Marshall Aerospace is targeting a return to VIP conversions as part of its growing civilian activities to counteract the UK group’s reliance on the declining military market.
The Cambridge-based family business used to conduct VIP conversions and interior modifications for commercial airliners in the past, such as premium cabin installations for British Airways. But a shift in focus to the military market led Marshall to mostly abandon its civilian activities over the last decade or so.
With the recent government defence budget cuts, however, the group has come under pressure to re-balance its business. Marshall maintains, for example, the Royal Air Force’s C-130 military transport fleet, but that contract will not be extended to the Airbus A400M replacement.
Earlier this year, Marshall decided to pursue a 50-50 split between its military and civilian business by 2020, says business development and strategy director Charles Hughes.
The strategy U-turn follows a management shakeup where about half of the senior executive team was replaced after Robert Marshall succeeded his father, Sir Michael, as group chief executive of the family dynasty in January 2012.
Three areas have been identified to expand the group’s civilian activities. The first, business aircraft support and management, has long been part of Marshall’s portfolio, but is now receiving much more investment than in the past – including by acquisition.
In September 2013, Marshall bought Hawker Beechcraft Services Chester in Broughton, for an undisclosed sum. The business has £30 million annual turnover and should boost the commercial aviation share in the group’s annual turnover - £230 million ($355.3 million) in 2012 (see table) - to 25%, from 15% today.
Marshall has also been appointed Beechcraft's distributor for the UK, Ireland and Scandinavia, but the 50-year-old Broughton facility will be rebranded Marshall Aviation Services and widen its scope beyond Beechcraft.
Marshall also owns Cambridge airport and the Cessna Citation authorised service centre there and a line maintenance base at London Luton airport and, earlier this year, it acquired business aircraft charter and management company Flairjet; together these business account for £20 million in annual sales.
Hughes says that the group also wants to become a Bombardier support facility “soon”; the company will also be looking for charter, management and MRO opportunities, especially in the Middle East.
The second growth area is VIP conversions. Marshall wants to target particularly A320 and 787 customers as well as operators of smaller types, says Hughes. Investment is needed for staff to gain 787 type training, but engineering capabilities and capacity is readily available for established aircraft, he adds.
No new VIP conversion deals have yet been won, but Hughes says that the company has bid for a number of contracts which could lead to potential work by year-end.
The third area targeted for civil-side growth is inflight entertainment system installations. Portuguese flag carrier TAP has been a recent customer for which Marshall conducted the engineering and certification, while the equipment was installed by the airline’s maintenance arm. Marshall could also fit the system to the aircraft – as it had done on, for example, Lufthansa 747s during the 1990s – Hughes says that revenue growth should mainly come from engineering services.
Source: Flight International
