FLUG REVUE March 2004: 328JET production to resume, says AvCraft

AVCRAFT RESUMES 328JET PRODUCTION

By Volker K. Thomalla

The silence that has reigned only too long at the Dornier 328 production facility at Oberpfaffenhofen airfield has finally come to an end, and slowly life is returning to the building: the American company AvCraft, which has taken over the rights and production tooling for the Dornier 328 from the insolvent Fairchild Dornier GmbH, is set to resume production of the twin-engined jet. AvCraft plans to start up production of the Dornier 328JET in Oberpfaffenhofen in the first quarter of 2004, Ben Bartel, the owner of AvCraft, announced on 21 January in Oberpfaffenhofen.

There are still five aircraft on the final assembly line, at different stages of completion, and the first of these is already 80 percent finished. It is expected to roll out of the plant in the fourth quarter of this year. The parts for these aircraft are available, and there is a detailed production schedule for the manufacture of new parts by AvCraft itself and suppliers. As before, the engines will be supplied by Pratt & Whitney Canada, and the fuselages by Aermacchi of Italy. According to AvCraft, the suppliers see the resumption of production as an opportunity to recoup the losses sustained in the past and to not just deliver spare parts.

Negotiations are under way with three different suppliers in Europe regarding the production of the wings, which were previously manufactured in San Antonio. AvCraft owns all rights to the wings, not just to the production tooling and rigs. According to Bartel, the company is talking to potential suppliers both about buying up the old tools but also about manufacturing completely new tools. The decision as to which route they will go does not have to be made until the end of March.

The production capacity of the plant is 54 aircraft per year in double-shift operation, but not all of this will be utilised. AvCraft has set itself the goal of starting up at a production rate of 18 aircraft per year. This figure will be achieved operating a single shift. “Production depends on the market,” says Bartel. Currently the company has 40-50 orders and options on its books, 22 of which are firm orders. “We are in the process of converting options to firm orders,” he says. About half the orders apparently come from non-airline customers.

Bartel views the Dornier 328 as a niche product which, however, attracts a broader range of customers than just airlines. “With the Dornier 328 we are offering four products on a single platform.” The four versions are the typical regional passenger aircraft, a business jet, a shuttle version and a special-mission aircraft.

On taking over the 328 programme, AvCraft also inherited 18 finished Dornier 328JETs, which were parked as “white tails”, as the purchasers for whom they had originally been earmarked refused to accept them when the company was on the verge of insolvency. Eight of these “white tails” have since been delivered to customers, and the rest will be handed over in 2004. At AvCraft, they are particularly proud of the quality of the delivered aircraft: there was not a single complaint following delivery to the customers!

As of the beginning of January, the company's workforce stood at 250. This number is set to rise to 320 by the end of the year, and to grow to 420 by the end of 2005. According to Bartel, AvCraft is in contact with many former employees of Dornier and therefore does not envisage any problems in recruiting qualified personnel who are familiar with the product. “The resumption of production represents a substantial investment, approaching $100 million. But we have not started up production again in order to lose money. We are making a profit and we can stay in business on fewer than 18 planes a year.” Hence they are looking around for possible savings in production. The 328 JET is currently offered at a list price of $11.5 million for the airline version.

AvCraft has no plans to resume production of the turboprop version of the 328. Nevertheless, the propeller version is in demand, but AvCraft is satisfying this demand by reviving some aircraft that had been mothballed. At present eight turboprops are being prepared for a return to active service. “We view the turboprops version as a wonderful ambassador for the 328 programme and see it supplementing the jet,” says Bartel.

In response to the question whether the 328 JET will remain the company's only platform or whether a stretched version, the 428 JET might not be revived, Bartel replies, “I like the 428 and I'm not prepared to comment.”

AvCraft does not see itself primarily as an aircraft manufacturer, but as a service company that also builds aircraft. In the long-term, aircraft sales are expected to account for only 20 percent of AvCraft's turnover, with 80 percent coming from its services activities.

From page 28 of FLUG REVUE 3/2004

Last updated 12 February 2004

FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany