16 сентября 2019

PC-24 in Russia - interview with Mikhail Alenkin

Pilatus РС-24 will emulate the success of its “younger brother”

This interview was taken during a flight on board Super Versatile Jet PC-24 with Mikhail Alenkin, owner at Nesterov Aviation. Mikhail shared his insights and expectations regarding the future of PC-24 in Russia. The aircraft just took off from Zhukovskiy airport in Russia after exhibiting at an international MAKS air show for the first time.

Mikhail, when was the first time you flew on board РС-24? What was your first impression?

I was positively surprised to find that once inside the cabin it feels much more spacious than from the outside. I thought it was more quiet than other jets. Its light and contemporary interior reflects that it’s a brand-new product. I was completely blown away by the short take-off distance, once you’re used to fly on business jets, you expect an aircraft to accelerate for another moment or so, but on PC-24 you are already airborne, landing distance is another advantage, as the aircraft practically stops once it touches the runway.

Will PC-24 emulate the success of its “younger brother” PC-12?

I am positive, otherwise we wouldn’t have become dealers.

This aircraft is for private use or for charters?

This aircraft has two niches, really. Just recently during the MAKS air show I spoke with one of the aircraft operators who sees PC-24 only for charter services specifically in Russia as it will comply with our Russian clientele’s requests. On the other hand, obviously, it is ideal for private use, especially if the owner is a pilot himself, the aircraft is very simple, elegantly intuitive piloting and you get a real pleasure out of flying it, despite it being a business jet there are no major qualifications required of a pilot. A huge advantage is its certified for one pilot operations, and just overall this aircraft is unique. We often compare Pilatus aircraft with Swiss army knife, and we couldn’t be more accurate as PC-24 can be easily transformed into medevac, special missions that require short runways, unpaved runways, this makes this aircraft absolutely cross functional.

Talking about the Russian market, what’s the outlook and what challenges might occur in terms of sales?

First of all, it’s probably the Russian mentality, as we all know Russians love everything big, expensive, in their mind it’s the best money can buy, whereas this aircraft is built to cater to Western mentality, it is a relatively big and sophisticated aircraft, but cost-effective. As main competitors I personally see not the new aircraft, but pre-owned heavy jets. The main sales pitch – it’s a state-of-the-art aircraft, all the technologies applied are the most cutting-edge. Pilatus Aircraft has an excellent reputation worldwide, including Russia – these are reliable, high-quality aircraft that retain their residual value and all characteristics even after being in operation a long time. Another sales pitch might be its speed and flight range, which covers all main destinations to Europe and across Russia even with max. payload, i.e. Moscow-London, Moscow-Novosibirsk, Moscow-Nice, Moscow-Olbia. One of its plus points is operating cost, it’s much lower compared to all other competitors, and since it is a brand-new aircraft it features a completely new ground-braking technology – one of the engines is supplied with Quite Power Mode, which provides quiet, economical energy to power electrical systems – including heating and air conditioning – independent of any source of ground power.

After opening a Pilatus service centre in Russia your current and future clients will not have any support issues?

We are currently working on obtaining the Russian type certificate. We expect to get PC-24 certified by the end of the year. We are also expanding our service centre for the needs of PC-24, this includes ordering all necessary equipment/tools and spare parts.

So, what is the demand for PC-24? Have you managed to convince your current PC-12 owners to take a closer look at PC-24 in the future?

Any PС-12 owner, potentially, wants to own PC-24 and as you know every PC-12 owner is a happy individual, satisfied with his aircraft. The main demand and interest comes from the current Pilatus owners. Everyone sees the PC-24 as an upgrade. I personally love PC-12 and I am sure that everyone who knows this aircraft will agree, it is very cost-effective, and it combines numerous advantages. However, PC-24 is a step up.

РС-12 enjoys an outstanding liquidity, will PC-24 follow suit?

It’s too early to predict, but so far it looks so. As we know jets fall in price much faster, for sure, we will not see the same linear price drop as with PC-12, but still compared with competitors we expect that the residual value will be much higher.

Who does Pilatus consider its main competitors?

PC-24 competes not only with Light jets like Phenom 300, CJ4 and Learjet 75, but in a way with Midsize and Super Midsize for clients who do not need long flight range. I can say that competitors for this aircraft are Citation Latitude, Legacy 450.

So, I heard that Embraer makes good sales with Legacy 450, 500, but they are genuinely worried about the interest for PC-24.

Yes, moreover, the nearest slots for PC-24 are sold two years in advance.

But with this being said, top management at Pilatus doesn’t seek to increase production, rather limit it.

Yes, as we see with the PC-12, by limiting production, they maintain the price. They do not try to run after demand or get ahead of demand, they see potential demand and produce slightly less in order not to oversaturate the market with aircraft.

РС-24 has been in operation for about a year and a half, have you managed to work out an average rate per flight hour?

Yes, we considered real costs, and if we take all costs and an average operation time of about 300-400 hours per year, then the cost of a flight hour comes at around 2000 Euros, this amount corresponds not only with our analytics, but also with the real situation.

Let’s talk about comfort - what distance is ideal for passengers to feel comfortable on board?

The aircraft is designed to fly up to almost 5 hours, and this is the maximum range. We are now flying in an aircraft with 6-seat configuration and all of them are occupied, but none of the passengers feel constrained, there is a lot of space and all 4 hours of flight passengers will continue to feel very comfortable. We are currently flying a little over an hour, but still you’ve been able to get an idea of ​​the level of comfort.

Nevertheless, exactly how fussy is the aircraft to a runway quality? We understand that it uses unpaved runways, grass and gravel.

A business jet, in my opinion, is not an aircraft you will constantly operate in harsh conditions (there is a PC-12 turboprop for this), although the Royal Flying Doctor, who ordered a large number of PC-24s along with PC-12s and are carrying out medevac in Australia and Africa, are planning to use unpaved runways, but this is more of an exception. At the same time, it’s nice to know that your business jet can land on gravel, grass, etc. In general, the main advantage is not about the quality of a runway, but about its length. Because this jet, unlike other similar aircraft, can land in almost all the airports of the world... St. Tropez, Gstaad, Lausanne, which has a very short runway, and before PC-24 existed it was available only for turboprops and PC-12s. Dassault Falcons can also  land in some of these but we are then talking of 30-50 million dollar aircraft. 

Should it be parked in a hangar?

Preferably, but it is relatively unpretentious, it was tested in cold and hot weather conditions. You can leave an aircraft in an open air, but, of course, any modern aircraft will be much better off in a hangar. 

So, 6-seat configuration is the most popular one?

As with PC-12 clients choose 6 + 2 configuration, where you can add two seats by removing some storage compartment at the back. But in my personal opinion, the 8-seater layout (2 clubs) is the most suitable for this aircraft, everyone will be comfortable and in equal conditions.

I would also like to ask about the medevac version, now three aircraft have been delivered to Royal Flying Doctor, and just recently, the Swedish National Air Ambulance Service placed an order for six PC-24s. Are there any prospects in Russia?

Yes, we see a huge promise, of course. In Russia, this is a bit of an issue, though, but we are working in this direction. 

Have you been offered to launch an air taxi project based on the PC-24?

Yes, we are also contemplating this idea. And other market players came to us with such suggestions.

What financial schemes are available upon purchase? 

In Russia, this is a problem because we do not have a good operating leasing product. And the issue of financial leasing is also very complex. But we work with some leasing structures and financial institutions, which will be very pleased to finance the PC-24, because they know the quality of Pilatus aircraft. Therefore, they are ready to take risks precisely for Pilatus. 

Tell me, 10+ million is expensive or not?  Well, is 1000 rubles a lot? It doesn’t seem much, but when you buy an ice cream or a loaf of bread, it is way too much. Everything is relative. In this case, 11 million, for which you get a business jet in a very good configuration, of course, this is not a small amount of money, but consider the asset you get for this price. Let's be honest, there are competitors that are cheaper, but less functional, and they don’t retain their residual value as well. 

So, today customers count money?

After the crisis of 2008 everyone counts money.

What is your customer profile?

Very interesting question. Let me ponder a little. Our client is a non-standard consumer of luxury business jet services. This is an individual who, on the one hand, counts money, on the other, comfort and time are important to him, a person with a Western mentality, for whom the attributes of luxury life are less important. I really like “sufficiency and expediency”, every action should have expediency, the second is sufficiency, I can ask myself “why do I need something more if I am happy with the current situation?” This aircraft embodies this very idea and is efficient from every angle.

When will we see the first PC-24 in Russia?

I will not hide the fact that there are already aircraft ordered by Russian customers, as soon as we get a type certificate, the first PC-24s will be delivered. This aircraft is very popular, each dealer gets a quota; unfortunately, the quota for Russia is not large, but in the next couple of years several aircraft will be in Russia. 

Are you satisfied working with Pilatus and is Pilatus satisfied working with you? 
If Pilatus was dissatisfied working with us, we probably would not have received a dealership on the PC-24. And, as far as we know, at the moment there are no alternatives, and Pilatus does not even consider them. We are very happy working with Pilatus. The success of any partnership lies in mutual respect and fulfillment of obligations, just as we fulfill our obligations to Pilatus, they fulfill obligations to us. 

Looking ahead to the future, do you think Pilatus will step up their game and build an even bigger jet?

Judging by how conservative the Swiss and Pilatus are, until PC-24 is immaculate in every way and until it becomes a bestseller, there will be no talks about it. You know, you have been to Pilatus headquarters several times, there is such a homely atmosphere, and, building new types of aircraft, they focus on the plant’s capabilities and options that their location allows as the airport is in a crevice between the mountains. If they make bold to do something bigger, then operating from their airport needs to be taken into account as well as all the technical requirements. I think it is unlikely that within 10 years we will be able to see a completely new aircraft. Although Pilatus is constantly updating existing types.