Jet sales skyrocket at Maine Aviation
Photo/Courtesy Maine Aviation Corp.
One of Maine Aviation Corp.'s CRJ200GLS jetliners at the Portland International Jetport
Photo/Courtesy Maine Aviation Corp.
The posh interior of a retrofitted CRJ200GLS jetliner from Maine Aviation
Clients from Saudi Arabia, Dubai and Russia are fueling jet sales at Maine Aviation Corp., which has logged more sales in the first two months of 2009 than in all of 2008.
The company, based at the Portland International Jetport, attributes the surge to customized, retrofitted corporate jets it sells primarily to international customers. Of the five jets sold by the end of February, four went to Middle East customers.
"These are people who have some wealth and want to capitalize on what's going on in the aviation market," says Jim Iacono, director of business development at the 50-year-old company. The jets sold for between $3 and $15 million each.
Two of them were CRJ200GLS jets, an innovative redesign of conventional corporate jets that Al Caruso, the second-generation owner and president of Maine Aviation, pioneered. Iacono says Caruso began looking for new opportunities for the company, which is the oldest Cessna dealer east of the Mississippi, a couple of years ago to diversify its base services of aircraft maintenance and management, sales and flight training. That desire to diversify, and satisfy a customer's request for a roomy corporate jet, sparked Caruso's innovation - the CRJ200GLS.
"Basically, he took a 50-seat airliner, converted it into a 16-seat executive luxury liner and resold it," says Iacono, a process that produced a lot of global attention and earned it a mention in the November 2008 edition of Aviation International News.
Maine Aviation began selling the CRJ200GLS in 2008, marketing it primarily through trade shows in places such as Switzerland, Russia and Dubai.
"Through those trade shows we made some great contacts," says Iacono.
The company typically finds a 6-to-8-year-old CRJ 200 jet, then retrofits it and customizes it into a luxury liner. Depending on the specifications, the aircraft typically sell in the neighborhood of $20 million and bring Maine Aviation a return on investment of between 2% and 8%, says Iacono. Its market position is further enhanced by a three-year wait for new, similarly sized corporate jets at aircraft manufacturers, which sell between $30-$32 million, says Iacono.
"Our timing was perfect," he says. "We can give customers what they want for two-thirds the price in seven or eight months."
The U.S. aviation industry is seeing an abundance of used corporate jets that are being unloaded by owners such as GM, Lehman Bros. and Coca-Cola, companies that are dismantling their fleets to avoid the appearance of corporate excess while the country struggles in a recession, says Iacono. That influx lowers the market value of the jets by about 30%, he says, a fact not lost on international customers.
Two of the jets Maine Aviation sold internationally will become private charter planes overseas, while one is for a client's personal use and the other likely for use by a royal family. The lone sale to a U.S. customer is also for personal use. Maine Aviation has six more jets under contract now, says Iacono.
Maine Aviation is also pursuing status as a fixed base operator at Portland Jetport, building a facility that should be open in 2010 to provide hangar space for smaller planes, a maintenance facility, hospitality services and perhaps U.S. Customs services. Iacono said the company expects to increase its 70-person work force by 20 or 30 once the FBO facility opens.
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