Jay Heublein, Executive Vice President at Nextant, on the company’s remanufacturing philosophy
Q: Before he left, Sean McGeough, the former CEO, was talking about Nextant having identified another remanufacturing opportunity in the heavier jet segment. How is that project going?
A: We looked at several different possibilities in the large-cabin segment. Given the nature of that segment you are pretty much limited to Bombardier or Gulfstream aircraft. However, right now we are very focused on the G90XT programme. This is our remanufacturing of the Beechcraft C90 turboprop, where, amongst other things, we swap out the old PT6 engines for the more powerful and fuel-efficient GE H75 turbofan engines from GE Aviation. We’ve also modernised the aircraft’s avionics, with a fully integrated Garmin 1000 flight deck, with electronic engine and fuel quantity indicators.
One of the most important innovations we have introduced into the G90XT, however, is single-lever power control technology, which both enhances the safety of the aircraft and makes for a substantial reduction in pilot workload. Plus we now have auto-start and full electronic engine control systems.
Getting the single-lever power control technology through certification has caused us some delay in getting the G90XT fully certified. We already have certification for the airframe and the avionics. The single-lever power control is such an important addition to the aircraft and a real differentiator. We expect to get certification for it by the second quarter of this year.
While we have been focused on the G90, it has become clear that the continuing price falls in the pre-owned mid-range and heavy jet sectors have reduced the attractiveness of a new remanufacturing effort in these segments considerably.
Around 18 months ago you would have been looking at paying US$10 million for a pre-owned G5. Now you can buy the same aircraft for $8.5 million, whereas a remanufactured aircraft in that category would probably have to be priced around $15 million to $20 million. In the light jets market we can add tremendous value through remanufacturing and we give the aircraft decades more life, without driving the price up to the point where it is a difficult sale.
Q: How is demand for the 400XTi progressing?
A: We are coming up on our 70th aircraft. Interestingly, in the early days of the 400XT programme we were only doing whole aircraft remanufacturing. In recent months we are seeing a lot more Beechcraft owners coming to us and asking if we can remanufacture their jet for them.
What they are saying is that they have done their research on what we do in remanufacturing the 400XTi and they like it and want the mod for themselves. People want the performance and the significantly lower operating costs and economies that go along with having a modern jet, at the price point we can provide it. We are definitely seeing a lot of traction there.
Q: How much interest are you seeing for the G90 during this pre-certification stage?
A: We are seeing a fair amount of interest, particularly from owner-operators, and from smaller corporate flight departments. There is already a substantial list of people who have indicated that they want to fly the aircraft. We’ll be doing a full market survey for the G90XT somewhere around EBACE in May, and certification will probably follow shortly thereafter.
We will have the demonstrator aircraft in late April or early May, and we have already finished all the ground testing. We have seeded the first couple of delivery orders for whole aircraft. However, I think that the G90 will see a lot more conversion orders from owners who want to upgrade their aircraft. This gives us a second route to market, rather than Nextant buying pre-owned C90s and remanufacturing the whole aircraft for resale.
Q: How long do you expect a full conversion of a C90 into a G90XT to take?
A: With a full paint and interior refit the conversion, including swapping out the engines for the GE H75 and new avionics, would take around 100 to 120 days. Given that the remanufacturing process extends the life of the aircraft by decades, this is not a long period of time for an owner to be without the jet. We don’t see it as being much of a hurdle in the way of the conversion process. After all, they can always lease a replacement through the period.
Q: What’s next on your list after the G90XT?
A: Well, we are just at the start of this programme, so there is a long way to go still. However, we are constantly looking at and evaluating opportunities. We see several interesting additional options in the light jets category, which is where we have decided to focus our efforts at this point in the market cycle. Plus we see some very interesting possibilities in the special missions market for the 400XTi programme. The jet lends itself very well to missions such as medevac and surveillance, where it provides a very cost-effective solution.
Q: How many countries are you now in with 400XTi sales, and how are you managing the demands of having a global client base?
A: We are now in 12 countries. There is no doubt that the major barrier to entry for a company wanting to get into the remanufacturing process is on the product support side. The reason Nextant has been so successful as a remanufacturer is that we have focused a great deal of attention on support issues right from the start.
Q: How would you say the remanufacturing story is playing now?
A: We have seen an enormous amount of progress in getting remanufacturing accepted in business aviation, in what is, after all, a relatively short period of time. We are constantly meeting with OEMs and engine manufacturers who want to work with us, and I expect that we will see many more entries in this space. Textron have talked about a remanufacturing programme but I am not sure if they will actually launch it. Others seem to be going in that direction, but it requires a very high degree of commitment and the real barrier to entry is on the product support side. If you want to be seen as real in this sector you have to have global support, and this is something we set up early and pay a lot of attention to. Definitely, remanufacturing is here to stay!