While sales of small business aircraft have continued to stall since the global financial crisis, one segment has ridden out the downturn unscathed. Demand for airliner-derived and other large cabin, long-range jets has remained buoyant, particularly among the ultra- and often newly-wealthy business elite of Asia and the Middle East. That is why - despite last year saying it had no interest in the market - Swiss maintenance, repair and overhaul house SR Technics has become the latest entrant to the oligopoly of Airbus and Boeing corporate jet completions.
The reason few companies play in the space is that it is specialised, with few economies of scale and a need for extreme discretion. Owners of a $65 million personal jet do not entrust the 12-month or more, highly bespoke outfitting of their pride and joy to maintenance shops who for a day job overhaul passenger airliners. As a result, only a handful of European and North American companies compete, including AMAC Aerospace and Jet Aviation of Switzerland, Germany's Lufthansa Technik, Airbus itself and Comlux and Gore Design in the USA.
The Zurich-based company - which until now had focused entirely on the airline MRO sector - is not going it alone. As part of a "long term cooperation agreement" its guide through the secretive world of high-end business aviation will be another Swiss company, TAG Aviation. Geneva-based TAG will provide sales contacts and offer completions as part of its portfolio of services to business jet owners. "It's a win-win for both companies and allows us to complete the circle," says Michael Gringmuth, sales manager VIP aircraft services for SR Technics.
CHANGED THINKING
Although former SR Technics chief executive Bernd Kessler said last year that SR Technics would not be entering the VIP completions market, the thinking has changed under his replacement, James Stewart, who took over in February, and his chief operating officer André Wall, formerly of Jet Aviation. Wall - who was closely involved in the completions sector as the chief of Jet Aviation's non-US business in the late 2000s - has been a driver of the new strategy.
SR Technics has another strong card in the market. Since 2006 it has been a subsidiary of Abu Dhabi state investment arm Mubadala, which also owns MRO Abu Dhabi Aircraft Technologies and has been increasing its foothold in the global aerospace market with a view to eventually creating a domestic industry in the Gulf emirate.
With much of the demand for top-end business jet interiors coming from the region, the link with Mubadala will do SR Technics' prospects no harm. Whether Mubadala is looking to take the next step and establish a completions facility in Abu Dhabi is unclear. SR Technics made it apparent in its announcement that all completions would be carried out in Switzerland (made in Switzerland carries a tremendous cachet in the Middle East and the country is a favourite business, educational and leisure destination for its elite).
However, Mubadala believes that Abu Dhabi can become a centre of excellence in aerospace engineering in the third decade of the century. Alongside a plant specialising in composite aerostructures and a possible final assembly line for the new Piaggio jet (Mubadala is a one-third shareholder in the Italian airframer), a high-end interior design and completions facility would sit very nicely.
A push into business aviation would also help SR Technics rebalance its business from a still heavy reliance on the sluggish European air transport market. The entity, which emerged from the wreckage of the Swissair bankruptcy in 2002 in a management buyout, still relies on its home market for 70% of its turnover.
Source: Flight International
