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Digital Makeover:
Making aerial offices out of older jets.

Does a day pass that your office fails to receive a pitch from a telecommunications company insisting that you must possess their latest-and-greatest product/ service if you want any hope of succeeding in the world – whatever that world may be? That phone you bought last week- you are told- is obsolete – the new one is what life requires for you to stay ahead of the game…until next week- in any case. That’s when someone else calls you to tell you about the latest technological advance…

In the space of a decade- our homes and offices morphed into communications suites from what we once considered to be living space. From dial-up modems to DSL- DSL to High-speed Broadband (by-cable)- and onwards through successive generations – we’re supposedly only up to four (4G)- even though it feels more like a Baker’s Dozen...and counting.

Business aircraft users certainly received no waiver from this digital flash-flood- on the flight deck or in the back cabin. But business aircraft owners and operators understandably expect their expensive aerial conveyances to remain functional and relevant for years longer than the lifecycle of today’s consumer electronics devices.

Upgrading an entire- wholly functional aircraft simply to access functions we didn’t miss when we didn’t have them is understandably a hard-sell for companies with higher expectations for their aircraft’s flight performance than office space alone. Many users weaned on flights typically averaging 90 to 100 minutes balk at spending millions on a new plane with modern in-flight communications and office gear- just to maintain contact during those 100-minute periods.

Thankfully- innovative engineers and designers offer options for enhancing older aircraft with most- if not all of the capabilities offered in today’s newest business aircraft. The options range from simple to complex- from single-solution to multi-purpose - and those options vary according to the aircraft size.

Options exist for every size business aircraft- from the high-performance piston singles to the largest continent-hopping jets (which were once considered cutting-edge if they sported only a flight phone). Picking- planning- funding and executing a cabin-electronics upgrade follows many of the same philosophies as any other project designed to keep the existing aircraft functional- productive and efficient.

One avionics shop manager recently volunteered that updating- or installing new to main-cabin systems accounted for nearly as much of his business as work on cockpit panels. “All the while we pilots were being awed by all the new equipment for the cockpit- the needs of the people in the cabin were getting far less attention-” he observed. “Then along came satellite phone links.”

In relatively recent times our offices have morphed from using Telex to Fax to Internet- Intranet and assorted wireless-communications technologies- Wi-Fi- 3G and 4G- expanding the communications bubble we inhabit to encompass ever more of the planet.

“I would imagine it just follows: we want to take our connectedness with us everywhere-” the avionics shop manager added. Consequently- today there’s something for literally every aircraft. Embraced to its ultimate limit- a cabin-system upgrade offers users access to as much of that communications bubble as budgets and aircraft can accommodate.

So the questions about Cabin Avionics retrofits for most operators should essentially revolve around what to seek- why and what will it costs – along with how to pay?

One frequent contact in the industry embraces new technology with fervor- acknowledging that as “an early adapter” he’s updating gadgets “almost as frequently as I buy groceries.” His current favorite: a device he calls “a phone”. While it does make and receive telephone calls- “phone” isn’t an entirely accurate label. The “device-” as my mind wants to call it- is closer to the computer on which this story was written.

You’ve seen them; they let users send and receive text messages- e-mail and surf the web. It also takes photographs- records and plays video and on-line movies – all wirelessly.

What else could you need in your company airplane if you’ve got a similar device? Well- firstly- not all of those functions are useable when hurtling through the sky at more than 500 miles an hour- eight miles up.

Hardware and services available offer aircraft cabins varying degrees of all those capabilities available on that hand-held device – including the ability to use that same device through an aerial connection in-flight. So the first question becomes: what is needed- versus what is wanted?

In-flight entertainment- for example- can consist of as little as a way to play personal music through aircraft speakers or a headset (some new audio-control panels do that)- or at the other end of the spectrum provide on-board internet access point with a movie player - accommodating a gaming system – up to and including satellite television.

Sources for these are numerous. The limits start with what’s available for the aircraft in question; don’t expect to put a 40-inch LED High-Definition monitor on the cabin bulkhead of a Citation I- Learjet 31A- Falcon 10 or King Air 90. (That said- any of those aircraft can handle any number of smaller viewing screens – including some available with seat-size screens.) The same applies to the source: a business aircraft incapable of supporting the requisite receiver antenna can’t be expected to use an airborne satellite-television package. But that same aircraft may be able to handle a small satellite-internet hub and antenna which- with enough speed- can run lower-definition video- internet access- email and myriad other entertainment functions.

Another upgrade approach focuses solely on productivity hardware: maybe an in-flight cell-phone system or a package with wireless servers to allow individual passengers’ notebooks to access the Web. The focus should start with fulfilling a need or potential use that enhances the passengers’ efficiencies – as long as a system exists that can fit the aircraft.

Aircraft operators generally loath to endure unnecessary downtime - but all experienced operators plan for those periods they know will come. Such enforced groundings serve as an excellent opportunity to schedule upgrade work- and minimize total downtime.

Scheduling- however- comes after you’ve assigned priorities for the work- investigated the product options with a serious heart-to-heart with the avionics shop- and set some goals. Among those goals: assure yourself of the viability of the upgrade(s) you want- and look ahead for opportunities to integrate the upgrade into time needed for other work.

Annual inspections- 100 hour checks- and other regular maintenance requirements proscribed by manufacturers and regulators – one of those may be a perfect time- or the mandatory work may need much less time than that needed for the planned cabin upgrade.

If a 100-hour inspection is too short- how about the annual inspection – or when a required heavy maintenance job comes due a few months later? The goal is to spend as little time as possible to gain as much improvement as you can afford; spending less time translates into less spending on alternative transportation- as well as less on the work itself.

The “Now’s a great time” attitude stems from tax and financial experts- management consultants- and shop owners eager for the business. The slump in aircraft sales (pre-owned and new) has proven helpful for many an aftermarket modification operation- avionics shops among them. Even though money is tight and flying times have been off- aircraft owners still want their investments to perform and maintain a favorable spot on the asset sheet.

What better way to protect the residual value of an older jet or turboprop than outfitting it with the vestiges of “new and improved.”

Engines- interiors- paint – and those two places where the planes all interface with the human race- cockpits and cabins – are all value-enhancing investments; some- like cabin connectivity and office technologies- also enhance passenger productivity- as opposed to the pilot-and-aircraft efficiencies of panels and engines.

Shops are eager to bid on valuable work packages with competitive prices. The OEMs are holding prices at competitive levels- and to encourage such investments- U.S. tax law now provides a number of ways to instantly reduce tax liabilities by spending money on upgrading the company plane.

These so-called “Bonus Depreciation” and “Bonus Deduction” rules represent big one-year savings potential for any operator able to apply them in one year; for other operators- the benefits may be best applied across a number of years. All the same- the deduction option in particular – up to $2.5 million in some cases – can be paid forward until accounted for across subsequent years. Some operations may even be able to use pieces of both programs.

The work must- however- be performed (or under contract) by year’s-end- and completed before the end of 2012. During 2012- the benefits will remain- but will be reduced by 50 percent. Essentially- the tax benefits reduce the final costs of a covered upgrade and could help make easier work of financing the upgrade.

With fewer aircraft transactions in recent years- finance institutions turned to upgrades as a way to maintain their businesses- and their connection to the market. One lender explained- “it’s all about residual value and exposure.”

An aircraft may be past an age that appeals to lenders as a sales-finance candidate- yet enjoy sufficient market value to provide comfortable collateral on a loan that upgrades the aircraft and- at the same time- helps keep a customer.

“You may not be able to get me to write $2 million on a 20-year-old jet worth $2.5 million-” he explained- “but if you want $250-000 against that plane- and the numbers look like they will still cover the note at end of term- we can talk. You may need to come up with 25 percent of the cost up front. Alternatively- we may have got an established and trusted relationship- in which case- I could possibly accept only five percent for a good risk- and an exceptional plane that the upgrade will help. Ultimately- though- plan on 25 percent- just in case.”

Minimizing costs and maximizing utility should appeal to any of the many lenders currently underwriting loans for upgrade work- several lenders reported. To that end- a few suggested that operators consider what other work might fit well with a cabin-systems upgrade. The synergy is easy to see- and many choices entail minimal disturbance of the interior finish. The more disruptive the cabin upgrade- however- the more it makes sense to weigh upgrading the interior itself. Well worth remembering is that the tax benefits would apply here- too.

One of the finance experts also suggested adding a hard look at the airplane- its age- potential- and where it will be in three- five- 10 years- before investing more than normal maintenance monies in enhancing cabin communications or productivity hardware.

Even with the tax advantages available- investing in an airplane that will soon also need engine hot section inspections or overhauls- or that is nearing the end of serviceable life for any airframe component should be seriously weighed against replacement of the aircraft.

According to one private-jet consultant- “When the engines the jet has got are the only engines it can use [no retrofit or upgrade program]- they just don’t get less expensive to fly - and at overhaul time you get a fresh engine that will still cost too much.”

Unless- he offered- you’re looking at five or more years before it becomes an overhaul issue- consider whether investing more is the appropriate approach to your aircraft.

You could do worse than start your search with the Aircraft Electronics Association (AEA)- whose website lists members and their specialties. Last month’s AEA Convention in Reno brought with it some announcements worth checking also. Looking at what the aircraft OEMs offer is a good way to see the current crop of available options (many of which will be available in retrofit versions).

But the best options may be as close as the airport. Among the aircraft hangars you should find your local avionics shop. These will be eager to help a customer- and be ready to make your upgrade needs happen- possibly without you leaving the airport.

Regardless of the upgrades sought- though- make yours with an eye to improving it with new – in five to 10 years. That should be a comforting change from deciding which cell phone to buy.

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