset Quality Rating

Scale -2.500 to 10.000

Scale -2.500 to 10.000

5.400 6.000

5.300 5.200

5.800

5.601

5.600

5.140

5.100 5.000

Market Summary Availability may have increased to 3.3% from April’s 3.2%, but that simply means an average 5.4 units per model were available, based on Asset Insight’s tracked fleet, versus 5.3 units in April. Demand continues to be plentiful, as are the number of first-time buyers when compared to one year ago, when inventory equated to 8% of the active fleet. Turboprops and Large Jets are the most marketable aircraft among the four groups. Traditional corporate buyers are starting to take delivery of new-production equipment, partly evidenced by the second consecutive monthly increase to pre-owned availability. However, shifting to a ‘balanced’ market will require a substantial production increase by airframe manufacturers, which won’t occur this year. Large Jets: Availability increased by six units for Asset Insight’s tracked 43-model Large Jet fleet. But the listed-for-sale pool is still down 13.1% YTD, and over 61% from the June 2020 peak. The group’s Quality Rating, which has recently exhibited some wild swings, decreased 6.4% in May following April’s all-time high/best 5.987. May’s 5.601 leaves the group in ‘Outstanding’ territory, and also represents a 0.5% improvement YoY. Maintenance Exposure also decreased, but that represented a 6.7% improvement while remaining basically unchanged YoY. Following a nearly-incredible 13.6% increase in April to establish an all-time record high figure for the group, Ask Price receded 20.1% in May to the lowest figure since January. Still, the group’s average Ask Price has increased 21.6% YTD and 28.6% YoY. Even with the price drop, the ETP Ratio improved to 34.1% to post

20 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

Jun-21

In May, more than 43% of the tracked models, and nearly 50% of all listed aircraft, posted an ETP Ratio above the 40% excessive mark.

Jun-21

4.900

5.400

the group’s third consecutive 12-month low/best figure. Clearly, Large Jet marketability, as it pertains to maintenance status, has improved quite dramatically over the past four months. Mid-Size Jets: Availability for the 45-model tracked Mid-Size Jet fleet rose to 181 aircraft in May, a 1.7% increase (three units) that left inventory 21.6% lower YTD and nearly 64% below the June 2020 peak. At 5.140, the group’s Quality Rating remained within ‘Very Good’ range but was worse than the 12-month average, and nearly 3.9% worse YoY. Following April’s unusually large improvement, Maintenance Exposure rose/worsened 7.6% to re-establish the trajectory it began back in November. May’s Exposure figure was also nearly 14% higher/worse YoY. Ask Price increased, though, by 27.8% in May to set a 12-month high figure that was also nearly 109% higher YTD (no, that’s not a misprint) and 52.8% higher YoY. These changes had an extremely positive effect on the group’s ETP Ratio, reducing it to a 12-month low 62.2%. With an average of only 3.9 aircraft available per tracked model, we continue to believe sellers hold the stronger hand. Light Jets: Listed aircraft for Asset Insight’s 29-model tracked Light Jet fleet increased by 6.1% (15 units) to create a pool of 259 assets. That represents only a 3% inventory decrease YTD, although 52.3% fewer aircraft are currently available compared to the June 2020 peak. The group’s Quality Rating worsened a minimal 0.2% following April’s 12-month high (best) Rating, but the 5.347 Rating kept Light Jets within ‘Excellent’ territory, and reflected a 5.3% improvement YoY. Maintenance Exposure remained better than average, decreasing (improving) 0.5% in May, and 14.4% YoY. The group’s average Ask Price was a big surprise, as it rose 9.3% in

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MarketIndicators.qxp_Layout 1 22/06/2022 12:21 Page 6

MARKET INDICATORS

AVBUYER.com

Light Jets

Turboprops

Ask Price vs. Maintenance Exposure

Ask Price vs. Maintenance Exposure $ Millions

$ Millions

$1.85

$2.50 $2.30

$1.05

$0.60

$1.80

$2.31 $1.75

$2.10 $1.65 $0.93

$0.55

$0.95 $1.55

$0.53

$1.50 $1.45 Mar-22

Jan-22

Feb-22

Dec-21

Oct-21

Nov-21

Sep-21

Aug-21

Jul-21

$0.50 Jun-21

May-22

Apr-22

Mar-22

Jan-22

Feb-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

$0.85 Jun-21

$1.30

May-22

$1.70

Apr-22

$1.90

Asset Quality Rating

Asset Quality Rating

Scale -2.500 to 10.000

Scale -2.500 to 10.000

5.400

5.200

5.347

5.126

5.300

5.100

5.200 5.000 5.100

Turboprops: Continuing to sport the highest selection per model, at an average 9.2 aircraft across Asset Insight’s 17-model tracked fleet, Turboprop availability increased by four units in May, leaving the group down nearly 23% YTD, and almost 36% lower since the June 2020 peak. Statistics for this group are all moving in the right direction, with the Quality Rating rising 3.4% in May and 0.5% YoY to 5.187, bringing the group back into ‘Very Good’ territory. Maintenance Exposure decreased 6.6% during the month, and 4.4% YoY – a better-than-average figure. Last, but certainly not least, Ask Price increased 4.6% in May, setting a 12-month high figure, while also rising 12.6% YTD and 12.2% YoY.

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Asset Quality Rating Key Outstanding Excellent 5.500 5.250 or to Greater 5.499

Very Good 5.000 to 5.249

Good 4.750 to 4.999

Below Average Average 4.500 Less to than 4.749 4.500

The effect on the group’s ETP Ratio was, as one would expect, quite positive, reducing/improving the figure to 37.6%, a 12-month low/best that also placed the group below the 40% ‘excessive’ demarcation point for the first time this year.

MI www.assetinsight.com ❙

TONY KIOUSSIS is President & CEO of Asset Insight, providing valuations, audits, analytics and consulting services, and a uniform methodology for grading an aircraft’s maintenance condition. Previously he worked with GE Capital’s Corporate Aircraft Finance group; Jet Aviation; and JSSI, developing the “Tip-to-Tail” airframe maintenance program. https://www.linkedin.com/in/tony-kioussis-a366b28/

22 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

Aug-21

Jun-21

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

Jun-21

May to set an all-time high figure that was also up 73.5% YTD and 43.2% YoY. The Maintenance Exposure improvement, combined with the Ask Price increase, resulted in an 88% ETP Ratio representing a 12-month low/best, and the third consecutive month the group’s Ratio has been below triple digits. That may not sound like much, but it is music to the ears of many Light Jet sellers.

Jul-21

4.900

5.000

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Market Insights 1.qxp_MARKET INSIGHTS 21/06/2022 16:09 Page 1

MARKET INSIGHTS BOMBARDIER GLOBAL 8000

Bombardier Global 8000: Did the Market Need More Range? Following the launch of the Bombardier Global 8000, the upper limits of non-stop business jet travel inched further forward. But is another Ultra-Long-Range Jet really what the industry needs? René Armas Maes explores…

L

aunched as an upgraded version of its existing Bombardier Global 7500, the Global 8000 offers greater range and high-cruise speed than any other purpose-built private jet in production or in development. Bombardier made a firm statement to the industry in its ongoing wrestle with Dassault and Gulfstream at the very top end of the market. As Bombardier said during the unveiling in May, the new Global 8000 is “two aircraft in one”, providing everything the Global 7500 has to offer but with a level of performance that has “never been seen before” in Business Aviation. In addition to the 8,000nm range, the jet will feature a top speed of Mach 0.94, powered by a pair of GE Passport engines. Bombardier was quick to reassure existing Global 7500 operators that they will be able to retrofit their aircraft to

26 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

bring Global 8000 performance to their jets. Initially, the Global 8000 was intended to be a shorter, three-zone aircraft. However, Bombardier chose to bide their time, waiting for Gulfstream to make the next move with its G800 before making a final decision on its future flagship aircraft. The result was to produce a longer-range version of the Global 7500 with an additional cabin zone to battle the G800 for market share. Based on market research, Bombardier believes that while range is one of the top deciding factors for business jet buyers, another key area is cabin comfort, followed by top speed. Thus, while much of the Global 8000 launch coverage focused on nudging the range boundaries that little bit further, Bombardier has actually captured all three key deciding factors in its newest jet.

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Market Insights 1.qxp_MARKET INSIGHTS 22/06/2022 10:49 Page 2

AVBUYER.com GULFSTREAM G800

DASSAULT FALCON 10X

Ultra-Long-Range Market Opportunity?

The top tiers of the Business Aviation segment can be divided into Long Range Jets (those with ranges between 5,000nm and 5,999nm), and Ultra-Long-Range Jets (those with ranges of 6,000 nautical miles or more). Three OEMs compete in the Ultra-Long-Range segment today: • Bombardier: Global 6000, Global 6500, Global 7500, and Global 8000 (scheduled service entry in 2025). • Dassault Falcon: Falcon 8X, and Falcon 10X (scheduled service entry in 2025 or later) • Gulfstream Aerospace: G600, G650/ER, G700, and G800 (scheduled service entry in 2023 or later). Gulfstream delivered its final G550 in 2021. According to AMSTAT data, and factoring the normal pre-pandemic business aircraft deliveries of 2016 and 2017, Bombardier, Dassault and Gulfstream shipped 275 factory new Ultra-Long-Range jets between them, or 137.5 aircraft annually. In 2018 and 2019, that increased slightly to 280 (or 140 aircraft per year). For the pandemic years of 2020 and 2021, the three OEMs again delivered 280 Ultra-Long-Range jets

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“The 140 aircraft delivered annually in the Ultra-LongRange Jet market can be estimated to be worth between $9.2bn and $9.5bn in 2021 – so there’s clearly much to play for with all three OEMs.”

between them. Looking at Ultra-Long-Range market share between 2016 and 2021, Gulfstream enjoyed the upper hand, with 57% of the units delivered, followed by Bombardier (34%) and Dassault Falcon (9%). But more recently – between 2020 and 2021 – Gulfstream’s market share shrunk 6% to 51%. Bombardier was the OEM to gain, seeing its market share increase to 41%. Specifically, the 100+ Bombardier Global 7500 deliveries helped Bombardier to a larger slice of the ‘pie’. The 140 aircraft delivered annually in the Ultra-LongRange Jet market can be estimated to be worth between $9.2bn and $9.5bn in 2021 – so there’s clearly much to play for with all three OEMs. With aftermarket services factored in, that total would likely exceed $10bn. Having made gains on Gulfstream with the Global 7500, it’s logical that Bombardier would fight hard to exceed the range and speed boundaries, yet again, with the Global 8000. As the Global 8000, Falcon 10X and G800 join the marketplace from 2023 and beyond, we can expect the top-end market value to increase by at least an additional $1.1bn, based on the new aircrafts’ higher price tags (currently between $75m and $78m).

AVBUYER MAGAZINE Vol 26 Issue 7 2022

27


Market Insights 1.qxp_MARKET INSIGHTS 22/06/2022 10:13 Page 3

MARKET INSIGHTS

AVBUYER.com

TABLE A: The Wealth Report 2021 '()*+,% -./0% )(*!

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UHNWI Market: Shrinking or Growing?

One key question arises for the OEMs as they focus on sales expansion within this market segment. Is the affluent Ultra-High-Net-Worth Individual (UHNWI) segment shrinking or growing globally? According to the Wealth Report 2021, lower interest rates and greater fiscal stimuli have increased the world’s UHNWI population by 2.4% compared to 2020. This has occurred across North America, Europe, and Asia. Indeed, by 2025 the population of UHNWI is expected to grow 27% (see Table A, above). With an increasing UHNWI population, the next question is what percentage of the UHNWI population has been exposed to Business Aviation already, and how many are already business jet owners? Based on Jetcraft’s Five-Year Pre-Owned Market Forecast (2021-2025), 10% of UHNWIs use private aviation solutions other than full aircraft ownership (i.e., jet cards, fractional ownership, and ad-hoc charter) as a primary travel solution, while only 2% actually own a private jet.

Conclusion

With the expected growth in the UHNWI population, coupled with the current low Business Aviation

penetration, the potential for the Ultra-Long-Range Jet market is clear. A key opportunity exists to expand and capture greater market share, and the OEMs must aggressively pursue this high-margin opportunity – as is being borne out with the launch of the Global 8000. While targeting potential new UHNWI Business Aviation users, the OEMs will be focusing their efforts on North America, Europe and Asia (as indicated in Table A) over the coming years. The final question is how Dassault will respond to ensure it increases its share of the market? I would predict the launch of another new product within the next 24 months – perhaps a Falcon 9X, capable of flying 6,500-6,975nm as Dassault focuses on expanding its own Ultra-Long-Range Jet portfolio. This is a highly active, competitive market, and from the analysis, it’s easy to see why. Did the market need another Ultra-Long-Range Jet? Absolutely! Combined with extra speed and cabin comfort, there’s every reason to hope a sizable portion of UHNWIs can be lured from the sidelines to become active participants in Business Aviation with the right products available on the market! T

RENÉ ARMAS MAES is vice president, Commercial at Jet Link International LLC and an international consultant with a broad experience in business aircraft sales. He has developed multiple analyses and studies for a number of US Fortune 500 companies and Venture Capital firms, and participated as keynote speaker at a number of business aircraft conferences.

UNDERSTAND THE MARKET BETTER with AvBUYER.com

https://www.linkedin.com/in/ren%C3%A9-armas-maes-4935b842/

28 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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General Aviation July.qxp_Layout 1 22/06/2022 14:17 Page 1


Market Insights 2.qxp_MARKET INSIGHTS 21/06/2022 16:23 Page 1

MARKET INSIGHTS

Aircraft Values Climb Again, Despite Economic Jitters The first six months of 2022 have been filled with several contradictions in the pre-owned business aircraft sales market, according to VREF’s Jason Zilberbrand…

O

n the one hand, things have never been so good in aviation; demand for aviation is back, with littleto-no end in sight for high charter utilization. On the other hand, will the current aircraft market withstand the number of obstacles ahead? So far, the answer has been an amazing yes. But is the sentiment shifting, and the bubble about to burst? While a downturn is unlikely, we have probably hit the ceiling regarding escalating aircraft values. Despite the continued talk of a downturn, I believe one is doubtful because our current market has little to nothing in common with previous recessions, especially the ‘Great Recession’ of 2008, and today. I mention 2008 only because it was the fastest and scariest race to the bottom ever witnessed for many seasoned veterans in Business Aviation. With that recession engrained and embedded in our memories, many tend to fear the worst today. However, there are several key differences between previous downturns and today's economic jitters. 1. Inventory: First, pre-owned aircraft inventory remains extremely low. Although inventory has risen slightly since Q4 2021, the increase is barely noticeable. For the most actively traded models, supply is still nowhere near normal. Take, for example, popular aircraft like the Cessna

30 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

Citation Excel/XLS and the Citation CJ3/CJ3+, which are trading at (or above) asking price. Even with a slight uptick in aircraft for sale, these models still have fewer than 2% of the total fleet available for sale. Even if off-market listings swelled the number closer to 3%, that’s still not enough to move the meter into a buyers’ market. The same holds true for just about every popular, actively-traded aircraft model. Despite a slight uptick in the number of aircraft for sale, there’s no slowdown in sight regarding buyers' appetites. 2. Healthy Balance Sheets: Secondly, the banks and their respective balance sheets are healthy, as is their desire to fund aircraft. While interest rates have risen, they’re still low compared to the past thirty years. 3. Loan-to-Value Rates: Thirdly, aircraft owners have skin in the game this time around. The loan-to-value requirements for aircraft lending has remained at approximately 75%, allowing most borrowers to stay far away from foreclosure and build equity. While there may have been a cooling for refinancing, the uptick in rates has not lessened offer purchasing. Lenders are more selective over the equipment, age, and several other factors, including enrolment in engine and airframe programs.

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Market Insights 2.qxp_MARKET INSIGHTS 21/06/2022 16:23 Page 2

AVBUYER.com

So, What’s Ahead?

Summers are historically slow in aviation – especially Business Aviation. This summer will be no different. We expect a ‘stalling’, but certainly not a crazy plunge into the abyss. The worst-case scenario of flat values for the upcoming summer can be attributed to most aircraft models' abnormally small fleet sizes and static populations. Between maintenance issues, including the need for modernization, and high costs, many of the older aircraft are realistically headed for the ‘parts bin’. While it will simply become too expensive for many aging aircraft to remain in service, it will also be nearly impossible for the manufacturers to build enough aircraft to offset the attrition, while producing them at a low enough purchase price to be competitive with most buyers. From a business jet perspective, if there’s one negative to this booming market it’s the fact that the $1m business jet is all-but-extinct. The higher the values of entry-level jets, the more buyers look for alternatives. Turboprops and Twin Piston aircraft have benefited significantly from the sharp increase in jet values. It will be interesting to see if the increased operating costs change the trend, however. One look at the Beechcraft King Air market would quickly reinforce this: Most models are up 25%, and inventory is lower than I can

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ever remember it. Surprisingly, I have only had one comment from a new Cirrus SR22 purchaser complaining high fuel costs will force him to park his airplane or fly much less than planned. For now, most operators are choosing to ignore fuel prices. Time will tell how long things can continue at the current pace. Charter operators, for example, will only be able to pass along so much of the inflation before demand is impacted. Sales of Russian-owned aircraft has been slow, not significantly impacting the market. Many buyers are wary of purchasing airplanes through Back-to-Back deals, along with the Russian ties that may, or may not, be sanctioned. Scrutiny is at an all-time. On the other hand, commercial leasing companies face billions in losses due to the nationalization of a good portion of the leased aircraft fleet within Russia. Unfortunately, insurance premiums will be taking the brunt of the hit once again as claims get filed, resulting in everybody paying more for insurance. From my perspective, the current market is ‘complicated’ and remains pretty much unchanged from my last update (‘What’s the Latest on Aircraft Market Values?’ AvBuyer April issue, p36). • Transactions remain steady. • The finance community is healthy.

AVBUYER MAGAZINE Vol 26 Issue 7 2022

31


Market Insights 2.qxp_MARKET INSIGHTS 21/06/2022 16:24 Page 3

MARKET INSIGHTS

AVBUYER.com

It has become increasingly difficult for anyone to find the ‘perfect’ aircraft. Most buyers are making concessions to close deals. • For many buyers, the word ‘frustration’ sums things up. Aircraft buyers have ‘features’ and ‘budget’ wish lists, but it has become impossible to check off every box on those lists. • Good markets allow bad aircraft to sell, and some firsttime buyers may be hoodwinked into purchasing some of these. I’ve seen many deals fall apart after initial due diligence, so buyers take heed. • The supply chain logjams, and wait-times to schedule maintenance, will worsen before improving. The fast-paced, frenzied market from Q4 2021 created a need for many buyers to forgo a pre-buy inspection or lose the aircraft. While I continue to hear this issue being brought up in many deals, it would be wise to resist, completing proper due diligence before closing. Granted, due diligence today requires near-sleuth-like skills, but it appears the message is getting through: It’s better to walk away from a potentially harmful deal than try to unwind it after you own it.

Market Trends for Q2 2022

Business Jet Market: Demand for business jets continues to outpace supply, inflation, and fuel prices. The only thing that can slow down the market is the lack of available aircraft for sale. More and more transactions being reported are offmarket, unlisted aircraft. Entry-Level and Light Jets continue to see price rises, creating a few opportunities for the twin-piston and turboprop markets, and some of the vintage jets. For example, Bombardier Learjet 35s were up 20% over Q1 2022, while Learjet 45s and Learjet 60s rose 30% as buyers battled for the few available units not being devoured by management/charter operators. Embraer Phenom 100s and Phenom 300s are up 15%

and 10%, respectively. The Phenom 100 is highly attractive to first-time buyers, and the lack of inventory suggests things will stay that way for the foreseeable future. The Phenom 300 is now one of the go-to models for the charter market, making it almost impossible to find one, let alone a deal. Cessna Citation CJ1 values increased 10% since Q1, while CJ2s and CJ3s were up 15%. Mid-Size Jets have also done incredibly well this past quarter, with Hawker 800 series jets up between 20% and 45% since Q1. Since operating costs are typically higher for these aircraft, it is possible buyer and operator sentiment could change with increased prices at the pump. The Gulfstream G200s and G280s, which benefited from a considerable price increases in Q1, were up roughly 5% in Q2, and pricing appears to have settled. Meanwhile, Dassault Falcon 50EXs were up 30% in Q2 over Q1. This popular Mid-size, wide-body aircraft was tremendously undervalued, and buyers have subsequently been quick to pounce on opportunities. Cessna Citation Sovereign and Sovereign+ have also benefited from popularity in the charter market, both having seen 15% price increases since Q1. The Citation X, meanwhile, was up 10% since Q1. One surprise was the Citation Ultra’s, Citation V’s, and Citation Encore’s market rebound in Q2, by as much as 60%. These older jets have become the ‘go-to’ for dealmakers seeking opportunity and relief from an over-picked market. Large Jets such as the Gulfstream GIV/GIV-SP were up 17% since Q1, with management and charter companies buying as many as they could find in good mechanical condition. This combined with brand name recognition and ramp presence created a run on these aircraft. Nevertheless, the potential dark cloud of fuel prices and heavy maintenance costs could prove problematic for profitability. Embraer Legacy 600s and Legacy 650s were up 35% as

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32 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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MARKET INSIGHTS

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the market again recognized value in an over-depreciated model. It was not long ago that a decent Legacy 600 could be bought for less than $6m. Today, you’d be lucky to get one under $8m. The capable, over-depreciated Bombardier Challenger 601, 604, 605, and 650 were up between 20% and 35% since Q1 2022, rebounding nicely in Q2. For the Gulfstream G500 and G600, airworthiness directives (ADs) has become the hot topic, and for good reason. Following two hard landings, the fleet is restricted until a software update is distributed later in the year. Both hard landings involved erroneous activation of the angle-ofattack ‘limiter’ function, which is designed to prevent stalls. Owing to the AD, G500 and G600 values have remained unchanged since Q1 2022. Turboprops: The Piper Meridian has benefited from several other markets’ tight inventory levels, and entry-level jet prices exceeding buyers’ budgets. The net result was a 17% increase in value since Q1 2022. With lower operating costs and a modern cockpit, we see increasing values continuing for some time in this market. The Pilatus PC-12 market continued to be the darling of the segment, once again demonstrating the best residual values in the single-engine turboprop market. In Q2, all variants were up 20% over Q1 2022. The Cessna Caravans also benefit from scarcity, as utility, cargo, and commercial operators can’t seem to buy enough of them at present. Market values were up 15% and should continue to perform well over the coming months. Various Beechcraft King Air models also shot up in Q2, and King Air B200s were up 25% since Q1, while the King Air 350 market was up 20%. Between charter demand and pressure from entry-level jet prices moving beyond many buyers’ budgets, the tried-and-true workhorse of aviation has benefitted tremendously.

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Assuming operators are not affected by higher fuel prices, this segment seems to be gaining popularity. Modernized aircraft with refurbished avionics are selling in record time. Piston Market: The Cessna 182 market was up another 10% over Q1 2022, and based on closing numbers and activity levels, this market continued to tick. The same held true for Cessna 172s, up another 10%. Market demand remained far greater than supply, and inventory was meager at best. Columbia 300, 350, and 400s were up 40% from Q1 2022 as many potential buyers sought to purchase highperformance aircraft. Demand rose as competing models (primarily Cirrus) priced buyers out of the market. For a while, Cirrus values were rising daily. SR20 prices were adjusted by 15%. This is one Piston Single market to

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34 Vol 26 Issue 7 2020 AVBUYER MAGAZINE

www.AVBUYER.com


Market Insights 2.qxp_MARKET INSIGHTS 21/06/2022 16:26 Page 5

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watch – many buyers are frustrated with the escalating values. Will the numbers stall in Q3? The SR22 was also up 15%, with backlogs growing and premiums paid for newer aircraft. With many new aircraft finally delivering from the pandemic orders, we may see an uptick in newer pre-owned aircraft inventory. Diamond models were up 20% on average, with little or no inventory available. DA40 inventory remains low across the board for all variants. DA20s, like other trainers, are benefiting from crazy demand. The DA62 is almost impossible to find, with only one aircraft listed for sale at the time of writing. Helicopters: The helicopter market is more of a mixed bag. While Enstrom and MD pre-owned models continue to struggle, many others have benefitted. Firefighting season starts earlier every year. EMS, timber, and other utility aircraft are also seeing an uptick in valuation and activity levels. As with the fixed-wing market, many buyers seek older aircraft to combat higher asking prices that often exceed budgets. Specifically, Bell 407, 429, and 427 helicopters continued

Keep an eye out for the entire historical archives from Vref, which will soon be available for sale via the online store (https://shop.vref.com/). And speaking of online, Vref will be releasing its new website soon. “You may have already noticed that all derivative models are being broken out into their models in terms of data,” says Jason Zilberbrand. “This allows us to add critical features from the FAA and provide a more accurate set of indices and specs.”

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to increase in terms of price, rising roughly 15% in Q2, vs Q1 2022. The Agusta A109 and Leonardo AW139 markets have benefitted from their multi-use mission profiles and beatendown values. AW109SP values were up 14% compared to Q1, and the AW139 short- and long-nose markets were up roughly 20%. However, the popular offshore models continue to lag as operators seek out leasing alternatives instead of outright purchases. During Q2 2022, the Robinson markets picked up where they left off in Q1, and were up another 15%, on average, as buyers’ appetites, combined with a lack of global inventory, pushed values higher. Aircraft fresh out of annual inspections continue to benefit from quicker resale times. Whether you’re in the market for a fixed-wing airplane or rotorcraft, enjoy the summer – and get some rest. It looks like we’ll be in for a crazy Q4 as buyers look to make purchases before the 100% bonus depreciation finally comes to an end at Year End. More information from www.vref.com T

JASON ZILBERBRAND Jason Zilberbrand is the President of VREF. He is an Accredited Senior Aircraft Appraiser with the American Society of Appraisers (ASA), and an Accredited Member of the Appraisers National Association (ANA), and he is also an Accredited Member of the International Society of Appraisers (ISA). He is an expert witness, broker, inventorying dealer, acquisition agent, aircraft owner, aircraft operator, contract negotiator, consultant, teacher, conference speaker, and author.

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Ownership 1.qxp_Finance 21/06/2022 16:33 Page 1

OWNERSHIP

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Determine a Jet’s Value by its Maintenance Status

How does maintenance status impact the value of a business aircraft, and what actions can buyers and sellers take to better determine true value? David Wyndham provides an outline… reviously, we looked at the cyclical nature of aircraft maintenance expenses, concluding there’s a need for analysis of an aircraft’s maintenance condition, both in terms of current status and upcoming events, and its physical condition of the aircraft. These will help to establish what a fair value is. This time, we consider the area in more detail, highlighting actions an aircraft buyer or seller can take to better determine its value. There are three major variables when determining the value of an aircraft. Aircraft age and utilization are the two variables that, once they’ve occurred, cannot be undone. Aircraft value declines with both. The third variable is maintenance status. What maintenance has already been done, and what is yet to be done are within the control of the owner, and will also impact the aircraft’s value. Let’s look at an example. Assume an eight-year major airframe inspection has a total cost of $800k. ● Every year from new, the inspection gets closer, averaging $100k in maintenance expense accrued annually. This is your accumulated financial exposure for the future maintenance due. ● At age five, the financial exposure reaches $500k. You have $300k yet to accrue. This amount is your maintenance equity.

P

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Now let’s look at three sample aircraft, each with a different financial exposure with respect to this single $800k maintenance inspection. ● ● ●

Aircraft A: Age 7; $700k financial exposure Aircraft B: Age 8; $800k financial exposure (inspection due) Aircraft C: Age 8; $0 financial exposure (inspection accomplished)

As a buyer, which of these three would most interest you? Even though Aircraft A is the youngest, it has a financial exposure (accrued expense) of $700k. Having just completed the inspection, Aircraft C, although older than Aircraft A, now has zero financial exposure – or $800,000 in equity related to this inspection. If you repeat this process for each inspection, component overhaul, and part replacement, you can end up with a chart like Chart A (overleaf), which is based on hours flown. As depicted, a new aircraft has zero financial exposure since all maintenance events are ‘fresh’ with zero time accrued. As the aircraft flies, individual maintenance events accrue more financial exposure. Periodically (hours or months) some maintenance will be accomplished, reducing the financial exposure (or adding equity).

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Ownership 1.qxp_Finance 21/06/2022 16:34 Page 2

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“Periodically (hours or months) some maintenance will be accomplished, reducing the financial exposure (or adding equity).”

After the aircraft enters service, the financial exposure is never at zero since the aircraft is always accumulating time towards one future maintenance event or another.

What Can Sellers do to Reduce the Exposure?

First, the seller needs to work with an experienced broker to look at the current marketplace. Where is the Seller’s aircraft positioned in relation to the other competitive aircraft available for sale? If the Seller’s aircraft is well positioned, relative to similar aircraft (i.e., in terms of age, airframe/engine hours, and maintenance financial exposure), then the ask price can reflect this desirability. However, if the Seller’s aircraft is not in a strong position relative to the other aircraft for sale, the Seller and broker will need to discuss either a price relative to its position, or undertaking some of the future maintenance ahead of schedule, which will better position it among the competition. Alternatively, the Seller could place the aircraft on a guaranteed hourly maintenance program (GHMP). Depending on the model and category, an engine GHMP is almost a requirement. Engine or airframe GHMP can be very desirable for buyers as they cover the financial exposure for the covered maintenance to the extent of the accrued coverage. Enrolling a used aircraft on a GHMP can be costly, since you are essentially ‘buying in’ the hours already accrued towards the next event. Therefore, this may be an option that needs careful discussion with your broker.

What Should the Buyer Do Regarding Maintenance Exposure?

The buyer needs to educate themselves about the risks and rewards of each aircraft they’re considering for purchase. How does one aircraft compare with the available options in the market – including when compared to the cost of acquiring a new aircraft with zero time, zero age, and almost zero flight hours? ● ●

Remember, if you acquire an aircraft with substantial maintenance coming due, you accept the financial exposure of that maintenance, not to mention the downtime while the maintenance is accomplished. A GHMP may be desirable, and that program shares the risk of the maintenance costs. Regardless of whether the aircraft is on a GHMP or not, a pre-buy inspection is always recommended to verify the condition and status of the aircraft you’re in the process of acquiring. An acceptance flight is also a good idea as it gives the buyer the chance to confirm the working order of everything from the lavatory to the landing gear. Lastly, note that while this article deals with the maintenance condition, there are other considerations – such as level of equipage, cosmetic condition, quality of the maintenance records, and more, that should be part of the decision of whether to buy or not. T

DAVID WYNDHAM is the Founder of David Wyndham + Associates, LLC. He is a highly respected industry veteran having built up more than 36 years of aviation experience, including as president and co-founder of Conklin & de Decker. He is also Vice President, Asset Insight Consulting Services. https://www.linkedin.com/in/davidwyndham/

38 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

What is the maintenance status of each aircraft available for sale? What is their financial exposure?

MAKE MORE INFORMED OWNERSHIP DECISIONS with AvBUYER.com www.AVBUYER.com


AOPA advertorial July 2022.qxp_Layout 1 22/06/2022 14:22 Page 1

SPONSORED CONTENT

TERM VS AMORTIZATION

Deciding to purchase a plane is ill-advised without a clear understanding of a loan’s term versus its amortization.

Adam Meredith

A

mortization is the length of time it takes a borrower to repay a loan. Term is the period of time in which it’s possible to repay the loan making regular payments. Term, therefore, is a portion of the loan amortization period. Consider it the length of time in which one is committing to doing business with the lender. Most people are used to or conceptualize that a loan’s term and its amortization are coterminous—that when the term is done, the amortization is also done. That’s not always the case. More importantly, that’s not always in your best financial interest. Frequently, banks offer loans where the term is shorter than amortization. When the two are not coterminous, the loan is said to have a balloon—common parlance for the remaining principal owed at the end of the term. At the end of the term, the borrower has three choices-refinance with the existing lender, finance externally with a different lender, or pay it off. Most people choose options #1 or #2 to avoid the balloon. Option #3—paying it off—can present two ways. The first is when the borrower pays off the debt; the second is when the borrower sells the plane. Part of your decision must include a thorough understanding of how long you intend to keep the loan--not how long you’re going to keep the plane. If you’re uncertain about how long

you plan to keep the loan, we might advise seeking a shorterterm loan at first. In a shorter-term loan, the cost of money is cheaper than it is in the long term. For instance, ten-year money costs more than five-year money. One note: The more technically advanced the aircraft typically the shorter the amortization. Also, lenders tend to favor shorter-term loans, particularly on bigger-dollar deals. That’s because banks know a lot can change in five years. They’d rather look at a loan every five years to reassess the risks. Additionally, revisiting a loan every five years provides a bank an opportunity to look at the borrower’s financials. Are things going better? Worse? The same? At AOPA AAF, we’ll also discuss with you the efficacy of floating vs. fixed interest rates. In this current environment, for instance, where interest rates will remain flat for some time or may potentially go down, a floating rate can often be a better option. In all cases, by trying to get a longer term and/or a longer fixed interest rate period—either/or—it’s going to cost you more in interest over the long term. But it will also cost you more money when the amortization is longer because you have principal outstanding for a longer period. Bottom line: The more quickly you pay down the principal, the less you pay in interest.

Great advice. Great rates. All from helpful and responsive reps you can trust! Three good reasons to turn to AOPA Aviation Finance when you are buying an airplane. If you need a dependable source of financing with people who are on your side, just call

800.62.PLANE (800.627.5263) www.AVBUYER.com

AVBUYER MAGAZINE Vol 26 Issue 7 2022

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AIRCRAFT DEVELOPMENT 1.qxp_Finance 21/06/2022 16:41 Page 1

SUSTAINABILITY

Carbon Offsetting: How Does it Work & Who Does it Help? The term ‘Carbon Offsetting’ has been floating around in Business Aviation for a while, but what exactly does it mean, and does it really make a difference? Matt Harris spoke with three program providers to get a clearer picture… s the National Business Aviation Association made a bold commitment at NBAA-BACE 2021 to work towards “net zero” carbon emissions by the year 2050, and various other leading aviation groups joined them, projects and technologies are being researched and developed by various leading airframe and engine manufacturers in Business Aviation. “Sustainability, including the mitigation of climate change, is one of the greatest long-term challenges the world faces,” notes Kennedy Ricci, President, 4AIR, an aviation sustainability company assisting stakeholders in private aviation to implement meaningful sustainability programs. “Although business jets are a relatively small part of the problem, Business Aviation’s history of innovation shows it can play a big role as an incubator of new strategies and technologies.” For the mid-term, these include the development of electric aircraft, while, in the shorter-term, there’s the promotion of Sustainable Aviation Fuel (SAF). Longer-term hydrogen-powered aircraft may hold the key, with Embraer – among others – known to be exploring concepts. None of these provide an immediate, complete

A

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solution, though. The industry is several years away from seeing a battery installed in an aircraft that’s capable of flying the types of payloads and distances required by today’s Mid-Size and Large Jet operators. And while Sustainable Aviation Fuel is a very positive step in the right direction, currently private jets are flying with up to 50% SAF blended with traditional fuel. Efforts are underway with the leading engine OEMs to certify 100% SAF blends in their powerplants, but, even then, there’s nowhere near enough SAF produced currently to fuel the world’s Business Aviation turbine fleet – and SAF remains a costly alternative to regular Jet-A fuel.

How to Make a Difference Today

While the industry’s top minds puzzle through these (and other) challenges to drive the industry towards its net zero carbon emissions goal by 2050, a simple, inexpensive option exists for environmentally conscious aircraft owners and operators who want to make a difference now. Those wishing to compensate for their carbon emissions might consider signing up to a carbon offsetting program. While everyone within the industry has heard about Carbon Offsetting, not everybody fully appreciates the workings of the various programs offered www.AVBUYER.com


AIRCRAFT DEVELOPMENT 1.qxp_Finance 21/06/2022 16:41 Page 2

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– including how they help to fund longer-term industry carbon neutrality goals. “There has been significant interest among Business Aviation industry participants wanting to address the concerns of their customers, employees, regulators and other stakeholders,” Ricci highlights. “By making carbon offset credits and other strategies feasible and cost-effective, we can enable the industry to have a positive impact on sustainability while continuing its operations, even while development continues on new technologies that will make actual aircraft operations far more carbon-efficient, or even carbon-free.” Simply put, a carbon ‘offset’ is the ‘capture’ of a metric ton of CO2 from the Earth’s atmosphere. An independent, ICAO-approved verifying body certifies the emission reduction, with each metric ton being assigned a credit ID number. Ultimately, when purchasing an offset, aircraft owners/operators purchase the specific credit ID number along with the right to claim its associated reduction. When claimed, the credit is retired in the public registry, ensuring the reduction can only be claimed once. According to Ricci, projects must be verified regularly in order to prove reductions are real, and that the credits meet stringent offset criteria. www.AVBUYER.com

Different verifying bodies have different projects or geographic focus where they distribute the carbon offsetting fees. As an example, Verra and Gold Standard tend to represent projects worldwide, whereas Climate Action Reserve and American Carbon Registry are more North America-focussed. 4AIR: Specifically, the rating system 4AIR employs has a four-part framework, with each level having “definite, science-based, independently verified results”, all escalating impacts on sustainability. “The first level is carbon neutrality through offsets,” Ricci outlines. “The second is emissions neutrality, again through offsets, but expanding to cover non-CO2 emissions as well. “The third is the actual reduction of net emissions, currently through Sustainable Aviation Fuel. And the fourth level is intended to promote further innovation by supporting universities and public and private research centers.” According to Ricci, after its first full year of operations in 2021, 4AIR has signed participants including fractional ownership providers, jet card and charter travel providers, aircraft management companies, independent corporate flight departments, OEMs, airports, Fixed Base Operators,

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“Different verifying bodies have different projects or geographic focus where they distribute the carbon offsetting fees.” and even individuals. “Each participant commits to a level in our framework and reports the relevant data. For instance, a fractional provider would report flight hours by aircraft type,” he explains. “The resulting emissions are estimated using a methodology consistent with the international aviation best practices. “Each level’s fee is based on the fuel efficiency of the covered aircraft, so, as clients transition to more efficient aircraft, it becomes cheaper to achieve higher ratings.” Pratt & Whitney Canada: Launching its Carbon Offset Service at the end of 2020 for business jet customers enrolled on its Eagle Service Plan (ESP) hourly maintenance program, Pratt & Whitney Canada has subsequently extended the program across all its engine types to include regional jets, helicopters and, most recently, General Aviation aircraft (turboprops) enrolled with ESP. P&WC’s Carbon Offset Service is designed as a “convenient turnkey service for our pay-per-hour customers, who already report their monthly engine utilization hours”, says Francois-Etienne Rheaume, Senior Manager, Aftermarket Services. No additional work is required by participants. 42 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

“All owners and operators have to do is sign up for the service and they are charged on their ESP invoice, only when their engines are operated,” he explains. “Service participants receive an annual certificate confirming the number of metric tons of CO2 they’ve offset, based on their utilization.” For its part, Pratt & Whitney Canada has established standardized emissions models for each engine, based on engine data it has as an engine manufacturer and service provider. Those models take into account operating conditions. “For example, we take into consideration factors impacting aircraft fuel burn and emissions, such as payload, operating conditions and environment,” Rheaume qualifies. “Through our standardized emissions model, we offer participants a predictable service rate, based on dollars per hour, for which Pratt & Whitney Canada works collaboratively with South Pole [an offsets provider],” he adds. Rolls-Royce: Announcing its SAFinity program in May 2021, Rolls-Royce’s program is a voluntary offset program. “This flexible program combines carbon neutral flight by combining independently verified sustainability projects with a direct investment in Sustainable Aviation Fuel,

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AIRCRAFT DEVELOPMENT 1.qxp_Finance 21/06/2022 16:45 Page 4

SUSTAINABILITY © P&WC

aiming to further support and accelerate the availability and use of SAF in the aviation industry,” says Megha Bhatia, Vice-President of Sales & Marketing, Rolls-Royce. With more than 3,600 business jets powered by RollsRoyce engines in service around the world – and many customers being single airplane operators – the engine OEM has clearly developed its program for simplicity. “Our customers know and trust us, and those who signup for SAFinity have a single point of contact for all services including sustainability through their OEM provider,” Bhatia explains. The fee charged to individual operators enrolled with SAFinity will be determined by the expected hourly fuel consumption of the aircraft, she adds.

How Popular is Carbon Offsetting?

During its first full year of operation last year, 4AIR reports enormous success, having facilitated more than 250,000 carbon-neutral flight hours, recording more than 80,000 emissions-neutral flight hours, and making possible more than 125 million carbon-neutral flight miles. “That’s the equivalent of 262 round trips to the Moon,” Ricci highlights, adding that most of the early successes have been generated through carbon offset credits. Similarly, Bhatia says Rolls-Royce has received an “overwhelmingly positive response” in the last year, since the launch of SAFinity. “This includes at events and at panels we’ve participated in – we receive a lot of questions about how owners or operators can join the program.” While Rolls-Royce is still finalizing the development phase, Bhatia reveals that it intends to extend SAFinity to all aircraft, including non-Rolls-Royce powered aircraft. “We’ve created a straightforward program open to the complete Business Aviation industry, and we see ourselves playing a leading role in collaborating with the industry to reach net zero by 2050,” she says. Uptake has been positive too for Pratt & Whitney, who note participants are predominantly business jet owners and operators, for whom the service was initially launched. Nevertheless, the recent announcement that the Carbon Offset Service is being extended to GA operators came with news that JetFly, the world’s largest Pilatus aircraft operator, had enrolled all of its PT6 powered Pilatus aircraft on the service. “We’re seeing an increased interest in our service as 44 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

more and more aircraft operators and aviation stakeholders continue to raise awareness and adopt sustainable best practices,” Rheaume highlights.

What do Offsetting Fees Fund?

Generally speaking, business aircraft owners and operators opting in to a Carbon Offsetting program are likely to find projects close to their heart, providing the satisfaction of knowing their offsetting fees are making a genuine difference. And often carbon offsetting fees have multiple benefits, including social, economic, and environmental. “4AIR’s program is designed to use offsets as a starting point for achieving carbon neutrality, but recognizing that they’re not the end-solution,” Ricci highlights. “Offsets are designed to align financing with the most cost-effective, global CO2 reduction opportunities. As cheaper decarbonization options are achieved, offsets become more expensive and help unlock harder to decarbonize initiatives.” 4AIR: In the case of 4AIR specifically, participants can purchase credits that fund particular projects. For example, in the Chhattisgarh, Karnataka, Maharashtra and Rajasthan states of India, carbon offset credits are helping to finance a solar renewable energy project. “This will generate enough solar power to replace more than 1.5 million megawatt hours of electricity annually,” Ricci says. “That’s a real impact in a nation in which 80% of electricity is generated through fossil fuels. Additionally, 4AIR carbon offsets fund a project to protect 300,000 hectares of bonobo and forest elephant habitat in Africa, keeping the Congo Basin secure as the world’s second-largest intact rainforest, and as one of the world’s largest ‘carbon sinks’, helping to capture carbon emissions. Participants can also opt for their fees to fund Ascend, a Florida-based producer of nylon resin, which has developed a technology that captures emissions of Nitrous Oxide (N2O) produced during the manufacturing process. “With a global warming potential 298 times greater than that of CO2, capturing emissions of N2O is critical – and with Ascend’s technology, nine million metric tons will be captured annually,” Ricci explains. www.AVBUYER.com


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Pratt & Whitney Canada: Among the global sustainability projects that are funded by Pratt & Whitney’s Carbon Offset Service are waste-to-energy and wastewater treatment projects where methane gas is captured and repurposed, generating renewable energy. In addition to achieving greenhouse gas reduction, these projects, conducted in America and Asia, provide employment opportunities, reduce fossil fuel consumption, and protect land, further enhancing biodiversity and the conservation of our planet. “Without such initiatives, quantities of methane, a very strong greenhouse gas, are released into the atmosphere and contribute to global warming,” Rheaume says. “As more and more customers procure carbon offsets, which have a fixed supply for a given project, project developers initiate new offset projects, contributing globally towards mitigating the effects of climate change, and towards the United Nations’ sustainable development goals.” Rolls-Royce: As already highlighted, participants in SAFinity will see a share of their fees directly fund Sustainable Aviation Fuel production, significant volumes of which will be needed to achieve net-zero goals. “SAFinity is one of the many ways to facilitate the increase of investment in SAF production and availability,” Bhatia says. “Every purchase through SAFinity ensures SAF is produced and pumped back into the aerospace grid for consumption.” Additionally, nature-based projects around the world will be beneficiaries of SAFinity, helping reduce greenhouse gas emissions while improving the livelihoods of local communities and preserving biodiversity and wildlife.

“These projects are verified by independent organizations to the highest internationally recognized standards such as Verified Carbon Standard (VCS) and Climate, Community and Biodiversity Standards (CCB),” Bhatia explains. “The contributions have had positive impacts on local communities by creating jobs, protecting biodiversity, improving soil quality, food production and rainwater absorption. Examples of the locations SAFinity is helping bring improvements are Cordellera Azul Natural Park in Peru, and Katingan Mentaya in Indonesia.”

In Summary…

Carbon-neutrality by the year 2050 is an ambitious target – but according to those working towards achieving that goal, it’s one the community is willing to get on board with. “The positive response from the private aviation community shows us that it is willing to take the lead on decarbonization, accelerating practices and technologies that will advance other areas of aviation and other industries towards enhanced sustainability,” Ricci summarizes. “As more and more customers procure carbon offsets, project developers create and launch new initiatives to help mitigate climate change and contribute to the United Nations sustainable development goals,” Rheaume concludes. More information from: 4AIR: www.4air.aero Pratt & Whitney Canada: https://www.pwc.ca/en/landing-pages-folder/ carbon-offset-service---esp-maintenance-program Rolls-Royce: https://safinity.net

MATT HARRIS is commissioning editor for AvBuyer. He is an experienced General and Business Aviation journalist and has edited a variety of titles across the last two decades. These include AvBuyer, BizJet Advisor and GA Buyer Europe. https://www.linkedin.com/in/matthew-harris-avbuyer/

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AVBUYER MAGAZINE Vol 26 Issue 7 2022

45


Project1_Layout 1 01/07/2022 10:16 Page 1


Action Aviation advertorial July 2022.qxp_Layout 1 22/06/2022 14:38 Page 1

SPONSORED CONTENT

Chairman of Action Aviation and holder of three Guinness World Records, Captain Hamish Harding, launched to Space

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AVBUYER MAGAZINE Vol 26 Issue 7 2022

47


AirCompAnalysis.qxp_ACAn 22/06/2022 09:04 Page 1

JET COMPARISON

GULFSTREAM GIV-SP DASSAULT FALCON 900EX

Jet Comparison: Gulfstream GIV-SP vs Dassault Falcon 900EX How do the Gulfstream GIV-SP and the Dassault Falcon 900EX compare on the pre-owned market? What are the advantages offered by each jet? Mike Chase analyses the performance and productivity parameters.

O

ver the following paragraphs we’ll consider key productivity parameters for the Gulfstream GIV-SP and Dassault Falcon 900EX (including payload, range, speed, and cabin size) to establish which aircraft provides the better value in the pre-owned Large Cabin business jet market. Among the questions we’ll look to answer is why there has been such a large increase in pre-owned sales for the Gulfstream GIV-SP in the past 12 months? Discover more within this article.

Gulfstream GIV-SP

FAA certification of the original Gulfstream GIV was awarded in April 1987, and deliveries were made until September 1992 when the improved Gulfstream GIV-SP (‘SP’ denoting Special Performance) entered the market. The GIV-SP provided higher payload and landing weights, and improved payload-range performance compared to its predecessor. It was subsequently made possible for owners of GIV models to upgrade their jets to GIV-SPs. Built between 1992 and 2002, the Gulfstream GIV-SP proved to be a hit with the market, and 303 aircraft were built during the

48 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

production run. As of this writing, 293 remained in service, and ten units had been retired. By continent, North America had the largest GIV-SP fleet percentage (87%), followed by Asia (6%) and Africa (4%), accounting for a 97% of the world’s fleet, per JETNET data.

Dassault Falcon 900EX

The first flight of the original Dassault Falcon 900 – a model developed from the Falcon 50 – took place in 1984. Over the years, Dassault refined and upgraded the original with the Falcon 900B, and eventually the Falcon 900EX, which offered improved engines and range over its predecessors, and an all-glass flight deck with modernized avionics. Produced between 1996 and 2003 (before a further upgrade was introduced in the form of the Falcon 900EX EASy), Dassault built 118 Falcon 900EX business jets, all of which remained in operation at the time of writing. By continent, North America had the largest fleet percentage (81%), followed by Europe (14%), accounting for a combined total of 95% of the world’s Falcon 900EX fleet, at the time of writing, per JETNET data. www.AVBUYER.com


AirCompAnalysis.qxp_ACAn 22/06/2022 09:05 Page 2

www.AVBUYER.com

GULFSTREAM

DASSAULT

GIV-SP

FALCON 900EX

vs.

(Produced 1992 to 2002)

(Produced 1996 to 2003)

HOW MANY

EXECUTIVE

14

$6.4 Million (2002 Model)

12

SEATS

$12 Million (2002 Model)

WHICH OF THESE LARGE CABIN JETS WILL COME OUT ON TOP? HOW FAR

CAN WE TAKE? (Max Payload)

4 Pax, Available Payload Gulfstream GIV-SP

4,091nm

Dassault Falcon 900EX

4,469nm

OPERATION?

5,700lbs

Gulfstream GIV-SP Dassault Falcon 900EX

HOW MANY

UNITS IN

WHAT’S THE

HOW MUCH

PAYLOAD

CAN WE GO?

4,836lbs

HOW MANY

USED JETS SOLD EACH MONTH?

CRUISING SPEED?

(Knots) 459kts

Gulfstream GIV-SP Dassault Falcon 900EX

436kts

WHAT’S THE

COST

PER HOUR?

3 (3.4%)

118 293

LONG RANGE

7 (1.7%) Gulfstream GIV-SP Dassault Falcon 900EX

$4,167 $2,655

12-Month Average Figure Sources used: JETNET, B&CA, Aircraft Bluebook, and Chase & Associates.

www.AVBUYER.com

(% = Global Fleet For Sale)

 AVBUYER MAGAZINE Vol 26 Issue 7 2022

49


AirCompAnalysis.qxp_ACAn 22/06/2022 12:27 Page 3

JET COMPARISON

AVBUYER.com

Table A - Payload Comparison

Payload Comparison

Gulfstream GIV-SP Dassault Falcon 900EX

74,600 48,300

20,281 21,000

MTOW (lb)

Max Fuel (lb)

520

303

Fuel Usage (GPH)

5,700

4,836

Max Payload (lb)

2,419

1,471

Avail Payload w/Max Fuel (lb)

Source: OEMs, B&CA

Chart A - Cabin Comparison Gulfstream GIV-SP

Dassault Falcon 900EX

3,976

4,404

Max Fuel w/Available P/L Range (nm)

When comparing business jets, an important area for potential operators to focus on is payload capability, and especially the ‘Available Payload with Maximum Fuel’. Table A (left) shows the Gulfstream GIV-SP’s ‘Available Payload with Maximum Fuel’ is 2,419lbs, which is 948lbs more than that offered by the Dassault Falcon 900EX (1,471lbs).

Cabin Comparison

As shown in Chart A (middle, left), the cabin height is the same for both aircraft. However, the cabin width is greater in the Dassault Falcon 900EX (7.7ft) compared to the Gulfstream GIVSP (7.3ft). Not depicted on the chart, the Gulfstream GIV-SP offers more cabin length (45.1ft. versus 33.2ft), and provides more overall cabin volume (1,658cu.ft versus 1,270cu.ft). Configured with executive seating, the Gulfstream GIV-SP provides room for up to 14 seats and two crew, while the Dassault Falcon 900EX provides room for 12 and two crew. Moreover, the Gulfstream GIV-SP provides more internal luggage volume (169cu.ft) compared to the Falcon 900EX (127cu.ft). Neither jet provides any external luggage space.

Range Comparison

Source: UPCAST JETBOOK

Chart B - Range Comparison Gulfstream GIV-SP Dassault Falcon 900EX

4,091 (nm) 4,469 (nm)

w/4 PAX w/4 PAX

Using Wichita, Kansas, as the start point, Chart B (below, left) shows the Dassault Falcon 900EX has a range of 4,469nm while carrying four passengers and available fuel. The Gulfstream GIV-SP provides a range of 4,091nm with the same payload. Note: For business jets, ‘Four Pax Range’ represents the maximum IFR range of the aircraft at long range cruise. The NBAA IFR fuel reserve calculation is for a 200nm alternate. This range does not include winds aloft or any other weather-related obstacles.

Powerplant Details

The Gulfstream GIV-SP is powered by two RollsRoyce Tay Mk611-8 engines, providing 13,850lbst each. These burn 520 gallons of fuel per hour. By comparison, the Dassault Falcon 900EX has three Honeywell TFE731-60 engines producing 5,000lbst each. These burn 303 gallons of per hour.

Cost per Mile Comparison

Source: Chase & Associates

50 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

Chart C (overleaf) details ‘Cost per Mile’, comparing the two business jets and factoring direct costs, with each aircraft flying a 1,000nm mission with 800lbs (four passengers) payload. The Gulfstream GIV-SP ($10.85/nm) has a highest variable cost compared to the Dassault Falcon 900EX ($6.69/nm) – a significant difference of 62.2% in favor of the Falcon 900EX.

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Freestream July - 1 page.qxp 23/06/2022 09:16 Page 1

2020 Boeing BBJ MAX 8

Bombardier Challenger 604

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S/N: 20271. Airframe TT: 3,262 hours. Aircraft Total Cycles: 1,752

Off Market – coming into inventory soon

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Airframe TT: 3,368 hours. Aircraft Total Cycles: 1,091

S/N: 36090. Airframe TT: 2,451 hours. Aircraft Total Cycles: 724

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AirCompAnalysis.qxp_ACAn 22/06/2022 12:30 Page 4

JET COMPARISON

AVBUYER.com

Variable Cost Comparison

The ‘Variable Cost’, illustrated in Chart D (middle, left), is defined as the estimated cost of fuel, maintenance, labor, scheduled parts, and miscellaneous trip expenses (e.g., hangar, crew, and catering). These costs DO NOT represent a direct source into every flight department and their trip support expenses. For comparative purposes, the costs presented are the relative differences, not the actual differences since these may vary from one flight department to another. The Gulfstream GIV-SP ($4,167/hr) has a higher variable cost compared to the Dassault Falcon 900EX ($2,655/hr) – a difference of 56.9% in favor of the Falcon 900EX.

Chart C – Cost Per Mile Comparison

Gulfstream GIV-SP

$10.85

Dassault Falcon 900EX

$6.69 $5.00

$0

$10.00

$15.00

US $ per nautical mile * 1,000 nm mission costs Source: JETNET

Market Comparison

Table B (bottom, left) contains the used 2002 prices (per Aircraft Bluebook) for the Gulfstream GIV-SP and the Dassault Falcon 900EX since this was the last year both models were in production. Notably, as of this writing, a 2002 model GIV-SP costs much less to purchase on average than a Falcon 900EX ($6.4m versus $12m). Adding a further level of intrigue to the preowned prices is the fact that in 2002 the cost of a new Gulfstream GIV-SP was $32.75m – just $50k less than a $32.80m Dassault Falcon 900EX. Also, listed are the long-range cruise speed and range numbers (per B&CA), while the number of aircraft in operation, the percentage for sale, and average sold are from JETNET. The average number of used transactions (units sold) per month over the previous 12 months were seven for the Gulfstream GIVSP, and three for the Falcon 900EX.

Chart D – Variable Cost Comparison

$4,167

Gulfstream GIV-SP Dassault Falcon 900EX

$2,655 $2,000

$0

$4,000

$6,000

US $ per hour Source: JETNET

Used Aircraft Retail Sale Transaction Trends

Table B - Aircraft Comparison Table Gulfstream GIV-SP Dassault Falcon 900EX

459

436

Long Range Cruise Speed

1,658 1,270

4,091 4,469

Cabin Volume Cu.Ft.

4 Pax w/Avail Fuel IFR Range (nm)

*Average Full Sale Transactions in the past 12 months as of May 2022, Source: JETNET Data courtesy of B&CA; JETNET, and Aircraft Bluebook

52 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

$6.4

$12

Used 2002 Price $US Mil.

293

118

In Operation

1.7% 3.4% % For Sale

0%

72

3

Used Average Sold per Month*

Current availability of used business jet inventory is a daily moving target. Comparing the 12 months ending May 2022, there were 82 pre-owned retail sale transactions for the Gulfstream GIV-SP. For comparison, in May 2021 there were 73, while the five-year average is 56. The difference between the two 12-month periods (May 2022 and May 2021) is a relatively minimal nine jets. However, the difference compared to the five-year average is 26 additional jet sales in the year leading up to May 2022. Where did the additional demand come from? In reviewing a detailed usage report from JETNET, we found the number of Gulfstream GIV-SP business jets used for charter operations increased from nine aircraft in May 2021 to 20 in May 2022. It is reasonable to conclude that with many new users entering Business Aviation via charter, and with a shortage of newer inventory

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Project2_Layout 1 30/06/2022 11:05 Page 1

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30 YEARS OF EXCELLENCE

GULFSTREAM G450 S N 4260

GULFSTREAM IV

SN

1 1 48

FALCON 7X S N 16 3

CHALLENGER 350 S N 20803

CHALLENGER 300 S N 2 0 4 3 0

CHALLENGER 300 S N 203 06

CHALLENGER 604 S N 53 5 0

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AirCompAnalysis.qxp_ACAn 22/06/2022 12:37 Page 5

JET COMPARISON

Chart E – Gulfstream GIV-SP Maximum Scheduled Maintenance Equity Gulfstream GIV-SP Assumed Annual Utilization: 375 Flight Hours Average Maximum Maintenance Equity: $3,233,878 Pct of Avg Max Mtnc Equity vs. Aircraft Age

Pct of Max Mtnc Equity

90% 80% 70% 60% 50% 40% 30% 20% 10%

21

20

23

22

25

24

27

26

28

29

30

31

32

33

34

35

Aircraft Age (Years) Source: Asset Insight Inc. (www.assetinsightinc.com)

Chart F – Dassault Falcon 900EX Maximum Scheduled Maintenance Equity Falcon 900EX Assumed Annual Utilization: 475 Flight Hours Average Maximum Maintenance Equity: $2,159,209

Pct of Max Mtnc Equity

Pct of Avg Max Mtnc Equity vs. Aircraft Age

80% 70% 60% 50% 40% 30% 20%

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

Aircraft Age (Years) Source: Asset Insight (www.assetinsight.com)

Table C - Gulfstream GIV-SP Sample MACRS Depreciation Schedule 2002 Gulfstream GIV-SP - Private (Part 91) Full Retail Price - $6.4m 1

2

3

4

5

6

20.0%

32.0%

19.2%

11.5%

11.5%

5.8%

Depreciation ($M)

$1.3

$2.0

$1.2

$0.7

$0.7

$0.4

Depreciation Value ($M)

$5.1

$3.1

$1.8

$1.1

$0.4

$0

Cum. Depreciation ($M)

$1.3

$3.3

$4.6

$5.3

$6.0

$6.4

Year Rate (%)

2002 Gulfstream GIV-SP - Charter (Part 135) Full Retail Price - $6.4m 1

2

3

4

5

6

7

8

Rate (%)

14.3%

24.5%

17.5%

12.5%

8.9%

8.9%

8.9%

4.5%

Depreciation ($M)

$0.91

$1.57

$1.12

$0.80

$0.57

$0.57

$0.57

$0.29

Depreciation Value ($M)

$5.49

$3.92

$2.80

$2.00

$1.43

$0.86

$0.29

$0.00

Cum. Depreciation ($M)

$0.9

$2.5

$3.6

$4.4

$5.0

$5.5

$6.1

$6.4

Year

Source: Aircraft Bluebook

54 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

on the open market, charter operators have found the Gulfstream GIV-SP to be a very useful model to turn to – especially with its lower purchase price. As of June 4, 2022, there were four Gulfstream GIV-SP jets available for sale, two had asking prices of $5m and $5.5m, one invited offers, and one was available for lease. By comparison, there were five Dassault Falcon 900EX jets for sale – one had a sale pending, while the other four invited offers. While each aircraft serial number is unique, the Airframe Total Time (AFTT) and age/condition will cause great variation in the price of a specific aircraft – even between two aircraft from the same year of manufacture. The final negotiated price remains to be decided between the seller and buyer before the sale of an aircraft is completed.

Maximum Scheduled Maintenance Equity

Chart E and Chart F (left) display the Gulfstream GIV-SP and Dassault Falcon 900EX, respectively. They depict (and project) the Maximum Maintenance Equity each jet has available based on its age. The Maximum Maintenance Equity figure was achieved the day an aircraft came off the production line (since it had not accumulated any utilization toward any maintenance events). The percent of the Maximum Maintenance Equity that an average aircraft will have available, based on its age, assumes: • Average annual utilization of 375 flight hours for the Gulfstream GIV-SP hours, and 475 flight hours for the Dassault Falcon 900EX; and • All maintenance is completed when due. The Gulfstream GIV-SP shows the highest average maximum equity of $3,234m. Though the Falcon 900EX shows a lower average maximum equity at $2,159m, however, it also shows a large percentage increase in Year 32 in terms of average maximum equity.

Depreciation Schedule

Aircraft that are owned and operated by US businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, taxpayers can use accelerated depreciation of assets by taking a greater percentage of the deductions during the first few years of the applicable recovery period. In certain cases, aircraft may not qualify under the MACRS system and must be depreciated under the less favorable Alternative Depreciation System (ADS), based on a straight-line method meaning that equal deductions are taken during each year of the www.AVBUYER.com


AirCompAnalysis.qxp_ACAn 22/06/2022 12:39 Page 6

AVBUYER.com

Table D - Dassault Falcon 900EX Sample MACRS Depreciation Schedule

Productivity Comparison

The points in Chart G (right) are centered on the same aircraft. Pricing used in the horizontal axis is as published in Aircraft Bluebook (2002 models). The productivity index requires further discussion since factors used can be somewhat arbitrary. Productivity can be defined (and it is here) as the multiple of three factors: 1. Four Passenger Range (nm) with available fuel 2. The long-range cruise speed flown to achieve that range 3. The cabin volume available for passengers and amenities Others may choose different parameters, www.AVBUYER.com

2002 Falcon 900EX - Private (Part 91) Full Retail Price - $12m Year

1

2

3

4

5

6

20.0%

32.0%

19.2%

11.5%

11.5%

5.8%

Depreciation ($M)

$2.4

$3.8

$2.3

$1.4

$1.4

$0.7

Depreciation Value ($M)

$9.6

$5.8

$3.5

$2.1

$0.7

$0

Cum. Depreciation ($M)

$2.4

$6.2

$8.5

$9.9

$11.3

$12.0

Rate (%)

2002 Falcon 900EX - Charter (Part 135) Full Retail Price - $12m 1

2

3

4

5

6

7

8

14.3%

24.5%

17.5%

12.5%

8.9%

8.9%

8.9%

4.5%

Depreciation ($M)

$1.71

$2.94

$2.10

$1.50

$1.07

$1.07

$1.07

$0.54

Depreciation Value ($M)

$10.29

$7.35

$5.25

$3.75

$2.68

$1.61

$0.54

$0.00

Cum. Depreciation ($M)

$1.7

$4.7

$6.8

$8.3

$9.3

$10.4

$11.5

$12.0

Year Rate (%)

Source: Aircraft Bluebook

Chart G - Productivity Comparison $15.0

Prices (millions)

applicable recovery period. In most cases, recovery periods under ADS are longer than recovery periods available under MACRS. There is a variety of factors that taxpayers must consider in determining if an aircraft may be depreciated, and, if so, the correct depreciation method and recovery period that should be utilized. For example, aircraft used in charter service (i.e. Part 135) are normally depreciated under MACRS over a seven-year recovery period, or under ADS using a twelveyear recovery period. Aircraft used for qualified business purposes, such as Part 91 business use flights, are generally depreciated under MACRS over a period of five years or by using ADS with a seven-year recovery period. There are certain uses of the aircraft, such as non-business flights, that may have an impact on the allowable depreciation deduction available in any given year. The US enacted the 2017 Tax Cuts & Jobs Act into law on December 22, 2017. Under the Act, taxpayers may be able to deduct up to 100% of the cost of a new or pre-owned aircraft purchased and placed in service before January 1, 2023. This 100% expensing provision is a huge bonus for aircraft owners and operators. After December 31, 2022, the Act decreases the percentage available each year by 20% to depreciate qualified business jets until December 31, 2026. Table C (left) depicts an example of using the MACRS schedule for a 2002-model Gulfstream GIV-SP in private (Part 91) and charter (Part 135) operations over five- and seven-year periods. The price is as published by Aircraft Bluebook at the time of writing. Table D (left) depicts an example of using the MACRS schedule for a 2002-model Dassault Falcon 900EX in private (Part 91) and charter (Part 135) operations over five- and seven-year periods. The price is as published by Aircraft Bluebook at the time of writing.

2002 Dassault Falcon 900EX

$10.0

2002 Gulfstream GIV-SP $5.0

$0.0 0.0000

2.0000

4.0000

6.0000

Index (Speed x Range x Cabin Volume / 1,000,000,000) but serious business aircraft buyers are usually impressed with price, range, speed, and cabin size. The Gulfstream GIV-SP offers greater ‘Available Payload with Maximum Fuel’, a larger cabin volume, and a higher cruise speed than the Dassault Falcon 900EX, which has a longer range, and has lower operating costs. The biggest differentiator, according to Aircraft Bluebook, is the pre-owned cost to acquire the aircraft, with a 2002 model GIVSP costing $6.4m versus $12m for a 2002 model Falcon 900EX (at the time of writing). Within these paragraphs we have touched

upon several of the attributes that business jet operators value, although there are other qualities, such as airport performance, terminal area performance and time-to-climb that might factor in a buying decision. Prospective buyers of one of these large business jets would have to weigh the capabilities of each very carefully against their specific mission need to determine which one is the best fit for their flight operations, but we believe the higher sales volume for the GIV-SP over the past two years is a reflection of the market finding an older model offering excellent value at its current price-point. T

MIKE CHASE Mike’s analytical and consultancy services are highly valued within the Business Aviation industry. He is founder and president of Chase & Associates, and works closely with several respected sources to compile his unique Aircraft Comparative Analysis features. Contact Mike via mike@avbuyer.com

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AVBUYER MAGAZINE Vol 26 Issue 7 2022

55


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Flight Dept 1 JULY.qxp_Finance 21/06/2022 16:00 Page 1

FLIGHT DEPARTMENT MANAGEMENT

AVBUYER.com

Tips for Training & Retaining Flight Crews Today In a world where many seasoned pilots are being tempted away from Business Aviation flight departments by big-money contracts, leaving a gap in experience, how can you keep your crew together, and fill any gaps in experience? Andre Fodor shares insights…

O

nly recently, I invited two former colleagues for lunch to celebrate their appointments to fly for one of the major airlines. We were just discussing the abundance of opportunities currently available in the industry as we ordered appetizers when both their phones rang. Each was receiving a call from other airlines asking if they were interested in coming for interviews. It was truly incredible to see. It also emphasized the fact that the corporate aviation industry had just lost two very experienced pilots. I never made a specific decision to work in corporate aviation. Rather, I was steered towards Business Aviation by

58 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

the lack of jobs available with the airlines. And having tried it, I enjoyed it. I cut my aviation teeth in the charter and fractional industries, biding my time and gaining experience before moving into bigger, more advanced business jets. Having always enjoyed the direct interaction which passengers that private aviation brings, the challenges of flying to new destinations and the preparation for some very challenging trips continue to excite me. After thirty years in Business Aviation, I have been nearly everywhere around the globe, meeting some amazing people. But, despite all of this, right now there are so many temptations for people who love flying airplanes to move out of Business Aviation – so many jobs that hold allure.

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Flight Dept 1 JULY.qxp_Finance 21/06/2022 16:01 Page 2

FLIGHT DEPARTMENT MANAGEMENT

AVBUYER.com

“...right now there are so many temptations for people who love flying airplanes to move out of Business Aviation – so many jobs that hold allure.”

The Experience Gap

As I talk with industry colleagues working in charter operations, stories of pilots low on experience occupying seats in aircraft that are crossing oceans and poles come up. With the current market demand, the seasoned pilots are moving into higher-paying jobs, leaving a gap where they would once have transferred valuable operational knowledge to less seasoned pilots. This is obviously a less-than-perfect scenario in an environment that requires a high degree of mastery. Meanwhile, the legacy airlines are struggling to fill training slots as candidates don’t show up for initial training having been seduced by other, aggressive offers. Several are resorting to “hiring and storing”, as in starting the new pilot on guaranteed pay, but with training scheduled months into the future due to a lack of available instructors and simulators. My two friends mentioned earlier will only begin their training three months from now. In private aviation, things are just as tough. One large charter operator hired fifty pilots last year and lost seventy to other jobs. That same operator planned the addition of sixteen large-cabin jets to cover growing demand from new and existing customers. The math simply doesn’t add up. Meanwhile, we’ve seen a recent rise in incidents such as runway excursions, which is obviously disconcerting. Industry peers involved in training and checking describe a growing lack of knowledge of aircraft performance among their trainees. Topics such as accelerate/stop, second segment climb, missed approach gradient, contamination corrections, and hold-over times generate puzzled looks. A growing reliance on electronic guidance is reported, as is a lack of discernment as to when technology has limitations. In order to mitigate these gaps in pilot knowledge, I suspect that Business Aviation will have to follow the airlines in providing trip-specific, “canned performance” for every take-off and landing. 60 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

What Needs to Happen to Enhance Experience?

To help our industry’s pilots gain more experience, I’d like to see a change in the training and checking process – specifically during initial training. Whereas today the typical syllabus is structured with many days of ground school, followed by several simulator sessions before a check ride, a new training protocol emulating the airlines would integrate computer-based training (CBT). Then the use of classroom time with experienced in-type instructors to apply the theory into reallife scenario discussions could provide tangible know-how transfer. The simulator sessions could become progressive checks, freeing up valuable time to learn advanced aircraft operations, instead of repeating the same maneuvers (already met to gain proficiency) in preparation for the check ride. If the airlines do it already, what is the Business Aviation industry waiting for? Moreover, as airline pilots reach mandatory retirement age, we should be considering them as a potential recruitment pool. Many are experienced professionals who are still fit to fly. Ultimately, the question will be whether they can successfully transfer from a scheduled airline environment into Business Aviation: Will they adapt to new roles requiring flight planning, loading baggage, and even servicing a lavatory?

How to Gain Loyalty in your Flight Operation

Surveys indicate that corporate pilots value quality of life (QoL) over salary. The challenge remains as to how we incorporate that QoL? For example, in my flight department, consisting of just enough pilots to fly our aircraft, granting vacations can be a struggle – especially when contract pilots are finding www.AVBUYER.com


Flight Dept 1 JULY.qxp_Finance 21/06/2022 16:04 Page 3

full-time jobs or getting premium pay to work overtime on top of their ‘day jobs’. I can only guarantee my team extended leave during heavy maintenance checks when the airplane will be grounded for a longer period of time. So my mitigation technique is to keep everyone well informed of the opportunities for leisure time, and take really good care of our contract pilots so we are their preferred customer. ‘Salary’ and ‘longevity’ do indeed come high on the list of things corporate pilots value, after QoL. Pilots want good compensation, a predictable career path, and stability. All of this means that company principals need the understanding that a committed crew leads to lower costs, savings in everything from maintenance, to fuel, expense reports, and higher dispatch availability. If a crew knows its principal values and respects QoL, it will work diligently to fulfill every aspect of the owner’s expectations. In my opinion, this should include (but not be limited to) an exit package if the airplane is sold, and the possibility of transitioning into a non-flying job if medical issues should cause the loss of a license. If the pilots know they’re cared for, they will develop a fierce longterm loyalty and commitment to their flight departments.

Closing Thoughts

There’s no denying the benefits of airline flying. Being part of a large operation has its perks, including coverage during sick leave, schedule flexibility, and an outlined career growth path. But as professional managers, we need to be careful to advertise the benefits of private flying too, valuing the excitement of private aviation, its ever-changing destinations, extended down-times that allow for crews to explore new locales, and flights that challenge a pilot’s skills and techniques. Finally, we need to be investors. Believe that you have made the right choice in staffing, invest in the growth of your team members, and in their development and future. Work hard to secure outstanding compensation and benefits on their behalf, and create an open-door culture ensuring your flight department is a great place to work. T

ANDRE FODOR With a focused approach on global excellence and creativity, Andre Fodor has managed flight operations for the U.N. and Flight Options as well as being a senior demonstration pilot and instructor for Embraer Aircraft. He is the Aviation Director for his current employer. https://www.linkedin.com/in/andrefodor/

www.AVBUYER.com

AVBUYER MAGAZINE Vol 26 Issue 7 2022

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The Private Jet Company May.qxp_Layout 1 19/05/2022 14:15 Page 1

Citation X S/N 97 8,242 Hours, Engines enrolled on RRCC, Airframe enrolled on Proparts, New Paint 2021, Make Offer


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FLIGHT DEPARTMENT MANAGEMENT

AVBUYER.com

COURTESY OF FRASCA

How BizAv Can Plan for Long-Term Pilot Proficiency What can flight departments and flight training providers be doing to promote long-term pilot proficiency? Mario Pierobon spoke with FRASCA’s Randy Gawenda to find out his thoughts…

F

or corporate flight departments it’s vitally important to manage both the initial and recurrent flight training well. Business aircraft operators need to be as proactive as possible to manage the availability of training slots, to source instructors, and to plan for proficiency in the long-term. “During Covid, pilot shortages and the rapid turnover that can result meant the level of uncertainty and difficulty in planning has never been higher,” notes Randy Gawenda, Business Development Manager at FRASCA. “The coordination and scheduling of slots can get derailed very quickly due to time constraints with ‘onboarding’ new hires. Everything takes longer right now, so getting as much paperwork completed ahead of time can

64 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

help,” Gawenda says – though admittedly he says this doesn’t solve the major challenges. During the Covid pandemic, international training was heavily impacted with significant cutbacks. Indeed, according to Gawenda, it was almost non-existent in some cases. “But even prior to the pandemic, international operators were having significant issues getting new hires to training, due to some of the United States’ foreign flight training policies,” he argues. “That really hasn’t gone away. While recurrent training has traditionally tended to be more stable and predictable, even that has grown more complex as the operators try to fill their ranks.” While larger flight department may have more elasticity,

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Flight Dept 2 JULY.qxp_Finance 22/06/2022 10:43 Page 2

FLIGHT DEPARTMENT MANAGEMENT

both in terms of resources and negotiated training slots, flight training is a tightrope for many operators. “Smaller flight departments may want to grow their network so they can gain better options when things do not go as planned”, Gawenda suggests. “This makes a bigger marketplace, which may help maintain a higher level of capacity and throughput to the benefit of everyone involved.”

Addressing the Need for Experienced Instructors

There is a set of best practices for operators to follow to source instructors that are experienced on their aircraft types. They should start talking to instructors early about how they can pass on their knowledge and experience, Gawenda suggests. “Retirement, or a failed medical does not mean a pilot’s aviation career is necessarily over. We do not promote the importance of good instruction enough,” he says. “We often mistake demonstrating manoeuvres over-andover again for instruction in the early stages of training, and we mistake ticking the boxes as good instruction for the more mature training stages later. That’s not instructing or teaching. We lack a consistent cadence to teach better aeronautical decision-making.” So how does one transfer, say, 35 years of high-level corporate aviation experience? “There needs to be more emphasis on scenario-based training and evidence-based training, because these concepts are not exclusive to the airlines by any means,” Gawenda says. “Surely, one does always need to demonstrate one can fly to the skills and standards of their certificate,” he argues.

AVBUYER.com

“But while we all know training can be expensive, and everyone has less and less time, how do we impart better aeronautical decision making? How do we teach threat and risk assessment? “It can take 30 years of flying the aircraft to acquire that knowledge, so that’s obviously not the answer. One way is to engage pilots that have that experience and the desire to pass it on via scenario-based, and evidence-based training.”

Planning for Long-Term Proficiency

In their proactive training management efforts, corporate flight department managers should plan for long-term proficiency, both in terms of training content and training slots. According to Gawenda, training courses need to account for a continuing level of proficiency in all facets of flying. “This includes full automation, degraded automation, and raw data. Unfortunately, none of these skills are like riding a bike – they’re refined skills requiring a regular cadence to

“Training should address the gaps and weak areas, not a static or fixed curriculum each time...”

COURTESY OF FRASCA

66 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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maintain proficiency, not just recency. “A good mix of scenario-based training that flows into evidence-based training is also needed,” he adds. “Perhaps pilot training should be a bit more like our medical records, as our skills are never a constant from year-to-year. They vary due to what we fly, how often, and the environments and situations we experience that year. It is never static though.” Training should address the gaps and weak areas, not a static or fixed curriculum each time, says Gawenda. “This requires a higher level of coordination, from the FAA, insurance industry, the training centers, the pilots, and the instructors. “Everyone would need to buy in. But at some point, we need to get beyond the fear of saying we are not proficient at something because we have not done it in a long time. “It just means that this will be a bigger part of the next training session and maybe some higher minimums in the pilot’s ops specs are needed if they are likely to encounter

that type of situation due to weather, airport, etc. “It is hard to fix or address the necessary areas when we think at the end of a training session we’re 100% good to go for the next six, 12, or 24 months,” Gawenda warns. Consider Major League Baseball (MLB) pitchers for an analogy. “Everyone can pitch. Some are starters, some are short relief, some are long relief, some are set-up, and others are closers. All of them are MLB pitchers but they get optimized for a role, based on their strengths and weaknesses”, Gawenda illustrates. “Think about a middle reliever: they can be a starter, but they’ll need more spring training to get their arm stretched out and build endurance up. That comes from training. “It would be ideal if we could get pilot training to a place where the training becomes holistic, yet flexible enough to make sure each ‘pitcher’ can fill any role equally as well,” he concludes. More information from www.frasca.com T

MARIO PIEROBON is a safety management consultant covering both fixed- and rotary-wing operations. He writes broadly on safety-related topics, with expertise of air operations and crew training safety regulations. As a consultant, Mario helps companies improve procedures. His knowledge of safety is valued by several industry-leading publications, including AvBuyer.

MAKE MORE INFORMED FLIGHT TRAINING DECISIONS with AvBUYER.com

More information from: https://www.linkedin.com/in/mario-pierobon-85991319/

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AVBUYER MAGAZINE Vol 26 Issue 7 2022

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Turboprop September.qxp_Layout 1 23/06/2022 08:21 Page 2


Aradian November.qxp 23/03/2022 14:36 Page 1

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Gulfstream 450

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Several aircraft available

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2015 Citation XLS+

2012 Embraer Phenom 300 1,495 hours. ESP Gold and Embraer Executive Care. EU Ops compliant. Synthetic Vision. In-flight phone and datalink. ADS-B compliant

1,725 hours. Power Advantage Plus. Aux Advantage. ProParts. ADS-B compliant. Iridium satcom

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2005 Airbus EC120B

2670 hours. Air conditioning. Single/Dual pilot IFR

1490TT. Recent paint and interior. Air conditioning. Engine particle filter

ALSO OFFERING: Beech King Air C90GTi, B200, 350. Hawker 800XP, 900XP. Bell 412EP Call/Email For Details

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Embraer Legacy 600

Business Jets Ltd Price:

Please email

Year:

2007

S/N:

TBD

Reg:

-

TTAF:

4468

Location: Malta

Bombardier Global 6000

Andrew Leslie Price:

USD $27,500,000

Year:

2014

S/N:

TBA

Reg:

TBA

TTAF:

1940

Location: United Kingdom

Cessna Citation Sovereign

The Ritchie Group Price:

Please call

Year:

2005

S/N:

680-0051

Reg:

-

TTAF:

13,007.2

Location: USA & Canada

M A R K E Tel: +380 67 363 06 75 T E-mail: at@businessjets.aero P L 2nd owner since new. ASA Equipped. August 2020 - Interior A complete refurbishment. Total Landings: 2,084. Range: 3,250 C nm | 6,000 km. Maximum cruise speed: 460 kt | 850 km/h. E Certified ceiling: 41,000 ft | 12,500 m. Int: Daytime arrangement: 6 single seats, conference group with 4 single seats, 1 divan with 3 seats. Cabin Equipment: SAT phones/DVD-Player. 2x LCD monitors/premium sound system. Cabin inflight entertainment. PC Interface. Microwave & convection oven/fridge. Full refreshment center. Fully enclosed aft & forward lavatories.

Tel: +44 (0)771 040 2980 E-mail: andy.leslie@network-airline.com AVAILABLE IMMEDIATELY. RR Corp Care. FANS 1/A CPDLC. Enhanced soundproofing. ADS-B OUT. TCAS 7:1. WAAS / LPV. LINK 2000+ Datalink. Swift Broadband. Cert for 19 seats, inc. 14/5 seats currently. DIRECT SALE TO END USER (UBO) REQUIRED. TOTALLY OFF MARKET WITH STRICT GUIDELINES FROM OWNER. Looking for decision in principle with basic brochure subject to gaining serial number, camp etc. upon reciept of LOI STRICT 100% BROCHURE SENT WITH LOI BASED ON ABOVE..... LOI is not APA so we do not anticipate a problem with this. BROKERS WELCOME WITH PROOF OF MANDATE STRICT. Offers over $27.2m considered. If not sold it will be going to the manufacturer as part exchange on a new aircraft.

Tel: +1 314-409-4791 E-mail: sales@jet-transactions.com Available For Sale or Lease. Beautiful Interior, Well-Maintained and Always Hangered. ADS-B OUT, WAAS and ATG 4000. Fresh Inspections in Work! Docs 1-4, 9-11, 14, 15 & 20 and Docs MC, MG, MD & MF. P&W ESP Silver Lite Engine Program. Eight Passenger with Double-Club Configuration, Forward Galley and Aft Lav. No Known Damage or Accident History. U.S. Registered — N2Q (Seller Will Retain Registration Number). Engines: Pratt & Whitney 306C. Int: Overall Almond. Cabinetry is F/C Mozambique Wood Veneer with Polished Champagne Gold Plating. Ext: New Paint Completed December 2020 at King Aerospace

www.jet-transactions.com

Cessna Citation CJ4

Park City Aviators Price:

$7,700,000 No VAT

Year:

2011

S/N:

525C-0064

Reg:

N43LJ

TTAF:

1953

Location: USA & Canada

Hawker 4000

High West Jets Price:

Make offer

Year:

2010

S/N:

RC-37

Reg:

N33VC

TTAF:

3330

Location: USA & Canada

www.AVBUYER.com

Tel: +1 (908) 391 2001 E-mail: management@pcaviators.com At the top of the single-pilot class, this aircraft meets the needs of corporate flight departments and owner-operators alike. With a trusted pedigree and a fully equipped cabin, the CJ4 jet can help you pursue your business goals while you enjoy the journey. This stunning CJ4 has been hangered, with a single owner/pilot since 6/14 and 575 hours. Cessna Service Center for all maintenance with fresh paint and new interior complete in 11/19. Engines: WILLIAMS FJ44-4A. Cycles: 1265. Avionics: Flight Deck Manufacturer/Model: Collins Pro Line 21 Integrated Avionics Suite. ADF: Collins NAV-4000. AHRS: Dual Collins AHC-3000. Avionics Package: Collins Pro Line 21 Communication. Radios: Dual Collins VHF-4000 CVR: Fairchild FA2100

Tel: +1 (801) 910-6920 E-mail: contact@highwestjets.com One U.S. owner since new. 10 passenger configuration w/aft divan and belted lav. Professionally managed and maintained. Flightdocs maintenance tracking. Engines enrolled on Pratt & Whitney ESP Gold. APU enrolled on Honeywell MSP Gold. Avionics enrolled on Honeywell MSP. Factory BPU & Load 20 upgrades completed at Textron. *Serial Number RC-40 parts aircraft available as add on purchase - inquire for details. Engines: Pratt & Whitney Model PW308A. APU: HONEYWELL MODEL GTCP36-150(HH). Avionics: Honeywell Primus Epic Avionics with 5 8x10 LCD Displays. Dual Honeywell FMS w/GPS. Dual Honeywell GPS Receivers. Dual Honeywell IRS. Int: Gogo Avance L5 WiFi. Aircell Corded and Cordless Handsets. Airshow 4000

AVBUYER MAGAZINE Vol 26 Issue 7 2022

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P071-073.qxp 23/06/2022 07:25 Page 2

M A R K E T P L A C E

BELL 412EMS

Leonard Hudson Drilling Price:

Offer

Year:

1981

S/N:

33017

Reg:

N554AL

TTAF:

15265

Tel: +1 (806) 662 5823 Email: ronfernuik@hotmail.com

Full EMS Medical 4 patient and 4 attendant interior. Recent ‘no expense spared’ airframe refurbishment at Acro Helipro within the last 100 hours. Both engines are fresh Pratt and Whitney overhauled. Immediate delivery, Meticulous records. Current with medical interior and 13 passenger utility interior are included, aircraft is ‘turn-key’ will provide Fresh annual /Export C of A

Location: USA & Canada

BELL 212 (Five Available)

Leonard Hudson Drilling Price:

Please Call

Year:

1991-1996

S/N:

Call for details

Reg:

Call for details

TTAF:

Call for details

Tel: +1 (806) 662 5823 Email: ronfernuik@hotmail.com

Five, Late Model, Bell 212s In 'Off Shore’. Available for immediate use. Asking $3.1M to $3.6M USD. Serial numbers: 35034, 35048, 35060, 35088 and 35096

Location: USA & Canada

McDonnell Douglas 902 Explorer

DynamicPitch Ltd Price:

Make offer

Year:

2002

S/N:

900-00103

Reg:

G-CIOS

TTAF:

2900

Location: United Kingdom

McDonnell Douglas 902 Explorer

DynamicPitch Ltd Price:

Please call

Year:

2007

S/N:

TBD

Reg:

-

TTAF:

5,420

Location: Belgium

Piper Meridian

Johannes Pichlmayr Price:

€949,000 Excl. VAT

Year:

2001

S/N:

4697108

Reg:

D-FAMJ

TTAF:

2385

Location: Germany

72 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

Tel: +44 (0)794 359 1121 Email: bobby@dynamicpitch.net A well specified MD902 Explorer helicopter in excellent condition. PWC PW207E Engines. Category A, Single Pilot. IFR Certified. NVIS Certified. EMS/Multirole Configuration. The aircaft can be specified, painted or modified to the new owners exact specification. A Spares package and ongoing maintenance/spares support also available.The MD902 Explorer posseses No Tail Rotor (NOTAR) Technology, an ultra smooth rotor system with plenty of ground clearance, spacious cabin, and powerful Pratt & Whitney engines. All resulting in a supremely capable and cost effective helicopter. The true definition of a multi-role helicopter, this MD902 Explorer is a worthy addition to your helicopter fleet

Tel: +44 (0)794 359 1121 Email: bobby@dynamicpitch.net Landings since new: 14,709. Engines - PW206A/PW207E. Avionics: SPIFR CAT A. GLASS COCKPIT. 3 AXIS AUTOPILOT. EFIS. VHF-AM BENDIX KING KX 165A (2X). INTER COMMUNICATION SYSTEM NAT AMS43. GPS NAVIGATION BENDIX KING KLN90B. BENDIX KING KRA405 RADAR ALTIMETER. ATC TRANSPONDER GARMIN KT73 TSO. KFC900 3AXIS AFCS. BENDIX KING SKYMAP IIIC. MOBILE PHONE (PROVISIONS). ADF BENDIX KING KR 87. DME BENDIX KING KN 63. VOR/ILS BENDIX KING KX 165A (2X). AIR DATA COMPUTER BENDIX KING KDC 481. AHRS LCR-100 Additional: FADEC. EMS CONFIG – AAT. NOTAR. WIRE STRIKE KIT. AIR CON

Tel: +49 (0) 170 186 4640 E-mail: j.pichlmayr@web.de CAMO an Maintenance by Piper Jet + Maintenance Kassel Germany. Interieur brown Leather. Exterieur blue Bottom and white Top. PFD 2 x Garmin G600. Garmin Synthetics Vision. NAV 1x Garmin G750, 1x Garmin G650. Garmin Flight Stream. Garmin GTX 330. Garmin GTX 327. Garmin GMA 340. Autopilot S-TEC 3100. Engine Monitor 2x Meggitt Avionics Magic. KING DME KN63. KING KMD 550/850 Stormscope/Weather Radar/Terrain/Traffic. RDR 2000 Weather Radar. KTA 870 Traffic Advisory Sytem. ELT Kannad 406 AF-Compact. Flightcom DVR 300i Digital Voice Recorder Clock. MID Continent MD 302 Standby Instrument. Air Condition. CD Musikplayer

www.AVBUYER.com


P071-073.qxp 23/06/2022 07:25 Page 3

CENTERVOL

Airbus H125

Price:

Make offer

Year:

2021

S/N:

8985

Reg:

-

TTAF:

6

M A R K E Tel: +34 (0) 626 571 821 T E-mail: GERENCIA@CENTERVOL.ES P L Brand new helicopter, only delivery time ( 6 hours ), full warranty A from Airbus and Turbomeca 2000hrs/3years. Available C inmediatly. High visibility cockpit, tail arch, cable cutter, extra on E top windows, float fixed parts, cargo fixed parts. Additional: High visibility cockpit, tail arch, cable cutter, extra on top windows, float fixed parts, cargo fixed parts. Aircraft in stock in our facilities in Girona Airport and available inmediatly.

Location: Spain

McDonnell Douglas 500E

Tel: +44 (0)787 680 1006 E-mail: anthony.draper@me.com

Anthony Draper Price:

Make offer

Year:

2002

S/N:

0563E

Reg:

G-MDDE

TTAF:

4465

Location: United Kingdom

Bell 206L 4

Beautifully refurbished MD500e. Completed in 2018 with custom designed paint and interior. Always hangared and well maintained. The aircraft has been valued at $1.45m, however we are accepting sensible offers. Airframe: Bristol Wire-strike Kit (Upper and Lower). Passenger Flight Steps. Sliding Vent Windows (Front). Pop Vent Windows (Rear). Fargo Auxiliary Fuel System. Engine 250-C20B. Avionics: Aspen EFD1000H with traffic unlock. Garmin GTN750H GPS/nav/com 1. King KY 196B com 2. Garmin GTX345 ADS-B transponder. Garmin GTS800 traffic awareness system. Beautiful Internal Farnborough Interiors Luxury Interior - Completed 2018. External New Porsche Crayon and Agate Grey Paint Scheme - Completed 2018

E-mail: ray.foran@nfc.ie

Ray Foran Price:

Please call

Year:

1996

S/N:

52175

Reg:

EI-GPH

TTAF:

6830

Location: Ireland

Aerospatiale Alouette II

Excellent Bell 206L 4 for sale, EASA compliant. Low time, meticulous records, part 145 maintained. Excellent component times. Van Horn Tail Rotor Blade. Recent interior refit & respray. Always hangared, available immediately. Engine Type 250-C30P. Avionics: GTN 650 Garmin Nav/Comm. KY196 VHF Comm Bendix King. Excellent interior, recent leather refit. Additional: Wire Strike Protection System (Upper) Bristol Aerospace. Wire Strike Protection System (Lower) Bristol Aerospace. High Skid Gear Aeronautical Accessories. Whelan LED Beacon Whelan. FreeFlight Rad alt, Display Garmin. Rubber Mounted Pax Wedge Window Assy Aeronautical Accessories. Tail Rotor Blade (Van Horn) Van Horn. Email only

Tel: +41 (0) 71 422 30 31 E-mail: willi.hefel@erlebnisflugplatz.ch

Hefel Willi Price:

€384,000 Inc. VAT

Year:

-

S/N:

TBD

Reg:

HB-XDF

TTAF:

-

Location: Switzerland

Aircraft Spare Parts Wheels, Starters, Brakes, etc. Outright and Exchange

For sale flight simulator Alouette III 316. Strobelights and position lights etc. are functional and can be operated. The wheels make it easy to load the simulator onto a trailer and bring it to the be brought to the event location. Power connection for whole plant 220 volt at former external power connection. Support device for foldable rotor blades are including. The simulator is equipped with dual controls and is always flown with pilot/instructor and visitor/student pilot. At events, exhibitions etc. the next "pilots" can the next "pilots" can already take a seat on the back seats and can listen to the listen to the explanations of the pilot/instructor. The simulator is not certified. However, it is very suitable for practicing the controls etc. before the start of the live training

Par Avion Ltd FALCONS • HAWKERS • LEARS

Cessna, Learjet, Hawker, Westwind, Falcon, Gulfstream, Global Express

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july AIRCRAFT INDEX.qxp 30/06/2022 12:44 Page 1

Aircraft For Sale • AIRCRAFT • HELICOPTERS

AIRCRAFT

PAGE

AIRBUS A318 Elite . . . . . . . . . . . 5, 76 A319 VIP . . . . . . . . . . . . 5

BOEING/MCDONNELL DOUGLAS BBJ . . . . . . . . . . . . . . . . 51 BBJ Max 8 . . . . . . . . . . . 51 737-700 . . . . . . . . . . . . . 16 787-8 . . . . . . . . . . . . . . 5, 76 787-9 . . . . . . . . . . . . . . 76

BOMBARDIER Global 5000 . . . . . . . . . . 76 Global 6000 . . . . . . . . . . 71, 76 Global 7500 . . . . . . . . . . 76 Global Express XRS. . . . 12

Challenger

300 350 604 605

. . . . . . . . . . . . . . . . 51, 53, 76 . . . . . . . . . . . . . . . . 53, 76 . . . . . . . . . . . . . . . . 16, 51, 53 . . . . . . . . . . . . . . . . 16

Learjet

45XR . . . . . . . . . . . . . . . 33

Citation

CESSNA

X. . . . . . . . . . . . . . . . . . . . 63, 76

AIRCRAFT

PAGE

AIRCRAFT

XLS+. . . . . . . . . . . . . . . . . 15, 53, 69 CJ2 . . . . . . . . . . . . . . . . 25 CJ2+ . . . . . . . . . . . . . . . 76 CJ3 . . . . . . . . . . . . . . . . 76 CJ4 . . . . . . . . . . . . . . . . 71 Bravo . . . . . . . . . . . . . . . 23 Latitude . . . . . . . . . . . . . 76 Mustang. . . . . . . . . . . . . 57 Sovereign. . . . . . . . . . . . 71, 76 182T Skylane. . . . . . . . . . 33 206H . . . . . . . . . . . . . . . 33

PAGE

AIRCRAFT

GULFSTREAM

V . . . . . . . . . . . . . . . . . . 69, 75 IV . . . . . . . . . . . . . . . . . . 53 IV SP . . . . . . . . . . . . . . . 69 150 . . . . . . . . . . . . . . . . 21 450 . . . . . . . . . . . . . . . . 33, 53, 69 500 . . . . . . . . . . . . . . . . 57 550 . . . . . . . . . . . . . . . . 5, 13, 51 . . . . . . . . . . . . . . . . . . . 69 650 . . . . . . . . . . . . . . . . 5, 6 650ER . . . . . . . . . . . . . . 53

SR22 G2. . . . . . . . . . . . . 33

DASSAULT FALCON 7X . . . . . . . . . . . . . . . . . 29, 33, 53 900B . . . . . . . . . . . . . . . 76 900EX EASy. . . . . . . . . . 75 900LX . . . . . . . . . . . . . . 76 2000 . . . . . . . . . . . . . . . 29, 43 2000LX . . . . . . . . . . . . . 75, 43 2000LXS . . . . . . . . . . . . 76

AIRBUS/ EUROCOPTER ACH135 . . . . . . . . . . . . . 57 EC 120B. . . . . . . . . . . . . 57, 69 EC135T2 . . . . . . . . . . . . 69 H125 . . . . . . . . . . . . . . . 73

AEROSPATIALE AGUSTAWESTLAND

King Air

350i . . . . . . . . . . . . . . . . 29 C90A . . . . . . . . . . . . . . . 57 C90GTi. . . . . . . . . . . . . . 69

AW109E Power. . . . . . . . .16 AW139. . . . . . . . . . . . . . 76

Beechcraft

BELL

1900D . . . . . . . . . . . . . . 57

Hawker

400A . . . . . . . . . . . . . . . 21 800XP . . . . . . . . . . . . . . 15, 29, 69 900XP . . . . . . . . . . . . . . 69 4000 . . . . . . . . . . . . . . . 71

PIAGGO

206 . . . . . . . . . . . . . . . . 16 206L. . . . . . . . . . . . . . . . 73 212 . . . . . . . . . . . . . . . . 72 412EP . . . . . . . . . . . . . . 69 412EMS . . . . . . . . . . . . . 72 505 Jet Ranger X. . . . . . 70

P180 Avanti . . . . . . . . . 75

EMBRAER

Legacy 500 . . . . . . . . . . 25 Legacy 600 . . . . . . . . . . 71, 76 Phenom 100. . . . . . . . . . 33 Phenom 300. . . . . . . . . . 69

HELICOPTERS

Alouette II . . . . . . . . . . . . .73

HAWKER BEECHCRAFT

CIRRUS

PAGE

McDONNELL Douglas 500E . . . . . . . . 73 Douglas 902. . . . . . . . . . 72

PILATUS PC-12 NG. . . . . . . . . . . . 16

PIPER Meridian . . . . . . . . . . . . 72

Advertiser’s Index 1st Source Bank ........................ 67 Action Aviation ............................47 Aircraft Bluebook ........................62 AeroBuyNow...............................57 AOPA ..........................................39 Aradian Aviation .........................69 Avpro ........................................ 53 Bose............................................65 Central Business Jets ................75 Clip Aviation .............................. 70 Dassault Falcon Pre-Owned .. 2 - 3 Duncan Aviation ........................ 15 Eagle Aviation .............................33 ElliottJets ....................................19 Flight Safety International ...........59 Freestream Aircraft ................... 51

General Aviation Services.......... 29 Global Jet Capital ..................... 37 Global Jet Monaco.................. 5 - 6 Hatt & Associates....................... 23 IADA ...........................................61 Jetcraft Corporation .......... 8 - 9, 76 JetHQ ........................................ 21 JETNET ..................................... 56 Jet Values ...................................62 OGARAJETS ............................. 25 Par Avion ................................... 43 Rolls-Royce ..................................1 Sparfell & Partners ............. 16 - 17 The Jet Business .................12 - 13 The Private Jet Company .......... 63

MRO Section Index Aero LEDs

49

Engine Assurance Program

Atlas Air Service AG

33

F/List

ATP

57

GE On Point

26 - 27

Bombardier

25

Gogo Business Aviation

38 - 39

C&L Aviation Group Concorde Battery Dassault

37, 55 49

23 2-3

Marklyn Jet Spares

21

More & Co

57

5

Pratt & Witney

7

Duncan Aviation

11

Satcom Direct

43

Elliott Aviation

13

TAE

19, 37

PROUD MEMBERS OF

British Business & General Aviation Assoc. • British Helicopter Assoc.• European Business Aviation Assoc. • International Aircraft Dealers Assoc. • National Aircraft Finance Assoc. • National Business Aviation Assoc.

74

AvBuyer (USPS 014-911), July 2022, Vol 26 Issue No 7, is published monthly by AvBuyer Ltd, 1210 West 11th Street, Wichita, KS 67203-3517 and has a targeted circulation to decision makers within business and corporate aviation throughout the world. It is also available on Annual Subscription @ UK £40 and USA $65. POSTMASTER: Send address changes to: AvBuyer Magazine 1210 West 11th Street, Wichita, KS 67203-3517. Postage is paid at Wichita, KS and additional mailing offices © Copyright of AvBuyer Ltd. Every effort is made to ensure the accuracy of material published in AvBuyer Magazine. However, the publishers cannot accept responsibility for claims made by manufacturers, advertisers or contributors. The views expressed are not necessarily those of the Editor or the publishers. Although all reasonable care is taken of all material, photographs, CD & DVDs submitted, the publishers cannot accept any responsibility for damage or loss. All rights reserved. No part of AvBuyer Magazine - Advertising, Design or Editorial - may be reproduced, stored in a retrieval system, or transmitted in any other form, or by any other means, electronic, mechanical, photographic, recording or otherwise, without prior written permission of the publishers.

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FLIP COVER JULY22.qxp_Layout 1 22/06/2022 13:51 Page 1

ACTIONABLE INTELLIGENCE FOR BUSINESS AVIATION MRO

MRO SPECIAL

INDUSTRY GUIDE JULY 2022

Keep on Budget with Your Business Jet Upgrade Pratt & Whitney Enhances Service Offerings Engine Overhaul: Understanding the Costs & Processes Engine Overhaul: Tips to Avoid Unnecessary Disruption Hourly Maintenance Programs: Getting Value for Money Rolls-Royce: Striving for Engine Support Perfection Cabin Electronics: New Jet Functionality for Older Planes Measuring ‘Cost’ versus ‘Value’ of a Flight Panel Retrofit Seven Factors Driving Your Next Cabin Refurbishment


2 - F/LIST July dps.qxp_Layout 1 23/06/2022 07:42 Page 1

SPONSORED CONTENT

F/LIST Spearheads Sustainability in the Cabin

©Embraer The new sustainable products do not mean compromising on quality and will meet the same exacting standards of current F/LIST products. Carbon fibre can be used as it reduces operating costs due to its light weight nature.

S

ustainability has become a watchword for the future of Business Aviation with the aerospace industry collectively navigating a pathway to a carbon neutral future by 2050. It is a bold ambition with discussions around sustainability dominated by talk of electric, hydrogen and hybrid propulsion programs, as well as sustainable aviation fuel (SAF) which is available now, although supply is still limited. In the cabin sustainability is already making its presence felt. OEMs and owners have started to question in detail how products are made and processed, which is positioning sustainability as part of the competitive landscape. The availability of sustainable options is influencing purchasing decisions and the need to offer attractive, compliant, competitively priced interiors that do not compromise on quality, is now critical. Anticipating and responding to these needs is Austria-based F/LIST. The third-generation family company is combining years of heritage, knowledge and craftsmanship with contemporary technology, new materials, and cross-industry knowledge sharing, to satisfy the increased demand for lightweight, high-performing, eco-friendly concepts.

Visionary Perspective Mélanie Prince, Head of Innovation at F/LIST takes a visionary

2 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

perspective leading a dynamic team to make the seemingly impossible possible. The eclectic mix of experts include carbon fiber technology professionals from the F1 sector, jewellery designers and architects, amongst others. “To enhance the passenger experience and disrupt the interiors sector we need to dream a little bit and change the status quo,” Prince says as she explains how her colleagues collaborate to define novel, environmentally friendly concepts that will add inherent value to the customer experience, and the asset itself. “We are ambassadors for cabin sustainability, and we can only ensure success by introducing new thinking around the subject. If we give our customers intriguing, stylish, yet functional materials we believe it will encourage them to think sustainability-first when it comes to creating a cabin interior. We must convey that sustainability does not mean compromise in the cabin.” F/LIST is already marketing decorative surfaces made from rattan, and textiles produced from agricultural byproducts, and Prince believes there is a world of opportunities. “Our incredible new product portfolio will surprise and delight with its superior quality, design potential and elegant beauty as we provide the opportunity to turn design fiction into design fact.” www.AVBUYER.com

w


2 - F/LIST July dps.qxp_Layout 1 30/06/2022 11:26 Page 2

SPONSORED CONTENT

Open-Minded Approach F/LIST embraces external industry experience and the innovators act as a conduit between aviation and a whole new set of suppliers. Prince’s team regularly liaises with start-ups devising impressive next-generation eco-materials, but that don’t have the experience of, or voice in, the aviation industry. Luxury brands are also benefitting from the opportunities provided to have their high-end products redirected from the catwalk to the cabin. “We keep an open mind, examining every opportunity, but the screening process is intense. We must make sure materials are fire retardant and durable, that they are relevant and practical to work with, and that we can modify and repurpose it for the aerospace sector. We then develop unique, attractive components that broaden cabin design options. It is a long iterative process, involves an element of failure, yet stimulates amazing results.”

Previously Unseen Materials The enhanced F/LIST portfolio will introduce previously unseen materials to operators, OEMs and completion centers, and demonstrate that sustainable materials can perform as well, if not better than existing products, last as long, and are breathtakingly stunning.

As our understanding of, and passion for natural products expands, we are creating innovative bio-based materials by applying bionic design to create smart structures that support loads and forces exactly where necessary,” she continues. “We are integrating plant fibers instead of synthetic fibers, as well as incorporating byproducts and materials from biorefineries. The results are strong, yet light components, that form cabin frameworks.” For F/LIST sustainability extends beyond the product. It is applied across the complete value chain. From fair and responsibly managed raw material sourcing to the use of solar and renewable energy, to supporting sustainable circular economies, F/LIST seeks to optimize the value delivered to the customer, while simultaneously minimizing resource consumption. This perspective leads to game-changing business models that encompass extended reuse, repair, and refurbishment, and reinforces the sustainability message. Even the buildings are sustainably managed. The Thomasberg, Austria, headquarters is river cooled, the production plant is heated with renewable energy and intelligent LED lighting brings light to the interiors.

“Our customers are going to be astounded as we extend the parameters of cabin design,” Prince says. “Business Aviation travellers are surrounded by our products in the cabin, which supports engagement with sustainability. The cabin interior will inspire debate and discussion amongst peers, and most importantly influence their environmental mindset in the skies.”

“Our mission is to manufacture tangible and pragmatic innovations that support the sustainability narrative. If customers approach us with one idea, and we can transform it into a sustainable concept, that really motivates us,” Prince summarizes. “Our goal is to sustainably create eco-friendly products that meet and exceed customer expectations, last longer and can be recycled at the end of life.”

Offering the best natural materials to the aerospace industry has always been fundamental to F/LIST. “We are going back to basics.

More information from http://f-list.at

©F/LIST

Mélanie Prince, Head of Innovation at F/LIST

The company’s headquarters in Thomasburg, Austria. Sustainability sits at the core of all F.LIST production www.AVBUYER.com

AVBUYER MAGAZINE Vol 26 Issue 7 2022

3


Editor Welcome JULY22.qxp_JMesingerNov06 22/06/2022 14:23 Page 1

Editor’s NOTE

Matt Harris

Matt Harris is commissioning editor for AvBuyer. He is an experienced General and Business Aviation journalist and has edited a variety of titles across the last two decades. These include AvBuyer, BizJet Advisor and GA Buyer Europe. https://www.linkedin.com/in/ matthew-harris-avbuyer/

Don’t Compromise on Maintenance! veryone’s been talking about the pre-owned market lately. Whether it’s the speed at which desirable business jets and turboprops sell, the increases in average asking prices, or the sudden resurgence of interest in various older models (given the lack of newer inventory on the market), we are without doubt navigating some abnormal times. Some of today’s market situation was created by charter and fractional ownership fleet operators needing to bolster their fleets to cater for a surge in demand emanating from the Covid pandemic when many traditional airline passengers turned to private aviation as a safer travel solution. And having liked what they saw, many of those first-time business aircraft users became first-time business aircraft owners, further draining the inventory pool. With the market balance now firmly tipped in favor of sellers, some are even insisting their desperate buyers forego a pre-purchase inspection, accepting their aircraft in an ‘as-is’ condition. A very real danger exists that inexperience, desperation, or a giddy combination of both could lead at least some to experience ‘buyer’s regret’ when the realities of ownership set in, and the aircraft’s full MRO needs become apparent.

E

Eyes Wide Open

Today’s market environment accentuates how vital it is to buy a jet with an understanding and a plan. The understanding includes knowing exactly what the maintenance condition of the aircraft is – whether it’s engines, airframe, APUs, and/or avionics are covered by an hourly maintenance plan and, if so, what is and isn’t covered when a maintenance need arises. Buyers should also be going into a purchase with their eyes wide open, and with a firm grasp of what they need the aircraft to do (both from a crew and passenger perspective). Given that today’s picked-over market is laced with older pedigree aircraft, if an aircraft’s systems are near to obsolescence, or don’t provide the necessary capability, prospective buyers should know what it will cost to upgrade them. And where differences exists between a buyer’s ideal for the aircraft and its existing capabilities and equipage, buyers need to be able to operate with any compromise for as long as it takes to find a suitable slot at their preferred MRO provider to upgrade. Supply chain issues and high demand on MRO facilities continue to put a strain on schedules. 4 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

All these factors and more are why various articles in this MRO special edition center on the need for you to plan and understand your MRO requirements.

In this MRO Special Edition

For example, it’s important to keep on budget with your business jet upgrade, and three leading industry experts offer tips for how to do so, while sharing some of the common ‘budget-busters’ to avoid. Chris Kjelgaard delves into gaining a fuller understanding of the costs and processes of an engine overhaul, reducing the chance of an expensive shock, while Dave Higdon discusses some strategies for avoiding unnecessary overhaul disruption – whether planning ahead to book the desired MRO slot or thinking about your ongoing flying needs with alternative lift or loaner engines. Hourly maintenance programs offer assurance and predictability to owners and operators – but it’s important to make sure you understand the levels of coverage. Gerrard Cowan asks some of the program providers how owners can achieve flexibility in their programs without becoming exposed to expensive maintenance risks. We also consider some of the upgrade elements of private jet ownership. For example, if you’re purchased an older pre-owned jet, or the cabin of your existing aircraft is feeling a little dated, what are some of the top cabin electronics upgrades you can make to bring new jet capability to your passengers? Brian Wilson discusses. Or, if you’re looking at the flight deck with a view to upgrading, how do you balance the cost versus value of any potential retrofit? Ken Elliott highlights the ways true value can be defined in the cockpit. And Chris Kjelgaard identifies the seven factors that could drive your next cabin refurbishment project, discussing them with some of the industry’s seasoned refurbishment professionals. One of several things the Business Aviation industry does extremely well is to provide ever-greater levels of service to owners and operators, as is borne out by Pratt & Whitney’s recent service offering enhancements, featured in this special edition, and highlighted by Rolls-Royce in their interview with AvBuyer, again published here. So, whether you’re new to aircraft ownership, or you’re a seasoned business aircraft owner/operator, the AvBuyer team trusts you’ll find this MRO Special Industry Guide useful, packed full of actionable intelligence for making the most of your aircraft’s next MRO shop visit. Enjoy! Matt Harris. Commissioning Editor, AvBuyer www.AVBUYER.com


MRO-4ways_205x270_AVB_uk.indd 1

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F CONTENTS JULY22.qxp 22/06/2022 13:38 Page 1

Contents

MRO Special Industry Guide 4

Editor’s Note: Don't Compromise on Maintenance!

8

Keep on Budget with Your Business Jet Upgrade

14

Pratt & Whitney Enhances Service Offerings

16

Engine Overhaul: Understanding the Costs & Processes

22

Engine Overhaul: Tips to Avoid Unnecessary Disruption

28

Hourly Maintenance Programs: Getting Value for Money

34

Rolls-Royce: Striving for Engine Support Perfection

40

Cabin Electronics: New Jet Functionality for Older Planes

46

Measuring ‘Cost’ versus ‘Value’ of a Flight Panel Retrofit

52 Don’t forget to

Seven Factors Driving Your Next Cabin Refurburbishment

read our regular content in the front section of this issue.

Sponsored Content

2 F/LIST 27 GE OnPoint 37 Sponsored Announcements from TAE and C&L

6 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

EDITORIAL Commissioning Editor Matthew Harris +44 (0) 20 8939 7722 editorial@avbuyer.com Editorial Contributor (USA Office) Dave Higdon dave@avbuyer.com ADVERTISING Steve Champness Publisher Americas +1 770 769 5872 steve@avbuyer.com Lise Margin Account Manager +1 703 818 1024 lise@avbuyer.com Maria Brabec Account Manager EMEA & APAC Aircraft & Services Sales +420 604 224 828 maria@avbuyer.com STUDIO/PRODUCTION Helen Cavalli Mark Williams +44 (0) 20 8939 7726 helen@avbuyer.com mark@avbuyer.com CIRCULATION Sue Brennan +44 (0) 20 8255 4000 Freephone from USA: +1 855 425 7638 sue@avbuyer.com AVBUYER.COM Michas Rapf michas@avbuyer.com Emma Davey emma@avbuyer.com MANAGING DIRECTOR John Brennan +44 (0) 20 8255 4229 john@avbuyer.com USA OFFICE 1210 West 11th Street, Wichita, KS 67203-3517 EUROPEAN OFFICE AvBuyer House, 34A High Street, Thames Ditton, Surrey KT7 0RY, UK +44 (0)20 8255 4000 Freephone from USA: +1 855 425 7638 PRINTED BY Fry Communications, Inc. 800 West Church Road, Mechanicsburg, PA 17055

www.AVBUYER.com


Pratt & Witney March.qxp_Layout 1 23/06/2022 07:44 Page 1

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1 MRO UPGRADES.qxp_Finance 22/06/2022 09:50 Page 1

AIRCRAFT UPGRADES

Keep on Budget with Your Business Jet Upgrade When planning to upgrade your business jet, is there ever a legitimate reason to exceed the budget? What are the pitfalls to avoid blowing an upgrade budget? Matt Harris asks for the insights of some leading industry insiders…

A

s anybody who has previously upgraded a business jet would testify, the numerous options available for getting the look, feel and functionality of the aircraft exactly as you’d want it are dizzying. With choice comes a lot of opportunity for original upgrade budgets to grow – sometimes exponentially beyond what was projected. Aircraft owners planning upgrades need to keep a strong

8 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

focus, take a disciplined approach to the overall upgrade project, and should be prepared to build a cushion into their budget to allow for an element of expansion on the original project. By working well ahead of the upgrade with a trusted MRO center, owners and operators will be able to discuss the popular and most effective solutions available for their cabins and cockpits that enhance not only their current mission needs, but future needs too.

The Benefit of Expert Input

“It’s less about going over budget, and more about the owner getting exactly what they need or want in the end,” argues Phil Stearns, Director of Sales & Marketing for Stevens Aerospace & Defense Systems, who adds that the initial budget for an upgrade is “just the starting conversation” and should include plenty of room for change before the project begins. In fact, owners have more chance of seeing their budget www.AVBUYER.com


1 MRO UPGRADES.qxp_Finance 21/06/2022 12:26 Page 2

AVBUYER.com

ensure that the upgrade is approved by the aircraft manufacturer, as well as the local aviation authority. “National airworthiness authorities require systems to be approved by the manufacturer and will require their consent in the form of an STC (Supplemental Type Certificate),” says Vince Goncalves, Regional VP Africa, ExecuJet MRO Services. “STCs have been carefully designed by the STC holder in conjunction with the aircraft manufacturer, and they require the appropriate expertise for integration into the aircraft’s systems.” Over the years, Ebach has seen many customers choose to perform an upgrade simply because they’ve seen it on another jet. “It is always better for the aircraft owner when their modifications and upgrade decisions are tailored to their own needs and aircraft,” he says, not just copied from another aircraft. Stearns notes that while owners may have an initial budget in mind, once they explore their needs with the MRO shop, based on how they use the aircraft, additional or alternative upgrade items can make sense, justifying an increase on what was originally budgeted. “It could be that a Large Jet

cabin configuration isn’t working as well as it could for the owner on transatlantic flights,” he highlights. “A slight reconfiguration – such as adding a bed, couch, or a redesign of the galley – could fix that. “Or perhaps, with the growing number of cell phones and laptops being used by passengers today, the addition of USB and other charging ports make perfect sense.” Ultimately, budget should be weighed against enhanced productivity or comfort. Not everything is driven by functionality, though. Sometimes personal preference can be important in planning an appropriate upgrade budget. For example, corporate owners may place high importance on corporate identity, conveyed through color scheme or logos, both inside and outside of the aircraft. And private owners might want to reflect some of their favorite things in the cabin, like the seat design of their sports car, or a design element from a vacation home, Stearns suggests. At that point, costs will inevitably increase. “If the owner can put a value on the ‘wow-factor’, they can usually justify increasing their budget,” he argues. As already mentioned, though, there’s a far

PHOTO COURTESY OF STEVENS AEROSPACE

swell significantly when they decide to perform an upgrade at the last minute, notes André Ebach, Head of Maintenance for Aero-Dienst. “Getting in contact and working with the maintenance facility at an early stage in the process is very important for proper planning, and for building a reliable budget for the upgrade,” he says. Another benefit of involving the MRO shop in the process early is that it will help owners www.AVBUYER.com

PHOTO COURTESY OF AERO-DIENST

AVBUYER MAGAZINE Vol 26 Issue 7 2022

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AIRCRAFT UPGRADES

AVBUYER.com

higher chance of hitting the ‘wowfactor’ with proper planning, far in advance of any proposed upgrade project’s start date.

Budget Upgrade? Avoid These Temptations…

While there are some legitimate reasons for aircraft upgrade budgets to increase, there are some common temptations aircraft owners experience that will result in unnecessary additional expense if they’re not carefully avoided. First, avoid selecting an MRO center for the upgrade based on the cheapest quote. Ebach suggests selecting a provider you trust, ultimately. Goncalves agrees. “Aircraft owners and operators shouldn’t be tempted or influenced by the ‘best price’, which could lead to a mismatch between the end-result and your expectations. “If there’s a large difference between proposals from MRO providers, then there’s usually a very good reason for this, and it needs to be queried first,” he suggests. “Next, avoid buying upgrade items based on brand or clever features,” Ebach warns, adding that it can be tempting to pay for a specific upgrade item “simply because it’s state-of-the-art”. Such an approach could lead to owners over-paying for functionality they

RENDERING COURTESY OF AERO-DIENST

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PHOTO COURTESY OF AERO-DIENST

don’t ultimately need or incurring unanticipated additional work to integrate it with the airplane’s existing systems. Nor should upgrade options be overlooked because they are a different brand to what the owner has been used to in the past, he adds. Ultimately, customers should be guided through the whole project by their trusted MRO center to identify the best upgrade for their needs. “With such a large number of options available on the retrofit market, it is easy to get lost,” Ebach warns. “But an experienced MRO shop will be able to walk its customers

through the project, and filter through the vast array of choices to find the right ones.”

Hidden Additional Costs

Clarity is also essential to managing budgets, and there are areas of an aircraft upgrade that owners should be very clear about – but often aren’t – such as the hidden extras of an upgrade or modification. “Don’t be led by the bottomline price,” Goncalves says. “Work through the upgrade proposals line by line when making comparisons between what each shop is offering. When there is a discrepancy, ask why, and don’t accept vague answers.” Does the price include the cost of equipment, but exclude installation costs? “Someone has to perform the work, including the removal of the existing system and installation of the new equipment,” Ebach adds. “Then there’s the cost of engineering, hangar space, costs of compliance with the relevant aviation regulations (e.g., burn testing). Are these included?” “When receiving a proposal make sure that any item quoted ‘Price to be Determined’ gets discussed early on,” Goncalves says. Stearns notes that the price for

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AIRCRAFT UPGRADES

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PHOTO COURTESY OF STEVENS AEROSPACE

paint stripes and colors have risen dramatically lately. “Custom paints, metallics, and extravagant designs are generally not in the base price” when owners are looking for a baseline budget for an upgrade. “Be very clear with the paint shop and designer what you want upfront so that all costs of a paint refurbishment are budgeted for.” And then there are the factors that the aircraft owner/operator is responsible for in their budget. “For example, in the case of charter operators there’s the lost income from charter flights owing to an extended period of downtime,” Ebach illustrates. “This is a hidden cost that can easily be overlooked.” Depending on the type of upgrade or modification, significant work could be required to gain access to the necessary area, including removal of the interior. “In addition to the extensive man-hours incurred, this can sometimes result in unexpected discoveries, such as corrosion,” Ebach notes. “Is there a contingency in the budget for such unforeseen surprises?” Other hidden costs can occur later because of penny-pinching in the near term. “From a strictly aircraft-protection standpoint, it’s important to understand that the 12 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

paint’s primary responsibility is to protect the aircraft,” Stearns illustrates. “The secondary function is to look good.” If the paint on an aircraft is peeling or cracked, the surface below will be at risk of corrosion, which can be an expensive fix further down the line. “It’s necessary for aircraft owners to budget for regular, inexpensive, visual inspections and repairs of such areas sooner, rather than later,” Stearns emphasizes. The upgrade could be a good opportunity to do so.

Tips for a Budget-Oriented Upgrade

Keeping the budget in hand when it comes to upgrading your business jet ultimately requires planning, planning, and more planning, according to Ebach. “We’ve seen many upgrade projects move through our

hangars over the decades, and, without exception, the most successful are the customers who get in contact with us early,” he emphasizes. Successful upgrades start with seeking the MRO center’s expertise and input into the project, proceeding with renderings, technical descriptions, engineering, removal of old equipment, installation of new, and, of course, aftermarket support, “with as few ‘budget shocks’ as possible along the way,” he concludes. “Authorized service centers are more likely to already have OEM approvals/STCs for the systems you’re upgrading, saving time and cost,” Goncalves adds. “Be sure to request the contact details of the STC holder or system OEM to discuss your upgrade with them, too. “OEMs place their reputation in the hands of your local service providers’ abilities and will guide you as best as they can,” to ensure your upgrade budget is well spent. “Moreover, service providers who have OEM approvals undergo regular audits, and tend to have the necessary infrastructure, experience and equipment to complete your upgrade successfully.” ■ More information from: Aero-Dienst: www.aero-dienst.com ExecuJet: www.execujet.com/en Stevens Aerospace: www.stevensaerospace.com

MATT HARRIS is commissioning editor for AvBuyer. He is an experienced General and Business Aviation journalist and has edited a variety of titles across the last two decades. These include AvBuyer, BizJet Advisor and GA Buyer Europe. https://www.linkedin.com/in/matthew-harris-avbuyer/

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2 MRO P&W.qxp_Finance 22/06/2022 11:09 Page 1

COMPANY UPDATE

Pratt & Whitney Enhances Service Offerings Among the companies making the headlines at the recent EBACE was Pratt & Whitney Canada with a trio of announcements highlighting enhancements to its products and services for customers in Business and General Aviation…

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ever one to miss an opportunity to grow the support services it offers to operators, Pratt & Whitney Canada has expanded the portfolio of its P&WCSMART maintenance, repair and overhaul (MRO) solutions.

P&WC Extends P&WCSMART into Turbofan Market Since Pratt & Whitney launched the P&WCSMART portfolio in 2014 it has grown to more than 30 different offerings for PT6A and P&WCpowered helicopters and regional aircraft. But this latest program expansion takes the service into the business jet market for the first time, 14 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

for Cessna Citation Mustang owners and operators. Specifically, the new P&WCSMART solution is a flat-rate ‘zero time since overhaul’ (0-TSO) engine exchange for PW615F-A engines. This is part of the company’s effort to provide flexible, cost-effective solutions for major engine maintenance, which support the full engine lifecycle, with flat-rate overhaul options, overhaul alternatives, and more, according to one company spokesperson. The new P&WCSMART offering enables Citation Mustang customers to exchange their existing PW615F-A engine with a freshly overhauled PW615F-A engine for a “very attractive price”, Pratt & Whitney says. With this option, customers avoid having to rent an engine and the corresponding removal and installation, reducing downtime to just a few days – the time necessary to install the 0-TSO exchange engine(s). “P&WCSMART solutions provide competitive flat rates and capped costs for major engine maintenance, eliminating price variables and uncertainty,” Irene Makris, Vice President, Customer Service, Pratt & Whitney Canada, commented.

Video Series to Support PT6E67XP Operators

Furthermore, having announced the expansion of its PT6 E-Series engine family in April, Pratt & Whitney Canada has launched a new video series about the PT6E-67XP to “help customers fully benefit from the PT6E67XP engine experience - including digital connectivity, built-in intelligence and powerful diagnostic/prognostic capabilities”. The PT6E-67XP engine powers the Pilatus PC-12 NGX (which entered service in 2020), and the Video Series comprises three parts, showcasing different aspects of the PT6E-67XP engine user experience. “This video series will help customers new to the PT6E-67XP engine to take full advantage of its state-of-the-art technology,” says Nicholas Kanellias, Vice President, General Aviation, Pratt & Whitney Canada. Part 1 - Simplifying the Flying Experience with Intuitive Controls: The PT6E-67XP features a dualchannel integrated electronic propeller and engine control system — the first of its kind in the General Aviation turboprop market. www.AVBUYER.com


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The result is a more intuitive way of flying that reduces pilot workload. The first video in the series demonstrates how the digitally enabled single lever simplifies engine operation and allows for true precision-controlled auto-throttle. Part 2 - Supporting Troubleshooting with World-Class Service: The PT6E67XP is digitally connected through its Data Collection and Transmission Unit (DCTU), which wirelessly transmits full-flight engine data shortly after landing and shutdown. The data is reviewed and analysed by dedicated experts of Pratt & Whitney Canada’s Proactive Services team, who will then contact the Director of Maintenance directly to provide updates, and, if needed, recommend preventive actions, such as proactively swapping-out parts. The second part in the series provides an overview of troubleshooting support. Part 3 - Facilitating Maintenance with Digital Connectivity: Part three looks at digital connectivity. Available for download on the Apple iOS App Store, the DCTU app was developed to communicate with DCTU hardware www.AVBUYER.com

“Pratt & Whitney Canada has now further extended its Carbon Offset Service into General Aviation.” on PT6 E-Series engines using wireless connectivity, for the purpose of performing maintenance actions. Primarily used by technicians, the DCTU app makes it easy to view a host of parameters, events, exceedances and faults, retrieve diagnostics data, monitor the engine’s health status, perform live diagnostics, and test transmissions or change engine modules using barcode scanning, among other actions. Part three of the series demonstrates how.

Carbon Offset Service Rolled-out to GA Customers And finally, having rolled-out its Carbon Offset Service initially to Eagle Service Plan (ESP)-enrolled

business jet customers, before expanding it to helicopter and regional operators, Pratt & Whitney Canada has now further extended the service into General Aviation. European fractional owner JetFly has signed up its entire fleet of PT6A and PT6 E-Series powered Pilatus aircraft that are enrolled in the ESP maintenance program to the Carbon Offset Service, which enables operators to contribute to greater environmental sustainability by offsetting the carbon footprint of their aircraft in a simple, costeffective manner. P&WC’s Carbon Offset Service enables operators to contribute to greater environmental sustainability. The operator’s aircraft’s emissions are estimated, and compensated, through the sourcing of carbon offset credits from South Pole (a globally recognized provider of environmentally sustainable solutions), and the Carbon Offset Service supports initiatives that benefit the environment and local communities by creating economic opportunities, such as clean water access, renewable energy, and forest conservation projects. “JetFly’s decision to register these engines in our Carbon Offset Service underscores the importance of expanding to our General Aviation customer base, the largest market segment for the company,” Irene Makris, vice president, Customer Service, Pratt & Whitney Canada highlights. “Environmental responsibility is important for JetFly and for our customers,” adds Cédric Lescop, Chief Executive Officer, JetFly. “It also fits within our sustainability goals, and this is one of the reasons why we also fly PT6A and PT6 ESeries powered aircraft – they are reliable and fuel-efficient engines.” “Pratt & Whitney has a longstanding commitment to offering environmentally responsible products and solutions to its customers,” Makris concludes. ■ More information from www.pwc.ca For the PT6E-67XP Video Series, visit: https://www.pwc.ca/en/airtimeblog/articles/expert-talk/new-videos -showcase-pt6e-67xp-features AVBUYER MAGAZINE Vol 26 Issue 7 2022

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ENGINES

Engine Overhaul: Understanding the Costs & Processes Any mistaken assumptions by an aircraft owner about an overhaul can add even more cost to an alreadyexpensive process. But what homework should owners do before the overhaul begins? Chris Kjelgaard finds out…

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t is all too easy for a Business Aircraft owner to not fully comprehend the extent of the repair and replacement work that might be required during a scheduled engine overhaul. It’s even easier to underestimate how much work might be required when an engine must undergo a shop visit for unscheduled maintenance after a fault is detected, or a part fails. Misunderstandings on the part of aircraft owners can easily happen when too much is taken for granted regarding their engine maintenance plan coverage, or an over-reliance on maintenance tracking software for 16 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

information on engine status exists. Preparatory homework is required, allowing the owner to review their assumptions before the engine enters the shop for maintenance, scheduled or otherwise. “We find operators are typically unfamiliar with many factors surrounding major maintenance events like overhauls,” says Joe Capra, Senior Commercial Director, Pratt & Whitney Turbofans for StandardAero Business Aviation. But if the owner realizes that, as with most things ‘information is power’…it is easy for the owner to prevent themselves being surprised. “Those who take the time to visit the

facility where their engines will undergo the maintenance benefit from meeting the technical team, learning the process, reviewing choices regarding parts, cost and supplemental support, and understanding anticipated turnaround-times for their event,” he adds. “Our OEM-authorized engine service centers have technical experts with experience from overhauling or repairing hundreds of engines and will provide all the tips and suggestions to navigate the process,” Capra assures. “This includes establishing a budget, or in the example of pre-paid maintenance plans, a review of what is and isn’t covered.” www.AVBUYER.com


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Engine Maintenance Plan Familiarization

To prevent expensive misunderstandings, it’s particularly important for owners to know exactly what they are buying when either they contract for new engine maintenance plans for their aircraft or buy an aircraft with engine maintenance coverage already in place, according to Sean Lynch, Program Coordinator for Engine Assurance Program (EAP). “Before you buy the aircraft [with an engine maintenance program supposedly already attached], you need to make sure the program is fully transferable and paid-up, or you’ll end www.AVBUYER.com

up in a fight with the seller over the bill or lose the engine coverage,” Lynch warns. As Capra indicates, it is vital for aircraft owners in possession of prepaid engine maintenance plans to know exactly what their plans cover. For instance, several engine OEMs — and at least one well-known independent pre-paid plan provider — offer different levels of maintenance coverage, each being priced to suit different owners’ budgets. The different levels offered by any given provider don’t all offer the same coverage. For example, cheaper monthly plans often don’t provide engine rentals

when the engines covered under the plan are in the shop for maintenance. Nor do they cover the costs of shipping those engines to and from the maintenance shop. And they’re less likely to provide engine condition trend monitoring or cover the replacement of Life Limited Parts (LLPs), or routine line maintenance. Indeed, some plans only cover engine maintenance following a catastrophic part failure. On the other hand, comprehensive programs — offered optionally by some engine OEMs and as the only choice by others — cover just about every cost incurred when an engine enters the shop for scheduled or unscheduled maintenance, including short-term engine rentals, transport costs, and even (in some cases) charters of an alternative aircraft. Those few maintenance-related cost items not covered by some of the comprehensive plans are either left out to provide a little wiggle room for plan cost savings at the owner’s option — the providers offering even more comprehensive coverage to owners willing to pay the full amounts — or are excluded because they can only arise owing to negligence on the aircraft owner’s part.

Over-reliance on Maintenance Tracking Software

For engines not covered by pre-paid maintenance programs, another misunderstanding that can mislead owners on each engine’s part life and condition is for them to place too much faith in the information provided by the maintenance tracking software program used for the engine. “If the engine is not on a program, you need to familiarize yourself with the [aircraft’s maintenance] logbooks, because with engine maintenance tracking programs the data is only as good as what has been inputted,” notes Lynch. “You need to verify [from the detailed information on completed maintenance tasks] in the logbooks that the engine status matches up with what the tracking program says.” Capra agrees. “We think maintenance tracking software AVBUYER MAGAZINE Vol 26 Issue 7 2022

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Know your Life-Limited Parts

From a maintenance-cost viewpoint, it is critical for aircraft owners to know how much life any given Life-Limited Part (LLP) has, both before and after full overhaul or major mid-term inspection, according to Lynch. LLPs (such as fuel control units, turbine disks and even individual turbine blades) are enormously expensive to replace. The cost of having to do so can be ruinous for an owner who has relied entirely on what the maintenance tracking software says regarding engine life, but suddenly finds during a major scheduled inspection conferring, say, another 1,000 hours of engine time until the next full overhaul, that the engine contains LLPs which only have 100 hours of running life remaining. This happened in one specific example Lynch encountered, of a Gulfstream G100 whose engines were covered under a plan which neither included the cost of LLP replacement nor the cost of renting replacement engines while the recently inspected engines were inducted again for LLP replacement. Another even more extreme example Lynch cites from his personal experience is that of a critical part failing in an engine which had emerged 18 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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programs and databases are excellent for tracking when maintenance is required,” he says. “We do, however, strongly believe that looking through the logbooks and understanding what the total run time has been on noncycle or hour-life items helps to understand whether these items will have a higher susceptibility for replacement during the next maintenance event. “An example might be the total time since installation of a set of turbine blades,” Capra highlights. “Were they installed new or used at the last major shop event? Or were they original to new manufacture and reinstalled at the last hot section inspection?” The logbook information is critical to understanding the history of what was accomplished on the engine, he explains, and it shouldn’t be taken for granted that maintenance time-tracking software alone provides these insights. from a mid-point inspection (MPI) only a few months earlier. Unknown to the owner, the engine contained a part which had been installed eight years earlier during a compressor zone inspection and was years out of warranty. The failure of that part when the engine was still fresh out of its MPI led to the engine having to be removed from the aircraft and inducted for unscheduled maintenance, at a total cost of $240k. Luckily for the owner, the engine was fully covered under an EAP comprehensive program. In some cases (not those cited above) the additional engine maintenance costs resulting from a misunderstanding over remaining part life can be so high that they exceed the actual market value of the aircraft in good condition. This effectively renders the aircraft immediately obsolete, fit only to be scrapped except possibly for a little price recovery available from some non-limited engine parts which may be resaleable. That said, Capra reckons most owners are aware of how expensive misunderstandings regarding remaining LLP life can be and pay particular attention to knowing just what the LLP

‘green time’ situation is in their engines. “In major maintenance events, where access to life limited parts is performed, we make owners and buyers aware of any short hour/cycle situations and offer the decision to replace these items with new or used parts with sufficient time remaining to suit their operational requirements.” Another bit of good news for owners is that “manufacturers’ warranty terms, and conditions and elements of maintenance plan cost coverage, are well understood by OEM-approved engine MRO facilities,” according to Capra. “These programs can change from time to time, so involving the prepaid maintenance plan provider and the MRO is very beneficial to understanding plan coverage.”

Involve Experts When Purchasing an Aircraft

Lynch recommends that, when aircraft engines are not covered by pre-paid maintenance plans and decisions need to be made regarding purchasing those aircraft or sending their engines for maintenance, owners avail themselves of the expertise of an experienced technical inspector or A&P mechanic who is highly familiar with the engine

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TAE Aerospace February.qxp_Layout 1 23/06/2022 10:17 Page 1

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3 MRO ENGINES 1.qxp_Finance 21/06/2022 12:40 Page 4

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type involved. StandardAero reckons that owners will get the same level of expert advice from high-quality engine maintenance providers when the owners contract them for the engine work required. “It really depends on how comfortable the owner or buyer is with making those decisions,” suggests Capra. “We recommend they find a qualified service provider that can answer their questions and is an organization they can trust. “Reputable, OEM-authorized shops are designated by the OEMs and are FAA-approved to do this, meaning that the owner/buyer’s aircraft will not only meet our high regulatory standards, but also the OEM requirements for service.” Today’s overheated used aircraft market is contributing to owner misunderstandings regarding engine maintenance costs — even more so given that supply-chain issues are affecting the prompt availability of parts, and the resulting cost of obtaining them quickly. “The market is dynamic, and parts have become 20-30 percent more expensive in the last six months,” says Lynch, noting that the issue is affecting 20 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

AVBUYER.com

the prices of a variety of parts produced by different engine manufacturers for different engine types.

How ‘Sunshine Parts’ & Improper Storage Impact Maintenance Costs Replacement of LLPs during unscheduled maintenance is a particularly onerous burden for aircraft owners. A single turbine blade can costs as much as $3,500, and when there are 72 of them on a single highpressure turbine blade stage, the cost of replacing that stage and its turbine disk can run to $300k or more, Lynch highlights. This type of eventuality raises another issue for aircraft owners — that of ‘sunshine parts’, LLPs and other parts which Lynch says may well be functioning completely normally and within operational parameters in an engine, but which airworthiness authorities require to be inspected for wear and tear every time the engine is opened up for unscheduled maintenance. Should the mechanics working on the engine find any wear at all in any sunshine parts, airworthiness regulations require that they be replaced immediately with unworn

parts — even if the replaced parts are still working and “are not the driving cause of the unscheduled maintenance event”, notes Capra. This can have a major effect on engine maintenance costs and overhaul decisions. “They can be difficult to predict,” Capra says. Wear in sunshine parts is “largely dependent on total time since the last major maintenance event, the total run time, and operating environment. All are factors that can create engine wear”. Improper preservation of the engines on stored aircraft is an important issue which can create huge cost and maintenance headaches for unwary, or naïve, aircraft buyers, adds Lynch. The engines of stored aircraft are supposed to be run once a month, so the engines remain within the technical and regulatory condition requirements imposed by the maintenance manual. Engines not run for 60 days are subject to additional engine maintenance protocols. A key requirement for anyone storing an aircraft over longer periods is to remove all oil from its engines. This is to ensure that any water entering the engine, for whatever reason, cannot bead up on the engine’s main bearing, Lynch explains. Should all oil not be removed from the stored engine and water beading occurs, this can cause corrosion in the main bearing. Thus, any engine in long-term storage which contains oil must undergo a maintenance bearing inspection before the engine can be operated. Effectively this means the engine must be disassembled and undergo a full overhaul, he says. If you’re buying a stored aircraft, “your best protection is to be on a fully covered engine program,” says Lynch. “Or else you should fully understand what program you’re on and deduct the value of what it doesn’t cover from the purchase price” for the aircraft. “If it’s not on an engine program, when you’re buying the aircraft you need a really expert mechanic who knows the engine and an expert technical inspector.” Thus, any engines that are no longer being run on a monthly basis, and have www.AVBUYER.com


3 MRO ENGINES 1.qxp_Finance 22/06/2022 09:56 Page 5

More than 20,000 aircraft parts in stock. If you’re having difficulty finding a specific Astra, Citation, Falcon, Hawker or Phenom part, chances are we have it! Check out our huge inventory to fulfill your parts needs and reduce your aircraft's operating costs. All of our parts are available for immediate sale, exchange or to rent. Engines • Engine Inlets • Actuators • Thrust Reversers • Windscreens • Wheels and Brakes •

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Always Doing Our Part

not adhered to a long-term preservation requirement, must undergo a comprehensive bearing inspection before the engine can be operated. Effectively, this means the engine must undergo a full disassembly — which could turn into an overhaul, he says. If you’re buying a stored aircraft, “your best protection is to be on a fully covered engine program,” says Lynch. “Or else you should fully understand what program you’re on and deduct the value of what it doesn’t cover from the purchase price” for the aircraft. “If it’s not on an engine program, when you’re buying the aircraft, you need an expert mechanic who knows the engine, and an expert technical inspector.”

In Summary…

The best way for aircraft owners and buyers to avoid making mistakes regarding the scheduling, downtime and costs of engine overhauls is to “start planning major maintenance early”, Capra summarizes. “Three to six months in advance of required maintenance is recommended. Engine leasing, parts www.AVBUYER.com

availability, and lead times should be considered. “Also, seek direct consultation from engine repair and overhaul providers to help establish a budget,” he concludes. “The sooner operators speak with a technical expert, the more informed they will be regarding their options in handling their maintenance events.” ■

“...some plans only cover engine maintenance following a

More information from Engine Assurance Program: www.eap.aero StandardAero: https://standardaero.com

catastrophic part failure.”

CHRIS KJELGAARD has been an aviation journalist for 40 years, and has covered a vast array of industry areas during that time. He has served as editor of ten print and online titles and written extensively on many aspects of aviation.

MAKE MORE INFORMED MRO DECISIONS with AvBUYER.com AVBUYER MAGAZINE Vol 26 Issue 7 2022

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ENGINES

Engine Overhaul Tips: Avoid Unnecessary Disruption Big on cost and complexity, the engine overhaul can seem an overwhelming event, ideally kept on the periphery as a ‘future event’. Dave Higdon shares tips, highlighting how confronting, and planning, the overhaul long in advance will remove uncertainty and disruption to your flight ops. 22 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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usiness jet owners and operators have a multitude of factors that come into play when the time approaches for them to choose the best MRO center to overhaul their airplane. From the basics of how experienced the shop is in working with your airplane’s powerplant, to whether they’re an approved maintenance center for the engine manufacturer, to what other customers say who have had overhauls done by the same shop – there’s lots to take on board. Further matters of price, guarantees, location, availability of slots at the time they’re required, and the type of overhaul that’s required will

also come into play as owners/operators consider the right shop for the job. And the decisions don’t stop with the selection of the overhaul center. Owners and operators need to work out how an intensive, lengthy period of downtime will be navigated with the least disruption to their operations. The good news is, with proper management of your jet, you will see the overhaul coming years ahead of time, assuming you purchased your aircraft with plenty of time remaining on the engines. But regardless of the engine’s Time Before Overhaul, it's never too early to start planning for the moment the aircraft needs some TLC. www.AVBUYER.com


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ENGINES

Where to Begin

The first item on your planning list should be to research and select a vendor who’s able to perform the work when the time arrives. That vendor should be capable of coordinating the other elements of the work package, including: • • •

Engine removal and reinstallation Shipping (where required) Test runs and acceptance flights.

Ensuring your overhaul partner is fully capable of coordinating the whole project, you will have peace of mind that you have a partner who knows the plan and can follow its progress closely. Next, timing is everything. It’s logical to schedule major engine maintenance events, whether overhauls or hotsection inspections, for periods of low demand for the aircraft. So, you’ll need to analyze the data available to your flight department to know when those are likely to be. When a major engine event is due, the ideal would be to schedule it at the 24 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

same time as the airplane’s annual inspection. Of course, this approach assumes you can afford to dispense of the company airplane for the duration of the inspection/overhaul.

Avoid Operational Disruption During an Overhaul

If it seems impossible to be without lift for the period the overhaul is projected to take, it would be a wise decision to consider some of the following options, checking with your engine maintenance program provider (where applicable) to see which costs are covered on your engine plan… Supplemental lift is one option,

whether ad hoc charter, or jet cards (if you anticipate needing more than 25 hours of charter time during the downtime). Perhaps a short-term wet lease is viable if intensive usage is anticipated. Alternatively, it could make sense to loan some powerplants while your own are being overhauled. This effectively ensures you continue to fly your own jet while only the powerplants remain at the MRO center for the duration of the overhaul. The only time the airplane would be out of action would be to have the engines uninstalled/loaners installed, and then swapped again at the end of the process. As mentioned, it may be that the cost of supplemental lift of engine loaners are covered by your engine maintenance program (assuming you’re enrolled on one). Therefore, a part of the planning process would be to speak to your program provider to learn exactly what’s covered and what isn’t. Note: The benefits of a professionally managed engine maintenance program can help ease the load on an operator on every level, depending on the details of the program they’re enrolled with. Support can vary from a full, turnkey process that’s completely managed by the program provider, to more limited service covering the overhaul or inspection itself, but not the removal and re-installation of the engines, for example. The message is clear. Use the time leading up to your overhaul wisely. Don’t wait for things to fall into place. Understand every element of the process, and the events and needs surrounding it. That is a sure-fire way to avoid any unnecessary disruption to your operations. ■

DAVE HIGDON is a highly respected aviation journalist who has covered all aspects of civil aviation over the past 40 years. Based in Wichita, he has several thousand flight hours, and has piloted pretty much everything from foot-launched wings to combat jets. Contact him via Dave@avbuyer.com

MAKE MORE INFORMED MRO DECISIONS with AvBUYER.com www.AVBUYER.com


Singapore Service Centre Expansion The industry’s largest service facility in Asia Full capabilities | Sustainable at its core

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Bombardier and Exceptional by design are trademarks of Bombardier Inc. or its subsidiaries. © 2022 Bombardier Inc. All rights reserved.

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Sponsored Content

Operational data returns insights for improved reliability The last few years have seen a step change in aircraft connectivity and the ability to pull massive amounts of real-time inflight engine and aircraft data. As the focus shifts from connectivity to monitoring and predictive maintenance, GE’s OnPoint is positioned to translate that operational data into tangible value in the form of proactive anticipation of problems, minimized downtime, reduced overall lifecycle costs through better planned maintenance schedules, improved fuel burn and ultimately increased residual value of the aircraft. It’s a known fact that engines need servicing over time to ensure their safe performance, but even normal functioning engines can see anomalies that may require corrections to ensure long-term safe operations. In the past, a service bulletin would be issued that might include fleet-wide aircraft downtime to inspect and if required replace hardware – a time and resource consuming resolution.

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With today’s analytics, more scenarios like this can instead be handled with surgical precision. Parameters such as temperatures, pressures and flow rates are carefully tracked throughout the engine and aircraft, and analytics can identify a concerning condition without the need for physical inspection, allowing a majority of the fleet to continue operations uninterrupted without unnecessary maintenance activity. Diagnostics and prognostics such as these allow engines to be on-condition, prolonging the need for engine overhaul and optimizing

maintenance costs. Modern engines have over 80 sensors, and interface with airframe sensors and controls forming a complete diagnostics package. Diagnostics should be recognized as more than simply monitoring for a parameter shift. Rather, it’s an array of parameters monitoring the sensors as a prognostic system in order to predict performance changes over time. Additionally, monitoring and predictive maintenance is further strengthened from a running log and history of the thousands of engine performance characteristics and calculations at any one time. By leveraging monitoring and prognostics in partnership with GE, then owners, directors of maintenance and even financers all can realize the many benefits of data that is specifically monitored, captured, and analyzed. Together, by using these insights, the industry can take a major step forward in overall operational optimization.

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GE’s OnPoint Service Program geaviation.com/onpoint

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5 MRO MAINTENANCE.qxp_Finance 21/06/2022 15:04 Page 1

MAINTENANCE PROGRAMS

Hourly Maintenance Programs: Getting Value for Money Do today’s aircraft maintenance programs offer owners and operators flexibility to get optimal value for money without significant exposure to expensive maintenance risks? Gerrard Cowan asks the experts and highlights some of the ‘gotchas’.

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ourly maintenance programs offer business jet and turboprop operators a high degree of security, with the knowledge that their engines, avionics, airframe, APUs, and/or parts will receive the maintenance they need. But in a challenging economic climate, how can operators ensure they get the best value for money, while still guaranteeing the coverage they need? According to Francisco Zozaya, Jet Support Services Inc’s (JSSI’s) Chief Revenue Officer, the Hourly Cost Maintenance Programs (HCMPs) offered by JSSI are “a bespoke service for our 28 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

customers”, with different coverage options, depending on their requirements and level of risk tolerance. It includes a “tip-to-tail” program for the entire aircraft, along with engine-only, or partsonly coverage. With concerns on the horizon for operators, notably supply chain shortages which are unlikely to end any time soon, Zozaya believes “in the coming years there will be more demand for HCMPs, since having a maintenance program in place means better access to scarce parts and engines, and additional peace of mind.” JSSI provides coverage for a range of aircraft equipment and

components, from engines, to avionics, to APUs – and the nature of the coverage is strongly affected by the system in question. “It will also depend on an operator’s use of the business jet because scheduled maintenance is determined by either calendar date or usage,” Zozava adds. “An operator with a more intense schedule and higher hourly and cycle usage is going to need inspections sooner. “They may see higher maintenance costs within a smaller time, compared to a low usage user – especially when their maintenance is hourly, and cycledriven.” Moreover, operators of older www.AVBUYER.com


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and higher usage aircraft can expect more unscheduled risk, since these aircraft are more susceptible to unscheduled maintenance requirements.

No One-Size-Fits-All

Honeywell provides maintenance programs for a range of systems, including engines, engine nacelles, APUs, and mechanical and avionics components. Nadya Krisko, Senior Director of Business and General Aviation, EMEIAI, highlights that the company’s Maintenance Service Plan (MSP) is designed to provide flexible options and cut back on unplanned maintenance costs and unnecessary downtime. “Pay-as-you-go maintenance www.AVBUYER.com

can result in unmanageable costs and insufficient maintenance budgets, especially when multiple unexpected failures happen,” she warns. “This can also lead to an extended aircraft downtime.” With MSP, business jet operators can choose to cover particular systems and components, or opt for broader coverage across the aircraft. There are also different service levels, extended service coverage, and consigned inventory management options, while the MSP Gold Level Service provides a 24/7 Road Crew Service and Extended Troubleshooting. “There is no ‘one size fits all’,” Krisko highlights. “Each operator

has a unique operation, whether short flights, long-range flights, flying into remote destinations, operations in areas with a comprehensive MRO network, Minimum Equipment List items to consider, new versus pre-owned aircraft, flight hours flown annually, and other factors. “These will all be parameters defining individual priorities,” she illustrates, adding that in general, engine and APU coverage appear to be a higher priority over avionics. Similarly, the type of system involved will impact coverage in numerous ways. For example, turbine engines will be subject to such processes as Major Periodic

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MAINTENANCE PROGRAMS

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PHOTO COURTESY OF HONEYWELL

Inspections (MPIs), which “can be pricey, and their cost may vary depending on whether there are any issues identified that need to be fixed to keep the engine in working order,” Krisko explains. On top of that, operators need to consider Life Limited Parts (LLP) replacement for APUs and engines once they have reached the end of their lives, which is something that’s less of a concern on mechanical and avionics components, Krisko says. Such concerns are factored into the company’s MSPs.

Balancing Budget with Maintenance Demand

Delray Dobbins, Senior Manager, Eagle Service Plan (ESP) Sales & Global Strategy at Pratt & Whitney Canada says the right hourly engine maintenance programs allow operators to balance budgetary needs with engine maintenance demands. “The benefits of hourly maintenance plans apply to all engines, no matter the type,” he argues. “Even when an engine is highly reliable, with high mission availability, hourly maintenance plans help operators pay less over the life, or length of ownership, of their aircraft. “This comes from cost savings associated with both scheduled and unscheduled maintenance,” he explains. Pratt & Whitney Canada’s ESP was traditionally built on four levels of coverage – Silver, Silver Lite, Gold and Gold Lite – but has since been simplified to two: ESP Gold and Platinum. “The data showed customers didn’t really want more than two coverage levels, and the trend is definitely for customers today to want more of a turn-key solution for their engine needs,” Dobbins observes. (While the Gold and Platinum options are offered to new customers, the company continues to honor those who signed up to the Silver or Silver Lite coverage previously.) 30 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

The company offers a range of other benefits, depending on an operator’s need. For example, operators of engines like the PW300 can combine the ESP hourly plan with digital engine health monitoring services, while, as well as ESP, P&WC offers a Fleet Management Program (FMP) for those operating six or more aircraft.

Shop Scheduling

Steve McManus, Sales Director for GE Aviation, highlights that his company’s OnPoint program provides exceptional levels of availability through dedicated slots for shop visits, along with full risk transfer for an engine’s service and maintenance needs. “OnPoint addresses and eliminates lifecycle cost spikes while offering a great option for long-term operational readiness,” he adds, highlighting that it especially eliminates induction time and turn time for customers. “There are occasional surprises even with on-condition engines, so we’ve also invested in our field and technical support staff to proactively manage customer’s needs,’ McManus added. “These practices help insulate customers from market swings or pricing

increases because of built in supply practices and defined economic adjustments.”

Selecting Coverage Levels: Beware the “Gotchas”

According to Dobbins, there are two common ‘gotchas’ to look out for when it comes to choosing the right coverage level. First, consider your geographic needs. If you operate in a saline environment, corrosion coverage is a vital part of your package. The second ‘gotcha’ relates to Life Limited Parts (LLPs)… “When an engine goes through an overhaul, the LLPs are not reset to zero hours – their limit is fixed,” he highlights. “That means buyers of older, or higher-time aircraft (perhaps one formerly flown in a Fractional Ownership program) need to be especially careful about the level of coverage they choose. Some coverage levels include LLPs, some don’t. “When parts reach their limit, if the owner hasn’t selected the right level of coverage, they will find that while the overhaul cost is covered, the cost of LLP replacement isn’t, which could result in a bill of as much as $1.5m per engine.”

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MAINTENANCE PROGRAMS

Krisko suggests the big ‘gotchas’ can be avoided with the right questions being asked. “Ask whether the maintenance provider will stand by the quality of its services and has a good reputation in the industry,” she advises. “Consider the types of spare parts that will be installed, and whether the plan fully covers parts and maintenance.” Operators should also establish whether LLPs will be replaced with new parts within the plan, she adds. “And operators should check whether upcoming and existing upgrades and service bulletins are included in the coverage, and whether the annual minimum of the plan matches the utilization.” There are other questions operators should ask, too, including whether the service centers are easily accessible from their base and other regular flying destinations? Does the plan cover off-site support? Will the support be given by a maintenance provider that can make it easy for operators to choose from a range of selectable coverage options, tailored to their platform and operations? Zozaya reiterates that customers must first understand 32 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

their projected utilization and the type of operation they will have – for example, there’s a big difference between private travel and charter use. Second, he advises, they should ask whether they’re looking for a one-stop service that requires a HCMP, or just need parts supplied, with maintenance handled in-house. The big question, Zozava

summarizes, is whether you, as the aircraft owner, are ultimately comfortable taking on the inevitable peaks and troughs of maintenance costs, or if you would be more comfortable with consistent, stabilized costs? The answer will establish whether a maintenance program is right for you, and, if so, the extent of the program coverage you ultimately choose. ■

More information from: • GE: www.geaviation.com/services/regional-business/onpoint • Honeywell: https://aerospace.honeywell.com/us/en/learn/services/ maintenance-and-service-plans • JSSI: www.jetsupport.com • Pratt & Whitney Canada: www.pwc.ca/en/products-and-services/services/ maintenance-programs-and-solutions/maintenance-programs/

GERRARD COWAN is a freelance journalist who focuses on aerospace and finance. In addition to his regular features in AvBuyer, Gerrard's work has appeared in the Wall Street Journal and Janes, among others. Gerrard can be found on Twitter: @GerrardCowan

MAKE MORE INFORMED MRO DECISIONS with AvBUYER.com www.AVBUYER.com


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ATLAS AIR SERVICE AG:

Full Service and Support for Modern Avionics in your Business Jet!

Why Atlas Air Service AG?

As an established provider of state-of-the-art avionics solutions for business aircraft, Atlas Air Service AG, together with its subsidiaries Augsburg Air Service and Altenhrein Aviation, offers customized solutions for Embraer Executive Jets, the Cessna Citation jet family, Beechcraft King Air Series, and Gulfstream G100 and G200 Series. Atlas Air Service was founded over 50 years ago and has V « iÌi` Ì ÕÃ> `Ã v >Û VÃ ` wV>Ì Ã > ` Õ«grades to the complete satisfaction of its customers. The company has been a constant in the ever-changing avionics industry and has continually invested in employee training and state-of-the-art tools and procedures.

“A key component of our service is our constant drive to improve and evolve,” said Radu Grigore, Deputy Manager – MRO Commercial. “We are continually working to improve ourselves and our customers’ experience of our maintenance operations. We can offer customers a wide range v ` wV>Ì Ã > ` Õ«}À>`ià q vÀ ÕÀ Ü Ƃ - "ÕÌ solutions to almost any customer request. To achieve this, we are in close contact with the best avionics suppliers in the market.”

Atlas Air Service Avionic Installations include: › Garmin G5000 for Citation XLS › Garmin G1000 NXi for Phenom 100/300 › Collins Pro Line Fusion for Cessna 525 Series › Garmin G600 TXi and GI 275 installations › Garmin GTN 650/750Xi upgrades › Cabin LED lights installation › iPad/tablet holders for cabin and cockpit › DU-875 Installations for Legacy 600/650 › FANS over Iridium installations for Legacy 600/650 › ADS-B Out upgrades › Honeywell FMS upgrade 6.1 for Legacy 600/650 › KA-Band Hi-Speed internet installation › Head-Up Display installation › Enhanced Vision System installation +49 421 53658 -760 mro-sales@aas.ag www.aas.ag


6 MRO ROLLS ROYCE.qxp_Finance 21/06/2022 13:44 Page 1

INTERVIEW

Rolls-Royce: Striving for Engine Support Perfection Can the challenge of meeting and exceeding engine maintenance support expectations ever be truly complete? AvBuyer spoke with Rolls-Royce about the engine OEM’s efforts to enhance customer support and pursue perfection…

S

ince the very early days of Business Aviation, RollsRoyce has been providing powerplants to the leading business jet OEMs, with Rolls-Royce engines today providing the power for some of the quickest, and longest-range private jets available on the new and pre-owned markets. Nowadays, there are more than 3,300 Rolls-Royce-powered bizjets in operation around the world. Given the propensity for OEMs building large cabin and long-range aircraft to select Rolls-Royce engines as their powerplants – the types of jets appealing to operators in many of the world’s developing Business Aviation markets – the maintenance and support requirements of owners and operators is spread far and wide around the planet. That’s a testament to the success

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of the engines, but also a challenge to Rolls-Royce, which needs to ensure owners and operators enjoy seamless support, irrespective of whether they’re based in a region where the nearest qualified maintenance support is only a couple of hours away, or they’re in a remote area of the world where support and parts are scarce, and an Aircraft On Ground (AOG) event has the potential to be highly problematic. How does Rolls-Royce manage to keep its global customer base happy and flying? AvBuyer got in touch to find out… AvBuyer: How are the needs of business jet owners and operators changing today regarding engine maintenance, compared to five or ten years ago? And how has RollsRoyce been responding with the support it offers?

Rolls-Royce: If you go back ten years, our targets looked different than today. Back then it required several days to solve a standard AOG situation. Today, Rolls-Royce Business Aviation is aiming for 100% ‘averted missed trips’ – meaning no private aircraft running on Rolls-Royce engines and covered by a CorporateCare (or CorporateCare Enhanced) agreement is kept on the ground long enough to delay a planned flight. At the moment, we average more than 99% averted missed trips. Even though we achieved 100% averted missed trips for a full month in March this year, we will only be satisfied when we are consistently achieving this month in, month out. Our pursuit of perfection continues. Exploiting digital technologies to further enhance reliability and www.AVBUYER.com


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customer experience is key to getting to 100% aircraft availability. We recognized this early on and introduced a new engine health monitoring system, including an engine vibration health monitoring unit (EVHMU) which can monitor about 10,000 data points in an engine’s operation that, when analysed, could give us advance indication of a potential problem. Being able to see problems before they actually occur allows us to proactively resolve the issue, thus avoiding any AOG at all. When you're asking what to do about that last one percent, part of the equation is going to be our new engine vibration monitoring system. Also, we’re utilizing machine learning (otherwise called AI). Effectively, we’re learning from experience and letting technology do the work for us. www.AVBUYER.com

The newest Rolls-Royce engines designed for business aircraft – known as the Pearl family – are already equipped with advanced remote engine diagnostics and bidirectional communications, both of which make it the first IoT-enabled aero engine family, with easy to reconfigure engine-monitoring features from the ground. But increasingly more sophisticated and better-performing technology is in development. AvBuyer: After 20 years of providing CorporateCare hourly engine maintenance coverage for business jets with Rolls-Royce powerplants, you recently rolled-out CorporateCare Enhanced. What was the thinking behind this, and what’s the industry demand been like for the Enhanced program?

Rolls-Royce: We recognize the unique nature of our customers in this market, and through extensive dialogue with them we have a clear understanding of what is important in their operation. Therefore, we created a dedicated Business Aviation organization that understands the needs of customers who use their aircraft as time machines. It is critical to minimize disruption at the time of an event and return the aircraft to service as soon as possible. Of course, before you can meet an expectation, you must know what it is. And with business aircraft operators, no two are the same. One of the major channels for hearing our customers’ voices is Rolls-Royce’s Corporate Customer Council (C3). We start by listening to what our customers want and expect from us. We take that feedback to heart and use it to create and implement AVBUYER MAGAZINE Vol 26 Issue 7 2022

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INTERVIEW

strategies as well as changes that will benefit the customer. That is one of our key differentiators in the Business Aviation market. One example of how the Corporate Customer Council has helped shape Rolls-Royce’s service offerings is C3’s influence on the development and launch of the CorporateCare Enhanced program. CorporateCare Enhanced offers substantial financial and operational benefits to customers, such as increased asset value and liquidity, mitigating maintenance cost risk and protection against unforeseen costs and unscheduled events anywhere in the world. Increased aircraft availability, reduced management burden, full risk transfer, direct priority access to the Rolls-Royce services infrastructure and remote site assistance are further benefits for our customers. Since we launched our CorporateCare Enhanced service in 2019, we have seen strong demand from customers around the world, who clearly recognize the value of this program. Demand was further confirmed by the recent capture of the 1,000th CorporateCare Enhanced contract. CorporateCare Enhanced offers an unrivalled, comprehensive coverage for the full powerplant, including engine and nacelle, and priority access to our dedicated Business Aviation Service Network. Our customers love the mindset of CorporateCare Enhanced, which can be summarised as: ‘If we provide it, we cover it’. AvBuyer: Speaking of enhancing engine support for operators, what are some of the key developments Rolls-Royce has made to its support services network around the world for business jet customers recently? Rolls-Royce: [As mentioned above] what's unique about Rolls-Royce is that we have a dedicated Business Aviation unit. This unit includes its own services organization, purposely set up to assist the special needs of Business Aviation clients, which differ 36 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

AVBUYER.com

“...we created a dedicated Business Aviation organization that understands the needs of customers who use their aircraft as time machines.” from those in commercial aviation. The main difference is our powerful services infrastructure and our relentless drive to never let a customer miss a planned trip. The global network of Authorized Service Centers (ASCs) forms an essential component of Rolls-Royce’s services portfolio for business aircraft and adds to its own existing global aftermarket capabilities. Rolls-Royce has more than 75 ASCs in place with key maintenance providers worldwide – the largest in Business Aviation – allowing for rapid response times to our customers’ needs. The powerful service infrastructure of the ASCs is complemented by On-Wing Services specialists in the US, Europe, the Middle East and Asia as well as a number of spare parts, lease engine and storage locations, all placed strategically around the world. We have more than 70 technicians around the world, and our goal is to have an On-Wing Services team identified and ready within four hours of a call, and to be on-site in under

12 hours. So, from going AOG to having a team on site with tools and parts should be no more than 16 hours, no matter where the aircraft is positioned. This makes our global support unique. AvBuyer: How do you see the maintenance needs of business aircraft owners and operators changing in the short- and mid-term future, and how will Rolls-Royce be ready to meet these? Rolls-Royce: As already mentioned, time is often at a premium for our customers, so availability and reliability of the aircraft are more and more essential. Digital tools, from robotics and cloud-based analytics to big data will continue to play an increasingly large role in delivering exceptional levels of aircraft availability, as well as providing peace-of-mind for our customers. ■ More information from www.rolls-royce.com/products-andservices/civil-aerospace/ business-aviation.aspx www.AVBUYER.com


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SPONSORED ANNOUNCEMENTS

TAE Acquires Arizona’s Southwest Airmotive TAE Aerospace has completed the purchase of Eloy, Arizona-based Southwest Airmotive Corporation (SWA) in a move that will expand its PT6 MRO capability in the United States. While the ownership of SWA will change with the purchase, SWA’s management, staff, tooling, test equipment, and inventory will remain to deliver the same high-quality PT6 MRO services it has always provided. SWA will also retain its company name and branding. By joining the TAE Aerospace group, SWA becomes part of a global company now offering both PT6 and TPE331 engine MRO solutions to customers from multiple locations in the world. SWA gains access to TAE Aerospace’s in-house PT6 LRU MRO capabilities, including both Honeywell and Woodward FCU and Prop Governor component approvals, and access to TAE’s global inventory of in-stock parts as well as its exchange engine and LRU pool (available to all its customers to help improve turn times). According to Andrew Sanderson, CEO, TAE Aerospace, the SWA team is committed to continue providing the same great level of service to customers that it has delivered throughout its long and proud history. “At TAE Aerospace we’re an aerospace maintenance, engineering and logistics company with offices and customers

around the world,” he said. “Our main focus is the MRO of turbine engines and controls for commercial, BGA and defense customers, which means the SWA operation is a great fit for the business in the US. “We now have six locations throughout the US, as well as four maintenance facilities in Australia and offices in Europe and Asia. Our rapid growth around the world in the past 10 years is a testament to the strong reputation we have built for providing outstanding services and value in every market in which we operate. SWA is now part of that global growth story, and we are delighted to have their team joining ours,” Sanderson concluded.

More information from www.taeaerospace.com

C&L Completes State-of-the-Art Interior Refurb Facility C&L Aviation Group has completed the construction of a state-of-the-art 12,000sq.ft. Aircraft Refurbishment Facility at its Bangor, Maine campus, next to the company’s aircraft paint hangar. The facility will be utilized to address the increased volume in both regional and corporate aircraft interior refurbishment projects the company has been receiving for the past several years. “We’ve made substantial investments in space, equipment, and manpower for the aircraft operators we serve,” said Chris Kilgour, CEO of C&L Aviation Group. “The new facility, along with increased in-house capabilities, provide us with robust options for customers looking for anything from a basic replacement of soft goods to complete interior upgrades and modifications.” The new facility is equipped with a Gerber leather cutting machine, laser engraving machine, paint booth, seatbelt manufacturing center, separate assembly and disassembly

www.AVBUYER.com

areas, and more. The new facility is one of five building projects C&L has completed since the start of the Covid pandemic. In 2020 the company purchased a local events center near Bangor airport and converted it into a component shop where it works on smaller aircraft components. The company also constructed a new 27,000sq.ft. aircraft parts warehouse, a 5,000sq.ft. extension to one of its hangars for storage, and a complete renovation of its corporate aircraft maintenance hangar, including new floors, walls, customer offices, and a state-of-the-art interior showcase and design center. More information from https://cla.aero/

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The era of the smartplane is here. It’s powered by Gogo AVANCE.


AVANCE connectivity can transform any size aircraft. Just like the smartphone gave people a single, user-friendly environment for their networks as well as their apps, services and productivity tools, Gogo AVANCE ushers in the era of the smartplane. AVANCE is the only inflight and entertainment technology platform that keeps you connected to everything and everyone that matters now, while ensuring you’re ready for what’s next — like the incredible Gogo 5G experience. It’s a single system that can be upgraded, supported and improved without needing to be replaced. Intrigued? Take an in-depth look at how AVANCE will transform your aircraft:

https://gogo.to/avance-for-avbuyer


7 MRO CABIN ELECTF.qxp_Finance 21/06/2022 14:08 Page 1

CABIN ELECTRONICS

Cabin Electronics: New Jet Functionality for Older Planes Is the cabin electronics functionality dated in your business jet? What’s available to breathe new jet functionality into your cabin? Brian Wilson reviews what’s popular now, offering tips on how to enjoy a successful upgrade path…

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inding the pre-owned airplane that matches your mission need can be a daunting task. Even more challenging is redesigning the cabin to give it a fresh new look, feel and functionality – but that’s often what is required to bring optimal productivity from your newly acquired plane. Like buying a pre-owned home, once the aesthetics have been addressed, the fun begins. The Business Aviation market offers an abundance of upgrade options relating to the cabin’s electronics. Whether you’ve recently purchased a pre-owned jet or have been flying your current airplane for several years, it’s worth reviewing the cabin, making a note of the areas where functionality could be improved. As you open your eyes to the possibilities of bringing new jet functionality to your older plane, you’ll need to consult with a seasoned

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advisor. They will help narrow down the focus, homing in on the products that enable the functionality you need, and assisting with your upgrade project. First, there is a variety of items that you might be considering upgrading or installing to help bring new jet functionality to your older airplane. These include: ● Moving Maps ● Connectivity (Wi-Fi) ● Cabin Management Systems ● LED lighting ● High-Definition 4K Monitors ● Chargers, USB Ports, and HDMI Ports ● Cell phone/iPad Mounts.

What are the Popular Cabin Electronics Upgrades?

Before moving into the practicalities of bringing new jet functionality to your older jet, let’s look at some of the popular upgrades in each of these areas…

Moving Maps: These have been synonymous with Collins Aerospace for many years, and today Collins still offers the Airshow 500, 4000 and the new ASXi HD interactive map. Loaded with geographical facts, passengers can learn about the world as they fly with ASXi HD, and by downloading the mobile App passengers can view the 3D map on their own Personal Electronic Devices (PEDs). Connectivity: While this area could form an article of its own, we’ll focus on some high-level points. Determining where you fly will help identify the correct system for modernizing your cabin’s connectivity/Wi-Fi. Owners and operators of Super Midsize and Large Cabin jets may consider Honeywell’s Jet ConneX system, Viasat or Collins Luxstream, which are either Ku- or Ka-band satellite connectivity solutions, bringing connectivity to the www.AVBUYER.com


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cabin in most parts of the world. For aircraft flying primarily in the United States, Gogo’s AVANCE Air-toGround connectivity platform not only provides internet access, but movies, TV shows and moving map functions, helping cover the in-flight entertainment, too.

a customized system that will meet the needs of any audiophile. Based on the ALTO Cadence system, a new feature called ALTO MySound was created which enables passengers to direct acoustic stereo or surround sound directly to their seat, at the push of a button.

Cabin Management Systems (CMS): There are many CMS’ installed in older jets that are twelve-plus years old, and face obsolescence. Upgrades can be very expensive – but the CMS plays an integral part in the modernization of a cabin space. So what’s popular, currently? Collins Aerospace’s Venue is installed in over 1,300 aircraft. A fiber optic-based system which can be controlled by either intuitive touchscreens or by a passenger’s PED, the system also has fully integrated moving map and Wi-Fi capabilities. Alternatively, ALTO Aviation provides

LED Lighting: Aircraft Lighting International (ALI) offers a vast array of Light Emitting Diode (LED) lighting options, providing greater intensity and longer life than conventional incandescent lights. The LED colour and intensity can be designed to cover any mood, from bright and fresh (promoting productivity), to muted (promoting rest and relaxation). ASI also provides a direct replacement for many legacy products, thus reducing downtime and costs. And don’t overlook Elliott Technologies’ Prizm lighting system,

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featuring full-color spectrum mood lighting controlled through a mobile App and existing cabin lighting controls. Available for upwash, downwash, lower accent, galley, lavatory and cupholders, the Prizm lighting system is expandable to meet the needs of most business jets and turboprops. High-Definition Monitors: Rosen Aviation leads the way for aircraft monitors, and many In-Flight Entertainment companies like Collins Aerospace and Honeywell use Rosen’s monitors as part of their IFE solutions. Monitors range from 22” to 55” and include Ultra-High-Definition (UHD) and 4K options. Nine- and 12-inch plug-in HD monitors are also available that can be located at each seat, allowing a personal control and optimum viewing. In late 2021, Rosen announced a full line of Organic Light Emitting Diode (OLED) monitors, which provide a AVBUYER MAGAZINE Vol 26 Issue 7 2022

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ELLIOTT TECHNOLOGIES PRIZM LED LIGHTING UPGRADE SOLUTION

significantly wider, better viewing angle over standard UHD LED or LCD monitors. Chargers/USB & HDMI Ports: Peripheral devices (although seen by many as somewhat ‘humdrum’), are essential to any cabin upgrade, given the proliferation of carry-on devices among today’s Business Aviation passengers. If you’ve ever travelled with plans to finish some work, or update your social media, and the charging units are nonexistent, or not operating while your PED’s battery drains away, you’ll have suddenly understood their necessity. Within this category, we also include Bluetooth for music and headphones, and auxiliary panels. Companies such as Rosen Aviation and Flight Display Systems (FDS) offer many solutions that will meet your needs.

gaining new jet functionality in your older jet: 1) 2)

3)

4) 5)

Envision how you want your cabin to look and feel. With the help of an expert, select the components and features needed to create this passenger experience. Work with an MRO shop with a seasoned CMS engineer on staff and provide them will ALL your current wiring diagrams and CMS software levels. Have the engineer whiteboard the existing system along with the new configuration. Be prepared that the result to achieve your goal could be a whole new installation.

Be Prepared to Overcome Obstacles

Though there’s a danger our five steps to new jet functionality in older jets could ‘over-simplify’ things, the importance of the engagement of your trusted MRO shop, well ahead of any desired upgrade, will prove essential when you consider some of the obstacles and challenges that sit in the path of a possible upgrade. These include: Compatibility: A focal point of your upgrade, you must establish whether an upgrade option is compatible with your aircraft, as you attempt to integrate the newer technology into your older model. That’s especially the case for the CMS system.

Cell phone/iPad Mounts: Providing mounting brackets for Personal Electronic Devices is a great idea. Cell phones, iPads and tablets must be held or propped up to make the viewing of a movie or TV show adequate in-flight. It’s worth noting that mounting brackets can also have a charging port, and even an HDMI interface, allowing content stored on the device to be displayed on a monitor.

Five Steps to New Jet Functionality in Your Plane

Having discussed some (but by no means all) of the exciting upgrade options available to modernize your cabin, there are five key steps towards 42 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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“Advancements in technology for today’s business aircraft allow even the most extreme expectations to be met, assuming the budget is available to match.”

CONTROLLED VIA AN APP

For example, obsolescence becomes a problem for many older CMS systems, and analog switch panels will require relabelling, while the digital types require software revisions. Existing audio/video controllers might already be fully utilized, with no open ports for new sources. Or they may not offer modern capabilities such as HDMI. Existing monitors are unlikely to be ‘smart’ devices, causing interface problems – or at the very least reducing functionality. Long Lead Times: CMS components and software revisions can have long lead-times, so stay laser-focused to finalize what you need, and get everything ordered in plenty of time. There should be a checklist showing

the quantity of components and software levels required. Interior Modifications: Another area of concern will be to address any interior modifications needed to support the new components. Bulkheads and panels might have to be redesigned and fabricated to fit new monitors. Drink rails and side panels may need alteration to fit the new switching units. Window lines or the headliner could require modification to fit new speakers. Audio technology has come a long way in the last 12-15 years, and newer systems use many smaller directional speakers to deliver the best audio fidelity, again necessitating alterations to the panels/bulkheads.

In Summary…

There is nothing more exciting than purchasing a new aircraft and redesigning the cabin, or bringing new life to the stale cabin of an existing aircraft, enhancing your in-flight experience. Advancements in technology for today’s business aircraft allow even the most extreme expectations to be met, assuming the budget is available to match. But regardless of the extent of the vision and upgrade project, it remains vital to take your time to properly plan the upgrade, establishing a timeline. If you solicit the expertise of a trusted MRO shop and advisor, you’ll soon be enjoying new jet capability in your older jet’s cabin. ■

BRIAN WILSON is the Director, Key Accounts at Gogo Business Aviation, an industryleading provider of in-flight connectivity and entertainment solutions. Prior to Gogo, he sat on numerous Dealer Advisory Boards along with being a member of the AEA Board of Directors.

COLLINS VENUE CMS CONTROL

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Measuring ‘Cost’ versus ‘Value’ of a Flight Panel Retrofit What defines value in a private jet flight panel retrofit? Is it all about cost, or are there other factors at play? Ken Elliott explores how you can measure value for your own upgrade...

alue is a way of expressing the worth of something, and although traditionally associated with monetary affairs, can be expressed in many other ways. This includes when value is applied to avionics upgrades in the cockpit of your business aircraft. The measure of value for the same item or experience can be low for one person and yet high for another, because value is subjective, and associated with context. We all assume that we can make the best value decisions, and sometimes, to avoid losing face, we will argue against our better judgment. To gravitate toward effective value decisions, we should do our due diligence looking at value across the full

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spectrum of any project we wish to start, including cockpit retrofits. This implies measuring value in several different areas. For aircraft, and options for cockpit upgrades, there are the following value associations to consider: ● ● ● ● ● ● ● ● ● ●

Safety Flight Operation Cockpit Ergonomics Budget Return on Investment (ROI) Bundling Resale Extended life Obsolescence & Futureproofing Level of Integration.

The cockpit is the engine house of the aircraft where, over the cabin,

ergonomics replaces comfort and flight operations replace office/home experience. Safety, on the other hand, will always rate as the priority for any part of the aircraft. When you first consider an upgrade, cost naturally comes to mind. While many flight departments will place cost on one side of a scale and everything else on the other, it is never that simple. As many a sales manager would say “it depends”. For this article, we’re going to avoid the murky maze of budget numbers themselves, instead focusing on the factors that determine them. Cost is a relative business, and facilities that upgrade aircraft have their own way of determining them, based on margin expectations, available www.AVBUYER.com


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a different applicant owner, and some may be available for a fee, for use by companies who are not the applicant. As you shop around for the best value STC, make sure the discussion includes how well each STC version fits your serial number, based on current equipage and the hardware/software status of that equipage. You may find a lower-cost STC, but Amendments could take the delivery price way beyond expectation.

Some Core Upgrade Value Measures Some of the upgrade values themselves, include: ● ● ● ● ● ● ● ● ●

options, labor hours and bundling projects. Bundling can tip the value scale very quickly if the impact of bundling a cockpit upgrade with an engine or airframe event leads to an overall reduction in cost.

Different Upgrade Methods

Cockpit changes are designed, integrated, and certified in different ways which can dramatically affect the ‘cost versus value’ measurement. For example, if the upgrade is provided from the aircraft or avionics Original Equipment Manufacturer (OEM), as a Service Bulletin (or Aircraft Service Change) it’s likely – but not guaranteed – that it will be ‘as represented’, and the quoted price will be the billed amount. It is important to check that the www.AVBUYER.com

‘package’ (material and paperwork) includes your aircraft serial number, and that a previous owner (or you) has not modified your aircraft via a third-party since delivery. If the upgrade is based on a Supplemental Type Certificate (STC), it’s possible there will be several caveats and variables to consider – any one of which could lead to a costly STC Amendment, over and above the cost to use the existing STC. If the STC is based on an Approved Model List (AML), it is designed and approved to cover different models of aircraft and should include your aircraft make/model. For some models of aircraft there may be several STCs available for a similar avionics upgrade. Each will have

Safer operations The ability to undertake new flight procedures A positive return on investment An increase in the Aircraft Bluebook/VREF value Improved aircraft and equipment reliability Reduction in operating costs Reduced downtime for continued airworthiness Improved odds of an aircraft resale How the upgrade fits with the market mood.

Timing is everything and advice given this month, or this year, may be out of sync with the reality later. For example, understanding the market mood for your aircraft sector is relevant to decision making. In 2022, the demand for pre-flown aircraft is high and the availability low. However, at any point in time, there may be more light jets and turboprops available than large cabin aircraft. Proportionately, spending a significant slice of your budget on an upgrade could have a very different ROI and resale value for different aircraft sectors, based on the demand in the marketplace. Spending some time studying aircraft OEM deliveries and available pre-flown aircraft of similar size and performance to your own, along with price escalation or decline, could reveal useful data to assist in your overall decision process. Some upgrade values are obvious and others not so. Common sales themes such as increased safety, ability AVBUYER MAGAZINE Vol 26 Issue 7 2022

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to fly new procedures and improved reliability are assumed in an upgrade. Others, centered on aircraft value, operating costs and reduction in downtime, are subjective. A quick guide to filter through those subtle upgrade values is to obtain data on similar aircraft valuations, equipage and pricing, through AMSTAT, VREF or JETNET. These are subscription aircraft intelligence services and are used frequently by brokers. Engaging your preferred or a new broker to tease out the subtle information may be very helpful, even if you are not currently trading your aircraft. Brokers are very smart on the market mood and their consultant aircraft specialists, with expertise on the technical aspects of each aircraft model, can steer you in a sensible direction. By reviewing comparison statistics, it is possible to figure out how a retrofit impacts aircraft valuation, resale potential and even savings in continued airworthiness (maintenance) & downtime. If the price of your aircraft model is declining in the marketplace, and an upgrade of your cockpit is going to increase the percentage against the total aircraft resale value, then your 48 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

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decision should factor in how you are likely to recover your investment (ROI). Sometimes an upgrade is a necessity, tipping the value scale with ‘required’ as a non-variable. When this occurs, there will be a tendency to rush toward the most economical upgrade option, perhaps motivated by a limited budget, a time crunch or simply cash flow at the corporate level. While understandable, rushing is the worst way to proceed. This is a time to reflect on the right decision by seeking advice, shop around for choices and always keeping the aircraft resale potential in the back of your mind, even if you intend to own the aircraft forever. Examples of meeting necessity are obsolescence of existing avionics, mandates such as ADS-B Out, significant recurring repair costs and changes to where and how you operate the aircraft. While being forced to upgrade a singular product may be straightforward, upgrading a cockpit is not. Here is what you should avoid: ▪ Turning your aircraft into a ‘project’ because you were in a hurry and due diligence was not completed. ▪ Third party integration products, providing analog to digital

conversion in older aircraft platforms, that could be seen as a risk by a future buyer and particularly when it comes to international support. Examples of these can be found when upgrading to a glass cockpit but retaining analog controls or legacy remote ‘radios’. A cluttered cockpit appearance with kludged components. The current market mood, due to supply limitations, is “if I cannot get a new or a recent pre-flown aircraft, I at least want the aircraft I buy to look and feel like it is new or recent”. While mostly an exterior and cabin experience, the desire and expectation extend to an uncluttered cockpit.

These are value related considerations to weigh against the downward pressure of saving on costs. The result of hurried decisions may be favorable in the short term and disastrous later, when least expected.

Equipment Value Considerations Anything that can bring benefits to both cabin and cockpit will enhance overall value, a great example being

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inflight internet. While bringing huge benefits into the cabin, connectivity is also useful to flight crew. Updates such as databases, charts, maps and information transfer, such as aircraft system status and enroute flight planning are just some examples of the benefits of cockpit internet. Sometimes small updates can provide benefits that exceed their cost in value. Installing AC outlets, USB provisions and easy access maintenance port give immediate facilitation to pilots and save on downtime for technicians to connect laptops for system updating and troubleshooting. Having weather tools from multiple sources is another equipage that has guaranteed benefits of value. Adding SiriusXM weather can be low cost if there is easy access for the antenna installation and while more expensive, upgrading the radar to one with predictive windshear, turbulence and lightning, keeps the pilot in control along risky flightpaths. Another equipment consideration is to watch the trending of price. A classic example would be Enhanced Vision and especially Enhanced Flight Vision System (EFVS or in Europe, EVS). At one time these were prohibitive to consider or had no factory bulletin or STC as a path to install. Manufacturers of both aircraft and avionics are rapidly introducing solutions to bring the aircraft closer to the final landing or take-off decision in low-visibility conditions. Recent changes to FAA Airworthiness Circulars (AC) are enabling approaches to touchdown and rollout in low Runway Visual Range (RVR) conditions. For many, the value of EFVS is hard to quantify, even as options become available and prices head down. However, there is a lot to be said for ‘taking off knowing you can land at the other end, irrespective of visibility’. There is also the bonus of seeing your aircraft next to a similar brand but having that EVS camera bump on the nose, and the little glass pull down screen in front of the crew. The ‘one-up’ factor, provided by these very visible upgrades of EVS and Head Up Display (HUD), can be a decider during a resale event. Nothing, however, beats the impact 50 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

“Nothing, however, beats the impact of 3-5 large clean screens across the instrument panel.” of 3-5 large clean screens across the instrument panel. When showing aircraft, it is very common for non-pilot buyers to be drawn by a slick paint scheme, then dwell in the awesome cabin, followed by a squeeze between the crew seats to have a quick scan at the instrument panel. When the panel is modernized and in keeping with a bespoke interior, the result of the quick scan is satisfying. From that point on the future owner leaves the cockpit details to the experts who wrangle over the contract, but, by and large, the aircraft may be considered sold! Outfit your aircraft in accordance with your need. If you are planning on

short routes or if that is the performance limitation of your model, then install equipment to meet that need. This mostly applies to the cabin and its capability but for the cockpit it may not be necessary to plan on significant airborne connectivity, when you can achieve your communication needs at an FBO between short flight legs. Integrated flight panels increase pilot ‘out the window’ time, but for short flights the benefit vs cost value may not be there to completely change the panel. Measure this against the risks mentioned in this article, where partial panel upgrades can have support and reliability issues. Pilot owners are more likely to understand the relationship between flights and equipage needs, where the capabilities and limitations are more intuitive to them. For others, any avionics sales specialist or broker subject matter expert (SME) can advise on this area. Pilot and non-pilot owners may have different value judgements and perspectives, which is partially why you will find all varieties of cockpits across the same model of aircraft. Getting the maximum use out of an upgrade is another consideration. In an www.AVBUYER.com


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environment where Lateral Path Vertical (LPV) approaches, in the US, now exceed traditional ILS, it begins to make sense to upgrade the aircraft Flight Management System and (possibly Flight Guidance for coupling), to facilitate the many LP/LPV approaches now available. It is wise to add graphic weather, electronic charts and enhanced maps, when upgrading a flight panel. The options involve a small amount of graft to install and yet a great amount of electronic capability enabled by the manufacturer. It also leads to an uncluttered cockpit, saving space and weight. If an option means more removal & reinstallation for access, more wiring and significant certification, think twice. If the option is mostly software or a fully compatible ‘slide-in’ component, then the value proposition is good.

Summary

In an environment where supply is below demand, the dynamics favor the seller. The squeeze is on the few available aircraft to be ready to fly, immediately upon closing the deal. Any delays from the buyer could cause the seller to unplug the aircraft and move it to one of many alternate buyers. This situation has www.AVBUYER.com

an enormous impact on cockpit upgrades, their cost, value and — most importantly — when they should be undertaken. Is it a buyer’s prerogative to upgrade, or should the seller plan to offer an aircraft that is as close to new as possible? There are arguments either way. For sure, if the aircraft is up to date and ready to fly, for a discerning buyer, the seller may maximize on price, reduce stress for all and expedite the deal. This would seem to be the wisest route to take, if not for the possibility the market mood may shift quickly and there could be an over supply of pre-flown aircraft. The price delta between new delivery and pre-flown aircraft is still sufficiently wide enough to allow owners of existing

models to repaint exteriors, replace interiors and upgrade cockpits, and still provide significant savings to buyers. The trick may be in making the updates look, feel and function as close to a new aircraft as possible. That is one large value proposition to consider. Anyone on this track should act fast as new aircraft manufacturers are ramping up both deliveries and new models to sell. In conclusion, price matters but it depends! Hopefully, this article has provided clues to sellers, buyers, owners and brokers that will enable them to navigate through the cost vs value challenge and come out the other side with an optimum solution for their operation. ■

KEN ELLIOTT has 52 years of aviation experience focused on avionics, in General and Business Aviation. Having a broad understanding after working in several countries on many aircraft types and avionics systems, he has contributed to several work groups and committees, including for NextGen, Airport Lighting, Human Factors, Unmanned Aircraft and Low Vision Technology. In retirement, he is striving to give back the knowledge gained with an eye on aviation’s future direction.

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Seven Factors Driving Your Next Cabin Refurbishment What are the key factors behind most aircraft owners’ decisions to refurbish their business aircraft cabins? Chris Kjelgaard asks Duncan Aviation and Elliott Aviation to share their collective observations…

here are seven common reasons why business aircraft owners and operators decide to have their cabins refurbished. These seven reasons pertain, even in today’s overheated preowned aircraft sales market. Indeed, the fact that so many aircraft are being bought and sold is almost certainly creating a greater volume of cabin refurbishment business than would be the case in less heated market conditions. The reason any given owner may decide to have the cabin of an aircraft refurbished will vary, depending not only on what that owner expects to do

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with the aircraft after refurbishment, but also on the look and functionality they want the cabin to have. Reasons for refurbishment also depend on whether the customer is operating the aircraft privately or for business, or offers it for charter. Other factors may be influential in determining the extent and nature of a cabin refurbishment. For instance, the geographical regions or areas in which the aircraft is mainly to be operated, and the typical durations of its flights, are likely to be important in determining the owner’s expectations of cabin comfort, functionality and service. If the aircraft is to be used mainly for

transporting corporate executives, any refurbishment is likely to emphasize the ease of doing business from the aircraft while in flight. If the owner plans mainly to use the aircraft for transporting family and friends, the refurbishment is likely to emphasize in-flight entertainment options and passenger relaxation. All of these factors play a role in deciding the work to be performed during a cabin refurbishment. But the basic seven reasons for performing the refurbishment in the first place remain — though only one or two (perhaps three, very occasionally) are likely to be involved in any given individual decision. www.AVBUYER.com


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often helping persuade new owners to have refurbishment work performed is that the inspection teams at MRO providers will spot “areas of concern” in the cabin furnishings and fittings, and advise the owners that repair or improvement work needs to be done in specific areas, notes Jerrod Pickford, Interior Department Scheduler at Duncan Aviation. Generally, the larger the business aircraft that an owner buys, the greater the amount of cabin refurbishment work that they’re prepared to perform, says Hawes. But much depends on the condition the aircraft is in when the new owner purchases it, particularly in today’s market. “We encourage buyers to know the current market for the aircraft, and if it needs a new interior, how much it will cost, for instance, for a soft-goods refurbishment,” she adds.

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2. Refurbishing an Aircraft Before Resale

Some of the most common reasons owners decide on refurbishment are when they decide to buy or sell their aircraft, or they choose instead to keep the aircraft in service.

1. Refurbishing a Newly Purchased Aircraft Possibly the most common reason of all for owners to have cabins of Business Aircraft refurbished is when they buy an aircraft “and want to make it their own”, says Suzanne Hawes, Completion Sales Representative for Duncan Aviation. Buyers can’t always find aircraft which closely match their particular cabin requirements in terms of look, www.AVBUYER.com

functionality, and comfort — particularly today, when many aircraft are being sold without ever being listed for sale on the open market. A new owner may decide to have the aircraft’s cabins refurbished to their own taste immediately upon completing the purchase. Often the fact that a sizable portion of the interior furnishings may be removed during a comprehensive pre-purchase or post-purchase inspection of the aircraft may influence the new owner to have a refurbishment performed on the spot, or as soon after the purchase closes as is practical, says Hawes. During such inspections, a factor

In normal pre-owned markets, some sellers choose to have the cabins of their aircraft refurbished before putting them up for sale, in order to have the aircraft “appeal to a broader prospect base” and thus maximize aircraft resale value, notes Meghan Welch, Director of Paint and Interior Sales for Elliott Aviation. In such cases, prospective sellers want to make their aircraft as widely marketable as possible, so they tend to specify that the aircraft be refurbished with furnishings and fittings — carpeting, upholstery and armrest and sidewall drink-holder finishes — of neutral tones and design, says Welch.

3. Refurbishments Ordered by Fleet/Charter Operators

Fleet and charter operators often have cabin refurbishments performed for one of two reasons, according to Welch. When buying used aircraft, each fleet operator wants the cabin interior of each aircraft in its fleet to have a look and feel which is unique to that operator, so any customer boarding any of its aircraft knowns immediately with which company they’re travelling. Often the charter or fleet operator will choose a bright and warm interior AVBUYER MAGAZINE Vol 26 Issue 7 2022

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REFURBISHMENT

color scheme, and emphasize the attractiveness of the interior by installing LED lighting throughout the cabin, Welch says. Such lighting generally has the advantage of being programmable to allow different settings and colorings to suit different times of day or passenger activities (dining, sleep and/or relaxation periods, or work). Additionally, because fleet operators usually fly their aircraft much more frequently than non-fleet/private owners, when ordering cabin refurbishments they seek furnishings and fitting that are more durable and damage-tolerant, says Pickford. This often means fleet owners choose darker-colored carpeting and furniture upholstery, and having furnishings made from hard-wearing materials such as ultra-leather, he says. Such operators also want cabin finishes to be easily repairable and replaceable, choosing thin veneers rather than solid hand-carved woods and granite counter-tops. And, as a consequence of their relatively high levels of aircraft utilization, it’s also possible that some fleet owners have the cabins of their aircraft refurbished more frequently than private owners do. 54 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

4. Refurbishing for Business Use

In some cases, the customers buying used business aircraft whose cabins were previously configured mainly for private or family use want to use the aircraft primarily for business purposes, according to Welch. These customers will have their aircraft refurbished after the transactions are completed – and, typically, this might mean increasing the Wi-Fi bandwidth to the cabin in order to allow business videoconferences to be streamed to and from the aircraft. Similar to fleet operators, if the new owner intends to increase the amount of flying the aircraft does, upgrading the durability, maintainability, and quality of the furnishings and fittings becomes a consideration, Welch adds.

5. Refurbishing Instead of Selling the Aircraft

Mission needs evolve over time, and sometimes owners choose to invest funds in refurbishing the cabins of their existing aircraft to provide a better functional match to the missions they’re operating, as opposed to buy one that matches that need. “We’re seeing a lot of owners/operators really trying to have

discussions about maximizing and personalizing their interiors,” Welch explains. “They want to do their refurbishments to personalize the cabins for proper function, fitting their uses and missions.” Duncan Aviation is seeing the same behavior among its customers. “We do see some refurbishing instead of buying at the inflated prices of today’s market,” Hawes notes. Major MRO and cabin refurbishment providers such as Elliott Aviation and Duncan Aviation pay close attention to owners seeking to keep their aircraft in service, consulting closely with them on their personal preferences for their refurbished cabins’ look and functionality. For instance, says Welch, Elliott Aviation performs a lot of detail design work to make sure it can maximize galley space and capabilities, meeting each owner’s in-flight catering and beverage-service requirements. Seat designs and materials are approved with each owner, and entertainment options are discussed exhaustively to identify what each owner wants in terms of cabin BlueTooth wireless, audio and video capability. This is particularly what each owner desires

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in terms of passengers being able to use personal electronic devices in the cabin.

6. Refurbishing to Replace CMS/Increase Wi-Fi Speed [and/or Bandwidth]

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Replacement of obsolete aircraft Cabin Management Systems (CMS) is another reason why owners — particularly of older business jets — choose to have cabin refurbishments performed, says Welch. Nowadays this is very often accompanied by installation or upgrading of Wi-Fi connectivity to the cabin, though Wi-Fi upgrading “depends on the subscriptions [aircraft owners have], and where they’re travelling”, says Hawes. “It’s variable.” Increasingly, also, CMS replacement

is accompanied by installation of dual USB charging ports (USB-A and/or USB-C) so that passengers can use their personal electronic devices onboard to view the Airmap display of the aircraft’s positional and velocity information, to watch films or listen to music, says Adrian Chene, Avionics Sales Representative at Duncan Aviation. (However, many owners are also specifying upgrades to their aircraft’s 56 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

Hi-Fi cabin audio equipment during refurbs.) Hawes adds that in most cases owners aren’t choosing to have cabin bulkhead monitors removed, despite the growing prevalence of onboard PED usage. But many are choosing to have onboard VHS tape players and DVD players removed as passengers increasingly look to their PEDs to provide them with personalized entertainment.

One area potentially of some design concern to Business Aircraft manufacturers is that outfitting an aircraft with dual USB charging ports for, say, eight to 15 passengers may alter the aircraft’s electrical powergeneration requirements substantially, according to Chene. Today’s rapid-charging dual-USB ports can require a power input of 60 watts, and when as many as 15 passengers are travelling, this can mean that the aircraft’s total power requirement, purely for USB ports, can exceed 1,000 watts. Modern Business Aircraft are designed with high electrical power usage in mind, and their electricity generators are sized to generate large power loads. But older aircraft, fitted with USB ports at every seat, could find their electric power-generation capabilities overwhelmed if every passenger wanted to use their PED at the same time. In the future, as more and more USB chargers find their way into the armrests of business aircraft, some may need to have more powerful electrical generators or auxiliary power units installed, Chene suggests.

7. Refurbishing to Coincide with Aircraft Downtime Some owners decide the time is right to refurbish the cabins of their aircraft — and sometimes for the aircraft also to undergo exterior repaint when

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REFURBISHMENT

they’re scheduled to be in the shop for a lengthy period of downtime for other maintenance or upgrade work, says Welch. In timing cabin refurbishments to coincide with what is unavoidable downtime anyway, such owners aim to minimize the total amount of downtime their aircraft must experience over the longer-term. Co-scheduling of cabin refurbishment is particularly common when owners decide to have the avionics of their aircraft replaced or upgraded, Welch explains. During downtime periods for avionics work, owners often feel that upgrading cabin connectivity and CMS functions, and performing other cabin refurbishment work is a natural fit with the cockpit modernization, and is best scheduled for the same time.

Tips on Scheduling Refurbishments

While scheduling a cabin refurbishment to accompany other planned aircraft downtime has the advantage that all the logistics involved in the refurb can be carefully worked out well beforehand, that is not necessarily the case when an owner wants to have the cabin refurbished immediately after completing the purchase of the aircraft. For various reasons to do with today’s overheated used-aircraft market, global trade tensions, the Covid-19 pandemic, and the plethora of supply-chain bottlenecks affecting the movement of 58 Vol 26 Issue 7 2022 AVBUYER MAGAZINE

many manufactured items throughout the world, lead times for aircraft parts and materials are “extremely challenging”, according to Hawes. “Pricing [of parts] has gone up, and supply is taking longer, all over the board,” confirms Pickford. “It is affecting everything, from seat leather to carpeting to switch panels. And it’s not just the interior [of the aircraft which is being affected], it’s the airframe as well. You can’t get engine parts,” for instance. Hawes estimates that about one in every three used-aircraft buyers Duncan Aviation sees expects to have some kind of cabin-refurbishment work performed when they buy their aircraft. But the supply-chain difficulties Business Aviation is facing (as are many other industries) make scheduling the required downtime a tricky business. “When the aircraft is going through a pre-buy or a post-buy inspection, we do a specification session to get everything [which is to be involved in the cabin refurb] selected,” she says. “Then we schedule it out for those parts,” to obtain

“Buyers can’t always find aircraft which closely match their particular cabin requirements in terms of look, functionality, and comfort...”

a planned date for the required downtime to begin. The timing of the downtime required for the cabin refurbishment “depends on the work-scope and the parts the owners select,” says Pickford. “For instance, lead time for a custom handmade carpet can be 18 weeks. It’s pretty critical to have everything on hand when the aircraft comes into the shop. That’s the biggest thing — educating the client on where we’re at,” in terms of the lead times on every part the client has selected. While this means clients won’t necessarily be able to have cabins refurbished to their liking immediately after they have bought their aircraft, “the good thing is that they’re flying the aircraft” in the intervening period before the scheduled cabin-refurb downtime begins, concludes Pickford. ■ More information from: Duncan Aviation: www.duncanaviation.aero Elliott Aviation: www.elliottaviation.com

CHRIS KJELGAARD has been an aviation journalist for 40 years and has covered a wide variety of industry areas during that time. He has served as editor of ten print and online titles and written extensively on many aspects of aviation.

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