““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Thinking of others can pay off
For some business jet buyers, money isn't a consideration. Such buyers can focus on completing or refurbishing a cabin to reflect their tastes and lifestyle and needn't worry much about what others will think of it. That group should now turn to the next story. This one is for those who want to manage a cabin completion or refurbishment in ways that will make the aircraft desirable to charter customers and, when the time comes to sell, to buyers. Here are eight tips for doing just that:
1 - Make it attractive, but not just to yourself. In the business, airplane interiors designed for charter or easy resale are often referred to as "vanilla," suggesting cabins that are bland or lack personality. They may not look exciting, but they can still be attractive if you add the right trim, piping and carpet, along with colorful accessories such as throws and pillows. And they're not likely to be aesthetically objectionable to charter customers–or to buyers, who might feel a need to pay for a total redo if the cabin were highly customized. Julie Timmons, manager of modification sales at Jet Aviation in St. Louis, remembered an aircraft "that I guarantee would have to be stripped out before it was resold–magenta and teal veneers and a carpet with a distinctive lime-green stripe."
2 - Opt for tough materials. Select leathers, fabrics and finishes that will wear well and be easy to maintain. Leather on seats is more durable than fabric and can be treated to resist stains and inks; a wool-blend carpet will stand up to hard use far better than silk or silk blend; and scratch and stain-resistant countertops in the lavatory and galley are worth the investment.
Don't use ultra-suede on sidewalls or bulkheads, said Gary Nash, president and owner of ABC Completions in Montreal. "Ultra-suede and ballpoint pens don't get along." And he added, "Don't put fabrics anyplace they can be touched."
3 - Buy upgradeable entertainment systems. Today's high-tech toys are often tomorrow's junk. Whatever entertainment equipment you select, consider whether it is likely to become outmoded soon. If so, find out whether it could be easily upgraded.
Make sure you equip your jet with entertainment technology that charter customers want. Video on-demand remains desirable, especially high-definition. But what's really hot now are docking ports that allow passengers to use their own entertainment devices, such as iPods, iPhones and iPads. Also gaining interest is Kaleidescape, a lightweight movie server on which thousands of movies can be stored and organized for easy retrieval and playback on a variety of devices, from iPads to laptops. These carry-on servers cost upwards of $10,000 but don't require certification and can be made to interface with the cabin-entertainment system.
4 - Keep Internet equipment simple. Because the technology for onboard Internet connectivity continues to advance rapidly, many owners are opting to install simple, relatively low-priced systems. Cobham, with a small antenna and easy mounting procedure, is one of the least expensive packages. International Communications Group has partnered with Aero Industries to produce a similar system that it expects to be certified before the end of the year. TrueNorth Express, from Canadian supplier TrueNorth Avionics, has received Transport Canada approval of its plug-in hardware module, which allows for worldwide e-mail via Blackberry. Danish manufacturer Thrane & Thrane has its own package using SwiftBroadband, but rack mounting makes it slightly more expensive.
As for Wi-Fi, it's in high demand and almost every large charter operator now promotes its fleet as Wi-Fi equipped. So Wi-Fi will make your aircraft more attractive for charter use. It will also enhance resale value, as it's unlikely to be rendered obsolete in the near future.
5 - Use LED lighting. Particularly if it includes so-called "mood lighting," an LED system can enhance the appearance of an otherwise bland-looking cabin. Plus, LED lighting is easy to maintain and will last well past the first resale of the airplane. According to Timmons, some owners, in an effort to give the cabin a more residential appearance, opt for lighting sconces. "They might make it more attractive to charter clients, but may add little to resale value," she said.
6 - Consider berthable seats. Manually articulated seats are far less expensive and require much less maintenance than electrically powered ones. Make sure the seats you install are comfortable, but skip such frills as vibrating massage and heated panels, which aren't likely to enhance resale value. What will add value–especially on an ultra-long-range business jet such as a Global Express XRS or Gulfstream 650–are berthable seats with a full-flat feature. Better yet, install a side-facing divan that converts to a berth. Even better than that would be two facing divan/sleepers that are 16-g certified and can accommodate passengers for takeoff and landing.
7 - Take advantage of capacity. A cabin that can comfortably carry as many passengers as possible is desirable. But remember, not every seat on the airplane is certified for landing and takeoff. Any seat not certified as such means one less passenger you can carry. Make yourself familiar with any regulatory issues that affect seating capacity, such as those regarding 16-g seats. To boost charter revenues and resale value, you should try for maximum seating capacity, but without turning your cabin into something resembling cattle class on an airliner.
8 - Don't forget certification. Finally, if you plan to make your aircraft available for charter, be sure to tell your completion or refurbishment center, as the airplane and its systems will have to be certified for FAA Part 135 rather than the simpler (and less expensive) Part 91. It is easier, and cheaper, to finish a cabin with the proper certification in mind than to go back and make modifications later.