Anthony Harrington talks to Comlux, The Aviation Group, Chairman and CEO, Richard Gaona
When Richard Gaona, Chairman and CEO of Comlux, The Aviation Group, joined the company eight years ago, the plan was always to build a market-leading aviation group. Today, with strong lines of business in VVIP charter, green completions and refurbishments, aircraft management and operations, plus MRO services and aircraft acquisition and sales, that plan is now considerably further forward.
Q: How close are you today to achieving the goals set out when you joined Comlux?
A: Nothing is finished yet, but looking back, given how difficult trading conditions have been right through those eight years since the global financial crash in 2008, we have to be very pleased with the progress the Group has made to date, and continues to make. Our fundamental strategy is to be a major group in business aviation and to be here for the long haul in all the areas in which we specialise.
We have seen some marked changes in the sector, some for the better. In aircraft management, for example, by comparison with 10 years ago, although the competition is still intense, there is a growing tendency for clients to be more interested today in service quality than in sheer price. That plays to our strengths since we are not interested in being an operator with 200 jets under management and a factory process for managing the client.
Q: What differentiates Comlux when it comes to aircraft management?
A: We believe very strongly in providing a very high level of service and a highly personalised relationship where every client is special and is treated as such. You have to ensure that you stay very close to the client and that you are aware of their needs at all times. Every client gets a dedicated account manager and we work hard to ensure that these are long-lived relationships.
One of the great features of aircraft management is that it gives you the opportunity to build that long-term relationship with the client and to be there as a help and support throughout, right from the acquisition process for their first aircraft through to advising on and procuring the next upgrade aircraft for the client.
If the client is not interested in chartering, but simply wants the aircraft for private flying, then we provide the pilot and the engineer and create a menu of options for the client, so that they can choose all the elements of the service package that meet their needs.
We are very aware that you can take nothing for granted in aircraft management. This is a very competitive area and clients are very sophisticated buyers of services. They are always looking to get the best and they know that they can switch suppliers if they are not satisfied. So our entire team realises that they have to be on their toes and deliver the highest possible standard of service at all times. Any time the client has a requirement we look to respond on a personal basis. Clients have my mobile number and they know they can call me at any time.
Q: The completions market seems to be rather difficult at present. How is Comlux faring on this front?
A: There is no doubt that the completions market has entered a more difficult period because of the falling off in demand for new, large aircraft. Sales of new ACJs and BBJs have definitely thinned out ahead of the expected first deliveries of ACJ320 and 319neos, which are scheduled to reach the market in 2019. We should start to see first deliveries of the Boeing BBJ Max in late 2017. It is normal for orders for existing models to tail off when new models are announced, and that is what we are seeing now.
Fifteen years ago, when the BBJ was launched, the demand forecast was for 500 aircraft. Today we are almost at that figure, so many of the people who were able and willing to buy a BBJ now already have one. So if Boeing and Airbus want to deliver 10 or 12 aircraft a year, they have to do so by replacing those first-generation BBJs. This will happen, but right now we are in this quiet period. This puts completions centres under stress and a few of them are now looking at empty forward order books. From the customer’s point of view, this makes it a very good time to think about getting a refit or refurbishment on an existing jet because there are some very good prices to be had.
This is actually an important point. Those first-generation BBJs and ACJs are now ageing. There may not be too many green aircraft available for completions before 2019, but a number of those BBJs and ACJs are now entering the pre-owned market and new owners will want to have them refreshed and fitted out to reflect their tastes and views. This makes refits and refurbishments a very good place to be for the next few years.
Q: Speaking of refits and refurbishments, you recently opened a facility in Bahrain as part of a cooperation agreement with Texel Air. Is this move designed to take advantage of the anticipated increase in demand for refits?
A: It is, but there is also a more strategic dimension to it. It is difficult to suggest to a Middle East client who has a requirement for a minor refit, costing say US$100,000, that he needs to fly the aircraft to Comlux America for the job. The fuel cost alone would add $30,000 to the bill. It makes a lot more sense to have the client go to our own facility in Bahrain! We have also increased the size of the facility there, so that we can now accommodate a Boeing 747, for example.
If the client wants to get an A-check done and a minor refurbishment, then the Bahrain facility is ideal. We will fly our refurb specialists out from Comlux America in Indianapolis and Texel Air has the MRO specialisms to do that side of the job. However, if the refurbishment is a large order, then we will still do the job in Indianapolis.
Q: You recently placed an order for three ACJ 320neos and two BBJs. Is that not a very bold move at this stage of the market?
A: It is a very strategic decision for us. For a start it means that at a time when, as I have said, the completions market is entering a thinner phase, we have five completions already scheduled in our hangars. The second point is that when the ACJ320neo becomes available for delivery the lag on orders for those wanting new jets is likely to be significant. We will be able to provide our clients with new, fully completed aircraft with none of the delay they will experience if they go direct to the manufacturer. That will be a very strong point for us. We will, of course, also be able to suggest to the client that they leave the aircraft management with us as well, so we are looking to grow our business on four fronts with these orders, namely completions, aircraft sales, charter and aircraft management.
Q: How many of these new orders do you see Comlux retaining for its own charter use?
A: I think that the probability is that we will end up keeping two of the new jets in our own fleet, and reselling some aircraft. We are also putting up for sale our 767BBJ VVIP aircraft. This aircraft is configured to carry up to 63 passengers with a dedicated section for the Principal in the forward section, while a large section at the back enables the Principal’s entourage and delegation to travel in plenty of comfort. This aircraft had a full interior refresh and makeover in 2013, which considerably enhanced the quality of the interior, with all the seats getting a new, beautiful beige leather refresh. We also added brand new carpet flooring and a new humidifier system to reduce dry air during flights.
The aircraft has GSM throughout the cabin and a modern in-flight entertainment system that allows passengers to watch movies and TV shows on either their own personal iPads or via the iPads on board. We have a dedicated media trolley that provides rapid recharging facilities for handheld devices.
The Principal’s section has a master bedroom and shower along with a Presidential office suite and a dining and meeting room. We took delivery of the 767BBJ five years ago and it has been really good for us. In particular we now have FAR 129 certification from the FAA, which means we can control the passports of all the passengers, and we do not have to request advance approval. We also have ETOPS 180, which means that as a wide-body aircraft with two engines, we are approved to fly up to 180 minutes from land. Having the 767 over this period has enabled us to achieve all these additional capabilities, quite apart from the excellent work the aircraft has done in providing luxury chartering for our VVIP clients.
Another great win that the 767 brought about was that it demonstrated our ability to run and manage widebody aircraft. As a result, we have had a number of requests from clients to manage their aircraft. So we have been able to add an Airbus 330 and a Boeing 777 to our fleet as well, and we will be specialising in VVIP charter for our clients with these aircraft. These wins mean that we are now in a position to offer the 767BBJ to the pre-owned market.
I would really like to see a better over-arching set of rules in the charter space so that the standard of private charter operations comes up to the same level as commercial flying. That would force all operators to deliver properly on quality and safety. At present we compete all the time against very small operators who constantly try to win any competitive deal on price and who deliver considerably less than we do on safety and quality. I recently had a client phone me out of the blue asking for help. They had been left high and dry at some airport because the smaller operator had run into difficulties. We were pleased to be able to help, but it shows that in this industry – as in any other – clients get what they pay for.
For example, we do all the flight planning for our clients and it is included in the fee. I have a dispatch team of 15 people working 24/7. A small operator will buy in flight planning services and if the client changes their mind and decides to go to Tokyo instead of Bahrain, the operator has to go outside to request a new flight plan, and the cost is passed on to the client. We do it all internally as part of the service. It is up to us to ensure that clients are kept abreast of what they are getting when they buy a quality service, and what they are risking when they shop for the cheapest deal!”