Comlux Aviation’s Arnaud Martin, Executive Vice President, Operations on the future of aircraft completions
For many companies in the business aviation sector, 2015 turned out to be a disappointment. The slowdown in China, the continuing collapse in the price of oil and heightened volatility in global equity markets prompted many potential corporate buyers and high net worth individuals to delay spending on private jets. However, some players in the sector are opting to look on the positive side and build for the future with orders for new VVIP aircraft.
One of the boldest moves has come from Comlux The Aviation Group, which, in February 2016, placed an order for three Airbus ACJ neo aircraft, with green deliveries starting in 2019. As Arnaud Martin, Executive Vice President, Operations notes, if you are solidly focused on the high net worth and high-end corporate sector, you have the benefit of working with clients who are unlikely to cut back on their travel commitments in a downturn, and who may in fact increase their requirements for private flying as they look to capitalise on falling asset prices around the globe.
Comlux’s order comes despite 2016 opening on a decidedly wobbly note, with global stock markets falling sharply in January and early February. The company’s order book of VVIP aircraft now stands at six aircraft, with the ACJ 320 neo orders adding to orders for two Boeing BBJ MAX8s and a Bombardier Global 7000.
“We are positioning ourselves with these new products to be ready to serve our customers. This is all about being ahead of the market and the new green deliveries will give our completions centre in Indianapolis a tremendous pipeline of work,” Martin says.
Of course, Comlux is also giving itself the option of being able to sell on ’ready-to-fly‘, highly desirable, long-range luxury VVIP jets at a premium price at a time when high-end buyers seeking new VVIP jets are likely to be facing a wait of three to four years before they could take delivery of a green aircraft. As Martin says, it’s all about being ahead of the market. “What we are doing is looking to optimise our business around all the skills that we have in the group, which includes aircraft transactions, VVIP operations, high-end charter and completions. These orders go directly to all these aspects,” he adds.
Martin acknowledges that current market conditions are challenging. “For years now the economies in our major markets have been making very slow progress. There is cause for concern in the Middle East with the very low oil price, but that is still one of our more lively markets and one where we are very well established. It continues to be a very good market for us, and this is why, despite the difficult economic climate, in January we announced the launch of a new VIP Service Centre in the Middle East,” he comments.
The new service centre is a joint venture with Texel Air, which is based at Bahrain International Airport. Comlux will look after system upgrades and cabin modifications for VIP clients, while Texel Air provides hangar, maintenance and certification services at its 3,200 square metre facility. Texel Air has a Bahraini Part 145 approval and is expected to get EASA Part 145 certification by the third quarter of this year.
“Ramping up our MRO and servicing capabilities in the Middle East with Texel Air is very important for us. We have a lot of customers in Asia and the Middle East, and if there are no alternative MRO facilities for them other than to fly to our centre in the US for maintenance, that’s not good. With Texel Air, we can do any VIP cabin upgrades that a client requests. We will fly in a specialist team from our Indianapolis centre, which gives us both a local presence with all things MRO related, and the ability to add specialist skills as they are required,” he notes.
Comlux is working hard not to allow itself to get trapped by sluggish market conditions. “We – and business aviation generally – have had a difficult context to work with for years now, but we have put our company in shape to deal with a difficult market. So we are not counting on any sudden rebound. Instead, we are actively looking for opportunities, and we are also backing new products over old,” Martin says.
The 320 Neo, for example, he points out, is much better than existing products in its category. As such, as this becomes obvious to the market, it will energise sales. “It is reasonably certain that we will see a group of existing owners of jets that will want to upgrade now the Neo is available. Because we have our completions centre in the US, with an established reputation for doing green aircraft completions on ACJs and BBJs, owners know that we have the skills to design and complete a unique aircraft for them,” he adds.
While Gulfstream has done very well so far with G650 orders, Martin argues that the BBJ MAX and the ACJ Neo deliver levels of space and comfort that cannot be matched by a G650. Range is a more complicated comparison. The G650’s range is 12,960 kilometres, which comfortably outclasses the ACJ 320 Neo’s 7,800 kilometres and is more than a thousand kilometres further than a BBJ’s 11,840 kilometre range (the comparisons assume eight passengers in each case).
“I think a lot of potential clients will choose comfort over the additional range provided by the G650. For most passengers any trip of 6,000 kilometres will be one of the longer missions they would expect to do in their lives,” Martin comments.
For commercial airlines fuel efficiency is an important consideration when choosing a jet, and if fuel efficiency were the clincher, then the G650 would win handsomely. But as Martin notes, if you are only flying 500 hours a year, the fact that the ACJs and the BBJs are about 15% less fuel efficient than the G650 does not provide enough cost savings to be a decisive factor for potential buyers.
Another strong plus point for the ACJs and BBJs is that both Boeing and Airbus are developing better features, such as lower cabin altitudes and greater airflow. “To this we can add air purification systems at the completions stage, so that the jet really does become an apartment and office in the sky,” Martin adds.
So what is next for Comlux? Martin says that given the recent major moves the company has made, the ensuing months will be mainly about capitalising on the investments and initiatives made so far. This will not hinder plans to expand the aircraft management and charter operations side of the business. “We are always looking for opportunities to add managed aircraft to our charter fleet. We’re not looking to grow to the size of Lux Aviation, with 250 aircraft in its managed fleet. Our target is to aim for around 45 aircraft, specialising in the VVIP market, with large jets, and run a boutique service for clients. As such we expect to increase our managed fleet steadily,” he concludes.