AvCraft und die 328

[Zulu]

Job creation at AvCraft falls short

 

By Travis Tritten

 

The Sun News

 

 

An aircraft company offered a $750,000 incentive package and reduced rent to set up shop at Myrtle Beach International Airport has not met first-year job-creation requirements, and industry analysts say the market is grim for its only product.

 

AvCraft produces and maintains the Dornier 328, a 30-seat regional aircraft it recently bought from a bankrupt German company.

 

Local officials lauded AvCraft's move to Myrtle Beach as a way to create high-quality jobs, and Gov. Mark Sanford held a news conference on job creation in front of a Dornier plane in December 2003.

 

The company was wooed to Myrtle Beach with a incentive package after business difficulties in Tyler, Texas, and a business failure in Akron, Ohio. The company president says Myrtle Beach operations are successful.

 

"I can tell you the amount of business we are doing on the 328s is more than we ever thought we would," AvCraft owner Ben Bartel said. "We are pretty upbeat."

 

AvCraft was required to create 80 jobs by Jan. 15, according to Airport Director Bob Kemp. But the company reported 65 employees Wednesday.

 

The company denied Wednesday that it is behind on job growth, saying that the county's Jan. 15 deadline is incorrect.

 

Meanwhile, airline industry analysts say the commercial market for the airplane is shrinking and has little potential, especially in the United States, where only one carrier still flies the Dornier.

 

"They are very nice airplanes, but you can't make money with them," said Mike Boyd, president of the Boyd Group, a national consulting firm to the airline industry.

 

To attract AvCraft last year, the county slashed its airport hangar rent from $5 to $2 per square foot, and the Air Force Base Redevelopment Authority offered the company $750,000 over four years to move to Myrtle Beach.

 

The Redevelopment Authority plans to make the first payment of grant money to AvCraft this month, Executive Director Buddy Styers said.

 

The county said AvCraft will not receive the full grant with only 65 employees, though the company disputed that Wednesday. "If they don't get the employment goal, the reimbursement will be incremental," Kemp said.

 

AvCraft manager Marvin Euchner said the company is still on track for job growth because it did not open for business until June 2004. Between January and June, the company worked to renovate its hangar space and could not create jobs.

 

The money is meant to reimburse the cost of work the company has done on three hangars at the airport.

 

Kemp said the company has spent at least $187,500 on hangar improvements but he had not seen the receipts and job figures from AvCraft on Tuesday.

 

Local operations

 

AvCraft is paid to maintain and store Dornier 328s at Myrtle Beach, usually when the planes are between leases to an airline, and also is restarting production of the plane at facilities in Germany. The company plans to begin working on other types of airplanes in the future but has yet to branch out, Bartel said.

 

There are about 45 of the airplanes parked at AvCraft's facility at the Myrtle Beach International Airport, according to the company.

 

The stored planes represent nearly a quarter of the 210 Dorniers that were produced, said Steve Rehrmann, vice president of the Appraisal Group, an Arlington, Va., airplane appraisal company.

 

Bartel said all the Dorniers at Myrtle Beach will be cycled back into service within six months, with some going to Europe.

 

Since it opened, AvCraft has cycled about nine Dorniers back into service, Euchner said. The "future is great" for the company's airplane, he said.

 

Overseas customers

 

Industry analysts say the Dornier 328 has little future beyond a niche market.

 

Boyd said "the regional jet bubble is over" and a changing economy has left a glut of short-distance passenger aircraft in the United States.

 

The Dornier 328 "is not an airplane that is any demand in the U.S.," he said.

 

Delta, one of two carriers that still has Dorniers, grounded its fleet and is considering its options on the planes, a company spokeswoman said Tuesday.

 

Midwest Airlines is the only other U.S. carrier that still flies the planes, according to several analysts. The largest user of the Dornier 328 is the Chinese airline Hainan, which has 29 of the planes, according to AvCraft.

 

International customers most likely will not support an airline maintenance and storage facility in Myrtle Beach, said Doug Kelly, vice president of asset evaluation for Avitas Inc., an aeronautics company.

 

"Anybody in Asia is not going to want to go to South Carolina to have their maintenance done," Kelly said. "The ones in Europe are not likely to go to South Carolina."

 

Niche market

 

Analysts say larger regional jets took the market from the Dornier 328 by the late 1990s, a trend that began before the former owner went bankrupt and AvCraft bought the plane.

 

"They are coming to the market late with a niche product," said Doug Abbey, a partner in The Velocity Group, a national airline industry consulting firm.

 

AvCraft plans to begin production of the Dornier again, but it will be difficult to sell the planes because of a "checkered history," Abbey said.

 

"I think they have their work cut out for them," he said. "I don't think relaunching the airplane is going to be easy."

 

Buyers want to know a company will be around to support an airplane over its life span, and in the past few years, the Dornier has changed hands twice and is now owned by a company with little history, Abbey said.

 

"This has basically been an airplane without a specific home for a long period of time," he said.

 

Past troubles

 

AvCraft lost a prior airport business venture in Ohio to changing economic and industry conditions and was facing closure at facility in Tyler, Texas, before moving to Myrtle Beach, according to officials in both areas.

 

Bartel bought a facility for private planes at Akron-Canton Airport, but the operation went under at least partly because of the economic recession and the terrorist attacks in 2001, according to Fred Crum, director of the Akron-Canton Airport in Ohio.

 

The airport's dealings with AvCraft and Bartel were always good, Crum said. "He paid all his bills and left reputably," he said.

 

In Texas, AvCraft asked the city of Tyler for a large incentive package for building a 100,000-square-foot hangar facility, but the town passed on the deal because it was too risky, said Tim Mullins, president of the Tyler Economic Development Council.

 

The city made the decision because AvCraft had "problems maintaining job levels and were a young company," Mullins said.

 

While in Tyler, AvCraft had financial problems and began talk of closing, he said.

 

"It seemed to do very well for a year or two," Mullins said. "After [sept. 11, 2001], like a lot of people in the airplane business, they started to struggle."

 

The company then accepted a benefit package from Myrtle Beach, which beat out Akron, to move its operation to existing hangar space at the airport.

 

Mullins said he was never contacted by local officials about AvCraft's business history in Tyler before the deal was inked at the Myrtle Beach airport.

 

Bartel was not available Wednesday to respond.

 

 

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Contact TRAVIS TRITTEN at 626-0303 or ttritten@thesunnews.com.

Posted on Thu, Jan. 20, 2005

link:

http://www.myrtlebeachonline.com/mld/myrtl...al/10687452.htm

[ChiefT]

Ich denke, daß AvCraft genauso ein Windei wird wie die Chinesen (D'long oder so) Der Kaufpreis wurde offenbar immer noch nicht bezahlt und verkaufen tun die auch nicht so toll. Schade...