by Dale Smith
When Sir Issac Newton penned his third law of motion in his Philosophiæ Naturalis Principia Mathematica (Mathematical Principles of Natural Philosophy) – For every action there is an equal and opposite reaction – he obviously didn’t have business aviation in mind (how could he, airplanes had not yet been invented).
Today however this law is all too relevant. Take business jet sales for example. When sales of new aircraft go down (action), the sales of pre-owned aircraft go up (reaction). Isn’t physics amazing?
The recent uptick in pre-owned business jet acquisitions has also been accompanied by an increase in cabin refurbishing opportunities. In fact, Marketsandmarkets.com recently stated that the total aircraft refurbishing and repurposing market was projected to grow from “$16.87 billion in 2016 to over $29.16 billion in 2021”; that’s a compound annual growth rate (CAGR) of over 11.5 percent.
While not all of that will be in upgrading the cabins of B&GA aircraft, it does indicate that business is getting better.
“It seems like there is a marked increase now compared to the last 18-months or so,” stated Gordon Ross, director of Interior Services, Pentastar Aviation. “A lot of people are getting into ownership through the purchase of pre-owned aircraft and want to personalize the aircraft to meet their specific taste and needs.”
Of course, the opposite reaction to the increasing business opportunities is the apparently decreasing profit margins.
“There is a lot of capacity in this industry so there is a lot of pricing pressure; some customers are purely focused on the lowest price now,” Don Milum, Director of Technical Sales, StandardAero said. “To keep prices low, many customers are focusing on what they consider the problem areas that they want improved.”
“Where we used to see customers saying, ‘Just pull it all out and redo the whole thing,’ today we are getting asked to quote just specific items or upgrades,” he said. “Of course, that changes a bit when the aircraft is a new acquisition.”
Yes, it seems that gone are the days of, “If you have to ask how much, you can’t afford it.” In today’s cabin refurbishment market it’s more like, “Just because I can afford it, don’t for a minute think I’m going to pay it.”
Tim Briscoe, interiors manager for Stevens Aviation shared a recent cabin refurbish project on a customer’s Bombardier Learjet 60.
“It’s operated by a transport business in New York and the woman who owns the company was shopping around for the lowest price she could find,” he said. “She wanted a good deal and she sure got one. The best part is when she saw it, she was ecstatic about the way the finished cabin turned out.”