Threshold Aviation Group: Maintenance Op Grows Out of Corporate Flying Assignment

 - November 5, 2007, 10:40 AM

Threshold Aviation Group is evidence of evolution in action. Company CEO Mark DiLullo got hooked on aviation while in Air Force pilot training for the Air National Guard. When he returned to civilian life, he went to work for Martin Aviation in Ontario, Calif., and began building civilian flight time.

In 1989 he started a small side business called Threshold Technologies and began flying a Falcon 20 for a customer. It was during this stint that he discovered how important maintenance is to the owner’s perception of the value of ownership. He said, “While the owner was happy with my flying he was unhappy with maintenance providers that were never on time or within the agreed-upon budget.” He realized that to ensure his longevity as the Falcon’s pilot he would have to control the non-flying aspects of the operation, especially maintenance.

“I talked to the owner and agreed to take over management of the aircraft using my existing Threshold Technologies company structure and its small facility to become an aircraft management company.” DiLullo hired a mechanic and within two years had him rated as a captain in the Falcon 20. Within 18 months the company outgrew the facility and moved into a larger one on the field.

“We began to develop a high-quality maintenance program with emphasis on delivery time and budget control,” he said. “The owner was so impressed [that] he started bragging to his friends about what we were doing and we started getting more owners asking us to manage their aircraft. By 2005 we had outgrown the second Ontario facility and moved to a larger space on Chino Airport.”

DiLullo said it was a natural expansion of services to begin negotiating other areas for his clients in addition to maintenance. “We never cut into quality, but we became master negotiators and really began to save our clients considerable money; the word spread.”

Today, Threshold Aviation Group consists of Threshold Technology, focused on the operations side of aircraft management, and Aviation Maintenance Group (AMG)–a Part 145 wholly owned subsidiary.

AMG’s roots were in the Falcon, so it was natural to offer maintenance on the Falcon 10, 20 and 50. While the company will work on most corporate aircraft, Falcons, Hawkers, GII/III/IVs, Challengers and Citations make up the bulk of its business.
The company is generating more than $12 million in gross sales/revenues annually, with a 35-percent increase in the past 12 months. DiLullo attributes that
improvement to the new location.

“Based on our projections for 2008 we anticipate another 35-percent increase in our overall business,” he said. The company’s annual maintenance sales are approximately $7 million.

Of the 65 employees, 25 are mechanics and two are full-time avionics techs. The maintenance division averages four Gulfstream “72-month/5,000-landing” inspections annually. In addition, this year the company completed two Falcon 20 C-inspections and two Hawker 48-month inspections.

AMG is also responsible for all of the company’s own maintenance requirements, including nine Gulfstreams, four Falcons, two Citation S/IIs, a Sabreliner 65 and a King Air. According to DiLullo, the facility can easily support twice the current workload.

“We’re developing a marketing strategy now to capitalize on the excess capacity,” he said. “Until now most of our business has come to us through word of mouth.”

New Projects Ahead

AMG has an interior completion center with 10 technicians, a fabrication division with capability ranging from minor aircraft structural repair to shoring a Gulfstream and replacing the fail-safe channel in the wing. The company has just completed construction of a clean room and trained mechanics for composite repair slated to begin in January. A new battery overhaul shop is also in the works.

“Last year we changed 12 Gulfstream Spey engines and have already changed six this year, with two more in process,” he said.

The company is wrapping up construction of a new FBO facility at Chino that will feature private transient customer offices, a full kitchen, wireless Internet and communication services, pilot quiet/sleep room, computerized weather services and flight tracking, large flat-screen tvs and commercial furnishings.

It is also building a sales, service and installation center to support the Clifford Development Group project slated to begin in March. The project is an STC to re-engine the Cessna Citation II with 3,000-pound-thrust Williams International FJ44-3 engines, including integration of the fadec system. They will also offer Citation II owners the concurrent installation of upgraded glass cockpit, interior and paint.

According to DiLullo, the re-engined Citation II will have significant performance improvements, including a 21-percent increase in long-range cruise speed, a 29-percent range increase, a 34-percent improvement in single-engine climb rate and a 20-percent gain in fuel efficiency. The fadec integration allows for a decreased takeoff field length. The Citation II engine conversion is priced at $2.15 million for 2008 installations.

DiLullo said the expansion of services is an integral part of the original company philosophy to be a partner with the customer. “His aircraft problems are our problems,” he said. “When an item breaks on an aircraft our response has always been to determine what is the proper repair with the most economical solution. We don’t simply replace the part and tack on an overhead charge. Our emphasis will always be on what’s the right solution for the operator