NBAA regional forum stops in West Palm
The regional NBAA forum at West Palm Beach International (PBI), Fla., on March 10 served a slice of business aviation with complex ingredients. Fractional ownership has added occupants to the back of the cabin without always expanding the industry pie. In response, the supply side has retreated to its own back office to refine and customize menus for individual tastes in finance, aircraft and cabin service, as well as the growing need to backfill assets on short notice.
Despite mergers and new alliances, the supply side is evolving to a pot-luck: solo freelancers serving single end users, with traditional service providers acting as host. The recipe requires substantial new effort in the portions but fewer complete meals. A squad of reluctant freelancers approached the 39 exhibitors and 14 static displays,
chef-to-chef, as the entire banquet watched for its elusive diners.
Some prospects browsed the ramp, to explore nuances of finance or ownership without committing, but the bulk of attendees talked shop. At lunchtime, enjoying what several connoisseurs of the NBAA forum series called the best catered, Greg Sisler of American Finance Group spoke openly.
“I see a lot of industry people here. Not a lot of customers,” said Sisler. “A lot of vendors,” echoed his tablemates. [NBAA told AIN that 1,100 people attended the forum but gave no breakdown of their reasons for being there. –Ed.]
One vendor asked Robert Breiling, an analyst and forecaster, when the industry would recover. “We’ll bounce back in a year,” said Breiling, based on orders reported by GAMA.
Dick Allan of InternetJetSales of Honesdale, Pa., fueled discussion about gas. “The fuel surveys in AIN and other trades are wrong. Way off,” he began. “I can put you in an airplane right on this ramp and fly you all the way across the country and never pay more than $2 a gallon [for jet-A].” Allan said that asking only suppliers is madness in the method. “They won’t tell you how cheap they’re selling to some customers.”
Tracy Gough, U.S. sales executive for Harrods Aviation, works from her base in Boca Raton, Fla. Harrods, formerly Metro Business Aviation, will open a new facility with fuel bowsers at Paris Le Bourget by July, expanding from its bases at London Heathrow (EGLL), Luton (EGGW) and Stansted (EGSS).
“This is the first time that Harrods has hired someone to work the U.S. market,” said Gough. “My job is to have you land at our facility when you fly across the pond,
and sell five-star catering from Harrods department store. I target only heavy-iron operators.” Harrods has divided security service to three levels–the most vigilant guarantees guard visits at least 14 times in 24 hours and round-the-clock CCTV coverage, with a log sheet of all activity near the aircraft.
“Americans are so brand happy,” noted Gough in her Indiana accent. “The clients want Harrods-brand wine and select menus from the food hall.” Harrods limits its menu to ensure quality. “A lot of food doesn’t hold up at altitude. The last thing we want is someone getting sick,” said Gough. “We also sell the Harrods teddy bear and the logo shirt. Hamper baskets are very popular.”
In his security briefing, Robert Albracht of the Transportation Security Administration sought ideas to hamper terrorism–specifically, how to prevent acquisition of a used GA aircraft. Albracht applauded efforts by the Treasury Department to halt money laundering, funds that might be used for a business jet to cause harm. He remarked about an online survey that reported 67 percent of GA owner-operators considered it “not easy at all” to steal their aircraft. Albracht underscored the experience of South Florida operators, who have deterred theft of aircraft by drug traffickers, saying similar measures work against terror.
Albracht outlined the complex organizational chart for the TSA. “General aviation is kind of hidden down here,” he said with his laser pointer, with unintended metaphor for its attention relative to airlines.
For airlines, the TSA performs name checks against its “no fly” list, a fingerprints-based check for flight deck crew and passenger identification checks. No such activity flows to business aviation, and though attendees wanted no regulation, they did want information. Jayna Hill of Tepper Aviation, a Part 125 operator out of Crestview, Fla., asked the question that had the crowd nodding.
“Where can we get that no-fly list?” she posed. Albracht responded, “We decided to focus on the larger aircraft, those over 12,500 pounds,” adding, “747 operators don’t think of themselves as general aviation.” Hill answered quietly for the audience, “Well, neither do we.”
Albracht displayed an example of the new FAA pilot certificate with its hologram, which no one in attendance had seen. He reminded the audience of the hotline to report suspicious activity via (866) GA-SECURE, a listing that’s hotter than intended. “Unfortunately, it’s not an 800 number. If you dial it with 800, it’s a phone-sex service. Believe me, we’ve tried.”
Albracht promised that this month the TSA will issue Recommended Security Practices for General Aviation Airports, with such checklists as key control for aircraft. The document was due in February, but “the lawyers got hold of it,” he said.
“The states may regulate, and your insurance companies may require certain
procedures as a result of this document, but the practices from a federal standpoint are just recommendations.” Still, Albracht said it’s prudent to accept the recommendations. “It won’t take long before your insurance company says, ‘The federal government is recommending this, so why aren’t you doing it?’
“The Secret Service is not warm and fuzzy with anything that doesn’t look like an airline, with the reinforced cockpit door and passenger screening,” he explained, yet added that TSA requirements are common sense. “The TSA access certificate [TSAAC] codifies the best practices you already do. You’re flying around the captains of industry and your mindset is similar to our government protection of the President. On the corporate side, you know who’s getting on your airplane, and if you don’t know them, they’re probably not getting into your parking lot.”
Stephen Lister and Robert Austin of Airnet Private Charter were there to reinforce the Airnet message: “Know what’s on board, know who’s on board.” The Airnet fleet includes the Learjet 60, Learjet 31A and the largest fleet of Learjet 35s outside the U.S. Air Force. Airnet, with 180 pilots, is losing its business of flying bank checks three times a night, which Lister called “super expedited” freight, now turning that responsiveness to charter and fractional companies. All is transparent to individual passengers, with no retail marketing.
“We backfill aircraft to companies like Jet Aviation,” said Lister. “We do lots of business in support of other charters, and some work with Flexjet and NetJets.” Austin added, “There are no owners to deal with to clear availability of the aircraft. We don’t have to track them down on a Friday afternoon.”
Airnet is committed to maintaining an all-Bombardier fleet. “Keep it standard. That way the peanuts are in the same drawer,” said Lister. Three Learjet 60s will be delivered to Airnet this month.
Private Travel for the Masses
Clint Clouatre, product marketing director for Eclipse Aviation, said the Eclipse 500 could be flown for peanuts. “It’s changing the value proposition for private jet travel,” he said, presenting a chart of costs lower than those for the Cessna Mustang, Adam A700, Safire Jet, Diamond D-Jet, Beechcraft Baron 58 and Piper Malibu Mirage.
Clouatre illustrated the Eclipse 500 range using NBAA Travel$ense software for a hypothetical trip from West Palm Beach to Atlanta to Tampa and return, taking 13 hours 35 minutes and costing $951. The comparable airline flight would consume 35 hours 5 minutes and cost $1,685.
“Light jets will expand the value of lost ground time to the middle management in a company,” he added, citing a three-passenger load of a broker and attorneys (each figured to weigh 200 pounds) along with a 170-pound pilot. At high-speed cruise, the four-hour radius from PBI reaches Halifax, Nova Scotia, to the north and Caracas, Venezuela, to the south.
“The majority of customers will fly the Eclipse single pilot. Those who are looking at two pilots are looking at it not for insurance requirements but for customer perception of safety.” The Eclipse mentor program provides an experienced pilot to fly with a new operator. Eclipse training takes five phases and includes upset-recovery training in a company-owned L-39.
Big-iron pilots were also thinking nimbly. Gerard Zubka, a Boeing 757 copilot, is using his four-year furlough from American Airlines to launch Affordable Aircraft Ownership (www.aaofly.com), planning to base a Cirrus SR20 or SR22 at Lantana (LNA) or North County (F45), both in West Palm Beach, by June.
Zubka was at the forum to research financing for potential quarter-share holders. “They can deliver the Cirrus in eight to 10 weeks from the time we have the owners.” He lists 25-percent equity shares for $134,500 to include 125 hours of yearly flight time, a monthly management fee of $975, and variable fuel costs based on a burn of 18 gph. The hourly fee is $30 dry. His management fee includes hangar, maintenance, oil, cleaning and insurance, and the purchase includes ANR headsets, window covers, chocks and tiedowns and handheld GPS navcom backup.
Those who spring for the “Aggressor Package” gain an electronic flight bag, ice protection and semi-portable oxygen system. In four years, the Cirrus would be sold, with each owner receiving one quarter of the proceeds minus 10 percent.
Few prospective owners ventured inside the Jet Aviation hangar to hear Zubka’s pitch, or to hear industry speakers warn against potential hazards. Ed Kammerer, a partner at the financial advisory firm of Edwards & Angell, advised prospective owners to consider the registration process before they close on a specific aircraft.
Kammerer explained that the FAA might consider the forming of a legal entity solely to act as owner for the aircraft to be a “single purpose” or “single asset” company. “Flight operations must be ‘within the scope’ or ‘incidental to’ your business,” he warned. “In other words, you’ve got to have some other business for flight to be incidental to.
“Look for the magic words in your certificate of aircraft registration in the name of the owner: aircraft, aviation, flight services or transportation services. You might be violating the FARs and be subject to tort liability, and violate the terms of your loan or insurance if you represent that you will always operate under Part 91. Insurance companies will happily take your premiums without saying anything, but if there’s a claim suddenly it’s an issue.
“The irony is that these companies are formed to shield you from liability in an incident, but when the insurance company won’t pay, it all crumbles. You’re the last man standing. The plaintiff’s lawyer is standing over there saying, ‘You mean to tell me that you didn’t operate to the highest standards of Part 135?’”
Jeremy Cox, v-p of Jet Brokers, led a briefing entitled “Ensure the Highest Resale Value for Your Aircraft.” Cox advised prospects that in considering their level of investment, “don’t think recuperation; think market position. The best will always sell first.” Cox said that damaged aircraft can still be resold; the effect of damage on price varies with the age of the scar. “If damage was done last month, that’s a 50-percent loss in value. If it was done 10 years ago, it’s maybe 10 percent. They can see you’ve been flying without problem.”
Looking for Work
April Brumbeck was on hand for Bravo Aviation Specialists, whose staff of eight hand washes business jets. Bravo operates out of Atlanta Fulton County (FTY). The Bravo crew exhibited for the first time at the NBAA regional event.
“We have noticed a significant decrease in quality detailing, and we see a need to standardize the aircraft detailing industry. Our crew will work one on one with your employees to ensure beautiful brightwork, immaculate interiors and longer-lasting leather,” said Brumbeck, adding that the key issue is safety, not just appearance and longevity. “We train them our way. Too many times the airplanes are really messed up if not done properly.”
Bravo’s niche has grown along with business aviation’s higher turnover and usage, which can require a kind of “supplemental lift” in aircraft detail cleaning. Bravo is not soliciting the customer directly; as a vendor to Raytheon, the service is purchased as a courtesy to end users. At Bravo’s home base, business aviation clients include AMS Group and Home Depot.
“Home Depot has in-house detailers, but our company can step in and do the job in an hour,” said Brumbeck. “Not everyone can be a detailer. It takes a lot to hold a brush over your head to scrub a tail.” Services begin small–polishing the nacelles, for example–stepping from aircraft such as small piston singles through heavy iron such as the Global Express and Gulfstream 550, the latter costing $650 for an exterior wash and another $650 for interior detail.
Corporate flight attendants Elizabeth Harrison and Christina Hernandez both attended the NBAA forum at Republic Airport in Farmingdale, N.Y., and then registered for the West Palm event for more job hunting. Likewise, business aviation flight attendants Laura Buckel of West Palm Beach and Jean Hutcheson of Addison, Texas, were also working the freelance angle at the NBAA forum.