AirportBusiness Blogs

… has been the resiliency of the FBO sector. During the past decade, fixed base operations were bought and sold at a frenzied pace, often for prices that were ten to 12 times multiples. With business aviation activity down some 30-40 percent, many in the industry expected that quite a few of these companies would be shutting their doors.

That was a common reaction for attendees at last week’s annual NBAA convention in Orlando. Comments one fuel supplier, “A normal person would expect more” [bankruptcies]. Says another, “We have seen a handful that have closed their doors. I expect more consolidation; I would hope that would happen before they just close their doors and walk away.”

While many observers expect more FBO bankruptcies in 2010, as well as continued consolidation, there was somewhat of a consensus at NBAA 2009 that the economic bottom was reached this summer, with September bringing an “uptick” (a popular word at this year’s show). Says one supplier, “Planes are flying; we found the floor.”

Three separate fuel suppliers all commented that they have been impressed with the level of cost control that their dealers (FBOs) have implemented during the downturn. “Many of them have made some tough choices to reduce costs,” comments one supplier. “Those who have made the tough choices will be in a good position when the turnaround comes.”

Ken Allison, president/CEO of Odyssey Aviation, a chain of seven FBOs, says he is optimistic that the turnaround has begun. He also plans to grow his chain through acquisitions, and says he hears of an FBO for sale every two weeks or so. “We’re always looking to grow,” he says, “The days of ten to 12 times multiples are gone; it’s coming back to reality.”

Stay tuned.

Thanks for reading. jfi

…not in numbers of the past few years, but reportedly some 21,000-plus strong – roughly a third less than in recent record-setting times. The trade show floor was populated and people were doing business… a healthy sign, albeit not the ‘buzz’ or ‘roar’ which one usually associates with an annual NBAA meeting. Although most recognize that the bizav industry is redefining itself as we watch, there is a sense that the bottom was hit earlier this year and things began to turn around in September.

Consider Ken Allison, who heads up the newly formed Odyssey Aviation, a mini-chain of seven fixed base operations which had previously been branded with Million Air. Says Allison, “I’m optimistic.We only see it going up. In August and September we began to see it turn around.” Yet, he says he doesn’t expect business activity to get back to 2007 levels – a record year – in the near future.

Or Bruce Van Allen, longtime president of Signature Flight Support, who is now charged with marketing globally the umbrella of companies under the BBA Aviation banner as group marketing director. “I sense there are signs of improvement. I’m completely convinced that business aviation will grow and prosper.”

One thing: Quite a few folks raised the idea that perhaps the association should have incentivized the audience with reduced registration fees and perhaps offering extra exhibit space to longtime vendors in an effort to fill some of the empty spaces on the show floor. One discussion suggested that the association may have gotten “too fat” in the boom times and wasn’t quite in tune with what the industry was facing economically. But then, NBAA has a history of responding to what the membership wants, so the 2010 show may bring with it some additional incentives in an attempt to reinvigorate.

Thanks for reading. jfi

…in an effort to expand networking capabilities, build relationships, and protect the integrity of well-established brands.

The power of social networking through web platforms like LinkedIn, Facebook, and Twitter is becoming increasingly apparent to all facets of the aviation industry; NBAA’s annual conference is no exception. In a session dedicated to educating aviation professionals on the value of social media, Ryan Keough, marketing and communications manager for Cutter Aviation comments, “Aviation is a community, and a family; we are a close-knit group of people separated by miles and miles. [Social networking] helps us see what our colleagues are doing to enhance their businesses.”

Says Aviation International News (AIN) writer and JetWhine blogger Rob Mark, “The way people are gathering information is changing; it’s all about stimulating the conversation.” Rob relates that there are two options when it comes to social media: a company can consider the networking tool and see if it can be helpful to the business, or the company needs to get out of the way; because [e-media networking] is coming more and more, like it or not.”

He also warns however, that social media should be considered as a tool, and not the be-all end-all of business.

“The value of the power of a message is not defined by the company anymore,” relates Mark. “It’s defined by the customers.” What he means is that customers have no problem letting companies now how they feel about their product/service, and are able to do that very effectively because of the viral nature of social media platforms. On the flip side…companies that pay close attention to what customers say about them via the web have the ability to quickly address a business’ weakness while also capitalizing on its strengths.

The prospect of utilizing social media can be overwhelming considering the growing number of options available; yet social media businesses wouldn’t be doing their job if they weren’t constantly adjusting the model to make the process easier, and in many ways, fun as well. And believe it, they are working hard on just that everyday.

Take the time to learn about the benefits that social media offers; anyone in my generation is a great resource. You will not regret it, and in fact, you will quickly find yourself embracing it.

Thanks for your interest,

Brad McAllister

… MSP’s Jeff Hamiel may be offering the first significant step. The long-time executive director of Minneapolis-St. Paul International says it’s time that an airport of any size be able to benchmark its various operations and services against comparable facilities. What industry has today, he asserts, is a “hodgepodge” of performance measures, but no definitive benchmarking tools that could serve to help set priorities and provide clearer direction to a governing body.

That was the overriding message Hamiel had for an audience attending a session at the annual meeting of Airports Council International-North America last week. The first step may be the dissertation he submitted to earn his Ph.D. recently, which took a first crack at benchmarking, using data from 33 hub airports he surveyed.

He plans on publishing his dissertation later this year and to make it available to industry for free via the Internet. In it he looks at some 120 areas for which an airport can measure performance – measuring specific operations or services and not just an overall airport, per se. In this way, the benchmarking can be more “apples to apples”, says Hamiel.

The only thing holding up publication, explains Hamiel, is a final chapter which the judging professors requested. That is, his analysis of the thesis with which he earned his Ph.D. They reasoned that with his years of experience he was as qualified as any to offer an assessment.

Thanks for reading. jfi

…to describe activity in the business aviation marketplace at this year’s National Business Aviation Association convention. August and September, it seems, offered an uptick. Such is the description of a senior Signature Flight Support official. 

‘Uptick’ is one of the better offerings. One vendor, a former fixed base operator who sold out on the high tide and who has been coming to NBAA since 1976, calls this year’s show of shows ‘sedate’. Another long-timer who has been to some 35 NBAAs calls it ‘unspectacular’. My perspective, having attended NBAA since 1985, is that it is subdued, cautious, and not very well attended. 

The word is that some 20,000-plus have registered for this event, which would be about one-third less than the past several years. Those 20,000 weren’t here today – perhaps tomorrow, and day number two is always the most vibrant. 

If you have ever been to an NBAA convention, picture this: You can stand in the middle of the show floor and see the ends (walls) of the show. In years past, unheard of; not so in 2009. It’s a fact. No one I spoke to today recalls ever being able to do that (except perhaps for the 1976 guy). 

Yet, the mood is fairly positive. The industry does seem to be, based on conversations, coming around, albeit slowly. FBOs have been slammed; corporate aviation has been slammed; but there is a mood out there of moving on. It’s encouraging. 

Coming into this year’s event, most everyone expected to see a down-sized convention. After all, most of Washington, D.C. wants to paint the industry as the bad guys, and they’ve had their effect. The association itself seems to be in denial of this fact, trying to paint a pretty picture. But there is no painting necessary … the industry has been hit hard but is determined to come back. 

And that is why we all love this biz … eh? 

Thanks for reading. jfi

…on the NBAA ‘09 trade show floor. The continuing emergence of aviation management/training programs and products able to be accessed via the Internet is a trend that is not letting up, and in fact…is more apparent than ever. This should not come as a surprise, as more and more of us connect with businesses and services on the web everyday. As web-based aviation solutions continue to grow in number, and functions of these solutions are progressively enhanced, it’s important that aviation professionals keep a close eye on the increasing services offered; a daunting task indeed.

Following are a few tech highlights from NBAA’s exhibition hall…

…JETNET LLC, an aircraft research and information provider, has partnered with ARGUS, a provider of financial, operational, and safety reporting for business aircraft, to provide a series of improvements to its flagship software interface, Evolution. JETNET now offers direct links to ARGUS data where users can find usage, distance, and average trips, number of trips per month, and geographic coverage for individual aircraft.

“Aircraft dealers and brokers who use JETNET…now have access to critical data on aircraft; [this] marks a huge advantage in their ability to serve their clients and stay competitive,” says JETNET director of sales and marketing Paul Cardarelli. www.jetnet.com.

Inventory Locator Service (ILS), an E-marketplace for the aviation industry, has announced a new suite of supply chain management solutions that leverage technology to offer aircraft procurement, inventory, and sales management services at a low cost of entry with no software or hardware required. www.ILSmart.com.

CharterMatrix Web Group, an aviation website design company, offers comprehensive design packages for the aviation industry, with a particular focus on search engine optimization (SEO) tools and charter solutions. The company is experienced in designing back-end management programs for aviation, such as aircraft scheduling, empty leg charters, and a contract pilot and flight attendant searchable directory. www.CharterMatrixWebGroup.com; www.FlyContract.com; and www.AirplaneManager.com.

Chevron Global Aviation will be debuting its new FBO trainer web program, Refueler, Operator, and Maintenance Training, on November 5. The software program will be available on www.totalga.com, and will include training modules related to fuel truck components, pre-trip instruction, vehicle start-up and shut-down, fueling/refueling, and line ops troubleshooting. Operators will be tested in between modules and will receive certification upon completion of the online training course. Users can participate in the training program on their own time while also experiencing hands-on training on the ramp.

Says Chevron’s Robert Taylor, “This is not replacement training; it is a supplement to a portfolio of training programs. The next generation of line ops folks are very web savvy, and this type of training is something they look for to complement the hands-on ramp training they receive…online training is definitely something we are moving forward with.”

Thanks for your interest,

Brad McAllister

… the phrase ‘cautious optimism’ is reverberating off the walls as the industry sector plods through the economic turmoil of the past year. Monday was media day at NBAA ‘09 and the difference from shows of the past 15 years was stark. Gone were records for the manufacturers’ order books … gone were the onslaught of new model introductions … and gone, too, were some of the OEMs on the show floor itself. Cessna and others chose to strut their aircraft only at the Static Display being hosted at Orlando Executive Airport near downtown.

Take away the manufacturers and their behemoth displays of years past and you have a changed trade show. In fact, NBAA’s senior VP of communications Dan Hubbard says that while the association has managed to retain some 91 percent of the exhibiting companies from 2008, the show encompasses some 80,000 square feet less of floor space, down from 500,000 square feet in recent years. Of course, as he aptly points out, some of those companies not on the floor are no longer selling aircraft period (think Eclipse, Grob, Epic).

NBAA president Ed Bolen offers a silver lining to this murky situation. He reports that the effort by NBAA and GAMA via its ‘noplanenogain’ public relations effort to highlight the benefits of business aviation is starting to get the attention of Washington politicos and other civic and business leaders around the country. Bolen is encouraged by the formation of a General Aviation Caucus in both the U.S. House and Senate, which can only serve to make legislators more informed. And this summer the House passed a resolution recognizing the value that the industry brings to commerce and transportation in the U.S.

Bolen is also encouraged that lawmakers are pushing TSA to take a more consultative approach with general aviation before attempting to impose unnecessary handcuffs on an industry that is in a severe struggle to recover from this downturn. The industry’s reaction to TSA’s proposed Large Aircraft Security Program earlier this year appears to have resonated with at least some in Washington – not an easy accomplishment.

The NBAA media day is a good barometer of how the show will go, but the true tale will come on Tuesday when the floor is opened for business. At this point, cautious optimism sounds about right.

Thanks for reading. jfi

…seems to be a dominant theme throughout the opening day press conferences at NBAA’s 62nd annual held here in Orlando. Last year’s unmistakable buzz exuded from attendees relating to new product announcements and healthy shipment and billing figures has been replaced by a subdued optimism for the long-term, and an understanding that investing in customer service is a must, especially amidst a struggling economic environment.

Christi Tannahill, vice president for Hawker Beechcraft Global Customer Service and Support relates that its customer support program now employs some 1,300; and the company has invested more than $30 million in service facilities during the last two years.

With regards to technology, Hawker announced the availability of broadband Internet for its aircraft. Comments Tannahill, “The availability of Internet access in flight further enhances the on-board experience for Hawker passengers and allows them to maintain communication and productivity while they are airborne.”

Officials from Dassault Falcon say the company is maintaining a 98 percent service level, with plans to expand its service centers at Reno, Nevada and Sao Paulo, Brazil. The company also offers 14 regional service seminars, and is now utilizing the Internet as a way to keep in direct contact with customers. Dassault’s E-forums feature a live chat environment where customers and operators alike can share information and learn about new technologies.

Dassault also introduced the Falcon ‘E-Maintenance’ program, which allows Dassault tech or service centers to remotely access an airplane’s central maintenance computer in order to troubleshoot or diagnose aircraft issues. The program gives technicians the capability to work in real time on one common interactive communication platform.

Air Routing International also announced its new web service, a comprehensive online suite of flight support tools that includes the company’s fuel stop analyzer, runway analysis, and international trip quote programs. The site is intended as a one-stop full service flight planning solution “driven by customers who wanted more extensive options from existing flight planning engines.”

Meanwhile…at Orlando Executive Airport, site of NBAA ’09’s static display of aircraft, Showalter Flying Service has opted out of handling the display for the second consecutive year in an effort to better serve the event’s transient customers.

Florida’s oldest family-owned FBO sold some 230,000 gallons of jet fuel during October in ‘08; this year the company would be more than pleased to see 175,000 gallons sold, relates president and CEO Kim Showalter.

Compared with last year, Kim says there are some 30 fewer aircraft on display this year, despite the fact that Cessna Aircraft and Hawker Beechcraft have chosen to amplify their presence at the static while scaling down their normally large exhibit booths on the tradeshow floor. Says Showalter, “Last year was kind of an anomaly; there were a ton of used aircraft on display. I thought we would see more of that this year…but a couple of big players are not here, including Aero Toy Store.”

Thanks for your interest,

Brad McAllister

By golly, a strange thing happened to friend Peggy on the way to Savannah. First, let me assure you that Peggy is not a High Muckety-Muck Imperial Grand Poobah with any airline. She travels a coupla times a year, maybe three.

Peggy just flew from Huntsville (AL) to Savannah. Her ticket routed her from Huntsville to Memphis to Atlanta to Savannah, with a 2 ½ hour wait in Memphis. Not a good schedule, but one seldom gets a good schedule when buying the bottom-dollar online ticket. Seems like they punish you just to get even with you for buying their cheap ticket.

You ain’t gonna believe this. When Peggy checked in at Huntsville, Delta asked her if she would like to skip the Memphis stop and fly from Huntsville to Atlanta to Savannah, Would she ever! Peggy is a (lovely) senior citizen and that change saved her a long wait in Memphis, an aircraft change and got her to Savannah more than an hour early. She loved it.

CNN, Fox and USA Today should have done big stories on that rare event, but I reckon they missed it.

Folks, I haven’t seen that kind of service and logic from an airline in so long I can’t remember when it was, and that tells you how far down the airline industry has slipped. Is it possible that this is an indication of a change in attitude? Lord, I hope so.

What’s amazing is that I have heard more than one such story of the airlines being nice, fair and reasonable in the last few months. Even my brother, who has sworn off airline travel more than once, gave a good report on his last long trip.

For once, I am not thinking cynically about good news. I sincerely hope that the airlines have seen the error of their ways and have also seen the light. Please, please let this be the beginning of a trend.

C’mon now—everybody shout hallelujah!

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… and that’s a good thing. I asked Greg Principato, president of Airports Council International – North America, about this during an interview at his group’s annual convention here in Austin. His answer: “The mood seems … (pause) … it’s not grim. A year ago, the mood was grim. People still don’t think it’s great out there. It’s definitely different, though; it’s better. No more deer in the headlights.

“We’re getting our arms around it.

“As someone said, flat is the new growth.”

In the past several weeks I’ve been to three conferences – the AAAE National Airports Conference; the Boyd Group forecasting conference; and ACI –NA here in AUS. The mood has been the same … it’s better, as Greg says. There’s a light at the end of this tunnel. (It just may not be as bright.)

It needs to be said. Life seems to be turning around.

Broad brush … things that stand out from recent conferences …
… major hubs will once again be the great connectors;
… smaller communities that rely on 50- to 70-seat RJs have a challenge ahead of them – those aircraft are going away;
… FAA/system reauthorization will probably happen by the end of the year, if for no other reason than Congress feeling a sense of guilt for not addressing this sooner;
… everyone – from airports to airlines to vendors to trade association presidents to FAA – is frustrated by Congress’s inability to give some long-term financial direction.

The next step is heading to the National Business Aviation Association annual convention in Orlando next week. We’ll see if business aviation is getting its “arms around it”. I suspect the answer is that it’s beginning to.

Thanks for reading. jfi