Gulfstream's $250 million acquisition of K-C Aviation will remove from the independent completions market a company responsible for outfitting almost half the Bombardier Challenger 604s sold last year.
Chairman Teddy Forstmann says Gulfstream was not the only bidder for K-C, suggesting that Boeing and Bombardier were interested, "but we were faster". Dallas, Texas-based K-C will honour existing contracts, but, as part of Gulfstream, will not take on any new third-party work, he says.
K-C had been named as a completion centre for the Boeing Business Jet, but had not yet signed up any customers, says president John Rahilly. The company was also close to signing its first contract to complete a Bombardier Global Express, he says.
Forstmann says that Gulfstream needs K-C's capacity to keep pace with production of the GIV and GV, now at its peak of 64 aircraft a year. Gulfstream's completion centres at Savannah, Georgia, and Long Beach, California, are struggling to bring down the cycle time for GV completions from the current 45-50 weeks to a planned 25 weeks, similar to the time required to complete a GIV.
Gulfstream had already off-loaded two GIV completions to K-C and will now send six aircraft there this year, and 18 next year, says president Jim Johnson.
Bombardier, meanwhile, says it is increasing its completions capacity while talking to other independent centres. K-C completed 17 Challenger 604s in 1997, while the manufacturer itself completed 20 at its Montreal, Canada, and Tucson, Arizona, locations. This year Bombardier plans to complete at least 24, leaving around 12 Challengers to be outfitted by independent centres.
Forstmann says the K-C acquisition is a strategic move that gives Gulfstream "critical mass". K-C's engine overhaul capability may be expanded to include the GIV's Rolls-Royce Spey and GV's BMW R-R BR710, while Gulfstream plans to take advantage of its aircraft refurbishment capability to pursue that end of the market.
Source: Flight International
