Owner-flown t-props a small but healthy niche
Art Maurice’s corner of the overall general aviation market is strong, and he has lots of reasons why he thinks that’s so. Maurice is a co-founder and president of Columbia Air Services, a family of companies that offers sales, maintenance, avionics, FBO services and, now, charter. Columbia, based in Groton, Conn., has built much of its reputation and following within the owner-flown turbine community.
The Columbia aircraft sales division is a Piper dealer (with emphasis on the turbine-powered Meridian), a sales representative for EADS Socata’s TBM 700 and the Northeast regional sales rep for the slowly progressing Sino Swearingen SJ30-2 light jet. Columbia’s sales territory for the TBM 700 covers the fertile ground of New England; New York; New Jersey; Pennsylvania; Delaware; Maryland; Washington, D.C.; Virginia; West Virginia; and the Canadian provinces of Ontario, Quebec, New Brunswick, Newfoundland, Nova Scotia and Prince Edward Island.
In addition, Columbia has built a strong foundation of owner-flown customer support with its maintenance division, specializing in Piper Cheyennes–especially the last and largest Cheyenne of the line, the TPE331-14-powered 400LS. Of the forty-two 400LSs built (the last one left the line in 1987), most have passed through Columbia’s maintenance hangar at least once–many regularly. On the day AIN visited Columbia recently, four of the tall-tailed Cheyennes were undergoing service on the shop floor. They come from around the world and there have been as many as 10 inside the hangar doors at once, said Maurice.
It’s a mix of business that seems to work. “We did $46 million in new aircraft sales over the past two years,” Maurice told AIN. But besides selling new airplanes, Columbia buys, refurbishes and sells pre-owned turbines, largely for the owner-flown market. “There are a lot of private individuals buying older turbine twins. More than you’d think. Many of the aircraft we have been taking care of for years used to be corporate, but are now owned and flown by individuals,” he said.
With a large portion of his business wrapped up in sales of new TBM 700s and Meridians, Maurice takes a double-sided look at buyers’ philosophies. “I have two hats. If a customer sounds as if he wants to buy a new airplane, I put on my new-airplane-salesman hat and reinforce the good reasons to go that route. But if he says, ‘I can buy a lot of maintenance for the $1 million I’m saving on a used airplane,’ then I’ll reach under the desk, put on my other hat and agree with him.”
Columbia’s maintenance director, Art Celentano, pointed out that there are good reasons for deciding either way. But he said that owners of older aircraft need to have “patience” when something breaks, or just wears out, and it can be tough to locate an elusive part or find someone with the background and expertise to fix the problem.
One significant related profit center for Columbia is its avionics retrofitting business. Fast-moving advances in avionics are making older airframes more attractive–if they’ve been sufficiently upgraded with the latest in panel glassware. Columbia’s avionics résumé includes refurbished panels on several TBM 700s, Cessna Conquests, a Piper Mojave, a Beech Duke and a veritable fleet of Cheyennes, ranging from a Cheyenne I to extensive refurbs on a pair of 400LSs and no fewer than six Cheyenne IIs.
Maurice and Celentano agree that the market for new or pre-owned turbine-powered, owner-flown aircraft has not diminished during the economic recession and the trauma of 9/11. Asked why he thought people were making room within shrinking portfolios for expensive airplanes, Celentano said, “I think, in part, they’re responding to 9/11 by thinking, ‘I could die tomorrow, so what am I waiting for?’” Maurice followed up by citing many of the same reasons charter and fractional customers are moving off the fence. He said, “No one wants to deal with the hassles of the airlines anymore, and security is a big issue. When someone tried to blow up an airliner with his shoes, that was the last straw for some of our customers.”
But what about the sagging economy? Maurice answered, “Not everyone lost their money. Some kept it.” He added that those are the people who don’t tend to garner a lot of public attention, and they are also the type of people who are more likely to fly their own airplanes, rather than opting for block charter, fractionals or setting up a flight department.
The Single Incentive
Maurice believes today’s single-engine turbine aircraft provide a powerful incentive for owner-pilots to plunk down big cash to own one, especially the TBM 700. At $2.66 million for a typically equipped new TBM 700, the market isn’t large–but it is well focused and attracted to the sleek French aircraft.
“The best way to sell a TBM is not to talk very much,” he said. “Listen to what it is they’re looking for in a personal airplane, and then just let them fly it.”
Maurice said he could sell more than his 2003 allotment of five or six new TBM 700C2s, but added that limited production makes the airplane that much more desirable– an asset that he believes Piper missed out on by building too many Meridians too fast. “The Meridian is a terrific entry-level turbine. But they built something like 118 in the first two years of production. Twelve years after the TBM came out, there are still only 210 in the fleet, worldwide.”
He further said that many of his TBM 700 buyers over the years have become repeat customers. Maurice cited Socata statistics indicating that some 40 percent of new-aircraft sales go to buyers who already owned a TBM 700. Part of the reason is that they hold their value well–another function of the limited production. He said owners are trading in their old aircraft and getting close to what they paid for them as a down payment toward a new model.
But one of the most profound reasons why people are paying top dollar for turboprop singles, Maurice said, is that they believe they can fly them confidently–and they can get insurance. Maurice said, “A pilot who has been flying a high-performance single such as a Bonanza looks at the cockpit of the TBM 700 and feels comfortable and safe. That’s just not the case in a used turbine twin that may cost half as much. And a 1,500-hour pilot probably couldn’t get insurance in the twin at any price–but in the single it’s actually affordable.”
Maurice also noted that the same twin that costs half as much to buy as the turbine single is a decades-old airplane carrying the albatross of a hefty maintenance budget. Once-expensive airplanes bought at bargain prices quickly show their original financial colors when they find their way back to the shop floor. With a new single, the pilot gets in and goes. Maintenance issues are covered by the warranty.
Asked what he thinks about the Cessna Citation Mustang, a light jet under development to sell in the same price range as the TBM 700, Maurice exhibited some righteous envy. He cringed, “I hate Cessna. They’re so good!” But he also pointed out that not all prospective owner-pilot buyers will be able to get insurance on the Mustang, and not all will feel safe or confident enough flying a twinjet.
Like most of the aviation industry, he takes a two-sided view of the low-cost Eclipse 500 very light jet. “I’d love to see them do it, but I’m skeptical on a number of fronts,” he said. He said one negative aspect of the Eclipse 500 is that it has deterred a lot of people from buying airplanes while they wait to see if the company can really produce a certified jet at that price. “A lot of my customers who are finally buying airplanes also have delivery positions for an Eclipse 500, but they’re not waiting,” said Maurice.
As a former mechanic for Pilgrim Airlines, Maurice and his employees built Columbia Air Services, which opened in 1980, from the ground up. The company currently employs a total of 70, including 20 maintenance technicians–eight of whom have been with Columbia for more than 20 years. The sales division has offices at Groton Airport (GON); Allaire Airport (BLM) in Belmar, N.J.; Rutland Airport (RUT), Vt.; Westchester County Airport (HPN) in White Plains, N.Y.; and international sales offices in Rio de Janeiro, Brazil, and Bordeaux, France. The international sales offices are headed by Maurice’s daughter, Melissa. He said, “I dread going on business trips with her. She works too hard.”