IN FOCUS: Cardiff Aviation aims to be 'mini Astraeus'

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When Bruce Dickinson, the lead singer of rock band Iron Maiden and an avid aviation buff, revealed in May 2012 that he was taking over an ex-Royal Air Force hangar at St Athan air base in south Wales, many observers were sceptical. His plans to begin aircraft maintenance operations admittedly seemed like an entertaining but ill-fated attempt to move into an overcrowded marketplace, where existing suppliers battle against fierce competition and low profit margins.

But the entrepreneur insists that the start-up company will fight its corner with a range of activities, comprising aircraft leasing and operation, training, maintenance - including Airbus A320 sharklet retrofits - and non-aerospace engineering projects.

Dickinson established Cardiff Aviation together with co-chief executive Mario Fulgoni, with whom he had worked at UK charter carrier Astraeus. Fulgoni, a former A320 pilot, was chief executive at the Gatwick-based airline, while Dickinson captained Boeing 757s and later became its marketing director. Fulgoni left the Iceland-owned carrier months before it ceased operations in November 2011, however.

The hangar at St Athan - consisting of two bays which can each accommodate aircraft up to the size of the 767-300 - was handed over to Cardiff Aviation in October 2012, with operations beginning in January. The company promptly applied for EASA Part 145 maintenance organisation approval, though this has yet to be granted. In the meantime, the firm has partnered with UK MRO provider BCT Aviation and operates under its approval.

Nevertheless, Fulgoni says that Cardiff Aviation is confident of attaining its own Part 145 certificate. While relations with BCT are "very amicable", he says that it is difficult to say how the partnership will develop over the next year.

Cardiff Aviation

A similar co-operation agreement has been established with UK aircraft painting business Clear Image, which has moved into Cardiff Aviation's facility in the air base's civilian aerospace enterprise zone.

Around 100 staff members are currently working for the "family of companies" around Cardiff Aviation, says Fulgoni, with about 60 being directly employed by the start-up business. He expects to generate revenues of around £7-8 million ($10-12 million) during the current first year, and up to £15 million in 2014 in combination with partners. But by 2015, Fulgoni aims to become an independent business with a turnover of £25-30 million and up to 250 employees.

Aircraft operations

Aircraft leasing and operations look set to become the main driver of the business, he says, admitting that establishing a profitable enterprise based purely on MRO work will be "very difficult". Cardiff Aviation expects to receive an air operator's certificate for executive aircraft in April 2013, allowing it to conduct flights with Embraer types, including Phenoms. But this is set to grow to transport category aircraft and - subject to negotiations with the UK CAA - should result in a "mini Astraeus with an MRO plugged on the back" with counter-seasonal dry- and wet-leasing activities, says Fulgoni.

The company aims to offer 737 Classics and mature A320s by 2014. But two regional aircraft have already been earmarked for introduction in the current year. Fulgoni declines to provide further detail, but says that news will likely be revealed at Paris air show in June. A customer is apparently already in place.

Fulgoni, who is also chief executive of Taiwan-based SkyGo Leasing - which provides leased 757s and 737s to carriers such as local Palau Airways and Cambodia's Tonlé Sap Airlines - wants to focus on start-up operators in emerging markets. The "sweet spot", he says, are aircraft that are at least 15 years old and widely parked by established airlines and lessors. While their fuel burn and maintenance costs make them less suitable for carriers with high utilisation rates, they remain attractive to start-up airlines with fewer flight hours. Fulgoni attributes this to their low capital costs. "Below 150 flight hours, it makes a lot more sense to deploy older assets, because fuel burn and maintenance costs is no longer the driving issue," he explains, adding that negotiations are already under way with a number of lessors.

The St Athan hangar will be used to maintain the planned fleet, as well as functioning as an operational base and training centre for client carriers. Both Fulgoni and Dickinson claim that with their background as airline executives, they will have a more customer-focussed market approach than pure MRO companies.

Nevertheless, both admit they will need significant third-party maintenance business to provide the economies of scale required to offer their MRO services at competitive prices. Aircraft lessors will be the main targets, with work likely to centre on lease-return checks, cabin reconfigurations, paint jobs and even aircraft storage facilities. Fulgoni reports that the management team is talking to "one or two large potential customers" at the moment.

Bruce Dickinson / Cardiff Aviation

The pressure to generate sufficient business is particularly high as Cardiff Aviation plans to offer a wide range of services. While other MRO providers have specialised in certain services to create the necessary throughput, the start-up business is going in the opposite direction. Dickinson says that employees need to be flexible and to offer broad capabilities. He gives the example of machine shop staff working on aircraft parts as well as sub-contracted component work for car manufacturers, with Honda and Jaguar Land Rover being potential customers. But he concedes that offering a wide range of services while growing economies of scale will be a balancing act. "Of course it is going to be a challenge, but that's the fun of it. What is easy is to hire 500 people and go out of business."

Sharklet installation

Retrofitting A320s with sharklet wing tips is one potential line of high-volume work that Dickinson has in mind. He has approached Airbus about establishing Cardiff Aviation as a facility for the wave of modification which is anticipated for the European narrowbody fleet. The problem with the 15-day installation programme, he says, is that the aircraft needs to be stress-jacked for 10 days, which makes it difficult to combine the work with a regular C-check.

Fitting the wing-tip fences will therefore interfere with MRO providers' other work commitments and require additional hangar capacity, claims Dickinson. Cardiff Aviation would not only offer free hangar slots, but could also provide a machine shop to produce bespoke components - for example, to remanufacture structural parts for mature airframes where standard spares might not fit - as well as an aircraft painting facility.

Dickinson is eyeing the so-called super-hangar on the other side of St Athan airfield for the modification programme. The 45,000m² (485,000ft²) facility, which could accommodate six A320s, was built for the RAF to maintain fast jets and Vickers VC10 tanker-transports, but just one year after its 2005 opening the decision was made to move the work elsewhere. Dickinson plans to take over the site and ring-fence some of its bays exclusively for sharklet installations.

One thing that could favour Cardiff Aviation's advances on the sharklet modification market is its recruitment of Colin Harrison as head of base maintenance in January. Harrison previously worked at UK systems supplier Cobham, where he managed the conversions of A330s into air-to-air refuelling tankers.

Dickinson says that the airframer will not supply any sharklet modification kits until the second quarter of 2014. "But we will certainly go on banging on Airbus's doors, saying 'Don't forget us! Look what we can do'."

Bruce Dickinson / Cardiff Aviation