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| Feature |
Sky Leviathans
Michelle Seaton
11/01/2005
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The problem is that its new owner will have to gut and
rebuild the interior, which will cost $10 million to $15 million. “When you
start weighing that option, you realize that you’re going to put more into the
airplane than it’s worth,” points out Quinn, who clearly disapproves. “Then
you’ll have a $20 million to $25 million airplane that you’re going to fly—for
how long?” This scenario assumes that the plane needs no major repairs, new
avionics or even new engines.
 | IN ADDITION to composing the cabin’s aesthetics, interior designers must
consider safety and engineering issues, such as the weight and balance of
the aircraft, and accessibility to emergency exits and equipment. (Photograph by Bud Shannon Photography.) |
Geoffrey Palmer, a real estate developer in
Beverly Hills, discovered the high cost of upgrading an old airliner when he
bought a used 727-200 for about $1 million in September 2004 and sent it to a
conversion center that specializes in this type of aircraft. The expenses
associated with his project spiraled upward. Older aircraft, like the 727-200,
which debuted in 1967, have engines that tend to be too noisy to meet airport
regulations in much of the United States. Current regulations will become more
stringent over the next decade. Owners buying aircraft that are more than two
decades old have two choices: pay up to $1 million to install a hush kit that
will muffle engine noise, or replace the engines completely.
Though Palmer
could have purchased like replacement engines for $150,000 each, he decided to
spend $5 million to install two brand new engines with 56,000 pounds of thrust
that burn just 1,100 gallons of fuel per flight hour. Palmer also added extra
fuel tanks and heavier landing gear. He stripped the interior to the rivets to
install noise-reduction materials and a new living space complete with bedrooms,
pull-out couches, an attractive galley, several bathrooms and a business and
entertainment center. All told, the plane will spend 15 months in the shop and
Palmer will spend 12 times its purchase price to recondition it. Most aviation
consultants—not to mention private bankers—would raise an eyebrow at such
numbers, but Palmer is deaf to arguments of impracticality. “There’s no
lifecycle to an airplane that’s well maintained,” he says, adding that he plans
to keep the aircraft for at least a decade.
Canadian clothing designer
and retailer Peter Nygård, chairman of Nygård International, believes that
adding new engines to these old airliners actually adds value. “It takes a Ford
and turns it into a Mercedes,” he says. Nygård bought a high-powered Boeing 727
last summer—he refuses to reveal how much he spent—which boasted brand new
engines. Yet he is still doubling the purchase price by investing in an interior
reconfiguration because he wants a king-size bed, a sauna, massage tables, a
disco with a karaoke system and a private business center, in addition to
seating, dining and sleeping accommodations for his assistants and friends. He
also wants a flexible lighting design, top-of-the-line entertainment options and
a wireless local area network.
To complete this transformation, he will send
his airplane to a shop in San Antonio, Texas, where the work will be undertaken
in stages. At first, it will only stay for a few weeks while workers freshen up
the interior. Then in a year or so, when the completion center is ready, he will
send the aircraft in for the full reconfiguration. Is all of the expense is
worth it? “The early answer is yes,” Nygård replies. “In terms of upfront cost,
it is still a cost savings over a new BBJ. But when you figure in depreciation,
it’s hard to tell. It will be a fair thing to figure out at the end of the
day.”
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