Kodak's 57-year-old flight dept. develops time savings

 - October 12, 2007, 10:32 AM

Picture Kodak, king of silver-oxide-and-celluloid photography forever, confronting the age of the digital image, and you can imagine the turmoil, upheaval and forced reinvention that have assaulted the Rochester, N.Y.-based film and processing giant in recent years. These have not been easy times for traditional “memories capsules” packaged in little yellow boxes. And before the digital onslaught, there was the assault by Japan’s brand F in the little green boxes.

The part of the company of interest here that has proved its worth through these trying times has been the corporate flight department, under the leadership of Jack Kuss, chief pilot since 1997. Kodak has long recognized the value of the mobility provided by company aircraft –it was back in 1945 that the first of two DC-3s began carrying company personnel between Rochester, New York City and Kingsport, Tenn. who had previously ridden the train, setting the stage for what has become one of the longest continuously operated flight departments in the U.S.

Today, Kodak operates an all-Bombardier fleet consisting of a Global Express (which entered service just a couple of months ago) and two Challenger 604s, but it wasn’t all smooth sailing to reach this fleet level. Along the way there were experiments with chargebacks that nearly shuttered the whole operation. But one unavoidable fact of life for any company based in Rochester is that the upstate New York city is two stops on the airlines to almost anywhere. To the Kodak flight department, that simple quirk of the hub-and-spoke system has been highly beneficial in adding to its perceived value in the company and therefore its sense of security.

Maj. Gen. Edward Peck Curtis, hired by Eastman Kodak immediately after his return from World War II service in 1945, convinced Kodak chairman Perley Wilcox and president Thomas Hargrave that a company airplane made business sense. Trips to New York, Washington and Kingsport were becoming more frequent, and an airplane would save the company’s executives much time spent traveling. Curtis, a World War I ace and later chief of staff of the U.S. Eighth Air Force in Europe in WWII, was persuasive. He became not only a valued Kodak executive in his role of vice president of the company’s motion-picture division, but also a key player in the growth of Hollywood. He also headed the commission that created the FAA.

Once management had approved Curtis’ idea, they hired Page Airways of Rochester to acquire a surplus Douglas C-47 from the War Assets Administration. Page found a suitable airplane at Bush Field in Augusta, Ga., and it was flown to Southern Airways’ Atlanta shops for conversion to the civilian passenger-carrying role. The trip was not uneventful for the chosen pilot–Army Capt. Joseph Clemow, then the pilot for Strategic Air Forces commander Lt. Gen. Carl Spaatz. Just as the wheels had left the ground on takeoff from Bush Field on the morning of Nov. 17, 1945, one engine failed, so Clemow feathered that prop and flew to Atlanta on one–an inauspicious start to his 30-year career with Kodak. Once the Southern Airways crew began to tear apart the C-47, they found hidden war wounds (small-arms-fire damage in the wings and tail) and deemed the airplane unacceptable. WAA refunded Kodak its money, and a replacement C-47 was ferried from Walnut Ridge, Ark., to Atlanta the following April for an eight-month conversion process.

The airlines had priority on new radio equipment, so only used boxes were available for private airplanes, but Southern managed to scrounge a new Bendix RTA1B transmitter–a heavy (40 pounds) 10-channel system that consumed a lot of power–and a new Bendix range station frequency receiver, to which Southern coupled the largest possible rotatable loop, installed on the nose. “It was our only system that would pick up the audible range beam signals in the presence of thunderstorms,” recalled Clemow. The bill for the C-47 and its conversion came to $65,000, broken down as $25,000 for the C-47; $37,800 for Southern’s conversion; and $2,200 for Clemow, who had lived at the Atlanta airport while supervising the eight-month process. On July 23, 1946, Clemow and newly hired copilot Edward Knitter flew the completed airplane from Atlanta to Rochester. A week later, Kodak’s first business flight departed Rochester for Boston Logan with 12 of its 14 passenger seats filled. The flight took about 90 minutes, versus the six hours of a typical train trip.

The “trim two-engine plane, its aluminum body shining like a new silver dollar,” made the front page of the company newspaper, Kodakery, on Aug. 1, 1946. It lived outside until Kodak bought space in a municipal hangar from the city in 1947. In 1951 Clemow and copilot Herb Schultz became FlightSafety’s first graduates, and the fees for their training generated FSI’s first income.

The Way It Used To Be
Corporate flying was different back then, as illustrated by a typical Kodak DC-3 run from Rochester to Kingsport and then on to Longview, Texas. One Sunday every month, Clemow and Schultz flew from Rochester to Kingsport, usually with a full load of 14 passengers, doughnuts, coffee and as much gas as the DC-3’s 25,436-pound mtow would allow. Generally it was a three-hour flight, but with a southwest wind it could take 4.5 hours. At Kingsport the passengers disembarked, and the pilots cleaned the ashtrays, loaded the Thermos with fresh coffee and supervised the filling of the tanks before 14 Tennessee Eastman passengers with 14 lunch boxes boarded for the continuation to Longview.

“In clear weather or if there were flat cloud tops below 9,000 feet,” recalled Clemow, “we would fly direct and report to ATC as we crossed any north or south airway. On that heading we were at 8,500 feet. However, if we had to fly on instruments on the lengthy airways, the flight time could be as much as six hours, especially in the wintertime.”

A newspaper article from April 1960 quotes Clemow as saying, “I am still flying the DC-3 after more than 7,000 hours, three major conversions and many other sizeable changes. Just the other day I asked management how long we should plan to operate it and they said ‘Indefinitely. When you came to work here, Clemow, you said we would be buying a new and better type in 1951, which proves you underestimate the DC-3.’”

 New equipment did arrive in 1960, in the form of a brand-new Gulfstream I (S/N 34), to augment the DC-3 based in Rochester and a second DC-3 that had been based at Tennessee Eastman’s headquarters in Kingsport since 1956 once Texas Eastman in Longview had opened. The Kingsport DC-3 was acquired after management determined that Tennessee Eastman was accounting for 25 percent of the original DC-3’s usage.

The Whistle of Darts
The arrival of the Rolls-Royce Dart turboprop-powered GI in 1960 spelled the beginning of the decline of the old and slow DC-3s. Clemow and Schultz, the ink still wet on their ratings after 6 hr 45 min with Grumman demo and training pilot Ken Douglas, flew the green GI (N620K) to Fort Worth for completion by Horton & Horton, which had got its start by outfitting luxury cars for oilmen.

Kodak bought a second GI (S/N 138) in 1964 and sent it to AiResearch Aviation in Los Angeles for completion. Upon delivery of the completed airplane, the first Kodak GI was reassigned to Tennessee Eastman. Both bases continued to operate the pair of DC-3s (the Rochester Douglas was upgraded to 1,350-hp Wright R1830-94s in place of the original 1,200-hp -92s) until 1968.

The company name flew aboard the outside of the airplanes until 1965, when Kodak acknowledged criticism from stockholders over whether the company really needed its own airplanes–and criticism of corporate airplanes in general from airline passengers waiting in line to take off.

Kodak joined the jet age in 1968, when it took delivery of the third production Grumman Gulfstream II (behind National Distillers and The Wall Street Journal), which was promptly dispatched to AiResearch at Ronkonkoma, Long Island, N.Y., for completion. In 1984 Kodak added two GIIBs to the fleet, and the GI soldiered on until 1989. One of the GIIs was lost in 1990, when Tennessee Eastman-based N46TE, piloted by Don Mason and Ed O’Neill, crashed in heavy rain near Knoxville. After this disaster, Kodak reassigned its Rochester-based GII to Tennessee Eastman and replaced it with a Challenger 601-3A, which was sold in 2001 and replaced by a Challenger 604.

George Fisher, Kodak’s immediate past chairman, was hired as CEO in 1992. At the time, he was CEO of Motorola and was having a GIV-SP built, and that is how Kodak acquired the GIV-SP that was recently replaced by a Global Express. One of Fisher’s early decisions at Kodak was to move the flight department under his direct control.

Kodak’s current hangar, large enough to accommodate five Challengers and plenty large enough for today’s fleet, was built in 1988, but it was not used for maintenance until 2000.

Kodak management introduced chargebacks in 1986, and the new accounting method severely curtailed utilization, according to chief pilot Kuss. “In July 1990 there was significantly less flying because the chargeback rate was set too high,” he recalled. “The rate started at $6,000 an hour and almost killed utilization, to the point that the Gulfstream was flying only 15 hours a month.” Chargebacks were eliminated in 1997.

Making Time
Dan Carp took over as chairman in January 2001, and Kuss described him as being “even more pro-aviation than George Fisher was. Mr. Carp sees the value in what we offer. Our product is time. The company makes film and imaging devices, but we make time.”

Kodak Aviation Services currently employs 21 people, and 12 of them are pilots. The department is managed jointly by Kuss and by manager of technical support Leonard Beauchemin, who heads the team of six aircraft and avionics maintenance technicians.

Kuss explained that pilots get a three-day weekend off every four weeks or so, and scheduling puts them on standby for six days, followed by one day off. “You need more captains than first officers to make hard time-off scheduling work,” he noted. Kuss himself flew 650 hours in 2000 but has been aiming since to fly no more than 400 hours annually, compared with a goal of 500 hours annually for each of his pilots.

Hiring minimums for being considered by Kodak include 2,000 hours of flight time (with no requirement for turbine time), graduation from a four-year degree program, an ATP and a first-class medical. Kuss said he has been receiving between one and two résumés a week from pilots lately, compared with eight to 10 a week in 1999. All the Kodak pilots look at the résumés and whittle them down to a selection who hold promise. “We generally invite four people in for interviews to fill one job,” he said. Kuss conducts a comprehensive interview, looking for experience and the right fit with the operation. Two other Kodak pilots also put the candidate through a thorough interview, along with one human-resources interview.

Aviation Services reports to the Kodak CFO, currently Bob Brust, whom Kuss described as being pro-aviation. Under the previous arrangement, the flight department used to report to general transportation, lumping the airplanes and pilots in with fleet cars and trucks, warehousing and distribution. “Harry Kavetas was the first CFO to whom the flight department reported,” recalled Kuss. “From our perspective, the flight department overseer has to be a user and as high up in the company as possible.”

Some 50 people in Kodak are eligible to request an aircraft, and the chairman can override bookings if no other aircraft is available. In reality, most of the trips are to fly half a dozen or so executive vice presidents. Fewer than 10 percent of the hours flown are to transport Kodak executives based outside Rochester.

To cope with maintenance problems and handle overflow requirements, Kodak Aviation Services typically buys between 200 and 250 hours of charter usage a year. About 80 of those charter hours are for handling board meetings, since Kodak undertakes to transport its dozen board members to Rochester for each of the seven board meetings annually. Charter fleshes out what the three company-owned aircraft cannot handle for that mission.

In the New Year, the top three people in the company pencil in their known trips on a year-at-a-glance calendar. Springtime is the busiest, followed by fall. A typical load is three passengers, and there are 10 seats in each aircraft. Flight attendants are used only for board-meeting flights or when there is a full passenger load. The spouses of flight department employees are encouraged to ride along when appropriate–recognition that the “significant other” contributes to the success of the department by tolerating its inevitable demands on family life. For regular trips, catering is provided by Marriott but, noted Kuss, “for board meetings we have a high-end caterer prepare something special.”

“We go where the business is–Europe and the Far East–and international ops have taken a leap since 2000,” noted Kuss. About 20 percent of the department’s operations are international, but the upward trend of this figure is what prompted the company to buy the Global Express. “Flying in China now versus 10 or even five years ago is infinitely easier,” he said, “and lots more of us are doing it. Progressive people in the government there see business aviation as a great investment inroad. Kodak has invested $1.2 billion in China so far this decade. We use Air Routing and Universal. Their handlers understand our needs. The government is relaxing its restrictions, and international routes get English-speaking controllers, so airlines and business aviation can fly without having to carry Chinese navigators.”

Charter has sufficed so far for meeting Kodak’s supplemental-lift needs, but the fractionals have been circling. Kuss reported that before its absorption into Flight Options, Raytheon Travel Air had been particularly aggressive with mailings and “trying to get its foot in the door downtown. Downtown tells them it’s a flight-department matter and refers any fractional marketing effort to us. Our own analysis that we conduct every couple of years shows us that if we’re flying more than 350 hours a year, we need our own aircraft, not fractional. Fractional for supplemental lift may come to pass, but the decision is driven by the flight department. For flexibility, we would probably buy a share in a large aircraft.” Flexjet can offer to convert a share into a fully owned aircraft if the need arises, he noted.

A Healing Process
When Kuss was appointed chief pilot in 1997, one of his top priorities was to implement a healing process between the pilots and the mechanics. The two camps have had their differences over the years, and Kuss knew he had to heal those wounds if the department was to remain strong and effective. The appointment of Beauchemin (he was hired away from Bombardier’s Hartford facility in 1991 shortly after Kodak bought its first Challenger) to hold joint responsibility with Kuss for the efficient running of the department helped to smooth ruffled feathers, and Kodak Aviation Services now has a strong in-house maintenance team whose members feel on an equal footing with the pilots. “In too many departments the pilots get all the glory and the mechanics do all the work. That is not the case at Kodak,” said Kuss. “We are truly a team. The pilots fly; the mechanics make sure the aircraft are reliable; administration supports the department’s operations with paperwork and record-keeping; and the schedulers (the hub of it all) perform the dispatch duties.” Other than approving major capital expenditures, the flight department has had complete autonomy since summer 1999. Before then, scheduling had been handled by company headquarters, so the flight department had found itself in the difficult position of trying to run the operation deprived of its most critical function. These days, scheduler/planner Renee Scorsone keeps track of the department’s trips, which average five each day.

The department’s own technicians conduct routine maintenance, including 600-hour, 1,200-hour, 1,800-hour and 20-month inspections. For heavy maintenance, the Challengers have been flown to Bombardier’s Hartford facility. On average both the Challengers and the recently sold GIV-SP have racked up dispatch reliability rates of better than 99 percent, and mechanical problems might scuttle two trips a year. The Challenger 601-3A went for five years straight without missing a trip. Last year the Challenger 604s flew about 950 hours each, and the GIV-SP logged 900 hours.

Kuss and Beauchemin bring varied credentials to their posts, and both have made a point of getting involved with industry initiatives and associations. Before joining Kodak in 1978, Kuss had flown a Howard 500 and Fokker F27 and started a regional airline in Iran flying Fairchild FH227s. From 1976 to 1978 he worked as a contract pilot, flying for Scott Paper, Atlantic Aviation and FlightSafety. While with Bombardier, Beauchemin played a key role in introducing MSG3 to business aviation with the Challenger 601 and later the 604. MSG3 is a maintenance program introduced by the airlines in the early 1970s that reduces costs and human error by using a logic process to select maintenance tasks. For Kodak’s Challenger, MSG3 meant the company went from performing a 300-hour inspection every three months to once every six months, and the 600-hour went annual instead of biannually. Beauchemin led the Global Express MSG3 program, and he is also involved with MSG3 for the Challenger 300 (nee Continental). He has also chaired the NBAA maintenance management committee, and Kuss is currently an NBAA board member.

Kodak’s old-timers, born and raised on Gulfstreams, were skeptical of the Challenger when it arrived, but they have grown to like its spacious cockpit and pressurization and air-conditioning systems. And for Kuss, due to retire at the end of May, the Global Express rounds out what he calls “a picture-perfect fleet for Kodak’s wide-ranging business transportation needs.”

Kodak expects to fly its three airplanes 2,800 hours/1.4 million miles this year, a far cry from the 600 hours/84,000 miles the first DC-3 flew annually in the late 1940s, and it stands as a prominent example of how a flight department can boost a company’s fortunes when headquarters is off the path beaten by the airlines. The airlines today are to Kodak exactly what the trains were after World War II–too slow and too hard to do business on–which bodes well for the continued success of the company’s Aviation Services.