AMAC completes its vision

Just over a year ago a new name emerged in corporate jet outfitting. How has it fared?

Timing is everything in business. So when former Jet Aviation chief executive Heinz Köhli and fellow investors announced in May 2008 that they were taking on the European giants of VIP completions, Jet Aviation and Lufthansa Technik, with a new venture called AMAC Aerospace, they looked to have picked the right moment.

There was a capacity bottleneck at the handful of providers able to install luxury cabins in Airbus, Boeing and other large business jets - there are another two or three in the USA. This was stretching waiting times as demand for high-end jets soared in Asia, the Middle East and Russia. AMAC, founded quietly in 2007 when Köhlileft Jet Aviation after 30 years, and backed by businessmen Kadri Muhiddin, Bernd Schramm and Mauro Grossi, aimed to tap this market.

© Boeing The world's wealthiest individuals do not opt for cheap and cheerful

VIP conversions is a specialist field with huge entry costs, risks and potential rewards. Not only does it need highly-trained technicians, it requires a large hangar, substantial investment and an unflinching dedication to quality. The world's wealthiest individuals do not opt for cheap and cheerful when they want an interior for their nine-figure dollar flying office.

CAPITALISATION

But with a site earmarked at Basle-Mulhouseairport - home of Jet Aviation's completion base - capitalisation of almost $100 million and a team of industry specialists already signed up, AMAC chief executive Köhliand his colleagues felt confident they could break the European duopoly and establish themselves as the world's number three completions centre.

Since that launch at last year's European Business Aviation Convention and Exhibition, of course, the crisis in the global economy has hit corporate air travel in a big way. When all the talk was of capacity crunches and lengthening waiting lists two years ago, the headlines today report job losses, cancelled orders and the collapse of high-profile manufacturers, operators and service-providers.

Köhli, however, is undeterred. He says the downturn has affected everything up to large cabin aircraft such as the Bombardier Global Express, Dassault Falcons and Gulfstreams, but the small - but highly lucrative - market for Airbus Corporate Jets and Boeing Business Jets has been largely untouched. "We have had only one or two cancellations from Russia. The crisis did not affect the Middle East or Asia so much. We have shifted one or two slots, but that's all," he says.

The company opened its first 4,200m2 double hangar at Basel-Mulhouse airport in September, able to accommodate two Boeing 737-size aircraft, or one BBJ and five Gulfstream-size jets. Work has started on a second larger hangar - at 8,400m2 - which will be ready in April and capable of housing two widebodies such as the 747-8 and two BBJs.

Not all that space is required for completions. About half the company's business is in straightforward maintenance and repair, with about 20,000h of work a month being carried out. AMAC also offers aircraft management and charter. Staff numbers are expected to increase from the current 180 to about 300 by the end of next year, making AMAC one of the few business aviation players currently recruiting rather than shedding employees.

LOCATION

AMAC's location in Switzerland's third city helps. Not only are the Swiss authorities keen to do what they can to maintain Basle's status as one of Europe's MRO hubs, but the company benefits from help from politicians just over the border in the economically-ailing French region of Alsace.

AMAC has sourced and retrained many of its skilled craftsmen from the troubled automotive sector based around the Peugeot-Citroen factory in nearby Mulhouse.

With the backlog for narrowbody ACJs and BBJs holding up well and a number of widebody corporate jets about to come off the production lines at Seattle, Hamburg and Toulouse, Köhliis confident about the future.

"Boeing will deliver at least 10 corporate 747-8s. With only two other players in Europe and two in the USA, we will get one or two of these almost by default," he says.

"We are solid with work until 2012. After that there are plenty prospects and the Middle East market continues to look healthy. As long as the oil flows, they still have money."

Source: Flight International