who doesn’t love the excitement and wonder of brining home a new plane? Now- who wants to write the check for a brandnew airplane? Anybody…? With today’s economic situation- there are far fewer people in a position to buy new right now - and a far higher number of people are faced with making do- or doing without. Who- once versed in the irreplaceable benefits of business aviation- wants to do without?
Cabin refurbs offer cost-conscious new-jet quality
Who doesn’t love the excitement and wonder of brining home a new plane? Now- who wants to write the check for a brandnew airplane? Anybody…? With today’s economic situation- there are far fewer people in a position to buy new right now - and a far higher number of people are faced with making do- or doing without. Who- once versed in the irreplaceable benefits of business aviation- wants to do without?
The good news is there’s a way to spruce up the existing aerial office or human aeronautical conveyance that fits the budget. If you look around- ask around and shop around- you just may find that you’ll get a better deal than you might expect for refurbishing the existing or pre-owned aircraft; move quickly enough and some tax advantages exist that could turn the corner for even the toughest ‘bean counter’ in your operation.
The key is matching what you truly need with what you can actually afford. It’s not as difficult or unlikely as you might think. But with all-new interior refurbishments running from a few hundred thousand dollars to a couple of million- depending on the extent of the work and the size of the plane- what have you got to lose from examining your options?
A RIPE ENVIRONMENT FOR CHANGE…
In terms of getting a good deal from capable- reputable shops- times right now look the best they’ve looked in years. The reasons are as simple as the last year’s business aviation story: a severe downturn at most levels.
Articles in the archives from just a year ago veritably glowed with the news of how usually busy shops were even busier than usual; they spoke of how record-setting sales of new planes and record work-loads in completion centers and refurbishment shops conspired to clog-up completion hangars far and wide.
As we know- shortages tend to increase the value – the charges- at least – for whatever resources become available. But a few years downstream from now- words like ‘waiting lists’- ‘higher prices’ and ‘backlogs’ will seldom turn up in articles about today’s level of business aircraft work activity.
Today’s convergent (and well documented) issues make selling the old jet a lower prospect than for a while – at least- selling it at anything reflective of the aircraft’s five-year value average: 15- 20- even 30 percent below par seems too common.
Refurbishment shops- meantime- that haven’t cut staff want to hang on to their prized workers- and they need work to keep those folks on board. Shops that have already cut costs as much as possible are equally eager to keep enough work to keep the doors open. And vendors supplying optional systems such as in-flight office gear- in-flight Internet and entertainment hardware are equally keen to do business.
Operators may find opportunities unlike anything they’ve seen since the last big collapse in the early 1990s. The environment is indeed a good one if you are considering an interior refurbishment- but a big plus in the shopping process is also knowing the extent of work you seek before you head in to the shop.
WEIGHING THE OPTIONS
Today- the trend in business aviation seems solidly in the camp of making do with what we’ve got. And right on its heels is a trend toward making the existing tool as useful and comfortable as the budget can handle. These days- the budget is far more likely to accommodate some form of cabin makeover than a new or later-model pre-owned business turbine aircraft.
The best ones probably need it if they’ve been flying for five or more years. If you think about the typical business turbine aircraft and the standard-issue quotes about utilization- it may not seem immediately apparent how much wear and tear the aircraft endures.
Imagine the airplane carries three- plus crew for an average of 300 hours per year on 150 flight segments per annum. Five sets of shoes treading up and down the airstair- to and from the cockpit- up and down the aisle- 300 cycles each year; that’s 1-500 sets of shoe falls for a couple of hours at a time… for five to 10 years. It’s not difficult to see how general wear and tear adds up?
If the aircraft’s in the hands of a management company- getting leased out or chartered when not flying for the owners- the above numbers can seem considerably light of the actual numbers. While this illustration may be overstating- or understating- your particular aircraft’s situation- the wear compounds itself. The chances are that some areas may show more wear than others- and some less.
Technology desires can influence a refurbishment decision too. Perhaps you want to add capabilities- or simply replace outdated equipment.
The Key point regarding a cabin refurbishment: know before you go.
Does the aircraft need only a touch-up- or a full-cabin makeover? Perhaps something in between - more or fewer seats- an office nook? Consider the options and the depth of the work required. Consider using the services of a consultant who will help clarify your wants versus your needs- along with the actual depth of work you require.
IT’S IN THE DETAIL
Perhaps you’ve noticed how- even when years old with plenty of use- the interior of a pre-owned aircraft you were looking at- looked fresh. You may have noticed a new smell- too. Despite the aroma- however- you still knew by the look and the price that the interior wasn’t new. The airplane in question undoubtedly will have spent time in a detail shop.
This is the place to start for an interior not showing obvious signs of wear- but still not looking or smelling entirely fresh.
A good trip to the detailers will give the aircraft a deep shampooing of the interior- from the headliner through the seats- and down to the carpeting. Wood surfaces receive a clean-and-polish treatment- while bright metal finishes – often actually coated plastics or composites – usually will be brightened with a compatible compound and a bit of elbow grease.
Even the transparencies can get a solid- specialized polishing that removes scratches and restores them to like-new clarity. And should some spots need some actual replacement work- often the detailers can work out a solution that blends like-new.
The results: a near-new looking interior cabin space- all fresh and sparkly – and smelling showroom fresh.
Best of all- even a lengthy- multiple-day detail job with all hands involved should set you back no more than several thousand bucks for the larger jets for a simple- straightforward job- and potentially- that’s even less than the operating costs for the next big trip.
Perhaps your seats need some attention. Seats can be pulled to have the upholstery repaired- even re-dyed and reinstalled for reasonable prices compared to a complete reupholstering of the seats (say in the low- to mid-five-digit-dollar range for small and medium-cabin jets- to high-five figures for a large-cabin). If it’s a business airliner- of course- you’re likely looking at a six figure cost – still a bargain- ultimately- though.
Best of all- most of this work can be accomplished when the plane is in for an annual inspection- a hot-section examination of the engines- or other work that takes a week- or a little more.
By coupling this work with other required maintenance you can help keep downtime to a minimum – and- in turn- help control costs for any alternative travel solutions required during the work.
THE LIGHT ONCE-OVER
Maybe the cabin needs a mere re-carpeting; or maybe new carpet and new seat upholstery- but the sidewalls and headliner are good enough to get away with a cleaning. All is possible with the better refurbishment shops.
They can provide detailing for the items held-over- as well as full service to replace the carpeting- seating cushions and upholstery. Of course- the prices will run higher- but still well short of the costs of a complete cabin makeover.
Depending on the size of the aircraft- again you should expect a bill in the highfive- figure-dollars region through low sixfigure costs for this level of rework. Again- you’re looking at an option that can be coupled to other work in order to minimize downtime while you also control costs of making the cabin feel like new.
MORE TIME- MONEY AND OPTIONS
If a detail job or partial refurbishment falls short of what is needed- by all means- push ahead. You’ll find no shortage of shops ready and willing to help you out - and probably faster than you expected. And here is where considering other options becomes more important than ever.
Pulling out seats and carpeting- sidewalls and headliners - maybe even partitions- necessarily exposes the aircraft hull- insulation and electrical wiring. That makes such a fullcabin makeover the ideal opportunity to consider enhancing the functionality of the space as well as the livability of the cabin. Consider for a moment the vast array of options from an operational standpoint.
If trips in the business jet create black holes in your ability to work with people outside the cabin- one of the multiple options for in-flight Internet access might be in order. Costs can run from the mid-five-figure range up- depending on options like wireless incabin connectivity- bandwidth and processing speed. Whether you want the cabin Internet system to work with other hardware like in-flight phone of fax machinery should be considered and factored into the project.
How about entertainment? You may want in-flight satellite television and a large flatpanel display – space permitting. A mediumsize screen and a DVD/music player could alternatively work for you. Have you thought about speakers or headphone access?
Of course- this degree of rework is also the best time to examine the appearance of the cabin – and a good time to make some choices that give the cabin a brighter and larger feel than it might have now. Working with even small- let alone medium and large shops these days can provide you with tools to help design the color combinations- lighting- fabrics- leathers and other finishes.
Costs start in the lower six-figure bracket for smaller jets and can get to high six figures for medium and large-cabin jets- depending on the extent of the makeover and the options for connectivity or entertainment choices made.
NEVER A BETTER TIME…
As noted- slow times in business aviation have translated into slow times for refurbishment shops and interior completion centers. So pricing has become aggressive as these businesses try to compete for enough business to keep open the doors- and keep specialized staff employed.
Here in the United States- Uncle Sam is also making it easier financially. Special considerations for investment in new business equipment or upgrades to existing equipment can provide the operator with as much as an additional tax write off worth as much as 50 percent of the costs of the purchase or upgrade - a figure that varies for expenditures over $250-000. That means if you opt to get new seats- new electronics or a complete cabin makeover- you may realize some extra help on tax day.
This so-called “bonus depreciation” comes on top of the typical first-year depreciation- making it possible to write-off up to about two-thirds of the costs in the first year. The issue with this bonus tax treatment is that- under current law- it ends at the end of the year. An accountant and a shop can help you work out whether it’s possible to contract for- and pay for the work in this year- but take delivery of the finished work in the next; experts have said that this scenario may not fly – but it’s worth exploring.
Rumblings in Washington- D.C. make it conceivable that Congress may opt to extend bonus depreciation for another year- as has happened in the past- to continue the stimulation it provides the economy. Right now- every little bit of stimulation seems to help- so an extension is rated as somewhere above “Possible” but short of “Sure Thing.” Stay tuned.
One financial aspect not in question is the impact on residual value of partial to complete makeovers. Brokers who’ve spoken about this concede that a new interior may not generate a 100 percent return if the aircraft is sold in the first couple of years though. “Couple a 60- to 80-percent return with the bonus depreciation- and you have a winner-” one West Coast broker said he advises owners. “While you’re waiting for the plane to sell- you get the tax benefits- the enjoyment of using an aircraft with a new cabin- and a better price at sale time. What’s not to like?”