Aerospace Coatings

By Christine Esposito | August 10, 2005

It�s tough times for commercial airlines, airplane manufacturers and their suppliers. The good news: aircraft in operation today need to be repainted at some point, and there�s always Asia.

According to the Air Transport Association of America (ATA), a trade organization that represents 95% of the U.S. airline industry (including cargo carriers), 2003 will be another year to forget. ATA is predicting the industry will post a loss of approximately $7 billion in 2003. John Heimlich, director, economic and market research at ATA, said he isn't expecting an industry-wide, full-year profit until at least 2005.

With the number of air travelers down, there are fewer flights needed, and airliners are making do with less by cutting back on routes and parking planes. In June 2001, ATA's membership had 4,950 mainline aircraft in operation; by the end of 2002 there were just 4,652. (That number may be even lower now, but ATA had yet to release its figures for June 2003). In addition, 13% of the U.S. fleet is currently inactive, according ATA, which translates to about 1,000 planes sitting idle somewhere.

To make matters worse, within the last few weeks, major airlines have announced they are holding back on orders.

This Qantas 737-800, manufactured by Boeing, is truly art in the sky. Qantas enlisted the help of a famous Australian artist and a design studio to create this look, which was executed at Boeing. Photo: Ed Turner.
Last month, Continental said it would defer deliveries of 36 Boeing 737 aircraft originally scheduled for delivery in 2005, 2006 and 2007. By doing so, Continental's fleet size is expected to decline slightly through 2005 and remain flat through 2007.

More bad news came from American Airlines and Midwest Express, the parent company of Midwest Airlines. American, which already has 57 fewer airplanes than it did one year ago, will further reduce its fleet by another 57 airplanes by next summer. By mid-2004, American's fleet will be roughly the same size it was back in March 2000. Midwest Express Holdings Inc. said it would slow its schedule for adding Boeing Co. 717 airliners to its fleet and defer Embraer SA regional jet deliveries until July 2006.

"We can't determine our need for additional airplanes until we see some return on the capital we've invested in our existing fleet of new airplanes and are confident we have a competitive long-term cost structure," Continental chairman and CEO Gordon Bethune said in a statement. "We are not going to invest in aircraft that we cannot profitably fly in the current marketplace."

Airplane OEMs recognize the current realities of the marketplace.

"Increased orders for new airplanes will not take place until after airlines are profitable. These factors will delay industry recovery," said Todd Blecher, a spokesperson for Boeing Commercial Airplanes. "If air travel, airline profitability and airplane orders recover in 2004, we should see airplane deliveries recover in 2005. The key to this chain of events is airline profitability and aging airplane retirements. We are closely monitoring individual airlines as they restructure their operations by dropping unprofitable routes, standardize fleets to fewer types and incorporate benefits from cost savings programs."

Not only are order cutbacks a major blow to OEMs such as Boeing and Airbus, but they also hurt their suppliers, including paint and coatings companies.

"With the reduction of planes being produced and the state of the economy, that of course affects our business," said Jim Stevens, market development director, aerospace and military, Sherwin-Williams Aerospace.

"In general, we see the OEM side of the commercial sector down by about 45% in the last two years, due to a combination of influences including softening of the economy, declining airline profitability, post 9/11 fallout and the SARS scare," said Paul Bowman, PPG global business platform manager for aerospace coatings.

While carriers reassess their fleet needs, there is some good news: the planes that are being used (or will someday be pulled out of the mothballs) will need to be repainted. Paint companies know it is in their best interest to continue R&D and marketing efforts as they wait for the market to rebound.

And that recovery may be on the horizon. Certain sectors of the marketplace might be showing signs of recovery-albeit subtle ones.

"Improvement is being seen on the OEM side," said Mr. Stevens, who, with more than 20 years experience in the industry, can recognize changes in patterns that might suggest a turnaround. "Although it is a slight improvement, original equipment manufacturers have started to see an increase in sales within the last 30 to 60 days. We have also started to see a slight turnaround in overall refit/ refurbishment business on the business jet side," Mr. Stevens added.

New Product Development
Planes may be sitting idle, but that doesn't mean paint companies are too. Major coatings companies have been active in terms of product development.

"This climate offers an opportunity to qualify new materials because there is more focus on technology," said Mr. Bowman. He said even in this tough economy, there remain keys areas of concern across the board in the aerospace industry: new, lower density products for weight savings, chromate removal from products and processes and cycle time reduction for systems application.

The Sherwin-Williams aerospace R&D team is in the process of re-introducing the Jet Glo Express system. The company started to roll out Jet Glo Express a year ago, but is now ready to deliver it to the marketplace as a full system that includes a new primer system and a new striping product known as Accent. The Jet Glo Express system will make its official debut at the NBAA convention in October.

Akzo Nobel Aerospace Coatings (ANAC) has also revamped one of its product ranges, rolling out an expanded Alumigrip line of urethane topcoats designed for general and corporate aviation. The line includes Alumigrip (formerly known as Awlgrip), a line of conventional topcoats; Alumigrip HS, a buffable VOC-compliant topcoat; and Alumigrip Accent (formerly Awlcraft 2000), a line of conventional acrylic-urethane topcoats in solids and metallics. ANAC has also developed 10P8-10 FR primer, an improved low-VOC fluid-resistant structural primer that meets stringent airframe specifications. It provides excellent corrosion and chemical resistance for aircraft detail and subassembly parts.

More Stylish Liveries
Even with an eye on cost, some airlines are opting for more creative paint designs than the simple colored tail marker or corporate logo.

"Customers want eye-catching liveries. [They] are asking for new types of paint and detailed paint schemes," said Larry St. Laurent, Boeing decorative paint manager in Seattle, WA.

Qantas Airways enlisted the help of a famous Australian artist and Balarinji, a Sydney-based design studio, to create a custom livery for one of its so-called "art planes." Qantas worked with artist Rene Kulitja and Balarinji on the Yananyi Dreaming art plane, a Boeing 737-800.

Executing elaborate designs often means finding new products. "A major issue we're dealing with right now has to do with getting new and different products approved in a time frame that is reasonable with our customers. Specifically, we're addressing issues regarding materials testing and getting people trained to use the new products," said Mr. St. Laurent.

Not only are these new schemes more demanding in terms of products used, they often involve pain-staking prep work and an acute attention to detail.

"'Designer input affects the flow time of painting an airplane-designer touches take more time," said Mr. St. Laurent. For the Yananyi Dreaming aircraft, 22.2 miles of tape were used to transfer the design to the plane and 215 different templates and overlays were used over a six-day period; it normally takes just three days to paint an airplane.

But it's not just commercial airlines that are focusing on appearance. Business jet liveries are getting more stylish too.

"Business jets have been very conservative in terms of design. But now OEMs are looking for something new, looking for change, to gain an advantage over the competition," Mr. Stevens said. Some business jet manufacturers are moving away from the rather straight-laced liveries typically found in the market. The driving force behind this trend is the highly competitive nature of the marketplace.

In some cases, the inspiration for new paint schemes is coming from a source closer to the ground-the automotive industry.

For greater runway appeal, Sherwin-Williams is currently working on a color-shifting product-a look Mr. Stevens said is growing in popularity in the OEM/business jet side of aviation market. Like its counterpart in the automotive industry, the color shift for aerospace application is subtle, rather than a dramatic change.

Mr. Bowman also acknowledged the influence of automotive styling trends in the aerospace market, and that is good news from PRC-DeSoto, now that it is part of the PPG stable.

"There is more emphasis on metallic/mica colors," said Mr. Bowman of PPG. "Obviously, this is a huge advantage for us. We are simply leveraging the automotive side to introduce new concepts to aviation."

Sherwin-Williams is working on ways to achieve a metallic look across the entire vehicle. "We are in the R&D stage on a new look-alike metallic formulated without aluminum flakes that can be used on radomes and other places where metals are not allowed," Mr. Stevens said. The coating would provide an airplane with that sought-after metallic look, without interfering with vital communication equipment and transmissions.

Runway to Growth: Asia
While the U.S. aviation market continues to sputter, there are opportunities elsewhere, such as Asia, and smart companies are setting up shop there.

"There's an obvious shift in subcontract work to Asia," said Mr. Bowman,"and we are aligning ourselves with the industry shift."

According to Mr. Bowman, there is consolidation in China among the government-owned airlines to four or five key flagships, which means a boon in livery repainting opportunities.

PRC-DeSoto is ready to win this business, as it will soon begin manufacturing aerospace coatings at its Suzhou, China application support center, making its easier for customer to procure products. Custom-blended Desothane HS topcoats (made from qualified tint bases) will be available in the third quarter.

"Our timing was perfect on this, said Mr. Bowman.

And in the airline business, being on time is everything.

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