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Hard Times Ahead For Narrowbody Completions?

With deliveries of green narrow-body business aircraft flat, and the growth in the number of completion centers in recent years, some industry insiders are starting to wonder if the sweet times that continued throughout the early part of the recession may now be turning sour.

With deliveries of green narrow-body business aircraft flat, and the growth in the number of completion centers in recent years, some industry insiders are starting to wonder if the sweet times that continued throughout the early part of the recession may now be turning sour.

While deliveries of narrow-body VIP jets remained healthy well into 2011, averaging nearly 18 a year from 2007 through 2011, deliveries dropped to 12 aircraft in both 2012 and 2013, according General Aviation Manufacturers Association numbers.

And although there remains a backlog at both Airbus and Boeing, it could hardly be described as healthy. Based on total orders, less the number of green airplanes delivered, the combined backlog is now 13 airplanes.

“Back in 2008 the OEM backlog was as much as two years,” said Matt Hill, VP of business development for PATS Aircraft Systems in Georgetown, Delaware. “Now that backlog doesn’t seem to be nearly so large.”

Completion centers have learned to take in refurbishment work, often to fill the occasional gap in between green completion slots.

L-3 Platform Integration focuses on widebody business and private jet completions. But the Waco, Texas center has the same approach regarding a diverse revenue stream. “We perform work for domestic and international military clients as well as commercial customers,” says VIP and head-of-state programs VP Ken McAlpin.

Lufthansa Technik in Hamburg also counts heavily on a diversified business model, handling not only completion and refurbishment of narrow- and wide-body aircraft, but maintenance and service for Lufthansa German Airlines and a multitude of other airlines around the world. “A wide portfolio of other products allows bridging gaps,” said Bernd Habbel, head of corporate communications. “Although market sales of VIP narrowbody aircraft may be slightly down, we have so far only seen a countable decrease in actual demand.”

Lufthansa Technik currently has two 747-8 BBJ widebodies in for completion, and at its BizjJet International subsidiary in Tulsa, Oklahoma there is one BBJ and a BBJ2, both green, in for completion. In 2015 BizJet International expects to see one ACJ and another BBJ, also both green, roll in for outfitting. Together, Lufthansa Technik and BizJet International run a total of five narrowbody and two wide-body completion lines.

Fokker Services in the Netherlands also depends much on something other than VIP narrow-body completion work to provide a reliable revenue stream. “We’re doing a lot of reconfiguring of aircraft coming off lease and a lot of modification of executive business jets for use in special mission roles,” says technical services VP James Aspell. “The peaks and valleys of this business are tough if you don’t have something to fill in the valleys.”

Greenpoint Technologies in Kirkland, Washington began shifting from BBJ narrow-body green completions and began bidding on widebody work about four years ago. And Greenpoint brought its MRO in-house in order to more fully control all aspects of the business.

“Now we have a Boeing 747-8 BBJ we’re delivering this summer, and we have contracts for two 787s,” says senior marketing manager Christine Hadley. “It’s not like before 2008 [and the recession], but we’re in talks with other customers with narrowbody and widebody airplanes and we’re definitely on the upswing.”

At PATS Aircraft Systems, the story is much the same. “We’re noticing a shift in narrow-body inquiries from green completions to modifications and refurbishments, and there is still more than a handful of BBJs being sold in the aftermarket that seems to be driving some of the refurbishment business,” says business development VP Matt Hill.

Unlike any other narrowbody completion center, PATS is the sole provider of auxiliary fuel systems for the entire BBJ line. “Every BBJ that has ever come out of Boeing came through here to have the auxiliary fuel package installation before going to a completion center,” Hill says. The company currently has a BBJ in for the 12-year maintenance check and has a “classic” VIP 737 arriving for maintenance this summer.

Will completion capacity exceed the number of narrowbody aircraft being sold in the near future, creating over-capacity and a buyer’s market? And if the VIP narrowbody market does indeed fall on hard times, how long will it last, and can a more diverse revenue stream and/or growing deliveries of wide-body aircraft fill the gap?

“If you know someone who has all those answers,” concluded Joe Barrett, director of sales and marketing at Gore Design Completions in San Antonio, Texas, “their crystal ball is a lot better than mine.”

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