Flying Colours Corp, the Canadian based service company which specialises in interior completions on new and pre-owned business aircraft, is making some very positive noises about market recovery. Its refurbishment business is settling into a good pattern of strong orders and busy hangars with mid-sized business jets leading the way. Jo Murray speaks to Sean Gillespie, Director, Completion Sales & Management
“This year has been steady. The market has come back strongly and we’re getting a lot of new US customers as well as continuing to develop our Canadian customers,” points out Gillespie. Some of them are repeat clients who have been holding off and some are simply new ones. These refurbishments feed the business while we continue to undertake larger projects.”
Of course Flying Colours Corp has a number of sides of the completions business. On one side is the green Challenger 850, another on the CRJ ExecLiner conversion programme (the larger projects) and on the other is the refurbishments of mid-large sized aircraft of which Gillespie is speaking.
So why is the market recovering at this point? Gillespie responds that there is definitely pent up demand that just cannot wait any longer. He adds that some clients have simply not been able to bear the cost of refurbishment until now. “The other reason is that it is still a good time to buy an airplane and aircraft owners want to put their own touch on them. That is where we come in from the service point of view,” he says.
“Prices are slowly starting to creep up for used aircraft,” he says. “But they are still pretty good value.”
So who are these clients that are now coming to the fore? Gillespie says they are a mix of both private individuals and corporate clients with some of them looking to put these aircraft into private charter use. There is really no typical client. By the same token, there is no typical refurbishment project: some are very streamlined and fairly simple in terms of the cabin technology; while others incorporate a whole menu of offerings including stone floors, exotic woods and a full range of communications technology.
One thing is clear though: the opportunists have disappeared and aircraft buyers who are seeking refurbishments have solid financing in place, albeit that that is difficult to come by.
Refurbishments aside, Gillespie says that conversions are also coming back strongly. There are a couple of conversions booked in at Flying Colours Corp for the Autumn of 2011. He says the 850 is still a good price and a 20,000 hour airframe is still the optimum point at which a conversion takes place – some criteria just do not change despite the recession.
In fact, Flying Colours Corp has had a tolerable recession with no layoffs and no cuts. It is even looking to expand internationally with Russia and Asia being prime locations for the next steps. “We have to follow our client base,” says Gillespie. We have to support them.” He is aware that the Indian and Chinese markets are going to be strong and there is very little there to support them at present. Of course partnerships are the usual route into new markets like these and are potentially on Flying Colours Corp’s radar. “A joint venture with an established company could be mutually beneficial,” says Gillespie.
For now, he is delighted with the increased demand for mid-size business jet refurbishments with particular demand focused on the Challenger 300, Challenger 604, Falcon 900, Hawker 800, and Global models.
“We are currently working on a total of ten mid-size jet projects and our backlog is starting to build with another four complete projects in the pipeline,” says Gillespie. “Our customer base is truly global but the major spikes in these refurbishments have come from existing or new North American customers.” This is the kind of good news the market most definitely needs to hear.