KCAC pilots a course for soaring sales--Aircraft cockpit retrofit work could land $60M
Kansas City Business Journal - by Chris GrenzStaff Writer
Kansas City Aviation Center anticipates $30 million to $60 million in sales of an instrument panel retrofit it will offer for one of the world's best-selling airplanes.
The Olathe-based aircraft sales and service company plans to build a $1.25 million facility at the Johnson County Executive Airport and hire perhaps 15 employees to accommodate the retrofit program, which it will market to owners of the Pilatus PC-12.
KCAC sells and services the plane, which is capable of carrying about nine passengers and is aimed at corporate and regional airline operators. The PC-12 has been the world's top-selling single-engine turboprop airplane for the past three years, according to the General Aviation Manufacturers Association.
KCAC is nearing authorization from the Federal Aviation Administration to do the retrofits.
The 40-year-old company expects to begin offering the $300,000 package in a couple of months. Company President Angelo Fiataruolo said he expects to do the installations on 100 to 200 Pilatus aircraft within the first few years of the program.
"KCAC has just completed the two best years in our history," he said. "Kansas City has been very good to us, and we hope to reward Kansas City with an expansion in our own back yard."
Before coming to KCAC, Fiataruolo was CEO of the U.S. subsidiary of Switzerland-based Pilatus. While in that capacity, he said customer surveys routinely identified a desire for an updated instrument panel in the PC-12. But Pilatus won't be able to upgrade the panel in new PC-12 aircraft for a couple of more years -- and more than 600 PC-12 planes already are in existence.
"It's a major business opportunity," Fiataruolo said. "I think it's a good direction for KCAC to move."
The equipment KCAC plans to install is manufactured by Universal Avionics. KCAC spent about $250,000 pursuing the federal certification to do the upgrades.
FAA certification is akin to a patent on the installation process, meaning KCAC will be the exclusive vendor of the retrofit package. Each retrofit will take about 300 hours, or about three weeks, to complete.
The upgrade will give the PC-12 what pilots call a "glass cockpit." All instruments will be on high-resolution computer screens, reducing instrument panel clutter and offering the latest in navigation, weather and safety technology, said Bill Benton, avionics manager for KCAC.
One key feature is the Vision-1 Synthetic Vision System, which creates a computerized 3-D image of the terrain in front of the aircraft, even at night or in cloudy conditions.
"Our systems allow much more information to be displayed for the pilot's awareness," Benton said. "It's very safety-oriented."
Ty Carter, a PC-12 pilot who regularly flies out of Johnson County Executive Airport, said he is excited about upgrading his aircraft. Carter, who sells aviation insurance for an Atlanta-based company, commutes between Atlanta and Kansas City in his PC-12.
Carter said a new PC-12 sells for $3 million to $3.5 million, meaning the avionics upgrade would represent a 10 percent investment in an aircraft that he said holds its value well and has about a 20-year life span.
"For someone that uses the airplane a lot and wants new technology, it's a worthwhile investment," he said.
Carter recently sold a Kansas City-based venture capital company he had owned called The Prospect Group. Selling the avionics retrofit, he said, appears to be a good business strategy for KCAC because the company will have the popular PC-12 market cornered.
"It was very strategic of them to do that, very forward-looking," he said. "It will pay dividends for them."
KCAC's growth isn't limited to the PC-12 retrofit. The company expects to close on a $4 million building at the Spirit of St. Louis Airport within 60 days. Fiataruolo said the St. Louis facility will employ 25 to 30 people and offer a full-service sales, fuel and service station. Based on fuel sales alone at the busy St. Louis airport, Fiataruolo said he expects that total company revenue could double within four years, pushing the company past $100 million in annual sales on top of the PC-12 retrofit program.
KCAC also is looking to open new facilities in Chicago and Oklahoma, Fiataruolo said.
On March 22, the Johnson County Aviation Commission -- KCAC's landlord at Executive Airport -- expressed support for the company's construction plans, said Lee Metcalfe, the commission's executive director. Metcalfe called Fiataruolo "a visionary" who understands the aviation industry well.
"KCAC certainly has been very successful in their history there at Executive Airport for a long time," Metcalfe said. "We're very proud of them and the successes they've had."
KCAC had 2005 revenue "in excess of $50 million," Fiataruolo said. The new avionics project, combined with the expansion in St. Louis, has positioned the company for rapid growth, he said.
"I've been here since early 2003, and each year, we've seen a very material increase in revenue for the company," he said. "I wanted to get KCAC to the point where I felt it was prepared for this kind of investment and this kind of move. I'm very comfortable now. I think we're ready to move on."