CRJ steps up to the challenge
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Posted Date: 01/03/2008
Issue: Executive & VIP Aviation International March 2008
Publication: Executive & VIP Aviation International
Call it eco-friendly if you will but the conversion of ageing CRJ-200s to VIP configuration by Project Phoenix is very much about accommodating market demand, despite the programme’s green credentials. And what a market this is proving to be. Where manufacturers cannot ramp up production fast enough to sate the appetite for executive aircraft there is little else a buyer can do but look to existing fleets that fit the aircraft profile they have in mind. Project Phoenix sits firmly in this niche. The conversion of former airline CRJ-200 regional jets to VIP configuration can fall at several hurdles but a conversation with Mike Cappuccitti, President of Project Phoenix, assures us that these hurdles are not set high at all.
Jumping the hurdles
Perhaps the first stumbling block would be the availability of fleet; Cappuccitti puts paid to this obstacle straight off. One time Vice President Sales for the Middle East, Africa and Asia at Bombardier he has had no trouble pinpointing exactly who owns or operates all 1,200 CRJ-200s built; albeit that maybe only one-quarter of those aircraft are suitable for conversion. Perhaps the age of these aircraft is one limiting factor with around eight to 10 years set as the optimum point at which the economics make sense. The explanation of the availability of this fleet for conversion to VIP configuration is simple: regional airline routes have become much denser with 50-seaters simply no longer doing the job. Traditional regional airlines have become thinner on the ground and, where they continue to operate, they have moved up to 70-seat aircraft and traded on their 50-seat fleets. Then there is the low-cost airline phenomenon which has given the regional airline business model a run for its money; and found it largely lacking. Of course the darlings of the low-cost world are the 737 and A320 families of aircraft with their larger cabins, higher seat-count and healthy operating economics. These high load factor operations are less concerned about feeding hubs using 50-seaters, but in matching city pairs, adding frequency and building a high level of availability into their strategies.
With the aircraft located, the next hurdle is perhaps set higher: the availability of conversion slots. Project Phoenix has partnered with Aerospace Concepts of Montreal to project manage the sourcing, maintenance and completion phase of these CRJ-200s. The partnership has been established on a 50:50 risk/reward basis. Already the primary interiors provider has been announced as Flying Colours of Peterborough, Ontario, but the search for sufficient completion capacity is ongoing. Cappuccitti sets out his criteria for selecting interiors shops – in this order: quality; price; the availability of slots; completion turnaround time; and the facility’s location.
Flying Colours puts its completion time at eight months and has five CRJ-200 conversions to its name already; albeit that they are not part of this programme. This outfitter has four slots available in the first year and all of these have already been taken by Project Phoenix clients. In the second year, Cappuccitti is hopeful that this number of slots could be doubled. Meanwhile, four other completion centres are in the frame but nothing has been inked. “We are very very specific about what we want,” Cappuccitti insists. The standard interior layout is 15 seats for charter operations at a cost of $17.9 million. But Cappuccitti is at pains to make clear that the CRJ-200 conversion can be custom designed at any price. This puts one in mind of Lufthansa Technik’s approach to the completion of the Airbus Elite interior that comes at a set price for a set interior or at additional cost if the buyer goes off piste. Long-range fuel tanks to take the CRJ-200’s range up to 3,000nm are also being made available to customers.
Cappuccitti is very keen to spread the net in terms of completion capacity; indeed he will probably have to do so given the high demand for slots. However, the beauty of Project Phoenix is that it is expected to be a meaty programme that assures continuous income to mods shops if they step up to the plate and meet the criteria. Cappuccitti and his team are in a position to buy these airliners in bulk and take a programme approach to conversion; there is nothing speculative about his plans. The third hurdle is the clients and this bar is set so low it is – at present – not a hurdle at all. “We have the clients,” remarks Cappuccitti. “Clients are not an issue – they are knocking on our door. The critical steps for us are finding the aircraft and the completion centres and we’re on top of that.” Letters of intent have already been signed with Opus Capital planning to take two CRJs and other undisclosed clients have either signed or are close to signing. Around 30 interested parties are already on the radar. Commenting on market demand, Cappuccitti says: “This aircraft is perfect for India. It has a large cabin and is good value. It is in a class of its own.”
The prognosis
On re-entry to the business jet world after an extended absence trading and chartering yachts, Cappuccitti was staggered by escalating private jet prices and lead times to delivery. He was prompted to remember the Special Edition programme based on the original Canadair RJ airframe which produced a popular business jet. The programme was only shelved when demand from the airline industry soaked up the available airframes. Now the CRJ-Phoenix is prompting considerable excitement from its mentors and the market alike. Perhaps part of the explanation for the brouhaha is that there will be nothing “second hand” about this private jet. Upon acquisition by the Project Phoenix team, the airframe and CF34-3B1 engines will undergo heavy maintenance, the stripping out any former modifications and the installation of a brand new interior, including state of the art avionics, inflight entertainment and interior components. Delivery of these rejuvenated aircraft will be at a very attractive price point and within less than a year. Compare that to the numbers being quoted by the original equipment manufacturers (OEMs).
“These will not be unsupported aeroplanes,” reminds Cappuccitti. He is putting together a tip to tail maintenance programme on a flight hour basis that simulates an OEM’s approach to aircraft sales and aftermarket support. “This is a perfect solution for Bombardier customers,” he adds. How long will the Project Phoenix programme last? This depends upon how long it takes for OEMs to catch up with their order books. At the last glance at OEM delivery dates, it would not be unreasonable to suggest that Project Phoenix could be around for a very long time.
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