Arizona trucking and bizjet tycoon has high hopes for Legacy
It has been said that “if you want something done, give it to a busy person.” This seems appropriate in the case of Jerry Moyes, president and CEO of Phoenix-based Swift Transportation, the world’s largest truckload carrier, with 16,000 trucks and 50,000 trailers covering 34 million miles a week. When the company went public in 1990 it had gross revenues of $120 million. Eleven years later it grossed $2.1 billion and is projected to reach $5 billion by 2007.
Finding that running a billion-dollar enterprise and holding ownership positions in three major league sports teams didn’t occupy his every waking hour, Moyes set out some six years ago to start a business aviation operation of which, unlike Swift Transportation, he would be sole owner. When AIN recently caught up with Moyes during one of his brief, uncommon stationary moments, we asked how much of his time he puts into overseeing his aviation activities.
“I spend 110 percent on the trucking business,” he deadpanned. Some members of Moyes’ aviation operations staff seem convinced that their boss has found a way to operate on a 25-hour clock and a calendar with eight-day weeks. “He never stops,” observed Marlene Purswell, who coordinates Swift Air charter activities along with Swift Aviation customer services and marketing. “He energizes the rest of us. But for all his drive, he’s just a down-to-earth guy.”
Moyes moved to Phoenix in 1966 shortly after graduating from Weber State University and marrying his high-school sweetheart, Vickie Favero. They have nine children, ranging in age from nine to 32, and eight grandchildren. Starting out by hauling steel around Arizona with a single truck, he expanded, as he said, “one truck at a time” until helping to found Swift Transportation. Moyes became its board chairman, president and CEO in 1984.
A licensed pilot since 1970, the Plain City, Utah native since 1995 has owned a series of Cessna Citations to oversee his transportation empire. Starting with a Citation II and “working up the food chain,” he later was a launch customer for the Citation X, taking delivery of S/N 10. He has since owned a total of 11 Citation Xs. In the process, Moyes recognized the benefits of leasing his aircraft for charter work when they weren’t serving Swift’s trucking business. In 1997 GTA Aviation Services, an FBO at Phoenix Sky Harbor Airport, became available, and Moyes bought it.
Three years ago this month, after Phoenix-area flight-training legend Darrell Sawyer decided to sell the adjacent Sawyer Aviation, his Sky Harbor-based flight school and FBO, Moyes–whom Sawyer had taught to fly–made him an acceptable offer. “Darrell was looking at retiring, and it looked like a good investment,” said the trucking magnate. The combined Sawyer and GTA leaseholds on the south side of the north PHX runway provided space and facilities sufficient for a full-service business aviation FBO, including aircraft basing, maintenance and line service, scheduled and on-demand charter, aircraft sales and leasing.
Three Profit Centers
Moyes organized the operation into three separate but cooperative entities: the FBO, Swift Aviation Services (SAS); Swift Air, the Part 135 charter operation; and Swift Aviation Group in Scottsdale, Ariz., which is the sales entity for aircraft including the Embraer Legacy. Swift Aviation Services in the next eight months will relocate to a new facility on the south side of Sky Harbor International, along with emergency medical service provider Air Evac, one of the current SAS tenants. The Swift facility is the largest dispenser of non-airline fuel on the airport, pumping almost 23 million gallons last year. It holds the military fuel contract at Sky Harbor.
SAS hosts more than 20 based aircraft, ranging from piston singles to corporate jets. Aviation Services this month becomes an authorized Embraer Legacy service center, and it offers maintenance and repair services for a variety of aircraft, engines and avionics from most major manufacturers.
Swift Air operates 11 charter aircraft, none of them currently Phoenix based. This “floating” charter fleet consists of Cessna Citation Xs, Citation 560s and a Falcon 2000. Swift Air moves charter crews by airline to and from an aircraft’s last arrival point.
Affiliated Moyes-owned charter operations are Luxury Air, which operates a Boeing 757 to transport the NBA Phoenix Suns, and Sport Jets with a 737-400 on a Part
125 certificate for the major league Arizona Diamondbacks and the NHL Phoenix Coyotes. Moyes holds a half interest in the Coyotes and minority positions in the major league basketball and baseball teams.
The Swift Aviation Group was formed for the initial purpose of administering the Embraer Legacy acquisition and managing the aircraft after delivery. It was set up after Swift became the launch customer for the Brazilian-built business jet, ordering 25 with options for another 25. The Swift Aviation Group is structured to be a first step in a long-term business strategy to place all of Moyes’ aviation interests under one overall managerial umbrella. He said that as each entity becomes profitable as a separate enterprise, the group as a whole “could go public” at some juncture.
Meanwhile, Swift Transportation, despite its 25-percent annual growth rate in recent years, has seen the current economic climate drive its stock price down to $16 a share from $41. Even so, Moyes remains optimistic that it will experience an upturn before too long.
The shape of Moyes’ aviation interests is being molded by two decisions–the strategy of making the Legacy and the charter operation the linchpins of the overall operation, and the decision by the city of Phoenix to have only two FBOs at Sky Harbor. The latter, made before Moyes bought GTA, included two city-designated FBO sites on the southwest side of the airport, south of the new third runway, 7R-25L. Nearly a decade ago Cutter Aviation developed and moved onto one of the leaseholds. On March 5 Swift Aviation broke ground on the other leasehold for its new facility planned for completion this October. Moyes said he has no plans to expand the FBO business to another Phoenix-area airport at present, but added in customary fashion, “I wouldn’t turn down an opportunity.”
The 22-acre site will include a 175- by 175-foot (30,625 sq ft) canopied ramp area adjacent to the two-story, 18,654-sq-ft terminal building, a feature sure to be appreciated on 110-degree F Phoenix summer afternoons. Project architects told AIN that the 28-foot-high (ground to roof) metal canopy is designed to withstand 70-mph winds, and will fully shelter aircraft up to Gulfstream IV size. It will completely shade Swift Air’s 757 and 737-400, except for their tails.
The Phoenix aviation department has yet to announce plans for the present Swift Aviation Service buildings after SAS moves to the new location, but it’s speculated that they will be razed to make way for an extended taxiway alongside Runway 8-26. Swift sold the former Sawyer Aviation School of Flight over a year ago and no longer provides flight instruction. The training operation has moved to the Scottsdale, Ariz., airport under ownership of Swift Aviation’s payroll service provider, Jim Miller. The sale achieved the city of Phoenix’s goal of removing all flight-training businesses from Sky Harbor Airport and its Class B airspace.
Moyes chose the Legacy to be the straw that stirs the drink for his aviation operations after evaluating several emerging super-midsize business jets and deciding that the ERJ-135 regional airliner variant had the best combination of performance, capacity and value. Ernie Edwards, Swift Aviation Group president, said a variety of potential customers have been impressed by the Legacy. “When they first see it, everybody says two things: ‘I had no idea it was this big,’ and ‘It’s bigger than a GIV.’” Indeed, the Legacy’s six-foot-high cabin is only two inches lower than the Gulfstream’s, and the Embraer twinjet has passenger area space (exclusive of galley, lav, baggage area and avionics bay) close to that of the GIV. Edwards added that a number of companies, including Intel, have shown strong interest in the Legacy as a corporate shuttle.
Moyes noted that selling the Legacy, both to wealthy private individuals “who aren’t controlled by the business climate of the moment” as well as to corporations and charter operators, will generate fuel, service and maintenance business for the FBO, in addition to charter revenue. The Swift Aviation Group is currently the only authorized Legacy distributor in the world, Edwards said, noting that under Tony Fitzpatrick, regional v-p for sales, it will continue to have exclusive Middle East marketing rights over an area from Morocco to Pakistan. Swift recently made the first sale of a Legacy in Saudi Arabia. “We’re in business for the long haul,” added Edwards, noting that Swift expects to log more than $220 million in Legacy sales next year.
He said the reliability of the demonstrator aircraft, the first in North America, validated Swift’s decision to become the Legacy’s launch customer and take a major role in its marketing. “That aircraft flew more than 1,000 hours with only one failure that caused a delay, a com radio that was replaced in just a few hours.” He said Swift Air Group expects to sell five Legacys this year for revenue of just over $100 million and 11 next year. The first Legacy delivered in the U.S. went to a customer in Phoenix for whom Swift is managing the aircraft.
The Sporting Life
Moyes, who continues to enjoy outdoor family activities, including skiing and driving a dune buggy over the sand dunes west of Yuma, Ariz., literally got in on the ground floor of a major league team. “I wanted to be part of bringing baseball to Arizona,” he recalled, and so became one of several investors approached by Joe Garagiola Sr. in the mid-1990s, when the former catcher and broadcaster was spearheading a group seeking an expansion franchise for Phoenix. Moyes put up $5 million to become a charter investor and today owns one-twenty-fourth of the team. In the process, he met Jerry Colangelo, principal owner of the 2001 World Champion Diamondbacks and the NBA Phoenix Suns. Moyes also owns “a small piece” of the basketball team.
Then, when developer Steve Ellman and NHL legend Wayne Gretzky acquired the financially strapped Phoenix Coyotes, Moyes provided enough capital to become owner of “about half” of the former Winnipeg Jets, doing so, he said, “to keep the Coyotes in Arizona.” He expressed confidence that the team’s fortunes will improve on and off the ice when its new purpose-built arena, about five miles from Moyes’ home in Glendale (west of Phoenix) opens this December 27.
Since leaving Canada the team has played in the downtown city-owned America West Arena, designed for Colangelo’s Suns. “It’s been tough,” said Moyes, noting the 4,000 limited-view seats that cannot be sold for full price and the lack of other stadium revenue under a contract entered into by the team’s previous owner. “It will be much better in the new arena. We’ll get the concession, parking and naming rights revenues that the team hasn’t been getting.” Like a number of other small-market NHL teams, the Coyotes have had to shed much of their high-salaried talent in recent years, and Moyes said that may have to continue in the short term.