After a difficult period, Lufthansa Technik is confident its executive aircraft division is about to take off to new heights.
While the business jet market seems to be slowly recovering from its crisis, the VIP completions sector was barely affected by the economic downturn - and LHT now expects a peak in widebody work in the next two years.
The financial meltdown in 2008 had a profound impact on the business jet industry, with the number of orders steeply falling, parts of the existing fleet being mothballed and MRO work being consequently deferred. Now, however, "the market is beginning to climb again or, at least, levelling out", says Walter Heerdt, senior vice-president marketing and sales at the German MRO provider. "Business aircraft are flying again and we see projects such as cabin refurbishments or touch-ups slowly returning to our facilities."
The VIP completions market, however, is hardly influenced by economic cycles but instead driven by new aircraft models entering service, namely the Boeing 747-8, 787 and, in the medium term, Airbus A350. Programme delays thus have an impact on the completion houses, and Heerdt concedes that the late arrival of the 747-8 and 787 put LHT under pressure.
He reports that the first 747-8 was due to be inducted for modification by this time but is now scheduled to arrive in mid-2012. Later aircraft will not be delivered with the same delay but in closer succession after one another, which should create a completions peak between 2012 and 2014. In 2013, the company plans to fill its full capacity with parallel work on three 747-8s, and it expects further VIP sales for the latest jumbo jet after 2014.
LHT has built up its capacity for this market and is now in the "final phase" of this expansion. Heerdt explains that this process requires not merely increasing headcount but recruiting and training specialist engineers and technicians with extensive experience and good project management skills. Consequently, it is not possible to "hire and fire" staff in the short-term according to demand, he says.
With engineering work typically starting around 12-18 months in advance and the production team taking over when the aircraft arrives, the 747-8 and 787 delays have clearly led to "certain temporary pressure" on the company, reports Heerdt. This was partly alleviate through substitute VIP completion projects, including one unspecified widebody aircraft, but also first-class upgrades and other cabin refurbishment programmes on commercial fleets.
While a lot of that work came from parent Lufthansa, sustaining the specialist personnel was largely due to flexible employee arrangements such as annual work hour accounts. Heerdt admits that moving the staff to other areas within the company is possible due to its size and broad product and services range.
Asked whether the German MRO provider will complete the first VIP A380, Heerdt responds: "I can neither say yes nor no." One aircraft has been ordered from Airbus, but where and how it will be completed has not been decided, he reports. "Our original market prognosis was for three to five aircraft, and I still don't see any reason today why this should change."
The company's facility is ready for the double-decker today and Heerdt sees no major technical challenges. "The aircraft is large, which leads to many possibilities for the VIP design. But it's not rocket science."
In terms of products, LHT presents two new developments in Geneva this year: the next version of its cabin management system "nice" and a maintenance and diagnosis system for cabin equipment called "nicemate".
High-definition video content will be a main feature of the next generation nice system. The more fundamental shift, however, lies in the integration of personal digital devices such as Apple iPhones and iPads in the system, which will allow passengers to consume and source content on their own equipment.
"We have been in the digital age for quite some time. But with the increase of speed of the internet, the possibilities now are becoming enormous," says Andrew Muirhead, director of innovation. "The more portable devices will come, the greater demand will come from passengers to have these things integrated."
The challenge is to meet copyright requirements as the display for fare-paying passengers falls in the public performance category. At the heart of the technology lies a digital rights management system, which handles the data download and secures the content against theft.
The new nice version will be standard on the Bombardier Learjet 40XR, 45XR and 85, and is to be installed in the first aircraft early next year.
Nicemate is a maintenance and diagnosis system for cabin equipment similar to aircraft condition monitoring systems in the cockpit. It will check and analyse the performance of cabin equipment and flag up relevant irregularities to the MRO company's customer support centre in Hamburg, where technicians have online access to the aircraft for fault rectification.
Conversely, operators will be able to consult a central maintenance database that will hold individual equipment details such as part number and modification status.
In terms of strategic development, LHT has formed an alliance with the Austrian luxury interior manufacturer List components & furniture, the German glass and lighting specialist Schott and UK-based design specialists Design Q. The purpose of this Inairvation-named venture is nothing less than "to take business jet cabin to the next level," according to Muirhead.
"We looked at all those cabins out there and decided that more could be done on the innovation front," he says. The four partners want to co-ordinate each others' product developments and optimise individual components with the whole interior in mind.
The future cabin is currently under development. Portions will be shown at NBAA in October and the complete final interior unveiled at next year's EBACE convention.
Idair, LHT's 50:50 VIP cabin joint venture with Panasonic, was created to merge the former's know-how in business jet equipment with the latter's expertise in in-flight entertainment and communications for commercial aircraft to develop new technology for the VIP field.
The activities will cover cabin management, IFEC, media services such as film and audio rental, as well as integration and engineering services.
The two companies are currently harmonising their combined product palette to simplify the choice for the customer, reports Muirhead who is Idair's chief executive.
However, they are also working on new products with "specific VIP requirements", which have neither been seen in the business jet nor commercial aircraft markets yet, he says.
While the joint venture has its own booth at EBACE to present itself to potential customers and discuss its background and philosophy, it wants to demonstrate some of its new developments at NBAA later this year.