The market for widebody airliner business jet completions is poised to get more competitive as new entrants tussle with the handful of established players for a declining number of lucrative contracts.
That is the prediction of Walter Heerdt, senior vice president sales and marketing for Lufthansa Technik, one of the big two in the European-dominated sector alongside Switzerland's Jet Aviation.
He says that while there is "good stability" in the market for the next four to five years, a levelling-off of demand in the middle of the decade, coupled with a ramping up in capacity, could lead to "fighting" among completions providers.
Top-end business jet completions have traditionally not been a price-sensitive business, with houses competing more on capabilities than cost.
Limited capacity and high barriers to entry to such a specialised, craft-based segment has ensured that demand has long outstripped supply, even during the downturn of recent years.
Concept interior of a VIP Boeing 747-8I
While Airbus A320 family and 737-based Boeing Business Jets are the bread and butter of the airliner business jet completions sector, the 747-8 - nine of which have been ordered from Boeing as head of state aircraft - is the most prestigious. The first of the new-generation jumbos have just begun to arrive in completion centres. An Airbus A380 has also been ordered by a member of the Saudi Arabian royal family, but a completion house is not yet thought to have been selected.
Two new entrants have joined the market during the past few years, both based in Switzerland. AMAC is a start-up founded by former Jet Aviation chief executive Heinz Kohli and based in Basle. Last year, the company signed its first Boeing 747-8 contract, for a Middle Eastern head of state. The aircraft is due to arrive in July. AMAC is also completing a Boeing 777-300ER for a Gulf client.
The other arrival is SR Technics. The Zurich-based airline maintenance specialist, owned by Abu Dhabi sovereign wealth fund Mubadala, announced it was moving into high-end completions in 2010 and has just redelivered to an undisclosed Middle Eastern customer its first converted VIP aircraft, identified only as an Airbus widebody previously in airline configuration.
Lufthansa Technik has signed for two 747-8s: the first will arrive in September and the second by the end of the year. Each completion will take 18-21 months, says Heerdt. The company is also completing a Boeing 767-400 and is "competing hard" for further 747-8 work.
Heerdt believes the next two years will be "the peak for 747-8 completions" as the pre-production backlog of orders for VIP versions declines.
He says the earliest Lufthansa could carry out an A380 completion would be 2014, "but it depends on what capacity we fill between now and then".